Exhibit 4(b)(1)
INTERCREDITOR AGREEMENT
Dated as of April 30, 2002
among
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Trustee of the
Delta Air Lines Pass Through Trust 2002-1G-1,
Delta Air Lines Pass Through Trust 2002-1G-2,
Delta Air Lines Pass Through Trust 2002-1C,
and
Delta Air Lines Pass Through Trust 2002-1D
WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH,
as Class G-1 Liquidity Provider,
Class G-2 Liquidity Provider,
and
Class C Liquidity Provider,
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Subordination Agent
and
MBIA INSURANCE CORPORATION,
as Policy
Provider
<PAGE>
Table of Contents
ARTICLE I
DEFINITIONS
Section 1.01.
Definitions......................................................
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
Section 2.01. Agreement to Terms of
Subordination; Payments from Monies
Received
Only....................................................
Section 2.02. Trust
Accounts...................................................
Section 2.03. Deposits to the Collection Account
and Special Payments
Account; Certain
Distributions...................................
Section 2.04. Distributions of Special
Payments................................
Section 2.05. Designated
Representatives.......................................
Section 2.06. Controlling
Party................................................
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
Section 3.01. Written Notice of
Distribution...................................
Section 3.02. Distribution of Amounts on Deposit
in the Collection Account.....
Section 3.03. Distribution of Amounts on Deposit
Following a Triggering
Event............................................................
Section 3.04. Other
Payments...................................................
Section 3.05. Payments to the Trustees and the
Liquidity Providers.............
Section 3.06. Liquidity
Facilities.............................................
Section 3.07. The
Policies.....................................................
ARTICLE IV
EXERCISE OF REMEDIES
Section 4.01. Directions from the Controlling
Party............................
Section 4.02. Remedies
Cumulative..............................................
Section 4.03. Discontinuance of
Proceedings....................................
Section 4.04. Right of Certificateholders to
Receive Payments Not to Be
Impaired.........................................................
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
Section 5.01. Notice of Indenture Event of
Default or Triggering Event.........
Section 5.02.
Indemnification..................................................
Section 5.03. No Duties Except as Specified in
Intercreditor Agreement.........
Section 5.04. Notice from the Liquidity
Providers and Trustees.................
ARTICLE VI
THE SUBORDINATION AGENT
Section 6.01. Authorization; Acceptance of
Trusts and Duties...................
Section 6.02. Absence of
Duties................................................
Section 6.03. No Representations or Warranties
as to Documents.................
Section 6.04. No Segregation of Monies; No
Interest............................
Section 6.05. Reliance; Agents; Advice of
Counsel..............................
Section 6.06. Capacity in Which
Acting.........................................
Section 6.07.
Compensation.....................................................
Section 6.08. May Become
Certificateholder.....................................
Section 6.09. Subordination Agent Required;
Eligibility........................
Section 6.10. Money to Be Held in
Trust........................................
ARTICLE VII
SUCCESSOR SUBORDINATION AGENT
Section 7.01. Replacement of Subordination
Agent; Appointment of Successor.....
ARTICLE VIII
SUPPLEMENTS AND AMENDMENTS
Section 8.01. Amendments, Waivers,
Etc.........................................
Section 8.02. Subordination Agent
Protected....................................
Section 8.03. Effect of Supplemental
Agreements................................
Section 8.04. Notice to Rating Agencies and the
Policy Provider................
ARTICLE IX
MISCELLANEOUS
Section 9.01. Termination of Intercreditor
Agreement...........................
Section 9.02. Intercreditor Agreement for
Benefit of Trustees, Liquidity
Providers, Policy Provider and Subordination
Agent...............
Section 9.03.
Notices..........................................................
Section 9.04.
Severability.....................................................
Section 9.05. No Oral Modifications or
Continuing Waivers......................
Section 9.06. Successors and
Assigns...........................................
Section 9.07.
Headings.........................................................
Section 9.08.
Counterparts.....................................................
Section 9.09.
Subordination....................................................
Section 9.10. Governing
Law....................................................
Section 9.11. Submission to Jurisdiction; Waiver
of Jury Trial; Waiver of
Immunity.........................................................
<PAGE>
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of April 30, 2002, is made
by
and among STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association
(in its individual capacity,
together with its successors and permitted
assigns, "State Street"), not in its
individual capacity but solely as trustee
of each Trust (such term and other
capitalized terms used herein without
definition being defined as provided in
Article I); WESTDEUTSCHE LANDESBANK
GIROZENTRALE, a German banking institution
organized under the laws of the State of
North Rhine-Westphalia, acting through
its New York Branch ("WestLB"), as Class
G-1 Liquidity Provider, Class G-2
Liquidity Provider and Class C Liquidity
Provider, STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual capacity
except as expressly set forth herein, but
solely as Subordination Agent and
trustee hereunder (in such capacity,
together with any successor appointed
pursuant to Article VII, the "Subordination
Agent") and MBIA INSURANCE
CORPORATION, a New York stock insurance
company ("MBIA"), as the Policy
Provider.
WHEREAS, subject to clause (ii) of this recital, (i) pursuant
to
each Indenture with respect to an Aircraft
owned by Delta at the time such
Indenture is entered into (an "Owned
Aircraft"), Delta will issue on a recourse
basis four (or, in the case of a Boeing
737-832 Aircraft, three) series of
Equipment Notes secured by such Aircraft
and (ii) if an Aircraft becomes subject
to a sale/leaseback transaction at any time
after the date hereof (a "Leased
Aircraft"), pursuant to an Indenture with
respect to such Aircraft, as amended
and restated in connection with such
sale/leaseback transaction, the Owner
Trustee will assume on a non-recourse basis
Delta's obligations in respect of
the Equipment Notes secured by such
Aircraft, subject to re-optimization of such
Equipment Notes (if such sale/leaseback
transaction occurs prior to May 1,
2003);
WHEREAS, pursuant to the Participation Agreements, each Trust
will
acquire those Equipment Notes having an
interest rate identical to the interest
rate applicable to the Certificates to be
issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created
thereby
proposes to issue a single class of
Certificates (a "Class") bearing the
interest rate and having the final
distribution date described in such Trust
Agreement on the terms and subject to the
conditions set forth therein;
WHEREAS, pursuant to the Underwriting Agreement, the
Underwriters
propose to purchase the Class G-1, Class
G-2 and Class C Certificates in the
aggregate face amount set forth on Schedule
I thereto on the terms and subject
to the conditions set forth therein;
WHEREAS, the Initial Class D Holder proposes to purchase the Class
D
Certificates in the aggregate face amount
of $90,043,000 on the terms and
subject to the conditions set forth in the
Class D Trust Agreement and the
Business Trust Agreement;
WHEREAS, the Liquidity Provider proposes to enter into three
separate revolving credit agreements with
the Subordination Agent, as agent and
trustee for the Trustee of each of the
Class G-1 Trust, the Class G-2 Trust and
the Class C Trust, respectively, for the
benefit of the Certificateholders of
such Trust;
WHEREAS, the Policy Provider proposes to enter into the Policy
Provider Agreement providing for the
issuance by the Policy Provider of (i) the
Class G-1 Policy for the benefit of the
Class G-1 Certificateholders and (ii)
the Class G-2 Policy for the benefit of the
Class G-2 Certificateholders; and
WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting
Agreement that the Subordination Agent, the
Trustees, the Liquidity Provider and the
Policy Provider agree to the terms of
subordination set forth in this Agreement
in respect of each Class of
Certificates, and the Subordination Agent,
the Trustees, the Liquidity Provider
and the Policy Provider, by entering into
this Agreement, hereby acknowledge and
agree to such terms of subordination and
the other provisions of this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements
herein
contained, and of other good and valuable
consideration the receipt and adequacy
of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) The definitions stated herein
apply
equally to the singular and the plural
forms of the terms defined.
(b) All references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to
the designated Articles, Sections and
other subdivisions of this Agreement.
(c) The words "herein", "hereof" and "hereunder" and other words
of
similar import refer to this Agreement as a
whole and not to any particular
Article, Section or other subdivision.
(d) Unless the context otherwise requires, whenever the words
"including", "include" or "includes" are
used herein, it shall be deemed to be
followed by the phrase "without
limitation".
(e) For purposes of this Agreement, unless the context
otherwise
requires, the following capitalized terms
shall have the following meanings:
"Acceleration" means, with respect to the amounts payable in
respect
of the Equipment Notes issued under any
Indenture, such amounts becoming
immediately due and payable by declaration
or otherwise. "Accelerate",
"Accelerated" and "Accelerating" have
meanings correlative to the foregoing.
"Accrued Class G-1 Interest" means, with respect to any
Distribution
Date, all amounts due and owing in respect
of accrued and unpaid interest on the
Class G-1 Certificates at the Stated
Interest Rate for the Class G-1
Certificates on such Distribution Date.
"Accrued Class G-2 Interest" means, with respect to any
Distribution
Date, all amounts due and owing in respect
of accrued and unpaid interest on the
Class G-2 Certificates at the Stated
Interest Rate for the Class G-2
Certificates on such Distribution Date.
"Adjusted Expected Distributions" means, with respect to the
Certificates of any Trust on any Current
Distribution Date, the sum of (x)
accrued and unpaid interest in respect of
such Certificates and (y) the greater
of:
(A) the difference between (x) the Pool Balance of such
Certificates
as of the
immediately preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, the original
aggregate
face
amount of the Certificates of such Trust) and (y) the Pool Balance
of
such
Certificates as of the Current Distribution Date calculated on
the
basis that
(i) the principal of the Non-Performing Equipment Notes held in
such Trust
has been paid in full and such payments have been distributed
to the
holders of such Certificates, (ii) the principal of the
Performing
Equipment
Notes held in such Trust has been paid when due (but without
giving
effect to any Acceleration of Performing Equipment Notes) and
such
payments
have been distributed to the holders of such Certificates and
(iii) the
principal of any Equipment Notes formerly held in such Trust
that have
been sold pursuant to the terms hereof has been paid in full
and
such
payments have been distributed to the holders of such
Certificates,
and
(B) the amount of the excess, if any, of (i) the Pool Balance
of
such Class
of Certificates as of the immediately preceding Distribution
Date (or,
if the Current Distribution Date is the first Distribution
Date,
the
original aggregate face amount of the Certificates of such
Trust),
over (ii)
the Aggregate LTV Collateral Amount for such Class of
Certificates for the Current Distribution Date;
provided that, until the date of the
initial LTV Appraisals for all the
Aircraft, clause (B) shall not apply.
For purposes of calculating Adjusted Expected Distributions
with
respect to the Certificates of any Trust,
any premium paid on the Equipment
Notes held in such Trust that has not been
distributed to the Certificateholders
of such Trust (other than such premium or a
portion thereof applied to the
distribution of interest on the
Certificates of such Trust or the reduction of
the Pool Balance of such Trust) shall be
added to the amount of Adjusted
Expected Distributions.
"Advance" means, with respect to any Liquidity Facility, any
Advance
as defined in such Liquidity Facility.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling,
controlled by or under direct or indirect
common control with such Person. For the
purposes of this definition, "control",
when used with respect to any specified
Person, means the power, directly or
indirectly, to direct or cause the
direction of the management and policies of
such Person, whether through the ownership
of voting securities or by contract
or otherwise; and the terms "controlling"
and "controlled" have meanings
correlative to the foregoing.
"Aggregate LTV Collateral Amount" for any Class of Certificates
for
any Distribution Date means an amount, not
less than zero, equal to the product
of (i) the sum of the applicable LTV
Collateral Amounts for such Class of
Certificates for all Aircraft, minus the
Pool Balance for each Class of
Certificates, if any, senior to such Class,
after giving effect to any
distribution of principal on such
Distribution Date with respect to such senior
Class or Classes multiplied by (ii) (a) in
the case of the Class G-1
Certificates or Class G-2 Certificates, a
fraction the numerator of which equals
the Pool Balance for the Class G-1
Certificates or the Class G-2 Certificates,
as the case may be, and the denominator of
which equals the aggregate Pool
Balance for the Class G-1 Certificates and
the Class G-2 Certificates, in each
case prior to giving effect to any
distribution of principal on such
Distribution Date with respect to either
such Class of Certificates, and (b) in
the case of the Class C Certificates and
the Class D Certificates, 1.0.
"Aircraft" means, with respect to each Indenture, the
"Aircraft"
referred to therein.
"Appraisal" means a current fair market value appraisal (which
may
be a "desktop" appraisal) performed by any
Appraiser or any other nationally
recognized appraiser on the basis of an
arm's-length transaction between an
informed and willing purchaser under no
compulsion to buy and an informed and
willing seller under no compulsion to sell
and both having knowledge of all
relevant facts.
"Appraised Current Market Value" of any Aircraft means the lower
of
the average and the median of the three
most recent LTV Appraisals of such
Aircraft.
"Appraisers" means Aircraft Information Systems, Inc., BK
Associates, Inc. and AvSolutions, Inc.
"Available Amount" means, with respect to any Liquidity Facility
on
any drawing date, subject to the proviso
contained in the first sentence of
Section 3.06(g), an amount equal to (a) the
Stated Amount of such Liquidity
Facility at such time, less (b) the
aggregate amount of each Interest Drawing
honored by the Liquidity Provider under
such Liquidity Facility on or prior to
such date that has not been reimbursed or
reinstated as of such date; provided
that, following a Downgrade Drawing, a
Non-Extension Drawing or a Final Drawing
under such Liquidity Facility, the
Available Amount of such Liquidity Facility
shall be zero.
"Avoided Payment", with respect to a Policy, has the meaning
specified in such Policy.
"Bankruptcy Code" means the United States Bankruptcy Code, 11
United
States Code ss.ss.101 et seq., as amended,
or any successor statutes thereto.
"Basic Agreement" means that certain Pass Through Trust
Agreement,
dated as of November 16, 2000, between
Delta and State Street, as the same may
be amended, supplemented or otherwise
modified from time to time in accordance
with its terms, but does not include any
Trust Supplement.
"Business Day" means, with respect to the Certificates of any
Class,
(a) any day other than a Saturday, a Sunday
or a day on which, (i) commercial
banks are required or authorized to close
in New York, New York, Atlanta,
Georgia, or, so long as any Certificate of
such Class is outstanding, the city
and state in which the Trustee, the
Subordination Agent or any related Loan
Trustee maintains its Corporate Trust
Office or receives and disburses funds, or
(ii) solely with respect to draws under a
Policy, the fiscal agent under such
Policy, at its office specified in such
Policy, the Policy Provider, at its
office specified in such Policy, and
insurance companies in New York, New York
are required or authorized by law or
executive order to close and (b) solely
with respect to Drawings under any
Liquidity Facility, which day is also a
"Business Day" as defined in such Liquidity
Facility.
"Business Trust Agreement" means the Trust Agreement dated as
of
April __, 2002 between New Sky, Ltd. and
Wilmington Trust Company, as Owner
Trustee, governing the creation and
administration of the Initial Class D
Holder, as the same may be amended,
supplemented or otherwise modified from time
to time in accordance with its terms.
"Cash Collateral Account" means the Class G-1 Cash Collateral
Account, the Class G-2 Cash Collateral
Account or the Class C Cash Collateral
Account, as applicable.
"Certificate" means a Class G-1 Certificate, a Class G-2
Certificate, a Class C Certificate or a
Class D Certificate, as applicable.
"Certificateholder" means, with respect to any Class of
Certificates, the Person in whose name a
Certificate is registered in the
Register for the Certificates of such
Class.
"Citizen of the United States" has the meaning specified for
such
term in Section 40102(a)(15) of Title 49 of
the United States Code or any
similar legislation of the United States
enacted in substitution or replacement
therefor.
"Class" has the meaning specified in the recitals to this
Agreement.
"Class C Cash Collateral Account" means an Eligible Deposit
Account
in the name of the Subordination Agent
maintained at an Eligible Institution,
which shall be the Subordination Agent if
it so qualifies, into which amounts
shall be deposited as referred to in
Section 3.06(f).
"Class C Certificateholder" means, at any time, any
Certificateholder of one or more Class C
Certificates.
"Class C Certificates" means the certificates issued by the Class
C
Trust, substantially in the form of Exhibit
A to the Class C Trust Agreement,
and authenticated by the Class C Trustee,
representing Fractional Undivided
Interests in the Class C Trust, and any
certificates issued in exchange therefor
or replacement thereof pursuant to the
terms of the Class C Trust Agreement.
"Class C Liquidity Facility" means, initially, the Revolving
Credit
Agreement, dated as of the date hereof,
between the Subordination Agent, as
agent and trustee for the Class C Trustee,
and WestLB, and, from and after the
replacement of such agreement pursuant
hereto, the Replacement Liquidity
Facility therefor, if any, in each case as
amended, supplemented or otherwise
modified from time to time in accordance
with its terms.
"Class C Liquidity Provider" means WestLB, together with any
Replacement Liquidity Provider that has
issued a Replacement Liquidity Facility
to replace the Class C Liquidity Facility
pursuant to Section 3.06(c) or
3.06(e).
"Class C Trust" means the Delta Air Lines Pass Through Trust
2002-1C
created and administered pursuant to the
Class C Trust Agreement.
"Class C Trust Agreement" means the Basic Agreement, as
supplemented
by Trust Supplement No. 2002-1C thereto,
dated as of the date hereof, governing
the creation and administration of the
Delta Air Lines Pass Through Trust
2002-1C and the issuance of the Class C
Certificates, as the same may be
amended, supplemented or otherwise modified
from time to time in accordance with
its terms.
"Class C Trustee" means State Street Bank and Trust Company of
Connecticut, National Association, not in
its individual capacity except as
expressly set forth in the Class C Trust
Agreement, but solely as trustee under
the Class C Trust Agreement, together with
any successor trustee appointed
pursuant thereto.
"Class D Certificateholder" means, at any time, any
Certificateholder of one or more Class D
Certificates.
"Class D Certificates" means the certificates issued by the Class
D
Trust, substantially in the form of Exhibit
A to the Class D Trust Agreement,
and authenticated by the Class D Trustee,
representing Fractional Undivided
Interests in the Class D Trust, and any
certificates issued in exchange therefor
or replacement thereof pursuant to the
terms of the Class D Trust Agreement.
"Class D Trust" means the Delta Air Lines Pass Through Trust
2002-1D
created and administered pursuant to the
Class D Trust Agreement.
"Class D Trust Agreement" means the Basic Agreement, as
supplemented
by Trust Supplement No. 2002-1D thereto,
dated as of the date hereof, governing
the creation and administration of the
Delta Air Lines Pass Through Trust
2002-1D and the issuance of the Class D
Certificates, as the same may be
amended, supplemented or otherwise modified
from time to time in accordance with
its terms.
"Class D Trustee" means State Street Bank and Trust Company of
Connecticut, National Association, not in
its individual capacity except as
expressly set forth in the Class D Trust
Agreement, but solely as trustee under
the Class D Trust Agreement, together with
any successor trustee appointed
pursuant thereto.
"Class G-1 Cash Collateral Account" means an Eligible Deposit
Account in the name of the Subordination
Agent maintained at an Eligible
Institution, which shall be the
Subordination Agent if it so qualifies, into
which amounts shall be deposited as
referred to in Section 3.06(f).
"Class G-1 Certificateholder" means, at any time, any
Certificateholder of one or more Class G-1
Certificates.
"Class G-1 Certificates" means the certificates issued by the
Class
G-1 Trust, substantially in the form of
Exhibit A to the Class G-1 Trust
Agreement, and authenticated by the Class
G-1 Trustee, representing Fractional
Undivided Interests in the Class G-1 Trust,
and any certificates issued in
exchange therefor or replacement thereof
pursuant to the terms of the Class G-1
Trust Agreement.
"Class G-1 Liquidity Facility" means, initially, the Revolving
Credit Agreement, dated as of the date
hereof, between the Subordination Agent,
as agent and trustee for the Class G-1
Trustee, and WestLB and, from and after
the replacement of such agreement pursuant
hereto, the Replacement Liquidity
Facility therefor, if any, in each case as
amended, supplemented or otherwise
modified from time to time in accordance
with its terms.
"Class G-1 Liquidity Provider" means WestLB, together with any
Replacement Liquidity Provider that has
issued a Replacement Liquidity Facility
to replace the Class G-1 Liquidity Facility
pursuant to Section 3.06(c) or
3.06(e).
"Class G-1 Policy" means the MBIA Financial Guaranty Insurance
Policy No. 37923(1) issued as of the
Closing Date by the Policy Provider,
together with all endorsements thereto, in
favor of the Subordination Agent for
the benefit of the Class G-1
Certificateholders, as amended, supplemented or
otherwise modified from time to time in
accordance with its terms.
"Class G-1 Policy Account" means the Eligible Deposit Account
established pursuant to Section
2.02(a)(iii)(x) into which amounts shall be
deposited as referred to in Section
3.07.
"Class G-1 Trust" means the Delta Air Lines Pass Through Trust
2002-1G-1 created and administered pursuant
to the Class G-1 Trust Agreement.
"Class G-1 Trust Agreement" means the Basic Agreement, as
supplemented by Trust Supplement No.
2002-1G-1 thereto, dated as of the date
hereof, governing the creation and
administration of the Delta Air Lines Pass
Through Trust 2002-1G-1 and the issuance of
the Class G-1 Certificates, as the
same may be amended, supplemented or
otherwise modified from time to time in
accordance with its terms.
"Class G-1 Trustee" means State Street Bank and Trust Company
of
Connecticut, National Association, not in
its individual capacity except as
expressly set forth in the Class G-1 Trust
Agreement, but solely as trustee
under the Class G-1 Trust Agreement,
together with any successor trustee
appointed pursuant thereto.
"Class G-2 Cash Collateral Account" means an Eligible Deposit
Account in the name of the Subordination
Agent maintained at an Eligible
Institution, which shall be the
Subordination Agent if it so qualifies, into
which amounts shall be deposited as
referred to in Section 3.06(f).
"Class G-2 Certificateholder" means, at any time, any
Certificateholder of one or more Class G-2
Certificates.
"Class G-2 Certificates" means the certificates issued by the
Class
G-2 Trust, substantially in the form of
Exhibit A to the Class G-2 Trust
Agreement, and authenticated by the Class
G-2 Trustee, representing Fractional
Undivided Interests in the Class G-2 Trust,
and any certificates issued in
exchange therefor or replacement thereof
pursuant to the terms of the Class G-2
Trust Agreement.
"Class G-2 Liquidity Facility" means, initially, the Revolving
Credit Agreement, dated as of the date
hereof, between the Subordination Agent,
as agent and trustee for the Class G-2
Trustee, and WestLB and, from and after
the replacement of such agreement pursuant
hereto, the Replacement Liquidity
Facility therefor, if any, in each case as
amended, supplemented or otherwise
modified from time to time in accordance
with its terms.
"Class G-2 Liquidity Provider" means WestLB, together with any
Replacement Liquidity Provider that has
issued a Replacement Liquidity Facility
to replace the Class G-2 Liquidity Facility
pursuant to Section 3.06(c) or
3.06(e).
"Class G-2 Policy" means the MBIA Financial Guaranty Insurance
Policy No. 37923(2) issued as of the
Closing Date by the Policy Provider,
together with all endorsements thereto, in
favor of the Subordination Agent for
the benefit of the Class G-2
Certificateholders, as amended, supplemented or
otherwise modified from time to time in
accordance with its terms.
"Class G-2 Policy Account" means the Eligible Deposit Account
established pursuant to Section
2.02(a)(iii)(y) into which amounts shall be
deposited as referred to in Section
3.07.
"Class G-2 Trust" means the Delta Air Lines Pass Through Trust
2002-1G-2 created and administered pursuant
to the Class G-2 Trust Agreement.
"Class G-2 Trust Agreement" means the Basic Agreement, as
supplemented by Trust Supplement No.
2002-1G-2 thereto, dated as of the date
hereof, governing the creation and
administration of the Delta Air Lines Pass
Through Trust 2001-1G-2 and the issuance of
the Class G-2 Certificates, as the
same may be amended, supplemented or
otherwise modified from time to time in
accordance with its terms.
"Class G-2 Trustee" means State Street Bank and Trust Company
of
Connecticut, National Association, not in
its individual capacity except as
expressly set forth in the Class G-2 Trust
Agreement, but solely as trustee
under the Class G-2 Trust Agreement,
together with any successor trustee
appointed pursuant thereto.
"Closing Date" means April 30, 2002.
"Code" means the Internal Revenue Code of 1986, as amended from
time
to time, and Treasury Regulations
promulgated thereunder.
"Collateral" means, with respect to any Indenture in respect of
an
Owned Aircraft, the "Collateral" referred
to therein.
"Collection Account" means the Eligible Deposit Account
established
by the Subordination Agent pursuant to
Section 2.02(a) in and from which the
Subordination Agent shall make deposits and
withdrawals in accordance with this
Agreement.
"Consent Notice" has the meaning specified in Section 3.06(d).
"Consent Period" has the meaning specified in Section 3.06(d).
"Controlling Party" means the Person entitled to act as such
pursuant to the terms of Section 2.06.
"Corporate Trust Office" means, with respect to any Trustee,
the
Subordination Agent or any Loan Trustee,
the office of such Person in the city
at which, at any particular time, its
corporate trust business shall be
principally administered.
"Current Distribution Date" means a Distribution Date specified as
a
reference date for calculating the Expected
Distributions or the Adjusted
Expected Distributions with respect to the
Certificates of any Trust as of such
Distribution Date.
"Defaulted Series G Equipment Note" has the meaning specified
in
Section 3.07(c).
"Delta" means Delta Air Lines, Inc., a Delaware corporation, and
its
successors and permitted assigns.
"Delta Bankruptcy Event" means the occurrence and continuation
of
any of the following:
(a) Delta consents to the appointment of or the taking of
possession
by a
receiver, trustee or liquidator of itself or of a substantial part
of
its
property, admits in writing its inability to pay its debts
generally
as they
come due or makes a general assignment for the benefit of
creditors;
(b) Delta files a voluntary petition in bankruptcy or a
voluntary
petition
or an answer seeking reorganization, liquidation or other
relief
as a
debtor in a case under any bankruptcy laws or insolvency laws (as
in
effect at
such time) or an answer admitting the material allegations of a
petition
filed against Delta as a debtor in any such case, or Delta
seeks
relief as
a debtor by voluntary petition, answer or consent, under the
provisions
of any other bankruptcy or other similar law providing for the
reorganization or winding-up of corporations (as in effect at such
time),
or Delta
seeks an agreement, composition, extension or adjustment with
its
creditors
under such laws; or
(c) an order, judgment or decree is entered by any court of
competent
jurisdiction appointing, without the consent of Delta , a
receiver,
trustee or liquidator of Delta or sequestering any substantial
part of
its property, or granting any other relief in respect of Delta
as
a debtor
under any bankruptcy laws or insolvency laws (as in effect at
such
time), and any such order, judgment or decree of appointment or
sequestration remains in force undismissed, unstayed and unvacated
for a
period of
90 days after the date of entry thereof; or
(d) a petition against Delta as a debtor in a case under the
federal
bankruptcy
laws or other insolvency laws (as in effect at such time) is
filed and
not withdrawn or dismissed within 90 days thereafter, or if,
under the
provisions of any law providing for reorganization or
winding-up
of
corporations that applies to Delta , any court of competent
jurisdiction assumes jurisdiction, custody or control of Delta or
of any
substantial part of its property and such jurisdiction, custody or
control
remains in
force unrelinquished, unstayed and unterminated for a period of
90
days.
"Delta Provisions" has the meaning specified in Section
8.01(a).
"Designated Representatives" means the Subordination Agent
Representatives, the Trustee
Representatives, the Policy Provider
Representatives, and the Liquidity Provider
Representatives identified under
Section 2.05.
"Disposition Payment" has the meaning specified in Section
3.07(b).
"Distribution Date" means a Regular Distribution Date or a
Special
Distribution Date.
"Dollars" means the lawful currency of the United States.
"Downgrade Drawing" has the meaning specified in Section
3.06(c).
"Downgraded Facility" has the meaning specified in Section
3.06(c).
"Drawing" means an Interest Drawing, a Final Drawing, a
Non-Extension Drawing or a Downgrade
Drawing, as the case may be.
"Election Distribution Date" has the meaning specified in
Section
3.07(c).
"Eligible Deposit Account" means either (a) a segregated
account
with an Eligible Institution or (b) a
segregated trust account with the
corporate trust department of a depository
institution organized under the laws
of the United States or any one of the
states thereof or the District of
Columbia (or any United States branch of a
foreign bank), having corporate trust
powers and acting as trustee for funds
deposited in such account, so long as any
of the securities of such depository
institution has a long-term unsecured debt
rating of at least A3 or its equivalent by
Moody's or at least A- or its
equivalent by S&P. An Eligible Deposit
Account may be maintained with the
Subordination Agent or Liquidity Provider
so long as the Subordination Agent or
such Liquidity Provider is an Eligible
Institution; provided that the
Subordination Agent, in its individual
capacity, or such Liquidity Provider
shall have waived all rights of set-off and
counterclaim with respect to such
account.
"Eligible Institution" means (a) the corporate trust department
of
the Subordination Agent or any Trustee, as
applicable, or (b) a depository
institution organized under the laws of the
United States of America or any
state thereof or the District of Columbia
(or any U.S. branch of a foreign
bank), which has a long-term unsecured debt
rating of at least A3 or its
equivalent by Moody's or at least A- or its
equivalent by S&P.
"Eligible Investments" means investments in (a) obligations of
the
United States government or agencies
thereof, or obligations guaranteed by the
United States government, (b) open market
commercial paper of any corporation
incorporated under the laws of the United
States or any state thereof rated at
least P-1 or its equivalent by Moody's or
at least A-1 or its equivalent by S&P,
(c) certificates of deposit issued by
commercial banks organized under the laws
of the United States or of any political
subdivision thereof (or any United
States branch of a foreign bank) having a
combined capital and surplus in excess
of $500,000,000 which banks or their
holding companies have a rating of A or its
equivalent by Moody's or A or its
equivalent by S&P; provided, however, that the
aggregate amount at any one time invested
in certificates of deposit issued by
any one bank shall not be in excess of 5%
of such bank's capital and surplus,
(d) Dollar denominated offshore
certificates of deposit issued by, or offshore
time deposits with, any commercial bank
described in (c) or any subsidiary
thereof, and (e) repurchase agreements with
any financial institution having
combined capital and surplus of at least
$500,000,000 with any of the
obligations described in clauses (a)
through (d) as collateral. If none of the
above investments is available, the entire
amounts to be invested may be used to
purchase Federal funds from an entity
described in clause (c). All Eligible
Investments must be held in an Eligible
Deposit Account. Any of the investments
described herein may be made through or
with, as applicable, the bank acting as
Trustee or its Affiliates.
"Eligible Liquidity Provider" has the meaning specified in
Section
2.06(c).
"Equipment Notes" means, at any time, the Series G-1 Equipment
Notes, the Series G-2 Equipment Notes, the
Series C Equipment Notes and the
Series D Equipment Notes, collectively, and
in each case, any Equipment Notes
issued in exchange therefor or replacement
thereof pursuant to the terms of the
Indentures.
"Excess Reimbursement Obligations" means, (a) in the event of
any
Policy Provider Election with respect to a
Series G-1 Equipment Note or a Series
G-2 Equipment Note, the portion of the
Policy Provider Obligations that
represents interest on such Equipment Note
in excess of 18 months of interest at
the interest rate applicable to such
Equipment Note and (b) any interest on the
Liquidity Obligations in respect of the
Liquidity Facilities paid by the Policy
Provider to the Liquidity Providers from
and after the end of the 18-month
period referred to in Section 3.07(c).
"Expected Distributions" means, with respect to the Certificates
of
any Trust on any Current Distribution Date,
the sum of (x) accrued and unpaid
interest in respect of such Certificates
and (y) the difference between (A) the
Pool Balance of such Certificates as of the
immediately preceding Distribution
Date (or, if the Current Distribution Date
is the first Distribution Date, the
original aggregate face amount of the
Certificates of such Trust) and (B) the
Pool Balance of such Certificates as of the
Current Distribution Date calculated
on the basis that (i) the principal of the
Equipment Notes held in such Trust
has been paid when due (whether at stated
maturity or upon redemption,
prepayment, purchase or Acceleration or
otherwise) and such payments have been
distributed to the holders of such
Certificates and (ii) the principal of any
Equipment Notes formerly held in such Trust
that have been sold pursuant to the
terms hereof has been paid in full and such
payments have been distributed to
the holders of such Certificates.
For purposes of calculating Expected Distributions with respect
to
the Certificates of any Trust, any premium
paid on the Equipment Notes held in
such Trust which has not been distributed
to the Certificateholders of such
Trust (other than such premium or a portion
thereof applied to distributions of
interest on the Certificates of such Trust
or the reduction of the Pool Balance
of such Trust) shall be added to the amount
of such Expected Distributions.
"Expiry Date" with respect to any Liquidity Facility, has the
meaning specified in such Liquidity
Facility.
"Fee Letter" means the Fee Letter among WestLB, the
Subordination
Agent and Delta with respect to the
Liquidity Facilities and any fee letter
entered into among the Subordination Agent,
Delta and any Replacement Liquidity
Provider.
"Final Distributions" means, with respect to the Certificates of
any
Trust on any Distribution Date, the sum of
(x) the aggregate amount of all
accrued and unpaid interest in respect of
such Certificates and (y) the Pool
Balance of such Certificates as of the
immediately preceding Distribution Date.
For purposes of calculating Final
Distributions with respect to the Certificates
of any Trust, any premium paid on the
Equipment Notes held in such Trust which
has not been distributed to the
Certificateholders of such Trust (other than
such premium or a portion thereof applied
to distributions of interest on the
Certificates of such Trust or the reduction
of the Pool Balance of such Trust)
shall be added to the amount of such Final
Distributions.
"Final Drawing" has the meaning specified in Section 3.06(i).
"Final Legal Distribution Date" means (i) with respect to the
Class
G-1 Certificates, July 2, 2024, (ii) with
respect to the Class G-2 Certificates,
January 2, 2014, (iii) with respect to the
Class C Certificates, July 2, 2013
and (iv) with respect to the Class D
Certificates, July 2, 2007.
"Final Order" has the meaning specified in each Policy.
"Fractional Undivided Interest" means the fractional undivided
interest in a Trust that is represented by
a Certificate relating to such Trust.
"Indenture" means each of the Indenture and Security Agreements
dated the date hereof entered into by the
Loan Trustee and Delta (or the Owner
Trustee, following a sale/leaseback
transaction relating to the Aircraft
referred to therein) pursuant to the
related Participation Agreements providing
for the issuance of the Equipment Notes on
the date hereof (or the assumption
thereof by the Owner Trustee), in each case
as the same may be amended,
supplemented or otherwise modified from
time to time in accordance with its
terms.
"Indenture Estate" means, with respect to any Indenture in
respect
of a Leased Aircraft, the "Indenture
Estate" referred to therein.
"Indenture Event of Default" means, with respect to any
Indenture,
any Event of Default (as such term is
defined in such Indenture) thereunder.
"Initial Class D Holder" means Delta 2002-1 Class D Certificate
Trust, a Delaware business trust organized
pursuant to the Business Trust
Agreement, as the sole initial purchaser
and holder of the Class D Certificates.
"Interest Drawing" has the meaning specified in Section
3.06(a).
"Interest Payment Date" means, with respect to any Liquidity
Facility, each date on which interest is
due and payable under Section 3.07(c),
(d) or (e) of such Liquidity Facility on a
Downgrade Drawing, Non-Extension
Drawing or Final Drawing thereunder.
"Investment Earnings" means investment earnings on funds on
deposit
in the Trust Accounts net of losses and the
Subordination Agent's reasonable
expenses in making such investments.
"Lease" means with respect to any Indenture relating to a
Leased
Aircraft, the "Lease" referred to
therein.
"Leased Aircraft" has the meaning specified in the recitals of
this
Agreement.
"Lending Office" has the meaning, with respect to any Liquidity
Facility, ascribed to such term in such
Liquidity Facility.
"Lien" means any mortgage, pledge, lien, charge, claim,
encumbrance,
lease, sublease or security interest of any
kind.
"Liquidity Event of Default", with respect to any Liquidity
Facility, has the meaning specified in such
Liquidity Facility.
"Liquidity Expenses" means all Liquidity Obligations other than
(i)
the principal amount of any Drawings under
the Liquidity Facilities and (ii) any
interest accrued on any Liquidity
Obligations.
"Liquidity Facility" means, at any time, the Class G-1
Liquidity
Facility, the Class G-2 Liquidity Facility
or the Class C Liquidity Facility, as
applicable.
"Liquidity Obligations" means all principal, interest, fees and
other amounts owing to the Liquidity
Providers under the Liquidity Facilities,
Section 4.02 of the Participation
Agreements relating to the Owned Aircraft,
Section 4.03 of the Participation
Agreements relating to the Leased Aircraft or
the Fee Letter.
"Liquidity Provider" means, at any time, the Class G-1
Liquidity
Provider, the Class G-2 Liquidity Provider
or the Class C Liquidity Provider, as
applicable.
"Liquidity Provider Incumbency Certificate" has the meaning
specified in Section 2.05(c).
"Liquidity Provider Representatives" has the meaning specified
in
Section 2.05(c).
"Loan Trustee" means, with respect to any Indenture, the bank,
trust
company or other financial institution
designated as loan trustee thereunder,
and any successor to such loan trustee.
"LTV Appraisals" has the meaning specified in Section 4.01(a).
"LTV Collateral Amount" of any Aircraft for any Class of
Certificates means, as of any Distribution
Date, the lesser of (i)(x) with
respect to any Aircraft other than an
Aircraft referred to in the following
clauses (y) and (z), the LTV Ratio for such
Class of Certificates multiplied by
the Appraised Current Market Value of such
Aircraft or (y) with respect to any
such Aircraft that has suffered an Event of
Loss under and as defined in the
relevant Indenture, the amount of the
insurance proceeds paid to the related
Loan Trustee in respect thereof to the
extent then held by such Loan Trustee
(and/or on deposit in the Special Payments
Account) or payable to such Loan
Trustee in respect thereof or (z) with
respect to any such Aircraft that has
been released from the applicable Indenture
pursuant to the provisions of
Section 10.01(b) thereof, the amount of
money and U.S. Government Obligations
deposited with the Loan Trustee pursuant
thereto as of such Distribution Date
and (ii) the outstanding principal amount
of the Equipment Notes secured by such
Aircraft after giving effect to any
principal payments of such Equipment Notes
on or before such Distribution Date.
"LTV Ratio" means (i) for the Class G-1 Certificates, 56.1%,
(ii)
for the Class G-2 Certificates, 56.1%,
(iii) for the Class C Certificates, 61.1%
and (iv) for the Class D Certificates,
69.7%.
"Minimum Sale Price" means, with respect to any Aircraft or the
Equipment Notes issued in respect of such
Aircraft, at any time, the lesser of
(a) 75% of the Appraised Current Market
Value of such Aircraft and (b) the
aggregate outstanding principal amount of
such Equipment Notes, plus accrued and
unpaid interest thereon.
"Moody's" means Moody's Investors Service, Inc.
"Non-Controlling Party" means, at any time, the Policy Provider,
any
Trustee or Liquidity Provider which is not
the Controlling Party at such time.
"Non-Extended Facility" has the meaning specified in Section
3.06(d).
"Non-Extension Drawing" has the meaning specified in Section
3.06(d).
"Non-Performing Equipment Note" means an Equipment Note issued
pursuant to an Indenture that is not a
Performing Equipment Note.
"Notice of Avoided Payment", with respect to a Policy, has the
meaning specified in such Policy.
"Notice of Nonpayment", with respect to a Policy, has the
meaning
specified in such Policy.
"Officer's Certificate" of any Person means a certification
signed
by a Responsible Officer of such
Person.
"Operative Agreements" means this Agreement, the Liquidity
Facilities, the Business Trust Agreement,
the Policies, the Policy Provider
Agreement, the Policy Fee Letter, the Fee
Letter, the Indentures, the Leases (if
any), the Trust Agreements, the
Participation Agreements, the Equipment Notes
and the Certificates, together with all
exhibits and schedules included with any
of the foregoing.
"Outstanding" means,
when used with respect to each Class of
Certificates, as of the date of
determination, all Certificates of such Class
theretofore authenticated and delivered
under the related Trust Agreement,
except:
(i) Certificates of such Class theretofore canceled by the
Registrar
(as
defined in such Trust Agreement) or delivered to the Trustee
thereunder
or such Registrar for cancellation;
(ii) all of the Certificates of such Class if money in the full
amount
required to make the final distribution with respect to such
Class
pursuant
to Section 11.01 of such Trust Agreement has been theretofore
deposited
with the related Trustee in trust for the Certificateholders of
such
Certificates as provided in Section 4.01 of such Trust
Agreement,
pending
distribution of such money to such Certificateholders pursuant
to
payment of
such final distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of
which
other
Certificates of such Class have been authenticated and
delivered
pursuant
to such Trust Agreement;
provided, however, that in determining
whether the holders of the requisite
Fractional Undivided Interest of such
Certificates have given any request,
demand, authorization, direction, notice,
consent or waiver hereunder, any
Certificates owned by Delta or any of its
Affiliates shall be disregarded and
deemed not to be Outstanding. In
determining whether such Trustee shall be
protected in relying upon any such request,
demand, authorization, direction,
notice, consent or waiver, only
Certificates that such Trustee knows to be so
owned shall be so disregarded.
Notwithstanding the foregoing, (x) if Delta and
its Affiliates own 100% of the Certificates
of each Class, such Certificates
shall not be so disregarded and (y) if any
amount of such Certificates owned by
Delta and its Affiliates have been pledged
in good faith, such Certificates
shall not be disregarded if the pledgee
establishes to the satisfaction of the
applicable Trustee the pledgee's right so
to act with respect to such
Certificates and that the pledgee is not
Delta or any of its Affiliates.
"Overdue Scheduled Payment" means any Scheduled Payment which is
not
in fact received by the Subordination Agent
within five days after the Scheduled
Payment Date relating thereto.
"Owned Aircraft" has the meaning specified in the recitals of
this
Agreement.
"Owner Participant" means, with respect to any Indenture
pertaining
to a Leased Aircraft, the Owner Participant
(as defined therein) and any
permitted successor or assign of such Owner
Participant.
"Owner Trustee" means, with respect to any Indenture pertaining to
a
Leased Aircraft, the Owner Trustee (as
defined therein) not in its individual
capacity but solely as trustee under the
related owner trust agreement, together
with any successor trustee appointed
pursuant to such owner trust agreement.
"Participation Agreement" means, with respect to each Indenture,
the
"Participation Agreement" referred to
therein, as the same may be amended,
supplemented or otherwise modified from
time to time in accordance with its
terms.
"Payees" has the meaning specified in Section 2.03(c).
"Performing Equipment Note" means an Equipment Note issued
pursuant
to an Indenture with respect to which no
payment default has occurred and is
continuing (without giving effect to any
Acceleration); provided, that in the
event of a bankruptcy proceeding in which
Delta is a debtor under Title 11 of
the United States Code (the "Bankruptcy
Code"), (i) any payment default
occurring before the date of the order for
relief for such proceeding shall not
be taken into consideration during the
60-day period under Section 1110(a)(2)(A)
of the Bankruptcy Code (or such longer
period as may apply under Section 1110(b)
of the Bankruptcy Code) (the "Section 1110
Period"), (ii) any payment default
occurring after the date of the order for
relief in such proceeding shall not be
taken into consideration if such payment
default is cured under Section
1110(a)(2)(B) of the Bankruptcy Code before
the later of 30 days after the date
of such default or the expiration of the
Section 1110 Period and (iii) any
payment default occurring after the Section
1110 Period will not be taken into
consideration if such payment default is
cured before the end of the grace
period, if any, set forth in the related
Indenture.
"Performing Note Deficiency" means any time that less than 65%
of
the then aggregate outstanding principal
amount of all Equipment Notes are
Performing Equipment Notes.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture,
association, joint-stock company, trust,
trustee, unincorporated organization or
government or any agency or political
subdivision thereof.
"Policy" means the Class G-1 Policy or the Class G-2 Policy.
"Policy Account" means the Class G-1 Policy Account or the Class
G-2
Policy Account, as applicable.
"Policy Drawing" means, with respect to any Policy, any payment of
a
claim under such Policy.
"Policy Expenses" means all amounts (including amounts in respect
of
expenses) owing to the Policy Provider
under the Policy Provider Agreement or
the Participation Agreements other than (i)
any amounts due under the Policy Fee
Letter, (ii) the amount of any Policy
Drawing and any interest accrued thereon,
(iii) reimbursement of and interest on the
Liquidity Obligations paid to the
Liquidity Provider by the Policy Provider,
(iv) any indemnity payments owed to
the Policy Provider, (v) any amounts that
the Policy Provider is entitled to
receive by virtue of the subrogation rights
of the Policy Provider hereunder,
including, without limitation, fees and
expenses incurred in connection with the
enforcement of such rights and (vi) any
Excess Reimbursement Obligations.
"Policy Fee Letter" means the fee letter, dated as of April 30,
2002
from the Policy Provider to Delta and the
Subordination Agent setting forth the
Premium and certain other amounts payable
in respect of the Policies.
"Policy Provider" means MBIA Insurance Corporation, or any
successor
thereto, as issuer of the Policies.
"Policy Provider Agreement" means the Insurance and Indemnity
Agreement, dated as of the date of issuance
of the Certificates, among the
Subordination Agent, the Class G-1 Trustee,
the Class G-2 Trustee, Delta and the
Policy Provider pursuant to which, among
other things, the Subordination Agent
agrees to reimburse the Policy Provider for
amounts paid pursuant to claims made
under the Policies.
"Policy Provider Default" means the occurrence of any of the
following events: (a) the Policy Provider
fails to make a payment required under
any Policy in accordance with its terms and
such failure remains unremedied for
two Business Days following the delivery of
Written Notice of such failure to
the Policy Provider or (b) the Policy
Provider (i) files any petition or
commences any case or proceeding under any
provisions of any federal or state
law relating to insolvency, bankruptcy,
rehabilitation, liquidation or
reorganization, (ii) makes a general
assignment for the benefit of its creditors
or (iii) has an order for relief entered
against it under any federal or state
law relating to insolvency, bankruptcy,
rehabilitation, liquidation or
reorganization that is final and
nonappealable, or (c) a court of competent
jurisdiction, the New York Insurance
Department or another competent regulatory
authority enters a final and nonappealable
order, judgment or decree (i)
appointing a custodian, trustee, agent or
receiver for the Policy Provider or
for all or any material portion of its
property or (ii) authorizing the taking
of possession by a custodian, trustee,
agent or receiver of the Policy Provider
(or taking of possession of all or any
material portion of the Policy Provider's
property).
"Policy Provider Election" has the meaning specified in Section
3.07(c).
"Policy Provider Incumbency Certificate" has the meaning
specified
in Section 2.05(d).
"Policy Provider Obligations" means all reimbursement and other
amounts, including fees and indemnities,
due to the Policy Provider under the
Policy Provider Agreement, but shall not
include (i) any amounts due under the
Policy Fee Letter and (ii) any interest on
Policy Drawings except, if the Class
G-1 Liquidity Provider or the Class G-2
Liquidity Provider has failed to honor
its obligation to make a payment on any
Interest Drawing in respect of the Class
G-1 Certificates or the Class G-2
Certificates, as applicable, interest on the
portion of any Policy Drawing made to cover
the shortfall attributable to such
failure by the Liquidity Provider in an
amount equal to the amount of interest
that would have accrued on such Interest
Drawing if such Interest Drawing had
been made at the interest rate applicable
to such Interest Drawing until such
Policy Drawing has been repaid in full, up
to a maximum of three such Policy
Drawings under the applicable Policy. For
the avoidance of doubt, and subject to
the effect of payment priorities with
respect to Excess Reimbursement
Obligations, Policy Provider Obligations
include reimbursement of and interest
on the Liquidity Obligations in respect of
the Liquidity Facilities paid by the
Policy Provider to the Liquidity
Provider.
"Policy Provider Representatives" has the meaning specified in
Section 2.05(d).
"Pool Balance" means, with respect to the Certificates of any
Class,
as of any date, (i) the original aggregate
face amount of the Certificates of
such Class less (ii) the aggregate amount
of all distributions made in respect
of such Certificates other than
distributions made in respect of interest or
premium or reimbursement of any costs or
expenses incurred in connection
therewith. The Pool Balance as of any
Distribution Date with respect to each
Class shall be computed after giving effect
to the payment of principal, if any,
on the Equipment Notes or other Trust
Property held in the related Trust and the
distribution thereof to be made on such
date and, with respect to the Class G-1
Trust or the Class G-2 Trust, payments
under the related Policy for the benefit
of the Class G-1 Certificateholders or the
Class G-2 Certificateholders,
respectively (other than in respect of the
Liquidity Facilities and interest on
the Class G-1 Certificates or the Class G-2
Certificates, respectively).
"Premium" has the meaning specified in the Policy Fee Letter.
"Premium Percentage" has the meaning specified in the Policy
Fee
Letter.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Provider Representatives" has the meaning specified in Section
2.05(c)
"PTC Event of Default" means, with respect to each Trust
Agreement,
the failure to distribute within 10
Business Days after the applicable
Distribution Date: (i) the outstanding Pool
Balance of the applicable Class of
Certificates on the Final Legal
Distribution Date for such Class (unless, in the
case of the Class G-1 Certificates or the
Class G-2 Certificates, the
Subordination Agent shall have made a
drawing under the Class G-1 Policy or the
Class G-2 Policy, respectively, in an
aggregate amount sufficient to pay such
outstanding Pool Balance and shall have
distributed such amount to the Class G-1
Trustee or the Class G-2 Trustee,
respectively) or (ii) interest scheduled for
distribution on such Certificates on any
Distribution Date (unless the
Subordination Agent shall have made an
Interest Drawing, or a withdrawal from
the Cash Collateral Account for such Class
or (in the case of the Class G-1
Certificates or the Class G-2 Certificates)
a drawing under the Class G-1 Policy
or the Class G-2 Policy, respectively, with
respect thereto in an aggregate
amount sufficient to pay such interest and
shall have distributed such amount to
the Trustee entitled thereto).
"Rating Agencies" means, collectively, at any time, each of two
nationally recognized rating agencies that
have been requested to rate the
Certificates and that are then rating the
Certificates. The initial Rating
Agencies will be Moody's and S&P.
"Ratings Confirmation" means, with respect to any action proposed
to
be taken, a written confirmation from each
of the Rating Agencies that such
action (without regard to the related
Policy in the case of the Class G-1
Certificates and Class G-2 Certificates)
would not result in (i) a reduction of
the rating for any Class of Certificates
below the then current rating for such
Class of Certificates or (ii) a withdrawal
or suspension of the rating of any
Class of Certificates.
"Register", with respect to any Trust, has the meaning ascribed
to
such term in the Trust Agreement for such
Trust.
"Regular Distribution Dates" means each January 2 and July 2,
commencing on January 2, 2003; provided,
however, that, if any such day shall
not be a Business Day, the related
distribution shall be made on the next
succeeding Business Day without additional
interest.
"Replacement Liquidity Facility" means, for any Liquidity
Facility,
an irrevocable revolving credit agreement
(or agreements) in substantially the
form of the replaced Liquidity Facility,
including reinstatement provisions, or
in such other form (which may include a
letter of credit, surety bond, financial
insurance policy or guaranty) as shall
permit the Rating Agencies to confirm in
writing their respective ratings then in
effect for the Certificates of the
Class with respect to which such Liquidity
Facility was issued (before
downgrading of such ratings, if any, as a
result of the downgrading, if any, of
the applicable Liquidity Provider without
regard to any Policy), and, in the
case of the Class G-1 Liquidity Facility or
the Class G-2 Liquidity Facility
only, to be consented to by the Policy
Provider, which consent shall not be
unreasonably withheld or delayed, in a face
amount (or in an aggregate face
amount) equal to the applicable Required
Amount and issued by a Person (or
Persons) having short-term ratings issued
by both Rating Agencies that are equal
to or higher than the Threshold Rating
specified in clause (a) of the definition
of "Threshold Rating" or if such Person (or
Persons) does not have a short-term
rating from a given Rating Agency, a
long-term rating issued by such Rating
Agency that is equal to or higher than the
"Threshold Rating" specified in
clause (b) of the definition of Threshold
Rating. Without limitation of the form
that a Replacement Liquidity Facility
otherwise may have pursuant to the
preceding sentence, a Replacement Liquidity
Facility for any Class of
Certificates may have a stated expiration
date earlier than 15 days after the
Final Legal Distribution Date of such Class
of Certificates so long as such
Replacement Liquidity Facility provides for
a Non-Extension Drawing as
contemplated by Section 3.06(d) hereof.
"Replacement Liquidity Provider" means a Person who issues a
Replacement Liquidity Facility.
"Required Amount" means, with respect to each Liquidity Facility,
or
the Cash Collateral Account, for any Class,
for any day, the sum of the
aggregate amount of interest, calculated at
the rate per annum equal to the
Stated Interest Rate for the related Class
of Certificates on the basis of a
360-day year comprised of twelve 30-day
months, that would be distributable on
such Class of Certificates on each of the
three successive Regular Distribution
Dates immediately following such day or, if
such day is a Regular Distribution
Date, on such day and the succeeding two
Regular Distribution Dates, in each
case calculated on the basis of the Pool
Balance of such Class of Certificates
on such date and without regard to expected
future distributions of principal on
such Class of Certificates. The Pool
Balance for purposes of the definition of
Required Amount with respect to the Class
G-1 Liquidity Facility or the Class
G-2 Liquidity Facility shall, in the event
of any Policy Provider Election, be
deemed to be reduced by an amount (if
positive) by which (a) the outstanding
principal balance of the Series G-1
Equipment Note or the Series G-2 Equipment
Note, respectively, in respect of which
such Policy Provider Election has been
made shall exceed (b) the amount of any
Policy Drawings previously paid by the
Policy Provider in respect of principal on
such Series G-1 Equipment Note or
Series G-2 Equipment Note,
respectively.
"Responsible Officer" means (i) with respect to the
Subordination
Agent and each of the Trustees, any officer
in the Corporate Trust Department or
similar department of the Subordination
Agent or such Trustee, as the case may
be, or any other officer customarily
performing functions similar to those
performed by the persons who at the time
shall be such officers or to whom any
corporate trust matter is referred because
of his knowledge of and familiarity
with a particular subject, (ii) with
respect to each Liquidity Provider, any
authorized officer of such Liquidity
Provider and (iii) with respect to the
Policy Provider, any of its authorized
officers.
"Scheduled Payment" means, with respect to any Equipment Note,
(i)
any payment of principal or interest on
such Equipment Note (other than an
Overdue Scheduled Payment) or (ii) any
distribution in respect of interest on
such Equipment Note to the
Certificateholders of Certificates of the
corresponding Class of Certificates with
funds drawn under the Liquidity
Facility for such Class or withdrawn from
the Cash Collateral Account for such
Class (or, in the case of any Series G-1
Equipment Note or Series G-2 Equipment
Note, under the Class G-1 Policy or the
Class G-2 Policy, respectively), which
payment in the case of clause (i) or clause
(ii) represents an installment of
principal on such Equipment Note at the
stated maturity of such installment, or
the payment of regularly scheduled interest
accrued on the unpaid principal
amount of such Equipment Note, or both;
provided, however, that any payment of
principal, premium, if any, or interest
resulting from the redemption or
purchase of any Equipment Note shall not
constitute a Scheduled Payment.
"Scheduled Payment Date" means, with respect to any Scheduled
Payment, the date on which such Scheduled
Payment is scheduled to be made.
"Section 2.04(b) Fraction" has the meaning specified in Section
2.04(b).
"Series C Equipment Notes" means the Series C Equipment Notes
issued
pursuant to each Indenture by Delta (or the
Owner Trustee, following a
sale/leaseback transaction relating to the
Aircraft referred to in such
Indenture) and authenticated by the Loan
Trustee thereunder, and any such
Equipment Notes issued in exchange therefor
or replacement thereof pursuant to
the terms of such Indenture.
"Series D Equipment Notes" means the Series D Equipment Notes
issued
pursuant to each Indenture by Delta and
authenticated by the Loan Trustee
thereunder, and any such Equipment Notes
issued in exchange therefor or
replacement thereof pursuant to the terms
of such Indenture.
"Series G-1 Equipment Notes" means the Series G-1 Equipment
Notes
issued pursuant to each Indenture by Delta
(or the Owner Trustee, following a
sale/leaseback transaction relating to the
Aircraft referred to in such
Indenture) and authenticated by the Loan
Trustee thereunder, and any such
Equipment Notes issued in exchange therefor
or replacement thereof pursuant to
the terms of such Indenture.
"Series G-2 Equipment Notes" means the Series G-2 Equipment
Notes
issued pursuant to each Indenture by Delta
(or the Owner Trustee, following a
sale/leaseback transaction relating to the
Aircraft referred to in such
Indenture) and authenticated by the Loan
Trustee thereunder, and any such
Equipment Notes issued in exchange therefor
or replacement thereof pursuant to
the terms of such Indenture.
"Special Distribution Date" means, (i) with respect to any
Special
Payment, the Business Day chosen by the
Subordination Agent pursuant to Section
2.04(a) or 3.07(b) for the distribution of
such Special Payment in accordance
with this Agreement, (ii) an Election
Distribution Date or (iii) each other date
designated in Section 3.07(c) or 3.07(e) as
a Special Distribution Date.
"Special Payment" means any payment (other than a Scheduled
Payment
or a distribution referred to in Section
2.03(c)) in respect of, or any proceeds
of, any Equipment Note or Collateral (as
defined in each Indenture in respect of
an Owned Aircraft) or Indenture Estate (as
defined in each Indenture in respect
of a Leased Aircraft).
"Special Payments Account" means the Eligible Deposit Account
created pursuant to Section 2.02(a) as a
sub-account to the Collection Account.
"S&P" means Standard & Poor's Ratings Services, a division
of The
McGraw-Hill Companies, Inc.
"State Street" has the meaning specified in the introductory
paragraph to this Agreement.
"Stated Amount" with respect to any Liquidity Facility, means
the
Maximum Commitment (as defined in such
Liquidity Facility) of the applicable
Liquidity Provider thereunder.
"Stated Expiration Date" has the meaning specified in Section
3.06(d).
"Stated Interest Rate" means (i) with respect to the Class G-1
Certificates, 6.718% per annum, (ii) with
respect to the Class G-2 Certificates,
6.417% per annum, (iii), with respect to
the Class C Certificates, 7.779% per
annum and (iv) with respect to the Class D
Certificates, 8.270% per annum.
"Subordination Agent" has the meaning specified in the
introductory
paragraph to this Agreement.
"Subordination Agent Incumbency Certificate" has the meaning
specified in Section 2.05(a).
"Subordination Agent Representatives" has the meaning specified
in
Section 2.05(a).
"Tax" and "Taxes" means all governmental fees (including,
without
limitation, license, filing and
registration fees) and all taxes (including,
without limitation, franchise, excise,
stamp, value added, income, gross
receipts, sales, use and property taxes),
withholdings, assessments, levies,
imposts, duties or charges, of any nature
whatsoever, together with any related
penalties, fines, additions to tax or
interest thereon imposed, withheld, levied
or assessed by any country, taxing
authority or governmental subdivision thereof
or therein or by any international
authority, including any taxes imposed on any
Person as a result of such Person being
required to collect and pay over
withholding taxes.
"Termination Notice" with respect to any Liquidity Facility has
the
meaning specified in such Liquidity
Facility.
"Threshold Rating" means (a) with respect to the Class G-1
Liquidity
Provider and the Class G-2 Liquidity
Provider, a short-term unsecured debt
rating of P-1 in the case of Moody's and a
short-term corporate credit rating of
A-1+ in the case of S&P, and with
respect to the Class C Liquidity Provider, a
short-term unsecured debt rating of P-1 in
the case of Moody's and a short-term
corporate credit rating of A-1 in the case
of S&P, and (b) in the case of any
Person who does not have such short-term
rating from either or both of such
Rating Agencies, then in lieu of such
short-term rating from such Rating Agency
or Rating Agencies, with respect to the
Class G-1 Liquidity Provider and the
Class G-2 Liquidity Provider, a long-term
unsecured debt rating of A1 in the
case of Moody's and a long-term corporate
credit rating of AA- in the case of
S&P and, with respect to the Class C
Liquidity Provider, a long-term unsecured
debt rating of A1 in the case of Moody's
and a long-term corporate credit rating
of A in the case of S&P.
"Treasury
Regulations" means regulations, including proposed or
temporary regulations, promulgated under
the Code. References herein to specific
provisions of proposed or temporary
regulations shall include analogous
provisions of final Treasury Regulations or
other successor Treasury
Regulations.
"Triggering Event" means (x) the occurrence of an Indenture Event
of
Default under all of the Indentures
resulting in a PTC Event of Default with
respect to the most senior Class of
Certificates then Outstanding, (y) the
Acceleration of all of the outstanding
Equipment Notes or (z) the occurrence of
a Delta Bankruptcy Event.
"Trust" means any of the Class G-1 Trust, the Class G-2 Trust,
the
Class C Trust or the Class D Trust.
"Trust
Accounts" has the meaning specified in Section 2.02(a).
"Trust Agreement" means any of the Class G-1 Trust Agreement,
the
Class G-2 Trust Agreement, the Class C
Trust Agreement or the Class D Trust
Agreement.
"Trust Property", with respect to any Trust, has the meaning
specified in the Trust Agreement for such
Trust.
"Trust Supplement" means an agreement supplemental to the Basic
Agreement pursuant to which (i) a separate
trust is created for the benefit of
the holders of Certificates of a series,
(ii) the issuance of the Certificates
of a series representing fractional
undivided interests in such trust is
authorized and (iii) the terms of the
Certificates of such series are
established, as such agreement may from
time to time be supplemented, amended or
otherwise modified.
"Trustee" means any of the Class G-1 Trustee, the Class G-2
Trustee,
the Class C Trustee or the Class D
Trustee.
"Trustee Incumbency Certificate" has the meaning specified in
Section 2.05(b).
"Trustee Representatives" has the meaning specified in Section
2.05(b).
"Underwriters" means the several underwriters listed as such in
the
Underwriting Agreement.
"Underwriting Agreement" means the Underwriting Agreement,
dated
April 23, 2002, among the Underwriters and
Delta, relating to the purchase of
the Certificates by the Underwriters, as
the same may be amended, supplemented
or otherwise modified from time to time in
accordance with its terms.
"United States" means the United States of America.
"WestLB" has the meaning specified in the introductory paragraph
to
this Agreement.
"Withdrawal Notice" has the meaning specified in Section
3.06(d).
"Written Notice" means, from the Subordination Agent, any
Trustee,
the Liquidity Provider or the Policy
Provider, a written instrument executed by
the Designated Representative of such
Person. An invoice delivered by a
Liquidity Provider pursuant to Section 3.01
in accordance with its normal
invoicing procedures shall constitute
Written Notice under such Section.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
Section 2.01. Agreement to Terms of Subordination; Payments
from
Monies Received Only. (a) Each Trustee
hereby acknowledges and agrees to the
terms of subordination set forth in this
Agreement in respect of each Class of
Certificates and agrees to enforce such
provisions and cause all payments in
respect of the Equipment Notes, the
Liquidity Facilities and the Policies to be
applied in accordance with the terms of
this Agreement. In addition, each
Trustee hereby agrees to cause the
Equipment Notes purchased by the related
Trust to be registered in the name of the
Subordination Agent or its nominee, as
agent and trustee for such Trustee, to be
held in trust by the Subordination
Agent solely for the purpose of
facilitating the enforcement of the
subordination and other provisions of this
Agreement.
(b) Except as otherwise expressly provided in the next
succeeding
sentence of this Section 2.01(b), all
payments to be made by the Subordination
Agent hereunder shall be made only from
amounts received by it that constitute
Scheduled Payments, Special Payments and
other payments under the Operative
Agreements, including payments under
Section 4.02 of the Participation
Agreements relating to the Owned Aircraft,
Section 4.03 of the Participation
Agreements relating to the Leased Aircraft,
and Section 2.14 of the Indentures,
and only to the extent that the
Subordination Agent shall have received
sufficient income or proceeds therefrom to
enable it to make such payments in
accordance with the terms hereof. Each of
the Trustees and the Subordination
Agent hereby agrees and each
Certificateholder, by its acceptance of a
Certificate, each Liquidity Provider, by
entering into the Liquidity Facility to
which it is a party, and the Policy
Provider, by entering into the Policy
Provider Agreement, has agreed to look
solely to such amounts to the extent
available for distribution to it as
provided in this Agreement or the applicable
Trust Agreement, as the case may be, and
that none of the Trustees, Owner
Trustees, Loan Trustees, Owner Participants
or the Subordination Agent is
personally liable to any of them for any
amounts payable or any liability under
this Agreement, any Trust Agreement, any
Liquidity Facility, the Policy Provider
Agreement or such Certificate, except (in
the case of the Subordination Agent)
as expressly provided herein or (in the
case of the Trustees) as expressly
provided herein and in each Trust Agreement
or (in the case of the Loan Trustees
and the Owner Trustees) as expressly
provided in any Operative Agreement.
Notwithstanding anything to the contrary in this Agreement and
in
the other Operative Agreements, the
Certificates do not represent indebtedness
of the related Trust, and references in
this Agreement and the Operative
Agreements to accrued interest or principal
amounts payable on the Certificates
of any Class are included only for
computational purposes. For purposes of such
computations, the Certificates of any Class
shall be deemed to be comprised of
interest and principal components, with the
principal component deemed to be the
Pool Balance, and the interest component
deemed to equal interest accruing at
the Stated Interest Rate for such Class of
Certificates from (i) the later of
(1) the date of the issuance thereof and
(2) the most recent but preceding
Distribution Date to which such interest
was distributed to (ii) the applicable
date of determination, such interest to be
considered payable in arrears and to
be calculated on the basis of a 360-day
year comprised of twelve 30-day months.
Section 2.02. Trust Accounts. (a) Upon the execution of this
Agreement, the Subordination Agent shall
establish and maintain in its name (i)
the Collection Account as an Eligible
Deposit Account, bearing a designation
clearly indicating that the funds deposited
therein are held in trust for the
benefit of the Trustees, the
Certificateholders, the Liquidity Providers and the
Policy Provider, (ii) as a sub-account in
the Collection Account, the Special
Payments Account as an Eligible Deposit
Account, bearing a designation clearly
indicating that the funds deposited therein
are held in trust for the benefit of
the Trustees, the Certificateholders, the
Liquidity Providers and the Policy
Provider and (iii) (x) a Class G-1 Policy
Account as an Eligible Deposit Account
bearing a designation clearly indicating
that the funds deposited therein are
held in trust for the benefit of the Class
G-1 Certificateholders and (y) a
Class G-2 Policy Account as an Eligible
Deposit Account bearing a designation
clearly indicating that the funds deposited
therein are held in trust for the
benefit of the Class G-2
Certificateholders. The Subordination Agent shall
establish and maintain the Cash Collateral
Accounts pursuant to and under the
circumstances set forth in Section 3.06(f).
Upon such establishment and
maintenance under Section 3.06(f), the
Collection Account, the Cash Collateral
Accounts and the Policy Accounts shall
constitute the "Trust Accounts"
hereunder.
(b) Funds on deposit in the Trust Accounts shall be invested
and
reinvested by the Subordination Agent in
Eligible Investments selected by Delta
or its designated representative if such
investments are reasonably available
and have maturities no later than the
earlier of (i) 90 days following the date
of such investment and (ii) the Business
Day immediately preceding the Regular
Distribution Date or the date of the
related distribution pursuant to Section
2.04, as the case may be, next following
the date of such investment; provided,
however, that, following the making of a
Downgrade Drawing or a Non-Extension
Drawing under any Liquidity Facility, the
Subordination Agent shall invest and
reinvest the amounts in the applicable Cash
Collateral Account in Eligible
Investments pursuant to the written
instructions of the Liquidity Provider
funding such Drawing, and provided further,
however, that upon the occurrence
and during the continuation of a Triggering
Event, the Subordination Agent shall
invest and reinvest such amounts (other
than amounts in the Cash Collateral
Accounts as a result of a Downgrade Drawing
or a Non-Extension Drawing, which
shall be governed by the foregoing proviso)
in Eligible Investments in
accordance with the written instructions of
the Controlling Party. Unless
otherwise expressly provided in this
Agreement (including, without limitation,
with respect to Investment Earnings on
amounts on deposit in the Cash Collateral
Accounts, Section 3.06(f)), any Investment
Earnings shall be deposited in the
Collection Account when received by the
Subordination Agent and shall be applied
by the Subordination Agent in the same
manner as the other amounts on deposit in
the Collection Account are to be applied.
The Subordination Agent's reasonable
fees and expenses actually incurred in
making such investments and any losses
incurred in such investments shall be
charged against the principal amount
invested. The Subordination Agent shall not
be liable for any loss resulting
from any investment, reinvestment or
liquidation required to be made under this
Agreement other than by reason of its
willful misconduct or negligence. Eligible
Investments and any other investment
required to be made hereunder shall be held
to their maturities except that any such
investment may be sold (without regard
to its maturity) by the Subordination Agent
without instructions whenever such
sale is necessary to make a distribution
required under this Agreement.
Uninvested funds held hereunder shall not
earn or accrue interest.
(c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time
to time in the Trust Accounts and in
all proceeds thereof (including all income
thereon, except as otherwise
expressly provided herein with respect to
Investment Earnings). The Trust
Accounts shall be held in trust by the
Subordination Agent under the sole
dominion and control of the Subordination
Agent for the benefit of the Trustees,
the Certificateholders, the Liquidity
Providers and the Policy Provider, as the
case may be. If, at any time, any of the
Trust Accounts ceases to be an Eligible
Deposit Account, the Subordination Agent
shall within 10 Business Days (or such
longer period, not to exceed 30 calendar
days, to which the Policy Provider, the
Liquidity Providers and each Rating Agency
may consent) establish a new
Collection Account, Special Payments
Account, Policy Account or Cash Collateral
Account, as the case may be, as an Eligible
Deposit Account and shall transfer
any cash and/or any investments to such new
Collection Account, Special Payments
Account, Policy Account, Cash Collateral
Account, as the case may be. So long as
the Subordination Agent is an Eligible
Institution, the Trust Accounts shall be
maintained with it as Eligible Deposit
Accounts.
Section 2.03. Deposits to the Collection Account and Special
Payments Account; Certain Distributions.
(a) The Subordination Agent shall, on
each day when one or more Scheduled
Payments are made to the Subordination Agent
as holder of the Equipment Notes (other
than any Scheduled Payment which by the
express terms hereof is to be deposited to
a Policy Account or a Cash Collateral
Account), deposit in the Collection Account
the aggregate amount of such
Scheduled Payments.
(b) The Subordination Agent shall, on each day when one or more
Special Payments are made to the
Subordination Agent as holder of the Equipment
Notes, deposit in the Special Payments
Account the aggregate amount of such
Special Payments.
(c) In the event that a Loan Trustee distributes to the
Subordination Agent pursuant to Section
3.04 or clause "first" of Section 3.03
of any Indenture any amounts payable under
clauses (b), (c), (d) or (e) of
Section 2.14 of any Indenture, the
Subordination Agent shall promptly deposit
such amounts in the Collection Account. The
Subordination Agent will distribute
promptly upon receipt thereof (or in the
case of any such payment, compensation
or reimbursement in respect of the
Subordination Agent, will retain) (i) any
indemnity payment received by it from Delta
in respect of any Trustee, the
Subordination Agent, any Liquidity Provider
or the Policy Provider
(collectively, the "Payees") and (ii) any
compensation or reimbursement received
by it from Delta or the Loan Trustee under
any Operative Agreement in respect of
any Payee (including, without limitation,
any fees payable to any Liquidity
Provider under Section 2.03 of any
Liquidity Facility, any premium payable to
the Policy Provider under the Policy
Provider Agreement or other amounts
referred to in clauses (a), (c), (d) or (e)
of Section 2.14 of any Indenture),
in any such case directly to the Payee
entitled thereto, provided that if such
Payee has previously received from the
Collection Account such payment,
compensation or reimbursement, then the
Subordination Agent shall deposit such
amount in the Collection Account.
Section 2.04. Distributions of Special Payments. (a) Notice of
Special Payment. Upon receipt by the
Subordination Agent, as registered holder
of the Equipment Notes, of any notice of a
Special Payment (or, in the absence
of any such notice, upon receipt by the
Subordination Agent of a Special
Payment), the Subordination Agent shall
promptly give notice thereof to each
Trustee, the Liquidity Providers and the
Policy Provider. The Subordination
Agent shall promptly calculate the amount
of the prepayment (including upon
Acceleration), redemption or purchase of
Equipment Notes or the amount of any
Overdue Scheduled Payment, as the case may
be, comprising such Special Payment
under the applicable Indenture or
Indentures and shall promptly send to each
Trustee and the Policy Provider a Written
Notice of such amount and the amount
allocable to each Trust. Such Written
Notice shall also set the distribution
date for such Special Payment (a "Special
Distribution Date"), which shall be
the first Business Day that follows the
later to occur of (x) the 15th day after
the date of such Written Notice or (y) the
date the Subordination Agent has
received or expects to receive such Special
Payment. Amounts on deposit in the
Special Payments Account shall be
distributed in accordance with Sections
2.04(b) and 2.04(c) hereof, as
applicable.
(b) Redemptions, Purchases and Prepayments of Equipment Notes.
(i)
So long as no Triggering Event shall have
occurred (whether or not continuing),
the Subordination Agent shall make
distributions pursuant to this Section
2.04(b) of amounts on deposit in the
Special Payments Account on account of the
redemption, purchase (including, without
limitation, a purchase resulting from a
sale of the Equipment Notes permitted by
Article IV) or prepayment (including
upon Acceleration) of all of the Equipment
Notes issued pursuant to an Indenture
on the Special Distribution Date for such
Special Payment in the following order
of priority:
first, such amount as shall be required to pay (A) all accrued
and unpaid Liquidity Expenses and Policy Expenses then in
arrears
plus (B) the product of (x) the aggregate amount of all accrued
and
unpaid Liquidity Expenses and Policy Expenses not in arrears to
such
Special Distribution Date multiplied by (y) a fraction, the
numerator of which is the aggregate outstanding principal amount
of
Equipment Notes being redeemed, purchased or prepaid on such
Special
Distribution Date and the denominator of which is the aggregate
outstanding principal amount of all Equipment Notes (the
"Section
2.04(b) Fraction"), shall be distributed to the Liquidity
Providers
and the Policy Provider pro rata on the basis of the amount of
Liquidity Expenses and Policy Expenses owed to each Liquidity
Provider and the Policy Provider, respectively;
second, such amount as shall be required to pay (i) (A) all
accrued and unpaid interest (including interest accrued and
unpaid
on any Interest Drawing or any Applied Provider Advance (as
defined
in any Liquidity Facility)) then in arrears on all Liquidity
Obligations (determined after giving effect to payments made by
the
Policy Provider to each Liquidity Provider, if any, in respect
of
interest on drawings under the Liquidity Facilities) plus (B)
the
product of (x) the aggregate amount of all accrued and unpaid
interest on all Liquidity Obligations not in arrears to such
Special
Distribution Date (at the rate provided in the applicable
Liquidity
Facility) (determined after giving effect to payments made by
the
Policy Provider to each Liquidity Provider, if any, in respect
of
interest on drawings under the Liquidity Facilities) multiplied
by
(y) the Section 2.04(b) Fraction, (ii) if the Class G-1
Liquidity
Provider or Class G-2 Liquidity Provider has defaulted in its
obligation to make any Interest Drawing, (A) the aggregate amount
of
interest accrued on the portion of any Policy Drawing made to
cover
the shortfall attributable to such default by the Liquidity
Provider
at the rate provided in the "except" clause of clause (ii) of
the
definition of "Policy Provider Obligations" which is then in
arrears
plus (B) the product of (x) the aggregate amount of all accrued
and
unpaid interest on such Policy Drawings not in arrears to such
Special Distribution Date multiplied by (y) the Section 2.04(b)
Fraction, and (iii) if the Policy Provider has elected to pay
to
each Liquidity Provider all outstanding drawings and interest
owing
to such Liquidity Provider under its Liquidity Facility pursuant
to
Section 2.06(c) hereof, the amount of such payment made to the
Liquidity Providers attributable to such interest accrued on
such
drawings, shall be distributed to the Liquidity Providers and
the
Policy Provider pro rata on the basis of the amount of such
Liquidity Obligations owed to each Liquidity Provider and the
amount
of such unreimbursed Policy Provider Obligations payable to the
Policy Provider under this clause "second";
third, such amount as shall be required (A) if any Cash
Collateral Account has been previously funded as provided in
Section
3.06(f), to fund such Cash Collateral Account up to its
Required
Amount shall be deposited in such Cash Collateral Account, (B)
if
any Liquidity Facility shall have become a Downgraded Facility or
a
Non-Extended Facility at a time when unreimbursed Interest
Drawings
under such Liquidity Facility have reduced the Available Amount
thereunder to zero, to deposit into the related Cash Collateral
Account an amount equal to such Cash Collateral Account's
Required
Amount shall be deposited in such Cash Collateral Account, (C)
if,
with respect to any particular Liquidity Facility, neither
subclause
(A) nor subclause (B) of this clause "third" is applicable, to
pay
or reimburse the Liquidity Provider in respect of such
Liquidity
Facility in an amount equal to the amount of any unreimbursed
Interest Drawings under such Liquidity Facility shall be
distributed
to such Liquidity Provider (other than amounts payable pursuant
to
clause "first" or "second" of this Section 2.04(b) and as
determined
after giving effect to payments made by the Policy Provider to
the
Liquidity Provider in respect of principal of drawings under
the
Liquidity Facilities), pro rata with any amount distributable
pursuant to subclause (D) of this clause "third" on the basis of
the
amount of all such unreimbursed Interest Drawings and
unreimbursed
Policy Provider Obligations payable to the Policy Provider
under
subclause (D) of this clause "third" and (D) if the Policy
Provider
has elected to pay to each Liquidity Provider all outstanding
drawings and interest owing to such Liquidity Provider under
its
Liquidity Facility pursuant to Section 2.06(c) hereof, to
reimburse
the Policy Provider for the principal amount of such payment made
to
the Liquidity Providers, shall be distributed to the Policy
Provider, but only after giving effect to the application of
amounts, if any, under subclause (A) or (B) of this clause
"third",
and if any amount shall be distributable under subclause (C) of
this
clause "third", pro rata with any amount distributable pursuant
to
such subclause (C) on the basis of the amounts of all such
unreimbursed Interest Drawings and the amount of such
unreimbursed
Policy Provider Obligations payable to the Policy Provider
under
this clause "third";
fourth, if, with respect to any particular Liquidity Facility,
any amounts are to be distributed pursuant to either subclause
(A)
or (B) of clause "third" above, then the Liquidity Provider
with
respect to such Liquidity Facility shall be paid the excess of
(x)
the aggregate outstanding amount of unreimbursed Advances
(whether
or not then due) under such Liquidity Facility over (y) the
Required
Amount for the relevant Class, pro rata on the basis of such
amounts
in respect of each Liquidity Provider;
fifth, if any Class G-1 Certificates or Class G-2 Certificates
are Outstanding on such Special Distribution Date, such amount
as
shall be required to pay in full Expected Distributions to the
holders of Class G-1 Certificates on such Special Distribution
Date
shall be distributed to the Class G-1 Trustee and such amount
as
shall be required to pay in full Expected Distributions to the
holders of Class G-2 Certificates on such Special Distribution
Date
shall be distributed to the Class G-2 Trustee, pro rata on the
basis
of such amounts in respect of each such Clas
