Exhibit 10.22
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CREDIT AGREEMENT
[Midway/LBK]
Dated as of
July 31, 2000
AMONG
MIDWAY AIRLINES CORPORATION,
Borrower,
EACH SENIOR LOAN PARTICIPANT
IDENTIFIED ON SCHEDULE I HERETO,
Senior Loan Participants,
BOEING NEVADA, INC.,
Junior Loan Participant
and
LANDESBANK SCHLESWIG-HOLSTEIN GIROZENTRALE,
Security Agent
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Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz
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TABLE OF CONTENTS
Page
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SECTION 1. Certain Definitions...................................................... 1
SECTION 2. Commitments; Borrower's Notice of Payment Dates; Closing Procedure....... 1
SECTION 3. Terms of Loan Certificates; Fees......................................... 4
SECTION 4. Conditions............................................................... 4
(a) Conditions Precedent to the Effectiveness of the Commitments......... 4
(b) Conditions Precedent to the Loan Participants' Participation
in each Advance...................................................... 6
SECTION 5. [Intentionally Omitted].................................................. 8
SECTION 6. Extent of Interest of Holders............................................ 8
SECTION 7. Borrower's Representations and Warranties................................ 8
SECTION 8. Indemnities.............................................................. 12
(a) General Indemnity.................................................... 12
(b) [Intentionally Omitted].............................................. 15
(c) Withholding Taxes.................................................... 15
(d) Interest............................................................. 16
SECTION 9. Covenants of the Borrower................................................ 16
(a) Borrower Merger...................................................... 16
(b) U.S. Air Carrier..................................................... 17
(c) Purchase Agreements.................................................. 17
(d) Financial Covenants.................................................. 18
(e) Restriction on Subsidiaries.......................................... 18
(f) Further Assurances................................................... 18
SECTION 11. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial............. 19
SECTION 12. Invoices and Payment of Expenses......................................... 20
SECTION 13. Terms of Subordination................................................... 20
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SECTION 14. Payment Rights........................................................... 22
SECTION 15. Confidentiality.......................................................... 24
SECTION 16. Miscellaneous............................................................ 24
Schedules:
I. Notice and Account Information
II. Participations
III. Description of Aircraft
IV. Advances
Exhibits:
Exhibit A - Form of Funding Notice
Exhibit B - Form of Assignment Agreement
Exhibit C - Financial Covenants of Borrower
Exhibit D - Intentionally Reserved
Exhibit E-1 - Consent and Agreement to Mortgage and Security Agreement
Exhibit E-2 - Consent and Agreement of CFM International, Inc.
Exhibit F - Remarketing and Support Agreement
ii
CREDIT AGREEMENT [Midway/LBK]
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THIS CREDIT AGREEMENT [Midway/LBK] dated as of July 31, 2000 is among (i)
Midway Airlines Corporation, a Delaware corporation, (the "Borrower"), (ii) each
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Senior Loan Participant identified on Schedule I hereto, (iii) Boeing Nevada,
Inc., as Junior Loan Participant, and (iv) Landesbank Schleswig-Holstein
Girozentrale, a statutory body incorporated under public law, domiciled in Kiel,
as the Security Agent.
W I T N E S S E T H:
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WHEREAS, certain terms are used herein as defined in Section 1(a) hereof;
and
WHEREAS, concurrently with the execution and delivery of this Agreement,
the Borrower and the Security Agent are entering into the Mortgage and Security
Agreement [Midway/LBK] dated as of the date hereof (the "Mortgage") pursuant to
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which the Borrower agrees, among other things, to issue one or more Senior Loan
Certificates and Junior Loan Certificates in respect of each Advance payable to
the Manufacturer under the Boeing Purchase Agreement as evidence of the
Borrower's indebtedness to the Senior Loan Participants and the Junior Loan
Participant, respectively, which Loan Certificates will be secured by the
mortgage and security interest created by the Borrower in favor of the Security
Agent.
NOW THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
SECTION 1. Certain Definitions.
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Except as otherwise defined in this Agreement, including its annexes,
schedules and exhibits, terms used herein in capitalized form shall have the
meanings attributed thereto in the Mortgage.
Unless the context otherwise requires, any reference herein to any of the
Operative Documents refers to such document as it may be modified, amended or
supplemented from time to time in accordance with its terms and the terms of
each other agreement restricting the modification, amendment or supplement
thereof.
SECTION 2. Commitments; Borrower's Notice of Payment Dates; Closing
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Procedure.
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(a) Subject to the terms and conditions of this Agreement, each Loan
Participant agrees to make a secured loan to the Borrower in respect of each
Advance (herein called, for such Advance, a "Drawing") on a Borrowing Date to be
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designated pursuant to Section 2(c) hereof, but in no event later than the
Commitment Termination Date. In the case of each Senior Loan Participant, such
Drawing shall be equal to the lesser of (i) $ * minus the aggregate amount of
---
outstanding Drawings made by such Senior Loan Participant prior to such
Borrowing Date and (ii) such Senior Loan Participant's Participation Percentage
set forth
_________________________________
* Indicates information deleted for confidentiality purposes.
opposite such Senior Loan Participant's name in Schedule II hereto multiplied by
the Senior Loan Portion of such Advance (for each Senior Loan Participant, such
Senior Loan Participant's "Commitment" with respect to such Advance) and, in the
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case of Junior Loan Participant, such Drawing shall be provided that at no time
shall the aggregate amount of Drawings made by the Senior Loan Participants in
respect of such Aircraft be more than * % of the sum of such Senior Loan
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Participants' outstanding Drawings with respect to such Aircraft plus the
Borrower's Cash Contribution for such Aircraft plus the Junior Loan
Participant's outstanding Drawings for such Aircraft (such Drawing, the Junior
Loan Participant's "Commitment" with respect to such Advance); provided
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further that the aggregate amount of Drawings for all Advances to be made by any
Senior Loan Participant shall not exceed the amount in Dollars set forth
opposite such Senior Loan Participant's name in Schedule II hereto as its
Maximum Commitment (its "Maximum Commitment"). The Drawings shall be made in
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separate series (each, a "Series") with respect to each Aircraft.
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If any Loan Participant shall default in its obligation to make the amount
of its Commitment available pursuant to this Section 2(a) in respect of any
Advance, no other Loan Participant shall have an obligation to increase the
amount of its Commitment for such Advance and the obligations of the non-
defaulting Loan Participant shall remain subject to the terms and conditions set
forth in this Agreement.
Borrower shall execute and deliver to each Loan Participant with
appropriate insertions a Loan Certificate to evidence such Loan Participant's
Commitment. The Loan Certificates shall be issued in two classes, with each
Senior Loan Participant receiving a Senior Loan Certificate and the Junior Loan
Participant receiving a Junior Loan Certificate. Each Drawing shall be
evidenced by this Agreement, the Loan Certificate with respect thereto, and
notations made from time to time by each Loan Participant in its books and
records, including computer records. Each Loan Participant shall record in its
books and records, including computer records, the principal amount of the
Drawings owing to it from time to time. Each Loan Participant's books and
records shall constitute presumptive evidence, absent manifest error, of the
accuracy of the information contained therein. Failure by any Loan Participant
to make any such notation or record shall not affect the obligations of Borrower
to such Loan Participant with respect to the repayment of its Drawings.
(b) The Borrower may arrange to have another financial institution
reasonably acceptable to the Security Agent act as a Senior Loan Participant
hereunder (an "Additional Senior Loan Participant"), as if it had been a Senior
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Loan Participant as of the initial Payment Date hereunder. Such Additional
Senior Loan Participant and the parties hereto shall execute an amendment to
this Agreement whereby (i) such Additional Senior Loan Participant shall become
a Senior Loan Participant hereunder, (ii) such Additional Senior Loan
Participant shall have a Maximum Commitment of up to *, and (iii) the
--
Additional Senior Loan Participant shall have a Participation Percentage for the
Senior Loan Portion of each Advance payable after the date of the addition of
the Additional Senior Loan Participant equal to such Additional Senior Loan
_________________________________
* Indicates information deleted for confidentiality purposes.
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Participant's Pro Rata Portion of the Senior Loan Portion of each such Advance.
In addition, each Senior Loan Participant's Participation Percentage (other than
the Additional Senior Loan Participant) shall be reduced to the percentage equal
to such Senior Loan Participant's Maximum Commitment divided by the sum of the
Maximum Commitments of all Senior Loan Participants (including the Additional
Senior Loan Participant). In addition, for each Loan made by the Senior Loan
Participants prior to the addition of the Additional Senior Loan Participant, on
the first Interest Payment Date after such addition, the Additional Senior Loan
Participant shall purchase at par from such Senior Loan Participants a portion
of each outstanding Senior Loan Certificate (based on a pro rata portion of the
outstanding balance of the Senior Loan Certificate then held by each Senior Loan
Participant) such that, after such purchase, the Additional Senior Loan
Participant shall hold its Pro Rata Portion of the outstanding amount of each
Drawing then made by the Senior Loan Participants and remaining outstanding
hereunder, such purchase and transfer to be accomplished in accordance with the
terms of Section 2.08 of the Mortgage.
(c) (i) The Borrower agrees to give the Security Agent at least five
(5) Business Days' prior written notice (the "Funding Notice") of the Effective
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Date and the Borrowing Date for each Advance, which Borrowing Date shall be a
Business Day not later than the Commitment Termination Date, which notice shall
specify any funding instructions and shall be in substantially the form of
Exhibit A. On the date of the execution and delivery of this Agreement and the
satisfaction of the conditions precedent in Section 4(a) hereof (the "Effective
Date"), the Loan Participants shall make Drawings (subject to the parameters in
Section 2(a)) in respect of Advances which were paid by Borrower or third-party
financiers prior to the Effective Date. The proceeds of such Drawings shall be
paid to Borrower or such third-party financiers as Borrower shall direct;
provided, however, that Borrower shall remain responsible for, and shall have
paid, its Cash Contribution for each Aircraft for which such Advances have been
paid.
(ii) In the event that any Drawing shall not be consummated in
accordance with the terms hereof on the Effective Date or the specified
Borrowing Date, the Senior Loan Participants, the Junior Loan Participant and
the Borrower shall cooperate with each other to arrange a mutually acceptable
postponement of such date (the "Delayed Borrowing Date"). In the event that the
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Drawing shall not be consummated in accordance with the terms by 2:00 p.m. (New
York time) on the Delayed Borrowing Date or, if earlier, the date on which the
Borrower notifies the Senior Loan Participants and the Junior Loan Participant
that the Drawing will not occur, the Senior Loan Participants and the Junior
Loan Participant may cancel or terminate any funding arrangements that they may
have made to enable them to fund their respective Commitments and the Borrower
shall pay to the Senior Loan Participants on demand their respective Break
Amounts (as reasonably determined by the Senior Loan Participants and certified
to the Borrower).
(d) On the Borrowing Date for each Drawing specified in a Borrower's
notice referred to in Section 2(c), subject to the terms and conditions of this
Agreement, each Loan Participant, through or on behalf of the Security Agent,
agrees to pay the amount of its Commitment for such Advance to the Manufacturer
by wire transferring (or by making other arrangements reasonably satisfactory to
the Security Agent and the Manufacturer) such amounts
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to account or accounts specified in the applicable Funding Notice, subject to
continued compliance with the parameters set forth in Section 2(b), to such
other account as the Borrower shall direct the Security Agent in writing, upon
closing to reimburse Borrower for previously funded Advances.
The closing with respect to the financing of each Advance shall take place
at the offices of ▇▇▇▇▇▇ Price, ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 3. Terms of Loan Certificates; Fees.
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(a) Each Loan Certificate shall bear interest and be repaid in
accordance with the applicable terms of the Mortgage.
(b) In consideration of the Senior Loan Participants' Commitments
hereunder, the Borrower shall pay to the Security Agent for the account of each
Senior Loan Participant on the Effective Date the up-front fee as separately
agreed in the Fee Letter. In addition, the Borrower shall pay to the Security
Agent for the account of each Senior Loan Participant quarterly on the 9th day
of each February, May, August and November in arrears on the basis of a year of
360 days and the actual number of days elapsed the commitment fee separately
agreed in the Fee Letter in respect of the average daily unused portion of each
such Senior Loan Participant's Maximum Commitment during the preceding quarterly
period. The Borrower shall continue to pay such commitment fee until the
earliest to occur of (i) the full drawing of each Senior Loan Participant's
Maximum Commitment, (ii) the Commitment Termination Date, and (iii) cancellation
or termination of the remaining unfunded Maximum Commitments of the Senior Loan
Participants.
SECTION 4. Conditions.
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(a) Conditions Precedent to the Effectiveness of the Commitments.
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It is agreed that the respective Commitments of each Loan Participant and the
effectiveness of this Agreement is subject to the satisfaction prior to or on
the Effective Date of the following conditions precedent:
(i) The following documents shall have been duly authorized,
executed and delivered by the respective party or parties thereto, shall
each be satisfactory in form and substance to such Loan Participant and
shall be in full force and effect and executed counterparts shall have been
delivered to such Loan Participant and its counsel:
(1) the Mortgage;
(2) a copy of each of the Purchase Agreements certified by
the Secretary or an Assistant Secretary of the Borrower as being a
true and accurate copy of the same;
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(3) the Consent and Agreement and the Engine Consent and
Agreement;
(4) such Loan Participant's Loan Certificate; and
(5) the Remarketing Agreement.
(ii) Such Loan Participant shall have received the following, in
each case in form and substance satisfactory to it:
(1) a certified copy of the Articles of Incorporation and
Bylaws of the Borrower and a copy of resolutions of the board of
directors of the Borrower or the executive committee thereof,
certified by the Secretary or an Assistant Secretary of the Borrower,
duly authorizing the execution, delivery and performance by the
Borrower of this Agreement, the Mortgage and each other document
required to be executed and delivered by the Borrower on each Delivery
Date in accordance with the provisions hereof and thereof; and
(2) a certificate of the Borrower as to the Person or
Persons authorized to execute and deliver this Agreement, the other
Operative Documents, and any other documents to be executed on behalf
of the Borrower in connection with the transactions contemplated
hereby and as to the signature of such person or persons.
(iii) Such Loan Participant shall have received opinions
addressed to such Loan Participant and the Security Agent from ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Esq., Senior Vice President and General Counsel for the Borrower,
Fulbright & ▇▇▇▇▇▇▇▇, special counsel to Borrower, and Kennedy, Covington,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., special North Carolina counsel to Borrower, each
in form and substance reasonably satisfactory to the addressees thereof.
(iv) Such Loan Participant shall have received an opinion
addressed to such Loan Participant and the Security Agent from counsel to
Manufacturer, in respect of the Boeing Purchase Agreement and the Consent
and Agreement, in form and substance reasonably satisfactory to the
addressees thereof.
(v) Such Loan Participant shall have received evidence in form
and substance satisfactory to such Loan Participant that the aggregate
amount of Advances in connection with each Aircraft shall be sufficient
when paid to the Manufacturer in accordance with the Credit Agreement to
satisfy the obligation of the Borrower with respect to all advance payments
due and payable for each such Aircraft under the Boeing Purchase Agreement.
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(vi) Such Loan Participant shall have received evidence in form
and substance reasonably satisfactory to such Loan Participant that the
rights of any lessee or purchaser of the Aircraft pursuant to any existing
contract between the Borrower or any of its Affiliates and such lessee or
purchaser shall not conflict with and shall be subordinate to the rights of
the Security Agent under the Mortgage.
(vii) Each Senior Loan Participant shall have received executed
copies of the Manufacturer Financing Letter and the Midway Letter.
(viii) In respect of Advances paid prior to the Effective Date,
any liens over the Mortgage Estate granted by the Borrower to finance such
Advances shall be released and terminated.
(ix) A Uniform Commercial Code financing statement or
statements covering all the security interests created by or pursuant to
the granting clause of the Mortgage shall have been executed and delivered
by the Borrower, and such financing statement or statements shall have been
duly filed in all places deemed necessary or advisable in the opinion of
counsel for the Senior Loan Participants or the Junior Loan Participant,
and any additional Uniform Commercial Code financing statements deemed
advisable by any Loan Participant or its counsel shall have been executed
and delivered by the Borrower and duly filed and all other action shall
have been taken as is deemed necessary or advisable, in the opinion of
counsel for the Senior Loan Participants or the Junior Loan Participant, to
establish and perfect the Security Agent's security interest in each of the
Purchase Agreements.
(x) Each Senior Loan Participant shall have received from
Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, special counsel for the Senior Loan
Participants, an opinion satisfactory in substance and form to such Senior
Loan Participant, as to such matters incident to the transactions
contemplated hereby as such Senior Loan Participant may reasonably request.
(xi) The Security Agent shall have received for account of the
Senior Loan Participants the up-front fee specified in Section 3(b). The
Security Agent shall disburse to each Senior Loan Participant such up-front
fee on such Loan Participant's Maximum Commitment as separately agreed.
(xii) The Rights Offering shall have closed.
(b) Conditions Precedent to the Loan Participants' Participation in
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each Advance. It is agreed that the respective obligations of each Loan
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Participant to lend its Commitment to the Borrower in respect of each Advance
(including Advances made by Borrower or a third-party financier prior to the
applicable Borrowing Date) is subject to the satisfaction prior to or on the
Borrowing Date for such Advance of the following conditions precedent:
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(i) The Security Agent shall have received due notice with
respect to the Borrowing Date for such Advance pursuant to Section 2 hereof
(or shall have waived such notice either in writing or as provided in
Section 2).
(ii) No change shall have occurred after the date of the
execution and delivery of this Agreement in applicable law or regulations
thereunder or interpretations thereof by appropriate regulatory authorities
which, in the reasonable opinion of such Loan Participant would make it a
violation of law or regulations for such Loan Participant to make its
Commitment for such Advance available to acquire its Loan Certificate(s) or
to realize the benefits of the security afforded by the Mortgage.
(iii) Each other Loan Participant shall have made available the
amount of its Commitment for such Advance in accordance with Section 2(c)
hereof (unless Borrower (in the case of Junior Loan Participant or any
Senior Loan Participant) or the Junior Loan Participant (as an additional
Drawing made by the Junior Loan Participant hereunder, in the case of any
Senior Loan Participant) shall have made available the amount of such
unfunded Commitment) and the Borrower shall have paid to the Manufacturer
its Cash Contribution in respect of the applicable Aircraft.
(iv) All appropriate action required to have been taken by any
governmental or political agency, subdivision or instrumentality of the
United States, on or prior to the Delivery Date for such Aircraft in
connection with the transaction contemplated by this Agreement shall have
been taken, and all orders, permits, waivers, authorizations, exemptions
and approvals of such entities required to be in effect on such Borrowing
Date in connection with the transaction contemplated by this Agreement
shall have been issued, and all such orders, permits, waivers,
authorizations, exemptions and approvals shall be in full force and effect
on such Borrowing Date.
(v) On such Borrowing Date, (A) the representations and
warranties of the Borrower contained in Section 7 of this Agreement shall
be true and accurate as though made on and as of such date except to the
extent that such representations and warranties relate solely to an earlier
date (in which case such representations and warranties shall be true and
accurate on and as of such earlier date), (B) no event shall have occurred
and be continuing which constitutes (or would, with the passage of time or
the giving of notice or both, constitute) an Event of Default, and (C)
since December 31, 1999 there shall have been no material and adverse
change in the financial or operational condition of the Borrower.
(vi) No action or proceeding shall have been instituted nor
shall governmental action be threatened before any court or governmental
agency, nor shall any order, judgment or decree have been issued or
proposed to be issued by any court or governmental agency at the time of
such Borrowing Date to set aside, restrain, enjoin or
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prevent the completion and consummation of this Agreement or the
transaction contemplated hereby.
(vii) The Security Agent shall have received for the account of
the Senior Loan Participants the commitment fees specified in Section 3(b)
and due and payable on or prior to such Borrowing Date. The Security Agent
shall distribute to each Senior Loan Participant such commitment fee as
separately agreed.
SECTION 5. [Intentionally Omitted].
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SECTION 6. Extent of Interest of Holders.
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No Holder shall have any further interest in, or other right with respect
to, the mortgage and security interests created by the Mortgage when and if the
Original Amount of and interest on the Loan Certificate held by such Holder and
all other sums payable to such Holder hereunder, under the Mortgage and under
such Loan Certificate shall have been paid in full; provided, however, that the
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interests and rights of the Loan Participants in and with respect to the
mortgage and security interests created by the Mortgage shall continue after all
such amounts have been paid in full so long as the Commitments have not
terminated.
SECTION 7. Borrower's Representations and Warranties.
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The Borrower represents and warrants that on the date hereof and on each
Borrowing Date:
(i) the Borrower is a corporation duly organized and validly
existing in good standing pursuant to the laws of the State of Delaware; is
duly qualified to do business as a foreign corporation in each jurisdiction
in which its operations or the nature of its business requires, except
where the failure to be so qualified would not have a material adverse
effect on the Borrower or its business; is a U.S. Air Carrier; has its
chief executive office (as such term is defined in Article 9 of the Uniform
Commercial Code) in the State of North Carolina; and has the corporate
power and authority to engage in air transport and to carry on scheduled
passenger service as presently conducted, to purchase the Aircraft under
the Boeing Purchase Agreement and to enter into and perform its obligations
under the Operative Documents;
(ii) the execution, delivery and performance by the Borrower of
the Operative Documents have been duly authorized by all necessary
corporate action on the part of the Borrower, do not require any
stockholder approval, or approval or consent of any trustee or holders of
any indebtedness or obligations of the Borrower except such as have been
duly obtained and are in full force and effect, and none of the execution,
delivery or performance by Borrower of such Operative Documents contravenes
any law, judgment, government rule, regulation or order binding on the
Borrower or the articles of incorporation or bylaws of the Borrower or
contravenes the provisions of, or constitutes a
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default under, or results in the creation of any Lien (other than Permitted
Liens) upon the property of the Borrower under, any indenture, mortgage,
contract or other agreement to which the Borrower is a party or by which it
or its properties may be bound or affected;
(iii) neither the execution and delivery by the Borrower of the
Operative Documents nor the performance by the Borrower of its obligations
thereunder requires the consent or approval of, the giving of notice to, or
the registration with, or the taking of any other action in respect of any
Federal, state or foreign government authority or agency, except for (A)
the orders, permits, waivers, exemptions, authorizations and approvals of
the regulatory authorities having jurisdiction over the operation of the
Aircraft by the Borrower, which orders, permits, waivers, exemptions,
authorizations and approvals, if any, required to be obtained and in full
force and effect as of the date hereof, have been duly obtained and are in
full force and effect except for those Permits the failure to obtain which
would not have a material adverse effect on the financial condition of the
Borrower or the ability of the Borrower to perform its obligations under
the Operative Documents, and (B) any filings, registrations or applications
specifically described in this Agreement (the items referred to in (A) and
(B) collectively referred to as "Permits");
(iv) the Operative Documents to which the Borrower is a party
each constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with the terms thereof
except as such enforceability may be limited by equitable principles or
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally;
(v) there are no pending or (to the best of Borrower's
knowledge) threatened actions or proceedings before any court, arbitrator
or administrative agency which individually (or in the aggregate in the
case of any group of related lawsuits) is expected to have a material and
adverse effect on the financial condition of the Borrower or the ability of
the Borrower to perform its obligations under the Operative Documents;
(vi) except for the filing of financing statements (and
continuation statements at periodic intervals) with respect to the
interests created by such documents under the Uniform Commercial Code of
North Carolina, and Delaware and such other states as may be specified in
the opinion furnished pursuant to Section 4(b)(ix) hereof, no further
action, including any filing or recording of any document (including any
financing statement in respect thereof under Article 9 of the Uniform
Commercial Code of any applicable jurisdiction), is necessary or advisable
in order to establish and perfect the first mortgage Lien on each of the
Purchase Agreements and the rest of the Mortgage Estate in favor of the
Security Agent pursuant to the Mortgage in any applicable jurisdiction in
the United States;
(vii) there has not occurred any event which constitutes a
Default or an Event of Default under the Mortgage which is presently
continuing;
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(viii) the statements of financial position of the Borrower as
of December 31, 1999 and March 31, 2000 and the related statements of
earnings and cash flow of the Borrower in all material respects for the
year and fiscal quarter, as the case may be, then ended, copies of which
have been furnished to each Loan Participant, fairly present the financial
condition of the Borrower at such date and the results of operations and
cash flow of the Borrower for the period ended on such dates, in accordance
with generally accepted accounting principles consistently applied, and
subject, in the case of the March 31, 2000 statements, to normal year-end
adjustments, and since December 31, 1999 there has been no material and
adverse change in such condition or operations;
(ix) each of the Purchase Agreements is in full force and
effect and neither the Borrower nor, to the knowledge of the Borrower,
either the Manufacturer or the Engine Manufacturer is in default of its
obligations thereunder. Except as contemplated by the Mortgage and Liens
granted to third-party financiers and released and terminated prior to the
Effective Date, the Borrower has not assigned nor granted any Lien in its
rights under either Purchase Agreement in respect of any of the Aircraft or
the Engines;
(x) assuming the Loan Participants are acquiring their Loan
Certificates in the ordinary course of their normal business operations for
their own accounts, none of the transactions contemplated by this Agreement
will violate or result in a violation of the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, or any
regulations issued pursuant thereto;
(xi) neither the Borrower nor anyone acting on behalf of the
Borrower has directly or indirectly offered any interest in the Loan
Certificates for sale to, or solicited any offer to acquire any of the same
from, anyone other than the Loan Participants and not more than 35 other
institutions believed capable of evaluating and bearing the risks of
investment in the transactions contemplated hereby;
(xii) no governmental approval of any kind is required of any
Loan Participant for its execution of or performance under this Agreement
or any agreement contemplated hereby solely by reason of any fact or
circumstance peculiar to the Borrower;
(xiii) the Borrower has filed or caused to be filed all Federal,
state, local and (in the Borrower's opinion) foreign tax returns which are
required to be filed and has paid or caused to be paid or provided adequate
reserves for the payment of all taxes shown to be due and payable on such
returns or (except to the extent being contested in good faith and by
appropriate proceedings and for the payment of which adequate reserves have
been provided in accordance with generally accepted accounting principles)
on any assessment received by the Borrower, to the extent that such taxes
have become due and payable, except such returns or taxes as to which the
failure to file or pay, as the
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case may be, could not be reasonably expected to materially and adversely
affect the assets, operations or financial condition, of the Borrower;
(xiv) the Borrower is not (x) in default under any indenture,
mortgage, lease or credit agreement or under any other agreement or
instrument of a material nature to which the Borrower is now a party or by
which it is bound, and no event has occurred and is continuing which, under
the provisions of any such indenture, mortgage, credit agreement or other
material agreement or instrument, with the lapse of time or the giving of
notice, or both, would constitute a default thereunder or (y) in violation
of any law, order, injunction, decree, rule or regulation applicable to the
Borrower of any court or administrative body, which default or violation
would reasonably be expected to materially and adversely affect the
operations or financial condition of the Borrower or the Borrower's ability
to execute, deliver and perform its obligations under the Operative
Documents;
(xv) (v) the Borrower has not engaged in any transaction with
respect to any Plan in connection with which the Borrower could be
subjected to either a material civil penalty assessed pursuant to Section
502(i) of ERISA, or a material tax imposed by Section 4975 of the Code; (w)
no material liability to the Pension Benefit Guaranty Corporation (other
than liability for premiums) has been incurred by the Borrower with respect
to any Plan; (x) there has been no event or condition which presents a
material risk of termination of any Plan by the Pension Benefit Guaranty
Corporation; (y) no accumulated funding deficiency (as defined in Section
302 of ERISA and Section 412 of the Code), whether or not waived, exists
with respect to any Plan; and (z) no material amount of "withdrawal
liability," as that term is used in Section 4201 of ERISA, has been or is
expected to be incurred by the Borrower nor has the Borrower or any
affiliate of the Borrower been notified by any multi-employer plan (within
the meaning of Section 3(37)(A) of ERISA) that such multi-employer plan is
in reorganization or insolvency within the meaning of Section 4241 or
Section 4245 of ERISA or that such multi-employer plan intends to terminate
or has been terminated under Section 4041A of ERISA (for purposes of this
subclause (z), the term "affiliate" shall mean any corporation or person
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower or is under common
control (within the meaning of Section 414(c) of the Code) with the
Borrower);
(xvi) assuming the Loan Participants are not using the assets of
any Plan to make the Drawings contemplated by this Agreement neither the
Borrower nor any Plan nor any trust created thereunder has engaged in a
"prohibited transaction," within the meaning of Section 406 of ERISA or
Section 4975 of the Code with respect to the transactions contemplated
hereby which could subject the Borrower to any material tax or penalty
pursuant to Section 4975 of the Code or Section 502(i) of ERISA;
(xvii) the Borrower is not an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 and
the Borrower is not
11
a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935;
(xviii) to the best of Borrower's knowledge, none of the written
financial statements or other written financial information (excluding
financial projections, information derived from secondary sources and
general market data) furnished by or on behalf of the Borrower to the
Security Agent or any Loan Participant in connection with the negotiation
of this Agreement or delivered hereunder (as modified or supplemented by
other information so furnished) contains any material misstatement of fact
or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading and the financial projections were prepared in good faith;
(xix) no part of the proceeds of any Loan hereunder will be
used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board of Governors of the
Federal Reserve, including Regulations U and X;
(xx) there have been no amendments or supplements to the
Manufacturer Financing so as to make the terms of the Manufacturer
Financing Letter untrue in any material respect;
(xxi) each of the Purchase Agreements, the Remarketing
Agreement and the Manufacturer Financing is in full force and effect and
neither Borrower nor Manufacturer is in material default in respect of its
obligations thereunder;
(xxii) the Security Agent has a duly perfected first priority
security interest in each of the Purchase Agreements (subject to Permitted
Liens); and
(xxiii) the Mortgage Estate is free and clear of all Liens
(except Liens contemplated by the Mortgage and Permitted Liens).
SECTION 8. Indemnities.
-----------
(a) General Indemnity. Subject to the next following paragraph,
-----------------
the Borrower hereby agrees to indemnify each Indemnitee against, and agrees to
protect, save and keep harmless each of them from any and all Expenses imposed
on, incurred by or asserted against any Indemnitee arising out of or directly
resulting from (i) the operation, possession, use, maintenance, overhaul,
testing, registration, reregistration, delivery, non-delivery, lease, nonuse,
modification, alteration, or sale of any Aircraft, Airframe or Engine, or any
engine used in connection with any Airframe or any part of any of the foregoing
by the Borrower, any lessee or any other Person whatsoever, including, without
limitation, claims for death, personal injury or property damage or other loss
or harm to any person whatsoever and claims relating to any laws, rules or
regulations pertaining to such operation, possession, use, maintenance,
overhaul, testing,
12
registration, reregistration, delivery, non-delivery, lease, non-use,
modification, alteration, sale or return including environmental control, noise
and pollution laws, rules or regulations; (ii) the manufacture, design,
purchase, acceptance, rejection, delivery, or condition of any Aircraft,
Airframe or Engine, any engine used in connection with any Airframe, or any part
of any of the foregoing including, without limitation, latent and other defects,
whether or not discoverable, or trademark or copyright infringement; (iii) any
breach of or failure to perform or observe, or any other noncompliance with, any
covenant or agreement to be performed, or other obligation of the Borrower under
any of the Operative Documents, or the falsity of any representation or warranty
of the Borrower in any of the Operative Documents; (iv) assuming the Loan
Participants are making Drawings in the ordinary course of their business for
their own accounts, the offer, sale and delivery by the Borrower or anyone
acting on behalf of the Borrower of any Loan Certificates or successor debt
obligations issued in connection with the refunding or refinancing thereof
(including, without limitation, any claim arising out of the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended, or any other
federal or state statute, law or regulation, or at common law or otherwise
relating to securities (collectively "Securities Liabilities")) (the indemnity
----------------------
provided in this clause (iv) to extend also to any Person who controls an
Indemnitee, its successors, assigns, employees, directors, officers, servants
and agents within the meaning of Section 15 of the Securities Act of 1933, as
amended); and (v) the transactions contemplated by the Operative Documents, any
Event of Default under the Mortgage or the enforcement against the Borrower of
any of the terms thereof (including, without limitation, Article V of the
Mortgage).
The foregoing indemnity shall not extend to any Expense of any Indemnitee
to the extent attributable to one or more of the following: (1) acts or
omissions involving the willful misconduct or gross negligence of such
Indemnitee or any Person acting on behalf of such Indemnitee (other than gross
negligence imputed to such Indemnitee solely by reason of its interest in an
Aircraft); (2) any Tax, or increase in tax liability under any tax law (such
matter being subject to the indemnity in Section (c) hereof); provided, however,
that this clause (2) shall not apply to (A) taxes taken into consideration in
making any payments on an after-tax basis or (B) any license, documentation,
registration or filing fees imposed upon or in connection with the execution,
delivery, registration or filing of this Agreement, a Loan Certificate or the
Mortgage as contemplated in Section 12(iii) hereof; or (3) a failure on the part
of the Security Agent to distribute in accordance with the Mortgage any amounts
received and distributable by it thereunder.
The Borrower further agrees that any payment or indemnity pursuant to this
Section 8(a) in respect of any "Expense" shall be in an amount which, after
deduction of all Taxes required to be paid by such recipient with respect to
such payment or indemnity under the laws of any federal, state or local
government or taxing authority in the United States, or under the laws of any
taxing authority or governmental subdivision of a foreign country, or any
territory or possession of the United States or any international authority,
shall be equal to the excess, if any, of (A) the amount of such Expense over (B)
the net reduction in Taxes required to be paid by such recipient resulting from
the accrual or payment of such Expense.
13
If a claim is made against an Indemnitee involving one or more Expenses and
such Indemnitee has notice thereof, such Indemnitee shall after receiving such
notice give notice of such claim to the Borrower; provided that the failure to
provide such notice shall not release the Borrower from any of its obligations
to indemnify hereunder except to the extent that the Borrower is prejudiced as a
result of the failure to give such notice, and no payment by the Borrower to an
Indemnitee pursuant to this Section 8(a) shall be deemed to constitute a waiver
or release of any right or remedy which the Borrower may have against such
Indemnitee for any actual damages as a result of the failure by such Indemnitee
to give the Borrower such notice. The Borrower shall be entitled, at its sole
cost and expense, acting through counsel reasonably acceptable to the respective
Indemnitee, so long as the Borrower has acknowledged in writing its
responsibility for such Expense hereunder (unless such Expense is covered by the
second paragraph of this Section 8(a), except that such acknowledgment does not
apply if the decision of a court or arbitrator provides that the Borrower is not
liable hereunder), (A) in any judicial or administrative proceeding that
involves solely a claim for one or more Expenses, to assume responsibility for
and control thereof, (B) in any judicial or administrative proceeding involving
a claim for one or more Expenses and other claims related or unrelated to the
transactions contemplated by the Operative Documents, to assume responsibility
for and control of such claim for Expenses to the extent that the same may be
and is severed from such other claims (and such Indemnitee shall use its
reasonable efforts to obtain such severance), and (C) in any other case, to be
consulted by such Indemnitee with respect to judicial proceedings subject to the
control of such Indemnitee and to be allowed, at the Borrower's sole expense, to
participate therein. The Indemnitee may participate at its own expense and with
its own counsel in any judicial proceeding controlled by the Borrower pursuant
to the preceding provisions. Notwithstanding any of the foregoing, the Borrower
shall not be entitled to assume responsibility for and control of any such
judicial or administrative proceedings if any Event of Default shall have
occurred and be continuing, if such proceedings will involve a material risk of
the sale, forfeiture or loss of an Aircraft unless the Borrower shall have
posted a bond or other security reasonably satisfactory to the relevant
Indemnitee with respect to such risk or if such proceedings could entail any
risk of criminal liability being imposed on such Indemnitee.
The Indemnitee shall supply the Borrower with such information reasonably
requested by the Borrower as is necessary or advisable for the Borrower to
control or participate in any proceeding to the extent permitted by this Section
8(a). Such Indemnitee shall not enter into a settlement or other compromise
with respect to any Expense without the prior written consent of the Borrower,
which consent shall not be unreasonably withheld or delayed, unless such
Indemnitee waives its right to be indemnified with respect to such Expense under
this Section 8(a).
The Borrower shall supply the Indemnitee with such information reasonably
requested by the Indemnitee as is necessary or advisable for the Indemnitee to
control or participate in any proceeding to the extent permitted by this Section
8(a).
Notwithstanding any other provision of this Section 8(a) to the contrary,
in the case of any Expense indemnified by the Borrower hereunder which is
covered by a policy of insurance
14
maintained by the Borrower, it shall be a condition of such indemnity with
respect to any particular Indemnitee that such Indemnitee shall cooperate with
the insurers in the exercise of their rights to investigate, defend or
compromise such claim as may be required to retain the benefits of such
insurance with respect to such claim.
To the extent of any payment of any Expense pursuant to this Section 8(a),
the Borrower, without any further action, shall be subrogated to any claims the
Indemnitee may have relating thereto. The Indemnitee agrees to give such
further assurances or agreements and to cooperate with the Borrower to permit
the Borrower to pursue such claims, if any, to the extent reasonably requested
by the Borrower.
In the event that the Borrower shall have paid an amount to an Indemnitee
pursuant to this Section 8(a), and such Indemnitee subsequently shall be
reimbursed in respect of such indemnified amount from any other Person, such
Indemnitee shall promptly pay the Borrower the amount of such reimbursement,
including interest received attributable thereto, provided that no Default or
Event of Default has occurred and is continuing.
(b) [Intentionally Omitted].
-----------------------
(c) Withholding Taxes.
-----------------
(i) The Borrower agrees that any payment made to or for the
benefit of a Loan Participant that is a Treaty Lender with respect to
interest, principal, Break Amount or other amounts payable on or with
respect to a Loan Certificate (including, without limitation, amounts
payable pursuant to Section 2.13 of the Mortgage) shall be free of all
withholdings or deductions with respect to United States Federal income
withholding Taxes ("U.S. Withholding Taxes"), and in the event that the
----------------------
Security Agent shall be required by applicable law to make any such
withholding or deduction for any such U.S. Withholding Taxes (a) the
Borrower shall pay to such Loan Participant an additional amount so that
after making all required withholdings or deductions for U.S. Withholding
Taxes from such payment such Loan Participant receives the same amount it
would have received had no such withholdings or deductions been made, (b)
the Security Agent shall make all such withholdings or deductions, and (c)
the Security Agent shall pay such amount withheld or deducted to the
Internal Revenue Service in accordance with applicable law; provided,
--------
however, that the Borrower shall only have an obligation under this Section
-------
8(c) for U.S. Withholding Taxes if such Loan Participant is a Treaty Lender
and such U.S. Withholding Taxes result from a change in the income tax
treaty between the United States and Austria, France, Germany, Ireland, the
Netherlands or the United Kingdom (each, a "Specified Transferee
--------------------
Jurisdiction") or any applicable law or regulation that occurs after the
------------
Effective Date.
(ii) For purposes of this Section 8(c), the term "Treaty Lender"
-------------
shall mean (a) a Senior Loan Participant who is a resident of a Specified
Transferee Jurisdiction and entitled to claim the benefits of the income
tax treaty between the United
15
States and such Specified Transferee Jurisdiction on the Effective Date or
(b) a transferee of a Treaty Lender described in clause (a) of this Section
8(c)(ii) which transferee satisfies all the requirements of such clause (a)
at the time it acquires its interest in a Loan Certificate.
(iii) Each Loan Participant agrees to investigate alternatives
for reducing or avoiding any Taxes indemnifiable pursuant to this Section
8(c) and to use reasonable efforts to avoid or minimize, to the greatest
extent possible, any liability with respect to such Taxes, including,
without limitation, by transferring its Loan Certificates to an Affiliate
or to a third party or by designating a different lending office, if such
transfer, designation or other action would avoid the need for, or reduce
the amount of, any such Taxes; provided, however, that this sentence shall
-------- -------
not obligate any Loan Participant to take any action that would, in its
reasonable judgment, cause such Loan Participant to incur any loss or cost,
unless the Borrower agrees to reimburse such Loan Participant therefor in
manner reasonably satisfactory to such Loan Participant.
(iv) If by reason of any U.S. Withholding Taxes with respect to
which a payment or indemnity was made or paid by the Borrower to, or on
behalf of, a Senior Loan Participant under clause (a) of Section 8(c)(i),
such Senior Loan Participant realizes a net tax savings (by means of a
credit, deduction or otherwise), such Senior Loan Participant shall pay to
the Borrower, as promptly as practicable after the realization of such net
saving, the amount of such net tax saving together with any additional tax
saving realized as a result of such payment (it being understood that the
amount of such tax saving and the timing of the realization thereof shall
be reasonably determined in good faith by the Holder).
(d) Interest. The Borrower will pay to each Indemnitee on demand,
--------
to the extent permitted by applicable law, interest on any amount of indemnity
not paid when due pursuant to this Section 8 until the same shall be paid, at
the Past Due Rate.
SECTION 9. Covenants of the Borrower. The Borrower hereby covenants for
-------------------------
the benefit of (x) in the case of Sections 9(a) and 9(d), the Senior Loan
Participants and (y) in all other cases, all Loan Participants, as follows:
-
(a) Borrower Merger. For so long as the Mortgage remains in force,
---------------
the Borrower shall not enter into any merger or consolidation, or sell,
transfer, lease or convey all or a substantial part of its assets, unless, only
in the case of such merger or consolidation:
(i) the Borrower shall be in compliance with the Financial
Covenants in Exhibit C hereto and no Default under Sections 4.01, 4.02,
4.07 or 4.08 of the Mortgage or Event of Default shall have occurred and be
continuing or would result therefrom;
16
(ii) the Borrower is the surviving corporation or, if
otherwise, such other Person or continuing corporation (herein called
"Successor Corporation") shall be a corporation incorporated under the
---------------------
laws of a state of the United States, and shall be a U.S. Air Carrier;
(iii) in the case of a Successor Corporation, such Successor
Corporation shall (A) execute, prior to or contemporaneously with the
consummation of such transaction, such agreements, if any, as are in the
reasonable opinion of the Security Agent necessary or advisable to evidence
the assumption by the Successor Corporation of liability for all of the
obligations of the Borrower under the Mortgage and the other Operative
Documents, (B) make such recordings and filings, and take such other action
with respect to the Operative Documents, as shall be necessary or advisable
in the reasonable opinion of the Loan Participants to protect their
security interest in the Aircraft, and (C) cause to be delivered to the
Security Agent and the Loan Participants such legal opinions (which may be
from in-house counsel) as any of them may reasonably request in connection
with the matters specified in the preceding clauses (A) and (B).
*
---
Upon any consolidation or merger in accordance with this Section 9(a), the
Successor Corporation shall succeed to, and be substituted for, and may exercise
every right and power of, the Borrower under this Agreement with the same effect
as if such Successor Corporation had been named as the Borrower herein.
(b) U.S. Air Carrier. The Borrower covenants and agrees that at all
----------------
times it will be an "air carrier" within the meaning of the Federal Aviation Act
operating under certificates issued pursuant to Section 40102(a) of such Act and
shall otherwise meet the standards of the definition of U.S. Air Carrier.
(c) Purchase Agreements. The Borrower shall duly perform all of its
-------------------
obligations under each of the Purchase Agreements and take all actions necessary
to keep the Purchase Agreements in full force and effect. The Borrower shall
immediately notify the Security Agent of any default (whether by the Borrower or
the Manufacturer or the Engine Manufacturer) under or cancellation, termination
or rescission or purported cancellation, termination or rescission of either
Purchase Agreement specifying in reasonable detail the nature of such default,
cancellation, rescission or termination. The Borrower shall not in any way
modify, terminate or amend either Purchase Agreement, except as expressly
permitted by the Mortgage, or the Manufacturer Financing in a way which would
make any material term of the Manufacturer Financing Letter untrue or would
otherwise adversely affect the Borrower's ability to utilize the Manufacturer
Financing without the written consent of the Security Agent (acting at the
unanimous direction of 100% of the Holders).
-------------------
* Indicates information deleted for confidentiality purposes.
17
(d) Financial Covenants. Subject to Section 3.04 of the Mortgage, the
-------------------
Borrower shall comply with the Financial Covenants set forth in Exhibit C.
(e) Restriction on Subsidiaries. The Borrower may not invest on an
---------------------------
aggregate basis more than Ten Million Dollars in any direct of indirect
subsidiary unless such subsidiary guarantees all of the Borrower's payment and
performance obligations under the Operative Documents.
(f) Further Assurances. The Borrower covenants and agrees with each
------------------
party hereto as follows:
(i) The Borrower will cause to be done, executed, acknowledged
and delivered all and every such further acts, conveyances and assurances
as any Holder shall reasonably require for accomplishing the purposes of
this Agreement and the other Operative Documents; provided that any
instrument or other document so executed by the Borrower will not expand
any obligations or limit any rights of the Borrower in respect of the
transactions contemplated by any Operative Documents.
(ii) The Borrower, at its expense, will take all actions
(including the filing of financing statements under the Uniform Commercial
Code in all applicable jurisdictions) and cause the lien of the Mortgage to
at all times be and remain a first priority and perfected Lien on the
Mortgage Estate.
(iii) The Borrower shall pay all reasonable costs and expenses
(including costs and disbursements of counsel) incurred by the Security
Agent and the Holders after the date hereof in connection with (x) any
supplements or amendments of the Operative Documents (including, without
limitation, any related recording costs) (other than any supplement or
amendment associated with the syndication of the Loan Certificates or the
sale of participation interests therein), (y) any Default and any
enforcement or collection proceedings resulting therefrom or in connection
with the negotiation of any restructuring or "work-out" (whether or not
consummated), or (z) the enforcement of this Section 9.
SECTION 10. Notices.
-------
All notices, demands, instructions and other communications required or
permitted to be given to or made upon any party hereto shall be in writing and
shall be personally delivered or sent by registered or certified mail, postage
prepaid, or by facsimile, or by prepaid courier service, and shall be effective
upon receipt.
Unless otherwise specified in a notice sent or delivered in accordance with
the foregoing provisions of this Section 10, notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at their respective addresses (or to their respective telex
address or facsimile numbers) as follows: (a) if to the Borrower or
18
the Security Agent, to the respective addresses set forth in Section 9.06 of the
Mortgage, (b) if to a Loan Participant, to the address set forth on Schedule I
hereto, or (c) if to any subsequent Holder, addressed to such Holder at its
address set forth in the Certificate Register maintained pursuant to the
Mortgage.
SECTION 11. Governing Law; Consent to Jurisdiction; Waiver of Jury
------------------------------------------------------
Trial.
-----
(a) This Agreement shall in all respects be governed by, and construed
in accordance with, the law of the State of New York, including all matters of
construction, validity and performance.
(b) Each party hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement
shall affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement against another party or its properties in
the courts of any jurisdiction.
(c) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
(e) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND
19
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 12. Invoices and Payment of Expenses.
--------------------------------
Each of the Security Agent and the Loan Participants shall promptly submit
to the Borrower for its prompt approval copies of invoices of the Transaction
Expenses (as defined below) as they are received. The Borrower agrees to pay
Transaction Expenses promptly upon receipt of invoices of such Transaction
Expenses. For the purposes hereof, "Transaction Expenses" means (i) with
--------------------
respect to the preparation, negotiation, execution and delivery of this
Agreement and the payment or anticipated payment of each Advance on each
Borrowing Date, the reasonable fees, expenses and disbursements of Vedder,
Price, ▇▇▇▇▇▇▇ & Kammholz, special counsel to the Senior Loan Participants, (ii)
▇▇▇▇, Scholer, Fierman, ▇▇▇▇ & Handler, LLP, special counsel to the Junior Loan
Participant, (iii) all fees, taxes (including license, documentary, stamp,
excise and property taxes) and other charges payable in connection with the
recording or filing of instruments and financing statements, (iv) each Loan
Participant's reasonable out-of-pocket costs and expenses relating to the
negotiation and closing of this transaction and (v) the up-front fee and
commitment fee of the Senior Loan Participants as separately agreed.
SECTION 13. Terms of Subordination.
----------------------
The Junior Loan Certificate and all other sums payable to the Junior Loan
Participant under the Operative Documents shall be subordinate and junior in
right of payment to the Senior Loan Certificates and all other sums payable to
the Senior Loan Participants under the Operative Documents to the extent and in
the manner hereinafter set forth:
(a) No payment or distribution shall be made on or in respect of the
principal or interest on the Junior Loan Certificate nor shall any payment or
distribution be made on or in respect of any other claim (other than an
indemnity claim under Section 8 hereof, an "Indemnity Claim") or obligation
---------------
owing to the Junior Loan Participant under any Operative Document, in either
case, except directly to the Security Agent for application as expressly
provided in Section 2.04 of the Mortgage.
(b) Any payment or distribution of any kind or character, whether in
cash, property, stock or obligations which may be payable or deliverable on or
in respect of the Junior Loan Certificate or other sum owing to the Junior Loan
Participant under the Operative Documents (other than an Indemnity Claim) shall
be paid or delivered directly to the Security Agent for distribution as provided
in Section 2.04 of the Mortgage. In the event that, notwithstanding the
foregoing, any such payment or distribution shall be received by the Junior Loan
Participant (other than from the Security Agent as provided in Section 2.04 of
the Mortgage, before the amount of all principal, Break Amount, if any, and
interest on all Senior Loan Certificates) and all other sums owing to the Senior
Loan Participants under the Operative
20
Documents is paid in full, or provision made for such payment, in accordance
with its terms, such payment or distribution shall be held in trust for and paid
over or delivered to the Security Agent in the form received for distribution as
provided in Section 2.04 of the Mortgage.
(c) By acceptance of its Junior Loan Certificate, the Junior Loan
Participant hereby irrevocably authorizes and empowers the Senior Loan
Participants or the Security Agent acting on its behalf, to demand, ▇▇▇ for,
collect and receive every payment or distribution made on or in respect of the
Junior Loan Certificate or other sum owing to the Junior Loan Participant under
the Operative Documents (other than an Indemnity Claim) and to file claims and
take such other proceedings, in its own name or in the name of the Junior Loan
Participant or otherwise, as the Senior Loan Participants or the Security Agent
acting on their behalf may deem necessary or advisable for the enforcement of
the provisions hereof. By the acceptance of its Junior Loan Certificate, the
Junior Loan Participant agrees duly and promptly to take such action as may be
reasonably requested by the Senior Loan Participants or the Security Agent
acting on their behalf to collect the indebtedness evidenced by its Junior Loan
Certificate or otherwise owing to it under the Operative Documents (other than
Indemnity Claims) for the account of the Senior Loan Participants and/or to file
appropriate proofs of claim in respect of such indebtedness, and to execute and
deliver to the Senior Loan Participants or the Security Agent acting on their
behalf on demand such powers of attorney, proofs of claims, assignments of claim
or proofs of claim, or other instruments as may be reasonably requested by the
Senior Loan Participants or the Security Agent acting on their behalf to enforce
any and all claims upon or with respect to its Junior Loan Certificate or
otherwise owing to it under the Operative Documents (other than Indemnity
Claims).
(d) The Senior Loan Participants or the Security Agent acting on their
behalf may, at any time and from time to time, without the consent of or notice
to the Junior Loan Participant, without incurring responsibility to such Junior
Loan Participant and without impairing or releasing any of the rights of the
Senior Loan Participants, or any of the obligations of the Junior Loan
Participant hereunder:
(i) sell, exchange, release or otherwise deal with all or any
part of any property by whomsoever mortgaged or pledged to secure, or
howsoever securing, the Senior Loan Certificates;
(ii) except as otherwise expressly provided in this Agreement,
exercise or refrain from exercising rights against the Borrower or any
other Person; and
(iii) other than Indemnity Claims, apply any sums, by whomsoever
paid or however realized, as provided in Section 2.04 of the Mortgage.
(e) By the acceptance of its Junior Loan Certificate, the Junior Loan
Participant agrees that in the event that it shall receive any payment on the
Junior Loan Certificate or otherwise owing to it under the Operative Documents
which it is not entitled to receive under this Section 13 or Section 2.04 of the
Mortgage, it will hold any amount so
21
received in trust for the Senior Loan Participants and will forthwith turn over
such payment to the Security Agent on behalf of the Senior Loan Participants in
the form received to be applied as provided in Section 2.04 of the Mortgage.
(f) By acceptance of its Junior Loan Certificate, the Junior Loan
Participant agrees that it may not commence any action or proceeding against the
Borrower or any other Person obligated in respect of any Operative Document to
recover all or any part of the principal or interest on its Junior Loan
Certificate or any other sum owing to it under any Operative Document or join
with any creditor, unless the Senior Loan Participants shall also join, in
bringing any such action or proceeding.
(g) By acceptance of its Junior Loan Certificate, the Junior Loan
Participant hereby irrevocably authorizes and empowers the Security Agent on
behalf of the Senior Loan Participants to vote the full amount of the
indebtedness evidenced by the Junior Loan Certificate or otherwise owing to it
under the Operative Documents.
(h) By acceptance of its Junior Loan Certificate, the Junior Loan
Participant agrees that it will not transfer, assign or otherwise dispose of any
interest in the Junior Loan Certificate to any entity that is not the
Manufacturer or an Affiliate of the Manufacturer without the prior written
consent of the Security Agent, such consent not to be unreasonably withheld.
(i) [Intentionally omitted]
(j) The provisions of this Section 13 and Section 2.04 of the Mortgage
are solely for the purpose of defining the relative rights of the Senior Loan
Participants on one hand, and the Junior Loan Participant on the other hand, and
nothing herein shall, except as otherwise provided herein, impair, as between
the Borrower, and the Junior Loan Participant, the obligation of the Borrower,
which is unconditional and absolute, to pay to the Junior Loan Participant the
principal amount of the Junior Loan Certificate, interest thereon and all other
amounts payable hereunder and under the other Operative Documents in accordance
with the terms and the provisions hereof and thereof.
SECTION 14. Payment Rights.
--------------
(a) (i) In the event that an Event of Default shall have occurred and
be continuing, the Junior Loan Participant may elect, by written notice to the
Security Agent, to purchase all, but not less than all, the Senior Loan
Certificates then outstanding on the date specified in such written notice,
which notice, in order to be effective, shall state that it is irrevocable.
Each Senior Loan Participant agrees by its acceptance thereof that it will upon
payment to it from the Junior Loan Participant of an amount equal to the
aggregate unpaid principal amount of all Senior Loan Certificates then held by
such Loan Participant, together with accrued and unpaid interest thereon to the
date of payment, Break Amount, if any, for such Loan Participant, with respect
to such Loan Certificates and all other sums then due and payable to such Loan
Participant hereunder, all in immediately available funds under its Senior Loan
22
Certificates and under the other Operative Documents, forthwith sell, assign,
transfer and convey to the Junior Loan Participant (without recourse,
representation or warranty of any kind except as to title in and to the Senior
Loan Certificates and except for its own acts or omissions, including without
limitation the absence of liens attributable to it), all of the right, title and
interest of such Loan Participant in and to the Mortgage Estate, the Mortgage,
Senior Loan Certificates held by such Loan Participant and the other Operative
Documents and the purchaser shall assume all of such Loan Participant's
obligations under the Operative Documents from and after the effectiveness of
such transfer. If the Junior Loan Participant shall so request, such Loan
Participant will comply with all provisions of Section 2.08 of the Mortgage
(other than those relating to Securities Act compliance) to enable new Loan
Certificates to be issued to the purchaser in such denominations as it shall
request. All charges and expenses in connection with the issuance of any such
new Senior Loan Certificates shall be borne by the Junior Loan Participant. In
the case of such purchase, the Junior Loan Participant shall, upon request,
furnish to the Senior Loan Participants an opinion of counsel for the purchaser
satisfactory to such Senior Loan Participants (or other evidence reasonably
satisfactory to the Senior Loan Participants) that such transfer and conveyance
are exempt from registration under the Securities Act and do not violate any
registration provision of any applicable state securities laws.
(ii) Prior to the exercise of its rights and remedies under
Article V of the Mortgage and/or the exercise of the Security Agent's
purchase right under Section 3.a of the Consent and Agreement in respect of
any Aircraft as a result of the occurrence of an Event of Default under the
Mortgage, the Security Agent shall notify the Junior Loan Participant in
writing. The Junior Loan Participant shall have the option, exercisable at
any time within ten (10) Business Days following receipt by the Junior Loan
Participant of such notice, to purchase the Security Agent's interest in
the Boeing Purchase Agreement insofar as it relates to any or all such
Aircraft. In the event that the Junior Loan Participant notifies the
Security Agent that it intends to exercise its option with respect to any
or all such Aircraft, the Junior Loan Participant shall purchase the
Security Agent's interest in the Boeing Purchase Agreement in respect of
such Aircraft by paying to the Security Agent within ten (10) Business Days
following the date of its notice to the Security Agent an amount equal to
the aggregate amount of Drawings outstanding with respect to such Aircraft,
accrued and unpaid interest thereon and Break Amount (if any), in each case
owed the Senior Loan Participants under the Senior Loan Certificates or
otherwise under the Operative Documents.
(b) In the event of any default by the Borrower in the payment when
due (without regard to any applicable grace period) of any installment of
interest due under the Senior Loan Certificates, the Junior Loan Participant
may, within five (5) Business Days after such default shall have become an Event
of Default (such period, the "Cure Period"), without the consent or concurrence
of any Senior Loan Participant, pay, as provided in Section 2.05 of the
Mortgage, for application in accordance with Section 2.04 of the Mortgage a sum
equal to the amount of all (but not less than all) such overdue interest.
Solely for the purpose of determining whether there exists an Event of Default,
any timely payment by the Junior Loan Participant pursuant to, and in compliance
with, the first sentence of this Section 14(b) shall be deemed to
23
remedy (but solely for purposes of the Mortgage) any default by the Borrower in
the payment of installments of interest theretofore due and payable under the
Senior Loan Certificates. If, on the basis specified in the preceding sentence,
any Event of Default shall have been remedied, then any declaration pursuant to
the Mortgage that the Senior Loan Certificates are due and payable or that an
Event of Default exists hereunder shall be deemed to be rescinded, and the
Junior Loan Participant shall (to the extent of any such payments made by it) be
subrogated to the rights of the Senior Loan Participants, to receive from the
Security Agent any such payment of overdue interest when made by the Borrower
and shall be entitled, so long as no other Default under Section 4.07 or 4.08 or
any Event of Default under the Mortgage shall have occurred and be continuing or
would result therefrom, to receive, subject to the provisions hereof and of the
Mortgage, such payment upon receipt thereof by the Security Agent; provided that
--------
the Junior Loan Participant shall not otherwise attempt to recover any such
amount paid by it on behalf of the Borrower pursuant to this Section 14(b)
except by demanding of the Borrower payment of such amount or by commencing an
action at law against the Borrower for the payment for such amount; provided,
--------
further, that at no time while an Event of Default shall have occurred and be
-------
continuing (A) shall any such demand be made or shall any such action be
commenced (or continued), and (B) any amounts nevertheless received by the
Junior Loan Participant in respect thereof shall be held in trust for the
benefit of, and promptly paid to, the Security Agent for distribution as
provided in Section 2.04 of the Mortgage; and further provided that:
------- --------
(x) the Junior Loan Participant may cure only three defaults during
the term hereof; and
(y) the Junior Loan Participant shall have no right to cure any Event
of Default except as specified in this Section 14(b).
SECTION 15. Confidentiality.
---------------
Each of the Loan Participants and the Security Agent covenants and agrees
to keep confidential, and not to disclose to any third parties, all non-public
information received by it from the Borrower pursuant to the Operative
Documents, provided that such information may be made available: (1) to
prospective and permitted transferees of a Loan Participant's Loan Certificates
or the Security Agent's respective interest in the Mortgage Estate, who agree to
hold such information confidential, (2) to any Holder's counsel or independent
certified public accountants, independent insurance advisors or other agents who
agree to hold such information confidential, (3) as may be required by
applicable law or by any statute, court or administrative order or decree or
governmental ruling or regulation (or, in the case of any Holder, to any bank
examiner or other regulatory personnel), or (4) as may be necessary for purposes
of enforcement of any Operative Document.
SECTION 16. Miscellaneous.
-------------
(a) The representations, warranties, indemnities and agreements of the
Borrower provided for in this Agreement and each party's obligations under any
and all thereof,
24
shall survive the expiration or other termination of this Agreement or any other
Operative Document, except as expressly provided herein or therein.
(b) This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument. Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified, except by an instrument
in writing signed by the party or parties thereto.
(c) (i) This Agreement shall be binding upon and shall inure to the
benefit of, and shall be enforceable by, the parties hereto and their respective
successors and permitted assigns including each successive holder of any Loan
Certificate(s) issued and delivered pursuant to this Agreement or the Mortgage
whether or not an express assignment to any such holder of rights under the
Agreement has been made.
(ii) The Borrower may not assign any of its rights or
obligations under this Agreement or the other Operative Documents except to
the extent expressly provided thereby.
(iii) Each Senior Loan Participant may assign its Senior Loan
Certificate, in whole or in part, as provided in Section 2.08 of the
Mortgage, which assignment shall be effected pursuant to an agreement
substantially in the form of Exhibit B hereto. In addition, a Senior Loan
Participant may assign, in whole or in part, its Commitment in respect of
any Advance to any other financial institution (so long as Borrower has no
obligations under Section 8 hereof or Section 2.13 of the Mortgage for such
transferee that are higher than the obligations that would be payable to
the transferor) having a net worth which demonstrates that such financial
institution is capable of meeting its funding obligation in respect of the
assigned Commitment, which assignment shall be effected pursuant to an
agreement substantially in the form of Exhibit B hereto, appropriately
modified to relate to the assignment of a Commitment. Effective upon the
assignment of any Commitment, the assigning Loan Participant shall be
relieved of its obligations in respect of such Commitment to the extent the
assignee thereof shall have become obligated in respect thereof.
(d) No Loan Participant shall have any obligation or duty to the
Borrower, or to other Persons with respect to the transactions contemplated
hereby except those obligations or duties of such Loan Participant expressly set
forth in this Agreement and the other Operative Documents and no Loan
Participant shall be liable for performance by any other party hereto of such
other party's obligations or duties hereunder. Without limitation of the
generality of the foregoing, under no circumstances whatsoever shall any Loan
Participant be liable to the Borrower for any action or inaction on the part of
the Security Agent in connection with the transactions contemplated herein,
whether or not such action or inaction is caused by willful misconduct or gross
negligence of the Security Agent.
25
(e) Any reference herein to an approval, consent or waiver to be given
by the Loan Participants shall be deemed hereunder to be an approval, consent or
waiver, as the case may be, if a Majority in Interest of Holders approve,
consent or waive, as the case may be.
* * *
26
IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
MIDWAY AIRLINES CORPORATION,
Borrower
By: *
--------------------------------------
______________________________________
LANDESBANK SCHLESWIG-HOLSTEIN
GIROZENTRALE, Security Agent
By: *
--------------------------------------
______________________________________
Senior Loan Participants:
------------------------
LANDESBANK SCHLESWIG-HOLSTEIN GIROZENTRALE
By: *
--------------------------------------
______________________________________
WACHOVIA BANK, N.A.
By: *
--------------------------------------
Senior Vice President
BANKGESELLSCHAFT BERLIN, A.G.
By: *
--------------------------------------
______________________________________
__________________
* Indicates information deleted for confidentiality purposes.
27
Junior Loan Participant:
-----------------------
BOEING NEVADA, INC.
By: *
--------------------------------------
Its: ____________________________________
________________
* Indicates information deleted for confidentiality purposes.
28
Schedule I
Notice & Account Information
----------------------------
*
---------------
* Indicates information deleted for confidentiality purposes.
Schedule II
Participations
--------------
*
--------------
* Indicates information deleted for confidentiality purposes.
Schedule III
Description of Aircraft
-----------------------
Aircraft Scheduled Delivery Date
---------- -----------------------
30740 February 2001
30741 April 2001
30742 June 2001
30743 August 2001
30744 October 2001
30745 December 2001
30746 February 2002
30747 April 2002
30748 June 2002
30749 August 2002
30750 October 2002
A-1
Schedule IV
Advances
--------
*
-----------------
* Indicates information deleted for confidentiality purposes.
A-2
EXHIBIT A
FUNDING NOTICE [MIDWAY/LBK]
______ __, 200_
Landesbank Schleswig-Holstein Girozentrale
*
Re: Predelivery Deposit Payment Financing for Midway Airlines
---------------------------------------------------------
Ladies and Gentlemen:
Reference is hereby made to that certain Credit Agreement [Midway/LBK] dated as
of July 31, 2000 (the "Credit Agreement"; capitalized terms used herein without
----------------
definition shall have the definitions set forth in the Credit Agreement) entered
into among Midway Airlines Corporation, as borrower (the "Borrower"), the
--------
institutions listed on Schedule I thereto, as senior loan participants (the
"Senior Loan Participants"), Boeing Nevada, Inc., as junior loan participant
-------------------------
(the "Junior Loan Participant") and Landesbank Schleswig-Holstein Girozentrale,
-----------------------
as security agent (the "Security Agent").
--------------
1. Pursuant to Section 2(c)(i) of the Credit Agreement,
Borrower hereby requests a Drawing in accordance with the following
parameters:
(1) Aircraft MSN: _________________
(2) Borrowing/Effective Date: ______________
(3) Advance Amount: _______________
(4) Senior Loan Portion: ______________
(5) Junior Loan Portion: _____________
(6) Each Loan Participant's Commitment for the Drawing is
set forth in Annex 1 hereto.
------------------------
* Indicates information deleted for confidentiality purposes.
A-3
2. Please distribute the proceeds of the Drawing as follows:
3. Borrower hereby confirms that the representations and
warranties of the Borrower in Section 7 of the Credit Agreement are true
and accurate on the date hereof as though made on the date hereof except to
the extent that such representations and warranties relate solely to an
earlier date (in which case such representations and warranties were true
and accurate on and as of such earlier date).
The terms and provisions of this Funding Notice shall be binding upon and inure
to the benefit of the Senior Loan Participants, the Junior Loan Participant and
the Borrower and their respective successors and assigns.
This Funding Notice shall be governed by the internal laws of the State of New
York.
* * *
A-4
By signing and returning an original counterpart hereof, the Senior Loan
Participants and the Junior Loan Participant hereby accept and agree to the
foregoing terms and provisions of this Letter Agreement.
Very truly yours,
MIDWAY AIRLINES CORPORATION
By: __________________________________
Title: _______________________________
▇-▇
▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇' Commitments
------------------------------
Loan Participant Commitment
---------------- -----------
A-6
EXHIBIT B
ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT [Midway/LBK] dated as of __________ __, ____ between
________________________________ (the "Assignee") and
--------
_____________________________ (the "Assignor").
--------
RECITALS
WHEREAS, the Assignor is the holder of the Loan Certificate No. ____ dated
__________ __, ____ (the "Assignor's Loan Certificate") issued under the Credit
---------------------------
Agreement [Midway/LBK], dated as of July ___, 2000 (the "Credit Agreement")
----------------
between Midway Airlines Corporation ("Midway"), the Loan Participants party
------
thereto and Landesbank Schleswig-Holstein Girozentrale, as Security Agent (the
"Security Agent");
--------------
WHEREAS, the Assignor proposes to assign to the Assignee $____________ of
the $_____________ Assignor's Loan Certificate and a pro rata portion of all of
the rights and obligations of the Assignor under the Credit Agreement and the
other Operative Documents (as defined below) in respect thereof, on the terms
and subject to the conditions set forth herein, and the Assignee proposes to
accept the assignment of such rights and obligations from the Assignor on such
terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
Section 1. Definitions. Unless otherwise defined herein, terms defined in
-----------
the Credit Agreement are used herein as therein defined.
Section 2. Assignment. On __________ __, ____ (the "Effective Date"), and
---------- --------------
on the terms and subject to the conditions set forth herein, the Assignor will
sell, assign and transfer to the Assignee, without recourse to or
representation, express or implied, by the Assignor (except as expressly set
forth in Section 5 hereof), a $___________ portion of the Assignor's Loan
Certificate and a pro rata portion of the rights and obligations of the Assignor
under the Credit Agreement and the other Operative Documents in respect thereof
(but not with respect to any indemnity or other claim, interest thereon at the
Past Due Rate and breakage amounts, if any, accrued and unpaid as of the
Effective Date or thereafter payable to the Assignor in respect of the period
prior to the Effective Date), and the Assignee shall accept such assignment from
the Assignor and assume all of the obligations of the Assignor accruing from and
after the Effective Date under the Credit Agreement and the other Operative
Documents relating to the Assignor's Loan Certificate on such terms and subject
to such conditions. Upon the satisfaction of the
B-1
conditions set forth in Section 4 hereof, (A) the Assignee shall, on the
Effective Date, succeed to the rights and be obligated to perform the
obligations of a Loan Participant and Holder under the Credit Agreement and the
other Operative Documents, and (B) the Assignor shall be released from its
obligations under the Credit Agreement and the other Operative Documents accrued
from and after the Effective Date, in each case to the extent such obligations
have been assumed by the Assignee.
Section 3. Payments. As consideration for the sale, assignment and
--------
transfer contemplated in Section 2 hereof, the Assignee shall pay to the
Assignor, on the Effective Date, in lawful currency of the United States and in
immediately available funds, to the account specified below its signature on the
signature pages hereof, an amount equal to $_______________.
Section 4. Conditions. This Assignment Agreement shall be effective upon
----------
the due execution and delivery of this Assignment Agreement by the Assignor and
the Assignee and the effectiveness of the assignment contemplated by Section 2
hereof is subject to (a) the receipt by the Assignor of the payment provided for
in Section 3 hereof [and the receipt by the Assignee of an up-front fee in the
amount of $_______] and (b) the delivery to the Security Agent of the Assignor's
Loan Certificate, duly endorsed for [partial] transfer to the Assignee, together
with a request in the form attached hereto as Exhibit A that a new Loan
Certificate be issued to the Assignee and Assignor.
Section 5. Representations and Warranties of the Assignor. The Assignor
------------------------------------- --------
represents and warrants as follows: (a) the Assignor has full power and
authority, and has taken all action necessary to execute and deliver this
Assignment Agreement and any other documents required or permitted to be
executed or delivered by it in connection with this Assignment Agreement and to
fulfill its obligations under, and to consummate the transactions contemplated
by, this Assignment Agreement, and no governmental authorizations or other
authorizations are required in connection therewith, (b) the Assignor's interest
in the Assignor's Loan Certificate is free and clear of any and all Liens
created by or through the Assignor, (c) this Assignment Agreement constitutes
the legal, valid and binding obligation of the Assignor, enforceable against the
Assignor in accordance with its terms, and (d) the Assignor has received no
written notice of any Default having occurred and continuing on the date of
execution hereof.
Section 6. Representations and Warranties of the Assignee. The Assignee
----------------------------------------------
hereby represents and warrants to the Assignor that (a) the Assignee has full
power and authority, and has taken all action necessary to execute and deliver
this Assignment Agreement and any and all other documents required or permitted
to be executed or delivered by it in connection with this Assignment Agreement
and to fulfill its obligations under, and to consummate the transactions
contemplated by, this Assignment Agreement, and no governmental authorizations
or other authorizations are required in connection therewith, (b) this
Assignment Agreement constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with its terms, and (c)
the Assignee has fully reviewed the terms of the Operative Documents and has
independently and without reliance upon the Assignor and based on such
B-2
information as the Assignee has deemed appropriate, made its own credit analysis
and decision to enter into this Assignment Agreement.
Section 7. Further Assurances. The Assignor and the Assignee hereby agree
------------------
to execute and deliver such other instruments, and take such other action, as
either party may reasonably request in connection with the transactions
contemplated by this Assignment Agreement.
Section 8. Governing Law. This Assignment Agreement shall be governed by,
-------------
and construed in accordance with, the law of the State of New York.
Section 9. Notices. All communications between the parties or notices in
-------
connection herewith shall be in writing, hand-delivered or sent by ordinary
mail, telex or facsimile transmitter, addressed as set forth on the signature
pages hereof. All such communications and notices shall be effective upon
receipt.
Section 10. Binding Effect. This Assignment Agreement shall be binding
--------------
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
Section 11. Interpretation. The headings of the various sections hereof
--------------
are for convenience of reference only and shall not affect the meaning or
construction of any provision hereof.
Section 12. Integration of Terms. This Assignment Agreement contains the
--------------------
entire agreement between the parties relating to the subject matter hereof and
supersedes all oral statements and other writings with respect to the subject
matter hereof.
Section 13. Counterparts. This Assignment Agreement may be executed in
------------
one or more counterparts, each of which shall be an original but all of which,
taken together, shall constitute one and the same instrument.
B-3
IN WITNESS WHEREOF, the parties have caused this Assignment Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNEE]
By ______________________________
Name:
Title:
Address for Notices:
Wire Instructions:
[ASSIGNOR]
By ______________________________
Name:
Title:
Address for Notices:
Wire Instructions:
B-4
Exhibit A
to Assignment Agreement
Request for Loan Certificate and Registration
_________ __, ____
To: Landesbank Schleswig-Holstein Girozentrale,
as Security Agent
Ladies and Gentlemen:
We refer to the assignment by ___________________________ (the "Assignor"),
--------
of certain of its rights and obligations with respect to Loan Certificate No.
______ in the principal amount of $____________ (the "Assignor's Loan
---------------
Certificate") to ___________________________ (the "Assignee"), pursuant to
----------- --------
an Assignment Agreement [Midway/LBK] dated as of _______ __, ____ between the
Assignor and the Assignee. Capitalized terms not otherwise defined herein shall
have the meanings assigned thereto in such Assignment Agreement. The Assignor
hereby delivers the Assignor's Loan Certificate to Landesbank Schleswig-Holstein
Girozentrale, in its capacity as Security Agent. The Assignor requests Midway
Airlines Corporation to issue to (i) the Assignee a new Loan Certificate (the
"New Loan Certificate") in the principal amount of $____________ and (ii) to the
---------------------
Assignor a new Loan Certificate (the "Assignor's New Loan Certificate") in the
-------------------------------
principal amount of $______________, each, with a [Borrowing Date] issue date.
[The Assignor represents, for the benefit of the Security Agent and each
Senior Loan Participant, that the Assignee is the Manufacturer or an Affiliate
of the Manufacturer.]/1/
The Security Agent is hereby instructed to pay all interest on the portion
of the Assignor's Loan Certificate being assigned hereunder accrued through the
date hereof directly to Assignor on the Interest Borrowing Date such interest is
payable and paid.
------------------------
/1/ To be used for transfers with respect to the Junior Loan Certificate.
B-5
The Assignor requests the Security Agent to deliver the New Loan
Certificate to the Assignee at its address set forth below and to deliver the
Assignor's New Loan Certificate to the undersigned.
Very truly yours,
[ASSIGNOR]
By _____________________________________
Name:
Title:
[ASSIGNEE]
By _____________________________________
Name:
Title:
Address for Notices:
Wire Instructions:
Accepted and Agreed:
LANDESBANK SCHLESWIG-HOLSTEIN
GIROZENTRALE, as Security Agent
By ________________________________
Title:
B-6
EXHIBIT C
*
--------------------
* Indicates information deleted for confidentiality purposes.
C-1
EXHIBIT D
Intentionally Reserved
D-1
EXHIBIT E-1
CONSENT AND AGREEMENT
---------------------
TO MORTGAGE AND SECURITY AGREEMENT [MIDWAY/LBK]
-----------------------------------------------
THIS CONSENT AND AGREEMENT ("Consent") entered into as of August __, 2000
is among Midway Airlines Corporation ("Midway"), each Senior Loan Participant
identified on the signature pages hereto (together with their successors and
assigns "Senior Loan Participants"), Boeing Nevada, Inc. ("Junior Loan
Participant"), Landesbank Schleswig-Holstein Girozentrale, as Security Agent on
behalf of each Loan Participant ("Assignee") and The Boeing Company
("Manufacturer").
RECITALS
--------
A. Midway and Assignee have heretofore entered into that certain Credit
Agreement [Midway/LBK] dated as of July 31, 2000 ("Credit Agreement") among
Midway, the Senior Loan Participants, the Junior Loan Participant and Assignee,
pursuant to which Assignee and the Loan Participants have agreed to make certain
funds available to Midway in order to enable Midway to meet certain of its
deposit and advance payment obligations under the Boeing Purchase Agreement in
respect of the Aircraft specified in the Mortgage.
B. Midway and Assignee have entered into that certain Mortgage and
Security Agreement [Midway/LBK] dated as of July 31, 2000 ("Mortgage"), pursuant
to which Midway has granted to Assignee a security interest in all of Midway's
right and interest in and to the Boeing Purchase Agreement with respect to the
Aircraft in order to secure performance of Midway under and in respect of the
Operative Documents.
C. Midway and Assignee wish to obtain Manufacturer's consent to the
Mortgage and Manufacturer is willing to grant such consent, all subject to and
upon the terms and conditions provided herein.
NOW THEREFORE, in consideration of the mutual promises herein contained,
the parties agree as follows:
1. Definitions
-----------
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Mortgage.
E-1-1
2. Consent of Manufacturer
-----------------------
a. Manufacturer hereby acknowledges notice of the Mortgage and
consents, subject to the terms and conditions of this Consent, to
the assignment to Assignee of all of Midway's right and interest
in and to the Boeing Purchase Agreement with respect to the
Aircraft pursuant to the Mortgage.
b. Manufacturer agrees that this Consent constitutes the consent of
Manufacturer as required by the Boeing Purchase Agreement.
3. Assignee's Rights under the Mortgage
------------------------------------
a. Event of Default. Manufacturer acknowledges that, subject to the
----------------
provisions of Paragraph 4 hereof, upon and after notice to
Manufacturer by Assignee that an Event of Default under the
Mortgage has occurred and is continuing and that Assignee is
exercising its rights and remedies under the Mortgage (and until
Manufacturer receives a further written notice from Assignee to
the effect that Midway may again exercise the rights of
"Customer" under the Boeing Purchase Agreement), Assignee shall
be entitled to make all demands, give all notices, take all
actions and exercise all rights of "Customer" under and subject
to the Boeing Purchase Agreement and Midway shall not be entitled
to do so including, if Assignee purchases an Aircraft, the right
to all product support and warranties with respect thereto under
the Boeing Purchase Agreement, to the extent assigned under the
Mortgage. Manufacturer acknowledges that such rights of
"Customer" include Assignee's right to purchase the Aircraft and
agrees that in such event, the purchase price for an Aircraft
shall be equal to the Aircraft Price (as defined in the Boeing
Purchase Agreement) minus twenty-five percent of the escalated
Airframe Price (as defined in the Boeing Purchase Agreement) as
set forth in that certain Letter Agreement 6-1162-CPJ-313 dated
June 11, 1999 between Manufacturer and Midway ("Agreed Price").
To the extent Assignee exercises its right to purchase one or
more Aircraft, it shall be under no obligation to exercise such
right with respect to any other Aircraft.
b. Termination of Boeing Purchase Agreement by Manufacturer.
--------------------------------------------------------
Manufacturer agrees that upon deciding to terminate the Boeing
Purchase Agreement with respect to the rights related to any one
or more of the Aircraft, (i) it shall give Assignee written
notice of its intent to terminate the Boeing Purchase Agreement;
and (ii) Assignee shall have the right, within ten (10) business
days of receipt of such notice, subject to the provisions of
Paragraph 4 of this Consent, to give Manufacturer written notice
of its irrevocable decision to assume all of the obligations of
"Customer" under the terminated Boeing Purchase Agreement insofar
as it
E-1-2
relates to any or all of the Aircraft by entering into a
substitute purchase agreement with Manufacturer, relating to such
Aircraft on terms and conditions substantially equivalent to
those set out in the Boeing Purchase Agreement. If Assignee does
so notify Manufacturer and enter into a substitute purchase
agreement, then, subject to the terms of the Mortgage and
Paragraph 7 of this Consent, Assignee shall be entitled to make
all demands, give all notices, take all actions and exercise all
rights of "Customer" under and subject to the substitute purchase
agreement and purchase the Aircraft for the Agreed Price. If no
notice from Assignee is timely received, Midway and Assignee will
be deemed to have waived all rights thereto. In such case,
Manufacturer shall be entitled but not obliged to purchase from
Assignee or Midway, as applicable, all buyer furnished equipment
related to the terminated Aircraft under the Boeing Purchase
Agreement, in which Assignee or Midway, as appropriate, has title
or an uncontested right to title. To the extent Assignee
exercises its right to be treated as "Customer" with respect to
one or more Aircraft, Assignee shall be under no obligation to
exercise such right with respect to any other Aircraft.
c. Assignment. Manufacturer acknowledges that upon the occurrence
----------
of an Event of Default under the Mortgage and notice thereof by
the Assignee to Manufacturer, subject to Section 4 hereof, the
Assignee shall have the right to assign its rights in and to the
Mortgage and this Consent (including the right to purchase
Aircraft in accordance with Section 3 hereof), as a delivery
assignment taking effect at or about delivery of the relevant
Aircraft, pursuant to an assignment agreement in the form of
Annex I hereto and any such assignee shall be entitled to
exercise the Assignee's rights thereunder and hereunder;
provided, that Assignee shall not assign its rights to any other
manufacturer of aircraft or to an entity with which the
Manufacturer is prevented by law from doing business, without the
Manufacturer's prior written consent.
d. Delivery Location. Manufacturer agrees that if Assignee
-----------------
exercises its rights under the Mortgage and purchases one or more
of the Aircraft, that Manufacturer will cooperate with Assignee
in accordance with and subject to the relevant provisions of the
Boeing Purchase Agreement to deliver the Aircraft in a
jurisdiction reasonably satisfactory to Assignee and Manufacturer
in order to minimize or avoid the imposition of any sales, use,
value added or other transfer taxes which may be imposed in
connection with such purchase. In the event that the Aircraft is
to be delivered in a location other than the location specified
in the Boeing Purchase Agreement, Assignee will be responsible
for all costs beyond those required to support delivery per the
Boeing Purchase Agreement. Such costs will include (but are not
limited to) ferry flight of the aircraft to
E-1-3
the alternate delivery location, transportation costs and per
diem for Manufacturer's personnel required to support delivery in
the alternate location, charges associated with the use of the
alternate location and any increased tax obligation on
Manufacturer. In any case, all pre-delivery activity (including
but not limited to); customer inspections, customer flights and
document reviews will be conducted at Manufacturer's facilities
in Washington State. It is agreed that the states of Montana, New
Hampshire and South Carolina are appropriate alternate delivery
locations.
4. Manufacturer's Purchase Option
------------------------------
Prior to the exercise of its rights and remedies under Article V of the
Mortgage and/or the exercise of Assignee's purchase right under Section 3.a
hereof in respect of any Aircraft as a result of the occurrence of an Event of
Default under the Mortgage, Assignee shall notify Manufacturer in writing.
Manufacturer shall have the option (the "Manufacturer's Option"), exercisable at
any time within ten (10) Business Days following receipt by Manufacturer of such
notice, to purchase Assignee's interest in the Boeing Purchase Agreement insofar
as it relates to any or all such Aircraft. In the event that Manufacturer
notifies Assignee that it intends to exercise Manufacturer's Option with respect
to any or all such Aircraft, Manufacturer shall purchase Assignee's interest in
the Boeing Purchase Agreement by paying to Assignee within ten (10) Business
Days following the date of its notice to Assignee, an amount equal to the
aggregate amount of Drawings outstanding to the Senior Loan Participants with
respect to such Aircraft, accrued and unpaid interest thereon (up to 90 days of
accrued and unpaid interest only) and Break Amount (if any) owed the Senior Loan
Participants under the Senior Loan Certificates or otherwise under the Operative
Documents. If Manufacturer fails to exercise Manufacturer's Option during such
ten (10) Business Day period, Manufacturer shall be deemed to have waived the
Manufacturer's Option and Assignee may exercise its rights and remedies under
the Mortgage.
5. Midway's Waiver and Indemnity; No Release from Obligations
----------------------------------------------------------
a. Midway hereby waives any rights which it may have pursuant to
contract or law or otherwise against Manufacturer arising out of,
or resulting from, the exercise by Assignee of its rights and
remedies under the Mortgage or this Consent and agrees to
indemnify and hold harmless Manufacturer, its successors and
assigns, and their respective officers, directors and employees
from and against any and all claims, losses or liabilities
(including reasonable attorneys' fees) resulting therefrom.
b. Midway hereby agrees, expressly for the benefit of Manufacturer
that notwithstanding anything contained in the Mortgage to the
contrary: (i) Midway shall at all times remain liable to
Manufacturer under the Boeing Purchase Agreement to perform all
duties and obligations of the "Customer" thereunder in respect of
the Aircraft to the same extent as if
E-1-4
the Mortgage and this Consent had not been executed, and (ii) the
exercise by Assignee of any rights assigned under the Mortgage
shall not release Midway from any of its duties or obligations to
Manufacturer under the Boeing Purchase Agreement except to the
extent that such exercise by Assignee shall constitute
performance of such duties or obligations.
6. Notices
-------
a. Midway and Assignee agree, expressly for the benefit of
Manufacturer, that for all purposes of the Mortgage, Manufacturer
shall not be deemed to have knowledge of and need not recognize
any event, condition, right, remedy or dispute affecting the
interests of Midway or Assignee under the Mortgage unless and
until Manufacturer shall have received written notice thereof
from Assignee addressed to its Vice President-Contracts, Boeing
Commercial Airplane Group, if by mail, at ▇.▇. ▇▇▇ ▇▇▇▇, Mail
Code 21-34, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or to 32-9430 Answerback
BOEINGREN RNTN, if by telex. In acting in accordance with the
Boeing Purchase Agreement and this Consent, Manufacturer may rely
conclusively upon any such notice.
b. Manufacturer shall be entitled to rely conclusively upon any
notice or instruction received by it from Assignee pursuant to
the Mortgage or this Consent, and Manufacturer shall have no
obligation to inquire as to the accuracy of such notice or
instruction or as to the relative priority of rights of any
person asserting rights in and to the Boeing Purchase Agreement
and the Aircraft.
c. Except as provided in Paragraph 3 of this Consent, unless and
until Assignee shall have notified Manufacturer that it is
exercising its rights and remedies under the Mortgage, Midway
shall have all rights and obligations of "Customer" under the
Boeing Purchase Agreement and Manufacturer shall have no duty to
consult with or otherwise deal with Assignee concerning the
Boeing Purchase Agreement or the Aircraft. Without limiting the
generality of the foregoing, prior to the receipt of Assignee's
written notice that it is exercising its remedies under the
Mortgage, as provided in Paragraph 3(a) hereof, Manufacturer
shall have no obligation to inquire as to whether Midway has
complied with the provisions of the Mortgage and shall be
entitled to rely upon any notice, consent, waiver or other action
taken by Midway in connection with the Boeing Purchase Agreement.
E-1-5
d. Notice to Assignee hereunder shall be given by hand, first class,
certified or registered mail, by a recognized overnight courier
service or by telecopier (confirmed by mail or overnight courier)
at *.
7. Rights Subject to the Boeing Purchase Agreement
-----------------------------------------------
a. Assignee and each Loan Participant hereby agrees, expressly for
the benefit of Manufacturer, that, notwithstanding anything
contained in the Mortgage to the contrary (and without in any way
releasing Midway from any of its duties or obligations under the
Boeing Purchase Agreement), insofar as the provisions of the
Boeing Purchase Agreement relate to the Aircraft, in exercising
any rights under the Boeing Purchase Agreement, or in making any
claim with respect to the Aircraft or other things (including
without limitation data, documents, training and services)
delivered or to be delivered pursuant to the Boeing Purchase
Agreement, the terms and conditions of the Boeing Purchase
Agreement, including without limitation, the DISCLAIMER AND
--------------
RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES in
------- --------------------------------------------
Article 11 of Part 2 of Exhibit C to the AGTA which was
incorporated by reference into the Boeing Purchase Agreement and
the insurance provisions in Article 8.2 of the AGTA which was
incorporated by reference into the Boeing Purchase Agreement,
shall apply to and be binding upon Assignee to the same extent as
if Assignee had been the original "Customer" thereunder.
Assignee and each Loan Participant further agrees, expressly for
the benefit of Manufacturer, that at any time and from time to
time upon the written request of Manufacturer, it shall promptly
and duly execute and deliver any and all such further assurances,
instruments and documents and take all such further action as
Manufacturer may reasonably request in order to obtain the full
benefits of its agreements set forth in this paragraph.
b. Except as otherwise expressly provided in this Consent, the
execution and delivery by Manufacturer of this Consent and the
performance by Manufacturer of its obligations hereunder shall
not be regarded as having created or imposed upon Manufacturer
any increased or additional obligations or undertakings or any
increased or additional limitations to the rights and duties on
its part than are contained in the Boeing Purchase Agreement as a
result of entering into this Consent. Manufacturer shall not be
required to divest itself of title to or possession of the
Aircraft or any other thing to be delivered under the Boeing
Purchase Agreement until delivery and transfer thereof and
payment therefor, as provided in the Boeing Purchase Agreement,
or to take any action with respect to the
-----------------
* Indicates information deleted for confidentiality purposes.
E-1-6
Boeing Purchase Agreement or the Aircraft in any manner
inconsistent with applicable law (including, without limitation,
any bankruptcy or other court order, ruling or finding).
8. Application of Deposits and Advance Payments
--------------------------------------------
The parties hereto acknowledge and agree that in the event Assignee
exercises its rights under the Mortgage and purchases any Aircraft, the deposits
and advance payments made under the Boeing Purchase Agreement with respect to
such Aircraft shall be applied toward the purchase price of such Aircraft.
9. Indemnification of Manufacturer by the Assignee
-----------------------------------------------
Assignee agrees to indemnify, defend and hold harmless Manufacturer, its
successors and assigns, and their respective officers, directors and employees
(collectively, the "Indemnitees") and each an "Indemnitee") from and against any
and all claims, losses obligations, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements and liabilities of any kind whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for such Indemnitees) which may be imposed on, incurred by, or asserted against
such Indemnitees in any manner resulting from or arising out of the exercise by
Assignee of its rights or remedies under the Mortgage or this Consent, if and
only if it is determined by the final judgment of a court of competent
jurisdiction that Assignee was not entitled to exercise such rights or remedies
or that such rights or remedies were exercised contrary to the provisions of
this Consent, the Mortgage or applicable law. If any Indemnitee hereunder has
knowledge of any liability hereby indemnified against, it shall give prompt
written notice thereof to Assignee. Assignee shall have the right to
investigate, defend or compromise any claim for which indemnification is sought
and each Indemnitee hereunder shall cooperate with the reasonable requests of
Assignee with respect thereto.
10. Manufacturer's Representations, Warranties and Covenants
--------------------------------------------------------
Manufacturer hereby represents and warrants to Midway and Assignee that:
a. Manufacturer is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and
is duly qualified to do business as a foreign corporation in the
State of Washington.
b. Manufacturer has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Consent
and the execution, delivery and performance of this Consent have
been duly authorized by all necessary corporate action on the
part of Manufacturer.
E-1-7
c. Each of the Boeing Purchase Agreement and this Consent has been
duly executed and delivered by Manufacturer and constitute the
legally valid and binding obligation of Manufacturer, enforceable
against Manufacturer in accordance with its terms except as
enforceability may be limited by applicable bankruptcy,
insolvency, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and general principles
of equity (regardless of whether such enforceability is at issue
in the proceeding in equity or at law).
d. Manufacturer confirms that the amounts set forth in Table 1 to
the Boeing Purchase Agreement accurately represent the advance
payments due and owing under the Boeing Purchase Agreement with
respect to each Aircraft.
e. In the event the Manufacturer releases Midway from its
obligations under the Boeing Purchase Agreement to purchase an
Aircraft prior to the expiration of the ten (10) Business Day
period in Section 3.b hereof, the Manufacturer shall pay to the
Assignee in full the Series of Drawings made by the Senior Loan
Participants with respect to such Aircraft, together with all
interest accrued and unpaid thereon under the Senior Loan
Certificates, and all other amounts due and payable in respect of
such Drawings under the Operative Documents.
f. Manufacturer will not convey title to any of the Aircraft to
Midway without confirmation from the Security Agent that all
amounts due and owing from Midway to the Loan Participants with
respect to such Aircraft have been paid in full (or arrangements
are in place to repay the Loan Participants simultaneously with
such conveyance).
11. GOVERNING LAW
-------------
THIS CONSENT WILL BE INTERPRETED UNDER AND GOVERNED BY THE LAWS OF THE
STATE OF WASHINGTON, U.S.A., EXCEPT THAT WASHINGTON'S CHOICE OF LAW RULES SHALL
NOT BE INVOKED FOR THE PURPOSE OF APPLYING THE LAW OF ANOTHER JURISDICTION.
12. Counterparts
------------
This Consent may be executed by the parties in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
E-1-8
IN WITNESS WHEREOF, the parties hereto have caused this Consent to be
executed by their respective officers or agents as of the date first above
written.
MIDWAY: MIDWAY AIRLINES CORPORATION
By: ________________________________________
Its: _______________________________________
ASSIGNEE: LANDESBANK SCHLESWIG-HOLSTEIN GIROZENTRALE,
as Security Agent
By: ________________________________________
Its: _______________________________________
MANUFACTURER: THE BOEING COMPANY
By: ________________________________________
Its: _______________________________________
SENIOR LOAN PARTICIPANTS: LANDESBANK SCHLESWIG-HOLSTEIN GIROZENTRALE
By: ________________________________________
Its: _______________________________________
BANKGESELLSCHAFT BERLIN A.G.
By: ________________________________________
Its: _______________________________________
WACHOVIA BANK, N.A.
By: ________________________________________
Its: _______________________________________
JUNIOR LOAN PARTICIPANT: BOEING NEVADA, INC.
By: ________________________________________
Its: _______________________________________
E-1-9
ANNEX I
--------------------------------------------------------------------------------
PURCHASE AGREEMENT ASSIGNMENT
Dated
[_____________]
between
LANDESBANK SCHLESWIG-HOLSTEIN GIROZENTRALE,
not individually, but solely as Security Agent, on behalf
of the Loan Participants,
Assignor
and
--------------------------
Assignee
--------------
--------------------------------------------------------------------------------
E-1-10
PURCHASE AGREEMENT ASSIGNMENT
THIS PURCHASE AGREEMENT ASSIGNMENT dated ________, ____ between
LANDESBANK SCHLESWIG-HOLSTEIN GIROZENTRALE, not individually, but solely as
Security Agent on behalf of the Loan Participants under the Credit Agreement (as
defined below) ("Assignor"), and __________________________________,
--------
("Assignee").
--------
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Midway Airlines Corporation ("Midway") has entered into the
Purchase Agreement (as hereinafter defined) with Manufacturer (as hereinafter
defined) pursuant to which, among other things, Manufacturer has agreed to sell
to Midway, and Midway has agreed to purchase from Manufacturer, the Aircraft (as
hereinafter defined);
WHEREAS, Midway has entered into a Credit Agreement [Midway/LBK] dated
as of July 31, 2000 ("Credit Agreement") among Midway, Assignor, as Security
Agent, Wachovia Bank, N.A., Bankgesellschaft Berlin, A.G. and Landesbank
Schleswig-Holstein Girozentrale (together with their successors and assigns, the
"Senior Loan Participants") and Boeing Nevada, Inc. ("Junior Loan Participant);
WHEREAS, Midway and Assignor have entered into a Mortgage and Security
Agreement [Midway/LBK] dated as of July 31, 2000 ("Mortgage"), pursuant to which
Midway has granted to Assignor a security interest in all of Midway's right and
interest in and to the Purchase Agreement with respect to the Aircraft in order
to secure payment and performance by Midway of its obligations under and in
respect of the Operative Documents, including the Credit Agreement;
WHEREAS, pursuant to the Mortgage, and the Consent and Agreement to
Mortgage and Security Agreement executed by the Manufacturer in connection with
the Credit Agreement, Assignor has the right, following an Event of Default
under the Mortgage, to purchase the Aircraft from the Manufacturer; and
WHEREAS, Assignee wishes to acquire the Aircraft and Assignor, on the
terms and conditions herein and in the Consent and Agreement of the Manufacturer
attached hereto as Exhibit A, desires to assign to Assignee all of Assignor's
---------
rights and interests in and under the Purchase Agreement relating to the
Aircraft, and Assignee desires to accept such assignment, as hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the parties hereto
agree as follows:
E-1-11
Section 1. Definitions. For all purposes of this Assignment, except as
-----------
otherwise expressly provided for or unless the context otherwise requires, the
following terms shall have the following meanings:
"Aircraft" means that certain Boeing Model 737-700 Aircraft bearing
--------
manufacturer's serial number ________, including two (2) CFM International,
Inc. Model CFM56-7 engines bearing manufacturer's serial numbers ________
and __________ in the configuration (including all optional features and
customer furnished equipment) specified in the Purchase Agreement, together
with, as the context permits, the aircraft and engine manuals, records and
other technical documents delivered therewith under each of the Purchase
Agreements.
"Consent and Agreement" means a consent and agreement substantially in
---------------------
the form of Exhibit A attached hereto.
---------
"Manufacturer" shall mean The Boeing Company, a Delaware corporation,
------------
and its successors and assigns.
"Purchase Agreement" means that certain Purchase Agreement Number 2235
------------------
dated June 11, 1999 between Manufacturer and Midway, together with that
certain Aircraft General Terms Agreement AGTA-MID dated as of June 11, 1999
between Manufacturer and Midway and that certain Customer Service General
Terms Agreement dated as of June 11, 1999 between Manufacturer and Midway,
in each case only to the extent relating to the Aircraft and including all
Exhibits, Appendices, Tables, and Letter Agreements (excluding, in the case
of the Purchase Agreement, Supplemental Exhibit EE1, Letter Agreements 6-
1162-CPJ-308 (Schedule Reliability), 6-1162-CPJ-311 (Maintenance Cost
Protection) and 6-1162-CPJ-316 (Special Matters); but including, without
limitation, Letter Agreement 6-1162-CPJ-313 (Basic Credit Memorandum)).
"Purchase Agreement Assignment", "this Agreement" or "this Assignment"
-----------------------------
shall mean this Purchase Agreement Assignment.
"Purchase Price" shall mean the full invoice price for the Aircraft as
--------------
specified in the invoice for the Aircraft to be delivered by the Manufacturer
pursuant to the Purchase Agreement.
All other terms used herein in capitalized form which are defined in
the Credit Agreement and not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.
Section 2. Assignment. Assignor does hereby assign, transfer and set over
----------
unto Assignee all of Assignor's right, title and interest in and to the Purchase
Agreement, as and to the extent that such right, title and interest relate to
the Aircraft and the purchase and operation thereof, including, without
limitation, (a) the right to purchase the Aircraft pursuant to and in
E-1-12
accordance with the Purchase Agreement upon valid tender by the Manufacturer,
(b) the right to accept delivery of the Aircraft, such acceptance to be
exercised by an authorized representative of Assignee (provided that
Manufacturer shall have received the written notice in advance of the identity
and authority of such authorized representative), (c) the right to take title to
the Aircraft and to be named as the purchaser in the ▇▇▇▇ of sale (the "▇▇▇▇ of
-------
Sale") to be delivered by the Manufacturer, (d) all claims for damages in
----
respect of the Aircraft arising as a result of any default by the Manufacturer
under the Purchase Agreement or by any vendor or other supplier of aircraft
engines or other parts or equipment installed on or in the Aircraft referred to
therein, including, without limitation, all warranty, service life policy,
aircraft performance guarantee and indemnity provisions contained in the
Purchase Agreement and all claims thereunder and (e) any and all rights of
Assignor to compel performance of the terms of the Purchase Agreement in respect
of the Aircraft; provided, however, notwithstanding anything contained herein to
the contrary: (a) Assignor shall at all times remain liable to Manufacturer
under the Purchase Agreement as and to the extent relating to the Aircraft to
perform all duties and obligations of the Customer thereunder to the same extent
as if this Assignment had not been executed, and (b) the exercise by Assignee of
any rights assigned hereunder shall not release Assignor from any of its duties
or obligations to Manufacturer under the Purchase Agreement except to the extent
that such exercise by Assignee shall constitute performance of such duties or
obligations.
Section 3. Representations, Warranties and Covenants of Assignor.
-----------------------------------------------------
Assignor does hereby represent and warrant that Assignor has not sold, assigned
or pledged or otherwise disposed of the whole or any part of the rights hereby
assigned, and that such rights are free and clear of all liens, claims or
encumbrances, except as provided in the Purchase Agreement.
Section 4. Acceptance of Assignment. Assignee hereby accepts the
------------------------
assignment contained in Section 2 hereof.
Section 5. Rights of Assignee.
------------------
(a) Effective upon the purchase of the Aircraft by Assignee, Assignee
and its successors and permitted assigns shall, to the exclusion of Assignor, be
entitled to assert and enforce such rights and claims as substitute party
plaintiff or otherwise, and Assignor shall, at the request of Assignee or its
successors or permitted assigns and at Assignor's expense, cooperate with and
take such action as is reasonably necessary to enable Assignee and its
successors and permitted assigns to enforce such rights and claims (including,
without limitation, providing Assignee with an execution original or certified
copy of the Purchase Agreement (but excluding therefrom any and all confidential
pricing information)). In furtherance of the foregoing, Assignor hereby
constitutes and appoints Assignee, its successors and permitted assigns,
Assignor's true and lawful attorney, irrevocably (it being acknowledged that
such appointment is coupled with an interest, namely Assignee's rights acquired
and to be acquired hereunder) with full power (in the name of Assignor or
otherwise) to ask, require, demand, receive, compromise, settle, compound and
give acquittance for any and all monies and claims for monies due and to become
due under, or arising out of, the Purchase Agreement in respect of the Aircraft,
to the extent that the same have been assigned by this Assignment, and for such
period as Assignee may
E-1-13
exercise rights with respect thereto hereunder, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or take any
action or institute (or, if previously commenced, assume control of) any
proceedings and to obtain any recovery in connection therewith that Assignee may
deem to be necessary or advisable in the premises.
(b) All amounts that the Manufacturer or subcontractor or vendor, as
the case may be, is obligated to pay to Assignor under the Purchase Agreement
with respect to the Aircraft, including, without limitation, in respect of
refunds thereunder or resulting from the enforcement of any warranty, covenant,
representation, service life policy, aircraft performance guarantee, indemnity
or product support agreement thereunder or the enforcement or exercise of any
right or power under the Purchase Agreement or hereunder (a "Manufacturer
Payment"), will be payable and applicable directly to the Assignee.
Section 6. Certain Rights and Obligations of the Parties.
---------------------------------------------
(a) Assignee confirms for the benefit of the Manufacturer and
subcontractor and vendor, as the case may be, that, insofar as the provisions of
the Purchase Agreement (and applicable vendor and subcontractor agreements)
relate to the Aircraft, in exercising any rights under the Purchase Agreement
(and applicable vendor and subcontractor agreements), or in making any claim
with respect to the Aircraft or other goods and services delivered or to be
delivered pursuant to the Purchase Agreement (and applicable Vendor and
subcontractor agreements), the terms and conditions of the Purchase Agreement
(and applicable Vendor and subcontractor agreements) (including, without
limitation, the DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER
DAMAGES in Article 11 of Part 2 of Exhibit C of the General Terms Agreement, and
other warranty disclaimer, insurance and indemnity provisions in the Customer
Support or Product Assurance Documents of Exhibits B and C, respectively, to the
General Terms Agreement (and such similar provisions in the applicable Vendor
and subcontractor agreements)) shall apply to, and be binding upon, Assignee to
the same extent as if originally named "Customer" therein. Assignee further
confirms that it cannot further assign its rights under the Purchase Agreement
without the written consent of Manufacturer.
(b) Nothing contained herein shall (i) subject the Manufacturer or
subcontractors and vendors, as the case may be, to any liability to which it
would not otherwise be subject under the Purchase Agreement (and applicable
vendor and subcontractor agreements) or (ii) modify in any respect the
Manufacturer's (or subcontractor's and vendor's, as the case may be) contract
rights thereunder, except as provided in the Consent and Agreement attached
hereto. Without limiting the generality of the foregoing, nothing contained in
this Assignment shall require Manufacturer (or subcontractors and vendors, as
the case may be) to transfer title to or possession of the Aircraft or any other
goods, property or services under the Purchase Agreement (and applicable vendor
and subcontractor agreements) until delivery thereof and payment therefor
pursuant to and in accordance with the terms of the Purchase Agreement (and
applicable vendor and subcontractor agreements).
E-1-14
(c) Insofar as this Agreement purports to assign vendor and
subcontractor agreements and to bind vendors and subcontractors, Assignee agrees
that such assignments and binding are subject to the terms and conditions of
such vendor and subcontractor agreements and any provision of this Agreement
that would violate any such agreement shall be considered void to the extent
relating to such agreement, and neither Assignor nor any other person has made
any representations as to the assignability of such agreements or the binding
effect of this Agreement on such vendors and subcontractors. For the avoidance
of doubt, Assignee acknowledges that the Manufacturer makes no representations
or warranties about, and does not consent to, the assignment of engine
warranties or warranties, if any, provided by any vendor or subcontractor
suppliers of parts or equipment installed on the Aircraft.
(d) Assignor and Assignee agree, expressly for the benefit of
Manufacturer, that for all purposes of this Assignment, Manufacturer shall not
be deemed to have knowledge of and need not recognize any event, condition,
right, remedy or dispute affecting the interests of Assignor or Assignee unless
and until Manufacturer shall have received written notice thereof addressed to
its Vice President-Contracts at ▇.▇. ▇▇▇ ▇▇▇▇, Mail Code 21-34, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, if by mail, or to 32-9430 Answerback BOEINGREN RNTN, if by
telex, and in acting in accordance with the Purchase Agreement and this
Assignment, Manufacturer may conclusively rely upon such notice.
Section 7. Further Assurances. Assignor agrees that at any time and from
------------------
time to time Assignor shall promptly and duly execute and deliver any and all
such further instruments and documents and take such further action as Assignee
may reasonably request in writing in order to obtain the full benefits of this
Assignment and of the rights and powers herein granted; provided however, that
the execution and delivery of any such instrument or document shall not in any
way limit or restrict the rights or enlarge the obligations of Assignor in
respect of any of the Operative Documents.
Section 8. Nondisclosure. Assignor and Assignee agree, expressly for the
-------------
benefit of the Manufacturer, that they will not disclose the terms of the
Purchase Agreement to any third party, except (a) as required by applicable laws
or governmental regulations, (b) with the prior written consent of the
Manufacturer, (c) to the Participants and to potential transferees thereof
permitted by the Operative Documents and their respective counsel or (d) to bona
fide potential purchasers of the Aircraft or Assignee's interest therein
permitted by the Participation Agreement or their respective counsel,
independent auditors, insurance brokers or other agents. Any disclosure
contemplated by clause (c) or (d) of the preceding sentence shall include a
requirement that the entity to whom such information is disclosed shall be
subject to obligations of nondisclosure with respect to such information
substantially the same as those contained herein.
Section 9. Binding Effect. This Assignment shall be binding upon and
--------------
shall inure to the benefit of Assignor, Assignee and their respective successors
and permitted assigns.
E-1-15
Section 10. Notice. Except as otherwise expressly provided herein, notice
------
hereunder may be given, and shall be deemed to have been received when given.
Notice shall be sent to:
Assignor
Landesbank Schleswig-Holstein Girozentrale
*
Assignee
Section 11. Counterparts. This Assignment may be executed by the parties
------------
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
Section 12. Governing Law. This Assignment shall be governed by and
-------------
construed in accordance with the internal laws of the State of New York,
including all matters of construction, validity and performance.
Section 13. Delivery. This Assignment is being delivered in the State of
--------
New York.
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* Indicates information deleted for confidentiality purposes.
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IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Agreement Assignment to be duly executed the day and year first above written.
LANDESBANK SCHLESWIG-HOLSTEIN GIROZENTRALE,
as Assignor
By: _____________________________________
Name:
Title:
_________________________________________
as Assignee
By: _____________________________________
Name:
Title:
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EXHIBIT A
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CONSENT AND AGREEMENT
The undersigned, THE BOEING COMPANY, a Delaware corporation, subject
to the last paragraph hereof, hereby acknowledges notice of, and consents to all
of the terms of, the Purchase Agreement Assignment dated _________, ______ by
and between Landesbank Schleswig-Holstein Girozentrale, as Security Agent
("Assignor") and _________________ ("Assignee") (herein called the "Purchase
-------- -------- --------
Agreement Assignment"; the terms defined therein or by reference therein being
--------------------
hereinafter used with the same meaning) and hereby confirms to the Assignor and
the Assignee, and agrees, that: (i) all representations, warranties,
indemnities and agreements of the Manufacturer under the Aircraft Purchase
Agreement No. 2235 dated June 11, 1999 between Manufacturer and Midway, together
with that certain Aircraft General Terms Agreement AGTA-MID dated as of June 11,
1999 between Manufacturer and Midway and that certain Customer Service General
Terms Agreement dated as of June 11, 1999 between Manufacturer and Midway, in
each case only to the extent relating to the Aircraft and including all
Exhibits, Appendices, Tables, and Letter Agreements (excluding, in the case of
the Purchase Agreement, Supplemental Exhibit EE1, Letter Agreements 6-1162-CPJ-
308 (Schedule Reliability), 6-1162-CPJ-311 (Maintenance Cost Protection) and 6-
1162-CPJ-316 (Special Matters); but including, without limitation, Letter
Agreement 6-1162-CPJ-313 (Basic Credit Memorandum)) (the "Purchase Agreement")
------------------
with respect to the Aircraft, to the extent assigned by the Assignor to the
Assignee, shall inure to the benefit of the Assignee to the same extent as if
originally named the "Customer" therein, subject to the terms and conditions of
the Purchase Agreement Assignment and the Purchase Agreement; (ii) the terms and
conditions of the Purchase Agreement relating to the Aircraft (including,
without limitation, the DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL
AND OTHER DAMAGES in Article 11 of Part 2 of Exhibit C of the General Terms
Agreement and other warranty disclaimer, insurance and indemnity provision in
the Customer Support or Product Assurance Documents of Exhibits B and C,
respectively, to the General Terms Agreement) shall apply to, and be binding
upon, the Assignee to the same extent as if originally named "Customer" therein,
(iii) the Manufacturer will pay to the Assignee all payments and amounts owed
which the Manufacturer may be required to make in respect to the Aircraft under
the Purchase Agreement directly to the Assignee at its address at
______________________________ Attention: ______________; (iv) the Assignee
cannot further assign its rights under the Purchase Agreement without the
written consent of Manufacturer; (v) until Assignee purchases the Aircraft,
Assignor shall remain obligated to purchase the Aircraft, to the extent the
Assignee fails to do so in accordance with the Purchase Agreement; (vi) the
Manufacturer agrees that it will not assert any lien or claim against the
Aircraft or any Part thereof arising with respect to or in connection with any
work or other services performed by the Manufacturer or at its direction on the
Aircraft on or prior to the Delivery Date; and (vii) for all purposes of an
Assignment under the Purchase Agreement Assignment, Manufacturer shall not be
deemed to have knowledge of and need not recognize any
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event, condition, right, remedy or dispute affecting the interests of Assignor
or Assignee unless and until Manufacturer shall have received written notice
thereof addressed to its Vice President - Contracts at ▇.▇. ▇▇▇ ▇▇▇▇, Mail Code
21-34, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, if by mail, or to 32-9430 Answerback BOEINGREN
RNTN, if by telex, and in acting in accordance with the Purchase Agreement and
the Purchase Agreement Assignment, Manufacturer may conclusively rely upon such
notice.
The Manufacturer hereby represents and warrants that (A) the
Manufacturer is a corporation duly organized and existing in good standing under
the laws of the State of Delaware, (B) the making and performance of the
Purchase Agreement, the Bills of Sale and this Consent and Agreement have been
duly authorized by all necessary corporate action on the part of the
Manufacturer, do not require any stockholder or other approval, do not
contravene the Manufacturer's Restated Certificate of Incorporation or By-laws
or any indenture, credit agreement or other contractual agreement to which the
Manufacturer is a party or by which it is bound, and the making of the Purchase
Agreement, the Bills of Sale and this Consent and Agreement does not contravene,
and to the best of the Manufacturer's knowledge, the Manufacturer's performance
of the Bills of Sale and this Consent and Agreement, does not contravene, any
law binding on the Manufacturer, and (C) each of the Purchase Agreement, the
Bills of Sale and this Consent and Agreement constitutes a binding obligation of
the Manufacturer enforceable against the Manufacturer in accordance with its
respective terms, subject to (a) applicable bankruptcy, insolvency, moratorium
and other similar laws affecting the enforcement of creditors' rights generally
and (b) general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
Insofar as the Purchase Agreement Assignment purports to assign vendor
and subcontractor agreements and to bind vendors and subcontractors,
Manufacturer makes no representations or warranties about, and does not consent
to, the assignment of engine warranties or warranties, if any, provided by any
vendor or subcontractor suppliers of parts or equipment installed on the
Aircraft.
* * *
E-1-19
This Consent and Agreement shall be governed by and construed in
accordance with the internal laws of the State of Washington, including all
matters of construction, validity and performance.
Dated __________, _____
THE BOEING COMPANY
By: ___________________________________
Name:
Title:
▇-▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
CONSENT AND AGREEMENT OF CFM INTERNATIONAL, INC.
------------------------------------------------
August __ , 2000
To: Midway Airlines Corporation
Landesbank Schleswig-Holstein Girozentrale
Wachovia Bank, N.A.
Bankgesellschaft Berlin, A.G.
Boeing Nevada, Inc.
The undersigned, CFM International, Inc. ("CFM International"), a corporation
-----------------
organized and existing under the laws of the State of Delaware, hereby
acknowledges notice of:
(a) the Mortgage and Security Agreement [Midway/LBK], dated July 31, 2000 (the
"Security Agreement") between Midway Airlines Corporation, a Delaware
------------------
corporation (the "Assignor") and Landesbank Schleswig-Holstein
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Girozentrale, as security agent (the "Assignee") in respect of Boeing model
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737-7BX aircraft (each, an "Aircraft"), together with two (2) CFM Model 56-
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7B20 engines for each Aircraft (collectively, the "Engines"); and
-------
(b) the sale by The Boeing Company to Assignee of the Engines pursuant to the
terms of the Purchase Agreement.
CEM International hereby consents to the collateral assignment of certain of
Assignor's rights in the CFM Purchase Agreement pursuant to the granting clauses
of the Security Agreement. Any capitalized terms used but not defined herein
shall have their respective meaning as set forth in the Security Agreement.
CFM International confirms to the Assignee that:
(i) any warranties related to the Engines (the "Warranties") provided or
----------
otherwise extended to the Assignor pursuant to the CFM Purchase Agreement
shall, subject to the terms and conditions thereof and of the Security
Agreement, inure to the benefit of Assignee to the same extent as if
originally named "Customer" or the "Airline" therein;
(ii) Assignee shall not be liable for any of the obligations or duties of the
Assignor under or in respect of the Warranties, nor shall the Security
Agreement give rise to any duties or obligations whatsoever on the part of
Assignee owing to CFM International except for the agreement in the
Security Agreement on the part of Assignee to the effect that in
exercising any rights in respect of the Warranties, or in making any claim
with respect to
E-2-1
the Warranties pursuant to the CFM Purchase Agreement, the terms and
conditions of the Warranties shall apply to and be binding upon Assignee
to the same extent as Assignor, and with respect to such agreement CFM
International agrees that, anything contained in the CFM Purchase
Agreement or the Security Agreement to the contrary notwithstanding, so
long as CFM International shall not have received notice from the Assignee
that an Event of Default has occurred and is continuing, the Assignee
shall not have any liability to CFM International for failure to comply
with any of the terms of the CFM Purchase Agreement with respect to the
Warranties; provided always that no person other than CFM International
shall have any rights against Assignee with respect to the undertaking and
agreement set forth in this paragraph (ii);
(iii) if, at such time as Assignee shall notify CFM International that an Event
of Default has occurred and is continuing, Assignee desires to lease or
sell any Aircraft to a person who is not then a party to a general terms
agreement with CFM International, to the extent permitted under the laws
of the United States of America, CFM International agrees that it will
then offer to such lessee or purchaser, subject to execution of an
agreement to lease or sell such Aircraft, a general terms agreement on CFM
International's then standard terms and conditions for a person in the
category in which CFM International reasonably determines such lessee or
purchaser falls; provided that if such lessee or purchaser is then a party
to a general terms agreement with CFM International, such general terms
agreement shall apply to any purchase by such lessee or purchaser of such
Aircraft provided however that nothing herein shall be deemed to
constitute any consent by CFM International to any assignment by the
Assignee of their rights in respect of the Warranties.
CFM International hereby represents and warrants that:
(a) CFM International is a company duly organized and validly existing under
the laws of the State of Delaware;
(b) the making and performance of this Consent and Agreement has been duly
authorized by all necessary corporate action on the part of CFM
International, does not require any shareholder approval and does not
contravene CFM International's certificate of incorporation or by-laws or
any indenture, credit agreement or other contractual agreement to which
CFM International is a party or by which it is bound or any law binding on
CFM International;
(c) the making and performance of the Warranties in accordance with their
terms have been duly authorized by all necessary corporate action on the
part of CFM International, does not require any shareholder approval, does
not contravene CFM International's certificate of incorporation or by-laws
or any indenture, credit agreement or other contractual agreement to which
CFM International is a party or by which it is bound, and does not, as to
the making thereof, contravene any law binding on CFM International, and
to the best knowledge of CFM International, does not, as to the
performance thereof, contravene any law binding on CFM International;
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(d) the Warranties constitute as of the date thereof and at all times
thereafter to and including the date of this Consent and Agreement a
binding obligation of CFM International enforceable against CFM
International in accordance with its terms and this Consent and Agreement,
when executed by CFM International, will be a binding obligation of CFM
International enforceable against CFM International in accordance with its
terms, subject to:
(i) the limitations of application bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally; and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
This Consent and Agreement shall be binding upon and shall inure to the benefit
of the Assignee and its respective successors and permitted assigns.
This Consent and Agreement may be executed by the party hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
This Consent and Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York, including all matters of
construction, validity and performance.
This Consent and Agreement is being delivered in the State of New York.
* * *
E-2-3
IN WITNESS WHEREOF, the party hereto has caused this Consent and Agreement
to be duly executed the day and year first above written.
CFM International, Inc.
By: _____________________________
Attorney-in-fact
E-2-4
EXHIBIT F
REMARKETING AND SUPPORT AGREEMENT
F-1