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EXHIBIT 10.75
CREDIT AGREEMENT
DATED AS OF SEPTEMBER 5, 1997
AMONG
ATLAS FREIGHTER LEASING II, INC.,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
BANKERS TRUST COMPANY,
as Administrative Agent,
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Syndication Agent
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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........... 19
1.3 Other Definitional Provisions............................ 20
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS............... 20
2.1 Commitments; Making of Loans; Notes; Register............ 20
A. Commitments..................................... 20
B. Borrowing Mechanics............................. 20
C. Disbursement of Funds........................... 21
D. Notes........................................... 22
E. The Register.................................... 22
2.2 Interest on the Loans.................................... 23
A. Rate of Interest................................ 23
B. Interest Periods................................ 24
C. Interest Payments............................... 24
D. Default Rate.................................... ▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇ of Interest......................... 25
2.3 Fees..................................................... 25
2.4 Repayments and Prepayments; General
Provisions Regarding Payments.......................... 25
A. Mandatory Reduction of Commitments.............. 25
B. Scheduled Repayments of Loans................... 25
C. Prepayments..................................... 26
D. General Provisions Regarding Payments........... 31
2.5 Use of Proceeds.......................................... 32
A. Application of Proceeds......................... 32
B. Margin Regulations.............................. 32
(i)
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2.6 Special Provisions Governing Loans........................ 32
A. Determination of Applicable Interest Rate........ 32
B. Inability to Determine Applicable Interest Rate.. 32
C. Illegality or Impracticability of Loans.......... 33
D. Compensation For Breakage or Non-Commencement of
of Interest Periods............................ 34
E. Booking of Loans................................. 34
F. Assumptions Concerning Funding of Loans.......... 34
G. Substitute Basis................................. 34
2.7 Increased Costs, Taxes; Capital Adequacy.................. 35
A. Compensation for Increased Costs and Taxes....... 35
B. Withholding of Taxes............................. 36
C. Capital Adequacy Adjustment...................... 39
D. Substitute Lenders............................... 40
2.8 Obligation of Lenders to Mitigate......................... 41
SECTION 3. CONDITIONS TO LOANS....................................... 41
3.1 Conditions to Loans....................................... 41
A. Borrower and Atlas Documents..................... 41
B. Aircraft Documents............................... 42
C. Notice of Borrowing.............................. 43
D. Necessary Consents............................... 43
E. Aircraft Chattel Mortgage........................ 43
F. Fairness Opinion................................. 43
G. Financial Condition Certificate.................. 43
H. Opinions of Borrower's Counsel................... 44
I. Opinion of Counsel............................... 44
J. Atlas Credit Agreement; Amended Leases........... 44
K. Opinions of FAA Counsel.......................... 44
L. Fees............................................. 44
M. Financial Statements............................. 44
N. Evidence of Insurance............................ 45
O. No Material Adverse Effect....................... 45
P. Representations and Warranties; Performance of
Agreements..................................... 45
Q. Compliance Certificate........................... 45
R. Transaction; Refinancing......................... 45
S. Completion of Proceedings........................ 46
T. Appraisals....................................... 46
(ii)
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U. FAA Certification and Title...................... 46
V. Bankruptcy-Remote Subsidiary..................... 47
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES ................ 47
4.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries.............................. 47
A. Organization and Powers.......................... 47
B. Qualification and Good Standing.................. 47
C. Subsidiaries..................................... 47
D. Collateral Documents............................. 47
4.2 Authorization of Borrowing, etc........................... 48
A. Authorization of Borrowing....................... 48
B. No Conflict...................................... 48
C. Governmental Consents............................ 48
D. Binding Obligation............................... 49
4.3 Financial Condition....................................... 49
4.4 No Material Adverse Change; No Restricted Junior Payments. 50
4.5 Title to Properties, Liens................................ 50
4.6 Litigation, Adverse Facts................................. 50
4.7 Payment of Taxes.......................................... 51
4.8 Performance of Agreements................................. 51
4.9 Governmental Regulation................................... 51
4.10 Securities Activities..................................... 51
4.11 Compliance with ERISA..................................... 52
4.12 Certain Fees.............................................. 52
4.13 Environmental Protection.................................. 52
4.14 Employee Matters.......................................... 52
4.15 Solvency.................................................. 53
4.16 Disclosure................................................ 53
4.17 Section 1110.............................................. 53
4.18 Special Purpose Corporation............................... 54
4.19 Transaction............................................... 54
4.20 Representations and Warranties in Documents............... 54
4.21 Leases.................................................... 54
SECTION 5. BORROWER'S AFFIRMATIVE COVENANTS ..........................54
5.1 Financial Statements and Other Reports.................... 55
5.2 Corporate Existence....................................... 58
5.3 Payment of Taxes and Claims; Tax Consolidation............ 58
(iii)
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5.4 Maintenance of Properties; Insurance...................... 59
5.5 Inspection; Lender Meeting................................ 59
5.6 Compliance with Laws, etc................................. 60
5.7 Environmental Indemnity................................... 60
5.8 Borrower's Remedial Action Regarding Hazardous Materials.. 60
5.9 Maintenance Contracts..................................... 60
5.10 Employee Benefit Plans.................................... 61
5.11 Further Assurances........................................ 61
5.12 Performance of Obligations................................ 61
5.13 Corporate Separateness. .................................. 61
SECTION 6. BORROWER'S NEGATIVE COVENANTS ............................ 62
6.1 Indebtedness.............................................. 62
6.2 Liens and Related Matters................................. 62
A. Prohibition on Liens............................. 62
B. No Negative Pledges.............................. 63
6.3 Investments; Joint Ventures............................... 63
6.4 Contingent Obligations.................................... 63
6.5 Restricted Junior Payments................................ 63
6.6 Restriction on Fundamental Changes; Asset Sales and
Acquisitions; New Subsidiaries......................... 63
6.7 Amendments of Material Agreements......................... 64
6.8 Restriction on Leases..................................... 64
6.9 Transaction with Shareholders and Affiliates.............. 64
6.10 Conduct of Business....................................... 64
SECTION 7. EVENTS OF DEFAULT ....................................... 65
7.1 Failure to Make Payments When Due......................... 65
7.2 Default Under Lease....................................... 65
7.3 Breach of Certain Covenants............................... 65
7.4 Breach of Warranty........................................ 65
7.5 Other Defaults Under Loan Documents....................... 66
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc...... 66
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc........ 66
7.8 Judgments and Attachments................................. 67
7.9 Dissolution............................................... 67
7.10 Change in Control......................................... 67
7.11 Failure of Security....................................... 67
7.12 Loss of United States Citizen Status...................... 68
(iv)
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SECTION 8. AGENTS ................................................... 69
8.1 Appointment............................................... 69
8.2 Powers and Duties; General Immunity....................... 69
▇. ▇▇▇▇▇▇; Duties Specified......................... 69
B. No Responsibility for Certain Matters............ 69
C. Exculpatory Provisions........................... 70
D. Agents Entitled to Act as Lender................. 70
8.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness.......................... 71
8.4 Right to Indemnity........................................ 71
8.5 Collateral Documents...................................... 72
8.6 Successor Administrative Agent............................ 72
SECTION 9. MISCELLANEOUS ............................................ 73
9.1 Assignments and Participations in Loans................... 73
A. General.......................................... 73
B. Assignments...................................... 73
C. Participations................................... 75
D. Assignments to Federal Reserve Banks and Others.. 75
E. Information...................................... 75
9.2 Expenses.................................................. 75
9.3 Indemnity................................................. 76
9.4 Set-Off................................................... 77
9.5 Ratable Sharing........................................... 78
9.6 Amendments and Waivers.................................... 78
9.7 Independence of Covenants................................. 80
9.8 Notices................................................... 80
9.9 Survival of Representations, Warranties and Agreements.... 80
9.10 Failure or Indulgence Not Waiver; Remedies Cumulative..... 81
9.11 Marshalling: Payments Set Aside........................... 81
9.12 Severability.............................................. 81
9.13 Obligations Several; Independent Nature of Lenders' Rights 81
9.14 Headings.................................................. 82
9.15 Applicable Law............................................ 82
9.16 Successors and Assigns.................................... 82
9.17 Consent to Jurisdiction and Service of Process............ 82
9.18 Waiver of Jury Trial...................................... 83
9.19 Confidentiality........................................... 83
9.20 Counterparts; Effectiveness............................... 84
(v)
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTE
III FORM OF COMPLIANCE CERTIFICATE
IVA FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
IVB FORM OF SECTION 1110 OPINION
IVC FORM OF OPINION COVERING CERTAIN TAX ISSUES
IVD FORM OF OPINION OF COUNSEL OF BORROWER
IVE FORM OF OPINION OF FAA COUNSEL
V FORM OF ASSIGNMENT AGREEMENT
VI FORM OF CERTIFICATE RE NON-BANK STATUS
VII FORM OF FINANCIAL CONDITION CERTIFICATE - BORROWER
VIIA FORM OF FINANCIAL CONDITION CERTIFICATE - ATLAS
VIII FORM OF LEASE
IX FORM OF AIRCRAFT CHATTEL MORTGAGE
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
2.2 MAXIMUM LOAN AMOUNT FOR AIRCRAFT AND SPARE
ENGINES
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CREDIT AGREEMENT, dated as of September 5, 1997, among ATLAS FREIGHTER
LEASING II, INC., a Delaware corporation ("Atlas Leasing II" or the "Borrower"),
the lenders party hereto from time to time (each a "Lender", and collectively,
the "Lenders"), BANKERS TRUST COMPANY, as Administrative Agent for the Lenders
(in such capacity, the "Administrative Agent"), and ▇▇▇▇▇▇▇ SACHS CREDIT
PARTNERS L.P., as Syndication Agent for the Lenders (in such capacity, the
"Syndication Agent" and together with the Administrative Agent, the "Agents").
W I T N E S S E T H :
WHEREAS, the Borrower has been established for the sole purpose of owning
and leasing to Atlas the Aircraft and Spare Engines;
WHEREAS, the Aircraft and Spare Engines are currently owned by Atlas;
WHEREAS, the Aircraft and Spare Engines are currently encumbered by certain
indebtedness which Atlas desires to refinance;
WHEREAS, in connection with the refinancing of such indebtedness, Atlas
will contribute the Aircraft and Spare Engines subject to certain indebtedness
to Atlas Leasing II;
WHEREAS, subject to and upon the terms and conditions herein set forth, the
Lenders are willing to make available to Borrower the credit facility provided
for herein to refinance the indebtedness relating to the Aircraft and Spare
Engines;
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the following
meanings:
"ACMI Contract" shall have the meaning provided therefor in the Leases.
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"Adjusted Eurodollar Rate" means, for any Interest Rate Determination Date,
the rate per annum obtained by dividing (rounded upward to the nearest 1/100 of
one percent) (x) the offered quotation, if any, to first class banks in the
interbank Eurodollar market by Administrative Agent for U.S. dollar deposits of
amounts in same day funds comparable to the principal amount of the Loans of
Administrative Agent 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 (y) 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).
"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.
"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.
"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.
"AFL I First Amendment" means the First Amendment to the Lease Agreement,
dated as of September 5, 1997 between Atlas Air, Inc. as lessee and Atlas
Freighter Leasing, Inc. as lessor.
"Agents" has the meaning assigned to that term in the introduction to this
Agreement and also means and includes any successor Agent appointed pursuant to
subsection 8.6.
"Aggregate Amounts Due" has the meaning assigned to that term in subsection
9.5.
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"Agreement" means this Credit Agreement dated as of September 5, 1997, as
it may be amended, supplemented or otherwise modified from time to time.
"Aircraft" means four Boeing 747-200 aircraft in full freighter
configuration with FAA Registration Nos. N523MC, N524MC, N526MC and N527MC,
including the Engines installed thereon and spare engines of the same type and
model, which aircraft (i) are in cargo configuration capable of immediate
operation in the business of Borrower, and (ii) have a maximum gross take-off
weight ("MTOW") of at least 800,000 pounds.
"Aircraft Chattel Mortgage" means, with respect to each Aircraft and Spare
Engine, a Security Agreement and Chattel Mortgage substantially in the form of
Exhibit IX annexed hereto granting to Administrative Agent for the benefit of
Lenders a first priority security interest in such Aircraft and Spare Engine, as
such Aircraft Chattel Mortgage may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof and
thereof.
"Aircraft Obligations" means all amounts owing by Atlas or any of its
Subsidiaries pursuant to the Amended Aircraft Credit Facility immediately prior
to giving effect to the third amendment and restatement thereof on the date
hereof and relating to the Aircraft and Spare Engines being contributed to the
Borrower pursuant to the Transaction.
"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 Aircraft Credit Facility" means the Third Amended and Restated
Credit Agreement, dated as of September 5, 1997, among Atlas Air, Inc., as
Borrower, the Lenders listed therein, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P., as
Syndication Agent, and Bankers Trust Company, as Administrative Agent, but
without giving effect to any amendments, modifications, supplements or waivers
thereof.
"Applicable Margin" has the meaning assigned to that term in subsection
2.2A.
"Appraised Value" means, with respect to any Aircraft or Spare Engines, the
average of the appraised value of such Aircraft or Spare Engines by two Approved
Appraisers as determined pursuant to subsection 3.1T.
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"Approved Appraiser" means either of BK Associates, Inc., Simat, Helliesen
& ▇▇▇▇▇▇▇, Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ or any other nationally recognized firm
of aircraft appraisers reasonably satisfactory to Administrative Agent.
"Asset Sale" means the sale (including any sale-leaseback transaction) or
other disposition by Borrower to any other Person of any assets of Borrower
(whether tangible or intangible) excluding transactions related to aircraft
engines, components, parts or spare parts or other equipment, appliances,
instruments, appurtenances, accessories or furnishings of whatever nature which
may from time to time be removed from any Airframe or Engine in connection with
transactions permitted pursuant to and in accordance with Section 4(d) or
Section 4(e) of the Aircraft Chattel Mortgages.
"Assignment Agreement" means an Assignment Agreement in substantially the
form of Exhibit V annexed hereto.
"Atlas" means Atlas Air, Inc., a Delaware corporation.
"Atlas Asset Sales" means the sale (including any sale-leaseback
transaction) by Atlas or any of its Subsidiaries to any other Person of (i) any
of the stock of any of Atlas' Subsidiaries, (ii) substantially all of the assets
of any division or line of business of Atlas or any of its Subsidiaries, or
(iii) any other assets (whether tangible or intangible) of Atlas or any of its
Subsidiaries outside of the ordinary course of business.
"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.
"Borrower" has the meaning assigned to that term in the introduction to
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.
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"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 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-I 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 I 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 VI 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.
"Collateral" means all of the properties and assets in which Liens are
purported to be granted by the Collateral Documents.
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"Collateral Documents" means each Aircraft Chattel Mortgage and any
security agreement executed pursuant to subsection 5.11.
"Commitment" means the commitment of each Lender as set forth on Schedule
2.1, as the same may be reduced or terminated pursuant to Section 2.4 and/or
Section 7.
"Compliance Certificate" means a certificate delivered to Administrative
Agent and Lenders by Borrower pursuant to subsection 3.1Q or 5.1(iii).
"Condemnation Proceeds" has the meaning assigned to that term in subsection
2.4C(ii)(b).
"Consolidated Adjusted EBITDA" means, for any period, (I) 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, (vi) other non-cash items
reducing Consolidated Net Income less other non-cash items increasing
Consolidated Net Income less (II) all cash expenditures reducing reserves
appearing on the June 30, 1997 balance sheet of Atlas, all of the foregoing as
determined on a consolidated basis for Atlas 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 Atlas and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Atlas 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 and Currency
Agreements.
"Consolidated Net Income" means, for any period, the net income (or loss)
of Atlas 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 Atlas) in which any other Person (other than Atlas or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Atlas 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 Atlas or is merged
into or consolidated with Atlas or any of its Subsidiaries or that Person's
assets are acquired by Atlas or any of its Subsidiaries, (iii) the income of any
Subsidiary of
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Atlas to the extent that the declaration or payment of dividends 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 Atlas 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 Rental Payments" means, for any period, the aggregate amount
of all rents paid or payable by Atlas and its Subsidiaries on a consolidated
basis (excluding rent paid pursuant to the Leases) during that period under all
Capital Leases and Operating Leases to which Atlas 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 Atlas and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"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 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
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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.
"Contribution" has the meaning assigned to that term in subsection 3.1R.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement designated to protect Borrower 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.
"Dollars" and the sign "$" mean the lawful money of the United States of
America.
"Effective Date" has the meaning assigned to that term in Section 9.20.
"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, and (B) any Lender and any Affiliate of any
Lender; provided that no Affiliate of Borrower 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 Borrower or any of its ERISA Affiliates.
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"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.
"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.
"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
Aircraft (whether the Airframe or an Engine of such Aircraft or Spare Engine or
both): (A) loss of such Aircraft or Spare Engine or the use thereof due to theft
or disappearance of such Aircraft or Spare Engine 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 Aircraft or Spare Engine); (B) the
destruction, damage beyond repair or rendition of such Aircraft or Spare Engine
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 Borrower obtains
adequate compensation from the United States
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17
Government) of such Aircraft or Spare Engine; (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 Aircraft or Spare Engine 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 Borrower, 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 Borrower 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 Aircraft or Spare Engine, 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 Aircraft or Spare Engine, if Borrower shall be unable to obtain indemnity
or "war risk" insurance in lieu thereof from the United States; (F) any damage
which results in an insurance settlement with respect to such Aircraft or Spare
Engine on the basis of an actual or constructive total loss or (G) a divestiture
of such Airframe or Spare Engine as described in Section 4(d)(iii) or Section
4(d)(vi) of any Aircraft Chattel Mortgage. An Event of Loss with respect to any
Aircraft shall be deemed to have occurred if an Event of Loss occurs with
respect to the Airframe of such Aircraft.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.
"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 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.
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18
"Final Maturity Date" means May 29, 2004.
"Fiscal Year" means the fiscal year of the Borrower.
"Funding and Payment Office" means the office of Administrative Agent
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇.
"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 Borrower to Lenders pursuant to clauses (i) and (ii) of subsection 5.1 shall
be prepared in accordance with GAAP as in effect at the time of such
preparation. Calculations in connection with the definitions, covenants and
other provisions of this Agreement shall utilize accounting principles and
policies in conformity with GAAP as in effect on the date of this Agreement.
"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 of Borrower; and (ii) caused by, or
undertaken by or on behalf of, Borrower.
"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
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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 are not Indebtedness.
"Indemnified Liabilities" has the meaning assigned to that term in
subsection 9.3.
"Indemnitee" has the meaning assigned to that term in subsection 9.3.
"Independent Director" means a director of Borrower that satisfies the
criteria for "Independent Director" set forth in the Certificate of
Incorporation of Borrower.
"Initial Borrowing Date" shall mean the date occurring on or after the
Effective Date on which the borrowing of the Loans occurs.
"Insurance Proceeds" has the meaning assigned to that term in subsection
2.4C(ii)(b).
"Interest Payment Date" means with respect to any Loan, the last day of
each Interest Period applicable to such Loan.
"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 Borrower 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.
"Investment" means (i) any direct or indirect purchase or other acquisition
by Borrower of, or of a beneficial interest in, any Securities of any other
Person or (ii) 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 Borrower to any other Person, 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 busi-
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20
ness. 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.
"Lease" or "Leases" shall mean each of the lease agreements, dated as of
September 5, 1997 between Atlas Freighter Leasing II, Inc., as Lessor and Atlas
Air, Inc., as Lessee, as the same may be amended, modified or supplemented from
time to time in accordance with the terms hereof. The term "Lease" shall include
any Lease Supplement entered into in accordance with the terms of any Lease.
"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 the term loans made under this Agreement on the
same day by all the Lenders to the Borrower and relating to one Aircraft and the
related Spare Engines but secured by all Collateral.
"Loan Documents" means this Agreement, the Notes, the Lease and the
Collateral Documents.
"Loan Exposure" means, with respect to any Lender as of any date of
determination the outstanding principal amount of the Loans of that Lender.
"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 of Borrower or (ii) the impairment of the ability of Borrower to
perform the Obligations,
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21
or the impairment, as a result of actions or inaction by Borrower, of the
ability of Administrative Agent or Lenders to enforce the Obligations.
"Maximum Loan Amount" means, with respect to each Aircraft and related
Spare Engines, the amount set forth on Schedule 2.2 opposite the respective
Aircraft and Spare Engines.
"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 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.
"Non-US Lender" has the meaning assigned to that term in subsection
2.7B(iii)(a).
"Notes" has the meaning assigned to that term in subsection 2.1D.
"Notice of Borrowing" means a notice delivered by Borrower to
Administrative Agent pursuant to subsection 2.1B.
"Obligations" means all obligations of every nature of Borrower from time
to time owed to 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.
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22
"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.
"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) 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
Aircraft Chattel Mortgages; and
(iv) Liens granted pursuant to the Collateral Documents.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, 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.
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23
"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(xi).
"Pricing Reduction" means a pricing reduction in the Applicable Margin
equal to 0.25%, if at the end of any four fiscal quarter period commencing on or
after December 31, 1997 and ending on or prior to December 31, 1999:
The ratio of (x) Consolidated Adjusted EBITDA for such four fiscal
quarter period to (y) Consolidated Interest Expense for such period is
greater than 2.30:1.00; and
The ratio of (x) Consolidated Total Debt (less Cash and Cash
Equivalents in excess of $25 million) at the end of any such period
plus seven times Consolidated Rental Payments for such period to (y)
Consolidated Adjusted EBITDA for such period plus Consolidated Rental
Payments for such period is less than 5.00:1.00.
The Pricing Reduction shall be determined with reference to the most recent
Pricing Certificate delivered by Borrower to Administrative Agent pursuant to
subsection 5.1(xi). Any Pricing Reduction shall become effective on the day
following the delivery of the relevant Pricing Certificate to Administrative
Agent and subject to the next succeeding sentence, the Pricing Reduction shall
remain in effect for the remainder of the term of this Agreement.
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 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 Rata Share" means, with respect to each Lender, the percentage
obtained by dividing the Loan Exposure of that Lender by the aggregate 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.
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"Proceedings" has the meaning assigned to that term in subsection
5.1(viii).
"Proceeds" has the meaning assigned to that term in subsection 2.4C(ii)(b).
"Projections" means the financial projections of Atlas and its Subsidiaries
delivered on or prior to the Initial Borrowing Date covering the five year
period ending on December 31, 2001.
"Refinancing" has the meaning assigned to that term in subsection 3.1R.
"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.
"Related Fund" means, with respect to any Lender that is a fund that
invests in loans, any other fund that invests in loans and is managed by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
"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 the
aggregate 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 Borrower
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 Borrower now or hereafter
outstanding and (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 Borrower now or hereafter outstanding.
"S&P" means Standard & Poor's Ratings Services.
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"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.
"Service Agreement" means the Service Agreement, dated as of September 5,
1997, between Atlas and Borrower.
"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.
"Spare Engines" shall mean nine General Electric CF6-50E2 engines with
manufacturer's serial numbers 530168, 517790, 517530, 517547, 455167, 517602,
517538, 517539, and 517544.
"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 there-
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26
of 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.
"Substitute Basis" has the meaning assigned to that term in subsection
2.6G.
"Syndication Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Syndication Agent.
"Syndication Date" means the date on which Agents have completed, in
Agents' determination, the primary syndication of Loans.
"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 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).
"Total Commitment" means the sum of the Commitments of the Lenders.
"Transaction" has the meaning assigned that term in subsection 3.1R.
"Transaction Documents" means the Amended Aircraft Credit Facility, any
bills of sale or certificates of transfer for each Aircraft and Spare Engines
(including bills of sale on AC Form 8050-2) delivered in connection with the
Transaction, the Leases, all documents relating to the Refinancing, and all
other agreements and documentation executed and delivered in connection with the
Transaction, including, without limitation, in connection with the Contribution.
"Uniform Commercial Code" or "UCC" means the Uniform Commercial Code (or
any similar or equivalent legislation) as in effect from time to time in the
applicable jurisdiction.
"United States Citizen" means a "citizen of the United States" within the
meaning of the Federal Aviation Act.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.
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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 Borrower herein set
forth, each Lender hereby severally agrees to make on the Initial Borrowing
Date, four Loans to Borrower in an aggregate amount not to exceed the Commitment
of such Lender. Each Loan of a Lender shall relate to one of the Aircraft and
certain Spare Engines designated in writing to relate to such Aircraft and shall
be in an amount equal to such Lender's Pro Rata Share on the Initial Borrowing
Date of the Maximum Loan Amount with respect to such Aircraft and related Spare
Engines. The Loans of all of the Lenders relating to one Aircraft and related
Spare Engines shall not exceed the Maximum Loan Amount for such Aircraft and
related Spare Engines and shall be made on the same day by the Lenders ratably
according to their respective Commitments. Once repaid, Loans borrowed hereunder
may not be reborrowed.
B. Borrowing Mechanics. (i) Each borrowing of Loans relating to a
particular Aircraft and related Spare Engines shall be made by the delivery of a
Notice of Borrowing by Borrower to Administrative Agent not later than 12:00
Noon (New York City time) on the third Business Day prior to the date of the
proposed borrowing. Administrative Agent shall give to each Lender prompt notice
thereof. Each such Notice of Borrowing shall be irrevocable and binding on
Borrower. Each such Notice of Borrowing shall be in the form of Exhibit I. The
Notice of Borrowing shall specify (i) the proposed borrowing date (which shall
be a Business Day), (ii) the amount of Loans requested and (iii) the Aircraft
and related Spare Engines to which the Loans relate. In lieu of delivering the
above described Notice of Borrowing, Borrower may
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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.
(ii) Neither Administrative Agent nor any Lender shall incur any liability
to Borrower 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 Borrower or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of the Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Borrower shall have effected the Loans hereunder. Borrower
shall notify Administrative Agent prior to the funding of the Loans in the event
that any of the matters to which Borrower is required to certify in the Notice
of Borrowing is no longer true and correct as of the Initial Borrowing Date and
the acceptance by Borrower of the proceeds of any Loans shall constitute a
recertification by Borrower as of the Initial Borrowing Date, as to the matters
to which Borrower is required to certify in the applicable Notice of Borrowing.
C. Disbursement of Funds. All 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 a 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
Loans available to Administrative Agent not later than 12:00 Noon (New York
time) on the Initial Borrowing 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 Initial Borrowing Date that such Lender does not intend to make available to
Administrative Agent the amount of such Lender's Loans so requested on the
Initial Borrowing Date, Administrative Agent may assume that such Lender has
made such amount available to Administrative Agent on the Initial Borrowing Date
and Administrative Agent may, in its sole discretion, but shall not be obligated
to, make available to Borrower a corresponding amount on the Initial Borrowing
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 the Initial Borrowing Date until the date
such amount is paid to Administrative Agent, at
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the customary rate set by Administrative Agent for the correction of errors
among banks for three Business Days. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent shall promptly notify Borrower and Borrower shall
immediately pay such corresponding amount to Administrative Agent together with
interest thereon, for each day from the Initial Borrowing Date until the date
such amount is paid to Administrative Agent, at the rate payable under this
Agreement. Nothing in this subsection 2.1C shall be deemed to relieve any Lender
from its obligation to fulfill its Commitment hereunder or to prejudice any
rights that Borrower may have against any Lender as a result of any default by
such Lender hereunder.
D. Notes. Borrower shall duly execute and deliver on the Initial Borrowing
Date to each Lender (or to Administrative Agent for that Lender) the Notes, each
substantially in the form of Exhibit II annexed hereto, to evidence that
Lender's Loans in respect of each Aircraft and related Spare Engines, in the
principal amount of such Lender's Pro Rata Share of the Maximum Loan Amount
relating to such Aircraft and related Spare Engines and with other appropriate
insertions (each a "Note" and collectively, the "Notes").
E. The Register.
(i) Administrative Agent shall maintain, at its address referred to in
subsection 9.8, a register (the "Register") for the recordation of the
names and addresses of Lenders and the Commitments and Loans of each Lender
from time to time and Administrative Agent shall record in the Register the
Commitment and the Loans from time to time of each Lender and each
repayment or prepayment in respect of the principal amount of the Loans of
each Lender. Such recordation shall be conclusive and binding on Borrower
and each Lender, absent manifest error; provided that failure to make any
such recordation, or any error in such recordation, shall not affect
Borrower's Obligations in respect of the applicable Loans. The Register
shall be available for inspection by Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(ii) Each Lender shall record on its internal records (including,
without limitation, the Notes held by such Lender) the amount of each Loan
made by it and each payment in respect thereof. Any such recordation shall
be conclusive and binding on Borrower, absent manifest error; provided that
failure to make any such recordation, or any error in such recordation,
shall not affect Borrower's Obligations in respect of the applicable Loans;
and provided further
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that in the event of any inconsistency between the Register and any
Lender's records, the recordations in the Register shall govern.
(iii) Borrower, 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 been 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 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.
(iv) Borrower hereby designates Administrative Agent to serve as
Borrower's agent solely for purposes of maintaining the Register as
provided in this subsection 2.1E, and Borrower 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.
2.2 Interest on the Loans.
A. Rate of Interest. (i) Subject to the provisions of Sections 2.6 and 2.7,
each Loan shall bear interest on the unpaid principal amount thereof from the
Initial Borrowing Date through maturity (whether by acceleration or otherwise)
at a rate determined by reference to the Adjusted Eurodollar Rate. The
applicable Interest Period for determining the rate of interest with respect to
the Loans shall be determined in accordance with subsection 2.2B.
(ii) Subject to the provisions of subsections 2.2D and 2.7, the Loans shall
bear interest through maturity at a per annum rate equal to the sum of the
Adjusted Eurodollar Rate plus the Applicable Margin.
The "Applicable Margin" for each Loan shall be 2.25% less the Pricing
Reduction, if any, in effect from time to time. Notwithstanding anything to the
contrary herein, each Loan shall bear interest initially at the rate of 9.75%
from the
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Initial Borrowing Date to but not including September 9, 1997 and on such date
each Loan shall bear interest through maturity as provided in this subsection
2.2A.
B. Interest Periods. In connection with each Loan, the interest period
("Interest Period") to be applicable to such Loan on and after September 9, 1997
shall be, (x) from September 9, 1997 until November 29, 1997, 81 days and (y)
immediately after the completion of the initial Interest Period three months,
provided that:
(i) the initial Interest Period for each Loan shall commence on the
Initial Borrowing Date and expire on November 29, 1997;
(ii) 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 shall extend beyond the Final Maturity Date;
(vi) no Interest Period shall extend beyond a date on which Borrower
is required to make a scheduled payment of principal of the Loans;
(vii) there shall be no more than one Interest Period at any time.
C. Interest Payments. Subject to the provisions of subsection 2.2D,
interest on each Loan shall be payable in arrears on the last day of each
Interest Period applicable to that Loan, upon any prepayment of Loans (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
D. 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 per-
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mitted by applicable law, any interest payments thereon not paid when due and
any fees and other amounts then due 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 1% per annum in excess of the sum of
the Base Rate as in effect from time to time and the Applicable Margin);
provided that, upon the expiration of the Interest Period in effect at the time
any such increase in interest rate is effective, such Loans shall thereupon bear
interest payable upon demand at a rate which is 1% per annum in excess of the
sum of the Base Rate as in effect from time to time and the Applicable Margin.
Payment or acceptance of the increased rates of interest provided for in this
subsection 2.2D 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.
E. 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 shall be included, and the date of payment of such Loan or the
expiration date of an Interest Period applicable to such Loan 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.
Borrower agrees to pay to Lenders and Agents such fees and in such amounts
and at such times as have been separately agreed in writing upon among Borrower
and Agents.
2.4 Repayments and Prepayments; General Provisions Regarding Payments.
A. Mandatory Reduction of Commitments. The Total Commitment (and the
Commitment of each Lender) shall terminate on the earlier of (x) the Initial
Borrowing Date, after giving effect to the incurrence of the Loans on such date
and (y) September 15, 1997.
B. Scheduled Repayments of Loans. Borrower shall make the following
scheduled payments on the Loans on each three month anniversary of November 29,
1997 commencing with the three month anniversary thereof: (i) the first two
scheduled
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principal payments shall be in the amount of $2,525,000; (ii) the next
succeeding 23 scheduled principal payments shall be in the amount of $5,650,000
and (iii) the final payment shall be in an amount equal to $50,000,000; provided
that such scheduled installments of principal of the Loans shall be reduced in
connection with any voluntary or mandatory prepayments of the Loans in
accordance with subsection 2.4C; and provided further, that the Loans and all
other amounts owed hereunder with respect to the Loans shall be paid in full no
later than the Final Maturity Date, and the final installment payable by
Borrower in respect of the Loans on such date shall be in an amount sufficient
to repay all amounts owing by Borrower under this Agreement with respect to the
Loans. Any payment pursuant to this subsection 2.4B will be applied ratably
among the Loans relating to all Aircraft and Spare Engines based on the
outstanding principal amount of each such Loan as compared to the total
outstanding principal amount of all Loans. If the date on which any scheduled
payment is due falls on a day that is not a Business Day, then such scheduled
repayment shall be made on the next succeeding Business Day; provided that, if
any such scheduled repayment would otherwise become due 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 scheduled repayment shall be made on the next
preceding Business Day.
C. Prepayments.
(i) Voluntary Prepayments. Borrower 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, the Loans on any
Business Day in whole or in part in an aggregate minimum amount of
$5,000,000 and integral multiples of $500,000 in excess of that amount;
provided, however, that Loans 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
2.4C(iii).
(ii) Mandatory Prepayments.
(a) Prepayments and Reductions from Asset Sales. No later than
the second Business Day following the date of receipt by Borrower of
Cash Proceeds of any Asset Sale, Borrower shall prepay, without
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premium or penalty (other than pursuant to subsection 2.6D), Loans in
an amount equal to the Net Cash Proceeds of such Asset Sale.
Concurrently with any prepayment of the Loans pursuant to this
subsection 2.4C(ii)(a), Borrower 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 Borrower shall, at any time after receipt
of Cash Proceeds of any Asset Sale requiring a prepayment pursuant to
this subsection 2.4C(ii)(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 2.4C(ii)(a),
Borrower shall promptly make an additional prepayment of the Loans, as
the case may be, in the manner described above in an amount equal to
the amount of any such deficit, and Borrower 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 2.4C(ii)(a) shall be applied as specified in subsection
2.4C(iii).
(b) Prepayments and Reductions Due to Insurance and Condemnation
Proceeds. Within 270 days of receipt by Borrower of any cash payments
under any of the casualty insurance policies covering damage to or
loss of property maintained pursuant to subsection 5.4 or otherwise
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 Borrower in connection with adjustment
and settlement thereof and in connection with the reinvestment of
proceeds permitted hereby, "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 Borrower in connection with adjustment and
settlement thereof and in connection with the reinvestment of proceeds
permitted hereby, "Condemnation Proceeds", and collectively with
Insurance Proceeds, "Proceeds") (other than proceeds applied pursuant
to subsection 2.4C(ii)(c)) and so long as at the time of receipt of
such proceeds there shall exist no Potential Event of Default or Event
of Default, Borrower may reinvest such Proceeds in property
substantially similar to the property so damaged or lost so long as
the Administrative Agent receives a first priority perfected security
interest in such property pursuant to documentation acceptable to the
Administrative Agent, the property is duly leased to Atlas pursuant to
the applicable Lease and the
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Administrative Agent receives all documents and opinions in connection
therewith which it may reasonably request, including without
limitation, an opinion from counsel that Borrower as lessor and the
collateral agent as the assignee under the Lease are entitled to the
benefits of Section 1110 of the Bankruptcy Code with respect to such
property. If 270 days after receipt of any such Proceeds, Borrower has
not reinvested such Proceeds as described above or if at the time of
receipt of such proceeds or at the time of reinvestment there shall
exist a Potential Event of Default or an Event of Default then
Borrower shall immediately prepay, without premium or penalty (other
than pursuant to subsection 2.6D), those Loans relating to the
Aircraft and related Spare Engines in respect of which such Proceeds
were received based on the outstanding principal amount of each Loan
as compared to the total outstanding principal amount of all Loans
relating to such Aircraft and related Spare Engines. Any amount of the
Proceeds remaining (a) after prepayment of the Loans described in the
immediately preceding sentence and/or (b) after being reinvested in
the manner described in the second preceding sentence shall be applied
ratably to the prepayment of Loans relating to all of the remaining
Aircraft and related Spare Engines based on the outstanding principal
amount of each such Loan as compared to the total outstanding
principal amount of all Loans relating to all of the remaining
Aircraft and related Spare Engines. Any such mandatory prepayments
shall be applied as specified in subsection 2.4C(iii). Until such time
as such proceeds are reinvested or applied to repay Loans, all such
proceeds shall be held by the Administrative Agent in a cash
collateral account with the Administrative Agent as security for the
Obligations pursuant to a cash collateral agreement in form and
substance satisfactory to the Administrative Agent and providing that
such proceeds may be invested in Cash or Cash Equivalents at the
direction of Borrower with any earnings thereon being for the account
of Borrower.
(c) Prepayments and Reductions Due to an Event of Loss. Following
an Event of Loss with respect to an Aircraft or a related Spare
Engine, Borrower shall prepay, without premium or penalty (other than
pursuant to subsection 2.6(D)) the outstanding principal amount of
Loans relating to the Aircraft and related Spare Engines which is the
subject of the Event of Loss; provided that Borrower shall not be
required to make a prepayment pursuant to this subsection 2.4C(ii)(c)
in the event that Borrower receives Insurance Proceeds or Condemnation
Proceeds in connection with such Event of Loss so long as at the time
of reinvestment there exists no Potential Event of Default or Event of
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Default, in which case, such proceeds may, within 270 days of receipt
of any such Proceeds, be reinvested in aircraft or spare engines
substantially similar to the Aircraft or Spare Engines which was the
subject of the Event of Loss so long as such replacement aircraft or
Spare Engines are duly leased to Atlas pursuant to the applicable
Lease or Leases and the Administrative Agent receives all documents
and opinions in connection therewith which it may reasonably request,
including, without limitation, an opinion from counsel of the Borrower
to the extent that the Borrower as lessor and Administrative Agent as
the assignee under the Lease are entitled to the benefits of Section
1110 of the Bankruptcy Code with respect to such property. To the
extent Insurance Proceeds or Condemnation Proceeds received upon the
occurrence of an Event of Loss with respect to an Aircraft or Spare
Engine are not reinvested in accordance with the preceding sentence,
then Borrower shall prepay, without premium or penalty (other than
pursuant to subsection 2.6D), those Loans relating to the Aircraft and
related Spare Engines in respect of which such Insurance Proceeds or
Condemnation Proceeds were received based on the outstanding principal
amount of each Loan as compared to the total outstanding principal
amount of all Loans relating to such Aircraft and related Spare
Engines. Any amount of the Proceeds remaining (a) after prepayment of
the Loan described in the immediately preceding sentence and/or (b)
after being reinvested in the manner described in the second preceding
sentence, shall be applied ratably to the prepayment of Loans relating
to all of the remaining Aircraft and related Spare Engines based on
the outstanding principal amount of each such Loan as compared to the
total outstanding principal amount of all Loans relating to all of the
remaining Aircraft and related Spare Engines. Any such mandatory
prepayments shall be applied as specified in subsection 2.4C(iii).
Until such time as such Proceeds are reinvested in replacement
aircraft or spare engines or applied to repay Loans, such proceeds
shall be held by the Administrative Agent in a cash collateral account
with the Administrative Agent as security for the Obligations pursuant
to a cash collateral agreement in form and substance satisfactory to
the Administrative Agent and providing that such proceeds may be
invested in Cash or Cash Equivalents at the direction of Borrower with
any earnings thereon being for the account of Borrower.
(d) Prepayments under Leases. On any date on which Borrower
receives any prepayments of rent or other amounts pursuant to the
terms of any Lease, Borrower shall prepay, without premium or
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penalty (other than pursuant to subsection 2.6), the outstanding
principal amount of Loans relating to the Aircraft and related Spare
Engines which is the subject of the Lease pursuant to which such
prepayments were made and to the extent that such payments are in
excess of the principal amount of Loans relating to such Aircraft and
related Spare Engines such excess proceeds shall be applied to make an
additional prepayment of Loans. All such additional prepayments of
Loans shall be applied ratably among the Loans relating to all of the
remaining Aircraft and related Spare Engines based on the amount of
each such Loan as compared to the total outstanding amount of all
Loans.
(iii) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of Loans and
Order of Maturity. Any voluntary prepayments pursuant to subsection
2.4C(i) shall be applied ratably among the Loans relating to all of
the Aircraft and related Spare Engines based on the outstanding
principal amount of each such Loan as compared to the total
outstanding principal amount of all Loans. All voluntary prepayments
of the Loans pursuant to subsection 2.4C(i) shall be applied pro rata
to all scheduled amortization payments.
(b) Application of Mandatory Prepayments of Loans. Any mandatory
prepayments of the Loans pursuant to subsection 2.4C(ii) shall be
applied ratably among the Loans relating to all of the Aircraft and
related Spare Engines based on the outstanding principal amount of
each such Loan as compared to the total outstanding principal amount
of all Loans; provided that in the event of a prepayment pursuant to
subsection 2.4C(ii)(a) such prepayment shall be applied first to the
Loans relating to such Aircraft and related Spare Engines which is the
subject of the Asset Sale on a pro rata basis based on the outstanding
principal amount of each Loan as compared to the total outstanding
principal amount of all Loans relating to such Aircraft and related
Spare Engines and second, ratably among the Loans relating to all
other Aircraft and related Spare Engines on a pro rata basis based on
the outstanding principal amount of the Loan being prepaid as compared
to the total outstanding principal amount of all Loans relating to all
other Aircraft and related Spare Engines. Any mandatory prepayments of
the Loans pursuant to subsection 2.4C(ii)(b) or (c) shall be applied
to the Loans relating to the particular Aircraft and related Spare
Engines, retained by Borrower and/or applied ratably among the Loans
relating to all other
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Aircraft and related Spare Engines in accordance with such sections.
All mandatory prepayments of the Loans pursuant to subsection 2.4C(ii)
shall be applied to scheduled amortization payments in inverse order
of maturity.
D. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Borrower 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 Borrower on the next succeeding Business Day.
Borrower 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).
(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 Loans shall be apportioned among all outstanding
Loans to which such payments relate, in each case proportionately to
Lenders' respective Pro Rata Share. Administrative Agent shall promptly
distribute to each Lender, at its address set forth below its name on the
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.
(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.
(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
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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 Borrower 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. Application of Proceeds. The proceeds of the Loans shall be applied
solely (I)(x) to consummate the Refinancing and (y) to pay fees and expenses
related to the Refinancing and the other transactions contemplated hereby and
(II) to the extent there are proceeds remaining after application pursuant to
preceding clause (I), for general corporate purposes, including the payment of
dividends to Atlas permitted hereunder.
B. Margin Regulations. No portion of the proceeds of any borrowing under
this Agreement shall be used by Borrower 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 Loans.
Notwithstanding any other provisions of this Agreement to the contrary, the
following provisions shall govern with respect to 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 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 Borrower 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 Loans, that by reason of circumstances
affecting the interbank
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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 Borrower
and each Lender of such determination, whereupon (i) no Loans may be incurred
until such time as Administrative Agent notifies Borrower and Lenders that the
circumstances giving rise to such notice no longer exist or until Borrower,
Administrative Agent and the Lenders agree upon a Substitute Basis in accordance
with Section 2.6G and (ii) the rate of interest applicable to any Affected Loans
then outstanding shall be determined in accordance with Section 2.6G.
C. Illegality or Impracticability of 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 Borrower and Administrative Agent) that the making,
maintaining or continuation of its 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,
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 Borrower and Administrative Agent of such determination
(which notice Administrative Agent shall promptly transmit to each other
Lender). Thereafter (a) the obligation of the Affected Lender to make Loans
shall be suspended until such notice shall be withdrawn by the Affected Lender,
(b) the Affected Lender's obligation to maintain its outstanding Loans (the
"Affected Loans") shall be suspended until such notice shall be withdrawn by the
Affected Lender, and (c) the parties shall follow the procedures set forth in
Section 2.6G with respect to the Affected Loans so long as, if following such
procedures the maintaining of such Loans is not unlawful. Notwithstanding the
foregoing, to the extent a determination by an Affected Lender as described
above relates to a borrowing then being requested by Borrower subject to the
provisions of subsection 2.6D, Borrower shall have the option, subject to the
provisions of subsection 2.6D, to rescind such borrowing 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
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than an Affected Lender to make or maintain Loans in accordance with the terms
of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Borrower 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 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 Loan does not occur on a date specified therefor in a Notice
of Borrowing or a telephonic request for borrowing, (ii) if any prepayment or
other principal payment 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 Loans is
not made on any date specified in a notice of prepayment given by Borrower, or
(iv) as a consequence of any other default by Borrower in the repayment of its
Loans when required by the terms of this Agreement.
E. Booking of Loans. Any Lender may make, carry or transfer 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 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 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 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 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. Substitute Basis. During the 30 days following the date of any notice
given to Borrower pursuant to subsections 2.6B and 2.6C, Administrative Agent,
the Lenders and Borrower shall negotiate in good faith in order to arrive at a
mutually acceptable alternative basis for determining the interest rate from
time to time applicable to the affected Loans (the "Substitute Basis"). If
within the 30 days following the date of any such notice to Borrower,
Administrative Agent, the Lenders and Borrower shall agree upon a Substitute
Basis, such Substitute Basis shall be retroactive
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to and effective from the first day of the then current Interest Period until
and including the last day of such Interest Period. If after 30 days from the
date of such notice, the Lenders and Borrower shall have failed to agree upon a
Substitute Basis, then each Lender shall certify in writing to Borrower through
Administrative Agent (such certification to be conclusive and binding on all of
the parties hereto absent manifest error) the interest rate at which such Lender
is prepared to make or maintain its affected Loan for such Interest Period, it
being understood that such Lender's interest rate shall be at a rate per annum
equal to the sum of the Applicable Margin plus a rate which adequately and
fairly reflects the cost to such Lender of obtaining the funds necessary to
maintain its affected Loan for such Interest Period, such interest rate to be
retroactive to and effective from the first day of such Interest Period. If no
Substitute Basis is established, upon receipt of notice of the interest rates at
which the Lenders are prepared to make or maintain their respective affected
Loans, Borrower shall have the right exercisable upon ten Business Days' prior
notice to any Lender through Administrative Agent (A) to continue to borrow
Loans at the interest rates so advised by the respective Lenders (as such rates
may be modified, from time to time, at the outset of each subsequent Interest
Period) or (B) to prepay in full the Affected Loans of any Lender, together with
accrued interest thereon at the interest rate certified in writing by such
Lender as provided above, whereupon such Affected Loans shall become due and
payable on the date specified by Borrower in such notice. In determining the
actual interest rate per annum to be charged on any Loan, the Substitute Basis
or the interest rate advised by the respective Lenders to apply to a Loan in
accordance with the provisions of this subsection 2.6G shall be increased to the
rate per annum obtained by dividing the Substitute Basis or such advised
interest rate by a percentage equal to 100% minus the then stated maximum rate
of all required reserve requirements under applicable law (including any
marginal, emergency, supplemental, special or other reserves) and applicable on
the date of determination of such interest rate to any member bank of the
Federal Reserve System in respect of "Eurocurrency liabilities" as defined in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time (or any successor category of liabilities under
Regulation D).
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
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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 change in the rate of 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 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 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, Borrower 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 Borrower (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 Borrower under
this Agreement and the other Loan Documents shall be paid free and clear
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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 any jurisdiction or by any political subdivision or taxing
authority thereof or therein with respect to such payments.
(ii) Grossing-up of Payments. If Borrower 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 Borrower to Administrative
Agent or any Lender under any of the Loan Documents:
(a) Borrower shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as
Borrower becomes aware of it;
(b) Borrower 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 Borrower) 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 Borrower 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;
(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, Borrower 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; and
(e) if any amounts are payable in respect of Taxes pursuant
to subsection 2.7B(ii)(c), Borrower agrees to reimburse each
Lender, upon the written request of such Lender, for taxes
imposed on or measured by the overall net income of such Lender
and for any
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withholding of taxes as such Lender shall determine are payable
by, or withheld from, such Lender, in respect of such amounts so
paid to or on behalf of such Lender pursuant to subsection
2.7B(ii)(c), and in respect of any amounts paid to or on behalf
of such Lender pursuant to this subsection 2.7B(ii)(e).
(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 Borrower, on or prior to the Effective
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
Borrower or Administrative Agent (each in the reasonable exercise
of its discretion), (1) two original copies of Internal Revenue
Service 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, certifi-
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▇▇▇▇▇ 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 Borrower
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 Borrower of its
inability to deliver any such forms, certificates or other
evidence in which case such Lender shall not be required to
deliver any such forms, certificates or other evidence pursuant
to this subsection 2.7B(iii)(b).
(c) Borrower shall not be required to pay any additional
amount to any Non-US Lender under clause (c) or (e) 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 Initial
Borrowing 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 Borrower of its obligation to pay any additional amounts
pursuant to clause (c) or (e) 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, 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).
(iv) If Borrower pays any additional amount under this subsection
2.7B to a Lender and such Lender determines in its sole discretion
that it has actually received or realized in connection therewith any
refund or any reduction of, or credit against, its Tax liabilities in
or with respect to the taxable year in which the additional amount is
paid, such Lender shall pay to Borrower an amount that Lender shall,
in its sole discretion, determine is equal to the net benefit, after
tax, which was obtained by the Lender in such year as a consequence of
such refund, reduction or credit.
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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 ten Business Days after receipt by Borrower from such Lender of the
statement referred to in the next sentence, Borrower 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 Borrower (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 Borrower is required under the
provisions of subsection 2.6C or this subsection 2.7 to make payments in a
material amount to any Lender or in the event any Lender fails to lend to
Borrower in accordance with this Agreement, Borrower 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) Borrower shall pay that Lender all
principal, interest and fees and other amounts (including, without limitation,
amounts, if any, owed under subsection 2.6C or this subsection 2.7) owed to such
Lender through such date of termination, (ii) another financial institution
satisfactory to Borrower 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.
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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
Commitment of such Lender or the Affected Loan 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 Borrower 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 Borrower pursuant to this subsection 2.8
(setting forth in reasonable detail the basis for requesting such amount)
submitted by such Lender to Borrower (with a copy to Administrative Agent) shall
be conclusive absent manifest error.
SECTION 3.
CONDITIONS TO LOANS
3.1 Conditions to Loans.
The obligations of Lenders to make the Loans on the Initial Borrowing Date
are subject to prior or concurrent satisfaction of the following conditions:
A. Borrower and Atlas Documents. On or before the Initial Borrowing Date,
Borrower 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 Effective Date:
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(i) certified copies of the certificate or articles of incorporation
of Borrower and Atlas, together with a good standing certificate from the
Secretary of State of the State of Delaware and each other state in which
such corporation 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 Effective Date;
(ii) copies of Bylaws of Borrower and Atlas, certified as of the
Effective Date by its corporate secretary or an assistant secretary;
(iii) resolutions of Board of Directors of Borrower and Atlas
approving and authorizing the execution, delivery and performance of this
Agreement, the other Loan Documents and the Transaction Documents (to the
extent such Person is a party thereto), certified as of the Effective Date
by such Person's corporate secretary or an assistant secretary as being in
full force and effect without modification or amendment;
(iv) signature and incumbency certificates of officers of Borrower and
Atlas executing this Agreement and the other Loan Documents;
(v) executed originals of this Agreement, the Notes (duly executed in
accordance with this Agreement) and the other Loan Documents, including
Aircraft Chattel Mortgages with respect to all of the Aircraft and Spare
Engines; and
(vi) such other documents as Administrative Agent may reasonably
request.
B. Aircraft Documents. With respect to each Aircraft and related Spare
Engines, the following documents shall have been duly authorized, executed and
delivered by the respective parties thereto, shall each be reasonably
satisfactory in form and substance to the Lenders and Agents and shall be in
full force and effect, and copies shall have been delivered to Administrative
Agent: all documents, including without limitation, any bills of sale,
certificates of transfer and bills of sale on AC Form 8050-2 evidencing the
conveyance of title of the Aircraft and Spare Engines from Atlas to Borrower and
such other evidence as Agents shall request confirming that Borrower has good
and valid title to each Aircraft and Spare Engine and that all registrations and
recordings necessary to evidence such title have been made, including, without
limitation, all recordings with the FAA to register the Aircraft in the name of
Borrower.
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C. Notice of Borrowing. Prior to the making of the Loans, Administrative
Agent shall have received such Notices of Borrowing as are required by
subsection 2.1B.
D. Necessary Consents. Borrower 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 Borrower, and each of
the foregoing shall be in full force and effect and in form and substance
satisfactory to Administrative Agent.
E. Aircraft Chattel Mortgage. Administrative Agent shall have received a
copy of a first priority Aircraft Chattel Mortgage relating to each Aircraft and
the related Spare Engines, duly executed by Borrower, in substantially the form
of Exhibit IX hereto which Aircraft Chattel Mortgage provides a first priority
security interest in the Collateral for the benefit of the Lenders, securing all
the Obligations, together with:
(i) executed copies of proper financing statements to be filed under
the UCC in all jurisdictions where Administrative Agent may deem necessary
or desirable in order to perfect the security interests created by the
Aircraft Chattel Mortgages;
(ii) evidence of the completion of all recordings and filings with
respect to the Collateral that Administrative Agent may deem necessary or
desirable in order to perfect the security interest created by the Aircraft
Chattel Mortgages including, without limitation, all filings with the FAA;
and
(iii) evidence that all other actions necessary or, in the reasonable
opinion of Administrative Agent, desirable to establish, preserve and
perfect the first priority security interests created by the Aircraft
Chattel Mortgages in all Aircraft and Spare Engines have been taken
(including all FAA filings).
F. Fairness Opinion. On or prior to the Initial Borrowing Date, Borrower
shall have delivered or shall have caused to be delivered to Administrative
Agent a fairness opinion from BT Alex. ▇▇▇▇▇ Incorporated stating that the
Transaction is on terms no less favorable to Atlas or the Borrower than those
which could have been obtained in an arm's length transaction with unrelated
third parties.
G. Financial Condition Certificate. Each of Borrower and Atlas shall have
delivered to Administrative Agent a Financial Condition Certificate dated the
Initial Borrowing Date, substantially in the form annexed hereto as Exhibit VII
and Exhibit VIIA respectively, with appropriate attachments demonstrating that,
after giving effect
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to the consummation of the financing transactions contemplated hereby, each of
Borrower and Atlas and its Subsidiaries is Solvent.
H. Opinions of Borrower's Counsel. Lenders and their respective counsel
shall have received (i) one or more favorable written opinions of ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel for Borrower, in form and substance reasonably satisfactory
to Agents and their counsel, dated as of the Initial Borrowing Date and setting
forth substantially the matters in the opinions designated in Exhibit IVA
annexed hereto and as to such other matters as Administrative Agent acting on
behalf of Lenders may reasonably request, (ii) an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ regarding Section 1110 of the Bankruptcy Code, dated the Initial
Borrowing Date and setting forth substantially the matters in the opinions
designated in Exhibit IVB annexed hereto and (iii) an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ regarding certain bankruptcy matters other than those covered in the
opinion referred to in clause (ii) above, dated the Initial Borrowing Date and
setting forth substantially the matters in the opinions designated in Exhibit
IVC annexed hereto.
I. Opinion of Counsel. Lenders and their respective counsel shall have
received executed copies of one or more favorable written opinions of counsel of
Atlas and Borrower, in form and substance reasonably satisfactory to Agents and
their counsel, dated the Initial Borrowing Date, and setting forth substantially
the matters in the opinions designated in Exhibit IVD annexed hereto.
J. Atlas Credit Agreement; Amended Leases. The Amended Aircraft Credit
Facility and the AFL I First Amendment shall be effective and shall be in form
and substance satisfactory to Agents and Lenders so as to allow, according to
its terms, the Transaction and the Refinancing to be consummated.
K. Opinions of FAA Counsel. Lenders and their respective counsel shall have
received originally executed copies of one or more favorable written opinions of
FAA counsel in form and substance satisfactory to Agents and their counsel,
dated the Initial Borrowing Date, and setting forth substantially the matters in
the opinions designated in Exhibit IVE annexed hereto.
L. Fees. Borrower shall have paid to Agents, for distribution (as
appropriate) to Agents and Lenders, the fees payable on the Initial Borrowing
Date referred to in subsection 2.3.
M. Financial Statements. On or before the Initial Borrowing Date,
Administrative Agent shall have received from Borrower (i) an audited
consolidated and consolidating balance sheet of Atlas and its Subsidiaries as at
December 31, 1996, and
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the related consolidated and consolidating statements of income, stockholders'
equity and cash flows of Atlas and its Subsidiaries for such fiscal year,
accompanied by an opinion of a nationally recognized firm of independent public
accountants and (ii) the unaudited consolidated and consolidating balance sheet
of Atlas and its Subsidiaries as at June 30, 1997 and the related unaudited
consolidated and consolidating statements of income, stockholders' equity and
cash flows of Atlas and its Subsidiaries for the three-month period then ended
and (iii) the Projections, which financial statements and Projections shall be
in form and substance reasonably satisfactory to Agents.
N. Evidence of Insurance. Borrower 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 Administrative Agent and Lenders as additional insured under the
liability policies of Borrower and a broker's report from Borrower'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.
O. No Material Adverse Effect. Since June 30, 1997, no Material Adverse
Effect (in the reasonable opinion of the Agents) shall have occurred.
P. Representations and Warranties; Performance of Agreements. On the
Initial Borrowing Date, (i) there shall exist no Potential Event of Default or
Event of Default and (ii) all representations and warranties in Section 4 hereof
are true, correct and complete in all material respects on and as of the Initial
Borrowing Date to the same extent as though made on and as of that date and the
Borrower 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 the Initial Borrowing Date except as otherwise
disclosed to and agreed to in writing by Agents and Requisite Lenders and
Borrower shall have delivered to Administrative Agent an Officer's Certificate,
in form and substance, satisfactory to Agents, to that effect.
Q. Compliance Certificate. Borrower shall have delivered to Administrative
Agent a Compliance Certificate dated the Initial Borrowing Date, substantially
in the form annexed hereto as Exhibit III.
R. Transaction; Refinancing. On or prior to the Initial Borrowing Date, the
following shall have occurred: (i) Atlas shall contribute to Borrower each of
the Aircraft and Spare Engines subject to the Aircraft Obligations (the
"Contribution"); (ii) Borrower shall lease each of the Aircraft and the related
Spare Engines to Atlas via
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the four Leases; (iii) all Aircraft Obligations shall have been indefeasibly
repaid in full from, among other sources, the proceeds of the borrowing
hereunder and (iv) all security interests and Liens encumbering the Aircraft or
any part thereof or the Spare Engines or any other assets of Borrower shall be
terminated and released (the actions taken in clauses (iii) and (iv)
collectively, the "Refinancing", and the actions taken in clauses (i) through
(iv) together with the incurrence of Loans hereunder collectively, the
"Transaction"). The Lenders shall have received true and correct copies of all
of the Transaction Documents, including, without limitation, all documentation
entered into in connection with the Contribution and the Leases, which Leases
shall be substantially in the form of Exhibit VIII annexed hereto and all terms
and conditions thereof shall be satisfactory to Agents (including, with respect
to the Leases, their terms, rental schedules, covenants, events of default and
remedies). All of the Transaction Documents shall have been duly executed and
delivered by all parties thereto, and shall be in full force and effect. Each of
the conditions precedent to the consummation of the Transaction set forth in the
Transaction Documents shall have been satisfied or waived, all to the
satisfaction of Agents, and on or prior to the Initial Borrowing Date, the
Transaction shall have been consummated in accordance with the Transaction
Documents and all applicable laws, rules and regulations.
S. 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 Agents, acting
on behalf of Lenders, and their counsel shall be satisfactory in form and
substance to Agents and such counsel, and Administrative Agent and such counsel
shall have received all such counterpart originals or certified copies of such
documents as Administrative Agent may reasonably request.
T. Appraisals. Borrower shall have delivered to Administrative Agent
appraisals from two Approved Appraisers, in form and substance satisfactory to
the Lenders, which appraisals shall demonstrate to the Lenders' satisfaction
that the ratio of the Total Commitment to the Appraised Value of the Aircraft
and the Spare Engines does not exceed 80% and that the terms of the Lease,
including, without limitation, rental rates, economic life and residual value,
are at fair market value.
U. FAA Certification and Title. Agents shall have received evidence
satisfactory to it to the effect that Atlas is an air carrier certificated under
Sections 401 and 604(b) of the Federal Aviation Act and with respect to each
Aircraft, Administrative Agent shall received evidence that (i) each of the
Aircraft has been registered with and duly certified by the FAA as to type and
airworthiness in the name of Borrower and Administrative Agent shall have
received a copy of such certification and evidence satisfactory to the Lenders
that each Engine and each Spare Engine is
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being maintained in accordance with an FAA-approved or substantially similar
program and (ii) Borrower shall have good and marketable title to and a valid
ownership interest in the Collateral, including the Aircraft and each Spare
Engine, free and clear of all Liens other than Liens permitted by subsection
6.2.
V. Bankruptcy-Remote Subsidiary. Agents and Lenders shall be satisfied that
Borrower is a bankruptcy-remote Subsidiary of Atlas and that the certificate of
incorporation contains provisions under which the Borrower may not commence a
voluntary bankruptcy proceeding without the affirmative vote of all directors.
SECTION 4.
BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, Borrower represents and warrants to each Lender, after giving effect to
the Transaction consummated on the Initial Borrowing Date, that the following
statements are true, correct and complete:
4.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Borrower 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 and by the Transaction Documents.
B. Qualification and Good Standing. Borrower 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.
C. Subsidiaries. Borrower has no Subsidiaries.
D. Collateral Documents. The security interests created in favor of
Administrative Agent under the Collateral Documents will at all times from and
after the Initial Borrowing Date constitute, as security for the obligations
purported to be secured thereby, a legal, valid and enforceable first priority
perfected security interest
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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. Borrower has good and marketable title to its
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 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 Initial Borrowing 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 and the Transaction Documents have been duly authorized by
all necessary corporate action on the part of Borrower.
B. No Conflict. The execution, delivery and performance by Borrower of the
Loan Documents and the Transaction Documents and the consummation of the
Transaction and 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 Borrower, the Certificate or Articles of Incorporation
or Bylaws of Borrower or any order, judgment or decree of any court or other
agency of government binding on Borrower, (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 material Contractual Obligation of
Borrower, including the Pass Through Trust Documents and the Amended Aircraft
Credit Facility, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Borrower (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 Borrower, except
for such approvals or consents which will be obtained on or before the Initial
Borrowing Date, disclosed in writing to Lenders and the terms and conditions of
which are acceptable to the Administrative Agent and the Lenders.
C. Governmental Consents. The execution, delivery and performance by
Borrower of the Loan Documents and the Transaction Documents and the
consummation of the Transaction and the transactions contemplated by the
Transaction Documents do not and will not require any registration with, consent
or approval of, or notice to,
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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 and the Transaction
Documents has been duly executed and delivered by Borrower and is the legally
valid and binding obligation of Borrower, enforceable against Borrower 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.
4.3 Financial Condition.
A. Borrower has heretofore delivered to Lenders the following financial
statements and information: (i) the audited consolidated and consolidating
balance sheets of Atlas and its Subsidiaries as at December 31, 1996, and the
related consolidated and consolidating statements of income, stockholders'
equity and cash flows of Atlas and its Subsidiaries for such fiscal year and
(ii) the unaudited consolidated and consolidating balance sheets of Atlas and
its Subsidiaries as at June 30, 1997 and the related unaudited consolidated and
consolidating statements of income, stockholders' equity and cash flows of Atlas
and its Subsidiaries for the three-month period then ended and (iii) the
Projections. 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. Atlas does not 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 Atlas or any of its Subsidiaries.
B. Except as fully disclosed in the financial statements delivered pursuant
to Section 4.3A, there were as of the Effective Date no liabilities or
obligations with respect to Atlas and its Subsidiaries or to Borrower of any
nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) which, either individually or in aggregate, could reasonably
be expected to be material to Atlas and its Subsidiaries taken as a whole but
excluding Borrower, or to Borrower on a stand-alone basis. As of the Effective
Date, neither Atlas nor Borrower knows of any basis for the
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assertion against it or, in the case of Atlas, against it or its Subsidiaries,
of any liability or obligation of any nature whatsoever that is not fully
disclosed in the financial statements delivered pursuant to Section 4.3A which,
either individually or in the aggregate, could reasonably be expected to be
material to Atlas and its Subsidiaries taken as a whole but excluding Borrower,
or to Borrower on a stand-alone basis.
4.4 No Material Adverse Change; No Restricted Junior Payments.
(i) Since June 30, 1997, no event or change has occurred that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect.
(ii) Since June 30, 1997, Borrower has not 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. Borrower has good, sufficient and legal title to all of its properties
and assets, including without limitation, all Aircraft and Spare Engines. Except
as permitted by this Agreement, all such properties and assets are free and
clear of Liens.
B. Each Aircraft 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 and Spare Engine has a rated takeoff
horsepower greater than 750 horsepower or the equivalent of such horsepower.
Each Aircraft is registered with the FAA in the name of Borrower and Atlas has
authority to operate such Aircraft.
4.6 Litigation, Adverse Facts.
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Borrower) 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 Borrower, threatened against or
affecting Borrower or any property of Borrower or with respect to the
Transaction that could reasonably be expected to result in a Material Adverse
Effect to Borrower's knowledge. Borrower is not (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,
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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 Borrower required to be filed by it have been timely filed, and all
taxes, assessments, fees and other governmental charges upon Borrower and upon
its respective properties, assets, income, businesses and franchises which are
due and payable have been paid when due and payable. Borrower does not know of
any proposed tax assessment against it which is not being actively contested by
it 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 Borrower. There are no agreements with respect to taxes
between Borrower and any tax agency or authority.
4.8 Performance of Agreements.
Borrower is not 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 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.
4.9 Governmental Regulation.
Borrower is not 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. Borrower is not 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. No part of the proceeds of any Loan will be used (or has been used) to
purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any margin Stock. Neither the making of any Loan nor the
use of the
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proceeds thereof will violate or be inconsistent with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System.
4.11 Compliance with ERISA.
Borrower has no qualified retirement plans under Section 401(k) of the
Internal Revenue Code nor medical benefit plans. Borrower has never sponsored,
maintained, contributed to (or had an obligation to contribute 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 Borrower
hereby indemnifies Lenders 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 Borrower are, and have been to the best
of Borrower's knowledge, in compliance in all material respects with all
applicable Environmental Laws.
B. There are no, and have been no, conditions, occurrences, or Hazardous
Materials Activity, (a) arising at any facilities owned or operated by Borrower
or (b) arising in connection with the operations of Borrower (including the
transportation of Hazardous Materials), which conditions, occurrences or
Hazardous Materials Activity could reasonably be expected to form the basis of
an Environmental Claim against Borrower and which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
C. To the best of Borrower's knowledge, there are no pending or threatened
Environmental Claims against Borrower, and Borrower has received no written
notices, inquiries, or requests for information with respect to any
Environmental Claims.
4.14 Employee Matters.
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There is no strike or work stoppage in existence or to Borrower's knowledge
threatened involving Borrower that could reasonably be expected to have a
Material Adverse Effect.
4.15 Solvency.
Borrower is and, upon the incurrence of any Obligations by Borrower on any
date on which this representation is made, will be, Solvent.
4.16 Disclosure.
No representation or warranty of Borrower contained in any Loan Document,
any Transaction Document or in any other document, certificate or written
statement furnished to Lenders by or on behalf of Borrower 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
Borrower, 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. The Projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Borrower to be reasonable at the time
made, it being recognized by Lenders that the Projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by the Projections may differ from the projected results. There
are no facts known (or which should upon the reasonable exercise of diligence be
known) to Borrower (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.
4.17 Section 1110.
(i) Borrower, as Lessor under the Leases, is entitled to the protection of
Section 1110 of the Bankruptcy Code with respect to each Aircraft and Spare
Engine in the event of a case under Chapter 11 of the Bankruptcy Code in which
Lessee is a debtor.
(ii) Administrative Agent will be entitled to the protection of Section
1110 of the Bankruptcy Code with respect to each Aircraft and Spare Engine in
the event of a case under Chapter 11 of the Bankruptcy Code in which Lessee is a
debtor upon the exercise of Administrative Agent's remedies under each Aircraft
Chattel Mortgage.
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(iii) All assumptions made by the appraisers with respect to the Aircraft
and Spare Engines in the appraisals delivered to Administrative Agent which
would affect Approved Appraiser's determinations as set forth in such appraisal
shall be true and correct as of the Initial Borrowing Date with respect to each
Aircraft and Spare Engine.
4.18 Special Purpose Corporation.
Borrower was formed solely for the purpose of effecting the Transaction,
and except in connection therewith (and as contemplated by this Agreement) has
no assets or liabilities.
4.19 Transaction.
The Transaction has been consummated in accordance with applicable law and
the Transaction Documents.
4.20 Representations and Warranties in Documents.
All representations and warranties of Borrower set forth in the Loan
Documents and the Transaction Documents were true and correct in all material
respects as of the time such representations and warranties were made and shall
be true and correct in all material respects as of the Initial Borrowing Date as
if such representations and warranties were made on and as of such date, unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date.
4.21 Leases.
The Leases are in full force and effect and are leases for U.S. federal
income tax purposes of Lessor and Lessee thereunder.
SECTION 5.
BORROWER'S AFFIRMATIVE COVENANTS
Borrower 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, Borrower shall perform all covenants in this Section 5.
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5.1 Financial Statements and Other Reports.
Borrower will maintain a system of accounting established and administered
in accordance with sound business practices to permit preparation of financial
statements in conformity with GAAP. Borrower will deliver to Administrative
Agent and Lenders:
(i) Quarterly Financials: as soon as available, and in any event
within 45 days after the end of each fiscal quarter of each Fiscal Year,
the balance sheet of Borrower as at the end of such fiscal quarter and the
related statements of income, stockholders' equity and cash flows of
Borrower 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, if applicable, in
reasonable detail and certified by the chief financial officer of Borrower
that they fairly present the financial condition of Borrower as at the
dates indicated and the results of its operations and its cash flows for
the periods indicated, subject to changes resulting from audit and normal
year-end adjustments.
(ii) Year-End Financials: as soon as available, and in any event
within 90 days after the end of each Fiscal Year, (a) the balance sheet of
Borrower as at the end of such Fiscal Year and the related statements of
income, stockholders' equity and cash flows of Borrower for such Fiscal
Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year, if applicable, in reasonable detail
and certified by the chief financial officer of Borrower that they fairly
present the financial condition of Borrower as at the dates indicated and
the results of their operations and their cash flows for the periods
indicated, and (b) in the case of such financial statements, a report
thereon of independent certified public accountants of recognized national
standing selected by Borrower and satisfactory to Agents, which report
shall be unqualified, shall express no doubts about the ability of Borrower
to continue as a going concern, and shall state that such financial
statements fairly present the financial position of Borrower 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 financial statements has been made in accordance with
generally accepted auditing standards;
(iii) Officers' and Compliance Certificates: together with each
delivery of financial statements of Borrower pursuant to subdivisions (i)
and (ii) above
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after the Effective Date, (a) an Officers' Certificate of Borrower 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 Borrower 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 Borrower 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 applicable
quarterly and annual accounting periods with the restrictions contained in
Section 6;
(iv) Notices under Leases: within 3 Business Days, all notices and
other information or documents delivered or received under any of the
Leases by Lessor pursuant to Section 19 of the Leases, including, without
limitation, all additional financial statements and reports delivered
pursuant to Section 6(a) of the Leases;
(v) Accountants' Certification: together with each delivery of
financial statements of Borrower pursuant to subdivision (ii) 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 (iii) above is not
correct or that the matters set forth in the Compliance Certificates
delivered therewith pursuant to clause (b) of subdivision (iii) above for
the applicable Fiscal Year are not stated in accordance with the terms of
this Agreement;
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(vi) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Borrower by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Borrower made by such accountants, including, without
limitation, any comment letter submitted by such accountants to management
in connection with their annual audit;
(vii) Events of Default, etc.: promptly upon any officer of Borrower
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 Borrower or taken
any other action with respect to a claimed default or event or condition of
the type referred to in subsection 7.2, or (c) 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 Borrower has taken, is taking
and proposes to take with respect thereto;
(viii) Litigation or Other Proceedings: (a) promptly upon any officer
of Borrower 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 Borrower or any property of Borrower (collectively,
"Proceedings") not previously disclosed in writing by Borrower 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
(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 Borrower to enable Lenders and their counsel to evaluate such
matters; and (b) within twenty days after the end of each fiscal quarter of
Borrower, a schedule of all Proceedings involving an alleged liability of, or
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claims against or affecting, Borrower equal to or greater than $1,000,000 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;
(ix) 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 Borrower and all material insurance
coverage planned to be maintained by Borrower in the immediately succeeding
Fiscal Year;
(x) Environmental Audits and Reports: as soon as practicable following
receipt thereof, copies of all environmental audits and reports, whether
prepared by personnel of Borrower or by independent consultants, with
respect to significant environmental matters or which relate to an
Environmental Claim which could result in a Material Adverse Effect;
(xi) Pricing Certificate: in the event that Borrower believes it is
entitled to a Pricing Reduction, consolidated financial statements of Atlas
and its Subsidiaries for the most recently ended four fiscal quarter period
(which shall be audited in the case of the financial statements for
year-end) and a certificate setting forth the calculations necessary to
demonstrate Borrower's entitlement to a Pricing Reduction.
(xii) Other Information: with reasonable promptness, such other
information and data with respect to Borrower or Atlas, as the case may be,
as from time to time may be reasonably requested by any Lender.
5.2 Corporate Existence.
Borrower will, at all times preserve and keep in full force and effect its
corporate existence and all rights and franchises material to its business.
Borrower will at all times maintain its corporate existence as a United States
Citizen.
5.3 Payment of Taxes and Claims; Tax Consolidation.
A. Borrower will 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
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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 Borrower.
B. Borrower will not file or consent to the filing of any consolidated
federal income tax return with any Person other than the affiliate group of
which Atlas is the parent corporation.
5.4 Maintenance of Properties; Insurance.
Borrower will 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 Borrower and from time to time will make or
cause to be made all appropriate repairs, renewals and replacements thereof.
Borrower will maintain or cause to be maintained, with financially sound and
reputable insurers, insurance with respect to its properties and business
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 Borrower will, with respect to each Aircraft and Spare
Engine, maintain the insurance specified in the Aircraft Chattel Mortgage with
respect to such Aircraft or Spare Engine.
5.5 Inspection; Lender Meeting.
Borrower will permit any authorized representatives designated by any
Lender to visit and inspect any of the properties of Borrower, 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 Borrower
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 Borrower's business, as reasonably determined by Borrower. Without
in any way limiting the foregoing, Borrower will, upon the request of Agents or
Requisite Lenders, participate in a meeting of Agents and Lenders once during
each Fiscal Year to be held at Borrower's corporate offices (or such other
location as may be agreed to by Borrower and Agents) at such time as may be
agreed to by Borrower and Agents.
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5.6 Compliance with Laws, etc.
Borrower will 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. Borrower shall not conduct, and
shall not permit the conduct of, any Hazardous Materials Activity at any other
location which could reasonably be expected to form the basis of an
Environmental Claim against Borrower and which could reasonably be expected to
have a Material Adverse Effect.
5.7 Environmental Indemnity.
Borrower agrees to indemnify, defend, and hold harmless Agents and Lenders,
and the officers, directors, employees, agents and affiliates of Agents and
Lenders from and against any and all losses, claims, liability or expenses
arising in connection with Environmental Claims against Borrower or with any
Hazardous Materials Activity.
5.8 Borrower's Remedial Action Regarding Hazardous Materials.
Borrower will promptly 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 Borrower undertakes any remedial action with respect to any Hazardous
Materials on, under or about any such facility, Borrower 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, Borrower's liability for such presence, storage, use, disposal,
transportation or Release of any such Hazardous Materials is being contested in
good faith by Borrower. Notwithstanding anything to the contrary contained in
the Transaction Documents, Borrower or Lessee may engage in the transportation
of Hazardous Materials in the ordinary course of business so long as such is
conducted in compliance with all applicable Environmental Laws and all other
applicable laws, policies, orders, regulations and directives.
5.9 Maintenance Contracts.
Borrower shall maintain or shall cause to be maintained a maintenance
program with respect to the Aircraft and Spare Engines approved by the FAA.
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5.10 Employee Benefit Plans.
Borrower will not establish, contribute to (or have an obligation to
contribute to) or permit to be established any Employee Benefit Plans for
Borrower or any of its employees.
5.11 Further Assurances.
At any time or from time to time upon the request of Administrative Agent,
Borrower will, at its expense, promptly execute, acknowledge and deliver such
further documents and do 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.
5.12 Performance of Obligations.
Borrower will perform all of its obligations under the terms of each Lease,
Collateral Document and Loan Document, contract or instrument by which it is
bound.
5.13 Corporate Separateness.
Borrower will take all such action as is necessary to keep its operations
separate and apart from those of Atlas or any of its Affiliates, including,
without limitation, ensuring that all customary corporate formalities, including
the maintenance of separate corporate records and documents and holding regular
meetings are followed. Any financial statements distributed to any creditors of
Borrower shall clearly establish the corporate separateness of Borrower from
Atlas and each of Atlas's other Subsidiaries. Borrower shall not take any action
or conduct its affairs in a manner which is likely to result in the corporate
existence of Borrower on the one hand and of Atlas or any Subsidiary of Atlas on
the other hand being disregarded, or in the assets and liabilities of Atlas or
any Subsidiary of Atlas being substantively consolidated with those of Borrower
in a bankruptcy, reorganization or other insolvency proceeding. Borrower shall
have at all times at least one Independent Director who shall be satisfactory to
the Administrative Agent. Borrower shall maintain its principal executive office
separate from Atlas or any of its Affiliates, which may be subleased from Atlas
on an arm's-length basis or maintained as provided in the Service Agreement.
Borrower shall pay out of its own funds fees for its directors and salaries
of its officers and employees, and shall promptly reimburse any Affiliate for
any services provided to Borrower by such Affiliate; provided, however, that
Atlas may advance
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funds on behalf of Borrower to pay for the expenses of its organization and
funding. All such advances shall be duly and properly recorded and promptly
repaid as intercompany advances. Borrower shall not commingle any of its funds
or other assets with the funds or assets of any other entity or person. Borrower
will maintain separate bank accounts in its own name.
The assets of Borrower shall be separately identified and segregated. All
of Borrower's assets shall at all times be held by or on behalf of Borrower,
and, if held on behalf of Borrower by another entity, shall at all times be kept
identifiable (in accordance with customary usages) as assets owned by Borrower.
In no event shall any of Borrower's assets be held by Atlas or by any other
Affiliate. Borrower shall pay from its assets all obligations and indebtedness
of any kind incurred by Borrower, and shall not pay from its assets any
obligations or indebtedness of any other entity or person. The liabilities of
Borrower will be separately managed from those of any Affiliate, and all
liabilities, including all administrative expenses, shall be paid from its own
separate assets; provided, however, Borrower will be included, to the extent
permitted by law, in the affiliated group of corporations of which Atlas is the
"common parent" for federal income tax returns filed for such affiliated group
by Atlas.
SECTION 6.
BORROWER'S NEGATIVE COVENANTS
Borrower 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, Borrower shall perform all covenants in this Section 6.
6.1 Indebtedness.
Borrower shall not directly or indirectly, create, incur, assume or
guaranty, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except Borrower may become and remain liable with
respect to the Obligations.
6.2 Liens and Related Matters.
A. Prohibition on Liens. Borrower shall not directly or indirectly, create,
incur, assume or permit to exist any Lien on or with respect to any property or
asset of any kind (including any document or instrument in respect of goods or
accounts receivable) of Borrower, whether now owned or hereafter acquired, or
any income or
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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 for
Permitted Encumbrances.
B. No Negative Pledges. Borrower shall not 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.
6.3 Investments; Joint Ventures.
Borrower shall not, directly or indirectly, make or own any Investment in
any Person, including any Joint Venture, except that Borrower may make and own
Investments in Cash Equivalents.
6.4 Contingent Obligations.
Borrower shall not, directly or indirectly, create or become or remain
liable with respect to any Contingent Obligation.
6.5 Restricted Junior Payments.
Borrower shall not directly or indirectly, declare, order, pay, make or set
apart any sum for any Restricted Junior Payment; provided that Borrower may make
payments pursuant to the Service Agreement in an aggregate annual amount not to
exceed $200,000 per annum; 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, within five Business Days of any payment made under any of the
Leases by Atlas to Borrower, to the extent such payment is in excess of amounts
owing the Lenders under the Loan Documents, Borrower may dividend such excess
amounts to Atlas to the extent Borrower, after giving effect to such dividend,
has no other liabilities and maintains a reserve of Cash or Cash Equivalents
adequate to fund all expenses of Borrower (exclusive of payments under the Loan
Documents) to be incurred during the next four quarters following such dividend.
6.6 Restriction on Fundamental Changes; Asset Sales and Acquisitions; New
Subsidiaries.
Borrower shall not 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
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transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or any
portion of the business, property or assets of, or stock or other evidence of
beneficial ownership of, any Person or any division or line of business of any
Person or establish any Subsidiary, except Borrower may effect the Transaction
on or prior to the Initial Borrowing Date and Borrower may sell, lease or
dispose of assets so long as such transaction is effected in accordance with
Section 4(d) or 4(e) of the Aircraft Chattel Mortgages.
6.7 Amendments of Material Agreements.
Borrower shall not permit (i) its articles of incorporation or bylaws to be
amended or otherwise modified in any manner or (ii) any Lease to be amended or
otherwise modified in any manner.
6.8 Restriction on Leases.
Borrower shall not 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 such lease be an Operating Lease or a Capital Lease.
6.9 Transaction with Shareholders and Affiliates.
Borrower shall not 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 Atlas or with any
other Affiliate of Borrower; provided that the foregoing restriction shall not
apply to (i) reasonable and customary fees paid to and indemnification of
members of the Board of Directors of Borrower, (ii) reasonable and customary
salaries, bonuses and other compensation paid to and indemnification of
employees of Borrower, (iii) the Transaction and (iv) the Service Agreement
providing for the rendering of accounting, administration and office services by
Atlas to Borrower on terms consistent with the terms of similar agreements
between unrelated parties in an aggregate amount not to exceed $200,000 per
annum.
6.10 Conduct of Business.
(a) From and after the Initial Borrowing Date, Borrower shall not engage in
any business other than in connection with owning the Aircraft and Spare Engines
or any replacement aircraft and spare engines and leasing of the Aircraft and
Spare Engines or any replacement aircraft and spare engines to Atlas and will
have no material assets (other than Cash, Cash Equivalents, the Aircraft, the
Spare Engines or any replacement
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aircraft, spare engines and the Leases) or liabilities (other than the Loans and
other liabilities which are expressly permitted hereunder); provided, however
that replacement aircraft and spare engines are substituted for Aircraft and
Spare Engines in accordance with the applicable Aircraft Chattel Mortgage.
(b) The Borrower shall not take any action or enter into any transaction
which requires the approval of the Independent Director without the consent of
the Independent Director.
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 Borrower 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 Borrower 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 Under Lease.
Any 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 there shall exist a
Default or a Lease Event of Default under, and as defined in, any of the Leases;
or
7.3 Breach of Certain Covenants.
Failure of Borrower to perform or comply in any material respect with any
term or condition contained in subsections 2.5, 5.1(vii), 5.2, 5.13, 6.1, 6.2,
6.5, 6.6, 6.7 or 6.10 of this Agreement or in clauses (i) and (ii) of Section
4(c), Section 4(d) or Section 4(g) of any Aircraft Chattel Mortgage; or
7.4 Breach of Warranty.
Any representation, warranty, certification or other statement made by
Atlas or Borrower in any Loan Document or in any Transaction Document or in any
statement
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or certificate at any time given by Atlas or Borrower 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.
Borrower 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 within 15 days after the earlier
of (a) an officer of Borrower becoming aware of such default or (b) receipt by
Borrower of notice from Administrative Agent or any Lender of such default; 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 Borrower 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 Borrower 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
Borrower, 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 of Borrower 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 Borrower, 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) Borrower 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
Borrower shall make any assignment for the benefit of creditors; or (ii)
Borrower shall be unable, or shall fail generally, or shall admit in writing its
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inability, to pay its debts as such debts become due; or the Board of Directors
of Borrower (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 (not
adequately covered by insurance as to which a solvent and unaffiliated insurance
company has acknowledged coverage) shall be entered or filed against Borrower or
any of its 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 Borrower decreeing
the dissolution or split up of Borrower and such order shall remain undischarged
or unstayed for a period in excess of 30 days; or
7.10 Change in Control.
Atlas shall cease to beneficially own and control all of the issued and
outstanding shares of capital stock of Borrower; or
7.11 Failure of Security.
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 Borrower, 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,
subject only to Liens permitted under the applicable Collateral Documents or
Borrower, as lessor under a Lease or the Administrative Agent, as assignee of
Borrower's rights under such Lease, shall cease to be entitled to the benefits
of Section 1110 of the Bankruptcy Code with respect to the rights and remedies
under such Lease; or
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7.12 Loss of United States Citizen Status.
Borrower for any reason ceases to be a United States Citizen;
THEN (I) (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 Borrower, 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 Borrower, 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 and (II) upon the occurrence of any
Event of Default, the Administrative Agent upon the written request of the
Requisite Lenders, shall by written notice to Borrower enforce all of the Liens
and security interests created pursuant to the Collateral Documents and (III)
exercise all other remedies at law or in equity available under the Loan
Documents.
If at any time within 60 days after an acceleration of the Loans pursuant
to the preceding paragraph Borrower 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
Borrower, 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 Borrower and do not grant Borrower the right to require Lenders to
rescind or annul any acceleration hereunder, even if the conditions set forth
herein are met.
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SECTION 8.
AGENTS
8.1 Appointment.
Each Lender hereby appoints Bankers Trust Company as 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. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. 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. 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 Borrower 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 Borrower. Syndication Agent, without consent of or notice to any party
hereto, may assign any or all of its rights or obligations hereunder to any of
its Affiliates. As of the Initial Borrowing Date, all obligations of Syndication
Agent hereunder shall terminate.
8.2 Powers and Duties; General Immunity.
▇. ▇▇▇▇▇▇; Duties Specified. Each Lender irrevocably authorizes 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 are expressly
specified in this Agreement and the other Loan Documents. Agents may exercise
such powers, rights and remedies and perform such duties by or through its
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,
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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 either Agent to Lenders or by or on behalf of Borrower 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
Borrower 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, Agents 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 either Agent 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, such Agent
shall be entitled to refrain from such act or taking such action unless and
until such Agent shall have received instructions from Requisite Lenders.
Without prejudice to the generality of the foregoing, (i) each Agent 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 Borrower), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against Agents as a result of Agents 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.
D. Agents Entitled to Act as Lender. 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, either 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
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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
Borrower or any of its Affiliates as if it were not performing the duties
specified herein, and may accept fees and other consideration from Borrower 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 Atlas and its
Subsidiaries, Borrower and the Aircraft and Spare Engines 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 Atlas and its Subsidiaries and
Borrower. Agents shall not 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 their possession before the making of
the Loans or at any time or times thereafter, and Agents shall not 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 Agents (and their respective affiliates and partners), to the extent
that Agents shall not have been reimbursed by Borrower, 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 either 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 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 such Agent's gross negligence or willful
misconduct.
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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 Borrower. Upon any such notice of
resignation, Requisite Lenders shall have the right, upon consultation with
Borrower, 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.
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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 Commitment 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 Borrower, require Borrower to file a registration statement with the
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 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). Except as otherwise
provided in this subsection 9.1, no Lender shall, as between Borrower 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 Commitment 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 or Related Fund of the assigning Lender or another Lender, with
the giving of notice to Borrower 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 Borrower and with the consent of
Administrative Agent and Borrower (which consent shall not be unreasonably
withheld) unless an Event of Default shall have occurred and be occurring,
in which case the consent of Borrower to such assignment shall not be
required. Any assignment of Loans hereunder shall effect a pro rata
assignment of the Notes with respect to each Aircraft and related Spare
Engine. 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 Commitment, 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
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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, acceptance and recording 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) provided,
however, that the assigning Lender shall retain any right to payment
accrued under subsections 2.6C, 2.6D, 2.7, 9.2 or 9.3 unless such rights
are explicitly assigned to the assignee in the Assignment Agreement. 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, 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 II annexed
hereto, with appropriate insertions, to reflect the new Commitment or
outstanding 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 V hereto and if Administrative
Agent and Borrower have consented to the assignment evidenced thereby to
the extent such consent is required pursuant to subsection 9.1B(i)), (a)
accept such Assignment Agreement
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by executing a counterpart thereof as provided therein (which acceptance
shall evidence any required consent of Administrative Agent and Borrower to
such assignment), (b) record the information contained therein in the
Register and (c) give prompt notice thereof to Borrower. 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 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 Borrower 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. Borrower
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
Borrower to the participant and (b) the participant shall be considered to be a
"Lender".
D. Assignments to Federal Reserve Banks and Others. 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 (i) 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 or (ii) if such Lender is a "fund", to its
lenders as collateral security to secure its indebtedness to said lenders;
provided that (i) no Lender shall, as between Borrower 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 or lender be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
E. Information. Each Lender may furnish any information concerning Borrower
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.
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Whether or not the transactions contemplated hereby shall be consummated,
Borrower 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 Borrower (including without limitation any opinions
requested by Lenders as to any legal matters arising hereunder) and of
Borrower'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 Agents 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 Borrower; (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 Agents (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 Loans 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 $25,000; 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 Borrower 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, Borrower
agrees to defend, indemnify, pay and hold harmless Administrative Agent and
Lenders, and the officers, directors, partners, employees, agents and affiliates
of Administrative Agent 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
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as a party or a potential party thereto), 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 Borrower with respect thereto (collectively called the "Indemnified
Liabilities"); provided that Borrower 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, Borrower 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 Borrower at any time or from time to
time, without notice to Borrower 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 Borrower against and on
account of the obligations and liabilities of Borrower to that Lender under this
Agreement, its 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.
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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 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 Borrower 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. Borrower 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 Borrower 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 and departure by Borrower
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 Final
Maturity Date (but not the date of any scheduled installment 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
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of any increase in the interest rate applicable to any of the Loans pursuant to
subsection 2.2D) or the amount of any fees payable hereunder; releases all or
substantially all of the Collateral; or changes in any manner the provisions
contained in 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) no amendment, modification, termination or waiver of
any provision of any Note shall be effective without the written concurrence of
the Lender which is the holder of that Note, (ii) no increase in the Commitment
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 (iii) no amendment, modification, termination
or waiver of any provision of Section 8 or of any other provision of this
Agreement which, by its terms, expressly requires the approval or concurrence of
either 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 Borrower in any case shall entitle Borrower 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 Borrower, on Borrower.
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 Borrower 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)
Borrower 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 Borrower 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 neces-
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sary, 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.
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 either 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 Borrower and Agents, 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 Borrower 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.
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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 Borrower or any other party or against or in
payment of any or all of the Obligations. To the extent that Borrower 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 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
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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 Borrower's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Borrower without the prior written consent of all Lenders.
9.17 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER 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 BORROWER 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
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DOCUMENT OR SUCH OBLIGATION (SUBJECT TO ANY RIGHT TO APPEAL TO A COURT IN THE
STATE OF NEW YORK). Borrower 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 Borrower at its address provided in subsection 9.8,
such service being hereby acknowledged by Borrower to be sufficient for personal
jurisdiction in any action against Borrower 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 Borrower 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 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 the Transaction Documents which has been identified as
confidential
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by Borrower in accordance with such Lender's customary procedures for handling
confidential information of this nature, it being understood and agreed by
Borrower that in any event a Lender may make disclosures to any Person who
evaluates, approves, structures or administers the Loans on behalf of a Lender
and who is subject to this confidentiality provision, or, subject to this
Section 9.19, 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 (at which time, any such
assignee, transferee or participant shall be bound by this Section 9.19) or as
required or requested by any governmental or regulatory agency (including,
without limitation, the National Association of Insurance Commissions) 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 Borrower of any request
by any governmental or regulatory agency or representative thereof (other than
any such request in connection with any examination of the financial condition
of such Lender by such governmental or regulatory 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 Borrower.
9.20 Counterparts; Effectiveness.
(i) 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.
(ii) This Agreement shall become effective upon the execution of a
counterpart hereof by (the "Effective Date") each of the parties hereto and
receipt by Company and Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof.
[Remainder of page intentionally left blank]
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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.
ATLAS FREIGHTER LEASING II, INC.
By:
-------------------------------
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Treasurer and Secretary
BANKERS TRUST COMPANY,
as Administrative Agent and Lender
By:
------------------------------
Name:
Title:
Notice Address:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
93
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT
PARTNERS L.P.,
as Syndication Agent and Lender
By:
-------------------------------
Name:
Title:
Notice Address:
▇▇▇▇▇▇▇ Sachs Credit Partners L.P.
c/o Goldman, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
LENDERS:
PRIME INCOME TRUST
By:
-------------------------------
Name:
Title:
ING HIGH INCOME PRINCIPAL
PRESERVATION OFFERING, L.P.
By: ING Capital Advisors, Inc.,
as Investment Advisor
By:
-------------------------------
Name:
Title:
94
KZH-ING-1 CORPORATION
By:
-------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING
RATE FUND, INC.
By:
-------------------------------
Name:
Title:
METROPOLITAN LIFE INSURANCE
COMPANY
By:
-------------------------------
Name:
Title:
OCTAGON CREDIT INVESTORS
LOAN PORTFOLIO (a unit of the Chase
Manhattan Bank)
By:
-------------------------------
Name:
Title:
95
KZH-SOLEIL CORPORATION
By:
-------------------------------
Name:
Title:
CRESCENT/MACH I PARTNERS, L.P.,
by: TCW Asset Management Company, its
Investment Manager
By:
-------------------------------
Name:
Title:
THE TRAVELERS INSURANCE COMPANY
By:
-------------------------------
Name:
Title:
96
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By:
-------------------------------
Name:
Title:
KZH-CRESCENT CORPORATION
By:
-------------------------------
Name:
Title: