EXHIBIT 99.1
COMPOSITE COPY INCORPORATING THE
FIRST, SECOND, THIRD, FOURTH, FIFTH,
SIXTH AND SEVENTH AMENDMENTS
FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF APRIL 25, 2000
AMONG
ATLAS AIR, INC.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
AND
DEUTSCHE BANK TRUST COMPANY AMERICAS,
AS ADMINISTRATIVE AGENT
ARRANGED BY:
DEUTSCHE BANK SECURITIES INC.
ATLAS AIR, INC.
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS....................................................................................... 2
1.1. Certain Defined Terms........................................................................... 2
1.2. Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement.............. 30
1.3. Other Definitional Provisions................................................................... 30
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS........................................................ 30
2.1. Commitments; Making of Loans; Notes; Register................................................... 30
2.2. Interest on the Loans........................................................................... 34
2.3. Fees............................................................................................ 37
2.4. Repayments, Prepayments and Reductions in Loans and Revolving Loan Commitments; General
Provisions Regarding Payments................................................................ 38
2.5. Use of Proceeds................................................................................. 44
2.6. Special Provisions Governing Eurodollar Rate Loans.............................................. 45
2.7. Increased Costs; Taxes; Capital Adequacy........................................................ 47
2.8. Obligation of Lenders to Mitigate............................................................... 51
2.9. Release of Collateral........................................................................... 51
SECTION 3. CONDITIONS TO LOANS............................................................................... 52
3.1. Conditions to Effectiveness and the Existing Aircraft Extended Loans............................ 52
3.2. Conditions to Loans to Finance Aircraft Acquisition............................................. 54
3.3. Condition to Loans to Finance Cargo Conversion.................................................. 57
3.4. Conditions to All Loans......................................................................... 58
SECTION 4. COMPANY'S REPRESENTATIONS AND WARRANTIES.......................................................... 59
4.1. Organization, Powers, Qualification, Good Standing, Business and Subsidiaries................... 59
4.2. Authorization of Borrowing, etc................................................................. 60
4.3. Financial Condition............................................................................. 61
4.4. No Material Adverse Change; No Restricted Junior Payments....................................... 62
4.5. Title to Properties; Liens...................................................................... 62
4.6. Litigation; Adverse Facts....................................................................... 62
4.7. Payment of Taxes................................................................................ 63
4.8. Performance of Agreements; Materially Adverse Agreements........................................ 63
4.9. Governmental Regulation......................................................................... 63
4.10. Securities Activities........................................................................... 63
4.11. Employee Benefit Plans.......................................................................... 64
4.12. Certain Fees.................................................................................... 64
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4.13. Environmental Protection........................................................................ 64
4.14. Employee Matters................................................................................ 64
4.15. Solvency........................................................................................ 64
4.16. Disclosure...................................................................................... 65
SECTION 5. COMPANY'S AFFIRMATIVE COVENANTS................................................................... 65
5.1. Financial Statements and Other Reports.......................................................... 65
5.2. Corporate Existence............................................................................. 70
5.3. Payment of Taxes and Claims; Tax Consolidation.................................................. 70
5.4. Maintenance of Properties; Insurance............................................................ 70
5.5. Inspection; Lender Meeting...................................................................... 71
5.6. Compliance with Laws, etc....................................................................... 71
5.7. Environmental Indemnity......................................................................... 71
5.8. Company's Remedial Action Regarding Hazardous Materials......................................... 71
5.9. Further Assurances; New Subsidiaries; Holding Company........................................... 72
5.10. Appraisals...................................................................................... 73
5.11. Maintenance Contracts........................................................................... 73
5.12. Employee Benefit Plans.......................................................................... 73
5.13. Registration of Foreign Leased Aircraft with FAA................................................ 74
5.14. Corporate Separateness.......................................................................... 74
SECTION 6. COMPANY'S NEGATIVE COVENANTS...................................................................... 74
6.1. Indebtedness.................................................................................... 75
6.2. Liens and Related Matters....................................................................... 76
6.3. Investments; Joint Ventures..................................................................... 77
6.4. Contingent Obligations.......................................................................... 78
6.5. Restricted Junior Payments...................................................................... 79
6.6. Financial Covenants............................................................................. 80
6.7. Restriction on Fundamental Changes; Asset Sales and Acquisitions; New Subsidiaries.............. 82
6.8. Amendments of Material Agreements............................................................... 86
6.9. Restriction on Leases........................................................................... 86
6.10. Sales and Lease-Backs........................................................................... 87
6.11. Sale or Discount of Receivables................................................................. 87
6.12. Transactions with Shareholders and Affiliates................................................... 87
6.13. Disposal of Subsidiary Stock.................................................................... 88
6.14. Conduct of Business............................................................................. 88
6.15. Change of Chief Executive Office................................................................ 89
SECTION 7. EVENTS OF DEFAULT................................................................................. 89
7.1. Failure to Make Payments When Due............................................................... 89
7.2. Default in Other Agreements..................................................................... 89
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7.3. Breach of Certain Covenants..................................................................... 89
7.4. Breach of Warranty.............................................................................. 90
7.5. Other Defaults Under Loan Documents............................................................. 90
7.6. Involuntary Bankruptcy; Appointment of Receiver, etc............................................ 90
7.7. Voluntary Bankruptcy; Appointment of Receiver, etc.............................................. 90
7.8. Judgments and Attachments....................................................................... 91
7.9. Dissolution..................................................................................... 91
7.10. Change in Control............................................................................... 91
7.11. Failure of Security............................................................................. 92
7.12. Certificated as Air Carrier..................................................................... 92
7.13. Material Agreements............................................................................. 92
7.14. "Change of Control" Put Payments................................................................ 92
SECTION 8. AGENT............................................................................................. 93
8.1. Appointment..................................................................................... 93
8.2. Powers and Duties; General Immunity............................................................. 93
8.3. Representations and Warranties; No Responsibility For Appraisal of Creditworthiness............. 95
8.4. Right to Indemnity.............................................................................. 95
8.5. Collateral Documents............................................................................ 95
8.6. Successor Administrative Agent.................................................................. 96
SECTION 9. MISCELLANEOUS..................................................................................... 96
9.1. Assignments and Participations in Loans......................................................... 96
9.2. Expenses........................................................................................ 98
9.3. Indemnity....................................................................................... 99
9.4. Set-Off......................................................................................... 99
9.5. Ratable Sharing................................................................................. 100
9.6. Amendments and Waivers.......................................................................... 100
9.7. Independence of Covenants....................................................................... 102
9.8. Notices......................................................................................... 102
9.9. Survival of Representations, Warranties and Agreements.......................................... 102
9.10. Failure or Indulgence Not Waiver; Remedies Cumulative........................................... 102
9.11. Marshalling; Payments Set Aside................................................................. 102
9.12. Severability.................................................................................... 103
9.13. Obligations Several; Independent Nature of Lenders' Rights...................................... 103
9.14. Headings........................................................................................ 103
9.15. Applicable Law.................................................................................. 103
9.16. Successors and Assigns.......................................................................... 103
9.17. Consent to Jurisdiction and Service of Process.................................................. 104
9.18. Waiver of Jury Trial............................................................................ 104
9.19. Confidentiality................................................................................. 105
9.20. Counterparts; Effectiveness; Effect if Agreement Does Not Become Effective...................... 105
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9.21. Cooperation in Refinancing, Syndication and Assignment.......................................... 105
9.22. Replacement Engines............................................................................. 106
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
IIIA FORM OF EXISTING AIRCRAFT EXTENSION NOTE
IIIB FORM OF NEW AIRCRAFT NOTE
IV FORM OF COMPLIANCE CERTIFICATE
VA FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ FORM OF SECTION 1110 OPINION
VC FORM OF OPINION OF ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
VI INTENTIONALLY OMITTED
VII FORM OF ASSIGNMENT AGREEMENT
VIII FORM OF CERTIFICATE RE NON-BANK STATUS
IX FORM OF FINANCIAL CONDITION CERTIFICATE
X FORM OF FIRST AIRCRAFT CHATTEL MORTGAGE
XI FORM OF SECOND AIRCRAFT CHATTEL MORTGAGE
SCHEDULES
1.1 EXISTING AIRCRAFT AND EXISTING AIRCRAFT LOAN EXTENSION AMOUNTS
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
5.1 SUBSIDIARIES OF COMPANY
6.1 CERTAIN EXISTING INDEBTEDNESS
6.2 CERTAIN EXISTING LIENS
6.3 CERTAIN EXISTING INVESTMENTS
6.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
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ATLAS AIR, INC.
FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
This FOURTH AMENDED AND RESTATED CREDIT AGREEMENT is dated as
of April 25, 2000 and entered into by and among ATLAS AIR, INC., a Delaware
corporation ("COMPANY"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE
PAGES HEREOF (each individually referred to herein as a "LENDER" and
collectively as "LENDERS"), and DEUTSCHE BANK TRUST COMPANY AMERICAS ("BANKERS
TRUST"), as administrative agent for Lenders (in such capacity, "ADMINISTRATIVE
AGENT").
R E C I T A L S
WHEREAS, pursuant to that certain Third Amended and Restated
Credit Agreement dated as of September 5, 1997 as amended by the First Amendment
thereto dated as of July 8, 1998, as further amended by the Second Amendment
thereto dated as of August 14, 1998 and as further amended by the Third
Amendment thereto dated as of June 14, 1999, by and among Company, as Borrower,
the financial institutions listed on the signature pages thereof, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Credit Partners L.P., as Syndication Agent and Administrative Agent (the
"EXISTING AGREEMENT"), Lenders have made certain credit facilities available to
Company for the purpose of acquisition and modification of certain aircraft to
be used in Company's air cargo business;
WHEREAS, the parties of the Existing Agreement desire to amend
and restate the Existing Agreement in order to (i) extend the maturity of the
Loans, (ii) decrease the Revolving Loan Commitments by $25,000,000 to
$175,000,000, (iii) adjust the financial covenants, and (iv) make certain other
amendments to the Existing Agreement;
WHEREAS, it is the intention of Company, Administrative Agent
and each of the Lenders that such amendment and restatement of the Existing
Agreement shall not constitute a refinancing of the Loans outstanding on the
Fourth Restatement Date and that, with respect to the Loans outstanding as of
the Fourth Restatement Date, the First Aircraft Chattel Mortgages shall continue
to constitute purchase-money security interests subject to Section 1110 of the
Bankruptcy Code; and
WHEREAS, the Lenders identified on the signature pages hereof
hold all of the "Revolving Loans" and "Revolving Commitments" under the Existing
Agreement as identified on Schedule 2.1.
NOW THEREFORE, in consideration of the premises and
agreements, provisions and covenants herein contained, Company, Lenders and
Administrative Agent hereby agree that the Existing Agreement shall be amended
and restated in its entirety as follows:
SECTION 1.
DEFINITIONS
1.1. CERTAIN DEFINED TERMS
The following terms used in this Agreement shall have the
following meanings:
"ACMI CONTRACT" means (i) any contract entered into by Company
pursuant to which Company furnishes the aircraft, crew, maintenance and
insurance and customers bear all other operating expenses and (ii) any similar
contract in which the customer provides the flight crew, all in accordance with
Company's historical practices.
"ACMI CONTRACTED AIRCRAFT" means an aircraft acquired by
Company or its Subsidiaries and dedicated to a new ACMI Contract entered into in
connection with the acquisition of such aircraft (which ACMI Contract shall not
represent a renewal or replacement of a prior ACMI Contract unless the aircraft
dedicated to such prior ACMI Contract was operated under an operating lease and
returned to the lessor) which is in effect on the date of calculation and has a
remaining term of one year or more on the date such aircraft was dedicated to
such ACMI Contract (subject to cancellation terms, which may include the right
to cancel on six months notice). When making any calculation on a Pro Forma
Basis effect shall be given to the acquisition of an ACMI Contracted Aircraft by
adding to the appropriate components of Consolidated Adjusted EBITDA (i) the net
projected annualized revenues from the operation of the ACMI Contracted Aircraft
under such ACMI Contract for that portion of the period for which Consolidated
Adjusted EBITDA is being calculated prior to the acquisition of such aircraft,
assuming operation for the minimum guaranteed number of block hours (less any
block hours subject to cancellation) at the minimum guaranteed rate under such
ACMI Contract less (ii) the projected annualized cash operating expenses from
such operation for the same period for which the related projected revenues are
determined in clause (i) above; provided that such projected cash operating
expenses shall not be less on a per block hour basis than the average historical
per block hour operating expenses of Company for the four full fiscal quarters
immediately preceding the date of calculation, and provided, further, that if
such aircraft is of a model other than a Boeing 747 freighter, such projected
cash operating expenses shall include maintenance costs which shall not be less
than the average for such aircraft type disclosed on the most recently available
DOT Forms 41 with respect to such aircraft type or any summary of such data as
reported in a nationally recognized industry publication. For purposes of this
definition, "ACMI CONTRACT" shall include contracts pursuant to which Company
does not pay any crew costs, in which event pro forma effect shall be given as
described above but excluding from the projected annualized cash operating
expenses all crew costs. Cash operating expenses means for purposes of this
definition consolidated operating expenses, less consolidated depreciation and
amortization and Consolidated Rental Payments, to the extent included in
computing consolidated operating expenses.
"ADDITIONAL AIRCRAFT" means the three aircraft bearing U.S.
registration numbers N512MC, N808MC and N809MC, respectively and manufacturer
serial numbers 21220, 21048 and 20887, respectively.
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"ADJUSTED CONSOLIDATED WORKING CAPITAL" means, as at any date
of determination, Consolidated Current Assets (excluding Cash and Cash
Equivalents) less Consolidated Current Liabilities.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date, (x) until such time as Reference Lenders are determined in
accordance with the definition thereof, the rate per annum obtained by dividing
the offered rate (expressed as a rate per annum and rounded upward to the
nearest 1/16 of one percent) appearing on the Dow ▇▇▇▇▇/Telerate Monitor on
Telerate Access Service Page 3750 (British Bankers Association Settlement Rate)
(or such other page as may, in the opinion of Administrative Agent, replace such
page on that system for the purpose of displaying such rate) at or about 11:00
a.m. (London time) on such Interest Rate Determination Date for U.S. dollar
deposits of amounts in same day funds comparable to the principal amount of the
Eurodollar Rate Loan for which the Adjusted Eurodollar Rate is then being
determined with maturities comparable to the Interest Period for which such
Adjusted Eurodollar Rate will apply by (ii) a percentage equal to 100% minus the
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable on
such Interest Rate Determination Date to any member bank of the Federal Reserve
System in respect of "Eurodollar liabilities" as defined in Regulation D (or any
successor category of liabilities under Regulation D) and (y) thereafter, the
rate per annum obtained by dividing (i) the arithmetic average (rounded upward
to the nearest 1/16 of one percent) of the offered quotation, if any, to first
class banks in the interbank Eurodollar market by each of the Reference Lenders
for U.S. dollar deposits of amounts in same day funds comparable to the
principal amount of the Eurodollar Rate Loan of that Reference Lender for which
the Adjusted Eurodollar Rate is then being determined with maturities comparable
to such Interest Period as of approximately 10:00 A.M. (New York time) on such
Interest Rate Determination Date by (ii) a percentage equal to 100% minus the
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable on
such Interest Rate Determination Date to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D (or
any successor category of liabilities under Regulation D); provided that if any
Reference Lender fails to provide Administrative Agent with its aforementioned
quotation then the Adjusted Eurodollar Rate shall be determined based on the
quotation(s) provided to Administrative Agent by the other Reference Lender(s).
"ADMINISTRATIVE AGENT" has the meaning assigned to that term
in the introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 8.6.
"AERONAUTICAL AUTHORITY" means, at any date, the Federal
Aviation Administration or other governmental airworthiness authority having
jurisdiction over any Eligible Aircraft or Airframe or Engine under the laws of
the country in which the Airframe is then registered.
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFECTED LOANS" has the meaning assigned to that term in
subsection 2.6C.
"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 defini-
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tion, "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" means Atlas Freighter Leasing, Inc., a Delaware
corporation, whose common stock is wholly owned by Company.
"AFL FINANCING AGREEMENT" means that certain Credit Agreement
dated as of May 29, 1997 by and among AFL, the lenders party thereto and Bankers
Trust Company, as Agent, as such agreement may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"AFL II" means Atlas Freighter Leasing II, Inc., a Delaware
corporation, whose common stock is wholly owned by Company.
"AFL II FINANCING AGREEMENT" means that certain Credit
Agreement dated as of September 5, 1997 by and among AFL II, the lenders party
thereto, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P., as Syndication Agent, and Bankers
Trust Company, as Administrative Agent, as such agreement may be amended,
modified or supplemented from time to time in accordance with the terms thereof.
"AFL III" means Atlas Freighter Leasing III, Inc., a Delaware
corporation, whose common stock is wholly owned by Company, the sole business of
which is the ownership of the AFL III Equipment and the leasing of the AFL III
Equipment to Company pursuant to the AFL III Leases and obtaining financing with
respect thereto.
"AFL III EQUIPMENT" means (i) ten Boeing 747-200 aircraft
(including the engines attached thereto) with registration numbers N505MC,
N509MC, N517MC, N522MC, N523MC, N524MC, N526MC, N527MC, N528MC and N534MC, (ii)
nine General Electric CF6-50E2 engines, (iii) three General Electric CF6-80C2
engines and (iv) the Additional Aircraft.
"AFL III FINANCING" means indebtedness in an aggregate
principal amount of $300,000,000 incurred by AFL III as of April 25, 2000
pursuant to the AFL III Financing Agreement.
"AFL III FINANCING AGREEMENT" means that certain Credit
Agreement dated as of April 25, 2000 by and among AFL III, the lenders party
thereto and Bankers Trust Company, as Agent, as such agreement may be amended,
modified or supplemented from time to time in accordance with the terms thereof.
"AFL III GUARANTY" means each Guaranty, dated as of October
30, 2001, given by the Holding Company, and each guaranty to be given with
respect to the Additional Aircraft, in each case, to and for the benefit of AFL
III, the Agent (as defined in the AFL III Financing Agreement), and the Lenders
(as defined in the AFL III Financing Agreement).
"AFL III LEASES" means one or more triple net leases by and
between Company and AFL III with respect to the AFL III Equipment providing for
fair market rental rates sufficient to pro-
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vide for principal and interest payments under the AFL III Financing Agreement
and a market rate of return on the equity interest of AFL III, as lessor
thereunder, as such leases may be amended, modified or supplemented from time to
time in accordance with the provisions of this Agreement.
"AFL III RESTRUCTURING" means the following transactions which
occurred concurrently on the Fourth Restatement Date: (i) the contribution of
the AFL III Equipment to AFL III as a capital contribution, (ii) the incurrence
of indebtedness pursuant to the AFL III Financing Agreement and the simultaneous
repayment of amounts outstanding under the AFL Financing Agreement and the AFL
II Financing Agreement and the release of all Liens arising thereunder and (iii)
the entering into of the AFL III Leases.
"AGREEMENT" means this Fourth Amended and Restated Credit
Agreement dated as of April 25, 2000, as it may be amended, supplemented or
otherwise modified from time to time.
"AIRCRAFT CHATTEL MORTGAGE" means any or all of the First
Aircraft Chattel Mortgages and the Second Aircraft Chattel Mortgages.
"AIRFRAME" means, as the context requires, an Airframe as
defined in a particular Aircraft Chattel Mortgage or all Airframes as defined in
all Aircraft Chattel Mortgages.
"ALITALIA" shall mean ALITALIA-Linee Aeree Italiane S.p.A.
"ALITALIA LOANS" shall mean Revolving Loans made to consummate
the Alitalia Transaction.
"ALITAIIA TRANSACTION" shall mean, subject to the conditions
set forth in Section 3, the borrowing by the Company of up to $45 million to be
used for the acquisition of up to two 747-200 aircraft in freighter
configuration from Alitalia (each, an "Alitalia Aircraft"); provided that (w)
the Company may acquire the Alitalia Aircraft in two separate transactions but
shall borrow no more than $22.5 million per transaction and there shall be no
more than one borrowing per Alitalia Aircraft, (x) concurrently with each such
acquisition, the Company shall enter into a sale-leaseback arrangement with
Alitalia with respect to such Alitalia Aircraft containing economic terms which
are sufficient to generate net free cash flow to pay all interest on the related
Alitalia Loans and to repay in full such Alitalia Loans within the term of such
Alitalia Lease and otherwise satisfactory in form and substance to the
Administrative Agent in its sole discretion (each, an "Alitalia Lease"), (y) the
Alitalia Loans shall be repaid on an amortization schedule based on at least 90%
of the net free cash flow generated by the related Alitalia Lease and which is
approved by the Administrative Agent, in its sole discretion and (z) no
conversion or modification costs shall be financed.
"APPLICABLE MARGIN" has the meaning assigned to that term in
subsection 2.2A.
"APPRAISED VALUE" means, with respect to any Financed
Aircraft, the average of the appraised value of such Financed Aircraft by two
Approved Appraisers as most recently determined pursuant to subsection 5.10.
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"APPROVED APPRAISER" means any of the following: AvSolutions,
Inc., BK Associates, ▇▇▇▇ ▇. ▇▇▇▇ Associates, ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇, Inc.,
Airclaims, Ltd., Aircraft Information Services, Inc., Simat, Helleisen &
▇▇▇▇▇▇▇, Inc. and AVITAS, Inc.
"APPROVED LEASE" means, with respect to any Financed Aircraft,
any lease designated as an Approved Lease by Administrative Agent in its sole
discretion; provided that, the term of any such lease shall not exceed 36
months.
"ASSET SALE" means the sale (including any sale-leaseback
transaction other than sale-leaseback transactions permitted by subsections 6.9
and 6.10 hereof) by Company or any of its Subsidiaries to any other Person of
(i) any of the stock of any of Company's Subsidiaries, (ii) substantially all of
the assets of any division or line of business of Company or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Company or any of its Subsidiaries outside of the ordinary course of business
excluding (A) any such other assets to the extent that the aggregate value of
such assets sold in any single transaction or related series of transactions is
equal to $5,000,000 or less, (B) transactions related to aircraft engines,
components, parts or spare parts pursuant to customary pooling, exchange or
similar arrangements, (C) asset swaps involving aircraft engines, components,
parts or spare parts (other than any engines encumbered pursuant to an Aircraft
Chattel Mortgage); provided that the assets received by the Company or any
Subsidiary have a fair market value at least equal to the assets transferred
(provided that with respect to any asset swap or series of related asset swaps
involving assets of Company or any Subsidiary with a fair market value exceeding
$10,000,000, such determination shall be made by the Board of Directors of
Company)), (D) asset sales involving obsolete, worn-out, excess or redundant
equipment as long as the proceeds therefrom are used to replace or to upgrade
the aircraft or the equipment installed thereon, (E) transactions permitted by
subsection 9.21 of the AFL III Financing Agreement and (F) the sale by AFL III
of a single aircraft pursuant to subsection 6.6(ii) of the AFL III Financing
Agreement.
"ASSIGNEE NOTES" means any promissory notes issued by Company
(i) at the request of a Lender pursuant to subsection 2.1D hereof or (ii)
pursuant to the last sentence of subsection 9.1B(i) in connection with
assignments of the Commitments, Existing Aircraft Extended Loans or New Aircraft
Loans of any Lenders, substantially in the form of Exhibit IIIA or Exhibit IIIB
annexed hereto, as the case may be, as they may be amended, supplemented or
otherwise modified from time to time.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit VII annexed hereto.
"ATLAS ONE" means Atlas One, Inc., a Delaware corporation.
"BANKERS TRUST" has the meaning assigned to that term in the
introduction to this Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
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"BASE RATE" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
"BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
"BFE AGREEMENT" means any agreement entered into by Company,
relating to buyer furnished equipment to be installed on any Financed Aircraft
in form and substance satisfactory to Administrative Agent, as amended,
restated, supplement or otherwise modified from time to time in accordance with
this Agreement.
"BOEING" means The Boeing Company or any of its affiliates.
"BOEING TERM SHEET" means the confidential term sheet dated
April 15, 2002 between Company and Boeing related to the proposed lease
financing of the New Leased Aircraft.
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the States of New York or
Colorado or is a day on which banking institutions located in either such state
are authorized or required by law or other governmental action to close.
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within two years
after the date of purchase; (ii) marketable direct obligations (fixed and/or
floating rate) 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 two years after the date of purchase and having, at
the time of the acquisition thereof and at all times thereafter, the highest
rating obtainable from at least two of S&P, ▇▇▇▇▇'▇ and Fitch; (iii)
Dollar-denominated marketable direct obligations (fixed and/or floating rate)
issued by any corporation or commercial bank including medium term notes and
bonds, deposit notes and eurodollar/yankee notes and bonds, in each case
maturing within two years after the date of purchase and, at the time of
acquisition thereof and at all times thereafter, both (A) having a rating from
at least two of S&P, ▇▇▇▇▇'▇, and Fitch and (B) not having a rating of less than
A from S&P, A2 from ▇▇▇▇▇'▇, or A from Fitch; (iv) Dollar-denominated commercial
paper maturing no more than two years from the date of purchase and issued by a
corporation or commercial. bank that, at the time of the acquisition of the
commercial paper and at all times thereafter, both (A) has a short-term credit
rating from at least two of S&P, ▇▇▇▇▇'▇, and Fitch and (B) does not have a
short-term credit rating of less than A-1 (or the equivalent thereof) from S&P,
P-1 (or the equivalent thereof) from ▇▇▇▇▇'▇, or F-1 (or the equivalent thereof)
from Fitch; (v) Dollar-denominated certificates of
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deposit, bankers' acceptances and/or time deposits maturing within two years
after the date of purchase and issued or accepted by (a) any Lender or (b) any
commercial bank that, at the time of acquisition of such security and at all
times thereafter, both (A) has a short-term credit rating from at least two of
S&P, ▇▇▇▇▇'▇, and Fitch and (B) does not have a short-term credit rating of less
than A-1 (or the equivalent thereof) from S&P, P-1 (or the equivalent thereof)
from ▇▇▇▇▇'▇, or F-1 (or the equivalent thereof) from Fitch; (vi) 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 Fitch; (vii) Dollar-denominated
asset-backed securities (excluding any mortgage products) with a stated bullet
maturity of no more than two years from the date of purchase and, at the time of
acquisition thereof and at all times thereafter, both (A) having a rating from
at least two of S&P, ▇▇▇▇▇'▇, and Fitch and (B) not having a rating of less than
A from S&P, A2 from ▇▇▇▇▇'▇, or A from Fitch; (viii) repurchase agreements
entered into with financial institutions satisfying the criteria set forth in
clause (v) above with terms of not more than thirty days for securities
described in clauses (i) and (ii) above and having a fair market value of at
least 102% of the amount of the repurchase obligations and (ix) auction rate
securities (auction rate debt and money market preferreds) with terms of not
more than ninety days and, at the time of acquisition thereof and at all times
thereafter, both (A) having a rating from at least two of S&P, ▇▇▇▇▇'▇, and
Fitch and (B) not having a rating of less than A from S&P, A2 from ▇▇▇▇▇'▇, or A
from Fitch.
"CASH PROCEEDS" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit VIII annexed hereto delivered by a Lender
to Administrative Agent pursuant to subsection 2.7B(iii).
"CERTIFICATED AIR CARRIER" means a United States "air carrier"
within the meaning of the Federal Aviation Act, operating pursuant to a
certificate issued under Section 401 of such Act, or a carrier of comparable
status under any successor law or provision.
"COLLATERAL" means all of the properties and assets in which
Liens are purported to be granted by the Collateral Documents.
"COLLATERAL DOCUMENTS" means each First Aircraft Chattel
Mortgage and each Second Aircraft Chattel Mortgage and any security agreement
executed pursuant to subsection 5.9.
"COMMITMENTS" means the commitments of Lenders to maintain,
make and convert Loans as set forth in subsection 2.1A.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPANY COMMON STOCK" means the common stock of Company, par
value $0.01 per share.
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"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit IV annexed hereto delivered to Administrative Agent and
Lenders by Company pursuant to subsection 5.1(iv).
"CONDEMNATION PROCEEDS" has the meaning assigned to that term
in subsection 2.4B(iii)(c).
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, the sum
of the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, and (vi) other non-cash
items reducing Consolidated Net Income less other non-cash items increasing
Consolidated Net Income, all of the foregoing as determined on a consolidated
basis for Company and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
sum of (i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on the consolidated balance sheet of Company and its
Subsidiaries) by Company and its Subsidiaries during that period that, in
conformity with GAAP, are included in "additions to property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Company and its Subsidiaries plus (ii) to the extent not covered by
clause (i) of this definition, the aggregate of all expenditures by Company and
its Subsidiaries during that period to acquire (by purchase or otherwise) the
business, property or fixed assets of any Person, or the stock or other evidence
of beneficial ownership of any Person that, as a result of such acquisition,
becomes a Subsidiary of Company.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current assets in
conformity with GAAP.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP but excluding the current portion of any Indebtedness of
the Company which would otherwise be included therein.
"CONSOLIDATED EXCESS CASH FLOW" means, for any Fiscal Year, an
amount equal to the sum of Consolidated Adjusted EBITDA for such Fiscal Year and
the Consolidated Working Capital Adjustment for such Fiscal Year, minus the sum
of the amounts for such Fiscal Year of (i) scheduled repayments of principal of
Indebtedness, mandatory prepayments of the principal of Indebtedness (other than
from the proceeds of Asset Sales), voluntary prepayments of the principal of
Indebtedness to the extent that such amount is not simultaneously reborrowed,
and other permanent reductions in the availability of revolving credit
facilities (ii) Consolidated Interest Expense, (iii) permitted Consolidated
Capital Expenditures (net of any proceeds of any related financing with respect
to such Consolidated Capital Expenditures) other than Consolidated Capital
Expenditures made pursuant to the reinvestment provisions of subsection
2.4B(iii)(a), and (iv) the portion of taxes based on income or revenues actually
paid in cash.
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"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
net interest expense (to be computed by reducing interest expense by the amount
of interest income) (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries, including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Agreements and Currency
Agreements, but excluding, however, any amounts referred to in subsection 2.3
payable to Syndication Agent, Administrative Agent and/or Lenders on or before
the Fourth Restatement Date.
"CONSOLIDATED NET INCOME" means, for any period, the net
income (or loss) of Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or loss) of any
Person (other than a Subsidiary of Company) in which any other Person (other
than Company or any of its Subsidiaries) has a joint interest, except to the
extent of the amount of dividends or other distributions actually paid to
Company or any of its Subsidiaries by such Person during such period, (ii) the
income (or loss) of any Person accrued prior to the date it becomes a Subsidiary
of Company or is merged into or consolidated with Company or any of its
Subsidiaries or that Person's assets are acquired by Company or any of its
Subsidiaries, (iii) the income of any Subsidiary of Company to the extent that
the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary, (iv) any
after-tax gains or losses attributable to Asset Sales or returned surplus assets
of any pension plan, and (v) (to the extent not included in clauses (i) through
(iv) above) any net extraordinary gains or net non-cash extraordinary losses.
"CONSOLIDATED NET WORTH" means, as at any date of
determination, the sum of the capital stock and additional paid-in capital plus
retained earnings (or minus accumulated deficits) of Company and its
Subsidiaries on a consolidated basis determined in conformity with GAAP.
"CONSOLIDATED RENTAL PAYMENTS" means, for any period, the
aggregate amount of all rents paid or payable by Company and its Subsidiaries on
a consolidated basis during that period under all Capital Leases and Operating
Leases to which Company or any of its Subsidiaries is a party as lessee (net of
sublease income other than income from ACMI Contracts). For the avoidance of
doubt, all rental payments to AFL III shall not be included in Consolidated
Rental Payments.
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
Company and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any
Fiscal Year on a consolidated basis, the amount (which may be a negative number)
by which the Adjusted Consolidated Working Capital of Company and its
Subsidiaries as of the beginning of the period exceeds (or is less than) the
Adjusted Consolidated Working Capital of Company and its Subsidiaries as of the
end of such period.
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"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. Notwithstanding
anything to the contrary herein, for purposes of subsection 6.4 only, the
Investments permitted by subsections 6.3(vii) and (viii) (and any obligation to
make such Investments) shall not be treated as Contingent Obligations. The
amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if less, the amount to which
such Contingent Obligation is specifically limited.
"CONTINUING DIRECTORS" shall mean the directors of a Person on
the Fourth Restatement Date and each other director, if such other director's
nomination for election to the Board of Directors of such Person is recommended
by a majority of the then Continuing Directors.
"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.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement designed to protect Company or any of its
Subsidiaries against fluctuations in currency values.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DESIGNATED INDEBTEDNESS" means Indebtedness incurred pursuant
to the Pass Through Trust Documents, the FINOVA Agreement, the Senior Note
Documents, the NationsBanc/Bank of America Agreement, the AFL III Financing
Agreement, any Permitted Extension Indebtedness and any Other Permitted
Indebtedness.
-11-
"DETERMINATION DATE" has the meaning assigned to that term in
subsection 6.1(vi).
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DRY LEASE" has the meaning assigned to such term in
subsection 6.7(xiii) hereof.
"ELIGIBLE AIRCRAFT" means a Boeing 747-200, 747-300, 747-400
or MD-11 aircraft, including any engines installed thereon and any spare engines
of the same type and model, which (i) is in a cargo configuration capable of
immediate operation in the business of Company or is eligible for delivery under
any Modification Agreement with a delivery slot available within a six month
period (or is leased in accordance with the Collateral Documents for a period of
longer than six months until a delivery slot is available), and (ii) has a
maximum gross take-off weight ("MTOW") of at least 800,000 pounds, in the case
of any 747-200, 747-300, or 747-400 aircraft and 630,000 pounds in the case of
any MD-11 aircraft.
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof; (ii) a savings and
loan association or savings bank organized under the laws of the United States
or any state thereof; (iii) a commercial bank organized under the laws of any
other country or a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act) which extends credit or buys loans as
one of its businesses including, but not limited to, insurance companies, mutual
funds and lease financing companies, in each case (under clauses (i) through
(iv) above) that is reasonably acceptable to Administrative Agent; and (B) any
Lender and any Affiliate of any Lender; provided that no Affiliate of Company
shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is, or was at any time, maintained or
contributed to by Company or any of its ERISA Affiliates.
"ENGINE" means, as the context requires, an Engine as defined
in a particular Aircraft Chattel Mortgage, Engines as defined in all Aircraft
Chattel Mortgages, a Replacement Engine, all Replacement Engines or all of any
of the foregoing.
"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.
-12-
"EQUITY PROCEEDS" means the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith) from
the issuance of any equity Securities of Company including, without limitation,
additional issuances of Company Common Stock.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is, or was at any time, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is, or was at any time, a member; (ii) any trade or
business (whether or not incorporated) which is, or was at any time, a member of
a group of trades or businesses under common control within the meaning of
Section 414(c) of the Internal Revenue Code of which that Person is, or was at
any time, a member; and (iii) any member of an affiliated service group within
the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that
Person, any corporation described in clause (i) above or any trade or business
described in clause (ii) above is, or was at any time, a member.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in
Section 7.
"EVENT OF LOSS" shall mean any of the following events with
respect to any Financed Aircraft (whether the Airframe or an Engine of such
Financed Aircraft or Spare Engine or both): (A) loss of such Financed Aircraft
or Spare Engine or the use thereof due to theft or disappearance of such
Financed 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 Financed Aircraft or Spare Engine); (B) the
destruction, damage beyond repair or rendition of such Financed 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 Company obtains
adequate compensation from the United States Government) of such Financed
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 Financed 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 Company, prior to the expiration of
such nine month period, shall have undertaken and shall be diligently carrying
forward all steps which are necessary or desirable to permit the normal use of
such property by Company or, in any event, if such use shall have been
prohibited for a period of twelve consecutive months; (E) the operation or
location of such Financed Aircraft 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
Financed Aircraft or Spare Engine, if Company shall be unable to obtain
indemnity in lieu thereof from the United States; (F) any damage which results
in an insurance settlement with respect to such Financed 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), Section
4(d)(vi), Section 4(d)(vii)(B) or Section 4(d)(viii)(B) of any Aircraft Chattel
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Mortgage. An Event of Loss with respect to any Financed Aircraft shall be deemed
to have occurred if an Event of Loss occurs with respect to the Airframe of such
Financed Aircraft.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXISTING AGREEMENT" has the meaning assigned to that term in
the Recitals hereto.
"EXISTING AIRCRAFT" means the aircraft identified on Schedule
1.1 annexed hereto.
"EXISTING AIRCRAFT EXTENDED LOANS" means Loans deemed made by
Lenders to Company pursuant to subsection 2.1A(i).
"EXISTING AIRCRAFT EXTENDED NOTES" means (i) the promissory
notes of Company issued pursuant to subsection 2.1D on the Fourth Restatement
Date and (ii) any promissory notes issued by Company pursuant to the last
sentence of subsection 9.1B(i) in connection with assignments of Existing
Aircraft Extended Loans of any Lenders, in each case substantially in the form
of Exhibit IIIA annexed hereto, as they may be amended, supplemented or
otherwise modified from time to time.
"EXISTING AIRCRAFT LOAN EXTENSION AMOUNT" means, for each
Existing Aircraft, the amount shown on Schedule 1.1 annexed hereto.
"EXISTING AIRCRAFT LOAN REPAYMENT AMOUNTS" means, for each
Existing Aircraft Loan Repayment Date for each Existing Aircraft Extended Loan,
an amount equal to 10% of the Existing Aircraft Loan Extension Amount.
"EXISTING AIRCRAFT LOAN REPAYMENT DATE" means, for each
Existing Aircraft Extended Loan, the three-year anniversary date of the Fourth
Restatement Date and each 3-month anniversary date thereafter; provided that,
notwithstanding anything in the foregoing to the contrary, the unpaid amount of
all Existing Aircraft Extended Notes shall be due and payable on the Final
Scheduled Maturity Date.
"FACILITIES" means any and all real property now, hereafter or
heretofore owned, leased, operated or used by Company or any of its
predecessors.
"FEDERAL AVIATION ACT" means the Federal Aviation Act of 1958,
as amended and as recodified in ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any similar
legislation of the United States enacted to supersede, amend or supplement such
Act and the rules and regulations promulgated thereunder.
"FEDERAL AVIATION ADMINISTRATION" or "FAA" means the United
States Federal Aviation Administration or any successor thereto administering
the functions of the Federal Aviation Administration under the Federal Aviation
Act.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds
-14-
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day on which is a Business Day, the
average of the quotations for such day on such transactions received by
Administrative Agent from three Federal funds brokers of recognized standing
selected by Administrative Agent.
"FIFTH AMENDMENT" means the Fifth Amendment dated as of June
14, 2002 entered into by the Company, the Lenders and Administrative Agent with
respect to the Agreement.
"FIFTH AMENDMENT EFFECTIVE DATE" shall have the meaning set
forth in Section 2 of the Fifth Amendment.
"FINAL SCHEDULED MATURITY DATE" means the five-year
anniversary date of the Fourth Restatement Date.
"FINANCED AIRCRAFT" means all Eligible Aircraft, including the
airframes and engines, purchased by Company with proceeds of Existing Aircraft
Extended Loans deemed made and New Aircraft Loans made under this Agreement and
with respect to which a First Aircraft Chattel Mortgage has been executed and
delivered.
"FINOVA AGREEMENT" means that certain Secured Loan Agreement
dated as of April 11, 1996 between FINOVA and Company, as amended, restated,
supplemented or otherwise modified from time to time in accordance with this
Agreement.
"FIRST AIRCRAFT CHATTEL MORTGAGE" means, with respect to each
Eligible Aircraft purchased with the proceeds of Loans, a Security Agreement and
Chattel Mortgage (Aircraft No. ___) substantially in the form of Exhibit X
annexed hereto granting to Administrative Agent for the benefit of Lenders a
purchase money first priority security interest in such Eligible Aircraft, as
such First Aircraft Chattel Mortgage may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof and
thereof.
"FISCAL YEAR" means Company's fiscal year ending on December
31 of each year.
"FITCH" means Fitch, Inc.
"FOREIGN LEASED AIRCRAFT" means a Leased Aircraft that is
registered in a country other than the United States during the term of the
applicable Approved Lease.
"FOURTH AMENDMENT" means the Fourth Amendment and Limited
Waiver dated as of December 14, 2001 entered into by the Company, the Lenders
and Administrative Agent with respect to the Agreement.
"FOURTH AMENDMENT EFFECTIVE DATE" shall have the meaning set
forth in Section 4 of the Fourth Amendment.
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"FOURTH RESTATEMENT DATE" means the date on or before April
25, 2000 on which the conditions to effectiveness set forth in subsection 3.1
are satisfied and the Existing Aircraft Extended Loans are deemed made.
"FUNDING AND PAYMENT OFFICE" means the office of
Administrative Agent located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession. Financial statements and other information required
to be delivered by Company to Lenders pursuant to clauses (ii) and (iii) of
subsection 5.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 5.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 4.3.
"GE CAPITAL LOANS" means the loans to be made pursuant to that
certain credit agreement, in form and substance satisfactory to Administrative
Agents entered into or to be entered into between Holdings and General Electric
Capital Corporation in connection with the Polar Air Transaction.
"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.
"GSS" means Global Supply Systems, Limited, an English
company.
"GSS PLEDGE" means a non-recourse pledge of the capital stock
of GSS to support certain obligations of GSS (which obligations shall not exceed
$8 million), which pledge shall be executed pursuant to documentation
(including, without limitation, all related documents reasonably requested by
the Administrative Agent) in form and substance reasonably satisfactory to the
Administrative Agent.
"HAZARDOUS MATERIALS" means any chemical or other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated under any law.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed, or threatened use, storage, release, generation, treatment,
remediation or transportation of any Hazardous Material (i) from, under, in,
into or on the Facilities or surrounding property; and (ii) caused by, or
undertaken by or on behalf of, Company.
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"HOLDING COMPANY" has the meaning assigned to such term in the
definition of "Holding Company Reorganization."
"HOLDING COMPANY REORGANIZATION" means the acquisition, in one
transaction or a series of transactions, of all of the outstanding Securities of
Company that are entitled to vote in the election of directors other than
Securities having such power only by reason of the happening of a contingency
(and all other Securities convertible into such Securities) by another
corporation (the "Holding Company"); provided that the Holding Company
Reorganization may involve more than one Holding Company of Company so long as
the ultimate Holding Company directly or indirectly owns 100% of the Company;
provided further, in connection with the Holding Company Reorganization, the
Company and its Subsidiaries shall not incur any material obligations or
liabilities of any type other than those permitted to be paid without causing an
Event of Default under subsection 7.14.
"HOLDING COMPANY SUBSIDIARY" means any Subsidiary of a Holding
Company other than the Company and its Subsidiaries.
"HOLDINGS" means Atlas Air Worldwide Holdings, Inc., a
Delaware corporation.
"HOLDINGS GUARANTY" means that certain Holdings Guaranty dated
as of October 31, 2001 and entered into by Holdings for the benefit of the
Administrative Agent and Lenders.
"INDEBTEDNESS" means, as applied to any Person, (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, and (v) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Interest Rate Agreements and Currency
Agreements constitute Contingent Obligations and not Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in
subsection 9.3.
"INITIAL CLOSING DATE" means the date on or before May 8, 1996
on which the initial Loans were made.
"INSURANCE PROCEEDS" has the meaning assigned to that term in
subsection 2.4B(iii)(c).
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, each March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Fourth Restatement Date,
and (ii) with respect to any Eurodollar Rate Loan, the last day of each Interest
Period applicable to such Loan; provided that in the case of each Interest
Period
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of six months "Interest Payment Date" shall also include the date that is three
months after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect Company or any of its
Subsidiaries against fluctuations in interest rates.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period
"INTERIM PERIOD" shall mean the period commencing on the
Second Amendment Effective Date through and including December 14, 2001.
"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 Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person, (ii) any direct or indirect
redemption, retirement, purchase or other acquisition for value, by any
Subsidiary of Company from any Person other than Company or any of its
Subsidiaries, of any equity Securities of such Subsidiary, or (iii) any direct
or indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Company or any of
its Subsidiaries to any other Person (other than a wholly owned Subsidiary of
Company), including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business. The amount of any Investment shall be
the original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"LEASED AIRCRAFT" means a Financed Aircraft subject to an
Approved 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.
"LEVERAGE RATIO" means, as of the last day of any fiscal
quarter of the Company, the ratio of (i) Consolidated Total Debt as of such date
(less Cash and Cash Equivalents held by Company in excess of $25 million as of
such date) plus seven times Consolidated Rental Payments (for the four fiscal
quarter period ending as of such date) to (ii) Consolidated Adjusted EBITDA plus
Consolidated Rental Payments for the four fiscal quarter period ending as of
such date.
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"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge, hypothecation, preference, priority, privilege, lease or
encumbrance of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement to give any
security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
"LOAN" or "LOANS" means one or more of the Existing Aircraft
Extended Loans or New Aircraft Loans or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Holdings
Guaranty and the Collateral Documents.
"LOAN EXPOSURE" means, with respect to any Lender as of any
date of determination the sum of that Lender's Existing Aircraft Extended Loans,
that Lender's New Aircraft Loans and the unfunded portion of that Lender's
Revolving Loan Commitment.
"LOAN PARTIES" means Company and Holdings.
"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 Company or of Company and its Subsidiaries taken as a
whole or (ii) the impairment of the ability of any Loan Party to perform the
Obligations, or the impairment, as a result of actions or inaction by Company,
of the ability of Administrative Agent or Lenders to enforce the Obligations.
"MATERIAL AGREEMENT" means any or all of the Pass Through
Trust Documents, the FINOVA Agreement, the Senior Note Documents, the
NationsBanc/Bank of America Agreement, each Purchase Agreement, any Modification
Agreement, any BFE Agreement, the AFL III Leases, each Approved Lease and
agreements in respect of Permitted Extension Indebtedness and Other Permitted
Indebtedness.
"MAXIMUM NOTE AMOUNT" means, with respect to any Eligible
Aircraft, 70% of the Appraised Value of such Eligible Aircraft based on
appraisals obtained pursuant to subsection 5.10 of such Eligible Aircraft made
within 30 days prior to the purchase thereof and giving effect to the proposed
modifications of such Eligible Aircraft pursuant to a Modification Agreement.
"MODIFICATION AGREEMENT" means any modification agreement
entered into by Company with respect to the modification of any Financed
Aircraft in form and substance satisfactory to Administrative Agent.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Service, Inc.
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"NATIONSBANC/BANK OF AMERICA AGREEMENT" means the Loan
Agreement, dated as of March 28, 1997, between Company, as Borrower and
NationsBanc Leasing Corporation, as Lender, as further amended, supplemented and
modified in accordance with this Agreement.
"NET CASH PROCEEDS" means, with respect to any Asset Sale,
Cash Proceeds of such Asset Sale net of bona fide direct costs of sale including
(i) income taxes reasonably estimated to be actually payable as a result of such
Asset Sale within two years of the date of such Asset Sale and (ii) payment of
the outstanding principal amount of, premium or penalty, if any, and interest on
any Indebtedness (other than the Loans) that is secured by a Lien on the stock
or assets of Company and that is required to be repaid under the terms thereof
as a result of such Asset Sale.
"NEW AIRCRAFT" means a Financed Aircraft acquired by Company
after the Fourth Restatement Date.
"NEW AIRCRAFT LEASE" means any lease that may be entered into
by Boeing or a third-party purchaser of a New Leased Aircraft, as lessor and
Company, as lessee.
"NEW AIRCRAFT LEASE DOCUMENTS" means, collectively, the New
Aircraft Lease and all related pass through trust agreements, depositary
agreements, participation agreements, trust indenture and security agreements,
trust indenture and security agreement supplements, equipment notes and related
documents.
"NEW AIRCRAFT LOAN" means a New Aircraft Revolving Loan or a
New Aircraft Term Loan.
"NEW AIRCRAFT LOAN CONVERSION DATE" means, with respect to New
Aircraft Revolving Loans in respect of a Related Aircraft, the Fifth Amendment
Effective Date.
"NEW AIRCRAFT NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1D on the initial Funding Date of each New
Aircraft Revolving Loan and (ii) any promissory notes issued by Company pursuant
to the last sentence of subsection 9.1B(i) in connection with assignments of the
Revolving Loan Commitments and New Aircraft Loans of any Lenders, in each case
substantially in the form of Exhibit IIIA annexed hereto as they may be amended,
supplemented or otherwise modified from time to time.
"NEW AIRCRAFT REVOLVING LOAN" means a Revolving Loan made
after the Fourth Restatement Date prior to the time such Loan is converted into
a New Aircraft Term Loan on its New Aircraft Loan Conversion Date.
"NEW AIRCRAFT TERM LOAN" means a Loan made after the Fourth
Restatement Date after its conversion on its New Aircraft Loan Conversion Date.
"NEW AIRCRAFT TERM LOAN REPAYMENT AMOUNT" means, for each New
Aircraft Loan Repayment Date for all New Aircraft Term Loans for each Related
Aircraft, an amount equal to 10% of the principal amount of all such New
Aircraft Term Loans outstanding on the New Aircraft Loan Conversion Date with
respect to that Related Aircraft.
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"NEW AIRCRAFT TERM LOAN REPAYMENT DATE" means, for New
Aircraft Term Loans made with respect to a New Aircraft, the three-year
anniversary of the date on which the initial New Aircraft Revolving Loans were
made with respect to such New Aircraft and each three-month anniversary date
thereafter; provided that, notwithstanding anything in the foregoing to the
contrary, the unpaid amount of all New Aircraft Term Loans shall be due and
payable on the Final Scheduled Maturity Date.
"NEW LEASED AIRCRAFT" means the three 747-400 aircraft
currently scheduled to be delivered by Boeing to Company in May, June and
November 2002 pursuant to the Boeing purchase contract dated June 9, 1997
between Company and Boeing, which aircraft may be purchased by third parties and
leased to Company.
"9 1/4% SENIOR NOTE DOCUMENTS" means the Indenture, dated as
of April 9, 1998 between Company and State Street Bank and Trust Company
relating to the 9 1/4% Senior Notes and any and all related agreements, as the
same may be amended, restated, supplemented or otherwise modified from time to
time in accordance with this Agreement.
"9 1/4% SENIOR NOTES" means the 9 1/4% Senior Notes due April
15, 2008 of Company issued pursuant to the 9 1/4% Senior Note Documents.
"9 3/8% SENIOR NOTE DOCUMENTS" means the Indenture, dated as
of November 18, 1998 between Company and State Street Bank and Trust Company
relating to the 9 3/8% Senior Notes due and any and all related agreements, as
the same may be amended, restated, supplemented or otherwise modified from time
to time in accordance with this Agreement.
"9 3/8% SENIOR NOTES" means the 9 3/8% Senior Notes due
November 15, 2006 of Company issued pursuant to the 9 3/8% Senior Note
Documents.
"1998 PASS THROUGH TRUST DOCUMENTS" means that certain Pass
Through Trust Agreement dated as of February 9, 1998 between Atlas Air, Inc. and
Wilmington Trust Company, as Trustee (the "1998 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 1998 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.
"1999 PASS THROUGH TRUST DOCUMENTS" means that certain Pass
Through Trust Agreement dated as of April 13, 1999 between Atlas Air, Inc. and
Wilmington Trust Company, as Trustee (the "1999 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 1999 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."
"NON-US LENDER" has the meaning assigned to that term in
subsection 2.7B(iii)(a).
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"NOTES" means one or more of the Existing Aircraft Extended
Notes, the New Aircraft Notes or the Assignee Notes, as the context requires.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit I annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 2.2D with respect to a proposed
conversion or continuation of the applicable basis for determining the interest
rate with respect to the Loans specified therein.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Administrative Agent, Lenders or any of
them under the Loan Documents, whether for principal, interest, fees, expenses,
indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its chairman of the
board (if an officer) or its president or one of its vice presidents and by its
chief financial officer or its treasurer; provided that every Officers'
Certificate with respect to the compliance with a condition precedent to the
making of any Loans hereunder shall include (i) a statement that the officer or
officers making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement relating
thereto, (ii) a statement that, in the opinion of the signers, they have made or
have caused to be made such examination or investigation as is necessary to
enable them to express an informed opinion as to whether or not such condition
has been complied with, and (iii) a statement as to whether, in the opinion of
the signers, such condition has been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that Person is the lessor.
"OTHER PERMITTED INDEBTEDNESS" means Indebtedness incurred for
the purpose of financing the acquisition of aircraft so long as (i) any such
Indebtedness bears interest at a rate which does not exceed 15% per annum, (ii)
such Indebtedness has a final stated maturity later than the Final Scheduled
Maturity Date of the Notes and (iii) the amortization and the other terms,
provisions, conditions, covenants and events of default thereof taken as a whole
shall be no more onerous or restrictive from the perspective of Company and its
Subsidiaries or any less favorable, from the perspective of Lenders, than any
other Designated Indebtedness.
"PART" means, as the context requires, a Part as defined in a
particular Aircraft Chattel Mortgage or Parts as defined in all Aircraft Chattel
Mortgages.
"PASS THROUGH TRUST DOCUMENTS" means the 1998 Pass Through
Trust Agreement, the 1999 Pass Through Trust Agreement and the 2000 Pass Through
Trust Agreement (the "PASS THROUGH TRUST AGREEMENTS") and any trust indenture
and security agreements including any related
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trust indenture and security agreement supplements which related to the
equipment notes to be held in trust pursuant to the Pass Through Trust
Agreements and all related agreements, as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with this
Agreement.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental charges
or claims the payment of which is not, at the time, required by
subsection 5.3;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent
or being contested in good faith by appropriate proceedings that do not
involve any danger of the sale, forfeiture or loss of any Collateral,
if such reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor;
(iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure
the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts, performance
and return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(iv) any attachment or judgment Lien not constituting an
Event of Default under subsection 7.8;
(v) easements, rights-of-way, restrictions, minor
defects, encroachments or irregularities in title and other similar
charges or encumbrances not interfering in any material respect with
the ordinary conduct of the business of Company or any of its
Subsidiaries;
(vi) any (a) interest or title of a lessor or sublessor
under any lease permitted by subsection 6.9, (b) restriction or
encumbrance that the interest or title of such lessor or sublessor may
be subject to, or (c) subordination of the interest of the lessee or
sublessee under such lease to any restriction or encumbrance referred
to in the preceding clause (b);
(vii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(viii) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(ix) the rights of others under agreements or arrangements
to the extent expressly permitted by the terms of Sections 4(d) and
4(e) of the First Aircraft Chattel Mortgages;
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(x) Liens described in Schedule 6.2 annexed hereto;
(xi) Liens arising pursuant to the NationsBanc/Bank of
America Agreement; provided that such Liens encumber only assets
acquired or refinanced with the proceeds of Indebtedness incurred
pursuant to the NationsBanc Agreement;
(xii) Liens arising pursuant to the AFL III Financing
Agreement; provided that such Liens do not encumber any assets other
than the AFL III Equipment and other assets of AFL III;
(xiii) Liens securing Indebtedness incurred in accordance
with subsection 6.1(x);
(xiv) The rights of others under agreements or arrangements
to the extent expressly permitted by the terms of Sections 4(d) and
4(e) of any aircraft chattel mortgages entered into in connection with
the AFL III Financing Agreement
(xv) Liens granted pursuant to the Collateral Documents.
"PERMITTED EXTENSION INDEBTEDNESS" means renewals, extensions,
substitutions, refinancings or replacements (each an "EXTENSION") by Company of
any Indebtedness of Company, including any such successive transactions by
Company, so long as (i) any such Indebtedness bears interest at a rate which
does not exceed 15% per annum, (ii) any such Permitted Extension Indebtedness
shall be in a principal amount that does not exceed the principal amount
immediately prior to such extension, plus the amount of any premium required to
be paid in connection with such extension pursuant to the terms of such
Indebtedness, plus the amount of expenses of Company reasonably incurred in
connection with such extension, (iii) in the case of any extension of
subordinated Indebtedness, such Permitted Extension Indebtedness is made
subordinate to the Obligations at least to the same extent as the Indebtedness
immediately prior to such extension, (iv) such Permitted Extension Indebtedness
has a final stated maturity later than the Final Stated Maturity Date of the
Notes and (v) the amortization and the other terms, provisions, conditions,
covenants and events of default thereof taken as a whole shall be no more
onerous or restrictive from the perspective of Company and its Subsidiaries or
any less favorable, from the perspective of Lenders than those contained in the
Indebtedness immediately prior to such extension.
"PERMITTED HOLDERS" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, his spouse, his
descendant(s) or any entity controlled by any of the foregoing, or any trust
solely for the benefit of any of the foregoing.
"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.
"POLAR AIR" means Polar Air Cargo, Inc., a California
corporation which will be an indirect wholly owned subsidiary of Holdings
subsequent to the Polar Air Transaction.
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"POLAR AIR PAYMENT" has the meaning set forth in subsection
6.5(ii).
"POLAR AIR TRANSACTION" has the meaning set forth in
subsection 6.5(ii).
"POLAR LEASES" means those four sublease agreements between
Polar Air, as sublessee, and General Electric Capital Corporation, as sublessor,
relating to 747-400 aircraft bearing U.S. registration numbers N450PA, N451PA,
N452PA and N453PA, respectively and manufacturer serial numbers 30808, 30809,
30810 and 30811, respectively and the aircraft lease agreement between Polar
Air, as lessee, and Polaris Holding Company, as lessor, relating to a 747-200
aircraft bearing U.S. registration number N920FT and manufacturer serial number
22237.
"POLAR TERM SHEET" means Part One of Schedule 5.11 to the
Stock Purchase Agreement dated as of July 11, 2001 by and among Airline
Acquisition Corp. I, Polar Air, Polaris Holding Company, Holdings and GE Capital
Aviation Services, Inc., as in effect on the Fifth Amendment Effective Date.
"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.
"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.
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"PRO FORMA BASIS" means, with respect to compliance with any
covenant hereunder, compliance with such covenant after giving effect to any
proposed incurrence of Indebtedness by Company or any of its Subsidiaries and
the application of the proceeds thereof, the acquisition (whether by purchase,
merger or otherwise) or disposition (whether by sale, merger or otherwise) of
any company, entity or business or any asset (including any ACMI Contracted
Aircraft) by Company or any of its Subsidiaries or any other related action
which requires compliance on a Pro Forma Basis. In making any determination of
compliance on a Pro Forma Basis, such determination shall be performed after
good faith consultation with Administrative Agent using the consolidated
financial statements of Company and its Subsidiaries which shall be reformulated
as if any such incurrence of Indebtedness and the application of proceeds,
acquisition, disposition or other related action had been consummated at the
beginning of the period specified in the covenant with respect to which Pro
Forma Basis compliance is required.
"PRO RATA SHARE" means, with respect to each Lender, the
percentage obtained by dividing the Loan Exposure of that Lender by the
aggregate Loan Exposure of all Lenders, as such percentage may be adjusted by
assignments permitted pursuant to subsection 9.1. The Pro Rata Share of each
Lender as of the date hereof is set forth opposite the name of that Lender in
Schedule 2.1 annexed hereto.
"PROCEEDINGS" has the meaning assigned to that term in
subsection 5.1(x).
"PURCHASE AGREEMENT" means, with respect to the purchase of
any Eligible Aircraft to be financed with the proceeds of New Aircraft Loans, an
aircraft purchase agreement and any related ▇▇▇▇ of sale providing, among other
things, for the sale to Company of such Eligible Aircraft in form and substance
satisfactory to Administrative Agent.
"REFERENCE LENDERS" means Bankers Trust and one or more other
Lenders designated by Administrative Agent and reasonably satisfactory to
Company.
"REGISTER" has the meaning assigned to that term in subsection
2.1.E.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"RELATED AIRCRAFT" means an Existing Aircraft or a New
Aircraft in respect of which Existing Aircraft Extended Loans are deemed made or
New Aircraft Loans are made, respectively.
"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.
"REPLACEMENT ENGINE" has the meaning assigned to that term in
subsection 9.22A.
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"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 Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Designated
Indebtedness.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender
to make New Aircraft Revolving Loans and New Aircraft Term Loans to Company
pursuant to subsection 2.1A(ii), and "REVOLVING LOAN COMMITMENTS" means such
commitments of all Lenders in the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means the Final
Scheduled Maturity Date.
"REVOLVING LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(ii).
"S&P" means Standard & Poor's, a division of the ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
"SECOND AIRCRAFT CHATTEL MORTGAGE" means with respect to each
Eligible Aircraft purchased with the proceeds of Loans, a Second Security
Agreement and Chattel Mortgage (Aircraft No. _____) and substantially in the
form of Exhibit XI annexed hereto, granting a security interest in such Eligible
Aircraft and Parts securing all Obligations that are not secured by the First
Chattel Mortgage entered into concurrently therewith, as such Second Aircraft
Chattel Mortgage may be amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms hereof and thereof.
"SECOND AMENDMENT" means the Second Amendment and Limited
Waiver dated as of October 15, 2001 entered into by the Company, the Lenders and
Administrative Agent with respect to the Agreement.
"SECOND AMENDMENT EFFECTIVE DATE" shall have the meaning set
forth in Section 4 of the Second Amendment.
"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 cer-
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tificates 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.
"SENIOR NOTES" means the 10 3/4% Senior Notes, the 9 1/4%
Senior Notes and the 9 3/8% Senior Notes.
"SENIOR NOTE DOCUMENTS" means the 10 3/4% Senior Note
Documents, the 9 1/4% Senior Note Documents and the 9 3/8% Senior Note
Documents.
"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 ENGINE" means, as the context requires, a Spare Engine
as defined in a particular Aircraft Chattel Mortgage or all Spare Engines as
defined in all Aircraft Chattel Mortgages.
"SPECIAL PURPOSE SUBSIDIARY" means (i) a Subsidiary of Company
formed solely for the purpose of refinancing Notes associated with a Financed
Aircraft or acquiring or refinancing other aircraft with Other Permitted
Indebtedness the only assets of which are such Financed Aircraft and
contributions to capital of such Subsidiary, which together with all other
contributions to capital made to other such Subsidiaries, are not in excess of
15% of the consolidated book value of the assets of the Company and its
Subsidiaries, and the only liability of which is the Permitted Extension
Indebtedness incurred to refinance such Notes; provided that Company
beneficially owns and controls at least 95% of the issued and outstanding
capital stock of such Subsidiary or (ii) a wholly owned Subsidiary formed
pursuant to subsection 9.21.
"SPECIFIED LEASE" has the meaning assigned to that term in
subsection 6.12 hereof.
"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 man-
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agement and policies thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"SUPPLEMENTAL TYPE CERTIFICATES" has the meaning assigned to
that term in the First Aircraft Chattel Mortgage.
"SYNDICATION AGENT" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
in its capacity as syndication agent under the Existing Agreement.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; provided that "TAX ON THE OVERALL NET INCOME" of a Person
shall be construed as a reference to a tax imposed by the jurisdiction in which
that Person's principal office (and/or, in the case of a Lender, its lending
office) is located or in which that Person is deemed to be doing business on all
or part of the net income, profits or gains of that Person (whether worldwide,
or only insofar as such income, profits or gains are considered to arise in or
to relate to a particular jurisdiction, or otherwise).
"10 3/4% SENIOR NOTES" means the 10 3/4% Senior Notes due 2005
of Company issued pursuant to the 10 3/4% Senior Note Documents.
"10 3/4% SENIOR NOTE DOCUMENTS" means the Indenture, dated as
of August 13, 1997 between Company and State Street Bank and Trust Company
relating to the 10 3/4% Senior Notes and any and all related agreements, as the
same may be amended, restated, supplemented or otherwise modified from time to
time in accordance with this Agreement.
"THIRD AMENDMENT" means the Third Amendment dated as of
October 31, 2001 entered into by the Company, the Lenders and Administrative
Agent with respect to the Agreement.
"THIRD AMENDMENT EFFECTIVE DATE" shall have the meaning set
forth in Section 2 of the Third Amendment.
"TNT ENTITY" means the TNT Post Group N.V. holding company and
any of its affiliates.
"2000 PASS THROUGH TRUST DOCUMENTS" means that certain Pass
Through Trust Agreement dated as of January 28, 2000 between Atlas Air, Inc. and
Wilmington Trust Company, as Trustee (the "2000 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 2000 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.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any jurisdiction.
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"UNITED STATES CITIZEN" has the meaning assigned to that term
in subsection 4.1B.
"UNRESTRICTED CASH AND CASH EQUIVALENTS" means Cash and Cash
Equivalents that are not subject to any Lien or any other restriction or
limitation on the Company's ability to withdraw (in the case of Cash) or sell
(in the case of Cash Equivalents).
1.2. ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP.
1.3. OTHER DEFINITIONAL PROVISIONS.
References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in subsection 1.1 may, unless
the context otherwise requires, be used in the singular or the plural, depending
on the reference.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1. COMMITMENTS; MAKING OF LOANS; NOTES; REGISTER.
A. COMMITMENTS. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of
Company herein set forth, each Lender hereby severally agrees to make the Loans
described in this subsection 2.1A. Notwithstanding anything to the contrary
herein, during the Interim Period, Company shall not be permitted to borrow and
the Lenders shall not be required to lend to Company, any amounts other than the
Alitalia Loans.
(i) Existing Aircraft Extended Loans. Prior to the date
hereof, Lenders have made "Revolving Loans" under the Existing
Agreement in the aggregate principal amount of $87,916,000, the
proceeds of which were used to purchase and modify the Existing
Aircraft. The principal amount of all "Revolving Loans" anticipated to
be outstanding on the Fourth Restatement Date with respect to each
Related Aircraft is set forth on Schedule 1.1 annexed hereto and shown
as the "Existing Aircraft Loan Extension Amount" for such Existing
Aircraft and each such "Revolving Loan" shall be deemed to be an
"Existing Aircraft Extended Loan" in such principal amount upon the
satisfaction of the conditions set forth in subsection 3.1 and the
effectiveness of this Agreement. From and after the Fourth Restatement
Date, each Lender severally agrees, subject to the terms and conditions
of this Agreement to maintain and extend its Pro Rata Share of Existing
Aircraft Extended Loans and such Loans shall be repaid as provided in
subsection 2.4A(i).
(ii) Prior to the Fifth Amendment Effective Date, Lenders have
made "Revolving Loans" under this Agreement in the aggregate principal
amount of $68,106,647.16 the pro-
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ceeds of which were used to purchase and modify the New Aircraft. Each
"Revolving Loan" outstanding on the Fifth Amendment Effective Date
shall be automatically converted on such date to a New Aircraft Term
Loan. From and after the Fifth Amendment Effective Date, each Lender
severally agrees, subject to the terms and conditions of this Agreement
to maintain its Pro Rata Share of New Aircraft Term Loans and such
Loans shall be repaid as provided in subsection 2.4A(ii). From and
after the Fifth Amendment Effective Date, the aggregate amount of the
Revolving Loan Commitments shall be zero and the Lenders shall have no
obligation to lend any amounts to the Company under this Agreement.
Anything to the contrary in this Agreement notwithstanding,
the New Aircraft Loans shall be subject to the limitation that in no event shall
the Lenders lend an amount in excess of (x) on the date of acquisition of a New
Aircraft the lesser of (i) an amount equal to the purchase price of such New
Aircraft and (ii) 70% of the Appraised Value of such New Aircraft as of the date
of acquisition (but without giving effect to the contemplated modifications) or
(y) on any date New Aircraft Loans are made to finance the modification of a New
Aircraft, the lesser of (i) 70% of the cost thereof as reflected in invoices
delivered to Administrative Agent pursuant to subsection 3.3A (or 100% of the
costs of modification associated with the final New Aircraft Loan to complete
the modification of such New Aircraft) and (ii) an amount which when added to
all other New Aircraft Loans made with respect to such New Aircraft does not
exceed 70% of the Appraised Value as set forth in appraisals delivered pursuant
to subsection 3.2 after giving effect to completion of modification. Further, in
no event shall the aggregate amount of all Existing Aircraft Extended Loans, New
Aircraft Revolving Loans and New Aircraft Term Loans at any time outstanding
exceed $140,000,000. The aggregate principal amount of all Revolving Loans
anticipated to be outstanding on the Fourth Amendment Effective Date, after
giving effect to the prepayment to be made pursuant to Section 4.3 hereof is
$68,106,647.16.
B. BORROWING MECHANICS. Revolving Loans made on any
Funding Date shall be in an aggregate minimum amount of $1,500,000. Whenever
Company desires that Lenders make Revolving Loans it shall deliver to
Administrative Agent a Notice of Borrowing no later than 12:00 Noon (New York
time) at least three Business Days in advance of the proposed Funding Date (in
the case of a Eurodollar Rate Loan) or at least one Business Day in advance of
the proposed Funding Date (in the case of a Base Rate Loan). The Notice of
Borrowing shall specify (i) the proposed Funding Date (which shall be a Business
Day), (ii) the amount of Loans requested, (iii) whether such Loans shall be Base
Rate Loans or Eurodollar Rate Loans, (iv) in the case of any Loans requested to
be made as Eurodollar Rate Loans, the initial Interest Period requested
therefor, (v) whether such Loans are for the purpose of the purchase or the
modification of an Eligible Aircraft and (vi) the identification of the Related
Aircraft. Revolving Loans and Term Loans may be continued as or converted into
Base Rate Loans and Eurodollar Rate Loans in the manner provided in subsection
2.2D. In lieu of delivering the above-described Notice of Borrowing, Company may
give Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B; provided that such notice shall be
promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of
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Company or for otherwise acting in good faith under this subsection 2.1B, and
upon funding of Loans by Lenders in accordance with this Agreement pursuant to
any such telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding
of any Loans in the event that any of the matters to which Company is required
to certify in the applicable Notice of Borrowing is no longer true and correct
as of the applicable Funding Date, and the acceptance by Company of the proceeds
of any Loans shall constitute a re-certification by Company, as of the
applicable Funding Date, as to the matters to which Company is required to
certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in
lieu thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in accordance
therewith.
C. DISBURSEMENT OF FUNDS. All Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu thereof), Administrative Agent shall notify each Lender of the proposed
borrowing. Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 12:00 Noon (New York time) on the applicable
Funding Date, in each case in same day funds in Dollars, at the Funding and
Payment Office.
Unless Administrative Agent shall have been notified by any
Lender prior to the Funding Date for any Loans that such Lender does not intend
to make available to Administrative Agent the amount of such Lender's Loan
requested on such Funding Date, Administrative Agent may assume that such Lender
has made such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
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D. NOTES.
(i) Existing Aircraft Extended Notes. Each of the
outstanding "Revolving Notes" under the Existing Agreement shall be deemed
amended and restated on the Fourth Restatement Date to reflect the extension of
the maturity from September 30, 2000 to the Final Scheduled Maturity Date.
Company shall execute and deliver on the Fourth Restatement Date to each Lender
(or to Administrative Agent for that Lender) Existing Aircraft Extension Notes
substantially in the form of Exhibit IIIA annexed hereto to evidence that
Lender's Existing Aircraft Extended Loans in respect of each Existing Aircraft
and the amendment and restatement of such "Revolving Notes".
(ii) New Aircraft Notes. Following the Fourth Restatement
Date, on each date on which Company delivers a Notice of Borrowing pursuant to
subsection 2.1B for the purpose of financing the purchase of a New Aircraft,
Company shall execute and deliver on such date to each Lender (or to
Administrative Agent for that Lender) with respect to such New Aircraft a New
Aircraft Note substantially in the form of Exhibit IIIB annexed hereto to
evidence that Lender's New Aircraft Revolving Loans and New Aircraft Term Loans
in respect of such New Aircraft in such Lender's Pro Rata Share of the
aggregate principal amount of such New Aircraft's Maximum Note Amount with
other appropriate insertions.
E. THE REGISTER.
(i) Administrative Agent shall maintain, at its address
referred to in subsection 9.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from time to
time (the "REGISTER"). The Register shall be available for inspection by Company
or any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(ii) Administrative Agent shall record in the Register the
Revolving Loan Commitment and the Existing Aircraft Extended Loans and New
Aircraft Loans from time to time of each Lender and each repayment or prepayment
in respect of the principal amount of the Existing Aircraft Extended Loans and
New Aircraft Loans of each Lender. Any such recordation shall be conclusive and
binding on Company and each Lender, absent manifest error; provided that failure
to make any such recordation, or any error in such recordation, shall not affect
Company's Obligations in respect of the applicable Loans.
(iii) Each Lender shall record on its internal records
(including, without limitation the Notes held by such Lender) the amount of each
Loan made by it and each payment in respect thereof. Any such recordation shall
be conclusive and binding on Company, absent manifest error; provided that
failure to make any such recordation, or any error in such recordation, shall
not affect Company's Obligations in respect of the applicable Loans; and
provided, further, that in the event of any inconsistency between the Register
and any Lender's records, the recordations in the Register shall govern.
(iv) Company, Administrative Agent and Lenders shall deem
and treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Commitment
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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 Commitment or Loan shall be owed to the Lender listed in the Register
as the owner thereof, and any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is
listed in the Register as a Lender shall be conclusive and binding on any
subsequent holder, assignee or transferee of the corresponding Commitments or
Loans.
(v) Company hereby designates Administrative Agent to
serve as Company's agent solely for purposes of maintaining the Register as
provided in this subsection 2.1E, and Company hereby agrees that, to the extent
Administrative Agent serves in such capacity, Administrative Agent and its
officers, directors, employees, agents and affiliates shall constitute
Indemnities for all purposes under subsection 9.3.
2.2. INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of
subsections 2.6 and 2.7, each Loan shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Base Rate or the Adjusted
Eurodollar Rate, as the case may be. The applicable basis for determining the
rate of interest with respect to any Loan shall be selected by Company initially
at the time a Notice of Borrowing is given with respect to such Loan pursuant to
subsection 2.1B. The basis for determining the interest rate with respect to any
Loan may be changed from time to time pursuant to subsection 2.2D. If on any day
a Loan is outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day
that Loan shall bear interest determined by reference to the Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, each
Loan shall bear interest through maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate
plus the Applicable Margin per annum; or
(ii) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus the Applicable Margin per annum.
The "APPLICABLE MARGIN" for each Base Rate Loan and Eurodollar
Rate Loan shall be the percentage set forth below for that type of Loan for the
periods set forth below:
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--------------------------------------------------------------------------------
Applicable Margin
-----------------
------------------------------------
Period Base Rate Loan Eurodollar Rate
------ Loan
--------------------------------------------------------------------------------
At all times prior to October 1, 2002 2.125% 3.125%
--------------------------------------------------------------------------------
From October 1, 2002 to March 31, 2003 3.125% 4.125%
--------------------------------------------------------------------------------
From April 1, 2003 and thereafter 2.125% 3.125%
--------------------------------------------------------------------------------
B. INTEREST PERIODS. In connection with each Eurodollar
Rate Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice
of Conversion/Continuation, as the case may be, select an interest period (each
an "INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:
(i) the initial Interest Period for any Eurodollar Rate
Loan shall commence on the Funding Date in respect of such Loan, in the
case of a Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest
Periods applicable to a Eurodollar Rate Loan continued as such pursuant
to a Notice of Conversion/Continuation, each successive Interest Period
shall commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Loans shall extend beyond the Final Scheduled Maturity Date;
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(vi) no Interest Period with respect to any portion of the
Loans shall extend beyond a date on which Company is required to make a
scheduled payment of principal of the Loans unless the sum of (a) the
aggregate principal amount of Loans that are Base Rate Loans plus (b)
the aggregate principal amount of Loans that are Eurodollar Rate Loans
with Interest Periods expiring on or before such date equals or exceeds
the principal amount required to be paid on the Loans on such date;
(vii) there shall be no more than twelve Interest Periods
outstanding at any time;
(viii) in the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan in the applicable Notice of
Borrowing or Notice of Conversion/Continuation, Company shall be deemed
to have selected an Interest Period of one month; and
(ix) prior to the date that is three months from the
Fourth Restatement Date, no Interest Period with respect to any portion
of the Loans shall exceed one month.
C. INTEREST PAYMENTS. Subject to the provisions of
subsection 2.2E, interest on each Loan shall be payable in arrears on and to
each Interest Payment Date applicable to that Loan, upon any prepayment of that
Loan (to the extent accrued on the amount being prepaid) and at maturity
(including final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions
of subsection 2.6, Company shall have the option (i) to convert at any time all
or any part of its outstanding Loans equal to $3,000,000 and integral multiples
of $100,000 in excess of that amount from Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $3,000,000 and integral multiples of $100,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that a
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 12:00 Noon (New York time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date.
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Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Conversion/Continuation for conversion to, or continuation of,
a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.
E. DEFAULT RATE. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is 2% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the applicable Loans
(or, in the case of any such fees and other amounts, at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans) ; provided that, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a rate
which is 2% per annum in excess of the interest rate otherwise payable under
this Agreement for Base Rate Loans. Payment or acceptance of the increased rates
of interest provided for in this subsection 2.2E is not a permitted alternative
to timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Administrative Agent or
any Lender.
F. COMPUTATION OF INTEREST. Interest on each Loan shall
be computed on the basis of a 360-day year, in each case for the actual number
of days elapsed in the period during which it accrues. In computing interest on
any Loan, the date of the making of such Loan or the first day of an Interest
Period applicable to such Loan or, with respect to a Base Rate Loan being
converted from a Eurodollar Rate Loan, the date of conversion of such Eurodollar
Rate Loan to such Base Rate Loan, as the case may be, shall be included, and the
date of payment of such Loan or the expiration date of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted to
a Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such
Eurodollar Rate Loan, as the case may be, shall be excluded; provided that if a
Loan is repaid on the same day on which it is made, one day's interest shall be
paid on that Loan.
2.3. FEES.
A. COMMITMENT FEES. Company agrees to pay to
Administrative Agent, for distribution to each Lender in proportion to that
Lender's Pro Rata Share, commitment fees for the period from and including the
Fourth Restatement Date to and excluding the Revolving Loan Commitment
Termination Date equal to the average of the daily excess of the Revolving Loan
Commitments
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over the aggregate principal amount of Loans outstanding multiplied by (y) if a
Pricing Reduction is not then in effect, 0.50% per annum or (z) if a Pricing
Reduction is then in effect, 0.375% per annum, such commitment fees to be
calculated on the basis of a 360-day year and the actual number of days elapsed
and to be payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing on the first such date to occur after the
Fourth Restatement Date, and on the Revolving Loan Commitment Termination Date.
B. ADMINISTRATIVE FEE. Company agrees to pay to
Administrative Agent, an Administrative Agent's fee in the amount as from time
to time agreed upon by Company and Administrative Agent.
C. OTHER FEES. Company agrees to pay to Administrative
Agent such other fees in the amounts and at the times separately agreed upon
between Company and Administrative Agent.
2.4. REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN LOANS AND REVOLVING LOAN
COMMITMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.
A. SCHEDULED REPAYMENTS.
(i) Scheduled Repayments of Existing Aircraft Extended
Loans. Company shall make principal payments of the Existing Aircraft Extended
Loans in installments on each Existing Aircraft Loan Repayment Date in an amount
equal to the applicable Existing Aircraft Loan Repayment Amount; provided that
such scheduled installments of principal of the Existing Aircraft Extended Loans
shall be reduced in connection with voluntary or mandatory prepayments of the
Existing Aircraft Extended Loans in accordance with subsection 2.4B; and
provided, further that the Existing Aircraft Extended Loans and all other
amounts owed hereunder with respect to the Existing Aircraft Extended Loans
shall be paid in full no later than the Final Stated Maturity Date, and the
final installment payable by Company in respect of the Existing Aircraft
Extended Loans on such date shall be in an amount sufficient to repay all
amounts owing by Company under this Agreement with respect to the Existing
Aircraft Extended Loans. Any payment pursuant to this subsection 2.4A(i) will be
applied ratably among the Existing Aircraft Extended Notes relating to all
Existing Aircraft; provided that, at Administrative Agent's election, any
prepayment may be deemed first to pay Existing Aircraft Extended Loans made to
finance labor costs associated with conversion of the Financed Aircraft, if any,
second to pay Existing Aircraft Extended Loans made to finance other costs of
such conversion, and thereafter to all other Existing Aircraft Extended Loans.
(ii) Scheduled Repayments of New Aircraft Term Loans.
Company shall make principal payments of each New Aircraft Term Loan in
installments on each New Aircraft Term Loan Repayment Date in an amount equal to
the applicable New Aircraft Term Loan Repayment Amount for such New Aircraft
Term Loan; provided that such scheduled installments of principal of the New
Aircraft Term Loans shall be reduced in connection with voluntary or mandatory
prepayments of the New Aircraft Term Loans in accordance with subsection 2.4B;
and provided, further, that the New Aircraft Term Loans and all other amounts
owed hereunder with respect to the New Aircraft Term Loans shall be paid in full
no later than the Final Stated Maturity Date, and the final installment payable
by Company in respect of the New Aircraft Term Loans on such date shall be in an
amount sufficient to repay all amounts owing by Company under this Agreement
with respect to the New Aircraft
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Term Loans. Any payment pursuant to this subsection 2.4A(ii) will be applied
ratably among the New Aircraft Term Notes relating to the Related Aircraft;
provided that, at Administrative Agent's election, any prepayment may be deemed
first to pay New Aircraft Term Loans made to finance labor costs associated with
conversion of such Related Aircraft, if any, second to pay New Aircraft Term
Loans made to finance other costs of such conversion, and thereafter to all
other New Aircraft Term Loans.
(iii) Mandatory Repayments of New Aircraft Revolving Loans.
Company shall make principal payments on the Final Stated Maturity Date of the
full amount of all New Aircraft Revolving Loans. Any repayment pursuant to this
subsection 2.4A(iii) will be applied ratably among the New Aircraft Notes
relating to the Related Aircraft; provided that, at Administrative Agent's
election, any prepayment may be deemed first to pay New Aircraft Revolving Loans
made to finance labor costs associated with conversion of such Related Aircraft,
if any, second to pay New Aircraft Revolving Loans made to finance other costs
of such conversion, and thereafter to all other New Aircraft Revolving Loans.
Notwithstanding the foregoing, all Alitalia Loans shall be
repaid on a quarterly repayment schedule beginning on the three month
anniversary of the date of borrowing of such Alitalia Loans based on at least
90% of the net free cash flow generated by the related Alitalia Lease and
approved by the Administrative Agent, in its sole discretion; provided that, the
full unpaid balance of such Alitalia Loans shall be due at the Final Stated
Maturity Date. Notwithstanding anything to the contrary in this Agreement, the
amortization schedule for the Alitalia Loans shall at all times be as set forth
in this Section 2.4A(iii) and at no time shall switch to the amortization
schedule set forth in Section 2.4A(ii).
B. PREPAYMENTS AND UNSCHEDULED REDUCTIONS IN REVOLVING
LOAN COMMITMENTS.
(i) Voluntary Prepayments. Company may, upon not less
than three Business Days' prior written or telephonic notice given to
Administrative Agent by 12:00 Noon (New York time) on the date required and, if
given by telephone, promptly confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent will promptly
transmit by telefacsimile or telephone to each Lender), at any time and from
time to time prepay, without premium or penalty (other than pursuant to
subsection 2.6D), any Loans on any Business Day in whole or in part in an
aggregate minimum amount of $3,000,000 and integral multiples of $100,000 in
excess of that amount; provided, however, that a Eurodollar Rate Loan may only
be prepaid on the expiration of the Interest Period applicable thereto. Notice
of prepayment having been given as aforesaid, the principal amount of the Loans
specified in such notice shall become due and payable on the prepayment date
specified therein. Any such voluntary prepayment shall be applied as specified
in subsection 2.4B(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments.
Company may, upon not less than three Business Days' prior written or telephonic
notice confirmed in writing to Administrative Agent (which original written or
telephonic notice Administrative Agent will promptly transmit by telefacsimile
or telephone to each Lender), at any time and from time to time terminate in
whole or permanently reduce in part, without premium or penalty (other than
pursuant to subsection
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2.6D), the Revolving Loan Commitments in an amount up to the amount by which the
Revolving Loan Commitments exceed the aggregate amount of all Existing Aircraft
Extended Loans and New Aircraft Loans outstanding at the time of such proposed
termination or reduction; provided that any such partial reduction of the
Revolving Loan Commitments shall be in an aggregate minimum amount of $3,000,000
and integral multiples of $100,000 in excess of that amount. Company's notice to
Administrative Agent shall designate the date (which shall be a Business Day) of
such termination or reduction and the amount of any partial reduction, and such
termination or reduction of the Revolving Loan Commitments shall be effective on
the date specified in Company's notice and shall reduce the Revolving Loan
Commitment of each Lender proportionately to its Pro Rata Share.
(iii) Mandatory Prepayments and Mandatory Reductions of
Revolving Loan Commitments.
(a) Prepayments and Reductions from Asset Sales. No later
than the second Business Day following the date of receipt by Company
or any of its Subsidiaries of Cash Proceeds of any Asset Sale, Company
shall prepay, without premium or penalty (other than pursuant to
subsection 2.6D), the Loans in an amount equal to the Net Cash Proceeds
of such Asset Sale; provided that, with respect to Asset Sales which do
not include the sale of a Financed Aircraft, so long as no Potential
Event of Default or Event of Default has occurred and is continuing,
(i) Company shall have the option to use the Net Cash Proceeds within
one hundred eighty (180) days of receipt thereof for the purpose of
making Consolidated Capital Expenditures otherwise permitted by this
Agreement and (ii) to the extent such Net Cash Proceeds are not
reinvested pursuant to clause (i), Company may retain Net Cash Proceeds
in respect of such Asset Sales of up to $10 million in any Fiscal Year
and $20 million in the aggregate; provided, further that, with respect
to any Asset Sale involving the sale of a Financed Aircraft, so long as
no Potential Event of Default or Event of Default has occurred and is
continuing, the Company may retain any Net Cash Proceeds in excess of
the amount equal to the sum of (x) the amount required to repay all
amounts outstanding under the Notes relating to such Financed Aircraft
and (y) the amount required to prepay any remaining Loans to the extent
necessary so that the outstanding principal amount of any Loans made to
finance the acquisition or conversion of a Financed Aircraft shall not
exceed 70% of the Appraised Value of such Financed Aircraft as
determined by appraisals to be provided at the time of such mandatory
prepayment by two Approved Appraisers. Concurrently with any prepayment
of the Loans pursuant to this subsection 2.4B(iii)(a), Company shall
deliver to Administrative Agent an Officers' Certificate demonstrating
the derivation of the Net Cash Proceeds of the correlative Asset Sale
from the gross sales price thereof and the amount required to be
prepaid pursuant to this subsection 2.4B(iii)(a). In the event that
Company shall, at any time after receipt of Cash Proceeds of any Asset
Sale requiring a prepayment pursuant to this subsection 2.4B(iii)(a),
determine that the prepayments previously made in respect of such Asset
Sale were in an aggregate amount less than that required by the terms
of this subsection 2.4B(iii)(a), Company shall promptly make an
additional prepayment of the Loans in the manner described above in an
amount equal to the amount of any such deficit, and Company shall
concurrently therewith deliver to Administrative Agent an Officers'
Certificate demonstrating the derivation of the additional Net Cash
Proceeds resulting in such deficit and the additional amount required
to be prepaid pursuant to this subsection 2.4B(iii)(a). Any mandatory
prepayments pursuant to this subsection 2.4B(iii)(a) shall be applied
as specified in
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subsection 2.4B(iv). Notwithstanding the foregoing, so long as the AFL
III Financing remains outstanding, Cash Proceeds from the sale or other
disposition of the AFL III Equipment shall not be subject to the
provisions of this subsection 2.4(B)(iii)(a) to the extent that such
Cash Proceeds are applied in accordance with the terms of the AFL III
Financing Agreement.
(b) Prepayments and Reductions Due to Issuance of Certain
Indebtedness. On the date of receipt by Company of the cash proceeds
(net of underwriting discounts and commissions and other reasonable
costs associated therewith) from the issuance of Permitted Extension
Indebtedness with respect to a Financed Aircraft, Company shall prepay,
without premium or penalty (other than pursuant to subsection 2.6D),
the Loans in an amount equal to such net cash proceeds. Any such
mandatory prepayments shall be applied as specified in subsection
2.4B(iv). Notwithstanding the foregoing, any such cash proceeds
received pursuant to the AFL III Financing Agreement shall not be
subject to the provisions of this subsection 2.4(B)(iii)(b).
(c) Prepayments and Reductions Due to Insurance and
Condemnation Proceeds. No later than the second Business Day following
the date of receipt by Company or any of its Subsidiaries of any cash
payments under any of the casualty insurance policies covering damage
to or loss of property maintained pursuant to subsection 5.4 resulting
from damage to or loss of all or any portion of the Collateral or any
other tangible asset (net of actual and documented reasonable costs
incurred by Company in connection with adjustment and settlement
thereof, "INSURANCE PROCEEDS") or any proceeds resulting from the
taking of assets by the power of eminent domain, condemnation or
otherwise (net of actual and documented reasonable costs incurred by
Company in connection with adjustment and settlement thereof,
"CONDEMNATION PROCEEDS") (other than (x) the portion of such proceeds
promptly applied to repair or replace the property in respect of which
such proceeds were paid, (y) the portion of such proceeds required to
be paid to Lien holders on aircraft other than Financed Aircraft or (z)
proceeds applied pursuant to subsection 2.4B(iii)(d)), Company shall
prepay, without premium or penalty (other than pursuant to subsection
2.6D), the Loans in an amount equal to such proceeds. Company shall, no
later than 180 days after receipt of any such Insurance Proceeds or
Condemnation Proceeds that have not theretofore been applied to the
Obligations, make an additional prepayment of Loans, in the manner
described above, in the full amount of all such proceeds that have not
then been applied to repair or replace the property in respect of which
such proceeds were paid. Any such mandatory prepayments shall be
applied as specified in subsection 2.4B(iv). Notwithstanding the
foregoing so long as (i) the AFL III Financing remains outstanding,
Insurance Proceeds and Condemnation Proceeds with respect to the AFL
III Equipment shall not be subject to the provisions of this subsection
2.4(B)(iii)(c) to the extent such proceeds are applied in accordance
with the terms of the AFL III Financing Agreement.
(d) Prepayments and Reductions Due to an Event of Loss.
No later than the earlier of (x) the second Business Day following the
date of receipt by Company or any of its Subsidiaries of any Insurance
Proceeds or Condemnation Proceeds with respect to a Financed Aircraft
or (y) 180 days following an Event of Loss with respect to a Financed
Aircraft, Company shall prepay, without premium or penalty (other than
pursuant to subsection 2.6D), the Loans associated with such Financed
Aircraft; provided that Company and its Subsidiaries
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shall not be required to make a prepayment pursuant to this subsection
2.4B(iii)(d) with respect to any proceeds applied pursuant to Section
4(f)(vi)(A) or 4(f)(vi)(B) of any Aircraft Chattel Mortgage.
(e) Prepayments and Reductions from Consolidated Excess
Cash Flow. In the event that there shall be Consolidated Excess Cash
Flow for any Fiscal Year, within 100 days after the last day of such
Fiscal Year Company shall prepay, without premium or penalty (other
than pursuant to subsection 2.6D), the Loans in an amount equal to 50%
of such Consolidated Excess Cash Flow; provided that, if as of the last
day of such Fiscal Year, the aggregate principal amount of all Loans
was less than 60% of the aggregate Appraised Value of all Financed
Aircraft, no prepayment will be required under this subsection
2.4B(iii)(e). Any such mandatory prepayments shall be applied as
specified in subsection 2.4B(iv).
(f) Prepayments Due to Reductions in Appraised Value.
Company shall from time to time prepay, without premium or penalty
(other than pursuant to subsection 2.6D), the Loans to the extent
necessary so that the outstanding principal amount of any Loans made to
finance the acquisition or conversion of a Financed Aircraft shall not
at any time exceed 70% of the Appraised Value of such Financed Aircraft
as most recently determined pursuant to subsection 5.10; provided that,
in lieu of making a prepayment hereunder, Company may provide
Administrative Agent for the benefit of Lenders with cash collateral or
a letter of credit in the amount of such prepayment pursuant to
arrangements in form and substance satisfactory to Administrative
Agent.
(g) Prepayments Due to Failure to Register Aircraft with
the FAA. In the event that, with respect to any Financed Aircraft,
Administrative Agent's security interest in such Financed Aircraft is
not fully perfected within five (5) Business Days of the funding of
Loans with respect to such Financed Aircraft, Company shall prepay the
full amount of such Loans.
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of Loans
and Order of Maturity. Any voluntary prepayments pursuant to subsection
2.4B(i) shall be applied ratably among the Notes relating to all of the
Financed Aircraft; provided that, Company may elect to apply any such
prepayment first to the Loans made with respect to a specific Financed
Aircraft, a specific Airframe or a specific Engine so long as (i) no
Event of Default has occurred and is continuing and (ii) in the event a
prepayment is applied to the Loans made with respect to a specific
Airframe or a specific Engine(s), (a) Administrative Agent shall have
received an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, or such other counsel
as may be acceptable to Administrative Agent, confirming that such
prepayment should not adversely affect any benefits of Section 1110 of
the Bankruptcy Code with respect to the remaining components of the
relevant Financed Aircraft that were applicable thereto prior to such
prepayment and (b) after giving effect to such prepayment, Company
shall be in compliance with subsection 2.4B(iii)(f) with respect to the
remaining components of the relevant Financed Aircraft and, at the
request of Administrative Agent, shall deliver appraisals from two
Approved Appraisers in form and substance satisfactory to
Administrative Agent demonstrating such compliance; provided further
that, at all times, for each Airframe included in the Collateral there
shall be
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at least four (4) Engines included in the Collateral; provided further
that, at Administrative Agent's election, any prepayment (other than a
prepayment of Loans made with respect to a specific Financed Aircraft,
Airframe or Engine) may be deemed first to prepay Loans made to finance
labor costs associated with conversion of a Financed Aircraft, if any,
second to prepay Loans made to finance other costs of conversion of a
Financed Aircraft and thereafter to all other Loans. Any voluntary
prepayments (other than a prepayment of Loans made with respect to a
specific Financed Aircraft, Airframe or Engine) of the Existing
Aircraft Loans and the New Aircraft Term Loans pursuant to subsection
2.4B(i) shall be applied to reduce the scheduled installments of
principal of the Existing Aircraft Loans or the New Aircraft Term
Loans, as the case may be, in inverse order of maturity.
(b) Application of Mandatory Prepayments of Loans. Any
mandatory prepayments of the Loans pursuant to subsection 2.4B(iii)
shall be applied ratably among the Notes relating to all of the
Financed Aircraft; provided that in the event a prepayment pursuant to
subsection 2.4B(iii)(a) relates to Financed Aircraft, such prepayment
shall be applied first to the Notes relating to such Financed Aircraft,
second to Notes relating to the remaining Financed Aircraft as required
to reduce the amount of the Loans financing such Financed Aircraft to
no more that 70% of the Appraised Value of such Financed Aircraft as
determined by the Appraised as required by subsection 2.4B(iii)(a) and
third ratably among the Notes relating to all remaining Financed
Aircraft; provided further that in the event a prepayment pursuant to
subsection 2.4B(iii)(b), (c), (d), (f) or (g) relates to Financed
Aircraft, such prepayment shall be applied first to the Notes relating
to such Financed Aircraft and second ratably among the Notes relating
to all other Financed Aircraft; provided further that, at
Administrative Agent's election, any such prepayment may be deemed
first to prepay Loans made to finance labor costs associated with
conversion, if any, second to prepay Loans made to finance other costs
of conversion of a Financed Aircraft and thereafter to all other Loans.
Any mandatory prepayments of the Existing Aircraft Loans and the New
Aircraft Term Loans pursuant to subsection 2.4B(iii) shall be applied
to reduce the scheduled installments of principal of the Existing
Aircraft Loans or the New Aircraft Term Loans, as the case may be, in
inverse order of maturity.
(c) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Any prepayment of Loans shall be applied first
to Base Rate Loans to the full extent thereof before application to
Eurodollar Rate Loans, in each case in a manner which minimizes the
amount of any payments required to be made by Company pursuant to
subsection 2.6D.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company
of principal, interest, fees and other Obligations hereunder and under the Notes
shall be made in Dollars in same day funds, without defense, set-off or
counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 Noon (New York time) on the date due
at the Funding and Payment Office for the account of Lenders; funds received by
Administrative Agent after that time on such due date shall be deemed to have
been paid by Company on the next succeeding Business Day. Company hereby
authorizes Administrative Agent to charge its accounts with Administrative Agent
in
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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 Shares. Administrative Agent shall promptly distribute to
each Lender, at its primary address set forth below its name on the appropriate
signature page hereof or at such other address as such Lender may request, its
Pro Rata Share of all such payments received by Administrative Agent and the
commitment fees of such Lender when received by Administrative Agent pursuant to
subsection 2.3. Notwithstanding the foregoing provisions of this subsection
2.4C(iii), if, pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all Loans
evidenced by that Note and all principal payments previously made thereon and of
the date to which interest thereon has been paid; provided that the failure to
make (or any error in the making of) a notation of any Loan made under such Note
shall not limit or otherwise affect the obligations of Company hereunder or
under such Note with respect to any Loan or any payments of principal or
interest on such Note.
2.5. USE OF PROCEEDS.
A. EXISTING AIRCRAFT EXTENDED LOANS. The proceeds of the
Existing Aircraft Extended Loans were used to finance the purchase and
renovation of the Existing Aircraft as shown on Schedule 1.1 annexed hereto.
B. NEW AIRCRAFT LOANS. The proceeds of New Aircraft
Loans shall be applied to finance (i) the purchase of an Eligible Aircraft
pursuant to a Purchase Agreement in an amount up to the lesser of the purchase
price of such Eligible Aircraft and 70% of the Appraised Value of such Eligible
Aircraft (but without giving effect to any contemplated modifications) and/or
(ii) the cost of making a Financed Aircraft usable by Company as a cargo
aircraft by paying for those modifications identified in any Modification
Agreement and any BFE Agreement (but not for maintenance costs) in an amount
that when added to the amount financed in (i) does not exceed 70% the Appraised
Value of
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such modified Eligible Aircraft; provided that the final Revolving Loan to
finance the modification of such Eligible Aircraft may be in an amount equal to
the lesser of (x) 100% of the costs of modification associated with such final
Revolving Loan and (y) an amount which, when added to all other Revolving Loans
made with respect to such Eligible Aircraft, does not exceed 70% of the
Appraised Value of such Eligible Aircraft after giving effect to the completion
of modification.
C. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.
2.6. SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 10:00 A.M. (New York time) on each Interest Rate Determination
Date, Administrative Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the interest
rate that shall apply to the Eurodollar Rate Loans for which an interest rate is
then being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In
the event that Administrative Agent shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto), on any
Interest Rate Determination Date with respect to any Eurodollar Rate Loans, that
by reason of circumstances affecting the interbank Eurodollar market adequate
and fair means do not exist for ascertaining the interest rate applicable to
such Loans on the basis provided for in the definition of Adjusted Eurodollar
Rate, Administrative Agent shall on such date give notice (by telefacsimile or
by telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist
and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by
Company with respect to the Loans in respect of which such determination was
made shall be deemed to be rescinded by Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE
LOANS. In the event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Company and Administrative Agent)
that the making, maintaining or continuation of its Eurodollar Rate Loans (i)
has become unlawful as a result of compliance by such Lender in good faith with
any law, treaty, governmental rule, regulation, guideline or order (or would
conflict with any such treaty, 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 hard-
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ship, as a result of contingencies occurring after the date of this Agreement
which materially and adversely affect the interbank Eurodollar market or the
position of such Lender in that market, then, and in any such event, such Lender
shall be an "AFFECTED LENDER" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination (which notice Agent shall promptly
transmit to each other Lender). Thereafter (a) the obligation of the Affected
Lender to make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be
suspended until such notice shall be withdrawn by the Affected Lender, (b) to
the extent such determination by the Affected Lender relates to a Eurodollar
Rate Loan then being requested by Company pursuant to a Notice of Borrowing or a
Notice of Conversion/Continuation, the Affected Lender shall make such Loan as
(or convert such Loan to, as the case may be) a Base Rate Loan, (c) the Affected
Lender's obligation to maintain its outstanding Eurodollar Rate Loans (the
"AFFECTED LOANS") shall be terminated at the earlier to occur of the expiration
of the Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Company shall have the
option, subject to the provisions of subsection 2.6D, to rescind such Notice of
Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF
INTEREST PERIODS. Company shall compensate each Lender, upon written request by
that Lender (which request shall set forth the basis for requesting such
amounts), for all reasonable losses, expenses and liabilities (including,
without limitation, any interest paid by that Lender to lenders of funds
borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense
or liability sustained by that Lender in connection with the liquidation or
re-employment of such funds) which that Lender may sustain: (i) if for any
reason (other than a default by that Lender) a borrowing of any Eurodollar Rate
Loan does not occur on a date specified therefor in a Notice of Borrowing or a
telephonic request for borrowing, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment or other principal payment or any conversion of any of
its Eurodollar Rate Loans occurs on a date prior to the last day of an Interest
Period applicable to that Loan, (iii) if any prepayment of any of its Eurodollar
Rate Loans is not made on any date specified in a notice of prepayment given by
Company, or (iv) as a consequence of any other default by Company in the
repayment of its Eurodollar Rate Loans when required by the terms of this
Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may
make, carry or transfer Eurodollar Rate Loans at, to, or for the account of any
of its branch offices or the office of an Affiliate of that Lender.
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F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE
LOANS. Calculation of all amounts payable to a Lender under this subsection 2.6
and under subsection 2.7A shall be made as though that Lender had actually
funded each of its relevant Eurodollar Rate Loans through the purchase of a
Eurodollar deposit bearing interest at the rate obtained pursuant to clause (i)
of the definition of Adjusted Eurodollar Rate in an amount equal to the amount
of such Eurodollar Rate Loan and having a maturity comparable to the relevant
Interest Period and through the transfer of such Eurodollar deposit from an
offshore office of that Lender to a domestic office of that Lender in the United
States of America; provided, however, that each Lender may fund each of its
Eurodollar Rate Loans in any manner it sees fit and the foregoing assumptions
shall be utilized only for the purposes of calculating amounts payable under
this subsection 2.6 and under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the
occurrence of and during the continuation of a Potential Event of Default or an
Event of Default, (i) Company may not elect to have a Loan be made or maintained
as, or converted to, a Eurodollar Rate Loan after the expiration of any Interest
Period then in effect for that Loan and (ii) subject to the provisions of
subsection 2.6D, any Notice of Borrowing or Notice of Conversion/Continuation
given by Company with respect to a requested borrowing or
conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Company.
2.7. INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject
to the provisions of subsection 2.7B, in the event that any Lender shall
determine (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law):
(i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the overall net
income of such Lender) with respect to this Agreement or any of its
obligations hereunder or any payments to such Lender (or its applicable
lending office) of principal, interest, fees or any other amount
payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any
office of such Lender (other than any such reserve or other
requirements with respect to Eurodollar Rate Loans that are reflected
in the definition of Adjusted Eurodollar Rate); or
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(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the interbank Eurodollar
market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by
Company under this Agreement and the other Loan Documents shall be paid free and
clear of and (except to the extent required by law) without any deduction or
withholding on account of any Tax (other than a Tax on the overall net income of
any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of Company or by any federation or organization of which the United
States of America or any such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other
Person is required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by Company to Administrative Agent or any
Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if the
liability to pay is imposed on Company) for its own account or (if that
liability is imposed on Administrative Agent or such Lender, as the
case may be) on behalf of and in the name of Administrative Agent or
such Lender;
(c) the sum payable by Company in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making of
that deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal to
what it would have received had no such deduction, withholding or
payment been required or made; and
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(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required by
clause (b) above to pay, Company shall deliver to Administrative Agent
evidence satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority;
provided that no such additional amount shall be required to be paid to any
Lender under clause (c) above except to the extent that any change after the
date hereof (in the case of each Lender listed on the signature pages hereof) or
after the date of the Assignment Agreement pursuant to which such Lender became
a Lender (in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect at the date of this Agreement or at the date of such Assignment
Agreement, as the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "NON-US LENDER") shall deliver to Administrative Agent for
transmission to Company, on or prior to the Fourth Restatement Date (in
the case of each Lender listed on the signature pages hereof) or on the
date of the Assignment Agreement pursuant to which it becomes a Lender
(in the case of each other Lender), and at such other times as may be
necessary in the determination of Company or Administrative Agent (each
in the reasonable exercise of its discretion), (1) two original copies
of Internal Revenue Service Form 1001 or 4224 (or any successor forms),
properly completed and duly executed by such Lender, together with any
other certificate or statement of exemption required under the Internal
Revenue Code or the regulations issued thereunder to establish that
such Lender is not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender of
principal, interest, fees or other amounts payable under any of the
Loan Documents or (2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code and cannot
deliver either Internal Revenue Service Form 1001 or 4224 pursuant to
clause (1) above, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8 (or any successor
form), properly completed and duly executed by such Lender, together
with any other certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder to establish
that such Lender is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such Lender
of interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States federal
income tax withholding matters pursuant to subsection 2.7B(iii)(a)
hereby agrees, from time to time after the initial delivery by such
Lender of such forms, certificates or other evidence, whenever a lapse
in time or change in circumstances renders such forms, certificates or
other evidence obsolete or inaccurate in any material respect, such
Lender shall (1) deliver to Administrative Agent for transmission to
Company two new original copies of Internal Revenue Service Form 1001
or 4224, or a Certificate re Non-
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Bank Status and two original copies of Internal Revenue Service Form
W-8, as the case may be, properly completed and duly executed by such
Lender, together with any other certificate or statement of exemption
required in order to confirm or establish that such Lender is not
subject to deduction or withholding of United States federal income tax
with respect to payments to such Lender under the Loan Documents or (2)
immediately notify Administrative Agent and Company of its inability to
deliver any such forms, certificates or other evidence.
(c) Company shall not be required to pay any additional
amount to any Non-US Lender under clause (c) of subsection 2.7B(ii) if
such Lender shall have failed to satisfy the requirements of subsection
2.7B(iii)(a); provided that if such Lender shall have satisfied such
requirements on the Fourth Restatement Date (in the case of each Lender
listed on the signature pages hereof) or on the date of the Assignment
Agreement pursuant to which it became a Lender (in the case of each
other Lender), nothing in this subsection 2.7B(iii)(c) shall relieve
Company of its obligation to pay any additional amounts pursuant to
clause (c) of subsection 2.7B(ii) in the event that, as a result of any
change in any applicable law, treaty or governmental rule, regulation
or order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly entitled to
deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to withholding as
described in subsection 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after the
date hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitments or other obligations hereunder to a level
below that which such Lender or such controlling corporation could have achieved
but for such adoption, effectiveness, phase-in, applicability, change or
compliance (taking into consideration the policies of such Lender or such
controlling corporation with regard to capital adequacy), then from time to
time, within five Business Days after receipt by Company from such Lender of the
statement referred to in the next sentence, Company shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
D. SUBSTITUTE LENDERS. In the event Company is required
under the provisions of this subsection 2.7 to make payments in a material
amount to any Lender or in the event any Lender fails to lend to Company in
accordance with this Agreement, Company may, so long as no Event of Default or
Potential Event of Default shall have occurred and be continuing, elect to
terminate such Lender as a party to this Agreement; provided that, concurrently
with such termination, (i) Company shall pay that Lender all principal,
interest and fees and other amounts (including with-
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out limitation, amounts, if any, owed under this subsection 2.7) owed to such
Lender through such date of termination, (ii) another financial institution
satisfactory to Company and Administrative Agent (or if Administrative Agent is
also the Lender to be terminated, the successor Administrative Agent) shall
agree, as of such date, to become a Lender for all purposes under this Agreement
(whether by assignment or amendment) and to assume all obligations of the Lender
to be terminated as of such date, and (iii) all documents and supporting
materials necessary, in the judgment of Administrative Agent (or if
Administrative Agent is also the Lender to be terminated, the successor
Administrative Agent) to evidence the substitution of such Lender shall have
been received and approved by Administrative Agent as of such date.
2.8. OBLIGATION OF LENDERS TO MITIGATE.
Each Lender agrees that, as promptly as practicable after the
officer of such Lender responsible for administering the Loans of such Lender
becomes aware of the occurrence of an event or the existence of a condition that
would cause such Lender to become an Affected Lender or that would entitle such
Lender to receive payments under subsection 2.7, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable legal
or regulatory restrictions, use reasonable efforts (i) to make, issue, fund or
maintain the Commitments of such Lender or the affected Loans of such Lender
through another lending office of such Lender, or (ii) take such other measures
as such Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender pursuant to subsection 2.7 would be materially reduced and if, as
determined by such Lender in its sole discretion, the making, issuing, funding
or maintaining of such Commitments or Loans through such other lending office or
in accordance with such other measures, as the case may be, would not otherwise
materially adversely affect such Commitments or Loans or the interests of such
Lender; provided that such Lender will not be obligated to utilize such other
lending office pursuant to this subsection 2.8 unless Company agrees to pay all
incremental expenses incurred by such Lender as a result of utilizing such other
lending office as described in clause (i) above. A certificate as to the amount
of any such expenses payable by Company pursuant to this subsection 2.8 (setting
forth in reasonable detail the basis for requesting such amount) submitted by
such Lender to Company (with a copy to Administrative Agent) shall be conclusive
absent manifest error.
2.9. RELEASE OF COLLATERAL.
RELEASE OF COLLATERAL. Upon the prepayment of all Loans made
with respect to a specific Financed Aircraft or a specific Airframe or Engine
pursuant to subsection 2.4B(iv)(a) hereof, Administrative Agent, at the
reasonable expense of Company, agrees to execute and deliver to Company such
documents as shall be reasonably satisfactory to Company to evidence the release
of the Liens granted pursuant to the Collateral Documents with respect to such
Financed Aircraft or such Airframe or Engine and shall use its best efforts to
(i) in the event of a prepayment of all Loans made with respect to a specific
Financed Aircraft, return the originals of all Notes representing such Loans to
Company, marked "Paid" or (ii) in the event of a prepayment of all Loans made
with respect to a specific Airframe or Engine(s), prepare allonges to the Notes
representing such Loans to Company describing the release of such Airframe or
Engine(s).
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SECTION 3.
CONDITIONS TO LOANS
The obligations of Administrative Agent and Lenders to make
Loans hereunder are subject to the satisfaction of the following conditions:
3.1. CONDITIONS TO EFFECTIVENESS AND THE EXISTING AIRCRAFT EXTENDED LOANS.
The effectiveness of this Agreement and the obligation of the
Lenders to maintain the Existing Aircraft Extended Loans are subject to the
satisfaction of all of the following conditions:
(i) Each of the parties hereto shall have executed and
delivered counterparts of this Agreement to Administrative Agent;
(ii) Company shall have delivered to Lenders (or to
Administrative Agent for Lenders) executed originals of the Existing
Aircraft Extended Notes, duly executed in accordance with subsection
2.1D, drawn to the order of each Lender and with appropriate
insertions;
(iii) Company shall have to delivered to Administrative
Agent the following, each, unless otherwise noted, dated the Fourth
Restatement Date:
(a) certified copies of the certificate of
incorporation of Company, together with a good standing certificate
from the Secretary of State of the State of Delaware and each other
state in which Company 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 Fourth Restatement Date;
(b) copies of the bylaws of Company, certified
as of the Fourth Restatement Date by its corporate secretary or an
assistant secretary;
(c) resolutions of the Board of Directors of
Company approving and authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents certified as
of the Fourth Restatement Date by Company's corporate secretary or
assistant secretary as being in full force and effect without
modification or amendment;
(d) signature and incumbency certificate of the
officer of Company executing this Agreement and any other Loan
Documents; and
(e) such other document as Administrative Agent
may reasonably request;
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(iv) Company shall have delivered to Administrative Agent
a Financial Condition Certificate executed by its Chief Executive
Officer, Chief Financial Officer or Executive Vice President--Strategic
Planning and Treasurer and dated the Fourth Restatement Date,
substantially in the form annexed hereto as Exhibit IX with appropriate
attachments demonstrating that, after giving effect to the full amounts
which will be available under this Agreement, Company and its
Subsidiaries, taken as a whole, are Solvent;
(v) Lenders and their respective counsel shall have
received (A) originally executed copies of one or more favorable
written opinions of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for Company, in
form and substance reasonably satisfactory to Administrative Agent and
its counsel, dated as of the Fourth Restatement Date and setting forth
substantially the matters in the opinions designated in Exhibit VA
annexed hereto and as to such other matters as Administrative Agent
acting on behalf of Lenders may reasonably request, (B) the opinion of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ regarding Section 1110 of the Bankruptcy Code,
dated the Fourth Restatement Date and setting forth substantially the
matters in the opinions designated in Exhibit VB annexed hereto, and
(C) evidence satisfactory to Administrative Agent that Company has
requested such counsel to deliver such opinions to Lenders;
(vi) Lenders and their respective counsel shall have
received executed copies of one or more favorable written opinions of
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Assistant General Counsel of Company, in form and
substance reasonably satisfactory to Administrative Agent and its
counsel, dated the Fourth Restatement Date, and setting forth
substantially the matters in the opinions designated in Exhibit VC
annexed hereto;
(vii) Company shall have delivered to Administrative Agent
appraisals from two Approved Appraisers, in form and substance
satisfactory to Administrative Agent demonstrating that the outstanding
principal amount of each Existing Aircraft Extended Loan does not
exceed 80% of the Appraised Value of the Related Aircraft as of the
Fourth Restatement Date;
(viii) After giving effect to the transactions contemplated
hereby (including the payment of, or taking reserves for, all
transactions fees and expenses), Company shall not have less than $400
million cash on its consolidated balance sheet;
(ix) Administrative Agent shall be satisfied with the
capital, organization, ownership and management structure of Company
and its Subsidiaries and with the form and substance of the ACMI
Contracts, any Modification Agreements, any BFE Agreements, aircraft
lease arrangements, Purchase Agreements, existing financing agreements
and intercreditor arrangements (including, without limitation, the
Senior Note Documents and the Pass Through Trust Documents);
(x) The AFL III Restructuring shall have been completed
or shall be completed concurrently under terms and conditions
reasonably satisfactory to Administrative Agent and Lenders; and
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(xi) Company shall have taken such actions and delivered
to Administrative Agent such documents as Administrative Agent may
reasonably request and all such documents shall be in form and
substance reasonably satisfactory to Administrative Agent.
3.2. CONDITIONS TO LOANS TO FINANCE AIRCRAFT ACQUISITION.
The obligations of Lenders to make Loans to finance the
acquisition of an aircraft on any Funding Date are subject to the following
conditions:
(i) Company shall deliver to Administrative Agent an
Officer's Certificate and such supportive documents as may be requested
by Administrative Agent, certifying that the aircraft to be acquired is
an Eligible Aircraft;
(ii) as of the date of purchase of such Eligible Aircraft,
Administrative Agent shall be reasonably satisfied that Company and its
Subsidiaries have entered into binding ACMI Contracts sufficient to
ensure the continued employment (consistent with past practices) of
substantially all other aircraft owned and operated by Company and its
Subsidiaries other than the new aircraft being acquired;
(iii) on the date of purchase of any such Eligible
Aircraft, Administrative Agent, on behalf of Lenders, shall have been
granted a first priority Lien on such Eligible Aircraft, spare parts
and related assets (including, without limitation, the Purchase
Agreement and any Modification Agreement) and the Purchase Agreement,
any Modification Agreement and any BFE Agreements shall have been
assigned to Administrative Agent and any Persons whose consent is
necessary for an effective assignment of such agreements shall have so
consented, in each case, pursuant to documentation and procedures
acceptable to Administrative Agent;
(iv) Company shall have delivered to Administrative Agent
appraisals from two Approved Appraisers, in form and substance
satisfactory to Administrative Agent, demonstrating that the amount of
the Revolving Loan requested does not exceed 70% of the Appraised Value
of the Eligible Aircraft to be acquired as of the Funding Date and
that, after giving effect to all proposed modifications of such
Eligible Aircraft, the Maximum Note Amount shall not exceed 70% of the
Appraised Value of such Eligible Aircraft as so modified;
(v) a First Aircraft Chattel Mortgage and a Second
Aircraft Chattel Mortgage with respect to the Eligible Aircraft shall
have been filed in such order for recordation with the FAA under the
Federal Aviation Act;
(vi) Uniform Commercial Code Financing Statements naming
Administrative Agent as the secured party covering such Eligible
Aircraft and spare parts shall have been duly executed and delivered
and duly filed in all jurisdictions necessary or desirable to perfect a
security interest in the Collateral;
(vii) the FAA ▇▇▇▇ of Sale shall have been delivered for
recordation with the FAA pursuant to the Federal Aviation Act;
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(viii) the Eligible Aircraft shall have been registered with
the FAA in the name of Company or if not previously registered in the
United States, an application for registration shall have been filed;
(ix) Administrative Agent shall have received originally
executed copies of one or more favorable written opinions of counsel to
Company in form and substance satisfactory to Administrative Agent
dated as of the Funding Date and setting forth the matters designated
in the opinions in Exhibits VA, VB and VC and such other matters as
Administrative Agent may reasonably request;
(x) Administrative Agent shall have received originally
executed copies of one or more favorable written opinions of FAA
counsel or other counsel in form and substance satisfactory to
Administrative Agent dated as of the Funding Date or the date such
Eligible Aircraft is registered with the FAA if such registration
occurs after the Funding Date and setting forth such matters related to
the FAA or other Aeronautical Authority having jurisdiction over the
Eligible Aircraft being acquired as Administrative Agent may reasonably
request;
(xi) Administrative Agent shall have received evidence
satisfactory to it to the effect that as of such Funding Date Company
is an air carrier certificated under Sections 401 and 604(b) of the
Federal Aviation Act; with respect to any Eligible Aircraft,
certificates of airworthiness with respect to the Eligible Aircraft
shall have been duly issued by the Aeronautical Authority pursuant to
the Federal Aviation Act or, in the case of a Foreign Leased Aircraft,
its foreign equivalent and shall be in full force and effect; and each
Engine shall be in compliance with all airworthiness standards of such
Aeronautical Authority or shall be maintained in accordance with a
program approved by such Aeronautical Authority;
(xii) Company shall have good and marketable title to and a
valid ownership interest in the Collateral free and clear of all Liens
other than Liens permitted by subsection 6.2;
(xiii) no Event of Loss with respect to the Airframe or any
Engine to be delivered shall have occurred and no event or condition
which with the giving of notice or lapse of time or both, would result
in any such Event of Loss shall have occurred and be continuing;
(xiv) Company shall have delivered to Administrative Agent
certificates of insurance naming Administrative Agent on behalf of
Administrative Agent and Lenders as loss payee under casualty insurance
policies with respect to the Eligible Aircraft to be acquired and a
broker's report evidencing compliance with the requirements of the
First Aircraft Chattel Mortgage with respect to such Eligible Aircraft;
(xv) Company shall have delivered to Administrative Agent
all documents executed in connection with the Purchase Agreement
related to such aircraft and such documents shall be in form and
substance satisfactory to Administrative Agent;
(xvi) any Revolving Loan made to finance the purchase of a
Financed Aircraft shall be made no later than ten days after the later
of Company's payment of the purchase price with respect to or
acquisition of title to such Financed Aircraft;
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(xvii) Company shall have delivered to Administrative Agent
such other documents as Administrative Agent may reasonably request and
all such documents shall be in form and substance reasonably
satisfactory to Administrative Agent;
(xviii) in addition to the foregoing conditions, with respect
to the Loans made to finance the acquisition of a Leased Aircraft,
Company shall have delivered to Administrative Agent a copy of the
Approved Lease in form and substance satisfactory to Administrative
Agent including, without limitation, provisions permitting the grant to
Administrative Agent on behalf of Lenders of the Liens contemplated by
subdivision (iii) of this subsection 3.2, and satisfaction of the
requirements of subdivision (xiv) of this subsection 3.2. In addition,
the form of Mortgages delivered with respect to a Leased Aircraft will
permit such Approved Lease and include provisions granting security
interests to the Administrative Agent, on behalf of Lenders, in the
Approved Lease and all rights and privileges of Company thereunder and
will require that ground and flight all-risk hull insurance be
maintained on such Leased Aircraft in an amount equal to the greater of
(x) 100% of the Appraised Value of such Leased Aircraft and (y) the
purchase price of such Leased Aircraft. Finally, Company will not be
required to enter into a Modification Agreement with respect to a
Leased Aircraft or to assign such Modification Agreement to
Administrative Agent for the benefit of Lenders; provided that, if such
Leased Aircraft requires Conversion, Company will enter into a
Modification Agreement with respect to such Leased Aircraft and will
assign such Modification Agreement to Administrative Agent for the
benefit of Lenders prior to or concurrently with the termination of
such Approved Lease;
(xix) the aggregate amount of Revolving Loans made in
respect of all Leased Aircraft shall not exceed 50% of the Revolving
Loan Commitments; and
(xx) with respect to any Foreign Leased Aircraft,
Administrative Agent shall have received originally executed copies of
one or more favorable written opinions of counsel located in the
jurisdiction where such Foreign Leased Aircraft is registered and
setting forth such matters related to the Aeronautical Authority having
jurisdiction over such Foreign Leased Aircraft as Administrative Agent
may reasonably request.
Notwithstanding the foregoing, Administrative Agent may
(provided that no Event of Default has occurred or is continuing) in its sole
and absolute discretion waive the conditions set forth in clauses (iii), (v),
(vii), (viii) and (x) to the extent necessary by reason of the fact that Company
is unable to obtain a deregistration certificate with respect to the applicable
Eligible Aircraft prior to the purchase of such Eligible Aircraft; provided
that, if Administrative Agent's security interest in such Eligible Aircraft is
not fully perfected within five (5) Business Days of full funding of the Loans
with respect to such Eligible Aircraft, Company shall prepay such Loans in
accordance with subsection 2.4B(iii)(g); provided further, that Administrative
Agent may not waive such conditions with respect to more than one Eligible
Aircraft at any time; provided further, that, notwithstanding anything to the
contrary contained herein, the conditions set forth in clauses (v), (vii) and
(viii) above shall not apply to a Foreign Leased Aircraft.
In addition to the foregoing, the condition set forth in
clause (ii) shall be waived in the event of a borrowing of Alitalia Loans.
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3.3. CONDITION TO LOANS TO FINANCE CARGO CONVERSION.
The obligations of Lenders to make Loans to finance the costs
of conversion of a Financed Aircraft on any Funding Date are subject to the
additional conditions set forth below:
A. CONDITIONS TO EACH LOAN TO FINANCE THE COSTS OF
CONVERSION.
(i) Administrative Agent shall have received an invoice
and ▇▇▇▇ of sale with respect to any Parts delivered in connection with
the modification of Financed Aircraft and with respect to any buyer
furnished equipment, and an invoice for any services or other costs
associated with the modification of such Financed Aircraft and/or such
other information and materials as may be reasonably requested by
Administrative Agent confirming the name of the vendor performing the
service, the Parts or service to be financed by such Revolving Loan,
the amount due from or previously paid by Company, the satisfactory
completion of the services for which such Revolving Loan proceeds shall
be applied and such other information regarding such service as
Administrative Agent may request. To the extent practicable, each
Revolving Loan made shall be allocated only to the costs of conversion
other than labor costs associated with such conversion; and
(ii) with respect to any Revolving Loan to finance the
purchase of a Part, such Revolving Loan shall be made no later than ten
days after the later of Company's payment for or acquisition of title
to such Part.
B. CONDITIONS TO THE FINAL LOAN TO FINANCE THE COST OF
CONVERSION.
(i) If there has been any material deviation from the
terms of the Modification Agreement entered into by Company with
respect to a Financed Aircraft after the date of the appraisals
delivered pursuant to subsection 3.2(iv), Company shall have delivered
to Administrative Agent appraisals demonstrating that the amount of the
Revolving Loans requested when added to all previous Revolving Loans
made with respect to the Financed Aircraft which has been converted as
of the Funding Date does not exceed the lesser of (x) 100% of the
remaining costs of conversion and (y) 70% of the Appraised Value of the
Financed Aircraft;
(ii) Company shall deliver to Administrative Agent an
Officer's Certificate (x) certifying that the conversion of the
Financed Aircraft has been completed and that all obligations of
Company with respect to the modifications of the Financed Aircraft
under a Modification Agreement and any BFE Agreement have been
satisfied and (y) stating the total cost of the purchase and
modification of such Financed Aircraft, which shall not be less than
all Loans made in respect of such Financed Aircraft;
(iii) Company shall deliver to Administrative Agent (a) a
copy of the Aircraft re-delivery receipt and evidence of transfer of
title to each Part included in the modification, (b) copies of any
Supplemental Types Certificates issued by the FAA, and (c) copies of
any FAA Form 337s to be filed in connection with such modification;
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(iv) Administrative Agent shall have received evidence
satisfactory to it to the effect that as of such Funding Date Company
is an air carrier certificated under Sections 401 and 604(b) of the
Federal Aviation Act; certificates of airworthiness with respect to the
Eligible Aircraft shall have been duly issued pursuant to the Federal
Aviation Act and shall be in full force and effect; and each Engine
shall be in compliance with all airworthiness standards of the FAA or
shall be maintained in accordance with an FAA approved program; and
(v) Company shall have delivered to Administrative Agent
such other documents as Administrative Agent may reasonably request and
all such documents shall be in form and substance reasonably
satisfactory to Administrative Agent.
3.4. CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date
are subject to the following further conditions precedent:
A. Administrative Agent shall have received before that
Funding Date, in accordance with the provisions of subsection 2.1B, an
originally executed Notice of Borrowing, in each case signed by the chief
executive officer, the chief financial officer or the treasurer of Company or by
any executive officer of Company designated by any of the above-described
officers on behalf of Company in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) the representations and warranties contained herein
and in the other Loan Documents shall be true, correct and complete in
all material respects on and as of that Funding Date to the same extent
as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier
date; provided that, with respect to any Funding Date referred to in
subsection 3.3, Company's representations and warranties shall be to
its best knowledge;
(ii) no event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
such Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) Company shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before that
Funding Date;
(iv) no order, judgment or decree of any court, arbitrator
or governmental authority shall purport to enjoin or restrain any
Lender from making the Loans to be made by it on that Funding Date;
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(v) the making of the Loans requested on such Funding
Date shall not violate any law including, without limitation,
Regulation T, Regulation U or Regulation X of the Board of Governors of
the Federal Reserve System; and
(vi) there shall not be pending or, to the knowledge of
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries that
has not been disclosed by Company in writing pursuant to subsection 4.6
or 5.1(x) prior to the making of the last preceding Loans (or, in the
case of the initial Loans, prior to the execution of this Agreement),
and there shall have occurred no development not so disclosed in any
such action, suit, proceeding, governmental investigation or
arbitration so disclosed, that, in either event, in the opinion of
Administrative Agent or of Requisite Lenders, would be expected to have
a Material Adverse Effect; and no injunction or other restraining order
shall have been issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed with respect
to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief
as a result of, the transactions contemplated by this Agreement or the
making of Loans hereunder.
C. With respect to any Revolving Loans made on a Funding
Date for the purpose of reborrowing an amount equal to the amount of mandatory
prepayments made pursuant to subsection 2.4B(iii)(e), Administrative Agent shall
have received an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, or such other counsel as
may be acceptable to Administrative Agent, dated as of such Funding Date
confirming the applicability of Section 1110 of the Bankruptcy Code, to such
Revolving Loans made on such Funding Date, in form and substance satisfactory to
Administrative Agent.
D. In the case of an initial Revolving Loan with respect
to a New Aircraft, Company shall have delivered to Lenders (or to Administrative
Agent for Lenders) executed originals of the New Aircraft Notes, duly executed
in accordance with subsection 2.1D, drawn to the order of each Lender and with
appropriate insertions.
SECTION 4.
COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make the Loans, Company represents and warrants to each Lender, on the date of
this Agreement and on each Funding Date, that the following statements are true,
correct and complete:
4.1. ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Company has all requisite corporate power and authority to
own and operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Loan Documents and to carry out the
transactions contemplated thereby.
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B. QUALIFICATION AND GOOD STANDING; AIR CARRIER
CERTIFICATION. Company is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, except in jurisdictions where the failure to be so
qualified or in good standing has not had and will not have a Material Adverse
Effect. Company is a "citizen of the United States" within the meaning of the
Federal Aviation Act (a "UNITED STATES CITIZEN") and holds an air carrier
operating certificate under the Federal Aviation Act for aircraft capable of
carrying 10 or more individuals or 6,000 pounds or more of cargo.
C. SUBSIDIARIES. All of the Subsidiaries of Company as
of the Fourth Restatement Date are identified in Schedule 4.1 annexed hereto, as
said Schedule 4.1 may be supplemented from time to time pursuant to the
provisions of subsection 5.1(xvii). The capital stock of each of the
Subsidiaries of Company identified in Schedule 4.1 annexed hereto (as so
supplemented) is duly authorized, validly issued, fully paid and nonassessable
and none of such capital stock constitutes Margin Stock. Each of the
Subsidiaries of Company identified in Schedule 4.1 annexed hereto (as so
supplemented) is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation set
forth therein, has all requisite corporate power and authority to own and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, in each case except where failure to be
so qualified or in good standing or a lack of such corporate power and authority
has not had and will not have a Material Adverse Effect. Schedule 4.1 annexed
hereto (as so supplemented) correctly sets forth the ownership interest of
Company and each of its Subsidiaries in each of the Subsidiaries of Company
identified therein.
D. COLLATERAL DOCUMENTS. The security interests created
in favor of Administrative Agent under the Collateral Documents have at all
times from and after the Initial Closing Date constituted and will continue to
constitute, as security for the obligations purported to be secured thereby, a
legal, valid and enforceable security interest in and Lien on all of the
Collateral referred to therein in favor of Administrative Agent for the benefit
of the Lenders, perfected and prior to the rights of all third persons in
accordance with the requirements of all applicable Collateral Documents. Each
Loan Party has good and marketable title to its respective Collateral, and all
such Collateral is free and clear of all Liens except for Liens permitted by
subsection 6.2. No consents, filings or recordings are required in order to
perfect (or maintain the perfection or priority of) the security interests
purported to be created by any of the Collateral Documents, other than such as
have been obtained and which remain in full force and effect and UCC financing
statements to be filed, or delivered to Administrative Agent for filing, on the
Fourth Restatement Date and periodic UCC continuation filings or as is
specifically otherwise permitted by the terms of any applicable Collateral
Document.
4.2. AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery
and performance of the Loan Documents have been duly authorized by all necessary
corporate action on the part of each Loan Party.
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B. NO CONFLICT. The execution, delivery and performance
by the Loan Parties of the Loan Documents and the consummation of the
transactions contemplated by the Loan Documents do not and will not (i) violate
any provision of any law or any governmental rule or regulation applicable to
Company or any of its Subsidiaries, the Certificate or Articles of Incorporation
or Bylaws of Company or any of its Subsidiaries or any order, judgment or decree
of any court or other agency of government binding on Company or any of its
Subsidiaries, (ii) conflict with in any material respect, result in a material
breach of or constitute (with due notice or lapse of time or both) a material
default under any Contractual Obligation of Company or any of its Subsidiaries,
(iii) result in or require the creation or imposition of any Lien upon any of
the properties or assets of Company or any of its Subsidiaries (other than any
Liens created under any of the Loan Documents in favor of Administrative Agent
on behalf of Lenders), or (iv) require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of Company or
any of its Subsidiaries, except for such approvals or consents which will be
obtained on or before the Fourth Restatement Date and disclosed in writing to
Lenders.
C. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by the Loan Parties of the Loan Documents and the consummation of
the transactions contemplated by the Loan Documents do not and will not require
any registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body which has not been obtained or made on or prior to the date required to be
obtained or made unless waived by Administrative Agent in accordance with this
Agreement.
D. BINDING OBLIGATION. Each of the Loan Documents has
been duly executed and delivered by each of the Loan Parties party thereto and
is the legally valid and binding obligation of each such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
4.3. FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders'
request, the following financial statements and information: the audited
consolidated balance sheets of Company and its Subsidiaries as at December 31,
1999, and the related consolidated statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for the Fiscal Year then ended.
All such statements were prepared in conformity with GAAP and fairly present the
financial position (on a consolidated 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 basis) of the entities described
therein for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to changes resulting from audit and normal
year-end adjustments. Company does not have any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Company or of Company and its Subsidiaries taken
as a whole.
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4.4. NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since December 31, 1999, no event or change has occurred that
has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect. Since December 31, 1999, neither Company nor any of its
Subsidiaries has directly or indirectly declared, ordered, paid or made, or set
apart any sum or property for, any Restricted Junior Payment or agreed to do so
except as permitted by subsection 6.5.
4.5. TITLE TO PROPERTIES; LIENS.
A. Company and its Subsidiaries have (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other personal
property), all of the properties and assets reflected in the financial
statements referred to in subsection 4.3 or in the most recent financial
statements delivered pursuant to subsection 5.1, in each case except for assets
disposed of since the date of such financial statements in the ordinary course
of business or as otherwise permitted under subsection 6.7. Except as permitted
by this Agreement, all such properties and assets are free and clear of Liens.
B. Each Financed Aircraft operated in the United States
has a current and valid airworthiness certificate issued by the FAA pursuant to
the Federal Aviation Act in effect and is in such condition as may be necessary
to enable the airworthiness certificate to be maintained in good standing. Each
Engine has a rated takeoff horsepower greater than 750 horsepower, or the
equivalent of such horsepower. Each Financed Aircraft operated in the United
States is registered with the FAA in the name of Company, and Company has
authority to operate such Financed Aircraft. Company has good title to such
Financed Aircraft, free and clear of all Liens other than Liens permitted by
subsection 6.2.
4.6. LITIGATION; ADVERSE FACTS.
There are no actions, suits, proceedings, arbitrations or
governmental investigations (whether or not purportedly on behalf of Company or
any of its Subsidiaries) at law or in equity or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the knowledge of Company,
threatened against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
Neither Company nor any of its Subsidiaries is (i) in violation of any
applicable laws that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect or (ii) subject to or in default
with respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
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4.7. PAYMENT OF TAXES.
Except to the extent permitted by subsection 5.3, all tax
returns and reports of Company and its Subsidiaries required to be filed by any
of them have been timely filed, and all taxes, assessments, fees and other
governmental charges upon Company and its Subsidiaries and upon their respective
properties, assets, income, businesses and franchises which are due and payable
have been paid when due and payable. Company does not know of any proposed tax
assessment against Company or any of its Subsidiaries which is not being
actively contested by Company or such Subsidiary in good faith and by
appropriate proceedings; provided that such reserves or other appropriate
provisions, if any, for liabilities for taxes as shall be required in conformity
with GAAP shall have been made or provided in the financial statements of
Company. There are no agreements with respect to taxes between Company and any
tax agency or authority.
4.8. PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
A. Neither Company nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, would not have a Material Adverse
Effect.
B. Neither Company nor any of its Subsidiaries is a
party to or is otherwise subject to any agreements or instruments or any charter
or other internal restrictions which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
4.9. GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable.
4.10. SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan,
not more than 25% of the value of the assets (either of Company only or of
Company and its Subsidiaries on a consolidated basis) subject to the provisions
of subsection 6.2 or 6.7 or subject to any restriction contained in any
agreement or instrument, between any Loan Party, on the one hand, and any Lender
or any Affiliate of any Lender, on the other hand, relating to Indebtedness and
within the scope of subsection 7.2, will be Margin Stock.
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4.11. EMPLOYEE BENEFIT PLANS.
Company maintains a qualified retirement plan under Section
401(k) of the Internal Revenue Code (the "COMPANY 401(k) PLAN"). Company's
401(k) Plan has no unfunded liabilities in excess of $10,000,000, and Company is
in compliance with all applicable provisions and requirements of ERISA and the
regulations and published interpretations thereunder with respect to each
Employee Benefit Plan and has performed all its obligations under such Employee
Benefit Plan in all material respects. The Company has no Employee Benefit
Plans, other than the Company 401(k) Plan and the plan described in subsection
6.2A(iv). The Company has no ERISA Affiliates that sponsor, maintain, contribute
to or are liable with respect to any Employee Benefit Plans.
4.12. CERTAIN FEES.
No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby, and
Company hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
4.13. ENVIRONMENTAL PROTECTION.
A. All Facilities and operations of the Company are, and
have been to the best of Company's knowledge, in compliance in all material
respects with all Environmental Laws.
B. There are no, and have been no, conditions,
occurrences, or Hazardous Materials Activity (a) arising at any Facilities or at
any other location or (b) arising in connection with the operations of Company
(including the transportation of Hazardous Materials in accordance with
applicable regulations), which conditions, occurrences or Hazardous Materials
Activity could reasonably be expected to form the basis of an Environmental
Claim against Company and which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
C. To the best of Company's knowledge, there are no
pending or threatened Environmental Claims against Company, and Company has
received no notices, inquiries, or requests for information with respect to any
Environmental Claims.
4.14. EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
4.15. SOLVENCY.
Company and each of its Subsidiaries is and, upon the
incurrence of any Obligations by Company on any date on which this
representation is made, will be, Solvent.
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4.16. DISCLOSURE.
No representation or warranty of Company or any of its
Subsidiaries contained in any Loan Document or in any other document,
certificate or written statement furnished to Lenders by or on behalf of Company
or any of its Subsidiaries for use in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact (known to Company, in the case of any document
not furnished by Company) necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances in which the same
were made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There are no facts known (or which should
upon the reasonable exercise of diligence be known) to Company (other than
matters of a general economic nature) that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect and that
have not been disclosed herein or in such other documents, certificates and
statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
SECTION 5.
COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations unless Requisite Lenders shall otherwise give
prior written consent, Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 5.
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Administrative Agent and Lenders:
(i) Monthly Financial Reports: as soon as available and
in any event within 15 days after the end of each calendar month during
2003, monthly financial reports that contain revenue, block hours,
debt, cash (including a thirteen week rolling cash flow report) and
investments as at the end of such calendar month, and setting forth in
each case (except with respect to the rolling cash flow report) in
comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year, if applicable, in reasonable
detail, together with a certificate signed by the chief financial
officer or treasurer of the Company that, to the best of such officer's
knowledge as of the date of delivery of such certificate, the reports
contain true and correct information for the period indicated;
(ii) Quarterly Financials: as soon as available and in any
event within 45 days after the end of each of the first three fiscal
quarters of each Fiscal Year, (a) the consolidated
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balance sheet of Company and its Subsidiaries as at the end of such
fiscal quarter and the related consolidated statement of income,
stockholders' equity and cash flows of Company and its Subsidiaries for
such fiscal quarter and for the period from the beginning of the then
current Fiscal Year to the end of such fiscal quarter, setting forth in
each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year, all in reasonable
detail and certified by the chief financial officer of Company that
they fairly present the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments, and (b) a
narrative report describing the operations of Company and its
Subsidiaries in the form prepared for presentation to senior management
for such fiscal quarter and for the period from the beginning of the
then current Fiscal Year to the end of such fiscal quarter; provided
that delivery of Company's Form 10-Q for such fiscal quarter shall be
deemed to satisfy the requirements of this subsection 5.1(ii);
(iii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of Company and its Subsidiaries as at the
end of such Fiscal Year and the related consolidated statement of
income, stockholders' equity and cash flows of Company and its
Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous Fiscal
Year, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present the financial condition of
Company and its Subsidiaries as at the dates indicated and the results
of their operations and their cash flows for the periods indicated, (b)
a narrative report describing the operations of Company and its
Subsidiaries in the form prepared for presentation to senior management
for such Fiscal Year, and (c) in the case of such consolidated
financial statements, a report thereon of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other
independent certified public accountants of recognized national
standing selected by Company and satisfactory to Administrative Agent,
which report shall be unqualified, shall express no doubts about the
ability of Company and its Subsidiaries to continue as a going concern,
and shall state that such consolidated financial statements fairly
present the consolidated financial position of Company and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years (except as
otherwise disclosed in such financial statements) and that the
examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally
accepted auditing standards; provided that delivery of Company's Form
10-K for such Fiscal Year shall be deemed to satisfy the requirements
of clauses (a) and (b) of this subsection 5.1(iii);
(iv) Officers' and Compliance Certificates: together with
each delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above after the Fourth
Restatement Date, (a) an Officers' Certificate of Company stating that
the signers have reviewed the terms of this Agreement and have made, or
caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of Company and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during
or at the end of such accounting period, and that the signers do not
have knowledge of the existence as at the date of such Officers'
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Certificate, of any condition or event that constitutes an Event of
Default or Potential Event of Default, or, if any such condition or
event existed or exists, specifying the nature and period of existence
thereof and what action Company has taken, is taking and proposes to
take with respect thereto; and (b) a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of
the applicable quarterly and annual accounting periods with the
restrictions contained in Section 6;
(v) Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 4.3, the consolidated financial statements of Company and
its Subsidiaries delivered pursuant to subdivisions (ii) or (iii) of
this subsection 5.1 will differ in any material respect from the
consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (ii) or (iii)
of this subsection 5.1 following such change, consolidated financial
statements of Company and its Subsidiaries for (y) the current Fiscal
Year to the effective date of such change and (z) the two full Fiscal
Years immediately preceding the Fiscal Year in which such change is
made, in each case prepared on a pro forma basis as if such change had
been in effect during such periods, and (b) together with each delivery
of financial statements pursuant to subdivision (ii) or (iii) of this
subsection 5.1 following such change, a written statement of the chief
accounting officer or chief financial officer of Company setting forth
the differences which would have resulted if such financial statements
had been prepared without giving effect to such change;
(vi) Accountants' Certification: together with each
delivery of consolidated financial statements of Company and its
Subsidiaries pursuant to subdivision (iii) above, a written statement
by the independent certified public accountants giving the report
thereon (a) stating that their audit examination has included a review
of the terms of this Agreement and the other Loan Documents as they
relate to accounting matters, (b) stating whether, in connection with
their audit examination, any condition or event that constitutes an
Event of Default or Potential Event of Default has come to their
attention and, if such a condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such Event of Default or Potential
Event of Default that would not be disclosed in the course of their
audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to
believe either or both that the information contained in the
certificates delivered therewith pursuant to subdivision (iv) above is
not correct or that the matters set forth in the Compliance
Certificates delivered therewith pursuant to clause (b) of subdivision
(iv) above for the applicable Fiscal Year are not stated in accordance
with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit of
the financial statements of Company and its Subsidiaries made by such
accountants, including,
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without limitation, any comment letter submitted by such accountants to
management in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Company to its security holders, (b) all regular and periodic reports
and all registration statements (other than on Form S-8 or a similar
form) and prospectuses, if any, filed by Company or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory
authority, and (c) all press releases and other statements made
available generally by Company or any of its Subsidiaries to the public
concerning material developments in the business of Company or any of
its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of
Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default, (b) that any
Person has given any notice to Company or any of its Subsidiaries or
taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 7.2, (c) of any
condition or event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange Commission on
Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the date
hereof), or (d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, an Officers' Certificate specifying the nature and
period of existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the nature of
such claimed Event of Default, Potential Event of Default, default,
event or condition, and what action Company has taken, is taking and
proposes to take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon
any officer of Company obtaining knowledge of (X) the institution of,
or non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or
any property of Company or any of its Subsidiaries (collectively,
"PROCEEDINGS") not previously disclosed in writing by Company to
Lenders or (Y) any material development in any Proceeding that, in any
case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(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;
(xi) written notice thereof together with such other
information as may be reasonably available to Company to enable Lenders
and their counsel to evaluate such matters; and (b) within twenty days
after the end of each fiscal quarter of Company, a schedule of all
Proceedings involving an alleged liability of, or claims against or
affecting, Company or any
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of its Subsidiaries 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;
(xii) 401K Plan Notices: promptly upon becoming aware of
the occurrence of or forthcoming occurrence of any material and adverse
event with respect to Company's 401(k) Plan (as defined in subsection
4.11), a written notice specifying the nature thereof, what action
Company has taken, is taking or proposes to take with respect thereto,
and, when known, any action taken or threatened by the Internal Revenue
Service, the Department of Labor or the PBGC with respect thereto;
(xiii) [Intentionally omitted];
(xiv) Insurance: as soon as practicable and in any event by
the last day of each Fiscal Year, a report in form and substance
satisfactory to Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by Company and its
Subsidiaries and all material insurance coverage planned to be
maintained by Company and its Subsidiaries in the immediately
succeeding Fiscal Year;
(xv) Environmental Audits and Reports: as soon as
practicable following receipt thereof, copies of all environmental
audits and reports, whether prepared by personnel of Company or any of
its Subsidiaries or by independent consultants, with respect to
significant environmental matters at any Facility or which relate to an
Environmental Claim which could result in a Material Adverse Effect;
(xvi) [Intentionally omitted];
(xvii) Holding Company: at least five Business Days prior to
the consummation thereof, the terms of the Holding Company
Reorganization and, on and after the consummation of the Holding
Company Reorganization, in addition to the information requirements of
this subsection 5.1 with respect to the Company, the same information
shall be delivered (and at the same times) with respect to the Holding
Company and Holding Company Subsidiaries; and
(xviii) Other Information: with reasonable promptness, such
other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by
Administrative Agent or any Lender.
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5.2. CORPORATE EXISTENCE.
Except as permitted under subsection 6.7, Company will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full
force and effect its corporate existence and all rights and franchises material
to its business; provided, however, that the corporate existence of any such
Subsidiary may be terminated if such termination is in the best interests of
Company and its Subsidiaries and is not materially disadvantageous to any
Lender. Company will, and will cause each of its Subsidiaries to, at all times
maintain its corporate existence as a United States Citizen.
5.3. PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Company will, and will cause its Subsidiaries to, pay
all taxes, assessments and other governmental charges imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any penalty, fine or interest accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty, fine or interest shall be incurred with respect thereto; provided that
no such charge or claim need be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and if such
reserve or other appropriate provision, if any, with respect to any liability
for taxes, as shall be required in conformity with GAAP shall have been made
therefor in the financial statements of the Company.
B. Company will not, and will not permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than any Subsidiary of Company or Company and
other than the Holding Company and Holding Company Subsidiaries).
5.4. MAINTENANCE OF PROPERTIES; INSURANCE.
Company will, and will cause its Subsidiaries to, maintain or
cause to be maintained in good repair, working order and condition, ordinary
wear and tear excepted, all material properties used or useful in the business
of Company and its Subsidiaries and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof. Company will
maintain or cause to be maintained, with insurers of recognized responsibility
and reputation, insurance with respect to its properties and business and the
properties and businesses of its Subsidiaries against loss or damage (including,
without limitation, flood insurance, if necessary or advisable) of the kinds
customarily carried or maintained under similar circumstances by corporations
engaged in similar businesses and Company will, with respect to each Financed
Aircraft, maintain the insurance specified in the First Aircraft Chattel
Mortgage with respect to such Financed Aircraft.
Company may self-insure, by way of deductible or equivalent
structures or provisions in insurance policies, the risks required to be insured
against pursuant to this subsection 5.4 in such reasonable amounts as are then
applicable to other similar aircraft or spare engines in Company's fleet, and as
are not substantially greater than amounts self-insured by corporations engaged
in the same or similar business and similarly situated with Company; provided,
however, that Company may not self-insure in an amount in excess of $1,000,000
per Financed Aircraft without the prior written consent of Administrative Agent.
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5.5. INSPECTION; LENDER MEETING.
Company will, and will cause its Subsidiaries to, permit any
authorized representatives designated by any Lender to visit and inspect any of
the properties of Company or any of its Subsidiaries, including its and their
financial and accounting records, and, with the permission of Company which
shall not be unreasonably withheld, to make copies and take extracts therefrom,
and to discuss its and their affairs, finances and accounts with its and their
officers and independent public accountants (provided that Company may, if it so
chooses, be present at or participate in any such discussion), all upon
reasonable notice and at such reasonable times during normal business hours and
as often as may be reasonably requested; provided that so long as no Event of
Default shall have occurred and be continuing, such inspection shall not be
disruptive to Company's business, as reasonably determined by Company. Within
120 days after the end of each Fiscal Year, senior management of Company shall
participate in a meeting of Lenders during which senior management will review,
among other matters, the financial results of Company and its Subsidiaries for
such Fiscal Year and outline the prospects for Company for the current Fiscal
Year and report on any major changes in the business strategy of Company
anticipated to occur during the term of this Agreement.
5.6. COMPLIANCE WITH LAWS, ETC.
Company will, and will cause its Subsidiaries to, comply with
the requirements of all applicable laws, rules, regulations and orders of any
governmental authority (including, without limitation, Environmental Laws),
noncompliance with which could reasonably be expected to cause a Material
Adverse Effect. Company shall not conduct, and shall not permit the conduct of,
any Hazardous Materials Activity at any Facility or at any other location which
could reasonably be expected to form the basis of an Environmental Claim against
Company and which could reasonably be expected to have a Material Adverse
Effect.
5.7. ENVIRONMENTAL INDEMNITY.
Company agrees to indemnify, defend, and hold harmless
Administrative Agent and Lenders, and the officers, directors, employees, agents
and affiliates of Administrative Agent and Lenders from and against any and all
losses, claims, liability or expenses arising in connection with Environmental
Claims against Company or with any Hazardous Materials Activity.
5.8. COMPANY'S REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
Company will promptly take, and will cause each of its
Subsidiaries promptly to take, any and all necessary remedial action in
connection with the presence, storage, use, disposal, transportation or Release
of any Hazardous Materials on, under or about any Facility in order to comply
with all applicable Environmental Laws and Governmental Authorizations. In the
event Company or any of its Subsidiaries undertakes any remedial action with
respect to any Hazardous Materials on, under or about any Facility, Company or
such Subsidiary will conduct and complete such remedial action in compliance
with all applicable Environmental Laws, and in accordance with the policies,
orders and directives of all federal, state and local governmental authorities
except when, and only to the extent that, Company's or such Subsidiary's
liability for such presence, storage, use, disposal,
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transportation or discharge of any Hazardous Materials is being contested in
good faith by Company or such Subsidiary.
5.9. FURTHER ASSURANCES; NEW SUBSIDIARIES; HOLDING COMPANY.
A. At any time or from time to time upon the request of
Administrative Agent, Company will, at its expense, promptly execute,
acknowledge and deliver such further documents and do 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.
B. In furtherance and not in limitation of the
foregoing, Company will cause any Subsidiary whose total assets exceed 15% of
the consolidated total assets of Company, in each case determined in accordance
with GAAP (other than a Special Purpose Subsidiary or Atlas One), to take such
actions as Administrative Agent may reasonably request from time to time to
ensure that the Obligations are guarantied by any such Subsidiary. If, after the
Fourth Restatement Date, Company or any of its Subsidiaries (other than a
Special Purpose Subsidiary or Atlas One) acquires any asset, other than an
aircraft financed with Loans hereunder or with Other Permitted Indebtedness,
with a fair market value in excess of $5 million, or the value of spare parts of
Company and its Subsidiaries not subject to Liens securing Designated
Indebtedness exceeds $25 million in the aggregate, Company shall so notify
Administrative Agent and take, or cause such Subsidiaries to take, such actions
as Administrative Agent may reasonably request from time to time (including,
without limitation, the execution and delivery of guaranties, security
agreements, mortgages, deeds of trust, financing statements and other documents,
the filing or recording of any of the foregoing, title insurance with respect to
any of the foregoing that relates to an interest in real property, and the
delivery of stock certificates and other collateral with respect to which
perfection is obtained by possession) to ensure that the Obligations are secured
by a first priority security interest in such asset or spare parts (other than
capital stock of a Subsidiary), as the case may be; provided that, in the case
of any engine otherwise subject to such security interest, such Lien may be
released at the request of Company in connection with a refinancing thereof with
Other Permitted Indebtedness. Notwithstanding the foregoing, so long as the AFL
III Financing remains outstanding nothing herein shall cause or give rise to an
obligation on the part of the Company or AFL III to require a guaranty or grant
of security interest in the assets of AFL III. The Lenders acknowledge that the
security interests and Liens created by the Collateral Documents do not extend
to the assets of AFL III now existing or hereafter acquired.
C. In furtherance and not in limitation of the
foregoing, Company shall not permit the Holding Company to create, incur, assume
or guarantee, or otherwise become or remain directly or indirectly liable with
respect to, any Contingent Obligation (other than the AFL III Guaranties, the
Holdings Guaranty, the guaranties of Polar Air's obligations under the Polar
Leases so long as the terms of such Polar Leases are not less favorable to Polar
Air in all material respects than the terms in effect as of the Fifth Amendment
Effective Date, and the guaranty of a future lease or sublease of a 747-400
aircraft bearing manufacturer serial number 30812 so long as the terms of such
lease or sublease are not less favorable to Polar Air in all material respects
than the terms described in the Polar Term Sheet) or Indebtedness (other than
the GE Capital Loans and the GSS Pledge) and will not engage in any business or
activity or own any assets other than (1) (x) holding the capital stock of
Company, GSS and any Subsidiaries of the Holding Company, and performing its
obligations incidental
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thereto, (y) investing an amount not to exceed $2,000,000 in GSS, and performing
its obligations incidental thereto and (z) investing an amount not to exceed
$500,000 in Equitime, a business organization to be formed to provide insurance
to airlines or a similar entity formed for the same purpose and performing its
obligations incidental thereto, (2) employing certain management employees and
pilots and performing its obligations incidental thereto, (3) paying general
administrative costs and expenses in the ordinary course of business and (4)
such other activities as may be consented to from time to time by Requisite
Lenders.
5.10. APPRAISALS.
Company will obtain appraisals of each of the Financed
Aircraft from two Approved Appraisers, in form and substance satisfactory to
Administrative Agent, on or before June 30, 2002 and thereafter at the request
of Administrative Agent or Requisite Lenders (but no more than once each
calendar year), Company will obtain appraisals of each of the Financed Aircraft
from two Approved Appraisers in form and substance satisfactory to
Administrative Agent; provided that, upon the occurrence and during the
continuance of an Event of Default, Company will obtain such additional
appraisals with respect to the Financed Aircraft as Administrative Agent or
Requisite Lenders may request. Without limiting the generality of the foregoing,
no earlier than December 1, 2002 and on or before December 31, 2002, Company
shall obtain appraisals of each Financed Aircraft from two Approved Appraisers,
which appraisals shall be in form and substance satisfactory to Administrative
Agent and which appraisals shall be delivered by Company to Administrative Agent
and Lenders. Based on the Appraised Value of the Financed Aircraft as determined
by such appraisals, Company shall make a prepayment to the extent required by
subsection 2.4(B)(iii)(f), provided that, notwithstanding anything to the
contrary in subsection 2.4(B)(iii)(f), any such prepayment shall be made on
January 27, 2003; provided that the amount of such prepayment shall not exceed,
when added to the prepayment required on such date under the AFL III Financing
Agreement pursuant to Section 24 of the Third Amendment (as defined in the AFL
III Financing Agreement), $10,000,000 in the aggregate, provided further, that
the aggregate amount of such prepayments shall be allocated between this
Agreement and the AFL III Financing Agreement on a pro rata basis based upon the
aggregate amount that would otherwise be required to be prepaid under this
Agreement in the absence of the immediately preceding proviso and the aggregate
amount that would otherwise be required to be prepaid under the Third Amendment
(as defined in the AFL III Financing Agreement) in the absence of the equivalent
proviso contained in the AFL III Amendment.
5.11. MAINTENANCE CONTRACTS.
Company shall maintain contracts with respect to the
maintenance of each Financed Aircraft sufficient to insure compliance with the
Federal Aviation Act, in form and substance reasonably satisfactory to
Administrative Agent.
5.12. EMPLOYEE BENEFIT PLANS.
Company will not establish or permit to be established any
Employee Benefit Plans for Company or any of its employees and will not permit
any ERISA Affiliate to establish any Employee Benefit Plan which, in either
case, could result in a liability for Company, under ERISA, in excess of $10
million.
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5.13. REGISTRATION OF FOREIGN LEASED AIRCRAFT WITH FAA.
Upon termination of an Approved Lease to which a Foreign
Leased Aircraft is subject, Company shall cause such Foreign Leased Aircraft to
be deregistered in such country and registered under the Federal Aviation Act
and file for recordation with the FAA following such deregistration a First
Aircraft Chattel Mortgage and Second Aircraft Chattel Mortgage with respect to
such Foreign Leased Aircraft and shall cause FAA counsel to deliver an opinion
in form and substance satisfactory to Administrative Agent.
5.14. CORPORATE SEPARATENESS.
Following the creation of a Holding Company, Company will take
all such action as is necessary to keep its operations separate and apart from
those of Holding Company 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
Company shall clearly establish the corporate separateness of Company from
Holding Company and each Holding Company Subsidiary. Company shall not take any
action or conduct its affairs in a manner that is likely to result in the
corporate existence of Company on the one hand and of Holding Company or any
Holding Company Subsidiary on the other hand being disregarded, or in the assets
and liabilities of Holding Company or any Holding Company Subsidiary being
substantively consolidated with those of Company in a bankruptcy, reorganization
or other insolvency proceeding. Company shall maintain its principal executive
office separate from Holding Company or any of its Affiliates.
5.15. CRAF PROGRAM.
To the extent any of the Financed Aircraft or any component
thereof are leased or under contract to the United States or any agency or
instrumentality thereof pursuant to the Civil Reserve Air Fleet Program (the
"CRAF PROGRAM") or a similar program, Company shall take such actions as
Administrative Agent may reasonably request to ensure that Administrative Agent,
for the benefit of the Lenders, (i) is a loss payee under any insurance policy
or indemnity granted to Company or any of its affiliates by the United States or
any agency or instrumentality thereof and/or (ii) has a perfected security
interest in the proceeds of any payments made by the United States or any agency
or instrumentality thereof pursuant to any such insurance policy or
indemnity.
SECTION 6.
COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations, unless Requisite Lenders shall otherwise give
prior written consent, Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.
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6.1. INDEBTEDNESS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Company may become and remain liable with respect to
the Obligations;
(ii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection
6.4 and, upon any matured obligations actually arising pursuant
thereto, the Indebtedness corresponding to the Contingent Obligations
so extinguished;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness in respect of Capital Leases;
provided that such Capital Leases are permitted under the terms of
subsection 6.9;
(iv) Company and its Subsidiaries, as applicable, may
remain liable with respect to Indebtedness described in Schedule 6.1
annexed hereto;
(v) Company may become and remain liable with respect to
Permitted Extension Indebtedness; provided, that with respect to any
transaction in which Permitted Extension Indebtedness is incurred with
respect to any Financed Aircraft, the cash proceeds from such Permitted
Extension Indebtedness are sufficient to repay in full the Notes
associated with such Financed Aircraft;
(vi) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing or would result therefrom
and Company delivers an Officers' Certificate to Administrative Agent
and Lenders, in form and substance reasonably satisfactory to
Administrative Agent, confirming that, on a Pro Forma Basis after
giving effect to such incurrence of Indebtedness, (i) the ratio of
Consolidated Total Debt (less Cash and Cash Equivalents held by Company
in excess of $25 million) as of the last day of the most recently ended
fiscal quarter (the "Determination Date") plus seven times Consolidated
Rental Payments to Consolidated Adjusted EBITDA plus Consolidated
Rental Payments for the four fiscal quarter period ending on such
Determination Date does not exceed the ratio set forth in subsection
6.6B for the fiscal quarter in which such Indebtedness is to be
incurred, (ii) the ratio of Consolidated Adjusted EBITDA for such four
fiscal quarter period to Consolidated Interest Expense for such
four-fiscal quarter period is not less than the ratio set forth in
subsection 6.6A for the fiscal quarter in which such Indebtedness is to
be incurred and (iii) Company will be in compliance with all covenants
set forth in subsection 6.6 hereof, Company and its Subsidiaries may
incur Other Permitted Indebtedness;
(vii) Company may become and remain liable with respect to
Indebtedness under the NationsBanc/Bank of America Agreement;
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(viii) AFL III may become and remain liable with respect to
all of the obligations under the AFL III Financing documents and
Company may become and remain liable with respect to the AFL III
Leases;
(ix) Company may become and remain liable with respect to
the Senior Notes and the Pass Through Trust Agreements; and
(x) Company and its Subsidiaries may become and remain
liable with respect to other Indebtedness in an aggregate principal
amount not to exceed, without duplication, when added to the maximum
aggregate liability, contingent or otherwise, of Company and its
Subsidiaries outstanding in accordance with subsection 6.4(vi), $50
million at any time outstanding;
provided that, notwithstanding the foregoing, Company may not become or remain
liable, directly or indirectly, for any Indebtedness of any Holding Company
Subsidiary.
6.2. LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods or
accounts receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any state or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens in respect of Permitted Extension Indebtedness
and Other Permitted Indebtedness; provided that such Liens encumber
only assets subject to purchase money Liens securing such Indebtedness;
(iii) other Liens securing Indebtedness in an aggregate
amount not to exceed $10 million at any time outstanding;
(iv) as part of an Employee Benefit Plan providing
deferred compensation to Company's employees and approved by its board
of directors, Company may create a trust, pursuant to documentation in
form and substance reasonably satisfactory to the Administrative Agent,
for the benefit of its employees and make payments thereto not to
exceed $10 million in the aggregate; and
(v) a pledge of any guaranteed investment contract or
similar instrument or document pursuant to which the Investment
permitted under subsection 6.3(vii) is made, as well as a pledge of any
accrued interest on such Investment.
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B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any
of its Subsidiaries shall create or assume any Lien upon any of its properties
or assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 6.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 6.2A.
C. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO
COMPANY OR OTHER SUBSIDIARIES. Except (i) as provided herein, as (ii) described
on Schedule 6.2 annexed hereto, (iii) with respect to Special Purpose
Subsidiaries and (iv) pursuant to the AFL III Financing Agreement, Company will
not, and will not permit any of its Subsidiaries to, create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or restriction
of any kind on the ability of any such Subsidiary to (i) pay dividends or make
any other distributions on any of such Subsidiary's capital stock owned by
Company or any other Subsidiary of Company, (ii) repay or prepay any
Indebtedness owed by such Subsidiary to Company or any other Subsidiary of
Company, (iii) make loans or advances to Company or any other Subsidiary of
Company, or (iv) transfer any of its property or assets to Company or any other
Subsidiary of Company.
6.3. INVESTMENTS; JOINT VENTURES.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
(i) Company may make and own Investments in Cash
Equivalents; provided that, (x) the weighted average maturity of all
Investments in Cash Equivalents shall not exceed twelve months, (y) no
more than 10% of the Company's Investments in Cash Equivalents shall be
in a single security or issuer (other than U.S. treasuries, U.S.
government agency obligations and money market funds), and (z) no more
than 50% of the Company's Investments in Cash Equivalents shall be in a
single U.S. treasury or U.S. government agency security;
(ii) Company and its Subsidiaries may continue to own the
Investments owned by them as of the Fourth Restatement Date in any
Subsidiaries of Company;
(iii) Company may make and own Investments in Special
Purpose Subsidiaries; provided that Company delivers to Administrative
Agent an Officer's Certificate in form and substance satisfactory to
Administrative Agent demonstrating that such Special Purpose Subsidiary
meets the requirements set forth in the definition thereof;
(iv) so long as no Event of Default or Potential Event of
Default has occurred and is continuing or would result therefrom, and
so long as, on a Pro Forma Basis, the Company will be in compliance
with the covenant set forth in subsection 6.6D, the Company may make
Investments in Joint Ventures in an aggregate amount not to exceed (A)
$21,100,000 at any time outstanding less (B) the aggregate amount
contributed to capital of Special Purpose Subsidiaries during the
period commencing January 1, 2000 and ending on the last day of the
Fiscal
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Year immediately preceding the date of determination (taken as a single
accounting period); provided that Company shall not incur liabilities
related to any such Joint Venture in excess of Company's Investment
therein; provided, further that no more than $4,100,000 may be invested
in Joint Ventures other than the TNT Entity;
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 6.3 annexed hereto
and Investments made in compliance with subsection 6.3(iv);
(vi) Company, AFL and AFL II may make the contributions to
AFL III of the AFL III Equipment and cash contemplated pursuant to the
AFL III Restructuring;
(vii) Company may make cash Investments for purposes of
providing credit support for the equity portion of rent due under each
New Aircraft Lease in an amount less than or equal to the amount
previously paid to Boeing as a pre-delivery deposit with respect to the
related New Leased Aircraft (to the extent such deposit has been
returned to Company); provided that such cash Investments shall in no
event exceed $24 million per New Leased Aircraft;
(viii) Company may make cash Investments in an aggregate
amount not to exceed $7 million for the purpose of paying the excess of
interest due under the New Aircraft Lease Documents over the amount of
interest earned from investing the proceeds from the issuance of
equipment trust certificates under the New Aircraft Lease Documents;
(ix) Company may contribute the Additional Aircraft to AFL
II as a capital contribution and AFL II may contribute the Additional
Aircraft to AFL III as a capital contribution; and
(x) so long as no Event of Default or Potential Event of
Default has occurred and is continuing or would result therefrom, and
so long as, on a Pro Forma Basis, the Company will be in compliance
with the covenant set forth in subsection 6.6D, Company and its
Subsidiaries may make and own other Investments in an aggregate amount
not to exceed $15 million at any time outstanding.
Notwithstanding the foregoing, (1) except in connection with
the AFL III Restructuring or pursuant to subsection 6.3(ix) hereof, neither
Company nor any of its Subsidiaries may make any direct or indirect loan,
advance or capital contribution to AFL III and (2) neither Company nor its
Subsidiaries may make any direct or indirect loan or advance to a Holding
Company.
6.4. CONTINGENT OBLIGATIONS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) any Subsidiary may become and remain liable with
respect to Contingent Obligations arising under their guaranties of the
Obligations;
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(ii) Company may become and remain liable with respect to
Contingent Obligations under Interest Rate Agreements and Currency
Agreements with a Lender;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets or securities;
(iv) Company and its Subsidiaries, as applicable, may
remain liable with respect to Contingent Obligations described in
Schedule 6.4 annexed hereto;
(v) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations to the extent such
Contingent Obligations are permitted pursuant to subsections 6.9 and
6.10; and
(vi) Company and its Subsidiaries may become and remain
liable with respect to other Contingent Obligations; provided that the
maximum aggregate liability, contingent or otherwise, of Company and
its Subsidiaries in respect of all such Contingent Obligations when
added, without duplication, to the aggregate principal amount of
Indebtedness outstanding in accordance with subsection 6.1(x) shall at
no time exceed $30 million.
6.5. RESTRICTED JUNIOR PAYMENTS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment; provided that Company may make
scheduled payments of principal and interest or mandatory prepayments of
principal (including through the exercise of remedies) from time to time on
Designated Indebtedness; and provided, further, that so long as no Event of
Default or Potential Event of Default has occurred and is continuing, or would
result therefrom and so long as, on a Pro Forma Basis, Company will be in
compliance with the covenant set forth in subsection 6.6D:
(i) Company may prepay Designated Indebtedness from the
proceeds of Permitted Extension Indebtedness or Other Permitted
Indebtedness;
(ii) Company may make a one-time Restricted Junior Payment
to Holdings in an amount not to exceed $37 million (the "Polar Air
Payment") of which $30 million is to be used by Holdings to fund its
acquisition of Polar Air (the "Polar Air Transaction") and $7 million
is to be used by Holdings to make mandatory principal and interest
payments required under the GE Capital Loans; provided that, prior to
making the Polar Air Payment, Company shall have provided to
Administrative Agent, an executed copy of the credit agreement pursuant
to which the GE Capital Loans will be made, which credit agreement
shall be in form and substance satisfactory to Administrative Agent;
provided further that, if the Company elects to make the Polar Air
Payment, such Polar Air Payment must be made on or prior to November 7,
2001; provided further, that if the Polar Air Payment is funded and,
for any reason, the closing of the Polar Air Transaction does not occur
on or before November 7, 2001, the Company shall cause Holdings to
refund the Polar Air Payment to the Company immediately;
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(iii) At any time other than during the Interim Period,
Company may repurchase Company Common Stock in an amount not to exceed
in any Fiscal Year $5 million for purposes of establishing or
contributing to an employee compensation plan; provided that any such
repurchased Company Common Stock resold to employees of Company shall,
to the extent of the price paid for such Company Common Stock by such
employee, be excluded from the calculation of the $5 million limit set
forth above;
(iv) Company may apply Equity Proceeds to prepay
Designated Indebtedness;
(v) Company and AFL III shall be permitted to consummate
the AFL III Restructuring; and
(vi) At any time other than during the Interim Period,
Company may repurchase or redeem all or any portion of the Senior Notes
for aggregate cash consideration not to exceed, when aggregated with
any "change of control" put payments arising as a result of the Holding
Company Reorganization, $75,000,000; provided that, (A) after giving
effect to the proposed repurchase or redemption, Company shall have not
less than $150,000,000 in Cash or Cash Equivalents on its balance sheet
and (B) the Leverage Ratio (calculated on a pro forma basis as if the
proposed repurchase or redemption had been consummated on the last day
of the most recent four fiscal quarter period) shall not exceed the
lower of 4.25:1.00 or the ratio required to be met in accordance with
subsection 6.6B for the immediately succeeding fiscal quarter end.
6.6. FINANCIAL COVENANTS.
A. MINIMUM INTEREST COVERAGE RATIO. Company shall not
permit the ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated
Interest Expense for the four fiscal quarter period ending as of the last day of
any fiscal quarter of Company set forth below to be less than the correlative
ratio indicated:
MINIMUM
INTEREST
FISCAL QUARTER ENDING COVERAGE RATIO
---------------------------------------------------------------------------
March 31, 2000 2.10:1.00
---------------------------------------------------------------------------
June 30, 2000 2.10:1.00
---------------------------------------------------------------------------
September 30, 2000 2.20:1.00
---------------------------------------------------------------------------
December 31, 2000 2.20:1.00
---------------------------------------------------------------------------
March 31, 2001 2.40:1.00
---------------------------------------------------------------------------
June 30, 2001 2.40:1.00
---------------------------------------------------------------------------
September 30, 2001 2.50:1.00
---------------------------------------------------------------------------
December 31, 2001 1.90:1.00
---------------------------------------------------------------------------
March 31, 2002 1.70:1.00
---------------------------------------------------------------------------
June 30, 2002 1.75:1.00
---------------------------------------------------------------------------
September 30, 2002 1.65:1.00
---------------------------------------------------------------------------
December 31, 2002 1.65:1.00
---------------------------------------------------------------------------
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MINIMUM
INTEREST
FISCAL QUARTER ENDING COVERAGE RATIO
---------------------------------------------------------------------------
March 31, 2003 2.50:1.00
---------------------------------------------------------------------------
June 30, 2003 2.75:1.00
---------------------------------------------------------------------------
September 30, 2003 2.75:1.00
---------------------------------------------------------------------------
December 31, 2003 2.75:1.00
---------------------------------------------------------------------------
March 31, 2004 2.75:1.00
---------------------------------------------------------------------------
June 30, 2004 2.75:1.00
---------------------------------------------------------------------------
September 30, 2004 2.75:1.00
---------------------------------------------------------------------------
December 31, 2004 2.75:1.00
---------------------------------------------------------------------------
March 31, 2005 2.75:1.00
---------------------------------------------------------------------------
B. MAXIMUM LEVERAGE RATIO. Company shall not permit the
ratio of (i) Consolidated Total Debt as of each date set forth below (less Cash
and Cash Equivalents held by Company in excess of $25 million as of such date)
plus seven times Consolidated Rental Payments (for the four fiscal quarter
period ending with the most recently ended fiscal quarter) to (ii) Consolidated
Adjusted EBITDA plus Consolidated Rental Payments for the four fiscal quarter
period ending as of the last day of any fiscal quarter of Company set forth
below to exceed the correlative ratio indicated:
MAXIMUM
LEVERAGE
FISCAL QUARTER ENDING RATIO
------------------------------------------------------------------------
March 31, 2000 4.75:1.00
------------------------------------------------------------------------
June 30, 2000 4.75:1.00
------------------------------------------------------------------------
September 30, 2000 4.75:1.00
------------------------------------------------------------------------
December 31, 2000 4.75:1.00
------------------------------------------------------------------------
March 31, 2001 4.75:1.00
------------------------------------------------------------------------
June 30, 2001 4.50:1.00
------------------------------------------------------------------------
September 30, 2001 4.50:1.00
------------------------------------------------------------------------
December 31, 2001 6.25:1.00
------------------------------------------------------------------------
March 31, 2002 6.70:1.00
------------------------------------------------------------------------
June 30, 2002 6.40:1.00
------------------------------------------------------------------------
September 30, 2002 6.75:1.00
------------------------------------------------------------------------
December 31, 2002 6.75:1.00
------------------------------------------------------------------------
March 31, 2003 4.25:1.00
------------------------------------------------------------------------
June 30, 2003 4.25:1.00
------------------------------------------------------------------------
September 30, 2003 4.25:1.00
------------------------------------------------------------------------
December 31, 2003 4.00:1.00
------------------------------------------------------------------------
March 31, 2004 4.00:1.00
------------------------------------------------------------------------
June 30, 2004 4.00:1.00
------------------------------------------------------------------------
September 30, 2004 4.00:1.00
------------------------------------------------------------------------
December 31, 2004 3.75:1.00
------------------------------------------------------------------------
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MAXIMUM
LEVERAGE
FISCAL QUARTER ENDING RATIO
------------------------------------------------------------------------
March 31, 2005 3.75:1.00
------------------------------------------------------------------------
C. MINIMUM CONSOLIDATED NET WORTH. Company shall not
permit Consolidated Net Worth at any time during any of the periods set forth
below to be less than the correlative amount indicated:
MINIMUM CONSOLIDATED
PERIOD NET WORTH
------------------------------------------------------------------------------
Fiscal quarter ending June 30, 2002 $400 million
------------------------------------------------------------------------------
Fiscal quarter ending September 30, $380 million
2002
------------------------------------------------------------------------------
Month ending October 31, 2002 $385 million
------------------------------------------------------------------------------
Month ending November 30, 2002 $385 million
------------------------------------------------------------------------------
Fiscal quarter ending December 31, $400 million
2002
------------------------------------------------------------------------------
Fiscal quarter ending March 31, 2003 $450 million
------------------------------------------------------------------------------
Fiscal quarter ending June 30, 2003 $450 million
------------------------------------------------------------------------------
Fiscal quarter ending September 30, $450 million
2003
------------------------------------------------------------------------------
Fiscal quarter ending December 31, $450 million
2003
------------------------------------------------------------------------------
Fiscal quarter ending March 31, 2004 $450 million
------------------------------------------------------------------------------
Fiscal quarter ending June 30, 2004 $450 million
------------------------------------------------------------------------------
Fiscal quarter ending September 30, $450 million
2004
------------------------------------------------------------------------------
Fiscal quarter ending December 31, $450 million
2004
------------------------------------------------------------------------------
Fiscal quarter ending March 31, 2005 $450 million
------------------------------------------------------------------------------
D. MINIMUM LIQUIDITY. The Company shall not permit its
reserve of Unrestricted Cash and Cash Equivalents to be less than $200,000,000
at any time except (a) during the period from and including July 1, 2002 to and
including November 29, 2002, when the Company shall not permit its reserve of
Unrestricted Cash and Cash Equivalents to be less than $140,000,000 and (b)
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during the period from and including November 30, 2002 to and including December
30, 2002, when the Company shall not permit its reserve of Unrestricted Cash and
Cash Equivalents to be less than $160,000,000.
6.7. RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS; NEW
SUBSIDIARIES.
Company shall not, and shall not permit any of its
Subsidiaries to, enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, sub-lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, all or any part of its
business, property or fixed assets, whether now owned or hereafter acquired, or
acquire by purchase or otherwise all or any portion of the business, property or
fixed assets of, or stock or other evidence of beneficial ownership of, any
Person or any division or line of business of any Person, except:
(i) any Subsidiary of Company may be merged with or into
Company or any wholly owned Subsidiary of Company that has entered into
a valid and effective guaranty and security agreement to the extent
required by subsection 5.9, or be liquidated, wound up or dissolved, or
all or any part of its business, property or assets may be conveyed,
sold, leased, transferred or otherwise disposed of, in one transaction
or a series of transactions, to Company or any such wholly owned
Subsidiary of Company; provided that, in the case of such a merger,
Company or such wholly owned Subsidiary shall be the continuing or
surviving corporation;
(ii) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof;
(iii) subject to subsection 6.13, Company and its
Subsidiaries may make Asset Sales of assets having a fair market value
not in excess of $100 million in any Fiscal Year or $500 million in the
aggregate; provided that (w) with respect to the sale of any Financed
Aircraft, the cash proceeds of the sale of such Financed Aircraft are
sufficient to repay in full the Notes associated with such Financed
Aircraft; (x) the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof; (y) the
consideration received shall be at least 75% cash; and (z) the proceeds
of such Asset Sales shall be applied as required by subsection
2.4B(iii)(a);
(iv) Company may lease or transfer any Financed Aircraft
to the extent expressly permitted by Section 4(d) of the First Aircraft
Chattel Mortgage with respect to such Financed Aircraft or as
contemplated by subsection 9.21;
(v) at any time other than during the Interim Period,
Company may make acquisitions of the capital stock of another Person or
all or substantially all of the assets of a division or line of
business of another Person provided that, (a) the acquisition primarily
involves the acquisition of assets to be used in the business of
Company, (b) if such acquisition is structured as a merger or as a
stock or other equity acquisition, then either (i) the Person so
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acquired becomes a wholly owned Subsidiary of the Company or (ii) such
Person is merged with and into the Company or a wholly owned Subsidiary
of the Company (with the Company or such wholly owned Subsidiary being
the surviving corporation of such merger), (c) if such acquisition is
structured as an asset acquisition, then such assets are acquired
either by the Company directly or by a wholly owned Subsidiary of
Company, (d) to the extent required by subsection 5.9, such wholly
owned Subsidiary of Company shall execute a guaranty of the Obligations
and Company or such wholly owned Subsidiary of Company shall grant a
security interest in the assets acquired to Administrative Agent for
the benefit of Lenders which may be subordinate to debt incurred in
such acquisition, (e) immediately before and after giving effect
thereto, no Potential Event of Default or Event of Default shall have
occurred and be continuing, (f) immediately after giving effect to the
acquisition, Company shall be in compliance on a Pro Forma Basis with
financial covenants in subsection 6.6 and such compliance shall be
evidenced by an Officer's Certificate demonstrating such compliance,
(g) Administrative Agent shall have reviewed and be reasonably
satisfied with the nature and amount of all contingent liabilities or
other liabilities not on the balance sheet of Company assumed in
connection with such acquisition and (h) the aggregate amount of cash
payments made in connection with all such acquisitions, other than with
the proceeds from sales or issuances of equity by Company, does not
exceed $100,000,000;
(vi) Company and its Subsidiaries may make Consolidated
Capital Expenditures in connection with the purchase of up to twelve
Eligible Aircraft during each Fiscal Year, such number of Eligible
Aircraft permitted during any Fiscal Year to be increased by any number
of Eligible Aircraft permitted to be purchased, but not purchased,
during the previous Fiscal Year (but in no event shall any such number
of Eligible Aircraft once carried forward to the next Fiscal Year be
carried forward to any Fiscal Year thereafter) together with
Consolidated Capital Expenditures with respect to the acquisition, in
the normal course of business, of spare parts and spare engines
associated with such Eligible Aircraft;
(vii) Company and its Subsidiaries may make Consolidated
Capital Expenditures with respect to maintenance of aircraft in the
normal course of business;
(viii) Company and its Subsidiaries may make other
Consolidated Capital Expenditures not in excess of $10 million during
any Fiscal Year; provided that, any amount of such other Consolidated
Capital Expenditures permitted, but not made, in any Fiscal Year may be
carried forward to and made during the immediately succeeding Fiscal
Year (but no amount once carried forward to the next Fiscal Year may be
carried forward to any Fiscal Year thereafter);
(ix) Company and AFL III shall be permitted to consummate
the AFL III Restructuring, and Company may contribute the Additional
Aircraft to AFL II as a capital contribution and AFL II may contribute
the Additional Aircraft to AFL III as a capital contribution;
(x) Company shall be permitted to dispose of or acquire
assets pursuant to the consolidation and relocation of its offices and
operations from Colorado to New York; provided
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that the aggregate consideration paid with respect to the acquisition
of assets shall be in an amount not to exceed $20 million;
(xi) the Holding Company Reorganization shall be permitted
so long as in connection therewith Company complies with, and causes
Holding Company to comply with, subsection 5.9 hereof;
(xii) the Company may lease aircraft pursuant to ACMI
Contracts; and
(xiii) the Company may lease aircraft other than pursuant to
ACMI Contracts (each such lease, a "DRY LEASE"); provided that (1) no
more than thirteen (13) aircraft may be on Dry Lease at any one time
including, without limitation, the five aircraft permitted to be leased
by that certain Consent and Limited Waiver to Credit Agreement, dated
as of April 16, 2002, among Company, the Lenders, and the
Administrative Agent and (2) in the case of a Financed Aircraft (a)
such Dry Lease (i) shall be expressly subject and subordinate to the
lien and security interest of the Lenders under the Collateral
Documents, (ii) shall not have a term (including, without limitation,
any option to renew or extend) in excess of sixty (60) months, (iii)
shall require rental payments to be made at least quarterly and (iv)
shall otherwise be in form and substance reasonably satisfactory to the
Administrative Agent (including, without limitation, with regard to the
identity of the lessee), (b) Company shall grant a first priority
security interest in such Dry Lease to the Administrative Agent, for
the benefit of the Lenders, and their respective successors and
assigns, shall take all necessary action to ensure that such security
interest is fully perfected pursuant to documentation reasonably
satisfactory to the Administrative Agent, and shall deliver an opinion
addressed to the Administrative Agent to the effect that Company holds
a fully perfected first priority security interest in such Dry Lease,
and as to such other matters as the Administrative Agent may reasonably
request, which opinion shall be in form and substance reasonably
satisfactory to the Administrative Agent, from counsel reasonably
satisfactory to the Administrative Agent, (c) either (1) (x) the lessee
under such Dry Lease, at the time such Dry Lease is entered into, shall
hold an air carrier operating certificate issued pursuant to Chapter
447 of Title 49 of the United States Code for aircraft capable of
carrying ten or more individuals or 6,000 pounds or more of cargo, (y)
Company and the lessee under such Dry Lease have expressed in writing
(either in such Dry Lease or in a substantially contemporaneous
writing) that such Dry Lease is intended to be treated as a lease for
U.S. federal income tax purposes, and (z) Company has obtained an
opinion, addressed to Company, the Administrative Agent, and the
Lenders, in form and substance reasonably satisfactory to the
Administrative Agent, stating that Company is entitled to the benefits
of Section 1110 of the Bankruptcy Code with respect to the relevant
Airframe and the relevant Engines or engines installed thereon or (2)
Company shall obtain the prior written consent of the Administrative
Agent, which consent may be withheld by the Administrative Agent in its
sole discretion, and which consent (x) may be conditioned on receipt of
opinions in form and substance satisfactory to the Administrative Agent
in its sole discretion from counsel of the same domicile as the lessee
under such Dry Lease, which counsel must be satisfactory to
Administrative Agent in its sole discretion and (y) may be conditioned
on such other conditions as the Administrative Agent may, in its sole
discretion, determine, (d) Company shall not enter into any waiver,
amendment or other modification with respect to the related Dry Lease
that could reasonably be expected to be materially adverse in any
respect to
-85-
the Company or Lenders without the prior written consent of the
Administrative Agent, which consent shall be granted or denied by
Administrative Agent in its sole discretion within ten (10) Business
Days of receipt by Administrative Agent of the proposed amendment and
any related documents reasonably requested by Administrative Agent and
(e) Company shall provide Administrative Agent with a copy of any
amendment, consent, waiver, supplement, or other modification with
respect to any such Dry Lease within fifteen Business Days after the
execution thereof.
6.8. AMENDMENTS OF MATERIAL AGREEMENTS.
Company shall not permit (i) the certificate or articles of
incorporation or bylaws of any Loan Party to be amended or otherwise modified in
any manner which could reasonably be expected to have a Material Adverse Effect
or (ii) any Material Agreement to be amended or otherwise modified in any manner
with respect to any provision providing material representations and warranties
to Company, indemnification rights to Company, or limiting Company's remedies or
rights upon the other party to such agreements failure to perform or which could
otherwise reasonably be expected to have Material Adverse Effect on the value of
any Financed Aircraft.
6.9. RESTRICTION ON LEASES.
Company shall not, and shall not permit any of its
Subsidiaries to, become liable in any way, whether directly or by assignment or
as a guarantor or other surety, for the obligations of the lessee under any
lease, whether an Operating Lease or a Capital Lease (other than intercompany
leases between Company and its wholly owned Subsidiaries); provided however that
Company may become so obligated to the extent that, and only to the extent that,
immediately after giving effect to the incurrence of liability with respect to
such lease, the Consolidated Rental Payments at the time in effect during the
then current Fiscal Year do not exceed $35 million plus the amount of
Consolidated Rental Payments made during such Fiscal Year in respect of up to
six 747-400F aircraft subject to Operating Leases as of the Fourth Restatement
Date plus the amount of Consolidated Rental Payments in respect of up to two
747-400F aircraft per year, subject to the agreement dated June 9, 1997 between
Company and The Boeing Company regarding the purchase of twelve new 747-400F
aircraft and the option to purchase eight additional new 747-400F aircraft, plus
an amount not to exceed $15 million during any Fiscal Year, equal to
Consolidated Rental Payments incurred in connection with sale and leaseback
transactions described in subsection 6.10, plus Consolidated Rental Payments
assumed pursuant to acquisitions permitted under subsection 6.7(v); provided
further that, notwithstanding the foregoing, Company shall not enter into any
New Aircraft Lease unless (A) Company has delivered to Administrative Agent an
originally executed officer's certificate, in form and substance satisfactory to
the Administrative Agent, stating that the terms of the New Aircraft Lease
Documents relating to such New Leased Aircraft are not less favorable to Company
in any material respect than the terms described in the Boeing Term Sheet and
(B) the term of such New Aircraft Lease does not expire prior to the first
anniversary of the Final Scheduled Maturity Date; provided further that Company
shall not agree to any amendment to such New Aircraft Lease that would cause the
officer's certificate described above to be incorrect after giving effect to
such amendment. Notwithstanding the foregoing, the AFL III Leases shall be
permitted hereunder and shall not be taken into account for purposes of
determining compliance with the foregoing provisions of this subsection 6.9.
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6.10. SALES AND LEASE-BACKS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, become or remain liable as lessee or as
a guarantor or other surety with respect to any lease, whether an Operating
Lease or a Capital Lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, (i) which Company or any of its
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than Company or any of its Subsidiaries) or (ii) which Company or
any of its Subsidiaries intends to use for substantially the same purpose as any
other property which has been or is to be sold or transferred by Company or any
of its Subsidiaries to any Person (other than Company or any of its
Subsidiaries) in connection with such lease; provided that Company and its
Subsidiaries may become and remain liable as lessee, guarantor or other surety
with respect to any such lease if and to the extent that Company or any of its
Subsidiaries would be permitted to enter into, and remain liable under, such
lease under subsection 6.9. Notwithstanding the foregoing provisions of this
subsection 6.10, this subsection 6.10 shall not restrict or prohibit in any
manner consummation of the AFL III Restructuring, the contribution of the
Additional Aircraft to AFL II by Company as a capital contribution, the
contribution of the Additional Aircraft to AFL III by AFL II as a capital
contribution or the leasing of the Additional Aircraft to Company from AFL III.
6.11. SALE OR DISCOUNT OF RECEIVABLES.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, sell with recourse, or discount or
otherwise sell for less than the face value thereof, any of its notes or
accounts receivable.
6.12. TRANSACTIONS WITH SHAREHOLDERS, AFFILIATES AND GSS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with any holder of 10%
or more of any class of equity Securities of Company or with any Affiliate of
Company or of any such holder, on terms that are less favorable to Company or
that Subsidiary, as the case may be, than those that might be obtained at the
time from Persons who are not such a holder or Affiliate Holding Company;
provided that the foregoing restrictions shall not apply to (i) reasonable and
customary fees paid to and indemnification of members of the Boards of Directors
of Company and its Subsidiaries, (ii) reasonable and customary salaries, bonuses
and other compensation paid to and indemnification of employees of Company or
any of its Subsidiaries in accordance with past practice or approved by the
compensation committee of Company, (iii) transactions contemplated in connection
with the AFL III Restructuring, the contribution of the Additional Aircraft to
AFL II by Company as a capital contribution, the contribution of the Additional
Aircraft to AFL III by AFL II as a capital contribution or the leasing of the
Additional Aircraft to Company from AFL III or (iv) the Holding Company
Reorganization.
In furtherance and not in limitation of the foregoing, Company
shall not, directly or indirectly, enter into any leases of aircraft to or from
GSS, the TNT Entity, or any holder of 10% or more of any class of equity
Securities of Company or with any Affiliate of Company or of any such
-87-
holder or of GSS or the TNT Entity (any such lease, a "SPECIFIED LEASE") unless
such lease is in form and substance reasonably satisfactory to Administrative
Agent. In addition, Company shall not enter into any amendment, consent, waiver,
supplement, or other modification with respect to a Specified Lease that could
reasonably be expected to be materially adverse in any respect to Company,
Administrative Agent, or the Lenders without the prior written consent of
Administrative Agent (which consent shall be given or withheld by Administrative
Agent in its sole discretion within ten Business Days after such proposed
amendment, consent, waiver, supplement, or other modification has been received
by Administrative Agent together with any related documents reasonably requested
by Administrative Agent). In any event, Company shall provide Administrative
Agent with a copy of any amendment, consent, waiver, supplement, or other
modification with respect to any Specified Lease within fifteen Business Days
after the execution thereof.
In the event that Company enters into any Specified Lease,
Company shall deliver an originally executed officer's certificate, in form and
substance satisfactory to Administrative Agent, stating that such Specified
Lease is on terms no less favorable to Company than those that could have been
obtained in an arm's-length transaction with unrelated third parties. Promptly
upon receipt by Company of any fairness opinion required under the Senior Note
Documents, Company shall deliver a copy of such opinion to Administrative Agent.
6.13. DISPOSAL OF SUBSIDIARY STOCK.
Company shall not:
(i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or other
equity Securities of any of its Subsidiaries, except to qualify
directors if required by applicable law or to a wholly owned Subsidiary
of Company; or
(ii) permit any of its Subsidiaries directly or indirectly
to sell, assign, pledge or otherwise encumber or dispose of any shares
of capital stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except to Company, another wholly owned
Subsidiary of Company, or to qualify directors if required by
applicable law.
Notwithstanding the foregoing, AFL III shall be permitted to issue preferred
stock in an amount not to exceed $100,000 to a third party.
6.14. CONDUCT OF BUSINESS.
From and after the Fourth Restatement Date, Company shall not,
and shall not permit any of its Subsidiaries to, engage in any business other
than (i) the businesses engaged in by Company and its Subsidiaries on the Fourth
Restatement Date and similar or related businesses and (ii) such other lines of
business as may be consented to by Requisite Lenders.
-88-
6.15. CHANGE OF CHIEF EXECUTIVE OFFICE.
Company shall not, and shall not permit any of its
Subsidiaries to, change its chief executive office without giving 30 days' prior
written notice to the Administrative Agent.
SECTION 7.
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF
DEFAULT") shall occur:
7.1. FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any
Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; or failure by
Company to pay any interest on any Loan or any fee or any other amount due under
this Agreement within five days after the date due; or
7.2. DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries to pay
when due following applicable grace periods (a) any principal of or interest on
any Indebtedness (other than Indebtedness referred to in subsection 7.1) in an
individual principal amount of $5 million or more or any items of Indebtedness
with an aggregate principal amount of $10 million or more or (b) any Contingent
Obligation in an individual principal amount of $5 million or more or any
Contingent Obligations with an aggregate principal amount of $10 million or
more, in each case beyond the end of any grace period provided therefor; or (ii)
breach or default by Company or any of its Subsidiaries with respect to any
other material term of (a) any evidence of any Indebtedness in an individual
principal amount of $5 million or more or any items of Indebtedness with an
aggregate principal amount of $10 million or more or any Contingent Obligation
in an individual principal amount of $5 million or more or any Contingent
Obligations with an aggregate principal amount of $10 million or more or (b) any
loan agreement, mortgage, indenture or other agreement relating to such
Indebtedness or Contingent Obligation(s), if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or holders) to
cause, that Indebtedness or Contingent Obligation(s) to become or be declared
due and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be (upon the giving or receiving of
notice, lapse of time, both, or otherwise); or
7.3. BREACH OF CERTAIN COVENANTS.
Failure of Company to perform or comply in any material
respect with any term or condition contained in subsection 2.5, 5.2, 5.9C or
5.14 or subsection 6.1, 6.2 (as it relates to prohibitions on Liens on Financed
Aircraft), 6.5, 6.7 (as it relates to the sale of any Financed Aircraft or all
or substantially all of the assets of Company or to the merger of Company into
any other Person), 6.8, 6.10 and 6.13 of this Agreement or in clauses (i) and
(ii) of Section 4(c), Section 4(d) or Section 4(g) of any First Aircraft Chattel
Mortgage; or
-89-
7.4. BREACH OF WARRANTY.
Any representation, warranty, certification or other statement
made by Holdings or Company or any of its Subsidiaries in any Loan Document or
in any statement or certificate at any time given by Holdings or Company or any
of its Subsidiaries in writing pursuant hereto or thereto or in connection
herewith or therewith shall be false in any material respect on the date as of
which made; or
7.5. OTHER DEFAULTS UNDER LOAN DOCUMENTS.
(i) Any Loan Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Loan
Documents, other than any such term referred to in any other subsection of this
Section 7, and such default shall not have been remedied or waived (x) within 15
days after the earlier of (a) an officer of Company becoming aware of such
default or (b) receipt by Company of notice from Administrative Agent or any
Lender of such default or (y) with respect to a default under subsection 6.6,
the earlier of (a) an officer of Company becoming aware of the default after the
applicable measurement date and (b) the delivery of financial statements
pursuant to subsection 5.1 or (ii) a guaranty, if any, of the Obligations for
any reason ceases to be in full force and effect; or
7.6. INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall
enter a decree or order for relief in respect of Company or any of its
Subsidiaries in an involuntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect,
which decree or order is not stayed; or any other similar relief shall be
granted under any applicable federal or state law; or (ii) an involuntary case
shall be commenced against Company or any of its material Subsidiaries under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
Company or any of its Subsidiaries, or over all or a substantial part of its
property, shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of Company or any
of its Subsidiaries for all or a substantial part of its property; or a warrant
of attachment, execution or similar process shall have been issued against any
substantial part of the property of Company or any of its Subsidiaries, and any
such event described in this clause (ii) shall continue for 60 days unless
dismissed, bonded or discharged; or
7.7. VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Company or any of its material Subsidiaries shall
have an order for relief entered with respect to it or commence a voluntary case
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property; or Company or any of its
Subsidiaries shall make any assignment for the benefit of creditors; or (ii)
Company or any of its Subsidiaries
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shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due; or the Board
of Directors of Company or any of its Subsidiaries (or any committee thereof)
shall adopt any resolution or otherwise authorize any action to approve any of
the actions referred to in clause (i) above or this clause (ii); or
7.8. JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $5 million
or (ii) in the aggregate at any time an amount in excess of $10 million (in
either case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Company or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 60 days (or in any event later than five days prior to the date of any
proposed sale thereunder); or
7.9. DISSOLUTION.
Any order, judgment or decree shall be entered against Company
or any of its material Subsidiaries decreeing the dissolution or split up of
Company or that Subsidiary and such order shall remain undischarged or unstayed
for a period in excess of 30 days; or
7.10. CHANGE IN CONTROL.
(i) (a) Permitted Holders shall cease to beneficially own
and control shares of capital stock of Company representing at least 30% of the
combined voting power of all Securities of Company entitled to vote in the
election of directors, other than Securities having such power only by reason of
the happening of a contingency, or (b) any Person or any two or more Persons
acting in concert (in any such case, excluding Permitted Holders) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Exchange Act), directly or
indirectly, of Securities of Company (or other Securities convertible into such
Securities) representing 20% or more of the combined voting power of all
Securities of Company entitled to vote in the election of directors, other than
Securities having such power only by reason of the happening of a contingency or
(c) the Board of Directors of Company shall not consist of a majority Continuing
Directors or (ii) a "Change of Control" shall occur under any of the Pass
Through Trust Documents, any of the Senior Note Documents or any other Material
Agreement (as in effect on the date of such occurrence); provided that,
following consummation of the Holding Company Reorganization (x) the references
in clause (i) above to Company shall be deemed to be reference to the Holding
Company, (y) it shall also be an Event of Default if at any time Holding Company
ceases to own directly 100% of (i) the outstanding capital stock of the Company
and (ii) any outstanding Securities (other than capital stock) of the Company
entitled to vote in the election of directors of the Company and (z) it shall
also be an Event of Default if at any time Holding Company grants a Lien with
respect to the capital stock of the Company; provided further, that an Event of
Default under clause (ii) above arising as a result of the Holding Company
Reorganization shall not constitute an "Event of Default"; provided further,
that in the event that Permitted Holders cease to own 30% of the combined voting
power of all Securities of Company (or the Holding Company, as the case may be)
because of the issuance of Securities of Company (or the Holding Company, as the
case may be) (as opposed to the
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Permitted Holders selling Securities) then the failure to maintain the 30%
ownership level shall not constitute an Event of Default unless the Permitted
Holders shall cease to own shares of capital stock constituting 25% of the
combined voting power of all Securities of Company (or the Holding Company, as
the case may be); or
7.11. FAILURE OF SECURITY.
Upon execution and delivery thereof, any Collateral Document
shall, at any time, cease to be in full force and effect (other than by reason
of a release of Collateral thereunder in accordance with the terms hereof or
thereof, the satisfaction in full of the Obligations or any other termination of
such Collateral Document in accordance with the terms hereof or thereof) or
shall be declared null and void, or the validity or enforceability thereof shall
be contested in writing by any Loan Party, or Administrative Agent shall not
have or shall cease to have a valid security interest in any Collateral
purported to be covered thereby, perfected and with the priority required by the
relevant Collateral Document, for any reason other than the failure of
Administrative Agent or any Lender to take any action within its control,
subject only to Liens permitted under the applicable Collateral Documents; or
7.12. CERTIFICATED AS AIR CARRIER.
Company for any reason ceases to be a United States Citizen or
to hold an air carrier operating certificate under the Federal Aviation Act for
aircraft capable of carrying 10 or more individuals or 6,000 pounds or more of
cargo; or
7.13. MATERIAL AGREEMENTS.
Any Material Agreement, other than any Approved Lease, shall
at any time be terminated other than by its terms or cease to be in full force
and effect other than by its terms, or any party to the Modification Agreement
or any Purchase Agreement shall default in the observance or performance of any
material covenants or agreements contained in any such agreement; or
7.14. "CHANGE OF CONTROL" PUT PAYMENTS.
Company becomes obligated to make any "change of control" put
payments in connection with the Holding Company Reorganization that, when
aggregated with all payments made under subsection 6.5(vi), exceed $75,000,000
or, after giving effect to such "change of control" put payments, (A) Company
shall have less than $150,000,000 in Cash or Cash Equivalents on its balance
sheet or (B) its Leverage Ratio (calculated on a pro forma basis as if the
proposed payment had been consummated on the last day of the most recent four
fiscal quarter period) shall exceed the lower of 4.25:1.00 or the ratio to be
met in accordance with subsection 6.6B for the immediately succeeding fiscal
quarter end:
THEN (i) upon the occurrence of any Event of Default described
in subsection 7.6 or 7.7, each of (a) the unpaid principal amount of and accrued
interest on the Loans and (b) all other Obligations shall automatically become
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by Company,
and
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the obligation of each Lender to make any Loan shall thereupon terminate and
(ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Company, declare all
or any portion of the amounts described in clauses (a) and (b) above to be, and
the same shall forthwith become, immediately due and payable, and the obligation
of each Lender to make any Loan shall thereupon terminate.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than
non-payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 9.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended to
benefit Company and do not grant Company the right to require Lenders to rescind
or annul any acceleration hereunder, even if the conditions set forth herein are
met.
SECTION 8.
AGENT
8.1. APPOINTMENT.
Bankers Trust is hereby appointed Administrative Agent
hereunder and under the other Loan Documents and each Lender hereby authorizes
Administrative Agent to act as its agent in accordance with the terms of this
Agreement and the other Loan Documents. Administrative Agent agrees 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
Administrative Agent and Lenders and Company shall have no rights as a third
party beneficiary of any of the provisions thereof. In performing its functions
and duties under this Agreement, Administrative Agent shall act solely as an
agent of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Company or any
of its Subsidiaries.
8.2. POWERS AND DUTIES; GENERAL IMMUNITY.
▇. ▇▇▇▇▇▇; DUTIES SPECIFIED. Each Lender irrevocably
authorizes Administrative Agent 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 Administrative Agent by
the terms hereof and thereof, together with such powers, rights and remedies as
are reasonably incidental thereto. Administrative Agent shall have only those
duties and responsibilities that are expressly specified in this Agreement and
the other Loan Documents. Administrative
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Agent may exercise such powers, rights and remedies and perform such duties by
or through its agents or employees. Administrative Agent 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 Administrative Agent 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. Administrative
Agent shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any other Loan Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written or oral
statements or in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by Administrative Agent to
Lenders or by or on behalf of Company to Administrative Agent or any Lender in
connection with the Loan Documents and the transactions contemplated thereby or
for the financial condition or business affairs of Company or any other Person
liable for the payment of any Obligations, nor shall Administrative Agent be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained in any of
the Loan Documents or as to the use of the proceeds of the Loans or as to the
existence or possible existence of any Event of Default or Potential Event of
Default. Anything contained in this Agreement to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Loans or the component amounts thereof.
C. EXCULPATORY PROVISIONS. Neither of Administrative
Agent nor any of its officers, directors, partners, employees or agents shall be
liable to Lenders for any action taken or omitted by Administrative Agent under
or in connection with any of the Loan Documents except to the extent caused by
Administrative Agent's gross negligence or willful misconduct. If Administrative
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, Administrative Agent shall be entitled to
refrain from such act or taking such action unless and until Administrative
Agent shall have received instructions from Requisite Lenders. Without prejudice
to the generality of the foregoing, (i) Administrative 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 Company and its Subsidiaries), accountants, experts and
other professional advisors selected by it; and (ii) no Lender shall have any
right of action whatsoever against Administrative Agent as a result of
Administrative Agent acting or (where so instructed) refraining from acting
under this Agreement or any of the other Loan Documents in accordance with the
instructions of Requisite Lenders. Administrative 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. ADMINISTRATIVE AGENT 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, Administrative Agent in its
individual capacity as a Lender hereunder. With respect to its
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participations in the Loans, Administrative Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Administrative Agent in its individual capacity.
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Company or any of its Affiliates as if it were not performing the
duties specified herein, and may accept fees and other consideration from
Company for services in connection with this Agreement and otherwise without
having to account for the same to Lenders.
8.3. REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans hereunder and that
it has made and shall continue to make its own appraisal of the creditworthiness
of Company and its Subsidiaries. Administrative Agent shall have no duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and Administrative Agent shall not have responsibility with respect
to the accuracy of or the completeness of any information provided to Lenders.
8.4. RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Administrative Agent (and its respective affiliates and
partners), to the extent that Administrative Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, counsel fees and disbursements) or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against Administrative Agent in exercising its powers, rights and
remedies or performing its duties hereunder or under the other Loan Documents or
otherwise in its capacity as Administrative Agent, in any way relating to or
arising out of this Agreement or the other Loan Documents; provided that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Administrative Agent's gross negligence or willful misconduct.
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
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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, (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 and (iii) in the event that a Financed
Aircraft is subject to a Dry Lease permitted by Section 6.7(xiii), to enter into
amendments, supplements or other modifications of the Collateral Documents
relating to such Financed Aircraft for the purpose of permitting the Dry Lease
and requiring Company to grant a security interest in favor of the Lenders in
such Dry Lease and other reasonably related changes.
8.6. SUCCESSOR ADMINISTRATIVE AGENT.
Administrative Agent may resign at any time by giving 30 days'
prior written notice thereof to Lenders and Company. Upon any such notice of
resignation, Requisite Lenders shall have the right, upon consultation with
Company, to appoint a successor Administrative Agent. Upon the acceptance of any
appointment hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent and
the retiring or removed Administrative Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this Section 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
SECTION 9.
MISCELLANEOUS
9.1. ASSIGNMENTS AND PARTICIPATIONS IN LOANS.
A. GENERAL. Each Lender shall have the right at any time
to (i) sell, assign or transfer to any Eligible Assignee, or (ii) sell
participations to any Person in, all or any part of its Commitments or any Loan
or Loans made by it or any other interest herein or in any other Obligations
owed to it; provided that no such sale, assignment, transfer or participation
shall, without the consent of Company, require Company to file a registration
statement with the Securities and Exchange Commission or apply to qualify such
sale, assignment, transfer or participation under the securities laws of any
state; provided, further that no such sale, assignment or transfer described in
clause (i) above shall be effective unless and until (a) an Assignment Agreement
effecting such sale, assignment or transfer shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
9.1B(ii) or (b) the sale, assignment or transfer is made in accordance with
subsection 9.21. Except as otherwise provided in this subsection 9.1, no Lender
shall, as between Company and such Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment or
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transfer of, or any granting of participations in, all or any part of its
Commitments or the Loans, or the other Obligations owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment,
Loan or other Obligation may (a) be assigned in any amount to another Lender, or
to an Affiliate of the assigning Lender or another Lender, with the giving of
notice to Company and Administrative Agent or (b) be assigned in an aggregate
amount of not less than $5,000,000 (or such lesser amount as shall constitute
the aggregate amount of the Commitments, Loans, and other Obligations of the
assigning Lender) to any other Eligible Assignee with the giving of notice to
Company and with the consent of Administrative Agent and Company (which consent
shall not be unreasonably withheld). Any assignment of Loans hereunder shall
effect a pro rata assignment of the Notes with respect to each Financed
Aircraft. To the extent of any such assignment in accordance with either clause
(a) or (b) above, the assigning Lender shall be relieved of its obligations with
respect to its Commitments, Loans, or other Obligations or the portion thereof
so assigned. The parties to each such assignment shall execute and deliver to
Administrative Agent, for its acceptance and recording in the Register, an
Assignment Agreement, together with a processing and recordation fee of $3,000
and such forms, certificates or other evidence, if any, with respect to United
States federal income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to Administrative Agent pursuant
to subsection 2.7B(iii)(a); provided, however that such processing fee shall not
be required where the assignee is an existing Lender. Upon such execution,
delivery and acceptance, from and after the effective date specified in such
Assignment Agreement, (y) the assignee thereunder shall be a party hereto and,
to the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment Agreement, shall have the rights and obligations of
a Lender hereunder and (z) the assigning Lender thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment Agreement, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment Agreement covering all
or the remaining portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto). The Commitments
hereunder shall be modified to reflect the Commitment of such assignee and any
remaining Commitment of such assigning Lender and, if any such assignment occurs
after the issuance of the Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as practicable,
surrender its applicable Notes to Administrative Agent for cancellation, and
thereupon new Notes shall be issued to the assignee substantially in the form of
Exhibit IIIA annexed hereto or Exhibit IIIB, as the case may be, with
appropriate insertions, to reflect the new Commitments and/or outstanding Loans,
as the case may be, of the assignee and/or the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee, together
with the processing and recordation fee referred to in subsection 9.1B(i) and
any forms, certificates or other evidence with respect to United States federal
income tax withholding matters that such assignee may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii)(a), Administrative Agent
shall, if such Assignment Agreement has been completed and is in substantially
the form of Exhibit VII hereto and if Administrative Agent has consented to the
assignment evidenced thereby to the extent such consent is required pursuant to
subsection
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9.1B(i)), (a) accept such Assignment Agreement by executing a counterpart
thereof as provided therein (which acceptance shall evidence any required
consent of Administrative Agent to such assignment), (b) record the information
contained therein in the Register and (c) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection 9.1B(ii).
C. PARTICIPATIONS. The holder of any participation,
other than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder
except action directly affecting (i) the extension of the scheduled final
maturity date of any Loan allocated to such participation, (ii) a reduction of
the principal amount of or the rate of interest payable on any Loan allocated to
such participation or (iii) a release of Collateral, and all amounts payable by
Company hereunder (including without limitation amounts payable to such Lender
pursuant to subsections 2.6D and 2.7) shall be determined as if such Lender had
not sold such participation. Company and each Lender hereby acknowledge and
agree that, solely for purposes of subsection 9.5, (a) any participation will
give rise to a direct obligation of Company to the participant and (b) the
participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to
the assignments and participations permitted under the foregoing provisions of
this subsection 9.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided that (i) no Lender shall, as between Company
and such Lender, be relieved of any of its obligations hereunder as a result of
any such assignment and pledge and (ii) in no event shall such Federal Reserve
Bank be considered to be a "Lender" or be entitled to require the assigning
Lender to take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information
concerning Company and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject to subsection 9.19.
9.2. EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents; (ii) all the costs of
furnishing all opinions by counsel for Company (including without limitation any
opinions requested by Lenders as to any legal matters arising hereunder) and of
Company's performance of and compliance with all agreements and conditions on
its part to be performed or complied with under this Agreement and the other
Loan Documents including, without limitation, with respect to confirming
compliance with environmental and insurance requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Administrative Agent in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and the Loans and any consents, amendments, waivers or other
modifications hereto or thereto and any other documents or matters requested by
Company; (iv) all the costs and expenses of creating and perfecting the Liens in
favor of Administrative Agent for the benefit of Lenders pursuant to the Loan
Documents, including filing and recording fees and expenses, title insurance,
fees and expenses of counsel
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for providing such opinions as Lenders may reasonably request and fees and
expenses of legal counsel to Administrative Agent (including local counsel); (v)
all other actual and reasonable costs and expenses incurred by Administrative
Agent in connection with the syndication of the Commitments and the negotiation,
preparation and execution of the Loan Documents and the transactions
contemplated hereby and thereby; provided that such costs and expenses of
syndication shall not exceed $10,000; and (vi) after the occurrence of an Event
of Default, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by Administrative Agent and Lenders in enforcing any Obligations of or
in collecting any payments due from Company hereunder or under the other Loan
Documents by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
9.3. INDEMNITY.
In addition to the payment of expenses pursuant to subsection
9.2, whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend, indemnify, pay and hold harmless Administrative Agent
and Lenders, and the officers, directors, partners, employees, agents and
affiliates of Administrative Agent and Lenders (collectively called the
"INDEMNITIES") 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 Indemnities in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including without limitation securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby (including without limitation
Lenders' agreement to make the Loans hereunder or the use or intended use of the
proceeds of any of the Loans) or the statements contained in the commitment
letter delivered by any Lender to Company with respect thereto (collectively
called the "INDEMNIFIED LIABILITIES"); provided that Company shall not have any
obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise solely from the
gross negligence or willful misconduct of that Indemnitee as determined by a
final judgment of a court of competent jurisdiction. To the extent that the
undertaking to defend, indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, Company shall contribute the maximum portion that it is permitted
to pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnities or any of them.
9.4. SET-OFF.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by Company
at any time or from time to time, without notice to Company or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply
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any and all deposits (general or special, including, but not limited to,
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender to or for the credit or the account of Company against and
on account of the obligations and liabilities of Company to that Lender under
this Agreement, the Notes, and the other Loan Documents, including, but not
limited to, all claims of any nature or description arising out of or connected
with this Agreement, the Notes, or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any other amounts due hereunder
shall have become due and payable pursuant to Section 7 and although said
obligations and liabilities, or any of them, may be contingent or unmatured.
9.5. RATABLE SHARING.
Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment, by realization upon security, through the
exercise of any right of set-off or banker's lien, by counterclaim or cross
action or by the enforcement of any right under the Loan Documents or otherwise,
or as adequate protection of a deposit treated as cash collateral under the
Bankruptcy Code, receive payment or reduction of a proportion of the aggregate
amount of principal, interest, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "AGGREGATE
AMOUNTS DUE" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Company or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
9.6. AMENDMENTS AND WAIVERS.
A. No amendment, modification, termination or waiver of
any provision of this Agreement or of the Notes, or consent to any departure by
Company therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided that any such amendment,
modification, termination, waiver or consent which: increases the amount of any
of the Commitments or reduces the principal amount of any of the Loans; changes
any Lender's Pro Rata Share; changes in any manner the definition of "Requisite
Lenders"; changes in any manner any provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of all Lenders; postpones
the Final Scheduled Maturity Date (but not the date of any scheduled installment
of principal)
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of any of the Loans; postpones the date on which any interest or any fees are
payable; decreases the interest rate borne by any of the Loans (other than any
waiver of any increase in the interest rate applicable to any of the Loans
pursuant to subsection 2.2E) or the amount of any fees payable hereunder;
increases the maximum duration of Interest Periods permitted hereunder; releases
all or substantially all of the Collateral; or changes in any manner the
provisions contained in subsection 7.1 or this subsection 9.6 shall be effective
only if evidenced by a writing signed by or on behalf of all Lenders to whom are
owed Obligations being directly affected by such amendment, modification,
termination, waiver or consent. In addition, (i) any amendment, modification,
termination or waiver of any of the provisions contained in Section 3 shall be
effective only if evidenced by a writing signed by or on behalf of
Administrative Agent and Requisite Lenders, (ii) 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, (iii) no
increase in the Commitments of any Lender over the amount thereof then in effect
shall be effective without the written concurrence of that Lender, it being
understood and agreed that in no event shall waivers or modifications of
conditions precedent, covenants, Events of Default, Potential Events of Default
or of a mandatory prepayment or a reduction of any or all of the Commitments be
deemed to constitute an increase of the Commitment of any Lender and that an
increase in the available portion of any Commitment of any Lender shall not be
deemed to constitute an increase in the Commitment of such Lender, and (iv) no
amendment, modification, termination or waiver of any provision of Section 7 or
of any other provision of this Agreement which, by its terms, expressly requires
the approval or concurrence of Administrative Agent shall be effective without
the written concurrence of Administrative Agent. Administrative Agent may, but
shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of that Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on Company in
any case shall entitle Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this subsection 9.6 shall be binding upon
each Lender at the time outstanding, each future Lender and, if signed by
Company, on Company. Notwithstanding anything in this subsection 9.6A to the
contrary, the Notes and Aircraft Chattel Mortgages may be amended in the manner
and for the purposes set forth in subsection 9.21 without the consents required
by this subsection 9.6A.
B. If, in connection with any proposed change, waiver,
discharge or termination to any of the provision of this Agreement as
contemplated by the proviso in the first sentence of this subsection 9.6, the
consent of Requisite Lenders is obtained but consent of one or more of such
other Lenders whose consent is required is not obtained, then Company may, so
long as all non-consenting Lenders are so treated, elect to terminate such
Lender as a party to this Agreement; provided that, concurrently with such
termination, (i) Company shall pay that Lender all principal, interest and fees
and other amounts owed to such Lender through such date of termination, (ii)
another financial institution satisfactory to Company and Administrative Agent
(or if Administrative Agent is also the Lender to be terminated, the successor
Administrative Agent) shall agree, as of such date, to become a Lender for all
purposes under this Agreement (whether by assignment or amendment) and to assume
all obligations of the Lender to be terminated as of such date, and (iii) all
documents and supporting materials necessary, in the judgment of Administrative
Agent (or if Administrative Agent is also the Lender to be terminated, the
successor Administrative Agent) to evidence the substitution of such Lender
shall have been received and approved by Administrative Agent as of such date.
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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 Administrative Agent shall not
be effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Company and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent.
9.9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made
herein shall survive the execution and delivery of this Agreement and the making
of the Loans hereunder.
B. Notwithstanding anything in this Agreement or implied
by law to the contrary, the agreements of Company set forth in subsections 2.6D,
2.7, 9.2, 9.3 and 9.4 and the agreements of Lenders set forth in subsections
8.2C, 8.4 and 9.5 shall survive the payment of the Loans, and the termination of
this Agreement.
9.10. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Administrative Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any
other Loan Document shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
9.11. MARSHALLING; PAYMENTS SET ASIDE.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the
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Obligations. To the extent that Company makes a payment or payments to
Administrative Agent or Lenders (or to Administrative Agent for the benefit of
Lenders), or Administrative Agent or Lenders enforce any security interests or
exercise their rights of set-off, and such payment or payments or the proceeds
of such enforcement or set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or set-off had not occurred.
9.12. SEVERABILITY.
In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
9.13. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute
Lenders as a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
9.14. HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
9.15. APPLICABLE LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
9.16. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of
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Lenders (it being understood that Lenders' rights of assignment are subject to
subsection 9.1). Neither Company's rights or obligations hereunder nor any
interest therein may be assigned or delegated by Company without the prior
written consent of all Lenders.
9.17. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OBLIGATION
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT COMPANY
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER LOAN
DOCUMENT OR SUCH OBLIGATION (SUBJECT TO ANY RIGHT TO APPEAL TO A COURT IN THE
STATE OF NEW YORK). Company hereby agrees that service of all process in any
such proceeding in any such court may be made by registered or certified mail,
return receipt requested, to Company at its address provided in subsection 9.8,
such service being hereby acknowledged by Company to be sufficient for personal
jurisdiction in any action against Company in any such court and to be otherwise
effective and binding service in every respect. Nothing herein shall affect the
right to serve process in any other manner permitted by law or shall limit the
right of any Lender to bring proceedings against Company in the courts of any
other jurisdiction.
9.18. WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty claims
and all other common law and statutory claims. Each party hereto acknowledges
that this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Agreement, and
that each will continue to rely on this waiver in their related future dealings.
Each party hereto further warrants and represents that it has reviewed this
waiver with its legal counsel and that it knowingly and voluntarily waives its
jury trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING
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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 this Agreement which has been identified as
confidential by Company in accordance with such Lender's customary procedures
for handling confidential information of this nature, it being understood and
agreed by Company that in any event a Lender may make disclosures 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, reasonably
required by any bona fide assignee, transferee or participant in connection with
the contemplated assignment or transfer by such Lender of any Loans or any
participation therein or as required or requested by any governmental or
regulatory agency (including, without limitation, the National Association of
Insurance Commissioners) or representative thereof or pursuant to legal process
or in accordance with any applicable law or regulation; provided that, unless
specifically prohibited by applicable law or court order, each Lender shall
notify Company of any request by any governmental 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 Company or
any of its Subsidiaries.
9.20. COUNTERPARTS; EFFECTIVENESS; EFFECT IF AGREEMENT DOES NOT BECOME
EFFECTIVE.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof and the satisfaction (or waiver) of each of
the conditions set forth in subsection 3.1. Until this Agreement becomes
effective, the Existing Agreement remains in full force and effect and, in the
event this Agreement does not become effective on or before April 18, 2000, the
execution and delivery of this Agreement shall be disregarded and this Agreement
shall be deemed null and void for all purposes.
9.21. COOPERATION IN REFINANCING, SYNDICATION AND ASSIGNMENT.
Company, Administrative Agent and Lenders agree that, in
connection with the refinancing, syndication or assignment of the Notes, to the
extent deemed reasonably necessary by Company or Administrative Agent, some or
all of the Financed Aircraft may be transferred to a Special Purpose Subsidiary
which will lease such aircraft to Company under arrangements reasonably
acceptable to Company and Administrative Agent all in a manner designed to
retain the economic obligations and benefits of the Company, Administrative
Agent and Lenders hereunder and under the other
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Loan Documents. Company, Administrative Agent and Lenders further agree that, in
connection with an assignment of Loans and Notes to a Person who will not become
a Lender hereunder, Administrative Agent and Lenders shall agree to any
amendments to the Loans and Notes to be assigned and the related Aircraft
Chattel Mortgages and/or releases of the related First Aircraft Chattel Mortgage
and Second Aircraft Chattel Mortgage, in each case, as requested by Company;
provided that the terms of such amended Notes and Aircraft Chattel Mortgages do
not violate any term of this Agreement and provided, further, that such
amendments shall be effective only upon and simultaneous with (i) the assignment
of such Notes and Aircraft Chattel Mortgages to such Person, (ii) indefeasible
payment in full to Lenders of an amount equal to all amounts owing under such
Notes and (iii) releases from any liability relating to such Notes and Aircraft
Chattel Mortgages of Administrative Agent and Lenders in form and substance
satisfactory to Administrative Agent. Assignments made in accordance with the
foregoing sentence will result in such assigned Loans and Notes being deemed not
"outstanding" hereunder and such assigned Loans and Notes will not reduce the
Revolving Loan Commitments of the Lenders otherwise available hereunder.
9.22. REPLACEMENT ENGINES.
A. ENGINES. So long as no Event of Default or Potential
Event of Default has occurred and is continuing, Company may, upon not less than
five (5) Business Days prior written notice to Administrative Agent, replace any
Engine which is the subject of an Aircraft Chattel Mortgage with another engine
(the "REPLACEMENT ENGINE") meeting the requirements of the applicable Aircraft
Chattel Mortgage. In addition to the preceding sentence, any Replacement Engine
shall be an engine that is the same or improved make and model as the Engine to
be replaced, and that is suitable for installation and use on any Airframe, and
that has a value, utility and remaining useful life (including with respect to
hours and cycles remaining until overhaul) at least equal to the Engine to be
replaced thereby.
The Lenders agree to release the Lien created by the
applicable Aircraft Chattel Mortgage for any Engine to be replaced by a
Replacement Engine promptly upon (i) presentation by Company of documentation
necessary to create a legal, valid and enforceable first priority security
interest in and to the Replacement Engine, (ii) delivery to Administrative Agent
of an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, or such other counsel as may be
acceptable to Administrative Agent, confirming that Administrative Agent will
continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code
with respect to such Replacement Engine free of all Liens (other than Permitted
Encumbrances) and (iii) receipt of all other deliveries required by Section
4(f)(iii) of the applicable Aircraft Chattel Mortgage.
B. FURTHER ASSURANCES. Company shall, in addition to the
actions required by the preceding subsection 9.21 A, take all necessary actions
to provide that Administrative Agent will continue to be entitled to the
benefits of Section 1110 of the Bankruptcy Code with respect to each Replacement
Engine, free of all Liens (other than Permitted Encumbrances).
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