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
BANKERS TRUST COMPANY,
as Administrative Agent
ARRANGED BY:
DEUTSCHE BANK SECURITIES INC.
ATLAS AIR, INC.
FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
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.............................. 27
1.3 Other Definitional Provisions............................. 27
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS................ 27
2.1 Commitments; Making of Loans; Notes; Register............. 27
2.2 Interest on the Loans..................................... 31
2.3 Fees...................................................... 35
2.4 Repayments, Prepayments and Reductions in Loans and
Revolving Loan Commitments; General Provisions Regarding
Payments.................................................. 35
2.5 Use of Proceeds........................................... 42
2.6 Special Provisions Governing Eurodollar Rate Loans........ 42
2.7 Increased Costs; Taxes; Capital Adequacy.................. 44
2.8 Obligation of Lenders to Mitigate......................... 48
2.9 Release of Collateral..................................... 49
SECTION 3. CONDITIONS TO LOANS....................................... 49
3.1 Conditions to Effectiveness and the Existing Aircraft
Extended Loans............................................ 49
3.2 Conditions to Loans to Finance Aircraft Acquisition....... 51
3.3 Condition to Loans to Finance Cargo Conversion............ 54
3.4 Conditions to All Loans................................... 55
SECTION 4. COMPANY'S REPRESENTATIONS AND WARRANTIES.................. 57
4.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries................................. 57
4.2 Authorization of Borrowing, etc........................... 58
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4.3 Financial Condition....................................... 59
4.4 No Material Adverse Change; No Restricted Junior Payments. 59
4.5 Title to Properties; Liens................................ 59
4.6 Litigation; Adverse Facts................................. 60
4.7 Payment of Taxes.......................................... 60
4.8 Performance of Agreements; Materially Adverse Agreements.. 60
4.9 Governmental Regulation................................... 61
4.10 Securities Activities..................................... 61
4.11 Employee Benefit Plans.................................... 61
4.12 Certain Fees.............................................. 61
4.13 Environmental Protection.................................. 61
4.14 Employee Matters.......................................... 62
4.15 Solvency.................................................. 62
4.16 Disclosure................................................ 62
SECTION 5. COMPANY'S AFFIRMATIVE COVENANTS........................... 62
5.1 Financial Statements and Other Reports.................... 63
5.2 Corporate Existence....................................... 67
5.3 Payment of Taxes and Claims; Tax Consolidation............ 67
5.4 Maintenance of Properties; Insurance...................... 68
5.5 Inspection; Lender Meeting................................ 68
5.6 Compliance with Laws, etc................................. 68
5.7 Environmental Indemnity................................... 69
5.8 Company's Remedial Action Regarding Hazardous Materials... 69
5.9 Further Assurances; New Subsidiaries; Holding Company..... 69
5.10 Appraisals................................................ 70
5.11 Maintenance Contracts..................................... 70
5.12 Employee Benefit Plans.................................... 70
5.13 Registration of Foreign Leased Aircraft with FAA.......... 71
5.14 Corporate Separateness.................................... 71
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SECTION 6. COMPANY'S NEGATIVE COVENANTS.............................. 71
6.1 Indebtedness.............................................. 71
6.2 Liens and Related Matters................................. 73
6.3 Investments; Joint Ventures............................... 73
6.4 Contingent Obligations.................................... 74
6.5 Restricted Junior Payments................................ 75
6.6 Financial Covenants....................................... 76
6.7 Restriction on Fundamental Changes; Asset Sales and
Acquisitions; New Subsidiaries............................ 78
6.8 Amendments of Material Agreements......................... 80
6.9 Restriction on Leases..................................... 81
6.10 Sales and Lease-Backs..................................... 81
6.11 Sale or Discount of Receivables........................... 81
6.12 Transactions with Shareholders and Affiliates............. 82
6.13 Disposal of Subsidiary Stock.............................. 82
6.14 Conduct of Business....................................... 82
SECTION 7. EVENTS OF DEFAULT......................................... 83
7.1 Failure to Make Payments When Due......................... 83
7.2 Default in Other Agreements............................... 83
7.3 Breach of Certain Covenants............................... 83
7.4 Breach of Warranty........................................ 83
7.5 Other Defaults Under Loan Documents....................... 84
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc. .... 84
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc. ...... 84
7.8 Judgments and Attachments................................. 85
7.9 Dissolution............................................... 85
7.10 Change in Control......................................... 85
7.11 Failure of Security....................................... 86
7.12 Certificated as Air Carrier............................... 86
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7.13 Material Agreements....................................... 86
7.14 "Change of Control" Put Payments.......................... 86
SECTION 8. AGENT..................................................... 87
8.1 Appointment............................................... 87
8.2 Powers and Duties; General Immunity....................... 87
8.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness............................. 89
8.4 Right to Indemnity........................................ 89
8.5 Collateral Documents...................................... 89
8.6 Successor Administrative Agent............................ 90
SECTION 9. MISCELLANEOUS............................................. 90
9.1 Assignments and Participations in Loans................... 90
9.2 Expenses.................................................. 92
9.3 Indemnity................................................. 93
9.4 Set-Off................................................... 93
9.5 Ratable Sharing........................................... 94
9.6 Amendments and Waivers.................................... 94
9.7 Independence of Covenants................................. 96
9.8 Notices................................................... 96
9.9 Survival of Representations, Warranties and Agreements.... 96
9.10 Failure or Indulgence Not Waiver; Remedies Cumulative..... 96
9.11 Marshalling; Payments Set Aside........................... 96
9.12 Severability.............................................. 97
9.13 Obligations Several; Independent Nature of Lenders'
Rights.................................................... 97
9.14 Headings.................................................. 97
9.15 Applicable Law............................................ 97
9.16 Successors and Assigns.................................... 97
9.17 Consent to Jurisdiction and Service of Process............ 98
9.18 Waiver of Jury Trial...................................... 98
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9.19 Confidentiality........................................... 99
9.20 Counterparts; Effectiveness; Effect if Agreement Does Not
Become Effective.......................................... 99
9.21 Cooperation in Refinancing, Syndication and Assignment.... 99
Signature pages ............................................................ S-1
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EXHIBITS
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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
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SCHEDULES
PAGE
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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 BANKERS TRUST COMPANY ("Bankers Trust"), as
administrative agent for Lenders (in such capacity, "Administrative Agent").
R E C I T A L S
WHEREAS, pursuant to that certain 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.
"ADJUSTED CONSOLIDATED WORKING CAPITAL" means, as at any date of
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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.
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"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFECTED LOANS" has the meaning assigned to that term in subsection
2.6C.
"AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"AFL" 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) eleven Boeing 747-200 aircraft
(including the engines attached thereto) with registration numbers N505MC,
N507MC, N508MC, N509MC, N516MC, N517MC, N523MC, N524MC, N526MC, N527MC and
N528MC, (ii) nine General Electric CF6-50E2 engines and (iii) three General
Electric CF6-80C2 engines.
"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
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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 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 provide 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.
"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.
"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.
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"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.
"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.
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"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.
"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 one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either S&P or ▇▇▇▇▇'▇; (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
▇▇▇▇▇'▇; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
▇▇▇▇▇'▇.
"CASH PROCEEDS" means, with respect to any Asset Sale, Cash payments
(including any Cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially
in the form of Exhibit VIII annexed hereto delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii).
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"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.
"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
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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.
"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
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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.
"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
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of business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of non-performance by any other party or
parties to an agreement, and (c) any liability of such Person for the obligation
of another through any agreement (contingent or otherwise) (X) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise) or
(Y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (X) or (Y) of this sentence, the primary purpose or intent thereof is
as described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the 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.
"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.
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"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.
"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
-12-
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
-13-
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 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
-14-
and as recodified in Title 49, United States Code, or any similar legislation of
the United States enacted to supersede, amend or supplement such Act and the
rules and regulations promulgated thereunder.
"FEDERAL AVIATION ADMINISTRATION" or "FAA" means the United States
Federal Aviation Administration or any successor thereto administering the
functions of the Federal Aviation Administration under the Federal Aviation Act.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day on which is a Business Day, the average of the quotations for such day on
such transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by Administrative Agent.
"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.
"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 RESTATEMENT DATE" means the date on or before April 25, 2000
on
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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.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
"HAZARDOUS MATERIALS" means any chemical or other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated under any law.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed, or
threatened use, storage, release, generation, treatment, remediation or
transportation of any Hazardous Material (i) from, under, in, into or on the
Facilities or surrounding property; and (ii) caused by, or undertaken by or on
behalf of, Company.
"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
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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.
"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 of six months "Interest Payment Date" shall also include the date that is
three months after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect Company or any of its Subsidiaries
against fluctuations in interest rates.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
-17-
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.
"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, any guaranty
entered
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into pursuant to subsection 5.9 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 any persons who enter into
guaranties pursuant to subsection 5.9.
"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,
80% 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.
"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
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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 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 three-year
anniversary of the date on which the initial New Aircraft Revolving Loans were
made with respect to that Related Aircraft.
"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.
"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.
"9-1/4% SENIOR NOTE DOCUMENTS" means the Indenture, dated as of
April 9,
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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).
"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
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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 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
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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;
(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;
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(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(xii);
(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.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or the expiration of any grace period or both, would constitute an Event
of Default.
"PRICING CERTIFICATE" has the meaning assigned to that term in
subsection 5.1(xvi).
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"PRICING REDUCTION" means, if at any time Company's "Senior Secured
Debt Rating" or "Senior Secured Rating" as assigned by Moody's or S&P, as
applicable, are at the levels specified below, a pricing reduction equal to the
per annum percentage corresponding to the applicable rating set forth in the
chart below:
Rating Pricing Reduction
------ -----------------
Ba1 or higher by Moody's and 0.125%
BB- or higher by S&P
Ba1 or higher by Moody's and 0.250%
BB or higher by S&P
The Pricing Reduction shall be determined with reference to the most
recent Pricing Certificate delivered by Company to Administrative Agent pursuant
to subsection 5.1(xvi). Any changes to the Pricing Reduction shall become
effective on the day following the delivery of the relevant Pricing Certificate
to Administrative Agent and shall remain in effect through the next date a
Pricing Certificate is required to be delivered. It is understood and agreed
that the Pricing Reduction percentages provided are not cumulative.
Notwithstanding anything to the contrary herein, at any time an Event of Default
shall have occurred and be continuing, the Pricing Reduction shall be zero.
"PRIME RATE" means the rate that Administrative Agent announces from
time to time as its prime lending rate, as in effect from time to time. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. Administrative Agent or any other
Lender may make commercial loans or other loans at rates of interest at, above
or below the Prime Rate.
"PRO FORMA BASIS" means, with respect to compliance with any
covenant hereunder, compliance with such covenant after giving effect to any
proposed incurrence of Indebtedness by Company or any of its Subsidiaries and
the application of the proceeds thereof, the acquisition (whether by purchase,
merger or otherwise) or disposition (whether by sale, merger or otherwise) of
any company, entity or business or any asset (including any ACMI Contracted
Aircraft) by Company or any of its Subsidiaries or any other related action
which requires compliance on a Pro Forma Basis. In making any determination of
compliance on a Pro Forma Basis, such determination shall be performed after
good faith consultation with Administrative Agent using the consolidated
financial statements of Company and its Subsidiaries which shall be reformulated
as if any such incurrence of Indebtedness and the application of proceeds,
acquisition, disposition or other related action had been consummated at the
beginning of the period specified in the covenant with respect to which Pro
Forma Basis compliance is required.
"PRO RATA SHARE" means, with respect to each Lender, the percentage
obtained by dividing the Loan Exposure of that Lender by the aggregate Loan
Exposure of all Lenders,
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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.
"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,
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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 Rating Services.
"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.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"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
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(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.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which more
than 50% of the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any contingency) to vote
in the election of the Person or Persons (whether directors, managers, trustees
or other Persons performing similar functions) having the power to direct or
cause the direction of the management and policies thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof.
"SUPPLEMENTAL TYPE CERTIFICATES" has the meaning assigned to that
term in the First Aircraft Chattel Mortgage.
"SYNDICATION AGENT" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ 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,
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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.
"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.
"UNITED STATES CITIZEN" has the meaning assigned to that term in
subsection 4.1B.
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.
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SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; NOTES; REGISTER.
A. COMMITMENTS. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Company herein set forth,
each Lender hereby severally agrees to make the Loans described in this
subsection 2.1A.
(i) 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) New Aircraft Loans. Each Lender severally agrees, subject to
the conditions set forth in Section 3 and subject to the limitations set
forth below, to lend to Company from time to time during the period from
the Fourth Restatement Date to but excluding the Revolving Loan Commitment
Termination Date an aggregate amount, together with its Pro Rata Share of
the aggregate principal amount of all Existing Aircraft Extended Loans
outstanding, not exceeding its Pro Rata Share of the aggregate amount of
the Revolving Loan Commitments to be used for the purposes identified in
subsection 2.5B. The amount of each Lender's Revolving Loan Commitment is
set forth on Schedule 2.1 annexed hereto and the aggregate amount of the
Revolving Loan Commitments is $175,000,000; provided that, 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 $175,000,000; provided further that the Revolving Loan
Commitments of Lenders shall be adjusted to give effect to any assignments
of the Revolving Loan Commitments pursuant to subsection 9.1B; and
provided, still further that the amount of the Revolving Loan Commitments
shall be reduced from time to time by the amount of any reductions thereto
made pursuant to subsection 2.4B(ii). Each Loan made after the Fourth
Restatement Date shall constitute a New Aircraft Loan and shall be made
with respect to a Related Aircraft. New Aircraft Loans made with respect
to a Related Aircraft may be made through but excluding the third
anniversary of the first
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New Aircraft Loan made with respect to such Related Aircraft; provided,
however, that no New Aircraft Loans may be made on or after the Revolving
Loan Commitment Termination Date. New Aircraft Loans shall be repaid as
provided in subsections 2.4A(ii) and 2.4A(iii).
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) 80% 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) 80% 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 80% 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 $175,000,000.
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 Company or
for otherwise acting in good faith under this subsection
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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
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day from such Funding Date until the date such amount is paid to Administrative
Agent, at the rate payable under this Agreement for Base Rate Loans. Nothing in
this subsection 2.1C shall be deemed to relieve any Lender from its obligation
to fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
D. NOTES.
(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.
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(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 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.
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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.
======================================================
APPLICABLE MARGIN
-----------------------
TIME PERIOD BASE RATE EURODOLLAR
LOAN RATE LOAN
======================================================
From the Second Amendment 1.00% 2.00%
Effective Date through the
Fourth Restatement Date
------------------------------------------------------
From the Fourth Restatement 0.75% 1.75%
Date and Thereafter
======================================================
Notwithstanding the foregoing, the Applicable Margin shall be reduced in
an amount equal to the applicable Pricing Reduction effective from the date
following the delivery by Company to Administrative Agent of a Pricing
Certificate through the date a subsequent Pricing Certificate is required to be
delivered. If Company fails to deliver a Pricing Certificate or delivers an
incorrect Pricing Certificate, no Pricing Reduction shall be effective until
Company delivers a correct Pricing Certificate.
B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan, Company
may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:
(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
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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.
(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
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Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $3,000,000 and integral multiples of $100,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that a
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 12:00 Noon (New York time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Conversion/Continuation for conversion to, or continuation of, a Eurodollar
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due 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
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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 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
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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 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
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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.
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 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
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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 80% 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
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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 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
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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 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 80% 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
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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 so
long as no Event of Default has occurred and continuing;
provided further that, at Administrative Agent's election, any
prepayment may be deemed first to prepay Loans made to finance
labor costs associated with conversion, if any, second to
prepay Loans made to finance other costs of conversion of a
Financed Aircraft and thereafter to all other Loans. Any
voluntary prepayments of the 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 80% 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
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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 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.
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(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 80% 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 80% the Appraised Value of 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 80% 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.
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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
hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the interbank Eurodollar market
or the position of such Lender in that market, then, and in any such event, such
Lender shall be an "AFFECTED LENDER" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination (which notice Agent shall promptly
transmit to each other Lender). Thereafter (a) the obligation of the Affected
Lender to make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be
suspended until such notice shall be withdrawn by the
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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.
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
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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
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Lender (other than any such reserve or other requirements with respect
to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the interbank Eurodollar
market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by Company
under this Agreement and the other Loan Documents shall be paid free
and clear of and (except to the extent required by law) without any
deduction or withholding on account of any Tax (other than a Tax on the
overall net income of any Lender) imposed, levied, collected, withheld
or assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other
jurisdiction from or to which a payment is made by or on behalf of
Company or by any federation or organization of which the United States
of America or any such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person
is required by law to make any deduction or withholding on account of
any such Tax from any sum paid or payable by Company to Administrative
Agent or any Lender under any of the Loan Documents:
(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
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Administrative Agent or such Lender, as the case may be) on
behalf of and in the name of Administrative Agent or such
Lender;
(c) the sum payable by Company in respect of which
the relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or payment,
Administrative Agent or such Lender, as the case may be,
receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been
required or made; and
(d) within 30 days after paying any sum from which it
is required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Tax which
it is required by clause (b) above to pay, Company shall
deliver to Administrative Agent evidence satisfactory to the
other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant taxing
or other authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an increase in the rate
of such deduction, withholding or payment from that in effect at the
date of this Agreement or at the date of such Assignment Agreement, as
the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of
any jurisdiction other than the United States or any state or
other political subdivision thereof (for purposes of this
subsection 2.7B(iii), a "NON-US LENDER") shall deliver to
Administrative Agent for transmission to Company, on or prior
to the 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
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payable under any of the Loan Documents or (2) if such Lender
is not a "bank" or other Person described in Section 881(c)(3)
of the Internal Revenue Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause
(1) above, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender
of interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or
other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, such
Lender shall (1) deliver to Administrative Agent for
transmission to Company two new original copies of Internal
Revenue Service Form 1001 or 4224, or a Certificate re
Non-Bank Status and two original copies of Internal Revenue
Service Form W-8, as the case may be, properly completed and
duly executed by such Lender, together with any other
certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax
with respect to payments to such Lender under the Loan
Documents or (2) immediately notify Administrative Agent and
Company of its inability to deliver any such forms,
certificates or other evidence.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) if such Lender shall have failed to
satisfy the requirements of subsection 2.7B(iii)(a); provided
that if such Lender shall have satisfied such requirements on
the 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
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subsection 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitments or other obligations hereunder to a level
below that which such Lender or such controlling corporation could have achieved
but for such adoption, effectiveness, phase-in, applicability, change or
compliance (taking into consideration the policies of such Lender or such
controlling corporation with regard to capital adequacy), then from time to
time, within five Business Days after receipt by Company from such Lender of the
statement referred to in the next sentence, Company shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
D. SUBSTITUTE LENDERS. In the event Company is required under the
provisions of this subsection 2.7 to make payments in a material amount to any
Lender or in the event any Lender fails to lend to Company in accordance with
this Agreement, Company may, so long as no Event of Default or Potential Event
of Default shall have occurred and be continuing, elect to terminate such Lender
as a party to this Agreement; provided that, concurrently with such termination,
(i) Company shall pay that Lender all principal, interest and fees and other
amounts (including without limitation, amounts, if any, owed under this
subsection 2.7) owed to such Lender through such date of termination, (ii)
another financial institution satisfactory to Company and Administrative Agent
(or if Administrative Agent is also the Lender to be terminated, the successor
Administrative Agent) shall agree, as of such date, to become a Lender for all
purposes under this Agreement (whether by assignment or amendment) and to assume
all obligations of the Lender to be terminated as of such date, and (iii) all
documents and supporting materials necessary, in the judgment of Administrative
Agent (or if Administrative Agent is also the Lender to be terminated, the
successor Administrative Agent) to evidence the substitution of such Lender
shall have been received and approved by Administrative Agent as of such date.
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2.8 OBLIGATION OF LENDERS TO MITIGATE.
Each Lender agrees that, as promptly as practicable after the officer
of such Lender responsible for administering the Loans of such Lender becomes
aware of the occurrence of an event or the existence of a condition that would
cause such Lender to become an Affected Lender or that would entitle such Lender
to receive payments under subsection 2.7, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable legal
or regulatory restrictions, use reasonable efforts (i) to make, issue, fund or
maintain the 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.
Upon the prepayment of all Loans made with respect to a specific
Financed Aircraft 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 and shall use its best efforts to return
the originals of all Notes representing such Loans to Company, marked "Paid."
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:
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(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.
(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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
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▇▇▇▇▇▇▇, 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
(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.
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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 80% of the Appraised Value
of the Eligible Aircraft to be acquired as of the Funding Date and
that, after giving effect to all proposed modifications of such
Eligible Aircraft, the Maximum Note Amount shall not exceed 80% of the
Appraised Value of such Eligible Aircraft as so modified;
(v) 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;
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(xv) Company shall have delivered to Administrative Agent all
documents executed in connection with the Purchase Agreement related to
such aircraft and such documents shall be in form and substance
satisfactory to Administrative Agent;
(xvi) any Revolving Loan made to finance the purchase of a
Financed Aircraft shall be made no later than ten days after the later
of Company's payment of the purchase price with respect to or
acquisition of title to such Financed Aircraft; and
(xvii) Company shall have delivered to Administrative Agent
such other documents as Administrative Agent may reasonably request and
all such documents shall be in form and substance reasonably
satisfactory to Administrative Agent.
(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
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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.
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
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does not exceed the lesser of (x) 100% of the remaining costs of
conversion and (y) 80% of the Appraised Value of the Financed Aircraft;
(ii) Company shall deliver to Administrative Agent an
Officer's Certificate (x) certifying that the conversion of the
Financed Aircraft has been completed and that all obligations of
Company with respect to the modifications of the Financed Aircraft
under 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;
(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
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of that Funding Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and
complete in all material respects on and as of such earlier date;
provided that, with respect to any Funding Date referred to in
subsection 3.3, Company's representations and warranties shall be to
its best knowledge;
(ii) no event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) Company shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before that
Funding Date;
(iv) no order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender
from making the Loans to be made by it on that Funding Date;
(v) the making of the Loans requested on such Funding Date
shall not violate any law including, without limitation, Regulation 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
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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.
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
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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.
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.
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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.
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
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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.
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
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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 had, and any Lender or any
Affiliate of any Lender, on the other hand, relating to Indebtedness and within
the scope of subsection 7.2, will be Margin Stock.
4.11 EMPLOYEE BENEFIT PLANS.
Company maintains a qualified retirement plan under Section 401(k) of
the Internal Revenue Code (the "Company 401(k) Plan"). 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
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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. 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.
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
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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) [Intentionally Omitted]
(ii) Quarterly Financials: as soon as available and in any
event within 45 days after the end of each fiscal quarter of each
Fiscal Year, (a) the consolidated 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
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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'
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
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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
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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, 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
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(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of each
fiscal quarter of Company, a schedule of all Proceedings involving an
alleged liability of, or claims against or affecting, Company or any of
its Subsidiaries equal to or greater than $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;
(xi) 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;
(xii) [intentionally omitted]
(xiii) Insurance: as soon as practicable and in any event by
the last day of each Fiscal Year, a report in form and substance
satisfactory to Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by Company and its
Subsidiaries and all material insurance coverage planned to be
maintained by Company and its Subsidiaries in the immediately
succeeding Fiscal Year;
(xiv) Environmental Audits and Reports: as soon as practicable
following receipt thereof, copies of all environmental audits and
reports, whether prepared by personnel of Company or any of its
Subsidiaries or by independent consultants, with respect to significant
environmental matters at any Facility or which relate to an
Environmental Claim which could result in a Material Adverse Effect;
(xv) Special Purpose Subsidiaries: promptly upon any Special
Purpose Subsidiary becoming a Subsidiary of Company, a written notice
setting forth with respect to such Special Purpose Subsidiary (a) the
date on which such Special Purpose Subsidiary became a Subsidiary of
Company and (b) all of the data required to be set forth in Schedule
4.1 annexed hereto with respect to all Subsidiaries of Company (it
being understood that such written notice shall be deemed to supplement
Schedule 4.1 annexed hereto for all purposes of this Agreement);
(xvi) Pricing Certificates: (a) together with each delivery of
financial statements of Company and its Subsidiaries pursuant to
subdivisions (ii) and (iii)
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above, (b) within one Business Day after any public release by S&P or
▇▇▇▇▇'▇ lowering Company's "Senior Secured Debt Rating" or "Senior
Secured Rating," as applicable, and (c) at such additional times as
Company may elect, a certificate setting forth its "Senior Secured Debt
Rating" and "Senior Secured Rating," as assigned by S&P or ▇▇▇▇▇'▇, as
applicable (each, a "Pricing Certificate");
(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.
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
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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.
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.
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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, 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
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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, if Company
interposes a Holding Company, Company will cause the Holding Company to take
such actions (including, without limitation, the execution and delivery of a
guaranty, pledge agreement, financing statements and other documents, the filing
or recording of any of the foregoing, and the delivery of stock certificates
properly endorsed for transfer or accompanied by duly executed stock powers) as
Administrative Agent and Lenders may reasonably request to ensure that the
Obligations are guarantied by the Holding Company and that the Obligations are
secured by a first priority security interest in all of the capital stock of
Company. Company agrees that the Holding Company will not incur, directly or
indirectly, any Indebtedness and will not engage in any business or activity or
own any assets other than (1) holding the capital stock of Company or other
Subsidiaries formed by the Holding Company, 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.
At the request of Administrative Agent or Requisite Lenders (but no
more than once
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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.
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.
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.
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SECTION 6.
COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations, unless Requisite Lenders shall otherwise give prior
written consent, Company shall perform, and shall cause each of its Subsidiaries
to perform, all covenants in this Section 6.
6.1 INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by subsection 6.4 and,
upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so
extinguished;
(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
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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;
(vii) Company may become and remain liable with respect to
Indebtedness under the NationsBanc/Bank of America Agreement;
(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; and
(iii) other Liens securing Indebtedness in an aggregate amount
not to exceed
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$10 million at any time outstanding.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 6.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 6.2A.
C. NO 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;
(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) Company may make Investments in Joint Ventures in an
aggregate amount not to exceed (A) $50 million plus (B) 20% of
Consolidated Net Income for the period commencing January 1, 2000 and
ending on the last day of the Fiscal Year immediately preceding the
date of determination (taken as a single accounting period) less (C)
the sum of (x) the aggregate amount of Restricted Junior Payments with
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respect to Company Common Stock declared or paid during such period
(excluding Restricted Junior Payments made in accordance with
subsection 6.5(iii)) and (y) the aggregate amount contributed to
capital of Special Purpose Subsidiaries during such period; provided
that Company shall not incur liabilities related to any such Joint
Venture in excess of Company's Investment therein;
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 6.3 annexed hereto
and Investments made in compliance with subsection 6.3(iv);
(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; and
(vii) 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, neither Company nor 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;
(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
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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:
(i) Company may prepay Designated Indebtedness from the
proceeds of Permitted Extension Indebtedness or Other Permitted
Indebtedness;
(ii) Company may make Restricted Junior Payments with respect
to Company Common Stock not to exceed in any Fiscal Year, the lesser of
20% of Consolidated Net Income for such Fiscal Year and $15 million;
(iii) Company may repurchase Company Common Stock in an amount
not to exceed in any Fiscal Year $15 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 $15
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) 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
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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:
==================================================================
FISCAL QUARTER ENDING MINIMUM INTEREST
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 2.50:1.00
March 31, 2002 2.50:1.00
June 30, 2002 2.50:1.00
September 30, 2002 2.50:1.00
December 31, 2002 2.50:1.00
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
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==================================================================
FISCAL QUARTER ENDING MINIMUM INTEREST
COVERAGE RATIO
==================================================================
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:
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===========================================================
FISCAL QUARTER ENDING MAXIMUM
LEVERAGE
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 4.50:1.00
March 31, 2002 4.50:1.00
June 30, 2002 4.50:1.00
September 30, 2002 4.50:1.00
December 31, 2002 4.25:1.00
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
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:
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=============================================================================
FISCAL QUARTER ENDING MINIMUM CONSOLIDATED
NET WORTH
=============================================================================
March 31, 2000 $300 million
June 30, 2000 $300 million
September 30, 2000 $325 million
December 31, 2000 $325 million
March 31, 2001 $350 million
June 30, 2001 $350 million
September 30, 2001 $350 million
December 31, 2001 $350 million
March 31, 2002 $400 million
June 30, 2002 $400 million
September 30, 2002 $400 million
December 31, 2002 $400 million
March 31, 2003 $450 million
June 30, 2003 $450 million
September 30, 2003 $450 million
December 31, 2003 $450 million
March 31, 2004 $450 million
June 30, 2004 $450 million
September 30, 2004 $450 million
December 31, 2004 $450 million
March 31, 2005 $450 million
6.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS; NEW
SUBSIDIARIES.
Company shall not, and shall not permit any of its Subsidiaries to,
enter into any transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, sub-lease, transfer or otherwise dispose of,
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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) 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 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
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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;
(x) Company shall be permitted to dispose of or acquire assets
pursuant to the consolidation and relocation of its offices and
operations to Colorado; provided that the aggregate consideration paid
with respect to the acquisition of assets shall be in an amount not to
exceed $20 million; and
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(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.
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). 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.
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
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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.
6.11 SALE OR DISCOUNT OF RECEIVABLES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable.
6.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 10% or more of any
class of equity Securities of Company or with any Affiliate of Company or of any
such holder, on terms that are less favorable to Company or that Subsidiary, as
the case may be, than those that might be obtained at the time from Persons who
are not such a holder or Affiliate 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 or (iv) the Holding Company Reorganization.
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
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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.
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
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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);
provided that the foregoing shall not apply to Indebtedness under the AFL III
Financing Agreement; or
7.3 BREACH OF CERTAIN COVENANTS.
Failure of Company to perform or comply in any material respect with
any term or condition contained in subsection 2.5 or 5.2 or subsection 6.1, 6.2
(as it relates to prohibitions on Liens on Financed Aircraft), 6.5, 6.7 (as it
relates to the sale of any Financed Aircraft or all or substantially all of the
assets of Company or to the merger of Company into any other Person), 6.8, 6.10
and 6.13 of this Agreement or in clauses (i) and (ii) of Section 4(c), Section
4(d) or Section 4(g) of any First Aircraft Chattel Mortgage; or
7.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
Company or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or
7.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
(i) Any Loan Party shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 7,
and such default shall not have been remedied or waived (x) within 15 days after
the earlier of (a) an officer of Company becoming aware of such default or (b)
receipt by Company of notice from Administrative Agent or any Lender of such
default or (y) with respect to a default under subsection 6.6, the earlier of
(a) an officer of Company becoming aware of the default after the applicable
measurement date and (b) the delivery of financial statements pursuant to
subsection 5.1 or (ii) a guaranty, if any, of the Obligations for any reason
ceases to be in full force and effect; or
7.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Company or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Company or any of its material Subsidiaries under the Bankruptcy Code or
under any other
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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 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
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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 and (y) it shall also be an Event of Default if at any time Holding
Company ceases to own directly or indirectly 100% of the outstanding Securities
of 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 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
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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 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,
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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 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
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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 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,
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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 right
individually to
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realize upon any of the collateral under any Collateral Document, it being
understood and agreed that all powers, rights and remedies under the Collateral
Documents may be exercised solely by Administrative Agent for the benefit of
Lenders in accordance with the terms thereof. Each Lender hereby authorizes
Administrative Agent (i) to release or subordinate Collateral as permitted or
required under this Agreement or the Collateral Documents, and agrees that a
certificate executed by Administrative Agent evidencing such release of
Collateral shall be conclusive evidence of such release as to any third party
and (ii) to enter into any amendments of the Collateral Documents to cure any
ambiguity, defect or inconsistency or to amend provisions relating to
ministerial or administrative matters which do not materially adversely affect
the rights of the Lenders thereunder.
8.6 SUCCESSOR ADMINISTRATIVE AGENT.
Administrative Agent may resign at any time by giving 30 days' prior
written notice thereof to Lenders and Company. Upon any such notice of
resignation, Requisite Lenders shall have the right, upon consultation with
Company, to appoint a successor Administrative Agent. Upon the acceptance of any
appointment hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent and
the retiring or removed Administrative Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this Section 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
SECTION 9.
MISCELLANEOUS
9.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS.
A. GENERAL. Each Lender shall have the right at any time to (i) sell,
assign or transfer to any Eligible Assignee, or (ii) sell participations to any
Person in, all or any part of its Commitments or any Loan or Loans made by it or
any other interest herein or in any other Obligations owed to it; provided that
no such sale, assignment, transfer or participation shall, without the consent
of Company, require Company to file a registration statement with the 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.
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(ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing and recordation fee referred to
in subsection 9.1B(i) and any forms, certificates or other evidence
with respect to United States federal income tax withholding matters
that such assignee may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii)(a), Administrative Agent shall, if
such Assignment Agreement has been completed and is in substantially
the form of Exhibit VII hereto and if Administrative Agent has
consented to the assignment evidenced thereby to the extent such
consent is required pursuant to subsection 9.1B(i)), (a) accept such
Assignment Agreement by executing a counterpart thereof as provided
therein (which acceptance shall evidence any required consent of
Administrative Agent to such assignment), (b) record the information
contained therein in the Register and (c) give prompt notice thereof to
Company. Administrative Agent shall maintain a copy of each Assignment
Agreement delivered to and accepted by it as provided in this
subsection 9.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation, (ii) a reduction of the principal amount
of or the rate of interest payable on any Loan allocated to such participation
or (iii) a release of Collateral, and all amounts payable by Company hereunder
(including without limitation amounts payable to such Lender pursuant to
subsections 2.6D and 2.7) shall be determined as if such Lender had not sold
such participation. Company and each Lender hereby acknowledge and agree that,
solely for purposes of subsection 9.5, (a) any participation will give rise to a
direct obligation of Company to the participant and (b) the participant shall be
considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
9.1, any Lender may assign and pledge all or any portion of its Loans, the other
Obligations owed to such Lender, and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.
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.
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9.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents; (ii) all the costs of
furnishing all opinions by counsel for Company (including without limitation any
opinions requested by Lenders as to any legal matters arising hereunder) and of
Company's performance of and compliance with all agreements and conditions on
its part to be performed or complied with under this Agreement and the other
Loan Documents including, without limitation, with respect to confirming
compliance with environmental and insurance requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Administrative Agent in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and the Loans and any consents, amendments, waivers or other
modifications hereto or thereto and any other documents or matters requested by
Company; (iv) all the costs and expenses of creating and perfecting the Liens in
favor of Administrative Agent for the benefit of Lenders pursuant to the Loan
Documents, including filing and recording fees and expenses, title insurance,
fees and expenses of counsel for providing such opinions as Lenders may
reasonably request and fees and expenses of legal counsel to Administrative
Agent (including local counsel); (v) all other actual and reasonable costs and
expenses incurred by Administrative Agent in connection with the syndication of
the Commitments and the negotiation, preparation and execution of the Loan
Documents and the transactions contemplated hereby and thereby; provided that
such costs and expenses of syndication shall not exceed $10,000; and (vi) after
the occurrence of an Event of Default, all costs and expenses, including
reasonable attorneys' fees (including allocated costs of internal counsel) and
costs of settlement, incurred by Administrative Agent and Lenders in enforcing
any Obligations of or in collecting any payments due from Company hereunder or
under the other Loan Documents by reason of such Event of Default or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings.
9.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 9.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend, indemnify, pay and hold harmless 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,
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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 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
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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) 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
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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.
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
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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 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
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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 Lenders (it being understood that
Lenders' rights of assignment are subject to
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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
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ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
9.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of 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
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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 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
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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).
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
ATLAS AIR, INC.
By: ______________________________________
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President,
General Counsel and Secretary
ADMINISTRATIVE AGENT:
BANKERS TRUST COMPANY,
as Administrative Agent and Lender
By: ______________________________________
Name:
Title:
Notice Address:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
LENDERS:
CITY NATIONAL BANK
By: ______________________________________
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
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FIRST SECURITY BANK
By: ______________________________________
Name:
Title:
Notice Address:
15 East ▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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FLEET NATIONAL BANK
By: ______________________________________
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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GMAC COMMERCIAL CREDIT LLC
By: ______________________________________
Name:
Title:
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Senior Vice President
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IMPERIAL BANK, A CALIFORNIA BANKING CORPORATION
By: ______________________________________
Name:
Title:
Notice Address:
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14th Floor, Department 2405
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Attention: ▇▇▇ ▇▇▇▇▇▇▇
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NORWEST BANK COLORADO NATIONAL ASSOCIATION
By: ______________________________________
Name:
Title:
Notice Address:
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
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SUMMIT BANK
By: ______________________________________
Name:
Title:
Notice Address:
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Aircraft Department, Third Floor
Cranford, New Jersey 07016
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
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TRANSAMERICA BUSINESS CREDIT CORP.
By: ______________________________________
Name:
Title:
Notice Address:
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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UNION BANK OF CALIFORNIA, N.A.
By: ______________________________________
Name:
Title:
Notice Address:
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇ BANK N.A.
By: ______________________________________
Name:
Title:
Notice Address:
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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U.S. BANK
By: ______________________________________
Name:
Title:
Notice Address:
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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