EXECUTION COPY
INTERCREDITOR AGREEMENT
Dated as of
April 13, 1999
AMONG
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee under the
Atlas Air Pass Through Trust 1999-1A-1,
Atlas Air Pass Through Trust 1999-1A-2,
Atlas Air Pass Through Trust 1999-1B
and
Atlas Air Pass Through Trust 1999-1C,
ABN AMRO BANK N.V.,
Chicago Branch,
as Class A-1 Liquidity Provider,
and as Class A-2 Liquidity Provider,
XXXXXX XXXXXXX CAPITAL SERVICES, INC.,
as Class B Liquidity Provider
and
as Class C Liquidity Provider
AND
WILMINGTON TRUST COMPANY
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and Trustee
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
SECTION 1.1. Definitions ............................................... 2
ARTICLE II TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1. Agreement to Terms of Subordination; Payments from
Monies Received Only ....................................24
SECTION 2.2. Trust Accounts ............................................24
SECTION 2.3. Deposits to the Collection Account and Special Payments
Account .................................................26
SECTION 2.4. Distributions of Special Payments .........................26
SECTION 2.5. Designated Representatives ................................29
SECTION 2.6. Controlling Party .........................................30
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF AMOUNTS RECEIVED
SECTION 3.1. Written Notice of Distribution ............................31
SECTION 3.2. Distribution of Amounts on Deposit in the Collection
Account .................................................34
SECTION 3.3. Distribution of Amounts on Deposit Following a
Triggering Event ........................................35
SECTION 3.4. Other Payments ............................................37
SECTION 3.5. Payments to the Trustees and the Liquidity Providers ......38
SECTION 3.6. Liquidity Facilities ......................................38
ARTICLE IV EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party .....................46
SECTION 4.2. Remedies Cumulative .......................................48
SECTION 4.3. Discontinuance of Proceedings .............................48
SECTION 4.4. Right of Certificateholders to Receive Payments Not
to Be Impaired ..........................................48
SECTION 4.5. Undertaking for Costs .....................................48
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ARTICLE V DUTIES OF THE SUBORDINATION AGENT; AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1. Notice of Indenture Event of Default or Triggering Event ..49
SECTION 5.2. Indemnification ...........................................49
SECTION 5.3. No Duties Except as Specified in Intercreditor Agreement ..50
SECTION 5.4. Notice from the Liquidity Providers and Trustees ..........50
ARTICLE VI THE SUBORDINATION AGENT
SECTION 6.1. Authorization; Acceptance of Trusts and Duties ............50
SECTION 6.2. Absence of Duties .........................................51
SECTION 6.3. No Representations or Warranties as to Documents ..........51
SECTION 6.4. No Segregation of Monies; No Interest .....................51
SECTION 6.5. Reliance; Agents; Advice of Counsel .......................51
SECTION 6.6. Capacity in Which Acting ..................................52
SECTION 6.7. Compensation ..............................................52
SECTION 6.8. May Become Certificateholder ..............................52
SECTION 6.9. Subordination Agent Required; Eligibility .................52
SECTION 6.10. Money to Be Held in Trust .................................53
ARTICLE VII INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. Scope of Indemnification ..................................53
ARTICLE VIII SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. Replacement of Subordination Agent; Appointment
of Successor ............................................53
ARTICLE IX SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. Amendments, Waivers, etc. .................................54
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SECTION 9.2. Subordination Agent Protected .............................56
SECTION 9.3. Effect of Supplemental Agreements .........................56
SECTION 9.4. Notice to Rating Agencies .................................57
ARTICLE X MISCELLANEOUS
SECTION 10.1. Termination of Intercreditor Agreement ...................57
SECTION 10.2. Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers and Subordination Agent .......57
SECTION 10.3. Notices ..................................................57
SECTION 10.4. Severability .............................................59
SECTION 10.5. No Oral Modifications or Continuing Waivers ..............59
SECTION 10.6. Successors and Assigns ...................................59
SECTION 10.7. Headings .................................................59
SECTION 10.8. Counterpart Form .........................................59
SECTION 10.9. Subordination ............................................59
SECTION 10.10 Governing Law ............................................61
SECTION 10.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity ................................61
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INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of April 13, 1999, 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); ABN AMRO BANK N.V.,
a bank organized under the laws of the Netherlands, acting through its Chicago
Branch ("ABN AMRO"), as Class A-1 Liquidity Provider and as Class A-2 Liquidity
Provider; XXXXXX XXXXXXX CAPITAL SERVICES, INC. ("MSCS"), a corporation
organized under the laws of Delaware, as Class B Liquidity Provider and as Class
C Liquidity Provider; and WILMINGTON TRUST COMPANY, not in its individual
capacity except as expressly set forth herein, but solely as Subordination Agent
and trustee hereunder (in such capacity, together with any successor appointed
pursuant to Article VIII hereof, the "Subordination Agent").
WHEREAS, all capitalized terms used herein shall have the respective
meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture (i) in the case of each Aircraft that
is owned by Atlas at the time such Indenture is entered into (the "Owned
Aircraft"), Atlas will issue on a recourse basis, up to five series of Equipment
Notes to finance the purchase of such Aircraft, and (ii) in the case of each
Aircraft that is leased to Atlas 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, three 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 Underwriting Agreement, the Underwriters 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, ABN AMRO (with respect to the Class A-1 Trust and the Class A-2
Trust) and MSCS (with respect to the Class B Trust and the Class C Trust)
propose to enter into separate revolving credit agreements (each, a "Liquidity
Facility") with the
Subordination Agent, as agent for the Trustee of such Trusts, respectively, for
the benefit of the Certificateholders of such Trusts; and
WHEREAS, Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co. (the "Guarantor") will guarantee
in full, pursuant to separate Guarantee Agreements dated as of the date hereof
(each, a "Guarantee Agreement"), the obligations of MSCS under the Class B
Liquidity Facility and the Class C Liquidity Facility, respectively;
WHEREAS, it is a condition precedent to the obligations of the Underwriters
under the Underwriting Agreement that the Subordination Agent, the Trustees and
the Liquidity Providers agree to the terms of subordination set forth in this
Agreement in respect of each Class of Certificates, and the Subordination Agent,
the Trustees and the Liquidity Providers, by entering into this Agreement,
hereby acknowledge and agree to such terms of subordination and the other
provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
and of other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article have the
meanings assigned to them in this Article, and include the plural as well
as the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections
and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(4) the term "including" shall mean "including without limitation".
"ABN AMRO" has the meaning assigned to such term in the recital of the
parties to this Agreement.
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"ABN AMRO Fee Letter" means the Fee Letter dated the date hereof between
ABN AMRO and the Subordination Agent with respect to the Class A-1 Liquidity
Facility and the Class A-2 Liquidity Facility.
"Acceleration" means, with respect to the amounts payable in respect of the
Equipment Notes issued under any Indenture, such amounts becoming immediately
due and payable by declaration or otherwise. "Accelerate", "Accelerated" and
"Accelerating" have meanings correlative to the foregoing.
"Adjusted Expected Distributions" means, with respect to the Certificates
of any Trust on any Current Distribution Date, the sum of (x) accrued and unpaid
interest 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) shall
not apply.
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For purposes of calculating Adjusted Expected Distributions with respect to
the Certificates of any Trust, any premium paid on the Equipment Notes held in
such Trust that has not been distributed to the Certificateholders of such Trust
(other than such premium or a portion thereof applied to the 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" for any Class of Certificates for any
Distribution Date means the product of (A) (i) the sum of the applicable LTV
Collateral Amounts for each Leased Aircraft and Owned Aircraft, minus (ii) the
Pool Balance for each Class of Certificates, if any, senior to such Class, after
giving effect to any distribution of principal on such Distribution Date with
respect to such senior Class or Classes, multiplied by (B) (i) in the case of
the Class A-1 Certificates or Class A-2 Certificates, a fraction the numerator
of which equals the Current Pool Balance for the Class A-1 Certificates or Class
A-2 Certificates, as the case may be, and the denominator of which equals the
sum of the Current Pool Balances of the Class A-1 Certificates and Class A-2
Certificates, and (ii) in the case of the Class B and Class C Certificates, 1.0
.
"Aircraft" has the meaning set forth in the Note Purchase Agreement and,
with respect to each Indenture, means the "Aircraft" referred to therein.
"Appraisal" means a current fair market value appraisal (which may be a
"desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed and
willing seller under no compulsion to sell and both having knowledge of all
relevant facts.
"Appraised Current Market Value" of any Leased Aircraft or Owned Aircraft
means the lower of the average and the median of the three most recent
Appraisals of such Aircraft.
"Appraisers" means AvS, MBA and Simat, Helliesen & Xxxxxxx, Inc.
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"Atlas" means Atlas Air, Inc., a Delaware corporation, and its successors
and assigns.
"Atlas Bankruptcy Event" means the occurrence and continuation of any of
the following:
(a) Atlas shall consent to the appointment of or the taking of
possession by a receiver, trustee or liquidator of itself or of a
substantial part of its property, or Atlas shall admit in writing its
inability to pay its debts generally as they come due, or does not pay its
debts generally as they become due or shall make a general assignment for
the benefit of creditors, or Atlas shall file a voluntary petition in
bankruptcy or a voluntary petition or an answer seeking reorganization,
liquidation or other relief in a case under any bankruptcy laws or other
insolvency laws (as in effect at such time) or an answer admitting the
material allegations of a petition filed against Atlas in any such case, or
Atlas shall seek relief by voluntary petition, answer or consent, under the
provisions of any other bankruptcy or other similar law providing for the
reorganization or winding-up of corporations (as in effect at such time) or
Atlas shall seek an agreement, composition, extension or adjustment with
its creditors under such laws, or Atlas' board of directors shall adopt a
resolution authorizing corporate action in furtherance of any of the
foregoing; or
(b) an order, judgment or decree shall be entered by any court of
competent jurisdiction appointing, without the consent of Atlas, a
receiver, trustee or liquidator of Atlas or of any substantial part of its
property, or any substantial part of the property of Atlas shall be
sequestered, or granting any other relief in respect of Atlas as a debtor
under any bankruptcy laws or other insolvency laws (as in effect at such
time), and any such order, judgment or decree of appointment or
sequestration shall remain in force undismissed, unstayed and unvacated for
a period of 60 days after the date of entry thereof; or
(c) a petition against Atlas in a case under any bankruptcy laws or
other insolvency laws (as in effect at such time) is filed and not
withdrawn or dismissed within 60 days thereafter, or if, under the
provisions of any law providing for reorganization or winding-up of
corporations which may apply to Atlas, any court of competent jurisdiction
assumes jurisdiction, custody or control of Atlas or of any substantial
part of its property and such jurisdiction, custody or control remains in
force unrelinquished, unstayed and unterminated for a period of 60 days.
"Atlas Provisions" has the meaning specified in Section 9.1(a).
"Available Amount" means, with respect to any Liquidity Facility on any
drawing date, subject to the proviso contained in the first sentence of Section
3.6(g) hereof, an amount equal to (a) the Maximum Commitment (as defined in such
Liquidity Facility) of such
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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 Available Amount of such Liquidity
Facility shall be zero.
"AvS" means Aviation Solutions Inc.
"Basic Agreement" means the Pass Through Trust Agreement dated as of April
1, 1999 between Atlas and WTC, not in its individual capacity, except as
otherwise expressly provided therein, but solely as trustee.
"Business Day" means any day other than a Saturday or Sunday or a day on
which commercial banks are required or authorized to close in Denver, Colorado,
Chicago, Illinois, 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 that, solely with respect to draws under any Liquidity Facility, also
is a "Business Day" as defined in such Liquidity Facility.
"Cash Collateral Account" means the Class A-1 Cash Collateral Account, the
Class A-2 Cash Collateral Account, the Class B Cash Collateral Account or the
Class C Cash Collateral Account, as applicable.
"Certificate" means a Class A-1 Certificate, a Class A-2 Certificate, a
Class B 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 A-1 Cash Collateral Account" means an Eligible Deposit Account in
the name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which all amounts
drawn under the Class A-1 Liquidity Facility pursuant to Section 3.6(c), 3.6(d)
or 3.6(i) shall be deposited.
"Class A-1 Certificateholder" means, at any time, any holder of one or more
Class A-1 Certificates.
"Class A-1 Certificates" means the certificates issued by the Class A-1
Trust, substantially in the form of Exhibit A to the Class A-1 Trust Agreement,
and authenticated by the Class A-1 Trustee, representing fractional undivided
interests in the Class A-1 Trust, and
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any certificates issued in exchange therefor or replacement thereof pursuant to
the terms of the Class A-1 Trust Agreement.
"Class A-1 Liquidity Facility" means, initially, the Revolving Credit
Agreement, dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class A-1 Trustee, and ABN AMRO, and from and after
the replacement of such Agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class A-1 Liquidity Provider" means ABN AMRO, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity Facility
to replace the Class A-1 Liquidity Facility pursuant to Section 3.6(e).
"Class A-1 Trust" means the Atlas Air Pass Through Trust 1999-1A-1 created
and administered pursuant to the Class A-1 Trust Agreement.
"Class A-1 Trust Agreement" means the Basic Agreement, as supplemented by
Supplement No. 1999-1A-1 thereto dated as of the date hereof, governing the
creation and administration of the Atlas Air Pass Through Trust 1999-1A-1 and
the issuance of the Class A-1 Certificates, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Class A-1 Trustee" means WTC, not in its individual capacity except as
expressly set forth in the Class A-1 Trust Agreement, but solely as trustee
under the Class A-1 Trust Agreement, together with any successor trustee
appointed pursuant thereto.
"Class A-2 Cash Collateral Account" means an Eligible Deposit Account in
the name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which all amounts
drawn under the Class A-2 Liquidity Facility pursuant to Section 3.6(c), 3.6(d)
or 3.6(i) shall be deposited.
"Class A-2 Certificateholder" means, at any time, any holder of one or more
Class A-2 Certificates.
"Class A-2 Certificates" means the certificates issued by the Class A-2
Trust, substantially in the form of Exhibit A to the Class A-2 Trust Agreement,
and authenticated by the Class A-2 Trustee, representing fractional undivided
interests in the Class A-2 Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class A-2 Trust
Agreement.
"Class A-2 Liquidity Facility" means, initially, the Revolving Credit
Agreement, dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class A-2 Trustee, and ABN AMRO and, from and after
the replacement of such Agreement
7
pursuant hereto, the Replacement Liquidity Facility therefor, if any, in each
case as amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Class A-2 Liquidity Provider" means ABN AMRO, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity Facility
to replace the Class A-2 Liquidity Facility pursuant to Section 3.6(e).
"Class A-2 Trust" means the Atlas Air Pass Through Trust 1999-1A-2 created
and administered pursuant to the Class A-2 Trust Agreement.
"Class A-2 Trust Agreement" means the Basic Agreement, as supplemented by
Supplement No. 1999-1A-2 thereto dated as of the date hereof, governing the
creation and administration of the Atlas Air Pass Through Trust 1999-1A-2 and
the issuance of the Class A-2 Certificates, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Class A-2 Trustee" means WTC, not in its individual capacity except as
expressly set forth in the Class A-2 Trust Agreement, but solely as trustee
under the Class A-2 Trust Agreement, together with any successor trustee
appointed pursuant thereto.
"Class B Cash Collateral Account" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which all amounts
drawn under the Class B Liquidity Facility pursuant to Section 3.6(c), 3.6(d) or
3.6(i) shall be deposited.
"Class B Certificateholder" means, at any time, any holder of one or more
Class B Certificates.
"Class B Certificates" means the certificates issued by the Class B Trust,
substantially in the form of Exhibit A to the Class B Trust Agreement, and
authenticated by the Class B Trustee, representing fractional undivided
interests in the Class B Trust, and any certificates issued in exchange therefor
or replacement thereof pursuant to the terms of the Class B Trust Agreement.
"Class B Liquidity Facility" means, initially, the Revolving Credit
Agreement, dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class B Trustee, and MSCS and, from and after the
replacement of such Agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class B Liquidity Provider" means MSCS, together with any Replacement
Liquidity Provider which has issued a Replacement Liquidity Facility to replace
the Class B Liquidity Facility pursuant to Section 3.6(e).
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"Class B Trust" means the Atlas Air Pass Through Trust 1999-1B created and
administered pursuant to the Class B Trust Agreement.
"Class B Trust Agreement" means the Basic Agreement, as supplemented by
Supplement No. 1999-1B thereto dated as of the date hereof, governing the
creation and administration of the Atlas Air Pass Through Trust 1999-1B and the
issuance of the Class B Certificates, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with its terms.
"Class B Trustee" means WTC, not in its individual capacity except as
expressly set forth in the Class B Trust Agreement, but solely as trustee under
the Class B Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"Class C Cash Collateral Account" means an Eligible Deposit Account in the
name of the Subordination Agent and 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 replacement thereof pursuant to the terms of the Class C Trust Agreement.
"Class C Liquidity Facility" means, initially, the Revolving Credit
Agreement. dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class C Trustee, and MSCS, 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 MSCS, together with any Replacement
Liquidity Provider which has issued a Replacement Liquidity Facility to replace
the Class C Liquidity Facility pursuant to Section 3.6(e).
"Class C Trust" means the Atlas Air Pass Through Trust 1999-1C created and
administered pursuant to the Class C Trust Agreement.
"Class C Trust Agreement" means the Basic Agreement, as supplemented by
Supplement No. 1999-1C thereto dated as of the date hereof, governing the
creation and administration of the Atlas Air Pass Through Trust 1999-1C and the
issuance of the Class C
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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 any pass through certificates issued by the
Class D Trust representing fractional undivided interests in the Class D Trust.
"Class D Trust" means the Atlas Air Pass Through Trust 1999-1D, if and when
established.
"Closing Date" means April 13, 1999.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"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 Expected Distributions or the Adjusted
Expected Distributions with respect to the Certificates of any Trust as of such
Distribution Date.
"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 Credit Suisse First Boston, acting through its New York
Branch, as depositary under each Deposit Agreement.
"Deposits" with respect to any Class, shall have the meaning set forth in
the Deposit Agreement pertaining to such Class.
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"Designated Representatives" means the Subordination Agent Representatives,
the Trustee Representatives and the LP Representatives identified under Section
2.5.
"Distribution Date" means a Regular Distribution Date or a Special
Distribution Date.
"Dollars" 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.
"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; and
provided further that no Cash Collateral Account may be maintained with a
Liquidity Provider at any time Atlas holds any participation in the related
Liquidity Facility unless written confirmation shall have been received from
each Rating Agency prior to such time to the effect that such maintenance of the
Cash Collateral Account with the Liquidity Provider will not result in a
withdrawal or downgrading of the ratings of the Certificates.
"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; provided that a Liquidity Provider
shall not qualify as an Eligible Institution at any time Atlas holds any
participation in the related Liquidity Facility unless written confirmation
shall have been received from each Rating Agency to the effect that such
Liquidity Provider's status as an Eligible Institution will not result in a
withdrawal or downgrading of the ratings of the Certificates.
"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
11
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 S&P
of at least A-1 and P-1, respectively, having maturities no later than 90 days
following the date of such investment or (c) investments in negotiable
certificates of deposit, time deposits, banker's acceptances, commercial paper
or other direct obligations of, or obligations guaranteed by, commercial banks
organized under the laws of the United States or of any political subdivision
thereof (or any U.S. branch of a foreign bank) with issuer ratings of at least
B/C by Thomson Bankwatch, having maturities no later than 90 days following the
date of such investment; provided, however, that (x) all Eligible Investments
that are bank obligations shall be denominated in U.S. dollars; and (y) the
aggregate amount of Eligible Investments at any one time that are bank
obligations issued by any one bank shall not be in excess of 5% of such bank's
capital surplus; provided further that (1) any investment of the types described
in clauses (a), (b) and (c) above may be made through a repurchase agreement in
commercially reasonable form with a bank or other financial institution
qualifying as an Eligible Institution so long as such investment is held by a
third party custodian also qualifying as an Eligible Institution, and (2) all
such investments set forth in clause (a), (b) or (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 a Liquidity Provider or Atlas or any of their
respective Affiliates, and no investment in the obligations of any one bank in
excess of $10,000,000, shall be an Eligible Investment at any time Atlas holds
any participation in the related Liquidity Facility unless written confirmation
shall have been received from each Rating Agency that the making of such
investment will not result in a withdrawal or downgrading of the ratings of the
Certificates.
"Equipment Notes" means, at any time, the Series A-1 Equipment Notes, the
Series A-2 Equipment Notes, the Series B Equipment Notes and the Series C
Equipment Notes, collectively, and in each case, any Equipment Notes issued in
exchange therefor or replacement thereof pursuant to the terms of the
Indentures.
"Escrow Agent" means 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 Underwriters, the Trustee for such Class and
the Paying Agent, as the same may be amended, modified or supplemented from time
to time in accordance with the terms thereof.
12
"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 or Acceleration or otherwise) and such payments have been
distributed to the holders of such Certificates and (ii) the principal of any
Equipment Notes formerly held in such Trust that have been sold pursuant to the
terms hereof has been paid in full and such payments have been distributed to
the holders of such Certificates, but without giving effect to any reduction in
the Pool Balance as a result of any distribution attributable to Deposits
occurring after the immediately preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, occurring after the initial
issuance of the Certificates of such Trust). For purposes of calculating
Expected Distributions with respect to the Certificates of any Trust, any
premium paid on the Equipment Notes held in such Trust which has not been
distributed to the Certificateholders of such Trust (other than such premium or
a portion thereof applied to the payment of interest on the Certificates of such
Trust or the reduction of the Pool Balance of such Trust) shall be added to the
amount of such Expected Distributions.
"Expiry Date" with respect to any Liquidity Facility, shall have the
meaning set forth in such Liquidity Facility.
"Fee Letter" means, collectively, the ABN AMRO Fee Letter and the MSCS Fee
Letter and any fee letter entered into between the Subordination Agent and any
Replacement Liquidity Provider.
"Final Distributions" means, with respect to the Certificates of any Trust
on any Distribution Date, the sum of (x) the aggregate amount of all accrued and
unpaid interest on such Certificates (excluding interest, if any, payable with
respect to the Deposits relating to such Trust) and (y) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date (less the amount
of the Deposits for such Class of Certificates as of such preceding Distribution
Date other than any portion of such Deposits thereafter used to acquire
Equipment Notes pursuant to the Note Purchase Agreement). For purposes of
calculating Final Distributions with respect to the Certificates of any Trust,
any premium paid on the Equipment Notes held in such Trust which has not been
distributed to the Certificateholders of such Trust (other than such premium or
a portion thereof applied to the payment of interest on the Certificates of such
Trust or the reduction of the Pool Balance of such Trust) shall be added to the
amount of such Final Distributions.
"Final Drawing" has the meaning assigned to such term in Section 3.6(i).
13
"Final Legal Distribution Date" means (i) with respect to the Class A-1
Certificates, July 2, 2020, (ii) with respect to the Class A-2 Certificates,
January 2, 2011, (iii) with respect to the Class B Certificates, July 2, 2016
and (iv) with respect to the Class C Certificates, July 2, 2012.
"Financing Agreement" means each of the Participation Agreements and the
Note Purchase Agreement.
"Guarantee Agreement" has the meaning assigned to such term in the
preliminary statements to this Agreement.
"Guarantee Event" has the meaning assigned to such term in Section 3.6(c).
"Guarantor" has the meaning assigned to such term in the preliminary
statements to this Agreement.
"Indenture" means each of the Trust Indentures entered into by the Loan
Trustee, and the Owner Trustee or Atlas, 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 Event of Default" means, with respect to any Indenture, any
Event of Default (as such term is defined in such Indenture) thereunder.
"Interest Drawing" has the meaning 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 3.07(c) or (d) of such
Liquidity Facility on a Downgrade Drawing, Non-Extension Drawing or Final
Drawing thereunder.
"Investment Earnings" means investment earnings on funds on deposit in the
Trust Accounts net of losses and 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 Participation Agreement" means a participation agreement
substantially in the form of Exhibit A-1 to the Note Purchase Agreement, as the
same may be amended, supplemented or otherwise modified in accordance with its
terms.
14
"Lending Office" means, with respect to any Liquidity Facility, the lending
office of such Liquidity Provider thereunder, presently located at Chicago,
Illinois and New York, New York, for ABN AMRO and MSCS, respectively, or such
other lending office as such Liquidity Provider from time to time shall notify
the applicable Trustee as its lending office under any such Liquidity Facility;
provided that such Liquidity Provider shall not change its Lending Office to a
Lending Office outside the United States of America except in accordance with
Section 3.01, 3.02 or 3.03 of any such Liquidity Facility.
"Lien" means any mortgage, pledge, lien, charge, claim, disposition of
title, encumbrance, lease, sublease, sub-sublease or security interest of any
kind, including, without limitation, any thereof arising under any conditional
sales or other title retention agreement.
"Liquidity Event of Default" with respect to any Liquidity Facility, has
the meaning assigned to such term in such Liquidity Facility.
"Liquidity Expenses" means all Liquidity Obligations other than (i) the
principal amount of any Drawings under the Liquidity Facilities and (ii) any
interest accrued on any Liquidity Obligations.
"Liquidity Facility" means, at any time, the Class A-1 Liquidity Facility,
the Class A-2 Liquidity Facility, the Class B Liquidity Facility or the Class C
Liquidity Facility.
"Liquidity Obligations" means all principal, interest, fees and other
amounts owing to the Liquidity Providers under the Liquidity Facilities, Section
8.1 of the Owned Aircraft Participation Agreements, Section 9.1 of the Leased
Aircraft Participation Agreements or the Fee Letters.
"Liquidity Provider" means, at any time, the Class A-1 Liquidity Provider,
Class A-2 Liquidity Provider, the Class B Liquidity Provider or the Class C
Liquidity Provider, as applicable.
"Loan Trustee" means, with respect to any Indenture, the loan trustee
thereunder.
"LP Incumbency Certificate" has the meaning assigned to such term in
Section 2.5(b).
"LP Representatives" has the meaning assigned to such term in Section
2.5(b).
"LTV Appraisals" has the meaning assigned to such term in Section 4.1(a).
"LTV Collateral Amount" of any Leased Aircraft or Owned Aircraft for any
Class of Certificates means, as of any Distribution Date, the lesser of (i) the
LTV Ratio for
15
such Class of Certificates multiplied by the Appraised Current
Market Value of such Aircraft (or with respect to any such Aircraft which has
suffered an Event of Loss under and as defined in the relevant Lease (in the
case of a Leased Aircraft) or Indenture (in the case of an Owned Aircraft), the
amount of the insurance proceeds paid to the related Loan Trustee in respect
thereof to the extent then held by such Loan Trustee (and/or on deposit in the
Special Payments Account) or payable to such Loan Trustee in respect thereof)
and (ii) the outstanding principal amount of the Equipment Notes secured by such
Aircraft after giving effect to any principal payments of such Equipment Notes
on or before such Distribution Date.
"LTV Ratio" means for the Class A-1 Certificates and the Class A-2
Certificates 39.0%, for the Class B Certificates 53.0%, and for the Class C
Certificates, 68.0%.
"Majority Liquidity Providers" means, at any time, Liquidity Providers
holding at least a majority of the aggregate outstanding Liquidity Obligations
at such time.
"MBA" means Xxxxxx Xxxxx & Xxxxx.
"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.
"MSCS" has the meaning assigned to such term in the recital of the parties
to this Agreement.
"MSCS Fee Letter" means the Fee Letter dated the date hereof, between MSCS
and the Subordination Agent with respect to the Class B Liquidity Facility and
the Class C Liquidity Facility.
"MSCS Liquidity Facilities" means the Class B Liquidity Facility and the
Class C Liquidity Facility.
"Non-Controlling Party" means, at any time, any Trustee or Liquidity
Provider which is not the Controlling Party at such time.
"Non-Extended Facility" has the meaning assigned to such term in Section
3.6(d).
"Non-Extension Drawing" has the meaning assigned to such term in Section
3.6(d).
16
"Non-Performing Equipment Note" means an Equipment Note that is not a
Performing Equipment Note.
"Note Purchase Agreement" means the Note Purchase Agreement dated as of the
date hereof, among Atlas, each Trustee, the Escrow Agent, the Subordination
Agent and the Paying Agent.
"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
Indentures, the Trust Agreements, the Underwriting Agreement, the Financing
Agreements, the Leases, the Fee Letter, the Equipment Notes and the
Certificates, together with all exhibits and schedules included with any of the
foregoing.
"Outstanding" means, when used with respect to each Class of Certificates,
as of the date of determination, all Certificates of such Class theretofore
authenticated and delivered under the related Trust Agreement, except:
(i) Certificates of such Class theretofore canceled by the Registrar
(as defined in such Trust Agreement) or delivered to the Trustee thereunder
or such Registrar for cancellation;
(ii) Certificates of such Class for which money in the full amount
required to make the final distribution with respect to such Certificates
pursuant to Section 11.01 of such Trust Agreement has been theretofore
deposited with the related Trustee in trust for the holders of such
Certificates as provided in Section 4.01 of such Trust Agreement pending
distribution of such money to such Certificateholders pursuant to such
final distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of which
other Certificates have been authenticated and delivered pursuant to such
Trust Agreement;
provided, however, that in determining whether the holders of the requisite
Outstanding amount of such Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, any Certificates
owned by Atlas or any of its Affiliates shall be disregarded and deemed not to
be Outstanding, except that, in determining whether such Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that such Trustee knows to be so
owned shall be so disregarded. Certificates so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the applicable Trustee the pledgee's right so to act with
respect to such Certificates and that the pledgee is not Atlas or any of its
Affiliates.
17
"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 of this Agreement.
"Owned Aircraft Participation Agreement" means a participation agreement
substantially in the form of Exhibit C-1 to the Note Purchase Agreement, as the
same may be amended, supplemented or otherwise modified in accordance with its
terms.
"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, collectively, any Leased Aircraft
Participation Agreement and any Owned Aircraft Participation Agreement.
"Payee" has the meaning assigned to such term in Section 2.4(e).
"Paying Agent" means WTC, as paying agent under each Escrow and Paying
Agent Agreement, together with its successors in such capacity.
"Performing Equipment Note" means an Equipment Note with respect to which
no payment default has occurred and is continuing (without giving effect to any
Acceleration); provided that in the event of a bankruptcy proceeding involving
Atlas 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 the Section 1110 Period the trustee in such
proceeding or Atlas 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 30 days after the date of such default or 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.
18
"Person" means any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust, trustee,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pool Balance" means, with respect to each Trust or the Certificates issued
by any Trust, as of any date, (i) the original aggregate face amount of the
Certificates of such Trust less (ii) the aggregate amount of all payments made
in respect of the Certificates of such Trust or in respect of Deposits relating
to such Trust other than payments made in respect of interest or 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, payment of principal of the
Equipment Notes or payment with respect to other Trust Property held in such
Trust and the distribution thereof to be made on that date.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"PTC Event of Default" means, with respect to each Trust Agreement, the
failure to pay within 10 Business Days of the due date thereof: (i) the
outstanding Pool Balance of the applicable Class of Certificates on the Final
Legal Distribution Date for such Class or (ii) interest due on such Certificates
on any Distribution Date (unless the Subordination Agent shall have made an
Interest Drawing, or a withdrawal from the Cash Collateral Account, with respect
thereto in an aggregate amount sufficient to pay such interest and shall have
distributed such amount to the Trustee entitled thereto).
"Rating Agencies" means Moody's and Standard & Poor's.
"Ratings Confirmation" means, with respect to any action proposed to be
taken, a written confirmation from each of the Rating Agencies that such action
would not result in (i) a reduction of the rating for any Class of Certificates
below the then current rating for such Class of Certificates or (ii) a
withdrawal or suspension of the rating of any Class of Certificates.
"Regular Distribution Dates" means each January 2 and July 2, commencing on
January 2, 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 Liquidity Facility, an
irrevocable revolving credit agreement in substantially the form of the replaced
Liquidity Facility, including reinstatement provisions, or in such other form
(which may include a letter of credit) as shall permit the Rating Agencies to
confirm in writing their respective ratings then
19
in effect for the Certificates (before downgrading of such ratings, if any, as a
result of the downgrading of the applicable Liquidity Provider), in a face
amount (or in an aggregate face amount) equal to the amount of interest payable
on the Certificates of such Trust (at the Stated Interest Rate for such Trust,
and without regard to expected future principal payments) on the three Regular
Distribution Dates following the date of replacement of such Liquidity Facility
and issued by a Person (or Persons) having unsecured short-term debt ratings
issued by the Rating Agencies which are equal to or higher than the Threshold
Rating. Without limitation of the form that a Replacement Liquidity Facility
otherwise may have pursuant to the preceding sentence, a Replacement Liquidity
Facility for any Class of Certificates may have a stated expiration date earlier
than 15 days after the Final Maturity Date of such Class of Certificates so long
as such Replacement Liquidity Facility provides for a Non-Extension Drawing as
contemplated by Section 3.6(d) hereof.
"Replacement Liquidity Provider" means a Person who issues a Replacement
Liquidity Facility.
"Required Amount" means, with respect to each Liquidity Facility, or the
Cash Collateral Account, for any Class, for any day, the sum of the aggregate
amount of interest, calculated at the rate per annum equal to the Stated
Interest Rate for the related Class of Certificates, that would be payable on
such Class of Certificates on each of the three successive Regular Distribution
Dates immediately following such day or, if such day is a Regular Distribution
Date, on such day and the succeeding two Regular Distribution Dates, in each
case calculated on the basis of the Pool Balance of such Class of Certificates
on such date and without regard to expected future payments of principal on such
Class of Certificates.
"Responsible Officer" means (i) with respect to the Subordination Agent and
each of the Trustees, any officer in the corporate trust administration
department of the Subordination Agent or such Trustee or any other officer
customarily performing functions similar to those performed by the Persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his knowledge of and familiarity with a particular
subject, and (ii) with respect to each Liquidity Provider, any authorized
officer of such Liquidity Provider.
"Scheduled Payment" means, with respect to any Equipment Note, (i) any
payment of principal or interest on such Equipment Note (other than an Overdue
Scheduled Payment) due from the obligor thereon or (ii) any payment of interest
on the corresponding Class of Certificates with funds drawn under any Liquidity
Facility, which payment represents the installment of principal at the stated
maturity of such installment of principal on such Equipment Note, the payment of
regularly scheduled interest accrued on the unpaid principal amount of such
Equipment Note, or both; provided that any payment of principal of, premium, if
any, or interest resulting from the redemption or purchase of any Equipment Note
shall not constitute a Scheduled Payment.
20
"Scheduled Payment Date" means, with respect to any Scheduled Payment, the
date on which such Scheduled Payment is scheduled to be made.
"Series A-1 Equipment Notes" means the 7.20% Series A-1 Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or Atlas, 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 A-2 Equipment Notes" means the 6.88% Series A-2 Equipment Notes.
issued by Atlas pursuant to an Indenture relating to an Owned Aircraft and
authenticated by the Loan Trustee thereunder, and any such Equipment Notes
issued in exchange therefor or replacement thereof pursuant to the terms of such
Indenture.
"Series B Equipment Notes" means the 7.63% Series B Equipment Notes issued
pursuant to each Indenture by the related Owner Trustee or Atlas, 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 C Equipment Notes" means the 8.77% Series C Equipment Notes issued
pursuant to each Indenture by the related Owner Trustee or Atlas, 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, 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.
"Special Payment" means any payment (other than a Scheduled Payment) in
respect of, or any proceeds of, any Equipment Note or Trust Indenture Estate (as
defined in each Indenture).
"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 Expiration Date" has the meaning specified in Section 3.6(d).
"Stated Interest Rate" means (i) with respect to the Class A-1
Certificates, 7.20% per annum, (ii) with respect to the Class A-2 Certificates,
6.88% per annum, (iii) with respect to the Class B Certificates, 7.63% per annum
and (iv) with respect to the Class C Certificates, 8.77% per annum.
21
"Subordination Agent" has the meaning assigned to it in the preliminary
statements to this Agreement.
"Subordination Agent Incumbency Certificate" has the meaning assigned to
such term in Section 2.5(a).
"Subordination Agent Representatives" has the meaning assigned to such term
in Section 2.5(a).
"Substitute Aircraft" shall have the meaning set forth in the Note Purchase
Agreement.
"Tax" and "Taxes" mean any and all taxes, fees, levies, duties, tariffs,
imposts, and other charges of any kind (together with any and all interest,
penalties, loss, damage, liability, expense, additions to tax and additional
amounts or costs incurred or imposed with respect thereto) imposed or otherwise
assessed by the United States of America or by any state, local or foreign
government (or any subdivision or agency thereof) or other taxing authority,
including, without limitation: taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth and similar charges; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer, value
added, taxes on goods and services, gains taxes, license, registration and
documentation fees, customs duties, tariffs, and similar charges.
"Tax Letter" means, collectively, the Tax Letter dated as of the date
hereof, between Atlas and ABN AMRO with respect to the Class A-1 Liquidity
Facility and the Class A-2 Liquidity Facility and all tax letters entered into
between Atlas and any Replacement Liquidity Provider.
"Termination Notice" with respect to any Liquidity Facility has the meaning
assigned to such term in such Liquidity Facility.
"Threshold Rating" means the short-term unsecured debt rating of P-1 by
Xxxxx'x and A-1+ by Standard & Poor's, in the case of the Class A-1 and Class
A-2 Liquidity Provider, and the short-term unsecured debt rating of P-1 by
Xxxxx'x, and A-1 by Standard & Poor's, in the case of the Class B Liquidity
Provider and the Class C Liquidity Provider (or the Guarantor, so long as MSCS
is the Class B Liquidity Provider or the Class C Liquidity Provider, as the case
may be).
"Treasury Regulations" means regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
22
"Triggering Event" means (x) the occurrence of an Indenture Event of
Default under all of the Indentures resulting in a PTC Event of Default with
respect to the most senior Class of Certificates then Outstanding, (y) the
Acceleration of all of the outstanding Equipment Notes (provided that during the
Delivery Period the aggregate principal amount of such Equipment Notes exceeds
$300,000,000) or (z) the occurrence of an Atlas Bankruptcy Event.
"Trust" means any of the Class A-1 Trust, Class A-2 Trust, the Class B
Trust or the Class C Trust.
"Trust Accounts" has the meaning assigned to such term in Section 2.2(a).
"Trust Agreement" means any of the Class A-1 Trust Agreement, the Class A-2
Trust Agreement, the Class B Trust Agreement or the Class C Trust Agreement.
"Trust Property" with respect to any Trust, has the meaning set forth in
the Trust Agreement for such Trust.
"Trustee" means any of the Class A-1 Trustee, the Class A-2 Trustee, the
Class B Trustee or the Class C Trustee.
"Trustee Incumbency Certificate" has the meaning assigned to such term in
Section 2.5(a).
"Trustee Representatives" has the meaning assigned to such term in Section
2.5(a).
"Underwriters" means Xxxxxx Xxxxxxx & Co. Incorporated, BT Alex. Xxxxx
Incorporated, CIBC Xxxxxxxxxxx Corp. and ING Baring Xxxxxx Xxxx LLC.
"Underwriting Agreement" means the Underwriting Agreement dated April 5,
1999 among the Underwriters and Atlas, relating to the purchase of the
Certificates by the Underwriters, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Written Notice" means, from the Subordination Agent, any Trustee or
Liquidity Provider, a written instrument executed by the Designated
Representative of such Person. An invoice delivered by a Liquidity Provider
pursuant to Section 3.1 in accordance with its normal invoicing procedures shall
constitute Written Notice under such Section.
"WTC" has the meaning assigned to such term in the recital of parties to
this Agreement.
23
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 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, all payments to be made by the Subordination Agent
hereunder shall be made only from amounts received by it that constitute
Scheduled Payments, Special Payments, payments under Section 9.1 of the
Participation Agreements or payments under Sections 6 and 7 of the Note Purchase
Agreement, and only to the extent that the Subordination Agent shall have
received sufficient income or proceeds therefrom to enable it to make such
payments in accordance with the terms hereof. Each of the Trustees and the
Subordination Agent hereby agrees and, as provided in each Trust Agreement, each
Certificateholder, by its acceptance of a Certificate, and each Liquidity
Provider, by entering into the Liquidity Facility to which it is a party, has
agreed to look solely to such amounts to the extent available for distribution
to it as provided in this Agreement and to the relevant Deposits and that none
of the Trustees, Owner Trustees, Loan Trustees, Owner Participants nor the
Subordination Agent is personally liable to any of them for any amounts payable
or any liability under this Agreement, any Trust Agreement, any Liquidity
Facility or such Certificate, except (in the case of the Subordination Agent) as
expressly provided herein or (in the case of the Trustees) as expressly provided
in each Trust Agreement or (in the case of the Owner Trustees and the Loan
Trustees) as expressly provided in any Operative Agreement.
SECTION 2.2. Trust Accounts. (a) Upon the execution of this Agreement, the
Subordination Agent shall establish and maintain in its name (i) the Collection
Account as an Eligible Deposit Account, bearing a designation clearly indicating
that the funds deposited therein are held in trust for the benefit of the
Trustees, the Certificateholders and the Liquidity Providers, and (ii) as a
sub-account in the Collection Account, the Special Payments Account as an
Eligible Deposit Account, bearing a designation clearly indicating that the
funds deposited therein are held in trust for the benefit of the Trustees, the
Certificateholders and the Liquidity Providers. The Subordination Agent shall
establish and maintain the Cash Collateral Accounts pursuant to and under the
circumstances set forth in Section 3.6(f) hereof.
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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 the related distribution pursuant to Section 2.4 hereof, as the case may be,
next following the date of such investment; (or, in the case of any amount on
deposit in the Cash Collateral Account with respect to any Liquidity Facility
(with respect to such Liquidity Facility, the "Relevant Amount"), (A) in the
case of a portion of the Relevant Amount equal to the amount scheduled to be
paid to the Liquidity Provider with respect to such Liquidity Facility on the
Regular Distribution Date next following the date of such investment in
accordance with clause (iv), (v) or (vi) of Section 3.6(f), the Business Day
immediately preceding such Regular Distribution Date, or (B) in the case of a
portion of the Relevant Amount equal to the Relevant Amount minus the amount
described in clause (A) above, the Business Day immediately preceding the
scheduled Interest Payment Date with respect to such Liquidity Facility next
following the date of such investment); provided, however, that following the
making of a Downgrade Drawing or a Non-Extension Drawing under any Liquidity
Facility, the Subordination Agent shall invest and reinvest such amounts in
Eligible Investments at the direction of Atlas; provided, however, that upon the
occurrence and during the continuation of a Triggering Event, the Subordination
Agent shall invest and reinvest such amounts in accordance with the written
instructions of the Controlling Party. Unless otherwise expressly provided in
this Agreement (including, without limitation, with respect to Investment
Earnings on deposit in the Cash Collateral Accounts, 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, except as otherwise expressly provided
herein with respect to Investment Earnings). The Trust Accounts shall be held in
trust by the Subordination Agent under the sole dominion and control of the
Subordination Agent for the benefit of the Trustees, the
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Certificateholders and the Liquidity Providers, as the case may be. If, at any
time, any of the Trust Accounts ceases to be an Eligible Deposit Account, the
Subordination Agent shall within 10 Business Days (or such longer period, not to
exceed 30 calendar days, to which each Rating Agency may consent) establish a
new Collection Account, Special Payments Account or Cash Collateral Account, as
the case may be, as an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Collection Account, Special Payments Account
or Cash Collateral Account, as the case may be. So long as WTC is an Eligible
Institution, the Trust Accounts shall be maintained with it as Eligible Deposit
Accounts.
SECTION 2.3. Deposits to the Collection Account and Special Payments
Account. (a) The Subordination Agent shall, upon receipt thereof, deposit in the
Collection Account all Scheduled Payments received by it.
(b) The Subordination Agent shall, on each date when one or more Special
Payments are made to the Subordination Agent as holder of the Equipment Notes,
deposit in the Special Payments Account the aggregate amount of such Special
Payments.
SECTION 2.4. Distributions of Special Payments. (a) Notice of Special
Payment. Except as provided in Section 2.4(e) below, upon receipt by the
Subordination Agent, as registered holder of the Equipment Notes, of any notice
of a Special Payment (or, in the absence of any such notice, upon receipt by the
Subordination Agent of a Special Payment), the Subordination Agent shall
promptly give notice thereof to each Trustee and the Liquidity Providers. The
Subordination Agent shall promptly calculate the amount of the redemption or
purchase of Equipment Notes or the amount of any Overdue Scheduled Payment, as
the case may be, comprising such Special Payment under the applicable Indenture
or Indentures and shall promptly send to each Trustee a Written Notice of such
amount and the amount allocable to each Trust. Such Written Notice shall also
set the distribution date for such Special Payment (a "Special Distribution
Date"), which shall be the Business Day which immediately follows the later to
occur of (x) the 15th day after the date of such Written Notice or (y) the date
the Subordination Agent has received or expects to receive such Special Payment.
Amounts on deposit in the Special Payments Account shall be distributed in
accordance with Sections 2.4(b) and 2.4(c) 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) all accrued and unpaid
Liquidity Expenses then in arrears plus (B) the product of (x) the
aggregate amount of all accrued
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and unpaid Liquidity Expenses not in arrears to such Special Payment Date
multiplied by (y) a fraction, the numerator of which is the aggregate
outstanding principal amount of Equipment Notes being redeemed, purchased
or prepaid on such Special Payment Date and the denominator of which is the
aggregate outstanding principal amount of all Equipment Notes, shall be
distributed to the Liquidity Providers pari passu on the basis of the
amount of Liquidity Expenses owed to each Liquidity Provider;
second, such amount as shall be required to pay (A) all accrued and unpaid
interest then in arrears on all Liquidity Obligations (including interest
accrued and unpaid on any Interest Drawing or any Applied Provider Advance
(as defined in any Liquidity Facility)) 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 Payment Date (at the rate
provided in the applicable Liquidity Facility) multiplied by (y) a
fraction, the numerator of which is the aggregate outstanding principal
amount of Equipment Notes being redeemed, purchased or prepaid on such
Special Payment Date and the denominator of which is the aggregate
outstanding principal amount of all Equipment Notes, shall be distributed
to the Liquidity Providers pari passu on the basis of the amount of such
Liquidity Obligations owed to each Liquidity Provider;
third, such amount as shall be required (A) if any Cash Collateral Account
had been previously funded as provided in Section 3.6(f), to fund such Cash
Collateral Account up to its Required Amount shall be deposited in such
Cash Collateral Account, (B) if any Liquidity Facility shall become a
Downgraded Facility or a Non-Extended Facility at a time when unreimbursed
Interest Drawings under such Liquidity Facility have reduced the Available
Amount thereunder to zero, to deposit into the related Cash Collateral
Account an amount equal to such Cash Collateral Account's Required Amount
shall be deposited in such Cash Collateral Account, and (C) if, with
respect to any particular Liquidity Facility, neither subclause (A) nor
subclause (B) of this clause "third" are applicable, to pay or reimburse
the Liquidity Provider in respect of such Liquidity Facility in an amount
equal to the amount of any unreimbursed Interest Drawings under such
Liquidity Facility shall be distributed to such Liquidity Provider, pari
passu on the basis of the amounts of all such deficiencies and/or
unreimbursed Interest Drawings;
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, pari passu on
the basis of such amounts in respect of each Liquidity Provider;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class A-1 Certificates on such Special
Distribution Date shall be distributed
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to the Class A-1 Trustee and such amount as shall be required to pay in
full Expected Distributions to the holders of Class A-2 Certificates on
such Special Distribution Date shall be distributed to the Class A-2
Trustee, pro rata on the basis of such amounts in respect of each such
Class of Certificates;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class B Certificates on such Special
Distribution Date shall be distributed to the Class B Trustee;
seventh, 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; and
eighth, the balance, if any, of such Special Payment shall be transferred
to the Collection Account for distribution in accordance with Section 3.2
hereof.
For the purposes of this Section 2.4(b), 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 Equipment Notes being redeemed, purchased or
prepaid (immediately prior to such redemption, purchase or prepayment)
(excluding interest, if any, payable with respect to the Deposits related to
such Trust)".
(ii) Upon the occurrence of a Triggering Event (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 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 received by it from the Owner
Participant, the Owner Trustee or Atlas in respect of any Trustee, any Liquidity
Provider, any Paying Agent, any Depositary or any Escrow Agent (collectively,
the "Payees") and (ii) any compensation
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(including, without limitation, any fees payable to any Liquidity Provider under
Section 2.03 of any Liquidity Facility) received by it from the Owner
Participant, the Owner Trustee or Atlas under any Operative Agreement in respect
of any Payee, directly to the Payee entitled thereto.
SECTION 2.5. Designated Representatives. (a) With the delivery of this
Agreement, the Subordination Agent shall furnish to each Liquidity Provider and
each Trustee, and from time to time thereafter may furnish to each Liquidity
Provider and each Trustee, at the Subordination Agent's discretion, or upon any
Liquidity Provider's or Trustee's request (which request shall not be made more
than one time in any 12-month period), a certificate (a "Subordination Agent
Incumbency Certificate") of a Responsible Officer of the Subordination Agent
certifying as to the incumbency and specimen signatures of the officers of the
Subordination Agent and the attorney-in-fact and agents of the Subordination
Agent (the "Subordination Agent Representatives") authorized to give Written
Notices on behalf of the Subordination Agent hereunder. Until each Liquidity
Provider and Trustee receives a subsequent Subordination Agent Incumbency
Certificate, it shall be entitled to rely on the last Subordination Agent
Incumbency Certificate delivered to it hereunder.
(b) With the delivery of this Agreement, each Trustee shall furnish to the
Subordination Agent, and from time to time thereafter may furnish to the
Subordination Agent, at such Trustee's discretion, or upon the Subordination
Agent's request (which request shall not be made more than one time in any
12-month period), a certificate (a "Trustee Incumbency Certificate") of a
Responsible Officer of such Trustee certifying as to the incumbency and specimen
signatures of the officers of such Trustee and the attorney-in-fact and agents
of such Trustee (the "Trustee Representatives") authorized to give Written
Notices on behalf of such Trustee hereunder. Until the Subordination Agent
receives a subsequent Trustee Incumbency Certificate, it shall be entitled to
rely on the last Trustee Incumbency Certificate delivered to it hereunder.
(c) With the delivery of this Agreement, each Liquidity Provider shall
furnish to the Subordination Agent, and from time to time thereafter may furnish
to the Subordination Agent, at such Liquidity Provider's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (an "LP Incumbency Certificate") of
any Responsible Officer of such Liquidity Provider certifying as to the
incumbency and specimen signatures of any officer, attorney-in-fact, agent or
other designated representative of such Liquidity Provider (the "LP
Representatives" and, together with the Subordination Agent Representatives and
the Trustee Representatives, the "Designated Representatives") authorized to
give Written Notices on behalf of such Liquidity Provider hereunder. Until the
Subordination Agent receives a subsequent LP Incumbency Certificate, it shall be
entitled to rely on the last LP Incumbency Certificate delivered to it
hereunder.
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SECTION 2.6. Controlling Party. (a) The Trustees and the Liquidity
Providers hereby agree that, with respect to any Indenture at any given time,
the Loan Trustee thereunder will be directed (i) in taking, or refraining from
taking, any action under such Indenture or with respect to the Equipment Notes
issued thereunder, so long as no Indenture Event of Default has occurred and is
continuing thereunder, by the holders of at least a majority of the outstanding
principal amount of such Equipment Notes (provided that, for so long as the
Subordination Agent is the registered holder of the Equipment Notes, the
Subordination Agent shall act with respect to this clause (i) in accordance with
the directions of the Trustees (in the case of each such Trustee, with respect
to the Equipment Notes issued under such Indenture and held as Trust Property of
such Trust) constituting, in the aggregate, directions with respect to such
principal amount of Equipment Notes), and (ii) after the occurrence and during
the continuance of an Indenture Event of Default thereunder (which, in the case
of an Indenture pertaining to a Leased Aircraft, has not been cured by the
applicable Owner Trustee or the applicable Owner Participant, if applicable,
pursuant to Section 4.03 of such Indenture), in taking, or refraining from
taking, any action under such Indenture or with respect to such Equipment Notes,
including exercising remedies thereunder (including Accelerating the Equipment
Notes issued thereunder or foreclosing the Lien on the Aircraft securing such
Equipment Notes), by the Controlling Party.
(b) The Person who shall be the "Controlling Party" with respect to any
Indenture shall be: (w) the Class A-1 Trustee or Class A-2 Trustee, whichever
represents the Class with the larger principal amount of Certificates
outstanding at the time that an Indenture Event of Default occurs (whether or
not any other Indenture Event of Default shall thereafter occur so long as such
initial Indenture Event of Default shall continue); (x) upon payment of Final
Distributions to the holders of Certificates of such larger Class, the other of
the Class A-1 Trustee or Class A-2 Trustee; (y) upon payment of Final
Distributions to the holders of Class A-1 Certificates and Class A-2
Certificates, the Class B Trustee and (z) upon payment of Final Distributions to
the holders of Class B Certificates, the Class C Trustee. For purposes of giving
effect to the foregoing, the Trustees (other than the Controlling Party)
irrevocably agree (and the Certificateholders (other than the Certificateholders
represented by the Controlling Party) shall be deemed to agree by virtue of
their purchase of Certificates) that the Subordination Agent, as record holder
of the Equipment Notes, shall exercise its voting rights in respect of the
Equipment Notes as directed by the Controlling Party and any vote so exercised
shall be binding upon the Trustees and all Certificateholders.
The Subordination Agent shall give written notice to all of the other
parties to this Agreement promptly upon a change in the identity of the
Controlling Party. Each of the parties hereto agrees that it shall not exercise
any of the rights of the Controlling Party at such time as it is not the
Controlling Party hereunder; provided, however, that nothing herein contained
shall prevent or prohibit any Non-Controlling Party from exercising such rights
as shall be specifically granted to such Non-Controlling Party hereunder and
under the other Operative Agreements.
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(c) Notwithstanding the foregoing, at any time after 18 months from the
earlier to occur of (i) the date on which the entire Available Amount under any
Liquidity Facility shall have been drawn (for any reason other than a Downgrade
Drawing or a Non-Extension Drawing) and remain unreimbursed, (ii) the date on
which the entire amount of any Downgrade Drawing or Non-Extension Drawing shall
have been withdrawn from the relevant Cash Collateral Account to pay interest on
the relevant Class of Certificates and remains unreimbursed, and (iii) the date
on which all Equipment Notes shall have been Accelerated, the Liquidity
Providers with at least a majority of unreimbursed Liquidity Obligations shall
have the right to elect, by Written Notice to the Subordination Agent and each
of the Trustees, to become the Controlling Party hereunder with respect to any
Indenture at any time from and including the last day of such 18-month period.
(d) The exercise of remedies by the Controlling Party under this Agreement
shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require or obligate any
Non-Controlling Party to provide funds necessary to exercise any right or remedy
hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1. Written Notice of Distribution. (a) No later than 3:00 P.M.
(New York City time) on the Business Day immediately preceding each Regular
Distribution Date (or Special Distribution Date for purposes of Section 2.4(b)
hereof, as the case may be), each of the following Persons shall deliver to the
Subordination Agent a Written Notice setting forth the following information as
at the close of business on such Business Day:
(i) With respect to the Class A-1 Certificates and the Class A-2
Certificates, the Class A-1 Trustee and the Class A-2 Trustee,
respectively, shall separately set forth the amounts to be paid in
accordance with clause "fifth" of Section 3.2 or 2.4(b), as the case may
be, hereof (without giving effect to the pro rata sharing therein);
(ii) With respect to the Class B Certificates, the Class B Trustee
shall separately set forth the amounts to be paid in accordance with clause
"sixth" of Section 3.2 or 2.4(b), as the case may be, hereof;
(iii) With respect to the Class C Certificates, the Class C Trustee
shall separately set forth the amounts to be paid in accordance with clause
"seventh" of Section 3.2 or 2.4(b), as the case may be, hereof;
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(iv) With respect to each Liquidity Facility, the Liquidity Provider
thereunder shall separately set forth the amounts to be paid in accordance
with clauses "first", "second", "third" and "fourth" of Section 3.2 or
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 "eighth" of Section 3.2 hereof.
The notices required under this Section 3.1(a) may be in the form of a schedule
or similar document provided to the Subordination Agent by the parties
referenced therein or by any one of them, which schedule or similar document may
state that, unless there has been a prepayment of the Certificates, such
schedule or similar document is to remain in effect until any substitute notice
or amendment shall be given to the Subordination Agent by the party providing
such notice.
(b) Following the occurrence of a Triggering Event, the Subordination Agent
shall request the following information from the following Persons, and each of
the following Persons shall, upon the request of the Subordination Agent,
deliver a Written Notice to the Subordination Agent setting forth for such
Person the following information:
(i) With respect to the Class A-1 Certificates and the Class A-2
Certificates, the Class A-1 Trustee and Class A-2 Trustee, respectively,
shall separately set forth the amounts to be paid in accordance with
clauses "first" (to reimburse payments made by the Class A-1
Certificateholders and Class A-2 Certificateholders, respectively, pursuant
to subclause (iii) of clause "first" of Section 3.3 hereof) and "seventh"
of Section 3.3 hereof (without giving effect to the pro rata sharing
therein);
(ii) With respect to the Class B Certificates, the Class B Trustee
shall separately set forth the amounts to be paid in accordance with
clauses "first" (to reimburse payments made by the Class B
Certificateholders pursuant to subclause (iii) of clause "first" of Section
3.3 hereof) and "eighth" of Section 3.3 hereof;
(iii) With respect to the Class C Certificates, the Class C Trustee
shall separately set forth the amounts to be paid in accordance with
clauses "first" (to reimburse payments made by the Class C
Certificateholders pursuant to subclause (iii) of clause "first" of Section
3.3 hereof) and "ninth" of Section 3.3 hereof;
(iv) With respect to each Liquidity Facility, the Liquidity Provider
thereunder shall separately set forth the amounts to be paid to it in
accordance with subclause (iii) of clause "first" of Section 3.3 hereof and
clauses "second", "third", "fourth" and "fifth" of Section 3.3 hereof; and
32
(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 or a Liquidity Provider shall have received
all amounts owing to it (and, in the case of a Trustee, the Certificateholders
for which it is acting) pursuant to Section 2.4, 3.2 or 3.3 hereof, as
applicable, and, in the case of a Liquidity Provider, its commitment under the
related Liquidity Facility shall have terminated or expired, such Person shall,
by a Written Notice, so inform the Subordination Agent and each other party to
this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination Agent shall be
fully protected in relying on any of the information set forth in a Written
Notice provided by any Trustee or any Liquidity Provider pursuant to paragraphs
(a) through (c) above and shall have no independent obligation to verify,
calculate or recalculate any amount set forth in any Written Notice delivered in
accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee or a Liquidity Provider, as
applicable, pursuant to Section 3.1(a), 3.1(b) or 3.1(c) hereof, if made prior
to 10:00 A.M. (New York City time) shall be effective on the date delivered (or
if delivered later 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 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
"ninth" of Section 3.2 and clauses "first" through "ninth" of Section 3.3 to the
extent it shall have sufficient information to enable it to make such
distributions, and shall continue to hold any funds remaining, after making such
distributions, until the Subordination Agent shall receive all necessary
information to enable it to distribute any funds so withheld.
(g) On such dates (but not more frequently than monthly) as any Liquidity
Provider or any Trustee shall request, but in any event automatically at the end
of each calendar quarter, the Subordination Agent shall send to such party a
written statement reflecting all amounts on deposit with the Subordination Agent
pursuant to Section 3.1(f) hereof.
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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 all accrued and unpaid
Liquidity Expenses owed to each Liquidity Provider shall be distributed to
the Liquidity Providers pari passu on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
second, such amount as shall be required to pay in full the aggregate
amount of interest accrued on all Liquidity Obligations (at the rate, or in
the amount, provided in the applicable Liquidity Facility) and unpaid shall
be distributed to the Liquidity Providers pari passu on the basis of the
amount of such Liquidity Obligations owed to each Liquidity Provider;
third, such amount as shall be required (A) if any Cash Collateral
Account had been previously funded as provided in Section 3.6(f), to fund
such Cash Collateral Account up to its Required Amount shall be deposited
in such Cash Collateral Account, (B) if any Liquidity Facility shall become
a Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Liquidity Facility have reduced
the Available Amount thereunder to zero, to deposit into the related Cash
Collateral Account an amount equal to such Cash Collateral Account's
Required Amount shall be deposited in such Cash Collateral Account, and (C)
if, with respect to any particular Liquidity Facility, neither subclause
(A) nor subclause (B) of this clause "third" is applicable, to pay or
reimburse the Liquidity Provider in respect of such Liquidity Facility in
an amount equal to the amount of all Liquidity Obligations then due under
such Liquidity Facility (other than amounts payable pursuant to clause
"first" or "second" of this Section 3.2) shall be distributed to such
Liquidity Provider, pari passu on the basis of the amounts of all such
deficiencies and/or unreimbursed Liquidity Obligations;
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, pari passu on the basis of such amounts in respect of each Liquidity
Provider;
34
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class A-1 Certificates on such
Distribution Date shall be distributed to the Class A-1 Trustee and such
amount as shall be required to pay in full Expected Distributions to the
holders of the Class A-2 Certificates on such Distribution Date shall be
distributed to the Class A-2 Trustee, pro rata on the basis of such amounts
in respect of each such Class of Certificates;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class B Certificates on such
Distribution Date shall be distributed to the Class B Trustee;
seventh, 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 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
ninth, the balance, if any, of any such amount remaining thereafter
shall be held in the Collection Account for later distribution in
accordance with this Article III.
SECTION 3.3. Distribution of Amounts on Deposit Following a Triggering
Event. (a) Except as otherwise provided in Sections 3.1(f) and 3.6(b) 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 Trust
Indenture Estate, shall be applied by the Subordination Agent in
reimbursement of such costs and expenses, (ii) each Trustee for any amounts
of the nature described in clause (i) above actually incurred by it under
the applicable Trust Agreement (to the extent not previously reimbursed),
shall be distributed to such Trustee, and (iii) any Liquidity Provider or
Certificateholder for payments, if any, made by it to the Subordination
Agent or any Trustee in respect of amounts described in clause (i) above,
shall be distributed to such Liquidity Provider or to the applicable
Trustee for the account of such Certificateholder, in each such case, pari
passu on the basis of all amounts described in clauses (i) through (iii)
above;
35
second, such amount remaining as shall be required to pay all accrued
and unpaid Liquidity Expenses shall be distributed to each Liquidity
Provider pari passu on the basis of the amount of Liquidity Expenses owed
to each Liquidity Provider;
third, such amount remaining as shall be required to pay accrued and
unpaid interest on the Liquidity Obligations as provided in the Liquidity
Facilities shall be distributed to each Liquidity Provider pari passu on
the basis of the amount of such accrued and unpaid interest owed to each
Liquidity Provider;
fourth, such amount remaining as shall be required (A) if any Cash
Collateral Account had been previously funded as provided in Section
3.6(f), unless (i) a Performing Note Deficiency exists and a Liquidity
Event of Default shall have occurred and be continuing with respect to the
relevant Liquidity Facility or (ii) a Final Drawing shall have occurred
with respect to such Liquidity Facility, to fund such Cash Collateral
Account up to its Required Amount (less the amount of any repayments of
Interest Drawings under such Liquidity Facility while subclause (A)(i)
above is applicable) shall be deposited in such Cash Collateral Account,
(B) if any Liquidity Facility shall become a Downgraded Facility or a
Non-Extended Facility at a time when unreimbursed Interest Drawings under
such Liquidity Facility have reduced the Available Amount thereunder to
zero, unless (i) a Performing Note Deficiency exists and a Liquidity Event
of Default shall have occurred and be continuing with respect to the
relevant Liquidity Facility or (ii) a Final Drawing shall have occurred
with respect to such Liquidity Facility, to deposit into the related Cash
Collateral Account an amount equal to such Cash Collateral Account's
Required Amount (less the amount of any repayments of Interest Drawings
under such Liquidity Facility while subclause (B)(i) above is applicable)
shall be deposited in such Cash Collateral Account, and (C) if, with
respect to any particular Liquidity Facility, neither subclause (A) nor
subclause (B) of this clause "fourth" are applicable, to pay in full the
outstanding amount of all Liquidity Obligations then due under such
Liquidity Facility (other than amounts payable pursuant to clause "second"
or "third" of this Section 3.3) shall be distributed to such Liquidity
Provider, pari passu on the basis of the amounts of all such deficiencies
and/or unreimbursed Liquidity Obligations;
fifth, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (A) or (B) of
clause "fourth" above, then the Liquidity Provider with respect to such
Liquidity Facility shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due) under
such Liquidity Facility over (y) the Required Amount for the relevant Class
(less the amount of any repayments of Interest Drawings under such
Liquidity Facility while subclause (A)(i) or (B)(i), as the case may be, of
clause "fourth" above is applicable), pari passu on the basis of such
amounts in respect of each Liquidity Provider;
36
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, pari passu on the basis of all amounts described in clauses (i)
through (iii) above;
seventh, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class A-1 Certificates shall be
distributed to the Class A-1 Trustee and such amount remaining as shall be
required to pay in full Adjusted Expected Distributions on the Class A-2
Certificates shall be distributed to the Class A-2 Trustee, pro rata on the
basis of such amounts in respect of each such Class of Certificates;
eighth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class B Certificates shall be
distributed to the Class B Trustee; and
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.
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) On any Interest Payment Date under each Liquidity Facility which is not
a Distribution Date, the Subordination Agent shall pay to the Liquidity Provider
under such Liquidity Facility from, and to the extent of, amounts on deposit in
the Collection Account, an amount equal to the amount of interest then due and
payable to such Liquidity Provider under such Liquidity Facility.
37
(c) Except as otherwise provided in Section 3.3 hereof, if the
Subordination Agent receives any Scheduled Payment after the Scheduled Payment
Date relating thereto, but prior to such payment becoming an Overdue Scheduled
Payment, then the Subordination Agent shall deposit such Scheduled Payment in
the Collection Account and promptly distribute such Scheduled Payment in
accordance with the priority of distributions set forth in Section 3.2 hereof;
provided that, for the purposes of this Section 3.4(c) only, each reference in
clause "eighth" of Section 3.2 to "Distribution Date" shall be deemed to mean
the actual date of payment of such Scheduled Payment and each reference in
clause "fifth", "sixth" 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 and the Liquidity Providers. Any
amounts distributed hereunder to any Liquidity Provider shall be paid to such
Liquidity Provider by wire transfer of funds to the address such Liquidity
Provider shall provide to the Subordination Agent. The Subordination Agent shall
provide a Written Notice of any such transfer to the applicable Liquidity
Provider, as the case may be, at the time of such transfer. Any amounts
distributed hereunder by the Subordination Agent to any Trustee which shall not
be the same institution as the Subordination Agent shall be paid to such Trustee
by wire transfer funds at the address such Trustee shall provide to the
Subordination Agent.
SECTION 3.6. Liquidity Facilities. (a) Interest Drawings. If on any
Distribution Date, after giving effect to the subordination provisions of this
Agreement, the Subordination Agent shall not have sufficient funds for the
payment of any amounts due and owing in respect of accrued interest on the Class
A-1 Certificates, the Class A-2 Certificates, the Class B Certificates or the
Class C Certificates (at the Stated Interest Rate for such Class of
Certificates), then, prior to 1:00 PM (New York City time) on such Distribution
Date, the Subordination Agent shall request a drawing (each such drawing, an
"Interest Drawing") under each Liquidity Facility with respect to such Class of
Certificates in an amount equal to the lesser of (i) of an amount sufficient to
pay the amount of such accrued interest (at the Stated Interest Rate for such
Class of Certificates) and (ii) the Available Amount under such Liquidity
Facility, and shall pay such amount to the Trustee with respect to such Class of
Certificates in payment of such accrued interest.
(b) Application of Interest Drawings. Notwithstanding anything to the
contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A-1
Liquidity Facility and all amounts withdrawn by the
38
Subordination Agent from the Class A-1 Cash Collateral Account, and payable in
each case to the Class A-1 Certificateholders or the Class A-1 Trustee, shall be
promptly distributed to the Class A-1 Trustee, (ii) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A-2
Liquidity Facility and all amounts withdrawn by the Subordination Agent from the
Class A-2 Cash Collateral Account, and payable in each case to the Class A-2
Certificateholders, shall be promptly distributed to the Class A-2 Trustee,
(iii) all payments received by the Subordination Agent in respect of an Interest
Drawing under the Class B Liquidity Facility and all amounts withdrawn by the
Subordination Agent from the Class B Cash Collateral Account, and payable in
each case to the Class B Certificateholders, shall be promptly distributed to
the Class B Trustee and (iv) all payments received by the Subordination Agent in
respect of an Interest Drawing under the Class C Liquidity Facility and all
amounts withdrawn by the Subordination Agent from the Class C Cash Collateral
Account, and payable in each case to the Class C Certificateholders, shall be
promptly distributed to the Class C Trustee.
(c) Downgrade Drawings. If at any time (i) in the case of any Liquidity
Facility (other than as provided in clause (ii) below) the short-term unsecured
debt rating of the Liquidity Provider thereof issued by any Rating Agency is
lower than the applicable Threshold Rating or (ii) (with respect to any MSCS
Liquidity Facility, so long as MSCS is the Liquidity Provider thereunder) the
short-term unsecured debt rating of the Guarantor issued by any Rating Agency is
lower than the applicable Threshold Rating or the related Guarantee Agreement
ceases to be in full force and effect, becomes invalid or unenforceable or the
Guarantor denies its liability thereunder (any such occurrence, a "Guarantee
Event"), within 10 days after receiving notice of such downgrading or Guarantee
Event, as the case may be (but not later than the expiration date of the
Liquidity Facility issued by the relevant Liquidity Provider (the "Downgraded
Facility")), such Liquidity Provider or Atlas may arrange for a Replacement
Liquidity Provider to issue and deliver a Replacement Liquidity Facility to the
Subordination Agent. If a Downgraded Facility has not been replaced in
accordance with the terms of this paragraph, the Subordination Agent shall, on
such 10th (or if such day is not a Business Day, on the next succeeding Business
Day) (or, if earlier, the expiration date of such Downgraded Facility), request
a drawing in accordance with and to the extent permitted by such Downgraded
Facility (such drawing, a "Downgrade Drawing") of all available and undrawn
amounts thereunder. Amounts drawn pursuant to a Downgrade Drawing shall be
maintained and invested as provided in Section 3.6(f) hereof. The Liquidity
Provider may also arrange for a Replacement Liquidity Provider to issue and
deliver a Replacement Liquidity Facility at any time after such Downgrade
Drawing so long as such Downgrade Drawing has not been reimbursed in full to the
Liquidity Provider.
(d) Non-Extension Drawings. If the any Liquidity Facility with respect to
any Class of Certificates is scheduled to expire on a date (the "Stated
Expiration Date") prior to the date that is 15 days after the Final Legal
Distribution Date for such Class of Certificates, then, no earlier than the 60th
day and no later than the 40th day prior to the then Stated Expiration Date, the
Subordination Agent shall request that such Liquidity Provider extend the Stated
Expiration Date for a period of 364 days after the Stated Expiration Date
(unless the obligations of such Liquidity Provider thereunder are earlier
terminated in accordance therewith). The applicable Liquidity Provider shall
advise the Borrower, no earlier than 40 days and no later than 25 days prior to
such Stated Expiration Date, whether, in its sole discretion, it agrees to so
extend the Stated Expiration Date for such Liquidity Facility. 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 such Liquidity Provider fails
irrevocably and unconditionally to advise the Borrower on or before the 25th day
prior to the Stated Expiration
39
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. Notwithstanding the immediately preceding three
sentences, so long as MSCS is the Liquidity Provider for any MSCS Liquidity
Facility, the Stated Expiration Date therefor shall be automatically extended,
effective on the 25th day prior to such Stated Expiration Date (unless such
Stated Expiration Date is on or after the date that is 15 days after the Final
Legal Distribution Date for the relevant Class of Certificates), for a period of
364 days after such Stated Expiration Date (unless the obligations of such
Liquidity Provider are earlier terminated in accordance with such Liquidity
Facility) without the necessity of any act by the Subordination Agent or such
Liquidity Provider, unless such Liquidity Provider shall advise the
Subordination Agent, prior to such 25th day, that it does not agree to such
extension of the Stated Expiration Date, in which event, 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 Non-Extended Facility, request a
Non-Extension Drawing under the Non-Extended Facility of all available and
undrawn amounts thereunder.
(e) Issuance of Replacement Liquidity Facility. (i) At any time, Atlas may,
at its option, with cause or without cause, arrange for a Replacement Liquidity
Facility to replace any Liquidity Facility for any Class of Certificates
(including any Replacement Liquidity Facility provided pursuant to Section
3.6(e)(ii) hereof); provided, however, that neither ABN AMRO nor MSCS shall be
replaced by Atlas as a Liquidity Provider with respect to any Class of
Certificates prior to the fourth anniversary of the Closing Date unless (A)
there shall have become due to such Liquidity Provider, or such Liquidity
Provider shall have demanded, amounts pursuant to Section 3.01, 3.02 or 3.03 of
any Liquidity Facility or pursuant to the Tax Letter and the replacement of such
Liquidity Provider would reduce or eliminate the obligation to pay such amounts
or Atlas determines in good faith that there is a substantial likelihood that
such Liquidity Provider will have the right to claim any such amounts (unless
such Liquidity Provider waives, in writing, any right it may have to claim such
amounts), which determination shall be set forth in a certificate delivered by
Atlas to such Liquidity Provider setting forth the basis for such determination
and accompanied by an opinion of outside counsel selected by Atlas and
reasonably acceptable to such Liquidity Provider verifying the legal
conclusions, if any, of such certificate relating to such basis, provided that,
in the case of any likely claim for such amounts based upon any proposed, or
proposed change in, law, rule, regulation, interpretation, directive,
requirement, request or administrative practice, such opinion may assume the
adoption or promulgation of such proposed matter, (B) it shall become unlawful
or impossible for such Liquidity Provider (or its Lending Office) to maintain or
fund its LIBOR Advances as described in Section 3.10 of any Liquidity Facility,
(C) with respect to any Liquidity Facility for which MSCS is not the Liquidity
Provider, the short-term unsecured debt rating of such Liquidity Provider or,
with
40
respect to the MSCS Liquidity Facilities (so long as MCSC is the Liquidity
Provider thereunder), the short-term unsecured debt rating of the Guarantor, is
downgraded by any Rating Agency and there is a resulting downgrade in the rating
by any Rating Agency of any related Class of Certificates, (D) a Downgrade
Drawing or a Non-Extension Drawing shall have occurred under any Liquidity
Facility, or (E) such Liquidity Provider shall have breached any of its payment
(including, without limitation, funding) obligations under any Liquidity
Facility. If such Replacement Liquidity Facility is provided at any time after a
Downgrade Drawing or Non-Extension Drawing has been made, all funds on deposit
in the relevant Cash Collateral Account will be returned to the Liquidity
Provider being replaced.
(ii) If any Liquidity Provider shall determine not to extend any of
its Liquidity Facility in accordance with Section 3.6(d), then such
Liquidity Provider may, at its option, arrange for a Replacement Liquidity
Facility to replace such Liquidity Facility during the period no earlier
than 40 days and no later than 25 days prior to the then effective Stated
Expiration Date of such Liquidity Facility.
(iii) No Replacement Liquidity Facility arranged by Atlas or a
Liquidity Provider in accordance with clause (i) or (ii) above,
respectively, shall become effective and no such Replacement Liquidity
Facility shall be deemed a "Liquidity Facility" under the Operative
Agreements (in each case other than insofar as necessary to permit the
repayment of amounts owed to the replaced Liquidity Provider), unless and
until (A) each of the conditions referred to in clause (iv) below shall
have been satisfied, (B) if such Replacement Liquidity Facility shall
materially adversely affect the rights, remedies, interests or obligations
of the Class A-1 Certificateholders, the Class A-2 Certificateholders, the
Class B 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 and (C) in the case of a Replacement Liquidity Facility arranged
by a Liquidity Provider under Section 3.6(e)(ii), such Replacement
Liquidity Facility is acceptable to Atlas.
(iv) In connection with the issuance of each Replacement Liquidity
Facility, the Subordination Agent shall (x) prior to the issuance of such
Replacement Liquidity Facility, obtain written confirmation from each
Rating Agency that such Replacement Liquidity Facility will not cause a
reduction of any rating then in effect for any Class of Certificates by
such Rating Agency (without regard to any downgrading of any rating of any
Liquidity Provider being replaced pursuant to Section 3.6(c) hereof), (y)
pay all Liquidity Obligations then owing to the replaced Liquidity Provider
(which payment shall be made first from available funds in the 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) 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
41
such Replacement Liquidity Facility is an enforceable obligation of such
Replacement Liquidity Provider.
(v) Upon satisfaction of the conditions set forth in clauses (iii) and
(iv) of this Section 3.6(e), (w) the replaced Liquidity Facility shall
terminate, (x) the Subordination Agent shall, if and to the extent so
requested by Atlas or the Liquidity Provider being replaced, execute and
deliver any certificate or other instrument required in order to terminate
the replaced Liquidity Facility, shall surrender the replaced Liquidity
Facility to the Liquidity Provider being replaced and shall execute and
deliver the Replacement Liquidity Facility and any associated Fee Letter,
(y) each of the parties hereto shall enter into any amendments to this
Agreement necessary to give effect to (1) the replacement of the applicable
Liquidity Provider with the applicable Replacement Liquidity Provider and
(2) the replacement of the applicable Liquidity Facility with the
applicable Replacement Liquidity Facility and (z) the applicable
Replacement Liquidity Provider shall be deemed to be a Liquidity Provider
with the rights and obligations of a Liquidity Provider hereunder and under
the other Operative Agreements and such Replacement Liquidity Facility
shall be deemed to be a Liquidity Facility hereunder and under the other
Operative Agreements.
(f) Cash Collateral Accounts; Withdrawals; Investments. In the event the
Subordination Agent shall draw all available amounts under the Class A-1
Liquidity Facility, the Class A-2 Liquidity Facility, the Class B Liquidity
Facility or the Class C Liquidity Facility pursuant to Section 3.6(c), 3.6(d) or
3.6(i) hereof, or in the event amounts are to be deposited in the Cash
Collateral Account pursuant to subclause (B) of clause "third" of Section
2.4(b), subclause (B) of clause "third" of Section 3.2 or subclause (B) of
clause "fourth" of Section 3.3, amounts so drawn or to be deposited, as the case
may be, shall be deposited by the Subordination Agent in the Class A-1 Cash
Collateral Account, the Class A-2 Cash Collateral Account, the Class B Cash
Collateral Account or the Class C Cash Collateral Account, respectively. All
amounts on deposit in each Cash Collateral Account shall be invested and
reinvested in Eligible Investments in accordance with Section 2.2(b) hereof.
Investment Earnings on amounts on deposit in the Cash Collateral Account with
respect to each Liquidity Facility shall be deposited in the Collection Account
on each Interest Payment Date under such Liquidity Facility and applied on such
Interest Payment Date in accordance with Section 3.2, 3.3 or 3.4 (as
applicable). The Subordination Agent shall deliver a written statement to Atlas
and the Liquidity Provider one day prior to each Interest Payment Date setting
forth the aggregate amount of Investment Earnings held in the Cash Collateral
Accounts as of such date. In addition, from and after the date funds are so
deposited, the Subordination Agent shall make withdrawals from such account as
follows:
(i) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid interest
due and owing on the Class A-1 Certificates (at the Stated Interest Rate
for the Class A-1 Certificates) from any other source, withdraw from the
Class A-1 Cash Collateral Account, and pay to the
42
Class A-1 Trustee, an amount equal to the lesser of (x) an amount necessary
to pay accrued and unpaid interest (at the Stated Interest Rate for the
Class A-1 Certificates) on such Class A-1 Certificates and (y) the amount
on deposit in the Class A-1 Cash Collateral Account;
(ii) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid interest
due and owing on the Class A-2 Certificates (at the Stated Interest Rate
for the Class A-2 Certificates) from any other source, withdraw from the
Class A-2 Cash Collateral Account, and pay to the Class A-2 Trustee, an
amount equal to the lesser of (x) an amount necessary to pay accrued and
unpaid interest (at the Stated Interest Rate for the Class A-2
Certificates) on such Class A-2 Certificates and (y) the amount on deposit
in the Class A-2 Cash Collateral Account;
(iii) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid interest
due and owing on the Class B Certificates (at the Stated Interest Rate for
the Class B Certificates) from any other source, withdraw from the Class B
Cash Collateral Account, and pay to the Class B Trustee, an amount equal to
the lesser of (x) an amount necessary to pay accrued and unpaid interest
(at the Stated Interest Rate for the Class B Certificates) on such Class B
Certificates and (y) the amount on deposit in the Class B Cash Collateral
Account;
(iv) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid interest
due and owing on the Class C Certificates (at the Stated Interest Rate for
the Class C Certificates) from any other source, withdraw from the Class C
Cash Collateral Account, and pay to the Class C Trustee, an amount equal to
the lesser of (x) an amount necessary to pay accrued and unpaid interest
(at the Stated Interest Rate for the Class C Certificates) on such Class C
Certificates and (y) the amount on deposit in the Class C Cash Collateral
Account;
(v) on each date on which the Pool Balance of the Class A-1 Trust
shall have been reduced by payments made to the Class A-1
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or pursuant
to Section 2.03 of the Escrow and Paying Agent Agreement for such Class,
the Subordination Agent shall withdraw from the Class A-1 Cash Collateral
Account such amount as is necessary so that, after giving effect to the
reduction of the Pool Balance on such date (including any such reduction
resulting from a prior withdrawal of amounts on deposit in the Class A-1
Cash Collateral Account on such date), an amount equal to the sum of the
Required Amount (with respect to the Class A-1 Liquidity Facility) plus
Investment Earnings on deposit in such Cash Collateral Account will be on
deposit in the Class A-1 Cash Collateral Account and shall first, pay such
amount to the relevant Class A-1 Liquidity Provider until the Liquidity
Obligations (with respect to the Class A-1 Certificates) owing to such
43
Liquidity Provider shall have been paid in full, and second, deposit any
remaining amount in the Collection Account;
(vi) on each date on which the Pool Balance of the Class A-2 Trust
shall have been reduced by payments made to the Class A-2
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or pursuant
to Section 2.03 of the Escrow and Paying Agent Agreement for such Class,
the Subordination Agent shall withdraw from the Class A-2 Cash Collateral
Account such amount as is necessary so that, after giving effect to the
reduction of the Pool Balance on such date (including any such reduction
resulting from a prior withdrawal of amounts on deposit in the Class A-2
Cash Collateral Account on such date), an amount equal to the sum of the
Required Amount (with respect to the Class A-2 Liquidity Facility) plus
Investment Earnings on deposit in such Cash Collateral Account will be on
deposit in the Class A-2 Cash Collateral Account and shall first, pay such
amount to the Class A-2 Liquidity Provider until the Liquidity Obligations
(with respect to the Class A-2 Certificates) owing to such Liquidity
Provider shall have been paid in full, and second, deposit any remaining
amount in the Collection Account;
(vii) on each date on which the Pool Balance of the Class B Trust
shall have been reduced by payments made to the Class B Certificateholders
pursuant to Section 2.4, 3.2 or 3.3 hereof or pursuant to Section 2.03 of
the Escrow and Paying Agent Agreement of such Class, the Subordination
Agent shall withdraw from the Class B Cash Collateral Account such amount
as is necessary so that, after giving effect to the reduction of the Pool
Balance on such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class B Cash Collateral Account on
such date), an amount equal to the sum of the Required Amount (with respect
to the Class B Liquidity Facility) plus Investment Earnings on deposit in
such Cash Collateral Account will be on deposit in the Class B Cash
Collateral Account and shall first, pay such amount to the Class B
Liquidity Provider until the Liquidity Obligations (with respect to the
Class B Certificates) owing to such Liquidity Provider shall have been paid
in full, and second, deposit any remaining amount in the Collection
Account;
(viii) on each date on which the Pool Balance of the Class C Trust
shall have been reduced by payments made to the Class C Certificateholders
pursuant to Section 2.4, 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), an amount equal to the sum of the Required Amount (with respect
to the Class C Liquidity Facility) plus Investment Earnings on deposit in
such Cash Collateral Account 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
44
Obligations (with respect to the Class C Certificates) owing to such
Liquidity Provider shall have been paid in full, and second, deposit any
remaining amount in the Collection Account;
(ix) 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
(x) 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 Available Amount of such Liquidity
Facility shall be reinstated by an amount equal to the amount of such Interest
Drawing so reimbursed to the applicable Liquidity Provider but not to exceed the
Maximum Commitment with respect to such Liquidity Facility; provided, however,
that such Liquidity Facility shall not be so reinstated in part or in full at
any time if (x) both a Performing Note Deficiency exists and a Liquidity Event
of Default shall have occurred and be continuing with respect to the relevant
Liquidity Facility or (y) a Final Drawing shall have occurred with respect to
such Liquidity Facility. In the event that, with respect to any particular
Liquidity Facility (i) funds are withdrawn from any Cash Collateral Account
pursuant to clause (i), (ii),(iii) or (iv) of Section 3.6(f) hereof or (ii) such
Liquidity Facility shall become a Downgraded Facility or a Non-Extended Facility
at a time when unreimbursed Interest Drawings under such Liquidity Facility have
reduced the Available Amount thereunder to zero, then funds received by the
Subordination Agent at any time other than (x) any time when a Liquidity Event
of Default shall have occurred and be continuing with respect to such Liquidity
Facility and a Performing Note Deficiency exists or (y) any time after a Final
Drawing shall have occurred with respect to such Liquidity Facility shall be
deposited in such Cash Collateral Account as and to the extent provided in
clause "third" of Section 2.4(b), 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.
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(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
regardless of whether such reductions are 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 3.2, 3.3 and 3.6(h) hereof.
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party. (a) (i) Following the
occurrence and during the continuation of an Indenture Event of Default under
any Indenture, the Controlling Party shall direct the Subordination Agent, which
in turn shall direct the Loan Trustee under such Indenture, in the exercise of
remedies available to the holders of the Equipment Notes issued pursuant to such
Indenture, including, without limitation, the ability to vote all such Equipment
Notes in favor of Accelerating such Equipment Notes in accordance with the
provisions of such Indenture. Subject to the Owner Trustees' and the Owner
Participants' rights, 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 Event of Default with respect thereto, the
Controlling Party direct the Subordination Agent to, assign,
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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 Leased Aircraft
to purchase the Equipment Notes, and notwithstanding the foregoing, so long
as any Certificates remain Outstanding, during the period ending on the
date which is nine months after the earlier of (x) the Acceleration of the
Equipment Notes issued pursuant to any Indenture or (y) the occurrence of a
Atlas 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
Atlas 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 Atlas under such Lease before giving effect to such adjustment,
in each case, using the weighted average interest rate of the Equipment
Notes issued pursuant to such Indenture as the discount rate.
(iii) At the request of the Controlling Party, the Subordination Agent
may from time to time during the continuance of an Indenture Event of
Default (and before the occurrence of a Triggering Event) commission LTV
Appraisals with respect to the Aircraft subject to such Indenture.
(iv) After a Triggering Event occurs and any Equipment Note becomes a
Non-Performing Equipment Note, the Subordination Agent shall obtain
Appraisals with respect to all of the Aircraft (the "LTV Appraisals") as
soon as practicable and additional LTV Appraisals on or prior to each
anniversary of the date of such initial LTV Appraisals; provided that if
the Controlling Party reasonably objects to the appraised value of the
Aircraft shown in such LTV Appraisals, the Controlling Party shall have the
right to obtain or cause to be obtained substitute any 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 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
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of the related Indenture, instruct the Loan Trustee under such Indenture to
foreclose on the Lien on the related Aircraft.
SECTION 4.2. Remedies Cumulative. Each and every right, power and remedy
given to the Trustees, the Liquidity Providers, the Controlling Party or the
Subordination Agent specifically or otherwise in this Agreement shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may, subject always to the terms and conditions
hereof, be exercised from time to time and as often and in such order as may be
deemed expedient by any Trustee, any Liquidity Provider, the Controlling Party
or the Subordination Agent, as appropriate, and the exercise or the beginning of
the exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by any Trustee, any Liquidity Provider, the
Controlling Party or the Subordination Agent in the exercise of any right,
remedy or power or in the pursuit of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default or to be an
acquiescence therein.
SECTION 4.3. Discontinuance of Proceedings. In case any party to this
Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such case
each such party shall, subject to any determination in such Proceeding, be
restored to its former position and rights hereunder, and all rights, remedies
and powers of such party shall continue as if no such Proceeding had been
instituted.
SECTION 4.4. Right of Certificateholders to Receive Payments Not to Be
Impaired. Anything in this Agreement to the contrary notwithstanding but subject
to each Trust Agreement, the right of any Certificateholder or any Liquidity
Provider, respectively, to receive payments hereunder (including without
limitation pursuant to Section 2.4, 3.2 or 3.3 hereof) when due, or to institute
suit for the enforcement of any such payment on or after the applicable
Distribution Date, shall not be impaired or affected without the consent of such
Certificateholder or such Liquidity Provider, respectively.
SECTION 4.5. Undertaking for Costs. In any Proceeding for the enforcement
of any right or remedy under this Agreement or in any Proceeding against any
Controlling Party or the Subordination Agent for any action taken or omitted by
it as Controlling Party or Subordination Agent, as the case may be, a court in
its discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. The provisions of
this Section do not apply to a
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suit instituted by the Subordination Agent, a Liquidity Provider or a Trustee or
a suit by Certificateholders holding more than 10% of the original principal
amount of any Class of Certificates.
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1. Notice of Indenture Event of Default or Triggering Event. (a)
In the event the Subordination Agent shall have actual knowledge of the
occurrence of an Indenture Event of Default or a Triggering Event, as promptly
as practicable, and in any event within 10 days after obtaining knowledge
thereof, the Subordination Agent shall transmit by mail or courier to the Rating
Agencies, the Liquidity Providers and the Trustees notice of such Indenture
Event of Default or Triggering Event, unless such Indenture Event of Default or
Triggering Event shall have been cured or waived. For all purposes of this
Agreement, in the absence of actual knowledge on the part of a Responsible
Officer, the Subordination Agent shall not be deemed to have knowledge of any
Indenture Event of Default or Triggering Event unless notified in writing by one
or more Trustees, one or more Liquidity Providers or one or more
Certificateholders.
(b) Other Notices. The Subordination Agent will furnish to each Liquidity
Provider and Trustee, promptly upon receipt thereof, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and
other instruments furnished to the Subordination Agent as registered holder of
the Equipment Notes or otherwise in its capacity as Subordination Agent to the
extent the same shall not have been otherwise directly distributed to such
Liquidity Provider or Trustee, as applicable, pursuant to the express provision
of any other Operative Agreement.
SECTION 5.2. Indemnification. The Subordination Agent shall not be required
to take any action or refrain from taking any action under Section 5.1 (other
than the first sentence thereof) or Article IV hereof unless the Subordination
Agent shall have been indemnified (to the extent and in the manner reasonably
satisfactory to the Subordination Agent) against any liability, cost or expense
(including counsel fees and expenses) which may be incurred in connection
therewith. The Subordination Agent shall not be under any obligation to take any
action under this Agreement and nothing contained in this Agreement shall
require the Subordination Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder
or in the exercise of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. The Subordination Agent
shall not be required to take any action under Section 5.1 (other than the first
sentence thereof) or Article IV hereof, nor shall any other provision of this
Agreement be
49
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 7.1 hereof) promptly take such action as may
be necessary to duly discharge all Liens on any of the Trust Accounts or any
monies deposited therein which result from claims against it in its individual
capacity not related to its activities hereunder or any other Operative
Agreement.
SECTION 5.4. Notice from the Liquidity Providers and Trustees. If any
Liquidity Provider or Trustee has notice of an Indenture Event of Default or a
Triggering Event, such Person shall promptly give notice thereof to all other
Liquidity Providers and Trustees and to the Subordination Agent, provided,
however, that no such Person shall have any liability hereunder as a result of
its failure to deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1. Authorization; Acceptance of Trusts and Duties. Each of the
Class A-1 Trustee, the Class A-2 Trustee, the Class B 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 authorizes
the Subordination Agent to enter into the applicable Liquidity Facility as agent
and trustee for such Trustee. Each of the Liquidity Providers and the Trustees
hereby designates and appoints the Subordination Agent as the Subordination
Agent under this Agreement. WTC hereby accepts the duties hereby created and
applicable to it as the Subordination Agent and agrees to perform the same but
only upon the terms of this Agreement and agrees to receive and disburse all
monies received by it in accordance with the terms hereof. The Subordination
Agent shall not be answerable or accountable under any circumstances, except (a)
for its own willful misconduct or gross negligence (or ordinary negligence in
the handling of funds), (b) as provided in Section 2.2 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.
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SECTION 6.3. No Representations or Warranties as to Documents. The
Subordination Agent in its individual capacity does not make nor shall be deemed
to have made any representation or warranty as to the validity, legality or
enforceability of this Agreement or any other Operative Agreement or as to the
correctness of any statement contained in any thereof, except for the
representations and warranties of the Subordination Agent, made in its
individual capacity, under any Operative Agreement to which it is a party. The
Certificateholders, the Trustees and the Liquidity Providers make no
representation or warranty hereunder whatsoever.
SECTION 6.4. No Segregation of Monies; No Interest. Any monies paid to or
retained by the Subordination Agent pursuant to any provision hereof and not
then required to be distributed to any Trustee or any Liquidity Provider as
provided in Articles II and III hereof or deposited into one or more Trust
Accounts need not be segregated in any manner except to the extent required by
such Articles II and III and by law, and the Subordination Agent shall not
(except as otherwise provided in Section 2.2 hereof) be liable for any interest
thereon; provided, however, that any payments received or applied hereunder by
the Subordination Agent shall be accounted for by the Subordination Agent so
that any portion thereof paid or applied pursuant hereto shall be identifiable
as to the source thereof.
SECTION 6.5. Reliance; Agents; Advice of Counsel. The Subordination Agent
shall not incur liability to anyone in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion, bond
or other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. As to the Pool Balance of any Trust as of
any date, the Subordination Agent may for all purposes hereof rely on a
certificate signed by any Responsible Officer of the applicable Trustee, and
such certificate shall constitute full protection to the Subordination Agent for
any action taken or omitted to be taken by it in good faith in reliance thereon.
As to any fact or matter relating to the Liquidity Providers or the Trustees the
manner of ascertainment of which is not specifically described herein, the
Subordination Agent may for all purposes hereof rely on a certificate, signed by
any Responsible Officer of the applicable Liquidity Provider or Trustee, as the
case may be, as to such fact or matter, and such certificate shall constitute
full protection to the Subordination Agent for any action taken or omitted to be
taken by it in good faith in reliance thereon. The Subordination Agent shall
assume, and shall be fully protected in assuming, that each of the Liquidity
Providers and each of the Trustees are authorized to enter into this Agreement
and to take all action to be taken by them pursuant to the provisions hereof,
and shall not inquire into the authorization of each of the Liquidity Providers
and each of the Trustees with respect thereto. In the administration of the
trusts hereunder, the Subordination Agent may execute any of the trusts or
powers hereof and perform its powers and duties hereunder directly or through
agents or attorneys and may consult with counsel,
51
accountants and other skilled persons to be selected and retained by it, and the
Subordination Agent shall not be liable for the acts or omissions of any agent
appointed with due care or for anything done, suffered or omitted in good faith
by it in accordance with the advice or written opinion of any such counsel,
accountants or other skilled persons.
SECTION 6.6. Capacity in Which Acting. The Subordination Agent acts
hereunder solely as agent and trustee herein and not in its individual capacity,
except as otherwise expressly provided in the Operative Agreements.
SECTION 6.7. Compensation. The Subordination Agent shall be entitled to
reasonable compensation, including expenses and disbursements, for all services
rendered hereunder and shall have a priority claim to the extent set forth in
Article III hereof on all monies collected hereunder for the payment of such
compensation, to the extent that such compensation shall not be paid by others.
The Subordination Agent agrees that it shall have no right against any Trustee
or Liquidity Provider for any fee as compensation for its services as agent
under this Agreement. The provisions of this Section 6.7 shall survive the
termination of this Agreement.
SECTION 6.8. May Become Certificateholder. The institution acting as
Subordination Agent hereunder may become a Certificateholder and have all rights
and benefits of a Certificateholder to the same extent as if it were not the
institution acting as the Subordination Agent.
SECTION 6.9. Subordination Agent Required; Eligibility. There shall at all
times be a Subordination Agent hereunder which shall be a corporation organized
and doing business under the laws of the United States of America or of any
State or the District of Columbia having a combined capital and surplus of at
least $100,000,000 (or the obligations of which, whether now in existence or
hereafter incurred, are fully and unconditionally guaranteed by a corporation
organized and doing business under the laws of the United States of America, any
State thereof or of the District of Columbia and having a combined capital and
surplus of at least $100,000,000), if there is such an institution willing and
able to perform the duties of the Subordination Agent hereunder upon reasonable
or customary terms. Such corporation shall be a citizen of the United States and
shall be authorized under the laws of the United States or any State thereof or
of the District of Columbia to exercise corporate trust powers and shall be
subject to supervision or examination by federal, state or District of Columbia
authorities. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of any of the aforesaid
supervising or examining authorities, then, for the purposes of this Section
6.9, the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published.
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In case at any time the Subordination Agent shall cease to be eligible in
accordance with the provisions of this Section, the Subordination Agent shall
resign immediately in the manner and with the effect specified in Section 8.1.
SECTION 6.10. Money to Be Held in Trust. All Equipment Notes, monies and
other property deposited with or held by the Subordination Agent pursuant to
this Agreement shall be held in trust for the benefit of the parties entitled to
such Equipment Notes, monies and other property. All such Equipment Notes,
monies or other property shall be held in the Trust Department of the
institution acting as Subordination Agent hereunder.
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. Scope of Indemnification. The Subordination Agent shall be
indemnified hereunder to the extent and in the manner described in Section 9.1
of the Participation Agreements and Section 7 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 the Trustees and
the Liquidity Providers. The Controlling Party may remove the Subordination
Agent for cause by so notifying the Subordination Agent and may appoint a
successor Subordination Agent. The Controlling Party shall remove the
Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.9 hereof;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of acting.
If the Subordination Agent resigns or is removed or if a vacancy exists in
the office of Subordination Agent for any reason (the Subordination Agent in
such event being
53
referred to herein as the retiring Subordination Agent), the Controlling Party
shall promptly appoint a successor Subordination Agent.
A successor Subordination Agent shall deliver (x) a written acceptance of
its appointment as Subordination Agent hereunder to the retiring Subordination
Agent and (y) a written assumption of its obligations hereunder and under each
Liquidity Facility to each party hereto, upon which the resignation or removal
of the retiring Subordination Agent shall become effective, and the successor
Subordination Agent shall have all the rights, powers and duties of the
Subordination Agent under this Agreement. The successor Subordination Agent
shall mail a notice of its succession to the Liquidity Providers and the
Trustees. The retiring Subordination Agent shall promptly transfer its rights
under each of the Liquidity Facilities and all of the property held by it as
Subordination Agent to the successor Subordination Agent.
If a successor Subordination Agent does not take office within 60 days
after the retiring Subordination Agent resigns or is removed, the retiring
Subordination Agent or one or more of the Trustees may petition any court of
competent jurisdiction for the appointment of a successor Subordination Agent.
If the Subordination Agent fails to comply with Section 6.9 hereof (to the
extent applicable), one or more of the Trustees or one or more of the Liquidity
Providers may petition any court of competent jurisdiction for the removal of
the Subordination Agent and the appointment of a successor Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be effective
unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
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,
except in the case of any amendment pursuant to Section 3.6(e)(v)(y) hereof,
with the consent of holders of Certificates of the related Class evidencing
interests in the related Trust aggregating not less than a majority in interest
in such Trust or as otherwise authorized pursuant to the relevant Trust
Agreement), the Subordination Agent and each Liquidity Provider; provided,
however, that this Agreement may be supplemented, amended or modified without
the consent of (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 if
such
54
supplement, amendment or modification is in accordance with Section 9.1(c)
hereof; provided further, however, that, if such supplement, amendment or
modification (A) would (x) directly or indirectly modify or supersede, or
otherwise conflict with, Section 2.2(b), Section 3.6(e), Section 3.6(f)(other
than the last sentence thereof), or the second sentence of Section 10.6
(collectively, together with this proviso and Section 9.1(c), the "Atlas
Provisions") or (y) otherwise adversely affect the interests of a potential
Replacement Liquidity Provider or of Atlas with respect to its ability to
replace any Liquidity Facility or with respect to its payment obligations under
any Financing Agreement, Leased or Owned Aircraft Indenture or (B) is made
pursuant to Section 9.1(c), then such supplement, amendment or modification
shall not be effective without the additional written consent of Atlas.
Notwithstanding the foregoing, without the consent of each Certificateholder and
the Liquidity Provider with respect to the applicable Class of Certificates, no
supplement, amendment or modification of this Agreement may (i) reduce the
percentage of the interest in the related Trust evidenced by the Certificates
issued by such Trust necessary to consent to modify or amend any provision of
this Agreement or to waive compliance therewith or (ii), except as provided in
Section 9.1(c), modify Section 2.4, 3.2 or 3.3 hereof, relating to the
distribution of monies received by the Subordination Agent hereunder from the
Equipment Notes or pursuant to the Liquidity Facilities. Nothing contained in
this Section shall require the consent of a Trustee at any time following the
payment of Final Distributions with respect to the related Class of
Certificates.
(b) 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 Event of
Default shall have occurred and be continuing with respect to such Indenture,
the Subordination Agent shall request directions with respect to each Series of
such Equipment Notes from the Trustee of the Trust which holds such Equipment
Notes and shall vote or consent in accordance with the directions of such
Trustee and (ii) if any Indenture Event of Default (which, in the case of any
Indenture pertaining to a Leased Aircraft, has not been cured by the applicable
Owner Trustee or the applicable Owner Participant, if applicable, pursuant to
Section 4.03 of such Indenture) shall have occurred and be continuing with
respect to such Indenture, the Subordination Agent will exercise its voting
rights as directed by the Controlling Party, subject to Sections 4.1 and 4.4
hereof; provided that no such amendment, modification or waiver shall, without
the consent of each Liquidity Provider, reduce the amount of rent, supplemental
rent or stipulated loss values payable by Atlas under any Lease or reduce the
amount of principal or interest payable by Atlas under any Equipment Note issued
under any Indenture in respect of an Owned Aircraft.
(c) If with respect to any Owned Aircraft Atlas issues Class D
Certificates, this Agreement shall be amended by written agreement of Atlas and
the Subordination Agent to provide for the subordination of such Class D
Certificates to the Class A-1 Certificates, the Class A-2 Certificates, the
Class B Certificates and the Class C Certificates substantially in the same
manner as the Class C Certificates are subordinated hereunder to the Class B
Certificates,
55
the Class A-1 Certificates and the Class A-2 Certificates. No such amendment
shall materially adversely affect any Trustee. 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" and "Controlling Party" shall be revised, as
appropriate, to reflect the issuance of the Class D Certificates (and the
subordination thereof); and
(iii) 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 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 Atlas and the Subordination Agent to (i) provide for each holder of
a Series D Equipment Note to be bound by the provision of Section 2.6(a) hereof
so that the Controlling Party shall 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 Class A-1 Trustee, the Class A-2 Trustee, the Class B
Trustee and the Class C Trustee to be such "Controlling Party"). No such
amendment shall materially adversely affect any Trustee.
SECTION 9.2. Subordination Agent Protected. If, in the reasonable opinion
of the institution acting as the Subordination Agent hereunder, any document
required to be executed pursuant to the terms of Section 9.1 affects any right,
duty, immunity or indemnity with respect to it under this Agreement or any
Liquidity Facility, the Subordination Agent may in its discretion decline to
execute such document.
SECTION 9.3. Effect of Supplemental Agreements. Upon the execution of any
amendment, consent or supplement hereto pursuant to the provisions hereof, this
Agreement shall be and be deemed to be and shall be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Agreement of the parties hereto
and beneficiaries hereof shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental agreement shall be and
56
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 provided
that there shall then be no other amounts due to the Certificateholders, the
Trustees, the Liquidity Providers and the Subordination Agent hereunder or under
the Trust Agreements, and that the commitment of the Liquidity Providers under
the Liquidity Facilities shall have expired or been terminated, this Agreement
and the trusts created hereby shall terminate and this Agreement shall be of no
further force or effect. Except as aforesaid or otherwise provided, this
Agreement and the trusts created hereby shall continue in full force and effect
in accordance with the terms hereof.
SECTION 10.2. Intercreditor Agreement for Benefit of Trustees, Liquidity
Providers and Subordination Agent. Subject to the second sentence of Section
10.6 and the provisions of Section 4.4, nothing in this Agreement, whether
express or implied, shall be construed to give to any Person other than the
Trustees, the Liquidity Providers and the Subordination Agent any legal or
equitable right, remedy or claim under or in respect of this Agreement.
SECTION 10.3. Notices. Unless otherwise expressly specified or permitted by
the terms hereof, all notices, requests, demands, authorizations, directions,
consents, waivers or documents provided or permitted by this Agreement to be
made, given, furnished or filed shall be in writing, mailed by certified mail,
postage prepaid, or by confirmed telecopy and
57
(i) if to the Subordination Agent, addressed to at its office at:
WILMINGTON TRUST COMPANY
One Xxxxxx Square
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
(ii) if to any Trustee, addressed to it at its office at:
WILMINGTON TRUST COMPANY
One Xxxxxx Square
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
(iii) if to ABN AMRO as Liquidity Provider, addressed to it at its
offices at:
ABN AMRO BANK N.V., Chicago Branch 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxx 000 Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxxx
Telecopier: 000-000-0000
and
ABN AMRO BANK N.V., Chicago Branch 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxx 000 Xxxxxxx, XX 00000-0000
Attention: Loan Administration
Telecopier: 000-000-0000
(iv) if to MSCS as Liquidity Provider, addressed to it at its office
at:
XXXXXX XXXXXXX CAPITAL SERVICES, INC.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
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Attention: Xxxxx Xxxxxxxx
Telecopier: 000-000-0000
Whenever any notice in writing is required to be given by any Trustee or
Liquidity Provider or the Subordination Agent to any of the other of them, such
notice shall be deemed given and such requirement satisfied when such notice is
received. Any party hereto may change the address to which notices to such party
will be sent by giving notice of such change to the other parties to this
Agreement.
SECTION 10.4. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.5. No Oral Modifications or Continuing Waivers. No terms or
provisions of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party or other Person
against whom enforcement of the change, waiver, discharge or termination is
sought and any other party or other Person whose consent is required pursuant to
this Agreement and any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.
SECTION 10.6. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of the
parties hereto and the successors and assigns of each, all as herein provided.
In addition, the Atlas Provisions shall inure to the benefit of Atlas and its
successors and assigns, and (without limitation of the foregoing) Atlas is
hereby constituted, and agreed to be, an express third party beneficiary of the
Atlas Provisions.
SECTION 10.7. Headings. The headings of the various Articles and Sections
herein and in the table of contents hereto are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.
SECTION 10.8. Counterpart Form. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 10.9. Subordination. (a) As between the Liquidity Providers, on the
one hand, and the Trustees and the Certificateholders, on the other hand, this
Agreement shall be a subordination agreement for purposes of Xxxxxxx 000 xx xxx
Xxxxxx Xxxxxx Bankruptcy Code, as amended from time to time.
59
(b) Notwithstanding the provisions of this Agreement, if prior to the
payment in full to the Liquidity Providers of all Liquidity Obligations then due
and payable, any party hereto shall have received any payment or distribution in
respect of Equipment Notes or any other amount under the Indentures or other
Operative Agreements which, had the subordination provisions of this Agreement
been properly applied to such payment, distribution or other amount, would not
have been distributed to such Person, then such payment, distribution or other
amount shall be received and held in trust by such Person and paid over or
delivered to the Subordination Agent for application as provided herein.
(c) If any Trustee, any Liquidity Provider or the Subordination Agent
receives any payment in respect of any obligations owing hereunder (or, in the
case of the Liquidity Providers, in respect of the Liquidity Obligations), which
is subsequently invalidated, declared preferential, set aside and/or required to
be repaid to a trustee, receiver or other party, then, to the extent of such
payment, such obligations (or, in the case of the Liquidity Providers, such
Liquidity Obligations) intended to be satisfied shall be revived and continue in
full force and effect as if such payment had not been received.
(d) The Trustees (on behalf of themselves and the holders of Certificates),
the Liquidity Providers and the Subordination Agent confirm that the payment
priorities specified in Sections 2.4, 3.2 and 3.3 shall apply in all
circumstances, notwithstanding the fact that the obligations owed to the
Trustees and the holders of Certificates are secured by certain assets and the
Liquidity Obligations may not be so secured. The Trustees expressly agree (on
behalf of themselves and the holders of Certificates) not to assert priority
over the holders of Liquidity Obligations due to their status as secured
creditors in any bankruptcy, insolvency or other legal proceeding.
(e) Each of the Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent may take any
of the following actions without impairing its rights under this Agreement:
(i) obtain a Lien on any property to secure any amounts owing to it
hereunder, including, in the case of the Liquidity Providers, the Liquidity
Obligations,
(ii) obtain the primary or secondary obligation of any other obligor
with respect to any amounts owing to it hereunder, including, in the case
of the Liquidity Providers, any of the Liquidity Obligations,
(iii) renew, extend, increase, alter or exchange any amounts owing to
it hereunder, including, in the case of the Liquidity Providers, any of the
Liquidity Obligations, or release or compromise any obligation of any
obligor with respect thereto,
60
(iv) refrain from exercising any right or remedy, or delay in
exercising such right or remedy, which it may have, or
(v) take any other action which might discharge a subordinated party
or a surety under applicable law;
provided, however, that the taking of any such actions by any of the Trustees,
the Liquidity Providers or the Subordination Agent shall not prejudice the
rights or adversely affect the obligations of any other party under this
Agreement.
SECTION 10.10. Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 10.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver of
Immunity. (a) Each of the parties hereto hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement, or
for recognition and enforcement of any judgment in respect hereof or
thereof, to the nonexclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the
Southern District of New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(iii) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form and 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
61
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE
RELATIONSHIP THAT IS BEING ESTABLISHED, including, without limitation, contract
claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each of the parties warrants and represents that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such legal
counsel. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) Each Liquidity Provider hereby waives any immunity it may have from the
jurisdiction of the courts of the United States of America or of any State and
waives any immunity any of its properties located in the United States of
America may have from attachment or execution upon a judgment entered by any
such court under the United States Foreign Sovereign Immunities Act of 1976 or
any similar successor legislation.
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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 /s/ Xxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
ABN AMRO BANK N.V.,
Chicago Branch, as
Class A-1 Liquidity
Provider and Class A-2
Liquidity Provider
By s/ Xxxxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
By /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
XXXXXX XXXXXXX CAPITAL
SERVICES, INC.
as Class B Liquidity Provider
and Class C Liquidity Provider
By /s/ Xxxxxx Xxxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
WILMINGTON TRUST COMPANY,
not in its individual
capacity except as
expressly set forth
herein, but solely as
Subordination Agent
and Trustee
By /s/ Xxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
