SLOT OPTION AGREEMENT
CONFIDENTIAL
TREATMENT
REQUEST
PURSUANT TO RULE 24b-2
Certain
portions of this exhibit have been omitted pursuant
to a request for confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934. The omitted materials have been filed separately
with the Securities and Exchange Commission.
This
SLOT
OPTION AGREEMENT (this “Agreement”)
is
entered into as of the 22nd
day of
September, 2005, by and between Republic Airways Holdings Inc., a Delaware
corporation (“Republic”)
and US
Airways, Inc., a Delaware corporation (including, as the context may require,
on
or after the Effective Date, as reorganized pursuant to the Bankruptcy Code)
(“Airways”).
WHEREAS,
pursuant to that certain Investment Agreement, dated as of March 15, 2005,
among
Wexford Capital LLC (“Wexford”),
Republic, Airways and US Airways Group, Inc., (the “Investment
Agreement”),
Airways was granted an option to sell the Commuter Slots to Republic (the
“Slots
Option”),
all
as set forth on Exhibit A-1 to the Investment Agreement; and
WHEREAS,
Republic and Airways desire to enter into this Agreement, as contemplated by
Exhibit A-1 to the Investment Agreement, in order to reflect the rights
and
obligations of the parties with respect to the Slots Option.
NOW,
THEREFORE, in consideration of the promises and the mutual agreements contained
herein and for other good and valuable consideration, it is understood and
agreed as follows:
1. Definitions.
Unless
the context otherwise requires, (i) all definitions of documents shall
refer to such documents as they may now or later be amended or supplemented,
and
(ii) all definitions of parties shall be deemed to include the successors
and permitted assigns of such parties. For purposes of this Agreement, the
following terms shall have the following meanings:
“Acquired
Slot Trust Agreement”
means
that certain trust agreement to which Republic transferred the Commuter Slots
concurrent with the exercise of the Repurchase Option.
“Affiliate”
means,
with respect to any specified Person, a Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the specified Person, where “control” (including the terms
“controlling,”“controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract, or otherwise; provided, however,
that when used with respect to Airways, “Affiliate” shall not include Retirement
Systems of Alabama Holdings LLC or any entity that would be deemed an Affiliate
of Airways solely by virtue of Retirement Systems of Alabama Holdings LLC being
a stockholder in Airways.
“Aircraft”
means
the “Aircraft” as defined in the Global Aircraft Transaction
Agreement.
“Aircraft
Transaction Agreements”
means
the “Aircraft Transaction Agreements” as defined in the Global Aircraft
Transaction Agreement.
“Bankruptcy
Code”
means
Chapter 11 of the United States Bankruptcy Code.
“Bankruptcy
Court”
means
the United States Bankruptcy Court for the Eastern District of Virginia,
Alexandria Division.
“Business
Day”
means
any day other than a Saturday, Sunday or a day on which banking institutions
of
the State of New York are authorized by law or executive order to
close.
“Cases”
means
the voluntary petitions filed by Airways under the Bankruptcy Code in Bankruptcy
Court on September 12, 2004.
“Certificated
Air Carrier”
means a
Citizen of the United States holding an air carrier operating certificate issued
pursuant to Chapter 447 of Title 49 of the United States Code,
for
aircraft capable of carrying ten or more individuals or 6,000 pounds or more
of
cargo.
“Chautauqua”
means
Chautauqua Airlines, Inc.
“Citizen
of the United States”
has the
meaning given to such term in Section 40102(a)(15) of the Transportation Code,
or any subsequent legislation that amends, supplements or supersedes such
provisions.
“Closing”
shall
have the meaning set forth in Section
3
hereof.
“Closing
Date”
means
the date the Closing occurs.
“Code”
means
the Internal Revenue Code of 1986, as amended and any successor
thereto.
“Collateral
Agent”
means
Republic, in its capacity as collateral agent for the Secured Parties under
the
Security Agreement and Trust Security Agreement.
“Commuter
Slots”
means
collectively, all the DCA Slots and the LGA Slots.
“Confirmation
Order”
means a
Final Order of the Bankruptcy Court approving the Plan.
“Consent
and Subordination”
means
the Consent and Subordination with respect to any interest in the Licensed
Slots, which Consent and Subordination shall be substantially in the form set
forth as Exhibit
C
hereto.
“Currently
Owned Aircraft”
means
the ten (10) EMB-170 aircraft currently owned by Airways to be purchased
concurrently with the consummation of this Agreement by Republic or its designee
in accordance with the Global Aircraft Transaction Agreement.
“DCA”
means
▇▇▇▇▇▇ ▇▇▇▇▇▇ Washington National Airport.
“DCA
Slots”
means
those certain Unrestricted Commuter Slots at DCA described in Schedule
1
attached
hereto or such lesser number of Slots and any replacement therefore as provided
in Section
8
hereof
or Section
10.3
of the
Slot License Agreement.
“Deed
of Conveyance”
means
the deeds of conveyance transferring and conveying to Republic the Commuter
Slots, which deeds of conveyance shall be substantially in the form set forth
as
Exhibit A
hereto.
“Effective
Date”
means
the effective date of the Plan.
“EMB
Committed Aircraft”
means
the three (3) newly-manufactured Embraer ERJ 170-100 aircraft listed on
Schedule 10 to the Global Aircraft Transaction Agreement.
“Existing
Jet Service Agreement” means
the
Amended and Restated Chautauqua Jet Service Agreement, dated April 20,
2005, between Chautauqua and Airways.
“Expenses”
means
the reasonable legal fees and expenses incurred by Republic in connection with
the negotiation, execution and delivery of this Agreement, the Slot License
Agreement and the other Slot/Gate Transaction Agreements.
“FAA”
means
the Federal Aviation Administration.
“Final
Order”
means
an order or judgment of the Bankruptcy Court, or other court of competent
jurisdiction, as entered on the docket in the Cases or the docket of any other
court of competent jurisdiction, that has not been reversed, stayed, modified
or
amended, and as to which the time to appeal or seek certiorari or move for
a new
trial, reargument or rehearing has expired, and no appeal or petition for
certiorari or other proceedings for a new trial, reargument or rehearing has
been timely taken, or as to which any appeal that has been taken or any petition
for certiorari that has been timely filed has been withdrawn or resolved by
the
highest court to which the order or judgment was appealed or from which
certiorari was sought or the new trial, reargument or rehearing shall have
been
denied or resulted in no modification of such order.
“Gates”
means
the gates as described in the Gates Option Agreement.
“Gates
Option Agreement”
means
the Gates Option Agreement dated as of the Closing Date between Republic and
Airways.
“Global
Aircraft Transaction Agreement”
means
that certain agreement between Republic and Airways dated as of
September 21, 2005.
“Governmental
Authority”
means
the government of the United States of America, any other nation or any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
“Holder
Affiliate”
means
an Affiliate of Airways that is a record holder of Commuter Slots, as set forth
on Schedule
1.
“Jet
Service Agreements”
means
the Existing Jet Service Agreement and New Jet Service Agreement. For avoidance
of doubt, this Agreement shall be deemed a Slot Option Agreement under the
Jet
Service Agreement.
“Law”
means
any law, treaty, statute, ordinance, code, rule or regulation of a Governmental
Authority or judgment, decree, order, writ, award, injunction or determination
of an arbitrator or court or other Governmental Authority.
“LGA
Slots”
means
those certain Unrestricted Commuter Slots at LGA described in Schedule
1
attached
hereto or such lesser number of Slots and any replacement therefore as provided
in Section
8
hereof
or Section
10.3
of the
Slot License Agreement.
“License
Fees”
means
the license fees as described in Section 5 of the Slot License
Agreement.
“Licensed
Slots”
has the
meaning set forth in the Slot License Agreement.
“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).
“Material
Adverse Effect”
means
any condition, circumstance or event or series of conditions, circumstances
or
events that, individually or in the aggregate, has had or could reasonably
be
expected to have (a) a material adverse effect on the condition (financial
or
otherwise), properties, assets, business, results of operations or prospects
of
Airways, (b) could reasonably be expected to prevent or limit or restrict in
any
material respect Airways or Republic from performing their respective
obligations hereunder or under any of the Slot/Gate Transaction Agreements
to
which any of them are a party or consummating any of the transactions hereunder
or thereunder, or (c) with respect to the Commuter Slots, could reasonably
be expected to result in any Regulatory Impairment.
“Material
Breach”
means
(i) with respect to Airways, a “License Default” as defined in the Slot License
Agreement, an Event of Default as defined in the Security Agreement, the
occurrence of an event allowing Republic to terminate under either of the Jet
Service Agreements or a breach of any material representation, warranty,
covenant or agreement in this Agreement, any other Slot/Gate Transaction
Agreement, the Aircraft Transaction Agreements, or the Investment Agreement
that
has not been cured within the applicable cure period or if there is no
applicable cure period within ten (10) Business Days following receipt by
Airways of written notice from Republic of such breach and (ii) with respect
to
Republic, the occurrence of a Termination Event under either of the Jet Service
Agreements or a breach of any material representation, warranty, covenant or
agreement in this Agreement, any other Slot/Gate Transaction Agreement, the
Aircraft Transaction Agreements, or the Investment Agreement that has not been
cured within the applicable cure period or if there is no applicable cure period
within ten (10) Business Days following receipt by Republic of written notice
from Airways of such breach.
“Material
Default”
means,
with respect to any agreement or document, a “Material Breach” on the part of
Airways as defined in such agreement or document, or if such term is not defined
therein, then a breach by Airways or any of its Affiliates of any
representation, warranty, covenant or agreement made pursuant to such agreement
or document, which breach is materially adverse to the interests, obligations,
rights or benefits of Republic or any of its Affiliates under such agreement
or
document.
“New
Jet Service Agreement”
means
the Republic Jet Service Agreement, dated as of September 2, 2005, between
Airways and Republic Airline Inc.
“Omnibus
Order”
means
the Final Order of the Bankruptcy Court, dated March 31, 2005, authorizing
Airways and its Subsidiaries to enter into and execute definitive documents
to
implement the terms of the Investment Agreement under Sections 105, 363, 364
and
365 of the Bankruptcy Code and applicable Bankruptcy Rules.
“Person”
means
any individual, corporation, company, association, partnership, limited
liability company, joint venture, trust, unincorporated organization, or
Governmental Authority.
“Plan”
means
the one or more plans of reorganization that restructure Airways.
“Postpetition”,
when
used with respect to any agreement, instrument or any obligation arising
thereunder, any claim or proceeding or any other matter, means an agreement
or
instrument that was first entered into or first became effective, an obligation,
claim or proceeding that first arose or was first instituted, or another matter
that first occurred, after the commencement of the Cases.
“Purchase
Price”
has the
meaning set forth in Section
4.1
hereof.
“Regulatory
Impairment”
means,
with respect to a Commuter Slot, any action by the United States Government
or
an instrumentality thereof, including by statute, regulation or otherwise
(including, without limitation, as a result of violation of the Use Provisions
or the termination or substantial modification of the Slot Regulations), not
at
the direct or indirect request or petition of Republic, which results or will
result in the impairment, restriction or Withdrawal of such Commuter Slot;
provided,
however,
that
(i) any such action that impairs or restricts, but is not a Withdrawal
of,
a Commuter Slot shall not be Regulatory Impairment unless it materially
adversely affects the value of the Commuter Slot to Republic or Republic’s
ability to own, hold, use or transfer the Commuter Slot; (ii) with respect
to a violation of the Use Provisions, no Regulatory Impairment shall exist
with
respect to the affected Commuter Slot while Airways is contesting such violation
in good faith unless and until the Withdrawal of such Commuter Slot;
(iii) no Regulatory Impairment shall exist with respect to a Withdrawal
of
a Commuter Slot resulting from a violation of the Use Provisions that results
solely from the failure of Republic (or an Affiliate of Republic) to use such
Commuter Slot at least eighty percent (80%) of the time for which such Commuter
Slot has been allocated to Republic (or an Affiliate of Republic) for operations
on behalf of Airways under the Jet Service Agreements; (iv) with
respect to the termination or substantial modification of the Slot Regulations,
the Regulatory Impairment shall exist at such time that the statute or
regulation affecting such termination or modification is, in the case of a
statute, signed into law or, in the case of regulation, when the regulation
is
issued, even if the effective date of the termination or modification is later;
and (v) the
termination of the Slot Regulations effective January 1, 2007 or any date
thereafter, with respect to the LGA Slots, pursuant to 49 U.S.C.
Section 41715, is not a Regulatory Impairment.
“Republic
Aircraft Transaction”
means
the aircraft purchase and lease transactions described more specifically in
the
Global Aircraft Transaction Agreement.
“Republic
Lien”
means,
with respect to Republic or the Commuter Slots, any Lien on such property which
(a) arises from claims against or affecting Republic not related to
any of
the transactions contemplated by the Slot/Gate Transaction Agreements,
(b) results from acts or omissions of Republic in violation of Republic’s
obligations under any of the terms of the Slot/Gate Transaction Agreements,
or
not related to the transactions contemplated by the Slot/Gate Transaction
Agreements, (c) is imposed as a result of Taxes against or affecting
Republic or any of its Affiliates not required to be indemnified by Airways
under any of the Slot/Gate Transaction Agreements or (d) claims against
such person arising out of any transfer by Republic of its interest in the
Commuter Slots or the Slot/Gate Transaction Agreements, other than a transfer
permitted by the terms of the Slot/Gate Transaction Agreements or pursuant
to
the exercise of remedies set forth in Section 12.2 of the Slot License
Agreement.
“Repurchase
Option”
means
the option of Airways to purchase the Beneficial Interest as provided in Section
9 of the Slot License Agreement.
“Restated
Acquired Slot Trust Agreement”
means
the amendment and restatement of the Acquired Slot Trust Agreement.
“Secured
Parties”
means
Republic, Republic Airline, Chautauqua, Shuttle America Corporation and each
Republic Designee (as defined in the Global Aircraft Transaction Agreement)
that
is or becomes a party to any of the Jet Service Agreements.
“Security
Agreement”
means
that certain Pledge and Security Agreement among Airways and Collateral Agent
dated as of the Closing Date.
“Slot”
means
all of the rights and operating authority granted by the FAA pursuant to Title
14 of the United States Code of Federal Regulations, Part 93, Subparts K and
S
(as amended from time to time by regulation, order or statute, or any successor
or recodified regulation, order or statute) to conduct one Instrument Flight
Rules (as defined under the federal aviation regulations) landing or takeoff
operation in a specified time period at LGA or DCA.
“Slot/Gate
Transaction Agreements”
means
this Agreement together with the Gates Option Agreement, the Slot License
Agreement, the Acquired Slot Trust Agreement, the Restated Acquired Slot Trust
Agreement, the Slot Trust License Agreement, the Security Agreement and the
Trust Security Agreement.
“Slot
License Agreement”
means
the Slot License Agreement dated as of the Closing Date between Airways and
Republic.
“Slot
Regulations”
means
Title 14 of the United States Code of Federal Regulations, Part 93, Subpart
K
and S (as amended from time to time by regulation, order or statute, or any
successor or recodified regulation, order or statute).
“Slot
Transaction Agreements”
means
each of the Slot/Gate Transaction Agreements other than the Gates Option
Agreement.
“Slot
Trust”
means
the trust created by the Acquired Slot Trust Agreement and continued under
the
Restated Acquired Slot Trust Agreement.
“Slot
Trust License Agreement”
means
that certain Slot Trust License Agreement between Airways and the Slot Trustee
to be entered into upon exercise of the Repurchase Option.
“Specified
Slot/Gates Transaction Agreements”
means
this Agreement, the Investment Agreement, the Gates Option Agreement, the Slot
License Agreement, the Security Agreement, the Slot Trust License Agreement,
and
the Restated Acquired Slot Trust Agreement and the Trust Security
Agreement.
“Subsidiary”
means
as to any Person, any other Person of which more than fifty percent (50%) of
the
shares of the voting stock or other voting interests are owned or controlled,
or
the ability to select or elect more than fifty percent (50%) of the directors
or
similar managers is held, directly or indirectly, by such first Person or one
or
more of its Subsidiaries or by such first Person and one or more of its
Subsidiaries.
“Taxes”
means
any and all present or future taxes, levies, imposts, duties, fees, deductions,
charges or withholdings imposed by any Governmental Authority.
“Trust
Security Agreement”
means
that certain Trust Security Agreement dated as of the date of the exercise
of
the Repurchase Option between the Slot Trust and Collateral Agent in the form
attached as Exhibit
B
hereto.
“Unrestricted
Commuter Slots”
means
the Slots allocated by FAA as commuter slots under Title 14 of the United States
Code of Federal Regulations, Part 93, Subparts K and S (as amended from time
to
time by regulation, order or statute, or any successor or recodified regulation,
order or statute imposing any operating limitations at the applicable airport),
to which no restrictions or limitations apply (other than those expressly set
forth in such regulation, order or statute).
“Use
Provisions”
means
Section 93.227 of the Slot Regulations (as amended from time to time by
regulation, order or statute, or any successor or recodified regulation, order
or statute).
“Withdrawal”
means,
with respect to a Commuter Slot, the withdrawal, recall, taking control of,
prevention or loss of use of, or the elimination or termination of, such
Commuter Slot or the non-application, elimination or termination of the Slot
Regulations with respect to DCA Slots or the non-application, elimination or
termination of the Slot Regulations with respect to the LGA Slots on a date
prior to January 1, 2007.
2. Exercise
of Slots Option.
Airways
has exercised the Slots Option pursuant to a notice dated June 23, 2005,
given pursuant to the Investment Agreement.
3. Closing.
3.1. Closing.
The
closing on the Slots Option (the “Closing”)
shall
be in accordance with the terms and conditions of this Agreement. The Closing
shall be on September 22, 2005. Subject to the satisfaction or waiver of the
conditions set forth in Sections 5
and 6 hereof,
at the Closing, Airways or its Affiliates shall sell and/or shall cause to
be
sold to Republic and Republic shall purchase, the Commuter Slots by transferring
the amount of the Purchase Price to Airways’ account by wire transfer of
immediately available funds, (ii) Republic shall license the Commuter Slots
to
Airways pursuant to the Slot License Agreement, (iii) Airways shall
enter
into the Security Agreement and (iv) Airways and Republic shall enter
into
the Gates Option Agreement.
3.2. Place
and Time of Closing
Subject
to the satisfaction or, if permissible, waiver of the conditions set forth
in
Sections 5
and 6
hereof,
the Closing shall occur at the New York offices of Vedder, Price, ▇▇▇▇▇▇▇ &
Kammholz, P.C. at 10:00 a.m. E.T. on the date specified in Section 3.1
or at
such other time, date and place as the parties may agree.
3.3. EXCEPT
AS
OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR THE DEED OF CONVEYANCE TO
THE
CONTRARY, INCLUDING BUT NOT LIMITED TO SECTION 7.1,
AS
BETWEEN AIRWAYS AND REPUBLIC, UPON CLOSING REPUBLIC SHALL UNCONDITIONALLY ACCEPT
THE COMMUTER SLOTS “AS-IS, WHERE-IS” UPON CLOSING. THE REPRESENTATIONS AND
WARRANTIES SET FORTH IN THIS AGREEMENT OR THE DEED OF CONVEYANCE ARE EXCLUSIVE
AND IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES OF AIRWAYS OF ANY KIND
WHATSOEVER, WHETHER WRITTEN, ORAL, EXPRESS OR IMPLIED, AND AIRWAYS HAS NOT
MADE
AND SHALL NOT BE DEEMED TO HAVE MADE, AND REPUBLIC HEREBY DISCLAIMS, ANY
REPRESENTATIONS OR WARRANTY (EXCEPT THE REPRESENTATIONS AND WARRANTIES SET
FORTH
IN THIS AGREEMENT OR THE DEED OF CONVEYANCE) AS TO THE TITLE, EXISTENCE, RIGHTS,
VALUE, OPERATION, MARKETABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF ANY COMMUTER SLOT OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
WHETHER WRITTEN, ORAL, EXPRESS OR IMPLIED, WITH RESPECT TO THE COMMUTER SLOTS,
IT BEING UNDERSTOOD THAT ALL SUCH DISCLAIMED RISKS, AS BETWEEN AIRWAYS AND
REPUBLIC, ARE TO BORNE BY REPUBLIC.
4. Purchase
Price.
4.1. Amount.
The
purchase price (the “Purchase
Price”)
for
the Commuter Slots is Fifty-One Million Six Hundred Forty Thousand United States
Dollars (US$51,640,000), subject to adjustment as provided in Section 8.
-
-
4.2. Purchase
Price Adjustment.
The
Purchase Price shall be reduced in accordance with Section 8
hereof
for any Commuter Slot subject to Regulatory Impairment prior to the Closing
and
not replaced by Airways in accordance with Section 8.
There
shall be a [*]
4.3. Payment.
Subject
to the satisfaction or, if permissible, waiver of the conditions set forth
in
Section 5,
on the
Closing Date, Republic shall pay the Purchase Price, less the amount of the
credit for the estimate of Expenses as set forth in Section
4.2,
by wire
transfer of immediately available funds to the account designated by
Airways.
5. Conditions
Precedent to Republic’s Obligations to Close and to Make Payment of the Purchase
Price.
Republic’s obligation to purchase the Commuter Slots and to pay the Purchase
Price shall be subject to the fulfillment (or waiver in whole or in part by
Republic in its sole discretion) of each of the following conditions
precedent:
5.1. The
representations and warranties of Airways contained in this Agreement, and
in
the certificates and documents delivered to Republic on or prior to the Closing
Date by Airways, shall be true on the date hereof and on the date of the Closing
as though such representations and warranties were made on and as of such date
(unless any such representation and warranty shall have been made with reference
to a specified date, in which case such representation and warranty shall be
true and accurate as of such specified date).
5.2. Airways
shall have performed and complied in all material respects with all of its
obligations under this Agreement, the Aircraft Transaction Agreements, the
Slot/Gate Transaction Agreements and the Jet Service Agreements to which it
is a
party.
5.3. Airways
and each Holder Affiliate shall have executed and delivered a Deed of
Conveyance.
5.4. Airways
and each Holder Affiliate shall have made all filings with and provide all
notices to the FAA required to effect transfer of the Commuter Slots to
Republic, and Republic shall have received written confirmation from the FAA
of
such transfer.
5.5. Airways
shall have executed and delivered the Security Agreement, Slot License Agreement
and the Gates Option Agreement.
_____
*
Confidential
5.6. The
Currently Owned Aircraft shall concurrently herewith have been purchased in
accordance with the Republic Aircraft Transaction, except as otherwise agreed
upon by the parties.
5.7. Republic
shall have received executed counterparts of the following agreements,
instruments, certificates or documents, and such counterparts (a) shall
have been duly authorized, executed and delivered by the respective party or
parties thereto, (b) shall be reasonably satisfactory in form and substance
to Republic and (c) shall be in full force and effect:
(i) this
Agreement;
(ii) the
Slot
License Agreement, the Gates Option Agreement and the Security
Agreement;
(iii) the
Global Aircraft Transaction Agreement;
(iv) the
New
Jet Service Agreement;
(v) (A) a
copy of the Certificate of Incorporation and Bylaws of Airways and resolutions
of the board of directors of Airways, in each case certified as of the Closing
Date, by the Secretary or an Assistant Secretary of Airways, duly authorizing
the sale of the Commuter Slots and the license of the Commuter Slots from
Republic under the Slot License Agreement and the execution, delivery and
performance by Airways of the Aircraft Transaction Agreements, the Slot/Gate
Transaction Agreements and the New Jet Service Agreements required to be
executed and delivered by Airways on or prior to the Closing Date in accordance
with the provisions hereof and thereof; (B) an incumbency certificate
of
Airways as to the person or persons authorized to execute and deliver the
relevant documents on behalf of Airways;
(vi) an
Officer’s Certificate of Airways, dated as of the Closing Date, stating that its
representations and warranties set forth in this Agreement are true and correct
as of the Closing Date (or, to the extent that any such representation and
warranty expressly relates to an earlier date, true and correct as of such
earlier date);
(vii) the
following opinions of counsel, in each case dated the Closing Date:
(A) (i) an
opinion of Vedder, Price, ▇▇▇▇▇▇▇ and Kammholz, P.C., special New York counsel
to Airways; and
(B) an
opinion of Airways’ Associate General Counsel.
5.8. No
Regulatory Impairment shall have occurred for which an adjustment has not been
made and no event or circumstances shall exist that would be likely to result
in
any Regulatory Impairment with respect to any of the Commuter
Slots.
5.9. No
change
shall have occurred after the date of this Agreement in any applicable Law
and
no judgment, decree, order, writ, award or determination by any Governmental
Authority shall have been issued that makes it a violation of Law for Airways
or
Republic to execute, deliver and perform the Slot/Gate Transaction Agreements
to
which either of them is a party.
5.10. On
the
Closing Date, no event shall have occurred and be continuing, or would result
from the sale of the Commuter Slots or the other transactions contemplated
by
Section
3.1,
which
constitutes a Material Default under any Slot/Gate Transaction Agreement, the
Jet Service Agreements, the Investment Agreement or any Aircraft Transaction
Agreement.
5.11. All
appropriate action required to have been taken prior to the Closing Date by
the
FAA, or any governmental or political agency, subdivision or instrumentality
of
the United States, in connection with the transactions contemplated by this
Agreement shall have been taken, and all orders, permits, waivers,
authorizations, written transfer confirmations, exemptions and approvals of
such
entities required to be in effect on the Closing Date in connection with the
transactions contemplated by this Agreement shall have been issued and all
such
other orders, permits, waivers, authorizations, exemptions and approvals shall
be in full force and effect on the Closing Date.
5.12. Republic
shall have received the written consent of the Air Transportation Stabilization
Board (the “ATSB”)
to the
transactions contemplated by the Slot/Gate Transaction Agreements.
5.13. Republic
shall have received a release of the Lien on the Slots granted under that
certain $1,000,000,000 Loan Agreement dated March 31, 2003, with, inter
alia,
the
several lenders from time to time parties thereto, the agent and collateral
agent identified therein and the ATSB (the “ATSB
Lien Release”).
5.14. Republic
shall have received a Consent and Subordination, duly executed by Airways and
each Affiliate of Airways that is an air carrier.
6. Conditions
Precedent to Airways’ Obligations to Sell and Convey the Commuter
Slots.
Airways’ obligation to sell and convey the Commuter Slots to Republic shall be
subject to the fulfillment (or waiver in whole or in part by Airways in its
sole
discretion) of each of the following conditions precedent:
6.1. The
representations and warranties of Republic contained in this Agreement, and
in
the certificates and documents delivered to Airways on or prior to the Closing
Date by Republic, shall be true on the date hereof and on the date of the
Closing as though such representations and warranties were made on and as of
such date (unless any such representation and warranty shall have been made
with
reference to a specified date, in which case such representation and warranty
shall be true and accurate as of such specified date).
6.2. Republic
shall have performed and complied with all of its obligations under this
Agreement, the Investment Agreement, the Transaction Documents, the Aircraft
Transaction Agreements, the Slot/Gate Transaction Agreements and the Jet Service
Agreements to which it is a party.
6.3. Airways
shall have received the Purchase Price in accordance with Section 4.
6.4. Republic
shall have executed and delivered the Slot License Agreement.
6.5. The
Currently Owned Aircraft shall concurrently herewith have been purchased in
accordance with the Republic Aircraft Transaction, except as otherwise agreed
upon by the parties.
6.6. The
EMB
Committed Aircraft shall have concurrently herewith been purchased and leased
in
accordance with the Aircraft Transaction Agreements.
6.7. Airways
shall have received executed counterparts of the following agreements,
instruments, certificates or documents, and such counterparts (a) shall
have been duly authorized, executed and delivered by the respective party or
parties thereto, (b) shall be reasonably satisfactory in form and substance
to Airways and (c) shall be in full force and effect:
(i) this
Agreement;
(ii) the
Slot
License Agreement, the Gates Option Agreement and the Security
Agreement;
(iii) the
Global Aircraft Transaction Agreement;
(iv) the
New
Jet Service Agreement;
(v) (A) a
copy of
the Certificate of Incorporation and Bylaws of Republic and resolutions of
the
board of directors of Republic, in each case certified as of the Closing Date,
by the Secretary or an Assistant Secretary of Republic, duly authorizing the
purchase of the Commuter Slots and the licensing of the Commuter Slots to
Airways under the Slot License Agreement and the execution, delivery and
performance by Republic of the Aircraft Transaction Agreements, the Slot/Gate
Transaction Agreements and the Jet Service Agreements required to be executed
and delivered by Republic on or prior to the Closing Date in accordance with
the
provisions hereof and thereof;
(B) an
incumbency certificate of Republic as to the person or persons authorized to
execute and deliver the relevant documents on behalf of Republic;
(vi) an
Officer’s Certificate of Republic, dated as of the Closing Date, stating that
its representations and warranties set forth in this Agreement are true and
correct as of the Closing Date (or, to the extent that any such representation
and warranty expressly relates to an earlier date, true and correct as of such
earlier date);
(vii) the
following opinions of counsel, in each case dated the Delivery
Date:
(A) (i) an
opinion of ▇▇▇▇▇ and ▇▇▇▇▇▇▇ LLP, special New York counsel to Republic;
and
(B) an
opinion of Republic’s General Counsel.
6.8. Airways
shall be satisfied that no sales, use, value added, goods and services or like
tax, and no stamp tax duty, is payable with respect to the sale of the Commuter
Slots on the Closing Date to the extent that Airways has liability therefore
under Section 9.
6.9. No
change
shall have occurred after the date of this Agreement in any applicable Law
that
makes it a violation of Law for Airways or Republic to execute, deliver and
perform the Slot/Gate Transaction Agreements to which either of them is a
party.
6.10. All
appropriate action required to have been taken prior to the Closing Date by
the
FAA, or any governmental or political agency, subdivision or instrumentality
of
the United States, in connection with the transactions contemplated by this
Agreement shall have been taken, and all orders, permits, waivers,
authorizations, written transfer confirmations, exemptions and approvals of
such
entities required to be in effect on the Closing Date in connection with the
transactions contemplated by this Agreement shall have been issued and all
such
other orders, permits, waivers, authorizations, exemptions and approvals shall
be in full force and effect on the Closing Date.
6.11. Airways
shall have received the written consent of the Air Transportation Stabilization
Board (the “ATSB”)
to the
transactions contemplated by the Slot/Gate Transaction Agreements.
6.12. Airways
shall have received a release of the Lien on the Slots granted under that
certain $1,000,000,000 Loan Agreement dated March 31, 2003, with, inter
alia,
the
several lenders from time to time parties thereto, the agent and collateral
agent identified therein and the ATSB (the “ATSB
Lien Release”).
7. Representations
and Warranties.
7.1. Airways
represents and warrants to Republic:
7.1.1. Airways
is duly organized, validly existing and in good standing as a corporation under
the laws of the State of Delaware, pursuant to Sections 1107 and 1108 of the
Bankruptcy Code and the orders of the Bankruptcy Court has all requisite power
and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, does not result in a
Material Adverse Effect, is qualified to do business in, and is in good standing
in, every jurisdiction where such qualification is required.
7.1.2. The
execution, delivery and performance by Airways of the Slot/Gate Transaction
Agreements to which Airways is or will be a party and the consummation by
Airways of the transactions contemplated thereby are within the corporate powers
of Airways and have been duly authorized by all necessary corporate and, if
required, stockholder action of Airways. This Agreement has been duly
authorized, executed and delivered by Airways and constitutes the legal, valid
and binding obligation of Airways enforceable in accordance with its
terms.
7.1.3. The
execution, delivery and performance by Airways of the Slot/Gate Transaction
Agreements to which Airways is or will be party (i) does not require any consent
or approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in
full force and effect (including without limitation, the Omnibus Order) and
except (A) where failure to obtain such consent, approval, registration, filing
or other action has not had a Material Adverse Effect, (B) the consent of the
ATSB to the transactions contemplated by this Agreement, which has been obtained
and is in full force and effect, (C) receipt of the ATSB Lien Release, which
Airways represents and warrants has been obtained and is in full force and
effect, (D) the filing of UCC financing statements (and continuation statements
with respect thereto) pursuant to the Security Agreement and (E) the written
approval of the FAA to the transfer of the Commuter Slots, (ii) does
not
violate any applicable Law or the charter, bylaws or other organizational
documents of Airways or any order of any Governmental Authority, (iii) will
not violate or result in a default under any Postpetition agreement or
Postpetition loan agreement or any other Postpetition indebtedness agreement
or
instrument of indebtedness binding upon Airways or its assets except where
such
default or violation has not had a Material Adverse Effect and (iv) will not
result in the creation or imposition of any Lien (other than the Lien of the
Security Agreement and the Gates Option Agreement) on any assets or properties
of Airways.
7.1.4. The
performance of any action by Airways required or contemplated by this Agreement
or any other Slot/Gate Agreement to which Airways is or will be a party is
not
restrained or enjoined by any order of the Bankruptcy Court or by any
Governmental Authority (either temporarily, preliminarily or
permanently).
7.1.5. Except
for Seabury Aviation Advisors LLC and/or its Affiliates (“Seabury”),
no
Person has acted, directly or indirectly, as a broker, finder or financial
advisor of Airways in connection with the Slot/Gate Transaction Agreements,
and
except for Seabury (whose fees and expenses shall not be the responsibility
of
Republic or any of its Affiliates), no Person acting for or on behalf of Airways
is entitled to receive any broker’s, finder’s or similar fee or commission in
respect thereof based in any way on any agreement, arrangement or understanding
made by or on behalf of Airways with respect to the Slot/Gate Transaction
Agreements.
7.1.6. Airways
is not an “investment company” as defined in, or subject to regulation under,
the Investment Company Act of 1940 or (ii) a “holding company” as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
Airways is a Certificated Air Carrier.
7.1.7. Schedule
1
sets
forth a true and accurate list of the Commuter Slots. Immediately prior to
Closing, Airways and each Holder Affiliate indicated on Schedule
1
is the
FAA holder of record of each of the Commuter Slots set forth opposite its name
on Schedule
1
pursuant
to authority granted to it by the FAA under the Slot Regulations and has full
right, title and interest in and to each of the Commuter Slots free and clear
of
all Liens and restrictions or limitations (other than those expressly set forth
in such Subparts or by statute, Republic Liens, or Temporary Exchanges permitted
by the Slot License Agreement). Schedule
2
hereto
sets forth a true and accurate list of all Temporary Exchanges in effect
immediately prior to Closing. Airways is utilizing each of the Commuter Slots
in
a manner consistent with all applicable laws governing Slots, including but
not
limited to the Use Provisions. The Commuter Slots come from Airways’ or the
applicable Holder Affiliate’s “then-current FAA approved base” as required by
14 C.F.R. Section 93.221, are not international Slots, temporary Slots
or
Slots designated for essential air service as those terms are used in 14 C.F.R.
Section 93.219.
7.1.8. Airways
has not received any notice from any Governmental Authority and is not aware
of
any event or circumstance that would be likely to result in any Regulatory
Impairment of all or any of the Commuter Slots.
7.2. Republic
represents and warrants to Airways, each of which shall survive the execution
and delivery of this Agreement, that:
7.2.1. Republic
is duly organized, validly existing and in good standing as a corporation under
the laws of the State of Delaware.
7.2.2. The
execution, delivery and performance by Republic of the Slot/Gate Transaction
Agreements to which Republic is or will be a party and the consummation by
Republic of the transactions contemplated thereby are within Republic’s
corporate powers and have been duly authorized by all necessary corporate action
of Republic. This Agreement has been duly authorized, executed and delivered
by
Republic and constitutes the legal, valid and binding obligation of Republic,
enforceable in accordance with its terms.
7.2.3. The
execution, delivery and performance by Republic of the Slot/Gate Transaction
Agreements to which Republic is or will be party (i) does not require
any
consent or approval of, registration or filing with, or any other action by,
any
Governmental Authority, except such as have been obtained or made and are in
full force and effect and (ii) will not violate any applicable Law or the
charter, bylaws or other organizational documents of Republic.
7.2.4. Other
than Affiliates of Republic, no Person has acted directly or indirectly as
a
broker, finder or financial advisor of Republic in connection with the Slot/Gate
Transaction Agreements, and other than fees that may be payable to Affiliates
of
Republic (whose fees and expenses shall not be the responsibility of Airways
or
any of its Affiliates), no Person acting for or on behalf of Republic is
entitled to receive any broker’s, finder’s or similar fee or commission in
respect thereof based in any way on any agreement, arrangement or understanding
made by or on behalf of Republic with respect to the Slot/Gate Transaction
Agreements.
8. Adjustment
to Purchase Price.
If
prior to the Closing, any Commuter Slot is subject to Regulatory Impairment
and
Airways does not elect to replace such Slot with an Unrestricted Commuter Slot
which in the reasonable determination of Republic is of substantially equivalent
utility (including within substantially equivalent time period, with equal
or
higher level of weekly frequencies and with the right to transfer under 14
C.F.R. § 93.221), the Purchase Price shall be reduced by [*].
9. Tax
Indemnification.
(a) Airways
shall pay, and on demand shall indemnify, protect, defend and hold harmless
Licensor from and against, all Taxes (other than Excluded Taxes as defined
in
Section 9(f) hereof) which are imposed upon or with respect to, or are required
to be paid in connection with or as a result of, any of the payments or
transactions or activities contemplated in the Slot/Gate Transaction Agreements
(regardless of how or when such Taxes are imposed, whether imposed upon
Republic, Airways, the Licensed Slots or otherwise), including, without
limitation, Taxes imposed on or with respect to, or required to be paid in
connection with or as a result of any of the following: (i) the Licensed Slots
or any interest in any thereof, (ii) the purchase, acceptance, delivery,
ownership, licensing, control, possession, use or operation of the Licensed
Slots or (iii) any License Fees, receipts, gains, earnings, income, or other
amounts paid or payable or received or receivable with respect to the Licensed
Slots or the transactions contemplated in the Slot Transaction Agreements,
or
(iv) any of the Slot/Gate Transaction Agreements or any amendment or supplement
thereto or the execution, delivery, filing, recording, performance or
enforcement of any thereof.
(b) Payments;
Tax Reports; Information.
(i) Airways
shall pay each Indemnified Tax (as defined in clause (ii) below) in a timely
and
proper manner directly to the relevant Governmental Authority or taxing
authority, to the extent that direct payment by Airways is permitted by
applicable Law, and shall deliver to Republic the original (or a certified
copy
of) an official receipt for Airways’ payment of such Tax (if obtainable by
Airways through the exercise of reasonable efforts) or such other documentary
evidence of Airways’ payment of such Tax as is reasonably acceptable to
Republic. If Airways fails to pay any Indemnified Tax when due to the relevant
Governmental Authority or other taxing authority in the time and manner required
by the applicable provisions of the Slot/Gate Transaction Agreements, Airways
shall indemnify Republic for, in addition to the Indemnified Tax, any
incremental taxes, interest or penalties that may become payable by Republic
as
a result of any such failure. Any additional amount payable by Airways directly
to Republic pursuant to this Section 9
shall be
paid together with the payment to which such additional amount relates. Any
amount payable by Airways directly to Republic pursuant to this clause (b)
shall
be paid in immediately available funds within thirty (30) days after Airways
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*
Confidential
receives
Republic’s written demand therefor (which demand shall include or be accompanied
by a description in reasonable detail of the Indemnified Tax and the calculation
of the indemnity demanded), provided that Airways shall not be required to
pay
any Tax more than five (5) Business Days before the date on which payment of
such Tax is due. In addition, if Republic receives a written invoice or other
documentation from a Governmental Authority or other taxing authority requesting
payment of an Indemnified Tax, Republic will send a copy of such document to
Airways promptly after receipt thereof.
(ii) Reports.
If any
report, return, certification, statement or other document (a “Tax
Document”)
is
required to be filed by Republic with respect to any Tax for which Airways
is
required to indemnify Republic pursuant to this Section 9
(an
“Indemnified
Tax”),
Airways shall promptly notify Republic of such requirement and:
(A) if
permitted by applicable Law, prepare and file such Tax Document in a timely
and
proper manner (except for any such Tax Document which Republic notifies Airways
in writing that Republic intends to prepare, sign and file) and deliver a copy
of such Tax Document to Republic, provided that Republic promptly delivers
to
Airways, at Airways timely written request and expense, such information within
Republic’s reasonable control as Airways may reasonably request and as may be
reasonably necessary for Airways to prepare such Tax Document; or
(B) Airways
is not permitted by applicable Law to file such Tax Document, Airways shall
prepare and deliver to Republic a proposed form of such Tax Document within
a
reasonable time prior to the time such Tax Document is required to be
filed.
(iii) Information.
Airways
shall furnish to Republic, promptly after receipt of Republic’s written request
therefor, such documents and other information as are maintained by Airways
in
the regular course of its business or required to be maintained by it pursuant
to applicable Law as Republic may reasonably request to enable Republic to
comply with its Tax reporting, payment, audit and litigation requirements
relating to Republic’s participation in the transactions contemplated in the
Slot/Gate Transaction Agreements. In addition, Republic shall furnish to Airways
such information maintained in the regular course of its business or required
to
be maintained pursuant to applicable Law as is reasonably requested by Airways
in writing and reasonably necessary to enable Airways to comply with its Tax
reporting, payment, audit and litigation requirements relating to the
transactions contemplated in the Slot/Gate Transaction Agreements.
(iv) Refunds.
If and
to the extent that Republic receives a refund (in cash, as an offset against
any
liability for any Tax, or otherwise) of any Indemnified Tax previously paid
by
Airways or for which Airways previously paid an indemnity or any additional
amount to Republic pursuant to Sections 9
and 10
hereof
(a “Refund”)
or if
Republic realizes a Tax Benefit that has not otherwise been taken into account
in calculating the amount payable by Airways as a result of the payment of
an
Indemnified Tax, Republic shall pay to Airways, the amount of such Refund or
Tax
Benefit (together with any interest received or credited with respect thereto)
minus the net amount of all Taxes payable by Republic with respect to the
receipt or accrual of such Refund (net of all Tax Benefits not previously taken
into account by Republic) with respect to claiming and obtaining such Refund,
provided,
however, that if a Material Breach with respect to Airways exists and is
continuing, Republic may hold the amount then due to Airways under this
Section 9
until
such Material Breach ceases to exist, and provided, further, that in no event
shall such payment (other than interest received or credited and net of any
Taxes on such interest) exceed (i) the amount of all prior payments by Airways
to Republic under Section 10 of the Slot Option Agreement or this Section 9
minus
(ii) the amount of all prior payments by Republic pursuant to this Section 9,
but any
such excess shall be carried forward and applied as a credit to reduce any
future indemnity liability of Airways under Sections 9
and 10.
If
Republic pays Airways any amount under this Section 9
and if
and to the extent that it is subsequently determined by the taxing authority
having jurisdiction that Republic was not entitled to the Refund for which
Republic made such payment to Airways, such determination shall be treated
as
the imposition of a Tax for which Airways is obligated to indemnify Republic
pursuant to the provisions of Section 9.
(c) Contest;
Survival.
(i) Contest.
If
Republic receives a written notice from any Governmental Authority or taxing
authority asserting a liability against Republic for any Tax for which Airways
would be required by Section 9
to
indemnify Republic
(a “Tax
Claim”),
Republic shall give Airways written notice of such Tax Claim as soon as
reasonably practicable, provided that any failure of Republic to give such
notice or any delay by Republic in giving such notice shall not affect the
obligations of Airways under this Section 9,
except,
and only to the extent, that Airways can demonstrate that the failure or delay
in providing such notice was unreasonable and resulted in additional obligations
for Airways in defending against any suit or proceeding relating to such matter.
If Airways delivers to Republic within thirty (30) days after the date of
receipt of Republic’s notice, a written request that Republic contest such Tax
Claim (or, in the case of an Airways Controlled Contest, permit Airways to
contest such Tax Claim) and if (and only so long as) the conditions described
in
Section 9(c)(ii)
are
satisfied, Republic shall, in good faith and at Airways’ expense, contest (or,
in the case of an Airways Controlled Contest, permit Airways to contest if
permitted by applicable Law) the validity, applicability or amount (as the
case
may be) of the Taxes that are the subject of such Tax Claim by (A) resisting
payment thereof, (B) not paying such Taxes except under protest if protest
is
necessary and proper, or (C) if payment is made, using reasonable efforts to
obtain a refund thereof in administrative and/or judicial proceedings permitted
by applicable Law (including all appeals, other than an appeal or petition
to
the United States Supreme Court).
(ii) Conditions.
Republic’s obligation under Section 9(c)(i)
with
respect to any Tax Claim is subject to the satisfaction of the following
conditions at the time the contest is requested and at all times while the
contest (if any) is continuing: (A) no Material Breach with respect to Airways
shall have occurred and be continuing (unless
Airways has provided to Republic security for its obligations hereunder that
is
reasonably satisfactory to Republic), (B) Republic shall have received (at
Airways’ expense) from independent tax counsel selected by Airways and
reasonably acceptable to Republic a written opinion that there is a Reasonable
Basis (within the meaning of Formal Opinion 85-352 of the American Bar
Association Standing Committee on Ethics and Professional Responsibility) for
such contest, (C) Airways
shall have agreed to pay, and shall be paying, on demand, all reasonable costs
and expenses incurred by Republic in connection with the contest of such Tax
Claim, (D) if the contest is to be conducted in a manner requiring payment
of
the Tax Claim, Airways shall have advanced to Republic, without interest, the
amount of the Tax Claim and shall have agreed to indemnify Republic for any
net
adverse Tax consequences of such interest-free advance, (E) Airways shall have
agreed in writing that the Taxes that are the subject of the Tax Claim are
Indemnified Taxes, provided that Airways shall not be bound by such
acknowledgement to the extent that the final determination of the Tax Claim
articulates conclusions of law and fact that demonstrate that the Taxes that
are
the subject of the Tax Claim are Excluded Taxes, and (F) the action to be taken
will not result in any risk of criminal penalty or any material risk of sale,
forfeiture or loss of the Licensed Slots (unless Airways shall have provided
security to Republic that is reasonably satisfactory to Republic).
(iii) Airways
Controlled Contests.
For the
purposes of this Section 9,
the
term “Airways
Controlled Contest”
means a
contest pursuant to this Section 9(c)
involving only Indemnified Taxes, provided that (A) such contest may be
conducted under applicable Law in the name of Airways, (B) no tax return of
Republic will be held open with respect to which Republic may be considered
to
have an actual or potential liability for Taxes that are not Indemnified Taxes,
and (C) Republic shall not then be contesting the same Tax in the same
jurisdiction. Airways shall, at its expense, conduct and control any Airways
Controlled Contest and, in the case of any contest involving a claim for one
or
more Indemnified Taxes and a claim for one or more Excluded Taxes, to conduct
and control such contest to the extent that it relates to claims for Indemnified
Taxes, but only to the extent that the contest of the claims for Indemnified
Taxes may be and are severed from the contest of claims for Excluded Taxes
(and
Republic shall, at the request and expense of Airways, use reasonable efforts
in
good faith to obtain such severance), provided, however, that in no event shall
Airways be permitted, or Republic be required, to take any action pursuant
to
this Section 9(c)
unless
(and only so long as) the conditions described in Section 9(c)(ii)
are
satisfied. With respect to any contest conducted by Airways, Airways shall
retain control over such contest but shall consult in good faith with Republic
and shall consider in good faith reasonable requests of Republic, including
reasonable requests to participate in such contest.
(iv) Republic
Controlled Contests.
Republic shall, at the expense of Airways, conduct and control any contest
(other than an Airways Controlled Contest) of a Tax Claim pursuant to this
Section 9(c);
provided,
however,
that in
no event shall Republic be required to commence or continue any contest pursuant
to this Section 9(c)
unless
(and only so long as) the conditions described in Section 9(c)(ii)
are
satisfied. With respect to any contest conducted by Republic, Republic shall
have sole control over such contest (including choice of forum) but shall
consult in good faith with Airways and shall consider in good faith reasonable
requests of Airways, including reasonable requests to participate in such
contest.
(v) Republic
shall not settle or compromise any Tax Claim or contest proceeding or (except
as
permitted by Section 9(c)(i))
refrain
from appealing any adverse determination with respect thereto without the prior
written consent of Airways, provided that Republic may in its sole discretion
unconditionally waive in writing its right to the indemnification provided
for
in Section 9,
with
respect to any Tax Claim and refrain from contesting, or continuing the contest
of, such claim, in which event:
(A) Airways
shall have no liability to Republic with respect to such Tax Claim (and, if
the
Indemnified Tax that is the subject of such Tax Claim is a recurring Tax, with
respect to any corresponding claim with respect to any other taxable period
if
and to the extent that such failure to contest has a material adverse effect
upon the contest of such corresponding claim), and
(B) Republic
shall refund to Airways any amounts theretofore paid or advanced by Airways
with
respect to such Indemnified Tax, excluding all contest costs described in
Section 9(c)(ii)
above
previously incurred, plus interest at the rate on refunds of the relevant
Governmental Authority or taxing authority.
(vi) Upon
a
final determination of a contest pursuant to this Section 9(c):
(A) if
the
amount of the indemnity payable by Airways pursuant to this Section 9
with
respect to the contested Tax Claim exceeds the amount (if any) advanced by
Airways to Republic pursuant to Section 9(c)(ii)(D),
Airways
shall pay to Republic the amount of such excess not later than thirty (30)
days
after the day on which Airways receives Republic’s written demand for the
indemnity payable by Airways after the date of such final determination;
or
(B) if
the
amount (if any) of the advance made by Airways to Republic pursuant to
Section 9(c)(ii)(D)
exceeds
the amount of the indemnity payable by Airways to Republic pursuant to this
Section 9
with
respect to the contested Tax Claim, Republic shall pay to Airways the amount
of
such excess not later than thirty (30) days after the date on which Republic
receives Airways’ written demand therefor after the date of such final
determination.
In
addition, if Republic receives an award of attorney’s fees in a contest for
which Airways has paid an allocable portion of the contest expenses, Republic
shall pay to Airways that portion of the award that relates to the issues
contested with respect to a Tax indemnified under this Section 9.
(d) Review
by Independent Accountants.
In the
event that there is a dispute with respect to the calculation of any amount
under Section 9,
such
dispute will be referred to an independent accountant jointly selected by
Republic and Airways for determination. The determination of the independent
accountant shall be final, binding and conclusive on Airways and Republic.
Airways shall pay the fees and expenses of the accounting firm unless the
accounting firm determines that [*].
(e) Change
in Circumstances, Mitigation.
If
Airways incurs an indemnity liability under Section 9
or if it
becomes reasonably foreseeable that Airways would (but for this Section 9(e)
incur an
indemnity liability under Section 9,
then
Airways and Republic shall consult in good faith with a view to restructuring
the transactions contemplated in this Agreement and the other Slot/Gate
Transaction Agreements so that the indemnity liability can be avoided or
minimized, provided that Republic shall not have any obligation to take any
action pursuant to this Section 9(e)
which
Republic would (but for this proviso) be required to take if
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Confidential
Republic
determines, in its good faith, that taking such action would result in a
material risk that Republic or any of its Affiliates could incur a liability,
cost or expense for which Airways is not required by any Slot/Gate Transaction
Agreement to indemnify Republic, unless Airways shall have delivered to Republic
a written undertaking to indemnify Republic and its Affiliates against such
loss, cost or expense in a manner reasonably satisfactory to
Republic.
(f) Definitions.
For
purposes of this Section 9
the
terms indicated below shall have the meanings given to them below:
(i) “Excluded
Tax”
means,
in respect of Republic, any of the following Taxes:
(A) any
Tax
imposed (by withholding or otherwise) on, or calculated by reference to, the
gross or net income (including any minimum Tax, any accumulated earnings Tax
or
personal holding company Tax, or any value added or turnover tax imposed in
direct substitution for an income Tax), profits (including any excess profits
Tax), gains, gross or net receipts or assets, capital, or net worth, corporate
franchise or conduct of business of Republic by any jurisdiction under the
laws
of which Republic or Related Indemnitee is incorporated or otherwise organized
or in which Republic or Related Indemnitee is booking the transactions
contemplated by the Slot/Gate Transaction Agreements or has an office or other
fixed place of business or is engaged in business;
(B) any
Tax
which is imposed on or with respect to any event or period occurring after
the
return of the Licensed Slots to Republic pursuant to the terms of the Slot
License Agreement or the termination of the Term or the discharge in full of
Airways obligation to pay License Fees and other amounts due under the Slot/Gate
Transaction Agreements, other than any Tax imposed on or with respect to any
payment by Airways pursuant to the Slot/Gate Transaction Agreements or the
performance of any other obligation of Airways pursuant to the Slot/Gate
Transaction Agreements;
(C)
any
Tax
imposed by any Governmental Authority or taxing authority on or with respect
to
the sale, assignment, transfer or other disposition of all or any part of (i)
Republic’s right, title and interest in the Licensed Slots or this Agreement,
any other Slot/Gate Transaction Agreement or the income derived therefrom or
(ii) Republic’s interest in itself, in each case other than any sale,
assignment, transfer or other disposition that occurs in connection with (x)
an
exercise of remedies after the occurrence and during the continuance of a
Material Breach in respect of Airways, or (y) a substitution or replacement
of
any Licensed Slot;
(D) any
Tax
caused by the gross negligence or willful misconduct of Republic or its Related
Indemnitees or the breach by Republic or its Related Indemnitees of any
representation, warranty or covenant given by it or to be performed by it under
this Agreement or any Slot/Gate Transaction Agreement;
(E) in
the
case of a transferee of Republic, Taxes to the extent that the aggregate amount
of such Taxes exceeds the aggregate amount of the Taxes that would have been
imposed on or payable by Republic and for which Airways would have been required
to indemnify Republic pursuant to Section 9
under
applicable Laws in effect on the date of transfer;
(F) any
Tax
imposed on or payable by Republic to the extent caused by, and would not have
been imposed but for, the existence of a Republic Lien;
(G) any
Tax
imposed on or payable by Republic to the extent caused by the failure of
Republic or its Related Indemnitees to file when due a Tax Document (as defined
in Section 9(b)(ii))
to
which Section 9(b)(ii)
applies,
or to pay any Tax when due (if Republic is required to pay such Tax pursuant
to
the terms of the Slot/Gate Transaction Agreements), other than where any such
failure arises as a result of any breach by Airways of any provision of, or
the
default by Airways in the performance of, its obligations under this Agreement
or as a result of any Material Breach with respect to Airways occurring or
otherwise arising as a result of the willful misconduct or gross negligence
of
Airways;
(H) any
Tax
to the extent such Tax is the result of, and would not have been incurred but
for, any activities of Republic or its Related Indemnitee in the jurisdiction
imposing such Tax that are unrelated to Republic’s dealings with Airways,
unrelated to the transactions contemplated in the Slot/Gate Transaction
Agreements and unrelated to the use of the Licensed Slots thereof by Airways
or
any of its Affiliates;
(I) any
Tax
to the extent such Tax is the result of, and would not have been incurred but
for, an amendment to any Slot/Gate Transaction Agreement to which Airways is
not
a party unless such amendment (i) is
made
at Airways’ written request or with Airways written approval; (ii) is made while
a Material Breach with respect to Airways exists; or (iii) is required by the
terms of the Slot/Gate Transaction Agreements;
(J) any
Tax
imposed arising from a “prohibited transaction” under Section 406 of ERISA or
Section 4977(c)(1) of the Code;
(K) any
Tax
to the extent that such Tax is imposed or increased as a result of the failure
of Republic or its Related Indemnitee or any financing party to provide Airways
any forms, certifications or other documents in conformity with the requirements
of Section 9(c);
or
(L) any
Tax
incurred or increased as a result of Republic or a Related Indemnitee not being
a “United States person” within the meaning of Section 7701(a)(3) of the Code or
as a result of Republic’s participation in the transactions contemplated by the
Slot/Gate Transaction Agreements through any office, permanent establishment
or
other place of business located outside the United States; or
(M) any
Tax
which is the result of or attributable to the financing of Republic’s cost of
acquiring, whether in whole or in part, the Commuter Slots or the Gates or
any
part thereof or any interest therein.
(ii) “Related
Indemnitee” means an Affiliate of Republic.
(iii) “Tax
Benefit”
means
any benefit with respect to Taxes (as a result of deductions, credits or other
Tax benefits) which are actually realized by Republic or its Related Indemnitees
and which are attributable to the incurrence or payment by Republic or its
Related Indemnitees of any indemnified Losses or Taxes.
(f) Reimbursements
by Republic.
If for
any reason Airways is required to make any payment with respect to Taxes
(including, but not limited to, any withholding Taxes) imposed on or with
respect to Republic in respect of the transactions contemplated by the Slot/Gate
Transaction Agreements and such Taxes are not the responsibility of Airways
under this Section 9,
Republic shall pay to Airways an amount which equals the amount paid by Airways
with respect to such Taxes plus interest at the [*]
(the
“Overdue Rate”), during the period commencing on the date Airways provides
Republic written demand for payment of such amount pursuant to this Section 9
and the
date Airways actually receives such payment.
10. Indemnification.
10.1. Indemnification
of Republic.
Airways
agrees to indemnify, defend and hold harmless Republic and its Affiliates and
each of their respective successors, assigns, agents, employees, managers,
officers and directors (collectively, the “Indemnitees”)
from
and against any and all losses, claims, damages, liabilities, costs and expenses
(including reasonable attorneys’ fees incurred in investigating or
_____
*
Confidential
defending
the same) (collectively, “Damages”)
in any
way relating to, based upon, or arising out of (a) the Commuter Slots or the
Gates; (b) this Agreement or any other Slot/Gate Transaction Agreement; or
(c)
the breach of any representation or warranty of Airways contained herein or
in
any other Slot/Gate Transaction Agreement; provided,
that,
Airways
shall not be required to indemnify any Indemnitee for any Damages to the extent
attributable to one or more of the following: (1) any representation
or
warranty by such Indemnitee in the Slot/Gate Transaction Agreements being
incorrect in any material respect; (2) the failure by such Indemnitee
to
perform or observe any agreement, covenant or condition in any of the Slot/Gate
Transaction Agreements; (3) acts or omissions involving the willful
misconduct or gross negligence of such Indemnitee; (4) a disposition
(voluntary or involuntary) by such Indemnitee of all or any part of such
Indemnitee’s interest in the Commuter Slots, the Gates or the Slot/Gate
Transaction Agreements; (5) any amount which constitutes a loss of future
profits; (6) any Taxes; or (7) any Damages to the extent attributable
to
acts, omissions or events occurring with respect to the period (i) if
the
Repurchase Option is exercised, after termination of the Security Agreement
in
accordance with Section 6 thereof, and full and final compliance by
Airways
with all of the terms of the Slot/Gate Transaction Documents and performance
by
Airways of all its obligations under the Slot/Gate Transaction Documents and
(ii) otherwise, after full and final compliance by Airways with all
of the
terms of the Slot License Agreement and performance by Airways of all of its
obligations hereunder and under the Slot License Agreement.
10.2. Indemnification
Procedure.
(a) Any
Indemnitee (the “Indemnified
Party”)
seeking indemnification hereunder shall give to the party or parties obligated
to provide indemnification to such Indemnified Party (the “Indemnitor”)
a
notice (“Claim
Notice”)
describing in reasonable detail the facts giving rise to its claim for
indemnification hereunder, and shall include in such Claim Notice (if then
known) the amount or method of computation of the amount of the claim, and
a
reference to the provision of this Agreement or any other agreement, document
or
instrument executed and delivered hereunder or in connection herewith upon
which
such claim is based; provided,
that a
Claim Notice in respect of any action at law or suit in equity against the
Indemnified Party by a third Person, as to which indemnification will be sought,
shall be given promptly after service of process in such action or suit is
properly made on such Indemnified Party, and, provided,
further,
that
failure of the Indemnified Party to give the Indemnitor prompt notice in respect
of any such action or suit as provided herein shall not relieve the Indemnitor
of its obligations hereunder, except to the extent such Indemnitor shall have
been prejudiced by such failure.
(b) If
no
Material Breach with respect to Airways shall have occurred and be continuing,
the Indemnitor shall be entitled, at its sole cost and expense, acting through
counsel reasonably acceptable to the respective Indemnified Party, (A) in any
judicial or administrative proceeding that involves solely a claim for Damages
subject to indemnification under this Section 10,
to
assume responsibility for and control thereof, (B) in any judicial or
administrative proceeding involving a claim for Damages and other claims related
or unrelated to the transactions contemplated by the Slot/Gate Transaction
Agreements, to assume responsibility for and control of such claim for Damages
subject to indemnification under this Section 10
to the
extent that the same may be and is severed from such other claims (and such
Indemnified Party shall use reasonable efforts to obtain such severance), and
(C) in any other case, to be consulted by such Indemnified Party with respect
to
judicial proceedings subject to the control of such Indemnified Party and to
be
allowed, at the Indemnitor’s sole expense, to participate therein.
Notwithstanding any of the foregoing to the contrary, the Indemnitor shall
not
be entitled to assume responsibility for and control of any such judicial or
administrative proceedings (i) if such proceedings will involve a material
risk of the sale, forfeiture or loss of, or the creation of any Lien on, the
Licensed Slots or any part thereof, unless in such an event the Indemnitor
shall
have posted a bond or other security satisfactory to the relevant Indemnified
Parties in respect to such risk or (ii) if such proceedings could, in
the
reasonable judgment of the Indemnified Party, entail any risk of criminal
liability. The Indemnified Party may participate at its own expense and with
its
own counsel in any judicial proceeding controlled by the Indemnitor pursuant
to
the preceding provisions. The
Indemnitor shall not be liable for any settlement of any proceeding effected
without its written consent (which consent shall not be unreasonably withheld),
but if settled with such consent or if there be a final judgment for the
plaintiff, the Indemnitor agrees to indemnify the Indemnified Party from and
against any loss or liability specified in such settlement or judgment. No
Indemnitor shall, without the prior written consent of the Indemnified Party,
effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Party is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Party from all liability
or claims that are the subject matter of such proceeding.
(c) With
respect to any payment or indemnity made pursuant to this Section 10
(including payments or indemnities made pursuant to this sentence), such payment
or indemnity shall include any amount necessary to hold the Indemnified Party
harmless on an after-tax basis from all Taxes required to be paid by the
Indemnified Party with respect to such payment or indemnity; provided,
however,
that if
the Indemnified Party realizes a tax benefit by reason of such payment or
indemnity, the Indemnified Party shall pay the Indemnitor an amount equal to
the
net value to the Indemnified Party of such tax benefit when, and to the extent,
realized (such payments by the Indemnified Party not to exceed in the aggregate
the amount of the related indemnity paid by the Indemnitor), but not before
the
Indemnitor shall have made all payments or indemnities to or on behalf of the
Indemnified Party required pursuant to this Section 10;
provided,
further,
however,
that if
the Indemnified Party loses such tax benefit subsequent to any payment to the
Indemnitor with respect thereto, the Indemnitor shall indemnify the Indemnified
Party with respect to such loss pursuant to the provisions of this Section 10.
If
an
Indemnified Party is not a party to this Agreement, the Indemnitor may require
such Indemnified Party to agree in writing to the terms of this Section 10.2
prior to
making any payment to such Indemnified Party under this Section 10.
11. No
Waiver.
The
failure of a party to require performance of any provision of this Agreement
shall in no way affect that party’s right thereafter to enforce such provision
nor shall the waiver by a party of any breach of any provision of this Agreement
be taken or held to be a waiver of any further breach of the same provision
or
any other provision. No investigation by a party hereto of any other party
hereto prior to or after the date hereof shall stop or prevent the exercise
of
any right hereunder or be deemed to be a waiver of any such right.
12. Severability
and Survival of Provisions.
If any
provision of this Agreement is held to be invalid, illegal or unenforceable,
the
validity, legality and enforceability of the remaining provisions shall not
in
any way be affected or impaired thereby. The terms, conditions, rights and
remedies set forth in Sections 9
and 10
shall
survive the expiration or termination of this Agreement.
13. Specific
Performance.
The
parties hereto specifically acknowledge that monetary damages are not an
adequate remedy for violations of this Agreement, and that any party hereto
may,
in its sole discretion, apply to a court of competent jurisdiction for specific
performance or injunctive or such other relief as such court may deem just
and
proper in order to enforce this Agreement or prevent any violation hereof and,
to the extent permitted by applicable Law and to the extent the party seeking
such relief would be entitled to the merits to obtain such relief, each party
waives any objection to the imposition of such relief.
14. Interpretive
Provisions.
Unless
otherwise expressly provided, the following shall apply in interpreting the
provisions of this Agreement:
(a) The
words
“hereof”, “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Article, Section, subsection, Annex, Schedule
and Exhibit references are to this Agreement unless otherwise
specified.
(b) The
meanings given to terms defined herein shall be equally applicable to both
the
singular and plural forms of such terms.
(c) References
to any Person shall include such Person’s successors and permitted assigns
subject to any limitations provided for herein.
(d) References
to agreements shall include such agreements as amended, modified or
supplemented.
(e) References
to any Law shall include such Law as amended, modified, supplemented,
substituted, reissued or reenacted from time to time.
(f) The
words
“including”, “including, without limitation”, “including, but not limited to”
and terms or phrases of similar import, with respect to any matter or thing,
mean including without limitation such matter or thing.
(g) Headings
used in this Agreement are for convenience only and shall not in any way affect
the construction of, or be taken into consideration in interpreting, this
Agreement.
15. Notices.
All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given, if delivered personally, by telecopier or sent
by first class mail, postage prepaid, as follows:
If
to
Airways, to:
US
Airways Group, Inc.
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
General Counsel
Telecopy
No. ▇▇▇-▇▇▇-▇▇▇▇
With
a
copy to:
▇▇▇▇▇▇
& ▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇,
▇.▇. ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopier
No. 202-942-5999
With
a
copy to:
Vedder,
Price, ▇▇▇▇▇▇▇ & Kammholz, P.C.
▇▇▇
▇.
▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇
If
to
Republic, to:
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Chief Executive Officer
Telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇
With
a
copy to:
Wexford
Capital LLC
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇, Vice President and General Counsel
Telecopier:
▇▇▇ ▇▇▇ ▇▇▇▇
and
▇▇▇▇▇
& ▇▇▇▇▇▇▇ L.L.P.
▇▇▇
▇▇▇▇
▇▇▇▇▇▇,
▇.▇.
▇▇▇▇▇▇▇▇▇▇,
▇.▇. ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopier:
(▇▇▇) ▇▇▇ ▇▇▇▇
16. Entire
Agreement; Amendment.
This
Agreement and the Slot/Gate Transaction Agreements set forth the entire
agreement between the parties hereto with respect to the transactions
contemplated by this Agreement. Any provision of this Agreement may only be
amended, modified or supplemented in whole or in part at any time by an
agreement in writing among the parties hereto executed in the same manner as
this Agreement.
17. Survival. All
representations, warranties, indemnities and covenants made by any party hereto,
herein or in any certificate or other instrument delivered by such party or
on
the behalf of any such party under this Agreement or any other Slot/Gate
Transaction Agreement, shall be considered to have been relied upon by the
other
party hereto and shall survive the consummation of the transactions contemplated
hereby on the Closing regardless of any investigation made by the other party
or
on behalf of the other party.
18. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed to constitute an original, but all of which together shall constitute
one
and the same document.
19. Governing
Law.
To the
extent not governed by the Bankruptcy Code, this Agreement shall be governed
by,
and interpreted in accordance with, the Laws of the State of New York applicable
to contracts made and to be performed in that State without reference to its
conflict of laws rules (other than Sections 5-1401 and 5-1402 of the
New
York General Obligations Law). The parties hereto agree that the appropriate
and
exclusive forum for any disputes arising out of this Agreement solely between
Airways and Republic shall be the Bankruptcy Court, or if such court will not
hear any such suit, the U.S. District Court for the Southern District of New
York, and, the parties hereto irrevocably consent to the exclusive jurisdiction
of such courts, and agree to comply with all requirements necessary to give
such
courts jurisdiction. The parties hereto further agree that the parties will
not
bring suit with respect to any disputes arising out of this Agreement except
as
expressly set forth below for the execution or enforcement of judgment, in
any
jurisdiction other than the above specified courts. Each of the parties hereto
irrevocably consents to the service of process in any action or proceeding
hereunder by the mailing of copies thereof by registered or certified airmail,
postage prepaid, to the address specified in Section 15
hereof.
The foregoing shall not limit the rights of any party hereto to serve process
in
any other manner permitted by the Law or to obtain execution of judgment in
any
other jurisdiction. The parties further agree, to the extent permitted by Law,
that final and non-appealable judgment against any of them in any action or
proceeding contemplated above shall be conclusive and may be enforced in any
other jurisdiction within or outside the United States by suit on the judgment,
a certified or exemplified copy of which shall be conclusive evidence of the
fact and the amount of indebtedness. THE PARTIES AGREE TO WAIVE ANY AND ALL
RIGHTS THAT THEY MAY HAVE TO A JURY TRIAL WITH RESPECT TO DISPUTES ARISING
OUT
OF THIS AGREEMENT.
20. Successors
and Assigns.
Except
as otherwise expressly provided herein, the provisions hereof shall inure to
the
benefit of, and be binding upon, Airways’ and Republic’s successors and assigns.
Neither this Agreement nor any rights or obligations hereunder shall be
assignable by any party hereto without the prior written consent of the other
party hereto, provided that (i) Republic shall be permitted to assign all or
any
portion of its rights and obligations hereunder to any of its wholly owned
Subsidiaries so long as such Subsidiaries are Certificated Air Carriers (if
required in connection with the rights or obligations being assigned) and
capable of performing each of Republic’s obligations and agreements proposed to
be assigned, without any other party’s consent,
provided that Republic shall remain obligated hereunder, and (ii) Republic
may
also sell and license back and/or grant a security interest in all or any part
of its interest in the Licensed Slots, this Agreement or any other Slot
Transaction Agreement in accordance with Section 21
below.
21. Republic
Financing Right.
Republic may at any time, with not less than ten (10) Business Days’ notice to
Airways, sell and license back all or any part of its interest in the Commuter
Slots and/or grant a security interest in all or any part of its interest in
the
Commuter Slots, this Agreement or any other Slot Transaction Agreement to a
third party (such third party, including any successors and assigns, an
“Assignee”
and
such sale and/or grant, an “Assignment”)
provided that as (i) such Assignment does not violate the Securities
Act or
any other law, as the case may be, and does not require Airways to be an
“issuer” of Securities registered under the Securities Act, (ii) Assignee
shall provide a covenant of quiet enjoyment in writing to Airways substantially
similar to Section 11 of the Slot License Agreement, (iii) Republic
shall pay all reasonable and documented out-of-pocket expense of Airways in
connection with such grant and transfer or “back-leveraging” and
(iv) except as specifically provided above, as of the date of such
Assignment, and after giving effect thereto, none of the obligations and
liabilities of Airways in the use and operation of the Commuter Slots or under
or in respect of the Slot License Agreement or any other Slot Transaction
Agreement shall be increased or altered and none of the rights and benefits
of
Airways in respect thereof shall be diminished, as a result of any such
Assignment. If so directed in writing, Airways shall pay all License Fees and
all other sums that become due under this Agreement and the Slot Transaction
Agreements directly to Assignee or any other party designated in writing by
Republic or such Assignee. Airways acknowledges that Republic’s right to enter
into an Assignment is essential to Republic and, accordingly, upon the request
of Republic or any Assignee, Airways also agrees (i) to promptly execute and
deliver to Republic or to such Assignee an acknowledgment of the Assignment
in
form and substance satisfactory to the requesting party and such other documents
and assurances reasonably requested by Republic or Assignee and (ii) to comply
with all other reasonable requirements of any such Assignee in connection with
any such Assignment; provided,
that
such documents, assurances and actions are in a form and of a nature reasonably
acceptable to Airways. At Republic’s request, Assignee shall be added as an
Indemnitee under the indemnities set forth in Section 10
hereof.
22. No
Third-Party Beneficiaries.
This
Agreement is for the sole benefit of the parties hereto and their respective
successors and permitted assigns and nothing herein, express or implied, is
intended or shall confer upon any other Person any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement,
except that the provisions of Sections
9 and 10
shall
inure to the benefit of and be enforceable by the Indemnitees.
23. Confidentiality.
Each
party shall use all reasonable efforts to keep the terms of the Slot/Gate
Transaction Agreements and the transactions contemplated thereby strictly
confidential; provided,
however,
that a
party may disclose the terms of the Slot/Transaction Agreements and the
transactions contemplated thereby if required to do so:
(a) for
the
purpose of legal proceedings, administrative or regulatory requirements or
as
otherwise required by law;
(b) to
effect
any registrations, notices, filings or recordation required by or pursuant
to
any of the Slot/Gate Transaction Agreements; or
(c) for
the
purpose of disclosure to its auditors or to its legal or other professional
advisers.
[The
remainder of this page intentionally left blank.]
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
authorized representatives as of the date first set forth above.
Airways:
US
AIRWAYS, INC.
By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
Title: VP
-
Finance and Treasurer
Republic:
|
REPUBLIC
AIRWAYS HOLDINGS, INC.
|
By: /s/
▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇
▇▇▇▇▇▇▇
Title: President
Exhibit
A
DEED
OF
CONVEYANCE AND ASSIGNMENT
OF
SLOTS
FOR
VALUE
RECEIVED, the undersigned, [Name
of Holder]
(“Holder”),
on
behalf of itself and for its successors and assigns, does hereby assign,
transfer and convey to Republic Airways Holdings Inc. (“Republic”)
all of
the right, title, interests and privileges of Holder in and to the Commuter
Slots (as defined in the Slot Option Agreement), set forth on Schedule
1
attached
hereto (the “Transferred
Slots”).
This
Deed
of Conveyance is an absolute and complete conveyance of all of Holder’s right,
title, interests and privileges in the Transferred Slots pursuant to that
certain Slot Option Agreement dated as of September 22, 2005, by and between
US
Airways, Inc. (“Airways”)
and
Republic (the “Slot
Option Agreement”).
Capitalized terms used herein without definition shall have the meanings set
forth in the Slot Option Agreement.
Holder
hereby represents and warrants to Republic:
1. This
Deed
of Conveyance has been duly authorized, executed and delivered by Holder and
constitutes the legal, valid and binding obligation of Holder enforceable in
accordance with its terms.
2. Schedule
1
hereto
sets forth a true and accurate list of the Commuter Slots held by Holder.
Immediately prior to Closing, Holder is the FAA holder of record of each of
the
Commuter Slots set forth on Schedule
1
hereto
pursuant to authority granted to it by the FAA under the Slot Regulations and
has full right, title and interest in and to each of such Commuter Slots free
and clear of all Liens and restrictions or limitations (other than those
expressly set forth in such Subparts or by statute, Republic Liens, or Temporary
Exchanges permitted by the Slot License Agreement). Schedule
2
to the
Agreement sets forth a true and accurate list of all Temporary Exchanges in
effect immediately prior to Closing. Holder is utilizing each of the Commuter
Slots in a manner consistent with all applicable laws governing Slots, including
but not limited to the Use Provisions. The Commuter Slots listed on Schedule 1
hereto
come from Holder’s “then-current FAA approved base” as required by
14 C.F.R. Section 93.221, are not international Slots, temporary Slots
or
Slots designated for essential air service as those terms are used in 14 C.F.R.
Section 93.219.
3. Holder
has not received any notice from any Governmental Authority and is not aware
of
any event or circumstance that would be likely to result in any Regulatory
Impairment of all or any of the Commuter Slots listed on Schedule 1
hereto.
The
representations and warranties made herein by Holder expressly survive the
Closing and the delivery of the Deed of Conveyance.
IN
WITNESS WHEREOF, the undersigned, by and through its duly undersigned authorized
officer, does hereby execute this DEED OF CONVEYANCE as of this
day of
,
2005.
[Name
of
Holder]
By:
Name:
Title:
Before
me
personally appeared this day
_______________
as _______________
of
____________________________
who
in my
presence did execute
this
Agreement and acknowledged
that
they
executed this Agreement for
the
purpose stated herein as an act
and
deed
of said company.
Acknowledged
and Agreed to as of
this
__
day of ,
2005
Republic
Airways Holdings, Inc.
By:
Name:
Title:
EXHIBIT
B
Trust
Security Agreement
SCHEDULE
1
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_____
*
Confidential
Schedule
1 -
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_____
*
Confidential
Schedule
1 -
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[*]
_____
*
Confidential
Schedule
1 -
|
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|||||
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[*]
_____
*
Confidential
Schedule
1 -
SCHEDULE
2
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*
Confidential
Schedule
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_____
*
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Schedule
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_____
*
Confidential
Schedule
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_____
*
Confidential
EXHIBIT
C
CONSENT
AND SUBORDINATION
Reference
is made to that certain Slot Option Agreement (the “Slot Option Agreement”)
dated as of September 22, 2005, between Republic Airways Holdings Inc.
(“Republic”) and US Airways, Inc. (“Airways”) and the Slot License Agreement
(the “Slot License Agreement”) dated as of September 22, 2005, between Republic
and Airways (capitalized terms used herein will have the meaning ascribed
thereto in the Slot License Agreement). In order to induce Republic to
consummate the transactions under the Slot Option Agreement, the undersigned
(“Airline”),
on
behalf of itself and for its successors and assigns, does hereby agree for
the
benefit of Republic:
1. To
the
extent that Airline has rights as an operator of the Licensed Slots and any
rights under any Exchange or other agreement relating to the Licensed Slots,
any
and all of its rights to the Licensed Slots are subject and subordinate in
any
and all respects to Republic’s rights under the Slot License Agreement and the
other Slot/Gate Transaction Agreements and the terms and conditions of the
Slot
License Agreement and the other Slot/Gate Transaction Agreements. [This
paragraph not applicable to Airways’ Consent and Subordination.]
2. At
any
time during the continuance of a Material Breach with respect to Airways under
the Slot License Agreement, Republic shall have the right to terminate any
and
all rights of Airline in and to the Licensed Slots, and Airline hereby
irrevocably consents to any such termination and the transfer of such rights
to
Republic or its designee free and clear of any rights or interest of
Airline.
3. Airline
hereby irrevocably appoints Republic as attorney-in-fact of Airline, with full
authority in the place and stead of Airline and in the name of Airline or
otherwise, from time to time in Republic’s discretion after the occurrence and
during the continuance of a Material Breach with respect to Airways under the
Slot License Agreement, to take any action and to execute any instrument that
Republic may deem necessary or advisable to accomplish the purposes of the
Slot
License Agreement, including without limitation:
(a) to
enforce compliance with the obligations of Airline and the rights of Republic
hereunder; and
(b) to
execute and deliver, on behalf of Airline, any documents that Republic deems
necessary or advisable to transfer any and all interest that Airline may have
in
the Licensed Slots to Republic or its designee and to make such filings at
the
FAA in the name of Airline in connection with any such transfer including but
not limited to written evidence of Airline’s consent to the
transfer.
4. For
all
purposes of this Consent and Subordination, Airline agrees to be subject to
Section 20 of the Slot License Agreement which is hereby incorporated
herein by reference.
5. Republic
agrees that so long as no Material Breach with respect to Airways shall have
occurred and be continuing, neither Republic nor any Person lawfully claiming
through Republic will interfere with Airline’s use and quiet enjoyment of the
Licensed Slots.
Airline
represents and warrants to Republic that this Consent and Subordination has
been
duly executed and delivered on behalf of Airline and constitutes a valid and
binding obligation of Airline, enforceable against Airline in accordance with
its terms.
Republic
represents and warrants to Airline that this Consent and Subordination has
been
duly executed and delivered on behalf of Republic and constitutes a valid and
binding obligation of Republic, enforceable against Republic in accordance
with
its terms.
IN
WITNESS WHEREOF, the undersigned, by and through its duly undersigned authorized
officer, does hereby execute this CONSENT AND SUBORDINATION as of this
___________ day of _________, 2005.
[Name
of Airline]
By:
Name:
Title:
By:
Name:
Title: