Exhibit 10.2
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SENIOR SECURED SUPERPRIORITY
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
Dated as of September 26, 2002
and as Amended and Restated as of October 18, 2002
among
US AIRWAYS GROUP, INC.,
a Debtor and Debtor-in-Possession
under Chapter 11 of the Bankruptcy Code,
as the Borrower,
CERTAIN OF THE SUBSIDIARIES OF
US AIRWAYS GROUP, INC. PARTY HERETO,
as Guarantors,
RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC,
as Administrative Agent, Syndication Agent and Collateral Agent
and
RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC
and the other lenders from time to time party hereto,
as Lenders
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SENIOR SECURED SUPERPRIORITY
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
This SENIOR SECURED SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT
AGREEMENT ("Agreement") is entered into as of September 26, 2002 and is
amended and restated as of October 18, 2002, among US AIRWAYS GROUP, INC., a
Delaware corporation and a debtor and debtor-in-possession in a case pending
under Chapter 11 of the Bankruptcy Code (as hereinafter defined) (the
"Borrower"), each of the Subsidiaries (as hereinafter defined) of the Borrower
from time to time party hereto, RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC and
the other lenders from time to time party hereto (collectively, the "Lenders"
and individually, a "Lender"), and RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC,
as Administrative Agent, Syndication Agent and Collateral Agent.
PRELIMINARY STATEMENTS
1. On August 11, 2002 (the "Petition Date"), the Borrower and each of
the Guarantors (as hereinafter defined) in existence on the Petition Date
filed voluntary petitions in the United States Bankruptcy Court for the
Eastern District of Virginia (such court, together with any other court having
jurisdiction over the Cases from time to time, the "Bankruptcy Court") for
relief, and commenced cases (the "Cases"), under Chapter 11 of 11 U.S.C.
xx.xx. 101 et seq. (as heretofore and hereafter amended, the "Bankruptcy
Code") and have continued in the possession of their assets and in the
management of their businesses pursuant to Sections 1107 and 1108 of the
Bankruptcy Code.
2. The Borrower has requested that the Lenders enter into revolving
credit, term and letter of credit facilities in an aggregate principal amount
not to exceed $500,000,000, all of the Borrower's obligations under which are
to be jointly and severally guaranteed by the Guarantors.
3. To provide guarantees and security for the repayment of the Loans
(as hereinafter defined), the reimbursement of any drawing under a Letter of
Credit (as hereinafter defined) and the payment of the other Obligations (as
hereinafter defined) of the Borrower and the Guarantors hereunder and under
the other Loan Documents (as hereinafter defined), the Borrower and the
Guarantors will provide to the Administrative Agent, the Collateral Agent and
the Lenders the following, each as more fully described herein:
A. a joint and several guaranty from the Guarantors of the due and
punctual payment and performance of the Obligations of the Borrower
hereunder;
B. subject to the Carve-Out (as hereinafter defined), an allowed
administrative expense claim pursuant to Section 364(c)(1) of the
Bankruptcy Code in each of the Cases having priority over all
administrative expenses of the kind specified in, or arising under, any
Sections of the Bankruptcy Code (including, without limitation, Sections
105, 326, 328, 330, 331, 503(b), 507, 546(c) or 726 thereof) whether or
not such claims or expenses may become secured by a judgment lien or
other non-consensual lien, levy or attachment;
C. subject to the Carve-Out and Permitted Senior Liens, first
priority Liens (as hereinafter defined) granted to the Collateral Agent
on behalf of the Administrative Agent, the Collateral Agent and the
Lenders pursuant to Section 364(c)(2) of the Bankruptcy Code on all real,
personal and mixed property of the Borrower and the Guarantors other than
Excluded Assets (as hereinafter defined) that is not subject to valid and
perfected Liens on the Petition Date or to valid Liens in existence on
the Petition Date that subsequently are perfected pursuant to Section
546(b) of the Bankruptcy Code; and
D. subject to the Carve-Out and Permitted Senior Liens, pursuant to
Section 364(c)(3) of the Bankruptcy Code, best priority Liens granted to
the Collateral Agent on behalf of the Administrative Agent, the
Collateral Agent and the Lenders on all real, personal and mixed property
of the Borrower and the Guarantors (other than Excluded Assets and
Section 1110 Assets) that is subject to valid and perfected Liens in
existence on the Petition Date of the Cases or to valid Liens in
existence on the Petition Date that subsequently are perfected pursuant
to Section 546(b) of the Bankruptcy Code, subject only to such existing
or subsequently perfected Liens.
4. On August 12, 2002, the Bankruptcy Court entered the Existing
Interim Order (as hereinafter defined), pursuant to which the Borrower was
authorized to borrow up to $75,000,000 and pay all fees and expenses payable
to or on behalf of Credit Suisse First Boston, Cayman Islands Branch, as
Administrative Agent under the Existing DIP Credit Agreement and Bank of
America, N.A., as Collateral Agent under the Existing DIP Credit Agreement,
pending entry of a final order by the Bankruptcy Court.
5. On August 14, 2002, in accordance with the terms and conditions of
the Existing Interim Order, the Existing Lenders advanced $75,000,000 to the
Borrower.
6. The Existing DIP Credit Agreement was terminated (except with
respect to contingent indemnification obligations) and replaced in its
entirety by this Agreement.
7. The parties hereto (other than Retirement Systems of Alabama
Holdings LLC) are each party to a Senior Secured Superpriority
Debtor-in-Possession Credit Agreement, dated as of September 26, 2002 (the
"Original Credit Agreement"), among the Borrower, the Lenders, the
Administrative Agent, the Collateral Agent and the Syndication Agent.
8. On the Effective Date (as defined below), The Retirement Systems
of Alabama will assign to Retirement Systems of Alabama Holdings LLC, and
Retirement Systems of Alabama Holdings LLC will assume from The Retirement
Systems of Alabama, all right, title and interest of The Retirement Systems of
Alabama in and to the Commitments, Loans and Notes issued (if any) under the
Original Credit Agreement and all of the rights and obligations of The
Retirement Systems of Alabama as Administrative Agent, Syndication Agent,
Collateral Agent and a Lender under the Original Credit Agreement, this
Agreement and the other Loan Documents.
9. The Borrower, the Lenders, the Administrative Agent, the
Collateral Agent and the Syndication Agent have agreed to amend and restate
the Original Credit Agreement to provide for certain amendments on the terms
set forth in this Agreement, which Agreement shall become effective upon
satisfaction of certain conditions precedent set forth herein.
10. It is the intent of the parties hereto that this Agreement not
constitute a novation of the obligation and liabilities existing under the
Original Credit Agreement or evidence payment of all or any of such
obligations and liabilities and that this Agreement amend and restate in its
entirety the Original Credit Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Account Collateral" has the meaning specified in Section 10.01(e).
"Administrative Agent" means RSA in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.
"Administrative Agent's Office" means the Administrative Agent's
address as set forth on Schedule 12.02, or such other address as the
Administrative Agent may from time to time notify the Borrower and the
Lenders.
"Administrative Agent's Disbursement Account" means the
Administrative Agent's account from which disbursements are to be made to the
Lenders hereunder as set forth on Schedule 12.02, or such other account as the
Administrative Agent may from time to time notify the Borrower and the
Lenders.
"Administrative Agent's Payment Account" means the Administrative
Agent's account to which payments are to be made by the Lenders hereunder as
set forth on Schedule 12.02, or such other account as the Administrative Agent
may from time to time notify the Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire
provided by each Lender in a form supplied by the Administrative Agent.
"AFA" means the Association of Flight Attendants.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto. Without limiting the
generality of the foregoing, a Person shall be deemed to be Controlled by
another Person if such other Person possesses, directly or indirectly, power
to vote 10% or more of the securities having ordinary voting power for the
election of directors, managing general partners or the equivalent.
"After-Acquired Intellectual Property" has the meaning specified in
Section 10.04(h)(vi).
"Agent-Related Persons" means the Administrative Agent, the
Collateral Agent, together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Agents" means the Administrative Agent and the Collateral Agent.
"Aggregate Commitments" means the sum of the Commitments of all the
Lenders.
"Agreement" means this Credit Agreement.
"Aircraft Mortgage" has the meaning specified in Section
6.26(a)(xii).
"Air Transportation Stabilization Act" means the Air Transportation
Safety and System Stabilization Act, P.L. 107-42, as the same may be amended
from time to time.
"ALPA" means Airline Pilots Association, International.
"American Express" means American Express Company, a New York
corporation.
"Applicable Rate" means a per annum rate equal to:
(a) with respect to Base Rate Loans, 2.50%;
(b) with respect to Eurodollar Rate Loans and Letters of Credit,
4.00%; and
(c) with respect to the commitment fee, (i) prior to the entry of
the Final Order, 0.50%, (ii) after the entry of the Final Order and until
such time as the Term Facility is drawn or utilized in full, (A) if less
than or equal to 1/3 of the Aggregate Commitments are drawn or utilized,
1.00%, (B) if less than or equal to 2/3 but more than 1/3 of the
Aggregate Commitments are drawn or utilized, 0.75%, and (C) if more than
2/3 of the Aggregate Commitments are drawn or utilized, 0.50%, and (iii)
at all times after the Term Facility is drawn or utilized in full and
until the Maturity Date, (A) if less than or equal to 1/3 of the amount
available under the Revolving Credit Facility is drawn or utilized,
1.00%, (B) if less than or equal to 2/3 but more than 1/3 of the
Revolving Credit Facility is drawn or utilized, 0.75%, and (C) if more
than 2/3 of the Revolving Credit Facility is drawn or utilized, 0.50%.
"Application" means the Application of the Borrower to the ATSB for
the issuance of a federal credit instrument under the Air Transportation
Stabilization Act and the Regulations dated June 7, 2002 (filed with the ATSB
on June 10, 2002), as amended, modified or supplemented from time to time.
"Approved Appraiser" means BACK Aviation Solutions or any replacement
appraiser selected by the Administrative Agent and reasonably acceptable to
the Borrower.
"Appropriate Lender" means, at any time, (a) with respect to the Term
Facility or the Revolving Credit Facility, a Lender that has a Commitment with
respect to such Facility at such time, and (b) with respect to the Letter of
Credit Sublimit, (i) the L/C Issuer and (ii) if any Letters of Credit have
been issued pursuant to Section 2.03(a), the Revolving Credit Lenders.
"Approved Fund" has the meaning specified in Section 12.07(g).
"ARC" means Airlines Reporting Corporation, a Delaware corporation.
"Assignment and Assumption" means an Assignment and Assumption
substantially in the form of Exhibit D.
"ATSB" means the Air Transportation Stabilization Board, created
pursuant to Section 102(b) of the Air Transportation Stabilization Act.
"ATSB Guaranty" means the guaranty proposed to be made by the ATSB
for approximately $900,000,000 of a loan in the aggregate principal amount of
approximately $1,000,000,000 pursuant to the Air Transportation Stabilization
Act.
"ATSB Loan" has the meaning specified in Section 4.04(c).
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel.
"Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear
on a balance sheet of such Person prepared as of such date in accordance with
GAAP, (b) in respect of any operating leases of any Person, an amount equal to
seven times the rental payments thereunder scheduled to be paid during the 12
months following such date and (c) in respect of any Synthetic Lease
Obligation, the capitalized amount of the remaining lease payments under the
relevant lease that would appear on a balance sheet of such Person prepared as
of such date in accordance with GAAP if such lease were accounted for as a
capital lease.
"Audited Financial Statements" means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the fiscal year ended December
31, 2001, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of the Borrower and
its Subsidiaries, including the notes thereto.
"Auto-Renewal Letter of Credit" has the meaning specified in Section
2.03(b)(iii).
"Availability Period" means the period from and including the Closing
Date to the earliest of (a) the Maturity Date, (b) the date of termination of
the Aggregate Commitments pursuant to Section 2.06, and (c) the date of
termination of the commitment of each Lender to make Loans and of the
obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section
8.02.
"Bank of America" means Bank of America, N.A., and its successors.
"Bankruptcy Code" has the meaning specified in Preliminary Statement
1 to this Agreement.
"Bankruptcy Court" has the meaning specified in Preliminary Statement
1 to this Agreement.
"Base Rate" means for any day a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by
Bank of America as its "prime rate". The "prime rate" is a rate set by Bank of
America based upon various factors including Bank of America's costs and
desired return, general economic conditions and other factors, and is used as
a reference point for pricing some loans, which may be priced at, above, or
below such announced rate. Any change in such rate announced by Bank of
America shall take effect at the opening of business on the day specified in
the public announcement of such change.
"Base Rate Loan" means a Loan that bears interest at a rate based on
the Base Rate.
"Bidding Procedures Order" means an order of the Bankruptcy Court
regarding the bidding procedures for the Borrower in form and substance
reasonably satisfactory to RSA.
"Borrower" has the meaning specified in the introductory paragraph
hereto.
"Borrowing" means a Revolving Credit Borrowing or a Term Borrowing,
as the context may require.
"Borrowing Base" means, on any date, an amount equal to the sum of
(without duplication):
(a) with respect to Eligible Equipment, 25% of the Current Market
Value thereof;
(b) with respect to Eligible Receivables, 80% of the book value
thereof;
(c) with respect to Eligible Slots, 60% of the Fair Market Value
thereof;
(d) with respect to Eligible Aircraft, 50% of the Fair Market Value
thereof;
(e) with respect to Eligible Flight Simulators, 50% of the Fair
Market Value thereof;
(f) with respect to Eligible Parts, 50% of the Current Market Value
thereof;
(g) with respect to Eligible Real Estate, 25% of the Fair Market
Value thereof;
(h) with respect to Eligible Engines, 50% of the Fair Market Value
thereof; and
(i) with respect to Eligible Gates, 20% of the Fair Market Value
thereof;
less the sum of (i) reserves for accrued but unpaid interest payable on the
Loans; and (ii) all other reserves that the Administrative Agent and the
Collateral Agent deem necessary in the exercise of their reasonable credit
judgment in light of the Loan Parties' financial or operational condition, in
light of competing claims against the Loan Parties' estates or to protect the
value of any Collateral and the interests of the Administrative Agent, the
Collateral Agent and the Lenders in the Collateral. From the date of entry by
the Bankruptcy Court of the Interim Order to October 31, 2002, the value of
Eligible Collateral (other than Eligible Receivables) shall be deemed to be
the values set forth on Schedule III. From and after October 31, 2002, all
calculations of the value of Eligible Collateral (other than Eligible
Receivables) shall be based on the first appraisals received by the
Administrative Agent from the Approved Appraiser after the Closing Date.
Thereafter, such values shall be updated as set forth in Section 6.02(l) and
(m).
"Borrowing Base Certificate" means a certificate in substantially the
form of Exhibit I, duly certified by the Chief Executive Officer or Chief
Financial Officer of the Borrower.
"Business Day" means any day other than a Saturday, Sunday or day on
which banks in New York City, New York or Montgomery, Alabama are authorized
or required by law to close; provided, however, that when used in connection
with a Eurodollar Rate Loan, the term "Business Day" shall also exclude any
date on which banks are not open for dealings in dollar deposits in the London
interbank market.
"Capital Expenditures" means, with respect to any Person for any
period, any expenditure in respect of the purchase or other acquisition of any
fixed or capital asset (excluding (a) normal replacements and maintenance
which are properly charged to current operations and (b) any expenditure
required by any FAA airworthiness directive, service bulletin or other
regulation issued after the date hereof). For purposes of this definition, the
purchase price of equipment that is purchased simultaneously with, or within
three months after, the trade-in of existing equipment or with insurance
proceeds shall be included in Capital Expenditures only to the extent of the
gross amount by which such purchase price exceeds the credit granted by the
seller of such equipment for the equipment being traded in at such time or the
amount of such insurance proceeds, as the case may be.
"Carve-Out" means the following amounts: (a) quarterly fees required
to be paid to the United States Trustee pursuant to 28 USC ss.1930(a)(6) and
any fees payable to the Clerk of the Court, and (b) (i) allowed (whether by
the Interim Order or the Final Order or pursuant to monthly compensation
procedures authorized by the Bankruptcy Court) professional fees and
disbursements incurred by the professionals retained, pursuant to Section
327(a) or (e) of the Bankruptcy Code under a general retainer (excepting
ordinary course professionals) or 1103(a), by the Loan Parties and any
statutory committees allowed under Section 503(b)(3)(F) of the Bankruptcy
Code, which collectively may not exceed $5,000,000 in the aggregate, inclusive
of any holdbacks required by the Bankruptcy Court, for post-Event of Default
services, plus (ii) unpaid professional fees and disbursements incurred or
accrued prior to the occurrence and continuance of an Event of Default and the
triggering of the Carve-Out as provided below, to the extent previously or
subsequently allowed (whether by the Interim Order or the Final Order or
pursuant to monthly compensation procedures authorized by the Bankruptcy
Court); provided no fees or disbursements which are incurred or accrued prior
to the delivery to the Borrower, counsel to any Committee and the Bankruptcy
Court of a written notice by the Administrative Agent and the Collateral Agent
of an Event of Default and the triggering of the Carve-Out shall reduce the
gross amount of the Carve-Out; provided further, however, that the Carve-Out
shall not include, apply to or be available for any fees or expenses incurred
by any party, including the Loan Parties, any Committee, or any of their
respective professionals, in connection with the investigation (including
discovery proceedings), initiation or prosecution of any claims, causes of
action, adversary proceedings or other litigation against the Administrative
Agent, the Collateral Agent or the Lenders in connection with the Loan
Documents, including challenging the amount, validity, perfection, priority or
enforceability of or asserting any defense, counterclaim or offset to, the
obligations thereunder or the security interests granted thereby and under the
DIP Financing Orders and Liens of the Secured Parties in respect thereof.
"Cases" has the meaning specified in Preliminary Statement 1 to this
Agreement.
"Cash Collateralize" has the meaning specified in Section 2.03(g).
"Cash Equivalents" means any of the following types of Investments,
to the extent owned by any Loan Party free and clear of all Liens (other than
Liens created under the Collateral Documents):
(i) marketable securities (a) issued or directly and unconditionally
guaranteed as to interest and principal by the United States Government
or (b) issued by any agency or instrumentality of the United States the
obligations of which are backed by the full faith and credit of the
United States, in each case maturing no more than 180 days after such
date; (ii) commercial paper issued by domestic corporations or
institutions, states or municipalities maturing no more than 180 days
after such date if such commercial paper, at the time of the acquisition
thereof, has a rating of at least A-1 from S&P or at least P-1 from
Xxxxx'x; (iii) time deposits, certificates of deposit or bankers'
acceptances maturing no more than 180 days after such date and issued or
accepted by any Lender or by any commercial bank organized under the laws
of the United States of America or any state thereof or the District of
Columbia that (a) is at least "adequately capitalized" (as defined in the
regulations of its primary Federal banking regulator) and (b) has net
assets of not less than $1,000,000,000 and that has a rating of at least
AA from S&P or at least Aa2 from Xxxxx'x; (iv) shares of any money market
mutual fund registered with the SEC under Rule 2a-7 that guarantees 100%
same day liquidity and has net assets not less than $1,000,000,000; (v)
marketable medium term notes maturing no more than 90 days after such
date that, at the time of the acquisition thereof, have a rating of at
least A- from S&P or at least A3 from Xxxxx'x; (vi) corporate bonds
maturing no more than 90 days after such date that, at the time of the
acquisition thereof, have a rating of at least A- from S&P or at least A3
from Xxxxx'x; and (vii) asset-backed securities maturing no more than 90
days after such date and issued by an originator that has a rating of at
least A from S&P or A2 from Xxxxx'x; provided, however, that in the case
of Cash Equivalents set forth in clauses (ii) through (vii) above, such
Cash Equivalents shall not have a yield of more than the yield on
treasury securities with a maturity comparable to such Cash Equivalents
plus 1.50% per annum.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"CFC" means a "controlled foreign corporation" under Section 957 of
the Code.
"Change of Control" means an event or series of events by which:
(a) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of the Borrower or its Subsidiaries, and any person
or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) other than any Permitted Holder becomes
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be
deemed to have "beneficial ownership" of all securities that such person
or group has the right to acquire (such right, an "option right"),
whether such option right is exercisable immediately or only after the
passage of time), directly or indirectly, of 25% or more of the combined
voting power of the Equity Interests of the Borrower entitled to vote for
members of the board of directors or equivalent governing body of the
Borrower on a fully-diluted basis (and taking into account all such
securities that such person or group has the right to acquire pursuant to
any option right);
(b) at any time after the Petition Date, a majority of the members
of the board of directors or other equivalent governing body of the
Borrower cease to be composed of individuals (i) who were members of that
board or equivalent governing body on the Petition Date, (ii) whose
election or nomination to that board or equivalent governing body was
approved or ratified by individuals referred to in clause (i) above
constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body, or (iii) whose
election or nomination to that board or other equivalent governing body
was approved or ratified by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at
least a majority of that board or equivalent governing body (excluding,
in the case of both clause (ii) and clause (iii), any individual whose
initial nomination for, or assumption of office as, a member of that
board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or
removal of one or more directors by any person or group other than a
solicitation for the election of one or more directors by or on behalf of
the board of directors); or
(c) any Person or two or more Persons acting in concert, in each
case other than a Permitted Holder, shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that,
upon consummation thereof, will result in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over
the management or policies of the Borrower, or control over the Equity
Interests of the Borrower entitled to vote for members of the board of
directors or equivalent governing body of the Borrower on a fully-diluted
basis (and taking into account all such securities that such Person or
group has the right to acquire pursuant to any option right) representing
25% or more of the combined voting power of such securities; provided
however, that notwithstanding the provisions of this clause (c), any
contract or arrangement to which the Borrower is a party (i) providing
solely for the acquisition of control upon or after consummation of a
Reorganization Plan or (ii) that provides for or is conditioned upon
payment in full in cash of all Obligations shall not be deemed to be a
"Change of Control".
"Closing Date" means September 26, 2002.
"Code" means the Internal Revenue Code of 1986.
"Collateral" means all of the "Collateral" referred to in the
Collateral Documents and all of the other property and assets that are or are
intended under the terms of the Collateral Documents to be subject to Liens in
favor of the Collateral Agent for the benefit of the Secured Parties, which
property and assets shall not include the Excluded Assets and the Section 1110
Assets.
"Collateral Agent" means RSA in its capacity as collateral agent
under any of the Loan Documents, or any successor collateral agent.
"Collateral Documents" means, collectively, the provisions of Article
X of this Agreement, the Intellectual Property Security Agreement, the
Mortgages, the Aircraft Mortgage, the Slot Security Agreement, IP Security
Agreement Supplements, security agreements, pledge agreements or other similar
agreements delivered to the Administrative Agent, the Collateral Agent and the
Lenders pursuant to Section 6.12, and each of the other agreements,
instruments or documents that creates or purports to create a Lien in favor of
the Collateral Agent for the benefit of the Secured Parties.
"Commitment" means a Term Commitment or a Revolving Credit
Commitment, as the context may require.
"Commitment Letter" means that letter agreement dated as of September
26, 2002, together with all schedules, annexes and attachments thereto, among
RSA, the Borrower and each of the Guarantors, pursuant to which, among other
things, RSA committed to provide the Aggregate Commitment, on the terms and
conditions described therein.
"Committee" means any statutory committee appointed in the Cases.
"Compensation Period" has the meaning specified in Section
2.12(c)(ii).
"Compliance Certificate" means a certificate substantially in the
form of Exhibit C.
"Computer Software" has the meaning specified in Section
10.01(f)(iv).
"Conditional Approval" has the meaning set forth in Section 8.01(t).
"Consolidated EBITDAR" means, for any period, for the Borrower and
its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net
Income for such period plus, without duplication, the following to the extent
deducted in calculating such Consolidated Net Income: (a) Consolidated
Interest Charges for such period, (b) the provision for federal, state, local
and foreign income taxes payable by the Borrower and its Subsidiaries for such
period, (c) the aggregate amount of any aircraft rental payments to the extent
deducted as an operating expense in calculating such Consolidated Net Income,
(d) the amount of depreciation and amortization expense, (e) to the extent
applicable, the IAMAW Amount in August 2002 and September 2002, (f)
administrative expenses incurred in connection with the Cases, (g) any
payments under employee profit sharing plans made by the Borrower or any of
its Subsidiaries during such period and (h) the aggregate amount of furlough
expenses accounted for on the September 2002 financial statements.
Notwithstanding the foregoing, Consolidated EBITDAR shall include the
Retroactive ALPA/AFA Amount.
"Consolidated Interest Charges" means, for any period, for the
Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all
interest expense (net of interest income), premium payments, debt discount,
fees (including, without limitation, amortization of deferred financing costs
related to the Cases), charges and related expenses of the Borrower and its
Subsidiaries in connection with borrowed money (including capitalized
interest) or in connection with the deferred purchase price of assets, in each
case to the extent treated as interest in accordance with GAAP, and (b) the
portion of rent expense of the Borrower and its Subsidiaries with respect to
such period under capital leases that is treated as interest in accordance
with GAAP, it being understood that rent expense that is treated as an
operating expense in accordance with GAAP is not included this calculation.
"Consolidated Net Income" means, for any period, for the Borrower and
its Subsidiaries on a consolidated basis, the net income of the Borrower and
its Subsidiaries (excluding extraordinary gains and extraordinary losses, in
each case, incurred in connection with the Cases) for that period.
"Contractual Obligation" means, as to any Person, any provision of
any security issued by such Person or of any indenture, mortgage, deed of
trust, contract, agreement, instrument or other undertaking to which such
Person is a party or by which it or any of its property is bound.
"Control" has the meaning specified in the definition of "Affiliate".
"Controlled Account" means a blocked deposit account or blocked
securities account of any Loan Party either (a) at the Collateral Agent or (b)
at another depository bank or other financial institution acceptable to the
Administrative Agent that has entered into account control agreements in form
and substance reasonably satisfactory to the Administrative Agent, and
otherwise established in a manner satisfactory to the Administrative Agent.
"Copyrights" has the meaning specified in Section 10.01(f)(iii).
"Credit Extension" means each of the following: (a) a Borrowing and
(b) an L/C Credit Extension.
"Current Market Value" means, at any time, the most likely trading
price that may be generated under the market circumstances at such time. The
Current Market Value of Eligible Equipment and Eligible Parts assumes that
each Eligible Part and each item of Eligible Equipment can be sold at the
current market price, and that the disposal of all of the Loan Parties'
equipment will not impact market prices.
"CWA" has the meaning specified in Section 4.03(b).
"Debtor Relief Laws" means the Bankruptcy Code, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights
of creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means an interest rate equal to (a) the Base Rate plus
(b) the Applicable Rate applicable to Base Rate Loans plus (c) 2.0% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default
Rate shall be an interest rate equal to the interest rate (including the
Applicable Rate) otherwise applicable to such Loan plus 2.0% per annum, in
each case to the fullest extent permitted by applicable Laws.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Term Loans, Revolving Credit Loans or participations in L/C
Obligations required to be funded by it hereunder within one Business Day of
the date required to be funded by it hereunder, (b) has otherwise failed to
pay over to the Administrative Agent, the Collateral Agent or any other Lender
any other amount required to be paid by it hereunder within one Business Day
of the date when due, unless the subject of a good faith dispute, or (c) has
been deemed insolvent or become the subject of a bankruptcy or insolvency
proceeding.
"DIP Financing Orders" means the Interim Order or the Final Order or
both, as the context may require.
"Disposition" or "Dispose" means the sale, transfer, license, lease
or other disposition (including any sale and leaseback transaction) of any
property by any Person, including any sale, assignment, transfer or other
disposal, with or without recourse, of any notes or accounts receivable or any
rights and claims associated therewith; provided, however, that a Slot trade
shall not constitute a Disposition if accomplished in a transaction where the
traded Slot is intended to be returned to the applicable Loan Party within 30
days after such trade is consummated (a "Temporary Slot Disposition").
"Dollar" and "$" mean lawful money of the United States.
"DOT" means the United States Department of Transportation.
"Effective Date" means the first date on which all of the conditions
precedent set forth in Section 4.01 are satisfied or waived.
"Eligible Aircraft" means the "Primary Aircraft" identified in the
Aircraft Mortgages and such additional commercial jet aircraft of the Loan
Parties as the Borrower may from time to time request from the Administrative
Agent and the Collateral Agent to be considered Eligible Aircraft for purposes
of this Agreement; provided, however, that no such Primary Aircraft or
additional aircraft shall be considered to be an Eligible Aircraft at any time
unless it meets the following criteria at such time:
(a) this Agreement and the relevant Aircraft Mortgage, after giving
effect to the entry of the DIP Financing Orders and the related filing of
such Aircraft Mortgage, create a valid and perfected first priority lien
or security interest in such aircraft (and all components thereof) in
favor of the Collateral Agent, on behalf of the Secured Parties, securing
the Secured Obligations, free and clear of all other Liens, other than
Permitted Liens;
(b) the applicable Loan Party has a current certificate of
airworthiness issued by the FAA and in the appropriate category for the
nature of the operations of such aircraft;
(c) the applicable Loan Party maintains with reputable and
responsible insurers or reinsurers all-risk aircraft hull insurance or
reinsurance and aircraft public liability and property damage insurance
or reinsurance for such aircraft in the amounts, covering the risks and
otherwise on the terms required by the relevant Aircraft Mortgage;
(d) such aircraft is duly registered with the FAA in the name of a
Loan Party;
(e) except to the extent operated under the Civil Reserve Air Fleet
Program as permitted by the relevant Aircraft Mortgage, such aircraft is
operated solely over routes originating and terminating in countries
located in North America, Europe and/or the Caribbean;
(f) such aircraft is in good operating condition, in passenger
configuration, with all equipment, components and systems functioning and
is otherwise maintained in accordance with the respective Loan Parties'
FAA approved maintenance programs;
(g) such aircraft qualifies as a "Stage 3 airplane" as defined in 14
C.F.R. Section 36.1(f)(6);
(h) except as otherwise permitted under the relevant Aircraft
Mortgage, such aircraft is in the possession of the relevant Loan Party
and is not leased to a third party and no third party otherwise has a
proprietary interest therein or, in the case of any Primary Aircraft, in
the engines forming part of such Primary Aircraft;
(i) such aircraft is in a condition not materially inconsistent with
the assumptions set forth in the appraisal by the Approved Appraiser,
other than the assumption that such aircraft is in half-time condition
(it being understood that, without in any way limiting the rights of the
Agents described in the definition of "Borrowing Base" set forth in this
Section 1.01, reserves may be taken if there is a material deviation from
the half-time value assumption described in the appraisal by the Approved
Appraiser for all Eligible Aircraft considered in the aggregate); and
(j) except with respect to the Primary Aircraft, the Administrative
Agent has not otherwise determined in its reasonable judgment that it is
not appropriate to include the value of such aircraft in the Borrowing
Base.
"Eligible Assignee" has the meaning specified in Section 12.07(g).
"Eligible Collateral" means, collectively, Eligible Slots, Eligible
Aircraft, Eligible Flight Simulators, Eligible Parts, Eligible Equipment,
Eligible Real Estate, Eligible Receivables, Eligible Gates and Eligible
Engines.
"Eligible Engines" means the "Primary Engines" referred to in the
Aircraft Mortgages and such additional engines (other than engines
constituting part of an Eligible Aircraft) as the Borrower may from time to
time request from the Administrative Agent and the Collateral Agent to be
considered Eligible Engines for purposes of this Agreement; provided, however,
that no such Primary Engine or additional engine shall be considered to be an
Eligible Engine at any time unless it meets the following criteria at such
time:
(a) this Agreement and the relevant Aircraft Mortgage, after giving
effect to the entry of the DIP Financing Orders and the related filing of
such Aircraft Mortgage, create a valid and perfected first priority lien
or security interest in such engine in favor of the Collateral Agent, on
behalf of the Secured Parties, securing the Secured Obligations, free and
clear of all Liens, other than Permitted Liens;
(b) the applicable Loan Party maintains with reputable and
responsible insurers insurance for such engine in the amounts, covering
the risks and otherwise on the terms required by the relevant Aircraft
Mortgage;
(c) other than engines undergoing maintenance, such engine is in
good operating condition, with all components and systems functioning and
is otherwise maintained in accordance with the respective Loan Parties'
FAA approved maintenance and repair program;
(d) except as otherwise permitted under the terms of the relevant
Aircraft Mortgage, such engine is in the possession of the relevant Loan
Party and is not leased to a third party and no third party otherwise has
a proprietary interest therein; and
(e) such engine is either a spare engine or is installed on an
aircraft that is operated solely over routes originating and terminating
in countries located in North America, Europe or the Caribbean or has
been removed from an aircraft for maintenance, repair or servicing and is
located in one of such countries;
(f) such engine is in a condition not materially inconsistent with
the assumptions set forth in the appraisal by the Approved Appraiser; and
(g) except with respect to the Primary Engines, the Administrative
Agent has not otherwise determined in its reasonable judgment that it is
not appropriate to include the value of such engine in the Borrowing
Base. "Eligible Equipment" means all Equipment of the Loan Parties (other
than aircraft, engines, parts and flight simulators) identified in the
appraisal by the Approved Appraiser (the "Primary Equipment") and such
additional Equipment as the Borrower may from time to time request from
the Administrative Agent and the Collateral Agent to be considered
Eligible Equipment for purposes of this Agreement; provided, however,
that no such Equipment shall be considered to be Eligible Equipment at
any time unless it meets the following criteria at such time:
(a) this Agreement, after giving effect to the entry of the DIP
Financing Orders and the related filings of financing statements, creates
a valid and perfected first priority lien or security interest in such
Equipment in favor of the Collateral Agent, on behalf of the Secured
Parties, securing the Secured Obligations, free and clear of all Liens,
other than Permitted Liens;
(b) such Equipment is in good operating condition, properly
maintained;
(c) such Equipment is in the possession of the relevant Loan Party
and is not leased to a third party and no third party otherwise has a
proprietary interest therein;
(d) such Equipment is located in the United States of America;
(e) such Equipment is in a condition not materially inconsistent
with the assumptions set forth in the appraisal by the Approved
Appraiser, including without limitation that all Equipment is in good
working order; and
(f) except with respect to the Primary Equipment, the Administrative
Agent has not otherwise determined in its reasonable judgment that it is
not appropriate to include the value of such Equipment in the Borrowing
Base.
"Eligible Flight Simulators" means all flight simulators and flight
training devices (collectively, for purposes of this definition, "flight
simulators") of the Loan Parties identified in the appraisals by the Approved
Appraiser (the "Primary Simulators") and such additional flight simulators as
the Borrower may from time to time request from the Administrative Agent and
the Collateral Agent to be considered Eligible Flight Simulators for purposes
of this Agreement; provided, however, that no flight simulator shall be
considered to be an Eligible Flight Simulator at any time unless it meets the
following criteria at such time:
(a) this Agreement, after giving effect to the entry of the DIP
Financing Orders and the related filings of financing statements, creates
a valid and perfected first priority lien or security interest in such
flight simulator in favor of the Collateral Agent, on behalf of the
Secured Parties, securing the Secured Obligations, free and clear of all
Liens, other than Permitted Liens;
(b) such flight simulator is in good operating condition, properly
maintained;
(c) such flight simulator is in the possession of the relevant Loan
Party, except the flight simulator located in Canada, to the extent a
valid and perfected first priority lien has been created therein and the
Agents are reasonably satisfied with respect to such perfected first
priority lien (the "Canadian Simulator") and is not leased to a third
party and no third party otherwise has a proprietary interest therein;
(d) such flight simulator (other than the Canadian Simulator) is
located in the United States of America;
(e) such flight simulator is in a condition not materially
inconsistent with the assumptions set forth in the appraisal by the
Approved Appraiser; and
(f) except with respect to the Primary Simulators, the
Administrative Agent has not otherwise determined in its reasonable
judgment that it is not appropriate to include the value of such flight
simulator in the Borrowing Base.
"Eligible Gates" means those airport gate leaseholds that the
Administrative Agent may from time to time in its sole discretion determine to
be eligible for inclusion in the calculation of the Borrowing Base.
"Eligible Parts" means all appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment (other than
engines and cargo containers) for, or suitable for use on, Eligible Aircraft
("Parts") identified in the appraisals by the Approved Appraiser (the "Primary
Parts") and such additional parts as the Borrower may from time to time
request from the Administrative Agent and the Collateral Agent to be
considered Eligible Parts for purposes of this Agreement; provided, however,
that no such Parts shall be considered to be Eligible Parts at any time unless
it meets the following criteria at such time:
(a) this Agreement and the relevant Aircraft Mortgage, after giving
effect to the entry of the DIP Financing Orders and the related filing of
such Aircraft Mortgage, create a valid and perfected first priority lien
or security interest in such Parts in favor of the Collateral Agent, on
behalf of the Secured Parties, securing the Secured Obligations, free and
clear of all Liens, other than Permitted Liens;
(b) the applicable Loan Party maintains with reputable and
responsible insurers or reinsurers insurance or reinsurance for such
Parts in the amounts, covering the risks and otherwise on the terms
required by the Credit Agreement and the relevant Aircraft Mortgage;
(c) except as permitted in the Aircraft Mortgage, such Parts are in
the possession of the relevant Loan Party and are not leased to a third
party and no third party otherwise has a proprietary interest therein;
(d) such Parts are in a condition not materially inconsistent with
the assumptions set forth in the appraisal by the Approved Appraiser,
including without limitation with respect to serviceability of aircraft
rotable parts; and
(e) except with respect to the Primary Parts, the Administrative
Agent has not otherwise determined in its reasonable judgment that it is
not appropriate to include the value of such Parts in the Borrowing Base.
"Eligible Real Estate" means the real property of the Loan Parties
described in the Mortgages (the "Primary Real Estate") and such additional
real property of the Loan Parties as the Borrower may from time to time
request from the Administrative Agent and the Collateral Agent to be
considered Eligible Real Estate for purposes of this Agreement; provided,
however, that no such real property shall be considered to be Eligible Real
Estate at any time unless it meets the following criteria at such time:
(a) the relevant Mortgage, after giving effect to the entry of the
DIP Financing Orders and the related filing of such Mortgage, creates a
valid and perfected first priority lien or security interest in such real
property in favor of the Collateral Agent, on behalf of the Secured
Parties, securing the Secured Obligations, free and clear of all other
Liens, other than Permitted Encumbrances (as defined in such Mortgage);
(b) the applicable Loan Party maintains with reputable and
responsible insurers insurance for such real property in the amounts,
covering the risks and otherwise on the terms required by the relevant
Mortgage;
(c) the applicable Loan Party holds marketable fee simple (or
equivalent) title to such real property;
(d) such real property is located in the United States of America;
(e) such real property is in the possession of the relevant Loan
Party and is not leased to a third party and no third party otherwise has
a proprietary interest therein;
(f) such real property is in a condition not materially inconsistent
with the assumptions set forth in the appraisal by the Approved
Appraiser;
(g) the Borrower has received for such real property, fully paid
American Land Title Association Lender's Extended Coverage title
insurance policies (the "Mortgage Policies") in form and substance, with
endorsements and in amounts acceptable to the Agents issued, coinsured
and reinsured by title insurers acceptable to the Agents, insuring the
Mortgages to be valid first and subsisting Liens on the property
described therein, free and clear of all defects (including, but not
limited to, mechanics' and materialmen's Liens) and encumbrances,
excepting only Permitted Encumbrances, and providing for such other
affirmative insurance (including endorsements for future advances under
the Loan Documents and for mechanics' and materialmen's Liens) and such
coinsurance and direct access reinsurance as the Agents may deem
necessary or desirable;
(h) except with respect to the Primary Real Estate, the
Administrative Agent has not otherwise determined in its reasonable
judgment that it is not appropriate to include the value of such real
property in the Borrowing Base.
"Eligible Receivables" means all Receivables of the Loan Parties;
provided, however, that no Receivables shall be considered to be Eligible
Receivables at any time unless they meet the following criteria at such time:
(a) this Agreement, after giving effect to the entry of the DIP
Financing Orders and the related filings of financing statements, creates
a valid and perfected first priority lien or security interest in such
Receivables in favor of the Collateral Agent, on behalf of the Secured
Parties, securing the Secured Obligations, free and clear of all Liens
(other than Permitted Liens);
(b) such Receivables arise out of sales of goods or rendering of
services in the ordinary course of the relevant Loan Party's business;
(c) such Receivables are payable in Dollars and are otherwise on
terms normal and customary in the relevant Loan Party's business;
(d) such Receivables are not more than 90 days past original invoice
date or more than 60 days past the date due;
(e) such Receivables are not owing from any Person from which an
aggregate amount of more than 20% of the Receivables owing therefrom is
more than 60 days past the date due;
(f) such Receivables are not owing from any Person that (i) has
disputed liability for any Receivable owing from such Person or (ii) has
otherwise asserted any claim, demand or liability against any Loan Party,
whether by action, suit, counterclaim or otherwise;
(g) such Receivables are not owing from any Person that shall take
or be the subject of any action or proceeding under any Debtor Relief
Laws;
(h) such Receivables (i) are not owing from any Person that is also
a supplier to, or creditor of, any Loan Party, is a credit card
processor, travel agent or marketing partner of any Loan Party and (ii)
do not represent any manufacturer's or supplier's credits, discounts,
incentive plans or similar arrangements entitling any Loan Party to
discounts on future purchase therefrom;
(i) such Receivables do not arise out of sales to account debtors
outside the United States;
(j) such Receivables do not arise out of sales on a xxxx-and-hold,
guaranteed sale, sale-or-return, sale on approval or consignment basis or
subject to any right of return, setoff or chargeback (including, without
limitation, Receivables for unutilized tickets);
(k) such Receivables are not owing from an account debtor that is an
agency, department or instrumentality of the United States or any state
thereof; and
(l) the Administrative Agent has not otherwise determined in its
reasonable judgment that it is not appropriate to include the value of
such Receivables in the Borrowing Base.
"Eligible Slots" means the Slots (other than Secondary Slots and
Excluded Slots) of the Loan Parties described in the Slot Security Agreement
(the "Primary Slots") and such additional Slots of any Loan Party as the
Borrower may request from the Administrative Agent and the Collateral Agent to
be considered Eligible Slots for purposes of this Agreement; provided,
however, that no such Slots shall be considered to be Eligible Slots at any
time unless they meet the following criteria at such time:
(a) this Agreement and the Slot Security Agreement, after giving
effect to the entry of the DIP Financing Orders and the related filings of
financing statements, creates a valid and perfected first priority lien or
security interest in such Slots in favor of the Collateral Agent, on behalf of
the Secured Parties, securing the Secured Obligations, free and clear of all
Liens (other than Permitted Liens);
(b) such Slots are at LaGuardia Airport or Xxxxxx Xxxxxx Washington
National Airport;
(c) such Slots have not been transferred or leased to a third party
and no third party otherwise has a proprietary interest therein (other than
Temporary Slot Dispositions);
(d) the relevant Loan Party is utilizing such Slots in a manner
sufficient to avoid withdrawal of such Slots by the FAA under 14 C.F.R. ss.
93.227(a); and
(e) except with respect to the Primary Slots, the Administrative
Agent has not otherwise determined in its reasonable judgment that it is not
appropriate to include the value of such Slots in the Borrowing Base.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, Environmental Permit or
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment, including, without limitation, (a) by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental or
regulatory authority or any third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, noise, air emissions and
discharges to waste or public systems.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower, any other Loan
Party or any of their respective Subsidiaries directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Equipment" has the meaning specified in Section 10.01(a).
"Equity Interests" means, with respect to any Person, all of the
shares of capital stock of (or other ownership or profit interests in) such
Person, all of the warrants, options or other rights for the purchase or
acquisition from such Person of shares of capital stock of (or other ownership
or profit interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are outstanding on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with any Loan Party within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by any Loan Party or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations that is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by any Loan Party or
any ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a notice of intent
to terminate, the treatment of a Plan amendment as a termination under Section
4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or condition
which constitutes grounds under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007
of ERISA, upon the Borrower or any ERISA Affiliate.
"Eurodollar Rate" means, with respect to any Eurodollar Rate Loan for
any Interest Period, the rate per annum equal to the rate per annum obtained
by dividing (a) the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m., London time, on the date which is two Business Days
prior to the beginning of such Interest Period by reference to the British
Bankers' Association Interest Settlement Rates for deposits in Dollars (as set
forth by any service selected by the Administrative Agent which has been
nominated by the British Bankers' Association as an authorized information
vendor for the purpose of displaying rates) for a period equal to such
Interest Period, or, to the extent that an interest rate is not ascertainable
pursuant to the foregoing provisions of this definition, the interest rate per
annum determined by the Administrative Agent equal to the average of the rates
per annum (rounded upwards, if necessary, to the next 1/16 of 1%) at which
deposits in Dollars approximately equal in principal amount to such Eurodollar
Rate Loan and for a maturity comparable to such Interest Period are offered by
two major banks selected by the Administrative Agent (or if such rate is not
available, the rate per annum (rounded upwards, if necessary, to the next 1/16
of 1%) at which deposits in Dollars are offered for such Interest Period by
the Administrative Agent) in the London interbank market in London, England at
approximately 11:00 a.m., London time, on the date which is two Business Days
prior to the beginning of such Interest Period by (b) a percentage equal to
100% minus Statutory Reserves for such Interest Period.
"Eurodollar Rate Loan" means a Loan that bears interest at a rate
based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
"Excess Amount" has the meaning specified in Section 7.12.
"Excluded Assets" means (a) avoidance actions under Chapter 5 of the
Bankruptcy Code, except to the extent of collateral or proceeds recovered
pursuant to Section 549 thereof, (b) funds held in the Trust Accounts, (c)
funds held in any account with, or as security for obligations owing to, IATA,
NPC, ARC, Diners Club, Discover Card or American Express to the extent that
the agreement governing the deposit of such funds (or the related processing
agreement) prohibits the granting of a security interest therein to any Person
other than the IATA, NPC, ARC, Diners Club, Discover Card or American Express,
as applicable, (d) the assets and, except to the extent of the pledge, if any,
described in Section 6.26(d), the stock of Airways Assurance Limited, (e) the
stock and assets of any other existing or future subsidiary of the Borrower
which qualifies as a CFC, solely to the extent that a tax liability would
result from the pledge of such stock or assets to the Collateral Agent or the
Lenders, and (f) the Purchasing Card Security Deposit (other than any
Purchasing Card Residual Interest). Notwithstanding anything to the contrary
in this Agreement or any other Loan Document, the term "Excluded Assets" shall
include: (i) any passenger facilities charges collected by the Loan Parties
constituting trust funds pursuant to 49 U.S.C. ss. 158, whether or not such
passenger facilities charges are held in a Trust Account and (ii) any security
service fees collected by the Loan Parties constituting trust funds pursuant
to 49 C.F.R. ss.1510, whether or not such security service fees are held in a
Trust Account.
"Excluded Slots" means the (a) Air-21 slot exemptions and (b)
Essential Air Services Slots described on Schedule 5.08(f).
"Existing DIP Credit Agreement" means that certain Senior Secured
Superpriority Debtor-in-Possession Credit Agreement, dated as of August 30,
2002, among the Borrower, the Guarantors party thereto, each lender from time
to time party thereto, Credit Suisse First Boston, Cayman Islands Branch, as
Administrative Agent, Bank of America, N.A., as Syndication Agent, Collateral
Agent and L/C Issuer, Credit Suisse First Boston, Cayman Islands Branch and
Banc of America Securities LLC, as Joint Lead Arrangers and Joint Book
Managers, and TPG Partners III, L.P.
"Existing Indebtedness" means Indebtedness of each Loan Party
existing on the Petition Date.
"Existing Interim Order" means the interim order of the Bankruptcy
Court approving the Borrower's incurrence of the indebtedness under the
Existing DIP Credit Agreement that was entered by the Bankruptcy Court on
August 12, 2002.
"Existing Lenders" means the lenders party to the Existing DIP Credit
Agreement.
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business other than
proceeds of Dispositions, but including, without limitation, tax refunds,
pension plan reversions, proceeds of insurance (other than proceeds of
business interruption insurance to the extent such proceeds constitute
compensation for lost earnings but including insurance payable upon an "Event
of Loss" as defined in the Aircraft Mortgage), condemnation awards (and
payments in lieu thereof), indemnity payments and any purchase price
adjustments; provided that there shall be excluded from Extraordinary Receipts
(a) any payments received by any Loan Party pursuant to a grant made by the
Air Transportation Stabilization Act as a result of the events occurring on
September 11, 2001, (b) payments made to a Loan Party by another Loan Party,
(c) cash receipts received from proceeds of insurance, condemnation awards (or
payments in lieu thereof) or indemnity payments to the extent that such
proceeds, awards or payments (i) are received by any Person in respect of any
third party claim against such Person and applied to pay (or to reimburse such
Person for its prior payment of) such claim and the costs and expenses of such
Person with respect thereto or (ii) are in respect of loss or damage to
equipment, fixed assets or real property (but specifically excluding loss or
damage to airframes) and are applied (or in respect of which expenditures were
previously incurred) to replace or repair the equipment, fixed assets or real
property in respect of which proceeds were received, provided that within 30
days after the occurrence of such loss or damage, the applicable Loan Party
has determined to so apply such cash receipts and provided further that such
application is made as soon as commercially reasonable and in any event within
90 days after the occurrence of such loss or damage or within such 90 day
period the applicable Loan Party has entered into a binding contractual
arrangement for such application and (d) cash collateral securing letters of
credit and surety bonds that is returned to any Loan Party.
"FAA" means the Federal Aviation Administration.
"Facility" means the Term Facility, the Revolving Credit Facility or
the Letter of Credit Sublimit, as the context may require.
"Fair Market Value" means, at any time, the most likely trading price
that may be generated under the market circumstances at such time.
"Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
"Final Order" means a final order of the Bankruptcy Court approving
the terms and conditions of the Loan Documents substantially in the form of
and containing, among other things, the provisions present in the Interim
Order (including, without limitation, the granting of Liens and the
superpriority status referred to in the Loan Documents), which final order
shall be in form and substance satisfactory to the Administrative Agent and
RSA in their sole discretion and shall not have been reversed, amended,
supplemented, modified, stayed or vacated.
"First Day Orders" means all orders entered by the Bankruptcy Court
granting the relief requested in the motions filed with the Bankruptcy Court
on the Petition Date or August 12, 2002.
"Flood Hazard Property" has the meaning specified in Section
6.26(b)(iii).
"Foreign Person" has the meaning specified in Section 12.15(a)(i).
"FRB" means the Board of Governors of the Federal Reserve System of
the United States.
"Fund" has the meaning specified in Section 12.07(g).
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards Board
or such other principles as may be approved by a significant segment of the
accounting profession in the United States, that are applicable to the
circumstances as of the date of determination, in accordance with Section
1.03.
"GECC" has the meaning specified in Section 7.03(c)(v).
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guarantors" means, collectively, each of the existing and future
direct and indirect Subsidiaries of the Borrower (other than Airways Assurance
Limited) that is not a CFC.
"Guaranty" has the meaning specified in Section 11.01.
"Guarantee" means, as to any Person, (a) any obligation, contingent
or otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness payable or performable by another Person (the
"primary obligor") in any manner, whether directly or indirectly, and
including any obligation of such Person, direct or indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness, (ii) to purchase or lease property, securities or services for
the purpose of assuring the obligee in respect of such Indebtedness of the
payment or performance of such Indebtedness, (iii) to maintain working
capital, equity capital or any other financial statement condition or
liquidity or level of income or cash flow of the primary obligor so as to
enable the primary obligor to pay such Indebtedness, or (iv) entered into for
the purpose of assuring in any other manner the obligee in respect of such
Indebtedness of the payment or performance thereof or to protect such obligee
against loss in respect thereof (in whole or in part), or (b) any Lien on any
assets of such Person securing any Indebtedness of any other Person, whether
or not such Indebtedness is assumed by such Person (or any right, contingent
or otherwise, of any holder of such Indebtedness to obtain any such Lien). The
amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by
the guaranteeing Person in good faith. The term "Guarantee" as a verb has a
corresponding meaning.
"Guaranteed Obligations" has the meaning specified in Section 11.01.
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Honor Date" has the meaning specified in Section 2.03(c)(i).
"IAMAW" means International Association of Machinists and Aerospace
Workers.
"IAMAW Amount" means the amounts of concessions that would have been
realized retroactively by the Borrower if the negotiations for the collective
bargaining agreement with the machinists and related employees represented by
the IAMAW had been concluded consensually in the amounts of $5,000,000 in
August 2002 and $10,000,000 in September 2002, provided that the Borrower asks
for and receives relief under Sections 1113 and 1114 of the Bankruptcy Code
for the collective bargaining agreement with the machinists and related
employees represented by the IAMAW and, in the granting of such relief, the
Bankruptcy Court does not make any concessions retroactive to August and
September 2002.
"IATA" means the International Air Transport Association.
"ICC" has the meaning specified in Section 2.03(h).
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising
under letters of credit (including standby and commercial), bankers'
acceptances, bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase
price of property or services (other than trade accounts payable in the
ordinary course of business and not past due for more than 60 days after
the date on which each such trade payable or account payable was
created);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by
such Person or is limited in recourse;
(f) capital leases, operating leases and Synthetic Lease
Obligations;
(g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interests
in such Person or any other Person or any warrants, rights or options to
acquire such Equity Interests, valued, in the case of redeemable
preferred interests, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends; and
(h) all Guarantees of such Person in respect of any of the
foregoing.
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company) in which
such Person is a general partner or a joint venturer, unless such Indebtedness
is expressly made non-recourse to such Person. The amount of any net
obligation under any Swap Contract on any date shall be deemed to be the Swap
Termination Value thereof as of such date. The amount of any capital lease,
operating lease or Synthetic Lease Obligation as of any date shall be deemed
to be the amount of Attributable Indebtedness in respect thereof as of such
date.
"Indemnified Liabilities" has the meaning set forth in Section 12.05.
"Indemnitees" has the meaning set forth in Section 12.05.
"Initial Pledged Debt" means the Indebtedness set forth opposite each
Loan Party's name on and as otherwise described in Schedule I.
"Initial Pledged Equity" means the shares of stock and other Equity
Interests set forth opposite each Loan Party's name on and as otherwise
described in Schedule II.
"Intellectual Property Collateral" has the meaning specified in
Section 10.01(f).
"Intellectual Property Security Agreement" has the meaning specified
in Section 6.26(a)(iii).
"Interest Payment Date" means the last Business Day of each month,
the Maturity Date and, with respect to each Eurodollar Rate Loan, the last day
of the Interest Period therefor.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to
or continued as a Eurodollar Rate Loan and ending on the date one, two or
three months thereafter, as selected by the Borrower in its Loan Notice;
provided that:
(a) any Interest Period that would otherwise end on a day that is
not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
(c) no Interest Period shall extend beyond the Maturity Date.
"Interim Order" means the interim order of the Bankruptcy Court
approving the Commitment Letter and the Borrower's incurrence of the
indebtedness thereunder that was approved by the Bankruptcy Court from the
bench on September 26, 2002 and entered by the Bankruptcy Court on October 1,
2002 and shall not have been reversed, amended, supplemented, modified, stayed
or vacated.
"Inventory" has the meaning specified in Section 10.01(b).
"Investment" means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person,
(b) a loan, advance or capital contribution to, Guarantee or assumption of
debt of, or purchase or other acquisition of any other debt or equity
participation or interest in, another Person, including any partnership or
joint venture interest in such other Person and any arrangement pursuant to
which the investor incurs debt of the type referred to in clause (h) of the
definition of "Indebtedness" set forth in this Section 1.01 in respect of such
Person, or (c) the purchase or other acquisition (in one transaction or a
series of transactions) of assets of another Person that constitute a business
unit or all or a substantial part of the business of, such Person; provided,
however, that deposits made by any Loan Party in the ordinary course of
business in connection with the acquisition of aircraft, airframes or engines
or the entry into contracts (but excluding deposits to secure Indebtedness)
shall not be considered an "Investment". For purposes of covenant compliance,
the amount of any Investment shall be the amount actually invested, without
adjustment for subsequent increases or decreases in the value of such
Investment.
"Investment Agreement" means that certain Investment Agreement, dated
as of September 26, 2002, between the Borrower and The Retirement Systems of
Alabama (and its successors and permitted assigns).
"IP Security Agreement Supplement" has the meaning specified in
Section 10.01(f).
"IRS" means the United States Internal Revenue Service.
"Laws" means, collectively, all international, foreign, Federal,
state and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities,
including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration
thereof, and all applicable administrative orders, directed duties, requests,
licenses, authorizations and permits of, any Governmental Authority, in each
case whether or not having the force of law.
"L/C Advance" means, with respect to each Revolving Credit Lender,
such Revolving Credit Lender's funding of its participation in any L/C
Borrowing in accordance with its Pro Rata Share.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Revolving Credit Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit,
the issuance thereof or extension of the expiry date thereof, or the renewal
or increase of the amount thereof.
"L/C Issuer" means any issuer of Letters of Credit hereunder mutually
acceptable to the Administrative Agent and the Borrower.
"L/C Obligations" means, as at any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit plus the
aggregate of all Unreimbursed Amounts, including all L/C Borrowings.
"Lender" has the meaning specified in the introductory paragraph
hereto and, as the context requires, includes the L/C Issuer.
"Lending Office" means, as to any Lender, the office or offices of
such Lender described as such in such Lender's Administrative Questionnaire,
or such other office or offices as a Lender may from time to time notify to
the Borrower and the Administrative Agent.
"Letter of Credit" means any letter of credit issued hereunder. A
Letter of Credit may be a documentary letter of credit or a standby letter of
credit.
"Letter of Credit Application" means an application and agreement for
the issuance or amendment of a Letter of Credit in the form from time to time
in use by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is 30 days
prior to the Maturity Date then in effect (or, if such day is not a Business
Day, the next preceding Business Day).
"Letter of Credit Sublimit" means, at any time, an amount equal to
(a) $50,000,000 minus (b) the aggregate outstanding amount of all Third Party
L/C Obligations at such time. The Letter of Credit Sublimit is part of, and
not in addition to, the Aggregate Commitments.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever intended for security (including any conditional sale or
other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"Liquidity" means, on any given date, the sum of (a) the total amount
available to be drawn under this Agreement on such date taking into account
all applicable conditions precedent set forth in Article IV on such date, (b)
the aggregate amount of all cash and Cash Equivalents held in Controlled
Accounts, and (c) until the entry of the Final Order, any other cash that is
not deposited in a Trust Account and is not otherwise subject to a Lien in
favor of Persons other than the Collateral Agent (other than Liens such as
bankers' liens and rights of setoff customarily arising under account
agreements or in connection with a cash management system), provided that to
the extent, if any, that cash or Cash Equivalents held in a Controlled Account
are subject to a security interest securing the L/C Issuer in accordance with
Section 2.03(l) or an obligation other than an obligation under the Loan
Documents, such cash or Cash Equivalents shall not be included in the
calculation of Liquidity.
"Loan" means an extension of credit by a Lender to the Borrower under
Article II in the form of a Term Loan or a Revolving Credit Loan.
"Loan Documents" means, collectively, (a) this Agreement, (b) the
Notes, (c) the Collateral Documents, (d) the Commitment Letter and (e) each
Letter of Credit Application.
"Loan Notice" means a notice of (a) a Term Borrowing, (b) a Revolving
Credit Borrowing, (c) a conversion of Loans from one Type to the other, or (d)
a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which,
if in writing, shall be substantially in the form of Exhibit A.
"Loan Parties" means, collectively, the Borrower and each Guarantor.
"Majority Revolving Credit Facility Lenders" means Lenders having
more than 50% of the sum of (a) the Total Outstandings under the Revolving
Credit Facility (with the aggregate amount of each Lender's risk participation
and funded participation in L/C Obligations being deemed "held" by such Lender
for purposes of this definition) and (b) the aggregate unused Revolving Credit
Commitments; provided that the unused Revolving Credit Commitment of, and the
portion of the Total Outstandings under the Revolving Credit Facility held or
deemed held by, any Defaulting Lender shall be excluded for purposes of making
a determination of Majority Revolving Credit Facility Lenders.
"Majority Term Facility Lenders" means Lenders having more than 50%
of the sum of (a) the Total Outstandings under the Term Facility and (b)
aggregate unused Term Commitments; provided that the unused Term Commitment
of, and the portion of the Total Outstandings under the Term Facility held or
deemed held by, any Defaulting Lender shall be excluded for purposes of making
a determination of Majority Term Facility Lenders.
"Material Adverse Change" means a material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries taken as a whole,
other than any change (a) of the type which customarily occurs as a result of
events leading up to and following the commencement of a case under Chapter 11
of the Bankruptcy Code and the commencement of the Cases or (b) disclosed in
(i) the annual report on Form 10-K for the year ended December 31, 2001 filed
by the Borrower and US Airways, Inc., (ii) in the quarterly reports on Form
10-Q for the quarters ended March 31, 2002 and June 30, 2002 filed by the
Borrower and US Airways, Inc. or (iii) in any report on Form 8-K filed by the
Borrower or US Airways, Inc. after December 31, 2001 and prior to August 10,
2002 and are listed and available on the SEC's "XXXXX" website; provided that
deferrals of payments to aircraft lessors/lenders with respect to grounded
aircraft and other aircraft in the Borrower's fleet (and any associated
ratings downgrade) shall not in and of themselves constitute a Material
Adverse Change.
"Material Adverse Effect" means (a) a material adverse effect upon
the business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries taken as a whole,
other than any effect of the type which customarily occurs as a result of
events leading up to and following the commencement of a case under Chapter 11
of the Bankruptcy Code and the commencement of the Cases; (b) a material
impairment of the rights and remedies of the Administrative Agent, the
Collateral Agent or any Lender under any Loan Document, or of the ability of
any Loan Party to perform its obligations under any Loan Document to which it
is a party; (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Loan Party of any Loan Document to which
it is a party; or (d) a material impairment of the Collateral taken as a
whole.
"Maturity Date" means the earliest of (a) September 30, 2003, (b) the
date of termination in whole of the Term Commitments, the Revolving Credit
Commitments and the Letter of Credit Sublimit pursuant to Section 2.06 or
8.02(b), and (c) the effective date of a Reorganization Plan.
"Milestone Four Achievement Date" has the meaning specified in
Section 4.04.
"Milestone Three Achievement Date" has the meaning specified in
Section 4.03.
"Milestone Two Achievement Date" has the meaning specified in Section
4.02.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor
thereto.
"Mortgage Policies" has the meaning set forth in the definition of
"Eligible Real Estate" set forth in this Section 1.01.
"Mortgaged Property" has the meaning specified in Section
6.26(b)(iii).
"Mortgages" has the meaning specified in Section 6.26(a)(xv).
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"Net Cash Proceeds" means:
(a) with respect to the sale of any asset by any Loan Party, the
excess, if any, of (i) the sum of cash and Cash Equivalents received in
connection with such sale (including any cash or Cash Equivalents received by
way of deferred payment pursuant to, or by monetization of, a note receivable
or otherwise, but only as and when so received) over (ii) the sum of (A) the
principal amount of any Indebtedness that is secured by such asset and that is
required to be repaid in connection with the sale thereof (other than
Indebtedness under the Loan Documents), (B) the out-of-pocket expenses
(including brokerage fees) incurred by such Loan Party in connection with such
sale and (C) taxes reasonably estimated by the Borrower to be actually payable
within two years of the date of the relevant asset sale as a result of any
gain recognized in connection therewith documented in form and substance
reasonably satisfactory to the Administrative Agent; and
(b) with respect to the issuance of any capital stock or other Equity
Interest by Loan Party or the issuance of any Indebtedness by any Loan Party,
the excess of (i) the sum of the cash and Cash Equivalents received in
connection with such sale or issuance over (ii) the underwriting discounts and
commissions, and other out-of-pocket expenses, incurred by such Loan Party in
connection with such sale or issuance.
"Non-Voting Foreign Stock" has the meaning set forth in Section
10.01(d)(iii).
"Nonrenewal Notice Date" has the meaning specified in Section
2.03(b)(iii).
"Note" means a Term Note or a Revolving Credit Note, as the context
may require.
"NPC" means National Processing Company, LLC, an Ohio limited
liability company.
"NPL" means the National Priorities List under CERCLA.
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against
any Loan Party or any Affiliate thereof of any proceeding under any Debtor
Relief Laws naming such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding. Without
limiting the generality of the foregoing, the Obligations of the Loan Parties
under the Loan Documents include (a) the obligation to pay principal,
interest, Letter of Credit commissions, charges, expenses, fees, attorneys'
fees and disbursements, indemnities and other amounts payable by any Loan
Party under any Loan Document and (b) the obligation of any Loan Party to
reimburse any amount in respect of any of the foregoing obligations under the
Loan Documents that any Lender, in its sole discretion, may elect to pay or
advance on behalf of such Loan Party.
"Orders" means the DIP Financing Orders and the Bidding Procedures
Order.
"Original Credit Agreement" has the meaning set forth in the recitals
to this Agreement.
"Organization Documents" means (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Other Taxes" has the meaning specified in Section 3.01(b).
"Outstanding Amount" means (a) with respect to Term Loans and
Revolving Credit Loans on any date, the aggregate outstanding principal amount
thereof after giving effect to any borrowings and prepayments or repayments of
Term Loans and Revolving Credit Loans, as the case may be, occurring on such
date; and (b) with respect to any L/C Obligations on any date, the amount of
such L/C Obligations on such date after giving effect to any L/C Credit
Extension occurring on such date and any other changes in the aggregate amount
of the L/C Obligations as of such date, including as a result of any
reimbursements of outstanding unpaid drawings under any Letters of Credit or
any reductions in the maximum amount available for drawing under Letters of
Credit taking effect on such date.
"Participant" has the meaning specified in Section 12.07(d).
"Patents" has the meaning set forth in Section 10.01(f)(i).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such
term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan,
that is subject to Title IV of ERISA and is sponsored or maintained by any
Loan Party or any ERISA Affiliate or to which any Loan Party or any ERISA
Affiliate contributes or has an obligation to contribute, or in the case of a
multiple employer or other plan described in Section 4064(a) of ERISA, has
made contributions at any time during the immediately preceding five plan
years.
"Permitted Encumbrances" has the meaning specified in the Mortgages.
"Permitted Holder" means any of RSA, any other Winning Plan Sponsor
approved by the Administrative Agent, the ATSB, IAMAW, ALPA, AFA, CWA and any
of the Borrower's other unions and any branch of IAMAW, ALPA, AFA, CWA or such
other unions.
"Permitted Liens" means Liens described in Sections 7.01(a), (c) (to
the extent such tax liens do not result in a material risk of loss of the
applicable asset), (d) and, to the extent permitted by the Aircraft Mortgages,
(k).
"Permitted Sale/Leaseback" means any transaction pursuant to which a
Loan Party sells "equipment" described in Section 1110(a)(3) of the Bankruptcy
Code (as in effect on the date hereof) that is subject to a mortgage,
conditional sale or security interest on the date hereof (such equipment, the
"Subject Equipment") and leases the Subject Equipment back from the buyer or
its designee.
"Permitted Senior Liens" means (a) Liens permitted under Section 7.01
which have priority by operation of law over the Liens granted to the
Collateral Agent on behalf of the Administrative Agent, the Collateral Agent
and the Lenders and (b) Liens permitted under Section 7.01(i), (o), (p) or
(q).
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Petition Date" has the meaning specified in Preliminary Statement 1
to this Agreement.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by any Loan Party or, with respect to any
such plan that is subject to Section 412 of the Code or Title IV of ERISA, any
ERISA Affiliate.
"Pledged Debt" has the meaning specified in Section 10.01(d)(iv).
"Pledged Equity" has the meaning specified in Section 10.01(d)(iii).
"Post-Petition", when used with respect to any agreement or
instrument, any claim or proceeding or any other matter, shall refer to an
agreement or instrument that was entered into or became effective, a claim or
proceeding that first arose or was first instituted, or another matter that
first occurred, after the commencement of the Cases.
"Pre-Petition", when used with respect to any agreement or
instrument, any claim or proceeding or any other matter, shall refer to an
agreement or instrument that was entered into or became effective, a claim or
proceeding that arose or was instituted, or another matter that occurred,
prior to the Petition Date.
"Pre-Petition Payment" means a payment (by way of adequate protection
or otherwise) of principal or interest or otherwise on account of any
Pre-Petition Indebtedness or trade payables or other Pre-Petition claims
against the Borrower or any Guarantor.
"Pro Rata Share" means, with respect to each Lender at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Commitment(s) of such Lender under
the applicable Facility or Facilities at such time and the denominator of
which is the amount of the Aggregate Commitments under the applicable Facility
or Facilities at such time; provided that if the commitment of each Lender to
make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 8.02, then the Pro Rata Share of each
Lender shall be determined based on the Pro Rata Share of such Lender
immediately prior to such termination and after giving effect to any
subsequent assignments made pursuant to the terms hereof. The initial Pro Rata
Share of each Lender is set forth opposite the name of such Lender on Schedule
2.01 or in the Assignment and Assumption pursuant to which such Lender becomes
a party hereto, as applicable.
"Purchasing Card Bank" means Bank of America and its successors and
assigns in such capacity.
"Purchasing Card Obligations" means obligations of the Borrower
and/or the Guarantors to the Purchasing Card Bank in connection with the
Purchasing Card Program.
"Purchasing Card Program" means the existing stored value card
program of one or more of the Loan Parties or any future program established
pursuant to an agreement between Bank of America and the Borrower pursuant to
which Bank of America has made or will make certain extensions of credit to
the Borrower and/or the Guarantors for corporate related purchases by certain
employees of the Borrower and/or the Guarantors, which agreement was
authorized by the Order Pursuant to 11 U.S.C. ss.ss.363(b) and 364(c)(2)
Authorizing Debtors to Enter Into a Corporate Purchasing Program with Bank of
America, N.A. (USA) entered by the Bankruptcy Court on August 12, 2002.
"Purchasing Card Residual Interest" means any unused portion of the
Purchasing Card Security Deposit after satisfaction of the obligations of the
Borrower under the Purchasing Card Program.
"Purchasing Card Security Deposit" means up to $1,000,000 of a
security deposit provided by the Borrower to the Purchasing Card Bank in
connection with the Purchasing Card Program.
"Receivables" has the meaning specified in Section 10.01(c).
"Reduction Amount" has the meaning set forth in Section
2.05(b)(viii).
"Register" has the meaning set forth in Section 12.07(c).
"Regulations" means the regulations for the Air Carrier Guarantee
Loan Program issued pursuant to the Air Transportation Stabilization Act, 14
C.F.R. Part 1300, as the same may be amended from time to time.
"Reorganization Plan" means a Chapter 11 plan of reorganization filed in any
Case by the Borrower and/or any of the Guarantors.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than events for which the 30 day notice period has
been waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Term Loans or Revolving Credit Loans, a Loan
Notice, and (b) with respect to an L/C Credit Extension, a Letter of Credit
Application.
"Required Lenders" means, as of any date of determination, Lenders
having more than 50% of the sum of the (a) Total Outstandings (with the
aggregate amount of each Lender's risk participation and funded participation
in L/C Obligations being deemed "held" by such Lender for purposes of this
definition), (b) aggregate unused Term Commitments and (c) aggregate unused
Revolving Credit Commitments; provided that the unused Term Commitment of,
unused Revolving Credit Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded
for purposes of making a determination of Required Lenders.
"Responsible Officer" means, (i) the chief executive officer,
president, chief financial officer, executive vice president, treasurer or
assistant treasurer of a Loan Party, and (ii) with respect to each Loan Party
(other than the Borrower), any person authorized by the Board of Directors or
shareholders of such Loan Party to execute documents in connection with the
Loan Documents on behalf of such Loan Party. Any document delivered hereunder
that is signed by a Responsible Officer of a Loan Party shall be conclusively
presumed to have been authorized by all necessary corporate, partnership
and/or other action on the part of such Loan Party and such Responsible
Officer shall be conclusively presumed to have acted on behalf of such Loan
Party.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any capital
stock or other Equity Interest of any Loan Party, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to the Borrower's
stockholders, partners or members (or the equivalent Persons thereof).
"Retroactive ALPA/AFA Amounts" means wage, benefit and productivity
concessions associated with July 2002 earnings for the pilot and flight
attendant work groups, which have been recorded for accounting purposes in the
Borrower's financial statements for August 2002.
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Loans of the same Type and, in the case of
Eurodollar Rate Loans, having the same Interest Period made by each of the
Revolving Credit Lenders pursuant to Section 2.01(b).
"Revolving Credit Commitment" means, as to each Revolving Credit
Lender, its obligation to (a) make Revolving Credit Loans to the Borrower
pursuant to Section 2.01(b) and (b) purchase participations in L/C
Obligations, in an aggregate principal amount at any one time outstanding not
to exceed the amount set forth opposite such Revolving Credit Lender's name on
Schedule 2.01 under the caption "Revolving Credit Commitment" or in the
Assignment and Assumption pursuant to which such Revolving Credit Lender
becomes a party hereto, as applicable, as such amount may be adjusted from
time to time in accordance with this Agreement.
"Revolving Credit Facility" means, at any time, the aggregate amount
of the Revolving Credit Lenders' Revolving Credit Commitments at such time.
"Revolving Credit Lender" means, at any time, any Lender that has a
Revolving Credit Commitment at such time.
"Revolving Credit Loan" has the meaning specified in Section 2.01(b).
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Revolving Credit Lender, in substantially the form
of Exhibit B-2, evidencing the aggregate indebtedness of the Borrower to such
Revolving Credit Lender resulting from the Revolving Credit Loans made by such
Revolving Credit Lender.
"RSA" means Retirement Systems of Alabama Holdings LLC, its
Affiliates and its successors.
"RSA Mandatory Prepayment" has the meaning set forth in Section
2.04(a).
"RSA Mandatory Prepayment Event" means a Person that is not RSA or an
Affiliate of RSA is determined by the Borrower or the Bankruptcy Court to be
the Winning Plan Sponsor.
"RSA Outstanding Amount" means, on any date, the aggregate amount of
the then current balance of the debt obligations on such date owed to RSA in
respect of the Obligations plus actual out-of-pocket expenses incurred by RSA
in connection with its participation in the Facilities which have not already
been advanced or reimbursed by the Loan Parties; provided that solely for
purposes of determining the prepayment required under Section 2.04(a), the
aggregate principal amount of the RSA Outstanding Amount shall not exceed
$100,000,000.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Secondary Slots" means (a) all 6:00 a.m. arrival and departure Slots
at LaGuardia Airport, (b) all arrival and departure Slots at LaGuardia Airport
commencing at or after 9:30 p.m. (2130), (c) all 6:00 a.m. Slots at Xxxxxx
Xxxxxx Washington National Airport, (d) all Slots at Xxxxxx Xxxxxx Washington
National Airport commencing at or after 9:30 p.m. (2130), (e) Slots at Xxxx X.
Xxxxxxx International Airport, and (f) Slots subject to a Lien (other than a
Lien in favor of the Agents and the Lenders); provided, however, that the
Slots described in clauses (a), (b), (c) and (d) of this definition shall not
be deemed to be "Secondary Slots" from and after the date on which the
Borrower provides an irrevocable written notice to the Agents that the
Borrower has determined to no longer treat such Slots as "Secondary Slots".
"Section 1110 Assets" means, to the extent the underlying lease,
security agreement, mortgage, trust agreement or other applicable instrument
would prohibit the grant of a Lien in favor of the Collateral Agent, equipment
that is an "aircraft", "aircraft engine", "propeller", appliance" or "spare
part" (as defined in Section 40102 of Title 49) as those terms are used in
Section 1110(a)(3)(A)(i) of the Bankruptcy Code.
"Secured Obligations" has the meaning specified in Section 10.01.
"Secured Parties" means, collectively, the Administrative Agent, the
Collateral Agent, the Lenders, each coagent or subagent appointed by the
Administrative Agent or the Collateral Agent from time to time pursuant to
Section 9.01(c), and the other Persons the Obligations owing to which are or
are purported to be secured by the Collateral under the terms of the
Collateral Documents.
"Security Collateral" has the meaning specified in Section 10.01(d).
"Slot" means the right and operational authority of a Loan Party to
conduct one Instrument Flight Rules (as defined under the FAA regulations)
landing or takeoff operation during a specific hour or other periods at New
York's LaGuardia Airport, Xxxx X. Xxxxxxx International Airport and Xxxxxx
Xxxxxx Washington National Airport pursuant to FAA regulations.
"Slot Reporting Guidelines" means that, for purposes of each slot
utilization report delivered pursuant to Section 6.02(n),
(i) a Slot will be deemed "utilized" if (A) such Slot is used for a
take-off or landing operation, (B) if, by regulation or other regulatory
notice, the FAA considers such Slot as "used" for purposes of 14 C.F.R.
Section 93.227, regardless of whether or not such Slot was, in fact, used
(e.g., holidays and labor actions), (C) if, by waiver, the FAA considers
such Slot as "used" for purposes of 14 C.F.R. Section 93.227, even though
such Slot was not, in fact, used, or (D) if the FAA otherwise waives the
utilization requirement of 14 C.F.R. Section 93.227,
(ii) if any Loan Party engages in a Slot trade, transfer or lease
with another air carrier, the Borrower shall report the utilization rate
for the Slot received in the trade, transfer or lease, rather than for
the Slot traded, transferred or leased to such other air carrier, for so
long as the Slot received continues to be operated by such Loan Party,
(iii) a "week" is defined as a seven-day period, and
(iv) the two month FAA reporting period shall be the period for
which air carriers provide Slot utilization reports to the FAA pursuant
to 14 C.F.R. Section 93.227.
"Slot Security Agreement" has the meaning specified in Section
6.26(a)(xi).
"SPC" has the meaning specified in Section 12.07(h).
"Statutory Reserves" means the aggregate of the maximum reserve
percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board of Eurocurrency
Liabilities (as defined in Regulation D of the FRB). Such reserve percentages
shall include those imposed pursuant to such Regulation D. Eurodollar Rate
Loans shall be deemed to constitute Eurocurrency Liabilities and to be subject
to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D. Statutory Reserves shall be adjusted automatically on
and as of the effective date of any change in reserve percentage.
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a
majority of the shares of securities or other interests having ordinary voting
power for the election of directors or other governing body (other than
securities or interests having such power only by reason of the happening of a
contingency) are at the time beneficially owned, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"Supermajority Revolving Credit Facility Lenders" means Lenders
having more than 66 2/3% of the sum of (a) the Total Outstandings under the
Revolving Credit Facility (with the aggregate amount of each Lender's risk
participation and funded participation of L/C Obligations being deemed "held"
by such Lender for purposes of this definition) and (b) the aggregate unused
Revolving Credit Commitments; provided that the unused Revolving Credit
Commitment of, and the portion of the Total Outstandings under the Revolving
Credit Facility held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Majority Revolving Credit
Facility Lenders.
"Supermajority Term Facility Lenders" means Lenders having more than
66 2/3% of the sum of (a) the Total Outstandings under the Term Facility and
(b) aggregate unused Term Commitments; provided that the unused Term
Commitment of, and the portion of the Total Outstandings under the Term
Facility held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Majority Term Facility Lenders.
"Superpriority Claim" shall mean a claim against the Borrower or any
Guarantor in any of the Cases pursuant to Section 364(c)(1) of the Bankruptcy
Code having priority over any or all administrative expenses and other claims
of the kind specified in, or otherwise arising or ordered under, any Sections
of the Bankruptcy Code (including, without limitation, Sections 105, 326, 328,
330, 331, 503(b), 507, 546(c) and/or 726 thereof), whether or not such claim
or expenses may become secured by a judgment lien or other non-consensual
lien, levy or attachment.
"Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement
(any such master agreement, together with any related schedules, a "Master
Agreement"), including any such obligations or liabilities under any Master
Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or
after the date such Swap Contracts have been closed out and termination
value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a), the amount(s)
determined as the xxxx-to-market value(s) for such Swap Contracts, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Swap Contracts (which may
include a Lender or any Affiliate of a Lender).
"Synthetic Lease Obligation" means the monetary obligation of a
Person under (a) a so-called synthetic, off-balance sheet or lease in which
the lessee is contractually entitled to the tax benefits of ownership of the
leased assets, or (b) an agreement for the use or possession of property
creating obligations that do not appear on the balance sheet of such Person
but which, upon the insolvency or bankruptcy of such Person, would be
characterized as the indebtedness of such Person (without regard to accounting
treatment).
"Taxes" has the meaning specified in Section 3.01(a).
"Temporary Slot Disposition" has the meaning set forth in the
definition of "Disposition" set forth in this Section 1.01.
"Term Borrowing" means a borrowing consisting of simultaneous Term
Loans of the same Type and, in the case of Eurodollar Rate Loans, having the
same Interest Period made by each of the Term Lenders pursuant to Section
2.01(a).
"Term Commitment" means, as to each Term Lender, its obligation to
make Term Loans to the Borrower pursuant to Section 2.01(a) in an aggregate
principal amount at any one time outstanding not to exceed the amount set
forth opposite such Term Lender's name on Schedule 2.01 under the caption
"Term Commitment" or in the Assignment and Assumption pursuant to which such
Term Lender becomes a party hereto, as applicable, as such amount may be
adjusted from time to time in accordance with this Agreement.
"Term Facility" means, at any time, the aggregate amount of the Term
Lenders' Term Commitments at such time.
"Term Lender" means, at any time, any Lender that has a Term
Commitment at such time.
"Term Loan" means an advance made by any Term Lender under the Term
Facility.
"Term Note" means a promissory note of the Borrower payable to the
order of any Term Lender, in substantially the form of Exhibit B-1, evidencing
the aggregate indebtedness of the Borrower to such Term Lender resulting from
the Term Loans made by such Term Lender.
"Third Party L/C Obligations" means, as at any date of determination,
the aggregate undrawn amount of all outstanding Third Party Letters of Credit
plus the aggregate amount of all unreimbursed drawings under Third Party
Letters of Credit.
"Third Party Letters of Credit" means letters of credit described in
Section 7.03(c)(xi).
"Title 49" means Title 49 of the United States Code, as amended and
in effect from time to time, and the regulations promulgated pursuant thereto.
"Total Cash Receipts" means, for any period, (a) cash received during
such period in the ordinary course of business from the sale of tickets, cargo
lift and other products and services related to providing air and cargo
transportation of the Loan Parties, including but not limited to express
service fees, loyalty program-related revenue, change fees and leasing
arrangements, plus (b) any increase in cash collateral holdbacks (excluding
the amounts of cash collateral holdbacks in existence on the date hereof) by
IATA, Diners Club, Discover Card, NPC, ARC and American Express during such
period, minus (c) any decrease in cash collateral holdbacks (excluding the
amounts of cash collateral holdbacks in existence on the date hereof) by IATA,
Diners Club, Discover Card, NPC, ARC and American Express during such period.
"Total Outstandings" means the aggregate Outstanding Amount of all
Loans and all L/C Obligations.
"Transaction" means, collectively, (a) the consummation of
transactions contemplated by the Investment Agreement and the Loan Documents
and (b) the payment of the fees and expenses incurred in connection with the
consummation of the foregoing.
"Trust Account" means all special purpose trust funds established by
any Loan Party to manage the collection and payment of amounts collected by
the Loan Parties for the express benefit of third-party beneficiaries relating
to (a) federal income tax withholding and backup withholding tax, employment
taxes, transportation excise taxes and security related charges, including (i)
federal payroll withholding taxes, as described in Sections 3101, 3111 and
3402 of the Code; (ii) federal Unemployment Tax Act taxes, as described in
Chapter 23 of Subtitle C of the Code; (iii) federal air transportation excise
taxes, as described in Sections 4261 and 4271 of the Code; (iv) federal
security charges, as described in Title 49 of the Code of Federal Regulations
of 2002 (referred to in this definition as the "CFR"), Chapter XII, Part 1510;
(v) federal Animal and Plant Health Inspection Service of the United States
Department of Agriculture (APHIS) user fees, as described in Title 00 Xxxxxx
Xxxxxx Code (2002) (referred to in this definition as "U.S.C.") Section 136a
and 7 CFR Section 354.3; (vi) federal Immigration and Naturalization Service
(INS) fees, as described in 8 CFR Part 286; (vii) federal customs taxes as
described in 19 U.S.C. Section 58c; and (viii) federal jet fuel taxes as
described in Sections 4091 and 4092 of the Code collected on behalf of and
owed to the federal government, (b) any and all state and local income tax
withholding, employment taxes and related charges and fees and similar taxes,
charges and fees, including, but not limited to, state and local payroll
withholding taxes, unemployment and supplemental unemployment taxes,
disability taxes, xxxxxxx'x or workers' compensation charges and related
charges and fees that are analogous to those described in Subtitle C of the
Code and that are described in or are analogous to Chapter 23 of Title 19
Delaware Code Annotated (2002) (referred to in this definition as "D.C.A.")
collected on behalf of and owed to state and local authorities, agencies and
entities, (c) Passenger Facility Fees and Charges as described in Title 00
Xxxxxx Xxxxxx Code Section 40117 (2002) and Title 14 of the Code of Federal
Regulations of 2002, Subchapter 1, Part 158 collected on behalf of and owed to
various administrators, institutions, authorities, agencies and entities and
(d) voluntary and/or other non-statutorily required employee payroll
deductions, whether authorized by the employee, imposed by court order, agreed
to pursuant to collective bargaining arrangement or otherwise, including (i)
employee contributions made for the purpose of participating in any
employer-sponsored retirement plan as described and defined in Section 401(k)
of the Code (including repayment of any 401(k) related loans made to the
employee but excluding any funds matched and/or contributed by the employer on
behalf of any employee), (ii) employee payments made for the purpose of
participating in any employer-sponsored medical, dental or related health
plan, (iii) employee payments made for the purpose of satisfying periodic
union dues, (iv) employee payments made for the purpose of purchasing United
States Savings Bonds, (v) employee payments made for the purpose of making
deposits to an account at or making repayment of an extension of credit from
an employer-associated credit union, (vi) employee payments made for the
purpose of purchasing life, accident, disability or other insurance, (vii)
employee payments made for the purpose of participating in any
employer-sponsored cafeteria plan as described and defined in Section 125 of
the Code, (viii) employee-directed donations to charitable organizations and
(ix) levys, garnishments and other attachments on employee compensation (as
described in Sections 6305 and 6331 of the Code, in Section 4913 of Title 10
of D.C.A. or in any analogous provision of other applicable federal, state or
local law) collected on behalf of any Governmental Authority or any other
Person authorized to receive funds of the type described in this clause (d).
"Type" means, with respect to a Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined as of the most recent valuation date
in accordance with the assumptions used for funding the Pension Plan pursuant
to Section 412 of the Code for the applicable plan year.
"United States" and "U.S." mean the United States of America.
"United States Citizen" has the meaning specified in Section 5.01.
"Unreimbursed Amount" has the meaning set forth in Section
2.03(c)(i).
"Use or Lose Rule" means with respect to the Slots, the terms of 14
C.F.R. ss. 93.227.
"UST/Clerk Fees" has the meaning set forth in the Interim Order.
"Voting Foreign Stock" has the meaning set forth in Section
10.01(d)(iii).
"Winning Plan Sponsor" has the meaning set forth in the Bidding
Procedures Order.
1.02 Other Interpretive Provisions. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such
other Loan Document:
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and "hereunder" and
words of similar import when used in any Loan Document shall refer to such
Loan Document as a whole and not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to the
Loan Document in which such reference appears.
(iii) The term "including" is by way of example and not limitation.
(iv) The term "documents" includes any and all instruments,
documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced, whether in physical or
electronic form.
(c) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including," the words
"to" and "until" each mean "to but excluding," and the word "through" means
"to and including."
(d) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 Accounting Terms.
(a) All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with,
GAAP, as in effect from time to time, applied in a manner consistent with that
used in preparing the Audited Financial Statements, except as otherwise
specifically prescribed herein.
(b) If at any time any change in GAAP or the application thereof
would affect the computation of any financial ratio or requirement set forth
in any Loan Document, and either the Borrower or the Required Lenders shall so
request, the Administrative Agent, the Lenders and the Borrower shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the
approval of the Required Lenders); provided that, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (ii) the Borrower shall provide to the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting
forth a reconciliation between calculations of such ratio or requirement made
before and after giving effect to such change in GAAP.
1.04 Rounding. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 References to Agreements and Laws. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements
(including the Loan Documents) and other contractual instruments shall be
deemed to include all subsequent amendments, restatements, extensions,
supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are
not prohibited by any Loan Document; and (b) references to any Law shall
include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such Law.
1.06 Times of Day. Unless otherwise specified, all references herein
to times of day shall be references to Eastern time (daylight or standard, as
applicable).
1.07 Letter of Credit Amounts. Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the
Letter of Credit Application therefor, whether or not such maximum face amount
is in effect at such time.
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 The Loans.
(a) The Term Borrowings. Subject to the terms and conditions set
forth herein, each Term Lender severally agrees to make a loan to the Borrower
on the Closing Date in an amount not to exceed the unused amount of such
Lender's Term Commitment; provided, however, that after giving effect to such
Term Borrowing the Total Outstandings shall not exceed the lesser of (i) the
Aggregate Commitments and (ii) the Borrowing Base. The Term Borrowing shall
consist of Term Loans made simultaneously by the Term Lenders in accordance
with their respective Pro Rata Share of the Term Facility. Amounts borrowed or
deemed borrowed under this Section 2.01(a) and repaid or prepaid may not be
reborrowed. Term Loans may be Base Rate Loans or Eurodollar Rate Loans, as
further provided herein.
(b) The Revolving Credit Borrowings. Subject to the terms and
conditions set forth herein, each Revolving Credit Lender severally agrees to
make loans (each such loan, a "Revolving Credit Loan") to the Borrower from
time to time, on any Business Day on or after the Milestone Three Achievement
Date during the Availability Period, in an aggregate amount not to exceed at
any time outstanding the amount of such Lender's Revolving Credit Commitment
less such Lender's Pro Rata Share of the Outstanding Amount of all L/C
Obligations; provided, however, that (i) after giving effect to any Revolving
Credit Borrowing, the Total Outstandings shall not exceed the lesser of (x)
the Aggregate Commitments and (y) the Borrowing Base, (ii) that prior to the
Milestone Four Achievement Date, the aggregate Outstanding Amount of all
Revolving Credit Loans and L/C Obligations shall not exceed $50,000,000, (iii)
until the Bankruptcy Court enters the Final Order, the Borrower shall not
reborrow Revolving Credit Loans or request Letters of Credit and (iv) until
the Administrative Agent and the Borrower have selected an L/C Issuer, the
Borrower shall not request Letters of Credit. Within the limits of each
Lender's Revolving Credit Commitment, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section 2.01(b), prepay
under Section 2.05, and reborrow under this Section 2.01(b). Revolving Credit
Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein.
2.02 Borrowings Conversions and Continuations of Loans.
(a) Each Term Borrowing, each Revolving Credit Borrowing, each
conversion of Term Loans or Revolving Credit Loans from one Type to the other,
and each continuation of Eurodollar Rate Loans shall be made upon the
Borrower's irrevocable notice to the Administrative Agent, which may be given
by telephone. Each such notice must be received by the Administrative Agent
not later than 11:00 a.m. (i) three Business Days prior to the requested date
of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or
of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) two
Business Days prior to the requested date of any Borrowing of Base Rate Loans.
Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must
be confirmed promptly by delivery to the Administrative Agent of a written
Loan Notice, appropriately completed and signed by a Responsible Officer of
the Borrower. Each Borrowing of, conversion to or continuation of Eurodollar
Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof. Except as provided in Section 2.03(c), each
Borrowing of or conversion to Base Rate Loans shall be in a principal amount
of $500,000 or a whole multiple of $100,000 in excess thereof. Each Loan
Notice (whether telephonic or written) shall specify (A) whether the Borrower
is requesting a Term Borrowing, a Revolving Credit Borrowing, a conversion of
Term Loans or Revolving Credit Loans from one Type to the other, or a
continuation of Eurodollar Rate Loans, (B) the requested date of the
Borrowing, conversion or continuation, as the case may be (which shall be a
Business Day), (C) the principal amount of Loans to be borrowed, converted or
continued, (D) the Type of Loans to be borrowed or to which existing Term
Loans or Revolving Credit Loans are to be converted, (E) if applicable, the
duration of the Interest Period with respect thereto and (F) remittance
instructions. If the Borrower fails to specify a Type of Loan in a Loan Notice
or if the Borrower fails to give a timely notice requesting a conversion or
continuation, then the applicable Term Loans or Revolving Credit Loans shall
be made as, or converted to, Base Rate Loans. Any such automatic conversion to
Base Rate Loans shall be effective as of the last day of the Interest Period
then in effect with respect to the applicable Eurodollar Rate Loans. If the
Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar
Rate Loans in any such Loan Notice, but fails to specify an Interest Period,
it will be deemed to have specified an Interest Period of one month.
(b) Following receipt of a Loan Notice, the Administrative Agent
shall promptly notify each Lender of the amount of its Pro Rata Share of the
applicable Term Loans or Revolving Credit Loans, and if no timely notice of a
conversion or continuation is provided by the Borrower, the Administrative
Agent shall notify each Lender of the details of any automatic conversion to
Base Rate Loans described in the preceding subsection. In the case of a Term
Borrowing or a Revolving Credit Borrowing, each applicable Lender shall make
the amount of its Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent's Payment Account not later than
1:00 p.m. on the Business Day specified in the applicable Loan Notice. Upon
satisfaction of the applicable conditions set forth in Article IV, the
Administrative Agent shall make all funds so received available to the
Borrower in like funds as received by the Administrative Agent by wire
transfer of such funds, in each case in accordance with instructions provided
to (and reasonably acceptable to) the Administrative Agent by the Borrower;
provided, however, that if, on the date the Loan Notice with respect to such
Borrowing is given by the Borrower, there are L/C Borrowings outstanding, then
the proceeds of such Borrowing shall be applied, first, to the payment in full
of any such L/C Borrowings, and second, to the Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may
be continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and
the Lenders of the interest rate applicable to any Interest Period for
Eurodollar Rate Loans upon determination of such interest rate. The
determination of the Eurodollar Rate by the Administrative Agent shall be
conclusive in the absence of manifest error. At any time that Base Rate Loans
are outstanding, the Administrative Agent shall notify the Borrower and the
Lenders of any change in Bank of America's prime rate used in determining the
Base Rate promptly following the public announcement of such change.
(e) After giving effect to all Term Borrowings, all Revolving Credit
Borrowings, all conversions of Term Loans or Revolving Credit Loans from one
Type to the other, and all continuations of Term Loans or Revolving Credit
Loans as the same Type, there shall not be more than five Interest Periods in
effect.
(f) The failure of any Lender to make the Loan to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Loan on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to
be made by such other Lender on the date of any Borrowing.
2.03 Letters of Credit.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the
L/C Issuer agrees, in reliance upon the agreements of the other Lenders
set forth in this Section 2.03, (1) from time to time on any Business Day
during the period from the Milestone Three Achievement Date until the
Letter of Credit Expiration Date, to issue Letters of Credit for the
account of the Borrower (for the benefit of itself or any other Loan
Party), and to amend or renew Letters of Credit previously issued by it,
in accordance with subsection (b) below, and (2) to honor drafts under
the Letters of Credit; and (B) the Revolving Credit Lenders severally
agree to participate in Letters of Credit issued for the account of the
Borrower; provided that the L/C Issuer shall not be obligated to make any
L/C Credit Extension with respect to any Letter of Credit, and no Lender
shall be obligated to participate in any Letter of Credit if as of the
date of such L/C Credit Extension and after giving effect to such L/C
Credit Extension, (w) the Total Outstandings would exceed the lesser of
(i) the Aggregate Commitments and (ii) the Borrowing Base, (x) the
aggregate Outstanding Amount of the Loans of any Lender, plus such
Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations
would exceed such Lender's Commitment, (y) the Outstanding Amount of the
L/C Obligations would exceed the Letter of Credit Sublimit, or (z) if
such date is prior to the Milestone Four Achievement Date, the aggregate
Outstanding Amount of all Revolving Credit Loans and L/C Obligations
would exceed $50,000,000. Within the foregoing limits, and subject to the
terms and conditions hereof, the Borrower's ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrower may, during
the foregoing period, obtain Letters of Credit to replace Letters of
Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall be under no obligation to issue any Letter
of Credit if:
(A) any order, judgment or decree of any Governmental Authority
shall by its terms enjoin or restrain the L/C Issuer from issuing
such Letter of Credit, or any Law applicable to the L/C Issuer or
any request or directive (whether or not having the force of law)
from any Governmental Authority with jurisdiction over the L/C
Issuer shall prohibit, or request that the L/C Issuer refrain from,
the issuance of letters of credit generally or such Letter of Credit
in particular or shall impose upon the L/C Issuer with respect to
such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon
the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C Issuer in good
xxxxx xxxxx material to it;
(B) subject to Section 2.03(b)(iii), the expiry date of such
requested Letter of Credit would occur more than twelve months (or
in the case of documentary Letters of Credit, 180 days) after the
date of issuance or last renewal, unless the Majority Revolving
Credit Facility Lenders have approved such expiry date;
(C) the expiry date of such requested Letter of Credit would
occur after the Letter of Credit Expiration Date, unless all the
Revolving Credit Lenders have approved such expiry date;
(D) the issuance of such Letter of Credit would violate one or
more policies of the L/C Issuer applicable to letters of credit
generally; or
(E) such Letter of Credit is to be denominated in a currency
other than Dollars.
(iii) The L/C Issuer shall be under no obligation to amend any
Letter of Credit if (A) the L/C Issuer would have no obligation at such
time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept
the proponed amendment to such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Renewal Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case
may be, upon the request of the Borrower delivered to the L/C Issuer
(with a copy to the Administrative Agent) in the form of a Letter of
Credit Application, appropriately completed and signed by a Responsible
Officer of the Borrower. Such Letter of Credit Application must be
received by the L/C Issuer and the Administrative Agent not later than
11:00 a.m. at least two Business Days (or such later date and time as the
L/C Issuer may agree in a particular instance in its sole discretion)
prior to the proposed issuance date or date of amendment, as the case may
be. In the case of a request for an initial issuance of a Letter of
Credit, such Letter of Credit Application shall specify in form and
detail satisfactory to the L/C Issuer: (A) the proposed issuance date of
the requested Letter of Credit (which shall be a Business Day); (B) the
amount thereof; (C) the expiry date thereof; (D) the name and address of
the beneficiary thereof; (E) the documents to be presented by such
beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as the L/C Issuer may reasonably
require. In the case of a request for an amendment of any outstanding
Letter of Credit, such Letter of Credit Application shall specify in form
and detail satisfactory to the L/C Issuer: (1) the Letter of Credit to be
amended; (2) the proposed date of amendment thereof (which shall be a
Business Day); (3) the nature of the proposed amendment; and (4) such
other matters as the L/C Issuer may reasonably require.
(ii) Promptly after receipt of any Letter of Credit Application, the
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter
of Credit Application from the Borrower and, if not, the L/C Issuer will
provide the Administrative Agent with a copy thereof. Upon receipt by the
L/C Issuer of confirmation from the Administrative Agent that the
requested issuance or amendment is permitted in accordance with the terms
hereof, then, subject to the terms and conditions hereof, the L/C Issuer
shall, on the requested date, issue a Letter of Credit for the account of
the Borrower or enter into the applicable amendment, as the case may be,
in each case in accordance with the L/C Issuer's usual and customary
business practices. Immediately upon the issuance of each Letter of
Credit, each Revolving Credit Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the L/C Issuer a
risk participation in such Letter of Credit in an amount equal to the
product of such Lender's Pro Rata Share times the amount of such Letter
of Credit.
(iii) If the Borrower so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole and absolute discretion,
agree to issue a Letter of Credit that has automatic renewal provisions
(each, an "Auto-Renewal Letter of Credit"; provided that any such
Auto-Renewal Letter of Credit must permit the L/C Issuer to prevent any
such renewal at least once in each twelve-month period (commencing with
the date of issuance of such Letter of Credit) by giving prior notice to
the beneficiary thereof not later than a day (the "Nonrenewal Notice
Date") in each such twelve-month period to be agreed upon at the time
such Letter of Credit is issued. Unless otherwise directed by the L/C
Issuer, the Borrower shall not be required to make a specific request to
the L/C Issuer for any such renewal. Once an Auto-Renewal Letter of
Credit has been issued, the Lenders shall be deemed to have authorized
(but may not require) the L/C Issuer to permit the renewal of such Letter
of Credit at any time to an expiry date not later than the Letter of
Credit Expiration Date; provided, however, that the L/C Issuer shall not
permit any such renewal if (A) the L/C Issuer has determined that it
would have no obligation at such time to issue such Letter of Credit in
its renewed form under the terms hereof (by reason of the provisions of
Section 2.03(a)(ii) or otherwise), or (B) it has received notice (which
may be by telephone or in writing) on or before the day that is two
Business Days before the Nonrenewal Notice Date (1) from the
Administrative Agent that the Required Lenders have elected not to permit
such renewal or (2) from the Administrative Agent, any Revolving Credit
Lender or the Borrower that one or more of the applicable conditions
specified in Section 4.02 is not then satisfied.
(iv) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto
or to the beneficiary thereof, the L/C Issuer will also deliver to the
Borrower and the Administrative Agent a true and complete copy of such
Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the L/C Issuer shall
notify the Borrower and the Administrative Agent thereof. Not later than
11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of
Credit (each such date, an "Honor Date"), the Borrower shall reimburse
the L/C Issuer through the Administrative Agent in an amount equal to the
amount of such drawing. If the Borrower fails to so reimburse the L/C
Issuer by such time, the Administrative Agent shall promptly notify each
Revolving Credit Lender of the Honor Date, the amount of the unreimbursed
drawing (the "Unreimbursed Amount"), and the amount of such Revolving
Credit Lender's Pro Rata Share thereof. In such event, the Borrower shall
be deemed to have requested a Revolving Credit Borrowing of Base Rate
Loans to be disbursed on the Honor Date in an amount equal to the
Unreimbursed Amount, without regard to the minimum and multiples
specified in Section 2.02 for the principal amount of Base Rate Loans,
but subject to the amount of the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.05 (other than the
delivery of a Loan Notice). Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.03(c)(i) may be given by
telephone if immediately confirmed in writing; provided that the lack of
such an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.
(ii) Each Revolving Credit Lender (including the Lender acting as
L/C Issuer) shall upon any notice pursuant to Section 2.03(c)(i) make
funds available to the Administrative Agent for the account of the L/C
Issuer at the Administrative Agent's Disbursement Account in an amount
equal to its Pro Rata Share of the Unreimbursed Amount not later than
1:00 p.m. on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of Section
2.03(c)(iii), each Revolving Credit Lender that so makes funds available
shall be deemed to have made a Base Rate Loan to the Borrower in such
amount. The Administrative Agent shall promptly remit the funds so
received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Revolving Credit Borrowing of Base Rate Loans because the
conditions set forth in Section 4.05 cannot be satisfied or for any other
reason, the Borrower shall be deemed to have incurred from the L/C Issuer
an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing (together with interest thereon) shall be
due and payable on demand and shall bear interest at the Default Rate. In
such event, each Revolving Credit Lender's payment to the Administrative
Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii)
shall be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Section 2.03.
(iv) Until each Revolving Credit Lender funds its Revolving Credit
Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C
Issuer for any amount drawn under any Letter of Credit, interest in
respect of such Lender's Pro Rata Share of such amount shall be solely
for the account of the L/C Issuer.
(v) Each Revolving Credit Lender's obligation to make Revolving
Credit Loans or L/C Advances to reimburse the L/C Issuer for amounts
drawn under Letters of Credit, as contemplated by this Section 2.03(c),
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense
or other right which such Lender may have against the L/C Issuer, the
Borrower or any other Person for any reason whatsoever; (B) the
occurrence or continuance of a Default, or (C) any other occurrence,
event or condition, whether or not similar to any of the foregoing;
provided, however, that each Revolving Credit Lender's obligation to make
Revolving Credit Loans pursuant to this Section 2.03(c) is subject to the
conditions set forth in Section 4.05 (other than delivery by the Borrower
of a Loan Notice). No such making of an L/C Advance shall relieve or
otherwise impair the obligation of the Borrower to reimburse the L/C
Issuer for the amount of any payment made by the L/C Issuer under any
Letter of Credit, together with interest as provided herein.
(vi) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the L/C Issuer any amount
required to be paid by such Lender pursuant to the foregoing provisions
of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), the
L/C Issuer shall be entitled to recover from such Lender (acting through
the Administrative Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date on
which such payment is immediately available to the L/C Issuer at a rate
per annum equal to the Federal Funds Rate from time to time in effect. A
certificate of the L/C Issuer submitted to any Revolving Credit Lender
(through the Administrative Agent) with respect to any amounts owing
under this clause (vi) shall be conclusive absent manifest error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Revolving Credit Lender such
Lender's L/C Advance in respect of such payment in accordance with
Section 2.03(c), if the Administrative Agent receives for the account of
the L/C Issuer any payment in respect of the related Unreimbursed Amount
or interest thereon (whether directly from the Borrower or otherwise,
including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such
Lender its Pro Rata Share thereof (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such
Lender's L/C Advance was outstanding) in the same funds as those received
by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to
be returned under any of the circumstances described in Section 12.06
(including pursuant to any settlement entered into by the L/C Issuer in
its discretion), each Revolving Credit Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Pro Rata Share
thereof on demand of the Administrative Agent, plus interest thereon from
the date of such demand to the date such amount is returned by such
Lender, at a rate per annum equal to the Federal Funds Rate from time to
time in effect.
(e) Obligations Absolute. The obligation of the Borrower to reimburse
the L/C Issuer for each drawing under each Letter of Credit and to repay each
L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other agreement or instrument relating thereto;
(ii) the existence of any claim, counterclaim, setoff, defense or
other right that the Borrower may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for
whom any such beneficiary or any such transferee may be acting), the L/C
Issuer or any other Person, whether in connection with this Agreement,
the transactions contemplated hereby or by such Letter of Credit or any
agreement or instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit; or any payment made by
the L/C Issuer under such Letter of Credit to any Person purporting to be
a trustee in bankruptcy, debtor-in-possession, assignee for the benefit
of creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of such Letter of Credit,
including any arising in connection with any proceeding under any Debtor
Relief Law;
(v) any exchange, release or nonperfection of any Collateral, or any
release or amendment or waiver of or consent to departure from the
Guaranty or any other guarantee, for all or any of the Obligations of the
Borrower in respect of such Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit
and each amendment thereto that is delivered to it and, in the event of any
claim of noncompliance with the Borrower's instructions or other irregularity,
the Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and
its correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or
the authority of the Person executing or delivering any such document. None of
the L/C Issuer, any Agent-Related Person nor any of the respective
correspondents, participants or assignees of the L/C Issuer shall be liable to
any Lender for (i) any action taken or omitted in connection herewith at the
request or with the approval of the Revolving Credit Lenders or the Majority
Revolving Credit Facility Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application.
The Borrower hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude the Borrower's pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement.
None of the L/C Issuer, any Agent-Related Person, nor any of the respective
correspondents, participants or assignees of the L/C Issuer, shall be liable
or responsible for any of the matters described in clauses (i) through (v) of
Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against the L/C
Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but
only to the extent, of any direct, as opposed to consequential or exemplary,
damages suffered by the Borrower which the Borrower proves were caused by the
L/C Issuer's willful misconduct or gross negligence or the L/C Issuer's
willful failure to pay under any Letter of Credit after the presentation to it
by the beneficiary of a sight draft and certificate(s) strictly complying with
the terms and conditions of a Letter of Credit. In furtherance and not in
limitation of the foregoing, the L/C Issuer may accept documents that appear
on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary, and
the L/C Issuer shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative Agent,
(i) if the L/C Issuer has honored any full or partial drawing request under
any Letter of Credit and such drawing has resulted in an L/C Borrowing which
has not been repaid, or (ii) if, as of the Letter of Credit Expiration Date,
any Letter of Credit may for any reason remain outstanding and partially or
wholly undrawn, the Borrower shall immediately Cash Collateralize the then
Outstanding Amount of all L/C Obligations (in an amount equal to such
Outstanding Amount determined as of the date of such L/C Borrowing or the
Letter of Credit Expiration Date, as the case may be). For purposes hereof,
"Cash Collateralize" means to pledge and deposit with or deliver to the
Collateral Agent, for the benefit of the L/C Issuer and the Revolving Credit
Lenders, as collateral for the L/C Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to the
Collateral Agent and the L/C Issuer (which documents are hereby consented to
by the Lenders). Derivatives of such term have corresponding meanings. The
Borrower hereby grants to the Collateral Agent, for the benefit of the L/C
Issuer and the Revolving Credit Lenders, a security interest in all such cash,
deposit accounts and all balances therein and all proceeds of the foregoing.
Cash collateral shall be maintained in blocked, non-interest bearing deposit
accounts at a bank reasonably acceptable to the Administrative Agent. If at
any time the Administrative Agent determines that any funds held as Cash
Collateral are subject to any right or claim of any Person other than the
Collateral Agent or that the total amount of such funds is less than the
aggregate Outstanding Amount of all L/C Obligations, the Borrower will,
forthwith upon demand by the Administrative Agent or the Collateral Agent, pay
to the Collateral Agent, as additional funds to be deposited and held in the
deposit accounts at the bank as aforesaid, an amount equal to the excess of
(a) such aggregate Outstanding Amount over (b) the total amount of funds, if
any, then held as Cash Collateral that the Administrative Agent or the
Collateral Agent determines to be free and clear of any such right and claim.
Upon the drawing of any Letter of Credit for which funds are on deposit as
Cash Collateral, such funds shall be applied, to the extent permitted under
applicable law, to reimburse the L/C Issuer.
(h) Applicability of ISP98 and UCP. Unless otherwise expressly agreed
by the L/C Issuer and the Borrower when a Letter of Credit is issued, (i) the
rules of the "International Standby Practices 1998" published by the Institute
of International Banking Law & Practice (or such later version thereof as may
be in effect at the time of issuance) shall apply to each standby Letter of
Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary
Credits, as most recently published by the International Chamber of Commerce
(the "ICC") at the time of issuance (including the ICC decision published by
the Commission on Banking Technique and Practice on April 6, 1998 regarding
the European single currency (euro)) shall apply to each commercial Letter of
Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the
Administrative Agent for the account of each Revolving Credit Lender in
accordance with its Pro Rata Share a Letter of Credit fee for each Letter of
Credit equal to the Applicable Rate times the daily maximum amount available
to be drawn under such Letter of Credit (whether or not such maximum amount is
then in effect under such Letter of Credit). Such letter of credit fees shall
be computed on a monthly basis in arrears. Such letter of credit fees shall be
due and payable on the last Business Day of each month, commencing with the
first such date to occur after the issuance of such Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand.
(j) Fronting Fee and Documentary and Processing Charges Payable to
L/C Issuer. The Borrower shall pay directly to the L/C Issuer for its own
account a fronting fee with respect to each Letter of Credit in the amounts
and at the times as separately agreed between the Borrower and the L/C Issuer.
In addition, the Borrower shall pay directly to the L/C Issuer for its own
account the customary issuance, presentation, amendment and other reasonable
processing fees, and other standard costs and charges, of the L/C Issuer
relating to letters of credit as from time to time in effect. Such customary
fees and standard costs and charges are due and payable on demand and are
nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
(l) Cash Collateralized Letters of Credit. Subject to the terms and
conditions set forth herein, the L/C Issuer agrees (i) from time to time on
any Business Day during the period from the Closing Date until the Letter of
Credit Expiration Date, to issue Letters of Credit for the account of the
Borrower, and to amend Letters of Credit previously issued by it, to the
extent that the Borrower has Cash Collateralized such Letters of Credit in a
manner satisfactory to the L/C Issuer in its sole discretion, and (2) to honor
drafts under such Letters of Credit; provided that the L/C Issuer shall not be
obligated to make any L/C Credit Extension with respect to any Letter of
Credit if as of the date of such L/C Credit Extension and after giving effect
to such L/C Credit Extension, (x) the Total Outstandings would exceed the
lesser of (1) the Borrowing Base and (2) the Aggregate Commitments, or (y) the
Outstanding Amount of the L/C Obligations would exceed the Letter of Credit
Sublimit. Upon any drawing under a Letter of Credit issued pursuant to this
Section 2.03(1), the L/C Issuer shall apply such Cash Collateral to the
reimbursement of such drawing. Notwithstanding anything in this Section 2.03
to the contrary, the Lenders shall not be required to participate in any
Letter of Credit issued pursuant to this Section 2.03(1). Notwithstanding any
availability limitations set forth in this Article II, at all times prior to
the Milestone Three Achievement Date, the Borrower may request the issuance of
Letters of Credit under this Section 2.03(1) in an aggregate maximum undrawn
amount of up to $50,000,000; provided that upon the occurrence of the
Milestone Three Achievement Date, any L/C obligation shall be charged against
the Revolving Credit Facility.
2.04 RSA Mandatory Prepayment Events and Lender Mandatory Prepayment
Events.
(a) If the RSA Mandatory Prepayment Event occurs, at RSA's election
the Borrower shall prepay the RSA Outstanding Amount in full on the 15th day
following the entry by the Bankruptcy Court of an order approving the
designation of a Person other than RSA as the Winning Plan Sponsor (to the
extent a portion of the RSA Outstanding Amount consists of L/C Obligations
owed to RSA, the Borrower shall Cash Collateralize such L/C Obligations) (the
"RSA Mandatory Prepayment"). In lieu of prepaying the RSA Outstanding Amount,
the Borrower may satisfy its obligations with respect to the RSA Mandatory
Prepayment, on or before the date that the RSA Outstanding Amount becomes due
and payable, by causing another Lender, Guarantor or other Person (including a
Winning Plan Sponsor) to purchase RSA's interest in the Facilities which are
subject to the RSA Mandatory Prepayment at a purchase price equal to 100% of
the RSA Outstanding Amount and paying RSA an amount equal to actual
out-of-pocket expenses incurred by RSA in connection with such participation
which have not already been advanced or reimbursed by any Loan Party (if the
Borrower so elects, RSA shall cooperate, at no cost to RSA, to facilitate such
purchase and release).
(b) If the RSA Mandatory Prepayment Event occurs and each of RSA and
the Borrower determine that the Winning Plan Sponsor is not acceptable, the
Borrower shall on the 15th day following the entry by the Bankruptcy Court of
an order approving the designation of a Person other than RSA as the Winning
Plan Sponsor (i) repay all outstanding Obligations and (ii) Cash Collateralize
the then outstanding amount of all L/C Obligations. In addition, RSA shall be
immediately released from all further funding obligations (including any
obligations to participate in any further L/C Credit Extension occurring on or
after the date of such determination).
(c) RSA's rights under this Section 2.04, including its right to seek
remedies following a failure by the Borrower to pay such amounts as are due
and payable, including, without limitation, attachment of RSA's ratable share
of the Collateral, shall not be subordinated to the rights of other Lenders
under the Facilities, and may only be waived by RSA in its sole discretion.
2.05 Prepayments.
(a) Optional. The Borrower may, upon notice to the Administrative
Agent, at any time or from time to time voluntarily prepay Loans in whole or
in part without premium or penalty; provided that (i) such notice must be
received by the Administrative Agent not later than 11:00 a.m. (A) three
Business Days prior to any date of prepayment of Eurodollar Rate Loans and (B)
on the date of prepayment of Base Rate Loans; (ii) any prepayment of
Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof; and (iii) any prepayment of Base
Rate Loans shall be in a principal amount of $500,000 or a whole multiple of
$100,000 in excess thereof or, in each case, if less, the entire principal
amount thereof then outstanding. Each such notice shall specify the date and
amount of such prepayment and the Type(s) of Loans and Facility to be prepaid.
The Administrative Agent will promptly notify each Lender of its receipt of
each such notice, and of the amount of such Lender's Pro Rata Share of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due
and payable on the date specified therein. Any prepayment of a Eurodollar Rate
Loan shall be accompanied by all accrued interest thereon, together with any
additional amounts required pursuant to Section 3.05. Each such prepayment
shall be paid to the Lenders in accordance with their respective Pro Rata
Shares.
(b) Mandatory. (i) If any Loan Party Disposes of any property or
assets permitted by Section 7.06(a), (f), (j), (k), (l) or (m), the Borrower
shall prepay an aggregate principal amount of Loans equal to 100% of all Net
Cash Proceeds received therefrom immediately upon receipt thereof by any Loan
Party, provided, however, that (A) Net Cash Proceeds of $25,000 or less from
any single transaction or related series of transactions shall not give rise
to any prepayment under this Section 2.05(b)(i), (B) no mandatory prepayment
shall be required until Net Cash Proceeds required to be prepaid hereunder
exceeds, $1,000,000, (C) no such prepayment shall be required in respect of
Section 7.06(l) to the extent that such proceeds are reinvested in accordance
with the terms of the relevant Collateral Documents, and (D) in the case of
Section 7.06(m), Net Cash Proceeds shall be determined in the aggregate for
any transaction or series of related transactions (including Dispositions of
different assets forming part thereof).
(ii) Upon the issuance by any Loan Party of any of its capital stock
or other Equity Interests to any Person other than another Loan Party (or
the receipt of any capital contribution by any Loan Party from any Person
other than another Loan Party), the Borrower shall prepay an aggregate
principal amount of Loans equal to 100% of all Net Cash Proceeds received
therefrom immediately upon receipt thereof by any Loan Party.
(iii) Upon the incurrence or issuance by any Loan Party of any
Indebtedness to any Person other than another Loan Party (other than
Indebtedness expressly permitted to be incurred or issued pursuant to
Section 7.03(c)), the Borrower shall prepay an aggregate principal amount
of Loans equal to 100% of all Net Cash Proceeds received therefrom
immediately upon receipt thereof by any Loan Party.
(iv) Upon any Extraordinary Receipt received by or paid to or for
the account of any Loan Party and not otherwise included in clause (i),
(ii) or (iii) of this Section 2.05(b), the Borrower shall prepay an
aggregate principal amount of Loans equal to 100% of all Net Cash
Proceeds received therefrom immediately upon receipt thereof by any Loan
Party.
(v) If for any reason the Total Outstandings at any time exceed the
lesser of (A) the Borrowing Base and (B) the Aggregate Commitments then
in effect, the Borrower shall immediately prepay Loans and/or Cash
Collateralize the L/C Obligations in an aggregate amount equal to such
excess; provided, however, that the Borrower shall not be required to
Cash Collateralize the L/C Obligations pursuant to this Section 2.05(b)
unless after the prepayment in full of the Loans the Total Outstandings
exceed the lesser of (A) the Borrowing Base and (B) the Aggregate
Commitments then in effect.
(vi) [Intentionally omitted.]
(vii) Upon an Event of Loss concerning an Airframe (each as defined
in the Aircraft Mortgage), the Borrower shall prepay an aggregate
principal amount of the Loans equal to 100% of all net cash proceeds of
any insurance claim received therefrom immediately upon receipt thereof
by any Loan Party.
(viii) Upon an Event of Loss concerning an Engine or Propeller (each
as defined in the Aircraft Mortgage), the Borrower shall prepay an
aggregate principal amount of the Loans equal to 100% of the net cash
proceeds of any insurance claim received by any Loan Party, unless such
Loan Party has (x) within 30 days after the occurrence of such Event of
Loss, determined to apply such net cash proceeds to replace such Engine
or Propeller, and (y) as soon as commercially reasonable and in any event
within 90 days after the occurrence of such Event of Loss, has so applied
such net cash proceeds or has entered into a binding contractual
arrangement for such application.
(ix) Each prepayment of Loans pursuant to this Section 2.05(b) shall
be applied, firs to the Term Facility and, thereafter, to the Revolving
Credit Facility in the manner set forth in clause (viii) of this Section
2.05(b).
(x) Prepayments of the Revolving Credit Facility made pursuant to
clause (i), (ii), (iii), (iv), (v), (vii), (viii) of this Section
2.05(b), first, shall be applied to prepay L/C Borrowings outstanding at
such time until all such L/C Borrowings are paid in full, second, shall
be applied to prepay Revolving Credit Loans outstanding at such time
until all such Revolving Credit Loans are paid in full and, third, shall
be used to Cash Collateralize the L/C Obligations; and, in the case of
prepayments of the Revolving Credit Facility required pursuant to clause
(i), (ii), (iii), (iv), (v), (vii) or (viii) of this Section 2.05(b), the
amount remaining, if any, after the prepayment in full of all Loans and
L/C Borrowings outstanding at such time and the L/C Obligations have been
Cash Collateralized in full (the sum of such prepayment amounts, cash
collateralization amounts and remaining amount being, collectively, the
"Reduction Amount") may be retained by the Borrower for use in the
ordinary course of its business, and the Revolving Credit Facility shall
be automatically and permanently reduced as set forth in Section
2.06(b)(iii). Upon the drawing of any Letter of Credit which has been
Cash Collateralized, such funds shall be applied (without any further
action by or notice to or from the Borrower or any other Loan Party) to
reimburse the L/C Issuer or the Revolving Credit Lenders, as applicable.
(xi) Notwithstanding anything to the contrary contained in this
Section 2.05(b), if, on any date on which a prepayment of Loans would
otherwise be required pursuant to clause (i), (ii), (iii) or (iv) of this
Section 2.05(b), the aggregate amount of Net Cash Proceeds or other
amounts otherwise required by such clauses to have been applied to prepay
Loans from the date hereof through such date are less than or equal to
the sum of (A) $25,000,000 plus (B) the aggregate amount of cash
collateral holdbacks or reserves that may from time to time be released
by IATA, Diners Club, Discover Card, NPC, ARC and American Express, the
Borrower shall not be obligated to apply such Net Cash Proceeds or other
amounts to prepay Loans.
(c) Prepayments to Include Accrued Interest, Etc. All prepayments
under this Section 2.05 shall be made together with (i) accrued and unpaid
interest to the date of such prepayment on the principal amount so prepaid and
(ii) in the case of any such prepayment of a Eurodollar Rate Loan on a date
other than the last day of an Interest Period therefor, any amounts owing in
respect of such Eurodollar Rate Loan pursuant to Section 3.05.
2.06 Termination or Reduction of Commitments.
(a) Optional. The Borrower may, upon notice to the Administrative
Agent, terminate without premium or penalty the unused portions of the Term
Commitment, the Letter of Credit Sublimit, or the unused Revolving Credit
Commitment, or from time to time permanently reduce without premium or penalty
the unused portions of the Term Commitment, the Letter of Credit Sublimit, or
the unused Revolving Credit Commitment; provided that (i) any such notice
shall be received by the Administrative Agent not later than 11:00 a.m. five
Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $5,000,000 or any whole
multiple of $1,000,000 in excess thereof and (iii) the Borrower shall not
terminate or reduce the unused portions of the Term Commitment, the Letter of
Credit Sublimit, or the unused Revolving Credit Commitment if, after giving
effect thereto and to any concurrent prepayments hereunder, the Total
Outstandings would exceed the lesser of (A) the Borrowing Base and (B) the
Aggregate Commitments.
(b) Mandatory. (i) Upon the Term Borrowing made immediately after the
Milestone Two Achievement Date, no more Term Loans shall be made and the
undrawn portion of the Term Facility, if any, shall be automatically and
permanently cancelled.
(ii) The Revolving Credit Facility shall be automatically and
permanently reduced on each date on which the prepayment of Revolving
Credit Loans outstanding thereunder is required to be made pursuant to
Section 2.05(b)(i), (ii), (iii), (iv) or (vi) by an amount equal to the
applicable Reduction Amount.
(iii) If after giving effect to any reduction or termination of
unused Commitments under this Section 2.06, the Letter of Credit Sublimit
exceeds the lesser of (A) the Borrowing Base and (B) the Aggregate
Commitments, such Sublimit shall be automatically reduced by the amount
of such excess.
(c) Application of Commitment Reductions; Payment of Fees. The
Administrative Agent will promptly notify the Lenders of any termination or
reduction of unused portions of the Term Commitment, the Letter of Credit
Sublimit, or the unused Revolving Credit Commitment under this Section 2.06.
Upon any reduction of unused Commitments under a Facility, the Commitment of
each Lender under such Facility shall be reduced by such Lender's Pro Rata
Share of the amount by which such Facility is reduced. All commitment fees
accrued until the effective date of any termination of the Aggregate
Commitments shall be paid on the effective date of such termination.
2.07 Repayment of Loans.
(a) Term Loans. The Borrower shall repay to the Administrative Agent
for the ratable account of the Term Lenders on the Maturity Date the aggregate
principal amount of all Term Loans outstanding on such date.
(b) Revolving Credit Loans. The Borrower shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders
on the Maturity Date the aggregate principal amount of all Revolving Credit
Advances outstanding on such date.
2.08 Interest.
(a) Interest Rate. Subject to the provisions of subsection (b) below,
(i) each Eurodollar Rate Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period at a rate per annum equal to the
Eurodollar Rate for such Interest Period plus the Applicable Rate; and (ii)
each Base Rate Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the
Base Rate plus the Applicable Rate.
(b) Default Rate. Upon the occurrence and during the continuance of
an Event of Default, the Borrower shall pay interest on (i) the unpaid
principal amount of each Loan owing to each Lender, payable in arrears on the
dates referred to in clause (a) above and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum required to be paid on
such Loan pursuant to clause (a) above and (ii) to the fullest extent
permitted by law, the amount of any interest, fee or other amount payable
under the Loan Documents that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on
the date such amount shall be paid in full and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be
paid, in the case of interest, on the Type of Loan on which such interest has
accrued pursuant to clause (a) above and, in all other cases, on Base Rate
Loans pursuant to clause (a) above.
(c) Payment Dates. Interest on each Loan shall be due and payable in
arrears on each Interest Payment Date applicable thereto and at such other
times as may be specified herein. Interest hereunder shall be due and payable
in accordance with the terms hereof before and after judgment.
2.09 Fees. In addition to certain fees described in subsections (i)
and (j) of Section 2.03:
(a) Commitment Fee. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Pro Rata Share, a
commitment fee equal to the Applicable Rate times the actual daily amount by
which (i) in the case of the Term Lenders, the aggregate Term Commitments
exceed the Outstanding Amount of Term Loans and (ii) in the case of the
Revolving Credit Lenders, the aggregate Revolving Credit Commitments exceed
the sum of (A) the Outstanding Amount of Revolving Credit Loans and (B) the
Outstanding Amount of L/C Obligations. The commitment fee shall accrue at all
times during the Availability Period, including at any time during which one
or more of the conditions in Article IV is not met, and shall be due and
payable monthly in arrears on the last Business Day of each month, commencing
with the first such date to occur after the Closing Date, and on the Maturity
Date. The commitment fee shall be calculated monthly in arrears, and if there
is any change in the Applicable Rate during any month, the actual daily amount
shall be computed and multiplied by the Applicable Rate separately for each
period during such month that such Applicable Rate was in effect.
(b) Other Fees. The Borrower shall pay to the Collateral Agent and
the Administrative Agent for their own respective accounts fees in the amounts
and at the times specified in the Commitment Letter. Such fees shall be fully
earned when paid and shall not be refundable for any reason whatsoever.
2.10 Computation of Interest and Fees. All computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more fees or interest, as applicable, being paid than if
computed on the basis of a 365-day year). Interest shall accrue on each Loan
for the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid,
provided that any Loan that is repaid on the same day on which it is made
shall, subject to Section 2.12(a), bear interest for one day. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.
2.11 Evidence of Indebtedness.
(a) The Credit Extensions made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Credit Extensions made
by the Lenders to the Borrower and the interest and payments thereon. Any
failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount
owing with respect to the Obligations. In the event of any conflict between
the accounts and records maintained by any Lender and the accounts and records
of the Administrative Agent in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error. Upon the request of any Lender made through the Administrative Agent,
the Borrower shall execute and deliver to such Lender (through the
Administrative Agent) a Note, which shall evidence such Lender's Loans in
addition to such accounts or records. Each Lender may attach schedules to its
Note and endorse thereon the date, Type (if applicable), amount and maturity
of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection
(a), each Lender and the Administrative Agent shall maintain in accordance
with its usual practice accounts or records evidencing the purchases and sales
by such Lender of participations in Letters of Credit. In the event of any
conflict between the accounts and records maintained by the Administrative
Agent and the accounts and records of any Lender in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error.
(c) Entries made in good faith by the Administrative Agent in the
Register pursuant to subsection (b) above, and by each Lender in its account
or accounts pursuant to subsection (a) above, shall be prima facie evidence of
the amount of principal and interest due and payable or to become due and
payable from the Borrower to, in the case of the Register, each Lender and, in
the case of such account or accounts, such Lender, under this Agreement and
the other Loan Documents, absent manifest error; provided that the failure of
the Administrative Agent or such Lender to make an entry, or any finding that
an entry is incorrect, in the Register or such account or accounts shall not
limit or otherwise affect the obligations of the Borrower under this Agreement
and the other Loan Documents.
2.12 Payments Generally.
(a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative
Agent's Disbursement Account in Dollars and in immediately available funds not
later than 2:00 p.m. on the date specified herein. The Administrative Agent
will promptly distribute to each Lender its Pro Rata Share (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender's Lending Office. All payments received by the
Administrative Agent after 2:00 p.m. shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue.
(b) If any payment to be made by the Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following
Business Day, and such extension of time shall be reflected in computing
interest or fees, as the case may be; provided, however, that, if such
extension would cause payment of interest on or principal of Eurodollar Rate
Loans to be made in the next succeeding calendar month, such payment shall be
made on the immediately preceding Business Day.
(c) Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that
the Borrower or such Lender, as the case may be, has timely made such payment
and may (but shall not be so required to), in reliance thereon, make available
a corresponding amount to the Person entitled thereto. If and to the extent
that such payment was not in fact made to the Administrative Agent in
immediately available funds, then:
(i) if the Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately
available funds, together with interest thereon in respect of each day
from and including the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is repaid to
the Administrative Agent in immediately available funds at the Federal
Funds Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Administrative Agent the amount thereof in
immediately available funds, together with interest thereon for the
period from the date such amount was made available by the Administrative
Agent to the Borrower to the date such amount is recovered by the
Administrative Agent (the "Compensation Period") at a rate per annum
equal to the Federal Funds Rate from time to time in effect. If such
Lender pays such amount to the Administrative Agent, then such amount
shall constitute such Lender's Loan included in the applicable Borrowing.
If such Lender does not pay such amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent may make a demand
therefor upon the Borrower, and the Borrower shall pay such amount to the
Administrative Agent, together with interest thereon for the Compensation
Period at a rate per annum equal to the rate of interest applicable to
the applicable Borrowing. Nothing herein shall be deemed to relieve any
Lender from its obligation to fulfill its Commitment or to prejudice any
rights which the Administrative Agent or the Borrower may have against
any Lender as a result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower
with respect to any amount owing under this subsection (c) shall be
conclusive, absent manifest error.
(d) If any Lender makes available to the Administrative Agent funds
for any Loan to be made by such Lender as provided in the foregoing provisions
of this Article II, and such funds are not made available to the Borrower by
the Administrative Agent because the conditions to the applicable Credit
Extension set forth in Article IV are not satisfied or waived in accordance
with the terms hereof, the Administrative Agent shall return such funds (in
like funds as received from such Lender) to such Lender, without interest.
(e) The obligations of the Lenders hereunder to make Loans and to
fund participations in Letters of Credit are several and not joint. The
failure of any Lender to make any Loan or to fund any such participation on
any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan or
purchase its participation.
(f) Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
(g) Whenever any payment received by the Administrative Agent under
this Agreement or any of the other Loan Documents is insufficient to pay in
full all amounts due and payable to the Administrative Agent and the Lenders
under or in respect of this Agreement and the other Loan Documents on any
date, such payment shall be distributed by the Administrative Agent and
applied by the Administrative Agent and the Lenders in the order of priority
set forth in Section 8.03. If the Administrative Agent receives funds for
application to the Obligations of the Loan Parties under or in respect of the
Loan Documents under circumstances for which the Loan Documents do not specify
the manner in which such funds are to be applied, the Administrative Agent
may, but shall not be obligated to, elect to distribute such funds to each of
the Lenders in accordance with such Lender's Pro Rata Share of the sum of (A)
the aggregate principal amount of all Loans outstanding at such time and (b)
the aggregate amount of all L/C Obligations outstanding at such time, in
repayment or prepayment of such of the outstanding Loans or other Obligations
then owing to such Lender.
2.13 Sharing of Payments. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it,
or the participations in L/C Obligations held by it, any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders
such participations in the Loans made by them and/or such subparticipations in
the participations in L/C Obligations held by them, as the case may be, as
shall be necessary to cause such purchasing Lender to share the excess payment
in respect of such Loans or such participations, as the case may be, pro rata
with each of them; provided that so long as the Obligations under the Loan
Documents shall not have been accelerated, any excess payment received by any
Appropriate Lender shall be shared on a pro rata basis only with other
Appropriate Lenders; provided further that if all or any portion of such
excess payment is thereafter recovered from the purchasing Lender under any of
the circumstances described in Section 12.06 (including pursuant to any
settlement entered into by the purchasing Lender in its discretion), such
purchase shall to that extent be rescinded and each other Lender shall repay
to the purchasing Lender the purchase price paid therefor, together with an
amount equal to such paying Lender's ratable share (according to the
proportion of (i) the amount of such paying Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any interest
or other amount paid or payable by the purchasing Lender in respect of the
total amount so recovered, without further interest thereon. The Borrower
agrees that any Lender so purchasing a participation from another Lender may,
to the fullest extent permitted by law, exercise all its rights of payment
(including the right of setoff, but subject to Section 12.09) with respect to
such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. The Administrative Agent will
keep records (which shall be conclusive and binding in the absence of manifest
error) of participations purchased under this Section and will in each case
notify the Lenders following any such purchases or repayments. Each Lender
that purchases a participation pursuant to this Section shall from and after
such purchase have the right to give all notices, requests, demands,
directions and other communications under this Agreement with respect to the
portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a) Except as otherwise provided in this Section 3.01 or Section
12.15, any and all payments by the Borrower to or for the account of the
Administrative Agent, the Collateral Agent or any Lender under any Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and all liabilities with respect
thereto, excluding, in the case of the Administrative Agent, the Collateral
Agent and each Lender, (i) taxes imposed on or measured by its overall net
income, and franchise taxes imposed on it (in lieu of net income taxes), by
the jurisdiction (or any political subdivision thereof) under the Laws of
which the Administrative Agent, the Collateral Agent or such Lender, as the
case may be, is organized or maintains its Lending Office or is otherwise a
resident or doing business (other than a jurisdiction in which such Person is
deemed to be doing business solely as a result of entering into, or performing
its obligations under, any Loan Document); and (ii) taxes other than as a
result of a change in applicable Law occurring after (A) the date that such
Person became a party to this Agreement, or (B) with respect to an assignment,
acquisition, grant of a participation or the appointment of a successor
Administrative Agent or Collateral Agent, the effective date of such
assignment, acquisition, participation or appointment, except to the extent
that such Person's predecessor was entitled to such additional amounts (all
such non-excluded taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and liabilities being hereinafter
referred to as ("Taxes"). If the Borrower shall be required by any Laws to
deduct any Taxes from or in respect of any sum payable under any Loan Document
to the Administrative Agent, the Collateral Agent or any Lender, then, except
as otherwise provided in this Section 3.01 or Section 12.15, (i) the sum
payable shall be increased as necessary so that after making all required
deductions with respect to Taxes (including deductions applicable to
additional sums payable under this Section), each of the Administrative Agent,
the Collateral Agent and such Lender receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable Laws, and (iv) within 30 days after the date of such payment, the
Borrower shall furnish to the Administrative Agent (which shall forward the
same to the Collateral Agent and such Lender, as applicable) the original or a
certified copy of a receipt evidencing payment .thereof to the extent such a
receipt is issued therefor, or other written proof of payment thereof that is
reasonably satisfactory to the Administrative Agent.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property,
intangible, mortgage recording taxes or similar charges or similar levies
which arise from any payment made under any Loan Document or from the
execution, delivery, performance, enforcement or registration of, or otherwise
with respect to, any Loan Document (hereinafter referred to as "Other Taxes").
(c) If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to
the Administrative Agent, the Collateral Agent or any Lender, the Borrower
shall also pay to the Administrative Agent, the Collateral Agent or to such
Lender, as the case may be, at the time interest is paid, such additional
amount that the Administrative Agent, the Collateral Agent or such Lender
specifies is necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) that the
Administrative Agent, the Collateral Agent or such Lender would have received
if such Taxes or Other Taxes had not been imposed.
(d) The Borrower agrees to indemnify the Administrative Agent, the
Collateral Agent and each Lender for (i) the full amount of Taxes and Other
Taxes (including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by the Administrative
Agent, the Collateral Agent and such Lender, (ii) amounts payable under
Section 3.01(c) without duplication and (iii) any liability (including
additions to tax, penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority; but excluding amounts resulting from the failure to comply with the
requirements of Section 12.05. Payment under this subsection (d) shall be made
within 30 days after the date such Lender, the Collateral Agent or the
Administrative Agent makes a demand therefor.
(e) If the Administrative Agent, the Collateral Agent or any Lender
determines, in its sole discretion, that is has actually received or realized
any refund of tax, any reduction of, or credit against, its withholding or
payment of any additional amount by the Borrower pursuant to this Section
3.01, such Person shall reimburse the Borrower in an amount equal to the net
benefit, after tax, and net of all expenses incurred by such Person in
connection with such refund, reduction, credit or recovery; provided that
nothing in this Section 3.01(e) shall require any Person to make available its
tax returns (or any other information relating to its taxes which it deems to
be confidential or interfere with any Person's right to arrange its tax
affairs in whatever manner it deems fit or to obligate any Person to claim any
credit). The Borrower shall return such amount to the applicable Person in the
event that such Person is required to repay such refund of tax or is not
entitled to such reduction of, or credit against its tax liabilities.
3.02 Illegality. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower
through the Administrative Agent, any obligation of such Lender to make or
continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar
Rate Loans shall be suspended until such Lender notifies the Administrative
Agent and the Borrower that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, the Borrower
shall, upon demand from such Lender (with a copy to the Administrative Agent),
prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to
Base Rate Loans, either on the last day of the Interest Period therefor, if
such Lender may lawfully continue to maintain such Eurodollar Rate Loans to
such day, or immediately, if such Lender may not lawfully continue to maintain
such Eurodollar Rate Loans. Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or
converted. Each Lender agrees to designate a different Lending Office if such
designation will avoid the need for such notice and will not, in the good
faith judgment of such Lender, otherwise be materially disadvantageous to such
Lender.
3.03 Inability to Determine Rates. If the Required Lenders reasonably
determine that by reason of circumstances arising after the date of this
Agreement affecting the relevant market, adequate and reasonable means do not
exist for determining the Eurodollar Rate for any requested Interest Period
with respect to a proposed Eurodollar Rate Loan, or that the Eurodollar Rate
for any requested Interest Period with respect to a proposed Eurodollar Rate
Loan does not adequately and fairly reflect the cost to such Lenders of
funding such Loan, or that dollar deposits are not being offered to banks in
the London interbank eurodollar market for the applicable amount and the
Interest Period of such Eurodollar Rate Loan, the Administrative Agent will
promptly so notify the Borrower and each Lender. Thereafter, the obligation of
the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until
the Administrative Agent (upon the instruction of the Required Lenders)
revokes such notice. Upon receipt of such notice, the Borrower may revoke any
pending request for a Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a Borrowing of Base Rate Loans in the amount
specified therein.
3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on
Eurodollar Rate Loans.
(a) If any Lender determines that as a result of the introduction of
or any change in or in the interpretation of any Law or such Lender's
compliance therewith, there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Rate Loans or
(as the case may be) issuing or participating in Letters of Credit, or a
reduction in the amount received or receivable by such Lender in connection
with any of the foregoing (excluding for purposes of this subsection (a) any
such increased costs or reduction in amount resulting from (i) Taxes or Other
Taxes (as to which Section 3.01 shall govern) and (ii) changes in the basis of
taxation of overall net income or overall gross income by the United States or
any foreign jurisdiction or any political subdivision of either thereof under
the Laws of which such Lender is organized or has its Lending Office or is
otherwise a resident or doing business (other than a jurisdiction in which
such Person is deemed to be doing business solely as a result of entering
into, or performing its obligations under, any Loan Document)), then from time
to time, within five days of demand of such Lender by delivery of a
certificate showing in reasonable detail the calculation of such amount and
the basis therefor (with a copy of such demand to the Administrative Agent),
the Borrower shall pay to such Lender such additional amounts as will
compensate such Lender for such increased cost or reduction.
(b) If any Lender determines that the introduction of any Law
regarding capital adequacy or any change therein or in the interpretation
thereof, or compliance by such Lender (or its Lending Office) therewith, has
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder (taking into consideration its policies with respect to
capital adequacy and such Lender's desired return on capital), then from time
to time, within five days of demand of such Lender by delivery of a
certificate showing in reasonable detail the calculation of such amount and
the basis therefor (with a copy of such demand to the Administrative Agent),
the Borrower shall pay to such Lender such additional amounts as will
compensate such Lender for such reduction.
(c) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right
to demand such compensation; provided that the Borrower shall not be required
to compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than six months prior to the date that such Lender
notifies the Borrower of the event or circumstance giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; provided further that, if the event or circumstance
giving rise to such increased costs or reductions is retroactive, then the
six-month period referred to above shall be extended to include the period of
retroactive effect thereof.
3.05 Funding Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost
or expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan
or from fees payable to terminate the deposits from which such funds were
obtained. Such compensation shall not exceed an amount equal to the excess, if
any, of (i) the amount of interest that would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to
the last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such
Loans provided for herein over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank Eurodollar market. The Borrower shall also pay any
customary administrative fees charged by such Lender in connection with the
foregoing.
For purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 3.05, each Lender shall be deemed to have funded
each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the London interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.
3.06 Matters Applicable to All Requests for Compensation. A
certificate of the Administrative Agent or any Lender claiming compensation
under this Article III and setting forth the additional amount or amounts to
be paid to it hereunder and the basis therefor shall be conclusive in the
absence of manifest error. In determining such amount, the Administrative
Agent or such Lender may use any reasonable averaging and attribution methods.
3.07 Survival. All of the Borrower's obligations under this Article
III shall survive termination of the Aggregate Commitments and repayment of
all other Obligations hereunder.
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions to Closing. This Agreement shall become effective on
and as of the first date on which all of the following conditions precedent
shall have been satisfied or waived by the Administrative Agent and the
Lenders:
(a) The Administrative Agent's receipt of the following, each of
which shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, and each in form and substance reasonably satisfactory to
the Administrative Agent, each of the Lenders and their respective legal
counsel:
(i) counterparts of this Agreement, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower,
duly executed by the appropriate Loan Parties;
(ii) a copy of the Interim Order certified by the clerk of the
Bankruptcy Court, which Interim Order shall be in the form attached to
the Commitment Letter and shall not have been reversed, amended,
supplemented, modified, stayed or vacated;
(iii) a copy of the Bidding Procedures Order certified by the clerk
of the Bankruptcy Court, which Bidding Procedures Order shall not have
been reversed, amended, supplemented, modified, stayed or vacated; and
(iv) a copy of the Investment Agreement certified as a true and
correct copy thereof by a Responsible Officer of the Borrower;
(b) Any fees required to be paid by any Loan Party pursuant to any
Loan Document, the Commitment Letter or any Order on or before the Closing
Date shall have been paid;
(c) The Borrower shall have paid all Attorney Costs of the
Administrative Agent and the Collateral Agent to the extent invoiced prior to
or on the Closing Date;
(d) The Administrative Agent shall be satisfied that the
debtor-in-possession credit facility provided for by the Existing DIP Credit
Agreement has been terminated, all obligations of the Loan Parties under the
Existing DIP Credit Agreement have been repaid in full (other than contingent
indemnity obligations) or will be repaid in full on the Closing Date and all
Liens granted under or in connection with the Existing DIP Credit Agreement
have been terminated, in each case on terms that are satisfactory to the
Administrative Agent; and
(e) The Existing Interim Order shall have been superceded and
replaced by the Interim Order.
4.02 Conditions to Milestone Two Achievement Date. The obligation of
each Term Lender to make a Term Loan shall become effective on the first date
(the "Milestone Two Achievement Date") on which all of the following
conditions precedent shall have been satisfied:
(a) The Closing Date shall have occurred;
(b) [Intentionally omitted];
(c) Either (i) execution of collective bargaining agreements
containing concessions as reflected in the tentative labor agreements (or, in
the case of IAMAW, if a tentative agreement has not been finalized, the draft
tentative agreement) with the Borrower as delivered to the Administrative
Agent and as existing as of the Petition Date by the following groups: (A)
Airline Pilots Association, International ("ALPA"), (B) International
Association of Machinists and Aerospace Workers ("IAMAW") relating to
mechanics and related employees, and (C) Association of Flight Attendants
("AFA") or (ii) (A) (1) execution of a collective bargaining agreement with
ALPA and AFA containing concessions as reflected in the tentative agreements
between the Borrower and ALPA and between the Borrower and the AFA, as
applicable, as delivered to the Administrative Agent and existing as of the
Petition Date, and (2) the Bankruptcy Court has approved relief under Section
1113 or 1114 of the Bankruptcy Code with respect to the Borrower's and certain
of its Affiliates' existing collective bargaining agreements with IAMAW and
the Borrower is in a position to impose in its sole discretion terms and
conditions of employment not materially inconsistent with the projected cost
savings embodied in the tentative agreements (or if a tentative agreement has
not been finalized, the draft tentative agreement) as delivered to the
Administrative Agent and existing as of the Petition Date, and which is
otherwise reasonably acceptable in form and substance to the Administrative
Agent, and (B) in the sole judgment of the Administrative Agent, sufficient
progress has been made by the Borrower in reaching a new collective bargaining
agreement with IAMAW;
(d) [Intentionally omitted];
(e) Material compliance by the Borrower with requests, if any, by the
ATSB with respect to its Application with the ATSB which contemplates the ATSB
Loan as part of the refinancing for Obligations under the Loan Documents;
(f) The Borrower having reached written agreements with each of NPC,
ARC and American Express limiting the aggregate amount of the cash collateral
holdbacks to an amount not materially inconsistent with the Borrower's
business plan; and
(g) The Borrower hereby notifies the Administrative Agent that the
conditions precedent to the Milestone Two Achievement Date have been
satisfied, and agrees to deliver after the Closing Date such evidence with
respect thereto as the Administrative Agent may reasonably request.
4.03 Conditions to Milestone Three Achievement Date. The obligation
of each Revolving Credit Lender to make a Revolving Credit Loan and of the L/C
Issuer to issue Letters of Credit (up to an aggregate Outstanding Amount not
to exceed $50,000,000) shall become effective on the first date (the
"Milestone Three Achievement Date") on which all of the following conditions
precedent shall have been satisfied:
(a) The Milestone Two Achievement Date shall have occurred;
(b) Execution of collective bargaining agreements containing
concessions reasonably acceptable in form and substance to the Administrative
Agent by the following groups: (i) Communications Workers of America ("CWA"),
(ii) IAMAW relating to fleet service and passenger service employees, and
(iii) all of the Borrower's other unions, or the Bankruptcy Court has approved
relief under Section 1113 or 1114 of the Bankruptcy Code with respect to the
Borrower's existing collective bargaining agreements with such groups and the
Borrower is in a position to impose in its sole discretion terms and
conditions of employment which embody cost savings to the Borrower reasonably
acceptable in form and substance to the Administrative Agent; and
(c) The Borrower hereby notifies the Administrative Agent that the
conditions precedent to the Milestone Three Achievement Date have been
satisfied, and agrees to deliver after the Closing Date such evidence with
respect thereto as the Administrative Agent may reasonably request.
4.04 Conditions to Milestone Four Achievement Date. The obligation of
each Revolving Credit Lender to make a Revolving Credit Loan and of the L/C
Issuer to issue Letters of Credit to the extent that such Loan or Letter of
Credit would cause the Outstanding Amount under the Revolving Credit Facility
to exceed $50,000,000 shall become effective on the first date (the "Milestone
Four Achievement Date") on which all of the following conditions precedent
shall have been satisfied:
(a) The Milestone Three Achievement Date shall have occurred; (b) The
minimum statutory and regulatory objection/review (as applicable) periods, if
any, shall have expired with respect to the Borrower's alliance with United
Air Lines, Inc. and neither the DOT nor any other applicable Governmental
Authority or third party has filed any objection, which is material in the
reasonable judgment of the Administrative Agent, to such alliance which has
not been resolved;
(c) Banks, financial institutions and other institutional lenders
reasonably acceptable to the Administrative Agent and the Borrower having
delivered commitments to lend at least $100,000,000 of the approximately
$1,000,000,000 loan (the "ATSB Loan") to be guaranteed in part by the ATSB,
provided that such committed amount shall not be guaranteed by the ATSB;
(d) (i) Written confirmation from the ATSB to the Administrative
Agent that (x) it has conditionally approved the issuance of the ATSB Guaranty
to support the ATSB Loan subject to approval by the Bankruptcy Court of a
Reorganization Plan reasonably acceptable to the ATSB, and (y) it has approved
a substantially final draft of the plan of reorganization and disclosure
statement to be filed in the Cases, and (ii) the Borrower has demonstrated to
the reasonable satisfaction of the Administrative Agent that it is likely to
satisfy all of the conditions to the issuance of the ATSB Guaranty;
(e) The entry of the Final Order which shall not have been reversed,
amended, supplemented, modified, stayed or vacated; and
(f) The Borrower shall have delivered to the Administrative Agent a
notice that the conditions precedent to the Milestone Four Achievement Date
have been satisfied, together with such evidence with respect thereto as the
Administrative Agent may reasonably request.
4.05 Conditions to all Credit Extensions. The obligation of each
Lender or the L/C Issuer to honor any Request for Credit Extension (other than
a Loan Notice requesting only a conversion of Loans to the other Type, or a
continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:
(a) The representations and warranties of the Borrower and each other
Loan Party contained in Article V or any other Loan Document, or which are
contained in any document furnished at any time under or in connection
herewith or therewith, shall be true and correct in all material respects on
and as of the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct in all material respects as of such
earlier date, and except that for purposes of this Section 4.05, the
representations and warranties contained in subsections (a) and (b) of Section
5.05 shall be deemed to refer to the most recent statements furnished pursuant
to clauses (a) and (b), respectively, of Section 6.01.
(b) No Default shall exist or would result from such proposed Credit
Extension.
(c) The Administrative Agent and, if applicable, the L/C Issuer shall
have received a Request for Credit Extension in accordance with the
requirements hereof.
(d) After giving effect to such Credit Extension, the Borrowing Base
(as reflected on the Borrowing Base Certificate most recently delivered to the
Administrative Agent) shall exceed the Total Outstandings.
(e) No material work disruptions or stoppages by employees of any of
the Loan Parties shall have occurred and be continuing.
(f) Other than for the making of the Loans on the Closing Date, the
Final Order shall be in full force and effect, and shall not have been
reversed, amended, supplemented, modified, stayed or vacated.
Each Request for Credit Extension (other than a Loan Notice
requesting only a conversion of Loans to the other Type or a continuation of
Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.05(a),
(b), (d), (e), and (f) have been satisfied on and as of the date of the
applicable Credit Extension.
4.06 Information Requests. The Borrower shall notify the
Administrative Agent at least five but no more than ten Business Days prior to
the anticipated Milestone Four Achievement Date. The Administrative Agent may
reasonably request the Borrower to provide additional information relating to
the conditions to be satisfied on the Milestone Four Achievement Date, no
later than three Business Days after the date of such notification, so long as
the Borrower would reasonably be expected to be able to provide such
information by the Milestone Four Achievement Date. The Borrower will use its
commercially reasonable efforts to provide such information promptly, and in
any event no later than the Milestone Four Achievement Date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and
the Lenders that:
5.01 Existence, Qualification and Power; Compliance with Laws; "Air
Carrier Status". Each Loan Party (a) is a corporation, partnership or limited
liability company duly organized or formed, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation or
organization, (b) subject to the entry of the DIP Financing Orders has all
requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own or lease its assets and
carry on its business and (ii) execute, deliver and perform its obligations
under the Loan Documents and, subject to the entry of the Bidding Procedures
Order, the Investment Agreement and (c) is duly qualified and is licensed and
in good standing under the Laws of each jurisdiction where its ownership,
lease or operation of properties or the conduct of its business requires such
qualification or license; except in each case referred to in clause (b)(i) or
(c), to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect. Each of US Airways, Inc., MidAtlantic Airways,
Inc., Allegheny Airlines, Inc., PSA Airlines, Inc. and Piedmont Airlines, Inc.
is an "air carrier" within the meaning of Section 40102 of Title 49 and,
except for MidAtlantic Airways, Inc., holds a certificate under Section 41102
of Title 49 or a commuter air carrier authorization; provided, however, that
prior to resuming scheduled service, MidAtlantic Airways, Inc. will have
secured a certificate under Section 41102 of Title 49 or reactivated its
commuter air carrier authorization. Each such Person (other than MidAtlantic
Airways, Inc.) holds an air carrier operating certificate issued pursuant to
Chapter 447 of Title 49; provided, however, that prior to resuming scheduled
service, MidAtlantic Airways, Inc. will have reactivated its air carrier
operating certificate issued pursuant to Chapter 447 of Title 49. The Borrower
and each Subsidiary that is an "air carrier" are each a "citizen of the United
States" as defined in Section 40102(a)(15) of Title 49 (a "United States
Citizen"). The Borrower and each Subsidiary that is an "air carrier" possess
all necessary certificates, franchises, licenses, permits, rights,
authorizations and concessions and consents which are material to the
operation of the routes flown by it and the conduct of its business and
operations as currently conducted.
5.02 Authorization; No Contravention. Following the entry of, and
giving effect to, the DIP Financing Orders (in the case of the Loan Documents)
and the Bidding Procedures Order (in the case of the Investment Agreement),
the execution, delivery and performance by each Loan Party of each Loan
Document to which such Person is or is to be a party and, with respect to the
Borrower, the Investment Agreement, and the consummation of the Transaction,
are within such Loan Party's corporate or other powers, have been duly
authorized by all necessary corporate or other organizational action, and do
not and will not (a) contravene the terms of any of such Person's Organization
Documents; (b) conflict with or result in any breach or contravention of, or
the creation of any Lien under, or require any payment to be made under (i)
any Post-Petition Contractual Obligation to which such Person is a party or
affecting such Person or the properties of such Person or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; or (c) violate any Law. No
Loan Party is in breach of any such Contractual Obligation, the breach of
which could be reasonably likely to have a Material Adverse Effect.
5.03 Governmental Authorization; Other Consents. Following the entry
of, and giving effect to, the DIP Financing Orders (in the case of the Loan
Documents) and the Bidding Procedures Order (in the case of the Investment
Agreement), no approval, consent, exemption, authorization, or other action
by, or notice to, or filing with, any Governmental Authority or any other
Person is necessary or required in connection with (i) the execution, delivery
or performance by, or enforcement against, any Loan Party of this Agreement or
any other Loan Document or the Investment Agreement, or for the consummation
of the Transaction (except for those required in connection with consummation
of the transactions contemplated by the Investment Agreement), (ii) the grant
by any Loan Party of the Liens granted by it pursuant to the Collateral
Documents or (iii) the perfection or maintenance of the Liens created under
the Collateral Documents (including the requisite priority set forth in the
DIP Financing Orders) except in each case for such consents, exemptions,
authorizations, approvals, actions, notices and filings listed on Schedule
5.03 hereto, all of which have been duly obtained, taken, given or made and
are in full force and effect. All applicable waiting periods in connection
with the Transaction (except for those required in connection with
consummation of the transactions contemplated by the Investment Agreement)
have expired without any action having been taken by any competent authority
restraining, preventing or imposing materially adverse conditions upon the
Transaction or the rights of the Loan Parties freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them.
5.04 Binding Effect. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and
delivered by each Loan Party that is party thereto. This Agreement
constitutes, and each other Loan Document when so delivered will constitute,
subject to the entry of the Interim Order or Final Order by the Bankruptcy
Court, as applicable, a legal, valid and binding obligation of such Loan
Party, enforceable against each Loan Party that is party thereto in accordance
with its terms.
5.05 Financial Statements; No Material Adverse Effect.
(a) The Audited Financial Statements (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except
as otherwise expressly noted therein; (ii) fairly present the financial
condition of the Borrower and its Subsidiaries as of the date thereof and
their results of operations for the period covered thereby in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (iii) show all material indebtedness
and other liabilities, direct or contingent, of the Borrower and its
Subsidiaries as of the date thereof required to be disclosed by GAAP,
including liabilities for taxes, material commitments and Indebtedness.
(b) The unaudited consolidated financial statements of the Borrower
and its Subsidiaries dated June 30, 2002, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for
the fiscal quarter ended on that date (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and (ii) fairly present the financial
condition of the Borrower and its Subsidiaries as of the date thereof and
their results of operations for the period covered thereby, subject, in the
case of clauses (i) and (ii), to the absence of footnotes and to normal
year-end audit adjustments.
(c) Except for the filing of the Cases, since the Closing Date, there
has been no event or circumstance, either individually or in the aggregate,
that has had or could reasonably be expected to have a Material Adverse
Change.
(d) The consolidated forecasted balance sheets, statements of income
and statements of cash flows of the Borrower and its Subsidiaries delivered to
the Lenders pursuant to Section 4.01 or 6.01(d) were prepared in good faith on
the basis of the assumptions stated therein, which assumptions were fair in
light of the conditions existing at the time of delivery of such forecasts,
and represented, at the time of delivery, the Borrower's best estimate of its
future financial performance.
5.06 Litigation. Other than the Cases, except as has been publicly
disclosed in any filing made by the Borrower or any other Loan Party with the
SEC between December 31, 2001 and the date of this Agreement and except as
otherwise set forth on Schedule 5.06, there are no actions, suits,
proceedings, claims or disputes pending or, to the knowledge of the Borrower
after due and diligent investigation, threatened or contemplated, at law, in
equity, in arbitration or before any Governmental Authority, by or against the
Borrower or any of its Subsidiaries or against any of their properties or
revenues that either individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect. The performance of any action by
any Loan Party required or contemplated by any of the Loan Documents, the
Investment Agreement or the Transaction is not restrained or enjoined (either
temporarily, preliminary or permanently). There are no actions, suits or
proceedings pending that challenge the validity of any Loan Document or the
applicability or enforceability of any Loan Document or any of the Orders or
which seek to void, avoid, limit, or otherwise adversely affect the security
interest created by or in any Loan Document or any of the Orders or any
payment made pursuant thereto.
5.07 No Default. Neither the Borrower nor any other Loan Party is in
default under or with respect to, or a party to, any Post Petition Contractual
Obligation that could, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. No Default has occurred and is
continuing or would result from the execution, delivery or performance of this
Agreement or any other Loan Document or the transactions contemplated hereby
or thereby.
5.08 Ownership of Property.
(a) Each Loan Party and each of its Subsidiaries has good record and
marketable title in fee simple to, or valid leasehold or subleasehold
interests in, all real property necessary to or used in the ordinary conduct
of its business, except for such defects in title as could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Set forth on Schedule 5.08(b) hereto is a complete and accurate
list of all Liens on Eligible Collateral, showing as of the date hereof the
lienholder thereof, the principal amount of the obligations secured thereby
and the Eligible Collateral subject thereto. The Eligible Collateral is
subject to no Liens, other than Liens set forth on Schedule 5.08(b), and as
otherwise permitted by Section 7.01.
(c) [Intentionally omitted].
(d) [Intentionally omitted].
(e) [Intentionally omitted].
(f) Set forth on Schedule 5.08(f) hereto is a complete and accurate
list of all Slots held by any Loan Party on the date hereof.
(g) Set forth on Schedule 5.08(g) hereto is a complete and accurate
list of all airport gate leaseholds contracted or licensed to any Loan Party
on the date hereof located at the top ten airports at which the Loan Parties
conduct operations, plus airport gate leaseholds used by the Loan Parties at
the Atlanta and Dallas-Fort Worth airports.
5.09 Environmental Compliance.
(a) The Loan Parties conduct in the ordinary course of business a
review of the effect of existing Environmental Laws and claims alleging
potential liability or responsibility for violation of any Environmental Law
on their respective businesses, operations and properties, and as a result
thereof the Borrower has reasonably concluded that, except as specifically
disclosed in Schedule 5.09, such effects of Environmental Laws and claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(b) Except as otherwise set forth on Schedule 5.09, none of the
properties currently owned or operated by any Loan Party, and, to the best of
the Borrower's knowledge, formerly owned or operated by any Loan Party, is
listed or proposed for listing on the NPL or on the CERCLIS or any analogous
foreign, state or local list; there are no and never have been any underground
or aboveground storage tanks or any surface impoundments, septic tanks, pits,
sumps or lagoons in which Hazardous Materials are being or have been treated,
stored or disposed on any property currently owned or operated by any Loan
Party or, to the best of the Borrower's knowledge, on any property formerly
owned or operated by any Loan Party, which treatment, storage or disposal
could individually, or in the aggregate reasonably be expected to have a
Material Adverse Effect; there is no asbestos or asbestos-containing material
on any property currently owned by any Loan Party as could individually or in
the aggregate reasonably be expected to have a Material Adverse Effect; and to
the best of the Borrower's knowledge Hazardous Materials have not been
released, discharged or disposed of on any property currently or formerly
owned or operated by any Loan Party in each case as could individually or in
the aggregate reasonably be expected to have a Material Adverse Effect.
(c) Except as otherwise set forth on Schedule 5.09, no Loan Party is
undertaking, and has not completed, either individually or together with other
potentially responsible parties, any investigation or assessment or remedial
or response action relating to any actual or threatened release, discharge or
disposal of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any Governmental Authority or the
requirements of any Environmental Law; and all Hazardous Materials generated,
used, treated, handled or stored at, or transported to or from, any property
currently or formerly owned or operated by any Loan Party have been disposed
of in a manner not reasonably expected to result in Material Adverse Effect.
5.10 Insurance. The properties of the Loan Parties are insured or
reinsured with financially sound and reputable insurance companies not
Affiliates of the Borrower, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the applicable
Loan Party operates.
5.11 Taxes. Except as otherwise set forth on Schedule 5.11(a): (a)
the Loan Parties have filed all Federal, state and other material tax returns
and reports required to be filed, and have paid or made adequate provision for
payment of all Federal, state and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets that are due and payable, except, in each case, those which
are being contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves have been provided in accordance
with GAAP; (b) there is no proposed tax assessment against any Loan Party that
would, if made, have a Material Adverse Effect; and (c) no Loan Party is party
to any tax sharing agreement with any Person other than another Loan Party,
other than tax indemnity agreements in leasing transactions.
5.12 ERISA Compliance.
(a) Each Plan is in compliance with the applicable provisions of
ERISA, the Code and other Federal or state Laws, except events that could not
reasonably be expected to result in a Material Adverse Change. Each Plan that
is intended to qualify under Section 401 (a) of the Code has received a
favorable determination letter from the IRS or an application for such a
letter has been filed with the IRS with respect thereto and, to the best
knowledge of the Loan Parties, nothing has occurred which would prevent, or
cause the loss of, such qualification. As of the date of this Agreement, each
Loan Party and each ERISA Affiliate has made all required contributions to
each Plan subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of
the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Loan
Parties, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan that could be reasonably be expected to
result in a Material Adverse Change. There has been no prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan
that has resulted or could reasonably be expected to result in a Material
Adverse Change.
(c) (i) Other than the filing of the Cases and events related to such
filing, no ERISA Event has occurred or is reasonably expected to occur; (ii)
the present value of all accumulated benefit obligations of all underfunded
Pension Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$648,000,000 the fair market value of the assets of all such underfunded
Pension Plans, and, as of the date of this Agreement, the "funded current
liability percentage," as defined in Section 412(l)(8) of the Code, of each
Pension Plan, based on the most recent actuarial valuation report of such plan
(January 1, 2001), equals or exceeds 81.7%; (iii) neither any Loan Party nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA); (iv) neither any
Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
neither any Loan Party nor any ERISA Affiliate has engaged in a transaction
that could be subject to Sections 4069 or 4212(c) of ERISA.
5.13 Subsidiaries; Equity Interests. As of the Closing Date, each
Loan Party has no Subsidiaries other than those specifically disclosed in Part
(a) of Schedule 5.13 and all of the outstanding Equity Interests in such
Subsidiaries have been validly issued, are fully paid and non-assessable and
are owned by a Loan Party in the amounts specified on Part (a) of Schedule
5.13 free and clear of all Liens except those created under the Collateral
Documents. Set forth in Part (b) of Schedule 5.13 is a complete and accurate
list of all Investments (other than (i) Cash Equivalents and (ii) those
Investments set forth in Part (a) of Schedule 5.13) held by any Loan Party on
the date hereof, showing as of the date hereof the amount, obligor or issuer
and maturity, if any, thereof. Each Loan Party has no equity investments in
any other corporation or entity other than those specifically disclosed in
Part (a) or Part (b) of Schedule 5.13.
5.14 Margin Regulations; Investment Company Act; Public Utility
Holding Company Act.
(a) The Borrower is not engaged and will not engage, principally or
as one of its important activities, in the business of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the FRB), or
extending credit for the purpose of purchasing or carrying margin stock and no
proceeds of any Borrowings or drawings under any Letter of Credit will be used
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.
(b) None of the Borrower, any Person Controlling the Borrower, or any
Subsidiary (i) is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, or (ii) is or is required to be registered as an
"investment company" under the Investment Company Act of 1940. Neither the
making of any Loan, nor the issuance of any Letters of Credit, nor the
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated by the Loan Documents,
will violate any provision of any such Act or any rule, regulation or order of
the SEC thereunder.
5.15 Disclosure. (a) All written information that has been made
available to the Administrative Agent or any Lender by the Borrower or any of
its representatives in connection with the transactions contemplated hereby
is, taken as a whole, complete and correct in all material respects and does
not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein not
misleading in light of the circumstances under which such statements were made
and (b) all financial projections, if any, that have been prepared by the
Borrower and made available to the Administrative Agent or any Lender have
been prepared in good faith based upon assumptions that were reasonable as of
the date of the preparation of such financial projections, it being understood
that no assurance is given that the results forecasted in the projections will
in fact be achieved and that the projections are subject to uncertainties and
contingencies, many of which are beyond the control of the Borrower and its
Subsidiaries.
5.16 Compliance with Laws. Each Loan Party is in compliance in all
material respects with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its properties, except in such
instances in which (a) such requirement of Law or order, writ, injunction or
decree is being contested in good faith by appropriate proceedings diligently
conducted or (b) the failure to comply therewith, either individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
5.17 Intellectual Property Licenses, Etc.
(a) The Loan Parties own all right, title and interest in and to, or
possess the right to use, the Intellectual Property Collateral (as defined in
Section 10.01(f)) that are reasonably necessary for the operation of their
respective businesses.
(b) To the best knowledge of the Loan Parties, the operation of their
respective businesses as currently conducted, or as contemplated to be
conducted and the use of the Intellectual Property Collateral in connection
therewith do not infringe, misappropriate, conflict with, or otherwise violate
the rights of any other Person. The Intellectual Property Collateral is
subsisting and has not been adjudicated invalid or unenforceable in whole or
in part, and to the best knowledge of the Loan Parties, is valid and
enforceable.
(c) Except as specifically disclosed in Schedule 5.17(c), no claim or
litigation has been asserted or is pending or, to the best knowledge of the
Loan Parties, threatened, that, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, alleging that the
Loan Parties' rights in or use of the Intellectual Property Collateral or the
operation of the businesses of the Loan Parties infringe, misappropriate, or
otherwise violate the rights of any other Person. To the best knowledge of the
Loan Parties, no Person is engaging in any activity that infringes,
misappropriates, or otherwise violates the Intellectual Property Collateral.
(d) With respect to each IP Agreement (as defined in Section
10.01(f)): (i) such IP Agreement is valid and binding and in full force and
effect; (ii) such IP Agreement will not cease to be valid and binding and in
full force and effect on terms identical to those currently in effect as a
result of the rights and interest granted herein, nor will the grant of such
rights and interest constitute a breach or default under such IP Agreement or
otherwise give any party thereto a right to terminate such IP Agreement; (iii)
the Borrower has not received any notice of termination, cancellation or
received any notice of a breach or default under such IP Agreement; (iv)
except as set forth on Schedule 5.17(d), the Borrower has not granted to any
other third party any rights, adverse or otherwise, under such IP Agreement;
and (v) neither the Borrower nor, to the best of the Borrower's knowledge, any
other party to such IP Agreement is in breach or default thereof in any
material respect, and, to the best of the Borrower's knowledge, no event has
occurred that, with notice or lapse of time or both, would constitute such a
breach or default or permit termination, modification or acceleration under
such IP Agreement.
5.18 [Intentionally omitted.]
5.19 Eligible Borrower. The information set forth in the certificate
delivered to the ATSB (as described in Section 6.26(a)(x) remains true and
correct in all material respects, other than the information set forth in
paragraph 7 of such certificate.
5.20 Security/Priority.
(a) On and after the Closing Date and the entry of the DIP Financing
Orders and after giving effect thereto, the provisions of the Loan Documents
and the DIP Financing Orders are effective to create in favor of the
Collateral Agent, for the benefit of the Secured Parties, legal, valid and
perfected Liens on and security interests (having the priority provided for
herein and in the DIP Financing Orders) in all right, title and interest in
the Collateral, enforceable against each Loan Party that owns an interest in
such Collateral.
(b) On and after the entry of the DIP Financing Orders and after
giving effect thereto, all Obligations owing by the Borrower under the
Facility and by the Guarantors in respect thereof will be secured by:
(i) subject to the Carve-Out and Permitted Senior Liens, first
priority liens granted to the Collateral Agent on behalf of the
Administrative Agent, the Collateral Agent and the Lenders pursuant to
Section 364(c)(2) of the Bankruptcy Code on all real, personal and mixed
property of the Borrower and the Guarantors, other than Excluded Assets,
that is not subject to valid and perfected liens on the Petition Date or
to valid liens in existence on the Petition Date that subsequently are
perfected pursuant to Section 546(b) of the Bankruptcy Code; and
(ii) subject to the Carve-Out and Permitted Senior Liens, pursuant
to Section 364(c)(3) of the Bankruptcy Code, best priority liens granted
to the Collateral Agent on behalf of the Administrative Agent, the
Collateral Agent and the Lenders on all real, personal and mixed property
of the Borrower and the Guarantors (other than Excluded Assets and
Section 1110 Assets) that is subject to valid and perfected liens in
existence on the Petition Date or to valid liens in existence on the
Petition Date that subsequently are perfected pursuant to Section 546(b)
of the Bankruptcy Code, subject only to such existing or subsequently
perfected liens.
(c) On and after the entry of the DIP Financing Orders and after
giving effect thereto, all Obligations owing by the Borrower under the
Facility and by the Guarantors in respect thereof will be, subject to the
Carve-Out, an allowed administrative expense claim pursuant to Section
364(c)(1) of the Bankruptcy Code in each of the Cases having priority over all
administrative expenses of the kind specified in, or arising under, any
Sections of the Bankruptcy Code (including, without limitation, Sections 105,
326, 328, 330, 331, 503(b), 507, 546(c) or 726 thereof) whether or not such
claims or expenses may become secured by a judgment lien or other
non-consensual lien, levy or attachment.
5.21 Entry of the Orders. The Interim Order was approved by the
Bankruptcy Court from the bench on September 26, 2002 and entered by the
Bankruptcy Court on October 1, 2002 and has not have been stayed, amended,
vacated, reversed or rescinded in any respect. On the date of the making of
any Loan or issuance of any Letter of Credit, the Interim Order or the Final
Order, as the case may be, will have been entered and will not have been
amended, stayed, vacated or rescinded in any respect that is adverse to the
Lenders. Upon the maturity (whether by the acceleration or otherwise) of any
of the Obligations of the Borrower and each Guarantor hereunder and under the
other Loan Documents, the Lenders shall, subject to the provisions of Section
8.02, be entitled to immediate payment of such Obligations, and to enforce the
remedies provided for hereunder, without further application to or order by
the Bankruptcy Court.
5.22 Slot Utilization. The Borrower and its Subsidiaries are
utilizing the Slots in a manner consistent with applicable regulations and
contracts in order to preserve the value of the Slots, taking into account any
waivers or other relief granted to the Borrower and/or its Subsidiaries by the
FAA. None of the Borrower or any of its Subsidiaries has received any notice
from the FAA, or is aware of any other event or circumstance, that would be
reasonably likely to impair the Slots or the value thereof.
5.23 Representations and Warranties as to Collateral. (a) Each Loan
Party's exact legal name, as defined in Section 9-503(a) of the Uniform
Commercial Code, is correctly set forth in Schedule 5.23(a)(1) hereto. Each
Loan Party has only the trade names, domain names and marks listed on Schedule
B of the Intellectual Property Security Agreement. Each Loan Party is located
(within the meaning of Section 9-307 of the Uniform Commercial Code) and has
its chief executive office in the state or jurisdiction set forth in Schedule
5.23(a)(1) hereto. The information set forth in Schedule 5.23(a)(1) hereto
with respect to each Loan Party is true and accurate in all respects. Except
as set forth in Schedule 5.23(a)(1), no Loan Party has previously changed its
name, location, chief executive office, type of organization, jurisdiction of
organization or organizational identification number during the 5 years
preceding the execution of this Agreement from those set forth in Schedule
5.23(a)(1) hereto except as disclosed in Schedule 5.23(a)(2) hereto.
(b) [Intentionally omitted].
(c) Each Loan Party is the legal and beneficial owner of the Eligible
Collateral of such Loan Party free and clear of any Lien of others, except for
Permitted Liens.
(d) Except for possessory interests of landlords and warehousemen,
each Loan Party has exclusive possession and control of the Equipment. In the
case of Equipment located on leased premises or in warehouses, no lessor or
warehouseman of any premises or warehouse upon or in which such Equipment is
located has (i) issued any warehouse receipt or other receipt in the nature of
a warehouse receipt in respect of any Equipment, (ii) to the best knowledge of
any Loan Party, issued any document for any of any Loan Party's Equipment and
(iii) to the best knowledge of any Loan Party, received notification of any
secured party's interest (other than the security interest granted hereunder)
in any Loan Party's Equipment.
(e) The Pledged Equity of any Subsidiary of any Loan Party pledged by
each Loan Party hereunder has been duly authorized and validly issued and is
fully paid and non-assessable. If any Loan Party is an issuer of Pledged
Equity, such Loan Party confirms that it has received notice of such security
interest. To the best of such Loan Party's knowledge, the Pledged Debt pledged
by each Loan Party hereunder has been duly authorized, authenticated or issued
and delivered, is the legal, valid and binding obligation of the issuers
thereof, is evidenced by one or more promissory notes and is not in default.
(f) The Pledged Equity of any Subsidiary of any Loan Party pledged by
each Loan Party constitutes the percentage of the issued and outstanding
Equity Interests of the issuers thereof indicated on Schedule II hereto. The
Pledged Debt constitutes all of the outstanding indebtedness owed to each Loan
Party by the issuers thereof and, as of the Closing Date, is outstanding in
the principal amount indicated on Schedule I hereto.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan
or other Obligation hereunder which is accrued and payable shall remain unpaid
or unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower
shall, and shall (except in the case of the covenants set forth in Sections
6.01, 6.02, 6.03 and 6.11) cause each Loan Party to:
6.01 Financial Statements. Deliver to the Administrative Agent and
each Lender, in form and detail consistent with comparable reports delivered
to the Administrative Agent or otherwise reasonably satisfactory to the
Administrative Agent:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year, and the
related consolidated statements of income or operations, shareholders' equity
and cash flows for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
prepared in accordance with GAAP, audited and accompanied by a report and
opinion of KPMG LLP or an independent certified public accountant of
nationally recognized standing reasonably acceptable to the Administrative
Agent, which report and opinion shall be prepared in accordance with generally
accepted auditing standards and shall not be qualified in any material respect
except with respect to the Cases or a "going concern" or like qualification or
exception;
(b) as soon as available, but in any event within 45 days after the
end of each of the first three fiscal quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as
at the end of such fiscal quarter, and the related consolidated statements of
income or operations, shareholders' equity and cash flows for such fiscal
quarter and for the portion of the Borrower's fiscal year then ended, setting
forth in each case in comparative form the figures for the corresponding
fiscal quarter of the previous fiscal year and the corresponding portion of
the previous fiscal year, all in reasonable detail and certified by the Chief
Executive Officer or the Chief Financial Officer of the Borrower as fairly
presenting the financial condition, results of operations, shareholders'
equity and cash flows of the Borrower and its Subsidiaries in accordance with
GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes;
(c) as soon as available, but in any event within 30 days after the
end of each month (except for the months ending August 31, 2002 and September
30, 2002, in which case the financial statements required by this Section
6.01(c) shall be delivered no later than November 15, 2002), a consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of such month
and consolidated statements of income and a consolidated statement of cash
flows of the Borrower and its Subsidiaries for the period commencing at the
end of the previous month and ending with the end of such month and a
consolidated statement of income and a consolidated statement of cash flows of
the Borrower and its Subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such month, setting forth in
each case in comparative form the corresponding figures for the corresponding
month of the preceding fiscal year, all in reasonable detail and duly
certified by the Chief Executive Officer or the Chief Financial Officer of the
Borrower;
(d) as soon as available, but no more than five (5) Business Days
after the end of each calendar week (i) the operating metrics for such week
for the Borrower and its Subsidiaries and (ii) an updated 13 week rolling cash
flow projection, together with a reconciliation of such cash flows to actual
results;
(e) as soon as available, but no more than five (5) Business Days
after the end of each calendar week (i) a cash balance report for such
calendar week, which report shall show, among other things, the aggregate
amount of cash and Cash Equivalents that any of the Loan Parties has
unrestricted access to on each day of such calendar week, and the aggregate
amount of cash that the Loan Parties are restricted from accessing on each day
of such calendar week, (ii) a flash cash report as of the day preceding such
report, and (iii) until the August 2002 financial statements are delivered, a
financial and operations flash report for such period as the Administrative
Agent may request;
(f) as soon as available, but in any event within 5 (five) days after
the end of each month, a report that shall demonstrate the computations used
by the Borrower in determining compliance with the covenant contained in
Section 7.11(b) for such month; and
(g) as soon as available, but in any event within fifteen (15) days
after the end of each month, a report, in form and substance acceptable to the
Administrative Agent, that contains a detail of the invoiced and unpaid
professional fees and expenses and UST/Clerk Fees.
6.02 Certificates; Other Information. Deliver to the Administrative
Agent and each Lender, in form and detail consistent with comparable reports
previously delivered to the Administrative Agent or otherwise reasonably
satisfactory to the Administrative Agent:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.01(a), a certificate (which certificate may be
limited to accounting matters and disclaim responsibility for legal
interpretations) of its independent certified public accountants certifying
such financial statements and stating that in making the regular audit of the
business of the Borrower and its Subsidiaries no knowledge was obtained of any
Default under Sections 7.03, 7.11 or 7.12 hereof or, if any such Default shall
exist, stating the nature and status of such event, provided that no such
certificate shall be required if prohibited by applicable accounting
literature;
(b) concurrently with the delivery of the financial statements
referred to in Sections 6.01(a), (b) and (c), a duly completed Compliance
Certificate signed by a Responsible Officer of the Borrower;
(c) promptly after any request by the Administrative Agent or any
Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit committee of
the board of directors) of any Loan Party by independent accountants in
connection with the accounts or books of any Loan Party, or any audit of any
of them;
(d) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent to
the stockholders of the Borrower, and copies of all annual, regular, periodic
and special reports and registration statements which the Borrower may file or
be required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, or with any Governmental Authority that may be
substituted therefor, or with any national securities exchange, and in any
case not otherwise required to be delivered to the Administrative Agent
pursuant hereto;
(e) promptly after the furnishing thereof, copies of any statement or
report furnished to any holder of debt securities of any Loan Party pursuant
to the terms of any indenture, loan or credit or similar agreement and not
otherwise required to be furnished to the Lenders pursuant to any other clause
of this Section 6.02;
(f) as soon as available and in any event within 30 days after the
end of each fiscal quarter, a report summarizing the insurance coverage
(specifying type, amount and carrier) in effect for each Loan Party and
containing such additional information as the Administrative Agent, or any
Lender through the Administrative Agent, may reasonably specify;
(g) promptly and in any event within five Business Days after receipt
thereof by any Loan Party, copies of each notice or other correspondence
received from the SEC (or comparable agency in any applicable non-U.S.
jurisdiction) concerning any investigation or possible investigation or other
inquiry by such agency regarding financial or other operational results of any
Loan Party;
(h) promptly upon request of the Administrative Agent, copies of all
notices, requests, pleadings and other documents received by any Loan Party
(and not otherwise distributed to the Lenders) under or pursuant to any
instrument, indenture, loan or credit or similar agreement and, from time to
time upon request by the Administrative Agent, such information and reports
regarding such instruments, indentures and loan and credit and similar
agreements as the Administrative Agent may reasonably request;
(i) promptly after the assertion or occurrence thereof, notice of any
Environmental Action against or of any noncompliance by any Loan Party with
any Environmental Law or Environmental Permit that could (i) reasonably be
expected to have a Material Adverse Effect or (ii) cause any property
described in the Mortgages to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(j) promptly upon receipt thereof, copies of each certificate or
order issued by the DOT and the applicable foreign aviation authority with
respect to Pledged Routes (as defined in the Slot Security Agreement);
(k) as soon as available and in any event within 10 days after the
end of each month, a Borrowing Base Certificate, as at the end of the previous
month, certified by the Chief Financial Officer of the Borrower;
(l) as soon as available in any event on the date which occurs six
months after the Closing Date and every six months thereafter, an appraisal by
the Approved Appraiser with respect to Eligible Collateral, other than
Eligible Receivables and (if otherwise delivered pursuant to Section 6.02(m))
Eligible Parts;
(m) in the discretion of the Administrative Agent and the Collateral
Agent, as soon as available in any event on the date which occurs three months
after the Closing Date and every three months thereafter, an appraisal by the
Approved Appraiser with respect to Eligible Parts;
(n) commencing on November 1, 2002, unless the FAA extends the waiver
of the minimum slot usage requirement, then commencing on the date on which
such waiver expires, on the fifth Business Day following the end of each
seven-day reporting period (or, with respect to the final report to be
delivered in any two-month period, following the end of such two-month
period), a slot utilization report conforming to the Slot Reporting Guidelines
for the most recently completed reporting period, showing, for each airport
and time allotment set forth in Schedule 6.02(n), the percentage utilization
for the Slots for such airport during such time allotment for the cumulative
period ending on the last day of such reporting period, certified by the Chief
Executive Officer or Chief Financial Officer of the Borrower and stating that
the Loan Parties are conducting their operations and monitoring Slot usage in
a manner such that the Loan Parties should be able to meet the Use or Lose
Rule for Eligible Slots with respect to the applicable two-month FAA reporting
period;
(o) promptly after the same is available, copies of all pleadings,
motions, applications, judicial information, financial information and other
documents filed by or on behalf of the Loan Parties with the Bankruptcy Court
in the Cases, or distributed on behalf of any of the Loan Parties to any
Committee, providing copies of the same to the Lenders and counsel for the
Administrative Agent;
(p) promptly, such additional information regarding the business,
financial or corporate affairs of any Loan Party, or compliance with the terms
of the Loan Documents, as the Administrative Agent or any Lender may from time
to time reasonably request; (q) promptly, and in any event no later than 15
days after the Closing Date, a schedule listing all locations at which
$5,000,000 or more of Equipment of any Loan Party is located; and
(r) promptly to the Administrative Agent, copies of all material
amendments, modifications, changes, waivers, consents or approvals between RSA
and the Borrower in connection with the Investment Agreement.
Documents required to be delivered pursuant to Section 6.01(a) or (b)
or Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower's
website on the Internet at the website address listed on Schedule 12.02; or
(ii) on which such documents are posted on the Borrower's behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each
Lender and the Administrative Agent have access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent);
provided that: (i) the Borrower shall deliver paper copies of such documents
to the Administrative Agent or any Lender that requests the Borrower to
deliver such paper copies until a written request to cease delivering paper
copies is given by the Administrative Agent or such Lender and (ii) the
Borrower shall notify (which may be by facsimile or electronic mail) the
Administrative Agent and each Lender of the posting of any such documents and
provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents. Notwithstanding anything contained
herein, in every instance the Borrower shall be required to provide paper
copies of the Compliance Certificates required by Section 6.02(c) to the
Administrative Agent and each of the Lenders. Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by the Borrower with
any such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.
6.03 Notices. Promptly notify the Administrative Agent:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be expected
to result in a Material Adverse Effect, including (i) breach or
non-performance of, or any default under, a material Post-Petition Contractual
Obligation of any Loan Party; (ii) any dispute, litigation, investigation,
proceeding or suspension between any Loan Party and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting any Loan Party, including pursuant to any
applicable Environmental Laws;
(c) of the occurrence of any ERISA Event;
(d) of any material change in accounting policies or financial
reporting practices by any Loan Party or any Subsidiary;
(e) of the (A) occurrence of any Disposition of property or assets
for which the Borrower is required to make a mandatory repayment pursuant to
Section 2.05(b)(i), (B) occurrence of any sale of capital stock or other
Equity Interests for which the Borrower is required to make a mandatory
repayment pursuant to Section 2.05(b)(ii), (C) incurrence or issuance of any
Indebtedness for which the Borrower is required to make a mandatory repayment
pursuant to Section 2.05(b)(iii), (D) receipt of any Extraordinary Receipt for
which the Borrower is required to make a mandatory repayment pursuant to
Section 2.05(b)(iv) and (E) receipt of any funds from IATA, Diners Club,
Discover Card, American Express, NPC or ARC;
(f) of any public announcement by Xxxxx'x or S&P of any change in a
rating of either Facility;
(g) of a material breach of the Use or Lose Rule; and
(h) of the satisfaction of the conditions precedent to the Milestone
Four Achievement Date.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of
the occurrence referred to therein and stating what action the Borrower has
taken and proposes to take with respect thereto. Each notice pursuant to
Section 6.03(a) shall describe with particularity any and all provisions of
this Agreement and any other Loan Document that have been breached.
6.04 Payment of Obligations. Pay, discharge or satisfy within 30 days
after the same shall become due and payable, all its obligations and
liabilities of whatever nature that constitute administrative expenses under
Section 503(b) of the Bankruptcy Code, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets attributed to the period after the Petition Date to the extent
permitted or required by the Bankruptcy Code or the Bankruptcy Court to be
paid, (b) all lawful claims which, if unpaid, would by law become a Lien upon
its property; and (c) all Indebtedness, within 30 days after the same shall
become due and payable, but subject to any subordination provisions contained
in any instrument or agreement evidencing such Indebtedness unless, in each
case, (i) the Bankruptcy Code or an order of the Bankruptcy Court precludes
making such payment or (ii) the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by the Loan Party.
6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain
in full force and effect its legal existence and good standing under the Laws
of the jurisdiction of its organization except in a transaction permitted by
Section 7.05 or 7.06; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (c)
preserve or renew all of its registered patents, trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
6.06 Maintenance of Properties. (a) Maintain, preserve and protect
all of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted;
and (b) make all necessary repairs thereto and renewals and replacements
thereof except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect; and (c) use the standard of care typical in
the industry in the operation and maintenance of its facilities.
6.07 Maintenance of Insurance. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance or
reinsurance with respect to its properties and business against loss or damage
of the kinds customarily insured against by Persons engaged in the same or
similar business, of such types and in such amounts as are customarily carried
under similar circumstances by such other Persons (including, without
limitation, casualty insurance or reinsurance on its aircraft at the appraised
value and flood insurance or reinsurance if required by the Mortgages) and
providing for not less than 30 days' prior notice to the Administrative Agent
and the Collateral Agent of termination, lapse or cancellation of such
insurance or reinsurance.
6.08 Compliance with Laws. Comply in all material respects with the
requirements of all Laws (including, without limitation, ERISA) and all
orders, writs, injunctions and decrees applicable to it or to its business or
property, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted; or (b) the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.
6.09 Books and Records. (a) Maintain proper books of record and
account, in which full, true and correct entries consistent with GAAP shall be
made of all financial transactions and matters involving the assets and
business of the Borrower or such Subsidiary, as the case may be; and (b)
maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Borrower or such Subsidiary, as the case may be.
6.10 Inspection Rights. Permit representatives and independent
contractors of the Administrative Agent and the Collateral Agent and
representatives of each Lender, at the expense of the Borrower, to (a) visit
and inspect any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its directors, officers, and
independent public accountants (with the Borrower having the right to have a
representative present at all such communications) and at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Borrower and (b) conduct semi-annual
(and, with respect to parts, quarterly in the discretion of the Administrative
Agent and the Collateral Agent) field examinations of the Collateral;
provided, however, that when an Event of Default exists the Administrative
Agent, Collateral Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice.
6.11 Use of Proceeds. Use the proceeds of the Credit Extensions to
repay the obligations under the Existing DIP Credit Agreement, to provide
general working capital and to pay ordinary operating costs and expenses of
the Loan Parties during the Availability Period, including payments to third
parties that are necessary to cure defaults, to the extent permitted by the
Bankruptcy Code or the Bankruptcy Court.
6.12 Covenant to Give Security. Except where prohibited by Applicable
Laws (including insurance regulations applicable to Airways Assurance
Limited), upon the request of the Administrative Agent following the
occurrence and during the continuance of an Event of Default, and without
further order or application to the Bankruptcy Court, within 10 days after
such request (and the delivery by the Administrative Agent of the requested
form of documentation), duly execute and deliver to the Administrative Agent
pledges or other security agreements covering the stock and assets of each
Subsidiary of the Borrower qualifying as a CFC to the extent such stock and
assets are not already pledged to the Collateral Agent and in all assets
acquired by any of the Loan Parties after the Closing Date to the extent such
assets are not already pledged to the Collateral Agent, in each case, as
specified by and in form and substance reasonably satisfactory to the
Administrative Agent, securing payment of all the Obligations under the Loan
Documents of the applicable Loan Party executing such pledge or security
agreement.
6.13 Compliance with Environmental Laws. Comply, and cause all
lessees and other Persons operating or occupying its properties to comply, in
all material respects, with all applicable Environmental Laws and
Environmental Permits; obtain and renew all Environmental Permits necessary
for its operations and properties; and conduct any investigation, study,
sampling and testing, and undertake any cleanup, removal, remedial or other
action necessary to remove and clean up all Hazardous Materials from any of
its properties, in accordance with the requirements of all Environmental Laws;
provided, however, that neither the Borrower nor any of its Subsidiaries shall
be required to undertake any such cleanup, removal, remedial or other action
to the extent that its obligation to do so is being contested in good faith
and by proper proceedings and appropriate reserves are being maintained with
respect to such circumstances.
6.14 Preparation of Environmental Reports. At the request of the
Required Lenders from time to time, provide to the Lenders within 60 days
after such request, at the expense of the Borrower, an environmental site
assessment report for any of its properties described in such request,
prepared by an environmental consulting firm reasonably acceptable to the
Administrative Agent, indicating the presence or absence of Hazardous
Materials and the estimated cost of any compliance, removal or remedial action
in connection with any Hazardous Materials on such properties; without
limiting the generality of the foregoing, if the Administrative Agent
determines at any time that a material risk exists that any such report will
not be provided within the time referred to above, the Administrative Agent
may retain an environmental consulting firm to prepare such report at the
expense of the Borrower, and the Borrower hereby grants and agrees to cause
any Subsidiary that owns any property described in such request to grant at
the time of such request to the Administrative Agent, the Lenders, such firm
and any agents or representatives thereof an irrevocable non-exclusive
license, subject to the rights of tenants, to enter their respective
properties to undertake such an assessment.
6.15 Further Assurances. Promptly upon request by the Administrative
Agent, the Collateral Agent or any Lender through the Administrative Agent (a)
correct any material defect or error that may be discovered in any Loan
Document or in the execution, acknowledgment, filing or recordation thereof,
and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file,
register and re-register any and all such further acts, deeds, certificates,
assurances and other instruments as the Administrative Agent, the Collateral
Agent or any Lender through the Administrative Agent may reasonably require
from time to time in order to (i) carry out more effectively the purposes of
the Loan Documents, (ii) to the fullest extent permitted by applicable law,
subject any Loan Party's or any of its Subsidiaries' properties, assets,
rights or interests to the Liens now or hereafter intended to be covered by
any of the Collateral Documents or the Orders, (iii) perfect and maintain the
validity, effectiveness and priority of any of the Collateral Documents and
any of the Liens intended to be created thereunder and under the Orders and
(iv) assure, convey, grant, assign, transfer, preserve, protect and confirm
more effectively unto the Secured Parties the rights granted or now or
hereafter intended to be granted to the Secured Parties under any Loan
Document, the Orders or under any other instrument executed in connection with
any Loan Document to which any Loan Party or any of its Subsidiaries is or is
to be a party, and cause each of its Subsidiaries to do so.
6.16 Compliance with Terms of Leaseholds. Make all Post-Petition
payments and otherwise perform all obligations in respect of all leases of
real property (including, without limitation, arrangements with respect to
airport gate leaseholds to which the Borrower or any of its Subsidiaries is a
party), to the extent necessary to keep such leases in full force and effect
and not allow such leases to lapse or be terminated or any rights to renew
such leases to be forfeited or cancelled, notify the Administrative Agent of
any default by any party with respect to such leases and cooperate with the
Administrative Agent in all respects to cure any such default, and cause each
of its Subsidiaries to do so, except, in any case, where the failure to do so,
either individually or in the aggregate, could not be reasonably likely to
have a Material Adverse Effect.
6.17 Cash Management System; Controlled Accounts. Maintain and cause
each of its Subsidiaries to maintain (a) a cash management system reasonably
acceptable to the Administrative Agent and the Collateral Agent and (b) from
and after the date of the Final Order, all cash in Controlled Accounts;
provided that (i) the Loan Parties shall be permitted to maintain up to an
aggregate amount of $35,000,000 in accounts that are not Controlled Accounts
but that have been disclosed to the Administrative Agent; (ii) the Loan
Parties shall be permitted to maintain cash in Trust Accounts, to the extent
consistent with current practices; (iii) to the extent consistent with
agreements with IATA, Diners Club, Discover Card, NPC, ARC and American
Express, the Loan Parties shall be permitted to hold accounts with such
Persons so long as the amounts on deposit in such accounts are intended solely
to cash collateralize holdback obligations and other obligations in connection
with payments of credit card processing or clearinghouse services to NPC, ARC,
American Express, IATA, Diners Club or Discover Card; (iv) the Loan Parties
shall be permitted to maintain cash in accounts with the L/C Issuer so long as
the aggregate amount on deposit in all such accounts (A) does not exceed 100%
of the maximum available amount under all Letters of Credit and (B) is
intended solely to cash collateralize obligations in connection with
outstanding Letters of Credit; and (v) the Loan Parties shall be permitted to
maintain cash in accounts that are not Controlled Accounts to the extent that
such accounts are subject to a Lien permitted by Section 7.01(b) (but only to
the extent any such Lien was cash collateralized on the Petition Date),
Section 7.01(e), Section 7.01(f) (except with respect to any cash
collateralization in respect of Swap Contracts), Section 7.01(l), Section
7.01(o) and Section 7.01(q).
6.18 [Intentionally omitted].
6.19 [Intentionally omitted].
6.20 FAA and DOT Matters; Citizenship. (a) Maintain at all times its
status at the DOT, as applicable, as an "air carrier" within the meaning of
Section 40102(a)(2) of Title 49, and, except for MidAtlantic Airways, Inc.,
hold a certificate under Section 41102 of Title 49, or a commuter air carrier
authorization, as applicable; provided, however, that prior to resuming
scheduled service, MidAtlantic Airways, Inc. shall secure a certificate under
Section 41102 of Title 49 or reactivate its commuter air carrier
authorization; (b) at all times hereunder be a citizen of the United States as
defined by Section 40102(a)15 of Title 49 and as that statutory provision has
been interpreted by the DOT pursuant to its policies; (c) maintain at all
times its status at the FAA as an air carrier and hold air carrier operating
certificates and other operating authorizations issued by the FAA pursuant to
14 C.F.R. Sections 119, 121 or 135 as currently in effect or as may be amended
or recodified from time to time, provided, however, that prior to resuming
scheduled service, MidAtlantic Airways, Inc. shall reactivate its air carrier
certificate issued pursuant to Chapter 447 of Title 49; and (d) possess and
maintain, and cause each other Loan Party to possess and maintain, all
necessary consents, franchises, licenses, permits, rights, concessions,
authorizations and consents which are material to the operation of the routes
flown by it and the conduct of its business and operations as currently
conducted except in any case described in this clause (d), where the failure
to do so, either individually or in the aggregate, could not be reasonably
likely to have a Material Adverse Effect.
6.21 Slot Utilization. For each period described in the table below
during each two-month period beginning on each January 1, March 1, May 1, July
1, September 1 and November 1, commencing November 1, 2002 (unless the FAA
extends the waiver of the minimum slot usage requirements, then commencing on
the date on which such waiver expires), each Loan Party shall utilize its
Slots (other than Secondary Slots and Excluded Slots) for each airport and
time allotment described in Schedule 6.02(n) at a percentage of not less than
the percentage set forth for such period below:
---------------------------- ----------------------------------- -------------------------- -----------------------------
Each Hour Slot Time Allotment at Each Half-Hour Each Half-Hour
Xxxxxx Arrival Slot Time Departure Slot Time
Period Reagan Washington Allotment at Allotment at
National Airport LaGuardia Airport LaGuardia Airport
---------------------------- ----------------------------------- -------------------------- -----------------------------
First 7 days 0% 0% 0%
---------------------------- ----------------------------------- -------------------------- -----------------------------
First 14 days 30% 30% 30%
---------------------------- ----------------------------------- -------------------------- -----------------------------
First 21 days 50% 50% 50%
---------------------------- ----------------------------------- -------------------------- -----------------------------
First 28 days 55% 55% 55%
---------------------------- ----------------------------------- -------------------------- -----------------------------
First 35 days 60% 60% 60%
---------------------------- ----------------------------------- -------------------------- -----------------------------
First 42 days 65% 65% 65%
---------------------------- ----------------------------------- -------------------------- -----------------------------
First 49 days 75% 75% 75%
---------------------------- ----------------------------------- -------------------------- -----------------------------
Full Two-Months 80% 80% 80%
---------------------------- ----------------------------------- -------------------------- -----------------------------
Each Loan Party shall be permitted to designate up to two seasonal schedule
changes per calendar year (the seven day period during which a seasonal
schedule change is implemented being, an "Excluded Period"). No Loan Party
shall be required to comply with this Section 6.21 during the first period
specified in the table above in which a seasonal schedule change is
implemented. In addition, for purposes of calculating compliance with this
Section 6.21, Slot utilization for an Excluded Period shall be excluded from
the calculations for the first two full periods, if any, following the date on
which the applicable seasonal schedule change is implemented.
6.22 ATSB Information Requests. Comply with any reasonable request
from the ATSB for information in connection with the Application.
6.23 Rating. Use best efforts to obtain a rating for the Term
Facility and the Revolving Credit Facility from S&P and Xxxxx'x as soon as
practicable.
6.24 Gate Utilization. Utilize all of its airport gate leaseholds at
LaGuardia Airport and Xxxxxx Xxxxxx Washington National Airport in a manner
sufficient to comply with applicable lease provisions governing such airport
gate leaseholds.
6.25 Disclosure Statement and Plan of Reorganization. File with the
Bankruptcy Court the disclosure statement (with a plan of reorganization
attached as an exhibit thereto) for all of the Cases, in each case on terms
satisfactory to the Administrative Agent, on or prior to December 31, 2002,
and receive approval of the Bankruptcy Court of such disclosure statement a
(with a plan of reorganization attached as an exhibit thereto) on or prior to
March 15, 2003.
6.26 Covenant for Post-Closing Deliveries.
(a) Deliver to the Administrative Agent, as soon as available and in
any event not later than the earlier of (x) the day before the hearing for the
Final Order and (y) 15 days after the Closing Date (or such later date as may
be approved by the Agents and RSA):
(i) a Revolving Credit Note executed by the Borrower in favor of
each Revolving Credit Lender requesting a Revolving Credit Note and a
Term Note executed by the Borrower in favor of each Term Lender
requesting a Term Note;
(ii) Each of the following:
(A) to the extent consisting of shares of stock or other certificated
securities, certificates representing the Initial Pledged Equity accompanied
by undated stock powers executed in blank;
(B) evidence of the insurance required by the terms of this Agreement
and the other Loan Documents; and
(C) completed requests for information, dated on or before the
Closing Date, listing all effective financing statements that name any Loan
Party as debtor, together with copies of such financing statements;
(iii) an intellectual property security agreement, in
substantially the form of Exhibit G (together with each other
intellectual property security agreement and intellectual property
security agreement supplement delivered pursuant to Section 6.12, in
each case as amended, the "Intellectual Property Security
Agreement"), duly executed by each Loan Party;
(iv) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of Responsible
Officers of each Loan Party as the Administrative Agent may
reasonably require evidencing the identity, authority and capacity
of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other
Loan Documents to which such Loan Party is a party or is to be a
party;
(v) such documents and certifications as the Administrative
Agent and the Lenders may reasonably require to evidence that each
Loan Party is duly organized or formed, and that each of the Loan
Parties is validly existing and in good standing in its jurisdiction
of organization;
(vi) a favorable opinion of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, counsel to the Loan Parties, addressed to the
Administrative Agent and each Lender, in substantially the form of
Exhibit H-1;
(vii) a favorable opinion of Xxxxxx X. Xx, Esq., Managing
Director and Associate General Counsel of US Airways, Inc.,
addressed to the Administrative Agent and each Lender, in
substantially the form of Exhibit H-2;
(viii) a favorable opinion of XxXxx Xxxxxxxxx & Xxxxx, special
aviation counsel to the Lenders with regard to, among other things,
(A) the granting of a security interest and perfection of the
security interest in Eligible Aircraft and Eligible Engines owned by
the Loan Parties in favor of the Collateral Agent, for itself and
for the ratable benefit of the Secured Parties and (B) the absence
of Liens on Eligible Aircraft and Eligible Engines on which the
Collateral Agent, for the benefit of the Secured Parties, is
entitled to have a first priority Liens, in each case, in form and
substance reasonably satisfactory to the Administrative Agent and
the Collateral Agent;
(ix) a certificate of a Responsible Officer of each Loan Party
either (A) listing all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Loan
Party and the validity against such Loan Party of the Loan Documents
to which it is a party, and such consents, licenses and approvals
shall be in full force and effect, or (B) stating that no such
consents, licenses or approvals are so required;
(x) a copy of the certificate of the Borrower to the ATSB
certifying that the Borrower is an "eligible borrower" within the
meaning of the Air Transportation Stabilization Act and Regulations,
does not have any outstanding delinquent federal debt (including tax
liabilities) and the Application complies with the requirements of
the Air Transportation Stabilization Act and Regulations;
(xi) a slot, gate and route security agreement, in
substantially the form of Exhibit K (together with each other slot,
gate and route security agreement and slot, gate and route security
agreement supplement delivered pursuant to Section 6.12, in each
case as amended (the "Slot Security Agreement"), duly executed by
each Loan Party that owns Slots as of the Closing Date;
(xii) an aircraft mortgage and security agreement, in
substantially the form of Exhibit L (together with each other
aircraft mortgage and security agreement and aircraft mortgage and
security agreement supplement delivered pursuant to Section 6.12, in
each case as amended (the "Aircraft Mortgage") duly executed by each
Loan Party that owns aircraft, engines or parts referred to therein
as of the Closing Date;
(xiii) acknowledgment copies or stamped receipt copies of
proper financing statements, duly filed on or before the date which
is 15 days after the Closing Date under the Uniform Commercial Code
of all jurisdictions that the Administrative Agent and the
Collateral Agent may deem necessary or desirable in order to perfect
and protect the first priority liens and security interests created
hereunder, covering the Collateral described in Article X;
(xiv) completed requests for information listing the financing
statements referred to in clause (i) above and all other effective
financing statements filed in the jurisdictions referred to in
clause (i) above that name any Loan Party as debtor, together with
copies of such other financing statements, as well as all FAA
filings for aircraft, engines and parts covered by the Aircraft
Mortgages;
(xv) deeds of trust, trust deeds, mortgages, leasehold
mortgages and leasehold deeds of trust, in substantially the form of
Exhibit F (with such changes as may be required to account for local
law matters) and otherwise in form and substance reasonably
satisfactory to the Administrative Agent, and covering the
properties located in Philadelphia, Pennsylvania and Orlando,
Florida (together with each other mortgage delivered pursuant to
Section 6.12, in each case as amended, the "Mortgages"), duly
executed by the appropriate Loan Party;
(xvi) [Intentionally Omitted];
(xvii) evidence that appropriate filings in the United States
Patent and Trademark Office and the United States Copyright Office
have been made in order to perfect and protect the first priority
liens and security interests created under the Intellectual Property
Security Agreement, and
(xviii) favorable opinions of local counsel in States in which
the Mortgaged Properties are located, with respect to the
enforceability of the Mortgages and any related fixture filings
substantially in the form of Exhibit H-3, and otherwise in form and
substance reasonably satisfactory to the Administrative Agent.
(b) Deliver to the Administrative Agent, as soon as available and in
any event not later than 60 days after the Closing Date (or such later date as
may be approved by the Agents):
(i) to the extent currently in the possession of the Borrower,
American Land Title Association/American Congress on Surveying and
Mapping form surveys for which all necessary fees (where applicable)
have been paid, certified to the Administrative Agent, the
Collateral Agent and the Lenders and the issuer of the Mortgage
Policies in a manner satisfactory to the Administrative Agent, the
Collateral Agent and the Lenders by a land surveyor duly registered
and licensed in the States in which the property described in such
surveys is located, showing all buildings and other improvements,
any off-site improvements, the location of any easements, parking
spaces, rights of way, building set-back lines and other dimensional
regulations and the absence of encroachments, either by such
improvements or on to such property, and other defects, other than
encroachments and other defects acceptable to the Administrative
Agent, the Collateral Agent and the Lenders,
(ii) an appraisal of each of the properties described in the
Mortgages to the extent required by, and complying with, the
requirements of the Federal Financial Institutions Reform, Recovery
and Enforcement Act of 1989, which appraisals shall be from a Person
acceptable to the Administrative Agent and the Collateral Agent and
otherwise in form and substance satisfactory to the Administrative
Agent and the Collateral Agent, and
(iii) evidence as to (1) whether any property subject to a
Mortgage (a "Mortgaged Property") is in an area designated by the
Federal Emergency Management Agency as having special flood or mud
slide hazards (a "Flood Hazard Property") and (2) if any Mortgaged
Property is a Flood Hazard Property, (a) whether the community in
which such Mortgaged Property is located is participating in the
National Flood Insurance Program, (b) the applicable Loan Party's
written acknowledgment of receipt of written notification from the
Administrative Agent (i) as to the fact that such Mortgaged Property
is a Flood Hazard Property and (ii) as to whether the community in
which each such Flood Hazard Property is located is participating in
the National Flood Insurance Program and (c) copies of insurance
policies or certificates of insurance of the Loan Parties evidencing
flood insurance satisfactory to the Administrative Agent and the
Collateral Agent and naming the Collateral Agent as sole loss payee
on behalf of the Lenders.
(c) Deliver to the Administrative Agent, as soon as available and in
any event not later than the date on which the Final Order is entered by the
Bankruptcy Court, control agreements duly executed by each depositary bank at
which a Controlled Account is maintained, in form and substance satisfactory
to the Administrative Agent.
(d) Use commercially reasonable efforts to promptly obtain the
consent of the applicable Governmental Authorities to the pledge to the
Collateral Agent of 66% of the Voting Foreign Stock and 100% of the Non-Voting
Foreign Stock of Airways Assurance Limited and, if such consent is obtained,
taking all actions reasonably requested by the Collateral Agent to evidence a
first priority perfected security interest in such Voting Foreign Stock and
Non-Voting Foreign Stock.
(e) Use best efforts to deliver to the Administrative Agent, as soon
as available and in any event not later than November 13, 2002, the original
of stock certificate number 144 issued by Aeronautical Radio, Inc. to US
Airways, Inc. for 900 shares of capital stock or a replacement thereof,
together with an undated stock power executed in blank by US Airways, Inc.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan
or other Obligation hereunder which is accrued and payable shall remain unpaid
or unsatisfied, or any Letter of Credit shall remain outstanding, the Borrower
shall not, nor shall it permit any other Loan Party to, directly or
indirectly:
7.01 Liens. Create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, or sign or file or suffer to exist under the Uniform Commercial Code
of any jurisdiction a financing statement that names the Borrower or any of
its Subsidiaries as debtor, or sign or suffer to exist any security agreement
authorizing any secured party thereunder to file such financing statement, or
assign any accounts or other right to receive income, other than the
following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the Petition Date;
(c) Liens for taxes, assessments or governmental charges or claims
not delinquent for a period of more than 30 days or which are being contested
in good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person in accordance with GAAP;
(d) Liens of landlords, carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary course
of business which are not overdue for a period of more than 30 days or which
are being contested in good faith and by appropriate proceedings diligently
conducted, if adequate reserves with respect thereto are maintained on the
books of the applicable Person;
(e) Liens incurred or pledges or deposits in the ordinary course of
business made in connection with workers' compensation, unemployment insurance
and other social security legislation, other than any Lien imposed by ERISA;
(f) Liens incurred or deposits made to secure the performance of
tenders, bids, trade contracts, leases (real and personal) (other than
Indebtedness), statutory obligations, surety bonds (other than bonds related
to judgments or litigation), performance and return of money (but not borrowed
money) bonds, reimbursement obligations and chargeback rights of Persons
performing credit card processing services for a Loan Party and other
obligations of a like nature incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities of title and other similar charges or
encumbrances affecting real property which do not materially detract from the
value of the property subject thereto or materially interfere with the
ordinary conduct of the business of the applicable Person;
(h) Liens securing judgments and attachments not constituting an
Event of Default under Section 8.01(g) or securing appeal or other surety
bonds related to such judgments;
(i) Liens securing Indebtedness permitted under Section
7.03(c)(iv) or (v); provided that (i) such Liens do not at any time
encumber any property other than the property financed by such
Indebtedness and (ii) with respect to capital leases, such Liens do
not at any time extend to or cover any Collateral or assets other
than the assets subject to such capital leases;
(j) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(k) operating leases or subleases of real or personal property
granted to others not interfering in any material respect with the business of
the Loan Parties, taken as a whole;
(l) Liens in favor of collecting or payor banks and credit card
processors having a right of setoff, revocation, refund or chargeback with
respect to money or instruments of any Loan Party on deposit with or in
possession of such bank;
(m) any renewal of or substitution for any Lien on any "equipment"
described in Section 1110(a)(3) of the Bankruptcy Code (as in effect on the
date hereof) permitted by any of the preceding clauses; provided that the debt
secured is not increased nor the Lien extended to any additional assets;
(n) Liens of creditors of any Person to whom any Loan Party's assets
are consigned for sale in the ordinary course of business;
(o) Liens incurred under the Trust Agreements or deposits made in a
Trust Account;
(p) Liens securing obligations under Permitted Sale/Leasebacks; and
(q) Liens securing Indebtedness permitted under Section 7.03(c)(viii)
and Section 7.03(c)(xi).
7.02 Investments. Make or hold any Investments, except:
(a) Investments held by any Loan Party in the form of Cash
Equivalents;
(b) advances to officers, directors and employees of the Borrower and
Subsidiaries in an aggregate amount not to exceed (i) $50,000 at any time
outstanding to any officer, director or employee or (ii) $5,000,000 at any
time outstanding for all such advances, in each case for travel,
entertainment, relocation and analogous ordinary business purposes;
(c) equity Investments of the Borrower in any Guarantor and
Investments of any Guarantor in the Borrower or in another Guarantor;
(d) Investments in accounts, contract rights and chattel paper (each
as defined in the UCC), notes receivable and similar items arising or acquired
in the ordinary course of business and Investments received in settlement of
amounts due to any Loan Party effected in the ordinary course of business
(including as a result of Dispositions not prohibited by Section 7.06);
(e) Investments in an amount not to exceed $5,000,000 in the
aggregate (or, if so approved by the Administrative Agent, $10,000,000 in the
aggregate) in travel or airline related businesses made in connection with
marketing and promotion agreements, alliance agreements, distribution
agreements, agreements with respect to fuel consortiums, agreements relating
to flight training, agreements relating to insurance arrangements, agreements
relating to parts management systems and other similar agreements;
(f) Guarantees permitted by Section 7.03;
(g) Investments (other than Cash Equivalents) existing on the
Petition Date and set forth on Schedule 5.13 hereof;
(h) Investments consisting of intercompany debt permitted under
Section 7.03; and
(i) Investments by the Borrower and its Subsidiaries not otherwise
permitted under this Section 7.02 in an aggregate amount not to exceed
$5,000,000;
(j) Investments in Airways Assurance Limited in an amount not to
exceed $250,000 at any time outstanding;
(k) payments of fees to any fuel consortium in the ordinary course of
business, consistent with past practices and consistent with industry
standards; and
(l) Investments in the Trust Accounts.
7.03 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) in the case of the Borrower, Indebtedness owed to a Guarantor,
which Indebtedness shall constitute Pledged Debt pursuant to the terms of
Article X;
(b) in the case of any Loan Party (other than the Borrower),
Indebtedness owed to the Borrower, which Indebtedness shall constitute Pledged
Debt pursuant to the terms of Article X; and
(c) in the case of the Loan Parties,
(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness and, in the case of financings
secured directly or indirectly by "equipment" described in Section
1110(a)(3) of the Bankruptcy Code (as in effect on the date hereof),
refinancings and replacements thereof, provided that (i) the
principal amount of such Existing Indebtedness shall not be
increased above the principal amount thereof outstanding immediately
prior to such refinancing or replacement, (ii) the maturity of such
Existing Indebtedness shall not be shortened as a result of such
refinancing or replacement, (iii) the weighted average life to
maturity of such Existing Indebtedness shall not be reduced as a
result of such refinancing or replacement, and (iv) the direct and
contingent obligors therefor shall not be changed, as a result of or
in connection with such refinancing or replacement;
(iii) Indebtedness incurred after the Petition Date consisting
of Guarantees permitted by Section 7.04;
(iv) Indebtedness incurred after the Petition Date in respect
of capital leases, Synthetic Lease Obligations, operating leases and
purchase money obligations for fixed or capital assets within the
limitations set forth in Section 7.01(i); provided, however, that
the aggregate Attributable Indebtedness thereof at any one time
outstanding shall not exceed $5,000,000;
(v) Indebtedness issued to General Electric Capital Corporation
or any of its Affiliates (collectively, "GECC"), in connection with
a restructuring of the Indebtedness of the Borrower and its
Subsidiaries owed to GECC which has been approved by the Bankruptcy
Court and is satisfactory to the Administrative Agent, to the extent
that (1) such Indebtedness is secured solely by assets currently
securing Indebtedness issued to GECC and (2) GECC's Lien with
respect to the newly-issued Indebtedness is pari passu with or
junior to its existing Liens on such assets;
(vi) debt securities, rent deferral notes and capital
expenditure notes for the modification or improvement of aircraft,
in each case issued to existing aircraft lessors and/or lenders in
connection with the modification of existing lease or financing
arrangements;
(vii) Indebtedness in respect of Swap Contracts that terminate
no later than the earlier of December 31, 2003 and the date that is
six months from the date of the applicable Swap Contract, and that
are designed to hedge against fluctuations in fuel costs incurred in
the ordinary course of business, consistent with past business
practice and industry standards and not entered into for speculative
purposes;
(viii) renewals of letters of credit with PNC Bank and Societe
Generale so long as the aggregate dollar equivalent amount available
to be drawn under such letters of credit does not exceed $5,500,000
and does not exceed the amount available to be drawn under the
letters of credit being renewed;
(ix) Indebtedness incurred in the ordinary course of business
in respect of surety bonds in an aggregate outstanding principal
amount at any time not to exceed $16,000,000;
(x) other Indebtedness not otherwise permitted by this Section
7.03 in an aggregate principal amount not to exceed $10,000,000 at
any time outstanding; and
(xi) letters of credit issued by Persons other than the L/C
Issuer to the extent that (i) the Loan Party requesting the issuance
of any such letter of credit pledges to and deposits with the issuer
of such letter of credit cash collateral in an amount not less than
100% of the face amount of such letter of credit and not in excess
of 105% of the face amount of such letter of credit, (ii) in the
event of a drawing under any such letter of credit, the issuer of
such letter of credit looks first to the cash collateral for
reimbursement of such drawing and (iii) after giving effect to the
issuance of each such letter of credit, the sum of all L/C
Obligations and Third Party L/C Obligations shall not exceed
$50,000,000.
7.04 Guarantees and Other Liabilities. Purchase or repurchase (or
agree, contingently or otherwise, so to do) the Indebtedness of, or assume,
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance of any obligation or capability of
so doing, or otherwise), endorse or otherwise become liable, directly or
indirectly, in connection with the Indebtedness, stock or dividends of any
Person, except (a) for any guaranty of Indebtedness or other obligations of
the Borrower or any Guarantor if the Borrower or such Guarantor could have
incurred such Indebtedness or obligations under this Agreement, (b) by
endorsement of negotiable instruments for deposit or collection in the
ordinary course of business, (c) Indebtedness or other obligations of any Loan
Party arising from agreements of any Loan Party providing for indemnification,
adjustment of purchase price, earn-out or other similar obligations, in each
case incurred or assumed in connection with the disposition of any business or
assets and (d) customary indemnities in favor of officers, employees,
directors, consultants, attorneys, accountants or other advisors.
7.05 Fundamental Changes. Merge, dissolve, liquidate, consolidate
with or into another Person, or Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so
long as no Default exists or would result therefrom:
(a) any Subsidiary may merge with (i) the Borrower, provided that the
Borrower shall be the continuing or surviving Person, or (ii) any one or more
other Subsidiaries, provided that when any Guarantor is merging with another
Subsidiary, the Guarantor shall be the continuing or surviving Person; and
(b) any Subsidiary may Dispose of all or substantially all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or to another
Subsidiary; provided that if the transferor in such a transaction is a
Guarantor, then the transferee must either be the Borrower or a Guarantor.
7.06 Dispositions. Make any Disposition of Collateral, except:
(a) Dispositions of unused, obsolete or worn out property and surplus
aircraft, engines and parts related thereto, whether now owned or hereafter
acquired, in the ordinary course of business;
(b) Dispositions of inventory in the ordinary course of business;
(c) Dispositions of equipment or real property to the extent that (i)
such property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
(d) Dispositions of property by the Borrower to any Subsidiary or by
any Subsidiary to the Borrower or to a wholly-owned Subsidiary; provided that
if the transferor of such property is a Guarantor, the transferee thereof must
either be the Borrower or a Guarantor;
(e) Dispositions permitted by Section 7.05;
(f) Dispositions by the Borrower and its Subsidiaries not otherwise
permitted under this Section 7.06; provided that (i) at the time of such
Disposition, no Default shall exist or would result from such Disposition,
(ii) the aggregate book value of all property Disposed of in reliance on this
clause (f) in any fiscal year shall not exceed $25,000,000 and (iii) the
purchase price for such asset shall be paid to the Borrower or such Subsidiary
in cash equal to not less than 85% of the purchase price;
(g) abandonment of Intellectual Property Collateral pursuant to
Section 10.04;
(h) licensing and sublicensing of Intellectual Property Collateral
consistent with the Borrower's past practices in the ordinary course of
business;
(i) Dispositions of cash for purposes not otherwise prohibited under
this Agreement or under any other Loan Document;
(j) so long as no Event of Default shall occur and be continuing, and
subject to the satisfaction of the terms and conditions of Section 6(vii) of
the Slot Security Agreement, the Loan Parties may consummate transfers of
Slots having an aggregate appraised value of not more than 5% of the aggregate
appraised value of the Slots as of the date of the most recent Borrowing Base
Certificate, provided, however, that in the event any such Slot is returned to
a Loan Party, the transfer of such Slot shall be deemed not to have occurred
for purposes hereof;
(k) the termination or rejection of any lease or the return,
surrender or abandonment of any property subject thereto;
(l) Dispositions permitted by the Collateral Documents;
(m) Permitted Sale/Leasebacks; and
(n) abandonment, surrender or withdrawal of Secondary Slots and
Excluded Slots;
provided, however, that any Disposition pursuant to this Section 7.06
shall be for fair market value.
7.07 Restricted Payments. Declare or make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to
do so, or issue or sell any Equity Interests or accept any capital
contributions, except that, so long as no Default shall have occurred and be
continuing at the time of any action described below or would result
therefrom:
(a) each Loan Party may make Restricted Payments to any Loan Party
which is its direct parent;
(b) each Loan Party may declare and make dividend payments or other
distributions payable solely in the common stock or other common Equity
Interests of such Person; and
(c) any Loan Party may issue Equity Interests, or make capital
contributions, to another Loan Party.
7.08 Change in Nature of Business. Engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and its Subsidiaries on or prior to the Petition Date or any business
related or incidental thereto.
7.09 Transactions with Affiliates. Enter into any transaction of any
kind with any Affiliate of the Borrower, whether or not in the ordinary course
of business, other than on fair and reasonable terms substantially as
favorable to the Borrower or such Loan Party as would be obtainable by the
Borrower or such Loan Party at the time in a comparable arm's length
transaction with a Person other than an Affiliate, provided that the foregoing
restriction shall not apply to (a) transactions between or among the Borrower
and any of the Guarantors or between and among any of the Guarantors; (b)
reasonable and customary fees and compensation paid to, and indemnity provided
on behalf of, officers, directors or employees of any Loan Party; (c) any
Restricted Payments not prohibited by Section 7.07; (d) any payments or other
distributions by a Subsidiary to its direct or indirect parent to enable such
parent to pay its liabilities for taxes attributable to such Subsidiary; (e)
transactions between any Loan Party with any employee labor unions or other
employee groups of any Loan Party; and (f) the Loan Documents and the
transactions contemplated thereby.
7.10 Use of Proceeds. Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of
Regulation U of the FRB) or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund Indebtedness originally
incurred for such purpose.
7.11 Financial and Performance Covenants.
(a) Minimum Consolidated EBITDAR. (i) Permit cumulative Consolidated
EBITDAR of the Borrower and its Subsidiaries for the periods set forth below
to be less than the amount set forth below for such periods:
------------------------------------ -----------------------------------
Period Minimum EBITDAR
------------------------------------ -----------------------------------
August 1, 2002 through:
------------------------------------ -----------------------------------
August 31, 2002 ($25,800,000)
------------------------------------ -----------------------------------
September 30, 2002 ($73,700,000)
------------------------------------ -----------------------------------
October 31, 2002 ($128,100,000)
------------------------------------ -----------------------------------
November 30, 2002 ($126,100,000)
------------------------------------ -----------------------------------
December 31, 2002 ($160,900,000)
------------------------------------ -----------------------------------
January 31, 2003 ($170,700,000)
------------------------------------ -----------------------------------
nor (ii) permit Consolidated EBITDAR of the Borrower and its Subsidiaries for
the six month periods ending on the dates set forth below to be less than the
amount set forth below for such periods:
----------------------------------- ------------------------------------
Period Minimum EBITDAR
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
6 month period ending:
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
February 28, 2003 ($139,800,000)
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
March 31, 2003 $(36,900,000)
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
April 30, 2003 $112,000,000
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
May 31, 2003 $153,900,000
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
June 30, 2003 $264,800,000
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
July 31, 2003 $348,600,000
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
August 31, 2003 $384,800,000
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
September 30, 2003 $391,900,000
----------------------------------- ------------------------------------
(b) Total Cash Receipts. Permit Total Cash Receipts for the months
ending on the dates set forth below to be less than the amounts set forth
below for such months:
--------------------------------- --------------------------------------
Month End Total Cash Receipts
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
August 31, 2002 $519,800,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
September 30, 2002 $506,500,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
October 31, 2002 $517,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
November 30, 2002 $451,200,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
December 31, 2002 $367,600,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
January 31, 2003 $518,800,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
February 28, 2003 $505,900,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
March 31, 2003 $551,200,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
April 30, 2003 $570,500,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
May 31, 2003 $599,800,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
June 30, 2003 $589,400,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
July 31, 2003 $547,600,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
August 31, 2003 $582,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
September 30, 2003 $624,600,000
--------------------------------- --------------------------------------
(c) Liquidity. Permit Liquidity on any day during the calendar months
ending on the dates set forth below to be less than the amounts set forth
below for such month:
--------------------------------- --------------------------------------
Period Liquidity
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
August 31, 2002 $250,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
September 30, 2002 $250,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
October 31, 2002 $250,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
November 30, 2002 $225,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
December 31, 2002 $200,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
January 31, 2003 $200,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
February 28, 2003 $200,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
March 31, 2003 $200,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
April 30, 2003 $200,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
May 31, 2003 $200,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
June 30, 2003 $225,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
July 31, 2003 $250,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
August 31, 2003 $250,000,000
--------------------------------- --------------------------------------
--------------------------------- --------------------------------------
September 30, 2003 $250,000,000
--------------------------------- --------------------------------------
7.12 Capital Expenditures. Make any Capital Expenditure, except for
Capital Expenditures in the ordinary course of business not exceeding, in the
aggregate for the Borrower and its Subsidiaries during each period set forth
below, the amount set forth opposite such period:
---------------------------------- -------------------------------------
Fiscal Quarter Ending Amount
---------------------------------- -------------------------------------
---------------------------------- -------------------------------------
September 30, 2002 $12,000,000
---------------------------------- -------------------------------------
---------------------------------- -------------------------------------
December 31, 2002 $12,000,000
---------------------------------- -------------------------------------
---------------------------------- -------------------------------------
March 31, 2003 $12,000,000
---------------------------------- -------------------------------------
---------------------------------- -------------------------------------
June 30, 2003 $12,000,000
---------------------------------- -------------------------------------
---------------------------------- -------------------------------------
September 30, 2003 $12,000,000
---------------------------------- -------------------------------------
provided, however, that if, for any fiscal quarter set forth above, the amount
specified above for such fiscal quarter exceeds the aggregate amount of
Capital Expenditures made by the Borrower and its Subsidiaries during such
fiscal quarter (the amount of such excess being the "Excess Amount"), the
Borrower and its Subsidiaries shall be entitled to make additional Capital
Expenditures in the immediately succeeding fiscal quarter in an amount equal
to the Excess Amount; provided that for each fiscal quarter, the amount
specified above for such fiscal quarter shall be deemed to be used first in
making capital expenditures in such fiscal quarter before any Excess Amount
shall be deemed to be used.
7.13 Amendments of Organization Documents. Amend any of its
Organization Documents other than for amendments which in the aggregate have
no Material Adverse Effect.
7.14 Changes in Fiscal Year. Make any change in fiscal year.
7.15 Prepayments Etc. of Indebtedness. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Indebtedness, except (a) the prepayment of the Credit Extensions in accordance
with the terms of this Agreement, (b) regularly scheduled or required
repayments or redemptions of Existing Indebtedness, (c) refinancing or
replacement of Existing Indebtedness permitted by Section 7.03(c)(ii) and (d)
the prepayment of the obligations under the Existing DIP Credit Agreement.
7.16 Partnerships, Etc. Become a general partner in any general or
limited partnership or joint venture.
7.17 Speculative Transactions. Except as permitted by Section
7.03(c)(vii), engage in any transaction involving commodity options or futures
contracts or any similar speculative transactions.
7.18 Formation of Subsidiaries. Organize or invest in any new
Subsidiary.
7.19 [Intentionally omitted].
7.20 Chapter 11 Claims. Incur, create, assume, suffer to exist or
permit any Superpriority Claim that is pari passu with or senior to any of the
claims of the Administrative Agent, the Collateral Agent and the Lenders
against the Borrower and the Guarantors except with respect to the Carve-Out
and the Existing DIP Credit Agreement to the extent of any contingent
indemnity claims.
7.21 Limitation on Prepayments and Pre-Petition Obligations. Except
as otherwise allowed pursuant to the DIP Financing Orders or any other order
of the Bankruptcy Court, (a) make any payment or prepayment on or redemption
or acquisition for value (including, without limitation, by way of depositing
with the trustee with respect thereto money or securities before the due date
for the purpose of paying when due) of any Pre-Petition Indebtedness or other
Pre-Petition obligations of the Borrower or any Guarantor, (b) pay any
interest on any Pre-Petition Indebtedness of the Borrower or any Guarantor
(whether in cash, in kind securities or otherwise), or (c) except as approved
by the Required Lenders, make any payment or create or permit any Lien
pursuant to Section 361 of the Bankruptcy Code (or pursuant to any other
provision of the Bankruptcy Code authorizing adequate protection), or apply to
the Bankruptcy Court for the authority to do any of the foregoing; provided,
however, that notwithstanding the foregoing, the Borrower and the Guarantors
may (and may file motions seeking to) (a) make payments in respect of
Indebtedness or obligations under any security agreement, lease or conditional
sale contract relating to "equipment" (as that term is defined in Section
1110(a)(3) of the Bankruptcy Code as in effect on the date hereof), (b) pay
cure costs with respect to executory contracts or unexpired leases that the
Borrower or Guarantors have been allowed by the Bankruptcy Court to assume
under Section 365 of the Bankruptcy Code, (c) make or pay accrued payroll and
related expenses and employee benefits as of the Petition Date, (d) pay sales
and use taxes, (e) pay other Pre-Petition Payments in an amount not to exceed
$10,000,000 in the aggregate, (f) pay all obligations required to be paid
pursuant to Section 6.04 and other provisions of this Agreement, (g) make
payments for administrative expenses that are allowed and payable under
Sections 330 and 331 of the Bankruptcy Code, (h) make payments permitted by
the First Day Orders, and (i) make payments to such other claimants and in
such amounts as may be consented to by the Required Lenders and approved by
the Bankruptcy Court.
7.22 Change in Capital Structure. Make any material change in its
equity capital structure as in existence on the Petition Date.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default. Any of the following shall constitute an
Event of Default:
(a) Non-Payment. The Borrower or any other Loan Party fails to pay
(i) when and as required to be paid herein, any amount of principal of any
Loan or any L/C Obligation, or (ii) within three days after the same becomes
due, any interest on any Loan or on any L/C Obligation, or any commitment or
other fee due hereunder, or (iii) within five days after the same becomes due,
any other amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. (i) The Borrower fails to perform or observe
any term, covenant or agreement contained in any of Section 2.04, 6.03, 6.05,
6.10, 6.11, 6.12, 6.17 or 6.20 or Article VII or (ii) the Borrower fails to
perform or observe any term, covenant or agreement contained in any of Section
6.01 or 6.02 and such failure continues for ten (10) Business Days after the
earlier of the date on which (A) a Responsible Officer becomes aware of such
failure or (B) written notice thereof shall have been given to the Borrower by
the Administrative Agent, the Collateral Agent or any Lender; or
(c) Other Defaults. Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in subsection (a) or (b) above or
(v) below) contained in any Loan Document on its part to be performed or
observed and such failure continues unremedied for 60 days (in the case of the
Mortgages, so long as the applicable Loan Party is using commercially
reasonable efforts to cure such default) and ten (10) Business Days (in the
case of any other Loan Document) after the earlier of the date on which (A) a
Responsible Officer becomes aware of such failure or (B) written notice
thereof shall have been given to the Borrower by the Administrative Agent, the
Collateral Agent or any Lender; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading in any maternal respect when made or deemed made; or
(e) Cross-Default. (i) Any Loan Party or any Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Post-Petition
Indebtedness or Post-Petition Guarantee (other than Indebtedness hereunder)
having an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $10,000,000, or (B) fails to
observe or perform any other agreement or condition relating to any such
Post-Petition Indebtedness or Post-Petition Guarantee or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event occurs, in each case the effect of which default or other event is to
cause, or to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause,
with the giving of notice if required, such Indebtedness to be demanded or to
become due or to be repurchased, prepaid, defeased or redeemed (automatically
or otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which the Borrower or any Subsidiary is the Defaulting Party
(as defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which the Borrower or any Subsidiary
is an Affected Party (as so defined) and, in either event, the Swap
Termination Value owed by the Loan Party or such Subsidiary as a result
thereof is greater than $10,000,000; or
(f) Judgments. There is entered against any Loan Party or any
Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding $10,000,000, as an administrative expense of the
kind specified in Section 503(b) of the Bankruptcy Code (to the extent not
covered by independent third-party insurance as to which the insurer is rated
at least "A" by A.M. Best Company, has been notified of such claim and does
not dispute coverage), or (ii) any one or more non-monetary final judgments
that have, or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and, in either case, there is a period of
ten (10) consecutive Business Days during which a stay of enforcement of such
judgment, by reason of a pending appeal or otherwise, is not in effect; or
(g) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan
or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of any Loan Party under Title IV of ERISA to the Pension
Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$10,000,000 or (ii) any Loan Party or any ERISA Affiliate fails to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan where such withdrawal liability is in an aggregate
amount in excess of $10,000,000; or
(h) Invalidity of Loan Documents. Any provision of any Loan Document,
at any time after its execution and delivery and for any reason other than as
expressly permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be valid and binding on or enforceable against any Loan
Party intended to be a party to it; any Loan Party files a motion or other
pleading seeking to challenge the validity of any Loan Document or the
applicability or enforceability of any Loan Document or any of the Orders or
which seeks to void, avoid, limit, or otherwise adversely affect the security
interest created by or in any Loan Document or any of the Orders or any
payment made pursuant thereto; or any Loan Party denies that it has any or
further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind any Loan Document; or
(i) Change of Control. There occurs any Change of Control; or
(j) Collateral Document. Any Collateral Document after delivery
thereof pursuant to Section 4.01 or 6.12 shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected lien on
and security interest in the Collateral purported to be covered thereby having
the priority contemplated by the Loan Documents and the DIP Financing Orders;
or
(k) Conversion of the Cases. Any of the Cases concerning the Borrower
or any Guarantors shall be dismissed or converted to a case under Chapter 7 of
the Bankruptcy Code or any Loan Party shall file a motion or other pleading or
support a motion or other pleading filed by any other Person seeking the
dismissal or conversion to Chapter 7 of the Bankruptcy Code of any of the
Cases concerning the Borrower or any Guarantors under Section 1112 of the
Bankruptcy Code or otherwise; a trustee under Chapter 7 or Chapter 11 of the
Bankruptcy Code, a responsible officer or an examiner with enlarged powers
relating to the operation of the business (powers beyond those set forth in
Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b) of
the Bankruptcy Code shall be appointed in any of the Cases and the order
appointing such trustee, responsible officer or examiner shall not be reversed
or vacated within 30 days after the entry thereof; or an application shall be
filed by the Borrower or any Guarantor for the approval of any other claim or
Superpriority Claim (other than the Carve-Out) in any of the Cases which is
pari passu with or senior to any of the claims (including, without limitation,
the Superpriority Claim) of the Administrative Agent, the Collateral Agent and
the Lenders against the Borrower or any Guarantor hereunder, or there shall
arise or be granted any such pari passu or senior to any such claims
(including, without limitation, a Superpriority Claim); or
(l) Relief from Automatic Stay. The Bankruptcy Court shall enter an
order or orders granting relief from the automatic stay applicable under
Section 362 of the Bankruptcy Code to the holder or holders of any security
interest to permit foreclosure (or the granting of a deed in lieu of
foreclosure or the like) on any assets of any of the Borrower or the
Guarantors (other than Section 1110 Assets or Excluded Assets) that have a
value in excess of $30,000,000 in the aggregate; or
(m) Modification of Orders. An order of the Bankruptcy Court shall be
entered reversing, amending, supplementing or staying for a period in excess
of ten (10) Business Days, vacating or otherwise modifying in a manner that is
adverse to the Lenders or RSA (unless, solely as it affects RSA, RSA has
otherwise consented thereto) any of the DIP Financing Orders; or
(n) Pre-Petition Payment. Except as permitted by the Orders or the
First Day Orders, the Borrower, any Guarantor or any of their Subsidiaries
(including all present and future debtors) shall make any Pre-Petition Payment
in violation of Section 7.22; or
(o) Material Adverse Change. Except for the filing of the Cases,
there occurs any event or circumstance that would give rise to a Material
Adverse Change since the Closing Date; or
(p) Defaults Under Orders. The Borrower or any Guarantor fails to
perform or observe any term or condition contained in the Interim Order or the
Final Order or any order with respect to the use by any Loan Party of cash
collateral; or
(q) Final Order. The entry of the Final Order shall not have occurred
within 60 days after the entry of the Interim Order; or
(r) Bankruptcy Court Motions. Any Loan Party shall bring or consent
to a motion in the Cases: (i) to obtain working capital financing from any
Person other than Lenders or GECC under Section 364(d) of the Bankruptcy Code,
other than in connection with any Indebtedness permitted under Section 7.03;
or (ii) to obtain financing from any Person other than the Lenders under
Section 364(c) of the Bankruptcy Code other than (x) with respect to a
financing used, in whole or part, to repay in full the Obligations or (y) in
connection with any Indebtedness permitted by Section 7.03; or (iii) to grant
any Lien other than those permitted under Section 7.01 upon or affecting any
Collateral; or (iv) to recover from any portions of the Collateral any costs
or expenses of preserving or disposing of such Collateral under Section 506(c)
of the Bankruptcy Code; or (v) to grant a Superpriority Claim pari passu or
senior to the Superpriority Claim granted to the Lenders other than that
granted in the DIP Financing Orders and other than with respect to the
Carve-Out; provided, however, that notwithstanding the foregoing, nothing
shall preclude any Loan Party from bringing or consenting to any motion that
seeks approval of a payment, Lien or other transaction expressly permitted
under the Loan Documents; or
(s) Reorganization Plan. An order shall be entered by the Bankruptcy
Court confirming a plan of reorganization or liquidation in any of the Cases
(or any Loan Party shall propose a plan of reorganization or liquidation in
any of the Cases) that does not contain a provision for termination of all of
the Commitments and indefeasible payment in full in cash of the Obligations
(including the cancellation and return of all Letters of Credit, delivery of
cash collateral with respect to such Letters of Credit or the deposit with the
Collateral Agent of a supporting Letter of Credit, in either case in an amount
equal to the aggregate undrawn amount of such Letters of Credit) on or before
the effective date of such plan; or
(t) ATSB. The ATSB (i) revokes its offer of a guarantee described in
the letter dated July 10, 2002 from the Air Transportation Stabilization Board
to Xxxxx X. Xxxxxx (such offer, the "Conditional Approval") and does not
provide the Borrower with an opportunity to appeal or to provide a
supplemental application, (ii) revokes its Conditional Approval and provides
the Borrower with an opportunity to appeal or provide a supplemental
application and the Conditional Approval is not reinstated within 15 days
thereafter, or (iii) imposes additional conditions or changes the conditions
to the Conditional Approval in a manner that is reasonably likely to have a
Material Adverse Effect and the Borrower has not within 15 days thereafter
demonstrated to the satisfaction of the Administrative Agent that the Borrower
is likely to satisfy all of the conditions to the Conditional Approval, unless
in the case of clauses (i) and (ii) above, the Administrative Agent is
reasonably satisfied that the Borrower can achieve alternative financing.
(u) Order for Termination. An order shall be entered by the
Bankruptcy Court, or any Loan Party shall make a motion for an order of the
Bankruptcy Court, dismissing any of the Cases that does not contain a
provision for termination of all of the Commitments and indefeasible payment
in full in cash of the Obligations (including the cancellation and return of
all Letters of Credit, delivery of cash collateral with respect to such
Letters of Credit or the deposit with the Collateral Agent of supporting
Letter of Credit, in either case in an amount equal to the aggregate undrawn
amount of such Letters of Credit).
(v) Slot Utilization. (i) During the first 35 days of any two-month
period described in Section 6.21, there shall be in the aggregate nine or more
instances in which Slot utilization for an airport and time allotment is not
in compliance with the percentage requirements described in such Section 6.21,
or (ii) during the period from the 36th day through the end of the applicable
two-month period described in Section 6.21, there shall be any instance in
which Slot utilization for an airport and time allotment is not in compliance
with the percentage requirements described in such Section 6.21; provided,
however, that for purposes of determining such compliance for clauses (i) and
(ii) above, a Slot utilization shall be deemed to be in compliance if the
applicable Loan Party petitions the FAA for a waiver in the event of a highly
unusual or unpredictable condition that is beyond the control of such Loan
Party, including, but not limited to, weather conditions or the grounding of
an aircraft type, which, if granted, would cause such Slot utilization to
satisfy such percentage requirements, unless the FAA fails to grant such
waiver within ten days after such Slot utilization would otherwise have failed
to satisfy such percentage requirements.
8.02 Remedies upon Event of Default. If any Event of Default occurs
and is continuing; the Administrative Agent shall, at the request of, or may,
with the consent of, the Required Lenders, take any or all of the following
actions without further order of or application to the Bankruptcy Court:
(a) declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower; and
(c) subject only to the giving of an "Enforcement Notice" under and
as defined in the Interim Order to the parties entitled under the Interim
Order to receive such notice, (i) require that the Borrower Cash Collateralize
the L/C Obligations (in an amount equal to the then Outstanding Amount
thereof), (ii) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders in respect of the collateral; or
(iii) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents, the DIP Financing
Orders or applicable Laws.
8.03 Application of Funds. After the exercise of remedies provided
for in Section 8.02 and subject to the Carve-Out, any amounts received on
account of the Obligations shall be applied by the Administrative Agent in the
following order:
First, to payment of that portion of the Obligations constituting
fees, indemnities, expenses and other amounts (including Attorney Costs
and amounts payable under Article III payable to the Administrative Agent
or the Collateral Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest)
payable to the Lenders (including Attorney Costs and amounts payable
under Article III), ratably among them in proportion to the amounts
described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans and L/C Borrowings, ratably
among the Lenders in proportion to the respective amounts described in
this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting
unpaid principal of the Loans and L/C Borrowings, ratably among the
Lenders in proportion to the respective amounts described in this clause
Fourth held by them;
Fifth, to the Administrative Agent for the account of the L/C
Issuer, to Cash Collateralize that portion of L/C Obligations comprised
of the aggregate undrawn amount of Letters of Credit;
Sixth, to the payment of all other Obligations of the Loan Parties
owing under or in respect of the Loan Documents that are due and payable
to the Administrative Agent and the other Secured Parties on such date,
ratably based upon the respective aggregate amounts of all such
Obligations owing to the Administrative Agent and the other Secured
Parties on such date; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by
Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX
ADMINISTRATIVE AGENT AND COLLATERAL AGENT
9.01 Appointment and Authorization of Administrative Agent and
Collateral Agent.
(a) Each Lender hereby irrevocably appoints, designates and
authorizes the Administrative Agent and the Collateral Agent to take such
action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent or the Collateral Agent, as
the case may be, by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere herein or in
any other Loan Document, the Administrative Agent and the Collateral Agent
shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent or the Collateral Agent have
or be deemed to have any fiduciary relationship with any Lender or
participant, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Administrative Agent or the Collateral
Agent. Without limiting the generality of the foregoing sentence, the use of
the term "agent" herein and in the other Loan Documents with reference to the
Administrative Agent or the Collateral Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law. Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith, and
the L/C Issuer shall have all of the benefits and immunities (i) provided to
the Administrative Agent and the Collateral Agent in this Article IX with
respect to any acts taken or omissions suffered by the L/C Issuer in
connection with Letters of Credit issued by it or proposed to be issued by it
and the applications and agreements for letters of credit pertaining to such
Letters of Credit as fully as if the term "Administrative Agent" or
"Collateral Agent" as used in this Article IX and in the definition of
"Agent-Related Person" included the L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the L/C
Issuer.
(c) The Collateral Agent shall act as the "collateral agent" under
the Loan Documents, and each of the Lenders (in its capacities as a Lender and
L/C Issuer (if applicable)) hereby irrevocably appoints and authorizes the
Collateral Agent to act as the agent of such Lender for purposes of acquiring,
holding and enforcing any and all Liens on Collateral granted by any of the
Loan Parties to secure any of the Secured Obligations, together with such
powers and discretion as are reasonably incidental thereto. In this
connection, the Collateral Agent (and any co-agents, sub-agents and
attorneys-in-fact appointed by the Collateral Agent pursuant to Section 9.02
for purposes of holding or enforcing any Lien on the Collateral (or any
portion thereof) granted under the Collateral Documents, or for exercising any
rights and remedies thereunder at the direction of the Collateral Agent),
shall be entitled to the benefits of all provisions of this Article IX
(including, without limitation, Section 9.07, as though such co-agents,
sub-agents and attorneys-in-fact were the "Collateral Agent" under the Loan
Documents) as if set forth in full herein with respect thereto.
9.02 Delegation of Duties. The Administrative and the Collateral
Agent may execute any of its duties under this Agreement or any other Loan
Document (including for purposes of holding or enforcing any Lien on the
Collateral (or any portion thereof) granted under the Collateral Documents or
of exercising any rights and remedies thereunder at the direction of the
Administrative Agent and the Collateral Agent) by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties.
Neither the Administrative Agent nor the Collateral Agent shall be responsible
for the negligence or misconduct of any agent or attorney-in-fact that it
selects in the absence of gross negligence or willful misconduct.
9.03 Liability of Administrative Agent and Collateral Agent. No
Agent-Related Person shall (a) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct in connection with its duties expressly
set forth herein), or (b) be responsible in any manner to any Lender or
participant for any recital, statement, representation or warranty made by any
Loan Party or any officer thereof, contained herein or in any other Loan
Document, or in any certificate, report, statement or other document referred
to or provided for in, or received by the Administrative Agent or the
Collateral Agent under or in connection with, this Agreement or any other Loan
Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or the perfection or
priority of any Lien or security interest created or purported to be created
under the Collateral Documents or the existence of any Liens or security
interests in the Collateral, or for any failure of any Loan Party or any other
party to any Loan Document to perform its obligations hereunder or thereunder.
No Agent-Related Person shall be under any obligation to any Lender or
participant to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any
Loan Party or any Affiliate thereof.
9.04 Reliance by Administrative Agent and Collateral Agent.
(a) The Administrative Agent and the Collateral Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
communication, signature, resolution, representation, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, electronic mail message, statement or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel to any Loan Party), independent accountants and
other experts selected by the Administrative Agent and the Collateral Agent.
The Administrative Agent and the Collateral Agent shall be fully justified in
failing or refusing to take any action under any Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action. The Administrative Agent and the Collateral Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent
of the Required Lenders (or such greater number of Lenders as may be expressly
required hereby in any instance) and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to a Lender unless the
Administrative Agent shall have received notice from such Lender prior to the
proposed Closing Date specifying its objection thereto.
9.05 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a "notice of default". The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default as may be directed by the Required
Lenders in accordance with Article VIII; provided, however, that unless and
until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.
9.06 Credit Decision; Disclosure of Information by Administrative
Agent and Collateral Agent. Each Lender acknowledges that no Agent-Related
Person has made any representation or warranty to it, and that no act by the
Administrative Agent or the Collateral Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any
Loan Party or any Affiliate thereof, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender as to any
matter, including whether Agent-Related Persons have disclosed material
information in their possession. Each Lender represents to the Administrative
Agent and the Collateral Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as
it has deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, property, financial and other condition
and creditworthiness of the Loan Parties and their respective Subsidiaries,
and all applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement
and to extend credit to the Borrower hereunder. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and
other condition and creditworthiness of the Borrower and the other Loan
Parties. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent herein, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of any of the Loan Parties or any of their respective
Affiliates which may come into the possession of any Agent-Related Person.
9.07 Indemnification of Administrative Agent and the Collateral
Agent. Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand each Agent-Related Person (to the
extent not reimbursed by or on behalf of any Loan Party and without limiting
the obligation of any Loan Party to do so), pro rata, and hold harmless each
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from such Agent-Related
Person's own gross negligence or willful misconduct; provided, however, that
no action taken in accordance with the directions of the Required Lenders
shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section. In the case of any investigation, litigation or
proceeding giving rise to any Indemnified Liabilities, this Section 9.07
applies whether any such investigation, litigation or proceeding is brought by
any Lender or any other Person. Without limitation of the foregoing, each
Lender shall reimburse the Administrative Agent and the Collateral Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including
Attorney Costs) incurred by the Administrative Agent or the Collateral Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any
document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of
the Borrower. The undertaking in this Section shall survive termination of the
Aggregate Commitments, the payment of all other Obligations and the
resignation of the Administrative Agent or the Collateral Agent.
9.08 Administrative Agent and Collateral Agent in its Individual
Capacity. RSA and its Affiliates may make loans to, issue letters of credit
for the account of, accept deposits from, acquire Equity Interests in and
generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with each of the Loan Parties and their
respective Affiliates as though RSA were not the Administrative Agent or the
Collateral Agent hereunder and without notice to or consent of the Lenders.
The Lenders acknowledge that, pursuant to such activities, RSA or its
Affiliates may receive information regarding any Loan Party or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Loan Party or such Affiliate) and acknowledge that the
Administrative Agent and the Collateral Agent shall be under no obligation to
provide such information to them. With respect to its Loans, RSA shall have
the same rights and powers under this Agreement as any other Lender and may
exercise such rights and powers as though RSA were not the Administrative
Agent or the Collateral Agent hereunder, and the terms "Lender" and "Lenders"
include RSA in its individual capacity.
9.09 Successor Administrative Agent.
(a) The Administrative Agent may resign as Administrative Agent upon
30 days' notice to the Lenders and the Borrower. If the Administrative Agent
resigns under this Agreement, the Required Lenders shall appoint a successor
administrative agent for the Lenders, which successor administrative agent
shall be consented to by the Borrower at all times other than during the
existence of an Event of Default (which consent of the Borrower shall not be
unreasonably withheld or delayed). If no successor administrative agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Lenders
and the Borrower, a successor administrative agent. Upon the acceptance of its
appointment as successor administrative agent hereunder, the Person acting as
such successor administrative agent shall succeed to all the rights, powers
and duties of the retiring Administrative Agent and the term "Administrative
Agent" shall mean such successor administrative agent and the retiring
Administrative Agent's appointment, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
any other Lender. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article IX and
Sections 12.04 and 12.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, discretion,
privileges, and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Loan Documents. The resignation of the retiring Administrative Agent shall
not be effective until the acceptance of appointment of a successor
administrative agent. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article IX shall
continue in effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as the Administrative Agent.
(b) Successor Collateral Agent. The Collateral Agent may resign as
Collateral Agent upon 30 days' notice to the Lenders and the Borrower. If the
Collateral Agent resigns under this Agreement, the Required Lenders shall
appoint a successor collateral agent for the Lenders, which successor
collateral agent shall be consented to by the Borrower at all times other than
during the existence of an Event of Default (which consent of the Borrower
shall not be unreasonably withheld or delayed). If no successor collateral
agent is appointed prior to the effective date of the resignation of the
Collateral Agent, the Collateral Agent may appoint, after consulting with the
Lenders and the Borrower, a successor collateral agent. Upon the acceptance of
its appointment as successor collateral agent hereunder, the Person acting as
such successor collateral agent shall succeed to all the rights, powers and
duties of the retiring Collateral Agent and the term "Collateral Agent" shall
mean such successor collateral agent and the retiring Collateral Agent's
appointment, powers and duties as Collateral Agent shall be terminated,
without any other or further act or deed on the part of any other Lender.
After any retiring Collateral Agent's resignation hereunder as Collateral
Agent, the provisions of this Article IX and Sections 12.04 and 12.05 shall
inure to its benefit as to any actions taken or omitted to be taken by it
while it was Collateral Agent under this Agreement. Upon the acceptance of any
appointment as Collateral Agent hereunder by a successor and upon the
execution and filing or recording of such financing statements, or amendments
thereto, and such amendments or supplements to the Mortgages, and such other
instruments or notices, as may be necessary or desirable, or as the Required
Lenders may request, in order to continue the perfection of the Liens granted
or purported to be granted by the Collateral Documents, such successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges, and duties of the retiring Collateral
Agent, and the retiring Collateral Agent shall be discharged from its duties
and obligations under the Loan Documents. The resignation of the retiring
Collateral Agent shall not be effective until the acceptance of appointment of
a successor collateral agent. After any retiring Collateral Agent's
resignation hereunder as Collateral Agent, the provisions of this Article IX
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Collateral Agent.
9.10 Collateral and Guaranty Matters. The Lenders irrevocably
authorize the Collateral Agent
(a) to release any Lien on any property granted to or held by the
Collateral Agent under any Loan Document (i) in accordance with the terms of
Section 10.09 or (ii) subject to Section 12.01, if approved, authorized or
ratified in writing by the Required Lenders; and
(b) to release any Guarantor from its obligations under the Guaranty
if such Person ceases to be a Subsidiary as a result of a transaction
permitted hereunder.
Upon request by the Collateral Agent at any time, the Required
Lenders will confirm in writing the Collateral Agent's authority to release
its interest in particular types or items of property, or to release any
Guarantor from its obligations under the Guaranty pursuant to this Section
9.10. In each case as specified in this Section 9.10, the Collateral Agent
will, at the Borrower's expense, execute and deliver to the applicable Loan
Party such documents as such Loan Party may reasonably request to evidence the
release of such item of Collateral from the assignment and security interest
granted under the Collateral Documents, or to release such Guarantor from its
obligations under the Guaranty, in each case in accordance with the terms of
the Loan Documents and this Section 9.10.
9.11 Other Agents; Arrangers and Managers. None of the Lenders or
other Persons identified on the facing page or signature pages of this
Agreement as a "syndication agent," "documentation agent," "co-agent," "book
manager," "lead manager," "arranger," "lead arranger," or "co-arranger" shall
have any right, power, obligation, liability, responsibility or duty under
this Agreement other than, in the case of such Lenders, those applicable to
all Lenders as such. Without limiting the foregoing, none of the Lenders or
other Persons so identified shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on any of the Lenders or other Persons so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
ARTICLE X
SECURITY
10.01 Grant of Security. To induce the Lenders to make the Loans, and
the L/C Issuer to issue Letters of Credit, to supplement the DIP Financing
Orders without in any way diminishing or limiting the effect of the DIP
Financing Orders or the security interest, pledge and lien granted thereunder,
each Loan Party hereby grants to the Collateral Agent, for itself and for the
ratable benefit of the Secured Parties, as security for the full and prompt
payment when due of the Obligations of such Loan Party under the Loan
Documents (the "Secured Obligations") a continuing first priority Lien and
security interest (subject only to (i) valid and perfected Liens in existence
on the Petition Date and junior to such valid and perfected Liens, (ii) only
to the extent such Post-Petition perfection is expressly permitted under the
Bankruptcy Code, valid, enforceable and nonavoidable Liens existing as of the
Petition Date, but perfected after the Petition Date, (iii) the Carve-Out and
(iv) Permitted Senior Liens) in accordance with subsections 364(c)(2) and (3)
of the Bankruptcy Code in and to all Collateral of such Loan Party.
"Collateral" means, except as otherwise specified in the DIP Financing Orders
and in the definition of Collateral set forth in Section 1.01, all of the
property and assets of each Loan Party and its estate, real and personal,
tangible and intangible, whether now owned or hereafter acquired or arising
and regardless of where located, including but not limited to:
(a) all equipment in all of its forms, including, without limitation,
all machinery, tools, motor vehicles, vessels, aircraft, aircraft engines,
aircraft propellers, furniture and fixtures, and all parts thereof and all
accessions thereto and all software related thereto, including, without
limitation, software that is embedded in and is part of the equipment (any and
all such property being the "Equipment");
(b) all inventory in all of its forms, including, without limitation,
(i) all raw materials, work in process, finished goods and materials used or
consumed in the manufacture, production, preparation or shipping thereof, (ii)
goods in which such Loan Party has an interest in mass or a joint or other
interest or right of any kind (including, without limitation, goods in which
such Loan Party has an interest or right as consignees) and (iii) goods that
are returned to or repossessed or stopped in transit by such Loan Party), and
all accessions thereto and products thereof and documents therefore, and all
software related thereto, including, without limitation, software that is
embedded in and is part of the inventory (any and all such property being the
"Inventory");
(c) all accounts (including, without limitation,
health-care-insurance receivables), chattel paper (including, without
limitation, tangible chattel paper and electronic chattel paper), instruments
(including, without limitation, promissory notes), deposit accounts,
letter-of-credit rights, general intangibles (including, without limitation,
payment intangibles) and other obligations of any kind, whether or not arising
out of or in connection with the sale or lease of goods or the rendering of
services and whether or not earned by performance, and all rights now or
hereafter existing in and to all supporting obligations and in and to all
security agreements, mortgages, Liens, leases, letters of credit and other
contracts securing or otherwise relating to the foregoing property (any and
all of such accounts, chattel paper, instruments, deposit accounts,
letter-of-credit rights, general intangibles and other obligations, to the
extent not referred to in clause(d), (e) or (f) below, being the
"Receivables", and any and all such supporting obligations, security
agreements, mortgages, Liens, leases, letters of credit and other contracts to
the extent not referred to in clause (d), (e) or (f) below being the "Related
Contracts");
(d) the following (the "Security Collateral"):
(i) the Initial Pledged Equity and the certificates, if any,
representing the Initial Pledged Equity, and all dividends,
distributions, return of capital, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Initial Pledged Equity
and all subscription warrants, rights or options issued thereon or with
respect thereto;
(ii) the Initial Pledged Debt and the instruments, if any,
evidencing the Initial Pledged Debt, and all interest, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Initial
Pledged Debt;
(iii) all additional shares of stock and other Equity Interests from
time to time acquired by such Loan Party in any manner (such shares and
other Equity Interests, together with the Initial Pledged Equity, being
the "Pledged Equity"), and the certificates, if any, representing such
additional shares or other Equity Interests, and all dividends,
distributions, return of capital, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares or other Equity
Interests and all subscription warrants, rights or options issued thereon
or with respect thereto; provided that no Loan Party shall be required to
pledge any Equity Interest in any Subsidiary that is a CFC owned or
otherwise held by such Loan Party which, when aggregated with all of the
other shares of stock in such Subsidiary pledged by any Loan Party, would
result in more than 66% of the shares of stock in such Subsidiary
entitled to vote (within the meaning of Treasury Regulation Section
1.956-2(c)(2) promulgated under the Code) (the "Voting Foreign Stock")
(on a fully diluted basis) being pledged to the Collateral Agent, on
behalf of the Secured Parties, under this Agreement (although all of the
shares of stock in such Subsidiary not entitled to vote (within the
meaning of Treasury Regulation Section 1.956-2(c)(2) promulgated under
the Code) (the "Non-Voting Foreign Stock" shall be pledged by each of the
Loan Parties that owns or otherwise holds any such Non-Voting Foreign
Stock therein); provided further that, if, as a result of any change in
the tax laws of the United States of America after the date of this
Agreement, the pledge by such Loan Party of any additional shares of
stock in any such Subsidiary to the Collateral Agent, on behalf of the
Secured Parties under this Agreement would not result in an increase in
the aggregate net consolidated tax liabilities of the Borrower and its
Subsidiaries, then, promptly after the change in such laws, all such
additional shares of stock shall be so pledged under this Agreement;
(iv) all additional indebtedness from time to time owed to such Loan
Party (such indebtedness, together with the Initial Pledged Debt, being
the "Pledged Debt") and the instruments, if any, evidencing such
indebtedness, and all interest, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such indebtedness; and
(v) all other investment property (including, without limitation,
all (A) securities, whether certificated or uncertificated, (B) security
entitlements, (C) securities accounts, (D) commodity contracts and (E)
commodity accounts) in which such Loan Party has now, or acquires from
time to time hereafter, any right, title or interest in any manner, and
the certificates or instruments, if any, representing or evidencing such
investment property, and all dividends, distributions, return of capital,
interest, distributions, value, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such investment property and all
subscription warrants, rights or options issued thereon or with respect
thereto;
(e) the following (collectively, the "Account Collateral"):
(i) all deposit and other bank accounts and all funds and financial
assets from time to time credited thereto (including, without limitation,
all cash equivalents), all interest, dividends, distributions, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
funds and financial assets, and all certificates and instruments, if any,
from time to time representing or evidencing such accounts;
(ii) all promissory notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time delivered to or
otherwise possessed by the Collateral Agent for or on behalf of such Loan
Party, including, without limitation; those delivered or possessed in
substitution for or in addition to any or all of the then existing
Account Collateral; and
(iii) all interest, dividends, distributions, cash, instruments and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Account Collateral;
(f) the following (collectively, the "Intellectual Property
Collateral"):
(i) all patents, patent applications, utility models and statutory
invention registrations, all inventions claimed or disclosed therein and
all improvements thereto ("Patents");
(ii) all trademarks, service marks, domain names, trade dress,
logos, designs, slogans, trade names, business names, corporate names and
other source identifiers, whether registered or unregistered (provided
that no security interest shall be granted in United States intent-to-use
trademark applications to the extent that, and solely during the period
in which, the grant of a security interest therein would impair the
validity or enforceability of such intent-to-use trademark applications
under applicable federal law), together, in each case, with the goodwill
symbolized thereby ("Trademarks");
(iii) all copyrights, including, without limitation, copyrights in
Computer Software, internet web sites and the content thereof, whether
registered or unregistered ("Copyrights");
(iv) all computer software, programs and databases (including,
without limitation, source code, object code and all related applications
and data files), firmware and documentation and materials relating
thereto, together with any and all maintenance rights, service rights,
programming rights, hosting rights, test rights, improvement rights,
renewal rights and indemnification rights and any substitutions,
replacements, improvements, error corrections, updates and new versions
of any of the foregoing ("Computer Software");
(v) all confidential and proprietary information, including, without
limitation, know-how, trade secrets, manufacturing and production
processes and techniques, inventions, research and development
information, databases and data, including, without limitation, technical
data, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and supplier lists
and information (collectively, "Trade Secrets"), and all other
intellectual, industrial and intangible property of any type, including,
without limitation, industrial designs and mask works;
(vi) all registrations and applications for registration for any of
the foregoing, including, without limitation, those registrations and
applications for registration set forth in Schedules A, B and C to the
Intellectual Property Security Agreement (as such Schedules may be
supplemented from time to time by supplements to the IP Security
Agreement, each such supplement being substantially in the form of
Exhibit G-1 (an "IP Security Agreement Supplement"), executed by such
Loan Party to the Collateral Agent from time to time), together with all
reissues, divisions, continuations, continuations-in- part, extensions,
renewals and reexaminations thereof;
(vii) all tangible embodiments of the foregoing, all rights in the
foregoing provided by international treaties or conventions, all rights
corresponding thereto throughout the world and all other rights of any
kind whatsoever of such Loan Party accruing thereunder or pertaining
thereto;
(viii) all agreements, permits, consents, orders and franchises
relating to the license, development, use or disclosure of any of the
foregoing to which such Loan Party, now or hereafter, is a party or a
beneficiary ("IP Agreements"); and
(ix) any and all claims for damages and injunctive relief for past,
present and future infringement, dilution, misappropriation, violation,
misuse or breach with respect to any of the foregoing, with the right,
but not the obligation, to xxx for and collect, or otherwise recover,
such damages;
(g) all books and records (including, without limitation, customer
lists, credit files, printouts and other computer output materials and
records) of such Loan Party pertaining to any of the Collateral; and
(h) all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the Collateral (including, without
limitation, proceeds, collateral and supporting obligations that constitute
property of the types described in clauses (a) through (g) of this Section
10.01 and this clause (h)) and, to the extent not otherwise included, all (A)
payments under insurance (whether or not the Collateral Agent is the loss
payee thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing
Collateral, (B) tort claims, including, without limitation, all commercial
tort claims and (C) cash.
10.02 Further Assurances.
(a) Each Loan Party agrees that from time to time, at the expense of
such Loan Party, such Loan Party will promptly execute and deliver, or
otherwise authenticate, all further instruments and documents, and take all
further action that may be necessary or desirable, or that the Collateral
Agent may reasonably request, in order to perfect and protect any pledge or
security interest granted or purported to be granted by such Loan Party
hereunder or to enable the Collateral Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral of such Loan Party.
Without limiting the generality of the foregoing, each Loan Party will within
a commercially reasonable time with respect to Collateral of such Loan Party:
(i) at the request of the Collateral Agent, xxxx conspicuously each document
included in Inventory, each chattel paper included in Receivables, each
Related Contract, and each of its records pertaining to such Collateral with a
legend, in form and substance reasonably satisfactory to the Collateral Agent,
indicating that such document, chattel paper, Related Contract, or Collateral
is subject to the security interest granted hereby; (ii) execute or
authenticate and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as the Collateral Agent may reasonably request, in order to
perfect and preserve the security interest granted or purported to be granted
by such Loan Party hereunder; (iii) at the request of the Collateral Agent,
deliver to the Collateral Agent for benefit of the Secured Parties
certificates representing Security Collateral that constitutes certificated
securities, accompanied by undated stock or bond powers executed in blank;
(iv) at the request of the Collateral Agent, take all action reasonably
necessary to ensure within the time required hereunder that the Collateral
Agent has control of Collateral consisting of deposit accounts, electronic
chattel paper, investment property, letter-of-credit rights and transferable
records as provided in Sections 9-104, 9-105, 9-106 and 9-107 of the Uniform
Commercial Code and in Section 16 of the Uniform Electronics Transactions Act,
as in effect in the jurisdiction governing such transferable record; (v) at
the request of the Collateral Agent, take all action reasonably necessary to
ensure that the Collateral Agent's security interest is noted on any
certificate of ownership related to any Collateral evidenced by a certificate
of ownership; (vi) at the reasonable request of the Collateral Agent, cause
the Collateral Agent to be the beneficiary under all letters of credit that
constitute Collateral, with the exclusive right to make all draws under such
letters of credit, and with all rights of a transferee under Section 5-114(e)
of the Uniform Commercial Code; and (viii) deliver to the Collateral Agent
evidence that all other action that the Collateral Agent may deem reasonably
necessary or desirable in order to perfect and protect the security interest
created by such Loan Party in the Collateral under this Agreement has been
taken.
(b) Each Loan Party hereby authorizes the Collateral Agent to file
one or more financing or continuation statements, and amendments thereto,
including, without limitation, one or more financing statements indicating
that such financing statements cover all assets or all personal property (or
words of similar effect) of such Loan Party, in each case without the
signature of such Loan Party, and regardless of whether any particular asset
described in such financing statements falls within the scope of the Uniform
Commercial Code or the granting clause of this Agreement. A photocopy or other
reproduction of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by Law. Each Loan Party ratifies its authorization for the
Collateral Agent to have filed such financing statements, continuation
statements or amendments filed prior to the date hereof.
(c) Each Loan Party will furnish to the Collateral Agent from time to
time statements and schedules further identifying and describing the
Collateral of such Loan Party and such other reports in connection with such
Collateral as the Collateral Agent may reasonably request, all in reasonable
detail.
(d) Notwithstanding subsections (a) and (b) of this Section 10.02, or
any failure on the part of any Loan Party or the Collateral Agent to take any
of the actions set forth in such subsections, the Liens and security interests
granted herein shall be deemed valid, enforceable and perfected by entry of
the Interim Order and the Final Order, as applicable. No financing statement,
notice of lien, mortgage, deed of trust or similar instrument in any
jurisdiction or filing office need be filed or any other action taken in order
to validate and perfect the Liens and security interests granted by or
pursuant to this Agreement, the Interim Order or the Final Order.
10.03 Rights of Lenders; Limitations on Lenders' Obligations.
(a) Subject to each Loan Party's rights and duties under the
Bankruptcy Code (including Section 365 of the Bankruptcy Code), and anything
herein to the contrary notwithstanding, (i) each Loan Party shall remain
liable under the contracts and agreements included in such Loan Party's
Collateral to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed (including paying cure costs if such contracts or agreements are
assumed), (ii) the exercise by the Collateral Agent of any of the rights
hereunder shall not release any Loan Party from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(iii) no Secured Party shall have any obligation or liability under the
contracts and agreements included in the Collateral by reason of this
Agreement or any other Loan Document, nor shall any Secured Party be obligated
to perform any of the obligations or duties of any Loan Party thereunder or to
take any action to collect or enforce any claim for payment assigned
hereunder.
(b) Except as otherwise provided in this subsection (b), each Loan
Party will continue to collect, at its own expense, all amounts due or to
become due such Loan Party under the Receivables and Related Contracts. In
connection with such collections, such Loan Party may take (and, at the
Collateral Agent's direction, will take) such action as such Loan Party or the
Collateral Agent may reasonably deem necessary or advisable to enforce
collection of the Receivables and Related Contracts; provided, however, that,
subject to any requirement of notice provided in the Orders or in Section
8.02, the Collateral Agent shall have the right at any time, upon the
occurrence and during the continuance of an Event of Default, to notify the
obligors, under any Receivables and Related Contracts of the assignment of
such Receivables and Related Contracts to the Collateral Agent and to direct
such obligors to make payment of all amounts due or to become due to such Loan
Party thereunder directly to the Collateral Agent and, upon such notification
and at the expense of such Loan Party, to enforce collection of any such
Receivables and Related Contracts, to adjust, settle or compromise the amount
or payment thereof, in the same manner and to the same extent as such Loan
Party might have done, and to otherwise exercise all rights with respect to
such Receivables and Related Contracts, including, without limitation, those
set forth in Section 9-607 of the Uniform Commercial Code. Upon and during the
exercise by the Collateral Agent on behalf of the Lenders of any of the
remedies described in the proviso of the immediately preceding sentence, (i)
any and all amounts and proceeds (including, without limitation, instruments)
received by such Loan Party in respect of the Receivables and Related
Contracts of such Loan Party shall be received in trust for the benefit of the
Collateral Agent hereunder, shall be segregated from other funds of such Loan
Party and shall be forthwith paid over to the Collateral Agent in the same
form as so received (with any necessary indorsement) to be deposited in a
collateral account maintained with the Collateral Agent and applied as
provided in Section 10.07(b) and (ii) such Loan Party will not adjust, settle
or compromise the amount or payment of any Receivable or amount due on any
Related Contract, release wholly or partly any obligor thereof, or allow any
credit or discount thereon. No Loan Party will permit or consent to the
subordination of its right to payment under any of the Receivables and Related
Contracts to any other indebtedness or obligations of the obligor thereof.
(c) The Collateral Agent shall have the right to make test
verification of the Receivables in any manner and through any medium that it
considers advisable in its reasonable discretion, and each Loan Party agrees
to furnish all such assistance and information as the Collateral Agent may
reasonably require in connection therewith.
10.04 Covenants of the Loan Parties with Respect to Collateral. Each
Loan Party hereby covenants and agrees with the Collateral Agent that from and
after the date of this Agreement and until the Secured Obligations (other than
contingent indemnification obligations which are not then due and payable) are
fully satisfied:
(a) Delivery and Control of Pledged Equity.
(i) All certificates or instruments representing or evidencing
Pledged Equity shall be delivered to and held by or on behalf of the
Collateral Agent pursuant hereto at the request of the Collateral Agent,
and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance reasonably satisfactory to the
Collateral Agent.
(ii) With respect to any Pledged Equity in which any Loan Party has
any right, title or interest and that constitutes an uncertificated
security, such Loan Party will cause the issuer thereof either (i) to
register the Collateral Agent as the registered owner of such security or
(ii) to agree in an authenticated record with such Loan Party and the
Collateral Agent that such issuer will comply with instructions with
respect to such security originated by the Collateral Agent without
further consent of such Loan Party, such authenticated record to be in
form and substance reasonably satisfactory to the Collateral Agent. With
respect to any Security Collateral in which any Loan Party has any right,
title, or interest and that is not an uncertificated security, upon the
request of the Collateral Agent, such Loan Party will notify each such
issuer of Pledged Equity that such Pledged Equity is subject to the
security interest granted hereunder.
(iii) Except as provided in Section 10.07, such Loan Party shall be
entitled to receive all cash dividends paid in respect of the Pledged
Equity with respect to the Pledged Equity.
(iv) Except as provided in Section 10.07 and subject to Article VII,
such Loan Party will be entitled to exercise all voting, consent and
corporate rights with respect to the Pledged Equity.
(b) Maintenance of Records. Such Loan Party will keep and maintain,
at its own cost and expense, satisfactory and complete records of the
Collateral, in all material respects, including, without limitation, a record
of all payments received and all credits granted with respect to the
Collateral and all other dealings concerning the Collateral in each case in
accordance with its normal business practice.
(c) Indemnification with Respect to Collateral. In any suit,
proceeding or action brought by the Collateral Agent relating to any
Collateral for any sum owing thereunder or to enforce any provision of any
Collateral in each case, brought by the Collateral Agent in accordance with
this Agreement, such Loan Party will save, indemnify and keep the Secured
Parties harmless from and against all expense, loss or damage suffered by the
Secured Parties by reason of any defense, setoff, counterclaim, recoupment or
reduction of liability whatsoever of the obligor thereunder, arising out of a
breach by such Loan Party of any obligation thereunder or arising out of any
other agreement, indebtedness or liability at any time owing to, or in favor
of, such obligor or its successors from such Loan Party, and all such
obligations of such Loan Party shall be and remain enforceable against and
only against such Loan Party and shall not be enforceable against the
Collateral Agent.
(d) Limitation on Liens on Collateral. Such Loan Party will defend
the Collateral against and take such other action as is necessary to remove,
any Lien on the Collateral except Liens permitted under Section 7.01 and will
defend the right, title and interest of the Collateral Agent in and to all of
such Loan Party's rights under the Collateral against the claims and demands
of all Persons whomsoever other than claims or demands arising out of Liens
permitted under Section 7.01.
(e) Limitations on Modifications of Receivables. Except with respect
to intercompany Receivables among the Loan Parties, such Loan Party will not,
without the Collateral Agent's prior written consent, grant any extension of
the time of payment under or in respect of any of the Receivables or Related
Contracts, compromise, compound or settle the same for less than the full
amount thereof, release, wholly or partly, any Person liable for the payment
thereof, or allow any credit or discount whatsoever thereon other than any of
the foregoing which are done in the ordinary course of business, consistent
with past practices, and trade discounts granted in the ordinary course of
business of such Loan Party.
(f) Notices. Such Loan Party will advise the Collateral Agent
promptly after it obtains knowledge thereof, in reasonable detail, (i) of any
Lien asserted against any of the Collateral other than Liens permitted under
Section 7.01, and (ii) of the occurrence of any other event which would result
in a material adverse change with respect to the aggregate value of the
Collateral or on the security interests created hereunder.
(g) Maintenance of Equipment. Such Loan Party will keep and maintain
the Equipment in good operating condition sufficient for the continuation of
the business conducted by such Loan Party on a basis consistent with past
practices, ordinary wear and tear excepted.
(h) As to Intellectual Property Collateral.
(i) With respect to each item of its Intellectual Property
Collateral, each Loan Party agrees to take, at its expense, all necessary
steps, including, without limitation, in the U.S. Patent and Trademark
Office, the U.S. Copyright Office and any other applicable U.S.
Governmental Authority, to (A) maintain the validity and enforceability
of such Intellectual Property Collateral and maintain such Intellectual
Property Collateral in full force and effect, and (B) pursue the
registration and maintenance of each patent, trademark, or copyright
registration or application, now or hereafter included in such
Intellectual Property Collateral of such Loan Party, including, without
limitation, the payment of required fees and taxes, the filing of
responses to office actions issued by the U.S. Patent and Trademark
Office, the U.S. Copyright Office or other applicable U.S. Governmental
Authorities, the filing of applications for renewal or extension, the
filing of affidavits under Sections 8 and 15 of the U.S. Trademark Act,
the filing of divisional, continuation, continuation-in-part, reissue and
renewal applications or extensions, the payment of maintenance fees and
the participation in interference, reexamination, opposition,
cancellation, infringement and misappropriation proceedings. No Loan
Party shall, without the written consent of the Collateral Agent,
discontinue use of or otherwise abandon any Intellectual Property
Collateral, or abandon any right to file an application for patent,
trademark, or copyright, unless such Loan Party shall have determined
prior to such cessation of use or abandonment that such use or the
pursuit or maintenance of such Intellectual Property Collateral is no
longer desirable in the conduct of such Loan Party's business and that
the loss thereof would not be reasonably likely to have a Material
Adverse Effect, in which case, such Loan Party will give prompt notice of
any such abandonment to the Collateral Agent.
(ii) Each Loan Party agrees promptly to notify the Collateral Agent
if such Loan Party becomes aware (A) that any material item of the
Intellectual Property Collateral has become abandoned, placed in the
public domain, invalid or, unenforceable, or of any adverse determination
or development regarding such Loan Party's ownership of any of the
material Intellectual Property Collateral or its right to register the
same or to keep and maintain and enforce the same, or (B) of any adverse
determination or the institution of any proceeding (including, without
limitation, the institution of any proceeding in the U.S. Patent and
Trademark Office or any court) regarding any material item of the
Intellectual Property Collateral.
(iii) In the event that any Loan Party becomes aware that any item
of the Intellectual Property Collateral that is material to such Loan
Party's business is being infringed or misappropriated by a third party,
such Loan Party shall promptly notify the Collateral Agent and shall take
such actions, at its expense, as such Loan Party or the Collateral Agent
deems reasonable and appropriate under the circumstances to protect or
enforce such Intellectual Property Collateral, including, without
limitation, suing for infringement or misappropriation and for an
injunction against such infringement or misappropriation.
(iv) Each Loan Party shall use proper statutory notice (where
necessary) in connection with its use of each item of its Intellectual
Property Collateral. No Loan Party shall do or permit any act or
knowingly omit to do any act whereby any of its Intellectual Property
Collateral may lapse or become invalid or unenforceable or placed in the
public domain except to the extent that it is commercially reasonable to
do so.
(v) Each Loan Party shall take all reasonable steps which it or the
Collateral Agent deems appropriate under the circumstances to preserve
and protect each item of its Intellectual Property Collateral, including,
without limitation, maintaining the quality of any and all products or
services used or provided in connection with any of the Trademarks,
consistent with the quality of the products and services as of the date
hereof, and taking all steps necessary to ensure that all licensed users
of any of the Trademarks use such consistent standards of quality.
(vi) Each Loan Party agrees that should it obtain an ownership
interest in any item of the type set forth in Section 10.01(f) that is
not on the date hereof a part of the Intellectual Property Collateral
("After-Acquired Intellectual Property") (i) the provisions of this
Agreement shall automatically apply thereto, and (ii) any such
After-Acquired Intellectual Property and, in the case of trademarks, the
goodwill symbolized thereby, shall automatically become part of the
Intellectual Property Collateral subject to the terms and conditions of
this Agreement with respect thereto. At the end of each month, each Loan
Party shall give prompt written notice to the Collateral Agent
identifying the After-Acquired Intellectual Property acquired during such
month (if any), and such Loan Party shall execute and deliver to the
Collateral Agent with such written notice, or otherwise authenticate, an
IP Security Agreement Supplement covering such After-Acquired
Intellectual Property which shall be recorded with the U.S. Patent and
Trademark Office, the U.S. Copyright Office and any other applicable
Governmental Authorities necessary to perfect the security interest
hereunder in such After-Acquired Intellectual Property.
(vii) Delivery and Control of Slot Transfer Documents. In order to
facilitate a subsequent transfer, if any, of Slots held by the Loan
Parties, the applicable Loan Party (A) has, prior to the Closing Date,
executed a blank, undated transfer document for each Pledged Slot (as
defined in the Slot Security Agreement) held by such Loan Party as of the
Closing Date, and (B) shall, on the date of acquisition thereof, execute
a blank, undated transfer document for each Pledged Slot acquired by such
Loan Party after the Closing Date, in each case, be held in escrow by the
Collateral Agent until (i) exercise by the Administrative Agent and the
Lenders of their rights upon the occurrence and during the continuance of
an Event of Default as set forth in and subject to Section 8.02, Section
10.07 and Section 10 of the Slot Security Agreement or (ii) termination
of, or release from, the Liens of the Slot Security Agreement and this
Agreement in accordance with the terms thereof and hereof.
10.05 Performance by Collateral Agent of the Loan Parties'
Obligations.
(a) Collateral Agent Appointed Attorney-in-Fact. Each Loan Party
hereby irrevocably appoints the Collateral Agent such Loan Party's
attorney-in-fact, with full authority in the place and stead of such Loan
Party and in the name of such Loan Party or otherwise, from time to time, in
the Collateral Agent's discretion after the occurrence and during the
continuance of an Event of Default, and after the Collateral Agent has
complied with the notice provisions of the Interim Order or the Final Order,
to take any action and to execute any instrument that the Collateral Agent may
deem necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation:
(i) to obtain and adjust insurance required to be paid to the
Collateral Agent pursuant to this Agreement,
(ii) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral,
(iii) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (i)
or (ii) above, and
(iv) to file any claims or take any action or institute any
proceedings that the Collateral Agent may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the
rights of the Collateral Agent with respect to any of the Collateral;
provided that the Collateral Agent shall not exercise any such rights
under this Section 10.05(a) except upon occurrence and during the
continuance of an Event of Default and after complying with the notice
provisions of the Interim Order or the Final Order.
(b) Collateral Agent May Perform. If any Loan Party fails to perform
any agreement contained herein, the Collateral Agent may, as the Collateral
Agent deems necessary to protect the security interest granted hereunder in
the Collateral or to protect the value thereof, but without any obligation to
do so after the occurrence and during the continuance of an Event of Default,
and after the Collateral Agent has complied with the notice provisions of the
Interim Order or the Final Order, itself perform, or cause performance of,
such agreement, and the expenses of the Collateral Agent incurred in
connection therewith shall be payable by such Loan Party under Section 12.04.
(c) Collateral Agent Not Liable. The Collateral Agent shall in no way
be responsible for the payment of any costs incurred in connection with
preserving or disposing of Collateral pursuant to Section 506(c) of the
Bankruptcy Code and the Collateral may not be charged for the incurrence of
any such cost.
10.06 The Collateral Agent's Duties.
(a) The powers conferred on the Collateral Agent hereunder are solely
to protect the Secured Parties' interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Other than the exercise
of reasonable care to assure the safe custody of the Collateral while being
held by the Collateral Agent pursuant to the terms of the Loan Documents, the
Collateral Agent shall have no duty or liability to preserve rights pertaining
thereto, it being understood and agreed that the grantor of such Collateral
shall be responsible for preservation of all rights in the Collateral, and the
Collateral Agent shall be relieved of all responsibility for the Collateral
upon surrendering it or tendering the surrender of it to such grantor. The
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equal to that which the Collateral Agent
accords its own property, which shall be no less than the treatment employed
by a reasonable and prudent agent in the industry, it being understood that
the Collateral Agent shall not have responsibility for taking any necessary
steps to preserve rights against any parties with respect to any of the
Collateral. In the event of a public or private sale of Collateral pursuant to
the terms of the Loan Documents, the Collateral Agent shall have no obligation
to clean-up, repair or otherwise prepare the Collateral for sale.
(b) Anything contained herein to the contrary notwithstanding, the
Collateral Agent may from time to time, when the Collateral Agent deems it to
be necessary, appoint one or more subagents (each a "Subagent") for the
Collateral Agent hereunder with respect to all or any part of the Collateral.
In the event that the Collateral Agent so appoints any Subagent with respect
to any Collateral, (i) the assignment and pledge of such Collateral and the
security interest granted in such Collateral by each Loan Party hereunder
shall be deemed for purposes of this Security Agreement to have been made to
such Subagent, in addition to the Collateral Agent, for the ratable benefit of
the Secured Parties, as security for the Secured Obligations of such Loan
Party, (ii) such Subagent shall automatically be vested, in addition to the
Collateral Agent, with all rights, powers, privileges, interests and remedies
of the Collateral Agent hereunder with respect to such Collateral, and (iii)
the term "Collateral Agent" when used herein in relation to any rights,
powers, privileges, interests and remedies of the Collateral Agent with
respect to such Collateral, shall include such Subagent; provided, however,
that no such Subagent shall be authorized to take any action with respect to
any such Collateral unless and except to the extent expressly authorized in
writing by the Collateral Agent.
(c) Notwithstanding anything herein or in the other Loan Documents to
the contrary, the Collateral Agent shall be fully justified in failing or
refusing to take any action under any Loan Document unless it shall first
receive direction from the Administrative Agent and, if it so requests, it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
10.07 Remedies. If any Event of Default shall have occurred and be
continuing or if requested by RSA upon the occurrence of a RSA Mandatory
Prepayment Event and the Borrower has failed to satisfy its obligations under
Section 2.04:
(a) The Collateral Agent may, subject only to compliance with the
notice provisions of the Interim Order or the Final Order, exercise in respect
of the Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a secured
party upon default under the Uniform Commercial Code (whether or not the
Uniform Commercial Code applies to the affected Collateral) and also may: (i)
require each Loan Party to, and each Loan Party hereby agrees that it will at
its expense and upon request of the Collateral Agent forthwith, assemble all
or part of the Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place and time to be designated by the
Collateral Agent that is reasonably convenient to such Loan Party and the
Collateral Agent; (ii) without notice except as specified below or in the
Orders, sell the Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Collateral Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms as are
commercially reasonable; (iii) occupy any premises owned or leased by any of
the Loan Parties where the Collateral or any part thereof is assembled or
located for a reasonable period in order to effectuate its rights and remedies
hereunder or under law, without obligation to such Loan Party in respect of
such occupation; and (iv) exercise any and all rights and remedies of any of
the Loan Parties under or in connection with the Collateral, or otherwise in
respect of the Collateral, including, without limitation, (A) any and all
rights of such Loan Party to demand or otherwise require payment of any amount
under, or performance of any provision of, the Receivables, the Related
Contracts and the other Collateral, (B) withdraw, or cause or direct the
withdrawal, of all funds with respect to the Account Collateral and (C)
exercise all other rights and remedies with respect to the Receivables, the
Related Contracts and the other Collateral, including, without limitation,
those set forth in Section 9-607 of the Uniform Commercial Code. Each Loan
Party agrees that, to the extent notice of sale shall be required by law, at
least 10 days' notice to such Loan Party of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Collateral Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) Subject to the Carve-Out, any cash held by or on behalf of the
Collateral Agent and all cash proceeds received by or on behalf of the
Collateral Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied against
the Secured Obligations, in the manner set forth in Section 8.03. Any surplus
of such cash or cash proceeds held by the Collateral Agent and remaining after
payment in full of the Secured Obligations shall be paid over to the
applicable Loan Party or to whomever may be lawfully entitle to receive such
surplus.
(c) Subject to the Carve-Out, all payments received by any Loan Party
under or in connection with the Collateral shall be received in trust for the
benefit of the Collateral Agent, shall be segregated from other funds of such
Loan Party and shall be forthwith paid over to the Collateral Agent in the
same form as so received (with any necessary indorsement).
(d) The Collateral Agent may, without notice to any Loan Party except
as required by law, the Orders or Section 8.02 and at any time or from time to
time, charge, set off and otherwise apply all or any part of the Secured
Obligations against any funds held with respect to the Account Collateral or
in any other deposit account.
(e) In the event of any sale or other disposition of any of the
Intellectual Property Collateral of any Loan Party, the goodwill symbolized by
any Trademarks subject to such sale or other disposition shall be included
therein, and such Loan Party shall supply to the Collateral Agent or its
designee such Loan Party's know-how and expertise, and documents and things
relating to any Intellectual Property Collateral subject to such sale or other
disposition, and such Loan Party's customer lists and other records and
documents relating to such Intellectual Property Collateral and to the
manufacture, distribution, advertising and sale of products and services of
such Loan Party.
(f) The Collateral Agent is authorized, in connection with any sale
of the Security Collateral pursuant to this Section 10.07, to deliver or
otherwise disclose to any prospective purchaser of the Security Collateral any
information in its possession relating to such Security Collateral.
10.08 Modifications.
The Liens, lien priority, administrative priorities and other rights
and remedies granted to the Collateral Agent for the benefit of the Lenders
pursuant to this Agreement, the Interim Order and/or the Final Order
(specifically, including, but not limited to, the existence, perfection and
priority of the Liens provided herein and therein and the administrative
priority provided herein and therein) shall not be modified, altered or
impaired in any manner by any other financing or extension of credit or
incurrence of Indebtedness by any of the Loan Parties (pursuant to Section 364
of the Bankruptcy Code or otherwise), or by any dismissal or conversion of any
of the Cases, or by any other act or omission whatsoever. Without limitation,
notwithstanding any such order, financing, extension, incurrence, dismissal,
conversion, act or omission:
(i) except for the Carve-Out having priority over the Secured
Obligations, no costs or expenses of administration which have been or
may be incurred in any of the Cases or any conversion of the same or in
any other proceedings related thereto, and no priority claims, are or
will be prior to or on a parity with any claim of the Collateral Agent or
the Lenders against the Loan Parties in respect of any Obligation;
(ii) the liens and security interests granted herein and in the
Orders shall constitute valid and perfected first priority liens and
security interests (subject only to (A) the Carve-Out, (B) valid and
perfected liens in existence on the Petition Date and junior to such
valid and perfected Liens and (C) only to the extent such post-petition
perfection is expressly permitted by the Bankruptcy Code, valid,
nonavoidable and enforceable Liens existing as of the Petition Date, but
perfected after the Petition Date, in accordance with sections 364(c)(2)
and (3) of the Bankruptcy Code, and shall be prior to all other Liens and
security interests, now existing or hereafter arising, in favor of any
other creditor or any other Person whatsoever; and
(iii) the liens and security interests granted hereunder shall
continue valid and perfected without the necessity that financing
statements be filed or that any other action be taken under applicable
nonbankruptcy law.
10.09 Release; Termination.
(a) Upon any sale, lease, transfer or other disposition of any item
of Collateral of any Loan Party in accordance with the terms of the Loan
Documents, such Collateral shall be released from the assignment and security
interest granted hereby, and in connection therewith, the Collateral Agent
will, at such Loan Party's expense, execute and deliver to such Loan Party
such documents as such Loan Party shall reasonably request to evidence the
release of such item of Collateral (other than Inventory sold in the ordinary
course of business) from the assignment and security interest granted hereby;
provided, however, that (i) at the time of such request and such release no
Default shall have occurred and be continuing, (ii) the proceeds of any such
sale, lease, transfer or other disposition required to be applied, or any
payment to be made in connection therewith, in accordance with Section 2.06 ,
shall, to the extent so required, be paid or made to, or in accordance with
the instructions of, the Collateral Agent when and as required under Section
2.06, and (iii) in the case of Collateral sold or disposed of, the release of
a Lien created hereby will not be effective until the receipt by the
Collateral Agent of the Net Cash Proceeds arising from the sale or disposition
of such Collateral.
(b) Upon the latest of (i) the payment in full in cash of the Secured
Obligations (other than contingent indemnification obligations which are not
then due and payable), (ii) the Maturity Date and (iii) the termination or
expiration of all Letters of Credit, the pledge and security interest granted
hereby shall terminate and all rights to the Collateral shall revert to the
applicable Loan Party. Upon any such termination, the Collateral Agent will,
at the applicable Loan Party's expense, execute and deliver to such Loan Party
such documents as such Loan Party shall reasonably request to evidence such
termination.
ARTICLE XI
SUBSIDIARY GUARANTY
11.01 Subsidiary Guaranty. Each Guarantor, severally, unconditionally
and irrevocably guarantees (the undertaking by each Guarantor under this
Article XI being the "Guaranty") the punctual payment when due, whether at
scheduled maturity or on any date of a required prepayment or by acceleration,
demand or otherwise, of all of the Obligations of each of the other Loan
Parties now or hereafter existing under or in respect of the Loan Documents
(including, without limitation, any extensions, modifications, substitutions,
amendments or renewals of any or all of the foregoing Obligations), whether
direct or indirect, absolute or contingent, and whether for principal,
interest, premium, fees, indemnification payments, contract causes of action,
costs, expenses or otherwise (such Obligations being the "Guaranteed
Obligations"), and agrees to pay any and all expenses (including, without
limitation, reasonable fees and expenses of counsel) incurred by the
Administrative Agent or any of the other Secured Parties solely in enforcing
any rights under this Guaranty or any other Loan Document.
11.02 Guaranty Absolute. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of
the Loan Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Administrative Agent or any other Secured Party with respect
thereto. The Obligations of each Guarantor under this Guaranty are independent
of the Guaranteed Obligations or any other Obligations of any Loan Party under
the Loan Documents, and a separate action or actions may be brought and
prosecuted against such Guarantor to enforce this Guaranty, irrespective of
whether any action is brought against any other Loan Party or whether any
other Loan Party is joined in any such action or actions. The liability of
each Guarantor under this Guaranty shall be absolute, unconditional and
irrevocable irrespective of, and such Guarantor hereby irrevocably waives any
defenses it may now or hereafter have in-any way relating to, any and all of
the following:
(a) any lack of validity or enforceability of any Loan Document or
any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other
Obligations of any Loan Party under the Loan Documents, or any other amendment
or waiver of or any consent to departure from any- Loan Document, including,
without limitation, any increase in the Guaranteed Obligations resulting from
the extension of additional credit to any Loan Party or any of its
Subsidiaries or otherwise;
(c) any taking, exchange, release or nonperfection of any Collateral,
or any taking, release or amendment or waiver of or consent to departure from
this Guaranty or any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any manner of application of Collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any Collateral for all or any of the Guaranteed Obligations or
any other Obligations of any Loan Party under the Loan Documents, or any other
property and assets of any other Loan Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any other Loan Party or any of its Subsidiaries;
(f) any failure of the Administrative Agent or any other Secured
Party to disclose to any Loan Party any information relating to the business,
condition (financial or otherwise), operations, performance, properties or
prospects of any other Loan Party now or hereafter known to the Administrative
Agent or such other Secured Party, as the case may be (such Guarantor waiving
any duty on the part of the Secured Parties to disclose such information);
(g) the failure of any other Person to execute this Agreement or any
other guarantee or agreement of the release or reduction of the liability of
any of the other Loan Parties or any other guarantor or surety with respect to
the Guaranteed Obligations; or (h) any other circumstance (including, without
limitation, any statute of limitations or any existence of or reliance on any
representation by the Administrative Agent or any other Secured Party) that
might otherwise constitute a defense available to, or a discharge of, such
Guarantor, any other Loan Party or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by the Administrative Agent or any
other Secured Party or by any other Person upon the insolvency, bankruptcy or
reorganization of any other Loan Party or otherwise, all as though such
payment had not been made.
11.03 Waivers and Acknowledgments.
(a) Each Guarantor hereby unconditionally and irrevocably waives
promptness, diligence, notice of acceptance, presentment, demand for
performance, notice of nonperformance, default, acceleration, protest or
dishonor and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty, and any requirement that the Administrative
Agent or any other Secured Party protect, secure, perfect or insure any Lien
or any property or assets subject thereto or exhaust any right or take any
action against any other Loan Party or any other Person or any Collateral.
(b) Each Guarantor hereby unconditionally waives any right to revoke
this Guaranty, and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed obligations, whether existing now or in the future.
(c) Each Guarantor hereby unconditionally and irrevocably waives (i)
any defense arising by reason of any claim or defense based upon an election
of remedies by the Secured Parties which in any manner impairs, reduces,
releases or otherwise adversely affects the subrogation, reimbursement,
exoneration, contribution or indemnification rights of such Guarantor or other
rights to proceed against any of the other Loan Parties, any other guarantor
or any other Person or any Collateral, and (ii) any defense based on any right
of setoff or counterclaim against or in respect of the Obligations of such
Guarantor hereunder.
(d) Each Guarantor acknowledges that the Administrative Agent may,
without notice (except to the extent required by the notice provisions of the
Interim Order or the Final Order) to or demand upon such Guarantor and without
affecting the liability of such Guarantor under this Guaranty, foreclose under
any Mortgage by nonjudicial sale, and such Guarantor hereby waives any defense
to the recovery by the Administrative Agent and the other Secured Parties
against such Guarantor of any deficiency after such nonjudicial sale and any
defense or benefits that may be afforded by applicable law.
(e) Each Guarantor hereby unconditionally and irrevocably waives any
duty on the part of any Secured Party to disclose to such Guarantor any
matter, fact or thing relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of any other Loan
Party or any of its Subsidiaries now or hereafter known by such Secured Party.
(f) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated by
the Loan Documents and that the waivers set forth in Section 11.02 and this
Section 11.03 are knowingly made in contemplation of such benefits.
11.04 Subrogation. Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or may
hereafter acquire against any other Loan Party or any other insider guarantor
that arise from the existence, payment, performance or enforcement of its
Obligations under this Guaranty or under any other Loan Document, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of the Administrative Agent or any other Secured Party against such
other Loan Party or any other insider guarantor or any Collateral, whether or
not such claim, remedy or right arises in equity or under contract, statute or
common law, including, without limitation, the right to take or receive from
such other Loan Party or any other insider guarantor, directly or indirectly,
in cash or other property or by set-off or in any other manner, payment or
security on account of such claim, remedy or right, until such time as all of
the Guaranteed Obligations and all other amounts payable under this Guaranty
shall have been paid in full in cash, all of the Letters of Credit shall have
expired, terminated or been cancelled and the Commitments shall have expired
or terminated. If any amount shall be paid to any Guarantor in violation of
the immediately preceding sentence at any time prior to the latest of (a) the
payment in full in cash of all of the Guaranteed Obligations and all other
amounts payable under this Guaranty, (b) the full drawing, termination,
expiration or cancellation of all Letters of Credit, and (c) the Maturity
Date, such amount shall be received and held in trust for the benefit of the
Administrative Agent and the other Secured Parties (in the same form as so
received) and shall forthwith be paid to the Administrative Agent (without any
necessary endorsement or assignment) to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising. If (i) any Guarantor
shall pay to the Administrative Agent all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall have been paid in full in cash, (iii) all of
the Letters of Credit shall have expired, terminated or been cancelled, and
(iv) the Maturity Date shall have occurred, the Administrative Agent and the
other Secured Parties will, at such Guarantor's request and expense, execute
and deliver to such Guarantor appropriate documents, without recourse and
without representation or warranty, necessary to evidence the transfer by
subrogation to such Guarantor of an interest in the Guaranteed Obligations
resulting from the payment made by such Guarantor pursuant to this Guaranty.
11.05 Continuing Guarantee; Assignments. This Guaranty is a
continuing guaranty and shall (a) remain in full force and effect until the
latest of (i) the payment in full in cash of all of the Guaranteed Obligations
and all other amounts payable under this Guaranty, (ii) the full drawing,
termination, expiration or cancellation of all Letters of Credit, and (iii)
the Maturity Date, (b) be binding upon each Guarantor and its successors and
assigns and (c) inure to the benefit of, and be enforceable by, the
Administrative Agent and the other Secured Parties and their respective
successors, transferees and assigns. Without limiting the generality of clause
(c) of the immediately preceding sentence, any Lender may assign or otherwise
transfer all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or any portion of its Commitment or
Commitments, the Loans owing to it and the Notes held by it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender Party under this Article XI
or otherwise, in each case as provided in Section 12.07.
11.06 No Reliance. Each Guarantor has, independently and without
reliance upon the Collateral Agent, Administrative Agent or any Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Guaranty and each other
Loan Document to which it is or is to be a party, and such Guarantor has
established adequate means of obtaining from each other Loan Party on a
continuing basis information pertaining to, and is now and on a continuing
basis will be completely familiar with, the business, condition (financial or
otherwise), operations, performance, properties and prospects of such other
Loan Party.
ARTICLE XII
MISCELLANEOUS
12.01 Amendments, Etc. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Loan
Party, as the case may be, and acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall:
(a) waive any Default or Event of Default without the written consent
of the Majority Revolving Credit Facility Lenders and the Majority Term
Facility Lenders;
(b) waive any condition set forth in Section 4.01(a), without the
written consent of each Lender;
(c) (i) extend or increase the Commitment of any Lender (or reinstate
any Commitment terminated pursuant to Section 8.02) without the written
consent of such Lender or (ii) increase the Aggregate Commitments to in excess
of $500,000,000 without the written consent of the Agents;
(d) postpone any date scheduled for any payment of principal or
interest under Section 2.07 or 2.08 without the written consent of each Lender
directly affected thereby;
(e) reduce the principal of, or the rate of interest specified herein
on, any Loan or L/C Borrowing, or (subject to clause (v) of the second proviso
to this Section 12.01) any fees or other amounts payable hereunder or under
any other Loan Document without the written consent of each Lender directly
affected thereby; provided, however, that only the consent of the Required
Lenders shall be necessary to amend the definition of "Default Rate" or to
waive any obligation of the Borrower to pay interest at the Default Rate;
(f) change the order of application of any reduction in the
Commitments or any prepayment of Loans between the Facilities from the
application thereof set forth in the applicable provisions of Section 2.05(b)
or 2.06(b), respectively, in any manner that materially and adversely affects
the Lenders under such Facilities or require the permanent reduction of the
Revolving Credit Facility at any time when all or a portion of the Term
Facilities remains in effect without the written consent of each such Lender
directly affected thereby;
(g) change any provision of this Section 12.01 or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder, without
the written consent of each Lender;
(h) release all or substantially all of the Collateral in any
transaction or series of related transactions, without the written consent of
each Lender;
(i) release all or substantially all of the value of the Guaranty,
without the written consent of each Lender;
(j) amend any of the following definitions without the written
consent of the Supermajority Revolving Credit Facility Lenders and the
Supermajority Term Facility Lenders: "Eligible Aircraft", "Eligible Engines",
"Eligible Equipment", "Eligible Flight Simulators", "Eligible Parts",
"Eligible Real Estate", "Eligible Slots", "Eligible Gates" or "Eligible
Receivables";
(k) increase any of the percentages set forth in the definition of
the Borrowing Base without the written consent of the Supermajority Revolving
Credit Lenders, the Supermajority Term Facility Lenders and the Agents;
(l) amend, waive or modify Section 6.17 or 10.06 without the written
consent of the Collateral Agent;
(m) amend, waive or modify Section 8.01(k) without the written
consent of each Lender; or
(n) amend, waive or modify clause (i), (ii) or (iv) of Section
8.01(r) without the written consent of the Agents,
and provided further that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required
above, affect the rights or duties of the L/C Issuer under this Agreement or
any Letter of Credit Application relating to any Letter of Credit issued or to
be issued by it; (ii) no amendment, waiver or consent shall, unless in writing
and signed by the Collateral Agent in addition to the Lenders required above,
affect the rights or duties of, or any fees or other amounts payable to, the
Collateral Agent under this Agreement or any other Loan Document; (iii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of, or any fees or other amounts payable to, the
Administrative Agent under this Agreement or any other Loan Document; and (iv)
Section 12.07(h) may not be amended, waived or otherwise modified without the
consent of each Granting Lender (as defined in Section 12.07(h)) all or any
part of whose Loans are being funded by an SPC at the time of such amendment,
waiver or other modification; and (v) the Commitment Letter may be amended, or
rights or privileges thereunder waived, in a writing executed only by the
parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.
Notwithstanding the foregoing, (i) no amendments shall be made to the Loan
Documents or the Interim Order or Final Order that would limit RSA's rights
with respect to any RSA Mandatory Prepayment Event or reduce RSA's rights with
respect to the Collateral, and (ii) RSA in its sole discretion shall have the
right to elect to exercise or to waive its rights under any RSA Mandatory
Prepayment Event.
12.02 Notices and Other Communications; Facsimile Copies.
(a) General. Unless otherwise expressly provided in Section 2.02 or
otherwise, all notices and other communications provided for hereunder or any
other Loan Document shall be in writing (including by facsimile transmission).
All such written notices shall be mailed, faxed or delivered to the applicable
address, facsimile number or (subject to subsection (c) below) electronic mail
address, and all notices and other communications expressly permitted
hereunder to be given by telephone shall be made to the applicable telephone
number, as follows:
(i) if to the Borrower, the Administrative Agent, the Collateral
Agent or the L/C Issuer, to the address, facsimile number, electronic
mail address or telephone number specified for such Person on Schedule
12.02 or to such other address, facsimile number, electronic mail address
or telephone number as shall be designated by such party in a notice to
the other parties; and
(ii) if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its
Administrative Questionnaire or to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by
such party in a notice to the Borrower, the Administrative Agent, the
Collateral Agent or the L/C Issuer.
The Administrative Agent shall provide the Borrower with a copy of each
Lender's Administrative Questionnaire.
All notices and other communications to or from the Administrative
Agent shall also be made to RSA at the address, facsimile number, electronic
mail address or telephone number specified on Schedule 12.04 or such other
address, facsimile, electronics address or telephone number as shall be
designated by RSA in a notice to the other parties. All such notices and other
communications shall be deemed to be given or made upon the earlier to occur
of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered
by hand or by courier, when signed for by or on behalf of the relevant party
hereto; (B) if delivered by mail, four Business Days after deposit in the
mails, first-class postage prepaid; (C) if delivered by facsimile, when sent;
and (D) if delivered by electronic mail (which form of delivery is subject to
the provisions of subsection (c) below), when delivered; provided, however,
that notices and other communications to the Administrative Agent, the
Collateral Agent or the L/C Issuer pursuant to Article II shall not be
effective until actually received by such Person. In no event shall a
voicemail message be effective as a notice, communication or confirmation
hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually signed originals and shall be binding on all
Loan Parties, the Administrative Agent, the Collateral Agent and the Lenders.
The Administrative Agent and the Collateral Agent may also require that any
such documents and signatures be confirmed by a manually-signed original
thereof; provided, however, that the failure to request or deliver the same
shall not limit the effectiveness of any facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such
as financial statements and other information as provided in Section 6.02, and
to distribute Loan Documents for execution by the parties thereto, and may not
be used for any other purpose as effective notice under this Agreement.
(d) Reliance by Administrative Agent, Collateral Agent and Lenders.
The Administrative Agent, the Collateral Agent and the Lenders shall be
entitled to rely and act upon any notices (including telephonic Loan Notices)
purportedly given by or on behalf of the Borrower even if (i) such notices
were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. The Borrower shall indemnify each Agent-Related Person and each
Lender from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of
the Borrower. All telephonic notices to and other communications with the
Administrative Agent and the Collateral Agent may be recorded by the
Administrative Agent, the Collateral Agent, the Borrower and the Guarantors,
and each of the parties hereto hereby consents to such recording.
12.03 No Waiver; Cumulative Remedies. No failure by any Lender, the
Collateral Agent or the Administrative Agent to exercise, and no delay by any
such Person in exercising, any right, remedy, power or privilege hereunder or
any other Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided, and provided under each other Loan Document, are cumulative
and not exclusive of any rights, remedies, powers and privileges provided by
law.
12.04 Attorney Costs, Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Administrative Agent and the Collateral Agent for all
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation, negotiation and execution of this Agreement and the
other Loan Documents and the Investment Agreement, and any amendment, waiver,
consent or other modification of the provisions hereof and thereof (whether or
not the transaction contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs (including, without limitation,
specialty and local counsel), provided that the Borrower shall not pay or be
responsible for more than one primary counsel for the Administrative Agent and
one primary counsel for the Collateral Agent (but, after the Closing Date,
solely with respect to its capacity as the Collateral Agent), and (b) to pay
or reimburse the Administrative Agent, the Collateral Agent and each Lender
for all costs and expenses incurred in connection with the enforcement of any
rights or remedies under this Agreement or the other Loan Documents (including
all such costs and expenses incurred during any legal proceeding, including
any proceeding under any Debtor Relief Law), including all Attorney Costs. The
foregoing costs and expenses shall include all search, filing, recording,
title insurance and appraisal charges and fees and taxes related thereto, and
other out-of-pocket expenses incurred by the Administrative Agent, the
Collateral Agent and the cost of independent public accountants and other
outside experts retained by the Administrative Agent, the Collateral Agent or
any Lender. All amounts due under this Section 12.04 shall be payable within
ten Business Days after demand therefor. The agreements in this Section shall
survive the termination of the Aggregate Commitments and repayment of all
other Obligations. If any Loan Party fails to pay when due any costs, expenses
or other amounts payable by it hereunder or under any Loan Document,
including, without limitation, Attorney Costs and indemnities, such amount may
be paid on behalf of such Loan Party by the Administrative Agent, the
Collateral Agent or any Lender, in its sole discretion.
12.05 Indemnification by the Borrower. Whether or not the
transactions contemplated hereby are consummated, the Borrower shall indemnify
and hold harmless each Agent-Related Person, RSA, each Lender and their
respective Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the "Indemnitees") from and against any and
all liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Indemnitee in any way
relating to or arising out of or in connection with (a) the execution,
delivery, enforcement, performance or administration of any Loan Document or
any other agreement, letter or instrument delivered in connection with the
transactions contemplated thereby or the consummation of the transactions
contemplated thereby, (b) any Commitment, Loan or Letter of Credit or the use
or proposed use of the proceeds therefrom (including any refusal by the L/C
Issuer to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (c) any actual or alleged presence or release of
Hazardous Materials on or from any property currently or formerly owned or
operated by the Borrower, any Subsidiary or any other Loan Party, or any
Environmental Liability related in any way to the Borrower, any Subsidiary or
any other Loan Party, or (d) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory (including any investigation of,
preparation for, or defense of any pending or threatened claim, investigation,
litigation or proceeding) and regardless of whether any Indemnitee is a party
thereto (all the foregoing, collectively, the "Indemnified Liabilities"), in
all cases, whether or not caused by or arising, in whole or in part, out of
the negligence of the Indemnitee; provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that such liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses or disbursements are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee. No Indemnitee shall
be liable for any damages arising from the use by others of any information or
other materials obtained through IntraLinks or other similar information
transmission systems in connection with this Agreement unless such damages are
caused by such Indemnitee's gross negligence or willful misconduct, nor shall
any Indemnitee have any liability for any indirect or consequential damages
relating to this Agreement or any other Loan Document or arising out of its
activities in connection herewith or therewith (whether before or after the
Closing Date). In the case of an investigation, litigation or other proceeding
to which the indemnity in this Section 12.05 applies, such indemnity will be
effective whether or not such investigation, litigation or proceeding is
brought by any Loan Party, its directors, shareholders or creditors or an
Indemnitee or any other Person, whether or not any Indemnitee is otherwise a
party thereto and whether or not any of the transactions contemplated
hereunder or under any of the other Loan Documents is consummated. All amounts
due under this Section 12.05 shall be payable within ten Business Days after
demand therefor. The agreements in this Section shall survive the resignation
of the Administrative Agent, the Collateral Agent, the replacement of any
Lender, the termination of the Aggregate Commitments, any RSA Mandatory
Prepayment Event and the repayment, satisfaction or discharge of all the other
Obligations. The provisions of this Section 12.05 shall not apply to amounts
related to taxes.
12.06 Payments Set Aside. To the extent that any payment by or on
behalf of the Borrower is made to the Administrative Agent, the Collateral
Agent or any Lender, or the Administrative Agent, the Collateral Agent or any
Lender exercises its right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent, the Collateral Agent or
such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender severally agrees to pay to the
Administrative Agent and the Collateral Agent upon demand its applicable share
of any amount so recovered from or repaid by the Administrative Agent and the
Collateral Agent, plus interest thereon from the date of such demand to the
date such payment is made at a rate per annum equal to the Federal Funds Rate
from time to time in effect.
12.07 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender and no Lender may assign or otherwise transfer any of
its rights or obligations hereunder except (i) to an Eligible Assignee in
accordance with the provisions of subsection (b) of this Section, (ii) by way
of participation in accordance with the provisions of subsection (d) of this
Section, (iii) by way of pledge or assignment of a security interest subject
to the restrictions of subsection (f) or (i) of this Section, or (iv) to an
SPC in accordance with the provisions of subsection (h) of this Section (and
any other attempted assignment or transfer by any party hereto shall be null
and void). Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided
in subsection (d) of this Section and, to the extent expressly contemplated
hereby, the Indemnitees) any legal or equitable right, remedy or claim under
or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this subsection (b), participations in L/C Obligations) at the
time owing to it); provided that (i) except in the case of an assignment of
the entire remaining amount of the assigning Lender's Commitment and the Loans
at the time owing to it, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the
Loan of the assigning Lender subject to each such assignment shall not be less
than $1,000,000 or an integral multiple of $100,000 in excess thereof, unless
each of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower otherwise consents (each such consent
not to be unreasonably withheld or delayed); (ii) each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender's rights and obligations under this Agreement with respect to the Loans
or the Commitment assigned, except that this clause (ii) shall not prohibit
any Lender from assigning all or a portion of its rights and obligations among
separate Facilities on a non-pro rata basis; (iii) any assignment of a
Revolving Credit Commitment must be approved by the Administrative Agent and
the L/C Issuer (whether or not the proposed assignee would otherwise qualify
as an Eligible Assignee); (iv) the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee of, at the Administrative Agent's
direction, $3,500, a duly completed Administrative Questionnaire and duly
completed forms required to be delivered pursuant to Section 12.15 and (v)
until the occurrence of the RSA Mandatory Prepayment Event, RSA shall not
assign its rights and obligations in respect of this Agreement to the extent
that, after giving effect thereto, the amount of RSA's obligations hereunder
or thereunder shall be less than 10% of the Total Commitments (it being
understood that all of RSA's rights and obligations hereunder may be allocated
to the Revolving Credit Facility). Subject to acceptance and recording thereof
by the Administrative Agent pursuant to subsection (c) of this Section, from
and after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of
the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 3.01, 3.04, 3.05, 12.04 and 12.05 with respect to
facts and circumstances occurring prior to the effective date of such
assignment). Upon request the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries
in the Register shall be conclusive, and the Borrower, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall
be available for inspection by the Borrower and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower's
Affiliates or Subsidiaries) (each, a "Participant") in all or a portion of
such Lender's rights and/or obligations under this Agreement (including all or
a portion of its Commitment and/or the Loans (including such Lender's
participations in L/C Obligations owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative
Agent, the Collateral Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights
and obligations under this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other
modification described in the first proviso to Section 12.01 that directly
affects such Participant. Subject to subsection (e) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to subsection (b) of this
Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 12.09 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.13 as though it were a
Lender.
(e) A Participant shall not be entitled to receive any greater
payment under Section 3.01 or 3.04 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower's prior written consent. A Participant shall not be entitled
to the benefits of Section 3.01 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 12.15 as though it were a
Lender.
(f) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its
Note, if any) to secure obligations of such Lender to a Federal Reserve Bank;
provided that no such pledge or assignment shall release such Lender from any
of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.
(g) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) RSA; (c) an Affiliate of
a Lender or RSA; (d) an Approved Fund; and (e) any other Person (other than a
natural person) approved by (i) the Administrative Agent, (ii) in the case of
any assignment of a Revolving Commitment, the L/C Issuer, and (iii) unless an
Event of Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include the
Borrower or any of the Borrower's Affiliates or Subsidiaries.
"Fund" means any Person (other than a natural person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of
its business.
"Approved Fund" means any Fund that is administered or managed by (a)
a Lender, (b) RSA, (c) an Affiliate of a Lender or RSA or (d) an entity or an
Affiliate of an entity that administers or manages a Lender.
(h) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an "SPC") the option to provide all or
any pari of any Loan that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to fund any Loan, (ii) if an SPC elects not
to exercise such option or otherwise fails to make all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof and (iii) such SPC complies with the provisions of Section 12.15
as if it were a Lender. Each party hereto hereby agrees that (i) neither the
grant to any SPC nor the exercise by any SPC of such option shall increase the
costs or expenses or otherwise increase or change obligations of the Borrower
under this Agreement (including its obligations under Section 3.01 or 3.04,
(ii) no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement for which a Lender would be liable, and (iii) the
Granting Lender shall for all purposes, including the approval of any
amendment, waiver or other modification of any provision of any Loan Document,
remain the Lender of record hereunder. The making of a Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Loan were made by such Granting Lender. In furtherance
of the foregoing, each party hereto hereby agrees (which agreement shall
survive the termination of this Agreement) that, prior to the date that is one
year and one day after the payment in full of all outstanding commercial paper
or other senior debt of any SPC, it will not institute against, or join any
other Person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency, or liquidation proceeding under the laws of the
United States or any State thereof. Notwithstanding anything to the contrary
contained herein, any SPC may (i) with notice to, but without prior consent of
the Borrower and the Administrative Agent, assign all or any portion of its
right to receive payment with respect to any Loan to the Granting Lender and
(ii) disclose on a confidential basis any non-public information relating to
its funding of Loans to any rating agency, commercial paper dealer or provider
of any surety or Guarantee or credit or liquidity enhancement to such SPC.
(i) Notwithstanding anything to the contrary contained herein, any
Lender that is a Fund may create a security interest in all or any portion of
the Loans owing to it and the Note, if any, held by it to the trustee for
holders of obligations owed, or securities issued, by such Fund as security
for such obligations or securities, provided that unless and until such
trustee actually becomes a Lender in compliance with the other provisions of
this Section 12.07, (i) no such pledge shall release the pledging Lender from
any of its obligations under the Loan Documents and (ii) such trustee shall
not be entitled to exercise any of the rights of a Lender under the Loan
Documents even though such trustee may have acquired ownership rights with
respect to the pledged interest through foreclosure or otherwise.
(j) Notwithstanding anything to the contrary contained herein, if at
any time a Lender assigns all of its Commitment and Loans pursuant to
subsection (b) above, such Lender may, upon 30 days' notice to the Borrower
and the Lenders, resign as L/C Issuer. In the event of any such resignation as
L/C Issuer, the Borrower shall be entitled to appoint from among the Lenders a
successor L/C Issuer hereunder; provided, however, that no failure by the
Borrower to appoint any such successor shall affect the resignation of such
Lender as L/C Issuer. If such Lender resigns as L/C Issuer, it shall retain
all the rights and obligations of the L/C Issuer hereunder with respect to all
Letters of Credit outstanding as of the effective date of its resignation as
L/C Issuer and all L/C Obligations with respect thereto (including the right
to require the Lenders to make Base Rate Loans or fund risk participations in
Unreimbursed Amounts pursuant to Section 2.03(c)).
12.08 Confidentiality. Each of the Administrative Agent, the
Collateral Agent and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a)
to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this
Agreement; (e) to the extent reasonably required in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating
to this Agreement or the enforcement of rights hereunder; (f) subject to an
agreement containing provisions substantially the same as those of this
Section, to (i) any Eligible Assignee of or Participant in, or any prospective
Eligible Assignee of or Participant in, any of its rights or obligations under
this Agreement or (ii) any direct or indirect contractual counterparty or
prospective counterparty (or such contractual counterparty's or prospective
counterparty's professional advisor) to any credit derivative transaction
relating to obligations of the Loan Parties; (g) with the consent of the
Borrower; (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available
to the Administrative Agent, the Collateral Agent or any Lender on a
nonconfidential basis from a source other than the Borrower; or (i) to any
state, federal or foreign authority or examiner (including the National
Association of Insurance Commissioners or any other similar organization)
regulating any Lender; (j) to any rating agency when required by it (it being
understood that, prior to any such disclosure, such rating agency shall
undertake to preserve the confidentiality of any Information relating to the
Loan Parties received by it from such Lender). In addition, the Administrative
Agent, the Collateral Agent and the Lenders may disclose the existence of this
Agreement and information about this Agreement to market data collectors,
similar service providers to the lending industry, and service providers to
the Administrative Agent, the Collateral Agent and the Lenders in connection
with the administration and management of this Agreement, the other Loan
Documents, the Commitments and the Credit Extensions. For the purposes of this
Section, "Information" means all information received from any Loan Party
relating to any Loan Party or its business, other than any such information
that is available to the Administrative Agent, the Collateral Agent or any
Lender on a nonconfidential basis prior to disclosure by any Loan Party;
provided that, in the case of information received from a Loan Party after the
date hereof, such information is clearly identified in writing at the time of
delivery as confidential. Any Person required to maintain the confidentiality
of Information as provided in this Section shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
12.09 Setoff. In addition to any rights and remedies of the Lenders
provided by law, subject to any notice or other requirement contained in the
DIP Financing Orders and after complying with the notice provisions of the
Interim Order or the Final Order, upon the occurrence and during the
continuance of any Event of Default and the making of the request or the
granting of the consent specified by Section 8.02 to authorize the
Administrative Agent to declare the Loans due and payable pursuant to the
provisions of Section 8.02, each Lender and each of its Affiliates is
authorized at any time and from time to time, without (i) further order of or
application to the Bankruptcy Court and (ii) prior notice to the Borrower or
any other Loan Party, any such notice being waived by the Borrower (on its own
behalf and on behalf of each Loan Party) to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held by, and other indebtedness at
any time owing by, such Lender to or for the credit or the account of the
respective Loan Parties against any and all Obligations owing to such Lender
hereunder or under any other Loan Document, now or hereafter existing,
irrespective of whether or not the Administrative Agent, the Collateral Agent
or such Lender shall have made demand under this Agreement or any other Loan
Document and although such Obligations may be contingent or unmatured or
denominated in a currency different from that of the applicable deposit or
indebtedness. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such
Lender; provided, however, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of the
Administrative Agent, the Collateral Agent and each Lender and their
respective Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of setoff) that the
Administrative Agent, the Collateral Agent, such Lender and their respective
Affiliates may have.
12.10 Interest Rate Limitation. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be
paid under the Loan Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the "Maximum Rate"). If the
Administrative Agent, the Collateral Agent or any Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrower. In determining whether the interest
contracted for, charged, or received by the Administrative Agent, the
Collateral Agent or a Lender exceeds the Maximum Rate, such Person may, to the
extent permitted by applicable Law, (a) characterize any payment that is not
principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations hereunder.
12.11 Counterparts. This Agreement and each other Loan Document may
be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. Delivery by telecopier of an executed counterpart of a signature
page to this Agreement and each other Loan Document shall be effective as
delivery of an original executed counterpart of this Agreement and such other
Loan Document. The Administrative Agent may also require that any such
documents and signatures delivered by telecopier be confirmed by a
manually-signed original thereof; provided that the failure to request or
deliver the same shall not limit the effectiveness of any document or
signature delivered by telecopier.
12.12 Integration. This Agreement, together with the DIP Financing
Orders and the other Loan Documents, comprises the complete and integrated
agreement of the parties on the subject matter hereof and thereof and
supersedes all prior agreements, written or oral, on such subject matter. In
the event of any conflict between the provisions of this Agreement and those
of any other Loan Document, the provisions of this Agreement shall control;
provided that the inclusion of supplemental rights or remedies in favor of the
Administrative Agent, the Collateral Agent or the Lenders in any other Loan
Document shall not be deemed a conflict with this Agreement. In the event of
any conflict between this Agreement or any other Loan Document and the DIP
Financing Orders, the DIP Financing Orders shall control. Each Loan Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.
12.13 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent, the Collateral Agent and each Lender, regardless of any
investigation made by the Administrative Agent, the Collateral Agent or any
Lender or on their behalf and notwithstanding that the Administrative Agent,
the Collateral Agent or any Lender may have had notice or knowledge of any
Default at the time of any Credit Extension, and shall continue in full force
and effect as long as any Loan or any other Obligation hereunder shall remain
unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
12.14 Severability. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired
thereby and (b) the parties shall endeavor in good faith negotiations to
replace the illegal, invalid or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the
illegal, invalid or unenforceable provisions. The invalidity of a provision in
a particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
12.15 Tax Forms.
(a) (i) Each Lender, Administrative Agent and Collateral Agent that
is not a "United States person" within the meaning of Section 7701(a)(30) of
the Code (a "Foreign Person") shall deliver to each of the Borrower and the
Administrative Agent, as applicable, on or prior to the date of its execution
and delivery of this Agreement (or upon accepting an assignment of an interest
herein), two duly signed completed copies of the applicable IRS Form W-8 or
any, successor thereto (entitling it to an exemption from, or reduction of,
withholding tax on payments to be, made to or for the benefit of such Person
pursuant to this Agreement) or such other evidence satisfactory to the
Borrower and the Administrative Agent, as applicable, that such Foreign Person
is entitled to an exemption from, or reduction of, U.S. withholding tax,
including any exemption pursuant to Section 881(c) of the Code. Thereafter and
from time to time, each such Foreign Person shall (A) promptly submit to the
Borrower and the Administrative Agent, as applicable, such additional duly
completed and signed copies of such forms (or such successor forms as shall be
adopted from time to time by the relevant United States taxing authorities) as
may then be available under then current United States Laws and regulations to
avoid or reduce, or such evidence as is satisfactory to the Borrower and the
Administrative Agent of any available exemption from or reduction of, United
States withholding taxes in, respect of all payments to be made to such
Foreign Person by the Borrower pursuant to this Agreement, (B) promptly notify
the Borrower and the Administrative Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction, and (C)
take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Person, and as may be reasonably necessary
(including the re-designation of its Lending Office) to avoid any requirement
of applicable Laws that the Borrower make any deduction or withholding for
taxes from amounts payable to such Foreign Person or indemnification pursuant
to Section 3.01.
(ii) Each Lender that is a Foreign Person, to the extent it does not
act or ceases to act for its own account with respect to any portion of
any sums paid or payable to such Lender under any of the Loan Documents
(for example, in the case of a typical participation by such Lender),
shall deliver to each of the Borrower and the Administrative Agent on the
date when such Lender ceases to act for its own account with respect to
any portion of any such sums paid or payable, and at such other times as
may be necessary in the determination of the Administrative Agent (in the
reasonable exercise of its discretion), (A) two duly signed completed
copies of the forms or statements required to be provided by such Lender
as set forth above, to establish the portion of any such sums paid or
payable with respect to which such Lender acts for its own account that
is not subject to U.S. withholding tax, and (B) two duly signed completed
copies of IRS Form W-8IMY (or any successor thereto), together with any
information such Lender chooses to transmit with such form, and any other
certificate or statement of exemption required under applicable Law, to
establish that such Lender is not acting for its own account with respect
to a portion of any such sums payable to such Lender.
(iii) The Loan Parties shall not be required to pay any additional
amount to any Person under Section 3.01 (A) with respect to any Taxes on
the basis of the information, certificates or statements of exemption
such Person transmits with an IRS Form W-8IMY pursuant to this Section
12.15 or (B) if such Person shall have failed to satisfy the provisions
of this Section 12.15(a) and Section 12.15(b); provided that if such
Person is a Lender and shall have satisfied the requirement of this
Section 12.15(a) on the date it became a Lender or ceased to act for its
own account with respect to any payment under any of the Loan Documents,
nothing in this Section 12.15(a) shall relieve the Borrower of its
obligation to pay any amounts pursuant to Section 3.01 in the event that,
as a result of any change in any applicable law, treaty or governmental
rule, regulation or order or any change in governmental interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent
date establishing that such Lender or other Person for the account of
which such Lender receives any sums payable under any of the Loan
Documents is not subject to withholding or is subject to withholding at a
reduced rate.
(iv) The Administrative Agent may, without reduction, withhold any
Taxes required to be deducted and withheld from any payment under any of
the Loan Documents with respect to which the Borrower is not required to
pay additional amounts under this Section 12.15(a).
(b) Each Lender, Administrative Agent and Collateral Agent that is a
"United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to each of the Borrower and the Administrative Agent two duly
signed completed copies of IRS Form W-9. If such Person fails to deliver such
forms, then each of the Borrower and the Administrative Agent may withhold
from any payment to such Person an amount equivalent to the applicable back-up
withholding tax imposed by Applicable Law.
(c) If any Governmental Authority asserts that the Administrative
Agent did not properly withhold or backup withhold, as the case may be, any
tax or other amount from payments made to or for the account of any Lender,
such Lender shall indemnify the Administrative Agent therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section, and costs and expenses
(including Attorney Costs) of the Administrative Agent. The obligation of the
Lenders under this Section shall survive the termination of the Aggregate
Commitments, repayment of all other Obligations hereunder and the resignation
of the Administrative Agent.
12.16 Governing Law.
(a) THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AND, TO THE
EXTENT APPLICABLE, THE BANKRUPTCY CODE.
(b) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR
FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
JURISDICTION OF THE BANKRUPTCY COURT. RETIREMENT SYSTEMS OF ALABAMA HOLDINGS
LLC, IN EACH OF ITS RESPECTIVE CAPACITIES AS ADMINISTRATIVE AGENT, SYNDICATION
AGENT, COLLATERAL AGENT AND A LENDER HEREUNDER, AGREES NOT TO ASSERT OR RAISE
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, ANY DEFENSE TO THE JURISDICTION OF ANY COURT DESCRIBED IN THE
PRECEDING SENTENCE WHICH DEFENSE IS BASED SOLELY ON THE ASSERTION THAT
RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC IS AFFILIATED WITH ONE OR MORE
INSTRUMENTALITIES OF THE STATE OF ALABAMA. THE BORROWER, THE ADMINISTRATIVE
AGENT, THE COLLATERAL AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT
OR OTHER DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
APPLICABLE LAW.
12.17 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO
OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
12.18 Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agent shall
have been notified by each Lender and the L/C Issuer that each such Lender and
the L/C Issuer has executed it and thereafter shall be binding upon and inure
to the benefit of the Borrower, the Administrative Agent, the Collateral Agent
and each Lender and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.
12.19 Documents Evidence the Same Indebtedness; Assignment to
Retirement Systems of Alabama Holdings LLC.
(a) Upon its effectiveness, this Agreement amends and restates in its
entirety the Original Credit Agreement and the Notes issued under this
Agreement, if any, amend and restate the "Notes" (as defined in the Original
Credit Agreement), if any, issued under the Original Credit Agreement. This
Agreement does not constitute and shall not be construed to evidence a
novation of or a payment and readvance of the loan principal, interest and
other sums, if any, heretofore outstanding under the Original Credit
Agreement, it being the intention of the Loan Parties, and by their signature
hereto, the Administrative Agent, the Syndication Agent, the Collateral Agent
and the Lenders, that this Agreement provide for the terms and conditions of,
and the Notes evidence, upon the effectiveness of this Agreement, the same
Indebtedness as was then outstanding under the Original Credit Agreement.
(b) Each party hereto hereby agrees that (i) effective on the
Effective Date, The Retirement Systems of Alabama shall assign to Retirement
Systems of Alabama Holdings LLC, and Retirement Systems of Alabama Holdings
LLC shall assume from The Retirement Systems of Alabama, (A) all of the right,
title and interest of The Retirement Systems of Alabama in and to the
Commitments, Loans and Notes issued (if any) under the Original Credit
Agreement, (B) all rights, obligations, duties and liabilities of The
Retirement Systems of Alabama as Administrative Agent, Syndication Agent,
Collateral Agent and a Lender under the Original Credit Agreement, this
Agreement, the other Loan Documents and any other documents or instruments
delivered pursuant thereto and (C) all claims, suits, causes of action and any
other right of The Retirement Systems of Alabama (in each of its respective
capacities as Administrative Agent, Syndication Agent, Collateral Agent and a
Lender) against any Person, whether known or unknown, arising under or in
connection with the Original Credit Agreement, this Agreement, the other Loan
Documents, any other documents or instruments delivered pursuant thereto or
the loan transactions governed thereby or in any way based on or related to
any of the foregoing, including, but not limited to, contract claims, tort
claims, malpractice claims, statutory claims and all other claims at law or in
equity related to the rights and obligations assigned pursuant to clauses (A)
and (B) above and (ii) on and after the Effective Date, The Retirement Systems
of Alabama shall relinquish and be released from all of its liabilities,
duties and obligations under the Original Credit Agreement, this Agreement,
the other Loan Documents and any other documents or instruments delivered
pursuant thereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
US AIRWAYS GROUP, INC.
By: ______________________________________________
Name:_____________________________________________
Title:____________________________________________
US AIRWAYS, INC.
By: ______________________________________________
Name:_____________________________________________
Title:____________________________________________
MIDATLANTIC AIRWAYS, INC.
By: ______________________________________________
Name:_____________________________________________
Title:____________________________________________
ALLEGHENY AIRLINES, INC.
By: ______________________________________________
Name:_____________________________________________
Title:____________________________________________
US AIRWAYS LEASING AND SALES, INC.
By: ______________________________________________
Name:_____________________________________________
Title:____________________________________________
MATERIAL SERVICES COMPANY, INC.
By: ______________________________________________
Name:_____________________________________________
Title:____________________________________________
PSA AIRLINES, INC.
By: ______________________________________________
Name:_____________________________________________
Title:____________________________________________
PIEDMONT AIRLINES, INC.
By: ______________________________________________
Name:_____________________________________________
Title:____________________________________________
RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC, as
Administrative Agent, Syndication Agent, Collateral
Agent and Lender
By: ______________________________________________
Name: Xxxxx X. Xxxxxxx
Its: Manager
Solely for purposes of the agreements set forth in
Section 12.19 of this Agreement:
THE RETIREMENT SYSTEMS OF ALABAMA, as retiring
Administrative Agent, retiring Syndication Agent,
retiring Collateral Agent and assigning Lender
By: ______________________________________________
Name: Xxxxx X. Xxxxxxx
Its: Manager
Table of Contents
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS...........................................................3
1.01 Defined Terms..................................................................................3
1.02 Other Interpretive Provisions.................................................................40
1.03 Accounting Terms..............................................................................41
1.04 Rounding......................................................................................41
1.05 References to Agreements and Laws.............................................................42
1.06 Times of Day..................................................................................42
1.07 Letter of Credit Amounts......................................................................42
ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS.....................................................42
2.01 The Loans.....................................................................................42
2.02 Borrowings Conversions and Continuations of Loans.............................................43
2.03 Letters of Credit.............................................................................44
2.04 RSA Mandatory Prepayment Events and Lender Mandatory Prepayment Events........................52
2.05 Prepayments...................................................................................53
2.06 Termination or Reduction of Commitments.......................................................55
2.07 Repayment of Loans............................................................................56
2.08 Interest......................................................................................56
2.09 Fees..........................................................................................57
2.10 Computation of Interest and Fees..............................................................57
2.11 Evidence of Indebtedness......................................................................58
2.12 Payments Generally............................................................................58
2.13 Sharing of Payments...........................................................................60
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY....................................................61
3.01 Taxes.........................................................................................61
3.02 Illegality....................................................................................62
3.03 Inability to Determine Rates..................................................................63
3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans........63
3.05 Funding Losses................................................................................64
3.06 Matters Applicable to All Requests for Compensation...........................................65
3.07 Survival......................................................................................65
ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS.................................................65
4.01 Conditions to Closing.........................................................................65
4.02 Conditions to Milestone Two Achievement Date..................................................66
4.03 Conditions to Milestone Three Achievement Date................................................67
4.04 Conditions to Milestone Four Achievement Date.................................................67
4.05 Conditions to all Credit Extensions...........................................................68
4.06 Information Requests..........................................................................69
ARTICLE V REPRESENTATIONS AND WARRANTIES............................................................69
5.01 Existence, Qualification and Power; Compliance with Laws; "Air Carrier Status"................69
5.02 Authorization; No Contravention...............................................................70
5.03 Governmental Authorization; Other Consents....................................................70
5.04 Binding Effect................................................................................70
5.05 Financial Statements; No Material Adverse Effect..............................................70
5.06 Litigation....................................................................................71
5.07 No Default....................................................................................71
5.08 Ownership of Property.........................................................................72
5.09 Environmental Compliance......................................................................72
5.10 Insurance.....................................................................................73
5.11 Taxes.........................................................................................73
5.12 ERISA Compliance..............................................................................73
5.13 Subsidiaries; Equity Interests................................................................74
5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act................74
5.15 Disclosure....................................................................................75
5.16 Compliance with Laws..........................................................................75
5.17 Intellectual Property Licenses, Etc...........................................................75
5.18 [Intentionally omitted.]......................................................................76
5.19 Eligible Borrower.............................................................................76
5.20 Security/Priority.............................................................................76
5.21 Entry of the Orders...........................................................................77
5.22 Slot Utilization..............................................................................77
5.23 Representations and Warranties as to Collateral...............................................77
ARTICLE VI AFFIRMATIVE COVENANTS.....................................................................78
6.01 Financial Statements..........................................................................78
6.02 Certificates; Other Information...............................................................80
6.03 Notices.......................................................................................82
6.04 Payment of Obligations........................................................................83
6.05 Preservation of Existence, Etc................................................................84
6.06 Maintenance of Properties.....................................................................84
6.07 Maintenance of Insurance......................................................................84
6.08 Compliance with Laws..........................................................................84
6.09 Books and Records.............................................................................84
6.10 Inspection Rights.............................................................................84
6.11 Use of Proceeds...............................................................................85
6.12 Covenant to Give Security.....................................................................85
6.13 Compliance with Environmental Laws............................................................85
6.14 Preparation of Environmental Reports..........................................................85
6.15 Further Assurances............................................................................86
6.16 Compliance with Terms of Leaseholds...........................................................86
6.17 Cash Management System; Controlled Accounts...................................................86
6.18 [Intentionally omitted].......................................................................87
6.19 [Intentionally omitted].......................................................................87
6.20 FAA and DOT Matters; Citizenship..............................................................87
6.21 Slot Utilization..............................................................................87
6.22 ATSB Information Requests.....................................................................88
6.23 Rating........................................................................................88
6.24 Gate Utilization..............................................................................88
6.25 Disclosure Statement and Plan of Reorganization...............................................88
6.26 Covenant for Post-Closing Deliveries..........................................................88
ARTICLE VII NEGATIVE COVENANTS........................................................................92
7.01 Liens.........................................................................................92
7.02 Investments...................................................................................94
7.03 Indebtedness..................................................................................95
7.04 Guarantees and Other Liabilities..............................................................96
7.05 Fundamental Changes...........................................................................96
7.06 Dispositions..................................................................................97
7.07 Restricted Payments...........................................................................98
7.08 Change in Nature of Business..................................................................98
7.09 Transactions with Affiliates..................................................................98
7.10 Use of Proceeds...............................................................................99
7.11 Financial and Performance Covenants...........................................................99
7.12 Capital Expenditures.........................................................................100
7.13 Amendments of Organization Documents.........................................................101
7.14 Changes in Fiscal Year.......................................................................101
7.15 Prepayments Etc. of Indebtedness.............................................................101
7.16 Partnerships, Etc............................................................................101
7.17 Speculative Transactions.....................................................................101
7.18 Formation of Subsidiaries....................................................................101
7.19 [Intentionally omitted]......................................................................101
7.20 Chapter 11 Claims............................................................................101
7.21 Limitation on Prepayments and Pre-Petition Obligations.......................................101
7.22 Change in Capital Structure..................................................................102
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES...........................................................102
8.01 Events of Default............................................................................102
8.02 Remedies upon Event of Default...............................................................106
8.03 Application of Funds.........................................................................107
ARTICLE IX ADMINISTRATIVE AGENT AND COLLATERAL AGENT................................................108
9.01 Appointment and Authorization of Administrative Agent and Collateral Agent...................108
9.02 Delegation of Duties.........................................................................109
9.03 Liability of Administrative Agent and Collateral Agent.......................................109
9.04 Reliance by Administrative Agent and Collateral Agent........................................109
9.05 Notice of Default............................................................................110
9.06 Credit Decision; Disclosure of Information by Administrative Agent and Collateral Agent......110
9.07 Indemnification of Administrative Agent and the Collateral Agent.............................111
9.08 Administrative Agent and Collateral Agent in its Individual Capacity.........................111
9.09 Successor Administrative Agent...............................................................112
9.10 Collateral and Guaranty Matters..............................................................113
9.11 Other Agents; Arrangers and Managers.........................................................113
ARTICLE X SECURITY.................................................................................114
10.01 Grant of Security............................................................................114
10.02 Further Assurances...........................................................................118
10.03 Rights of Lenders; Limitations on Lenders' Obligations.......................................119
10.04 Covenants of the Loan Parties with Respect to Collateral.....................................120
10.05 Performance by Collateral Agent of the Loan Parties' Obligations.............................124
10.06 The Collateral Agent's Duties................................................................125
10.07 Remedies.....................................................................................126
10.08 Modifications................................................................................127
10.09 Release; Termination.........................................................................128
ARTICLE XI SUBSIDIARY GUARANTY......................................................................128
11.01 Subsidiary Guaranty..........................................................................128
11.02 Guaranty Absolute............................................................................129
11.03 Waivers and Acknowledgments..................................................................130
11.04 Subrogation..................................................................................131
11.05 Continuing Guarantee; Assignments............................................................132
11.06 No Reliance..................................................................................132
ARTICLE XII MISCELLANEOUS............................................................................132
12.01 Amendments, Etc..............................................................................132
12.02 Notices and Other Communications; Facsimile Copies...........................................134
12.03 No Waiver; Cumulative Remedies...............................................................135
12.04 Attorney Costs, Expenses and Taxes...........................................................136
12.05 Indemnification by the Borrower..............................................................136
12.06 Payments Set Aside...........................................................................137
12.07 Successors and Assigns.......................................................................138
12.08 Confidentiality..............................................................................141
12.09 Setoff.......................................................................................142
12.10 Interest Rate Limitation.....................................................................143
12.11 Counterparts.................................................................................143
12.12 Integration..................................................................................143
12.13 Survival of Representations and Warranties...................................................143
12.14 Severability.................................................................................144
12.15 Tax Forms....................................................................................144
12.16 Governing Law................................................................................145
12.17 Waiver of Right to Trial by Jury.............................................................146
12.18 Binding Effect...............................................................................146
12.19 Documents Evidence the Same Indebtedness; Assignment to Retirement Systems of Alabama
Holdings LLC.................................................................................147
SCHEDULES
I Initial Pledged Debt
II Initial Pledged Equity
III Initial Eligible Collateral Values
2.01 Commitments and Pro Rata Shares
5.03 Certain Authorizations
5.06 Litigation
5.08(b) Existing Liens on Eligible Collateral
5.08(f) Existing Slots
5.08(g) Airport Gate Leaseholds
5.09 Environmental Matters
5.11 Tax Matters
5.13 Subsidiaries and Other Equity Investments
5.17(c) IP Litigation and Claims Matters
5.17(d) Third Party Rights under IP Agreements
5.23(x}(1) UCC Information
5.23(a)(2) UCC Information Changes
6.02(n) Slot Periods
12.02 Administrative Agent's Office; Administrative Agent's Disbursement Account,
Administrative Agent's Payment Account, Certain Addresses for Notices
EXHIBITS
A Form of Loan Notice
B-1 Form of Term Note
B-2 Form of Revolving Credit Note
C Form of Compliance Certificate
D Form of Assignment and Assumption
E [Reserved]
F Form of Mortgage
G Form of Intellectual Property Security Agreement
G-1 Form of Intellectual Property Agreement Supplement
H-1 Opinion Matters - Counsel to Loan Parties
H-2 Opinion Matters - Opinion of Associate General Counsel of US Airways, Inc.
H-3 Opinion Matters - Form of Opinion for Real Estate
I Form of Borrowing Base Certificate
J Form of Bidding Procedures Order
K Form of Slot Security Agreement
L Form of Aircraft Mortgage
