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NOTE PURCHASE AGREEMENT
Dated as of June 29, 2004
Among
CONTINENTAL AIRLINES, INC.,
WILMINGTON TRUST COMPANY,
as Pass Through Trustee under the
Pass Through Trust Agreement
WILMINGTON TRUST COMPANY,
as Subordination Agent
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
as Escrow Agent
and
WILMINGTON TRUST COMPANY,
as Paying Agent
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<PAGE>
INDEX TO NOTE PURCHASE AGREEMENT
Page
SECTION 1. Financing of New
Aircraft........................................3
SECTION 2. Conditions
Precedent.............................................7
SECTION 3. Representations and
Warranties...................................7
SECTION 4.
Covenants.......................................................12
SECTION 5.
Notices.........................................................13
SECTION 6.
Expenses........................................................13
SECTION 7. Further
Assurances..............................................14
SECTION 8.
Miscellaneous...................................................15
SECTION 9. Governing
Law...................................................16
SCHEDULES
Schedule I. Aircraft
Schedule II. Trust Supplement
Schedule III Mandatory Economic Terms
Schedule IV. Mandatory Document Terms
ANNEX
Annex A
Definitions
EXHIBITS
Exhibit A Form of
Participation Agreement
Exhibit B Form of
Lease
Exhibit C Form of Trust
Indenture
Exhibit D-1 Form of Purchase Agreement
Assignment (Existing Aircraft)
Exhibit D-2 Form of Initial Purchase
Agreement Assignment (New Aircraft)
Exhibit D-3 Form of Purchase Agreement
Assignment (New Aircraft)
Exhibit E Form of Trust
Agreement
Exhibit F Form of Delivery
Notice
<PAGE>
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT, dated as of June 29, 2004, among
(i)
CONTINENTAL AIRLINES, INC., a Delaware
corporation (the "COMPANY"), (ii)
WILMINGTON TRUST COMPANY ("WTC"), a
Delaware banking corporation, not in its
individual capacity except as otherwise
expressly provided herein, but solely as
trustee (in such capacity together with its
successors in such capacity, the
"PASS THROUGH TRUSTEE") under the Pass
Through Trust Agreement (as defined
below), (iii) WILMINGTON TRUST COMPANY, a
Delaware banking corporation, as
subordination agent and trustee (in such
capacity together with its successors
in such capacity, the "SUBORDINATION
AGENT") under the Intercreditor Agreement
(as defined below), (iv) WELLS FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION, a
national banking association, as Escrow
Agent (in such capacity together with
its successors in such capacity, the
"ESCROW Agent"), under the Escrow and
Paying Agent Agreement (as defined below)
and (v) WILMINGTON TRUST COMPANY, a
Delaware banking corporation, as Paying
Agent (in such capacity together with
its successors in such capacity, the
"PAYING AGENT") under the Escrow and Paying
Agent Agreement.
W I T N E S S E T H:
WHEREAS, capitalized terms used but not defined herein shall
have
the meanings ascribed to such terms in
Annex A hereto;
WHEREAS, the Company has (i) previously taken delivery of the
11
Embraer EMB-145 XR aircraft listed in Part
A of Schedule I hereto (the "EXISTING
AIRCRAFT"), each of which has been leased
to the Company pursuant to a separate
lease agreement (collectively, the
"EXISTING LEASES") and (ii) obtained
commitments from the Manufacturer pursuant
to the Purchase Agreement for the
delivery of the five Embraer EMB-145 XR
aircraft listed in Part B of Schedule I
hereto (together with any aircraft
substituted therefor in accordance with the
Purchase Agreement, the "NEW AIRCRAFT" and,
together with the Existing Aircraft,
the "AIRCRAFT");
WHEREAS, the Manufacturer, which is obligated to arrange lease
financing of the Aircraft for the Company,
wishes to arrange debt financing with
respect to a portion of the purchase price
of the Aircraft and, at the request
of the Manufacturer, the Company has
entered into this Agreement;
<PAGE>
WHEREAS,
pursuant to the Basic Pass Through Trust Agreement and the
Trust Supplement set forth in Schedule II
hereto, and concurrently with the
execution and delivery of this Agreement, a
grantor trust (the "PASS THROUGH
TRUST") has been created to facilitate
certain of the transactions contemplated
hereby, including, without limitation, the
issuance and sale of pass through
certificates pursuant thereto (the
"CERTIFICATES") to provide for a portion of
the financing of the Aircraft;
WHEREAS, the Company has entered into the Underwriting
Agreement
dated as of June 18, 2004 (the
"UNDERWRITING AGREEMENT") with the underwriters
(the "UNDERWRITERS") named therein, which
provides that the Company will cause
the Pass Through Trustee to issue and sell
the Certificates to the Underwriters
on the Issuance Date;
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) the Escrow Agent and the
Depositary have entered into a Deposit
Agreement, dated as of the Issuance Date,
relating to the Pass Through Trust
(the "DEPOSIT AGREEMENT") whereby the
Escrow Agent agreed to direct the
Underwriters to make certain deposits
referred to therein on the Issuance Date
(the "INITIAL DEPOSITS") and to permit the
Pass Through Trustee to make
additional deposits from time to time
thereafter (the Initial Deposits together
with such additional deposits are
collectively referred to as the "DEPOSITS")
and (ii) the Pass Through Trustee, the
Underwriters, the Paying Agent and the
Escrow Agent have entered into the Escrow
and Paying Agent Agreement, dated as
of the Issuance Date, relating to the Pass
Through Trust (the "ESCROW AND PAYING
AGENT AGREEMENT") whereby, among other
things, (a) the Underwriters agreed to
deliver an amount equal to the amount of
the Initial Deposits to the Depositary
on behalf of the Escrow Agent and (b) the
Escrow Agent, upon the Depositary
receiving such amount, agreed to deliver
escrow receipts to be affixed to each
Certificate;
WHEREAS, upon receipt of a Delivery Notice with respect to an
Aircraft, subject to the terms and
conditions of this Agreement, the Pass
Through Trustee will enter into the
applicable Financing Agreements relating to
such Aircraft;
WHEREAS, upon the financing of each Aircraft, the Pass Through
Trustee will fund its purchase of Equipment
Notes with the proceeds of one or
more Deposits withdrawn by the Escrow Agent
under the Deposit Agreement (or, if
financed on the Issuance Date, with a
portion of the proceeds from the offering
of the Certificates); and
<PAGE>
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) Citicorp North America, Inc.
("CNAI"), has entered into a
revolving credit agreement for the benefit
of the Certificateholders with the
Subordination Agent, as agent for the Pass
Through Trustee (the "CNAI LIQUIDITY
FACILITY"), (ii) WestLB AG, New York Branch
("WESTLB" and together with CNAI,
the "LIQUIDITY PROVIDERS"), has entered
into a revolving credit agreement for
the benefit of the Certificateholders with
the Subordination Agent, as agent for
the Pass Through Trustee (the "WESTLB
LIQUIDITY FACILITY" and together with the
CNAI Liquidity Facility, the "LIQUIDITY
FACILITIES") and (iii) the Pass Through
Trustee, the Liquidity Provider and the
Subordination Agent have entered into
the Intercreditor Agreement, dated as of
the date hereof (the "INTERCREDITOR
AGREEMENT");
NOW, THEREFORE, in consideration of the foregoing premises and
the
mutual agreements herein contained and
other good and valuable consideration,
the receipt and adequacy of which are
hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. FINANCING OF AIRCRAFT. (a) The Company confirms that
(i)
it has previously taken delivery of the
Existing Aircraft under the Purchase
Agreement and, as of the Issuance Date,
leases as lessee the Existing Aircraft
pursuant to the Existing Leases and (ii)
ExpressJet Airlines, Inc. has entered
into the Purchase Agreement with the
Manufacturer pursuant to which ExpressJet
Airlines, Inc. has agreed to acquire, and
the Manufacturer has agreed to
deliver, the New Aircraft in the months
specified in Schedule I hereto, all on
and subject to terms and conditions
specified in the Purchase Agreement. The
Company agrees to finance the Aircraft in
the manner provided herein, all on and
subject to the terms and conditions hereof
and of the relevant Financing
Agreements.
(b) In furtherance of the foregoing, the Company agrees to give
the
parties hereto, the Depositary and each of
the Rating Agencies not less than two
Business Days' prior notice substantially
in the form of Exhibit F hereto (a
"DELIVERY NOTICE") of the scheduled closing
date (the "SCHEDULED CLOSING DATE")
(or, in the case of a substitute Delivery
Notice under Section 1(e) or (f)
hereof, one Business Day's prior notice) in
respect of the financing of each
Aircraft under this Agreement, which notice
shall:
(i) specify the Scheduled Closing Date of such Aircraft (which
shall
be a Business Day before the Cut-off Date)
on which the financing therefor in
the manner provided herein shall be
consummated;
<PAGE>
(ii) instruct the Pass Through Trustee to instruct the Escrow
Agent
to provide a Notice of Purchase Withdrawal
to the Depositary with respect to the
Equipment Notes to be issued in connection
with the financing of such Aircraft
(except in the case of any such financing
on the Issuance Date);
(iii) instruct the Pass Through Trustee to enter into the
Participation Agreement included in the
Financing Agreements with respect to
such Aircraft in such form and at such a
time on or before the Scheduled Closing
Date specified in such Delivery Notice and
to perform its obligations
thereunder; and
(iv) specify the principal amount of the Equipment Notes to be
issued, and purchased by the Pass Through
Trustee, in connection with the
financing of such Aircraft scheduled to be
financed on such Scheduled Closing
Date (which shall in all respects comply
with the Mandatory Economic Terms).
Notwithstanding the foregoing, in the case
of any Aircraft to be financed
hereunder on the Issuance Date, the
Delivery Notice therefor may be delivered to
the parties hereto on the Issuance
Date.
(c) Upon receipt of a Delivery Notice, the Pass Through Trustee
shall, and shall cause the Subordination
Agent to, enter into and perform their
obligations under the Participation
Agreement specified in such Delivery Notice,
PROVIDED that such Participation Agreement
and the other Financing Agreements to
be entered into pursuant to such
Participation Agreement shall be in the forms
thereof annexed hereto in all material
respects with such changes therein as
shall have been agreed upon by the related
Owner Participant and the Company
and, if modified in any material respect,
as to which Rating Agency Confirmation
shall have been obtained from each Rating
Agency by the Company (to be delivered
by the Company to the Pass Through Trustee
on or before the relevant Closing
Date, it being understood that if Rating
Agency Confirmation shall have been
received with respect to any Financing
Agreements and such Financing Agreements
are utilized for subsequent New Aircraft
(or Substitute Aircraft) without
material modifications, no additional
Rating Agency Confirmation shall be
required); PROVIDED, HOWEVER, that the
relevant Financing Agreements as executed
and delivered shall not vary the Mandatory
Economic Terms and shall contain the
Mandatory Document Terms. The Company shall
pay the reasonable costs and
<PAGE>
expenses of the Rating Agencies in
connection with obtaining any such Rating
Agency Confirmation. With respect to each
Aircraft, the Company shall cause WTC
(or such other person that meets the
eligibility requirements to act as loan
trustee under the Trust Indenture) to
execute as Loan Trustee the Financing
Agreements relating to such Aircraft to
which such Loan Trustee is intended to
be a party, and shall concurrently
therewith execute such Financing Agreements
to which the Company is intended to be a
party and perform its respective
obligations thereunder. Upon the request of
either Rating Agency, the Company
shall deliver or cause to be delivered to
each Rating Agency a true and complete
copy of each Financing Agreement relating
to the financing of each Aircraft
together with a true and complete set of
the closing documentation (including
legal opinions) delivered to the related
Loan Trustee, Subordination Agent and
Pass Through Trustee under the related
Participation Agreement.
(d) [Intentionally omitted.]
(e) If after giving any Delivery Notice, there shall be a delay
in
the delivery of the New Aircraft referred
to therein, or if on the Scheduled
Closing Date of an Aircraft the financing
thereof in the manner contemplated
hereby shall not be consummated for
whatever reason, the Company shall give the
parties hereto prompt notice thereof.
Concurrently with the giving of such
notice of postponement or subsequently, the
Company shall give the parties
hereto a substitute Delivery Notice
specifying the date to which the financing
of such Aircraft shall have been
re-scheduled (which shall be a Business Day
before the Cut-off Date on which the Escrow
Agent shall be entitled to withdraw
one or more Deposits under the Deposit
Agreement to enable the Pass Through
Trustee to fund its purchase of the related
Equipment Notes). Upon receipt of
any such notice of postponement, the Pass
Through Trustee shall comply with its
obligations under Section 5.01 of the Trust
Supplement and thereafter the
financing of such Aircraft, as specified in
such substitute Delivery Notice,
shall take place on the re-scheduled
closing date therefor (all on and subject
to the terms and conditions of the relevant
Financing Agreements) unless further
postponed as provided herein.
(f) Anything in this Section 1 to the contrary notwithstanding,
the
Company shall have the right to accept
delivery of a New Aircraft under the
Purchase Agreement on the Delivery Date
thereof by utilization of bridge
financing of such New Aircraft and promptly
thereafter give the parties hereto a
Delivery Notice specifying a Scheduled
Closing Date not later than 90 days after
<PAGE>
the Delivery Date of such New Aircraft and
no later than the Cut-off Date and
otherwise complying with the provisions of
Section 1(b) hereof. All other terms
and conditions of this Note Purchase
Agreement shall apply to the financing of
any such New Aircraft on the re-scheduled
closing date therefor except (i) the
re-scheduled closing date shall be deemed
the Delivery Date of such New Aircraft
for all purposes of this Section 1 and (ii)
the related Financing Agreements
shall be amended to reflect the original
delivery of such New Aircraft to the
Company.
(g) If the scheduled Delivery Date for any New Aircraft is
delayed
(a) more than 30 days beyond the last day
of the month set forth opposite such
New Aircraft under the heading "Scheduled
Delivery Month" in Schedule I hereto
or (b) beyond December 31, 2004, the
Company may identify for delivery a
substitute aircraft therefor meeting the
following conditions (a "SUBSTITUTE
AIRCRAFT"): (i) a Substitute Aircraft must
be an Embraer EMB-145 XR aircraft
manufactured after the date of this
Agreement and (ii) the Company shall be
obligated to obtain Rating Agency
Confirmation in respect of the replacement of
any New Aircraft by Substitute Aircraft.
Upon the satisfaction of the conditions
set forth above with respect to a
Substitute Aircraft, the New Aircraft to be
replaced shall cease to be subject to this
Agreement and all rights and
obligations of the parties hereto
concerning such New Aircraft shall cease, and
such Substitute Aircraft shall become and
thereafter be subject to the terms and
conditions of this Agreement to the same
extent as such New Aircraft.
(h) The Company shall have no liability for the failure of the
Pass
Through Trustee to purchase Equipment Notes
with respect to any Aircraft or
Substitute Aircraft.
(i) The parties agree that if, in connection with the financing of
a
New Aircraft or Substitute Aircraft, any
Owner Participant who is to be a party
to any Financing Agreement shall be a
"Citizen of the United States" within the
meaning of Section 40102(a)(15) of the Act,
then the applicable Financing
Agreements may be modified, consistent with
the Mandatory Document Terms, to
eliminate the restrictions on the Owner
Participant's right to control the Owner
Trustee and to make other customary changes
to reflect that the Owner
Participant is a "Citizen of the United
States".
(j) Anything herein to the contrary notwithstanding, the
Company
shall not have the right, and shall not be
entitled, at any time to request the
issuance of Equipment Notes to the Pass
Through Trustee in an aggregate
<PAGE>
principal amount in excess of the amount of
the Deposits then available for
withdrawal by the Escrow Agent under and in
accordance with the provisions of
the Deposit Agreement.
SECTION 2. CONDITIONS PRECEDENT. The obligation of the Pass
Through
Trustee to enter into, and to cause the
Subordination Agent to enter into, any
Participation Agreement as directed
pursuant to a Delivery Notice and to perform
its obligations thereunder is subject to
satisfaction of the following
conditions:
(a) no Triggering Event shall have occurred; and
(b) the Company shall have delivered a certificate to such Pass
Through Trustee and the Liquidity Providers
stating that (i) such Participation
Agreement and the other Financing
Agreements to be entered into pursuant to such
Participation Agreement do not vary the
Mandatory Economic Terms and contain the
Mandatory Document Terms and (ii) any
substantive modification of such Financing
Agreements from the forms of Financing
Agreements attached to this Agreement do
not materially and adversely affect the
Certificateholders, and such
certification shall be true and
correct.
Anything herein to the contrary notwithstanding, the obligation
of
the Pass Through Trustee to purchase
Equipment Notes shall terminate on the
Cut-off Date.
SECTION 3.
REPRESENTATIONS AND WARRANTIES. (a) The Company
represents and warrants that:
(i) the Company is duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and is a
"citizen of the United States" as defined in Section 40102(a)(15)
of
the Act, and has the full corporate power, authority and legal
right
under the laws of the State of Delaware to execute and deliver
this
Agreement and each Financing Agreement to which it will be a
party
and to carry out the obligations of the Company under this
Agreement
and each Financing Agreement to which it will be a party;
(ii) the execution and delivery by the Company of this
Agreement and the performance by the Company of its obligations
under this Agreement have been duly authorized by the Company
and
will not violate its Certificate of Incorporation or by-laws or
the
<PAGE>
provisions of any indenture, mortgage, contract or other
agreement
to which it is a party or by which it is bound; and
(iii) this Agreement
constitutes the legal, valid and binding
obligation of the Company, enforceable against it in accordance
with
its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws
affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at law
or
in equity.
(b) WTC represents and warrants that:
(i) WTC is duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and is a
"citizen
of the United States" as defined in Section 40102(a)(15) of the
Act,
and has the full corporate power, authority and legal right
under
the laws of the State of Delaware and the United States
pertaining
to its banking, trust and fiduciary powers to execute and
deliver
this Agreement and each Financing Agreement to which it will be
a
party and to carry out the obligations of WTC, in its capacity
as
Subordination Agent, Pass Through Trustee or Paying Agent, as
the
case may be, under this Agreement and each Financing Agreement
to
which it will be a party;
(ii) the execution and delivery by WTC, in its capacity as
Subordination Agent, Pass Through Trustee or Paying Agent, as
the
case may be, of this Agreement and the performance by WTC, in
its
capacity as Subordination Agent, Pass Through Trustee or Paying
Agent, as the case may be, of its obligations under this
Agreement
have been duly authorized by WTC, in its capacity as
Subordination
Agent, Pass Through Trustee or Paying Agent, as the case may be,
and
will not violate its articles of association or by-laws or the
provisions of any indenture, mortgage, contract or other
agreement
to which it is a party or by which it is bound; and
(iii) this Agreement constitutes the legal, valid and binding
obligations of WTC, in its capacity as Subordination Agent,
Pass
Through Trustee or Paying Agent, as the case may be,
enforceable
<PAGE>
against it in accordance with its terms, except as the same may
be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether considered
in
a proceeding at law or in equity.
(c) The Pass Through Trustee hereby confirms to each of the
other
parties hereto that its representations and
warranties set forth in Section 7.15
of the Basic Pass Through Trust Agreement
and Section 5.04 of the Trust
Supplement are true and correct as of the
date hereof.
(d) The Subordination Agent represents and warrants that:
(i) the Subordination Agent is duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, and has the full corporate power, authority and legal
right under the laws of the State of Delaware and the United
States
pertaining to its banking, trust and fiduciary powers to execute
and
deliver this Agreement and each Financing Agreement to which it
is
or will be a party and to perform its obligations under this
Agreement and each Financing Agreement to which it is or will be
a
party;
(ii) this Agreement has been duly authorized, executed and
delivered by the Subordination Agent; this Agreement constitutes
the
legal, valid and binding obligations of the Subordination Agent
enforceable against it in accordance with its terms, except as
the
same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights
of
creditors generally and by general principles of equity,
whether
considered in a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by the
Subordination Agent of this Agreement contravenes any law, rule
or
regulation of the State of Delaware or any United States
governmental authority or agency regulating the Subordination
Agent's banking, trust or fiduciary powers or any judgment or
order
applicable to or binding on the Subordination Agent and do not
contravene the Subordination Agent's articles of association or
<PAGE>
by-laws or result in any breach of, or constitute a default
under,
any agreement or instrument to which the Subordination Agent is
a
party or by which it or any of its properties may be bound;
(iv) neither the execution and delivery by the Subordination
Agent of this Agreement nor the consummation by the
Subordination
Agent of any of the transactions contemplated hereby requires
the
consent or approval of, the giving of notice to, the
registration
with, or the taking of any other action with respect to, any
Delaware governmental authority or agency or any federal
governmental authority or agency regulating the Subordination
Agent's banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Subordination Agent
imposed by the State of Delaware or any political subdivision
or
taxing authority thereof in connection with the execution,
delivery
and performance by the Subordination Agent of this Agreement
(other
than franchise or other taxes based on or measured by any fees
or
compensation received by the Subordination Agent for services
rendered in connection with the transactions contemplated by
the
Intercreditor Agreement or any of the Liquidity Facilities),
and
there are no Taxes payable by the Subordination Agent imposed by
the
State of Delaware or any political subdivision thereof in
connection
with the acquisition, possession or ownership by the
Subordination
Agent of any of the Equipment Notes (other than franchise or
other
taxes based on or measured by any fees or compensation received
by
the Subordination Agent for services rendered in connection with
the
transactions contemplated by the Intercreditor Agreement or any
of
the Liquidity Facilities); and
(vi) there are no pending or threatened actions or proceedings
against the Subordination Agent before any court or
administrative
agency which individually or in the aggregate, if determined
adversely to it, would materially adversely affect the ability
of
the Subordination Agent to perform its obligations under this
Agreement.
<PAGE>
(e) The Escrow Agent represents and warrants that:
(i) the Escrow Agent is a national banking association duly
incorporated, validly existing and in good standing under the
laws
of the United States and has the full corporate power, authority
and
legal right under the laws of the United States pertaining to
its
banking, trust and fiduciary powers to execute and deliver this
Agreement, the Deposit Agreement and the Escrow and Paying
Agent
Agreement (collectively, the "ESCROW AGENT AGREEMENTS") and to
carry
out the obligations of the Escrow Agent under each of the
Escrow
Agent Agreements;
(ii) the execution and delivery by the Escrow Agent of each of
the Escrow Agent Agreements and the performance by the Escrow
Agent
of its obligations hereunder and thereunder have been duly
authorized by the Escrow Agent and will not violate its articles
of
association or by-laws or the provisions of any indenture,
mortgage,
contract or other agreement to which it is a party or by which it
is
bound; and
(iii) each of the Escrow Agent Agreements constitutes the
legal, valid and binding obligations of the Escrow Agent
enforceable
against it in accordance with its terms, except as the same may
be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether considered
in
a proceeding at law or in equity.
(f) The Paying Agent represents and warrants that:
(i) the Paying Agent is duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and
has
the full corporate power, authority and legal right under the
laws
of the United States pertaining to its banking, trust and
fiduciary
powers to execute and deliver this Agreement and the Escrow and
Paying Agent Agreement (collectively, the "PAYING AGENT
AGREEMENTS")
and to carry out the obligations of the Paying Agent under each
of
the Paying Agent Agreements;
(ii) the execution and delivery by the Paying Agent of each of
the Paying Agent Agreements and the performance by the Paying
Agent
of its obligations hereunder and thereunder have been duly
<PAGE>
authorized by the Paying Agent and will not violate its articles
of
association or by-laws or the provisions of any indenture,
mortgage,
contract or other agreement to which it is a party or by which it
is
bound; and
(iii) each of the Paying Agent Agreements constitutes the
legal, valid and binding obligations of the Paying Agent
enforceable
against it in accordance with its terms, except as the same may
be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether considered
in
a proceeding at law or in equity.
SECTION 4. COVENANTS.
(a) The Company covenants with each
of
the other parties hereto that:
(i) [Intentionally omitted.]
(ii) subject to Section 4(a)(iv) of this Agreement, the Company
shall at all times maintain its corporate
existence and shall not wind up,
liquidate or dissolve or take any action,
or fail to take any action, that would
have the effect of any of the
foregoing;
(iii) the Company shall at all times remain a U.S. Air Carrier
(as
defined in the Financing Agreements) and
shall at all times be otherwise
certificated and registered to the extent
necessary to entitle the Owner Trustee
(and the Loan Trustee as assignee of the
Owner Trustee's rights under each
Lease) to the rights afforded to lessors of
aircraft equipment under Section
1110;
(iv) Section 13.2.1 of each Lease is hereby incorporated by
reference herein;
(v) the Company agrees to provide written notice to each of the
parties hereto of the occurrence of the
Cut-off Date no later than one Business
Day after the date thereof.
(b) WTC, in its individual capacity, covenants with each of the
other parties to this Agreement that it
will, immediately upon obtaining
knowledge of any facts that would cast
doubt upon its continuing status as a
"citizen of the United States" as defined
in Section 40102(a)(15) of the Act and
promptly upon public disclosure of
negotiations in respect of any transaction
<PAGE>
which would or might adversely affect such
status, notify in writing all parties
hereto of all relevant matters in
connection therewith. Upon WTC giving any such
notice, WTC shall, subject to Section 8.02
of any Trust Indenture then entered
into, resign as Loan Trustee in respect of
such Trust Indenture.
SECTION 5. NOTICES. Unless otherwise specifically provided
herein,
all notices required or permitted by the
terms of this Agreement shall be in
English and in writing, and any such notice
shall become effective upon being
delivered personally or, if promptly
confirmed by mail, when dispatched by
facsimile or other written
telecommunication, addressed to such party hereto at
its address or facsimile number set forth
below the signature of such party at
the foot of this Agreement or to such other
address or facsimile number as such
party may hereafter specify by notice to
the other parties.
SECTION 6. EXPENSES. (a) The Company agrees to pay to the
Subordination Agent when due, to the extent
not paid when due by the
Manufacturer, an amount or amounts equal to
the fees payable to the Liquidity
Providers under Section 2.03 of each
Liquidity Facility and the related Fee
Letter (as defined in the Intercreditor
Agreement) multiplied by a fraction the
numerator of which shall be the then
outstanding aggregate amount of the
Deposits under the Deposit Agreement and
the denominator of which shall be the
sum of (x) the then outstanding aggregate
principal amount of the Equipment
Notes issued under all of the Trust
Indentures and (y) the then outstanding
aggregate amount of the Deposits under the
Deposit Agreement.
(b) So long as no Equipment Notes have been issued in respect of
any
Aircraft, the Company agrees to pay (i) to
the Subordination Agent when due, to
the extent not paid when due by the
Manufacturer, (A) the amount equal to
interest on any Downgrade Advance (other
than any Applied Downgrade Advance)
payable under Section 3.07 of each
Liquidity Facility minus Investment Earnings
while such Downgrade Advance shall be
outstanding, (B) the amount equal to
interest on any CNAI Special Termination
Advance (other than any Applied CNAI
Special Termination Advance) payable under
Section 3.07 of the CNAI Liquidity
Facility minus Investment Earnings from
such CNAI Special Termination Advance,
(C) the amount equal to interest on any
WestLB Expiration Advance (other than
any Applied WestLB Expiration Advance)
payable under Section 3.07 of the WestLB
Liquidity Facility minus Investment
Earnings from such WestLB Expiration
Advance; (D) the amount equal to interest
on any Non-Extension Advance (other
<PAGE>
than any Applied Non-Extension Advance)
payable under Section 3.07 of the CNAI
Liquidity Facility minus Investment
Earnings from such Non-Extension Advance;
(E) the amount equal to interest on any
WestLB Early Termination Advance (other
than any Applied WestLB Early Termination
Advance) payable under Section 3.07 of
the WestLB Liquidity Facility minus
Investment Earnings from such WestLB Early
Termination Advance; (F) any other amounts
owed to the Liquidity Providers by
the Subordination Agent as borrower under
the Liquidity Facilities (other than
amounts due as repayment of advances
thereunder or as interest on such advances,
except to the extent payable pursuant to
clause (A) or (B)), (ii) all
compensation and reimbursement of expenses,
disbursements and advances payable
by the Company under the Pass Through Trust
Agreements, (iii) all compensation
and reimbursement of expenses and
disbursements payable to the Subordination
Agent under the Intercreditor Agreement
except with respect to any income or
franchise taxes incurred by the
Subordination Agent in connection with the
transactions contemplated by the
Intercreditor Agreement and (iv) in the event
the Company requests any amendment to any
Operative Agreement, all reasonable
fees and expenses (including, without
limitation, fees and disbursements of
counsel) of the Escrow Agent and/or the
Paying Agent in connection therewith.
For purposes of this Section 6(b), (i) the
terms "Applied Downgrade Advance",
"Cash Collateral Account", "Downgrade
Advance", "Final Advance", "Investment
Earnings" and "Unpaid Advance" shall have
the meanings specified in each
Liquidity Facility, (ii) the terms "Applied
WestLB Early Termination Advance",
"Applied WestLB Expiration Advance", "West
LB Expiration Advance" and "WestLB
Early Termination Advance" shall have the
meanings specified in the WestLB
Liquidity Facility and (iii) the terms
"Applied Non-Extension Advance", "Applied
CNAI Special Termination Advance",
"Non-Extension Advance" and "CNAI Special
Termination Advance" shall have the
meanings specified in the CNAI Liquidity
Facility.
SECTION 7. FURTHER ASSURANCES. Each party hereto shall duly
execute,
acknowledge and deliver, or shall cause to
be executed, acknowledged and
delivered, all such further agreements,
instruments, certificates or documents,
and shall do and cause to be done such
further acts and things, in any case, as
any other party hereto shall reasonably
request in connection with its
administration of, or to carry out more
effectually the purposes of, or to
better assure and confirm unto it the
rights and benefits to be provided under,
this Agreement.
<PAGE>
SECTION 8. MISCELLANEOUS. (a) Provided that the transactions
contemplated hereby have been consummated,
and except as otherwise provided for
herein, the representations, warranties and
agreements herein of the Company,
the Subordination Agent, the Escrow Agent,
the Paying Agent and the Pass Through
Trustee, and the Company's, the
Subordination Agent's, the Escrow Agent's, the
Paying Agent's and the Pass Through
Trustee's obligations under any and all
thereof, shall survive the expiration or
other termination of this Agreement and
the other agreements referred to
herein.
(b) This Agreement may be executed in any number of
counterparts
(and each of the parties hereto shall not
be required to execute the same
counterpart). Each counterpart of this
Agreement, including a signature page
executed by each of the parties hereto,
shall be an original counterpart of this
Agreement, but all of such counterparts
together shall constitute one
instrument. Neither this Agreement nor any
of the terms hereof may be
terminated, amended, supplemented, waived
or modified orally, but only by an
instrument in writing signed by the party
against which the enforcement of the
termination, amendment, supplement, waiver
or modification is sought. The index
preceding this Agreement and the headings
of the various Sections of this
Agreement are for convenience of reference
only and shall not modify, define,
expand or limit any of the terms or
provisions hereof. The terms of this
Agreement shall be binding upon, and shall
inure to the benefit of, the Company
and its successors and permitted assigns,
the Pass Through Trustee and its
successors as Pass Through Trustee (and any
additional trustee appointed) under
any of the Pass Through Trust Agreements,
the Escrow Agent and its successors as
Escrow Agent under the Escrow and Paying
Agent Agreement, the Paying Agent and
its successors as Paying Agent under the
Escrow and Paying Agent Agreement and
the Subordination Agent and its successors
as Subordination Agent under the
Intercreditor Agreement.
(c) This Agreement is not intended to, and shall not, provide
any
person not a party hereto (other than the
Underwriters and each of the
beneficiaries of Section 6 hereof) with any
rights of any nature whatsoever
against any of the parties hereto, and no
person not a party hereto (other than
the Underwriters and each of the
beneficiaries of Section 6 hereof) shall have
any right, power or privilege in respect
of, or have any benefit or interest
arising out of, this Agreement.
<PAGE>
SECTION 9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK. THIS AGREEMENT
IS BEING DELIVERED IN THE STATE OF NEW
YORK.
<PAGE>
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.
CONTINENTAL AIRLINES, INC.
By
---------------------------------------
Name:
Title:
Address:
1600 Smith Street, HQSFN
Houston, TX 77002
Attention:
Treasurer
Facsimile: (713)
324-2447
WILMINGTON TRUST COMPANY, not in its
individual capacity, except as otherwise
provided herein, but solely as Pass Through
Trustee
By
----------------------------------------
Name:
Title:
Address: Rodney
Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust
Administration
Facsimile: (302)
651-8882
<PAGE>
WILMINGTON TRUST COMPANY, not in its
individual capacity, except as otherwise
provided herein, but solely as Subordination
Agent
By
----------------------------------------
Name:
Title:
Address: Rodney
Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust
Administration
Facsimile: (302)
651-8882
WELLS FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION,
as Escrow Agent
By
----------------------------------------
Name:
Title:
Address: MAC:
U1228-120
299 South Main Street
12th Floor
Salt Lake City, Utah 84111
Attention: Corporate Trust
Services
Facsimile: (801)
246-5053
<PAGE>
WILMINGTON TRUST COMPANY,
as Paying Agent
By
----------------------------------------
Name:
Title:
Address: Rodney
Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust
Administration
Facsimile: (302)
651-8882
<PAGE>
SCHEDULE I to
NOTE PURCHASE AGREEMENT
AIRCRAFT
PART A - EXISTING AIRCRAFT
Registration
Manufacturer's
Scheduled
Number
Serial Number Delivery
Month
------------------- ------------------
-------------------
N11155
145782
Previously
Delivered
N10156
145786
Previously
Delivered
N12157
145787
Previously
Delivered
N14158
145791
Previously
Delivered
N17159
145792
Previously
Delivered
N12160
145799
Previously
Delivered
N13161
14500805
Previously
Delivered
N14162
14500808
Previously
Delivered
N12163
14500811
Previously
Delivered
N11164
14500817
Previously
Delivered
N11165
14500819
Previously
Delivered
PART B - NEW AIRCRAFT
N12166
14500831 July
2004
N12167
14500834
July 2004
N14168
14500840
August 2004
N17169
14500844
August 2004
N16170
14500850
September 2004
<PAGE>
SCHEDULE II to
NOTE PURCHASE AGREEMENT
TRUST SUPPLEMENT
Trust Supplement dated as of the Issuance
Date between the Company and the Pass
Through Trustee in respect of the
Continental Airlines Class A Pass Through
Trust, Series 2004-ERJ1.
<PAGE>
Schedule III to
NOTE PURCHASE AGREEMENT
MANDATORY ECONOMIC TERMS
o
The
aggregate principal amount of the Equipment Notes issued with
respect to an Aircraft shall not exceed the amounts set forth in
the
following table:
AIRCRAFT
REGISTRATION
MANUFACTURER'S
PRINCIPAL AMOUNT
NUMBER
SERIAL NUMBER
OF EQUIPMENT NOTES
------------
--------------
------------------
N11155
145782
$10,745,972
N10156
145786
10,686,554
N12157
145787
10,692,100
N14158
145791
10,571,853
N17159
145792
10,598,759
N12160
145799
10,926,373
N13161
14500805
11,062,500
N14162
14500808
11,348,468
N12163
14500811
10,748,893
N11164
14500817
10,822,420
N11165
14500819
11,013,029
N12166
14500831
11,096,335
N12167
14500834
11,096,335
N14168
14500840
11,149,043
N17169
14500844
11,152,077
N16170
14500850
11,150,989
o
The
Loan to Aircraft Value for the Equipment Notes issued for each
Aircraft computed on the date of issuance thereof (with value
for
such Aircraft for these purposes initially equal to its value
set
forth
under "Description of the Aircraft and the Appraisals--The
Appraisals" in the column "Appraised Value" in the Prospectus
Supplement and thereafter based on such value after giving effect
to
the Depreciation Assumption (as defined in the Prospectus
Supplement)) as of the issuance date of such Equipment Notes and
any
Regular Distribution Date thereafter (assuming no default in
the
payment of the Equipment Notes and after giving effect to
scheduled
payments) will not exceed 56.5%.
o
The
initial average life of the Equipment Notes for any Aircraft
shall not extend beyond 10 years from the Issuance Date.
o
As
of the Delivery Period Termination Date, the average life of
the
Certificates shall not be more than 9.8 years from the Issuance
Date
<PAGE>
(computed without regard to the acceleration of any Equipment
Notes
and after giving effect to any special distribution on the
Certificates thereafter required in respect of unused
Deposits).
o
The
final expected distribution date of the Certificates shall be
as
set forth on the cover page of the Prospectus Supplement.
o The original
aggregate principal amount of all of the Equipment
Notes shall not exceed the original aggregate face amount of
the
Certificates.
o
The
interest rate applicable to the Equipment Notes must be equal
to
the rate applicable to the Certificates.
o
The
payment dates for the Equipment Notes must be on the first day
of each month after July 1, 2004, and basic rent under the
Leases
must be payable on such dates.
o
Basic rent, stipulated loss values and termination values under
the
Leases must be sufficient to pay amounts due with respect to
the
related Equipment Notes.
o
The
amounts payable under the all-risk aircraft hull insurance
maintained with respect to each Aircraft must be sufficient to
pay
the applicable stipulated loss value, subject to certain rights
of
self-insurance.
o
(a)
The past due rate in the Trust Indentures and the Leases, (b)
the "Make-Whole Amount" payable under the Trust Indentures, (c)
the
provisions relating to the redemption and purchase of Equipment
Notes in the Trust Indentures, (d) the minimum liability
insurance
amount on Aircraft in the Leases, and (e) the indemnification of
the
Loan Trustees, Subordination Agent, Liquidity Providers, Pass
Through Trustee, Escrow Agent and registered holders of the
Equipment Notes with respect to certain taxes and expenses, in
each
case shall be provided as set forth in the forms of
Participation
Agreements, Lease and Trust Indentures attached as exhibits to
the
Note Purchase Agreement.
<PAGE>
SCHEDULE IV TO
NOTE PURCHASE AGREEMENT
MANDATORY DOCUMENT TERMS
The terms "Form of Participation Agreement"
"Form of Lease" and "Form of Trust
Indenture" correspond to Exhibits A, B and
C of the Note Purchase Agreement.
1. May not modify in any
material adverse respect the Granting Clause of the
Form of
Trust Indenture so as to deprive the Note Holders of a first
priority
security interest in and mortgage lien on the Aircraft and the
Lease or
to eliminate any of the obligations secured thereby or
otherwise
modify in
any material adverse respect as regards the interests of the
Note
Holders, the Subordination Agent, the Liquidity Providers or
the
Mortgagee
the provisions of Article II or III or Section 4.02, 4.03,
4.04,
5.02,
5.06, 9.01(b), 10.04, 10.11 or 10.12 of the Form of Trust
Indenture.
2. May not modify in any
material adverse respect as regards the interests of
the Note
Holders, the Subordination Agent, the Liquidity Providers or
the
Mortgagee
the provisions of Section 3.2.1(b), 3.3(c), 4.7, the final
sentence
of 7.1.1, 10.3.1(d)(ii), 13.3, 16, 18.3 or 18.7(a) of the Form
of
Lease or
otherwise modify the terms of the Form of Lease so as to
deprive
the
Mortgagee of rights expressly granted to the "Mortgagee"
therein.
3. May not modify in any
material adverse respect as regards the interests of
the Note
Holders, the Subordination Agent, the Liquidity Providers or
the
Mortgagee
the provisions of Section 5.1.9, 5.1.10, 5.1.11, 5.1.12, 7.5,
12,
15.8(a) or 15.9 of the Form of Participation Agreement or of
the
provisions
of Section 5.1.2(xxv) or 10.1.1(a)(iv) of the Form of
Participation Agreement so as to eliminate the requirement to
deliver to
the Loan
Participant or the Mortgagee, as the case may be, the legal
opinions
to be provided to such Persons thereunder (recognizing that the
lawyers
rendering such opinions may be changed) or of the provisions of
Section
7.6.11(a)(ii) of the Form of Participation Agreement as regards
the rights
of the Mortgagee thereunder or otherwise modify the terms of
the Form
of Participation Agreement to deprive the Note Holders, the
Subordination Agent, the Liquidity Providers or the Mortgagee of
any
indemnity
or right of reimbursement in its favor for Expenses or Taxes.
<PAGE>
4. May not modify, in any
material adverse respect as regards the interests
of the
Note Holders, the Subordination Agent, the Liquidity Providers
or
the
Mortgagee, the definition of "Make Whole Amount" in Annex A to
the
Participation Agreement Form.
Notwithstanding the foregoing, any such Mandatory Document Term may
be
modified
to correct or supplement any such provision which may be
defective
or to cure any ambiguity or correct any mistake, PROVIDED that
any such
action shall not materially adversely affect the interests of
the
Note
Holders, the Subordination Agent, the Liquidity Providers, the
Mortgagee
or the Certificateholders.
<PAGE>
ANNEX A to
NOTE PURCHASE AGREEMENT
DEFINITIONS
"ACT" means part A of subtitle VII of title
49, United States Code.
"AFFILIATE" means, with respect to any
person, any other person directly or
indirectly controlling, controlled by or
under common control with such person.
For 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 "controlling," "controlled
by" and "under common control with"
have correlative meanings.
"AIRCRAFT" has the meaning set forth in the
second recital to the Note Purchase
Agreement.
"ASSUMED AMORTIZATION SCHEDULE" means the
amortization schedule set forth on
page S-32 of the Prospectus Supplement.
"AVERAGE LIFE DATE" means, for any
Equipment Note, the date which follows the
time of determination by a period equal to
the Remaining Weighted Average Life
of such Equipment Note.
"BANKRUPTCY CODE" means the United States
Bankruptcy Code, 11 U.S.C. ss.ss. 101
ET SEQ.
"BASIC PASS THROUGH TRUST AGREEMENT" means
the Pass Through Trust Agreement,
dated September 25, 1997, between the
Company and Pass Through Trustee, as such
agreement may be supplemented, amended or
modified, but does not include the
Trust Supplement.
"BUSINESS DAY" means any day, other than a
Saturday, Sunday or other day on
which commercial banks are authorized or
required by law to close in New York,
New York, Houston, Texas, Wilmington,
Delaware or Salt Lake City, Utah.
"CERTIFICATES" has the meaning set forth in
the fourth recital to the Note
Purchase Agreement.
"CERTIFICATEHOLDER" means the Person in
whose name a Certificate is registered
in the Register.
<PAGE>
"COMPANY" means Continental Airlines, Inc.,
a Delaware corporation.
"CORPORATE TRUST OFFICE" with respect to
the Pass Through Trustee or any Loan
Trustee, means the office of such trustee
in the city at which at any particular
time its corporate trust business shall be
principally administered.
"CUT-OFF DATE" means the earlier of (a) the
day after the Delivery Period
Termination Date and (b) the date on which
a Triggering Event occurs.
"DELIVERY PERIOD TERMINATION DATE" means
the earlier of (a) December 31, 2004,
or, if the Equipment Notes relating to all
of the New Aircraft (or Substitute
Aircraft in lieu thereof) have not been
purchased by the Pass Through Trustee on
or prior to such date due to any reason
beyond the control of the Company and
not occasioned by the Company's fault or
negligence, March 31, 2005 and (b) the
date on which Equipment Notes issued with
respect to all of the Aircraft (or
Substitute Aircraft in lieu thereof) have
been purchased by the Pass Through
Trustee in accordance with the Note
Purchase Agreement.
"DELIVERY DATE" means the Business Day on
which a New Aircraft is delivered to
and accepted by the Company.
"DELIVERY NOTICE" means a Delivery Notice
substantially in the form of Exhibit F
to the Note Purchase Agreement.
"DEPOSIT" has the meaning set forth in the
sixth recital to the Note Purchase
Agreement.
"DEPOSIT AGREEMENT" has the meaning set
forth in the sixth recital to the Note
Purchase Agreement.
"DEPOSITARY" means WestLB AG, New York
Branch.
"EQUIPMENT NOTES" means and includes any
equipment notes issued under any Trust
Indenture in the form specified in Section
2.01 thereof (as such form may be
varied pursuant to the terms of such Trust
Indenture) and any Equipment Note
issued under any Trust Indenture in
exchange for or replacement of any other
Equipment Note.
"ESCROW AGENT" has the meaning set forth in
the first paragraph of the Note
Purchase Agreement.
<PAGE>
"ESCROW AGENT AGREEMENTS" has the meaning
set forth in Section 3(e)(i) of the
Note Purchase Agreement.
"ESCROW AND PAYING AGENT AGREEMENT" has the
meaning set forth in the fifth
recital to the Note Purchase Agreement.
"EXISTING AIRCRAFT" has the meaning set
forth in the second recital to the Note
Purchase Agreement.
"EXISTING LEASES" has the meaning set forth
in the second recital to the Note
Purchase Agreement.
"FAA" means the Federal Aviation
Administration of the United States.
"FINAL WITHDRAWAL" with respect to the
Escrow and Paying Agent Agreement, has
the meaning set forth in Section 1.02
thereof.
"FINANCING AGREEMENTS" means, collectively,
the Purchase Agreement Assignment,
the Initial Purchase Agreement Assignment
(if a New Aircraft), the Participation
Agreement, the Lease, the Trust Indenture,
the Equipment Notes issued
thereun
