1
EXHIBIT 10.54
ATLAS AIR, INC.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT is dated as of
February 28, 1997 and entered into by and among ATLAS AIR, INC., a Delaware
corporation ("COMPANY"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P. ("CREDIT
PARTNERS") (formerly known as Pearl Street L.P.), THE FINANCIAL INSTITUTIONS
LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to herein as a
"LENDER" and collectively as "LENDERS"), ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.
("CREDIT PARTNERS"), as syndication agent (in such capacity, "SYNDICATION
AGENT") and BANKERS TRUST COMPANY ("BANKERS TRUST"), as administrative agent
for Lenders (in such capacity, "ADMINISTRATIVE AGENT").
R E C I T A L S
WHEREAS, pursuant to that certain First Amended and Restated Credit
Agreement dated as of July 15, 1996, by and among Company, as Borrower, the
financial institutions listed on the signature pages thereof, Syndication Agent
and Administrative Agent (the "EXISTING AGREEMENT"), Lenders have made
certain credit facilities available to Company for the purpose of acquisition
and modification of certain aircraft to be used in Company's air cargo
business;
WHEREAS, the parties of the Existing Agreement desire to amend and
restate the Existing Agreement in order to increase the Revolving Loan
Commitments by $100,000,000 to $275,000,000, to add certain Lenders not party
to the Existing Agreement and to make certain other amendments to the Existing
Agreement.
NOW THEREFORE, in consideration of the premises and agreements,
provisions and covenants herein contained, Company, Lenders, Syndication Agent
and Administrative Agent hereby agree that the Existing Agreement shall be
amended and restated in its entirety as follows:
1
2
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ACMI CONTRACT" means (i) any contract entered into by
Company pursuant to which Company furnishes the aircraft, crew,
maintenance and insurance and customers bear all other operating
expenses and (ii) any similar contract in which the customer provides
the flight crew, all in accordance with Company's historical
practices.
"ACMI CONTRACTED AIRCRAFT" means an aircraft acquired by
Company or its Subsidiaries and dedicated to a new ACMI Contract
entered into in connection with the acquisition of such aircraft
(which ACMI Contract shall not represent a renewal or replacement of a
prior ACMI Contract unless the aircraft dedicated to such prior ACMI
Contract was operated under an operating lease and returned to the
lessor) which is in effect on the date of calculation and has a
remaining term of one year or more on the date such aircraft was
dedicated to such ACMI Contract (subject to cancellation terms, which
may include the right to cancel on six months notice). When making
any calculation on a Pro Forma Basis effect shall be given to the
acquisition of an ACMI Contracted Aircraft by adding to the
appropriate components of Consolidated Adjusted EBITDA (i) the net
projected annualized revenues from the operation of the ACMI
Contracted Aircraft under such ACMI Contract for that portion of the
period for which Consolidated Adjusted EBITDA is being calculated
prior to the acquisition of such aircraft, assuming operation for the
minimum guaranteed number of block hours (less any block hours subject
to cancellation) at the minimum guaranteed rate under such ACMI
Contract less (ii) the projected annualized cash operating expenses
from such operation for the same period for which the related
projected revenues are determined in clause (i) above; provided that
such projected cash operating expenses shall not be less on a per
block hour basis than the average historical per block hour operating
expenses of Company for the four full fiscal quarters immediately
preceding the date of calculation, and provided, further, that if such
aircraft is of a model other than a Boeing 747 freighter, such
projected cash operating expenses shall include maintenance costs
which shall not be less than the average for such aircraft type
disclosed on the most recently available DOT Forms 41 with respect to
such aircraft type or any summary of such data as reported in a
nationally recognized industry publication. For purposes of this
definition, "ACMI CONTRACT" shall include contracts pursuant to
which Company does not pay any crew costs, in which event pro forma
effect shall be given as described above but excluding from the
projected annualized cash operating expenses all crew costs. Cash
operating expenses means for purposes of this definition consolidated
operating expenses, less consolidated depreciation and amortization
and Consolidated Rental Payments, to the extent included in computing
consolidated operating expenses.
2
3
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date, (x) until such time as Reference Lenders are
determined in accordance with the definition thereof, the rate per
annum obtained by dividing the offered rate (expressed as a rate per
annum and rounded upward to the nearest 1/16 of one percent) appearing
on the Dow ▇▇▇▇▇/Telerate Monitor on Telerate Access Service Page 3750
(British Bankers Association Settlement Rate) (or such other page as
may, in the opinion of Administrative Agent, replace such page on that
system for the purpose of displaying such rate) at or about 11:00 a.m.
(London time) on such Interest Rate Determination Date for U.S. dollar
deposits of amounts in same day funds comparable to the principal
amount of the Eurodollar Rate Loan for which Adjusted Eurodollar Rate
is then being determined with maturities comparable to the Interest
Period for which such Adjusted Eurodollar Rate will apply by (ii) a
percentage equal to 100% minus the stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest
Rate Determination Date to any member bank of the Federal Reserve
System in respect of "Eurodollar liabilities" as defined in
Regulation D (or any successor category of liabilities under
Regulation D) and (y) thereafter, the rate per annum obtained by
dividing (i) the arithmetic average (rounded upward to the nearest
1/16 of one percent) of the offered quotation, if any, to first class
banks in the interbank Eurodollar market by each of the Reference
Lenders for U.S. dollar deposits of amounts in same day funds
comparable to the principal amount of the Eurodollar Rate Loan of that
Reference Lender for which the Adjusted Eurodollar Rate is then being
determined with maturities comparable to such Interest Period as of
approximately 10:00 A.M. (New York time) on such Interest Rate
Determination Date by (ii) a percentage equal to 100% minus the stated
maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other
reserves) applicable on such Interest Rate Determination Date to any
member bank of the Federal Reserve System in respect of "Eurocurrency
liabilities" as defined in Regulation D (or any successor category of
liabilities under Regulation D); provided that if any Reference Lender
fails to provide Administrative Agent with its aforementioned
quotation then the Adjusted Eurodollar Rate shall be determined based
on the quotation(s) provided to Administrative Agent by the other
Reference Lender(s).
"ADMINISTRATIVE AGENT" has the meaning assigned to that term
in the introduction to this Agreement and also means and includes any
successor Administrative Agent appointed pursuant to subsection 8.6.
"AERONAUTICAL AUTHORITY" means, at any date, the Federal
Aviation Administration or other governmental airworthiness authority
having jurisdiction over any Eligible Aircraft or Airframe or Engine
under the laws of the country in which the Airframe is then
registered.
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFECTED LOANS" has the meaning assigned to that term in
subsection 2.6C.
3
4
"AFFILIATE" means, as applied to any Person, any other
Person directly or indirectly controlling, controlled by, or under
common control with, that Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"),
as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership
of voting securities or by contract or otherwise.
"AGREEMENT" means this Second Amended and Restated Credit
Agreement dated as of February 28, 1997, as it may be amended,
supplemented or otherwise modified from time to time.
"AIRCRAFT CHATTEL MORTGAGE" means any or all of the First
Aircraft Chattel Mortgages and the Second Aircraft Chattel Mortgages.
"AIRFRAME" means, as the context requires, an Airframe as
defined in a particular Aircraft Chattel Mortgage or all Airframes as
defined in all Aircraft Chattel Mortgages.
"AMENDED AND RESTATED NOTES" means (i) the promissory notes
of Company amended and restated pursuant to subsection 2.1D on the
Conversion Date and (ii) any promissory notes issued by Company
pursuant to the last sentence of subsection 9.1B(i) in connection with
assignments of the Term Loan Commitments or Term Loans of any Lenders,
in each case, substantially in the form of Exhibit IIIB annexed
hereto, as they may be amended, supplemented or otherwise modified
from time to time.
"APPLICABLE MARGIN" has the meaning assigned to that term in
subsection 2.2A.
"APPRAISED VALUE" means, with respect to any Financed
Aircraft, the average of the appraised value of such Financed Aircraft
by two Approved Appraisers as most recently determined pursuant to
subsection 5.11.
"APPROVED APPRAISER" means any of the following: B.K.
Associates, ▇▇▇▇ ▇. ▇▇▇▇ Associates, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Associates,
Airclaims, Ltd., Aircraft Information Services, Inc., Simat, Helleisen
& ▇▇▇▇▇▇▇, Inc. and AVITAS, Inc.
"ASSET SALE" means the sale (including any sale-leaseback
transaction) by Company or any of its Subsidiaries to any other Person
of (i) any of the stock of any of Company's Subsidiaries, (ii)
substantially all of the assets of any division or line of business of
Company or any of its Subsidiaries, or (iii) any other assets (whether
tangible or intangible) of Company or any of its Subsidiaries outside
of the ordinary course of business excluding (A) any such other assets
to the extent that the aggregate value of such assets sold in any
single transaction or related series of transactions is equal to
$500,000 or less, (B) transactions related to aircraft engines,
components, parts or spare
4
5
parts pursuant to customary pooling, exchange or similar arrangements
and (C) asset swaps involving aircraft engines, components, parts or
spare parts (other than any engines encumbered pursuant to an Aircraft
Chattel Mortgage); provided that the assets received by the Company or
any Subsidiary have a fair market value at least equal to the assets
transferred (provided that with respect to any asset swap or series of
related asset swaps involving assets of Company or any Subsidiary with
a fair market value exceeding $3,000,000, such determination shall be
made by the Board of Directors of Company)).
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit VII annexed hereto.
"ATLAS ONE" means Atlas One, Inc., a Delaware corporation.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any
successor statute.
"BASE RATE" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection
2.2A.
"BFE AGREEMENT" means (i) that certain Purchase Agreement
dated as of June 19, 1995 between Ancra International Corporation and
Company, (ii) that certain letter agreement dated March 15, 1996
between Aero Union Corporation and Company and (iii) any other
agreement relating to buyer furnished equipment entered into by
Company, in form and substance satisfactory to Administrative Agent,
in each case, as amended, restated, supplement or otherwise modified
from time to time in accordance with this Agreement.
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the States of New
York or Colorado or is a day on which banking institutions located in
either such state are authorized or required by law or other
governmental action to close.
"CAPITAL LEASE", as applied to any Person, means any lease
of any property (whether real, personal or mixed) by that Person as
lessee that, in conformity with GAAP, is accounted for as a capital
lease on the balance sheet of that Person.
"CASH" means money, currency or a credit balance in a
Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination,
(i) marketable securities (a) issued or directly and unconditionally
guaranteed as to interest and principal by the United States
Government or (b) issued by any agency of the United States the
5
6
obligations of which are backed by the full faith and credit of the
United States, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or
any public instrumentality thereof, in each case maturing within one
year after such date and having, at the time of the acquisition
thereof, the highest rating obtainable from either S&P or ▇▇▇▇▇'▇;
(iii) commercial paper maturing no more than one year from the date of
creation thereof and having, at the time of the acquisition thereof, a
rating of at least A-1 from S&P or at least P-1 from ▇▇▇▇▇'▇; (iv)
certificates of deposit or bankers' acceptances maturing within one
year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia that (a) is
at least "adequately capitalized" (as defined in the regulations of
its primary Federal banking regulator) and (b) has Tier 1 capital (as
defined in such regulations) of not less than $100,000,000; and (v)
shares of any money market mutual fund that (a) has at least 95% of
its assets invested continuously in the types of investments referred
to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either
S&P or ▇▇▇▇▇'▇.
"CASH PROCEEDS" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment
pursuant to, or monetization of, a note receivable or otherwise, but
only as and when so received) received from such Asset Sale.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit VIII annexed hereto delivered by
a Lender to Administrative Agent pursuant to subsection 2.7B(iii).
"CERTIFICATED AIR CARRIER" means a United States "air
carrier" within the meaning of the Federal Aviation Act, operating
pursuant to a certificate issued under Section 401 of such Act, or a
carrier of comparable status under any successor law or provision.
"CLOSING DATE" means the date on or before May 8, 1996 on
which the initial Loans were made to finance a portion of the purchase
of the Thai Aircraft which was leased pursuant to the New Zealand
Lease.
"COLLATERAL" means all of the properties and assets in which
Liens are purported to be granted by the Collateral Documents.
"COLLATERAL DOCUMENTS" means each First Aircraft Chattel
Mortgage and each Second Aircraft Chattel Mortgage and any security
agreement executed pursuant to subsection 5.10.
6
7
"COMMITMENTS" means the commitments of Lenders to make and
convert Loans as set forth in subsection 2.1A.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPANY COMMON STOCK" means the common stock of Company,
par value $0.01 per share.
"COMPLIANCE CERTIFICATE" means a certificate substantially
in the form of Exhibit IV annexed hereto delivered to Administrative
Agent and Lenders by Company pursuant to subsection 5.1(iv).
"CONDEMNATION PROCEEDS" has the meaning assigned to that
term in subsection 2.4B(iii)(c).
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, the
sum of the amounts for such period of (i) Consolidated Net Income,
(ii) Consolidated Interest Expense, (iii) provisions for taxes based
on income, (iv) total depreciation expense, (v) total amortization
expense, and (vi) other non-cash items reducing Consolidated Net
Income less other non-cash items increasing Consolidated Net Income,
all of the foregoing as determined on a consolidated basis for Company
and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period,
the sum of (i) the aggregate of all expenditures (whether paid in cash
or other consideration or accrued as a liability and including that
portion of Capital Leases which is capitalized on the consolidated
balance sheet of Company and its Subsidiaries) by Company and its
Subsidiaries during that period that, in conformity with GAAP, are
included in "additions to property, plant or equipment" or
comparable items reflected in the consolidated statement of cash flows
of Company and its Subsidiaries plus (ii) to the extent not covered by
clause (i) of this definition, the aggregate of all expenditures by
Company and its Subsidiaries during that period to acquire (by
purchase or otherwise) the business, property or fixed assets of any
Person, or the stock or other evidence of beneficial ownership of any
Person that, as a result of such acquisition, becomes a Subsidiary of
Company.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current assets
in conformity with GAAP (it being understood that Cash on hand of
$65,000,000 or less shall not be taken into account for purposes of
calculating the Consolidated Working Capital Adjustment).
7
8
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries
on a consolidated basis which may properly be classified as current
liabilities in conformity with GAAP.
"CONSOLIDATED EXCESS CASH FLOW" means, for any Fiscal Year,
an amount equal to the sum of Consolidated Adjusted EBITDA for such
Fiscal Year and the Consolidated Working Capital Adjustment for such
Fiscal Year, minus the sum of the amounts for such Fiscal Year of (i)
scheduled repayments of principal of Indebtedness, mandatory
prepayments of the principal of Indebtedness (other than from the
proceeds of Asset Sales), voluntary prepayments of the principal of
Indebtedness to the extent that such amount is not simultaneously
reborrowed, and other permanent reductions in the availability of
revolving credit facilities (ii) Consolidated Interest Expense, (iii)
permitted Consolidated Capital Expenditures (net of any proceeds of
any related financing with respect to such Consolidated Capital
Expenditures), and (iv) the portion of taxes based on income or
revenues actually paid in cash.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum
of the amounts for such period of (i) Consolidated Interest Expense,
(ii) provisions for taxes based on income, (iii) one third of
Consolidated Rental Payments and (iv) scheduled repayments of
principal of Indebtedness, all of the foregoing as determined on a
consolidated basis for Company and its Subsidiaries in conformity with
GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
net interest expense (to be computed by reducing interest expense by
the amount of interest income) (including that portion attributable to
Capital Leases in accordance with GAAP and capitalized interest) of
Company and its Subsidiaries on a consolidated basis with respect to
all outstanding Indebtedness of Company and its Subsidiaries,
including, without limitation, all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Agreements, but
excluding, however, any amounts referred to in subsection 2.3 payable
to Credit Partners, Syndication Agent, Administrative Agent and
Lenders on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, the net
income (or loss) of Company and its Subsidiaries on a consolidated
basis for such period taken as a single accounting period determined
in conformity with GAAP; provided that there shall be excluded (i) the
income (or loss) of any Person (other than a Subsidiary of Company) in
which any other Person (other than Company or any of its Subsidiaries)
has a joint interest, except to the extent of the amount of dividends
or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (ii) the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary
of Company or is merged into or consolidated with Company or any of
its Subsidiaries or that Person's assets are acquired by Company or
any of its Subsidiaries, (iii) the income of any Subsidiary of Company
to the extent that the declaration or payment of dividends
8
9
or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (iv) any
after-tax gains or losses attributable to Asset Sales or returned
surplus assets of any Pension Plan, and (v) (to the extent not
included in clauses (i) through (iv) above) any net extraordinary
gains or net non-cash extraordinary losses.
"CONSOLIDATED NET WORTH" means, as at any date of
determination, the sum of the capital stock and additional paid-in
capital plus retained earnings (or minus accumulated deficits) of
Company and its Subsidiaries on a consolidated basis determined in
conformity with GAAP.
"CONSOLIDATED RENTAL PAYMENTS" means, for any period, the
aggregate amount of all rents paid or payable by Company and its
Subsidiaries on a consolidated basis during that period under all
Capital Leases and Operating Leases to which Company or any of its
Subsidiaries is a party as lessee (net of sublease income other than
income from ACMI Contracts).
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all
Indebtedness of Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the excess of Consolidated Current Assets over
Consolidated Current Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any
Fiscal Year on a consolidated basis, the amount (which may be a
negative number) by which the Consolidated Working Capital of Company
and its Subsidiaries as of the beginning of the period exceeds (or is
less than) the Consolidated Working Capital of Company and its
Subsidiaries as of the end of such period.
"CONTINGENT OBLIGATION" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person
(i) with respect to any Indebtedness, lease, dividend or other
obligation of another if the primary purpose or intent thereof by the
Person incurring the Contingent Obligation is to provide assurance to
the obligee of such obligation of another that such obligation of
another will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings, or (iii) under Interest Rate Agreements
and Currency Agreements. Contingent Obligations shall include,
without limitation, (a) the direct or indirect guaranty, endorsement
(otherwise than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of another, (b) the obligation to
make
9
10
take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c)
any liability of such Person for the obligation of another through any
agreement (contingent or otherwise) (X) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether
in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (Y) to maintain the solvency or any balance sheet
item, level of income or financial condition of another if, in the
case of any agreement described under subclauses (X) or (Y) of this
sentence, the primary purpose or intent thereof is as described in the
preceding sentence. The amount of any Contingent Obligation shall be
equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation
is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means
any provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement
or other instrument to which that Person is a party or by which it or
any of its properties is bound or to which it or any of its properties
is subject.
"CONVERSION DATE" means the date on which Revolving Loans
are converted to Term Loans pursuant to subsection 2.1A(ii).
"CREDIT PARTNERS" has the meaning assigned to that term in
the introduction to this Agreement.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic
cap or other similar agreement or arrangement designed to protect
Company or any of its Subsidiaries against fluctuations in currency
values.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union
or like organization, other than an account evidenced by a negotiable
certificate of deposit.
"DESIGNATED INDEBTEDNESS" means Indebtedness incurred
pursuant to the ING Financing Agreement, the FINOVA Agreement, the
Pass Through Trust Documents and the Unsecured Revolving Credit
Facility, any Permitted Extension Indebtedness and any Other Permitted
Indebtedness.
"DETERMINATION DATE" has the meaning assigned to that term
in subsection 3.4C.
"DOLLARS" and the sign "$" mean the lawful money of the
United States of America.
10
11
"ELIGIBLE AIRCRAFT" means a Boeing 747-100, 747-200,
747-300, 747-400, DC-10-30 or MD-11 aircraft, including any engines
installed thereon and any spare engines of the same type and model,
which (i) is in a cargo configuration capable of immediate operation
in the business of Company or is eligible for delivery under the
Modification Agreement with a delivery slot available within a six
month period (or is leased in accordance with the Collateral Documents
for a period of longer than six months until a delivery slot is
available), and (ii) has a maximum gross take-off weight ("MTOW") of
at least 800,000 pounds, in the case of any 747-200, 747-300, or
747-400 aircraft, 750,000 pounds in the case of any 747-100 aircraft,
630,000 pounds in the case of any MD-11 aircraft and 580,000 pounds in
the case of any DC-10-30 aircraft.
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank
organized under the laws of the United States or any state thereof;
(ii) a savings and loan association or savings bank organized under
the laws of the United States or any state thereof; (iii) a commercial
bank organized under the laws of any other country or a political
subdivision thereof; provided that (x) such bank is acting through a
branch or agency located in the United States or (y) such bank is
organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an
"accredited investor" (as defined in Regulation D under the
Securities Act) which extends credit or buys loans as one of its
businesses including, but not limited to, insurance companies, mutual
funds and lease financing companies, in each case (under clauses (i)
through (iv) above) that is reasonably acceptable to Administrative
Agent; and (B) any Lender and any Affiliate of any Lender; provided
that no Affiliate of Company shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan"
as defined in Section 3(3) of ERISA which is, or was at any time,
maintained or contributed to by Company or any of its ERISA
Affiliates.
"ENGINE" means, as the context requires, an Engine as
defined in a particular Aircraft Chattel Mortgage or Engines as
defined in all Aircraft Chattel Mortgages.
"ENVIRONMENTAL CLAIM" means any investigation, notice,
claim, suit or order, by any governmental authority or any Person
arising in connection with any alleged or actual violation of
Environmental Laws or with any Hazardous Material, or any actual or
alleged damage, or harm to health, safety or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents,
judgments, governmental authorizations, or any other requirement of
governmental authorities relating to environmental matters, including,
without limitation, those relating to any Hazardous Materials
Activity.
"EQUITY PROCEEDS" means the cash proceeds (net of
underwriting discounts and commissions and other reasonable costs
associated therewith) from the issuance of any
11
12
equity Securities of Company including, without limitation, additional
issuances of Company Common Stock.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is, or was at any time, a member of a controlled
group of corporations within the meaning of Section 414(b) of the
Internal Revenue Code of which that Person is, or was at any time, a
member; (ii) any trade or business (whether or not incorporated) which
is, or was at any time, a member of a group of trades or businesses
under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is, or was at any time, a
member; and (iii) any member of an affiliated service group within the
meaning of Section 414(m) or (o) of the Internal Revenue Code of which
that Person, any corporation described in clause (i) above or any
trade or business described in clause (ii) above is, or was at any
time, a member.
"EURODOLLAR RATE LOANS" means Loans bearing interest at
rates determined by reference to the Adjusted Eurodollar Rate as
provided in subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in
Section 7.
"EVENT OF LOSS" shall mean any of the following events with
respect to any Financed Aircraft (whether the Airframe or an Engine of
such Financed Aircraft or both): (A) loss of such or the use thereof
due to theft or disappearance of such Financed Aircraft which shall
result in the loss of possession thereof for a period of 120 days (or
for a shorter period ending on the date on which there is an insurance
settlement for a total loss on the basis of the theft or disappearance
of such Financed Aircraft); (B) the destruction, damage beyond repair
or rendition of such Financed Aircraft permanently unfit for normal
use for any reason whatsoever; (C) the condemnation, confiscation or
seizure of, or requisition of title to, or use or possession (other
than use by the United States Government if Company obtains adequate
compensation from the United States Government) of such Financed
Aircraft; (D) as a result of any rule, regulation, order or other
action by the FAA or other governmental body having jurisdiction, the
use of such Financed Aircraft in the normal course of interstate air
transportation of persons or cargo shall have been prohibited for a
period of more than nine consecutive months unless Company, prior to
the expiration of such nine month period, shall have undertaken and
shall be diligently carrying forward all steps which are necessary or
desirable to permit the normal use of such property by Company or, in
any event, if such use shall have been prohibited for a period of
twelve consecutive months; (E) the operation or location of such
Financed Aircraft, while under requisition for use by the United
States or any instrumentality or agency thereof, in any area excluded
from coverage by any insurance policy in effect with respect to such
Financed Aircraft, if Company shall be unable to obtain indemnity in
lieu thereof from the United States; (F) any damage which results
12
13
in an insurance settlement with respect to such Financed Aircraft on
the basis of an actual or constructive total loss or (G) a divestiture
of such Airframe as described in Section 4(d)(iii), Section 4(d)(vi),
Section 4(d)(vii)(B) or Section 4(d)(viii)(B) of any Aircraft Chattel
Mortgage. An Event of Loss with respect to any Financed Aircraft
shall be deemed to have occurred if an Event of Loss occurs with
respect to the Airframe of such Financed Aircraft.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXISTING AGREEMENT" has the meaning assigned to that term
in the Recitals hereto.
"FACILITIES" means any and all real property now, hereafter
or heretofore owned, leased, operated or used by Company or any of its
predecessors.
"FEDERAL AVIATION ACT" means the Federal Aviation Act of
1958, as amended and as recodified in ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or
any similar legislation of the United States enacted to supersede,
amend or supplement such Act and the rules and regulations promulgated
thereunder.
"FEDERAL AVIATION ADMINISTRATION" or "FAA" means the
United States Federal Aviation Administration or any successor thereto
administering the functions of the Federal Aviation Administration
under the Federal Aviation Act.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day on which
is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by Administrative Agent.
"FINANCED AIRCRAFT" means all Eligible Aircraft, including
the airframes and engines, purchased by Company with proceeds of
Revolving Loans made under this Agreement and with respect to which a
First Aircraft Chattel Mortgage has been executed and delivered.
"FINOVA AGREEMENT" means that certain Secured Loan Agreement
dated as of April 11, 1996 between FINOVA and Company, as amended,
restated, supplemented or otherwise modified from time to time in
accordance with this Agreement.
13
14
"FIRST AIRCRAFT CHATTEL MORTGAGE" means, with respect to
each Eligible Aircraft purchased with the proceeds of Loans, a
Security Agreement and Chattel Mortgage (Aircraft No. ___) and
substantially in the form of Exhibit X annexed hereto granting to
Administrative Agent for the benefit of Lenders a purchase money first
priority security interest in such Eligible Aircraft, as such First
Aircraft Chattel Mortgage may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms
hereof and thereof.
"FISCAL YEAR" means (i) with respect to the financial
statements to be delivered by Company pursuant to subsection 5.1,
Company's fiscal year on the date of such delivery and (ii) for all
other purposes hereunder, a calendar year.
"FUNDING AND PAYMENT OFFICE" means the office of
Administrative Agent located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting
principles set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting
profession. Financial statements and other information required to be
delivered by Company to Lenders pursuant to clauses (ii), (iii) and
(xiii) of subsection 5.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (and delivered together with
the reconciliation statements provided for in subsection 5.1(v)).
Calculations in connection with the definitions, covenants and other
provisions of this Agreement shall utilize accounting principles and
policies in conformity with those used to prepare the financial
statements referred to in subsection 4.3.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or
from any federal, state or local governmental authority, agency or
court.
"HAZARDOUS MATERIALS" means any chemical or other material
or substance, exposure to which is now or hereafter prohibited,
limited or regulated under any law.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed, or threatened use, storage, release, generation, treatment,
remediation or transportation of any Hazardous Material (i) from,
under, in, into or on the Facilities or surrounding property; and (ii)
caused by, or undertaken by or on behalf of, Company.
14
15
"INDEBTEDNESS" means, as applied to any Person, (i) all
indebtedness for borrowed money, (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability
on a balance sheet in conformity with GAAP, (iii) notes payable and
drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money, (iv) any obligation owed
for all or any part of the deferred purchase price of property or
services (excluding any such obligations incurred under ERISA), which
purchase price is (a) due more than six months from the date of
incurrence of the obligation in respect thereof or (b) evidenced by a
note or similar written instrument, and (v) all indebtedness secured
by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person.
Obligations under Interest Rate Agreements and Currency Agreements
constitute Contingent Obligations and not Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in
subsection 9.3.
"ING FINANCING AGREEMENT" means that certain Secured Loan
Agreement dated as of December 30, 1994 between Company and
Internationale Nederlanden Aviation Lease B.V., as amended by
Amendment No. 1 thereto and as further amended, restated, supplemented
and otherwise modified from time to time in accordance with this
Agreement.
"INSURANCE PROCEEDS" has the meaning assigned to that term
in subsection 2.4B(iii)(c).
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, each March 31, June 30, September 30 and December 31 of
each year, commencing on the first such date to occur after the
Closing Date, and (ii) with respect to any Eurodollar Rate Loan, the
last day of each Interest Period applicable to such Loan; provided
that in the case of each Interest Period of six months "Interest
Payment Date" shall also include the date that is three months after
the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement or arrangement designed to protect Company
or any of its Subsidiaries against fluctuations in interest rates.
"INTEREST RATE DETERMINATION DATE" means, with respect to
any Interest Period, the second Business Day prior to the first day of
such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.
15
16
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a
beneficial interest in, any Securities of any other Person, (ii) any
direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person
other than Company or any of its Subsidiaries, of any equity Securities
of such Subsidiary, or (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary
course of business) or capital contribution by Company or any of its
Subsidiaries to any other Person (other than a wholly-owned Subsidiary
of Company), including all indebtedness and accounts receivable from
that other Person that are not current assets or did not arise from
sales to that other Person in the ordinary course of business. The
amount of any Investment shall be the original cost of such Investment
plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal
form; provided that in no event shall any corporate Subsidiary of any
Person be considered to be a Joint Venture to which such Person is a
party.
"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together
with their successors and permitted assigns pursuant to subsection 9.1.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge, hypothecation, preference, priority, privilege, lease
or encumbrance of any kind (including any conditional sale or other
title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the
foregoing.
"LOAN" or "LOANS" means one or more of the Revolving Loans or
Term Loans or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, any guaranty
entered into pursuant to subsection 5.10 and the Collateral Documents.
"LOAN PARTIES" means Company and any persons who enter into
guaranties pursuant to subsection 5.10.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as
in effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial
or otherwise) or prospects
16
17
of Company or any of its Subsidiaries or (ii) the impairment of the
ability of any Loan Party to perform the Obligations, or the
impairment, as a result of actions or inaction by Company, of the
ability of Credit Partners, Syndication Agent, Administrative Agent or
Lenders to enforce the Obligations.
"MATERIAL AGREEMENT" means any or all of the ING Financing
Agreements, the Pass Through Trust Documents, the FINOVA Agreement,
the Unsecured Revolving Credit Facility, each Purchase Agreement, the
Modification Agreement, each BFE Agreement, the New Zealand Lease, the
Philippine Lease and agreements in respect of Permitted Extension
Indebtedness and Other Permitted Indebtedness.
"MAXIMUM NOTE AMOUNT" means, with respect to any Eligible
Aircraft, 80% of the Appraised Value of such Eligible Aircraft based
on appraisals obtained pursuant to subsection 5.11 of such Eligible
Aircraft made within 30 days prior to the purchase thereof and giving
effect to the proposed modifications of such Eligible Aircraft
pursuant to the Modification Agreement.
"MODIFICATION AGREEMENT" means that certain Modification
Agreement dated as of March 25, 1996 between Company and The Boeing
Company, as amended through the date hereof and as further amended,
restated, supplemented or otherwise modified from time to time in
accordance with this Agreement and other modification agreements
entered into by Company in form and substance satisfactory to
Administrative Agent.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"NET CASH PROCEEDS" means, with respect to any Asset Sale,
Cash Proceeds of such Asset Sale net of bona fide direct costs of sale
including (i) income taxes reasonably estimated to be actually payable
as a result of such Asset Sale within two years of the date of such
Asset Sale and (ii) payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness (other
than the Loans) that is secured by a Lien on the stock or assets of
Company and that is required to be repaid under the terms thereof as a
result of such Asset Sale.
"NEW ZEALAND LEASE" means that certain Lease Agreement dated
as of March 29, 1996 between Company, as lessor, and Air New Zealand
Limited, as lessee, as amended, restated, supplemented or otherwise
modified from time to time in accordance with this Agreement.
"NON-US LENDER" has the meaning assigned to that term in
subsection 2.7B(iii)(a).
"NOTES" means one or more of the Revolving Notes or the
Amended and Restated Notes, as the context requires.
17
18
"NOTICE OF BORROWING" means a notice substantially in the
form of Exhibit I annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 2.1B with respect to a
proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by
Company to Administrative Agent pursuant to subsection 2.2D with
respect to a proposed conversion or continuation of the applicable
basis for determining the interest rate with respect to the Loans
specified therein.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Syndication Agent, Administrative
Agent, Lenders or any of them under the Loan Documents, whether for
principal, interest, fees, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any
corporation, a certificate executed on behalf of such corporation by
its chairman of the board (if an officer) or its president or one of
its vice presidents and by its chief financial officer or its
treasurer; provided that every Officers' Certificate with respect to
the compliance with a condition precedent to the making of any Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers,
such condition has been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the
lessee at any time) of any property (whether real, personal or mixed)
that is not a Capital Lease other than any such lease under which that
Person is the lessor.
"OTHER PERMITTED INDEBTEDNESS" means Indebtedness incurred
for the purpose of financing the acquisition of aircraft so long as
(i) any such Indebtedness bears interest at a rate which does not
exceed 15% per annum, (ii) such Indebtedness has a final stated
maturity later than the final stated maturity of the Notes after
giving effect to the conversion of Revolving Loans into Term Loans and
(iii) the amortization and the other terms, provisions, conditions,
covenants and events of default thereof taken as a whole shall be no
more onerous or restrictive from the perspective of Company and its
Subsidiaries or any less favorable, from the perspective of Lenders
than any other Designated Indebtedness.
"PART" means, as the context requires, a Part as defined in
a particular Aircraft Chattel Mortgage or Parts as defined in all
Aircraft Chattel Mortgages.
18
19
"PASS THROUGH TRUST DOCUMENTS" means that certain Pass
Through Trust Agreement dated as of November 30, 1995 between Atlas
Air, Inc. and First Fidelity Bank, National Association, as Trustee
(the "PASS THROUGH TRUST AGREEMENT") and any trust indenture and
security agreements including any related trust indenture and security
agreement supplements which related to the equipment notes to be held
in trust pursuant to the Pass Through Trust Agreement and all related
agreements, as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with this
Agreement.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(other than any such Lien imposed pursuant to Section 401(a)(29) or
412(n) of the Internal Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental
charges or claims the payment of which is not, at the time,
required by subsection 5.3;
(ii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics and materialmen and other
Liens imposed by law incurred in the ordinary course of
business for sums not yet delinquent or being contested in
good faith by appropriate proceedings that do not involve any
danger of the sale, forfeiture or loss of any Collateral, if
such reserve or other appropriate provision, if any, as shall
be required by GAAP shall have been made therefor;
(iii) Liens incurred or deposits made in the
ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money);
(iv) any attachment or judgment Lien not
constituting an Event of Default under subsection 7.8;
(v) easements, rights-of-way, restrictions, minor
defects, encroachments or irregularities in title and other
similar charges or encumbrances not interfering in any
material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries;
(vi) any (a) interest or title of a lessor or
sublessor under any lease permitted by subsection 6.9, (b)
restriction or encumbrance that the interest or title of such
lessor or sublessor may be subject to, or (c) subordination of
the interest of the lessee or sublessee under such lease to
any restriction or encumbrance referred to in the preceding
clause (b);
19
20
(vii) Liens arising from filing UCC financing
statements relating solely to leases permitted by this
Agreement;
(viii) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods;
(ix) the rights of others under agreements or
arrangements to the extent expressly permitted by the terms of
Sections 4(d) and 4(e) of the First Aircraft Chattel
Mortgages;
(x) Liens described in Schedule 6.2 annexed
hereto; and
(xi) Liens granted pursuant to the Collateral
Documents.
"PERMITTED EXTENSION INDEBTEDNESS" means renewals,
extensions, substitutions, refinancings or replacements (each an
"EXTENSION") by Company of any Indebtedness of Company, including
any such successive transactions by Company, so long as (i) any such
Indebtedness bears interest at a rate which does not exceed 15% per
annum, (ii) any such Permitted Extension Indebtedness shall be in a
principal amount that does not exceed the principal amount immediately
prior to such extension, plus the amount of any premium required to be
paid in connection with such extension pursuant to the terms of such
Indebtedness, plus the amount of expenses of Company incurred in
connection with such extension, (iii) in the case of any extension of
subordinated Indebtedness, such Permitted Extension Indebtedness is
made subordinate to the Obligations at least to the same extent as the
Indebtedness immediately prior to such extension, (iv) such Permitted
Extension Indebtedness has a final stated maturity later than the
final stated maturity of the Notes after giving effect to the
conversion of Revolving Loans into Term Loans and (v) the amortization
and the other terms, provisions, conditions, covenants and events of
default thereof taken as a whole shall be no more onerous or
restrictive from the perspective of Company and its Subsidiaries or
any less favorable, from the perspective of Lenders than those
contained in the Indebtedness immediately prior to such extension.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies,
Joint Ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations,
whether or not legal entities, and governments and agencies and
political subdivisions thereof.
"PHILIPPINE AIRCRAFT" means the Financed Aircraft subject to
the Philippine Lease.
"PHILIPPINE LEASE" means, that certain Lease Agreement dated
as of February 23, 1995 by and between First Security Bank of Utah,
National Association and Philippine Airlines Inc. as amended by an
Amendment dated March 31, 1995, as
20
21
modified pursuant to an acknowledgement dated December 31, 1996 by and
between Philippine Airlines and Company, and as assigned to Atlas Air,
Inc. pursuant to an Assignment and Acceptance of Lease dated December
31, 1996 as the Lease Agreement may be further amended, restated,
supplemented or otherwise modified from time to time in accordance
with this Agreement.
"POTENTIAL EVENT OF DEFAULT" means a condition or event
that, after notice or the expiration of any grace period or both,
would constitute an Event of Default.
"PRICING CERTIFICATE" has the meaning assigned to that term
in subsection 5.1(xvii).
"PRICING REDUCTION" means, if at any time Company's
obligations in respect of the Pass Through Trust Documents are rated
by ▇▇▇▇▇'▇ or S&P at the levels specified below, a pricing reduction
equal to the percentage corresponding to the applicable rating set
forth in the chart below:
Rating Pricing Reduction
------ -----------------
Ba 3 or below by ▇▇▇▇▇'▇ and
BB- or below by S&P None
Ba 2 by ▇▇▇▇▇'▇ and
BB by S&P 0.25%
Ba 1 or higher by ▇▇▇▇▇'▇ and
BB+ by S&P 0.50%
In the event of a split rating, the more creditworthy of the two
ratings shall be used to determine the Pricing Reduction; provided
that, if the less creditworthy of the two ratings is two or more
rating categories below the more creditworthy rating, the more
creditworthy rating shall be deemed to be the rating category which is
one rating category above the less creditworthy rating. The Pricing
Reduction shall be determined with reference to the most recent
Pricing Certificate delivered by Company to Administrative Agent
pursuant to subsection 5.1(xvii). Any changes to the Pricing
Reduction shall become effective on the day following the delivery of
the relevant Pricing Certificate to Administrative Agent and shall
remain in effect through the next date a Pricing Certificate is
required to be delivered. It is understood and agreed that the
Pricing Reduction percentages provided are not cumulative.
Notwithstanding anything to the contrary herein, at any time an Event
of Default shall have occurred and be continuing, the Pricing
Reduction shall be zero.
"PRIME RATE" means the rate that Administrative Agent
announces from time to time as its prime lending rate, as in effect
from time to time. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged
21
22
to any customer. Administrative Agent or any other Lender may make
commercial loans or other loans at rates of interest at, above or
below the Prime Rate.
"PRO FORMA BASIS" means, with respect to compliance with any
covenant hereunder, compliance with such covenant after giving effect
to any proposed incurrence of Indebtedness by Company or any of its
Subsidiaries and the application of the proceeds thereof, the
acquisition (whether by purchase, merger or otherwise) or disposition
(whether by sale, merger or otherwise) of any company, entity or
business or any asset (including any ACMI Contracted Aircraft) by
Company or any of its Subsidiaries or any other related action which
requires compliance on a Pro Forma Basis. In making any determination
of compliance on a Pro Forma Basis, such determination shall be
performed after good faith consultation with Administrative Agent
using the consolidated financial statements of Company and its
Subsidiaries which shall be reformulated as if any such incurrence of
Indebtedness and the application of proceeds, acquisition, disposition
or other related action had been consummated at the beginning of the
period specified in the covenant with respect to which Pro Forma Basis
compliance is required.
"PRO RATA SHARE" means, with respect to each Lender, (i)
prior to any Conversion Date the percentage obtained by dividing the
Revolving Loan Exposure of that Lender by the aggregate Revolving Loan
Exposure of all Lenders, and (ii) thereafter, the percentage obtained
by dividing the Term Loan Exposure of that Lender by the aggregate
Term Loan Exposure of all Lenders, in each case as such percentage may
be adjusted by assignments permitted pursuant to subsection 9.1. The
initial Pro Rata Share of each Lender is set forth opposite the name
of that Lender in Schedule 2.1 annexed hereto.
"PROCEEDINGS" has the meaning assigned to that term in
subsection 5.1(x).
"PURCHASE AGREEMENT" means, with respect to the purchase of
any Eligible Aircraft to be financed with the proceeds of Revolving
Loans, an aircraft purchase agreement and any related ▇▇▇▇ of sale
providing, among other things, for the sale to Company of such
Eligible Aircraft in form and substance satisfactory to Administrative
Agent.
"REFERENCE LENDERS" means Bankers Trust and one or more
other Lenders designated by Credit Partners and Administrative Agent
and reasonably satisfactory to Company.
"REGISTER" has the meaning assigned to that term in
subsection 2.1.E.
"REGULATION D" means Regulation D of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
22
23
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Materials into
the indoor or outdoor environment (including, without limitation, the
abandonment or disposal of any barrels, containers or other closed
receptacles containing any Hazardous Materials), or into or out of any
Facility, including the movement of any Hazardous Material through the
air, soil, surface water, groundwater or property.
"REQUISITE LENDERS" means Lenders having or holding 50.1% or
more of (i) prior to any Conversion Date, the aggregate Revolving Loan
Exposure of all Lenders and (ii) thereafter, the aggregate Term Loan
Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any
class of stock of Company now or hereafter outstanding, except a
dividend payable solely in shares of that class of stock to the
holders of that class, (ii) any redemption, retirement, sinking fund
or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of stock of Company now or hereafter
outstanding, and (iv) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement,
defeasance (including in-substance or legal defeasance), sinking fund
or similar payment with respect to, any Designated Indebtedness.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender to
make Revolving Loans to Company pursuant to subsection 2.1A(i), and
"REVOLVING LOAN COMMITMENTS" means such commitments of all Lenders in
the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means June 30,
1998.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender
as of any date of determination (i) prior to the termination of the
Revolving Loan Commitments, that Lender's Revolving Loan Commitment
and (ii) after the termination of the Revolving Loan Commitments, the
aggregate outstanding principal amount of the Revolving Loans of that
Lender.
"REVOLVING LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(i).
"REVOLVING NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1D on the Closing Date and on each
Funding Date on which Company purchases an aircraft with the proceeds
of Revolving Loans and (ii) any promissory notes issued by Company
pursuant to the last sentence of subsection 9.1B(i) in connection with
assignments of the Revolving Loan Commitments and Revolving Loans of
any Lenders,
23
24
in each case substantially in the form of Exhibit IIIA annexed hereto,
as they may be amended, supplemented or otherwise modified from time
to time.
"S&P" means Standard & Poor's Corporation.
"SECOND AIRCRAFT CHATTEL MORTGAGE" means with respect to
each Eligible Aircraft purchased with the proceeds of Loans, a Second
Security Agreement and Chattel Mortgage (Aircraft No. _____) and
substantially in the form of Exhibit XI annexed hereto, granting a
security interest in such Eligible Aircraft and Parts securing all
Obligations that are not secured by the First Chattel Mortgage entered
into concurrently therewith, as such Second Aircraft Chattel Mortgage
may be amended, restated, supplemented or otherwise modified from time
to time in accordance with the terms hereof and thereof.
"SECOND AMENDED AND RESTATED CLOSING DATE" means the date on
or before February 28, 1997, on which the conditions set forth in
subsection 3.6 are met and this Agreement becomes effective.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation
in any profit-sharing agreement or arrangement, options, warrants,
bonds, debentures, notes, or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise, or in general
any instruments commonly known as "securities" or any certificates
of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as
amended from time to time, and any successor statute.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (A) (i) the then fair saleable value of the
property of such Person is (y) greater than the total amount of
liabilities (including contingent liabilities) of such Person and (z)
not less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such
Person's capital is not unreasonably small in relation to its business
or any contemplated or undertaken transaction; and (iii) such Person
does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to pay such
debts as they become due; and (B) such Person is "solvent" within
the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of
this definition, the amount of any contingent liability at any time
shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
24
25
"SPECIAL PURPOSE SUBSIDIARY" means (i) a Subsidiary of
Company formed solely for the purpose of refinancing Notes associated
with a Financed Aircraft or acquiring or refinancing other aircraft
with Other Permitted Indebtedness the only assets of which are such
Financed Aircraft and contributions to capital of such Subsidiary,
which together with all other contributions to capital made to other
such Subsidiaries, are not in excess of 15% of the consolidated book
value of the assets of the Company and its Subsidiaries, and the only
liability of which is the Permitted Extension Indebtedness incurred to
refinance such Notes; provided that Company beneficially owns and
controls at least 95% of the issued and outstanding capital stock of
such Subsidiary or (ii) a wholly-owned Subsidiary formed pursuant to
subsection 9.21.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association, joint venture or other business
entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person
or Persons (whether directors, managers, trustees or other Persons
performing similar functions) having the power to direct or cause the
direction of the management and policies thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more
of the other Subsidiaries of that Person or a combination thereof.
"SUPPLEMENTAL TYPE CERTIFICATES" has the meaning assigned to
that term in the First Aircraft Chattel Mortgage.
"SYNDICATION AGENT" means ▇▇▇▇▇▇▇ Sachs in its capacity as
syndication agent.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed,
levied, collected, withheld or assessed; provided that "TAX ON THE
OVERALL NET INCOME" of a Person shall be construed as a reference to
a tax imposed by the jurisdiction in which that Person's principal
office (and/or, in the case of a Lender, its lending office) is
located or in which that Person is deemed to be doing business on all
or part of the net income, profits or gains of that Person (whether
worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or
otherwise).
"TERM LOAN COMMITMENT" means the commitment of a Lender to
convert Revolving Loans into Term Loans pursuant to subsection
2.1A(ii), and "TERM LOAN COMMITMENTS" means such commitments of all
Lenders in the aggregate.
"TERM LOAN EXPOSURE" means, with respect to any Lender as of
any date of determination (i) prior to any Conversion Date, that
Lender's Term Loan Commitment and (ii) thereafter, the outstanding
principal amount of the Term Loan of that Lender.
25
26
"TERM LOANS" means the Loans converted into Term Loans
pursuant to subsection 2.1A(ii).
"THAI AIRCRAFT" means the Financed Aircraft subject to that
certain First Security Agreement and Chattel Mortgage (Aircraft No.
21782) dated the Closing Date between Company and Administrative
Agent, as amended, restated, supplement or otherwise modified from
time to time in accordance with the terms hereof and thereof.
"UNITED STATES CITIZEN" has the meaning assigned to that
term in subsection 4.1B.
"UNSECURED REVOLVING CREDIT FACILITY" means that certain
credit facility to be entered into between Atlas Air, Inc. and Bank
One, Colorado, N.A., which provides for a $25,000,000 revolving
working capital line of credit and a $1,000,000 term real estate loan,
on terms substantially similar to the term sheet delivered to
Administrative Agent as amended, restated, supplemented or otherwise
modified from time to time in accordance with this Agreement.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP.
1.3 OTHER DEFINITIONAL PROVISIONS.
References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; NOTES; REGISTER.
A. COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Company
herein set forth, each Lender hereby severally agrees to make the Loans
described in this subsection 2.1A.
(i) Revolving Loans. Prior to the Second Amended and
Restated Closing Date, Lenders have made Revolving Loans in the
aggregate principal amount of
26
27
$135,469,221.60 against the Revolving Loan Commitments, the proceeds
of which were used to purchase and modify Eligible Aircraft. From and
after the Second Amended and Restated Closing Date, each Lender
severally agrees, subject to the conditions set forth in Section 3 and
subject to the limitations set forth below, to lend to Company from
time to time during the period from the Closing Date to but excluding
the Revolving Loan Commitment Termination Date an aggregate amount,
together with the amount of Revolving Loans made prior to the Second
Amended and Restated Closing Date, not exceeding its Pro Rata Share of
the aggregate amount of the Revolving Loan Commitments to be used for
the purposes identified in subsection 2.5A. The amount of each
Lender's Revolving Loan Commitment on the date hereof is set forth
opposite its name on Schedule 2.1 annexed hereto and the aggregate
amount of the Revolving Loan Commitments on the date hereof is
$275,000,000; provided that the Revolving Loan Commitments of Lenders
shall be adjusted to give effect to any assignments of the Revolving
Loan Commitments pursuant to subsection 9.1B; and provided, further
that the amount of the Revolving Loan Commitments shall be reduced
from time to time by the amount of any reductions thereto made
pursuant to subsection 2.4B(ii). Each Lender's Revolving Loan
Commitment shall expire on the Revolving Loan Commitment Termination
Date and all Revolving Loans and all other amounts owed hereunder with
respect to the Revolving Loans and the Revolving Loan Commitments
shall be paid in full no later than that date unless converted to Term
Loans pursuant to subsection 2.1A(ii). Amounts borrowed under this
subsection 2.1A may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date. Amounts reborrowed after
prepayment pursuant to subsection 2.4B(iii)(e) shall be allocated
ratably among the Revolving Notes relating to all Financed Aircraft.
Anything to the contrary in this Agreement notwithstanding,
the Revolving Loans shall be subject to the limitation that in no
event shall the Lenders lend an amount in excess of (x) on the date of
acquisition of an Eligible Aircraft the lesser of (i) an amount equal
to the purchase price of such Eligible Aircraft and (ii) 80% of the
Appraised Value of such Eligible Aircraft as of the date of
acquisition (but without giving effect to the contemplated
modifications) or (y) on any date Revolving Loans are made to finance
the modification of an Eligible Aircraft, 80% of the cost thereof as
reflected in invoices delivered to Administrative Agent pursuant to
subsection 3.3A (other than the final Revolving Loan to finance the
cost of modification of such Eligible Aircraft which may be in an
amount up to the lesser of (x) 100% of the costs of modification
associated with such final Revolving Loan and (y) an amount which when
added to all other Loans made with respect to such Eligible Aircraft
does not exceed 80% of the Appraised Value as set forth in appraisals
delivered pursuant to subsection 3.2(iv) after giving effect to
completion of modification).
(ii) Term Loans. Each Lender severally agrees, at the
request of Company, to convert all of its Revolving Loans outstanding
on the Revolving Loan Commitment Termination Date into Term Loans upon
the terms and conditions set forth in this Agreement. Any request by
Company for a conversion of Revolving Loans to Term
27
28
Loans shall be made at least 30 days prior to the Revolving Loan
Commitment Termination Date and shall be accompanied by an Officer's
Certificate stating that no Potential Event of Default or Event of
Default has occurred and is continuing. On the Conversion Date,
Company shall deliver to each Lender an Amended and Restated Note with
respect to each Financed Aircraft in substantially the form of Exhibit
IIIB annexed hereto and such further documents as Administrative Agent
may reasonably request.
B. BORROWING MECHANICS. Revolving Loans made on any Funding Date
shall be in an aggregate minimum amount of $1,500,000. Whenever Company
desires that Lenders make Revolving Loans it shall deliver to Administrative
Agent a Notice of Borrowing no later than 12:00 Noon (New York time) at least
three Business Days in advance of the proposed Funding Date (in the case of a
Eurodollar Rate Loan) or at least one Business Day in advance of the proposed
Funding Date (in the case of a Base Rate Loan). The Notice of Borrowing shall
specify (i) the proposed Funding Date (which shall be a Business Day), (ii) the
amount of Loans requested, (iii) whether such Loans shall be Base Rate Loans or
Eurodollar Rate Loans, (iv) in the case of any Loans requested to be made as
Eurodollar Rate Loans, the initial Interest Period requested therefor and (v)
whether such Loans are for the purpose of the purchase or the modification of
an Eligible Aircraft. Revolving Loans and Term Loans may be continued as or
converted into Base Rate Loans and Eurodollar Rate Loans in the manner provided
in subsection 2.2D. In lieu of delivering the above-described Notice of
Borrowing, Company may give Administrative Agent telephonic notice by the
required time of any proposed borrowing under this subsection 2.1B; provided
that such notice shall be promptly confirmed in writing by delivery of a Notice
of Borrowing to Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any
Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds
of any Loans shall constitute a re-certification by Company, as of the
applicable Funding Date, as to the matters to which Company is required to
certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in
accordance therewith.
28
29
C. DISBURSEMENT OF FUNDS. All Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic
notice in lieu thereof), Administrative Agent shall notify each Lender of the
proposed borrowing. Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 12:00 Noon (New York time) on the
applicable Funding Date, in each case in same day funds in Dollars, at the
Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to
make available to Administrative Agent the amount of such Lender's Loan
requested on such Funding Date, Administrative Agent may assume that such
Lender has made such amount available to Administrative Agent on such Funding
Date and Administrative Agent may, in its sole discretion, but shall not be
obligated to, make available to Company a corresponding amount on such Funding
Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the date such
amount is paid to Administrative Agent, at the customary rate set by
Administrative Agent for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. If such Lender does not pay
such corresponding amount forthwith upon Administrative Agent's demand
therefor, Administrative Agent shall promptly notify Company and Company shall
immediately pay such corresponding amount to Administrative Agent together with
interest thereon, for each day from such Funding Date until the date such
amount is paid to Administrative Agent, at the rate payable under this
Agreement for Base Rate Loans. Nothing in this subsection 2.1C shall be deemed
to relieve any Lender from its obligation to fulfill its Commitments hereunder
or to prejudice any rights that Company may have against any Lender as a result
of any default by such Lender hereunder.
D. NOTES. Company shall execute and deliver on the Closing Date
to each Lender (or to Administrative Agent for that Lender), with respect to
each Eligible Aircraft purchased by Company on the Closing Date, a Revolving
Note substantially in the form of Exhibit IIIA annexed hereto to evidence that
Lender's Revolving Loans in respect of such Eligible Aircraft, in the principal
amount of such Eligible Aircraft's Maximum Note Amount and with other
appropriate insertions. Following the Closing Date, on each date on which
Company delivers a Notice of Borrowing pursuant to subsection 2.1B for the
purpose of financing the purchase of an Eligible Aircraft, Company shall
execute and deliver on such date to each Lender (or to Administrative Agent for
that Lender) with respect to such Eligible Aircraft a Revolving Note
substantially in the form of Exhibit IIIA annexed hereto to evidence that
Lender's Revolving Loans in respect of such Eligible Aircraft in the principal
amount of such Eligible Aircraft's Maximum Note Amount with other appropriate
insertions. Company shall execute and deliver
29
30
on the Conversion Date an Amended and Restated Note substantially in the form
of Exhibit IIIB annexed hereto amending and restating each Revolving Note to
evidence that Lender's Term Loans in the principal amount of such Revolving
Note and with other appropriate insertions.
E. THE REGISTER.
(i) Administrative Agent shall maintain, at its address
referred to in subsection 9.8, a register for the recordation of the
names and addresses of Lenders and the Commitments and Loans of each
Lender from time to time (the "REGISTER"). The Register shall be
available for inspection by Company or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Revolving Loan commitment and the Term Loan Commitment and the
Revolving Loans and Term Loans from time to time of each Lender and
each repayment or prepayment in respect of the principal amount of the
Revolving Loans or Term Loans of each Lender. Any such recordation
shall be conclusive and binding on Company and each Lender, absent
manifest error; provided that failure to make any such recordation, or
any error in such recordation, shall not affect Company's Obligations
in respect of the applicable Loans.
(iii) Each Lender shall record on its internal records
(including, without limitation the Notes held by such Lender) the
amount of each Revolving Loan and each Term Loan made by it and each
payment in respect thereof. Any such recordation shall be conclusive
and binding on Company, absent manifest error; provided that failure
to make any such recordation, or any error in such recordation, shall
not affect Company's Obligations in respect of the applicable Loans;
and provided, further, that in the event of any inconsistency between
the Register and any Lender's records, the recordations in the
Register shall govern.
(iv) Company, Administrative Agent and Lenders shall deem
and treat the Persons listed as Lenders in the Register as the holders
and owners of the corresponding Commitments and Loans listed therein
for all purposes hereof, and no assignment or transfer of any such
Commitment or Loan shall be effective, in each case unless and until
an assignment Agreement effecting the assignment or transfer thereof
shall have ben accepted by Administrative Agent and recorded in the
Register as provided in subsection 9.1B(ii). Prior to such
recordation, all amounts owed with respect to the applicable
Commitment or Loan shall be owed to the Lender listed in the Register
as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Commitments or Loans.
(v) Company hereby designates Administrative Agent to
serve as Company's agent solely for purposes of maintaining the
Register as provided in this subsection 2.1E,
30
31
and Company hereby agrees that, to the extent Administrative Agent
serves in such capacity, Administrative Agent and its officers,
directors, employees, agents and affiliates shall constitute
Indemnitees for all purposes under subsection 9.3.
F. REALLOCATION OF PRO RATA SHARES. On the Second Amended and
Restated Closing Date, each Lender that will have a greater Pro Rata
Share upon the Second Amended and Restated Closing Date than its Pro
Rata Share (under and as defined in the Existing Credit Agreement)
immediately prior to the Second Amended and Restated Closing Date
(including any Lender not party to the Existing Credit Agreement
immediately prior to the Second Amended and Restated Closing Date)
(each a "PURCHASING LENDER"), without executing an Assignment
Agreement, shall be deemed to have automatically purchased assignments
pro rata from each Lender that will have a smaller Pro Rata Share upon
the Second Amended and Restated Closing Date (a "SELLING LENDER") in
all such Selling Lenders' rights and obligations under this Agreement
and the other Loan Documents, including with respect to Revolving Loan
Commitments and outstanding Revolving Loans (collectively, except as
set forth below, the "ASSIGNED RIGHTS AND OBLIGATIONS") so that,
after giving effect to such assignments, each Lender shall have its
respective Pro Rata Share as set forth in Schedule 2.1 of the Assigned
Rights and Obligations. Each such purchase hereunder shall be at par
for a purchase price equal to the principal amount of Loans and
without recourse, representation or warranty, except that, each
Selling Lender shall be deemed to represent and warrant to each
Purchasing Lender that the Assigned Rights and Obligations of such
Selling Lender are not subject to any Liens created by that Selling
Lender.
Administrative Agent shall calculate the net amount to be paid
or received by each Lender in connection with the assignments effected
hereunder on the Second Amended and Restated Closing Date. Each
Purchasing Lender required to make a payment shall make the net amount
of its required payment available to Administrative Agent, in same day
funds, at the office of Administrative Agent located at One Bankers
Trust Plaza, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, not later than
12:00 p.m. (New York time) on the Second Amended and Restated Closing
Date. Administrative Agent shall distribute on the Second Amended and
Restated Closing Date the proceeds of such amounts to the Selling
Lenders entitled to receive payments, pro rata in proportion to the
amount each Selling Lender is entitled to receive at the primary
address set forth below such Selling Lender's name on the signature
pages hereof or at such other address as such Selling Lender may
request in writing to Administrative Agent.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections
2.6 and 2.7, each Revolving Loan and each Term Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate
or the Adjusted Eurodollar Rate, as the case may be. The applicable basis for
determining the rate of interest with respect to any Loan shall be selected by
31
32
Company initially at the time a Notice of Borrowing is given with respect to
such Loan pursuant to subsection 2.1B; provided that for the first 60 days
following the Closing Date, only Eurodollar Rate Loans with Interest Periods of
one month shall be available. The basis for determining the interest rate with
respect to any Revolving Loan or any Term Loan may be changed from time to time
pursuant to subsection 2.2D. If on any day a Revolving Loan or a Term Loan is
outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day
that Loan shall bear interest determined by reference to the Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, each Revolving
Loan and each Term Loan shall bear interest through maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate
plus the Applicable Margin per annum; or
(ii) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus the Applicable Margin per annum.
The "APPLICABLE MARGIN" for each Base Rate Loan and Eurodollar Rate
Loan shall be the percentage set forth below for that type of Loan for the
periods set forth below.
---------------------------------------------------------------------
APPLICABLE MARGIN
-------------------------
BASE EURODOLLAR
TIME PERIOD RATE LOAN RATE LOAN
---------------------------------------------------------------------
From the Closing Date through the
second anniversary of the Closing Date 1.50% 2.50%
---------------------------------------------------------------------
Thereafter 2.00% 3.00%
---------------------------------------------------------------------
Notwithstanding the foregoing, the Applicable Margin shall be reduced in an
amount equal to the applicable Pricing Reduction effective from the date
following the delivery by Company to Administrative Agent of a Pricing
Certificate through the date a subsequent Pricing Certificate is required to be
delivered. If Company fails to deliver a Pricing Certificate or delivers an
incorrect Pricing Certificate, no Pricing Reduction shall be effective until
Company delivers a correct Pricing Certificate.
B. INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:
32
33
(i) the initial Interest Period for any Eurodollar Rate
Loan shall commence on the Funding Date in respect of such Loan, in
the case of a Loan initially made as a Eurodollar Rate Loan, or on the
date specified in the applicable Notice of Conversion/Continuation, in
the case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest
Periods applicable to a Eurodollar Rate Loan continued as such
pursuant to a Notice of Conversion/Continuation, each successive
Interest Period shall commence on the day on which the next preceding
Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding
Business Day;
(iv) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Term Loans shall extend beyond June 30, 2000;
(vi) no Interest Period with respect to any portion of the
Term Loans shall extend beyond a date on which Company is required to
make a scheduled payment of principal of the Term Loans unless the sum
of (a) the aggregate principal amount of Term Loans that are Base Rate
Loans plus (b) the aggregate principal amount of Term Loans that are
Eurodollar Rate Loans with Interest Periods expiring on or before such
date equals or exceeds the principal amount required to be paid on the
Term Loans on such date;
(vii) there shall be no more than twelve Interest Periods
outstanding at any time; and
(viii) in the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan in the applicable Notice of
Borrowing or Notice of Conversion/Continuation, Company shall be
deemed to have selected an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
33
34
D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Company shall have the option (i) to convert at any time all or
any part of its outstanding Revolving Loans or Term Loans equal to $3,000,000
and integral multiples of $100,000 in excess of that amount from Loans bearing
interest at a rate determined by reference to one basis to Loans bearing
interest at a rate determined by reference to an alternative basis or (ii) upon
the expiration of any Interest Period applicable to a Eurodollar Rate Loan, to
continue all or any portion of such Loan equal to $3,000,000 and integral
multiples of $100,000 in excess of that amount as a Eurodollar Rate Loan;
provided, however, that a Eurodollar Rate Loan may only be converted into a
Base Rate Loan on the expiration date of an Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 12:00 Noon (New York time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of,
a Eurodollar Rate Loan, that no Potential Event of Default or Event of Default
has occurred and is continuing. In lieu of delivering the above-described
Notice of Conversion/Continuation, Company may give Administrative Agent
telephonic notice by the required time of any proposed conversion/continuation
under this subsection 2.2D; provided that such notice shall be promptly
confirmed in writing by delivery of a Notice of Conversion/ Continuation to
Administrative Agent on or before the proposed conversion/continuation date.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or
for otherwise acting in good faith under this subsection 2.2D, and upon
conversion or continuation of the applicable basis for determining the interest
rate with respect to any Loans in accordance with this Agreement pursuant to
any such telephonic notice Company shall have effected a conversion or
continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation
of any Event of Default, the outstanding principal amount of all Loans and, to
the extent permitted by applicable law, any interest payments thereon not paid
when due and any fees and other amounts then due
34
35
and payable hereunder, shall thereafter bear interest (including post-petition
interest in any proceeding under the Bankruptcy Code or other applicable
bankruptcy laws) payable upon demand at a rate that is 2% per annum in excess
of the interest rate otherwise payable under this Agreement with respect to the
applicable Loans (or, in the case of any such fees and other amounts, at a rate
which is 2% per annum in excess of the interest rate otherwise payable under
this Agreement for Base Rate Loans) ; provided that, in the case of Eurodollar
Rate Loans, upon the expiration of the Interest Period in effect at the time
any such increase in interest rate is effective such Eurodollar Rate Loans
shall thereupon become Base Rate Loans and shall thereafter bear interest
payable upon demand at a rate which is 2% per annum in excess of the interest
rate otherwise payable under this Agreement for Base Rate Loans. Payment or
acceptance of the increased rates of interest provided for in this subsection
2.2E is not a permitted alternative to timely payment and shall not constitute
a waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of Administrative Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on each Loan shall be
computed on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on
any Loan, the date of the making of such Loan or the first day of an Interest
Period applicable to such Loan or, with respect to a Base Rate Loan being
converted from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded;
provided that if a Loan is repaid on the same day on which it is made, one
day's interest shall be paid on that Loan.
2.3 FEES.
A. COMMITMENT FEES. Company agrees to pay to Administrative
Agent, for distribution to each Lender in proportion to that Lender's Pro Rata
Share, commitment fees for the period from and including the Closing Date to
and excluding the Revolving Loan Commitment Termination Date equal to the
average of the daily excess of the Revolving Loan Commitments over the
aggregate principal amount of Revolving Loans outstanding multiplied by
one-half of 1% (.50%) per annum, such commitment fees to be calculated on the
basis of a 360-day year and the actual number of days elapsed and to be payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing on the first such date to occur after the Closing Date, and on
the Revolving Loan Commitment Termination Date.
B. ADMINISTRATIVE FEE. Company agrees to pay to Administrative
Agent, an Administrative Agent's fee in the amount of $75,000 on the Closing
Date and on each anniversary thereof.
35
36
C. OTHER FEES. Company agrees to pay to Credit Partners, ▇▇▇▇▇▇▇
▇▇▇▇▇ and Administrative Agent such other fees in the amounts and at the times
separately agreed upon between Company and Credit Partners, ▇▇▇▇▇▇▇ Sachs and
Administrative Agent.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS;
GENERAL PROVISIONS REGARDING PAYMENTS.
A. SCHEDULED REDUCTIONS OF TERM LOAN COMMITMENTS. Company shall
make principal payments on the Term Loans in installments the last day of each
fiscal quarter commencing on September 30, 1998 in an amount equal to 1/12th of
the principal amount of Term Loans outstanding on the Conversion Date; provided
that such scheduled installments of principal of the Term Loans shall be
reduced in connection with any voluntary or mandatory prepayments of the Term
Loans in accordance with subsection 2.4B(iv); and provided, further that the
Term Loans and all other amounts owed hereunder with respect to the Term Loans
shall be paid in full no later than June 30, 2000, and the final installment
payable by Company in respect of the Term Loans on such date shall be in an
amount, sufficient to repay all amounts owing by Company under this Agreement
with respect to the Term Loans. Any payment pursuant to this subsection 2.4A
will be applied ratably among the Notes relating to all Financed Aircraft;
provided that, at Administrative Agent's election, any prepayment may be deemed
first to pay Loans made to finance labor costs associated with conversion, if
any, and second to pay Loans made to finance other costs of conversion of the
Financed Aircraft and thereafter to all other Loans.
B. PREPAYMENTS AND UNSCHEDULED REDUCTIONS IN REVOLVING LOAN
COMMITMENTS.
(i) Voluntary Prepayments. Company may, upon not less
than three Business Days' prior written or telephonic notice given to
Administrative Agent by 12:00 Noon (New York time) on the date
required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or
telephone to each Lender), at any time and from time to time prepay,
without premium or penalty (other than pursuant to subsection 2.6D),
any Term Loans or Revolving Loans on any Business Day in whole or in
part in an aggregate minimum amount of $3,000,000 and integral
multiples of $100,000 in excess of that amount; provided, however,
that a Eurodollar Rate Loan may only be prepaid on the expiration of
the Interest Period applicable thereto. Notice of prepayment having
been given as aforesaid, the principal amount of the Loans specified
in such notice shall become due and payable on the prepayment date
specified therein. Any such voluntary prepayment shall be applied as
specified in subsection 2.4B(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments.
Company may, upon not less than three Business Days' prior written or
telephonic notice confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each Lender), at
any
36
37
time and from time to time terminate in whole or permanently reduce in
part, without premium or penalty (other than pursuant to subsection
2.6D), the Revolving Loan Commitments in an amount up to the amount by
which the Revolving Loan Commitments exceed the aggregate amount of
all outstanding Revolving Loans at the time of such proposed
termination or reduction; provided that any such partial reduction of
the Revolving Loan Commitments shall be in an aggregate minimum amount
of $3,000,000 and integral multiples of $100,000 in excess of that
amount. Company's notice to Administrative Agent shall designate the
date (which shall be a Business Day) of such termination or reduction
and the amount of any partial reduction, and such termination or
reduction of the Revolving Loan Commitments shall be effective on the
date specified in Company's notice and shall reduce the Revolving Loan
Commitment of each Lender proportionately to its Pro Rata Share.
(iii) Mandatory Prepayments and Mandatory Reductions of
Revolving Loan Commitments.
(a) Prepayments and Reductions from Asset Sales.
No later than the second Business Day following the date of
receipt by Company or any of its Subsidiaries of Cash Proceeds
of any Asset Sale, Company shall (1) if such Asset Sale occurs
prior to the Conversion Date, prepay, without premium or
penalty (other than pursuant to subsection 2.6D), the
Revolving Loans in an amount equal to the Net Cash Proceeds of
such Asset Sale and (2) if such Asset Sale occurs following
the Conversion Date, prepay, without premium or penalty (other
than pursuant to subsection 2.6D), Term Loans in such amount;
provided that, with respect to Asset Sales which do not
include the sale of a Financed Aircraft, Company may retain
Net Cash Proceeds in respect of such Asset Sales of up to $10
million in any Fiscal Year and $20 million in the aggregate.
Concurrently with any prepayment of the Loans pursuant to this
subsection 2.4B(iii)(a), Company shall deliver to
Administrative Agent an Officers' Certificate demonstrating
the derivation of the Net Cash Proceeds of the correlative
Asset Sale from the gross sales price thereof. In the event
that Company shall, at any time after receipt of Cash Proceeds
of any Asset Sale requiring a prepayment pursuant to this
subsection 2.4B(iii)(a), determine that the prepayments
previously made in respect of such Asset Sale were in an
aggregate amount less than that required by the terms of this
subsection 2.4B(iii)(a), Company shall promptly make an
additional prepayment of the Revolving Loans or Term Loans, as
the case may be, in the manner described above in an amount
equal to the amount of any such deficit, and Company shall
concurrently therewith deliver to Administrative Agent an
Officers' Certificate demonstrating the derivation of the
additional Net Cash Proceeds resulting in such deficit. Any
mandatory prepayments pursuant to this subsection 2.4B(iii)(a)
shall be applied as specified in subsection 2.4B(iv).
37
38
(b) Prepayments and Reductions Due to Issuance of
Certain Indebtedness. On the date of receipt by Company of
the cash proceeds (net of underwriting discounts and
commissions and other reasonable costs associated therewith)
from the issuance of Permitted Extension Indebtedness with
respect to a Financed Aircraft, Company shall (1) if such
issuance occurs prior to the Conversion Date, prepay, without
premium or penalty (other than pursuant to subsection 2.6D),
the Revolving Loans in an amount equal to such net cash
proceeds and (2) if such issuance occurs following the
Conversion Date, prepay, without premium or penalty (other
than pursuant to subsection 2.6D), Term Loans in such amount.
Any such mandatory prepayments shall be applied as specified
in subsection 2.4B(iv).
(c) Prepayments and Reductions Due to Insurance
and Condemnation Proceeds. No later than the second Business
Day following the date of receipt by Company or any of its
Subsidiaries of any cash payments under any of the casualty
insurance policies covering damage to or loss of property
maintained pursuant to subsection 5.4 resulting from damage to
or loss of all or any portion of the Collateral or any other
tangible asset (net of actual and documented reasonable costs
incurred by Company in connection with adjustment and
settlement thereof, "INSURANCE PROCEEDS") or any proceeds
resulting from the taking of assets by the power of eminent
domain, condemnation or otherwise (net of actual and
documented reasonable costs incurred by Company in connection
with adjustment and settlement thereof, "CONDEMNATION
PROCEEDS") (other than (x) the portion of such proceeds
promptly applied to repair or replace the property in respect
of which such proceeds were paid, (y) the portion of such
proceeds required to be paid to lien holders on aircraft other
than Financed Aircraft or (z) proceeds applied pursuant to
subsection 2.4B(iii)(d)), Company shall (1) if such receipt of
cash payments occurs prior to the Conversion Date, prepay,
without premium or penalty (other than pursuant to subsection
2.6D), the Revolving Loans in an amount equal to such proceeds
and (2) if such receipt of cash payments occurs following the
Conversion Date, prepay, without premium or penalty (other
than pursuant to subsection 2.6D), Term Loans in such amount.
Company shall, no later than 180 days after receipt of any
such Insurance Proceeds or Condemnation Proceeds that have not
theretofore been applied to the Obligations, make an
additional prepayment of Revolving Loans or Term Loans, as the
case may be, in the manner described above, in the full amount
of all such proceeds that have not then been applied to repair
or replace the property in respect of which such proceeds were
paid. Any such mandatory prepayments shall be applied as
specified in subsection 2.4B(iv).
(d) Prepayments and Reductions Due to an Event of
Loss. No later than the earlier of (x) the second Business
Day following the date of receipt by Company or any of its
Subsidiaries of any Insurance Proceeds or Condemnation
Proceeds with respect to a Financed Aircraft or (y) 180 days
following an Event
38
39
of Loss with respect to a Financed Aircraft, Company shall (1)
if such receipt of proceeds or Event of Loss occurs prior to
the Conversion Date, prepay, without premium or penalty (other
than pursuant to subsection 2.6D), the Revolving Loans
associated with such Financed Aircraft and (2) if such receipt
of proceeds or Event of Loss occurs following the Conversion
Date, prepay, without premium or penalty (other than pursuant
to subsection 2.6D), the Term Loans associated with such
Financed Aircraft; provided that Company and its Subsidiaries
shall not be required to make a prepayment pursuant to this
subsection 2.4B(iii)(d) with respect to any proceeds applied
pursuant to Section 4(f)(vi)(A) or 4(f)(vi)(B) of any Aircraft
Chattel Mortgage.
(e) Prepayments and Reductions from Consolidated
Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Year, or, in the
case of Fiscal Year 1996, for the period from the Closing Date
through the end of such Fiscal Year, within 100 days after the
last day of such Fiscal Year Company shall (1) prior to the
Conversion Date, prepay, without premium or penalty (other
than pursuant to subsection 2.6D), the Revolving Loans in an
amount equal to 50% of such Consolidated Excess Cash Flow and
(2) following the Conversion Date, prepay, without premium or
penalty (other than pursuant to subsection 2.6D), Term Loans
in such amount; provided that, if as of the last day of such
Fiscal Year, the aggregate principal amount of all Loans was
less than 60% of the aggregate Appraised Value of all Financed
Aircraft, no prepayment will be required under this subsection
2.4B(iii)(e). Any such mandatory prepayments shall be applied
as specified in subsection 2.4B(iv).
(f) Prepayments Due to Reductions in Appraised
Value. Company shall from time to time prepay, without
premium or penalty (other than pursuant to subsection 2.6D),
the Revolving Loans to the extent necessary so that the
outstanding principal amount of any Revolving Loans made to
finance the acquisition or conversion of a Financed Aircraft
shall not at any time exceed 80% of the Appraised Value of
such Financed Aircraft as most recently determined pursuant to
subsection 5.11; provided that, in lieu of making a prepayment
hereunder, Company may provide Administrative Agent with cash
collateral or a letter of credit in the amount of such
prepayment pursuant to arrangements in form and substance
satisfactory to Administrative Agent.
(g) Prepayments Due to Failure to Register
Aircraft with the FAA. In the event that, with respect to any
Financed Aircraft, Administrative Agent's security interest in
such Financed Aircraft is not fully perfected within five (5)
business days of the funding of Loans with respect to such
Financed Aircraft, Company shall prepay the full amount of
such Loans.
(iv) Application of Prepayments.
39
40
(a) Application of Voluntary Prepayments by Type
of Loans and Order of Maturity. Any voluntary prepayments
pursuant to subsection 2.4B(i) shall be applied ratably among
the Notes relating to all of the Financed Aircraft; provided
that, at Administrative Agent's election, any prepayment may
be deemed first to prepay Loans made to finance labor costs
associated with conversion, if any, second to prepay Loans
made to finance other costs of conversion of a Financed
Aircraft and thereafter to all other Loans. Any voluntary
prepayments of the Term Loans pursuant to subsection 2.4B(i)
shall be applied to reduce the scheduled installments of
principal of the Term Loans set forth in subsection 2.4A in
inverse order of maturity.
(b) Application of Mandatory Prepayments of
Loans. Any mandatory prepayments of the Loans pursuant to
subsection 2.4B(iii) shall be applied ratably among the Notes
relating to all of the Financed Aircraft; provided that in the
event a prepayment pursuant to subsection 2.4B(iii)(a), (b),
(c), (d) (f) or (g) relates to Financed Aircraft, such
prepayment shall be applied first to the Notes relating to
such Financed Aircraft and second ratably among the Notes
relating to all other Financed Aircraft, and then, in the case
of Term Loans, to scheduled amortization payments in inverse
order of maturity; provided further that, at Administrative
Agent's election, any such prepayment may be deemed first to
prepay Loans made to finance labor costs associated with
conversion, if any, second to prepay Loans made to finance
other costs of conversion of a Financed Aircraft and
thereafter to all other Loans.
(c) Application of Prepayments to Base Rate Loans
and Eurodollar Rate Loans. Any prepayment of Loans shall be
applied first to Base Rate Loans to the full extent thereof
before application to Eurodollar Rate Loans, in each case in a
manner which minimizes the amount of any payments required to
be made by Company pursuant to subsection 2.6D.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company
of principal, interest, fees and other Obligations hereunder and under
the Notes shall be made in Dollars in same day funds, without defense,
set-off or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 12:00 Noon (New York
time) on the date due at the Funding and Payment Office for the
account of Lenders; funds received by Administrative Agent after that
time on such due date shall be deemed to have been paid by Company on
the next succeeding Business Day. Company hereby authorizes
Administrative Agent to charge its accounts with Administrative Agent
in order to cause timely payment to be made to Administrative Agent of
all principal, interest, fees and expenses due hereunder (subject to
sufficient funds being available in its accounts for that purpose).
40
41
(ii) Application of Payments to Principal and Interest.
All payments in respect of the principal amount of any Loan shall
include payment of accrued interest on the principal amount being
repaid or prepaid, and all such payments shall be applied to the
payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments in respect of Term Loans and Revolving Loans shall
be apportioned among all outstanding Loans to which such payments
relate, in each case proportionately to Lenders' respective Pro Rata
Shares. Administrative Agent shall promptly distribute to each
Lender, at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such
Lender may request, its Pro Rata Share of all such payments received
by Administrative Agent and the commitment fees of such Lender when
received by Administrative Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4C(iii),
if, pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if
any Affected Lender makes Base Rate Loans in lieu of its Pro Rata
Share of any Eurodollar Rate Loans, Administrative Agent shall give
effect thereto in apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to
be made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment
fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation
thereon of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided that the failure to make (or any error in the
making of) a notation of any Loan made under such Note shall not limit
or otherwise affect the obligations of Company hereunder or under such
Note with respect to any Loan or any payments of principal or interest
on such Note.
2.5 USE OF PROCEEDS.
A. The proceeds of Revolving Loans shall be applied to finance
(i) the purchase of an Eligible Aircraft pursuant to a Purchase Agreement in an
amount up to the lesser of the purchase price of such Eligible Aircraft and 80%
of the Appraised Value of such Eligible Aircraft (but without giving effect to
any contemplated modifications) and (ii) the cost of making an Eligible
Aircraft usable by Company as a cargo aircraft by paying for those
modifications identified in the Modification Agreement and the BFE Agreements
(but not for maintenance costs) in an amount that when added to the amount
financed in (i) does not exceed 80% the Appraised Value of such modified
Eligible Aircraft; provided that the final Revolving Loan to
41
42
finance the modification of such Eligible Aircraft may be in an amount equal to
the lesser of (x) 100% of the costs of modification associated with such final
Revolving Loan and (y) an amount which, when added to all other Revolving Loans
made with respect to such Eligible Aircraft, does not exceed 80% of the
Appraised Value of such Eligible Aircraft after giving effect to the completion
of modification.
B. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation G, Regulation U, Regulation T or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board or to violate the Exchange Act, in each case as in
effect on the date or dates of such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 10:00 A.M. (New York time) on each Interest Rate
Determination Date, Administrative Agent shall determine (which determination
shall, absent manifest error, be final, conclusive and binding upon all
parties) the interest rate that shall apply to the Eurodollar Rate Loans for
which an interest rate is then being determined for the applicable Interest
Period and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to Company and each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist
and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by
Company with respect to the Loans in respect of which such determination was
made shall be deemed to be rescinded by Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In
the event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Company and Administrative
Agent) that the making, maintaining or continuation of its Eurodollar Rate
Loans (i) has become unlawful as a result of compliance by such Lender in good
faith with any law, treaty, governmental rule, regulation, guideline or order
(or would conflict with any such treaty,
42
43
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful) or (ii) has
become impracticable, or would cause such Lender material hardship, as a result
of contingencies occurring after the date of this Agreement which materially
and adversely affect the interbank Eurodollar market or the position of such
Lender in that market, then, and in any such event, such Lender shall be an
"AFFECTED LENDER" and it shall on that day give notice (by telefacsimile or
by telephone confirmed in writing) to Company and Administrative Agent of such
determination (which notice Agent shall promptly transmit to each other
Lender). Thereafter (a) the obligation of the Affected Lender to make Loans
as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until such
notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or
convert such Loan to, as the case may be) a Base Rate Loan, (c) the Affected
Lender's obligation to maintain its outstanding Eurodollar Rate Loans (the
"AFFECTED LOANS") shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company
pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation,
Company shall have the option, subject to the provisions of subsection 2.6D, to
rescind such Notice of Borrowing or Notice of Conversion/Continuation as to all
Lenders by giving notice (by telefacsimile or by telephone confirmed in
writing) to Administrative Agent of such rescission on the date on which the
Affected Lender gives notice of its determination as described above (which
notice of rescission Administrative Agent shall promptly transmit to each other
Lender). Except as provided in the immediately preceding sentence, nothing in
this subsection 2.6C shall affect the obligation of any Lender other than an
Affected Lender to make or maintain Loans as, or to convert Loans to,
Eurodollar Rate Loans in accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Company shall compensate each Lender, upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including, without
limitation, any interest paid by that Lender to lenders of funds borrowed by it
to make or carry its Eurodollar Rate Loans and any loss, expense or liability
sustained by that Lender in connection with the liquidation or re-employment of
such funds) which that Lender may sustain: (i) if for any reason (other than a
default by that Lender) a borrowing of any Eurodollar Rate Loan does not occur
on a date specified therefor in a Notice of Borrowing or a telephonic request
for borrowing, or a conversion to or continuation of any Eurodollar Rate Loan
does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment or other principal payment or any conversion of any of
its Eurodollar Rate Loans occurs on a date prior to the last day of an Interest
Period applicable to that Loan, (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given
43
44
by Company, or (iv) as a consequence of any other default by Company in the
repayment of its Eurodollar Rate Loans when required by the terms of this
Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry
or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of
and during the continuation of a Potential Event of Default or an Event of
Default, (i) Company may not elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest
Period then in effect for that Loan and (ii) subject to the provisions of
subsection 2.6D, any Notice of Borrowing or Notice of Conversion/Continuation
given by Company with respect to a requested borrowing or
conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B, in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after
the date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force
of law):
(i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the overall net
income of such Lender) with respect to this Agreement or any of its
obligations hereunder or any payments to such Lender (or its
44
45
applicable lending office) of principal, interest, fees or any other
amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement against assets held by, or deposits
or other liabilities in or for the account of, or advances or loans
by, or other credit extended by, or any other acquisition of funds by,
any office of such Lender (other than any such reserve or other
requirements with respect to Eurodollar Rate Loans that are reflected
in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Lender (or its applicable
lending office) or its obligations hereunder or the interbank
Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender
of agreeing to make, making or maintaining Loans hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending office)
with respect thereto; then, in any such case, Company shall promptly pay to
such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by
Company under this Agreement and the other Loan Documents shall be
paid free and clear of and (except to the extent required by law)
without any deduction or withholding on account of any Tax (other than
a Tax on the overall net income of any Lender) imposed, levied,
collected, withheld or assessed by or within the United States of
America or any political subdivision in or of the United States of
America or any other jurisdiction from or to which a payment is made
by or on behalf of Company or by any federation or organization of
which the United States of America or any such jurisdiction is a
member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other
Person is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by Company to
Administrative Agent or any Lender under any of the Loan Documents:
45
46
(a) Company shall notify Administrative Agent of
any such requirement or any change in any such requirement as
soon as Company becomes aware of it;
(b) Company shall pay any such Tax before the
date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on Company) for its
own account or (if that liability is imposed on Administrative
Agent or such Lender, as the case may be) on behalf of and in
the name of Administrative Agent or such Lender;
(c) the sum payable by Company in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to ensure
that, after the making of that deduction, withholding or
payment, Administrative Agent or such Lender, as the case may
be, receives on the due date a net sum equal to what it would
have received had no such deduction, withholding or payment
been required or made; and
(d) within 30 days after paying any sum from
which it is required by law to make any deduction or
withholding, and within 30 days after the due date of payment
of any Tax which it is required by clause (b) above to pay,
Company shall deliver to Administrative Agent evidence
satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the
relevant taxing or other authority;
provided that no such additional amount shall be required to be paid
to any Lender under clause (c) above except to the extent that any
change after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an increase in the
rate of such deduction, withholding or payment from that in effect at
the date of this Agreement or at the date of such Assignment
Agreement, as the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws
of any jurisdiction other than the United States or any state
or other political subdivision thereof (for purposes of this
subsection 2.7B(iii), a "NON-US LENDER") shall deliver to
Administrative Agent for transmission to Company, on or prior
to the Closing Date (in the case of each Lender listed on the
signature pages hereof) or on the date of the Assignment
Agreement pursuant to which it becomes a Lender (in the case
of each other Lender), and at such other times as may be
necessary in the determination of Company or Administrative
Agent (each in the reasonable exercise of its discretion), (1)
two original copies of Internal Revenue Service
46
47
Form 1001 or 4224 (or any successor forms), properly completed
and duly executed by such Lender, together with any other
certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect
to any payments to such Lender of principal, interest, fees or
other amounts payable under any of the Loan Documents or (2)
if such Lender is not a "bank" or other Person described in
Section 881(c)(3) of the Internal Revenue Code and cannot
deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (1) above, a Certificate re Non-Bank Status
together with two original copies of Internal Revenue Service
Form W-8 (or any successor form), properly completed and duly
executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that
such Lender is not subject to deduction or withholding of
United States federal income tax with respect to any payments
to such Lender of interest payable under any of the Loan
Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or
other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, such
Lender shall (1) deliver to Administrative Agent for
transmission to Company two new original copies of Internal
Revenue Service Form 1001 or 4224, or a Certificate re
Non-Bank Status and two original copies of Internal Revenue
Service Form W-8, as the case may be, properly completed and
duly executed by such Lender, together with any other
certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax
with respect to payments to such Lender under the Loan
Documents or (2) immediately notify Administrative Agent and
Company of its inability to deliver any such forms,
certificates or other evidence.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) if such Lender shall have failed to
satisfy the requirements of subsection 2.7B(iii)(a); provided
that if such Lender shall have satisfied such requirements on
the Closing Date (in the case of each Lender listed on the
signature pages hereof) or on the date of the Assignment
Agreement pursuant to which it became a Lender (in the case of
each other Lender), nothing in this subsection 2.7B(iii)(c)
shall relieve Company of its obligation to pay any additional
amounts pursuant to clause (c) of subsection 2.7B(ii) in the
event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any
change in the interpretation,
47
48
administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or
other evidence at a subsequent date establishing the fact that
such Lender is not subject to withholding as described in
subsection 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after
the date hereof of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its applicable lending office) with any guideline,
request or directive regarding capital adequacy (whether or not having the
force of law) of any such governmental authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's Loans or Commitments or
other obligations hereunder to a level below that which such Lender or such
controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within five Business Days
after receipt by Company from such Lender of the statement referred to in the
next sentence, Company shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to Company (with
a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such additional amounts,
which statement shall be conclusive and binding upon all parties hereto absent
manifest error.
D. SUBSTITUTE LENDERS. In the event Company is required
under the provisions of this subsection 2.7 to make payments in a material
amount to any Lender or in the event any Lender fails to lend to Company in
accordance with this Agreement, Company may, so long as no Event of Default or
Potential Event of Default shall have occurred and be continuing, elect to
terminate such Lender as a party to this Agreement; provided that, concurrently
with such termination, (i) Company shall pay that Lender all principal,
interest and fees and other amounts (including without limitation, amounts, if
any, owed under this subsection 2.7) owed to such Lender through such date of
termination, (ii) another financial institution satisfactory to Company and
Administrative Agent (or if Administrative Agent is also the Lender to be
terminated, the successor Administrative Agent) shall agree, as of such date,
to become a Lender for all purposes under this Agreement (whether by assignment
or amendment) and to assume all obligations of the Lender to be terminated as
of such date, and (iii) all documents and supporting materials necessary, in
the judgment of Administrative Agent (or if Administrative Agent is also the
Lender to be terminated, the successor Administrative Agent) to evidence the
substitution of such Lender shall have been received and approved by
Administrative Agent as of such date.
48
49
2.8 OBLIGATION OF LENDERS TO MITIGATE.
Each Lender agrees that, as promptly as practicable after the officer
of such Lender responsible for administering the Loans of such Lender becomes
aware of the occurrence of an event or the existence of a condition that would
cause such Lender to become an Affected Lender or that would entitle such
Lender to receive payments under subsection 2.7, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable legal
or regulatory restrictions, use reasonable efforts (i) to make, issue, fund or
maintain the Commitments of such Lender or the affected Loans of such Lender
through another lending office of such Lender, or (ii) take such other measures
as such Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender pursuant to subsection 2.7 would be materially reduced and if, as
determined by such Lender in its sole discretion, the making, issuing, funding
or maintaining of such Commitments or Loans through such other lending office
or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or the
interests of such Lender; provided that such Lender will not be obligated to
utilize such other lending office pursuant to this subsection 2.8 unless
Company agrees to pay all incremental expenses incurred by such Lender as a
result of utilizing such other lending office as described in clause (i) above.
A certificate as to the amount of any such expenses payable by Company pursuant
to this subsection 2.8 (setting forth in reasonable detail the basis for
requesting such amount) submitted by such Lender to Company (with a copy to
Administrative Agent) shall be conclusive absent manifest error.
SECTION 3.
CONDITIONS TO LOANS
The obligations of Administrative Agent and Lenders to make Loans
hereunder are subject to the satisfaction of the following conditions:
3.1 CONDITIONS TO INITIAL REVOLVING LOANS.
The obligations of Lenders to make the Revolving Loans to be made on
the Closing Date are, in addition to the conditions precedent specified in
subsections 3.2 and 3.4, subject to prior or concurrent satisfaction of the
following conditions:
A. COMPANY DOCUMENTS. On or before the Closing Date, Company
shall deliver or cause to be delivered to Lenders (or to Administrative Agent
for Lenders with sufficient originally executed copies, where appropriate, for
each Lender and its counsel) the following, each, unless otherwise noted, dated
the Closing Date:
(i) certified copies of its Certificate of Incorporation,
together with a good standing certificate from the Secretary of State
of the State of Delaware and each other
49
50
state in which it is qualified as a foreign corporation to do business
and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
states, each dated a recent date prior to the Closing Date;
(ii) copies of its Bylaws, certified as of the Closing
Date by its corporate secretary or an assistant secretary;
(iii) resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement
and the other Loan Documents, certified as of the Closing Date by its
corporate secretary or an assistant secretary as being in full force
and effect without modification or amendment;
(iv) signature and incumbency certificates of its officers
executing this Agreement and the other Loan Documents;
(v) executed originals of this Agreement, the Revolving
Notes (duly executed in accordance with subsection 2.1D, drawn to the
order of each Lender and with appropriate insertions) and the other
Loan Documents including a First Aircraft Chattel Mortgage with
respect to each Eligible Aircraft purchased on the Closing Date; and
(vi) such other documents as Administrative Agent may
reasonably request.
B. CAPITALIZATION; RELATED AGREEMENTS. Administrative Agent
shall be satisfied with the capital, organization, ownership and management
structure of Company and its Subsidiaries and with the form and substance of
the ACMI Contracts, the Modification Agreement, the BFE Agreements, aircraft
lease arrangements (including, without limitation, the New Zealand Lease),
Purchase Agreements and existing financing agreements and intercreditor
arrangements (including, without limitation, the ING Financing Agreement and
the Pass Through Trust Documents).
C. NECESSARY CONSENTS. Company shall have obtained all consents
necessary or advisable in connection with the transactions contemplated by the
Loan Documents and the continued operation of the business of Company and its
Subsidiaries, and each of the foregoing shall be in full force and effect and
in form and substance satisfactory to Administrative Agent other than those
which the failure to obtain, either individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect.
D. PERFECTION OF SECURITY INTERESTS. Company shall have taken or
caused to be taken such actions in such a manner so that Administrative Agent
has a valid and perfected first priority security interest in the entire
Collateral (subject to Liens consented to in writing by Administrative Agent
with respect to such Collateral and other Liens permitted by subsection 6.2)
granted by the Collateral Documents. Such actions shall include, without
limitation: (i) the delivery to Administrative Agent of Uniform Commercial Code
financing statements, executed
50
51
by the applicable Loan Parties as to the Collateral granted by such Loan
Parties for all jurisdictions as may be necessary or desirable to perfect
Administrative Agent's security interest in such Collateral; and (ii) evidence
reasonably satisfactory to Administrative Agent that all other filings
(including, without limitation, filing of the First Aircraft Chattel Mortgage
with the FAA (as it relates to the Engines mortgaged thereunder) and filings
with the appropriate Aeronautical Authority in New Zealand and the New Zealand
High Court in the appropriate jurisdiction and evidence of delivery of the
Aircraft Chattel Mortgages to the relevant Company Offices in New Zealand),
recordings and other actions Credit Partners and Administrative Agent deem
necessary or advisable to establish, preserve and perfect the first priority
Liens (subject to Permitted Encumbrances and Liens consented to in writing by
Credit Partners and Administrative Agent or permitted by subsection 6.2 with
respect to such Collateral) granted to Administrative Agent in personal and
mixed property shall have been made.
E. FINANCIAL CONDITION CERTIFICATE. Company shall have delivered
to Administrative Agent a Financial Condition Certificate dated the Closing
Date, substantially in the form annexed hereto as Exhibit IX, with appropriate
attachments demonstrating that, after giving effect to the consummation of the
financing transactions contemplated hereby, Company and its Subsidiaries, taken
as a whole, are Solvent.
F. OPINIONS OF COMPANY'S COUNSEL. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for Company, in
form and substance reasonably satisfactory to Administrative Agent and its
counsel, dated as of the Closing Date and setting forth substantially the
matters in the opinions designated in Exhibit VA annexed hereto and as to such
other matters as Administrative Agent acting on behalf of Lenders may
reasonably request (ii) the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ regarding
Section 1110 of the Bankruptcy Code, dated the Closing Date and setting forth
substantially the matters in the opinions designated in Exhibit VB annexed
hereto and (iii) evidence satisfactory to Administrative Agent that Company has
requested such counsel to deliver such opinions to Lenders.
G. OPINIONS OF ▇▇▇▇▇ ▇▇▇▇▇▇. Lenders and their respective
counsel shall have received executed copies of one or more favorable written
opinions of ▇▇▇▇▇ ▇▇▇▇▇▇, General Counsel of Company, in form and substance
reasonably satisfactory to Administrative Agent and its counsel, dated the
Closing Date, and setting forth substantially the matters in the opinions
designated in Exhibit VC annexed hereto.
H. OPINIONS OF COLORADO COUNSEL. Lenders and their respective
counsel shall have received originally executed copies of one or more favorable
written opinions of local Colorado counsel regarding perfection of
Administrative Agent's security interest in the Collateral, in form and
substance satisfactory to Administrative Agent and its counsel, dated the
Closing Date, and setting forth substantially the matters in the opinions
designated in Exhibit VD annexed hereto.
I. OPINIONS OF NEW ZEALAND COUNSEL. Lenders and their respective
counsel shall have received originally executed copies of one or more favorable
written opinions of local New
51
52
Zealand counsel, in form and substance reasonably satisfactory to
Administrative Agent and its counsel, dated the Closing Date, setting forth
substantially the matters in the opinions designated in Exhibit VE annexed
hereto.
J. OPINIONS OF O'MELVENY & ▇▇▇▇▇. Lenders shall have received
originally executed copies of one or more favorable written opinions of
O'Melveny & ▇▇▇▇▇ dated as of the Closing Date, substantially in the form of
Exhibit VI annexed hereto and as to such other matters as Administrative Agent
acting on behalf of Lenders may reasonably request.
K. FEES. Company shall have paid to Administrative Agent, for
distribution (as appropriate) to Administrative Agent and Lenders, the fees
payable on the Closing Date referred to in subsection 2.3.
L. FINANCIAL STATEMENTS. On or before the Closing Date,
Administrative Agent shall have received from Company the unaudited quarterly
balance sheet of Company as at March 31, 1996 and the related consolidated and
consolidating statements of operations, stockholders' equity and cash flows of
Company for the three month period ending on such date, all in reasonable
detail and certified by the chief financial officer of Company that they fairly
present the financial condition of Company as at the dates indicated and the
results of their operations and their cash flows for the period indicated,
subject to changes resulting from audit and normal year-end adjustments, which
financial statements demonstrate to Administrative Agent's satisfaction that no
material adverse change in the condition (financial or otherwise), results of
operations, assets, liabilities or prospects of Company has occurred relative
to the information previously disclosed to Administrative Agent.
M. EVIDENCE OF INSURANCE. Company shall have delivered to
Administrative Agent certificates of insurance naming Administrative Agent on
behalf of Administrative Agent and Lenders as loss payee under the casualty
insurance policies and as additional insured under the liability policies of
Company and a broker's report from each of Company's and Air New Zealand
Limited's insurance broker evidencing compliance with the requirements of each
Aircraft Chattel Mortgage, all as required pursuant to subsection 5.4 hereof or
pursuant to the Collateral Documents. All such certificates of insurance shall
contain such endorsements as are reasonably required by Administrative Agent.
N. NO MATERIAL ADVERSE EFFECT. Since December 31, 1995, no
Material Adverse Effect (in the opinion of Administrative Agent) shall have
occurred.
O. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Company shall have delivered to Administrative Agent an Officers' Certificate,
in form and substance satisfactory to Administrative Agent, to the effect that
the representations and warranties in Section 4 hereof are true, correct and
complete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date and that Company shall have
performed in all material respects all agreements and satisfied all conditions
which this
52
53
Agreement provides shall be performed or satisfied by it on or before the
Closing Date except as otherwise disclosed to and agreed to in writing by
Administrative Agent and Requisite Lenders.
P. CASH ON HAND. After giving effect to the transactions
contemplated hereby (including the initial funding made pursuant to the
Revolving Loan Commitment and the payment of, or taking reserves for, all
transactions fees and expenses), Company shall not have less than $50 million
cash on its consolidated balance sheet.
Q. COMPLIANCE CERTIFICATE. Company shall have delivered to
Administrative Agent a Compliance Certificate dated the Closing Date,
substantially in the form annexed hereto as Exhibit IV.
R. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and its
counsel shall be satisfactory in form and substance to Administrative Agent and
such counsel, and Administrative Agent and such counsel shall have received all
such counterpart originals or certified copies of such documents as Credit
Partners and Administrative Agent may reasonably request.
3.2 CONDITIONS TO LOANS TO FINANCE AIRCRAFT ACQUISITION.
The obligations of Lenders to make Loans to finance the acquisition of
an aircraft on any Funding Date are subject to the following additional
conditions:
(i) Company shall deliver to Administrative Agent an
Officer's Certificate and such supportive documents as may be
requested by Administrative Agent, certifying that the aircraft to be
acquired is an Eligible Aircraft;
(ii) as of the date of purchase of such Eligible Aircraft,
Administrative Agent shall be reasonably satisfied that Company and
its Subsidiaries have entered into binding ACMI Contracts sufficient
to ensure the continued employment (consistent with past practices) of
substantially all other aircraft owned and operated by Company and its
Subsidiaries other than the new aircraft being acquired;
(iii) on the date of purchase of any such Eligible
Aircraft, Administrative Agent, on behalf of Lenders, shall have been
granted a first priority lien on such Eligible Aircraft, spare parts
and related assets (including, without limitation, the Purchase
Agreement and the Modification Agreement) and the Purchase Agreement,
the Modification Agreement and the BFE Agreements shall have been
assigned to Administrative Agent and any Persons whose consent is
necessary for an effective assignment of such agreements shall have so
consented (other than initial purchase
53
54
pursuant to the Purchase Agreement with respect to the Thai Aircraft),
in each case, pursuant to documentation and procedures acceptable to
Administrative Agent;
(iv) Company shall have delivered to Administrative Agent
appraisals demonstrating that the amount of the Revolving Loan
requested does not exceed 80% of the Appraised Value of the Eligible
Aircraft to be acquired as of the Funding Date and that, after giving
effect to all proposed modifications of such Eligible Aircraft, the
Maximum Note Amount shall not exceed 80% of the Appraised Value of
such Eligible Aircraft as so modified;
(v) with respect to any Eligible Aircraft other than the
Thai Aircraft, a First Aircraft Chattel Mortgage and a Second Aircraft
Chattel Mortgage with respect to such Eligible Aircraft shall have
been filed in such order for recordation with the FAA under the
Federal Aviation Act and, with respect to the second Eligible Aircraft
financed hereunder, a Second Aircraft Chattel Mortgage relating to the
first Eligible Aircraft financed hereunder shall have been filed for
recordation with the FAA under the Federal Aviation Act;
(vi) Uniform Commercial Code Financing Statements naming
Administrative Agent as the secured party covering such Eligible
Aircraft and spare parts shall have been duly executed and delivered
and duly filed in all jurisdictions necessary or desirable to perfect
a security interest in the Collateral;
(vii) with respect to Eligible Aircraft other than the Thai
Aircraft, the FAA ▇▇▇▇ of Sale shall have been delivered for
recordation with the FAA pursuant to the Federal Aviation Act;
(viii) with respect to an Eligible Aircraft other than the
Thai Aircraft, such Eligible Aircraft shall have been registered with
the FAA in the name of Company or if previously registered in the
United States, an application for registration shall have been filed;
(ix) Administrative Agent shall have received originally
executed copies of one or more favorable written opinions of counsel
to Company in form and substance satisfactory to Administrative Agent
dated as of the Funding Date and setting forth the matters designated
in the opinions in Exhibits VA, VB and VC and such other matters as
Administrative Agent may reasonably request; provided that with
respect to the opinion regarding matters set forth in Exhibit VB no
such opinion shall be required unless Administrative Agent in its
reasonable judgment determines that any factual assumption set forth
in the corresponding opinion delivered pursuant to subdivision F of
subsection 3.1 no longer applies or there have been any change in
applicable law or the contemplation thereof as a result of which the
opinion delivered pursuant to subdivision F of subsection 3.1 does not
apply to the aircraft being financed with such Loan.
54
55
(x) Administrative Agent shall have received originally
executed copies of one or more favorable written opinions of FAA
counsel or other counsel in form and substance satisfactory to
Administrative Agent dated as of the Funding Date or the date such
Eligible Aircraft is registered with the FAA if such registration
occurs after the Funding Date and setting forth such matters related
to the FAA or other Aeronautical Authority having jurisdiction over
the Eligible Aircraft being acquired as Administrative Agent may
reasonably request;
(xi) Administrative Agent shall have received evidence
satisfactory to it to the effect that as of such Funding Date Company
is an air carrier certificated under Sections 401 and 604(b) of the
Federal Aviation Act; with respect to any Eligible Aircraft other than
the Thai Aircraft, certificates of airworthiness with respect to such
Eligible Aircraft shall have been duly issued by an Aeronautical
Authority pursuant to the Federal Aviation Act and shall be in full
force and effect; and each Engine shall be in compliance with all
airworthiness standards of the FAA or shall be maintained in
accordance with an FAA approved program;
(xii) Company shall have good and marketable title to and a
valid ownership interest in the Collateral free and clear of all Liens
other than Liens permitted by subsection 6.2;
(xiii) no Event of Loss with respect to the Airframe or any
Engine to be delivered shall have occurred and no event or condition
which with the giving of notice or lapse of time or both, would result
in any such Event of Loss shall have occurred and be continuing;
(xiv) Company shall have delivered to Administrative Agent
certificates of insurance naming Administrative Agent on behalf of
Administrative Agent and Lenders as loss payee under casualty
insurance policies with respect to the Eligible Aircraft to be
acquired and a broker's report evidencing compliance with the
requirements of the First Aircraft Chattel Mortgage with respect to
such Eligible Aircraft;
(xv) Company shall have delivered to Administrative Agent
all documents executed in connection with the Purchase Agreement
related to such aircraft and such documents shall be in form and
substance satisfactory to Administrative Agent;
(xvi) any Revolving Loan made to finance the purchase of a
Financed Aircraft shall be made no later than ten days after the later
of Company's payment of the purchase price with respect to or
acquisition of title to such Financed Aircraft; and
(xvii) Company shall have delivered to Administrative Agent
such other documents as Administrative Agent may reasonably request
and all such documents shall be in form and substance reasonably
satisfactory to Administrative Agent.
55
56
(xviii) In addition to the foregoing conditions, with respect
to the Loans made to finance the acquisition of the Philippine
Aircraft, Company shall have delivered to Administrative Agent and
Requisite Lenders a copy of the Philippine Lease in form and substance
satisfactory to Administrative Agent and Requisite Lenders including,
without limitation, provisions permitting the grant to Administrative
Agent on behalf of Lenders of the Liens contemplated by subdivision
(iii) of this subsection 3.2 and satisfaction of the requirements of
subdivision (xiv) of this subsection 3.2. In addition, the form of
Mortgages delivered with respect to the Philippine Aircraft will
permit the Philippine Lease and include provisions granting security
interests to Administrative Agent, on behalf of Lenders, in the
Philippine Lease and all rights and privileges of Company thereunder
and will require that ground and flight all-risk hull insurance be
maintained on the Philippine Aircraft in an amount of at least
$30,000,000. Finally, Company will not be required to enter into a
Modification Agreement with respect to the Philippine Aircraft or to
assign such Modification Agreement to Administrative Agent for the
benefit of Lenders; provided that Company will enter into a
Modification Agreement with respect to the Philippine Aircraft and
will assign such Modification Agreement to Administrative Agent for
the benefit of Lenders prior to or concurrently with the termination
of the Philippine Lease.
Notwithstanding the foregoing, Administrative Agent may in its
sole and absolute discretion waive the conditions set forth in clauses
(iii), (v), (vii), (viii) and (x) to the extent necessary by reason of
the fact that Company is unable to obtain a deregistration certificate
with respect to the applicable Eligible Aircraft prior to the purchase
of such Eligible Aircraft; provided that, if Administrative Agent's
security interest in such Eligible Aircraft is not fully perfected
within five (5) business days of full funding of the Loans with
respect to such Eligible Aircraft, Company shall prepay such Loans in
accordance with subsection 2.4B(iii)(g); provided further, that
Administrative Agent may not waive such conditions with respect to
more than one Eligible Aircraft at any time.
3.3 CONDITION TO LOANS TO FINANCE CARGO CONVERSION.
The obligations of Lenders to make Loans to finance the costs of
conversion of an aircraft on any Funding Date are subject to the additional
conditions set forth below:
A. CONDITIONS TO EACH LOAN TO FINANCE THE COSTS OF CONVERSION.
(i) Administrative Agent shall have received an invoice
and ▇▇▇▇ of sale with respect to any Parts delivered in connection
with the modification of Financed Aircraft and with respect to any
buyer furnished equipment, and an invoice for any services or other
costs associated with the modification of such Financed Aircraft
and/or such other information and materials as may be reasonably
requested by Administrative Agent confirming the name of the vendor
performing the service, the Parts or service to be
56
57
financed by such Revolving Loan, the amount due from or previously
paid by Company, the satisfactory completion of the services for which
such Revolving Loan proceeds shall be applied and such other
information regarding such service as Administrative Agent may
request. To the extent practicable, each Revolving Loan made shall be
allocated only to the costs of conversion other than labor costs
associated with such conversion; and
(ii) with respect to any Revolving Loan to finance the
purchase of a Part, such Revolving Loan shall be made no later than
ten days after later of Company's payment for or acquisition of title
to such part.
B. CONDITIONS TO THE FINAL LOAN TO FINANCE THE COST OF
CONVERSION.
(i) If there has been any material deviation from the
terms of the Modification Agreement after the date of the appraisals
delivered pursuant to subsection 3.2(iv), Company shall have delivered
to Administrative Agent appraisals demonstrating that the amount of
the Revolving Loans requested when added to all previous Revolving
Loans made with respect to the Financed Aircraft which has been
converted as of the Funding Date does not exceed the lesser of (x)
100% of the remaining costs of conversion and (y) 80% of the Appraised
Value of the Financed Aircraft;
(ii) Company shall deliver to Administrative Agent an
Officer's Certificate (x) certifying that the conversion of the
Financed Aircraft has been completed and that all obligations of
Company with respect to the modifications of the Financed Aircraft
under the Modification Agreement and any BFE Agreement have been
satisfied and (y) stating the total cost of the purchase and
modification of such Financed Aircraft, which shall not be less than
all Loans made in respect of such Financed Aircraft.
(iii) Company shall deliver to Administrative Agent (a) a
copy of the Aircraft Re-Delivery receipt and evidence of transfer of
title to each Part included in the modification, (b) copies of any
Supplemental Types Certificates issued by the FAA, and (c) copies of
any FAA Form 337s to be filed in connection with such modification;
(iv) Administrative Agent shall have received evidence
satisfactory to it to the effect that as of such Funding Date Company
is an air carrier certificated under Sections 401 and 604(b) of the
Federal Aviation Act; with respect to Eligible Aircraft other than the
Thai Aircraft certificates of airworthiness with respect to such
Eligible Aircraft shall have been duly issued pursuant to the Federal
Aviation Act and shall be in full force and effect; and each Engine
shall be in compliance with all airworthiness standards of the FAA or
shall be maintained in accordance with an FAA approved program; and
57
58
(v) Company shall have delivered to Administrative Agent
such other documents as Administrative Agent may reasonably request
and all such documents shall be in form and substance reasonably
satisfactory to Administrative Agent.
3.4 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the chief executive
officer, the chief financial officer or the treasurer of Company or by any
executive officer of Company designated by any of the above-described officers
on behalf of Company in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) the representations and warranties contained herein
and in the other Loan Documents shall be true, correct and complete in
all material respects on and as of that Funding Date to the same
extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier
date, in which case such representations and warranties shall have
been true, correct and complete in all material respects on and as of
such earlier date; provided that, with respect to any Funding Date
referred to in subsection 3.3, Company's representations and
warranties shall be to its best knowledge;
(ii) no event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
such Notice of Borrowing that would constitute an Event of Default or
a Potential Event of Default;
(iii) Company shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before that
Funding Date;
(iv) no order, judgment or decree of any court, arbitrator
or governmental authority shall purport to enjoin or restrain any
Lender from making the Loans to be made by it on that Funding Date;
(v) the making of the Loans requested on such Funding
Date shall not violate any law including, without limitation,
Regulation G, Regulation T, Regulation U or Regulation X of the Board
of Governors of the Federal Reserve System; and
(vi) there shall not be pending or, to the knowledge of
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting
58
59
Company or any of its Subsidiaries or any property of Company or any
of its Subsidiaries that has not been disclosed by Company in writing
pursuant to subsection 4.6 or 5.1(x) prior to the making of the last
preceding Loans (or, in the case of the initial Loans, prior to the
execution of this Agreement), and there shall have occurred no
development not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, that, in
either event, in the opinion of Administrative Agent or of Requisite
Lenders, would be expected to have a Material Adverse Effect; and no
injunction or other restraining order shall have been issued and no
hearing to cause an injunction or other restraining order to be issued
shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated by this Agreement or the making of Loans
hereunder.
C. Company shall have delivered to Administrative Agent at least
three Business Days in advance of that Funding Date an Officer's Certificate of
Company, in form and substance satisfactory to Administrative Agent,
demonstrating that (i) the ratio of Consolidated Total Debt (less Cash and Cash
Equivalents held by Company in excess of $25 million) as of the last day of the
most recently ended fiscal quarter (the "DETERMINATION DATE") to Consolidated
Adjusted EBITDA for the four-fiscal quarter period ending on such Determination
Date did not exceed than 4.5:1.0 and (ii) the ratio of Consolidated Adjusted
EBITDA for such four-fiscal quarter period to Consolidated Interest Expense for
such four-fiscal quarter period was not less than 3.0:1.0; provided, that to
the extent Consolidated Adjusted EBITDA is being determined for purposes of
calculation made under this paragraph for any period ending on or prior to
December 31, 1996, the amount of Consolidated Adjusted EBITDA to be used for
purposes of calculations being made pursuant hereto shall be equal to the
product of the amount of Consolidated Adjusted EBITDA for the period commencing
January 1, 1996 and ending on the Determination Date and a fraction, the
numerator of which is 365 and the denominator of which is the number of days
elapsed during such period.
D. With respect to any Revolving Loans made on a Funding Date for
the purpose of reborrowing prior to the Conversion Date an amount equal to the
amount of mandatory prepayments made pursuant to subsection 2.4B(iii)(e),
Administrative Agent shall have received an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
or such other counsel as may be acceptable to Administrative Agent, dated as of
such Funding Date confirming the applicability of Section 1110 of the
Bankruptcy Code, to such Revolving Loans made on such Funding Date, in form and
substance satisfactory to Administrative Agent.
3.5 CONDITIONS TO CONVERSION OF REVOLVING LOANS INTO TERM LOANS.
The obligations of Lenders to convert Revolving Loans into Term Loans
on the Conversion Date are subject to the following conditions precedent:
(i) each of the conditions set forth in Subsections 3.4B
and 3.4C shall have been satisfied as of the Conversion Date;
59
60
(ii) Company shall have delivered to Lenders (or to
Administrative Agent for Lenders) executed originals of the Amended
and Restated Notes, duly executed in accordance with subsection 2.1D,
drawn to the order of each Lender and with appropriate insertions;
(iii) Lenders and their respective counsel shall have
received originally executed copies of one or more favorable written
opinions of counsel for Company in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated as of the
Conversion Date, as setting forth such matters as Administrative Agent
may reasonably request; and
(iv) Administrative Agent shall have received copies of
such other documents as Administrative Agent may reasonably request
and all such documents shall be in form and substance reasonably
satisfactory to Administrative Agent.
3.6 CONDITIONS TO EFFECTIVENESS.
The effectiveness of this Agreement and the obligations of Lenders to
make the Loans are subject to the satisfaction of all of the following
conditions:
(i) each of the parties hereto shall have executed and
delivered counterparts of this Agreement to Administrative Agent;
(ii) each of the Purchasing Lenders shall have purchased
assignments pro rata from each Selling Lender in the Assigned Rights
and Obligations so that, after giving effect to such assignments, each
Lender shall have its respective Pro Rata Share as set forth in
Schedule 2.1 of the Assigned Rights and Obligations in accordance with
subsection 2.1F;
(iii) Company shall have furnished such opinions of counsel
as Administrative Agent may reasonably request; and
(iv) Company and Credit Partners shall have taken such
actions and delivered to Administrative Agent such documents as
Administrative Agent may reasonably request and all such documents
shall be in form and substance reasonably satisfactory to
Administrative Agent.
SECTION 4.
COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
the Loans, Company represents and warrants to each Lender, on the date of this
Agreement, on each Funding Date, that the following statements are true,
correct and complete:
60
61
4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Company has all requisite corporate power and authority to own and
operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Loan Documents and to carry out the
transactions contemplated thereby.
B. QUALIFICATION AND GOOD STANDING; AIR CARRIER CERTIFICATION.
Company is qualified to do business and in good standing in every jurisdiction
where its assets are located and wherever necessary to carry out its business
and operations, except in jurisdictions where the failure to be so qualified or
in good standing has not had and will not have a Material Adverse Effect.
Company is a "citizen of the United States" within the meaning of the Federal
Aviation Act (a "UNITED STATES CITIZEN") and holds an air carrier operating
certificate under the Federal Aviation Act for aircraft capable of carrying 10
or more individuals or 6,000 pounds or more of cargo.
C. SUBSIDIARIES. All of the Subsidiaries of Company as of the
Closing Date are identified in Schedule 4.1 annexed hereto, as said Schedule
4.1 may be supplemented from time to time pursuant to the provisions of
subsection 5.1(xvii). The capital stock of each of the Subsidiaries of Company
identified in Schedule 4.1 annexed hereto (as so supplemented) is duly
authorized, validly issued, fully paid and nonassessable and none of such
capital stock constitutes Margin Stock. Each of the Subsidiaries of Company
identified in Schedule 4.1 annexed hereto (as so supplemented) is a corporation
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation set forth therein, has all requisite
corporate power and authority to own and operate its properties and to carry on
its business as now conducted and as proposed to be conducted, and is qualified
to do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, in
each case except where failure to be so qualified or in good standing or a lack
of such corporate power and authority has not had and will not have a Material
Adverse Effect. Schedule 4.1 annexed hereto (as so supplemented) correctly
sets forth the ownership interest of Company and each of its Subsidiaries in
each of the Subsidiaries of Company identified therein.
D. COLLATERAL DOCUMENTS. The security interests created in favor
of Administrative Agent under the Collateral Documents will at all times from
and after the Closing Date constitute, as security for the obligations
purported to be secured thereby, a legal, valid and enforceable security
interest in and Lien on all of the Collateral referred to therein in favor of
Administrative Agent for the benefit of the Lenders, perfected and prior to the
rights of all third persons in accordance with the requirements of all
applicable Collateral Documents. Each Loan Party has good and marketable title
to its respective Collateral, and all such Collateral is free and clear of all
Liens except for Liens permitted by subsection 6.2. No consents, filings or
recordings are required in order to perfect (or maintain the perfection or
priority of) the security interests purported to be created by any of the
Collateral Documents, other than such as have
61
62
been obtained and which remain in full force and effect and uniform commercial
code financing statements to be filed, or delivered to Administrative Agent for
filing, on the Closing Date and periodic uniform commercial code continuation
filings or as is specifically otherwise permitted by the terms of any
applicable Collateral Document.
4.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary
corporate action on the part of each Loan Party.
B. NO CONFLICT. The execution, delivery and performance by the
Loan Parties of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to
Company or any of its Subsidiaries, the Certificate or Articles of
Incorporation or Bylaws of Company or any of its Subsidiaries or any order,
judgment or decree of any court or other agency of government binding on
Company or any of its Subsidiaries, (ii) conflict with in any material respect,
result in a material breach of or constitute (with due notice or lapse of time
or both) a material default under any Contractual Obligation of Company or any
of its Subsidiaries, (iii) result in or require the creation or imposition of
any Lien upon any of the properties or assets of Company or any of its
Subsidiaries (other than any Liens created under any of the Loan Documents in
favor of Administrative Agent on behalf of Lenders), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of Company or any of its Subsidiaries, except for such
approvals or consents which will be obtained on or before the Closing Date and
disclosed in writing to Lenders.
C. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by the Loan Parties of the Loan Documents and the consummation of
the transactions contemplated by the Loan Documents do not and will not require
any registration with, consent or approval of, or notice to, or other action
to, with or by, any federal, state or other governmental authority or
regulatory body which has not been obtained or made on or prior to the date
required to be obtained or made.
D. BINDING OBLIGATION. Each of the Loan Documents has been duly
executed and delivered by each of the Loan Parties party thereto and is the
legally valid and binding obligation of each such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
62
63
4.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
and consolidating balance sheets of Company and its Subsidiaries as at December
31, 1995, and the related consolidated and consolidating statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for the
Fiscal Year then ended and (ii) the unaudited consolidated and consolidating
balance sheets of Company and its Subsidiaries as at September 30, 1996 and the
related unaudited consolidated and consolidating statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for the
nine months then ended. All such statements were prepared in conformity with
GAAP and fairly present the financial position (on a consolidated and, where
applicable, consolidating basis) of the entities described in such financial
statements as at the respective dates thereof and the results of operations and
cash flows (on a consolidated and, where applicable, consolidating basis) of
the entities described therein for each of the periods then ended, subject, in
the case of any such unaudited financial statements, to changes resulting from
audit and normal year-end adjustments. Company does not (and will not
following the funding of the initial Loans) have any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Company or any of its Subsidiaries.
4.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since December 31, 1995, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Since December 31, 1995, neither Company nor any of its Subsidiaries
has directly or indirectly declared, ordered, paid or made, or set apart any
sum or property for, any Restricted Junior Payment or agreed to do so except as
permitted by subsection 6.5.
4.5 TITLE TO PROPERTIES; LIENS.
A. Company and its Subsidiaries have (i) good, sufficient and
legal title to (in the case of fee interests in real property), (ii) valid
leasehold interests in (in the case of leasehold interests in real or personal
property), or (iii) good title to (in the case of all other personal property),
all of the properties and assets reflected in the financial statements referred
to in subsection 4.3 or in the most recent financial statements delivered
pursuant to subsection 5.1, in each case except for assets disposed of since
the date of such financial statements in the ordinary course of business or as
otherwise permitted under subsection 6.7. Except as permitted by this
Agreement, all such properties and assets are free and clear of Liens.
63
64
B. Each Financed Aircraft operated in the United States has a
current and valid airworthiness certificate issued by the FAA pursuant to the
Federal Aviation Act in effect and is in such condition as may be necessary to
enable the airworthiness certificate to be maintained in good standing. Each
Engine has a rated takeoff horsepower greater than 750 horsepower, or the
equivalent of such horsepower. Each Financed Aircraft operated in the United
States is registered with the FAA in the name of Company, and Company has
authority to operate such Financed Aircraft. Company has good title to such
Financed Aircraft, free and clear of all Liens other than Liens permitted by
subsection 6.2.
4.6 LITIGATION; ADVERSE FACTS.
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the knowledge of Company,
threatened against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
Neither Company nor any of its Subsidiaries is (i) in violation of any
applicable laws that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect or (ii) subject to or in
default with respect to any final judgments, writs, injunctions, decrees, rules
or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
4.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 5.3, all tax returns and
reports of Company and its Subsidiaries required to be filed by any of them
have been timely filed, and all taxes, assessments, fees and other governmental
charges upon Company and its Subsidiaries and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been
paid when due and payable. Company does not know of any proposed tax
assessment against Company or any of its Subsidiaries which is not being
actively contested by Company or such Subsidiary in good faith and by
appropriate proceedings; provided that such reserves or other appropriate
provisions, if any, for liabilities for taxes as shall be required in
conformity with GAAP shall have been made or provided in the financial
statements of Company. There are no agreements with respect to taxes between
Company and any tax agency or authority.
4.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
A. Neither Company nor any of its Subsidiaries is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse
64
65
of time or both, would constitute such a default, except where the
consequences, direct or indirect, of such default or defaults, if any, would
not have a Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party to or
is otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
4.9 GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act,
the Interstate Commerce Act or the Investment Company Act of 1940 or under any
other federal or state statute or regulation which may limit its ability to
incur Indebtedness or which may otherwise render all or any portion of the
Obligations unenforceable.
4.10 SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more
than 25% of the value of the assets (either of Company only or of Company and
its Subsidiaries on a consolidated basis) subject to the provisions of
subsection 6.2 or 6.7 or subject to any restriction contained in any agreement
or instrument, between any Loan Party, on the one had, and any Lender or any
Affiliate of any Lender, on the other hand, relating to Indebtedness and within
the scope of subsection 7.2, will be Margin Stock.
4.11 EMPLOYEE BENEFIT PLANS.
Company maintains a qualified retirement plan under Section 401(k) of
the Internal Revenue Code (the ``Company 401(k) Plan'') and a medical benefit
plan. Company's 401(k) Plan has no unfunded liabilities in excess of
$10,000,000, and Company is in compliance with all applicable provisions and
requirements of ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan and has performed all its
obligations under such Employee Benefit Plan in all material respects. The
Company has no Employee Benefit Plans, other than the Company 401(k) Plan and
the medical benefit plan. The Company has no ERISA Affiliates that sponsor,
maintain, contribute to or are liable with respect to any Employee Benefit
Plans.
4.12 CERTAIN FEES.
No broker's or finder's fee or commission will be payable with respect
to this Agreement or any of the transactions contemplated hereby, and Company
hereby indemnifies Lenders
65
66
against, and agrees that it will hold Lenders harmless from, any claim, demand
or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
4.13 ENVIRONMENTAL PROTECTION.
A. All Facilities and operations of the Company are, and have
been to the best of Company's knowledge, in compliance with all Environmental
Laws.
B. There are no, and have been no, conditions, occurrences, or
Hazardous Materials Activity (a) arising at any Facilities or at any other
location or (b) arising in connection with the operations of Company (including
the transportation of Hazardous Materials in accordance with applicable
regulations), which conditions, occurrences or Hazardous Materials Activity
could reasonably be expected to form the basis of an Environmental Claim
against Company and which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
C. To the best of Company's knowledge, there are no pending or
threatened Environmental Claims against Company, and Company has received no
notices, inquiries, or requests for information with respect to any
Environmental Claims.
4.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
4.15 SOLVENCY.
Company and each of its Subsidiaries is and, upon the incurrence of
any Obligations by Company on any date on which this representation is made,
will be, Solvent.
4.16 DISCLOSURE.
No representation or warranty of Company or any of its Subsidiaries
contained in any Loan Document or in any other document, certificate or written
statement furnished to Lenders by or on behalf of Company or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state a
material fact (known to Company, in the case of any document not furnished by
them) necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Company to be
reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during
66
67
the period or periods covered by any such projections may differ from the
projected results. There are no facts known (or which should upon the
reasonable exercise of diligence be known) to Company (other than matters of a
general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.
SECTION 5.
COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations unless Requisite Lenders shall otherwise give prior
written consent, Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause Company and each of its Subsidiaries
to maintain, a system of accounting established and administered in accordance
with sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Administrative Agent and
Lenders:
(i) Monthly Financials: as soon as available and in any
event within 30 days after the end of each month ending after the
Closing Date, financial statements prepared by Company in the ordinary
course of business certified by the chief financial officer of Company
that they fairly present the financial condition of Company and its
Subsidiaries for such month, subject to changes resulting from audit
and normal year-end adjustments;
(ii) Quarterly Financials: as soon as available and in
any event within 45 days after the end of each fiscal quarter of each
Fiscal Year, (a) the consolidated and consolidating balance sheets of
Company and its Subsidiaries as at the end of such fiscal quarter and
the related consolidated and consolidating statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries
for such fiscal quarter and for the period from the beginning of the
then current Fiscal Year to the end of such fiscal quarter, setting
forth in each case in comparative form the corresponding figures for
the corresponding periods of the previous Fiscal Year and the
corresponding figures from the consolidated plan and financial
forecast for the current Fiscal Year delivered pursuant to subsection
5.1(xii), all in reasonable detail and certified by the chief
financial officer of Company that they fairly present the financial
condition of Company and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal
year-end adjustments, and (b) a narrative report describing the
operations of Company and its Subsidiaries in the form prepared for
presentation to senior management for such fiscal
67
68
quarter and for the period from the beginning of the then current
Fiscal Year to the end of such fiscal quarter; provided that delivery
of Company's Form 10-Q for such fiscal quarter shall be deemed to
satisfy the requirements of this subsection 5.1(ii);
(iii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the
consolidated and consolidating balance sheets of Company and its
Subsidiaries as at the end of such Fiscal Year and the related
consolidated and consolidating statements of income, stockholders'
equity and cash flows of Company and its Subsidiaries for such Fiscal
Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year and the corresponding figures
from the consolidated plan and financial forecast delivered pursuant
to subsection 5.1(xii) for the Fiscal Year covered by such financial
statements, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present the financial
condition of Company and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flows for the
periods indicated, (b) a narrative report describing the operations of
Company and its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Year, and (c) in the case of such
consolidated financial statements, a report thereon of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP or other independent certified public accountants of recognized
national standing selected by Company and satisfactory to
Administrative Agent, which report shall be unqualified, shall express
no doubts about the ability of Company and its Subsidiaries to
continue as a going concern, and shall state that such consolidated
financial statements fairly present the consolidated financial
position of Company and its Subsidiaries as at the dates indicated and
the results of their operations and their cash flows for the periods
indicated in conformity with GAAP applied on a basis consistent with
prior years (except as otherwise disclosed in such financial
statements) and that the examination by such accountants in connection
with such consolidated financial statements has been made in
accordance with generally accepted auditing standards; provided that
delivery of Company's Form 10-K for such Fiscal Year shall be deemed
to satisfy the requirements of clauses (a) and (b) of this subsection
5.1(iii);
(iv) Officers' and Compliance Certificates: together with
each delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above after the Closing Date,
(a) an Officers' Certificate of Company stating that the signers have
reviewed the terms of this Agreement and have made, or caused to be
made under their supervision, a review in reasonable detail of the
transactions and condition of Company and its Subsidiaries during the
accounting period covered by such financial statements and that such
review has not disclosed the existence during or at the end of such
accounting period, and that the signers do not have knowledge of the
existence as at the date of such Officers' Certificate, of any
condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what
action Company has taken, is taking and proposes to take with respect
thereto; and (b) a Compliance Certificate demonstrating in reasonable
detail compliance during and at the end of the
68
69
applicable quarterly and annual accounting periods with the
restrictions contained in Section 6;
(v) Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 4.3, the consolidated financial statements of Company and
its Subsidiaries delivered pursuant to subdivisions (ii), (iii) or
(xii) of this subsection 5.1 will differ in any material respect from
the consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (ii), (iii)
or (xii) of this subsection 5.1 following such change, consolidated
financial statements of Company and its Subsidiaries for (y) the
current Fiscal Year to the effective date of such change and (z) the
two full Fiscal Years immediately preceding the Fiscal Year in which
such change is made, in each case prepared on a pro forma basis as if
such change had been in effect during such periods, and (b) together
with each delivery of financial statements pursuant to subdivision
(ii), (iii) or (xii) of this subsection 6.1 following such change, a
written statement of the chief accounting officer or chief financial
officer of Company setting forth the differences which would have
resulted if such financial statements had been prepared without giving
effect to such change;
(vi) Accountants' Certification: together with each
delivery of consolidated financial statements of Company and its
Subsidiaries pursuant to subdivision (iii) above, a written statement
by the independent certified public accountants giving the report
thereon (a) stating that their audit examination has included a review
of the terms of this Agreement and the other Loan Documents as they
relate to accounting matters, (b) stating whether, in connection with
their audit examination, any condition or event that constitutes an
Event of Default or Potential Event of Default has come to their
attention and, if such a condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such Event of Default or Potential
Event of Default that would not be disclosed in the course of their
audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to
believe either or both that the information contained in the
certificates delivered therewith pursuant to subdivision (iv) above is
not correct or that the matters set forth in the Compliance
Certificates delivered therewith pursuant to clause (b) of subdivision
(iv) above for the applicable Fiscal Year are not stated in accordance
with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of
all reports submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit
of the financial statements of Company and its Subsidiaries made by
such accoun-
69
70
tants, including, without limitation, any comment letter submitted by
such accountants to management in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Company to its security holders, (b) all regular and periodic reports
and all registration statements (other than on Form S-8 or a similar
form) and prospectuses, if any, filed by Company or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory
authority, and (c) all press releases and other statements made
available generally by Company or any of its Subsidiaries to the
public concerning material developments in the business of Company or
any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer
of Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default, (b) that any
Person has given any notice to Company or any of its Subsidiaries or
taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 7.2, (c) of any
condition or event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange Commission on
Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the date
hereof) if Company were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, an Officers' Certificate specifying the
nature and period of existence of such condition, event or change, or
specifying the notice given or action taken by any such Person and the
nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Company has taken, is
taking and proposes to take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon
any officer of Company obtaining knowledge of (X) the institution of,
or non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or
any property of Company or any of its Subsidiaries (collectively,
"PROCEEDINGS") not previously disclosed in writing by Company to
Lenders or (Y) any material development in any Proceeding that, in any
case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
70
71
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of
each fiscal quarter of Company, a schedule of all Proceedings
involving an alleged liability of, or claims against or affecting,
Company or any of its Subsidiaries equal to or greater than $500,000
and promptly after request by Administrative Agent such other
information as may be reasonably requested by Administrative Agent to
enable Administrative Agent and its counsel to evaluate any of such
Proceedings;
(xi) ERISA Notices: with reasonable promptness, copies of
(a) each annual report (Form 5500 Series) filed by Company or any of
its ERISA Affiliates with the Internal Revenue Service with respect to
each Employee Benefit Plan, (b) any notices received by Company or any
of its ERISA Affiliates with respect to a "multiemployer plan,"
within the meaning of Section 4001(a)(3) of ERISA, and (c) such other
documents or governmental reports or filings relating to any Employee
Benefit Plan as Administrative Agent shall reasonably request;
(xii) Financial Plans and Projections: as soon as
practicable after preparation thereof by Company in the normal course
of business, Company shall provide copies of its financial plans and
projections and at the reasonable request of Administrative Agent or
Requisite Lenders an opportunity for Lenders to question and discuss
such materials with the Chief Financial Officer of Company; provided
that, at the request of Company, all copies of such financial plans
and projections shall be returned to Company after review thereof and
the completion of such discussion;
(xiii) Insurance: as soon as practicable and in any event
by the last day of each Fiscal Year, a report in form and substance
satisfactory to Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by Company and its
Subsidiaries and all material insurance coverage planned to be
maintained by Company and its Subsidiaries in the immediately
succeeding Fiscal Year;
(xiv) Environmental Audits and Reports: as soon as
practicable following receipt thereof, copies of all environmental
audits and reports, whether prepared by personnel of Company or any of
its Subsidiaries or by independent consultants, with respect to
significant environmental matters at any Facility or which relate to
an Environmental Claim which could result in a Material Adverse
Effect;
(xv) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of Company or
any of its Subsidiaries;
71
72
(xvi) Special Purpose Subsidiaries: promptly upon any
Special Purpose Subsidiary becoming a Subsidiary of Company, a written
notice setting forth with respect to such Special Purpose Subsidiary
(a) the date on which such Special Purpose Subsidiary became a
Subsidiary of Company and (b) all of the data required to be set forth
in Schedule 4.1 annexed hereto with respect to all Subsidiaries of
Company (it being understood that such written notice shall be deemed
to supplement Schedule 4.1 annexed hereto for all purposes of this
Agreement); and
(xvii) Pricing Certificates (a) together with each delivery
of financial statements of Company and its Subsidiaries pursuant to
subdivisions (ii) and (iii) above, (b) within one Business Day after
any public release by S&P or ▇▇▇▇▇'▇ lowering its credit rating on
Company's obligations under the Pass Through Trust Documents, and (c)
at such additional times as Company may elect, a certificate setting
forth the credit rating on Company's obligations under the Pass
Through Trust Documents (each, a "Pricing Certificate"); and
(xviii) Other Information: with reasonable promptness, such
other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
5.2 CORPORATE EXISTENCE.
Except as permitted under subsection 6.7, Company will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to its
business; provided, however, that the corporate existence of any such
Subsidiary may be terminated if such termination is in the best interests of
Company and its Subsidiaries and is not materially disadvantageous to any
Lender. Company will, and will cause each of its Subsidiaries to, at all times
maintain its corporate existence as a United States Citizen.
5.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Company will, and will cause its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty, fine or interest accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty fine or interest shall be incurred with respect thereto; provided that
no such charge or claim need be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and if
such reserve or other appropriate provision, if any, with respect to any
liability for taxes, as shall be required in conformity with GAAP shall have
been made therefor in the financial statements of the Company.
72
73
B. Company will not, and will not permit any of its Subsidiaries
to, file or consent to the filing of any consolidated income tax return with
any Person (other than any Subsidiary of Company or Company).
5.4 MAINTENANCE OF PROPERTIES; INSURANCE.
Company will, and will cause its Subsidiaries to, maintain or cause to
be maintained in good repair, working order and condition, ordinary wear and
tear excepted, all material properties used or useful in the business of
Company and its Subsidiaries and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof. Company will
maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and business and the
properties and businesses of its Subsidiaries against loss or damage
(including, without limitation, flood insurance, if necessary or advisable) of
the kinds customarily carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses and
Company will, with respect to each Financed Aircraft, maintain the insurance
specified in the First Aircraft Chattel Mortgage with respect to such Financed
Aircraft.
5.5 INSPECTION; LENDER MEETING.
Company will, and will cause its Subsidiaries to, permit any
authorized representatives designated by any Lender to visit and inspect any of
the properties of Company or any of its Subsidiaries, including its and their
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants (provided that Company
may, if it so chooses, be present at or participate in any such discussion),
all upon reasonable notice and at such reasonable times during normal business
hours and as often as may be reasonably requested; provided that so long as no
Event of Default shall have occurred and be continuing, such inspection shall
not be disruptive to Company's business, as reasonably determined by Company.
Without in any way limiting the foregoing, Company will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
5.6 COMPLIANCE WITH LAWS, ETC.
Company will, and will cause its Subsidiaries to, comply with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority (including, without limitation, Environmental Laws),
noncompliance with which could reasonably be expected to cause a Material
Adverse Effect. Company shall not conduct, and shall not permit the conduct
of, any Hazardous Materials Activity at any Facility or at any other location
which could reasonably be expected to form the basis of an Environmental Claim
against Company and which could reasonably be expected to have a Material
Adverse Effect.
73
74
5.7 ENVIRONMENTAL INDEMNITY.
Company agrees to indemnify, defend, and hold harmless Administrative
Agent and Lenders, and the officers, directors, employees, agents and
affiliates of Administrative Agent and Lenders from and against any and all
losses, claims, liability or expenses arising in connection with Environmental
Claims against Company or with any Hazardous Materials Activity.
5.8 COMPANY'S REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
Company will promptly take, and will cause each of its Subsidiaries
promptly to take, any and all necessary remedial action in connection with the
presence, storage, use, disposal, transportation or Release of any Hazardous
Materials on, under or about any Facility in order to comply with all
applicable Environmental Laws and Governmental Authorizations. In the event
Company or any of its Subsidiaries undertakes any remedial action with respect
to any Hazardous Materials on, under or about any Facility, Company or such
Subsidiary will conduct and complete such remedial action in compliance with
all applicable Environmental Laws, and in accordance with the policies, orders
and directives of all federal, state and local governmental authorities except
when, and only to the extent that, Company's or such Subsidiary's liability for
such presence, storage, use, disposal, transportation or discharge of any
Hazardous Materials is being contested in good faith by Company or such
Subsidiary.
5.9 REGISTRATION OF THAI AIRCRAFT WITH FAA.
Upon termination of the New Zealand Lease, Company shall cause the
Thai Aircraft to be deregistered under the New Zealand Act and registered under
the Federal Aviation Act and file for recordation with the FAA following such
deregistration mortgage supplements with respect to the First Aircraft Chattel
Mortgage and Second Aircraft Chattel Mortgage to which the Thai Aircraft is
subject and shall cause FAA counsel to deliver an opinion in form and substance
reasonably satisfactory to Administrative Agent and cause Company's insurance
broker to deliver the report required by Section 4(g)(v) of such First Aircraft
Chattel Mortgage. In furtherance of the foregoing, within 5 days after the
Closing Date, Company shall deliver to an acceptable escrow agent the original
Thai ▇▇▇▇ of Sale, supplements to the First Aircraft Chattel Mortgage and
Second Aircraft Chattel Mortgage to which the Thai Aircraft is subject and an
executed Registration Application on Form 8050-1 with respect to the Thai
Aircraft and shall instruct the escrow agent to file such documents along with
all other documents required to be filed with the FAA in connection with
registration of the Thai Aircraft and the protection of Administrative Agent's
rights under the First Aircraft Chattel Mortgage and the Second Aircraft
Chattel Mortgage under the Federal Aviation Act.
5.10 FURTHER ASSURANCES; NEW SUBSIDIARIES.
At any time or from time to time upon the request of Administrative
Agent, Company will, at its expense, promptly execute, acknowledge and deliver
such further documents and do
74
75
such other acts and things as Administrative Agent may reasonably request in
order to effect fully the purposes of the Loan Documents and to provide for
payment of the Obligations in accordance with the terms of this Agreement, the
Notes and the other Loan Documents. In furtherance and not in limitation of
the foregoing, Company will cause any Subsidiary whose total assets exceed 15%
of the consolidated total assets of Company, in each case determined in
accordance with GAAP (other than a Special Purpose Subsidiary or Atlas One), to
take such actions as Administrative Agent may reasonably request from time to
time to ensure that the Obligations are guarantied by any such Subsidiary. If,
after the Closing Date, Company or any of its Subsidiaries (other than a
Special Purpose Subsidiary or Atlas One) acquires any asset, other than an
Aircraft financed with Loans hereunder or with Other Permitted Indebtedness,
with a fair market value in excess of $2 million, or the value of spare parts
of Company and its Subsidiaries not subject to Liens securing Designated
Indebtedness exceeds $15 million in the aggregate, Company shall so notify
Administrative Agent and take, or cause such Subsidiaries to take, such actions
as Administrative Agent may reasonably request from time to time (including,
without limitation, the execution and delivery of guaranties, security
agreements, mortgages, deeds of trust, financing statements and other
documents, the filing or recording of any of the foregoing, title insurance
with respect to any of the foregoing that relates to an interest in real
property, and the delivery of stock certificates and other collateral with
respect to which perfection is obtained by possession) to ensure that the
Obligations are secured by a first priority security interest in such asset or
spare parts (other than capital stock of a Subsidiary), as the case may be;
provided that, in the case of any engine otherwise subject to such security
interest, such Lien may be released at the request of Company in connection
with a refinancing thereof with Other Permitted Indebtedness.
5.11 APPRAISALS.
Upon Administrative Agent's request after the occurrence and during
the continuance of an Event of Default and in any event no less than once each
calendar year, Company will obtain appraisals of each of the Financed Aircraft
from two Approved Appraisers, in form and substance satisfactory to
Administrative Agent. On or prior to the initial Funding Date for each
Financed Aircraft, and substantially contemporaneously with the final Funding
Date with respect to such Financed Aircraft, Company will obtain appraisals of
the Financed Aircraft to be purchased or which has been converted on such
Funding Date from two Approved Appraisers, in form and substance satisfactory
to Administrative Agent.
5.12 KEY MAN LIFE INSURANCE.
In the event Company is not required (or no longer required) by the
terms of the ING Financing Agreement to provide keyman life insurance policies
with respect to ▇▇. ▇▇▇▇▇▇▇ in an amount of $10 million or more, Company shall
use its best efforts to obtain Key Man Life Insurance in an amount and for a
period to be agreed upon by Company and Administrative Agent and with respect
to which Administrative Agent, on behalf of Lenders, shall be named
beneficiary.
75
76
5.13 MAINTENANCE CONTRACTS.
Company shall maintain contracts with respect to the maintenance of
each Financed Aircraft sufficient to insure compliance with the Federal
Aviation Act and in a manner consistent with Company's past practices, in form
and substance reasonably satisfactory to Administrative Agent.
5.14 CONSENT WITH RESPECT TO THAI AIRCRAFT.
Company shall use its best efforts to obtain the consent of all
parties to the Purchase Agreement with respect to the Thai Aircraft to the
assignment of Company's rights under such Purchase Agreement to Administrative
Agent for the benefit of Lenders.
5.15 EMPLOYEE BENEFIT PLANS.
Company will not establish or permit to be established any Employee
Benefit Plans for Company or any of its employees and will not permit any ERISA
Affiliate to establish any Employee Benefit Plan which, in either case, could
result in a liability for Company, under ERISA, in excess of $10 million.
SECTION 6.
COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations, unless Requisite Lenders shall otherwise give prior
written consent, Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.
6.1 INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to
the Obligations;
(ii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection
6.4 and, upon any matured obligations actually arising pursuant
thereto, the Indebtedness corresponding to the Contingent Obligations
so extinguished;
76
77
(iii) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness in respect of Capital Leases;
provided that such Capital Leases are permitted under the terms of
subsection 6.9;
(iv) Company and its Subsidiaries, as applicable, may
remain liable with respect to Indebtedness described in Schedule 6.1
annexed hereto;
(v) Company may become and remain liable with respect to
Permitted Extension Indebtedness; provided, that with respect to any
transaction in which Permitted Extension Indebtedness is incurred with
respect to any Financed Aircraft, the cash proceeds from such
Permitted Extension Indebtedness are sufficient to repay in full the
Notes associated with such Financed Aircraft;
(vi) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing or would result
therefrom and Company delivers an Officers' Certificate to
Administrative Agent and Lenders, in form and substance reasonably
satisfactory to Administrative Agent, confirming that, on a Pro Forma
Basis after giving effect to such incurrence of Indebtedness, (i) the
ratio of Consolidated Total Debt (less Cash and Cash Equivalents held
by Company in excess of $25 million) as of the last day of the most
recently ended fiscal quarter (the "Determination Date") to
Consolidated Adjusted EBITDA for the four-fiscal quarter period ending
on such Determination Date did not exceed 4.5:1.0, (ii) the ratio of
Consolidated Adjusted EBITDA for such four-fiscal quarter period to
Consolidated Interest Expense for such four-fiscal quarter period was
not less than 3.0:1.0; provided, that to the extent Consolidated
Adjusted EBITDA is being determined for purposes of calculation made
under this paragraph for any period ending on or prior to December 31,
1996, the amount of Consolidated Adjusted EBITDA to be used for
purposes of calculations being made pursuant hereto shall be equal to
the product of the amount of Consolidated Adjusted EBITDA for the
period commencing January 1, 1996 and ending on the Determination Date
and a fraction, the numerator of which is 365 and the denominator of
which is the number of days elapsed during such period; and (iii)
Company will be in compliance with all covenants set forth in
subsection 6.6 hereof, Company and its Subsidiaries may incur Other
Permitted Indebtedness; and
(vii) Company may become and remain liable with respect to
Indebtedness under the Unsecured Revolving Credit Facility in an
aggregate principal amount not to exceed $26 million at any time
outstanding.
(viii) Company may become and remain liable with respect to
other Indebtedness in an aggregate principal amount not to exceed $10
million at any time outstanding.
6.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or
77
78
with respect to any property or asset of any kind (including any document or
instrument in respect of goods or accounts receivable) of Company or any of its
Subsidiaries, whether now owned or hereafter acquired, or any income or profits
therefrom, or file or permit the filing of, or permit to remain in effect, any
financing statement or other similar notice of any Lien with respect to any
such property, asset, income or profits under the Uniform Commercial Code of
any state or under any similar recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens in respect of Permitted Extension Indebtedness
and Other Permitted Indebtedness; provided that such Liens encumber
only assets subject to purchase money Liens securing such
Indebtedness; and
(iii) other Liens securing Indebtedness in an aggregate
amount not to exceed $10 million at any time outstanding.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 6.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 6.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither
Company nor any of its Subsidiaries shall enter into any agreement prohibiting
the creation or assumption of any Lien upon any of its properties or assets,
whether now owned or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR
OTHER SUBSIDIARIES. Except (i) as provided herein, as (ii) described on
Schedule 6.2 annexed hereto and (iii) with respect to Special Purpose
Subsidiaries, Company will not, and will not permit any of its Subsidiaries to,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Subsidiary to
(i) pay dividends or make any other distributions on any of such Subsidiary's
capital stock owned by Company or any other Subsidiary of Company, (ii) repay
or prepay any Indebtedness owed by such Subsidiary to Company or any other
Subsidiary of Company, (iii) make loans or advances to Company or any other
Subsidiary of Company, or (iv) transfer any of its property or assets to
Company or any other Subsidiary of Company.
78
79
6.3 INVESTMENTS; JOINT VENTURES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Company may make and own Investments in Cash
Equivalents;
(ii) Company and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries
of Company;
(iii) Company may make and own Investments in Special
Purpose Subsidiaries; provided that Company delivers to Administrative
Agent an Officer's Certificate in form and substance satisfactory to
Administrative Agent demonstrating that such Special Purpose
Subsidiary meets the requirements set forth in the definition thereof;
(iv) Company may make Investments in Joint Ventures in an
aggregate amount not to exceed in any Fiscal Year, (A) the lesser of
25% of Consolidated Net Income for such Fiscal Year and $10 million
less (B) the sum of (x) the aggregate amount of dividends on Company
Common Stock declared or paid in such Fiscal Year and (y) the
aggregate amount contributed to capital of Special Purpose
Subsidiaries in such Fiscal Year; provided that Company shall not
incur liabilities related to any such Joint Venture in excess of
Company's Investment therein;
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 6.3 annexed hereto
and Investments made in compliance with subsection 6.3(iv); and
(vi) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time $5
million.
6.4 CONTINGENT OBLIGATIONS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) any Subsidiary may become and remain liable with
respect to Contingent Obligations arising under their guaranties of
the Obligations;
(ii) Company may become and remain liable with respect to
Contingent Obligations under Interest Rate Agreements with a Lender;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
indemnification and purchase price
79
80
adjustment obligations incurred in connection with Asset Sales or
other sales of assets or securities;
(iv) Company and its Subsidiaries, as applicable, may
remain liable with respect to Contingent Obligations described in
Schedule 6.4 annexed hereto; and
(v) Company and its Subsidiaries may become and remain
liable with respect to other Contingent Obligations; provided that the
maximum aggregate liability, contingent or otherwise, of Company and
its Subsidiaries in respect of all such Contingent Obligations shall
at no time exceed $10 million.
6.5 RESTRICTED JUNIOR PAYMENTS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that Company may make scheduled payments of
principal and interest from time to time on Designated Indebtedness; and
provided, further, that so long as no Event of Default or Potential Event of
Default has occurred and is continuing, or would result therefrom:
(i) Company may prepay Designated Indebtedness from the
proceeds of Permitted Extension Indebtedness or Other Permitted
Indebtedness;
(ii) Company may declare and pay dividends on Company
Common Stock in an amount not to exceed in any Fiscal Year, the lesser
of 25% of Consolidated Net Income for such Fiscal Year and $10
million; and
(iii) Company may apply Equity Proceeds to prepay
Designated Indebtedness.
6.6 FINANCIAL COVENANTS.
A. MINIMUM INTEREST COVERAGE RATIO. Company shall not permit the
ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Interest Expense
for any four-fiscal quarter period ending as of the last day of any fiscal
quarter of Company occurring during any of the periods set forth below to be
less than the correlative ratio indicated; provided, that to the extent
Consolidated Adjusted EBITDA is being determined for purposes of calculation
made under this paragraph for any period ending on or prior to December 31,
1996, the amount of Consolidated Adjusted EBITDA to be used for purposes of
calculations being made pursuant hereto shall be equal to the product of the
amount of Consolidated Adjusted EBITDA for the period commencing January 1,
1996 and ending on the date of determination and a fraction, the numerator of
which is 365 and the denominator of which is the number of days elapsed during
such period:
80
81
---------------------------------------------------
Minimum Interest
Period Coverage Ratio
---------------------------------------------------
Fiscal Year 1996 2.50:1.00
---------------------------------------------------
Fiscal Year 1997 2.50:1.00
---------------------------------------------------
Fiscal Year 1998 2.75:1.00
---------------------------------------------------
Fiscal Year 1999 3.00:1.00
---------------------------------------------------
Thereafter 3.25:1.00
---------------------------------------------------
B. MINIMUM FIXED CHARGE COVERAGE RATIO. Company shall not permit
the ratio of (i) Consolidated Adjusted EBITDA plus one-third of Consolidated
Rental Payments to (ii) Consolidated Fixed Charges (excluding any scheduled
amortization payments made in accordance with the Unsecured Revolving Credit
Facility as in effect on the date hereof) for any four-fiscal quarter period
ending as of the last day of any fiscal quarter of Company occurring during any
of the periods set forth below to be less than the correlative ratio indicated:
---------------------------------------------------
Minimum Fixed
Period Charge Coverage Ratio
---------------------------------------------------
Fiscal Year 1996 1.25:1.00
---------------------------------------------------
Fiscal Year 1997 1.25:1.00
---------------------------------------------------
Thereafter 1.10:1.00
---------------------------------------------------
C. MAXIMUM LEVERAGE RATIO. Company shall not permit the ratio of
(i) Consolidated Total Debt as of each date set forth below (less Cash and Cash
Equivalents held by Company in excess of $25 million as of such date) to (ii)
Consolidated Adjusted EBITDA for the four-fiscal quarter period ending on such
date to exceed the correlative ratio indicated; provided, that to the extent
Consolidated Adjusted EBITDA is being determined for purposes of calculation
made under this paragraph for any period ending on or prior to December 31,
1996, the amount of Consolidated Adjusted EBITDA to be used for purposes of
calculations being made pursuant hereto shall be equal to the product of the
amount of Consolidated Adjusted EBITDA for the period commencing January 1,
1996 and ending on the date of determination and a fraction, the numerator of
which is 365 and the denominator of which is the number of days elapsed during
such period:
81
82
---------------------------------------------------
Maximum
Period Leverage Ratio
---------------------------------------------------
Fiscal Year 1996 4.50:1.00
---------------------------------------------------
Fiscal Year 1997 4.50:1.00
---------------------------------------------------
Fiscal Year 1998 4.25:1.00
---------------------------------------------------
Fiscal Year 1999 4.00:1.00
---------------------------------------------------
Thereafter 3.75:1.00
---------------------------------------------------
D. MINIMUM CONSOLIDATED NET WORTH. Company shall not permit
Consolidated Net Worth at any time during any of the periods set forth below to
be less than the correlative amount indicated:
---------------------------------------------------------------
Minimum Consolidated
Period Net Worth
---------------------------------------------------------------
Closing Date - 12/31/96 $100 million
---------------------------------------------------------------
Fiscal Year 1997 $120 million
---------------------------------------------------------------
Fiscal Year 1998 $145 million
---------------------------------------------------------------
Fiscal Year 1999 $170 million
---------------------------------------------------------------
Thereafter $195 million
---------------------------------------------------------------
6.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS; NEW
SUBSIDIARIES.
Company shall not, and shall not permit any of its Subsidiaries to,
enter into any transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, sub-lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any part of its business, property or fixed
assets, whether now owned or hereafter acquired, or acquire by purchase or
otherwise all or any portion of the business, property or fixed assets of, or
stock or other evidence of beneficial ownership of, any Person or any division
or line of business of any Person, except:
(i) any Subsidiary of Company may be merged with or into
Company or any wholly-owned Subsidiary of Company that has entered
into a valid and effective guaranty and security agreement pursuant to
subsection 5.10, or be liquidated, wound up or dissolved, or all or
any part of its business, property or assets may be conveyed, sold,
82
83
leased, transferred or otherwise disposed of, in one transaction or a
series of transactions, to Company or any such wholly-owned Subsidiary
of Company; provided that, in the case of such a merger, Company or
such wholly-owned Subsidiary shall be the continuing or surviving
corporation;
(ii) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in
an amount at least equal to the fair market value thereof;
(iii) subject to subsection 6.13, Company and its
Subsidiaries may make Asset Sales of assets having a fair market value
not in excess of $100 million in any Fiscal Year or $400 million in
the aggregate; provided that (w) with respect to the sale of any
Financed Aircraft, the cash proceeds of the sale of such Financed
Aircraft are sufficient to repay in full the Notes associated with
such Financed Aircraft; (x) the consideration received for such assets
shall be in an amount at least equal to the fair market value thereof;
(y) the consideration received shall be at least 75% cash; and (z) the
proceeds of such Asset Sales shall be applied as required by
subsection 2.4B(iii)(a);
(iv) Company may lease or transfer any Financed Aircraft
to the extent expressly permitted by Section 4(d) of the First
Aircraft Chattel Mortgage with respect to such Financed Aircraft or as
contemplated by subsection 9.21; and
(v) Company may make acquisitions of the capital stock of
another Person or all or substantially all of the assets of the
business of another Person provided that, (a) the acquisition
primarily involves the acquisition of assets to be used in the
business of Company, (b) with respect to such acquisition any newly
acquired or created subsidiary of Company shall be a wholly-owned
subsidiary and shall execute a guaranty of the Obligations and grant a
security interest in the assets acquired to Administrative Agent for
the benefit of Lenders which may be subordinate to debt incurred in
such acquisition, (c) immediately before and after giving effect
thereto, no Potential Event of Default or Event of Default shall have
occurred and be continuing, (d) immediately after giving effect to the
acquisition, Company shall be in compliance on a Pro Forma Basis with
financial covenants in subsection 6.6 and such compliance shall be
evidenced by an Officer's Certificate demonstrating such compliance,
(e) Administrative Agent shall have reviewed and be reasonably
satisfied with the nature and amount of all contingent liabilities or
other liabilities not on the balance sheet of Company assumed in
connection with such acquisition and a business plan prepared by
Company with respect to such acquisition and (f) the aggregate amount
of cash payments made in connection with all such acquisitions other
than with the proceeds from sales or issuances of equity by Company
does not exceed $100,000,000;
(vi) Company and its Subsidiaries may make Consolidated
Capital Expenditures in connection with the purchase of up to twelve
Eligible Aircraft during each Fiscal Year, such number of Eligible
Aircraft permitted during any Fiscal Year to be increased
83
84
by any number of Eligible Aircraft permitted to be purchased, but not
purchased, during the previous Fiscal Year (but in no event shall any
such number of Eligible Aircraft once carried forward to the next
Fiscal Year be carried forward to any Fiscal Year thereafter) together
with Consolidated Capital Expenditures with respect to the
acquisition, in the normal course of business, of spare parts and
spare engines associated with such Eligible Aircraft;
(vii) Company and its Subsidiaries may make Consolidated
Capital Expenditures with respect to maintenance of aircraft in the
normal course of business; and
(viii) Company and its Subsidiaries may make other
Consolidated Capital Expenditures not in excess of $10 million during
any Fiscal Year; provided that, any amount of such other Consolidated
Capital Expenditures permitted, but not made, in any Fiscal Year may
be carried forward to and made during the immediately succeeding
Fiscal Year (but no amount once carried forward to the next Fiscal
Year may be carried forward to any Fiscal Year thereafter).
6.8 AMENDMENTS OF MATERIAL AGREEMENTS.
Company shall not permit (i) the certificate or articles of
incorporation or bylaws of any Loan Party to be amended or otherwise modified
in any manner which could reasonably be expected to have a Material Adverse
Effect or (ii) any Material Agreement to be amended or otherwise modified in
any manner with respect to any provision providing material representations and
warranties to Company, indemnification rights to Company, or limiting Company's
remedies or rights upon the other party to such agreements failure to perform
or which could otherwise reasonably be expected to have Material Adverse Effect
on the value of any Financed Aircraft.
6.9 RESTRICTION ON LEASES.
Company shall not, and shall not permit any of its Subsidiaries to,
become liable in any way, whether directly or by assignment or as a guarantor
or other surety, for the obligations of the lessee under any lease, whether an
Operating Lease or a Capital Lease (other than intercompany leases between
Company and its wholly-owned Subsidiaries); provided however that Company may
become so obligated to the extent that, and only to the extent that,
immediately after giving effect to the incurrence of liability with respect to
such lease, the Consolidated Rental Payments at the time in effect during the
then current Fiscal Year do not exceed $60 million plus the amount of
Consolidated Rental Payments made during such Fiscal Year in respect of up to
five Eligible Aircraft leased by Company from ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation
within twelve months following the Closing Date plus, an amount not to exceed
$12 million during any Fiscal Year, equal to Consolidated Rental Payments
incurred in connection with sale leaseback transactions described in subsection
6.10 plus Consolidated Rental Payments assumed pursuant to acquisitions
permitted under subsection 6.7(v).
84
85
6.10 SALES AND LEASE-BACKS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company
or any of its Subsidiaries) or (ii) which Company or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Company or any of its Subsidiaries
to any Person (other than Company or any of its Subsidiaries) in connection
with such lease; provided that Company and its Subsidiaries may become and
remain liable as lessee, guarantor or other surety with respect to any such
lease if and to the extent that Company or any of its Subsidiaries would be
permitted to enter into, and remain liable under, such lease under subsection
6.9.
6.11 SALE OR DISCOUNT OF RECEIVABLES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable.
6.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 10% or more of any
class of equity Securities of Company or with any Affiliate of Company or of
any such holder, on terms that are less favorable to Company or that
Subsidiary, as the case may be, than those that might be obtained at the time
from Persons who are not such a holder or Affiliate; provided that the
foregoing restriction shall not apply to (i) reasonable and customary fees paid
to and indemnification of members of the Boards of Directors of Company and its
Subsidiaries or (ii) reasonable and customary salaries, bonuses and other
compensation paid to and indemnification of employees of Company or any of its
Subsidiaries in accordance with past practice or approved by the compensation
committee of Company.
6.13 DISPOSAL OF SUBSIDIARY STOCK.
Company shall not:
(i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or other
equity Securities of any of its Subsidiaries, except to qualify
directors if required by applicable law or to a wholly-owned
Subsidiary of Company; or
85
86
(ii) permit any of its Subsidiaries directly or indirectly
to sell, assign, pledge or otherwise encumber or dispose of any shares
of capital stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except to Company, another wholly-owned
Subsidiary of Company, or to qualify directors if required by
applicable law.
6.14 CONDUCT OF BUSINESS.
From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company and its Subsidiaries on the Closing Date and
similar or related businesses and (ii) such other lines of business as may be
consented to by Requisite Lenders.
SECTION 7.
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; or failure by Company to pay
any interest on any Loan or any fee or any other amount due under this
Agreement within five days after the date due; or
7.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries to pay when due
following applicable grace periods (a) any principal of or interest on any
Indebtedness (other than Indebtedness referred to in subsection 7.1) in an
individual principal amount of $5 million or more or any items of Indebtedness
with an aggregate principal amount of $10 million or more or (b) any Contingent
Obligation in an individual principal amount of $5 million or more or any
Contingent Obligations with an aggregate principal amount of $10 million or
more, in each case beyond the end of any grace period provided therefor; or
(ii) breach or default by Company or any of its Subsidiaries with respect to
any other material term of (a) any evidence of any Indebtedness in an
individual principal amount of $5 million or more or any items of Indebtedness
with an aggregate principal amount of $10 million or more or any Contingent
Obligation in an individual principal amount of $5 million or more or any
Contingent Obligations with an aggregate principal amount of $10 million or
more or (b) any loan agreement, mortgage, indenture or other agreement relating
to such Indebtedness or Contingent Obligation(s), if the effect of such breach
or default is to cause, or to permit the holder or holders of that Indebtedness
or Contingent Obligation(s) (or a trustee on behalf of such holder or holders)
to cause, that Indebtedness or Contingent Obligation(s) to become or be
declared due and payable prior to its
86
87
stated maturity or the stated maturity of any underlying obligation, as the
case may be (upon the giving or receiving of notice, lapse of time, both, or
otherwise); or
7.3 BREACH OF CERTAIN COVENANTS.
Failure of Company to perform or comply in any material respect with
any term or condition contained in subsection 2.5 or 5.2 or subsection 6.1, 6.2
(as it relates to prohibitions on Liens on Financed Aircraft), 6.5, 6.7 (as it
relates to the sale of any Financed Aircraft or all or substantially all of the
assets of Company or to the merger of Company into any other Person), 6.8, 6.10
and 6.13 of this Agreement or in clauses (i) and (ii) of Section 4(c), Section
4(d) or Section 4(g) of any First Aircraft Chattel Mortgage; or
7.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
Company or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be
false in any material respect on the date as of which made; or
7.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
(i) Any Loan Party shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 7,
and such default shall not have been remedied or waived (x) within 15 days
after the earlier of (a) an officer of Company becoming aware of such default
or (b) receipt by Company of notice from Administrative Agent or any Lender of
such default or (y) with respect to a default under subsection 6.6, the earlier
of (a) an officer of Company becoming aware of the default after the applicable
measurement date and (b) the delivery of financial statements pursuant to
subsection 5.1 or (ii) a guaranty, if any, of the Obligations for any reason
ceases to be in full force and effect; or
7.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a decree
or order for relief in respect of Company or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Company or any of its material Subsidiaries under the Bankruptcy Code
or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over Company or any of its
Subsidiaries, or over all or a substantial part of its property, shall have
been entered; or there shall have occurred the involuntary appointment of an
interim receiver, trustee or other custodian
87
88
of Company or any of its Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of Company or any of
its Subsidiaries, and any such event described in this clause (ii) shall
continue for 60 days unless dismissed, bonded or discharged; or
7.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Company or any of its material Subsidiaries shall have an order
for relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or Company or any of its Subsidiaries shall
make any assignment for the benefit of creditors; or (ii) Company or any of its
Subsidiaries shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due; or the Board
of Directors of Company or any of its Subsidiaries (or any committee thereof)
shall adopt any resolution or otherwise authorize any action to approve any of
the actions referred to in clause (i) above or this clause (ii); or
7.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $5 million or (ii)
in the aggregate at any time an amount in excess of $10 million (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Company or any of its Subsidiaries or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of 60 days
(or in any event later than five days prior to the date of any proposed sale
thereunder); or
7.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Company or any
of its material Subsidiaries decreeing the dissolution or split up of Company
or that Subsidiary and such order shall remain undischarged or unstayed for a
period in excess of 30 days; or
7.10 CHANGE IN CONTROL.
(i) (a) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall cease to beneficially own and control
at least a number of the issued and outstanding shares of capital stock of
Company entitled (without regard to the occurrence of any contingency) to vote
for the election of members of the Board of Directors of Company sufficient to
elect a majority of the members of the Board of Directors or (b) any Person or
any two or more Persons acting in concert (in any such case, excluding ▇▇.
▇▇▇▇▇▇▇) shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and
88
89
Exchange Commission under the Exchange Act), directly or indirectly, of
Securities of Company (or other Securities convertible into such Securities)
representing 25% or more of the combined voting power of all Securities of
Company entitled to vote in the election of directors, other than Securities
having such power only by reason of the happening of a contingency or (ii) a
"Change of Control" shall occur under the Pass Through Trust Documents or any
other Material Agreement (as in effect on the date of such occurrence); or
7.11 FAILURE OF SECURITY.
Upon execution and delivery thereof, any Collateral Document shall, at
any time, cease to be in full force and effect (other than by reason of a
release of Collateral thereunder in accordance with the terms hereof or
thereof, the satisfaction in full of the Obligations or any other termination
of such Collateral Document in accordance with the terms hereof or thereof) or
shall be declared null and void, or the validity or enforceability thereof
shall be contested in writing by any Loan Party, or Administrative Agent shall
not have or shall cease to have a valid security interest in any Collateral
purported to be covered thereby, perfected and with the priority required by
the relevant Collateral Document, for any reason other than the failure of
Administrative Agent or any Lender to take any action within its control,
subject only to Liens permitted under the applicable Collateral Documents; or
7.12 CERTIFICATED AS AIR CARRIER.
Company for any reason ceases to be a United States Citizen or to hold
an air carrier operating certificate under the Federal Aviation Act for
aircraft capable of carrying 10 or more individuals or 6,000 pounds or more of
cargo; or
7.13 MATERIAL AGREEMENTS.
Any Material Agreement, other than the Philippine Lease, shall at any
time be terminated other than by its terms or cease to be in full force and
effect other than by its terms, or any party to the Modification Agreement or
any Purchase Agreement shall default in the observance or performance of any
material covenants or agreements contained in any such agreement:
THEN (i) upon the occurrence of any Event of Default described in subsection
7.6 or 7.7, each of (a) the unpaid principal amount of and accrued interest on
the Loans and (b) all other Obligations shall automatically become immediately
due and payable, without presentment, demand, protest or other requirements of
any kind, all of which are hereby expressly waived by Company, and the
obligation of each Lender to make any Loan shall thereupon terminate and (ii)
upon the occurrence and during the continuation of any other Event of Default,
Administrative Agent shall, upon the written request or with the written
consent of Requisite Lenders, by written notice to Company, declare all or any
portion of the amounts described in clauses (a) and (b) above to be, and the
same shall forthwith become, immediately due and payable, and the obligation of
each Lender to make any Loan shall thereupon terminate.
89
90
Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
such paragraph Company shall pay all arrears of interest and all payments on
account of principal which shall have become due otherwise than as a result of
such acceleration (with interest on principal and, to the extent permitted by
law, on overdue interest, at the rates specified in this Agreement) and all
Events of Default and Potential Events of Default (other than non-payment of
the principal of and accrued interest on the Loans, in each case which is due
and payable solely by virtue of acceleration) shall be remedied or waived
pursuant to subsection 9.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended to
benefit Company and do not grant Company the right to require Lenders to
rescind or annul any acceleration hereunder, even if the conditions set forth
herein are met.
SECTION 8.
AGENTS
8.1 APPOINTMENT.
▇▇▇▇▇▇▇ ▇▇▇▇▇ is hereby appointed Syndication Agent hereunder and each
Lender hereby authorizes Syndication Agent to act as its agent in accordance
with the terms of this Agreement and the other Loan Documents. Bankers Trust
is hereby appointed Administrative Agent hereunder and under the other Loan
Documents and each Lender hereby authorizes Administrative Agent to act as its
agent in accordance with the terms of this Agreement and the other Loan
Documents. Agents agree to act upon the express conditions contained in this
Agreement and the other Loan Documents, as applicable. The provisions of this
Section 8 are solely for the benefit of Agents and Lenders and Company shall
have no rights as a third party beneficiary of any of the provisions thereof.
In performing its functions and duties under this Agreement, each Agent shall
act solely as an agent of Lenders and does not assume and shall not be deemed
to have assumed any obligation towards or relationship of agency or trust with
or for Company or any of its Subsidiaries. Syndication Agent, without consent
of or notice to any party hereto, may assign any and all of its rights or
obligations hereunder to any of its Affiliates, including, without limitation,
Credit Partners. As of the Closing Date, all obligations of Syndication Agent
hereunder shall terminate.
8.2 POWERS AND DUTIES; GENERAL IMMUNITY.
▇. ▇▇▇▇▇▇; DUTIES SPECIFIED. Each Lender irrevocably authorizes
each of the Agents to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents
as are specifically delegated or granted to such Agent by the terms hereof and
thereof, together with such powers, rights and remedies as are reasonably
incidental thereto. Agents shall have only those duties and responsibilities
that
90
91
are expressly specified in this Agreement and the other Loan Documents. Agents
may each exercise such powers, rights and remedies and perform such duties by
or through their agents or employees. Agents shall not have, by reason of this
Agreement or any of the other Loan Documents, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon Agents any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Agents shall not be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or
any other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Agents to Lenders or by or on behalf
of Company to Agents or any Lender in connection with the Loan Documents and
the transactions contemplated thereby or for the financial condition or
business affairs of Company or any other Person liable for the payment of any
Obligations, nor shall Agents be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Loan Documents or as to the use
of the proceeds of the Loans or as to the existence or possible existence of
any Event of Default or Potential Event of Default. Anything contained in this
Agreement to the contrary notwithstanding, Administrative Agent shall not have
any liability arising from confirmations of the amount of outstanding Loans or
the component amounts thereof.
C. EXCULPATORY PROVISIONS. None of Agents nor any of their
respective officers, directors, partners, employees or agents shall be liable
to Lenders for any action taken or omitted by Agents under or in connection
with any of the Loan Documents except to the extent caused by their respective
gross negligence or willful misconduct. If Agents shall request instructions
from Lenders with respect to any act or action (including the failure to take
an action) in connection with this Agreement or any of the other Loan
Documents, Agents shall be entitled to refrain from such act or taking such
action unless and until Agents shall have received instructions from Requisite
Lenders. Without prejudice to the generality of the foregoing, (i) Agents
shall be entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender
shall have any right of action whatsoever against any Agent as a result of such
Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the
instructions of Requisite Lenders. Each Agent shall be entitled to refrain
from exercising any power, discretion or authority vested in it under this
Agreement or any of the other Loan Documents unless and until it has obtained
the instructions of Requisite Lenders.
91
92
D. AGENTS ENTITLED TO ACT AS LENDERS. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, any Agent in its individual capacity as a Lender
hereunder. With respect to its participations in the Loans, each Agent shall
have the same rights and powers hereunder as any other Lender and may exercise
the same as though it were not performing the duties and functions delegated to
it hereunder, and the term "Lender" or "Lenders" or any similar term shall,
unless the context clearly otherwise indicates, include each Agent in its
individual capacity. Each Agent and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of banking, trust, financial
advisory or other business with Company or any of its Affiliates as if it were
not performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.
8.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans hereunder and that
it has made and shall continue to make its own appraisal of the
creditworthiness of Company and its Subsidiaries. No Agent shall have any duty
or responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter, and no Agent shall have any responsibility with respect to
the accuracy of or the completeness of any information provided to Lenders.
8.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Administrative Agent (and its respective affiliates and partners), to
the extent that Administrative Agent shall not have been reimbursed by Company,
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, without
limitation, counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against
Administrative Agent in exercising its powers, rights and remedies or
performing its duties hereunder or under the other Loan Documents or otherwise
in its capacity as Administrative Agent, in any way relating to or arising out
of this Agreement or the other Loan Documents; provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Administrative Agent's gross negligence or willful misconduct.
92
93
8.5 COLLATERAL DOCUMENTS.
Without limiting the generality of subsection 8.1, each Lender hereby
further authorizes Administrative Agent to enter into the Collateral Documents
as secured party on behalf of and for the benefit of such Lender and agrees to
be bound by the terms of each of the Collateral Documents; provided that,
except as otherwise provided below, Administrative Agent shall not enter into
or consent to any amendment, modification, termination or waiver of any
provision contained in any Collateral Document without prior written consent of
Requisite Lenders. Anything contained in any of the Loan Documents to the
contrary notwithstanding, each Lender agrees that no Lender shall have any
right individually to realize upon any of the collateral under any Collateral
Document, it being understood and agreed that all powers, rights and remedies
under the Collateral Documents may be exercised solely by Administrative Agent
for the benefit of Lenders in accordance with the terms thereof. Each Lender
hereby authorizes Administrative Agent (i) to release or subordinate Collateral
as permitted or required under this Agreement or the Collateral Documents, and
agrees that a certificate executed by Administrative Agent evidencing such
release of Collateral shall be conclusive evidence of such release as to any
third party and (ii) to enter into any amendments of the Collateral Documents
to cure any ambiguity, defect or inconsistency or to amend provisions relating
to ministerial or administrative matters which do not materially adversely
affect the rights of the Lenders thereunder.
8.6 SUCCESSOR ADMINISTRATIVE AGENT.
Administrative Agent may resign at any time by giving 30 days' prior
written notice thereof to Lenders and Company. Upon any such notice of
resignation, Requisite Lenders shall have the right, upon consultation with
Company, to appoint a successor Administrative Agent. Upon the acceptance of
any appointment hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent and
the retiring or removed Administrative Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Section 8 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement.
SECTION 9.
MISCELLANEOUS
9.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS.
A. GENERAL. Each Lender shall have the right at any time to (i)
sell, assign or transfer to any Eligible Assignee, or (ii) sell participations
to any Person in, all or any part of its Commitments or any Loan or Loans made
by it or any other interest herein or in any other Obligations owed to it;
provided that no such sale, assignment, transfer or participation shall,
without the consent of Company, require Company to file a registration
statement with the
93
94
Securities and Exchange Commission or apply to qualify such sale, assignment,
transfer or participation under the securities laws of any state; provided,
further that no such sale, assignment or transfer described in clause (i) above
shall be effective unless and until (a) an Assignment Agreement effecting such
sale, assignment or transfer shall have been accepted by Administrative Agent
and recorded in the Register as provided in subsection 9.1B(ii) or (b) the
sale, assignment or transfer is made in accordance with subsection 9.21.
Except as otherwise provided in this subsection 9.1, no Lender shall, as
between Company and such Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment or transfer of, or any granting
of participations in, all or any part of its Commitments or the Loans, or the
other Obligations owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment,
Loan or other Obligation may (a) be assigned in any amount to another
Lender, or to an Affiliate of the assigning Lender or another Lender,
with the giving of notice to Company and Administrative Agent or (b)
be assigned in an aggregate amount of not less than $5,000,000 (or
such lesser amount as shall constitute the aggregate amount of the
Commitments, Loans, and other Obligations of the assigning Lender) to
any other Eligible Assignee with the giving of notice to Company and
with the consent of Administrative Agent and Company (which consent
shall not be unreasonably withheld). Any assignment of Loans
hereunder shall effect a pro rata assignment of the Notes with respect
to each Financed Aircraft. To the extent of any such assignment in
accordance with either clause (a) or (b) above, the assigning Lender
shall be relieved of its obligations with respect to its Commitments,
Loans, or other Obligations or the portion thereof so assigned. The
parties to each such assignment shall execute and deliver to
Administrative Agent, for its acceptance and recording in the
Register, an Assignment Agreement, together with a processing and
recordation fee of $3,000 and such forms, certificates or other
evidence, if any, with respect to United States federal income tax
withholding matters as the assignee under such Assignment Agreement
may be required to deliver to Administrative Agent pursuant to
subsection 2.7B(iii)(a); provided, however that such processing fee
shall not be required where the assignee is an existing Lender. Upon
such execution, delivery and acceptance, from and after the effective
date specified in such Assignment Agreement, (y) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such
Assignment Agreement, shall have the rights and obligations of a
Lender hereunder and (z) the assigning Lender thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment Agreement, relinquish its rights and be
released from its obligations under this Agreement (and, in the case
of an Assignment Agreement covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto). The Commitments hereunder
shall be modified to reflect the Commitment of such assignee and any
remaining Commitment of such assigning Lender and, if any such
assignment occurs after the issuance of the Notes hereunder, the
assigning Lender shall,
94
95
upon the effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Administrative Agent
for cancellation, and thereupon new Notes shall be issued to the
assignee substantially in the form of Exhibit IIIA annexed hereto or
Exhibit IIIB, as the case may be, with appropriate insertions, to
reflect the new Commitments and/or outstanding Term Loans, as the case
may be, of the assignee and/or the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing and recordation fee referred to
in subsection 9.1B(i) and any forms, certificates or other evidence
with respect to United States federal income tax withholding matters
that such assignee may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii)(a), Administrative Agent shall, if
such Assignment Agreement has been completed and is in substantially
the form of Exhibit VII hereto and if Administrative Agent has
consented to the assignment evidenced thereby to the extent such
consent is required pursuant to subsection 9.1B(i)), (a) accept such
Assignment Agreement by executing a counterpart thereof as provided
therein (which acceptance shall evidence any required consent of
Administrative Agent to such assignment), (b) record the information
contained therein in the Register and (c) give prompt notice thereof
to Company. Administrative Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it as provided in
this subsection 9.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than
an Affiliate of the Lender granting such participation, shall not be entitled
to require such Lender to take or omit to take any action hereunder except
action directly affecting (i) the extension of the scheduled final maturity
date of any Loan allocated to such participation, (ii) a reduction of the
principal amount of or the rate of interest payable on any Loan allocated to
such participation or (iii) a release of Collateral, and all amounts payable by
Company hereunder (including without limitation amounts payable to such Lender
pursuant to subsections 2.6D and 2.7) shall be determined as if such Lender had
not sold such participation. Company and each Lender hereby acknowledge and
agree that, solely for purposes of subsection 9.5, (a) any participation will
give rise to a direct obligation of Company to the participant and (b) the
participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 9.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided that (i) no Lender shall, as between
Company and such Lender, be relieved of any of its obligations hereunder as a
result of any such assignment and pledge and (ii) in no event shall such
Federal Reserve Bank be considered to be a "Lender" or be entitled to require
the assigning Lender to take or omit to take any action hereunder.
95
96
E. INFORMATION. Each Lender may furnish any information
concerning Company and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject to subsection 9.19.
9.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents; (ii) all the costs of
furnishing all opinions by counsel for Company (including without limitation
any opinions requested by Lenders as to any legal matters arising hereunder)
and of Company's performance of and compliance with all agreements and
conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including, without limitation, with respect to
confirming compliance with environmental and insurance requirements; (iii) the
reasonable fees, expenses and disbursements of counsel to Administrative Agent
in connection with the negotiation, preparation, execution and administration
of the Loan Documents and the Loans and any consents, amendments, waivers or
other modifications hereto or thereto and any other documents or matters
requested by Company; (iv) all the costs and expenses of creating and
perfecting the Liens in favor of Administrative Agent for the benefit of
Lenders pursuant to the Loan Documents, including filing and recording fees and
expenses, title insurance, fees and expenses of counsel for providing such
opinions as Lenders may reasonably request and fees and expenses of legal
counsel to Administrative Agent (including local counsel); (v) all other actual
and reasonable costs and expenses incurred by Administrative Agent in
connection with the syndication of the Commitments and the negotiation,
preparation and execution of the Loan Documents and the transactions
contemplated hereby and thereby; provided that such costs and expenses of
syndication shall not exceed $10,000; and (vi) after the occurrence of an Event
of Default, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by Administrative Agent and Lenders in enforcing any Obligations of or
in collecting any payments due from Company hereunder or under the other Loan
Documents by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
9.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 9.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend, indemnify, pay and hold harmless Agents and Lenders,
and the officers, directors, employees, agents and affiliates of Agents and
Lenders (collectively called the "INDEMNITEES") from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including without limitation the reasonable fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened by any Person,
whether or not any such Indemnitee shall be designated as a party or a
potential party thereto),
96
97
whether direct, indirect or consequential and whether based on any federal,
state or foreign laws, statutes, rules or regulations (including without
limitation securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby
(including without limitation Lenders' agreement to make the Loans hereunder or
the use or intended use of the proceeds of any of the Loans) or the statements
contained in the commitment letter delivered by any Lender to Company with
respect thereto (collectively called the ``INDEMNIFIED LIABILITIES''); provided
that Company shall not have any obligation to any Indemnitee hereunder with
respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise solely from the gross negligence or willful misconduct of
that Indemnitee as determined by a final judgment of a court of competent
jurisdiction. To the extent that the undertaking to defend, indemnify, pay and
hold harmless set forth in the preceding sentence may be unenforceable because
it is violative of any law or public policy, Company shall contribute the
maximum portion that it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
9.4 SET-OFF.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Company at any time or
from time to time, without notice to Company or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by that Lender to or for the credit or the account of
Company against and on account of the obligations and liabilities of Company to
that Lender under this Agreement, the Notes, and the other Loan Documents,
including, but not limited to, all claims of any nature or description arising
out of or connected with this Agreement, the Notes, or any other Loan Document,
irrespective of whether or not (i) that Lender shall have made any demand
hereunder or (ii) the principal of or the interest on the Loans or any other
amounts due hereunder shall have become due and payable pursuant to Section 7
and although said obligations and liabilities, or any of them, may be
contingent or unmatured.
9.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment, by realization upon security, through the
exercise of any right of set-off or banker's lien, by counterclaim or cross
action or by the enforcement of any right under the Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, fees and other amounts then due and
owing to that Lender hereunder or under
97
98
the other Loan Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such
Lender) which is greater than the proportion received by any other Lender in
respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (i) notify Administrative
Agent and each other Lender of the receipt of such payment and (ii) apply a
portion of such payment to purchase participations (which it shall be deemed to
have purchased from each seller of a participation simultaneously upon the
receipt by such seller of its portion of such payment) in the Aggregate Amounts
Due to the other Lenders so that all such recoveries of Aggregate Amounts Due
shall be shared by all Lenders in proportion to the Aggregate Amounts Due to
them; provided that if all or part of such proportionately greater payment
received by such purchasing Lender is thereafter recovered from such Lender
upon the bankruptcy or reorganization of Company or otherwise, those purchases
shall be rescinded and the purchase prices paid for such participations shall
be returned to such purchasing Lender ratably to the extent of such recovery,
but without interest. Company expressly consents to the foregoing arrangement
and agrees that any holder of a participation so purchased may exercise any and
all rights of banker's lien, set-off or counterclaim with respect to any and
all monies owing by Company to that holder with respect thereto as fully as if
that holder were owed the amount of the participation held by that holder.
9.6 AMENDMENTS AND WAIVERS.
A. No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, or consent to any departure by
Company therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided that any such amendment,
modification, termination, waiver or consent which: increases the amount of
any of the Commitments or reduces the principal amount of any of the Loans;
changes any Lender's Pro Rata Share; changes in any manner the definition of
"Requisite Lenders"; changes in any manner any provision of this Agreement
which, by its terms, expressly requires the approval or concurrence of all
Lenders; postpones the scheduled final maturity date (but not the date of any
scheduled installment of principal) of any of the Loans; postpones the date or
reduces the amount of any scheduled payment (but not prepayment) (other than
the prepayment required by subsection 2.4B(iii)(g))) of principal of any of the
Loans; postpones the date on which any interest or any fees are payable;
decreases the interest rate borne by any of the Loans (other than any waiver of
any increase in the interest rate applicable to any of the Loans pursuant to
subsection 2.2E) or the amount of any fees payable hereunder; increases the
maximum duration of Interest Periods permitted hereunder; releases all or
substantially all of the Collateral; or changes in any manner the provisions
contained in subsection 7.1 or this subsection 9.6 shall be effective only if
evidenced by a writing signed by or on behalf of all Lenders to whom are owed
Obligations being directly affected by such amendment, modification,
termination, waiver or consent. In addition, (i) any amendment, modification,
termination or waiver of any of the provisions contained in Section 3 shall be
effective only if evidenced by a writing signed by or on behalf of Credit
Partners, Administrative Agent and Requisite Lenders, (ii) no amendment,
modification, termination or waiver of any provision of any Note shall be
effective without
98
99
the written concurrence of the Lender which is the holder of that Note, (iii)
no increase in the Commitments of any Lender over the amount thereof then in
effect shall be effective without the written concurrence of that Lender, it
being understood and agreed that in no event shall waivers or modifications of
conditions precedent, covenants, Events of Default, Potential Events of Default
or of a mandatory prepayment or a reduction of any or all of the Commitments be
deemed to constitute an increase of the Commitment of any Lender and that an
increase in the available portion of any Commitment of any Lender shall not be
deemed to constitute an increase in the Commitment of such Lender, and (iv) no
amendment, modification, termination or waiver of any provision of Section 7 or
of any other provision of this Agreement which, by its terms, expressly
requires the approval or concurrence of any Agent shall be effective without
the written concurrence of such Agent. Administrative Agent may, but shall
have no obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Company in any case
shall entitle Company to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or
consent effected in accordance with this subsection 9.6 shall be binding upon
each Lender at the time outstanding, each future Lender and, if signed by
Company, on Company. Notwithstanding anything in this subsection 9.6A to the
contrary, the Notes and Aircraft Chattel Mortgages may be amended in the manner
and for the purposes set forth in subsection 9.21 without the consents required
by this subsection 9.6A.
B. If, in connection with any proposed change, waiver, discharge
or termination to any of the provision of this Agreement as contemplated by the
proviso in the first sentence of this subsection 9.6, the consent of Requisite
Lenders is obtained but consent of one or more of such other Lenders whose
consent is required is not obtained, then Company may, so long as all
non-consenting Lenders are so treated, elect to terminate such Lender as a
party to this Agreement; provided that, concurrently with such termination, (i)
Company shall pay that Lender all principal, interest and fees and other
amounts owed to such Lender through such date of termination, (ii) another
financial institution satisfactory to Company and Administrative Agent (or if
Administrative Agent is also the Lender to be terminated, the successor
Administrative Agent) shall agree, as of such date, to become a Lender for all
purposes under this Agreement (whether by assignment or amendment) and to
assume all obligations of the Lender to be terminated as of such date, and
(iii) all documents and supporting materials necessary, in the judgment of
Administrative Agent (or if Administrative Agent is also the Lender to be
terminated, the successor Administrative Agent) to evidence the substitution of
such Lender shall have been received and approved by Administrative Agent as of
such date.
9.7 INDEPENDENCE OF COVENANTS.
All covenants under this Agreement shall be given independent effect
so that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
99
100
9.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States
mail or courier service and shall be deemed to have been given when delivered
in person or by courier service, upon receipt of telefacsimile or telex, or
three Business Days after depositing it in the United States mail with postage
prepaid and properly addressed; provided that notices to Credit Partners,
Syndication Agent and Administrative Agent shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be
as set forth under such party's name on the signature pages hereof or (i) as to
Company and Administrative Agent, such other address as shall be designated by
such Person in a written notice delivered to the other parties hereto and (ii)
as to each other party, such other address as shall be designated by such party
in a written notice delivered to Administrative Agent.
9.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of
the Loans hereunder.
B. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of Company set forth in subsections 2.6D, 2.7,
9.2, 9.3 and 9.4 and the agreements of Lenders set forth in subsections 8.2C,
8.4 and 9.5 shall survive the payment of the Loans, and the termination of this
Agreement.
9.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other power, right or privilege. All rights
and remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
9.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of set-off, and
such payment or payments or the proceeds of such enforcement or set-off or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to
100
101
a trustee, receiver or any other party under any bankruptcy law, any other
state or federal law, common law or any equitable cause, then, to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or set-off had not occurred.
9.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
9.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no
action taken by Lenders pursuant hereto or thereto, shall be deemed to
constitute Lenders as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
9.14 HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
9.15 APPLICABLE LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
9.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 9.1). Neither
Company's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Company without the prior written consent of all
Lenders.
101
102
9.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OBLIGATION MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT COMPANY ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER LOAN DOCUMENT OR
SUCH OBLIGATION (SUBJECT TO ANY RIGHT TO APPEAL TO A COURT IN THE STATE OF NEW
YORK). Company hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail,
return receipt requested, to Company at its address provided in subsection 9.8,
such service being hereby acknowledged by Company to be sufficient for personal
jurisdiction in any action against Company in any such court and to be
otherwise effective and binding service in every respect. Nothing herein shall
affect the right to serve process in any other manner permitted by law or shall
limit the right of any Lender to bring proceedings against Company in the
courts of any other jurisdiction.
9.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION
OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of
this waiver is intended to be all-encompassing of any and all disputes that may
be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in
their related future dealings. Each party hereto further warrants and
represents that it has reviewed this waiver with its legal counsel and that it
knowingly and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS MADE
102
103
HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
9.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature, it being understood and agreed by
Company that in any event a Lender may make disclosures reasonably required by
any bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by such Lender of any Loans or any
participation therein or as required or requested by any governmental agency or
representative thereof or pursuant to legal process or in accordance with any
applicable law or regulation; provided that, unless specifically prohibited by
applicable law or court order, each Lender shall notify Company of any request
by any governmental agency or representative thereof (other than any such
request in connection with any examination of the financial condition of such
Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further that
in no event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries.
9.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company, Credit
Partners, Syndication Agent and Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof.
9.21 COOPERATION IN REFINANCING, SYNDICATION AND ASSIGNMENT.
Company, Administrative Agent and Lenders agree that, in connection
with the refinancing, syndication or assignment of the Notes, to the extent
deemed reasonably necessary by Company or Administrative Agent, some or all of
the Financed Aircraft may be transferred to a Special Purpose Subsidiary which
will lease such aircraft to Company under arrangements reasonably acceptable to
Company and Administrative Agent all in a manner designed to retain the
economic obligations and benefits of the Company, Administrative Agent and
Lenders hereunder and under the other Loan Documents. Company, Administrative
Agent and Lenders further agree that, in connection with an assignment of Notes
to a Person who will not become a Lender hereunder, Administrative Agent and
Lenders shall agree to any amendments to the
103
104
Notes to be assigned and the related Aircraft Chattel Mortgages and/or releases
of the related First Aircraft Chattel Mortgage and Second Aircraft Chattel
Mortgage, in each case, as requested by Company; provided that the terms of
such amended Notes and Aircraft Chattel Mortgages do not violate any term of
this Agreement and provided, further, that such amendments shall be effective
only upon and simultaneous with (i) the assignment of such Notes and Aircraft
Chattel Mortgages to such Person, (ii) indefeasible payment in full to Lenders
of an amount equal to all amounts owing under such Notes and (iii) releases
from any liability relating to such Notes and Aircraft Chattel Mortgages of
Administrative Agent and Lenders in form and substance satisfactory to
Administrative Agent.
[Remainder of page intentionally left blank]
104
105
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
ATLAS AIR, INC.
By:
------------------------------------------------
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President,
General Counsel and Secretary
ADMINISTRATIVE AGENT:
BANKERS TRUST COMPANY,
as Administrative Agent and Lender
By:
------------------------------------------------
Name:
Title:
Notice Address:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
S-1
106
SYNDICATION AGENT:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Syndication Agent
-------------------------------------------
Notice Address:
▇▇▇▇▇▇▇ Sachs Credit Partners L.P.
c/o Goldman, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
LENDERS:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.
(formerly Pearl Street L.P.),
By:
------------------------------------------------
Authorized Signatory
BANK ONE, COLORADO, N.A.
By:
------------------------------------------------
Name:
Title:
CITY NATIONAL BANK
By:
------------------------------------------------
Name:
Title:
S-2
107
COLORADO NATIONAL BANK
By:
------------------------------------------------
Name:
Title:
FIRST SECURITY BANK
By:
------------------------------------------------
Name:
Title:
FUJI BANK
By:
------------------------------------------------
Name:
Title:
IMPERIAL BANK, A CALIFORNIA BANKING
CORPORATION
By:
------------------------------------------------
Name:
Title:
S-3
108
KEY BANK
By:
------------------------------------------------
Name:
Title:
KEYPORT LIFE INSURANCE COMPANY
By:
------------------------------------------------
Name:
Title:
NORWEST-COLORADO N.A.
By:
------------------------------------------------
Name:
Title:
MASSACHUSETTS MUTUAL LIFE INSURANCE CO.
By:
------------------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING RATE FUND, INC.
By:
------------------------------------------------
Name:
Title:
S-4
109
OCTAGON CREDIT INVESTORS LOAN PORTFOLIO
(A UNIT OF THE CHASE MANHATTAN BANK)
By:
--------------------------------
Name:
Title:
PILGRIM AMERICA PRIME RATE TRUST
By:
--------------------------------
Name:
Title:
PPM AMERICA, INC., AS ATTORNEY-IN-FACT,
ON BEHALF OF ▇▇▇▇▇▇▇ NATIONAL LIFE
INSURANCE COMPANY
By:
--------------------------------
Name:
Title:
THE SAKURA BANK, LIMITED
By:
--------------------------------
Name:
Title:
SOUTHERN PACIFIC THRIFT AND LOAN
ASSOCIATION
By:
--------------------------------
Name:
Title:
S-5
110
TRANSAMERICA BUSINESS CREDIT CORP.
By:
------------------------------------------------
Name:
Title:
S-6
111
EXECUTION
================================================================================
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF FEBRUARY 28, 1997
AMONG
ATLAS AIR, INC.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.
AS SYNDICATION AGENT
AND
BANKERS TRUST COMPANY,
AS ADMINISTRATIVE AGENT
================================================================================
112
ATLAS AIR, INC.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
----
SECTION 1.
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement . . . . . . . . . 26
1.3 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS . . . . . . . . . . . . . . . . . 27
2.1 Commitments; Making of Loans; Notes; Register . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.2 Interest on the Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments; General Provisions
Regarding Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.5 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.6 Special Provisions Governing Eurodollar Rate Loans. . . . . . . . . . . . . . . . . . . . . . . . . 42
2.7 Increased Costs; Taxes; Capital Adequacy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
2.8 Obligation of Lenders to Mitigate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 3.
CONDITIONS TO LOANS . . . . . . . . . . . . . . . . . . . . . . . 50
3.1 Conditions to Initial Revolving Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
3.2 Conditions to Loans to Finance Aircraft Acquisition. . . . . . . . . . . . . . . . . . . . . . . . . 54
3.3 Condition to Loans to Finance Cargo Conversion. . . . . . . . . . . . . . . . . . . . . . . . . . . 57
3.4 Conditions to All Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
3.5 Conditions to Conversion of Revolving Loans Into Term Loans . . . . . . . . . . . . . . . . . . . . 60
3.6 Conditions to Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 4.
COMPANY'S REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . 61
4.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries. . . . . . . . . . . . 61
4.2 Authorization of Borrowing, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
4.3 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
4.4 No Material Adverse Change; No Restricted Junior Payments. . . . . . . . . . . . . . . . . . . . . . 64
(i)
113
PAGE
----
4.5 Title to Properties; Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
4.6 Litigation; Adverse Facts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
4.7 Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.8 Performance of Agreements; Materially Adverse Agreements. . . . . . . . . . . . . . . . . . . . . . 65
4.9 Governmental Regulation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.10 Securities Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4.11 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4.12 Certain Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4.13 Environmental Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4.14 Employee Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
4.15 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
4.16 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 5.
COMPANY'S AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . 67
5.1 Financial Statements and Other Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.2 Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
5.3 Payment of Taxes and Claims; Tax Consolidation. . . . . . . . . . . . . . . . . . . . . . . . . . . 73
5.4 Maintenance of Properties; Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
5.5 Inspection; Lender Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
5.6 Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
5.7 Environmental Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
5.8 Company's Remedial Action Regarding Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . 74
5.9 Registration of Thai Aircraft with FAA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.10 Further Assurances; New Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.11 Appraisals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5.12 Key Man Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5.13 Maintenance Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5.14 Consent with Respect to Thai Aircraft. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5.15 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 6.
COMPANY'S NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 77
6.1 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
6.2 Liens and Related Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
6.3 Investments; Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
6.4 Contingent Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
6.5 Restricted Junior Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
6.6 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
6.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions; New Subsidiaries. . . . . . . . . 83
6.8 Amendments of Material Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
(ii)
114
PAGE
----
6.9 Restriction on Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
6.10 Sales and Lease-Backs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
6.11 Sale or Discount of Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
6.12 Transactions with Shareholders and Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
6.13 Disposal of Subsidiary Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
6.14 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 7.
EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . 87
7.1 Failure to Make Payments When Due. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
7.2 Default in Other Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
7.3 Breach of Certain Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
7.4 Breach of Warranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
7.5 Other Defaults Under Loan Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . . . . 88
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . . . . . 88
7.8 Judgments and Attachments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
7.9 Dissolution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
7.10 Change in Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
7.11 Failure of Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
7.12 Certificated as Air Carrier. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
7.13 Material Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 8.
AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.2 Powers and Duties; General Immunity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness. . . . . . . . . 93
8.4 Right to Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
8.5 Collateral Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
8.6 Successor Administrative Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 9.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 94
9.1 Assignments and Participations in Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
9.2 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
9.3 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
9.4 Set-Off. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
9.5 Ratable Sharing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
9.6 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
9.7 Independence of Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
(iii)
115
PAGE
----
9.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
9.9 Survival of Representations, Warranties and Agreements. . . . . . . . . . . . . . . . . . . . . . . 101
9.10 Failure or Indulgence Not Waiver; Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . 101
9.11 Marshalling; Payments Set Aside. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
9.12 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
9.13 Obligations Several; Independent Nature of Lenders' Rights. . . . . . . . . . . . . . . . . . . . . 102
9.14 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
9.15 Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
9.16 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
9.17 Consent to Jurisdiction and Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
9.18 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
9.19 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
9.20 Counterparts; Effectiveness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
9.21 Cooperation in Refinancing, Syndication and Assignment. . . . . . . . . . . . . . . . . . . . . . . 104
Signature pages S-1
(iv)
116
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
IIIA FORM OF REVOLVING NOTE
IIIB FORM OF AMENDED AND RESTATED NOTE
IV FORM OF COMPLIANCE CERTIFICATE
VA FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ FORM OF SECTION 1110 OPINION
VC FORM OF OPINION OF ▇▇▇▇▇ ▇▇▇▇▇▇
VD FORM OF OPINION OF COLORADO COUNSEL
VI FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇
VII FORM OF ASSIGNMENT AGREEMENT
VIII FORM OF CERTIFICATE RE NON-BANK STATUS
IX FORM OF FINANCIAL CONDITION CERTIFICATE
X FORM OF FIRST AIRCRAFT CHATTEL MORTGAGE
XI FORM OF SECOND AIRCRAFT CHATTEL MORTGAGE
(v)
117
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
5.1 SUBSIDIARIES OF COMPANY
6.1 CERTAIN EXISTING INDEBTEDNESS
6.2 CERTAIN EXISTING LIENS
6.3 CERTAIN EXISTING INVESTMENTS
6.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
(vi)
