EXHIBIT 10.5
NEGATIVE PLEDGE AGREEMENT
THIS NEGATIVE PLEDGE AGREEMENT, dated this the 16th day of June, 2005,
made by PINNACLE AIRLINES, INC., a Georgia corporation, party of the first part
("Borrower"), in favor of FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national
banking association having its principal place of business at 000 Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000, party of the second part ("Bank").
W I T N E S S E T H :
WHEREAS, the Borrower has made application to the Bank for certain
loans and financial accommodations in the maximum principal amount of Seventeen
Million Dollars ($17,000,000.00), to be currently evidenced by a Seventeen
Million Dollar ($17,000,000.00) revolving credit note of even date herewith and
possibly to be evidenced in the future by certain other promissory notes and
standby letters of credit (collectively, the "Note") as described in that
certain Loan Agreement of even date herewith by and among the Borrower, the
Bank, and Pinnacle Airlines Corp., a Delaware corporation (the "Guarantor" and
the "Loan Agreement"); and
WHEREAS, the Bank is unwilling to make such loans unless Borrower
further enters into this Agreement with the Banks;
NOW, THEREFORE, for and in consideration of the premises, and other
good and valuable considerations, the receipt and sufficiency of which are
hereby acknowledged, Borrower does hereby agree with the Bank as follows:
1. So long as Borrower is indebted to Bank pursuant to the Note,
Borrower will not, either directly or indirectly, incur, create, assume, or
permit to exist any mortgage, pledge, security interest, encumbrance, lien, or
charge of any kind upon any of the property (the "Property") owned by Borrower
and described in EXHIBIT "A," attached hereto and made a part hereof as fully as
if set out verbatim herein.
2. Borrower hereby acknowledges to the Bank that the identity of
Borrower was and continues to be material circumstances upon which the Bank has
relied in connection with, and which constitutes valuable consideration to the
Bank for, the extending to Borrower of the loan evidenced by the Note. Borrower
therefore covenants and agrees with the Bank that the entire indebtedness
evidenced by the Note shall, at the absolute option of the Bank, be and become
immediately due and payable should the Borrower, without the prior written
consent of the Bank (which consent may be given or withheld in the sole and
absolute discretion of the Banks), sell, assign, transfer (other than for
purposes of collection of checks and instruments in the ordinary course of
business), convey, lease with option to purchase, enter into a contract for
sale, grant an option to purchase, or further encumber any or all of Borrower's
interest in the Property, or any portion thereof, or permit the same to be sold,
assigned, transferred, conveyed, contracted for or encumbered.
3. Any mortgage, pledge, security interest, or other lien or
encumbrance on the Property granted or created by Borrower, or any conveyance or
sale of the Property, without the prior written consent of the Bank, shall be
void and of no force and effect.
4. In the event of a default hereunder, the Bank shall be entitled to
exercise all of their rights and remedies set forth in (a) the Note and (b) the
Loan Agreement.
5. This Agreement shall be binding upon Borrower, its successors and
assigns, shall inure to the benefit of the Bank, its successors and assigns, and
shall remain in full force and effect until all indebtednesses, liabilities, and
obligations of Borrower to the Bank evidenced by the Note and any renewals,
modifications or extensions thereof, due or to become due, absolute or
contingent, shall have been fully paid and satisfied.
6. This Agreement shall be governed by and construed under the laws of
the State of Tennessee.
7. It is understood and agreed that the Bank may at its option record
this Negative Pledge Agreement, and/or cause evidence thereof to be filed in
such governmental offices as the Bank deems advisable.
[SEPARATE SIGNATURE PAGE FOLLOWS]
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SIGNATURE PAGE
TO
NEGATIVE PLEDGE AGREEMENT
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IN TESTIMONY WHEREOF, the undersigned has caused this Negative Pledge
Agreement to be executed by its duly authorized officers on the day and year
first above written.
"Borrower"
PINNACLE AIRLINES, INC.
By:
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Name:
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Title:
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STATE OF TENNESSEE
COUNTY OF SHELBY
Before me, ______________________________, a Notary Public in and for
the State and County aforesaid, personally appeared ___________________________,
with whom I am personally acquainted (or proved to me on the basis of
satisfactory evidence), and who, upon oath, acknowledged himself (or herself)
to be the ______________________ of PINNACLE AIRLINES, INC., the within-named
bargainor, a corporation, and that _he as such ________________________, being
duly authorized so to do, executed the foregoing instrument for the purposes
therein contained, by signing the name of the corporation by ___self as
such ____________________.
WITNESS my hand and seal at office, on this the ____ day of June, 2005.
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Notary Public
My Commission Expires:
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S-1
EXHIBIT "A"
TO
NEGATIVE PLEDGE AGREEMENT
All of the Borrower's accounts, accounts receivable, cash, chattel
paper, instruments, marketable securities, and other obligations of any kind,
whether or not evidenced by an instrument or chattel paper, and whether or not
it has been earned by performance whether now or hereafter existing, arising out
of or in connection with the sale or lease of goods or the rendering of services
or otherwise, and all rights now or hereafter existing in and to all security
agreements, leases and other contracts securing or otherwise relating to any
such accounts receivable.
