1
EXHIBIT 10.59
CREDIT AGREEMENT
DATED AS OF MAY 29, 1997
AMONG
ATLAS FREIGHTER LEASING, INC.,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
and
BANKERS TRUST COMPANY,
as Agent
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.................................................................................1
1.1 Certain Defined Terms.......................................................................1
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement..................................................................................17
1.3 Other Definitional Provisions..............................................................17
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS.................................................18
2.1 Commitments; Making of Loans; Notes; Register..............................................18
A. Commitments................................................................................18
B. Borrowing Mechanics........................................................................18
C. Disbursement of Funds......................................................................19
D. Notes......................................................................................19
E. The Register...............................................................................19
2.2 Interest on the Loans......................................................................20
A. Rate of Interest...........................................................................20
B. Interest Periods...........................................................................21
C. Interest Payments..........................................................................22
D. Default Rate...............................................................................22
E. Computation of Interest....................................................................22
2.3 Fees.......................................................................................23
2.4 Repayments and Prepayments; General Provisions Regarding Payments.........................23
A. Mandatory Reduction of Commitments.........................................................23
B. Scheduled Repayments of Loans..............................................................23
C. Prepayments................................................................................23
D. General Provisions Regarding Payments......................................................27
2.5 Use of Proceeds............................................................................28
A. Application of Proceeds....................................................................28
B. Margin Regulations.........................................................................28
2.6 Special Provisions Governing Loans.........................................................29
A. Determination of Applicable Interest Rate..................................................29
B. Inability to Determine Applicable Interest Rate............................................29
C. Illegality or Impracticability of Loans....................................................29
D. Compensation For Breakage or Non-Commencement of Interest Periods..........................30
E. Booking of Loans...........................................................................30
F. Assumptions Concerning Funding of Loans....................................................30
G. Substitute Basis...........................................................................31
2.7 Increased Costs, Taxes; Capital Adequacy...................................................32
A. Compensation for Increased Costs and Taxes.................................................32
B. Withholding of Taxes.......................................................................33
C. Capital Adequacy Adjustment................................................................35
D. Substitute Lenders.........................................................................36
2.8 Obligation of Lenders to Mitigate..........................................................36
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SECTION 3. CONDITIONS TO LOANS........................................................................37
3.1 Conditions to Loans........................................................................37
A. Borrower and Atlas Documents...............................................................37
B. Aircraft Documents.........................................................................38
C. Notice of Borrowing........................................................................38
D. Necessary Consents.........................................................................38
E. Aircraft Chattel Mortgage..................................................................38
F. Solvency Opinion...........................................................................39
G. Financial Condition Certificate............................................................39
H. Opinions of Borrower's Counsel.............................................................39
I. Opinions of ▇▇▇▇▇ ▇▇▇▇▇▇...................................................................39
J. Atlas Credit Agreement.....................................................................40
K. Opinions of FAA Counsel....................................................................40
L. Fees.......................................................................................40
M. Financial Statements.......................................................................40
N. Evidence of Insurance......................................................................40
O. No Material Adverse Effect.................................................................40
P. Representations and Warranties; Performance of Agreements..................................40
Q. Compliance Certificate.....................................................................41
R. Transaction; Refinancing...................................................................41
S. Completion of Proceedings..................................................................41
T. Appraisals.................................................................................42
U. FAA Certification and Title................................................................42
V. Bankruptcy-Remote Subsidiary...............................................................42
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES..................................................42
4.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries..............42
A. Organization and Powers....................................................................42
B. Qualification and Good Standing............................................................43
C. Subsidiaries. Borrower has no Subsidiaries................................................43
D. Collateral Documents.......................................................................43
4.2 Authorization of Borrowing, etc............................................................43
A. Authorization of Borrowing.................................................................43
B. No Conflict................................................................................43
C. Governmental Consents......................................................................44
D. Binding Obligation.........................................................................44
4.3 Financial Condition........................................................................44
4.4 No Material Adverse Change; No Restricted Junior Payments..................................45
4.5 Title to Properties, Liens.................................................................45
4.6 Litigation, Adverse Facts..................................................................45
4.7 Payment of Taxes...........................................................................46
4.8 Performance of Agreements..................................................................46
4.9 Governmental Regulation....................................................................46
4.10 Securities Activities......................................................................47
4.11 Compliance with ERISA......................................................................47
4.12 Certain Fees...............................................................................47
4.13 Environmental Protection...................................................................47
4.14 Employee Matters...........................................................................48
4.15 Solvency...................................................................................48
4.16 Disclosure.................................................................................48
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4.17 Section 1110...............................................................................48
4.18 Special Purpose Corporation................................................................49
4.19 Transaction................................................................................49
4.20 Representations and Warranties in Documents................................................49
4.21 Leases.....................................................................................49
SECTION 5. BORROWER'S AFFIRMATIVE COVENANTS...........................................................50
5.1 Financial Statements and Other Reports.....................................................50
5.2 Corporate Existence........................................................................53
5.3 Payment of Taxes and Claims; Tax Consolidation.............................................54
5.4 Maintenance of Properties; Insurance.......................................................54
5.5 Inspection; Lender Meeting.................................................................54
5.6 Compliance with Laws, etc..................................................................55
5.7 Environmental Indemnity....................................................................55
5.8 Borrower's Remedial Action Regarding Hazardous Materials...................................55
5.9 Maintenance Contracts......................................................................56
5.10 Employee Benefit Plans.....................................................................56
5.11 Further Assurances.........................................................................56
5.12 Performance of Obligations.................................................................56
5.13 Corporate Separateness.....................................................................56
SECTION 6. BORROWER'S NEGATIVE COVENANTS..............................................................57
6.1 Indebtedness...............................................................................57
6.2 Liens and Related Matters..................................................................58
A. Prohibition on Liens.......................................................................58
B. No Negative Pledges........................................................................58
6.3 Investments; Joint Ventures................................................................58
6.4 Contingent Obligations.....................................................................58
6.5 Restricted Junior Payments.................................................................58
6.6 Restriction on Fundamental Changes; Asset Sales and Acquisitions; New
Subsidiaries...............................................................................59
6.7 Amendments of Material Agreements..........................................................59
6.8 Restriction on Leases......................................................................59
6.9 Transaction with Shareholders and Affiliates...............................................59
6.10 Conduct of Business........................................................................60
SECTION 7. EVENTS OF DEFAULT..........................................................................60
7.1 Failure to Make Payments When Due..........................................................60
7.2 Default Under Lease........................................................................60
7.3 Breach of Certain Covenants................................................................60
7.4 Breach of Warranty.........................................................................61
7.5 Other Defaults Under Loan Documents........................................................61
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc.......................................61
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc.........................................61
7.8 Judgments and Attachments..................................................................62
7.9 Dissolution................................................................................62
7.10 Change in Control..........................................................................62
7.11 Failure of Security........................................................................62
7.12 Loss of United States Citizen Status.......................................................63
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SECTION 8. AGENT......................................................................................64
8.1 Appointment................................................................................64
8.2 Powers and Duties; General Immunity........................................................64
▇. ▇▇▇▇▇▇; Duties Specified...................................................................64
B. No Responsibility for Certain Matters......................................................64
C. Exculpatory Provisions.....................................................................65
D. Agent Entitled to Act as Lender............................................................65
8.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness...........................................................................66
8.4 Right to Indemnity.........................................................................66
8.5 Collateral Documents.......................................................................66
8.6 Successor Agent............................................................................67
SECTION 9. MISCELLANEOUS..............................................................................67
9.1 Assignments and Participations in Loans....................................................67
A. General....................................................................................67
B. Assignments................................................................................68
C. Participations.............................................................................69
D. Assignments to Federal Reserve Banks and Others............................................69
E. Information................................................................................70
9.2 Expenses...................................................................................70
9.3 Indemnity..................................................................................70
9.4 Set-Off....................................................................................71
9.5 Ratable Sharing............................................................................72
9.6 Amendments and Waivers.....................................................................72
9.7 Independence of Covenants..................................................................74
9.8 Notices....................................................................................74
9.9 Survival of Representations, Warranties and Agreements.....................................74
9.10 Failure or Indulgence Not Waiver; Remedies Cumulative......................................74
9.11 Marshalling: Payments Set Aside............................................................75
9.12 Severability...............................................................................75
9.13 Obligations Several; Independent Nature of Lenders' Rights.................................75
9.14 Headings...................................................................................76
9.15 Applicable Law.............................................................................76
9.16 Successors and Assigns.....................................................................76
9.17 Consent to Jurisdiction and Service of Process.............................................76
9.18 Waiver of Jury Trial.......................................................................77
9.19 Confidentiality............................................................................77
9.20 Counterparts; Effectiveness................................................................78
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTE
III FORM OF COMPLIANCE CERTIFICATE
IVA FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
IVB FORM OF SECTION 1110 OPINION
IVC FORM OF OPINION COVERING CERTAIN TAX ISSUES
IVD FORM OF OPINION OF ▇▇▇▇▇ ▇▇▇▇▇▇
IVE FORM OF OPINION OF FAA COUNSEL
V FORM OF ASSIGNMENT AGREEMENT
VI FORM OF CERTIFICATE RE NON-BANK STATUS
VII FORM OF FINANCIAL CONDITION CERTIFICATE - BORROWER
VIIA FORM OF FINANCIAL CONDITION CERTIFICATE - ATLAS
VIII FORM OF LEASE
IX FORM OF AIRCRAFT CHATTEL MORTGAGE
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
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CREDIT AGREEMENT, dated as of May 29, 1997, among ATLAS FREIGHTER LEASING,
INC., a Delaware corporation ("Atlas Leasing" or the "Borrower"), the lenders
party hereto from time to time (each a "Lender" and, collectively, the
"Lenders"), and BANKERS TRUST COMPANY, as Agent for the Lenders (in such
capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower has been established for the sole purpose of owning
and leasing to Atlas the Aircraft;
WHEREAS, the Aircraft are currently owned by Atlas One, a wholly owned
subsidiary of Atlas;
WHEREAS, the Aircraft are currently encumbered by certain indebtedness
which Atlas desires to refinance;
WHEREAS, in connection with the refinancing of such indebtedness, Atlas One
will dividend the Aircraft subject to the related indebtedness to Atlas which
will in turn contribute the Aircraft subject to certain indebtedness to Atlas
Leasing;
WHEREAS, subject to and upon the terms and conditions herein set forth, the
Lenders are willing to make available to Borrower the credit facility provided
for herein to refinance the indebtedness relating to the Aircraft;
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the following
meanings:
"Adjusted Eurodollar Rate" means, for any Interest Rate Determination Date,
the rate per annum obtained by dividing (rounded upward to the nearest 1/100 of
one percent) of the offered quotation, if any, to first class banks in the
interbank Eurodollar market by Agent for U.S. dollar deposits of amounts in same
day funds comparable to the principal amount of the Loans of Agent for which the
Adjusted Eurodollar Rate is then being determined with maturities comparable to
such Interest Period as of approximately 10:00 A.M. (New York time) on such
Interest Rate Determination Date by (y) a percentage equal to 100% minus the
stated maximum rate of all reserve requirements (including, without limi-
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tation, 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).
"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.
"Agent" has the meaning assigned to that term in the introduction to this
Agreement and also means and includes any successor Agent appointed pursuant to
subsection 8.6.
"Aggregate Amounts Due" has the meaning assigned to that term in subsection
9.5.
"Agreement" means this Credit Agreement dated as of May 29, 1997, as it may
be amended, supplemented or otherwise modified from time to time.
"Aircraft" means six Boeing 747-200 aircraft in full freighter
configuration with FAA Registration Nos. N505MC, N507MC, N508MC, N509MC, N516MC
and N808MC, including the Engines installed thereon and spare engines of the
same type and model, which aircraft (i) are in cargo configuration capable of
immediate operation in the business of Borrower, and (ii) have a maximum gross
take-off weight ("MTOW") of at least 800,000 pounds.
"Aircraft Chattel Mortgage" means, with respect to each Aircraft a Security
Agreement and Chattel Mortgage in substantially in the form of Exhibit IX
annexed hereto granting to Agent for the benefit of Lenders a first priority
security interest in such Aircraft, as such Aircraft Chattel Mortgage may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms hereof and thereof.
"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.
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"Appraised Value" means, with respect to any Aircraft, the average of the
appraised value of such Aircraft by two Approved Appraisers as determined
pursuant to subsection 3.1T.
"Approved Appraiser" means either of BK Associates, Inc. or Simat,
Helliesen & ▇▇▇▇▇▇▇, Inc. or any other nationally recognized firm of aircraft
appraisers reasonably satisfactory to Agent.
"Asset Sale" means the sale (including any sale-leaseback transaction) or
other disposition by Borrower to any other Person of any assets of Borrower
(whether tangible or intangible) excluding transactions related to aircraft
engines, components, parts or spare parts or other equipment, appliances,
instruments, appurtenances, accessories or furnishings of whatever nature which
may from time to time be removed from any Airframe or Engine in connection with
transactions permitted pursuant to and in accordance with Section 4(d) or
Section 4(e) of the Aircraft Chattel Mortgages.
"Assignment Agreement" means an Assignment Agreement in substantially the
form of Exhibit V annexed hereto.
"Atlas" means Atlas Air, Inc., a Delaware corporation.
"Atlas One" means Atlas One, Inc., a Delaware corporation.
"Atlas One Leases" means those leases existing prior to the Effective Date
with Atlas One as lessor and Atlas as lessee.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (x) the Prime Rate or (y) the
rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.
"Borrower" has the meaning assigned to that term in the introduction to
this Agreement.
"Business Day" means any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the States of New York or Colorado or is a
day on which banking institutions located in either such state are authorized or
required by law or other governmental action to close.
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"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-I from
▇▇▇▇▇'▇; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier I capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
▇▇▇▇▇'▇.
"Cash Proceeds" means, with respect to any Asset Sale, Cash payments
(including any Cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale.
"Certificate re Non-Bank Status" means a certificate substantially in the
form of Exhibit VI annexed hereto delivered by a Lender to Agent pursuant to
subsection 2.7B(iii).
"Certificated Air Carrier" means a United States "air carrier" within the
meaning of the Federal Aviation Act, operating pursuant to a certificate issued
under Section 401 of such Act, or a carrier of comparable status under any
successor law or provision.
"Collateral" means all of the properties and assets in which Liens are
purported to be granted by the Collateral Documents.
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"Collateral Documents" means each Aircraft Chattel Mortgage and any
security agreement executed pursuant to subsection 5.11.
"Commitment" means the commitment of each Lender as set forth on Schedule
2.1, as the same may be reduced or terminated pursuant to Section 2.4 and/or
Section 7.
"Compliance Certificate" means a certificate delivered to Agent and Lenders
by Borrower pursuant to subsection 3.1Q or 5.1(iii).
"Condemnation Proceeds" has the meaning assigned to that term in subsection
2.4C(ii)(b).
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under Interest Rate Agreements and Currency Agreements. Contingent Obligations
shall include, without limitation, (a) the direct or indirect guaranty,
endorsement (otherwise than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of non-performance by any other party or
parties to an agreement, and (c) any liability of such Person for the obligation
of another through any agreement (contingent or otherwise) (X) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise) or
(Y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (X) or (Y) of this sentence, the primary purpose or intent thereof is
as described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation is
specifically limited.
"Contractual Obligation", as applied to any Person, means any provision of
any Security issued by that Person or of any material indenture, mortgage, deed
of trust, contract, undertaking, agreement or other instrument to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.
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"Contribution" has the meaning assigned to that term in subsection 3.1R.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement designated to protect Borrower against fluctuations in
currency values.
"Deposit Account" means a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.
"Dividend" has the meaning assigned to that term in subsection 3.1R.
"Dollars" and the sign "$" mean the lawful money of the United States of
America.
"Effective Date" has the meaning assigned to that term in Section 9.20.
"Eligible Assignee" means (A) (i) a commercial bank organized under the
laws of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (iii) a commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act) which extends credit or buys loans as
one of its businesses including, but not limited to, insurance companies, mutual
funds and lease financing companies, and (B) any Lender and any Affiliate of any
Lender; provided that no Affiliate of Borrower shall be an Eligible Assignee.
"Employee Benefit Plan" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is, or was at any time, maintained or contributed to
by Borrower or any of its ERISA Affiliates.
"Engine" means, as the context requires, an Engine as defined in a
particular Aircraft Chattel Mortgage or Engines as defined in all Aircraft
Chattel Mortgages.
"Environmental Claim" means any investigation, notice, claim. suit or
order, by any governmental authority or any Person arising in connection with
any alleged or actual violation of Environmental Laws or with any Hazardous
Material, or any actual or alleged damage, or harm to health, safety or the
environment.
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"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirement of governmental
authorities relating to environmental matters, including, without limitation,
those relating to any Hazardous Materials Activity.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate" means, as applied to any Person, (i) any corporation
which is, or was at any time, a member of a controlled group of corporations
within the meaning of Section 414(b) of the Internal Revenue Code of which that
Person is, or was at any time, a member; (ii) any trade or business (whether or
not incorporated) which is, or was at any time, a member of a group of trades or
businesses under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is, or was at any time, a member; and
(iii) any member of an affiliated service group within the meaning of Section
414(m) or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is, or was at any time, a member.
"Event of Default" means each of the events set forth in Section 7.
"Event of Loss" shall mean any of the following events with respect to any
Aircraft (whether the Airframe or an Engine of such Aircraft or both): (A) loss
of such or the use thereof due to theft or disappearance of such Aircraft which
shall result in the loss of possession thereof for a period of 120 days (or for
a shorter period ending on the date on which there is an insurance settlement
for a total loss on the basis of the theft or disappearance of such Aircraft);
(B) the destruction, damage beyond repair or rendition of such Aircraft
permanently unfit for normal use for any reason whatsoever; (C) the
condemnation, confiscation or seizure of, or requisition of title to, or use or
possession (other than use by the United States Government if Borrower obtains
adequate compensation from the United States Government) of such Aircraft; (D)
as a result of any rule, regulation, order or other action by the FAA or other
governmental body having jurisdiction, the use of such Aircraft in the normal
course of interstate air transportation of persons or cargo shall have been
prohibited for a period of more than nine consecutive months unless Borrower,
prior to the expiration of such nine month period, shall have undertaken and
shall be diligently carrying forward all steps which are necessary or desirable
to permit the normal use of such property by Borrower or, in any event, if such
use shall have been prohibited for a period of twelve consecutive months; (E)
the operation or location of such Aircraft, while under requisition for use by
the United States or any instrumentality or agency thereof, in any area excluded
from coverage by any insurance policy in effect with respect to such Aircraft,
if Borrower shall be unable to obtain indemnity or "war risk" insurance in lieu
thereof from the United
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States; (F) any damage which results in an insurance settlement with respect to
such Aircraft on the basis of an actual or constructive total loss or (G) a
divestiture of such Airframe as described in Section 4(d)(iii) or Section
4(d)(vi) of any Aircraft Chattel Mortgage. An Event of Loss with respect to any
Aircraft shall be deemed to have occurred if an Event of Loss occurs with
respect to the Airframe of such Aircraft.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.
"Existing Indebtedness" means the ING Obligations and the Lufthansa
Obligations.
"Federal Aviation Act" means the Federal Aviation Act of 1958, as amended
and as recodified in ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any similar legislation of
the United States enacted to supersede, amend or supplement such Act and the
rules and regulations promulgated thereunder.
"Federal Aviation Administration" or "FAA" means the United States Federal
Aviation Administration or any successor thereto administering the functions of
the Federal Aviation Administration under the Federal Aviation Act.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day on which is a Business Day, the average of the quotations for such day on
such transactions received by Agent from three Federal funds brokers of
recognized standing selected by Agent.
"Final Maturity Date" means the seventh anniversary of the Initial
Borrowing Date.
"Funding and Payment Office" means the office of Agent located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇.
"GAAP" means, subject to the limitations on the application thereof set
forth in subsection 1.2, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession. Financial statements and other information required to
15
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be delivered by Borrower to Lenders pursuant to clauses (i) and (ii) of
subsection 5.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation. Calculations in connection with the definitions,
covenants and other provisions of this Agreement shall utilize accounting
principles and policies in conformity with GAAP as in effect on the date of this
Agreement.
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"Hazardous Materials" means any chemical or other material or substance,
exposure to which is now or hereafter prohibited, limited or regulated under any
law.
"Hazardous Materials Activity" means any past, current, proposed, or
threatened use, storage, release, generation, treatment, remediation or
transportation of any Hazardous Material (i) from, under, in, into or on the
facilities or surrounding property of Borrower; and (ii) caused by, or
undertaken by or on behalf of, Borrower.
"Indebtedness" means, as applied to any Person, (i) all indebtedness for
borrowed money, (ii) that portion of obligations with respect to Capital Leases
that is properly classified as a liability on a balance sheet in conformity with
GAAP, (iii) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money, (iv) any obligation
owed for all or any part of the deferred purchase price of property or services
(excluding any such obligations incurred under ERISA), which purchase price is
(a) due more than six months from the date of incurrence of the obligation in
respect thereof or (b) evidenced by a note or similar written instrument, and
(v) all indebtedness secured by any Lien on any property or asset owned or held
by that Person regardless of whether the indebtedness secured thereby shall have
been assumed by that Person or is nonrecourse to the credit of that Person.
Obligations under Interest Rate Agreements and Currency Agreements constitute
Contingent Obligations and are not Indebtedness.
"Indemnified Liabilities" has the meaning assigned to that term in
subsection 9.3.
"Indemnitee" has the meaning assigned to that term in subsection 9.3.
"Independent Director" means a director of Borrower that satisfies the
criteria for "Independent Director" set forth in the Certificate of
Incorporation of Borrower.
"ING Financing Agreement" means that certain Secured Loan Agreement dated
as of December 30, 1994 between Atlas and Internationale Nederlanden Aviation
Lease B.V.,
16
-10-
as amended by Amendment No. 1 thereto and as further amended, restated,
supplemented and otherwise modified from time to time on or prior to the date of
this Agreement.
"ING Obligations" means all amounts owing by Atlas or any of its
Subsidiaries made pursuant to the ING Financing Agreement and related documents.
"Initial Borrowing Date" shall mean the date occurring on or after the
Effective Date on which the borrowing of the Loans occurs.
"Insurance Proceeds" has the meaning assigned to that term in subsection
2.4C(ii)(b).
"Interest Payment Date" means with respect to any Loan, the last day of
each Interest Period applicable to such Loan.
"Interest Period" has the meaning assigned to that term in subsection 2.2B.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement designed to protect Borrower against fluctuations in interest rates.
"Interest Rate Determination Date" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
to the date hereof and from time to time hereafter.
"Investment" means (i) any direct or indirect purchase or other acquisition
by Borrower of, or of a beneficial interest in, any Securities of any other
Person or (ii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital contribution
by Borrower to any other Person, including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of 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.
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"Lease" or "Leases" shall mean each of the lease agreements, dated as of
May 29, 1997 between Atlas Freighter Leasing, Inc., as Lessor and Atlas Air,
Inc., as Lessee, as the same may be amended, modified or supplemented from time
to time in accordance with the terms hereof. The term "Lease" shall include any
Lease Supplement entered into in accordance with the terms of any Lease.
"Lender" and "Lenders" means the persons identified as "Lenders" and listed
on the signature pages of this Agreement, together with their successors and
permitted assigns pursuant to subsection 9.1.
"Lien" means any lien, mortgage, pledge, assignment, security interest,
charge, hypothecation, preference, priority, privilege, lease or encumbrance of
any kind (including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security interest)
and any option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"Loan" or "Loans" means the term loans made under this Agreement on the
same day by all the Lenders to the Borrower and relating to one Aircraft but
secured by all Collateral.
"Loan Documents" means this Agreement, the Notes, the Lease and the
Collateral Documents.
"Loan Exposure" means, with respect to any Lender as of any date of
determination the outstanding principal amount of the Loans of that Lender.
"Lufthansa Financing Agreement" means the two Conditional Sales Agreements
and two Sales Agreements between Atlas and Deutsche Lufthansa Aktiengellschaft,
each dated September 22, 1994.
"Lufthansa Obligations" means all amounts owing by Atlas or any of its
Subsidiaries to Lufthansa pursuant to the Lufthansa Financing Agreement and
related documents.
"Margin Stock" has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Borrower or (ii) the impairment of the ability of Borrower to
perform the Obligations, or the impairment, as a result of actions or inaction
by Borrower, of the ability of Agent or Lenders to enforce the Obligations.
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"Maximum Loan Amount" means, with respect to the Loan relating to (i) the
Aircraft with U.S. Registration No. N516MC, $36,264,150.94, (ii) the Aircraft
with U.S. Registration No. N509MC, $29,452,830.19, (iii) the Aircraft with U.S.
Registration No. N508MC, $34,452,830.19, (iv) the Aircraft with U.S.
Registration No. N507MC, $32,622,641.51, (v) the Aircraft with U.S. Registration
No. N505MC, $30,094,339.62 and (vi) the Aircraft with U.S. Registration No.
N808MC, $22,113,207.55.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Cash Proceeds" means, with respect to any Asset Sale, Cash Proceeds of
such Asset Sale net of bona fide direct costs of sale including income taxes
reasonably estimated to be actually payable as a result of such Asset Sale
within two years of the date of such Asset Sale.
"Non-US Lender" has the meaning assigned to that term in subsection
2.7B(iii)(a).
"Notes" has the meaning assigned to that term in subsection 2.1D.
"Notice of Borrowing" means a notice delivered by Borrower to Agent
pursuant to subsection 2.1B.
"Obligations" means all obligations of every nature of Borrower from time
to time owed to 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.
19
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"Pass Through Trust Documents" means that certain Pass Through Trust
Agreement dated as of November 30, 1995 between Atlas Air, Inc. and First
Fidelity Bank, National Association, as Trustee (the "Pass Through Trust
Agreement") and any trust indenture and security agreements including any
related trust indenture and security agreement supplements which related to the
equipment notes to be held in trust pursuant to the Pass Through Trust Agreement
and all related agreements, as the same may be amended, restated, supplemented
or otherwise modified from time to time in accordance with this Agreement.
"Permitted Encumbrances" means the following types of Liens (other than any
such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by subsection
5.3;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent
or being contested in good faith by appropriate proceedings that do not
involve any danger of the sale, forfeiture or loss of any Collateral,
if such reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor;
(iii) the rights of others under agreements or arrangements to
the extent expressly permitted by the terms of Sections 4(d) and 4(e)
of the Aircraft Chattel Mortgages; and
(iv) Liens granted pursuant to the Collateral Documents.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, 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(xi).
"Pricing Reduction" means, if at any time on or after the third anniversary
of the Initial Borrowing Date, Atlas's obligations in respect of the Pass
Through Trust Documents
20
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are rated by Moody's or S&P at the levels specified below, a pricing reduction
equal to the percentage corresponding to the applicable rating set forth in the
chart below:
Rating Pricing Reduction
------ -----------------
Ba 2 by Moody's and BB by S&P 0.25%
Ba 1 or higher by Moody's and
BB+ or higher by S&P 0.50%
In the event of a split rating, the more creditworthy of the two
ratings shall be used to determine the Pricing Reduction; provided that, if the
less creditworthy of the two ratings is two or more rating categories below the
more creditworthy rating, the more creditworthy rating shall be deemed to be the
rating category which is one rating category above the less creditworthy rating.
The Pricing Reduction shall be determined with reference to the most recent
Pricing Certificate delivered by Borrower to Agent pursuant to subsection
5.1(xi). Any changes to the Pricing Reduction shall become effective on the day
following the delivery of the relevant Pricing Certificate to 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 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. Agent or any other Lender may make commercial
loans or other loans at rates of interest at, above or below the Prime Rate.
"Proceedings" has the meaning assigned to that term in subsection
5.1(viii).
"Projections" means the financial projections of Atlas and its Subsidiaries
delivered on or prior to the Initial Borrowing Date covering the five-year
period ending on December 31, 2001.
"Pro Rata Share" means, with respect to each Lender, the percentage
obtained by dividing the Loan Exposure of that Lender by the aggregate Loan
Exposure of all Lenders, in each case as such percentage may be adjusted by
assignments permitted pursuant to subsection 9.1. The initial Pro Rata Share of
each Lender is set forth opposite the name of that Lender in Schedule 2.1
annexed hereto.
"Refinancing" has the meaning assigned to that term in subsection 3.1R.
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"Register" has the meaning assigned to that term in subsection 2.1.E.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Related Fund" means, with respect to any Lender that is a fund that
invests in loans, any other fund that invests in loans and is managed by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
"Release" means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of Hazardous Materials into the indoor or outdoor environment
(including, without limitation, the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Materials), or
into or out of any Facility, including the movement of any Hazardous Material
through the air, soil, surface water, groundwater or property.
"Requisite Lenders" means Lenders having or holding 50.1% or more of the
aggregate Loan Exposure of all Lenders.
"Restricted Junior Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of Borrower
now or hereafter outstanding, except a dividend payable solely in shares of that
class of stock to the holders of that class, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of stock of Borrower now or hereafter
outstanding and (iii) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire shares of any class
of stock of Borrower now or hereafter outstanding.
"S&P" means Standard & Poor's Ratings Group.
"Second Amended and Restated Credit Agreement" means the Second Amended and
Restated Credit Agreement, dated as of February 28, 1997, among Atlas Air, Inc.,
as Borrower, the Lenders listed therein, ▇▇▇▇▇▇▇ Sachs Credit Partners L.P., as
Syndication Agent, and Bankers Trust Company, as Administrative Agent as amended
by the First Amendment thereto, dated as of April 25, 1997, and the Second
Amendment thereto, dated as of May 29, 1997, but without giving effect to any
further amendments, modifications, supplements or waivers 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
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unsecured, convertible, subordinated or otherwise, or in general any instruments
commonly known as "securities" or any certificates of interest, shares or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and any successor statute.
"Service Agreement" means the Service Agreement, dated as of May 29, 1997,
between Atlas and Borrower.
"Solvent" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"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.
"Substitute Basis" has the meaning assigned to that term in subsection
2.6G.
"Syndication Date" means the date on which Agent has completed, in Agent's
determination, the primary syndication of Loans.
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"Tax" or "Taxes" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided that "Tax on the overall net income" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person's principal office (and/or, in the case of a Lender, its lending office)
is located on all or part of the net income, profits or gains of that Person
(whether worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or otherwise).
"Total Commitment" means the sum of the Commitments of the Lenders.
"Transaction" has the meaning assigned that term in subsection 3.1R.
"Transaction Documents" means the Second Amendment to the Second Amended
and Restated Credit Agreement, any bills of sale or certificates of transfer for
each Aircraft (including bills of sale on AC Form 8050-2) delivered in
connection with the Transaction, the Leases, the releases of the Atlas One
Leases, all documents relating to the Refinancing, and all other agreements and
documentation executed and delivered in connection with the Transaction,
including, without limitation, in connection with the Dividend and the
Contribution.
"United States Citizen" means a "citizen of the United States" within the
meaning of the Federal Aviation Act.
1.2 Accounting Terms; Utilization of GAAP
for Purposes of Calculations Under Agreement.
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 Borrower herein set
forth, each Lender hereby severally agrees to make on the Initial Borrowing
Date, six Loans to Borrower in an aggregate amount not to exceed the Commitment
of such Lender. Each Loan of a Lender shall relate to one of the Aircraft and
shall be in an amount equal to such Lender's Pro Rata Share on the Initial
Borrowing Date of the Maximum Loan Amount with respect to such Aircraft. The
Loans of all of the Lenders relating to one Aircraft shall not exceed the
Maximum Loan Amount for such Aircraft and shall be made on the same day by the
Lenders ratably according to their respective Commitments. Once repaid, Loans
borrowed hereunder may not be reborrowed.
B. Borrowing Mechanics. (i) Each borrowing of Loans relating to a
particular Aircraft shall be made by the delivery of a Notice of Borrowing by
Borrower to Agent not later than 12:00 Noon (New York City time) on the third
Business Day prior to the date of the proposed borrowing. Agent shall give to
each Lender prompt notice thereof. Each such Notice of Borrowing shall be
irrevocable and binding on Borrower. Each such Notice of Borrowing shall be in
the form of Exhibit I. The Notice of Borrowing shall specify (i) the proposed
borrowing date (which shall be a Business Day), (ii) the amount of Loans
requested and (iii) the Aircraft to which the Loans relate. In lieu of
delivering the above described Notice of Borrowing, Borrower may give Agent
telephonic notice by the required time of any proposed borrowing under this
subsection 2.1B; provided that such notice shall be promptly confirmed in
writing.
(ii) Neither Agent nor any Lender shall incur any liability to Borrower in
acting upon any telephonic notice referred to above that Agent believes in good
faith to have been given by a duly authorized officer or other person authorized
to borrow on behalf of Borrower or for otherwise acting in good faith under this
subsection 2.1B, and upon funding of the Loans by Lenders in accordance with
this Agreement pursuant to any such telephonic notice Borrower shall have
effected the Loans hereunder. Borrower shall notify Agent prior to the funding
of the Loans in the event that any of the matters to which Borrower is required
to certify in the Notice of Borrowing is no longer true and correct as of the
Initial Borrowing Date and the acceptance by Borrower of the proceeds of any
Loans shall constitute a recertification by Borrower as of the Initial Borrowing
Date, as to the matters to which Borrower is required to certify in the
applicable Notice of Borrowing.
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C. Disbursement of Funds. All Loans under this Agreement shall be made by
Lenders simultaneously and proportionately to their respective Pro Rata Shares,
it being understood that no Lender shall be responsible for any default by any
other Lender in that other Lender's obligation to make a Loan requested
hereunder nor shall the Commitment of any Lender to make a Loan requested be
increased or decreased as a result of a default by any other Lender in that
other Lender's obligation to make a Loan requested hereunder. Promptly after
receipt by Agent of a Notice of Borrowing pursuant to subsection 2.1B (or
telephonic notice in lieu thereof), Agent shall notify each Lender of the
proposed borrowing. Each Lender shall make the amount of its Loans available to
Agent not later than 12:00 Noon (New York time) on the Initial Borrowing Date,
in each case in same day funds in Dollars, at the Funding and Payment Office.
Unless Agent shall have been notified by any Lender prior to the Initial
Borrowing Date that such Lender does not intend to make available to Agent the
amount of such Lender's Loans so requested on the Initial Borrowing Date, Agent
may assume that such Lender has made such amount available to Agent on the
Initial Borrowing Date and Agent may, in its sole discretion, but shall not be
obligated to, make available to Borrower a corresponding amount on the Initial
Borrowing Date. If such corresponding amount is not in fact made available to
Agent by such Lender, Agent shall be entitled to recover such corresponding
amount on demand from such Lender together with interest thereon, for each day
from the Initial Borrowing Date until the date such amount is paid to Agent, at
the customary rate set by Agent for the correction of errors among banks for
three Business Days. If such Lender does not pay such corresponding amount
forthwith upon Agent's demand therefor, Agent shall promptly notify Borrower and
Borrower shall immediately pay such corresponding amount to Agent together with
interest thereon, for each day from the Initial Borrowing Date until the date
such amount is paid to Agent, at the rate payable under this Agreement. Nothing
in this subsection 2.1C shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment hereunder or to prejudice any rights that
Borrower may have against any Lender as a result of any default by such Lender
hereunder.
D. Notes. Borrower shall duly execute and deliver on the Initial Borrowing
Date to each Lender (or to Agent for that Lender) the Notes, each substantially
in the form of Exhibit II annexed hereto, to evidence that Lender's Loans in
respect of each Aircraft, in the principal amount of such Lender's Pro Rata
Share of such Aircraft's Maximum Loan Amount and with other appropriate
insertions (each a "Note" and collectively, the "Notes").
E. The Register.
(i) Agent shall maintain, at its address referred to in subsection 9.8, a
register (the "Register") for the recordation of the names and addresses of
Lenders and the Com-
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mitments and Loans of each Lender from time to time and Agent shall record in
the Register the Commitment and the Loans from time to time of each Lender and
each repayment or prepayment in respect of the principal amount of the Loans of
each Lender. Such recordation shall be conclusive and binding on Borrower and
each Lender, absent manifest error; provided that failure to make any such
recordation, or any error in such recordation, shall not affect Borrower's
Obligations in respect of the applicable Loans. The Register shall be available
for inspection by Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(ii) Each Lender shall record on its internal records (including, without
limitation, the Notes held by such Lender) the amount of each Loan made by it
and each payment in respect thereof. Any such recordation shall be conclusive
and binding on Borrower, absent manifest error; provided that failure to make
any such recordation, or any error in such recordation, shall not affect
Borrower's Obligations in respect of the applicable Loans; and provided further
that in the event of any inconsistency between the Register and any Lender's
records, the recordations in the Register shall govern.
(iii) Borrower, 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 Agent and recorded in the Register as
provided in subsection 9.1B(ii). Prior to such recordation, all amounts owed
with respect to the applicable Loan shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding
on any subsequent holder, assignee or transferee of the corresponding
Commitments or Loans.
(iv) Borrower hereby designates Agent to serve as Borrower's agent solely
for purposes of maintaining the Register as provided in this subsection 2.1E,
and Borrower hereby agrees that, to the extent Agent serves in such capacity,
Agent and its officers, directors, employees, agents and affiliates shall
constitute Indemnitees for all purposes under subsection 9.3.
2.2 Interest on the Loans.
A. Rate of Interest. (i) Subject to the provisions of Sections 2.6 and 2.7,
each Loan shall bear interest on the unpaid principal amount thereof from the
Initial Borrowing Date through maturity (whether by acceleration or otherwise)
at a rate determined by reference to the Adjusted Eurodollar Rate. The
applicable Interest Period for determining the
27
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rate of interest with respect to the Loans shall be determined in accordance
with subsection 2.2B.
(ii) Subject to the provisions of subsections 2.2D and 2.7, the Loans shall
bear interest through maturity at a per annum rate equal to the sum of the
Adjusted Eurodollar Rate plus the Applicable Margin.
The "Applicable Margin" for each Loan shall be the percentage set forth
below for the periods set forth below.
Time Period Applicable Margin
----------- -----------------
From the Initial Borrowing Date through the
third anniversary of the Initial Borrowing
Date 2.50%
Thereafter 3.00%
Notwithstanding the foregoing, from and after the third anniversary of the
Initial Borrowing Date the Applicable Margin shall be reduced by an amount equal
to the applicable Pricing Reduction effective from the date following the
delivery by Borrower to Agent of a Pricing Certificate through the date a
subsequent Pricing Certificate is required to be delivered. If Borrower fails to
deliver a Pricing Certificate or delivers an incorrect Pricing Certificate, no
Pricing Reduction shall be effective until Borrower delivers a correct Pricing
Certificate.
B. Interest Periods. In connection with each Loan, the interest period
("Interest Period") to be applicable to such Loan shall be, (x) from the Initial
Borrowing Date until the earlier to occur of (1) the 60th day after the Initial
Borrowing Date and (2) the Syndication Date, one month, and (y) immediately
after the completion of any one-month Interest Period following the earlier of
the dates described above, three months, provided that:
(i) the initial Interest Period for each Loan shall commence on the
Initial Borrowing Date;
(ii) each successive Interest Period shall commence on the day on
which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day
28
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occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall,
subject to clause (v) of this subsection 2.2B, end on the last Business Day
of a calendar month;
(v) no Interest Period shall extend beyond the Final Maturity Date;
(vi) no Interest Period shall extend beyond a date on which Borrower
is required to make a scheduled payment of principal of the Loans;
(vii) there shall be no more than one Interest Period at any time.
C. Interest Payments. Subject to the provisions of subsection 2.2D,
interest on each Loan shall be payable in arrears on the last day of each
Interest Period applicable to that Loan, upon any prepayment of Loans (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
D. Default Rate. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 1% per annum in
excess of the sum of the Base Rate as in effect from time to time and the
Applicable Margin); provided that, upon the expiration of the Interest Period in
effect at the time any such increase in interest rate is effective, such Loans
shall thereupon bear interest payable upon demand at a rate which is 1% per
annum in excess of the sum of the Base Rate as in effect from time to time and
the Applicable Margin. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2D is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Agent or any Lender.
E. Computation of Interest. Interest on each Loan shall be computed on the
basis of a 360-day year, in each case for the actual number of days elapsed in
the period during which it accrues. In computing interest on any Loan, the date
of the making of such Loan or the first day of an Interest Period applicable to
such Loan shall be included, and
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the date of payment of such Loan or the expiration date of an Interest Period
applicable to such Loan shall be excluded; provided that if a Loan is repaid on
the same day on which it is made, one day's interest shall be paid on that Loan.
2.3 Fees.
Borrower agrees to pay to Lenders and Agent such fees and in such amounts
and at such times as have been separately agreed in writing upon among Borrower
and Agent.
2.4 Repayments and Prepayments; General
Provisions Regarding Payments.
A. Mandatory Reduction of Commitments. The Total Commitment (and the
Commitment of each Lender) shall terminate on the earlier of (x) the Initial
Borrowing Date, after giving effect to the incurrence of the Loans on such date
and (y) June 1, 1997.
B. Scheduled Repayments of Loans. Borrower shall make the following
scheduled payments on the Loans on each three month anniversary of the Initial
Borrowing Date commencing with the nine month anniversary thereof: (i) the first
two scheduled principal payments shall be in the amount of $2,525,000; (ii) the
next succeeding 23 scheduled principal payments shall be in the amount of
$5,650,000 and (iii) the final payment shall be in an amount equal to
$50,000,000; provided that such scheduled installments of principal of the Loans
shall be reduced in connection with any voluntary or mandatory prepayments of
the Loans in accordance with subsection 2.4C; and provided further, that the
Loans and all other amounts owed hereunder with respect to the Loans shall be
paid in full no later than the Final Maturity Date, and the final installment
payable by Borrower in respect of the Loans on such date shall be in an amount
sufficient to repay all amounts owing by Borrower under this Agreement with
respect to the Loans. Any payment pursuant to this subsection 2.4B will be
applied ratably among the Loans relating to all Aircraft based on the
outstanding principal amount of each such Loan as compared to the total
outstanding principal amount of all Loans. If the date on which any scheduled
payment is due falls on a day that is not a Business Day, then such scheduled
repayment shall be made on the next succeeding Business Day; provided that, if
any such scheduled repayment would otherwise become due on a day that is not a
Business Day but is a day of the month after which no further Business Day
occurs in such month, such scheduled repayment shall be made on the next
preceding Business Day.
C. Prepayments.
(i) Voluntary Prepayments. Borrower may, upon not less than three Business
Days' prior written or telephonic notice given to Agent by 12:00 Noon (New York
time) on
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the date required and, if given by telephone, promptly confirmed in writing to
Agent (which original written or telephonic notice Agent will promptly transmit
by telefacsimile or telephone to each Lender), at any time and from time to time
prepay, without premium or penalty, the Loans on any Business Day in whole or in
part in an aggregate minimum amount of $5,000,000 and integral multiples of
$500,000 in excess of that amount; provided, however, that Loans may only be
prepaid on the expiration of the Interest Period applicable thereto. Notice of
prepayment having been given as aforesaid, the principal amount of the Loans
specified in such notice shall become due and payable on the prepayment date
specified therein. Any such voluntary prepayment shall be applied as specified
in subsection 2.4C(iii).
(ii) Mandatory Prepayments.
(a) Prepayments and Reductions from Asset Sales. No later than the
second Business Day following the date of receipt by Borrower of Cash
Proceeds of any Asset Sale, Borrower shall prepay, without premium or
penalty (other than pursuant to subsection 2.6D), Loans in an amount equal
to the Net Cash Proceeds of such Asset Sale. Concurrently with any
prepayment of the Loans pursuant to this subsection 2.4C(ii)(a), Borrower
shall deliver to Agent an Officers' Certificate demonstrating the
derivation of the Net Cash Proceeds of the correlative Asset Sale from the
gross sales price thereof. In the event that Borrower shall, at any time
after receipt of Cash Proceeds of any Asset Sale requiring a prepayment
pursuant to this subsection 2.4C(ii)(a), determine that the prepayments
previously made in respect of such Asset Sale were in an aggregate amount
less than that required by the terms of this subsection 2.4C(ii)(a),
Borrower shall promptly make an additional prepayment of the Loans, as the
case may be, in the manner described above in an amount equal to the amount
of any such deficit, and Borrower shall concurrently therewith deliver to
Agent an Officers' Certificate demonstrating the derivation of the
additional Net Cash Proceeds resulting in such deficit. Any mandatory
prepayments pursuant to this subsection 2.4C(ii)(a) shall be applied as
specified in subsection 2.4C(iii).
(b) Prepayments and Reductions Due to Insurance and Condemnation
Proceeds. Within 180 days of receipt by Borrower of any cash payments under
any of the casualty insurance policies covering damage to or loss of
property maintained pursuant to subsection 5.4 or otherwise resulting from
damage to or loss of all or any portion of the Collateral or any other
tangible asset (net of actual and documented reasonable costs incurred by
Borrower in connection with adjustment and settlement thereof and in
connection with the reinvestment of proceeds permitted hereby, "Insurance
Proceeds") or any proceeds resulting from the taking of assets by the power
of eminent domain, condemnation or otherwise (net of actual and documented
reasonable costs incurred by Borrower in connection with adjustment
31
-25-
and settlement thereof and in connection with the reinvestment of proceeds
permitted hereby, "Condemnation Proceeds" and, collectively with Insurance
Proceeds, "Proceeds") (other than proceeds applied pursuant to subsection
2.4C(ii)(c)) and so long as at the time of receipt of such proceeds there
shall exist no Potential Event of Default or Event of Default, Borrower may
reinvest such Proceeds in property substantially similar to the property so
damaged or lost so long as the Collateral Agent receives a first priority
perfected security interest in such property pursuant to documentation
acceptable to the Collateral Agent, the property is duly leased to Atlas
pursuant to the applicable Lease and the Collateral Agent receives all
documents and opinions in connection therewith which it may reasonably
request, including without limitation, an opinion from counsel that
Borrower as lessor and the Collateral Agent as the assignee under the Lease
are entitled to the benefits of Section 1110 of the Bankruptcy Code with
respect to such property. If 180 days after receipt of any such Proceeds,
Borrower has not reinvested such Proceeds as described above or if at the
time of receipt of such proceeds or at the time of reinvestment there shall
exist a Potential Event of Default or an Event of Default then Borrower
shall immediately prepay, without premium or penalty (other than pursuant
to subsection 2.6D), those Loans relating to the Aircraft in respect of
which such Proceeds were received based on the outstanding principal amount
of each Loan as compared to the total outstanding principal amount of all
Loans relating to such Aircraft. Any amount of the Proceeds remaining (a)
after prepayment of the Loans described in the immediately preceding
sentence and/or (b) after being reinvested in the manner described in the
second preceding sentence shall be applied ratably to the prepayment of
Loans relating to all of the remaining Aircraft based on the outstanding
principal amount of each such Loan as compared to the total outstanding
principal amount of all Loans relating to all of the remaining Aircraft.
Any such mandatory prepayments shall be applied as specified in subsection
2.4C(iii). Until such time as such proceeds are reinvested or applied to
repay Loans, all such proceeds shall be held by the Agent in a cash
collateral account with the Agent as security for the Obligations pursuant
to a cash collateral agreement in form and substance satisfactory to the
Agent and providing that such proceeds may be invested in Cash or Cash
Equivalents at the direction of Borrower with any earnings thereon being
for the account of Borrower.
(c) Prepayments and Reductions Due to an Event of Loss. Following an
Event of Loss with respect to an Aircraft, Borrower shall prepay, without
premium or penalty (other than pursuant to subsection 2.6(D)) the
outstanding principal amount of Loans relating to the Aircraft which is the
subject of the Event of Loss; provided that Borrower shall not be required
to make a prepayment pursuant to this subsection 2.4C(ii)(c) in the event
that Borrower receives Insurance Proceeds or
32
-26-
Condemnation Proceeds in connection with such Event of Loss so long as at
the time of reinvestment there exists no Potential Event of Default or
Event of Default, in which case, such Proceeds may, within 180 days of
receipt of any such Proceeds, be reinvested in aircraft substantially
similar to the Aircraft which was the subject of the Event of Loss so long
as such replacement aircraft is duly leased to Atlas pursuant to the
applicable Lease or Leases and the Collateral Agent receives all documents
and opinions in connection therewith which it may reasonably request,
including without limitation, an opinion from counsel of the Borrower to
the extent that the Borrower as lessor and Collateral Agent as the assignee
under the Lease are entitled to the benefits of Section 1110 of the
Bankruptcy Code with respect to such property. To the extent Insurance
Proceeds or Condemnation Proceeds received upon the occurrence of an Event
of Loss with respect to an Aircraft are not reinvested in accordance with
the preceding sentence, then Borrower shall prepay, without premium or
penalty (other than pursuant to subsection 2.6D), those Loans relating to
the Aircraft in respect of which such Insurance Proceeds or Condemnation
Proceeds were received based on the outstanding principal amount of each
Loan as compared to the total outstanding principal amount of all Loans
relating to such Aircraft. Any amount of the Proceeds remaining (a) after
prepayment of the Loan described in the immediately preceding sentence
and/or (b) after being reinvested in the manner described in the second
preceding sentence, shall be applied ratably to the prepayment of Loans
relating to all of the remaining Aircraft based on the outstanding
principal amount of each such Loan as compared to the total outstanding
principal amount of all Loans relating to all of the remaining Aircraft.
Any such mandatory prepayments shall be applied as specified in subsection
2.4C(iii). Until such time as such Proceeds are reinvested in replacement
aircraft or applied to repay Loans, such proceeds shall be held by the
Agent in a cash collateral account with the Agent as security for the
Obligations pursuant to a cash collateral agreement in form and substance
satisfactory to the Agent and providing that such proceeds may be invested
in Cash or Cash Equivalents at the direction of Borrower with any earnings
thereon being for the account of Borrower.
(d) Prepayments under Leases. On any date on which Borrower receives
any prepayments of rent or other amounts pursuant to the terms of any
Lease, Borrower shall prepay, without premium or penalty (other than
pursuant to subsection 2.6), the outstanding principal amount of Loans
relating to the Aircraft which is the subject of the Lease pursuant to
which such prepayments were made and to the extent that such payments are
in excess of the principal amount of Loans relating to such Aircraft such
excess proceeds shall be applied to make an additional prepayment of Loans.
All such additional prepayments of Loans shall be applied ratably
33
-27-
among the Loans relating to all of the remaining Aircraft based on the
amount of each such Loan as compared to the total outstanding amount of all
Loans.
(iii) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of Loans and Order of
Maturity. Any voluntary prepayments pursuant to subsection 2.4C(i) shall be
applied ratably among the Loans relating to all of the Aircraft based on
the outstanding principal amount of each such Loan as compared to the total
outstanding principal amount of all Loans. All voluntary prepayments of the
Loans pursuant to subsection 2.4C(i) shall be applied pro rata to all
scheduled amortization payments.
(b) Application of Mandatory Prepayments of Loans. Any mandatory
prepayments of the Loans pursuant to subsection 2.4C(ii) shall be applied
ratably among the Loans relating to all of the Aircraft based on the
outstanding principal amount of each such Loan as compared to the total
outstanding principal amount of all Loans; provided that in the event of a
prepayment pursuant to subsection 2.4C(ii)(a) such prepayment shall be
applied first to the Loans relating to such Aircraft which is the subject
of the Asset Sale on a pro rata basis based on the outstanding principal
amount of each Loan as compared to the total outstanding principal amount
of all Loans relating to such Aircraft and second, ratably among the Loans
relating to all other Aircraft on a pro rata basis based on the outstanding
principal amount of the Loan being prepaid as compared to the total
outstanding principal amount of all Loans relating to all other Aircraft.
Any mandatory prepayments of the Loans pursuant to subsection 2.4C(ii)(b)
or (c) shall be applied to the Loans relating to the particular Aircraft,
retained by Borrower and/or applied ratably among the Loans relating to all
other Aircraft in accordance with such sections. All mandatory prepayments
of the Loans pursuant to subsection 2.4C(ii) shall be applied to scheduled
amortization payments in inverse order of maturity.
D. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Borrower of principal,
interest, fees and other Obligations hereunder and under the Notes shall be made
in Dollars in same day funds, without defense, set-off or counterclaim, free of
any restriction or condition, and delivered to 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 Agent after that time on such due date
shall be deemed to have been paid by Borrower on the next succeeding Business
Day. Borrower hereby authorizes Agent to charge its accounts with Agent in order
to cause timely payment to be made to Agent of all principal, interest, fees
34
-28-
and expenses due hereunder (subject to sufficient funds being available in its
accounts for that purpose).
(ii) Application of Payments to Principal and Interest. All payments in
respect of the principal amount of any Loan shall include payment of accrued
interest on the principal amount being repaid or prepaid, and all such payments
shall be applied to the payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest payments
in respect of Loans shall be apportioned among all outstanding Loans to which
such payments relate, in each case proportionately to Lenders' respective Pro
Rata Share. Agent shall promptly distribute to each Lender, at its address set
forth below its name on the signature page hereof or at such other address as
such Lender may request, its Pro Rata Share of all such payments received by
Agent.
(iv) Payments on Business Days. Whenever any payment to be made hereunder
shall be stated to be due on a day that is not a Business Day, such payment
shall be made on the next succeeding Business Day and such extension of time
shall be included in the computation of the payment of interest hereunder.
(v) Notation of Payment. Each Lender agrees that before disposing of any
Note held by it, or any part thereof (other than by granting participations
therein), that Lender will make a notation thereon of all Loans evidenced by
that Note and all principal payments previously made thereon and of the date to
which interest thereon has been paid; provided that the failure to make (or any
error in the making of) a notation of any Loan made under such Note shall not
limit or otherwise affect the obligations of Borrower hereunder or under such
Note with respect to any Loan or any payments of principal or interest on such
Note.
2.5 Use of Proceeds.
A. Application of Proceeds. The proceeds of the Loans shall be applied
solely to (x) consummate the Refinancing and (y) to pay fees and expenses
related to the Refinancing and the other transactions contemplated hereby.
B. Margin Regulations. No portion of the proceeds of any borrowing under
this Agreement shall be used by Borrower in any manner that might cause the
borrowing or the application of such proceeds to violate Regulation G,
Regulation U, Regulation T or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board or to violate the
Exchange Act, in each case as in effect on the date or dates of such borrowing
and such use of proceeds.
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2.6 Special Provisions Governing Loans.
Notwithstanding any other provisions of this Agreement to the contrary, the
following provisions shall govern with respect to Loans as to the matters
covered:
A. Determination of Applicable Interest Rate. As soon as practicable after
10:00 A.M. (New York time) on each Interest Rate Determination Date, Agent shall
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) the interest rate that shall apply to
the Loans for which an interest rate is then being determined for the applicable
Interest Period and shall promptly give notice thereof (in writing or by
telephone confirmed in writing) to Borrower and each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that Agent
shall have determined (which determination shall be final and conclusive and
binding upon all parties hereto), on any Interest Rate Determination Date with
respect to any Loans, that by reason of circumstances affecting the interbank
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, Agent shall on such date give notice (by
telefacsimile or by telephone confirmed in writing) to Borrower and each Lender
of such determination, whereupon (i) no Loans may be incurred until such time as
Agent notifies Borrower and Lenders that the circumstances giving rise to such
notice no longer exist or until Borrower, Agent and the Lenders agree upon a
Substitute Basis in accordance with Section 2.6G and (ii) the rate of interest
applicable to any Affected Loans then outstanding shall be determined in
accordance with Section 2.6G.
C. Illegality or Impracticability of Loans. In the event that on any date
any Lender shall have determined (which determination shall be final and
conclusive and binding upon all parties hereto but shall be made only after
consultation with Borrower and Agent) that the making, maintaining or
continuation of its Loans (i) has become unlawful as a result of compliance by
such Lender in good faith with any law, treaty, governmental rule, regulation,
guideline or order (or would conflict with any such treaty, governmental rule,
regulation, guideline or order not having the force of law even though the
failure to comply therewith would not be unlawful) or (ii) has become
impracticable, or would cause such Lender material hardship, as a result of
contingencies occurring after the date of this Agreement which materially and
adversely affect the interbank Eurodollar market or the position of such Lender
in that market, then, and in any such event, such Lender shall be an "Affected
Lender" and it shall on that day give notice (by telefacsimile or by telephone
confirmed in writing) to Borrower and 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 shall be suspended until such
notice shall be withdrawn by the Affected Lender, (b) the Affected Lender's
obligation to maintain its outstanding Loans (the
36
-30-
"Affected Loans") shall be suspended until such notice shall be withdrawn by the
Affected Lender, and (c) the parties shall follow the procedures set forth in
Section 2.6G with respect to the Affected Loans so long as, if following such
procedures the maintaining of such Loans is not unlawful. Notwithstanding the
foregoing, to the extent a determination by an Affected Lender as described
above relates to a borrowing then being requested by Borrower subject to the
provisions of subsection 2.6D, Borrower shall have the option, subject to the
provisions of subsection 2.6D, to rescind such borrowing as to all Lenders by
giving notice (by telefacsimile or by telephone confirmed in writing) to Agent
of such rescission on the date on which the Affected Lender gives notice of its
determination as described above (which notice of rescission 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 in
accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Borrower shall compensate each Lender, upon written request by that Lender
(which request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including, without limitation, any
interest paid by that Lender to lenders of funds borrowed by it to make or carry
its Loans and any loss, expense or liability sustained by that Lender in
connection with the liquidation or reemployment of such funds) which that Lender
may sustain: (i) if for any reason (other than a default by that Lender) a
borrowing of any Loan does not occur on a date specified therefor in a Notice of
Borrowing or a telephonic request for borrowing, (ii) if any prepayment or other
principal payment occurs on a date prior to the last day of an Interest Period
applicable to that Loan, (iii) if any prepayment of any of its Loans is not made
on any date specified in a notice of prepayment given by Borrower, or (iv) as a
consequence of any other default by Borrower in the repayment of its Loans when
required by the terms of this Agreement.
E. Booking of Loans. Any Lender may make, carry or transfer Loans at, to,
or for the account of any of its branch offices or the office of an Affiliate of
that Lender.
F. Assumptions Concerning Funding of Loans. Calculation of all amounts
payable to a Lender under this subsection 2.6 and under subsection 2.7A shall be
made as though that Lender had actually funded each of its relevant Loans
through the purchase of a Eurodollar deposit bearing interest at the rate
obtained pursuant to clause (i) of the definition of Adjusted Eurodollar Rate in
an amount equal to the amount of such Loan and having a maturity comparable to
the relevant Interest Period and through the transfer of such Eurodollar deposit
from an offshore office of that Lender to a domestic office of that Lender in
the United States of America; provided, however, that each Lender may fund each
of its Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the
37
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purposes of calculating amounts payable under this subsection 2.6 and under
subsection 2.7A.
G. Substitute Basis. During the 30 days following the date of any notice
given to Borrower pursuant to subsections 2.6B and 2.6C, Agent, the Lenders and
Borrower shall negotiate in good faith in order to arrive at a mutually
acceptable alternative basis for determining the interest rate from time to
time applicable to the affected Loans (the "Substitute Basis"). If within the
30 days following the date of any such notice to Borrower, Agent, the Lenders
and Borrower shall agree upon a Substitute Basis, such Substitute Basis shall
be retroactive to and effective from the first day of the then current Interest
Period until and including the last day of such Interest Period. If after 30
days from the date of such notice, the Lenders and Borrower shall have failed
to agree upon a Substitute Basis, then each Lender shall certify in writing to
Borrower through Agent (such certification to be conclusive and binding on all
of the parties hereto absent manifest error) the interest rate at which such
Lender is prepared to make or maintain its affected Loan for such Interest
Period, it being understood that such Lender's interest rate shall be at a rate
per annum equal to the sum of the Applicable Margin plus a rate which
adequately and fairly reflects the cost to such Lender of obtaining the funds
necessary to maintain its affected Loan for such Interest Period, such interest
rate to be retroactive to and effective from the first day of such Interest
Period. If no Substitute Basis is established, upon receipt of notice of the
interest rates at which the Lenders are prepared to make or maintain their
respective affected Loans, Borrower shall have the right (i) exercis able upon
ten Business Days' prior notice to any Lender through Agent (A) to continue to
borrow Loans at the interest rates so advised by the respective Lenders (as
such rates may be modified, from time to time, at the outset of each subsequent
Interest Period) or (B) to prepay in full the Affected Loans of any Lender,
together with accrued interest thereon at the interest rate certified in
writing by such Lender as provided above, whereupon such Affected Loans shall
become due and payable on the date specified by Borrower in such notice. In
determining the actual interest rate per annum to be charged on any Loan, the
Substitute Basis or the interest rate advised by the respective Lenders to
apply to a Loan in accordance with the provisions of this subsection 2.6G shall
be increased to the rate per annum obtained by dividing the Substitute Basis or
such advised interest rate by a percentage equal to 100% minus the then stated
maximum rate of all required reserve requirements under applicable law
(including any marginal, emergency, supplemental, special or other reserves)
and applicable on the date of determination of such interest rate to any member
bank of the Federal Reserve System in respect of "Eurocurrency liabilities" as
defined in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time (or any successor category of
liabilities under regulation D).
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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 change in the rate of Tax on the overall net
income of such Lender) with respect to this Agreement or any of its
obligations hereunder or any payments to such Lender (or its applicable
lending office) of principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any reserve (including,
without limitation, any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in or
for the account of, or advances or loans by, or other credit extended by,
or any other acquisition of funds by, any office of such Lender (other
than any such reserve or other requirements with respect to Loans that
are reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Borrower shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Borrower (with a copy to Agent) a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Lender under this sub-
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section 2.7A, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Borrower under this
Agreement and the other Loan Documents shall be paid free and clear of and
(except to the extent required by law) without any deduction or withholding on
account of any Tax (other than a Tax on the overall net income of any Lender)
imposed, levied, collected, withheld or assessed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
such payments.
(ii) Grossing-up of Payments. If Borrower or any other Person is required
by law to make any deduction or withholding on account of any such Tax from any
sum paid or payable by Borrower to Agent or any Lender under any of the Loan
Documents:
(a) Borrower shall notify Agent of any such requirement or any change
in any such requirement as soon as Borrower becomes aware of it;
(b) Borrower shall pay any such Tax before the date on which penalties
attach thereto, such payment to be made (if the liability to pay is imposed
on Borrower) for its own account or (if that liability is imposed on Agent
or such Lender, as the case may be) on behalf of and in the name of Agent
or such Lender;
(c) the sum payable by Borrower in respect of which the relevant
deduction, withholding or payment is required shall be increased to the
extent necessary to ensure that, after the making of that deduction,
withholding or payment, Agent or such Lender, as the case may be, receives
on the due date a net sum equal to what it would have received had no such
deduction, withholding or payment been required or made;
(d) within 30 days after paying any sum from which it is required by
law to make any deduction or withholding, and within 30 days after the due
date of payment of any Tax which it is required by clause (b) above to pay,
Borrower shall deliver to Agent evidence satisfactory to the other affected
parties of such deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority; and
(e) if any amounts are payable in respect of Taxes pursuant to
subsection 2.7B(ii)(c), Borrower agrees to reimburse each Lender, upon the
written request of such Lender, for taxes imposed on or measured by the
overall net income of such
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Lender and for any withholding of taxes as such Lender shall determine are
payable by, or withheld from, such Lender, in respect of such amounts so
paid to or on behalf of such Lender pursuant to subsection 2.7B(ii)(c),
and in respect of any amounts paid to or on behalf of such Lender pursuant
to this subsection 2.7B(ii)(e).
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of any jurisdiction
other than the United States or any state or other political subdivision
thereof (for purposes of this subsection 2.7B(iii), a "Non-US Lender")
shall deliver to Agent for transmission to Borrower, on or prior to the
Effective Date (in the case of each Lender listed on the signature pages
hereof) or on the date of the Assignment Agreement pursuant to which it
becomes a Lender (in the case of each other Lender), and at such other
times as may be necessary in the determination of Borrower or Agent (each
in the reasonable exercise of its discretion), (1) two original copies of
Internal Revenue Service Form 1001 or 4224 (or any successor forms),
properly completed and duly executed by such Lender, together with any
other certificate or statement of exemption required under the Internal
Revenue Code or the regulations issued thereunder to establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Loan Documents or
(2) if such Lender is not a "bank" or other Person described in Section
881(c)(3) of the Internal Revenue Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 pursuant to clause (1) above, a
Certificate re Non-Bank Status together with two original copies of
Internal Revenue Service Form W-8 (or any successor form), properly
completed and duly executed by such Lender, together with any other
certificate or statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States federal income
tax with respect to any payments to such Lender of interest payable under
any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or other
evidence with respect to United States federal income tax withholding
matters pursuant to subsection 2.7B(iii)(a) hereby agrees, from time to
time after the initial delivery by such Lender of such forms, certificates
or other evidence, whenever a lapse in time or change in circumstances
renders such forms, certificates or other evidence obsolete or inaccurate
in any material respect, such Lender shall (1) deliver to Agent for
transmission to Borrower two new original copies of Internal Revenue
Service Form 1001 or 4224, or a Certificate re Non-Bank Status and two
original copies of Internal Revenue Service Form W-8, as the case may be,
properly completed and
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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 Agent and Borrower of its inability to
deliver any such forms, certificates or other evidence in which case such
Lender shall not be required to deliver any such forms, certificates or
other evidence pursuant to this subsection 2.7B(iii)(b).
(c) Borrower shall not be required to pay any additional amount to any
Non-US Lender under clause (c) or (e) of subsection 2.7B(ii) if such Lender
shall have failed to satisfy the requirements of subsection 2.7B(iii)(a);
provided that if such Lender shall have satisfied such requirements on the
Initial Borrowing Date (in the case of each Lender listed on the signature
pages hereof) or on the date of the Assignment Agreement pursuant to which
it became a Lender (in the case of each other Lender), nothing in this
subsection 2.7B(iii)(c) shall relieve Borrower of its obligation to pay any
additional amounts pursuant to clause (c) or (e) of subsection 2.7B(ii) in
the event that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or other evidence
at a subsequent date establishing the fact that such Lender is not subject
to withholding as described in subsection 2.7B(iii)(a).
(iv) If Borrower pays any additional amount under this subsection 2.7B to a
Lender and such Lender determines in its sole discretion that it has actually
received or realized in connection therewith any refund or any reduction of,
or credit against, its Tax liabilities in or with respect to the taxable year
in which the additional amount is paid, such Lender shall pay to Borrower an
amount that Lender shall, in its sole discretion, determine is equal to the net
benefit, after tax, which was obtained by the Lender in such year as a
consequence of such refund, reduction or credit.
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
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corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within ten Business Days after receipt by Borrower from
such Lender of the statement referred to in the next sentence, Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender or such controlling corporation on an after-tax basis for such
reduction. Such Lender shall deliver to Borrower (with a copy to Agent) a
written statement, setting forth in reasonable detail the basis of the
calculation of such additional amounts, which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
D. Substitute Lenders. In the event Borrower is required under the
provisions of subsection 2.6C or this subsection 2.7 to make payments in a
material amount to any Lender or in the event any Lender fails to lend to
Borrower in accordance with this Agreement, Borrower may, so long as no Event of
Default or Potential Event of Default shall have occurred and be continuing,
elect to terminate such Lender as a party to this Agreement; provided that,
concurrently with such termination, (i) Borrower shall pay that Lender all
principal, interest and fees and other amounts (including, without limitation,
amounts, if any, owed under subsection 2.6C or this subsection 2.7) owed to such
Lender through such date of termination, (ii) another financial institution
satisfactory to Borrower and Agent (or if Agent is also the Lender to be
terminated, the successor 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 Agent (or if Agent is also the Lender to be terminated, the
successor Agent) to evidence the substitution of such Lender shall have been
received and approved by Agent as of such date.
2.8 Obligation of Lenders to Mitigate.
Each Lender agrees that, as promptly as practicable after the officer of
such Lender responsible for administering the Loans of such Lender becomes aware
of the occurrence of an event or the existence of a condition that would cause
such Lender to become an Affected Lender or that would entitle such Lender to
receive payments under subsection 2.7, it will, to the extent not inconsistent
with the internal policies of such Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitment of such Lender or the affected Loan of such Lender through another
lending office of such Lender, or (ii) take such other measures as such Lender
may deem reasonable, if as a result thereof the circumstances which would cause
such Lender to be an Affected Lender would cease to exist or the additional
amounts which would otherwise be required to be paid to such Lender pursuant to
subsection 2.7 would be materially reduced and if, as determined by such Lender
in its sole discretion, the making, issuing,
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funding or maintaining of such Commitments or Loans through such other lending
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or the
interests of such Lender; provided that such Lender will not be obligated to
utilize such other lending office pursuant to this subsection 2.8 unless
Borrower agrees to pay all incremental expenses incurred by such Lender as a
result of utilizing such other lending office as described in clause (i) above.
A certificate as to the amount of any such expenses payable by Borrower
pursuant to this subsection 2.8 (setting forth in reasonable detail the basis
for requesting such amount) submitted by such Lender to Borrower (with a copy
to Agent) shall be conclusive absent manifest error.
SECTION 3.
CONDITIONS TO LOANS
3.1 Conditions to Loans.
The obligations of Lenders to make the Loans on the Initial Borrowing Date
are subject to prior or concurrent satisfaction of the following conditions:
A. Borrower and Atlas Documents. On or before the Initial Borrowing Date,
Borrower shall deliver or cause to be delivered to Lenders (or to Agent for
Lenders with sufficient originally executed copies, where appropriate, for each
Lender and its counsel) the following, each, unless otherwise noted, dated the
Effective Date:
(i) certified copies of certificate or articles of incorporation of
Borrower and Atlas, together with a good standing certificate from the
Secretary of State of the State of Delaware and each other state in which
such corporation is qualified as a foreign corporation to do business and,
to the extent generally available, a certificate or other evidence of good
standing as to payment of any applicable franchise or similar taxes from
the appropriate taxing authority of each of such states, each dated a
recent date prior to the Effective Date;
(ii) copies of Bylaws of Borrower and Atlas, certified as of the
Effective Date by its corporate secretary or an assistant secretary;
(iii) resolutions of Board of Directors of Borrower, Atlas and Atlas
One approving and authorizing the execution, delivery and performance of
this Agreement, the other Loan Documents and the Transaction Documents (to
the extent such Person is a party thereto), certified as of the Effective
Date by such Person's corpo-
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rate secretary or an assistant secretary as being in full force and
effect without modification or amendment;
(iv) signature and incumbency certificates of officers of Borrower and
Atlas executing this Agreement and the other Loan Documents;
(v) executed originals of this Agreement, the Notes (duly executed in
accordance with this Agreement) and the other Loan Documents, including
Aircraft Chattel Mortgages with respect to all of the Aircraft; and
(vi) such other documents as Agent may reasonably request.
B. Aircraft Documents. With respect to each Aircraft, the following
documents shall have been duly authorized, executed and delivered by the
respective parties thereto, shall each be reasonably satisfactory in form and
substance to the Lenders and Agent and shall be in full force and effect, and
copies shall have been delivered to Agent all documents, including without
limitation, any bills of sale, certificates of transfer and bills of sale on AC
Form 8050-2 evidencing the conveyance of title of the Aircraft from Atlas One to
Atlas to Borrower and such other evidence as Agent shall request confirming that
Atlas Leasing has good and valid title to each Aircraft and that all
registrations and recordings necessary to evidence such title have been made,
including, without limitation, all recordings with the FAA to register the
Aircraft in the name of Atlas Leasing.
C. Notice of Borrowing. Prior to the making of the Loans, Agent shall have
received such Notices of Borrowing as are required by subsection 2.1B.
D. Necessary Consents. Borrower shall have obtained all consents necessary
or advisable in connection with the transactions contemplated by the Loan
Documents and the continued operation of the business of Borrower, and each of
the foregoing shall be in full force and effect and in form and substance
satisfactory to Agent.
E. Aircraft Chattel Mortgage. Agent shall have received a copy of a first
priority Aircraft Chattel Mortgage relating to each Aircraft, duly executed by
Borrower, in substantially the form of Exhibit IX hereto which Aircraft Chattel
Mortgage provides a first priority security interest in the Collateral for the
benefit of the Lenders, securing all the Obligations, together with:
(i) executed copies of proper financing statements to be filed under
the U.C.C. in all jurisdictions where Agent may deem necessary or desirable
in order to perfect the security interests created by the Aircraft Chattel
Mortgages;
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(ii) evidence of the completion of all recordings and filings with
respect to the Collateral that Agent may deem necessary or desirable in
order to perfect the security interest created by the Aircraft Chattel
Mortgages including, without limitation, all filings with the FAA; and
(iii) evidence that all other actions necessary or, in the reasonable
opinion of Agent, desirable to establish, preserve and perfect the first
priority security interests created by the Aircraft Chattel Mortgages in
all Aircraft have been taken (including all FAA filings).
F. Solvency Opinion. On or prior to the Initial Borrowing Date, Borrower
shall have delivered or shall have caused to be delivered to Agent a solvency
opinion in form and substance satisfactory to Agent and from a firm satisfactory
to Agent setting forth its conclusions, that after giving effect to the
Transaction each of Atlas One, the Borrower and Atlas and its Subsidiaries is
Solvent.
G. Financial Condition Certificate. Each of Borrower and Atlas shall have
delivered to Agent a Financial Condition Certificate dated the Initial Borrowing
Date, substantially in the form annexed hereto as Exhibit VII and Exhibit VIIA
respectively, with appropriate attachments demonstrating that, after giving
effect to the consummation of the financing transactions contemplated hereby,
each of Borrower and Atlas and its Subsidiaries is Solvent.
H. Opinions of Borrower's Counsel. Lenders and their respective counsel
shall have received (i) originally executed copies of one or more favorable
written opinions of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for Borrower, in form and
substance reasonably satisfactory to Agent and its counsel, dated as of the
Initial Borrowing Date and setting forth substantially the matters in the
opinions designated in Exhibit IVA annexed hereto and as to such other matters
as Agent acting on behalf of Lenders may reasonably request, (ii) an opinion of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ regarding Section 1110 of the Bankruptcy Code, dated the
Initial Borrowing Date and setting forth substantially the matters in the
opinions designated in Exhibit IVB annexed hereto and (iii) an opinion of ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ regarding certain bankruptcy matters other than those covered
in the opinion referred to in clause (ii) above, dated the Initial Borrowing
Date and setting forth substantially the matters in the opinions designated in
Exhibit IVC annexed hereto.
I. Opinions of ▇▇▇▇▇ ▇▇▇▇▇▇. Lenders and their respective counsel shall
have received executed copies of one or more favorable written opinions of ▇▇▇▇▇
▇▇▇▇▇▇, General Counsel of Atlas, Atlas One and Borrower, in form and substance
reasonably satisfactory to Agent and its counsel, dated the Initial Borrowing
Date, and setting forth substantially the matters in the opinions designated in
Exhibit IVD annexed hereto.
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J. Atlas Credit Agreement. The Second Amended and Restated Credit Agreement
shall have been amended in a manner satisfactory to Agent and Lenders so as to
allow, according to its terms, the Transaction and the Refinancing to be
consummated.
K. Opinions of FAA Counsel. Lenders and their respective counsel shall have
received originally executed copies of one or more favorable written opinions of
FAA counsel in form and substance satisfactory to Agent and its counsel, dated
the Initial Borrowing Date, and setting forth substantially the matters in the
opinions designated in Exhibit IVE annexed hereto.
L. Fees. Borrower shall have paid to Agent, for distribution (as
appropriate) to Agent and Lenders, the fees payable on the Initial Borrowing
Date referred to in subsection 2.3.
M. Financial Statements. On or before the Initial Borrowing Date, Agent
shall have received from Borrower (i) an audited consolidated and consolidating
balance sheet of Atlas and its Subsidiaries as at December 31, 1996, and the
related consolidated and consolidating statements of income, stockholders'
equity and cash flows of Atlas and its Subsidiaries for such fiscal year,
accompanied by an opinion of a nationally recognized firm of independent public
accountants and (ii) the unaudited consolidated and consolidating balance sheet
of Atlas and its Subsidiaries as at March 31, 1997 and the related unaudited
consolidated and consolidating statements of income, stockholders' equity and
cash flows of Atlas and its Subsidiaries for the three-month period then ended
and (iii) the Projections, which financial statements and Projections shall be
in form and substance reasonably satisfactory to Agent.
N. Evidence of Insurance. Borrower shall have delivered to Agent
certificates of insurance naming Agent on behalf of Agent and Lenders as loss
payee under the casualty insurance policies and Agent and Lenders as additional
insured under the liability policies of Borrower and a broker's report from
Borrower's insurance broker evidencing compliance with the requirements of each
Aircraft Chattel Mortgage, all as required pursuant to subsection 5.4 hereof or
pursuant to the Collateral Documents. All such certificates of insurance shall
contain such endorsements as are reasonably required by Agent.
O. No Material Adverse Effect. Since March 31, 1997, no Material Adverse
Effect (in the reasonable opinion of Agent) shall have occurred.
P. Representations and Warranties; Performance of Agreements. On the
Initial Borrowing Date, (i) there shall exist no Potential Event of Default or
Event of Default and (ii) all representations and warranties in Section 4 hereof
are true, correct and complete in all material respects on and as of the Initial
Borrowing Date to the same extent
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as though made on and as of that date and that Borrower shall have performed in
all material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before the
Initial Borrowing Date except as otherwise disclosed to and agreed to in
writing by Agent and Requisite Lenders and Borrower shall have delivered to
Agent an Officer's Certificate, in form and substance, satisfactory to Agent,
to that effect.
Q. Compliance Certificate. Borrower shall have delivered to Agent a
Compliance Certificate dated the Initial Borrowing Date, substantially in the
form annexed hereto as Exhibit III.
R. Transaction; Refinancing. On or prior to the Initial Borrowing Date, the
following shall have occurred: (i) Atlas One shall terminate the Atlas One
Leases; (ii) Atlas One shall dividend each of the Aircraft to Atlas subject to
the Existing Indebtedness (the "Dividend"); (iii) Atlas shall contribute to
Borrower each of the Aircraft subject to the Existing Indebtedness and
approximately $10,400,000 in cash (the "Contribution"); (iv) Borrower shall
lease each of the Aircraft to Atlas via the six Leases; (v) all Existing
Indebtedness shall have been indefeasibly repaid in full and (vi) all security
interests and Liens encumbering the Aircraft or any part thereof or any other
assets of Borrower shall be terminated and released (the actions taken in
clauses (v) and (vi) collectively, the "Refinancing", and the actions taken in
clauses (i) through (vi) together with the incurrence of Loans hereunder
collectively, the "Transaction"). The Lenders shall have received true and
correct copies of all of the Transaction Documents, including, without
limitation, all documentation entered into in connection with the Dividend and
the Contribution and the Leases, which Leases shall be substantially in the form
of Exhibit VIII annexed hereto and all terms and conditions thereof shall be
satisfactory to Agent (including, with respect to the Leases, their terms,
rental schedules, covenants, events of default and remedies). All of the
Transaction Documents shall have been duly executed and delivered by all parties
thereto, and shall be in full force and effect. Each of the conditions precedent
to the consummation of the Transaction set forth in the Transaction Documents
shall have been satisfied or waived, all to the satisfaction of Agent, and on or
prior to the Initial Borrowing Date, the Transaction shall have been consummated
in accordance with the Transaction Documents and all applicable laws, rules and
regulations.
S. Completion of Proceedings. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Agent, acting on
behalf of Lenders, and its counsel shall be satisfactory in form and substance
to Agent and such counsel, and Agent and such counsel shall have received all
such counterpart originals or certified copies of such documents as Agent may
reasonably request.
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T. Appraisals. Borrower shall have delivered to Agent appraisals from two
Approved Appraisers, in form and substance satisfactory to the Lenders, which
appraisals shall demonstrate to the Lenders' satisfaction that the ratio of the
Total Commitment to the Appraised Value of the Aircraft does not exceed 75% and
that the terms of the Lease, including, without limitation, rental rates,
economic life and residual value, are at fair market value.
U. FAA Certification and Title. Agent shall have received evidence
satisfactory to it to the effect that Atlas is an air carrier certificated under
Sections 401 and 604(b) of the Federal Aviation Act and with respect to each
Aircraft, Agent shall received evidence that (i) each of the Aircraft has been
registered with and duly certified by the FAA as to type and airworthiness in
the name of Borrower and Agent shall have received a copy of such certification
and evidence satisfactory to the Lenders that each Engine is being maintained in
accordance with an FAA-approved or substantially similar program and (ii)
Borrower shall have good and marketable title to and a valid ownership interest
in the Collateral, including the Aircraft, free and clear of all Liens other
than Liens permitted by subsection 6.2.
V. Bankruptcy-Remote Subsidiary. Agent and Lenders shall be satisfied that
Borrower is a bankruptcy-remote Subsidiary of Atlas and that the certificate of
incorporation contains provisions under which the Borrower may not commence a
voluntary bankruptcy proceeding without the affirmative vote of all directors.
SECTION 4.
BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, Borrower represents and warrants to each Lender, after giving effect to
the Transaction consummated on the Initial Borrowing Date, that the following
statements are true, correct and complete:
4.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Borrower has all requisite corporate power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Docu-
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ments and to carry out the transactions contemplated thereby and by the
Transaction Documents.
B. Qualification and Good Standing. Borrower is qualified to do business
and in good standing in every jurisdiction where its assets are located and
wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and will not have a Material Adverse Effect.
C. Subsidiaries. Borrower has no Subsidiaries.
D. Collateral Documents. The security interests created in favor of Agent
under the Collateral Documents will at all times from and after the Initial
Borrowing Date constitute, as security for the obligations purported to be
secured thereby, a legal, valid and enforceable first priority perfected
security interest in and Lien on all of the Collateral referred to therein in
favor of Agent for the benefit of the Lenders, perfected and prior to the rights
of all third persons in accordance with the requirements of all applicable
Collateral Documents. Borrower has good and marketable title to its Collateral,
and all such Collateral is free and clear of all Liens except for Liens
permitted by subsection 6.2. No consents, filings or recordings are required in
order to perfect (or maintain the perfection or priority of) the security
interests purported to be created by any of the Collateral Documents, other than
such as have been obtained and which remain in full force and effect and Uniform
Commercial Code financing statements to be filed, or delivered to Agent for
filing, on the Initial Borrowing Date and periodic Uniform Commercial Code
continuation filings or as is specifically otherwise permitted by the terms of
any applicable Collateral Document.
4.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents and the Transaction Documents have been duly authorized by
all necessary corporate action on the part of Borrower.
B. No Conflict. The execution, delivery and performance by Borrower of the
Loan Documents and the Transaction Documents and the consummation of the
Transaction and the transactions contemplated by the Loan Documents do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Borrower, the Certificate or Articles of Incorporation
or Bylaws of Borrower or any order, judgment or decree of any court or other
agency of government binding on Borrower, (ii) conflict with in any material
respect, result in a material breach of or constitute (with due notice or lapse
of time or both) a material default under any material Contractual Obligation of
Borrower, including the Pass Through Trust Documents and the Second Amended and
Restated
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Credit Agreement, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Borrower (other than any
Liens created under any of the Loan Documents in favor of Agent on behalf of
Lenders), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of Borrower, except for
such approvals or consents which will be obtained on or before the Initial
Borrowing Date, disclosed in writing to Lenders and the terms and conditions of
which are acceptable to the Agent and the Lenders.
C. Governmental Consents. The execution, delivery and performance by
Borrower of the Loan Documents and the Transaction Documents and the
consummation of the Transaction and the transactions contemplated by the
Transaction Documents do not and will not require any registration with, consent
or approval of, or notice to, or other action to, with or by, any federal, state
or other governmental authority or regulatory body which has not been obtained
or made on or prior to the date required to be obtained or made.
D. Binding Obligation. Each of the Loan Documents and the Transaction
Documents has been duly executed and delivered by Borrower and is the legally
valid and binding obligation of Borrower, enforceable against Borrower in
accordance with its respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
4.3 Financial Condition.
A. Borrower has heretofore delivered to Lenders the following financial
statements and information: (i) the audited consolidated and consolidating
balance sheets of Atlas and its Subsidiaries as at December 31, 1996, and the
related consolidated and consolidating statements of income, stockholders'
equity and cash flows of Atlas and its Subsidiaries for such fiscal year and
(ii) the unaudited consolidated and consolidating balance sheets of Atlas and
its Subsidiaries as at March 31, 1997 and the related unaudited consolidated and
consolidating statements of income, stockholders' equity and cash flows of Atlas
and its Subsidiaries for the three-month period then ended and (iii) the
Projections. All such statements were prepared in conformity with GAAP and
fairly present the financial position (on a consolidated, and, where applicable,
consolidating basis) of the entities described in such financial statements as
at the respective dates thereof and the results of operations and cash flows (on
a consolidated and, where applicable, consolidating basis) of the entities
described therein for each of the periods then ended, subject, in the case of
any such unaudited financial statements, to changes resulting from audit and
normal year-end adjustments. Atlas does not have any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto and which in any such case is ma-
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terial in relation to the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Atlas or any of its Subsidiaries.
B. Except as fully disclosed in the financial statements delivered pursuant
to Section 4.3A, there were as of the Effective Date no liabilities or
obligations with respect to Atlas and its Subsidiaries or to Borrower of any
nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) which, either individually or in aggregate, could reasonably
be expected to be material to Atlas and its Subsidiaries taken as a whole but
excluding Borrower, or to Borrower on a stand-alone basis. As of the Effective
Date, neither Atlas nor Borrower knows of any basis for the assertion against it
or, in the case of Atlas, against it or its Subsidiaries, of any liability or
obligation of any nature whatsoever that is not fully disclosed in the financial
statements delivered pursuant to Section 4.3A which, either individually or in
the aggregate, could reasonably be expected to be material to Atlas and its
Subsidiaries taken as a whole but excluding Borrower, or to Borrower on a
stand-alone basis.
4.4 No Material Adverse Change; No Restricted Junior Payments.
(i) Since March 31, 1997, no event or change has occurred that has caused
or evidences, either in any case or in the aggregate, a Material Adverse Effect.
(ii) Since March 31, 1997, Borrower has not directly or indirectly
declared, ordered, paid or made, or set apart any sum or property for, any
Restricted Junior Payment or agreed to do so, except as permitted by subsection
6.5.
4.5 Title to Properties, Liens.
A. Borrower has good, sufficient and legal title to all of its properties
and assets, including without limitation, all Aircraft. Except as permitted by
this Agreement, all such properties and assets are free and clear of Liens.
B. Each Aircraft has a current and valid airworthiness certificate issued
by the FAA pursuant to the Federal Aviation Act in effect and is in such
condition as may be necessary to enable the airworthiness certificate to be
maintained in good standing. Each Engine has a rated takeoff horsepower greater
than 750 horsepower or the equivalent of such horsepower. Each Aircraft is
registered with the FAA in the name of Borrower and Atlas has authority to
operate such Aircraft.
4.6 Litigation, Adverse Facts.
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Borrower) at law or in
equity or before or by any
▇▇
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▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, pending or, to the
knowledge of Borrower, threatened against or affecting Borrower or any property
of Borrower or with respect to the Transaction that could reasonably be expected
to result in a Material Adverse Effect to Borrower's knowledge. Borrower is not
(i) in violation of any applicable laws that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect or (ii)
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
4.7 Payment of Taxes.
Except to the extent permitted by subsection 5.3, all tax returns and
reports of Borrower required to be filed by it have been timely filed, and all
taxes, assessments, fees and other governmental charges upon Borrower and upon
its respective properties, assets, income, businesses and franchises which are
due and payable have been paid when due and payable. Borrower does not know of
any proposed tax assessment against it which is not being actively contested by
it in good faith and by appropriate proceedings; provided that such reserves or
other appropriate provisions, if any, for liabilities for taxes as shall be
required in conformity with GAAP shall have been made or provided in the
financial statements of Borrower. There are no agreements with respect to taxes
between Borrower and any tax agency or authority.
4.8 Performance of Agreements.
Borrower is not in default in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any of its
Contractual Obligations, and no condition exists that, with the giving of notice
or the lapse of time or both, would constitute such a default, except where the
consequences, direct or indirect, of such default or defaults, if any, would not
have a Material Adverse Effect.
4.9 Governmental Regulation.
Borrower is not subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable.
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4.10 Securities Activities.
A. Borrower is not engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock.
B. No part of the proceeds of any Loan will be used (or has been used) to
purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any margin Stock. Neither the making of any Loan nor the
use of the proceeds thereof will violate or be inconsistent with the provisions
of Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System.
4.11 Compliance with ERISA.
Borrower has no qualified retirement plans under Section 401(k) of the
Internal Revenue Code nor medical benefit plans. Borrower has never sponsored,
maintained, contributed to (or had an obligation to contribute to) any Employee
Benefit Plans.
4.12 Certain Fees.
No broker's or finder's fee or commission will be payable with respect to
this Agreement or any of the transactions contemplated hereby, and Borrower
hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
4.13 Environmental Protection.
A. All facilities and operations of Borrower are, and have been to the best
of Borrower's knowledge, in compliance in all material respects with all
applicable Environmental Laws.
B. There are no, and have been no, conditions, occurrences, or Hazardous
Materials Activity, (a) arising at any facilities owned or operated by Borrower
or (b) arising in connection with the operations of Borrower (including the
transportation of Hazardous Materials), which conditions, occurrences or
Hazardous Materials Activity could reasonably be expected to form the basis of
an Environmental Claim against Borrower and which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
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C. To the best of Borrower's knowledge, there are no pending or threatened
Environmental Claims against Borrower, and Borrower has received no written
notices, inquiries, or requests for information with respect to any
Environmental Claims.
4.14 Employee Matters.
There is no strike or work stoppage in existence or to Borrower's knowledge
threatened involving Borrower that could reasonably be expected to have a
Material Adverse Effect.
4.15 Solvency.
Borrower is and, upon the incurrence of any Obligations by Borrower on any
date on which this representation is made, will be, Solvent.
4.16 Disclosure.
No representation or warranty of Borrower contained in any Loan Document,
any Transaction Document or in any other document, certificate or written
statement furnished to Lenders by or on behalf of Borrower for use in connection
with the transactions contemplated by this Agreement contains any untrue
statement of a material fact or omits to state a material fact (known to
Borrower, in the case of any document not furnished by them) necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances in which the same were made. The Projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Borrower to be reasonable at the time
made, it being recognized by Lenders that the Projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by the Projections may differ from the projected results. There
are no facts known (or which should upon the reasonable exercise of diligence be
known) to Borrower (other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such other
documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
4.17 Section 1110.
(i) Borrower, as Lessor under the Leases, is entitled to the protection of
Section 1110 of the Bankruptcy Code with respect to each Aircraft in the event
of a case under Chapter 11 of the Bankruptcy Code in which Lessee is a debtor.
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(ii) Agent will be entitled to the protection of Section 1110 of the
Bankruptcy Code with respect to each Aircraft in the event of a case under
Chapter 11 of the Bankruptcy Code in which Lessee is a debtor upon the exercise
of Agent's remedies under each Aircraft Chattel Mortgage.
(iii) All assumptions made by the appraisers with respect to the Aircraft
in the appraisals delivered to Agent which would affect Approved Appraiser's
determinations as set forth in such appraisal shall be true and correct as of
the Initial Borrowing Date with respect to each Aircraft.
4.18 Special Purpose Corporation.
Borrower was formed solely for the purpose of effecting the Transaction,
and except in connection therewith (and as contemplated by this Agreement) has
no assets or liabilities.
4.19 Transaction.
The Transaction has been consummated in accordance with applicable law and
the Transaction Documents.
4.20 Representations and Warranties in Documents.
All representations and warranties of Borrower set forth in the Loan
Documents and the Transaction Documents were true and correct in all material
respects as of the time such representations and warranties were made and shall
be true and correct in all material respects as of the Initial Borrowing Date as
if such representations and warranties were made on and as of such date, unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date.
4.21 Leases.
The Leases are in full force and effect and are leases for U.S. Federal
income tax purposes of Lessor and Lessee thereunder.
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SECTION 5.
BORROWER'S AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations unless Requisite Lenders shall otherwise give prior
written consent, Borrower shall perform all covenants in this Section 5.
5.1 Financial Statements and Other Reports.
Borrower will maintain a system of accounting established and administered
in accordance with sound business practices to permit preparation of financial
statements in conformity with GAAP. Borrower will deliver to Agent and Lenders:
(i) Quarterly Financials: as soon as available, and in any event
within 45 days after the end of each fiscal quarter of each Fiscal Year,
the balance sheet of Borrower as at the end of such fiscal quarter and the
related statements of income, stockholders' equity and cash flows of
Borrower for such fiscal quarter and for the period from the beginning of
the then current Fiscal Year to the end of such fiscal quarter, setting
forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year, if applicable, in
reasonable detail and certified by the chief financial officer of Borrower
that they fairly present the financial condition of Borrower as at the
dates indicated and the results of its operations and its cash flows for
the periods indicated, subject to changes resulting from audit and normal
year-end adjustments.
(ii) Year-End Financials: as soon as available, and in any event
within 90 days after the end of each Fiscal Year, (a) the balance sheet of
Borrower as at the end of such Fiscal Year and the related statements of
income, stockholders' equity and cash flows of Borrower for such Fiscal
Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year, if applicable, in reasonable detail
and certified by the chief financial officer of Borrower that they fairly
present the financial condition of Borrower as at the dates indicated and
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the results of their operations and their cash flows for the periods
indicated, and (b) in the case of such financial statements, a report
thereon of independent certified public accountants of recognized national
standing selected by Borrower and satisfactory to Agent, which report
shall be unqualified, shall express no doubts about the ability of
Borrower to continue as a going concern, and shall state that such
financial statements fairly present the financial position of Borrower as
at the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such financial statements has been made in accordance with
generally accepted auditing standards;
(iii) Officers' and Compliance Certificates: together with each
delivery of financial statements of Borrower pursuant to subdivisions (i)
and (ii) above after the Effective Date, (a) an Officers' Certificate of
Borrower stating that the signers have reviewed the terms of this Agreement
and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of Borrower during the
accounting period covered by such financial statements and that such review
has not disclosed the existence during or at the end of such accounting
period, and that the signers do not have knowledge of the existence as at
the date of such Officers' Certificate, of any condition or event that
constitutes an Event of Default or Potential Event of Default, or, if any
such condition or event existed or exists, specifying the nature and period
of existence thereof and what action Borrower has taken, is taking and
proposes to take with respect thereto; and (b) a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of the
applicable quarterly and annual accounting periods with the restrictions
contained in Section 6;
(iv) Notices under Leases: within 3 Business Days, all notices and
other information or documents delivered or received under any of the
Leases by Lessor pursuant to Section 19 of the Leases, including, without
limitation, all additional financial statements and reports delivered
pursuant to Section 6(a) of the Leases;
(v) Accountants' Certification: together with each delivery of
financial statements of Borrower pursuant to subdivision (ii) above, a
written statement by the independent certified public accountants giving
the report thereon (a) stating that their audit examination has included a
review of the terms of this Agreement, the other Loan Documents as they
relate to accounting matters, (b) stating whether, in connection with their
audit examination, any condition or event that constitutes an Event of
Default or Potential Event of Default has come to their attention and, if
such a condition or event has come to their attention, specifying the
nature and period of existence thereof; provided that such accountants
shall not be liable by reason of any failure to obtain knowledge of any
such Event of Default or Potential Event of Default that would not be
disclosed in the course of their audit examination, and (c) stating that
based on their audit examination nothing has come to their attention that
causes them to believe either or both that the information contained in
the certificates delivered therewith pursuant to subdivision (iii) above
is not correct
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or that the matters set forth in the Compliance Certificates delivered
therewith pursuant to clause (b) of subdivision (iii) above for the
applicable Fiscal Year are not stated in accordance with the terms of this
Agreement;
(vi) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Borrower by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Borrower made by such accountants, including, without
limitation, any comment letter submitted by such accountants to management
in connection with their annual audit;
(vii) Events of Default, etc.: promptly upon any officer of Borrower
obtaining knowledge (a) of any condition or event that constitutes an Event
of Default or Potential Event of Default, or becoming aware that any Lender
has given any notice (other than to Agent) or taken any other action with
respect to a claimed Event of Default or Potential Event of Default, (b)
that any Person has given any notice to Borrower or taken any other action
with respect to a claimed default or event or condition of the type
referred to in subsection 7.2, or (c) of the occurrence of any event or
change that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, an Officers' Certificate specifying
the nature and period of existence of such condition, event or change, or
specifying the notice given or action taken by any such Person and the
nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Borrower has taken, is taking
and proposes to take with respect thereto;
(viii) Litigation or Other Proceedings: (a) promptly upon any officer
of Borrower obtaining knowledge of (X) the institution of, or non-frivolous
threat of, any action, suit, proceeding (whether administrative, judicial
or otherwise), governmental investigation or arbitration against or
affecting Borrower or any property of Borrower (collectively,
"Proceedings") not previously disclosed in writing by Borrower to Lenders
or (Y) any material development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
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written notice thereof together with such other information as may be
reasonably available Borrower to enable Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of each
fiscal quarter of Borrower, a schedule of all Proceedings involving an
alleged liability of, or claims against or affecting, Borrower equal to or
greater than $1,000,000 and promptly after request by Agent such other
information as may be reasonably requested by Agent to enable Agent and
its counsel to evaluate any of such Proceedings;F
(ix) Insurance: as soon as practicable and in any event by the last
day of each Fiscal Year, a report in form and substance satisfactory to
Agent outlining all material insurance coverage maintained as of the date
of such report by Borrower and all material insurance coverage planned to
be maintained by Borrower in the immediately succeeding Fiscal Year;
(x) Environmental Audits and Reports: as soon as practicable following
receipt thereof, copies of all environmental audits and reports, whether
prepared by personnel of Borrower or by independent consultants, with
respect to significant environmental matters or which relate to an
Environmental Claim which could result in a Material Adverse Effect;
(xi) Pricing Certificates: on or after the third anniversary of the
Initial Borrowing Date, a certificate setting forth the credit rating on
Atlas's obligations under the Pass Through Trust Documents (each a "Pricing
Certificate"), (a) upon each delivery of financial statements of Borrower
pursuant to subdivisions (i) and (ii) above, (b) within one Business Day
after any public release by S&P or ▇▇▇▇▇'▇ lowering its credit rating on
Atlas's obligations under the Pass Through Trust Documents and (c) at such
additional times as Borrower may elect ;
(xii) Other Information: with reasonable promptness, such other
information and data with respect to Borrower or Atlas, as the case may be,
as from time to time may be reasonably requested by any Lender.
5.2 Corporate Existence.
Borrower will, at all times preserve and keep in full force and effect its
corporate existence and all rights and franchises material to its business.
Borrower will at all times maintain its corporate existence as a United States
Citizen.
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5.3 Payment of Taxes and Claims; Tax Consolidation.
A. Borrower will pay all taxes, assessments and other governmental charges
imposed upon it or any of its properties or assets or in respect of any of its
income, businesses or franchises before any penalty, fine or interest accrues
thereon, and all claims (including, without limitation, claims for labor,
services, materials and supplies) for sums that have become due and payable and
that by law have or may become a Lien upon any of its properties or assets,
prior to the time when any penalty fine or interest shall be incurred with
respect thereto; provided that no such charge or claim need be paid if being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and if such reserve or other appropriate provision, if any,
with respect to any liability for taxes, as shall be required in conformity with
GAAP shall have been made therefor in the financial statements of Borrower.
B. Borrower will not file or consent to the filing of any consolidated
federal income tax return with any Person other than the affiliate group of
which Atlas is the parent corporation.
5.4 Maintenance of Properties; Insurance.
Borrower will maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of Borrower and from time to time will make or
cause to be made all appropriate repairs, renewals and replacements thereof.
Borrower will maintain or cause to be maintained, with financially sound and
reputable insurers, insurance with respect to its properties and business
against loss or damage (including, without limitation, flood insurance, if
necessary or advisable) of the kinds customarily carried or maintained under
similar circumstances by corporations of established reputation engaged in
similar businesses and Borrower will, with respect to each Aircraft, maintain
the insurance specified in the Aircraft Chattel Mortgage with respect to such
Aircraft.
5.5 Inspection; Lender Meeting.
Borrower will permit any authorized representatives designated by any
Lender to visit and inspect any of the properties of Borrower, including its and
their financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants (provided that Borrower
may, if it so chooses, be present at or participate in any such discussion), all
upon reasonable notice and at such reasonable times during normal business hours
and as often as may be reasonably requested; provided that so long as no Event
of Default shall have occurred and be continuing, such inspection shall not be
dis-
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ruptive to Borrower's business, as reasonably determined by Borrower. Without in
any way limiting the foregoing, Borrower will, upon the request of Agent or
Requisite Lenders, participate in a meeting of Agent and Lenders once during
each Fiscal Year to be held at Borrower's corporate offices (or such other
location as may be agreed to by Borrower and Agent) at such time as may be
agreed to by Borrower and Agent.
5.6 Compliance with Laws, etc.
Borrower will comply with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority (including, without
limitation, Environmental Laws), noncompliance with which could reasonably be
expected to cause a Material Adverse Effect. Borrower shall not conduct, and
shall not permit the conduct of, any Hazardous Materials Activity at any other
location which could reasonably be expected to form the basis of an
Environmental Claim against Borrower and which could reasonably be expected to
have a Material Adverse Effect.
5.7 Environmental Indemnity.
Borrower agrees to indemnify, defend, and hold harmless Agent and Lenders,
and the officers, directors, employees, agents and affiliates of Agent and
Lenders from and against any and all losses, claims, liability or expenses
arising in connection with Environmental Claims against Borrower or with any
Hazardous Materials Activity.
5.8 Borrower's Remedial Action Regarding Hazardous Materials.
Borrower will promptly take any and all necessary remedial action in
connection with the presence, storage, use, disposal, transportation or Release
of any Hazardous Materials on, under or about any facility in order to comply
with all applicable Environmental Laws and Governmental Authorizations. In the
event Borrower undertakes any remedial action with respect to any Hazardous
Materials on, under or about any such facility, Borrower will conduct and
complete such remedial action in compliance with all applicable Environmental
Laws, and in accordance with the policies, orders and directives of all federal,
state and local governmental authorities except when, and only to the extent
that, Borrower's liability for such presence, storage, use, disposal,
transportation or Release of any such Hazardous Materials is being contested in
good faith by Borrower. Notwithstanding anything to the contrary contained in
the Transaction Documents, Borrower or Lessee may engage in the transportation
of Hazardous Materials in the ordinary course of business so long as such is
conducted in compliance with all applicable Environmental Laws and all other
applicable laws, policies, orders, regulations and directives.
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5.9 Maintenance Contracts.
Borrower shall maintain or shall cause to be maintained a maintenance
program with respect to the Aircraft approved by the FAA.
5.10 Employee Benefit Plans.
Borrower will not establish, contribute to (or have an obligation to
contribute to) or permit to be established any Employee Benefit Plans for
Borrower or any of its employees.
5.11 Further Assurances.
At any time or from time to time upon the request of Agent, Borrower will,
at its expense, promptly execute, acknowledge and deliver such further documents
and do such other acts and things as Agent may reasonably request in order to
effect fully the purposes of the Loan Documents and to provide for payment of
the Obligations in accordance with the terms of this Agreement, the Notes and
the other Loan Documents.
5.12 Performance of Obligations.
Borrower will perform all of its obligations under the terms of each Lease,
Collateral Document and Loan Document, contract or instrument by which it is
bound.
5.13 Corporate Separateness.
Borrower will take all such action as is necessary to keep its operations
separate and apart from those of Atlas or any of its Affiliates, including,
without limitation, ensuring that all customary corporate formalities, including
the maintenance of separate corporate records and documents and holding regular
meetings are followed. Any financial statements distributed to any creditors of
Borrower shall clearly establish the corporate separateness of Borrower from
Atlas and each of Atlas's other Subsidiaries. Borrower shall not take any action
or conduct its affairs in a manner which is likely to result in the corporate
existence of Borrower on the one hand and of Atlas or any Subsidiary of Atlas on
the other hand being disregarded, or in the assets and liabilities of Atlas or
any Subsidiary of Atlas being substantively consolidated with those of Borrower
in a bankruptcy, reorganization or other insolvency proceeding. Borrower shall
have at all times at least one Independent Director who shall be satisfactory to
the Agent. Borrower shall maintain its principal executive office separate from
Atlas, which may be subleased from Atlas on an arm's-length basis or maintained
as provided in the Service Agreement.
Borrower shall pay out of its own funds fees for its directors and salaries
of its officers and employees, and shall promptly reimburse any Affiliate for
any services provided to
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Borrower by such Affiliate; provided, however, that Atlas may advance funds on
behalf of Borrower to pay for the expenses of its organization and funding. All
such advances shall be duly and properly recorded and promptly repaid as
intercompany advances. Borrower shall not commingle any of its funds or other
assets with the funds or assets of any other entity or person. Borrower will
maintain separate bank accounts in its own name.
The assets of Borrower shall be separately identified and segregated. All
of Borrowers's assets shall at all times be held by or on behalf of Borrower,
and, if held on behalf of Borrower by another entity, shall at all times be kept
identifiable (in accordance with customary usages) as assets owned by Borrower.
In no event shall any of Borrower's assets be held by Atlas or by any other
Affiliate. Borrower shall pay from its assets all obligations and indebtedness
of any kind incurred by Borrower, and shall not pay from its assets any
obligations or indebtedness of any other entity or person. The liabilities of
Borrower will be separately managed from those of any Affiliate, and all
liabilities, including all administrative expenses, shall be paid from its own
separate assets; provided, however, Borrower will be included, to the extent
permitted by law, in the affiliated group of corporations of which Atlas is the
"common parent" for federal income tax returns filed for such affiliated group
by Atlas.
SECTION 6.
BORROWER'S NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations, unless Requisite Lenders shall otherwise give prior
written consent, Borrower shall perform all covenants in this Section 6.
6.1 Indebtedness.
Borrower shall not directly or indirectly, create, incur, assume or
guaranty, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except:
(i) Borrower may become and remain liable with respect to the
Obligations; and
(ii) Borrower may become and remain liable with respect to Contingent
Obligations permitted by subsection 6.4 and, upon any matured obligations
actually
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arising pursuant thereto, the Indebtedness corresponding to the Contingent
Obligations so extinguished.
6.2 Liens and Related Matters.
A. Prohibition on Liens. Borrower shall not directly or indirectly, create,
incur, assume or permit to exist any Lien on or with respect to any property or
asset of any kind (including any document or instrument in respect of goods or
accounts receivable) of Borrower, whether now owned or hereafter acquired, or
any income or profits therefrom, or file or permit the filing of, or permit to
remain in effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the Uniform
Commercial Code of any state or under any similar recording or notice statute,
except for Permitted Encumbrances.
B. No Negative Pledges. Borrower shall not enter into any agreement
prohibiting the creation or assumption of any Lien upon any of its properties or
assets, whether now owned or hereafter acquired.
6.3 Investments; Joint Ventures.
Borrower shall not, directly or indirectly, make or own any Investment in
any Person, including any Joint Venture, except that Borrower may make and own
Investments in Cash Equivalents.
6.4 Contingent Obligations.
Borrower shall not, directly or indirectly, create or become or remain
liable with respect to any Contingent Obligation.
6.5 Restricted Junior Payments.
Borrower shall not directly or indirectly, declare, order, pay, make or set
apart any sum for any Restricted Junior Payment; provided that Borrower may make
payments pursuant to the Service Agreement in an aggregate annual amount not to
exceed $200,000 per annum; and provided, further, that so long as no Event of
Default or Potential Event of Default has occurred and is continuing, or would
result therefrom, within five Business Days of any payment made under any of the
Leases by Atlas to Borrower, to the extent such payment is in excess of amounts
owing the Lenders under the Loan Documents, Borrower may dividend such excess
amounts to Atlas to the extent Borrower, after giving effect to such dividend,
has no other liabilities and maintains a reserve of Cash or Cash Equivalents
adequate to fund all expenses of Borrower (exclusive of payments under the Loan
Documents) to be incurred during the next four quarters following such dividend.
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6.6 Restriction on Fundamental Changes; Asset Sales and Acquisitions;
New Subsidiaries.
Borrower shall not enter into any transaction of merger or consolidation,
or liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, sub-lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, all or any part of its
business, property or assets, whether now owned or hereafter acquired, or
acquire by purchase or otherwise all or any portion of the business, property or
assets of, or stock or other evidence of beneficial ownership of, any Person or
any division or line of business of any Person or establish any Subsidiary,
except Borrower may effect the Transaction on or prior to the Initial Borrowing
Date and Borrower may sell, lease or dispose of assets so long as such
transaction is effected in accordance with Section 4(d) or 4(e) of the Aircraft
Chattel Mortgages.
6.7 Amendments of Material Agreements.
Borrower shall not permit (i) its articles of incorporation or bylaws to be
amended or otherwise modified in any manner or (ii) any Lease to be amended or
otherwise modified in any manner.
6.8 Restriction on Leases.
Borrower shall not become liable in any way, whether directly or by
assignment or as a guarantor or other surety, for the obligations of the lessee
under any lease, whether such lease be an Operating Lease or a Capital Lease.
6.9 Transaction with Shareholders and Affiliates.
Borrower shall not directly or indirectly, enter into or permit to exist
any transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with Atlas or with any
other Affiliate of Borrower; provided that the foregoing restriction shall not
apply to (i) reasonable and customary fees paid to and indemnification of
members of the Board of Directors of Borrower, (ii) reasonable and customary
salaries, bonuses and other compensation paid to and indemnification of
employees of Borrower, (iii) the Transaction and (iv) the Service Agreement
providing for the rendering of accounting, administration and office services by
Atlas to Borrower on terms consistent with the terms of similar agreements
between unrelated parties in an aggregate amount not to exceed $200,000 per
annum.
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6.10 Conduct of Business.
(a) From and after the Initial Borrowing Date, Borrower shall not engage in
any business other than in connection with owning the Aircraft or any
replacement aircraft and leasing of the Aircraft or any replacement aircraft to
Atlas and will have no material assets (other than Cash, Cash Equivalents, the
Aircraft or any replacement aircraft and the Leases) or liabilities (other than
the Loans and other liabilities which are expressly permitted hereunder);
provided, however that replacement aircraft are substituted for Aircraft in
accordance with the applicable Aircraft Chattel Mortgage.
(b) The Borrower shall not take any action or enter into any transaction
which requires the approval of the Independent Director without the consent of
the Independent Director.
SECTION 7.
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default") shall
occur:
7.1 Failure to Make Payments When Due.
Failure by Borrower to pay any installment of principal of any Loan when
due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; or failure by Borrower to pay
any interest on any Loan or any fee or any other amount due under this Agreement
within five days after the date due; or
7.2 Default Under Lease.
Any Lease shall at any time be terminated other than by its terms or cease
to be in full force and effect other than by its terms, or there shall exist a
Default or a Lease Event of Default under, and as defined in, any of the Leases;
or
7.3 Breach of Certain Covenants.
Failure of Borrower to perform or comply in any material respect with any
term or condition contained in subsections 2.5, 5.1(vii), 5.2, 5.13, Subsections
6.1, 6.2, 6.5, 6.6, 6.7 or 6.10 of this Agreement or in clauses (i) and (ii) of
Section 4(c), Section 4(d) or Section 4(g) of any Aircraft Chattel Mortgage; or
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7.4 Breach of Warranty.
Any representation, warranty, certification or other statement made by
Atlas, Atlas One or Borrower in any Loan Document or in any Transaction Document
or in any statement or certificate at any time given by Atlas, Atlas One or
Borrower in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made;
or
7.5 Other Defaults Under Loan Documents.
Borrower shall default in the performance of or compliance with any term
contained in this Agreement or any of the other Loan Documents, other than any
such term referred to in any other subsection of this Section 7, and such
default shall not have been remedied or waived within 15 days after the earlier
of (a) an officer of Borrower becoming aware of such default or (b) receipt by
Borrower of notice from Agent or any Lender of such default; or
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Borrower in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, which decree or order is not stayed; or any
other similar relief shall be granted under any applicable federal or state law;
or (ii) an involuntary case shall be commenced against Borrower under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
Borrower, or over all or a substantial part of its property, shall have been
entered; or there shall have occurred the involuntary appointment of an interim
receiver, trustee or other custodian of Borrower for all or a substantial part
of its property; or a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the property of Borrower, and
any such event described in this clause (ii) shall continue for 60 days unless
dismissed, bonded or discharged; or
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Borrower shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking posses-
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sion by a receiver, trustee or other custodian for all or a substantial part of
its property; or Borrower shall make any assignment for the benefit of
creditors; or (ii) Borrower shall be unable, or shall fail generally, or shall
admit in writing its inability, to pay its debts as such debts become due; or
the Board of Directors of Borrower (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or
7.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar process (not
adequately covered by insurance as to which a solvent and unaffiliated insurance
company has acknowledged coverage) shall be entered or filed against Borrower or
any of its assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of 60 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or
7.9 Dissolution.
Any order, judgment or decree shall be entered against Borrower decreeing
the dissolution or split up of Borrower and such order shall remain undischarged
or unstayed for a period in excess of 30 days; or
7.10 Change in Control.
Atlas shall cease to beneficially own and control all of the issued and
outstanding shares of capital stock of Borrower; or
7.11 Failure of Security.
Any Collateral Document shall, at any time, cease to be in full force and
effect (other than by reason of a release of Collateral thereunder in accordance
with the terms hereof or thereof, the satisfaction in full of the Obligations or
any other termination of such Collateral Document in accordance with the terms
hereof or thereof) or shall be declared null and void, or the validity or
enforceability thereof shall be contested in writing by Borrower, or Agent shall
not have or shall cease to have a valid security interest in any Collateral
purported to be covered thereby, perfected and with the priority required by the
relevant Collateral Document, for any reason, subject only to Liens permitted
under the applicable Collateral Documents or Borrower, as lessor under a Lease
or the Agent, as assignee of Borrower's rights under such Lease, shall cease to
be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect
to the rights and remedies under such Lease; or
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7.12 Loss of United States Citizen Status
Borrower for any reason ceases to be a United States Citizen;
THEN (I) (i) upon the occurrence of any Event of Default described in
subsection 7.6 or 7.7, each of (a) the unpaid principal amount of and accrued
interest on the Loans and (b) all other Obligations shall automatically become
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by Borrower,
and the obligation of each Lender to make any Loan shall thereupon terminate and
(ii) upon the occurrence and during the continuation of any other Event of
Default, Agent shall, upon the written request or with the written consent of
Requisite Lenders, by written notice to Borrower, declare all or any portion of
the amounts described in clauses (a) and (b) above to be, and the same shall
forthwith become, immediately due and payable, and the obligation of each Lender
to make any Loan shall thereupon terminate and (II) upon the occurrence of any
Event of Default, the Agent upon the written request of the Requisite Lenders,
shall by written notice to Borrower enforce all of the Liens and security
interests created pursuant to the Collateral Documents and (III) exercise all
other remedies at law or in equity available under the Loan Documents.
If at any time within 60 days after an acceleration of the Loans pursuant
to the preceding paragraph Borrower shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than
non-payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 9.6, then Requisite Lenders, by written notice to
Borrower, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended to
benefit Borrower and do not grant Borrower the right to require Lenders to
rescind or annul any acceleration hereunder, even if the conditions set forth
herein are met.
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SECTION 8.
AGENT
8.1 Appointment.
Each Lender hereby appoints Bankers Trust Company as Agent hereunder and
under the other Loan Documents and each Lender hereby authorizes Agent to act as
its agent in accordance with the terms of this Agreement and the other Loan
Documents. 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 Agent and Lenders, and Borrower shall
have no rights as a third-party beneficiary of any of the provisions thereof. In
performing its functions and duties under this Agreement, Agent shall act solely
as an agent of Lenders and does not assume and shall not be deemed to have
assumed any obligation towards or relationship of agency or trust with or for
Borrower.
8.2 Powers and Duties; General Immunity.
▇. ▇▇▇▇▇▇; Duties Specified. Each Lender irrevocably authorizes 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 Agent by the terms hereof and thereof, together with
such powers, rights and remedies as are reasonably incidental thereto. Agent
shall have only those duties and responsibilities that are expressly specified
in this Agreement and the other Loan Documents. Agent may exercise such powers,
rights and remedies and perform such duties by or through its agents or
employees. 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 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. Agent shall not be responsible to
any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by Agent to Lenders or by or on behalf of Borrower
to Agent or any Lender in connection with the Loan Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of Borrower or any other Person liable for the payment of any
Obligations, nor shall Agent be required to as-
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certain 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, Agent
shall not have any liability arising from confirmations of the amount of
outstanding Loans or the component amounts thereof.
C. Exculpatory Provisions. Neither Agent nor any of its respective
officers, directors, partners, employees or agents shall be liable to Lenders
for any action taken or omitted by Agent under or in connection with any of the
Loan Documents except to the extent caused by their respective gross negligence
or willful misconduct. If 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, Agent shall
be entitled to refrain from such act or taking such action unless and until
Agent shall have received instructions from Requisite Lenders. Without prejudice
to the generality of the foregoing, (i) Agent shall be entitled to rely, and
shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Borrower), accountants, experts and other professional advisors
selected by it; and (ii) no Lender shall have any right of action whatsoever
against Agent as a result of 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. 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. 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, Agent in its individual capacity as a Lender hereunder. With
respect to its participations in the Loans, 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 Agent in its individual capacity. Agent and its
Affiliates may accept deposits from, lend money to and generally, engage in any
kind of banking, trust, financial advisory or other business with Borrower or
any of its Affiliates as if it were not performing the duties specified herein,
and may accept fees and other consideration from Borrower for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
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8.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Atlas and its
Subsidiaries, Borrower and the Aircraft in connection with the making of the
Loans hereunder and that it has made and shall continue to make its own
appraisal of the creditworthiness of Atlas and its Subsidiaries and Borrower.
Agent shall not have any duty or responsibility, either initially or on a
continuing basis, to make any such investigation or any such appraisal on behalf
of Lenders or to provide any Lender with any credit or other information with
respect thereto, whether coming into its possession before the making of the
Loans or at any time or times thereafter, and Agent shall not have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
8.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Agent (and its respective affiliates and partners), to the extent that
Agent shall not have been reimbursed by Borrower, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against Agent in exercising its powers, rights and
remedies or performing its duties hereunder or under the other Loan Documents or
otherwise in its capacity as Agent, in any way relating to or arising out of
this Agreement or the other Loan Documents; provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from Agent's gross negligence or willful misconduct.
8.5 Collateral Documents.
Without limiting the generality of subsection 8.1, each Lender hereby
further authorizes 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, Agent shall not enter into or consent to any amendment,
modification, termination or waiver of any provision contained in any Collateral
Document without prior written consent of Requisite Lenders. Anything contained
in any of the Loan Documents to the contrary notwithstanding, each Lender agrees
that no Lender shall have any right individually to realize upon any of the
collateral under any Collateral Document, it being understood and agreed that
all powers, rights and remedies under the Collateral Documents may be exercised
solely by Agent for the benefit of Lenders in accordance with the terms thereof.
Each Lender hereby authorizes
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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 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 Agent.
Agent may resign at any time by giving 30 days' prior written notice
thereof to Lenders and Borrower. Upon any such notice of resignation, Requisite
Lenders shall have the right, upon consultation with Borrower, to appoint a
successor Agent. Upon the acceptance of any appointment hereunder by a successor
Agent, that successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent and the
retiring or removed Agent shall be discharged from its duties and obligations
under this Agreement. After any retiring Agent's resignation hereunder as 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 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 Commitment or any Loan or Loans made by it or
any other interest herein or in any other Obligations owed to it; provided that
no such sale, assignment, transfer or participation shall, without the consent
of Borrower, require Borrower to file a registration statement with the
Securities and Exchange Commission or apply to qualify such sale, assignment,
transfer or participation under the securities laws of any state; provided
further, that no such sale, assignment or transfer described in clause (i) above
shall be effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Agent and recorded in the
Register as provided in subsection 9.1B(ii). Except as otherwise provided in
this subsection 9.1, no Lender shall, as between Borrower and such Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment or transfer of, or any granting of participations in, all or any
part of its Commitment or the Loans, or the other Obligations owed to such
Lender.
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B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan or other
Obligation may (a) be assigned in any amount to another Lender, or to an
Affiliate or Related Fund of the assigning Lender or another Lender, with
the giving of notice to Borrower and Agent or (b) be assigned in an
aggregate amount of not less than $5,000,000 (or such lesser amount as
shall constitute the aggregate amount of the Commitments, Loans, and other
Obligations of the assigning Lender) to any other Eligible Assignee with
the giving of notice to Borrower and with the consent of Agent and Borrower
(which consent shall not be unreasonably withheld) unless an Event of
Default shall have occurred and be occurring, in which case the consent of
Borrower to such assignment shall not be required. Any assignment of Loans
hereunder shall effect a pro rata assignment of the Notes with respect to
each Aircraft. To the extent of any such assignment in accordance with
either clause (a) or (b) above, the assigning Lender shall be relieved of
its obligations with respect to its Commitment, Loans, or other Obligations
or the portion thereof so assigned. The parties to each such assignment
shall execute and deliver to 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 Agent pursuant to subsection 2.7B(iii)(a); provided, however
that such processing fee shall not be required where the assignee is an
existing Lender. Upon such execution, delivery, acceptance and recording
from and after the effective date specified in such Assignment Agreement,
(y) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and (z) the assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment Agreement, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a party hereto) provided, however, that the assigning Lender shall retain
any right to payment accrued under Subsections 2.6C, 2.6D, 2.7, 9.2 or 9.3
unless such rights are explicitly assigned to the assignee in the
Assignment Agreement. The Commitments hereunder shall be modified to
reflect the Commitment of such assignee and any remaining Commitment of
such assigning Lender and, if any such assignment occurs after the
issuance of the Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as practicable,
surrender its applicable Notes to Agent for cancellation, and thereupon
new
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Notes shall be issued to the assignee substantially in the form of Exhibit
I annexed hereto, with appropriate insertions, to reflect the new
Commitment or outstanding Loans, as the case may be, of the assignee
and/or the assigning Lender.
(ii) Acceptance by 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
Agent pursuant to subsection 2.7B(iii) (a), Agent shall, if such Assignment
Agreement has been completed and is in substantially the form of Exhibit V
hereto and if Agent and Borrower have consented to the assignment evidenced
thereby to the extent such consent is required pursuant to subsection
9.1B(i)), (a) accept such Assignment Agreement by executing a counterpart
thereof as provided therein (which acceptance shall evidence any required
consent of Agent and Borrower to such assignment), (b) record the
information contained therein in the Register and (c) give prompt notice
thereof to Borrower. Agent shall maintain a copy of each Assignment
Agreement delivered to and accepted by it as provided in this subsection
9.1B(ii).
C. Participations. The holder of any participation, other than an Affiliate
of the Lender granting such participation, shall not be entitled to require such
Lender to take or omit to take any action hereunder except action directly
affecting (i) the extension of the Final Maturity Date of any Loan allocated to
such participation, (ii) a reduction of the principal amount of or the rate of
interest payable on any Loan allocated to such participation or (iii) a release
of Collateral, and all amounts payable by Borrower hereunder (including without
limitation amounts payable to such Lender pursuant to subsections 2.6D and 2.7)
shall be determined as if such Lender had not sold such participation. Borrower
and each Lender hereby acknowledge and agree that, solely for purposes of
subsection 9.5, (a) any participation will give rise to a direct obligation of
Borrower to the participant and (b) the participant shall be considered to be a
"Lender".
D. Assignments to Federal Reserve Banks and Others. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 9.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to (i) any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank or (ii) if such Lender is a "fund", to its
lenders as collateral security to secure its indebtedness to said lenders;
provided that (i) no Lender shall, as between Borrower and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event
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shall such Federal Reserve Bank or lender be considered to be a "Lender" or be
entitled to require the assigning Lender to take or omit to take any action
hereunder.
E. Information. Each Lender may furnish any information concerning Borrower
in the possession of that Lender from time to time to assignees and participants
(including prospective assignees and participants), subject to subsection 9.19.
9.2 Expenses.
Whether or not the transactions contemplated hereby shall be consummated,
Borrower agrees to pay promptly (i) all the actual and reasonable costs and
expenses of preparation of the Loan Documents; (ii) all the costs of furnishing
all opinions by counsel for Borrower (including without limitation any opinions
requested by Lenders as to any legal matters arising hereunder) and of
Borrower's performance of and compliance with all agreements and conditions on
its part to be performed or complied with under this Agreement and the other
Loan Documents including, without limitation, with respect to confirming
compliance with environmental and insurance requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to 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 Borrower; (iv) all the
costs and expenses of creating and perfecting the Liens in favor of 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 Agent (including local counsel); (v) all other actual and
reasonable costs and expenses incurred by Agent in connection with the
syndication of the Commitments and the Loans and the negotiation, preparation
and execution of the Loan Documents and the transactions contemplated hereby and
thereby; provided that such costs and expenses of syndication shall not exceed
$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 Agent and Lenders in
enforcing any Obligations of or in collecting any payments due from Borrower
hereunder or under the other Loan Documents by reason of such Event of Default
or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
9.3 Indemnity.
In addition to the payment of expenses pursuant to subsection 9.2, whether
or not the transactions contemplated hereby shall be consummated, Borrower
agrees to defend, indemnify, pay and hold harmless Agent and Lenders, and the
officers, directors, employ-
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ees, agents and affiliates of Agent and Lenders (collectively called the
"Indemnitees") from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including without
limitation the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto),
whether direct, indirect or consequential and whether based on any federal,
state or foreign laws, statutes, rules or regulations (including without
limitation securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby
(including without limitation Lenders' agreement to make the Loans hereunder or
the use or intended use of the proceeds of any of the Loans) or the statements
contained in the commitment letter delivered by any Lender to Borrower with
respect thereto (collectively called the "Indemnified Liabilities"); provided
that Borrower shall not have any obligation to any Indemnitee hereunder with
respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise solely from the gross negligence or willful misconduct of
that Indemnitee as determined by a final judgment of a court of competent
jurisdiction. To the extent that the undertaking to defend, indemnify, pay and
hold harmless set forth in the preceding sentence may be unenforceable because
it is violative of any law or public policy, Borrower shall contribute the
maximum portion that it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
9.4 Set-Off.
In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, upon the occurrence of any Event of
Default each Lender is hereby authorized by Borrower at any time or from time to
time, without notice to Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other Indebtedness at any time held or owing
by that Lender to or for the credit or the account of Borrower against and on
account of the obligations and liabilities of Borrower to that Lender under
this Agreement, its Notes, and the other Loan Documents, including, but not
limited to, all claims of any nature or description arising out of or connected
with this Agreement, the Notes, or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any other amounts due
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hereunder shall have become due and payable pursuant to Section 7 and although
said obligations and liabilities, or any of them, may be contingent or
unmatured.
9.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them shall, whether by
voluntary payment, by realization upon security, through the exercise of any
right of set-off or banker's lien, by counterclaim or cross action or by the
enforcement of any right under the Loan Documents or otherwise, or as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code,
receive payment or reduction of a proportion of the aggregate amount of
principal, interest, fees and other amounts then due and owing to that Lender
hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Agent and each other Lender of the receipt of such payment and (ii) apply a
portion of such payment to purchase participations (which it shall be deemed to
have purchased from each seller of a participation simultaneously upon the
receipt by such seller of its portion of such payment) in the Aggregate Amounts
Due to the other Lenders so that all such recoveries of Aggregate Amounts Due
shall be shared by all Lenders in proportion to the Aggregate Amounts Due to
them; provided that if all or part of such proportionately greater payment
received by such purchasing Lender is thereafter recovered from such Lender upon
the bankruptcy or reorganization of Borrower or otherwise, those purchases shall
be rescinded and the purchase prices paid for such participations shall be
returned to such purchasing Lender ratably to the extent of such recovery, but
without interest. Borrower expressly consents to the foregoing arrangement and
agrees that any holder of a participation so purchased may exercise any and all
rights of banker's lien, set-off or counterclaim with respect to any and all
monies owing by Borrower to that holder with respect thereto as fully as if that
holder were owed the amount of the participation held by that holder.
9.6 Amendments and Waivers.
A. No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, or consent to and departure by Borrower
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that any such amendment, modification, termination,
waiver or consent which: increases the amount of any of the Commitments or
reduces the principal amount of any of the Loans; changes any Lender's Pro Rata
Share; changes in any manner the definition of "Requisite Lenders"; changes in
any manner any provision of this Agreement which, by its terms, expressly
requires the approval or concurrence of all Lenders; postpones the Final
Maturity Date (but not the date of any scheduled installment of principal) of
any of the Loans; postpones
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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 2.2D) or the
amount of any fees payable hereunder; releases all or substantially all of the
Collateral; or changes in any manner the provisions contained in this subsection
9.6 shall be effective only if evidenced by a writing signed by or on behalf of
all Lenders to whom are owed Obligations being directly affected by such
amendment, modification, termination, waiver or consent. In addition, (i) no
amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the Lender which is the
holder of that Note, (ii) no increase in the Commitment of any Lender over the
amount thereof then in effect shall be effective without the written concurrence
of that Lender, it being understood and agreed that in no event shall waivers or
modifications of conditions precedent, covenants, Events of Default, Potential
Events of Default or of a mandatory prepayment or a reduction of any or all of
the Commitments be deemed to constitute an increase of the Commitment of any
Lender and that an increase in the available portion of any Commitment of any
Lender shall not be deemed to constitute an increase in the Commitment of such
Lender, (iii) 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 Agent shall be effective
without the written concurrence of Agent and (iv) no amendment, modification,
termination or waiver of any provision of Section 8 shall be effective without
the written consent of the Agent. Agent may, but shall have no obligation to,
with the concurrence of any Lender, execute amendments, modifications, waivers
or consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Borrower in any case shall entitle Borrower to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 9.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Borrower on Borrower.
B. If, in connection with any proposed change, waiver, discharge or
termination to any of the provision of this Agreement as contemplated by the
proviso in the first sentence of this subsection 9.6, the consent of Requisite
Lenders is obtained but consent of one or more of such other Lenders whose
consent is required is not obtained, then Borrower may, so long as all
non-consenting Lenders are so treated, elect to terminate such Lender as a
party to this Agreement; provided that, concurrently with such termination, (i)
Borrower shall pay that Lender all principal, interest and fees and other
amounts owed to such Lender through such date of termination, (ii) another
financial institution satisfactory to Borrower and Agent (or if Agent is also
the Lender to be terminated, the successor Agent) shall agree, as of such date,
to become a Lender for all purposes under this Agreement (whether
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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 Agent (or if Agent is also the Lender to be
terminated, the successor Agent) to evidence the substitution of such Lender
shall have been received and approved by Agent as of such date.
9.7 Independence of Covenants.
All covenants under this Agreement shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
9.8 Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Agent shall not be effective
until received. For the purposes hereof, the address of each party hereto shall
be as set forth under such party's name on the signature pages hereof or (i) as
to Borrower and 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 partner in a
written notice delivered to Agent.
9.9 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall survive
the execution and delivery of this Agreement and the making of the Loans
hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Borrower set forth in subsections 2.6D, 2.7, 9.2,
9.3 and 9.4 and the agreements of Lenders set forth in subsections 8.2C, 8.4 and
9.5 shall survive the payment of the Loans, and the termination of this
Agreement.
9.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Agent or any Lender in the exercise of
any power, right or privilege hereunder or under any other Loan Document shall
impair such power,
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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 Agent nor any Lender shall be under any obligation to marshal any
assets in favor of Borrower or any other party or against or in payment of any
or all of the Obligations. To the extent that Borrower makes a payment or
payments to Agent or Lenders (or to Agent for the benefit of Lenders), or Agent
or Lenders enforce any security interests or exercise their rights of set-off,
and such payment or payments or the proceeds of such enforcement or set-off or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or set-off had not occurred.
9.12 Severability.
In case any provision in or obligation under this Agreement or the Notes
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
9.13 Obligations Several; Independent Nature of Lenders' Rights.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any
other Lender to be joined as an additional party in any proceeding for such
purpose.
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9.14 Headings.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
9.15 Applicable Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
9.16 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of lenders (it being understood that
Lenders' rights of assignment are subject to subsection 9.1). Neither Borrower's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Borrower without the prior written consent of all Lenders.
9.17 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OBLIGATION MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT BORROWER ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH
OBLIGATION (SUBJECT TO ANY RIGHT TO APPEAL TO A COURT IN THE STATE OF NEW
YORK). Borrower hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail,
return receipt requested, to Borrower at its address provided in subsection
9.8, such service being hereby acknowledged by Borrower to be sufficient for
personal jurisdiction in any action against Borrower in any such court and to
be otherwise effective and binding service in every respect. Nothing herein
shall affect the right to serve process in any other manner permitted by law or
shall
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limit the right of any Lender to bring proceedings against Borrower in the
courts of any other jurisdiction.
9.18 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. Each party hereto acknowledges that this
waiver is a material inducement to enter into a business relationship, that each
has already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this waiver
with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event
of litigation, this Agreement may be filed as a written consent to a trial by
the court.
9.19 Confidentiality.
Each Lender shall hold all non-public information obtained pursuant to the
requirements of the Transaction Documents which has been identified as
confidential by Borrower in accordance with such Lender's customary procedures
for handling confidential information of this nature, it being understood and
agreed by Borrower that in any event a Lender may make disclosures, subject to
this Section 9.19, reasonably required by any bona fide assignee, transferee or
participant in connection with the contemplated assignment or transfer by such
Lender of any Loans or any participation therein (at which time, any such
assignee, transferee or participant shall be bound by this Section 9.19) or as
required or requested by any governmental agency or representative thereof or
pursuant to legal process or in accordance with any applicable law or
regulation; provided that, unless specifically prohibited by applicable law or
court order, each Lender shall notify Borrower of any request by any
governmental agency or representative thereof (other than any such request in
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connection with any examination of the financial condition of such Lender by
such governmental agency) for disclosure of any such non-public information
prior to disclosure of such information; and provided further, that in no event
shall any Lender be obligated or required to return any materials furnished by
Borrower.
9.20 Counterparts; Effectiveness.
(i) This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
(ii) This Agreement shall become effective upon the execution of a
counterpart hereof by (the "Effective Date") each of the parties hereto and
receipt by Company and Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
ATLAS FREIGHTER LEASING, INC.
By:
---------------------------------
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Treasurer and Secretary
BANKERS TRUST COMPANY, as Agent and Lender
By:
---------------------------------
Name:
Title:
Notice Address:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
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LENDERS:
SENIOR HIGH INCOME PORTFOLIO, INC.,
as Lender
By:
---------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING
RATE FUND, INC., as Lender
By:
---------------------------------
Name:
Title:
FLOATING RATE PORTFOLIO, as Lender
BY: CHANCELLOR LGT SENIOR
SECURED MANAGEMENT INC.,
as Attorney-in-Fact
By:
---------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Lender
By:
---------------------------------
Name:
Title:
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OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO (a unit of The Chase Manhattan
Bank), as Lender
By:
---------------------------------
Name:
Title:
88
-▇▇-
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PRIME RATE TRUST, as Lender
By:
---------------------------------
Name:
Title:
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▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME RATE
INCOME TRUST, as Lender
By:
---------------------------------
Name:
Title:
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DEEPROCK & COMPANY, as Lender
BY: ▇▇▇▇▇ ▇▇▇▇▇ MANAGEMENT,
as Investment Advisor
By:
---------------------------------
Name:
Title: