EXHIBIT 10.20
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY {***}. THE
CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
CONFIDENTIAL
February 10, 0000
Xxxxxx Xxxxxxxx Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx, President
Re: Participation in the Restructuring of Midway Airlines
Corporation
Dear Xx. Xxxxxxxxx:
This letter agreement sets forth the general terms and conditions under
which American Airlines, Inc. ("American") is prepared to waive its right to
accelerate payment under the {***} and waive its right to terminate certain of
the American Agreements as a result of, and to participate in, the {***}.
In consideration of the mutual covenants contained herein, we agree as
follows:
{***}
{***}
2
{***}
3
8. Conditions Precedent. American's and its affiliates' participation in,
and its agreement to waive its right to accelerate payment under the {***} and
waive its right to terminate certain of the American Agreements as a result of
the Equity Investment shall be subject to the following conditions precedent:
(a) Equity Investment. Midway shall successfully complete the proposed
merger with GoodAero, Inc. in substantially the same manner as set forth in the
Agreement and Plan of Merger between the companies dated January 17, 1997 (the
"Plan of Merger") a copy of which has been provided to American, resulting in a
minimum of $22,000,000 in gross proceeds to be available as working capital for
Midway as of the Closing Date (the "Equity Investment").
(b) Creditor Participation. Prior to or as of the Closing Date, Midway
shall have entered into agreements with the Aircraft Creditors and Ameritech
Corporation substantially consistent with Exhibit 6.02(k) attached hereto,
pertaining to their participation in Midway's restructuring, on terms reasonably
satisfactory to American. Further, Midway shall have resolved obligations owed
to AVSA, S.A.R.L. in accordance with Xxx Xxxxxx'x letter dated February 10, 1997
addressed to Xxxxxx Xxxxx.
(c) Other Conditions Precedent. The agreements of American set forth in
this Letter Agreement are subject to the satisfaction or waiver by American on
or before the Closing Date of the following conditions:
{***}
(4) The receipt by American on or prior to the Closing Date, a final
Certificate of Merger of GoodAero, Inc. and Midway, a Restated Certificate
of Incorporation of Midway certified by the Secretary of State of Delaware,
and bylaws of Midway, all in substantially the same form as attached to the
Plan of Merger, certified to be true and up to date by a duly authorized
officer thereof or certifying no changes or amendments to
4
such documents since the date they were last certified to American or
attaching copies of such amendments.
{***}
(6) Copies of resolutions of the board of directors of Midway authorizing
Midway to enter into and perform the transactions contemplated by the Plan
of Merger, certified to be true and up to date copies by a duly authorized
officer of Midway.
(7) A closing certificate and an incumbency certificate of duly authorized
officers of Midway setting out the names and signatures of the person or
persons authorized to sign the documents contemplated by this agreement.
(8) The receipt by American of opinions of counsel to Midway, which may be
internal counsel, dated as the Closing Date, in the form of the attached
Exhibit I.
(9) No Event of Default shall have occurred and be continuing under any of
the American Agreements.
9. Waiver. American hereby waives any rights it might have to terminate the
American Agreement identified as items (i), (ii), (iv), (v) and (viii) in
Exhibit A attached hereto or to accelerate payments under the {***} arising
solely from the Change of Control (as defined in such identified American
Agreements) resulting from the Equity Investment.
10. Expenses. American and Midway shall bear their respective costs,
expenses and charges incurred by them in connection with the negotiations
contemplated herein, including, but not limited to, fees of their respective
counsel, advisors and accountants.
11. Governing Law and Dispute Resolution. This Letter Agreement and the
rights and obligations of the parties hereunder shall be governed by and
construed in accordance with the laws of the State of Texas, without regard to
choice of law principles. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the United States District Court for the Northern
District of Texas and, if such court does not have jurisdiction, of the courts
of the State of Texas in Tarrant County for the purposes of any suit, action or
other proceeding arising out of this Letter Agreement or the subject matter
hereof or
5
thereof brought by any other party. American and Midway each agrees that neither
of them will bring any suit, action or other proceeding arising out of this
Letter Agreement or any of the transactions described herein or therein, in any
jurisdiction other than the jurisdiction described above. To the extent
permitted by applicable law, each party hereby waives and agrees not to assert,
by way of motion, as a defense or otherwise, in any such suit, action or
proceeding, any claim (i) that it is not personally subject to the jurisdiction
of the above-named courts, (ii) that the suit, action or proceeding is brought
in an inconvenient forum, (iii) that it is immune from any legal process with
respect to itself or its property, (iv) that the venue of the suit, action or
proceeding is improper, or (v) that this Letter Agreement or the subject matter
hereof or thereof may not be enforced in or by such courts. Each party agrees
that, even if at any time during the term of this Agreement Midway is not
qualified to do business as a foreign corporation in the State of Texas, Midway
shall and does hereby irrevocably designate and appoint the Secretary of State
of the State of Texas as its agent for service of process in any action, suit or
proceeding with respect to any matter as to which it submits to jurisdiction as
set forth above, it being agreed that any method of service upon such agent,
with a copy sent to Midway's address as reflected in the records of American
shall constitute valid service upon Midway. American designates CT Corporation
as its agent for service of process in Texas.
12. Confidentiality. Midway and American expressly acknowledge and agree
that the terms and conditions of this Letter Agreement constitute confidential
information of both parties (the "Confidential Information"), whether or not
marked or expressly indicated as confidential, and American and Midway each
agrees to keep such information confidential, using the same degree of care with
respect to such Confidential Information as it uses in protecting its own
proprietary information, trade secrets and similar items, and not to disclose
such information to any third party, except as permitted hereby. Notwithstanding
the foregoing, Confidential Information shall not include any information which
is in the public domain; is placed in the public domain, through no violation of
the this Letter Agreement; or is lawfully obtained from another source free of
restriction. Except as expressly provided below, neither party shall sell,
transfer, publish, disclose, display or otherwise make available the
Confidential Information to any third party (and third parties shall be deemed
also to include Affiliates of the party so restricted), except as may be
required by applicable law (including, without limitation, requirement by oral
questions, interrogatories, subpoenas, civil investigative demands or similar
processes), in which case the party from whom disclosure is sought (or, if
applicable, who is seeking to make disclosure as required by applicable law)
shall promptly notify the other party and shall provide the other party (if the
other party so requests) with a copy of the information proposed to be disclosed
and all related descriptions thereof within a reasonable period (which period
shall generally be at least five days) in advance of the proposed disclosure. To
the extent that the other party objects to disclosure of such Confidential
Information, the party from which disclosure is
6
sought (or, if applicable, who is seeking to make disclosure as required by
Applicable Law) shall (i) use reasonable and lawful efforts to resist making any
disclosure of such Confidential Information, (ii) use reasonable and lawful
efforts to limit the amount of such Confidential Information to be disclosed
(and, in connection therewith, shall reasonably consider all modifications,
deletions and additions to such information, and related descriptions, proposed
by the other party), and (iii) use all reasonable efforts to obtain a protective
order or other appropriate relief to minimize the further dissemination of any
Confidential Information to be disclosed. In addition, neither party shall
disclose the Confidential Information received to any of its directors,
officers, employees, Affiliates, or professional advisors (collectively,
"Representatives") except on a need-to-know basis for the purposes of
implementing and giving effect to the transactions contemplated by this Letter
Agreement; provided, however, that prior to any such disclosure, the party shall
inform all such Representatives of the confidential nature of the information,
and that it is subject to this non-disclosure obligation, and shall further
instruct such Representatives to treat such information confidentially. American
and Midway each agrees to be responsible for any breach of this Section by their
respective Representatives. Each party acknowledges and agrees that the other
party will have no adequate remedy at law if there is a breach or threatened
breach of this Section and, accordingly, that such other party shall be entitled
to an injunction or other equitable or preventative relief against the allegedly
breaching party or its Representatives for such breach or threatened breach.
Nothing herein shall be construed as a waiver of any other legal or equitable
remedies which may be available to the non-breaching party in the event of a
breach or threatened breach of this Section, and the non-breaching party may
pursue any other such remedy, including, without limitation, the recovery of
damages. Notwithstanding anything herein to the contrary, American hereby
permits Midway to disclose the Confidential Information to Xxxx/Chilmark Fund
L.P., debis AirFinance B.V., Wings Aircraft Finance, Inc., DASA Aircraft Finance
XVI, B.V., Ameritech Services Corporation, AVSA, S.A.R.L., GoodAero, Inc.,
Stockholm Aircraft Finance V, B.V. and/or International Aero Engines; provided,
however, that upon any such parties receipt of such confidential information it
shall be deemed to have accepted the terms of confidentiality set forth in this
provision and Midway shall be liable for any breach of such obligation, unless
otherwise agreed in a separate agreement between American and any such other
party; provided, however, that the terms of the new promissory note referred to
in paragraph 1 of this letter may be disclosed by any holder of the promissory
note executed by Midway Airlines corporation in favor of Daimler-Benz Aerospace
A.G. or the promissory note executed by Midway Airlines Corporation in favor of
debis AirFinance B.V., each dated as of January 31, 1997, in connection with any
action taken to enforce such notes; and may otherwise be disclosed to any person
with a need to know the terms thereof, provided that such person agrees to keep
such information confidential in accordance with the terms hereof; and provided,
further, that the terms and conditions of this Letter Agreement may be
7
disclosed to affiliates of the holders of those Notes, provided that such
persons agree to keep such information confidential in accordance with the terms
hereof. The provisions of this Section shall survive the execution, expiration
or termination of this Letter Agreement and the consummation of the transactions
contemplated hereby.
13. Entirety and Amendments. This Letter Agreement contains the entire
agreement between the parties with respect to the subject matter hereof. This
Letter Agreement may be amended only by an instrument in writing executed by the
party against whom such amendment is sought to be enforced. The parties
acknowledge that nothing herein shall in any manner be construed to be a
novation of the Security Agreement.
14. Parties Bound. This Letter Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, assigns and
legal representatives; provided however, that Midway may not, without the prior
written consent of American, assign any rights, powers, duties or obligations
hereunder.
The foregoing sets forth American's agreement in respect to the subject
matter hereof. If the terms of this Letter Agreement are satisfactory to Midway,
an authorized officer of Midway should execute this Letter Agreement in the
space provided below and return the executed counterpart to the attention of Mr.
Xxxxxx Xxxxx by telefax at 000-000-0000, with the manually executed original
counterpart to be delivered promptly thereafter.
AMERICAN AIRLINES, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Xxxxxx X. Xxxxx
Managing Director
Airline Management Services, Inc.
AGREED AND ACCEPTED AS OF THE
10th DAY OF FEBRUARY, 1997.
MIDWAY AIRLINES CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxxx
Senior Vice President
8
EXHIBIT A
"American Agreements" means all of the following agreements, as they may be
amended from time to time and all replacement or renewal agreements:
(i) Agreement of Sublease between American and Midway, dated as of January 18,
1995;
(ii) AAdvantage Participating Carrier Agreement between American and Midway,
dated as of January 18, 1995 (as amended on December 10, 1996);
(iii) AAirpass Agreement between American and Midway, dated March 2, 1995;
(iv) Aircraft Maintenance Agreement between American and Midway, dated as of
November 1, 1993 (as amended on February 17, 1995);
(v) SABRE Multihost Agreement executed by SABRE Decision Technologies, a
division of The SABRE Group, Inc., on March 20, 1995 and executed by Midway on
February 24, 1995;
(vi) SABRE Participating Carrier Distribution and Services Agreement between
American and Jet Express, Inc. (now known as Midway Airlines Corporation), dated
as of May 14, 1993;
(vii) Inbound Reservations Services Agreement between American Airlines Direct
Marketing Corporation (now known as Teleservice Resources, Inc.) and Jet
Express, Inc. (now known as Midway Airlines Corporation) dated April 13, 1993,
as renewed under the Services and Licenses Agreement Annex B dated on or about
February 1, 1997;
(viii) Services and Licenses Agreement between Airline Management Services, Inc.
and Midway dated December 7, 1995;
(ix) Standard Ground Handling Agreement between American and Midway, dated
effective November 15, 1993, and all Annexes thereto including without
limitation B7.0 (BOS), B4.1 (DCA), B6.0 (EWR), B1.1 (LGA), B8.0 (MCO), B1.0
(CUN), B10.0 (PHL), B18.0 (RDU-Facility Maintenance and Facility Services), B8.0
(RDU-City Ticket Offices), and B10.0 (RDU-Admirals Club);
(x) Bilateral Traffic Agreement between American and Jet Express, Inc. d/b/a
Midway Airlines, dated July 12, 1993;
(xi) Chattel Mortgage and Security Agreement between American and Midway, dated
April 25,1996; and
(xii) all other agreements in effect as of January 31, 1997 of any nature
between Midway or any of Midway's affiliates and American or any of American's
affiliates.
EXHIBIT B
See final Warrant issued on 2/11/97
EXHIBIT C
{***} (4 pages omitted)
EXHIBIT D
THIRD AMENDMENT TO AGREEMENT OF SUBLEASE
This Third Amendment to Agreement of Sublease (the "Third Amendment"),
dated as of February 10, 1997, by and between American Airlines, Inc.
("American") and Midway Airlines Corporation ("Sublessee").
WHEREAS, American and Sublessee have entered into an Agreement of Sublease
(the "Sublease") dated as of the 18th day of January, 1995, amended pursuant to
a First Amendment of Agreement of Sublease dated on or about February 6, 1996
(the "First Amendment") and Amendment to AA Agreements dated April 25, 1996 (the
"Second Amendment)(for ease in drafting the Sublease, First Amendment and Second
Amendment are collectively referred to herein as the Sublease), pursuant to
which American has subleased a portion of the Base Lease Premises and the
Improvements located thereon; and
WHEREAS, concurrently herewith, American and Sublessee are entering into a
certain Letter Agreement providing the terms and conditions under which American
has agreed to participate in a financial restructuring of Sublessee; and
WHEREAS, in connection with such restructuring, Sublessee has requested and
American has agreed to make certain amendments to the Sublease, subject to the
terms and conditions set forth in this Third Amendment.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, American and Sublessee hereby agree to amend the Sublease as
follows:
1. Section 1.D. shall be amended by changing the reference to "August 31, 1997"
in the last sentence of the first paragraph to read "August 31, 1999".
2. Section 1.D. shall further be amended by adding the following to the end
thereof:
"From the effective date of this Third Amendment until May 1, 1997,
Sublessee shall have the option to sublease from American a portion of the
additional space in the Base Lease Premises (including the Improvements
located therein), other than ticket counters and gates, identified by
American to be surplus, unused space (the "Surplus Space"). American shall
identify such Surplus Space to Sublessee by written notice on or before
March 15, 1997. The Rental Rate for any Surplus Space subleased by
Sublessee pursuant to this paragraph shall be {***} per square foot per
annum, subject to the yearly increases of 2%
(compounded annually) on January 1 of each year during the Term. Sublessee
may exercise the option for Surplus Space by delivering to American, at any
time prior to the termination date of this option, an unconditional written
notice of exercise ("Notice") in substantially the form of Exhibit C
attached to the Sublease. Any sublease of Surplus Space shall be subject to
the terms and conditions set forth in the Sublease, unless terminated by
either party upon six (6) months prior written notice to the other party.
If Sublessee should sublease Surplus Space under this paragraph, Sublessee
and American will execute an amendment to the Sublease effective as of the
Additional Premises Commencement Date specified in the Notice which will
amend and restate Exhibit A to the Sublease. If there shall have occurred
and be continuing on the date of the Notice or on the Additional Premises
Commencement Date an Event of Default by Sublessee under the Sublease,
American may, at is option, refuse to sublease to Sublessee any Surplus
Space until and unless the breach giving rise to such Event of Default has
been cured in accordance with the Sublease.
3. Section 5.A.(i) shall be amended by adding the following to the end thereof:
"Commencing with the rental payment due on March 1, 1997, the rent for the
Demised Premises payable or common use charges, at American's sole
discretion, hereunder shall be reduced by {***} per month (the
"Rental Discount") for the remainder of the term of this Sublease;
provided, however, the Rental Discount shall immediately end if (i)
Sublessee terminates its participation in American's frequent flier mileage
program (currently, the "AAdvantage Program"), (ii) American terminates the
AAdvantage Participating Carrier Agreement (the "AAdvantage Agreement")
dated January 18, 1995, as amended, between American and Sublessee pursuant
to Section 11 (a)(ii) or Section 11(e) thereof, or (iii) Sublessee fails to
renew its participation in the AAdvantage Program upon the expiration of
the AAdvantage Agreement after American has offered, in writing, the
renewal of Sublessee's participation in the AAdvantage Program on
substantially the same terms as those included in the AAdvantage Agreement,
subject to an increase in the rates payable by Sublessee under Section
8(a)(ii) thereof not to exceed the percentage change between (a) the
average of American's (including AMR Eagle) passenger revenue per ASM
(RASM) and operating cost per ASM (CASM) for the year 1996 and (b) the
average of American's (including AMR Eagle) RASM and CASM for the 12 months
immediately preceding the expiration of the AAdvantage Agreement (or the
most recent 12 months for which data is available). Nothing herein shall,
however, be construed to impose any obligation on American to renew
Sublessee's current AAdvantage Agreement upon substantially the same terms
or
2
otherwise, or to offer a renewal rate for Sublessee's AAdvantage Agreement
as described above.
Should Midway exercise its Option to sublease the Option Premises as
described in Section 1.D. above, the rent for such Option Premises shall be
{***}
4 Section 6 shall be amended by deleting everything after the end of the
first sentence thereof.
5. Section 38 shall be amended in its entirety to read as follows:
"On or before the fifteenth day following each calendar quarter during the
Term of the Sublease (i.e., January 15, April 15, July 15 or October 15, as
applicable) and on the first such date following the expiration or earlier
termination hereof, American shall provide Sublessee with a report showing
the amount spent by American pursuant to Section 5.A.(ii)(b) of this
Sublease or received by American pursuant to Article 15 of the Base Lease,
in each case shown on a monthly basis during the most recently concluded
calendar quarter, or portion thereof (along with such supporting documents
as Sublessee shall reasonably request from time to time hereunder) and also
showing American's calculations on a monthly basis, of the amounts payable
by or owing to Sublessee pursuant to Section 5.A.(ii)(b) and Section 5.D.
of this Sublease. If such report shows that an adjustment to any amount
paid by or owed to Sublessee is proper then the party shown to be owing
amounts (as a reimbursement or otherwise) to the other party shall promptly
make such payment to the other within five (5) business days following
receipt of written notice of such adjustment. American shall give Sublessee
and its agents access during normal business hours to documents and/or
personnel as may be reasonably necessary for Sublessee to review the report
submitted by American to Sublessee pursuant to this Section 38. The terms
of this Section 38 shall survive the termination of the Sublease for a
period of six (6) months.
6. This Third Amendment, together with the Sublease, First Amendment and Second
Amendment, constitutes the entire agreement of the parties with respect to its
subject matter and supersedes all prior agreements or understandings, whether
written or oral, if any, concerning such subject matter. All defined terms used
herein without definition shall have the meanings set forth in the Sublease. As
modified hereby, the Sublease is ratified and confirmed and shall remain in full
force and effect.
3
IN WITNESS WHEREOF, the parties have caused this Third Amendment to be duly
executed and delivered as of the date and year first above written.
MIDWAY AIRLINES CORPORATION AMERICAN AIRLINES INC.
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxx A/ Cuomo
----------------------------- -----------------------------
Xxxxxxxx X. Xxxxxx Xxxxxx X. Xxxxx
Managing Director
Its: Senior Vice President Airline Management Services, Inc.
Agreed to by Landlord this ___ day of _________________, 1997.
RALEIGH-DURHAM AIRPORT AUTHORITY
By:
------------------------------
Its:
-----------------------------
4
EXHIBIT E
THIRD AMENDMENT TO AADVANTAGE
PARTICIPATING CARRIER AGREEMENT
This Third Amendment to AAdvantage Participating Carrier Agreement ("Third
Amendment"), dated as of February 10, 1997, by and between American Airlines,
Inc. ("American") and Midway Airlines Corporation ("Carrier").
WHEREAS, American and Carrier have entered into an AAdvantage Participating
Carrier Agreement (the "Agreement") dated as of the 18th day of January, 1995,
amended pursuant to the Amendment to AA Agreements dated as of April 25, 1996
(the "First Amendment") and as of December 10, 1996 (the "Second Amendment")
(for ease in drafting the Agreement, the First Amendment and the Second
Amendment are collectively referred to herein as the Agreement), pursuant to
which Carrier participates in American's AAdvantage Program; and
WHEREAS, concurrently herewith, American and Carrier are entering into a
certain Letter Agreement providing the terms and conditions under which American
has agreed to participate in a financial restructuring of Carrier; and
WHEREAS, in connection with such restructuring, Carrier has requested and
American has agreed to make certain Amendments to the Agreement, subject to the
terms and conditions set forth in this Third Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, American and Carrier agree to amend the Agreement as follows:
1. Section 1 is amended to change the definition of "Expiration Date" in its
entirety to read as follows:
"Expiration Date" means 23.59 Coordinated Universal Standard Time (UTC) on
April 30, 2001, unless this Agreement is extended or terminated earlier in
accordance with the terms of this Agreement, in which case the last day of
the extended term of the date on which this Agreement is earlier terminated
shall be the Expiration Date."
2. Section 8.a.ii.A. shall be amended in its entirety to read as follows:
"Carrier shall pay to American on a monthly basis, for every Accrual Mile
posted to a Member's AAdvantage Account as follows (except as otherwise
specified on Attachment A attached hereto):
{***}
In addition, Carrier shall pay American, on a monthly basis, for the
reinstatement in a given month of any Award Certificate and/or Award Ticket
which was issued prior to the effective date of Carrier's conversion (if
any) to the alternative fee structure."
3. This Third Amendment, together with the Agreement, First Amendment and Second
Amendment, constitutes the entire agreement of the parties with respect to its
subject matter and supersedes all prior agreements or understandings, whether
written or oral, if any, concerning the subject matter. All defined terms used
herein without definition shall have the meanings set forth in the Agreement. As
modified hereby, the Agreement is ratified and confirmed and shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties have caused this Third Amendment to be duly
executed and delivered as of the date and year first above written.
MIDWAY AIRLINES CORPORATION AMERICAN AIRLINES, INC.
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
----------------------------- -----------------------------
Xxxxxxxx X. Xxxxxx Xxxxxx X. Xxxxx
Its: Senior Vice President Managing Director
Airline Management Services, Inc.
2
EXHIBIT F
FIRST AMENDMENT TO AAIRPASS
AGREEMENT
This First Amendment to AAirpass Agreement ("First Amendment"), dated as of
February 10, 1997, by and between American Airlines, Inc. ("American") and
Midway Airlines Corporation ("Carrier").
WHEREAS, American and Carrier have entered into an AAirpass Agreement (the
"Agreement") dated as of the March 2, 1995, pursuant to which American has
granted Carrier the right to carry AAirpass members and their companions on
Carrier Flights in accordance with the terms of the Agreement; and
WHEREAS, concurrently herewith, American and Carrier are entering into a
certain Letter Agreement providing the terms and conditions under which American
has agreed to participate in a financial restructuring of Carrier; and
WHEREAS, in connection with such restructuring, Carrier has requested and
American has agreed to make certain amendments to the Agreement, subject to the
terms and conditions set forth in this First Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, American and Carrier agree to amend the Agreement as follows:
1. Section 7 is amended in its entirety to read as follows:
"Unless sooner terminated in accordance with this Agreement, this Agreement
shall terminate on April 30, 2001."
2. This First Amendment together with the Agreement constitutes the entire
agreement of the parties with respect to its subject matter and supersedes all
prior agreements or understandings, whether written or oral, if any, concerning
the subject matter. All defined terms used herein without definition shall have
the meanings set forth in the Agreement. As modified hereby, the Agreement is
ratified and confirmed and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this First Amendment to be duly
executed and delivered as of the date and year first above written.
MIDWAY AIRLINES CORPORATION AMERICAN AIRLINES, INC.
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------------ ------------------------------
Xxxxxxxx X. Xxxxxx Xxxxxx X. Xxxxx
Managing Director
Its: Senior Vice President Airline Management Services, Inc.
EXHIBIT G
FIRST AMENDMENT TO CHATTEL MORTGAGE
AND SECURITY AGREEMENT
This First Amendment to Chattel Mortgage and Security Agreement ("First
Amendment"), dated as of February 10, 1997, by and between American Airlines,
Inc. ("Secured Party") and Midway Airlines Corporation ("Grantor").
WHEREAS, Secured Party and Grantor have entered into a Chattel Mortgage and
Security Agreement (the "Agreement) dated as of the April 25, 1996, pursuant to
which Grantor has granted Secured Party as security interest and lien to certain
Collateral and the proceeds therefrom to secure the Note and other Obligations
owed to the American Entities; and
WHEREAS, concurrently herewith, Secured Party and Grantor are entering into
a certain Letter Agreement providing the terms and conditions under which
Secured Party has agreed to participate in a financial restructuring of Grantor;
and
WHEREAS, in connection with such restructuring, Grantor has requested and
Secured Party has agreed to make certain amendments to the Agreement, subject to
the terms and conditions set forth in this First Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Secured Party and Grantor agree to amend the Agreement as follows:
1. Section 2.6 shall be amended by changing the last sentence thereof in its
entirety to read as follows:
"In addition, the Secured Party will release from the Lien of this Security
Agreement items of Collateral specified by the Grantor in the event Grantor
is able to obtain additional cash financing utilizing such Collateral."
2. This First Amendment together with the Agreement constitutes the entire
agreement of the parties with respect to its subject matter and supersedes all
prior agreements or understandings, whether written or oral, if any, concerning
the subject matter. All defined terms used herein without definition shall have
the meanings set forth in the Agreement. As modified hereby, the Agreement is
ratified and confirmed and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this First Amendment to be duly
executed and delivered as of the date and year first above written.
MIDWAY AIRLINES CORPORATION AMERICAN AIRLINES, INC.
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------------ ------------------------------
Xxxxxxxx X. Xxxxxx Xxxxxx X. Xxxxx
Managing Director
Its: Senior Vice President Airline Management Services, Inc.
2
February 7, 1997
EXHIBIT H
Xx. Xxxx Xxxxxxxxx
President
Midway Airlines
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Subject: AA / JI Agreement
Reference 1) X. Xxxxx memo to J. Frame dated 12/20/96
2) J. Frame letter to X. Xxxxx dated January 16, 1997 Proposal
Revision 1
3) J. Frame letter to X. Xxxxx dated February 4,1997 Proposal
Revision 2
4) X. Xxxxxxxx letter to J. Frame dated February 6, 1997 Proposal
Revision 3
Dear Xxxx:
{***}
Page 1 of 6
Mr. Xxx Xxxxx
February 7, 1997
{***}
Page 2 of 6
Mr. Xxx Xxxxx
February 7, 1997
The new agreement would end at the completion of the last JI C4 aircraft check
or May 1, 1999, whichever occurs first.
If you are in agreement with the above proposals, please sign and return. This
offer expires February 28, 1997. Nothing herein shall be considered as legally
binding upon either party until a definitive agreement pertaining to the subject
matter hereof has been duly executed by both parties.
Please contact myself or Xxx Xxxxxx should you have any questions on any of the
information above.
Sincerely,
/s/ Xxxx Xxxxx
Xxxx Xxxxx
Managing Director
Finance and Planning
office 000-000-0000
fax 000-000-0000
cc: Xxxxxx Xxxxxxxx
Xxx Xxxxx
/gm
Attachments
/s/ Xxxx X. Xxxxxxxxx
-------------------------------
Accepted by Midway Airlines
Xxxx X. Xxxxxxxxx
President
Page 3 of 6
Attachment I
February 7, 1997
{***}
Page 4 of 6
Attachment II
February 7, 1997
Tay Engine Lease Rates
AA's current Tay engine lease rates are:
Daily {***}
Hourly {***}
Transaction Fee {***}
Note: These rates are subject to change.
Page 5 of 6
Attachment III
February 7, 1997
Exhibit A-1
{***}
Page 6 of 6
RIDER
to February 7, 1997 Letter Agreement
between Midway Airlines Corporation and American Airlines, Inc.
{***}
AGREED:
American Airlines, Inc. Midway Airlines Corporation
By: /s/ Xxxx X. Frame By: Xxxx Xxxxxxxxx
-------------------------- --------------------------
Name: Xxxx X. Frame Name: Xxxx Xxxxxxxxx
Title: Mang. Dir. M&E Fin. & Plng. Title: Chief Financial Officer
[Letterhead of Midway Airlines]
Exhibit I
(000) 000-0000 (Direct Dial)
(000) 000-0000 (Direct FAX)
February 11, 1997
American Airlines, Inc.
0000 Xxxx Xxxxxx Xxxx.
Xx. Xxxxx, Xxxxx 00000
Re: Letter Agreement dated February 10, 1997 (the "Letter Agreement")
between Midway Airlines Corporation ("Midway") and American Airlines,
Inc. ("American")
Ladies and Gentlemen:
I am Senior Vice President and General Counsel of Midway and as such have
acted as an attorney for Midway in connection with the execution and delivery by
Midway of by following:
(A) The Letter Agreement;
(B) {***}
(C) Third Amendment to Agreement of Sublease dates as of February 10, 1997
between Midway and American;
(D) Third Amendment to AAdvantage Participating Carrier Agreement dated as
of February 10, 1997 between Midway and American;
(E) First Amendment to AAirpass Agreement dated as of February 10, 1997
between Midway and American; and
(F) {***}
Such documents are referred to collectively herein as the "Agreements".
In connection with this opinion, I have examined originals or copies
certified or otherwise identified to my satisfaction as being true copies of the
Agreements and I have examined or I am familiar with the original or a copy, the
authenticity of which has been established to my satisfaction, of such other
documents, corporate records, agreements and instruments and certificates of
public officials and officers of Midway as I have deemed necessary or
appropriate to enable me to express the opinions set forth below. As to
questions of fact material to such opinions, I have, when relevant facts were
not independently established, relied upon certifications by officers of Midway
which I believe to be reliable.
The opinions hereinafter expressed are subject to the following
qualifications:
A. I have assumed, without investigation, that the parties (other than
Midway) to the Agreements, or any document or oral agreement relating thereto,
are not subject to any statute, rule, or
[Letterhead of Midway Airlines]
February 11, 1997
Page 2
regulations, or to any impediment to which contracting parties are generally not
subject; which requires Midway to obtain the consent of or to make a declaration
or filing with any governmental entity.
B. The validity, binding effect and enforceability of the Agreements (or
any portion of such documents) and the rights and remedies of the parties
thereunder are subject to, and limited by, the following: (a) the effect of the
federal and state bankruptcy laws, (the "Bankruptcy Code"), insolvency,
reorganization, receivership, moratorium, and other similar laws; (b) principles
of equity and the doctrine of commercial reasonableness (and I express no
opinion as to the availability of any equitable remedies); (c) the power of
federal and state courts to refuse to enforce (or to stay enforcement of) any
provision of the Agreements which purports to: (i) establish evidentiary
standards, (ii) waive the right of Midway to due notice and hearing, (iii) waive
the right of Midway to assert defenses available to Midway by statute, common
law or in equity, (iv) declare the Lessee to be in default in the event of the
institution of any proceeding in bankruptcy (whether voluntary or involuntary)
pursuant to the Bankruptcy Code, (v) waive the right of personal service of
process, or (vi) provide for self-help remedies.
C. Intentionally Omitted.
D. The opinions set forth above are based upon and limited to the laws of
the State of Illinois, and the Federal laws of the United States applicable
therein, the Bankruptcy Code of 1978, as amended (11 U.S.C. ss.101 et. seq.) and
the general corporate law of the State of Delaware. I note that the Agreements
are stated to be governed by the laws of the State of Texas and I am not
familiar with those laws and render no opinion about them.
E. This letter is limited to the matters expressly set forth herein; no
statements or opinions may be inferred beyond such matters.
F. The opinions set forth herein are based upon and limited to the law as
is in effect on the date of this letter and my knowledge of the facts relevant
to such opinions on the date of this letter. I assume no obligation to update
the opinions set forth in this letter.
Based upon the foregoing and having regard to legal considerations which I
have deemed relevant, it is my opinion that:
1) Midway is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the requisite corporate
power to own and operate its assets and to carry on and conduct its business as
now conducted and is qualified as a foreign corporation authorized to conduct
business and is in good standing in all jurisdictions where qualification is
necessary except where the failure to be so qualified would not have a material
adverse effect on the business, assets or financial condition of Midway.
2) Midway has the full right, power and authority to execute and deliver
the Agreements and to perform its obligations thereunder; and the execution,
delivery and performance of the Agreements by Midway will not contravene any
articles of incorporation or bylaw provision of Midway or any provision of any
contract to which Midway is a party. The Agreements have been duly authorized,
executed and delivered by Midway and constitute the legal, valid and binding
obligation of Midway, enforceable against
[Letterhead of Midway Airlines]
February 11, 1997
Page 3
Midway in accordance with their terms. There is no law, rule or regulation that
would be contravened by the execution, delivery or performance by Midway of the
Agreements.
3) Neither the execution and delivery by Midway of the Agreements, the
performance by Midway of its respective obligations thereunder nor the
consummation of the transactions contemplated thereby constitute (or will
constitute, as the case may be) a violation of any applicable Federal law,
governmental rule or regulation or, to my actual knowledge, any order of any
court or governmental authority that is applicable to Midway.
4) No consent, approval or authorization of; and no registration,
declaration or filing with any administrative, governmental or other public
authority of the United States of America is required by law to be obtained or
made in connection with the execution, delivery and performance by Midway, or
for the validity or enforceability against Midway, of any of the Agreements
other than (i) such consents, approvals, authorizations, registrations,
declarations and filings that have been made or obtained on or prior to the data
hereof and remain in full force and effect, and (ii) such consents, approvals,
authorizations, registrations, declarations and filings, the failure to make or
obtain (a) which would not have a material adverse effect on the business,
condition or results of operation of Midway, and (b) which would not adversely
affect the validity or enforceability of any of the Agreements or the right as
or remedies of American or its affiliates.
This opinion is rendered to American and its affiliates in connection with
the Agreements and may not be relied upon by any person in any other context,
provided that American and its affiliates may provide this opinion (i) to
regulatory authorities should they so request or in connection with their normal
examinations, (ii) to their respective independent auditors and attorneys, (iii)
pursuant to order or legal process of any court or governmental agency, or (iv)
in connection with any legal action to which American or any of its affiliates
is a party arising out of the transactions contemplated by the Agreements.
Very truly yours,
MIDWAY AIRLINES CORPORATION
/s/ Xxxxxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxx
Senior Vice President and General Counsel
