Exhibit 10.2
EXECUTION COPY
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AMENDED AND RESTATED LOAN AGREEMENT
DATED AS OF SEPTEMBER 27, 2005
AMONG
AMERICA WEST AIRLINES, INC.,
AS BORROWER,
US AIRWAYS GROUP, INC.
AND ITS SUBSIDIARIES FROM
TIME TO TIME PARTY HERETO,
CITIBANK, N.A.,
AS INITIAL LENDER,
CITIBANK, N.A.,
AS AGENT,
WILMINGTON TRUST COMPANY,
AS COLLATERAL AGENT
AND
AIR TRANSPORTATION STABILIZATION BOARD
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS.................... 2
Section 1.1. Defined Terms.............................................. 2
Section 1.2. Computation of Time Periods................................ 32
Section 1.3. Accounting Terms and Principles............................ 32
Section 1.4. Certain Terms.............................................. 32
ARTICLE II THE LOAN........................................................... 33
Section 2.1. The Loan................................................... 33
Section 2.2. Scheduled Repayment of the Loan............................ 33
Section 2.3. Evidence of Debt........................................... 34
Section 2.4. Optional Prepayments....................................... 36
Section 2.5. Mandatory Prepayments...................................... 37
Section 2.6. Interest................................................... 41
Section 2.7. Fees....................................................... 41
Section 2.8. Payments and Computations.................................. 43
Section 2.9. Certain Provisions Governing the Loan...................... 45
Section 2.10. Capital Adequacy........................................... 47
Section 2.11. Taxes...................................................... 48
ARTICLE III CONDITIONS PRECEDENT TO EFFECTIVENESS............................. 50
ARTICLE IV REPRESENTATIONS AND WARRANTIES..................................... 54
Section 4.1. Organization, Powers, Qualification, Good Standing,
Business, Subsidiaries, the Act and the Regulations........ 54
Section 4.2. Authorization of Loan Documents, etc....................... 55
Section 4.3. Financial Condition........................................ 56
Section 4.4. No Material Adverse Change; No Restricted Payments......... 57
Section 4.5. Title to Properties; Liens................................. 57
Section 4.6. Litigation; Adverse Facts.................................. 57
Section 4.7. Payment of Taxes........................................... 58
Section 4.8. Performance of Agreements; Materially Adverse Agreements... 58
Section 4.9. Governmental Regulation.................................... 58
Section 4.10. Securities Activities...................................... 59
Section 4.11. Employee Benefit Plans..................................... 59
Section 4.12. Environmental Protection................................... 59
Section 4.13. Disclosure................................................. 60
Section 4.14. Compliance with Laws....................................... 60
Section 4.15. Indebtedness............................................... 61
Section 4.16. Insurance.................................................. 61
Section 4.17. Perfected Security Interests............................... 61
Section 4.18. Compliance with the Plan of Reorganization................. 61
Section 4.19. Absence of Labor Disputes.................................. 61
Section 4.20. Compliance with certain Gate Leases........................ 61
Section 4.21. Slot Utilization........................................... 61
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Section 4.22. Deposit Accounts and Securities Accounts................... 61
Section 4.23. Unrestricted Cash and Cash Equivalents..................... 62
ARTICLE V AFFIRMATIVE COVENANTS............................................... 62
Section 5.1. Accounting Controls; Financial Statements and Other
Reports.................................................... 62
Section 5.2. Corporate Existence........................................ 67
Section 5.3. Payment of Taxes and Claims................................ 67
Section 5.4. Maintenance of Properties; Insurance....................... 68
Section 5.5. Inspection................................................. 68
Section 5.6. Compliance with Laws, Etc.................................. 69
Section 5.7. Remedial Action Regarding Hazardous Materials.............. 69
Section 5.8. Additional Obligors; Collateral............................ 70
Section 5.9. Employee Benefit Plans..................................... 72
Section 5.10. FAA Matters; Citizenship................................... 72
Section 5.11. Board Guaranty............................................. 72
Section 5.12. Audits and Reviews......................................... 72
Section 5.13. Control of Deposit Accounts and Securities Accounts........ 72
Section 5.14. Lower-Tier Covered Transaction............................. 73
Section 5.15. Contractual Obligations.................................... 73
Section 5.16. Slot Utilization........................................... 73
Section 5.17. Stock Exchange Listing..................................... 73
Section 5.18. Further Assurances......................................... 73
Section 5.19. Credit Rating of Loan...................................... 74
ARTICLE VI NEGATIVE COVENANTS................................................. 74
Section 6.1. Liens and Related Matters.................................. 74
Section 6.2. Investments................................................ 76
Section 6.3. Restricted Payments........................................ 76
Section 6.4. Financial Covenants........................................ 77
Section 6.5. Restriction on Acquisitions; Change in Fiscal Year......... 78
Section 6.6. Sales-Leasebacks........................................... 79
Section 6.7. Transactions with Affiliates............................... 79
Section 6.8. Conduct of Business........................................ 80
Section 6.9. Merger or Consolidation.................................... 80
Section 6.10. Limitations on Amendments.................................. 81
Section 6.11. No Further Negative Pledges................................ 81
Section 6.12. Speculative Transactions................................... 81
Section 6.13. Asset Sales................................................ 82
Section 6.14. Spare Parts................................................ 82
ARTICLE VII EVENTS OF DEFAULT................................................. 83
Section 7.1. Events of Default.......................................... 83
Section 7.2. Remedies................................................... 85
ARTICLE VIII THE AGENT AND THE COLLATERAL AGENT............................... 86
Section 8.1. Authorization and Action................................... 86
Section 8.2. Reliance, Etc.............................................. 87
Section 8.3. Affiliates................................................. 88
Section 8.4. Representations of the Lenders and the Board............... 88
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Section 8.5. Events of Default; Termination of Board Guaranty........... 89
Section 8.6. Agent's and Collateral Agent's Right to Indemnity.......... 89
Section 8.7. Indemnification of Agent and Collateral Agent.............. 89
Section 8.8. Successor Agent and Collateral Agent....................... 90
Section 8.9. Release of Liens on Collateral and Subsidiary Guarantors... 90
Section 8.10. Co-Collateral Agent; Separate Collateral Agent............. 91
Section 8.11. Collateral Agents' Lien.................................... 92
ARTICLE IX MISCELLANEOUS...................................................... 92
Section 9.1. Amendments, Waivers, Etc................................... 92
Section 9.2. Assignments and Participations; Successors and Assigns..... 94
Section 9.3. Costs and Expenses......................................... 97
Section 9.4. Indemnities................................................ 97
Section 9.5. Right of Set-Off........................................... 98
Section 9.6. Sharing of Payments, Etc................................... 98
Section 9.7. Notices, Etc............................................... 99
Section 9.8. No Waiver; Remedies........................................ 99
Section 9.9. Governing Law.............................................. 99
Section 9.10. Submission to Jurisdiction; Service of Process............. 99
Section 9.11. Waiver of Jury Trial....................................... 100
Section 9.12. Marshaling; Payments Set Aside............................. 100
Section 9.13. Section Titles............................................. 100
Section 9.14. Execution in Counterparts.................................. 100
Section 9.15. Severability............................................... 100
Section 9.16. Confidentiality............................................ 101
Section 9.17. Third Party Beneficiary.................................... 101
Section 9.18. Acknowledgment Regarding Federal Authority................. 102
Section 9.19. Independence of Representations, Warranties and
Covenants.................................................. 103
Section 9.20. Acknowledgment Regarding Second Lien....................... 103
Section 9.21. Board Acknowledgment....................................... 103
Section 9.22. Counter-Guarantor Acknowledgment........................... 103
Section 9.23. GE Acknowledgement......................................... 103
Annexes
Annex A Notice Addresses
Annex B Lending Office
Annex C Guarantee Rate Schedule
Schedules
Schedule 1.1(a) Slots
Schedule 2.5(b) Collateral Release Values
Schedule 2.5(d) Designated Asset Sales
Schedule 3(a)(vii) Stock Certificates
Schedule 3.1(b) Other Agreements
Schedule 4.1(b) Operating Authority
Schedule 4.1(c) Subsidiaries
Schedule 4.2(c) Consents, Approvals, etc.
Schedule 4.3(d) Financial Condition
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Schedule 4.6 Material Litigation
Schedule 4.7(a) Payment of Taxes
Schedule 4.7(b) Government Tax Claims
Schedule 4.8(c) Other Agreements
Schedule 4.11(a) Plans and Multiemployer Plans
Schedule 4.12(b) Hazardous Material Activity
Schedule 4.12(c) Environmental Claims
Schedule 4.15 Indebtedness
Schedule 4.20 Gate Leases
Schedule 4.22 Deposit Accounts and Securities Accounts
Schedule 5.13 Account Control Agreements
Schedule 6.1(a) Permitted Liens
Schedule 6.1(b) Permitted Payment Restrictions
Schedule 6.6 Sale-Leasebacks
Schedule 6.7(b) Transactions with Affiliates
Exhibits
Exhibit A Form of Assignment and Acceptance
Exhibit B-1 Form of Tranche A Note
Exhibit B-2 Form of Tranche B-1 Note
Exhibit B-3 Form of Tranche B-2 Note
Exhibit B-4 Form of Tranche B-3 Note
Exhibit B-5 Form of Tranche B-4 Note
Exhibit C Form of Second Lien Aircraft Mortgage and Security
Agreement for US Airways
Exhibit D Form of Second Lien Aircraft Mortgage and Security
Agreement for Piedmont
Exhibit E Form of Second Lien Slot Security Agreement
Exhibit F Form of Second Lien Security Agreement
Exhibit G Form of Second Lien Intellectual Property Security
Agreement
Exhibit H Leasehold Mortgage, Security Agreement, Assignment of
Rents and Leases and Fixture Filing (Second Lien)
(Pennsylvania)
Exhibit I Form of Collateral Value Certificate
Exhibit J Form of Second Lien Guaranty
Exhibit K [Reserved]
Exhibit L Form of Summary Report of Slot Utilization
Exhibit M Form of Subsidiary Joinder
Exhibit N Investment Guidelines
Exhibit O Form of Warrants
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AMENDED AND RESTATED LOAN AGREEMENT, dated as of September 27, 2005,
among AMERICA WEST AIRLINES, INC., a Delaware corporation (the "Borrower"), US
AIRWAYS GROUP, INC., a Delaware corporation ("Group"), the direct and indirect
Subsidiaries of Group parties hereto from time to time, CITIBANK, N.A., as the
Initial Lender (in such capacity, together with its successors and permitted
assigns, the "Initial Lender"), CITIBANK, N.A., as agent for the Lenders (in
such capacity, together with its successors and permitted assigns, the "Agent"),
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as Collateral Agent
(in such capacity, together with its successors and permitted assigns, the
"Collateral Agent") and AIR TRANSPORTATION STABILIZATION BOARD, created pursuant
to Section 102 of the Act referred to below (the "Board").
WITNESSETH:
WHEREAS, the Borrower, the Agent, the Initial Lender, the Board and
KPMG Consulting, Inc. (now known as BearingPoint, Inc.), as Loan Administrator,
are parties to that certain Loan Agreement dated as of January 18, 2002 (as
amended, supplemented or otherwise modified through the date hereof, the
"Original Loan Agreement") pursuant to which the Initial Lender made a single
term loan to the Borrower in the amount of $429,000,000;
WHEREAS, America West Holdings Corporation, a Delaware corporation and
owner of 100% of the Common Stock of the Borrower ("AWA Holdings"), Group and
Barbell Acquisition Corp., a Delaware corporation and wholly owned Subsidiary of
Group ("Merger Sub"), are parties to that certain Agreement and Plan of Merger
dated as of May 19, 2005 (the "Merger Agreement") providing for the merger of
Merger Sub with and into AWA Holdings (the "Merger");
WHEREAS, on September 12, 2004, Group, US Airways, Inc. ("US Airways")
and certain of their affiliates (the "Debtors") filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the Eastern District of Virginia, Alexandria Division (the "Bankruptcy
Court"), jointly administered Case No. 04-13819 (the "Bankruptcy Case");
WHEREAS, the Plan of Reorganization (as defined below) in the
Bankruptcy Case contemplates, among other things, the Merger;
WHEREAS, the consummation of the Merger and the transactions
contemplated by the Plan of Reorganization requires the consent of, among
others, the Board and the Initial Lender;
WHEREAS, the Borrower has requested that the Board, the
Counter-Guarantors (as defined below) and the Initial Lender consent to the
Merger and the transactions contemplated by the Plan of Reorganization, and, in
connection therewith, amend and restate the Original Loan Agreement as provided
herein; and
WHEREAS, the Board, the Counter-Guarantors and the Initial Lender are
willing to consent to the Merger and the transactions contemplated by the Plan
of Reorganization and amend and restate the Original Loan Agreement upon the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree to amend and
restate the Original Loan Agreement as follows:
ARTICLE I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
SECTION 1.1. DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Act" means the Air Transportation Safety and System Stabilization
Act, P.L. 107-42, as the same may be amended from time to time.
"Adjusted Cash Amount" has the meaning specified in Section 6.4(a).
"Adjusted Excess Cash Flow" means, for any period, (i) Excess Cash
Flow of Group for such period, minus (ii) the sum of (A) 25% of such Excess Cash
Flow, (B) 100% of the aggregate amount of prepayments of the Loan previously
made pursuant to Section 5.8(d), during such period, and (C) 100% of the
aggregate amount of prepayments of the US Airways Loan previously made by US
Airways pursuant to Section 5.8(d) of the US Airways Loan Agreement.
"Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Affiliate Transaction" has the meaning specified in Section 6.7(a).
"After-Acquired Section 1110 Equipment" means Section 1110 Equipment
acquired by an Obligor after the Effective Date.
"Agent" has the meaning specified in the preamble to this Agreement.
"Aggregate Amounts Due" has the meaning specified in Section 9.6.
"Agreement" means this Amended and Restated Loan Agreement.
"Airbus Counter-Guarantor" means AFS Cayman Limited, a company
incorporated under the laws of the Cayman Islands.
"Airbus Financing Letter Agreement" means the A350/A330 Financing
Letter Agreement, dated as of September 27, 2005, among Borrower, US Airways,
Group, and AVSA, S.A.R.L., or any financing pursuant thereto, as amended,
restated, supplemented or modified.
"Airbus Financings" means the Airbus Loan Agreements and the Airbus
Financing Letter Agreement.
"Airbus Loan Agreements" means the $161,000,000 Loan Agreement and the
$89,000,000 Loan Agreement, each dated as of September 27, 2005, among the
Borrower, US Airways, Group, Airbus Financial Services, individually and as loan
agent, and ▇▇▇▇▇ Fargo Bank Northwest, National Association, as collateral
agent, each as amended, restated, supplemented or modified.
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"Aircraft Related Equipment" means each Obligor's aircraft fleet
(including engines, airframes, propellers and appliances), spare aircraft
engines and propellers, spare parts, aircraft parts, simulators and other
training devices, passenger loading bridges or other flight or ground equipment
and Aircraft Related Facilities.
"Aircraft Related Facilities" means (i) airport terminal facilities,
including without limitation, baggage systems, loading bridges and related
equipment, building, infrastructure and maintenance, club rooms, apron, fueling
systems or facilities, signage/image systems, administrative offices,
information technology systems and security systems, (ii) airline support
facilities, including without limitation, cargo, catering, mail, ground service
equipment, ramp control, deicing, hangars, aircraft parts/storage, training and
reservations facilities and (iii) all equipment used in connection with the
foregoing.
"ALPA Letter Agreement" means the Letter Agreement, dated September
14, 2005, among Group, AWA Holdings and the Airline Pilots Association.
"Applicable Interest Rate" means, for any Interest Period, a rate per
annum equal to LIBOR for such Interest Period plus 0.40% per annum; provided
that if (i) some or all of Tranche A, Tranche B-1, Tranche B-2 or Tranche B-3 is
assigned pursuant to Section 9.2 and in connection with such assignment, the
Board Guaranty (in the case of Tranche A) is terminated in accordance with its
terms, or any applicable Counter-Guarantee (in the case of Tranche ▇-▇, ▇▇▇▇▇▇▇
▇-▇ or Tranche B-3) is no longer in effect, in each case, with respect to the
assigned portion of the applicable Tranche (such that the Guarantee Fee or any
Counter-Guarantee Fee is no longer payable with respect to such assigned
portion); or (ii) Tranche B-4 is assigned pursuant to Section 9.2 (such that the
Supplemental Facility Fee is no longer payable with respect to such assigned
portion), then in each such case the Applicable Interest Rate on such assigned
portion of the Loan will be LIBOR for such Interest Period plus 8.40%
(increasing by 0.05% on January 18 of each year, beginning January 18, 2006).
"Appraisal Report" means, with respect to each category of Appraised
Collateral, a desktop appraisal (or, if applicable, pursuant to Section 5.8(c),
a physical inspection report) in form and substance reasonably satisfactory to
the Controlling Creditor and prepared by an Appraiser, which certifies, at the
time of determination, the current market value and the liquidation value of the
assets subject to such appraisal; provided that with respect to aircraft,
engines, spare engines, spare parts and flight simulators, the terms "current
market value" and "liquidation value" shall be as defined by the International
Society of Transport Aircraft Trading if applicable to the particular
Collateral; provided, further, that except as otherwise agreed to by the
Controlling Creditor, each Appraisal Report obtained subsequent to the
preparation of the Baseline Appraisal with respect to each category of Appraised
Collateral shall be (A) prepared by the same Appraiser used in the Baseline
Appraisal for such category of Appraised Collateral, unless such Appraiser is no
longer providing appraisals for such type of property or the Borrower, the Agent
and the Board (so long as the Board is either a guarantor of Tranche A or a
Lender hereunder) agree that good cause exists to change Appraisers and (B) in
any event, based on the same methodologies and assumptions (including, without
limitation, the time period for the disposition of such Appraised Collateral and
the market conditions perceived to exist at the time) used in the Baseline
Appraisal for such category of Appraised Collateral.
"Appraised Collateral" means (i) all aircraft, spare engines, flight
simulators, ground service equipment, passenger loading bridges and spare parts
that are part of the Collateral, (ii) Slots and Gate Leases that are part of the
Collateral, (iii) each item of Pledged Real Property that is the subject of a
Mortgage, and (iv) such other Aircraft Related Equipment that is part of the
Collateral and for which the Obligors elect to obtain Appraisal Reports.
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"Appraised Value" means, with respect to any item of Collateral, the
liquidation value of such Collateral as reflected in the most recent Appraisal
Report obtained in respect of such Collateral in accordance with this Agreement.
"Appraiser" means BACK Aviation Solutions, AVITAS, Inc. or Simat
Helliesen & ▇▇▇▇▇▇▇, Inc. or any other firm of nationally recognized,
independent appraisers as may be agreed by the Borrower and the Controlling
Creditor.
"Asset Sale" means any sale, transfer or other disposition (including
by way of merger, consolidation, exchange of assets or sale-leaseback
transactions) by an Obligor to any Person other than another Obligor of (i) all
or any of the Capital Stock of any Obligor other than Group or (ii) any other
property or assets of an Obligor (including spare parts); provided that the term
"Asset Sale" shall not include (a) any sale or disposition of spare parts,
inventory (including available seat miles and frequent flier miles (including
dividend and flightfund miles)), receivables and other current assets, in each
case in the ordinary course of business; provided that with respect to a sale or
disposition of spare parts, the aggregate Appraised Value of the remaining spare
parts which would be counted in the computation of Collateral Value as of such
date is not less than 75% of the Appraised Value of the spare parts set forth in
the Baseline Appraisal; (b) any licensing or sublicensing of intellectual
property in the ordinary course of business of the Obligors; (c) any leasing or
subleasing of property in the ordinary course of business; (d) a sale, transfer
or other disposition resulting from a casualty or a condemnation by a
Governmental Authority; (e) any sale or disposition (in a single transaction or
related series of transactions) of obsolete or worn out property (other than
spare parts) in the ordinary course of business that generate(s) consideration
to the Obligors of $100,000 or less; (f) the contemporaneous exchange, in the
ordinary course of business, of property for property of a like kind; (g) any
disposition of property which is not Collateral in connection with the making of
an Investment permitted under Section 6.2; or (h) a sale or disposition of cash
or Cash Equivalents.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Lender, consented to by the Board and the
Borrower (if applicable) and accepted by the Agent (unless consummated pursuant
to Section 9.2(d)), in substantially the form of Exhibit A.
"AWA Holdings" has the meaning specified in the recitals to this
Agreement.
"Bankruptcy Case" has the meaning specified in the recitals to this
Agreement.
"Bankruptcy Code" means Title 11 of the United States Code as now and
hereafter in effect, or any successor statute.
"Bankruptcy Court" has the meaning specified in the recitals to this
Agreement.
"Base Rate Loan" means a Loan that bears interest based on a
fluctuating rate per annum for any day equal to the sum of (a) the higher of (i)
the Federal Funds Rate plus 1/2 of 1% and (ii) the rate of interest in effect
for such day as publicly announced from time to time by Citibank, N.A. (or any
successor thereto) as its "prime rate" plus (b) 3.00%. For purposes of this
definition, "Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of
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1/100 of 1%) charged to Citibank, N.A. on such day on such transactions as
determined by the Agent. Furthermore, the "prime rate" is a rate set by
Citibank, N.A. based upon various factors including its costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such prime rate announced by Citibank, N.A.
shall take effect at the opening of business on the day specified in the public
announcement of such change.
"Baseline Appraisal" means, as to each category of Appraised
Collateral, the first Appraisal Report with respect to such category of
Appraised Collateral obtained by the Obligors after the Effective Date pursuant
to Section 5.8(c).
"Board" has the meaning specified in the preamble to this Agreement,
and any successor approved by or established in accordance with the Act.
"Board Guaranty" means the Amended and Restated Guarantee Agreement
dated as of the date hereof and executed by the Board, the Initial Lender and
the Agent.
"Borrower" has the meaning specified in the preamble to this
Agreement.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York, New York, Charlotte, North Carolina or
Phoenix, Arizona and, if the applicable Business Day relates to notices,
determinations, fundings and payments in connection with LIBOR, a day on which
dealings in Dollar deposits are also carried on in the London interbank market.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is required to be accounted for as a capital lease on the
balance sheet of that Person, and the amount of Indebtedness represented by such
lease shall be the capitalized amount of the obligations evidenced thereby
determined in accordance with GAAP.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital stock, or corresponding equity
rights in any partnership, limited liability company or other entity, whether
now outstanding or issued after the date of this Agreement, including, without
limitation, all Common Stock.
"Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States government or (b) issued by any
agency or instrumentality of the United States the obligations of which are
backed by the full faith and credit of the United States, in each case maturing
within one year after such date; (ii) marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any instrumentality thereof, in each case maturing within one year
after such date and having, at the time of the acquisition thereof, the highest
rating obtainable from either S&P or ▇▇▇▇▇'▇; (iii) commercial paper not issued
by the Borrower maturing no more than one year after such date and having, at
the time of the acquisition thereof, a rating of at least A-2 from S&P or at
least P-2 from ▇▇▇▇▇'▇; (iv) certificates of deposit or bankers' acceptances
maturing within one year after such date and issued or accepted by any Lender or
by any commercial bank organized under the laws of the United States of America
or any state thereof or the District of Columbia that (a) is at least
"adequately capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $500,000,000; (v) shares of any money market mutual fund that
(a) has at least 95% of its assets invested continuously in the types of
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investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $500,000,000, and (c) has the highest rating obtainable from either
S&P or ▇▇▇▇▇'▇; and (vi) investments made pursuant to the Investment Guidelines,
so long as an amount equal to 100% of the Minimum Adjusted Cash Amount required
to be maintained at such time pursuant to Section 6.4(a) is maintained in cash
and/or investments covered in clauses (i) through (v) above.
"Cash Proceeds" means, (a) with respect to any Asset Sale, the cash or
Cash Equivalents proceeds of such Asset Sale, including payments of deferred
payment obligations (to the extent corresponding to the principal, but not the
interest component thereof) when received in the form of cash or Cash
Equivalents and proceeds from the conversion of other property received when
converted to cash or Cash Equivalents, and (b) with respect to any Future
Issuance, the cash proceeds of such Future Issuance.
"CFC" means a "controlled foreign corporation" under Section 957 of
the Internal Revenue Code.
"Change of Control" means (i) the acquisition at any time by any
Person of "beneficial ownership" (within the meaning of Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder ("Section
13(d)")) in excess of 35% of the total voting power of the Voting Stock of
Borrower, US Airways, AWA Holdings or Group; (ii) the sale, lease, transfer or
other disposition, of all or substantially all of the assets of the Borrower, US
Airways, AWA Holdings or Group to any Person as an entirety or substantially as
an entirety in one transaction or a series of related transactions; (iii) the
merger or consolidation of the Borrower, US Airways, AWA Holdings or Group, with
or into another corporation, or the merger of another corporation into the
Borrower, US Airways, AWA Holdings or Group, or any other transaction, with the
effect that a Person acquires as a result of such transaction "beneficial
ownership" in excess of 35% of the total voting power of the Voting Stock of the
Borrower, US Airways, AWA Holdings or Group, or (if the Borrower, US Airways,
AWA Holdings or Group is not the surviving corporation in such transaction) such
other corporation (including, in any such case, indirect ownership through
another Person); (iv) the liquidation or dissolution of the Borrower, US Airways
or Group, other than a liquidation or dissolution in which another Obligor
acquires all of the assets of the liquidating entity; or (v) if a majority of
the board of directors of Group shall no longer be composed of individuals (a)
who were members of said board on the Effective Date (after giving effect to the
Consummation of the Plan), (b) whose election or nomination to said board was
approved by individuals referred to in clause (a) above constituting at the time
of such election or nomination at least a majority of said board, (c) whose
election or nomination to said board was approved by individuals referred to in
clauses (a) and (b) above constituting at the time of such election or
nomination at least a majority of said board or (d) in the case of individuals
nominated by the investors under the Equity Investment Agreements, who were
nominated or proposed by such investors; provided, however, that notwithstanding
the provisions of clauses (i) through (v) above, none of (A) the Merger, (B) the
Consummation of the Plan and the implementation of the transactions contemplated
thereby, or (C) entry by the Obligors into any contract or arrangement that
provides for or is conditioned upon payment in full in cash of all Obligations
shall constitute a "Change of Control" hereunder. For purposes of this
definition, the term Person includes a "person" or "group" within the meaning of
Rule 13d-3 under the Exchange Act but does not include any other Obligor.
"Closing Date" means January 18, 2002.
"Collateral" means all of the properties and assets that are (or are
purported to be) from time to time subject to the Liens granted to the
Collateral Agent pursuant to the Collateral Documents as security for the
Obligations but not including Excluded Property.
6
"Collateral Agent" has the meaning set forth in the preamble to this
Agreement.
"Collateral Documents" means, collectively, (i) that certain Second
Lien Aircraft Mortgage and Security Agreement, dated as of the date hereof,
between US Airways and the Collateral Agent, in substantially the form of
Exhibit C (the "US Airways Aircraft Mortgage"); (ii) that certain Second Lien
Aircraft Mortgage and Security Agreement, dated as of the date hereof, between
Piedmont and the Collateral Agent, in substantially the form of Exhibit D (the
"Piedmont Aircraft Mortgage," and together with the US Airways Aircraft
Mortgage, the "Aircraft Mortgages"); (iii) that certain Second Lien Slot
Security Agreement, dated as of the date hereof, among the Borrower, US Airways,
Piedmont, PSA Airlines, Inc. and the Collateral Agent, in substantially the form
of Exhibit E (the "Slot Security Agreement"); (iv) that certain Second Lien
Security Agreement, dated as of the date hereof, among the Obligors and the
Collateral Agent, in substantially the form of Exhibit F (the "Security
Agreement"); (v) that certain Second Lien Intellectual Property Security
Agreement, dated as of the date hereof, among the Obligors party thereto and the
Collateral Agent, in substantially the form of Exhibit G (the "Intellectual
Property Security Agreement"); (vi) Leasehold Mortgage, Security Agreement,
Assignment of Rents and Leases and Fixture Filing (Second Lien) (Pennsylvania)
dated as of the date hereof, by US Airways for the benefit of the Collateral
Agent, in substantially the form of Exhibit H (the "Mortgage"); (vii) the
Intercreditor Agreement; (viii) each other certificate, agreement or document
executed and delivered by any Obligor pursuant to any of the foregoing
agreements, including any Control Agreement, certificate, agreement or document
delivered pursuant hereto or to the terms of Section 5.8; and (ix) any consents
of lessors of any of the Collateral to the pledge of such Collateral pursuant to
the agreements or documents listed in (i) through (vi) above.
"Collateral Document Supplement" means a supplement to a Collateral
Document that subjects additional Collateral to the Lien granted by such
Collateral Document.
"Collateral Release Value" means, for each item of Collateral with
respect to which the Lien of the Collateral Agent is being released (or
subordinated) in connection with a Replacement Secured Financing, an amount
equal to (a) with respect to (i) Slots or (ii) rotable, repairable and
expendable spare parts, 100% of the dollar amount therefor set forth on Schedule
2.5(b) (which amount, for the avoidance of doubt, shall not be pro rated for a
Replacement Secured Financing with respect to less than all of the Obligors'
Slots or spare parts), and (b) with respect to aircraft and spare engines, the
product of (i) the Appraised Value of such Collateral (based on an Appraisal
Report obtained within sixty (60) days of the date of such transaction and
otherwise satisfactory to the Controlling Creditor) and (ii) the prepayment
percentage for such item or type of Collateral which is set forth on Schedule
2.5(b).
"Collateral Value" means, as of any date of determination, the sum of:
(a) the Appraised Value of all Appraised Collateral, as stated in the then most
current Appraisal Report(s) therefor and (b) 85% of the Eligible Accounts as of
such date; provided that none of the following assets shall be included in the
computation of Collateral Value (collectively, the "Ineligible Assets"): (A)
property or assets not subject to a first-priority perfected Lien in favor of
the Collateral Agent (subject to Permitted Encumbrances and the prior Liens
securing the First Lien Obligations (as defined in the Intercreditor
Agreement)), including, without limitation, any property or assets that may no
longer be owned by an Obligor as a result of an Asset Sale or otherwise; (B)
After-Acquired Section 1110 Equipment; and (C) property or assets subject to any
event of loss, damage or other casualty that has materially and adversely
affected the value of such Collateral, whether insured or not, and in the event
that any Ineligible Assets are excluded from the computation of the Collateral
Value based on this proviso, the Collateral Value computed in accordance with
the foregoing method shall be adjusted to exclude such Ineligible Assets.
7
"Collateral Value Certificate" means a certificate executed by a
Responsible Officer of the Borrower in substantially the form of Exhibit I
annexed hereto (provided that such certificate may be incorporated into a
certificate contemporaneously delivered pursuant to clause (iv) of Section
5.1(b)).
"Collateral Value Deficiency" means, as of any date of determination,
the positive amount, if any, equal to the difference of (i) 135% of (x) the sum
of the aggregate outstanding amount of principal of and accrued interest on the
Loan on such date plus the aggregate outstanding amount of principal of and
accrued interest on the US Airways Loan on such date less (y) the Minimum
Adjusted Cash Amount required to be maintained by the Obligors on such date
minus (ii) the Collateral Value as of such date.
"Collateral Value Test Date" has the meaning specified in Section
5.8(d).
"Commodity Agreement" means any agreement or arrangement the value of
which fluctuates based on the value of a commodity.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Agreement, including, without limitation, all
series and classes of such common stock.
"Confirmation Order" means the order of the Bankruptcy Court, dated
September 16, 2005, confirming the Plan of Reorganization pursuant to Section
1129 of the Bankruptcy Code.
"Consolidated EBITDAR" means, with respect to any Person, for any
period, the sum of (i) the operating income of such Person for such period, (ii)
rental expenses of such Person for such period under aircraft Operating Leases
and (iii) depreciation and amortization and stock compensation expenses and
extraordinary charges and non-cash unusual items of such Person that were
recognized in arriving at the amount of such operating income for such period,
all as determined on a consolidated basis in accordance with GAAP.
"Consolidated Fixed Charges" means, with respect to any Person, for
any period, the sum of (a) the aggregate gross interest expense relating to
Indebtedness of such Person for such period (calculated without regard to any
limitations on the payment thereof), including the corresponding amounts for
such period under Capital Lease obligations and Synthetic Lease obligations of
such Person (and including, for the avoidance of doubt, the Guarantee Fee
hereunder and the "Guarantee Fee" under and as defined in the US Airways Loan
Agreement payable for such period), (b) the aggregate rental expenses of such
Person for such period under aircraft Operating Leases, and (c) dividends or any
other payments or distributions in respect of any class of Capital Stock of such
Person, including in connection with any redemption, purchase, retirement or
other acquisition, directly or indirectly of any such class of Capital Stock,
paid or payable during such period (but only to the extent payment thereof is
permitted under this Agreement), all determined on a consolidated basis.
"Consummation of the Plan" means substantial consummation of the Plan
of Reorganization within the meaning of Section 1101(2) of the Bankruptcy Code.
"Contractual Obligation" means, as applied to any Person, any
provision of any equity security issued by that Person or of any indenture,
mortgage, deed of trust, contract, lease, license, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
8
"Control Agreement" has the meaning specified in Section 5.13 hereof.
"Controlling Creditor" means, as of any date, (a) the Board, so long
as (i) the Board Guaranty is in full force and effect as of such date and has
not been terminated without payment having been made thereunder and (ii) the
outstanding amount of Tranche A guaranteed under the Board Guaranty as of such
date represents a majority of the principal amount of the Loan then outstanding,
and (b) at all other times, the Requisite Lenders.
"Convertible Note Offering" means the offering of $125,000,000 of US
Airways Group, Inc. Senior Convertible Notes as described in the Confidential
Offering Memorandum dated September 20, 2005, together with the offering of such
principal amount of such notes pursuant to any overallotment option granted to
the initial purchasers thereof in connection therewith.
"Counter-Guarantee" means, as the context may require, any or all of
(i) the Amended and Restated Counter-Guarantee Agreement dated as of the date
hereof among the Airbus Counter-Guarantor, the Initial Lender and the Agent;
(ii) the Amended and Restated Counter-Guarantee Agreement dated as of the date
hereof among the GECC Counter-Guarantor, the Initial Lender and the Agent; and
(iii) any counter-guarantee entered into after the date hereof for purposes of
guaranteeing Tranche B-2.
"Counter-Guarantee Fee" means the counter-guarantee fee payable to
each Counter-Guarantor on an Interest Payment Date in an amount equal to the
product of (x) the applicable Guarantee Rate set forth on Annex C for such
Interest Payment Date and (y) the outstanding amount of Tranche ▇-▇, ▇▇▇▇▇▇▇ ▇-▇
or Tranche B-3 (as applicable) guaranteed under the applicable Counter-Guarantee
or held by the applicable Counter-Guarantor (as a result of a payment
thereunder) on such date (computed on the basis of a year of 360 days and actual
number of days elapsed) as determined by the Agent as of the date of payment of
such fee and after giving effect to any payment of principal of the Loan made on
such date.
"Counter-Guarantee Taxes" has the meaning specified in Section
2.11(b).
"Counter-Guarantor" means, as the context may require, any or all of
the Airbus Counter-Guarantor, the GECC Counter-Guarantor and any person who
becomes a counter-guarantor after the date hereof with respect to Tranche B-2.
"Counter-Guarantor Letter of Credit" means, with respect to any
applicable Counter-Guarantee, an irrevocable standby letter of credit issued by
a "Letter of Credit Bank" (as defined in such Counter-Guarantee), in favor of
the Agent, in the form required under such Counter-Guarantee.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement.
"DCA" means ▇▇▇▇▇▇ ▇▇▇▇▇▇ Washington National Airport.
"Debtors" has the meaning specified in the recitals to this Agreement.
"Default" means any condition or event which with the required passing
of time or the giving of any required notice or both would, unless cured or
waived, become an Event of Default.
"Designated Asset Sale" means an Asset Sale with respect to an asset
identified on Schedule 2.5(d).
9
"Disclosure Statement" means the Disclosure Statement with respect to
the Plan of Reorganization of US Airways Group, Inc. and its Affiliated Debtors
and Debtors-in-Possession pursuant to Section 1125 of the Bankruptcy Code which
was approved by the Bankruptcy Court on August 9, 2005, together with any
amendments, supplements or modifications thereto that have been approved by the
Bankruptcy Court prior to the Effective Date.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Effective Date" has the meaning specified in Article III hereof.
"Eligible Accounts" means, as of any date of determination, accounts
receivable shown on the consolidated balance sheet of Group as of the end of the
then most recently ended fiscal quarter, net of, without duplication, all
reserves against such accounts receivables and all accounts receivables owed by
another Obligor, provided that:
(a) such accounts receivable arise out of sales of goods or rendering
of services in the ordinary course of the relevant Obligor's business;
(b) such accounts receivable are payable in Dollars and are otherwise
on terms normal and customary in the relevant Obligor's business;
(c) such accounts receivable are not more than 90 days past original
invoice date or more than 60 days past the date due;
(d) such accounts receivable are not owing from any Person from which
an aggregate amount of more than 20% of the accounts receivable owing therefrom
is more than 60 days past the date due;
(e) such accounts receivable are not owing from any Person that (i)
has disputed liability for any account receivable owing from such Person (but
only to the extent of such dispute) or (ii) has otherwise asserted any claim,
demand or liability against any Obligor, whether by action, suit, counterclaim
or otherwise (but only to the extent of such claim, demand or liability);
(f) such accounts receivable are not owing from any Person that has
taken or is the subject of any action or proceeding under any bankruptcy,
insolvency or similar law;
(g) such accounts receivable (i) are not owing from any Person that is
also a supplier to, or creditor of, any Obligor, is a credit card processor,
travel agent or marketing partner of any Obligor, or to whom any Obligor is
otherwise indebted, and (ii) do not represent any manufacturer's or supplier's
credits, discounts, incentive plans or similar arrangements entitling any
Obligor to discounts on future purchase therefrom;
(h) such accounts receivable do not arise out of sales to account
debtors outside the United States or Canada;
(i) such accounts receivable do not arise out of sales on a
▇▇▇▇-and-hold, guaranteed sale, sale-or-return, sale on approval or consignment
basis or subject to any right of return, setoff or chargeback (including,
without limitation, accounts receivables for unutilized tickets);
(j) such accounts receivable are not owing from an account debtor that
is an agency, department or instrumentality of the United States or any state
thereof; and
10
(k) such accounts receivables arise out of sales for which the account
debtors' obligations to pay are not conditioned upon any Obligor's completion of
any further performance or as to which the goods or services giving rise thereto
have been delivered or performed by the Obligors, and if applicable, have been
accepted by the account debtors, and the account debtors have not revoked their
acceptance.
"Eligible Collateral" means property and assets of the Obligors other
than Excluded Property.
"Eligible Lender" means a "lender" as defined in the Act.
"Environmental Claim" means any investigation, notice, claim, suit,
proceeding, demand or order, by any Governmental Authority or any Person arising
in connection with any alleged or actual violation of Environmental Laws or with
any Hazardous Materials Activity, or any actual or alleged damage, or harm to
health, safety, property or the environment.
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
governmental authorizations, or any other requirement of Governmental
Authorities relating to (a) the prevention or control of pollution or protection
of the environment, (b) solid, gaseous or liquid waste generation, handling,
treatment, storage, disposal, discharge, Release, emission or transportation, or
(c) exposure to Hazardous Materials. "Environmental Laws" shall include, but not
be limited to, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. 9601 et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. 6901 et seq.), the National Environmental Policy Act (42 U.S.C.
4321 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. 1801 et
seq.), the Toxic Substances Control Act (49 U.S.C. 2601 et seq.), the Clean Air
Act (42 U.S.C. 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.), the Safe Drinking Water Act (42 U.S.C. 3007 et seq.), the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. 11001 et seq.),
the Occupational Safety and Health Act (29 U.S.C. 641 et seq.), and the State of
Arizona Environmental Quality Act (A.R.S. 49-101 et seq.).
"Equity Investment Agreements" means (i) the Investment Agreement,
dated as of May 19, 2005, by and among Peninsula Investment Partners, L.P.,
Group and AWA Holdings, (ii) the Investment Agreement, dated as of May 19, 2005,
by and among ACE Aviation Holdings, Inc., Group and AWA Holdings, (iii) the
Investment Agreement, dated as of May 19, 2005, by and among Par Investment
Partners, L.P., Group and AWA Holdings, (iv) the Investment Agreement, dated as
of May 19, 2005, by and among Eastshore Aviation, LLC, Group and AWA Holdings,
(v) the Investment Agreement, dated May 27, 2005, by and among Wellington
Investment Management Company, LLP, Group and AWA Holdings, and (vi) the
Investment Agreement, dated as of July 7, 2005, by and among Tudor Proprietary
Trading, L.L.C., certain investors listed on Schedule 1 thereto, Group and AWA
Holdings, in each case as amended, restated, supplemented or otherwise modified
through the date hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate" means, as applied to Group, (i) any corporation
which is, or (other than for purposes of the first sentence of each of Section
4.11(a) and Section 5.1(b)(viii)) was at any time in the preceding six (6)
years, a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which Group is a member; (ii) any
trade or business (whether or not incorporated) which is a member of a group of
trades or businesses under common control within the meaning of Section 414(c)
of the Internal Revenue Code of which Group is a member; and (iii) any member of
an affiliated service group within the meaning of Section 414(m) or (o) of the
11
Internal Revenue Code of which Group, any corporation described in clause (i)
above or any trade or business described in clause (ii) above is a member.
"ERISA Event" means (a) any "reportable event," as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which reporting is waived); (b) the existence with respect to
any Plan of an "accumulated funding deficiency" (as defined in Section 412 of
the Internal Revenue Code or Section 302 of ERISA); (c) the filing pursuant to
Section 412(d) of the Internal Revenue Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by Group or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e)(i) the receipt by Group or any ERISA Affiliate from the PBGC of a notice of
determination that PBGC intends to seek termination of any Plan or to have a
trustee appointed for any Plan, or (ii) the filing by Group or any ERISA
Affiliate of a notice of intent to terminate any Plan; (f) the incurrence by
Group or any of its ERISA Affiliates of any liability (i) with respect to the
withdrawal from a Multiemployer Plan pursuant to Sections 4063 and 4064 of
ERISA, (ii) with respect to a facility closing pursuant to Section 4062(e) of
ERISA, or (iii) with respect to the withdrawal or partial withdrawal from any
Multiemployer Plan; or (g) the receipt by Group or any ERISA Affiliate of any
notice concerning the imposition of Withdrawal Liability or a determination that
a Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Event of Default" has the meaning specified in Section 7.1.
"Excess Cash Flow" means, for any period, (i) Consolidated EBITDAR of
Group for such period, minus (plus) (ii) any increase (decrease) in Working
Capital of Group from the first day of such period to the last day of such
period (as adjusted for fresh start accounting as of the first day of such
period), minus (iii) the sum of (A) payments by the Obligors of principal and
interest with respect to the consolidated Indebtedness of Group (but excluding
Indebtedness that is solely the obligation of any Subsidiary that is not an
Obligor) during such period, to the extent such payments are not prohibited
under this Agreement, (B) income taxes paid during such period, (C) aircraft
rentals paid during such period under Operating Leases, (D) cash used during
such period for capital expenditures, (E) deposit and pre-delivery payments made
in respect of Aircraft Related Equipment, and (F) an amount equal to pension or
FASB 106 payments made in excess, if any, of pension or FASB 106 expenses, plus
(iii) an amount equal to the excess of pension or FASB 106 expense in excess, if
any, of pension or FASB 106 payments.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Excluded Cash" means cash and Cash Equivalents maintained in accounts
that are not subject to Control Agreements to the extent that such accounts are
any of the following:
(i) subject to Liens arising or granted in the ordinary course of
business in favor of Persons performing credit card processing services,
travel charge processing services or clearinghouse services for any
Obligor, including IATA, Diners Club, Discover Card, NPC, ARC and American
Express, so long as such Liens are on cash and Cash Equivalents that are
subject to holdbacks by, or are pledged (in lieu of such holdbacks) to,
such Persons to secure amounts that may be owed to such Persons under the
Obligors' agreements with them in connection with their provision of credit
card processing, travel charge processing or clearinghouse services to the
Obligors; being Liens of the type described in clause (iii)(B) of the
definition of "Permitted Encumbrances";
12
(ii) subject to Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods in the ordinary course of
business; being Liens of the type described in clause (v) of the definition
of "Permitted Encumbrances";
(iii) subject to Liens incurred or deposits made in each case required
under or in connection with the Trust Agreements (not including the
Obligors' residuary interest in, claims to or refunds of any such trust
funds); being Liens of the type described in clause (ix) of the definition
of "Permitted Encumbrances";
(iv) subject to Liens securing reimbursement obligations in respect of
letters of credit issued for the account of any Obligor in the ordinary
course of business and consistent with past practice, so long as the
aggregate amount of such cash and Cash Equivalents does not exceed 115% of
the maximum available amount under the secured letters of credit; being
Liens of the type described in Section 6.1(a)(viii)(A);
(v) subject to Liens securing reimbursement or other margin
requirements in connection with, in the case of Liens contemplated in this
clause (v), (x) transactions designed to hedge against fluctuations in fuel
costs, entered into in the ordinary course of business, consistent with
past business practice or then current industry practice, and not entered
into for speculative purposes, (y) transactions designed to hedge interest
rates entered into with respect to notional amounts not to exceed actual or
anticipated Indebtedness, not entered into for speculative purposes and (z)
transactions designed to hedge against risks associated with fluctuations
in currencies entered into in the ordinary course of business; being Liens
of the type described in Section 6.1(a)(viii)(B);
(vi) subject to Liens securing prepaid fuel and healthcare expenses in
the ordinary course of business and consistent with past practice; being
Liens of the type described in Section 6.1(a)(viii)(C);
(vii) subject to Liens incurred or deposits (other than with respect
to the Plans described in Section 4.11) made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money
bonds, reimbursement obligations and chargeback rights of Persons
performing services for an Obligor (including Liens securing Trade Payables
arising from the Obligors' use in the ordinary course of business,
consistent with past practice, of credit advance facilities to purchase
goods and services) and other similar obligations (exclusive of obligations
for the payment of borrowed money); being Liens of the type described in
clause (iii)(A) of the definition of "Permitted Encumbrances";
(viii) referred to in any of clauses (i) through (iii) of Section
5.13; or
(ix) the US Airways Loan Prepayment Account.
For the avoidance of doubt, all amounts on deposit in deposit accounts and
securities accounts not subject to Control Agreements or otherwise pledged to
the Collateral Agent in reliance on Section 5.13 hereof shall constitute
Excluded Cash.
"Excluded Property" means (i)(A) any lease or other written agreement
under which an Obligor leases real property (other than Gate Leases) and (1)
that requires such Obligor to pay annual
13
rentals of $10,000,000 or more but where the grant of a Lien in favor of the
Collateral Agent would violate such lease or other written agreement, provided,
that if requested by the Controlling Creditor such Obligor has used commercially
reasonable efforts to obtain the consent of the lessor to the grant of a Lien on
such lease or other agreement in favor of the Collateral Agent, (2) that
requires such Obligor to pay annual rentals of less than $10,000,000, or (3)
that the Controlling Creditor has agreed in writing in its or their sole
discretion is not material or (B) Gate Leases, other than (upon receipt of
consent of the respective lessors thereof) the Gate Leases at LGA and DCA; (ii)
any property which is subject to a Lien of the type described in Section
6.1(a)(ii), (iii), (iv), (vi), (x) or (xii) but only while subject to such Lien;
(iii) any After-Acquired Section 1110 Equipment which the Obligors have owned
for a period of less than fifteen (15) days; (iv) any right in any agreement (A)
the grant of a security interest in which would violate the agreement under
which such right arises except to the extent provided under Sections 9-406 and
9-407 of the UCC of the State of New York, if such Obligor has failed to obtain
a waiver or other relief from such provision, but provided that such Obligor
has, if requested by the Controlling Creditor, used commercially reasonable
efforts (without obligation to incur more than immaterial costs or expenses in
connection with such commercially reasonable efforts) to obtain such waiver or
other relief or (B) to the extent that the pledge or assignment of such
agreement requires the consent of any third party, unless such third party has
consented thereto, except to the extent provided under Sections 9-406 and 9-407
of the UCC of the State of New York, so long as such Obligor has, if requested
by the Controlling Creditor, used commercially reasonable efforts (without
obligation to incur more than immaterial costs or expenses in connection with
such commercially reasonable efforts) to obtain such consent; (v) Excluded Cash;
(vi) 100% of the Capital Stock of Excluded Subsidiaries, 35% of the voting
Capital Stock of Subsidiaries of the Obligors that are CFCs, and all beneficiary
interests of third parties in the trusts created by or pursuant to the Trust
Agreements (which does not include the Obligors' residuary interest in, claims
to or refunds of any trust funds in respect of such trusts); (vii) assets
pledged to secure a Permitted Acquisition Financing; and (viii) aircraft
purchase agreements which by their terms are not assignable; provided that if an
Obligor nonetheless pledges to the Collateral Agent pursuant to Section 5.8 or
otherwise assets that otherwise would constitute Excluded Property absent this
proviso, unless or until the Lien with respect to such assets is released in
accordance with this Agreement and the applicable Collateral Document, such
assets shall constitute Collateral for all purposes under this Agreement and
under the other Loan Documents and shall not be treated as Excluded Property.
"Excluded Subsidiaries" means (i) FTCHP LLC, a Delaware limited
liability company, if and for so long as (A) the assets of and ownership
interests in FTCHP LLC are pledged to secure its obligations under that certain
Senior Secured Term Loan Agreement dated as of December 23, 2004 among FTCHP
LLC, the Borrower, Heritage Bank, SSB, Citibank, N.A. and the other lenders
named therein (and any amendments, restatements, supplements, modifications,
refinancings or replacements thereof) or (B) restrictions contained in its
constituent documents prevent it from becoming an Obligor under the Loan
Documents, (ii) Airways Assurance Limited LLC, (iii) AWHQ LLC and (iv) America
West Company Store LLC.
"Exercising Lender" has the meaning specified in Section 2.2(c).
"FAA" means the Federal Aviation Administration.
"Facilities" means any and all real property now, hereafter or
heretofore owned, leased, operated or used by an Obligor.
"Fair Market Value" means, with respect to any asset subject to an
Asset Sale, the price that could be obtained for such asset by a seller in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer.
14
"FASB" means the Financial Accounting Standards Board.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"First Lien Claimholders" has the meaning given to such term in the
Intercreditor Agreement.
"Fiscal Year" means Group's fiscal year referenced in the financial
statements to be delivered by Group pursuant to Section 5.1.
"Fitch" means Fitch, Inc., and any successor thereto that is a
nationally recognized rating agency.
"Fixed Cash Amount" has the meaning specified in Section 6.4(a)(i).
"Future Issuance" means, without duplication, each (i) borrowing after
the Effective Date by an Obligor from any source (including in the debt capital
markets or from commercial bank lenders) (other than any other Obligor) of any
Indebtedness of the type described in clauses (i), (ii), (x) or (xii) of the
definition of "Indebtedness" and (ii) issuance after the Effective Date of any
Capital Stock or any warrants, options or other rights to acquire Capital Stock
by any Obligor (other than to another Obligor) or the exercise after the
Effective Date of any warrants, options or other rights to acquire Capital Stock
of any Obligor (other than exercise by another Obligor) other than, in each
case, the issuance of restricted stock or the exercise or issuance of options or
similar rights, in each case as compensation by or to existing or former
officers, directors or employees of an Obligor or cashless exercise of warrants
issued by any Obligor; provided, however, that notwithstanding the provisions of
clauses (i) and (ii) above, no borrowing, issuance of Capital Stock or exercise
or issuance of any warrants, options or other rights to acquire Capital Stock
(including any Capital Stock issued pursuant to the terms of such Capital Stock,
warrants, options or other rights to acquire Capital Stock) in each case,
effected on or around the Effective Date or otherwise in connection with the
Consummation of the Plan shall constitute a "Future Issuance" hereunder
(including, without limitation, the issuance of shares of Common Stock of Group
pursuant to the Stock Offering and the Equity Investment Agreements, the
borrowing pursuant to the Convertible Note Offering or the issuance of options
and warrants pursuant to the ALPA Letter Agreement).
"GAAP" means, subject to the limitations on the application thereof
set forth in Section 1.3, accounting principles generally accepted in the United
States, as in effect from time to time as set forth in opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of FASB approved
by a significant segment of the accounting profession in the United States,
subject to requirements of applicable law.
"Gate Leases" means all right, title and interest of each Obligor, now
existing or hereafter acquired, in and to any airport facility use, operation or
occupancy lease, license or other agreement with respect to arrival and
departure gates, aircraft parking spaces, passenger lounges, ticket counters,
terminal common areas, baggage handling areas, carousels and other facilities,
crew briefing areas, club lounges, kiosks, flight simulator buildings and other
related properties and rights with respect to airports at which any Obligor
lands, takes off or otherwise conducts operations or maintains property (not
including Slots).
"GE 2001 Credit Agreement" means the Credit Agreement, dated as of
November 16, 2001, among US Airways, Group, and General Electric Capital
Corporation, as amended, restated, supplemented or modified, including pursuant
to that certain Credit Agreement Amendment No. 1, dated
15
as of January 30, 2003, that certain Credit Agreement Amendment No. 2, dated as
of March 31, 2003, among the parties thereto, and that certain Amended and
Restated Credit Agreement, dated as of July 15, 2005 among US Airways, Group and
General Electric Capital Corporation.
"GE Engine Financing" means the Loan Agreement [Engines], dated as of
September 3, 2004, among the Borrower, General Electric Capital Corporation,
individually and as administrative agent, ▇▇▇▇▇ Fargo Bank Northwest, National
Association, as security trustee, and the lenders party thereto, as amended,
restated, supplemented or modified.
"GE Expendables Mortgage" means the Expendables Mortgage and Security
Agreement dated as of September 27, 2005 between AWA and ▇▇▇▇▇ Fargo Bank
Northwest, National Association, as security trustee, as amended, restated,
supplemented or modified.
"GE Financings" means the GE Engine Financing and the GE Spare Parts
Financing.
"GE Merger MOU" means the Master Merger Memorandum of Understanding,
dated as of June 13, 2005, among Group, US Airways, the Borrower, AWA Holdings,
General Electric Capital Corporation and General Electric Company.
"GE Spare Parts Financing" means the Loan Agreement [Spare Parts],
dated as of September 3, 2004, among the Borrower, General Electric Capital
Corporation, individually and as administrative agent, ▇▇▇▇▇ Fargo Bank
Northwest, National Association, as security trustee, and the lenders party
thereto, as amended, restated, supplemented or modified.
"GECC Counter-Guarantor" means General Electric Capital Corporation, a
Delaware corporation and any Affiliate assignee thereof permitted under the
relevant Counter-Guarantee.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Governmental Authorization" means any permit, license, certificate,
authorization, plan, directive, consent order or consent decree or agreement of,
from or with any Governmental Authority.
"Group" has the meaning specified in the preamble to this Agreement.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such first Person (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise), (ii)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), including any pledge of any assets to
secure indebtedness of another or (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of such other Person so as to enable such Person to pay such
Indebtedness. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantee Fee" has the meaning specified in Section 2.06 of the Board
Guaranty.
16
"Guarantee Rate" means, with respect to each date set forth in Annex C
hereto, the percentage set forth opposite such date.
"Hazardous Materials" means all substances defined as Hazardous
Substances, Oil, Pollutants or Contaminants in the National Oil and Hazardous
Substances Pollution Contingency Plan, 40 C.F.R. Section 300.5, or defined as
such by or regulated as such under, any Environmental Law.
"Hazardous Materials Activity" means any past, current, proposed, or
threatened use, storage, Release, generation, treatment, remediation or
transportation of any Hazardous Material (i) from, under, in, into or on the
Facilities or surrounding property; and (ii) caused by, or undertaken by or on
behalf of, an Obligor or any of their respective predecessors or Affiliates.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money; (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto); (iv) all obligations of such
Person to pay the deferred and unpaid purchase price of property or services,
which purchase price is due more than six (6) months after the date of placing
such property in service or taking delivery and title thereto or the completion
of such services, except Trade Payables; (v) all Capital Lease obligations of
such Person (the amount of the Indebtedness in respect of Capital Lease
obligations to be determined as provided in the definition of Capital Lease in
this Section 1.1); (vi) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person, provided that the amount of such Indebtedness shall be the lesser of (A)
the fair market value of such asset at such date of determination and (B) the
stated principal amount of such Indebtedness, provided, however, that if such
Indebtedness is assumed by such Person or provides for recourse against such
Person, the amount of such Indebtedness shall be the greater of (A) and (B)
above; (vii) all Indebtedness of other Persons Guaranteed by such Person to the
extent such Indebtedness is Guaranteed by such Person; (viii) to the extent not
otherwise included in this definition and to the extent treated as a liability
under GAAP, obligations under Currency Agreements, Interest Rate Agreements and
Commodity Agreements; (ix) the capitalized amount of remaining lease payments
owing by such Person under Synthetic Leases that would appear on the balance
sheet of such Person if such lease were treated as a Capital Lease; (x) the
aggregate amount of uncollected accounts receivable of such Person subject at
such time to a sale of receivables (or similar transaction) to the extent such
transaction is effected with recourse to such Person (whether or not such
transaction would be reflected on the balance sheet of such Person in accordance
with GAAP); (xi) the Indebtedness of any partnership or unincorporated joint
venture in which such Person is a general partner or a joint venturer to the
extent such Indebtedness is recourse to such Person; and (xii) all prepaid
forward sales in bulk of dividend miles or available seat miles or like
transactions other than in the ordinary course of business. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date; provided that the amount outstanding
at any time of any Indebtedness issued with original issue discount is the face
amount of such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined in
conformity with GAAP.
"Indemnified Liabilities" has the meaning specified in Section 9.4.
"Indemnified Taxes" has the meaning specified in Section 2.11(a).
"Indemnitees" has the meaning specified in Section 9.4.
17
"Initial Indebtedness" has the meaning specified in Section 6.10(a).
"Initial Lender" has the meaning specified in the preamble to this
Agreement.
"Intercreditor Agreement" means that certain Intercreditor Agreement,
dated as of the date hereof, by and among the Borrower, US Airways, the other
Subsidiary Guarantors, Group, the Collateral Agent and Wilmington Trust Company,
as Collateral Agent under the US Airways Loan Agreement.
"Interest Payment Date" means the last Business Day of each December,
March, June, and September, commencing September 2005; provided, however, that
(i) the Loan Maturity Date shall be an Interest Payment Date; and
(ii) following a Default or an Event of Default, each "Interest
Payment Date" shall be the last day of each Interest Period occurring
during such period in which such Default or Event of Default exists.
"Interest Period" means (a) initially, the period commencing on June
30, 2005 and ending on but excluding the next succeeding Interest Payment Date
and (b) thereafter, each successive period commencing on and including the
immediately preceding Interest Payment Date and ending on but excluding the next
succeeding Interest Payment Date; provided, however, that during the continuance
of an Event of Default, each "Interest Period" shall be for such duration of one
(1) month or less as shall be selected by the Agent by notice to the Borrower,
each Lender, the Board and the Loan Administrator on or prior to the start of
such Interest Period (and in the absence of any such notice or selection, the
applicable Interest Period shall be determined as provided above without regard
to this proviso).
"Interest Rate Agreement" means any interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"Investment" means with respect to any Person, any direct or indirect
advance, loan (other than loans or advances to customers in the ordinary course
of business that are recorded as accounts receivable on the balance sheet of
such Person or its Subsidiaries) or other extensions of credit or capital
contribution or other equity investment by such Person to any other Person,
including by means of any transfer of cash or other property to others or any
payment for property or services for the account or use of others, any Guarantee
(including any support for a letter of credit issued on behalf of such Person)
incurred for the benefit of such Person or any purchase or acquisition by such
Person of Capital Stock (or warrants, options or rights convertible into or
exercisable for Capital Stock), bonds, notes, debentures or other similar
instruments issued by any other Person; provided that advances or loans by any
Obligor to any other Obligor, Guarantees (including any support for a letter of
credit issued on behalf of another Obligor) incurred by any Obligor for the
benefit of any other Obligor, capital contributions or other equity investments
by an Obligor in any other Obligor and deposits made by any Obligor in
connection with the purchase by an Obligor of Aircraft Related Equipment or
other property shall not constitute an "Investment."
18
"Investment Guidelines" means investment guidelines in the form
attached hereto as Exhibit N, together with any amendments, restatements,
supplements or other modifications thereof permitted in accordance with Section
6.10(c).
"IRS" means the Internal Revenue Service of the United States or any
successor thereto.
"Juniper Financing" means the America West Co-Branded Card Agreement,
dated January 25, 2005, between the Borrower and Juniper Bank, as amended,
restated, supplemented or modified, including pursuant to the Assignment and
First Amendment to the America West Co-Branded Card Agreement, dated as of
August 8, 2005, among the Borrower, Group and Juniper Bank.
"Lender" means each of the Tranche A Lender, the Tranche B-1 Lender,
the Tranche B-2 Lender, the Tranche B-3 Lender and/or the Tranche B-4 Lender
(including its respective successors and permitted assigns), as the context may
require, and the term "Lenders" means the Tranche A Lender, the Tranche B-1
Lender, the Tranche B-2 Lender, the Tranche B-3 Lender and/or the Tranche B-4
Lender (including their respective successors and permitted assigns)
collectively, as the context may require; provided that the terms "Lender" and
"Lenders" shall include the Board to the extent it acquires any interest in
Tranche A as contemplated by Section 2.8(f) hereof and by the Board Guaranty.
"Lending Office" means, with respect to any Lender, the office of such
Lender specified as its "Lending Office" opposite its name on Annex B or on the
Assignment and Acceptance by which it became a Lender or such other office of
such Lender as such Lender may from time to time specify to the Borrower and the
Agent.
"LGA" means LaGuardia Airport.
"LIBOR" means, with respect to any Interest Period, the offered rate
in the London interbank market for deposits in Dollars of amounts equal or
comparable to the unpaid principal amount of the Loan offered for a term
comparable to such Interest Period, as currently shown on the Bridge/Telerate
page 3750 as of 11:00 a.m., London time, two (2) Business Days prior to the
first day of such Interest Period; provided, however, that (A) LIBOR for the
initial Interest Period shall be 3.49% per annum, (B) if more than one offered
rate as described above appears on such Bridge/Telerate page, the rate used to
determine LIBOR will be the arithmetic average (rounded upward, if necessary, to
the next higher 1/100 of 1%) of such offered rates, or (C) if no such offered
rates appear, the rate used for such Interest Period will be the arithmetic
average (rounded upward, if necessary, to the next higher 1/100 of 1%) of rates
quoted by the Reference Banks at approximately 10:00 a.m., New York time, two
(2) Business Days prior to the first day of such Interest Period for deposits in
Dollars offered to leading European banks for a period comparable to such
Interest Period in an amount comparable to the unpaid principal amount of the
Loan. If the Agent ceases generally to use such Bridge/Telerate page for
determining interest rates based on eurodollar deposit rates, a comparable
internationally recognized interest rate reporting service shall be used to
determine such offered rates.
"Lien" means any lien, mortgage, pledge, assignment for security,
security interest, charge, hypothecation, lease or encumbrance of any kind
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any easement, right of way or other encumbrance on title to
real property and any agreement to give any security interest).
"Loan" means the loan outstanding under this Agreement and consisting
of Tranche A and Tranche B.
19
"Loan Administration Agreement" means that certain Loan Administration
Agreement, dated as of the date hereof among the Loan Administrator, the
Borrower, US Airways, Group, the Board, the Lenders and the lenders under the US
Airways Loan Agreement.
"Loan Administrator" means Capstone Advisory Group, LLC, a New Jersey
limited liability company.
"Loan Discharge Exercise" has the meaning specified in Section 2.2(b).
"Loan Documents" means, collectively, this Agreement, the Notes, the
Collateral Documents, the Second Lien Guaranty, the Loan Administration
Agreement, the Warrants, the Registration Rights Agreements, and each
certificate, agreement or document executed by an Obligor and delivered to the
Agent, the Lenders or the Board in connection with or pursuant to this
Agreement.
"Loan Prepayment Percentage" means, with respect to any mandatory
prepayment required to be made by the Borrower pursuant to Section 2.5, the
fraction, expressed as a percentage, whose numerator is the outstanding
principal amount of the Loan as of the date of such prepayment and whose
denominator is the sum of (a) the outstanding principal amount of the Loan and
(b) the outstanding principal amount of the US Airways Loan, in each case as of
such date.
"Mandatory Prepayment Date" has the meaning specified in Section
2.5(i).
"Marketing and Service Agreements" means those certain business,
marketing and service agreements among an Obligor and any of Mesa Airlines,
Inc., Chautauqua Airlines, Inc., Trans States Airlines, Inc., United Air Lines,
Inc., Republic Airline, Inc., and Air Wisconsin Airlines Corporation and such
other parties or agreements from time to time that include, but are not limited
to, code-sharing, pro-rate, capacity purchase, service, frequent flyer, ground
handling and marketing agreements that are entered into in the ordinary course
of business.
"Material Adverse Effect" means (a) a material adverse effect on (i)
the business, condition (financial or otherwise), operations, performance,
prospects, assets or properties of the Obligors, taken as a whole or (ii) the
legality, validity, binding effect or enforceability against any Obligor of any
Loan Document, or the rights and remedies of the Agent, the Collateral Agent,
the Board or any Lender under any Loan Document, or (b) any material adverse
effect on or material impairment of (i) the ability of the Obligors, taken as a
whole, to perform their payment or other material obligations under the Loan
Documents or (ii) the value of the Collateral or the validity and priority of
the Liens on the Collateral in each case taken as a whole.
"Maturity Date" means September 30, 2008, except that if such date is
not a Business Day, then the Maturity Date shall be the immediately preceding
Business Day.
"Merger" has the meaning specified in the recitals to this Agreement.
"Merger Agreement" has the meaning specified in the recitals to this
Agreement.
"Merger Sub" has the meaning specified in the recitals to this
Agreement.
"Minimum Adjusted Cash Amount" has the meaning specified in Section
6.4(a).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor
thereto that is a nationally recognized rating agency.
20
"Mortgage" has the meaning specified in the definition of "Collateral
Documents."
"Multiemployer Plan" means a multiemployer plan as defined Section
4001(a)(3) of ERISA, and in respect of which Group or any ERISA Affiliate is (or
with the application of Section 4212(c) of ERISA would be) (a) an "employer" as
defined in Section 3(5) of ERISA or (b) a "seller" as defined in Section 4204 of
ERISA.
"Net Cash Proceeds" means, with respect to any Asset Sale, the Cash
Proceeds of such Asset Sale, net of (i) reasonable and customary brokerage
commissions and other reasonable and customary fees and expenses (including
reasonable fees and expenses of counsel, investment bankers, accountants and
other professionals, consultants and advisors) related to such Asset Sale, (ii)
provisions for all taxes payable as a result of such Asset Sale without regard
to the consolidated results of operations of Group, the Borrower and their
respective Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
(or any related expenses required to be paid to third parties pursuant to
documentation related to the financing of the assets subject to such Asset Sale)
that (A) is secured by a Lien on the property or assets sold and (B) is required
by its terms to be paid as a result of such Asset Sale and (iv) appropriate
amounts to be provided by any Obligor as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP, but limited to the
period of the required reserve.
"Net Condemnation Proceeds" means an amount equal to: (i) any cash
payments or proceeds received by an Obligor as a result of any condemnation or
other taking or temporary or permanent requisition of any property, any interest
therein or right appurtenant thereto, or any change of grade affecting any
property, as the result of the exercise of any right of condemnation or eminent
domain by a Governmental Authority (including a transfer to a Governmental
Authority in lieu or anticipation of a condemnation), minus (ii) (a) any actual
and reasonable costs incurred by an Obligor in connection with any such
condemnation or taking (including reasonable fees and expenses of counsel), (b)
provisions for all taxes payable as a result of such condemnation, without
regard to the consolidated results of operations of Group, the Borrower, and
their respective Subsidiaries, taken as a whole, (c) the amount of any
Indebtedness secured by a Lien on any property subject to such condemnation or
taking and any related expenses of third parties, in each case, required by the
documentation related to such Indebtedness to be discharged or paid from the
proceeds thereof and (d) any amounts required to be paid to any Person (other
than an Obligor) owning a beneficial interest in the property subject to such
condemnation or taking.
"Net Insurance Proceeds" means an amount equal to: (i) any cash
payments or proceeds received by an Obligor under any casualty insurance policy
in respect of a covered loss thereunder with respect to tangible, real or
personal property, minus (ii) (a) any actual and reasonable costs incurred by an
Obligor in connection with the adjustment or settlement of any claims of an
Obligor in respect thereof (including reasonable fees and expenses of counsel),
(b) provisions for all taxes payable as a result of such event without regard to
the consolidated results of operations of Group, the Borrower and their
respective Subsidiaries, taken as a whole, (c) the amount of any Indebtedness
secured by a Lien on any property subject to such covered loss and any related
expenses of third parties, in each case, required by the documentation related
to such Indebtedness to be discharged or paid from the proceeds thereof and (d)
any amounts required to be paid to any Person (other than an Obligor) owning a
beneficial interest in the property subject to such loss.
"Net Issue Proceeds" means, with respect to any Future Issuance, the
Cash Proceeds of such Future Issuance net of (i) any reasonable and customary
brokers' and advisors' fees, any underwriting discounts and commissions and
other costs incurred in connection with such transaction
21
(provided that evidence of such fees, discounts, commissions and costs is
provided to the Board and the Agent), (ii) provisions for all taxes payable as a
result of such transaction without regard to the consolidated results of
operations of Group, the Borrower and their respective Subsidiaries, taken as a
whole, and (iii) payments made to repay Indebtedness or any other obligation
outstanding at the time of such Future Issuance that is secured by a Lien on the
property or assets pledged to secure such Future Issuance.
"Non-Consenting Lender" has the meaning specified in Section 9.1(c).
"Non-U.S. Person" means a Person that is not a United States person as
defined in Section 7701(a)(30) of the Internal Revenue Code.
"Note" and "Notes" have the meanings specified in Section 2.3(d).
"Obligations" means all payment and performance obligations of every
nature of any Obligor from time to time owed to the Agent, the Collateral Agent,
the Lenders, the Loan Administrator, any Counter-Guarantor or the Board
(together with their respective permitted successors and assigns), or any of
their respective Affiliates, officers, directors, employees, agents or advisors
under or in respect of any Loan Document, whether for principal, interest, fees,
expenses, indemnification or otherwise.
"Obligors" means Group, the Borrower and each Subsidiary Guarantor,
and their respective successors and assigns.
"Officer" means, as applied to any corporation, each Responsible
Officer, the Chairman of the Board (if an officer), Assistant Treasurer,
Secretary or Assistant Secretary.
"Officer's Certificate" means, as applied to Group or the Borrower, a
certificate executed by a Responsible Officer of such Person in his/her capacity
as such; provided that every Officer's Certificate shall include a statement
that, in the opinion of the signer, such Responsible Officer has made or has
caused to be made such examination or investigation as is necessary to enable
such Responsible Officer to express an informed opinion as to the substance of
such Officer's Certificate in light of the provisions hereof pursuant to which
it is being delivered.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) under which such
Person is lessee, that is not a Capital Lease.
"Original Loan Agreement" has the meaning specified in the recitals to
this Agreement.
"Other Taxes" has the meaning specified in Section 2.11(c).
"Participant" has the meaning specified in Section 9.2(e).
"Payee" has the meaning specified in Section 9.12.
"Payment Restriction" means, with respect to a Subsidiary of any
Person, any encumbrance, restriction or limitation, whether by operation of the
terms of its charter or by reason of any agreement or instrument, on the ability
of (i) such Subsidiary to (a) pay dividends or make other distributions on its
Capital Stock or make payments on any obligation, liability or Indebtedness owed
to such Person or any other Subsidiary of such Person, (b) make loans or
advances to such Person or any other Subsidiary of such Person or (c) transfer
any of its property or assets to such Person or any other
22
Subsidiary of such Person or (ii) such Person or any other Subsidiary of such
Person to receive or retain any such (a) dividend, distributions or payments,
(b) loans or advances or (c) property or assets.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Acquisition Financing" means Indebtedness incurred by an
Obligor in connection with an acquisition, merger or consolidation which is
permitted by Section 6.5 and/or Section 6.9 (as applicable) if and to the extent
used (i) to refinance existing Indebtedness of the Person acquired or
Indebtedness secured by the assets acquired or (ii) to pay consideration or
related expenses in connection with such transaction.
"Permitted Encumbrances" means the following types of Liens (other
than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA) as applied to property:
(i) Liens for taxes, assessments or governmental charges or claims the
payment of which is either (a) not delinquent for a period of more than 30
days or (b) being contested in good faith by appropriate proceedings, if
such reserve or other appropriate provision, if any, as shall be required
by GAAP shall have been made therefor, as set forth in Section 5.3;
(ii) statutory Liens of landlords and Liens of carriers, vendors,
warehousemen, repairmen, mechanics and materialmen and other Liens imposed
by law incurred in the ordinary course of business for sums either (a) not
delinquent for a period of more than thirty (30) days or (b) being
contested in good faith by appropriate proceedings, if such reserve or
other appropriate provision, if any, as shall be required by GAAP shall
have been made therefor;
(iii) (A) Liens incurred or deposits (other than with respect to the
Plans described in Section 4.11) made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return-of-money bonds,
reimbursement obligations and chargeback rights of Persons performing
services for an Obligor (including Liens securing Trade Payables arising
from the Obligors' use in the ordinary course of business, consistent with
past practice, of credit advance facilities to purchase goods and services)
and other similar obligations (exclusive of obligations for the payment of
borrowed money) and (B) Liens arising or granted in the ordinary course of
business in favor of Persons performing credit card processing services,
travel charge processing services or clearinghouse services for any
Obligor, including IATA, Diners Club, Discover Card, NPC, ARC and American
Express, so long as such Liens are on cash and Cash Equivalents that are
subject to holdbacks by, or are pledged (in lieu of such holdbacks) to,
such Persons to secure amounts that may be owed to such Persons under the
Obligors' agreements with them in connection with their provision of credit
card processing, travel charge processing or clearinghouse services to the
Obligors;
(iv) with respect to real property, easements, rights-of-way,
restrictions, minor defects, encroachments or irregularities in title and
other similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of an Obligor; provided
that such charges or encumbrances, if affecting any of the Collateral
constituting real property, comply with the terms of the Mortgage;
23
(v) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods in the ordinary course of business;
(vi) any interest or title of a lessor in property leased by an
Obligor under any Capital Lease obligation or Operating Lease which, in
each case, is not prohibited under this Agreement;
(vii) Liens in favor of collecting or payor banks and other banks
providing cash management services, in each case, having a right of setoff,
revocation, refund or chargeback against money or instruments of any
Obligor on deposit with or in possession of such bank arising for the
payments of bank fees and other similar amounts owed in the ordinary course
of business;
(viii) Liens of creditors of any Person to whom any Obligor's assets
are consigned for sale in the ordinary course of business;
(ix) Liens incurred or deposits made in connection with the Trust
Agreements;
(x) any renewal of or substitution for any Lien permitted by any of
the preceding clauses; provided that the Indebtedness secured is not
increased nor the Lien extended to any additional assets;
(xi) any licensing or sublicensing of intellectual property in the
ordinary course of business of the Obligors;
(xii) Liens arising from precautionary UCC and similar financing
statements relating to Operating Leases not otherwise prohibited under any
Loan Document; and
(xiii) Liens created under the Collateral Documents.
"Permitted Refinancing Indebtedness" means Indebtedness of any Obligor
the cash proceeds of which are used to refinance (for purposes of this
definition, "Refinancing Indebtedness") then outstanding Indebtedness (for
purposes of this definition, "Old Indebtedness") (including by way of an
extension, renewal or replacement of, or substitution for, such Old
Indebtedness) in an amount not to exceed the then outstanding principal amount
of the Old Indebtedness, plus accrued and unpaid interest, premiums, fees and
expenses; provided that: (a) if the Old Indebtedness is subordinated in right of
payment to the Loan, the Refinancing Indebtedness, by its terms or by the terms
of any agreement or instrument pursuant to which it is outstanding, is expressly
made subordinate in right of payment to the Loan, (b) the Refinancing
Indebtedness does not have a final scheduled maturity prior to the final
scheduled maturity of the Old Indebtedness and (c) the average life of the
Refinancing Indebtedness calculated as of the consummation of the refinancing is
not less than the remaining average life of the Old Indebtedness.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity, or a Governmental
Authority.
"Piedmont" means Piedmont Airlines, Inc.
"Plan" means any "employee benefit plan" as defined in Section 3(3) of
ERISA which is, or was at any time during the preceding six (6) years,
maintained or contributed to, or required to be
24
contributed to, by Group or any of its ERISA Affiliates, other than a
multiemployer plan, within the meaning of Section 4001(a)(3) of ERISA.
"Plan of Reorganization" means the Plan of Reorganization of US
Airways Group, Inc. and its Affiliated Debtors and Debtors-in-Possession dated
June 30, 2005 together with amendments, supplements or modifications thereto, as
confirmed by the Confirmation Order, together with any amendments, supplements
or modifications thereto that have been approved or authorized by the Bankruptcy
Court prior to the Effective Date.
"Pledged Cash" means, as of any time of determination, the aggregate
Dollar amount of unrestricted cash and Cash Equivalents of the Obligors held in
deposit and securities accounts over which the Collateral Agent maintains
perfected first priority security interests in accordance with (and subject to)
Section 5.13 and the terms of the Intercreditor Agreement (it being acknowledged
and agreed for the avoidance of doubt that Pledged Cash shall not include
Excluded Cash and cash held in the Prepayment Account (as defined in the
definition of "Prepayment Breakage Avoidance Procedure") or in the US Airways
Loan Prepayment Account).
"Pre-Funded Amount" means, as of any date of determination, an amount
equal to the sum of (i) the aggregate amount of (A) Excluded Cash held by the
Obligors as of such date for the purpose of satisfying their obligations under
or in respect of the Trust Agreements plus (B) cash and Cash Equivalents held as
of such date by a Person performing credit card processing services or travel
charge processing services for an Obligor which such Person has unconditionally
agreed in writing to transfer to or at the direction of such Obligor as and when
needed to satisfy the obligations of such Obligor under or in respect of the
Trust Agreements; and (ii) the aggregate amount of cash and Cash Equivalents
held by a Person performing clearinghouse services for an Obligor (including,
without limitation IATA, ARC and ACH) to secure amounts that may be owed to such
Person in connection with such Person's performance of clearinghouse services
for such Obligor; provided that for purposes of calculating the Adjusted Cash
Amount under Section 6.4(a) hereof, the aggregate amount under clause (i) above
shall not exceed $250,000,000 and the aggregate amount under clause (ii) above
shall not exceed $35,000,000.
"Prepayment Account" has the meaning specified in the definition of
"Prepayment Breakage Avoidance Procedure."
"Prepayment Breakage Avoidance Procedure" means, with respect to any
prepayment of the Loan required or permitted by Section 2.5 or Section 2.9, that
the Borrower shall at its option have the right to apply any amounts required or
permitted to be prepaid by Section 2.5 or Section 2.9 with respect to the Loan
as follows: (i) the Borrower may immediately prepay the Loan (in whole or in
part) as required or permitted by Section 2.5 or Section 2.9, as applicable,
and/or (ii) the Borrower may deposit all or a portion of such amount in an
account established by the Borrower with the Agent and over which the Agent
shall have a perfected first priority security interest (the "Prepayment
Account"). To the extent the Borrower elects to deposit cash in the Prepayment
Account as provided in the preceding sentence, the Agent shall apply any cash so
deposited in the Prepayment Account to prepay the Loan on the last day of the
relevant Interest Period for the applicable tranche. The Borrower shall be
deemed to have satisfied the prepayment requirements of Section 2.5 or Section
2.9, as applicable, upon deposit of cash in the Prepayment Account in an amount
equal to the amount of the prepayment otherwise remaining due pursuant to
Section 2.5 or Section 2.9, as applicable. The Agent shall, at the request of
the Borrower, invest amounts on deposit in the Prepayment Account in Cash
Equivalents maturing on or prior to the last day of the next Interest Period
with any interest thereon for the benefit of the Borrower.
"Prepayment Premium" has the meaning specified in Section 2.4(d).
25
"Principal Obligors" means Borrower, Group and US Airways.
"Pro Forma Basis" means, with respect to compliance with any covenant
hereunder, compliance with such covenant after giving effect to the acquisition
(whether by purchase, merger or otherwise) or disposition (whether by sale,
merger or otherwise) of any company, entity or business or any asset by any
Obligor or any other action which requires compliance on a Pro Forma Basis. In
making any determination of compliance on a Pro Forma Basis, such determination
shall be performed using the consolidated financial statements of such Obligor
which shall be reformulated as if any such acquisition, disposition or other
action had been consummated at the beginning of the period specified in the
covenant with respect to which Pro Forma Basis compliance is required.
"Proceedings" has the meaning specified in Section 5.1(b)(vii).
"Prohibited Transferee" has the meaning specified in Section 9.2(a).
"Redeemable Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise (i) is required to be redeemed prior to
the Maturity Date, (ii) may be required to be redeemed at the option of the
holder of such class or series of Capital Stock at any time prior to the
Maturity Date or (iii) is convertible into or exchangeable for (a) Capital Stock
referred to in clause (i) or (ii) above or (b) Indebtedness having a scheduled
maturity prior to the Maturity Date; provided that any Capital Stock that would
constitute Redeemable Stock solely because of the provisions thereof offering
holders thereof the right to require the issuer thereof to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" occurring prior to the
Maturity Date shall not constitute Redeemable Stock if the asset sale provisions
contained in such Capital Stock specifically provide that, in respect of any
particular asset sale proceeds, the issuer thereof will not be required to
repurchase or redeem any such Capital Stock pursuant to such provisions so long
as the Borrower applies the full amount of such proceeds (net of associated
taxes and transaction costs) to the permanent reduction of the aggregate
outstanding principal amount of the Loan.
"Reference Banks" means Citibank, N.A., JPMorgan Chase Bank and Bank
of America, N.A., and each of their respective successors.
"Register" has the meaning specified in Section 2.3(e).
"Registration Rights Agreements" means (i) that certain Registration
Rights Agreement, dated as of January 18, 2002, by and among AWA Holdings, the
Initial Lender, and the Counter-Guarantors, and (ii) that certain Registration
Rights Agreement, dated as of January 18, 2002, by and between AWA Holdings and
the Board.
"Regulations" means the regulations for Air Carrier Guarantee Loan
Program issued pursuant to the Act, 14 C.F.R. Part 1300, as the same may be
amended from time to time.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facilities, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"Replacement Secured Financing" means any financing transaction,
whether structured as Indebtedness, sale-leaseback or otherwise, (a) which is
secured by any of the Obligors' (i) Slots, (ii)
26
rotable, repairable and expendable spare parts, (iii) aircraft, or (iv) spare
engines, in each case which immediately prior to such transaction constituted
Collateral, and (b) the Net Issue Proceeds of which are at least equal to the
Collateral Release Value of the Collateral released in connection with such
transaction, other than a financing transaction referred to in the proviso to
Section 5.8(b) with respect to After-Acquired Section 1110 Equipment.
"Reporting Obligor" means any Obligor which files or is required to
file reports with the SEC under Section 13(a) or 15(d) of the Exchange Act.
"Requisite Lenders" means, collectively, Lenders holding not less than
a majority of the principal amount of the Loan then outstanding; provided that
if (i) the Board Guaranty is in full force and effect as of such date and has
not been terminated without payment having been made thereunder and (ii) the
outstanding amount of Tranche A guaranteed under the Board Guaranty as of such
date represents less than a majority of the principal amount of the Loan then
outstanding (such that the Board is not the Controlling Creditor at such time),
then for purposes of this definition, the Board shall be deemed to be the Lender
with respect to the outstanding amount of Tranche A then guaranteed under the
Board Guaranty.
"Responsible Officer" means with respect to an Obligor, any of its
Chief Executive Officer, President, Chief Financial Officer, General Counsel,
Treasurer or Controller, but in any event, with respect to financial matters,
its Chief Financial Officer, Treasurer or Controller.
"Restricted Payment" means, with respect to any Person (i) any
declaration or payment of dividends on or making of any distributions in respect
of the Capital Stock of such Person (other than dividends or distributions
payable solely in shares of Capital Stock (other than Redeemable Stock) or in
options, warrants, or other rights to purchase Capital Stock (other than
Redeemable Stock)) to holders of Capital Stock of such Person, (ii) any
purchase, redemption or other acquisition or retirement for value (other than
through the issuance solely of Capital Stock (other than Redeemable Stock) or
options, warrants or other rights to purchase Capital Stock (other than
Redeemable Stock)) of any Capital Stock or warrants, rights (other than
exchangeable or convertible Indebtedness of such Person not prohibited under
clause (iii) below) or options to acquire Capital Stock of such Person, and
(iii) any prepayment, redemption, repurchase, defeasance (including, but not
limited to, in substance or legal defeasance) or other acquisition or retirement
for value (other than through the issuance solely of Capital Stock (other than
Redeemable Stock) or warrants, rights or options to acquire Capital Stock (other
than Redeemable Stock)) of Indebtedness of such Person or any Subsidiary of such
Person, directly or indirectly (including by way of setoff or amendment of the
terms of any Indebtedness in connection with any retirement or acquisition of
such Indebtedness), which is made other than at any scheduled maturity thereof
or by any scheduled repayment or scheduled sinking fund payment (collectively, a
"prepayment"); provided that the following shall not constitute Restricted
Payments: (a) any declaration, payment, distribution, purchase, redemption,
acquisition or retirement for value, repurchase or defeasance referred to in
clauses (i) through (iii) above in each case solely among Obligors, (b)
repayment of the Loan, (c) repayment of the US Airways Loan, (d) repayment of
the loan outstanding under the GE Financings (and any replacements or
refinancings of any thereof) to cure a collateral value deficiency thereunder
and repayment of obligations secured by the GE Expendables Mortgage, (e)
payments made pursuant to the Plan of Reorganization, and (f) payments of cash
in lieu of fractional shares in connection with repurchases or conversions of
securities of an Obligor not prohibited hereunder.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor thereto that is a nationally
recognized rating agency.
27
"SEC" means the Securities and Exchange Commission of the United
States or any successor thereto.
"Second Lien Guaranty" means the Second Lien Guaranty dated as of the
date hereof made by Group and the Subsidiary Guarantors, in substantially the
form of Exhibit J.
"Secondary Slots" means (a) Air-21 slot exemptions, (b) the Essential
Air Services Slots identified on Schedule 1.1(a) hereto, (c) any other Slots
which, under the Slot Regulations, are not transferable among private parties,
(d) for so long as their aggregate Appraised Value does not exceed $5,000,000,
Slots at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ International Airport, (e) the Slots identified on
Schedule 1.1(a) hereto as "pool" Slots (within the meaning of 14 C.F.R. Section
93.226(e)), (f) all 6:00 a.m. arrival and departure Slots at LaGuardia Airport,
(g) all arrival and departure Slots at LaGuardia Airport commencing at or after
9:30 p.m. (2130), (h) all 6:00 a.m. Slots at ▇▇▇▇▇▇ ▇▇▇▇▇▇ Washington National
Airport, and (i) all Slots at ▇▇▇▇▇▇ ▇▇▇▇▇▇ Washington National Airport
commencing at or after 9:00 p.m. (2100).
"Section 1110 Equipment" means airframes, aircraft, aircraft engines,
propellers and appliances which are not spare parts (as such terms are used in
Section 1110 of the Bankruptcy Code).
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Security Agreement" has the meaning specified in clause (iv) of the
definition of Collateral Documents.
"Slot Regulations" means 49 U.S.C. Section 40103 and 14 C.F.R.
Sections 93.211 - 93.227, and any amendment, supplement or other modification
thereto, or successor, replacement or substitute federal law or regulation
concerning the right or operational authority to conduct landing or takeoff
operations at any airports.
"Slots" means all of the rights and operational authority granted
under the Slot Regulations and now or hereafter acquired or held by each Obligor
to conduct one instrument flight rule landing or takeoff operation in a
specified time period at DCA, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ International Airport, LGA, or any
other airport.
"Solvent" means, with respect to any Person, that as of the date of
determination (a) the then fair saleable value of the business of such Person is
not less than the amount that will be required to pay the probable liabilities
on such Person's then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to such Person; (b) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction; and (c)
such Person does not intend to incur, or believes that it will not incur, debts
beyond its ability to pay such debts as they become due. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"Stock Offering" means the offering of common stock pursuant to the
registration statement on form S-1 (file no. 33-126226) of Group filed with the
SEC on June 29, 2005, as amended, including any overallotment option.
28
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association, limited liability company, trust or estate, joint
venture or other business entity of which more than 50% of the issued and
outstanding shares of Voting Stock at the time of determination are owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"Subsidiary Guarantor" means each Person that is a direct or indirect
Subsidiary of Group as of the Effective Date and after giving effect to the
Merger (other than the Borrower and the Excluded Subsidiaries) and each other
Subsidiary of Group that becomes a party to the Second Lien Guaranty pursuant to
Section 5.8(a), but with respect to any such Subsidiary, subject to the last
sentence of Section 8 of the Second Lien Guaranty and excluding in each case any
Subsidiary that is a CFC. As of the Effective Date the Subsidiary Guarantors are
AWA Holdings, US Airways, Piedmont, Material Services Company, Inc. and PSA
Airlines, Inc.
"Substitute Basis" has the meaning specified in Section 2.9(b).
"Supplemental Facility Fee" means the supplemental facility fee
payable to the Initial Lender on an Interest Payment Date in an amount equal to
the product of (x) the applicable Guarantee Rate set forth on Annex C for such
Interest Payment Date and (y) the outstanding amount of Tranche B-4 held by the
Initial Lender on such date (computed on the basis of a year of 360 days and
actual number of days elapsed) as determined by the Agent as of the date of
payment of such fee and after giving effect to any payment of principal of the
Loan made on such date.
"Synthetic Lease" means (a) a so-called synthetic, off-balance sheet
lease or lease in which the lessee is contractually entitled to the tax benefits
of ownership of the leased assets, or (b) an agreement for the use or possession
of property creating obligations that do not appear on the balance sheet of such
Person but which, upon the insolvency or bankruptcy of such Person, would be
characterized as the indebtedness of such Person (without regard to accounting
treatment).
"Taxes" means any and all present or future taxes, levies, fees,
duties, imposts, deductions, charges or withholdings of any nature, and all
interest, penalties and other liabilities thereon or computed by reference
thereto imposed by any Governmental Authority.
"Title 49" means Title 49 of the United States Code, as amended and in
effect from time to time, and the regulations promulgated pursuant thereto.
"Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries and
arising in the ordinary course of business in connection with the acquisition of
goods or services but limited to current liabilities in accordance with GAAP.
"Tranche" means each of Tranche A, Tranche ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, ▇▇▇▇▇▇▇
▇-▇ and Tranche B-4.
"Tranche A" has the meaning specified in Section 2.1(a).
"Tranche A Lender" means the Initial Lender and each other Person who
becomes the holder of Tranche A pursuant to the provisions of this Agreement,
including the Board if it acquires any interest in Tranche A as contemplated by
Section 2.8(f) and the Board Guaranty.
"Tranche A Note" has the meaning specified in Section 2.3(d)(i).
29
"Tranche B" means, collectively, Tranche ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, ▇▇▇▇▇▇▇ ▇-▇
and Tranche B-4.
"Tranche B Lenders" means, collectively, the Tranche B-1 Lender, the
Tranche B-2 Lender, the Tranche B-3 Lender and the Tranche B-4 Lender.
"Tranche B-1" has the meaning specified in Section 2.1(b).
"Tranche B-1 Lender" means the Initial Lender and each other Person
who is the holder of Tranche B-1.
"Tranche B-1 Note" has the meaning specified in Section 2.3(d)(ii).
"Tranche B-2" has the meaning specified in Section 2.1(c).
"Tranche B-2 Lender" means the Initial Lender and each other Person
who is the holder of Tranche B-2.
"Tranche B-2 Note" has the meaning specified in Section 2.3(d)(iii).
"Tranche B-3" has the meaning specified in Section 2.1(d).
"Tranche B-3 Lender" means the Initial Lender and each other Person
who is the holder of Tranche B-3.
"Tranche B-3 Note" has the meaning specified in Section 2.3(d)(iv).
"Tranche B-4" has the meaning specified in Section 2.1(e).
"Tranche B-4 Lender" means the Initial Lender and each other Person
who is the holder of Tranche B-3.
"Tranche B-4 Note" has the meaning specified in Section 2.3(d)(v).
"Trust Agreements" means all special purpose trust funds established
by any Obligor to manage the collection and payment of amounts collected by the
Obligors for the express benefit of third-party beneficiaries relating to (a)
federal income tax withholding and backup withholding tax, employment taxes,
transportation excise taxes and security related charges, including (i) federal
payroll withholding taxes, as described in Sections 3101, 3111 and 3402 of the
Internal Revenue Code; (ii) federal Unemployment Tax Act taxes, as described in
Chapter 23 of Subtitle C of the Internal Revenue Code; (iii) federal air
transportation excise taxes, as described in Sections 4261 and 4271 of the
Internal Revenue Code; (iv) federal security charges, as described in Title 49
of the Code of Federal Regulations of 2002 (referred to in this definition as
the "CFR"), Chapter XII, Part 1510; (v) federal Animal and Plant Health
Inspection Service of the United States Department of Agriculture (APHIS) user
fees, as described in Title ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code (2002) (referred to in this
definition as "U.S.C.") Section 136a and 7 CFR Section 354.3; (vi) federal
Immigration and Naturalization Service (INS) fees, as described in 8 U.S.C.
Section 1356 and 8 CFR Part 286; (vii) federal customs fees as described in 19
U.S.C. Section 58c and 19 CFR Section 24.22; and (viii) federal jet fuel taxes
as described in Sections 4091 and 4092 of the Internal Revenue Code collected on
behalf of and owed to the federal government, (b) any and all state and local
income tax withholding, employment taxes and related charges and fees and
similar taxes, charges and fees, including, but not limited to, state and local
payroll withholding taxes,
30
unemployment and supplemental unemployment taxes, disability taxes, ▇▇▇▇▇▇▇'▇ or
workers' compensation charges and related charges and fees that are analogous to
those described in Subtitle C of the Internal Revenue Code and that are
described in or are analogous to Chapter 23 of Title 19 Delaware Code Annotated
(2002) (referred to in this definition as "D.C.A.") collected on behalf of and
owed to state and local authorities, agencies and entities, (c) Passenger
Facility Charges as described in Title ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code Section 40117
(2004) and Title 14 of the Code of Federal Regulations, Subchapter 1, Part 158
collected on behalf of and owed to various administrators, institutions,
authorities, agencies and entities and (d) voluntary and/or other
non-statutorily required employee payroll deductions, whether authorized by the
employee, imposed by court order, agreed to pursuant to collective bargaining
arrangement or otherwise, including (i) employee contributions made for the
purpose of participating in any employer-sponsored retirement plan as described
and defined in Section 401(k) of the Internal Revenue Code (including repayment
of any 401(k) related loans made to the employee but excluding any funds matched
and/or contributed by the employer on behalf of any employee), (ii) employee
payments made for the purpose of participating in any employer-sponsored
medical, dental or related health plan, (iii) employee payments made for the
purpose of satisfying periodic union dues, (iv) employee payments made for the
purpose of purchasing United States Savings Bonds, (v) employee payments made
for the purpose of making deposits to an account at or making repayment of an
extension of credit from an employer-associated credit union, (vi) employee
payments made for the purpose of purchasing life, accident, disability or other
insurance, (vii) employee payments made for the purpose of participating in any
employer-sponsored cafeteria plan as described and defined in Section 125 of the
Internal Revenue Code, (viii) employee-directed donations to charitable
organizations and (ix) levys, garnishments and other attachments on employee
compensation (as described in Sections 6305 and 6331 of the Internal Revenue
Code, in Section 4913 of Title 10 of D.C.A. or in any analogous provision of
other applicable federal, state or local law) collected on behalf of any
Governmental Authority or any other Person authorized to receive funds of the
type described in this clause (d).
"UCC" means the Uniform Commercial Code.
"United States Citizen" has the meaning specified in Section 4.1(b).
"US Airways" has the meaning specified in the recitals to this
Agreement.
"US Airways Loan" means the "Loan" under and as defined in the US
Airways Loan Agreement.
"US Airways Loan Agreement" means that certain Amended and Restated
Loan Agreement dated as of the date hereof among US Airways, as borrower
thereunder, Group, the other direct and indirect Subsidiaries of Group parties
thereto, the several lenders from time to time party thereto, Citibank, N.A., as
Agent, Citicorp North America, Inc., as Govco Administrative Agent, Wilmington
Trust Company, as Collateral Agent, and the Board.
"US Airways Loan Prepayment Account" means the "Prepayment Account"
under and as defined in the US Airways Loan Agreement.
"Variable Cash Amount" has the meaning specified in Section
6.4(a)(ii).
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to vote for the election of directors, managers or trustees of any
Person (or Persons performing similar functions) irrespective of whether or not
at the time stock of any such class or classes will have or might have such
voting power by the reason of the happening of any contingency.
31
"Warrants" means (i) the Warrant to purchase up to 7,735,770 shares of
Groups' Common Stock issued by Group to the Board, which Warrant is being issued
in replacement for the Warrant to purchase up to 18,754,000 shares of AWA
Holdings' class B common stock issued by AWA Holdings to the Board on January
18, 2002 and (ii) the Warrant to purchase up to 386,925 shares of Groups' Common
Stock issued by Group to the Airbus Counter-Guarantor, which Warrant is being
issued in replacement for the Warrant to purchase up to 938,000 shares of AWA
Holdings' class B common stock issued by AWA Holdings to the Airbus
Counter-Guarantor on January 18, 2002, in each case in substantially the form of
Exhibit O.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Working Capital" means, as of any date, (i) the current assets
(excluding cash and Cash Equivalents) of Group minus (ii) the current
liabilities of Group (other than the current portion of long term debt), in each
case, determined on a consolidated basis and otherwise, in accordance with GAAP
as of such date.
SECTION 1.2. COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including".
SECTION 1.3. ACCOUNTING TERMS AND PRINCIPLES.
(a) Accounting Terms. All accounting terms not specifically defined
herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.
(b) Change in GAAP. If any change in accounting principles used in the
preparation of the most recent financial statements referred to in Section 5.1
is hereafter required or permitted by the rules, regulations, pronouncements and
opinions of FASB or the American Institute of Certified Public Accountants (or
any successor thereto) and such change is adopted by an Obligor with the
agreement of its independent public accountants and results in a change in any
of the calculations required by Article VI had such accounting change not
occurred, the parties hereto agree to promptly enter into good faith
negotiations in order to amend such provisions so as to equitably reflect such
change with the desired result that the criteria for evaluating compliance with
such covenants by the Obligors shall be the same after such change as if such
change had not been made; provided, however, that no change in GAAP that would
affect a calculation that measures compliance with any covenant contained in
Article VI shall be given effect until such provisions are amended to reflect
such changes in GAAP.
SECTION 1.4. CERTAIN TERMS.
(a) Certain References. The words "herein," "hereof" and "hereunder"
and similar words refer to this Agreement as a whole, and not to any particular
Article, Section, subsection or clause in, this Agreement.
(b) References to Exhibits, Schedules, etc. References in this
Agreement to an Exhibit, Schedule, Article, Section, subsection or clause refer
to the appropriate Exhibit or Schedule to, or Article, Section, subsection or
clause in this Agreement unless otherwise indicated.
32
(c) References to Agreements. Each agreement defined in this Article I
shall include all appendices, exhibits and schedules thereto. If the prior
written consent of any Person is required hereunder for an amendment,
restatement, supplement or other modification to any such agreement and the
consent of each such Person is obtained, references in this Agreement to such
agreement shall be to such agreement as so amended, restated, supplemented or
modified. If no such consent is required, references in this Agreement to such
agreement shall be to such agreement as so amended, restated, supplemented or
modified.
(d) References to Statutes. References in this Agreement to any
statute shall be to such statute as amended or modified and in effect at the
time any such reference is operative.
(e) Miscellaneous. The term "including" when used in any Loan Document
means "including without limitation" except when used in the computation of time
periods.
ARTICLE II
THE LOAN
SECTION 2.1. THE LOAN. The aggregate principal amount of the Loan on
the date hereof is $300,300,000, comprised of the following Tranches:
(a) a Tranche A portion of the Loan in the principal amount of
$265,685,000 ("Tranche A"), which as of the Effective Date is held by the
Initial Lender and guaranteed by the Board under the Board Guaranty;
(b) a Tranche B-1 portion of the Loan in the principal amount of
$13,300,000 ("Tranche B-1"), which as of the Effective Date is held by the
Initial Lender and guaranteed by the Airbus Counter-Guarantor under its
Counter-Guarantee;
(c) a Tranche B-2 portion of the Loan in the principal amount of
$9,100,000 ("Tranche B-2"), which as of the Effective Date is held by the
Initial Lender;
(d) a Tranche B-3 portion of the Loan in the principal amount of
$9,100,000 ("Tranche B-3"), which as of the Effective Date is held by the
Initial Lender and guaranteed by the GECC Counter-Guarantor under its
Counter-Guarantee; and
(e) a Tranche B-4 portion of the Loan in the principal amount of
$3,115,000 ("Tranche B-4"), which as of the Effective Date is held by the
Initial Lender.
Any amount of the Loan repaid or prepaid may not be reborrowed.
SECTION 2.2. SCHEDULED REPAYMENT OF THE LOAN.
(a) Schedule Amortization. The Borrower shall repay principal amounts
with respect to the Loan on the dates and in the amounts set forth below:
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INTEREST PAYMENT DATE FALLING ON OR ABOUT REPAYMENT AMOUNT
----------------------------------------- ----------------
September 30, 2005 $42,900,000
March 31, 2006 $42,900,000
September 30, 2006 $42,900,000
March 31, 2007 $42,900,000
September 30, 2007 $42,900,000
March 31, 2008 $42,900,000
September 30, 2008 $42,900,000
Notwithstanding anything herein to the contrary, the Borrower shall
repay the entire unpaid principal amount of the Loan together with accrued and
unpaid interest thereon and all other amounts owing hereunder in respect thereof
on the Maturity Date (or, if earlier, the date the Loan is accelerated pursuant
to Section 7.2).
(b) Reduction of Principal Amount upon Exercise of Warrants. Any
Lender holding Warrants shall be entitled to pay some or all of the Exercise
Price (as defined in the Warrants) for any of its Warrants by offsetting amounts
owed to such Lender (such Lender, an "Exercising Lender") in respect of its
interest in the Loan as provided in Section 2.1(b)(ii) of the Warrants (such
exercise, a "Loan Discharge Exercise"). In such event, the principal amount of
the Loan outstanding and owing to the Exercising Lender on the effective date of
such exercise shall be discharged on a dollar-for-dollar basis by the amount of
the Exercising Lender's interest in the Loan which was applied to pay such
Exercise Price. Any such reduction in the principal amount of the Loan shall be
applied to the then remaining installments of the outstanding principal amount
of the Loan owed to such Exercising Lender in the inverse order of maturity
thereof. For the avoidance of doubt, no discharge of the principal amount of the
Loan as provided herein shall discharge the principal amount of the Loan owed to
any other Lender or otherwise impair the Borrower's obligations with respect
thereto. An Exercising Lender shall give prompt written notice to the Agent
(with a copy to the Borrower) of any exercise of its Warrants in the manner
described in this subsection in order to enable the Agent to record such
transaction.
(c) Principal Payments. Each payment of the principal amount of the
Loan due and owing on each date specified in Section 2.2(a) shall be made after
giving effect to all repayments and prepayments of the Loan and each Loan
Discharge Exercise effected on or prior to such date.
SECTION 2.3. EVIDENCE OF DEBT.
(a) Lenders' Accounts. Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing such Lender's portion of
the Loan outstanding from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time under this Agreement.
(b) Agent's Records of Loan. The Agent shall establish and maintain a
register for recording with respect to the Loan (i) the date and amount of each
payment on the Loan made by or on behalf of, or collected from, the Borrower,
(ii) the amount of each such payment applied in accordance with Section 2.8(d)
and (e) or other applicable terms hereof to scheduled principal of or interest
on the Loan and to each of the fees identified in Section 2.7(a) through Section
2.7(d), (iii) the amount by which the principal amount of the Loan owing to an
Exercising Lender is reduced in connection with the exercise by such Exercising
Lender of its Warrant as described in Section 2.2(b), (iv) the then outstanding
principal balance of the Loan (without reliance on the Lender's accounts), and
(v) the date and amount of each payment made by the Board under the Board
Guaranty.
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(c) Entries Prima Facie Evidence. The entries made in the accounts
maintained pursuant to this Section 2.3 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of any Lender
or the Agent to maintain such accounts or any error therein shall not in any
manner affect the obligations of the Borrower to repay the Loan in accordance
with its terms.
(d) Notes. The Borrower shall execute and deliver to the Agent on the
Effective Date the following promissory notes:
(i) a promissory note substantially in the form of Exhibit B-1 in the
principal amount of Tranche A of the Loan outstanding on the date hereof,
dated the Effective Date and otherwise appropriately completed (such note,
including any replacement note therefor issued in accordance with the
provisions of this Section 2.3(d), the "Tranche A Note");
(ii) a promissory note substantially in the form of Exhibit B-2 in the
principal amount of Tranche B-1 of the Loan outstanding on the date hereof
owing to the Tranche B-1 Lender, dated the Effective Date and otherwise
appropriately completed, (each such note, including any replacement note
therefor issued in accordance with the provisions of this Section 2.3(d), a
"Tranche B-1 Note");
(iii) a promissory note substantially in the form of Exhibit B-3 in
the principal amount of Tranche B-2 of the Loan outstanding on the date
hereof owing to the Tranche B-2 Lender, dated the Effective Date and
otherwise appropriately completed, (each such note, including any
replacement note therefor issued in accordance with the provisions of this
Section 2.3(d), a "Tranche B-2 Note");
(iv) a promissory note substantially in the form of Exhibit B-4 in the
principal amount of Tranche B-3 of the Loan outstanding on the date hereof
owing to the Tranche B-3 Lender, dated the Effective Date and otherwise
appropriately completed, (each such note, including any replacement note
therefor issued in accordance with the provisions of this Section 2.3(d), a
"Tranche B-3 Note"); and
(v) a promissory note substantially in the form of Exhibit B-5 in the
principal amount of Tranche B-4 of the Loan outstanding on the date hereof
owing to the Tranche B-4 Lender, dated the Effective Date and otherwise
appropriately completed, (each such note, including any replacement note
therefor issued in accordance with the provisions of this Section 2.3(d), a
"Tranche B-4 Note," and collectively with the Tranche A Note, Tranche B-1
Note, Tranche B-2 Note and Tranche B-3 Note, the "Notes").
Each Note shall be made payable to the Agent at the office of the
Agent; provided that at the request of any Lender, the Borrower shall execute
and deliver a Note (or replacement thereof) payable directly to such Lender in
the amount of its interest in the Loan. If a Note is mutilated, lost, stolen or
destroyed, the Borrower shall issue a new Note of the same Tranche in the same
principal amount and having the same interest rate, date and maturity as the
Note so mutilated, lost, stolen or destroyed endorsed to indicate all payments
thereon. In the case of any lost, stolen or destroyed Note, there shall first be
furnished to the Borrower and the Board an instrument of indemnity from the
Agent (or Lender, as applicable) and evidence of such loss, theft or destruction
reasonably satisfactory to each of them. Upon the execution and delivery by the
Borrower of the Notes, the promissory notes executed and delivered by the
Borrower under the Original Loan Agreement shall be null and void and of no
further force and effect, and shall be contemporaneously returned to the
Borrower for cancellation.
35
(e) Register. A manually signed copy of this Agreement and the
original of a Note shall be evidence of (i) the rights of each Lender under this
Agreement and such Note and (ii) the rights of the Agent under this Agreement.
Neither this Agreement nor any of the Notes is a bearer instrument. The Agent
will establish and maintain a record of ownership (the "Register") in which the
Agent agrees to register by book entry the Agent's and each Lender's interest in
the Loan, the Notes and this Agreement, and in the right to receive any payments
hereunder or thereunder (including any adjustment pursuant to Section 2.2(b))
and any assignment of any such interest or rights. In connection with any
assignment pursuant to Section 9.2, the Agent shall maintain a copy of each
Assignment and Acceptance delivered to and accepted by it and shall record the
names and addresses of the Lenders and principal amount of the Loan owing to
each Lender from time to time. Solely for purposes of this Section 2.3(e), the
Agent shall be the Borrower's agent for purposes of establishing and maintaining
the Register. The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrower, the Board, the Agent and
the Lenders shall treat each Person whose name is recorded in the Register as a
Lender for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower, the Agent, the Board (so long as the Board is either
a guarantor of Tranche A or a Lender hereunder), the Loan Administrator or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
SECTION 2.4. OPTIONAL PREPAYMENTS.
(a) Notice. Subject to subsection (e) below, the Borrower may, upon at
least fifteen (15) days' prior revocable notice to the Board, the
Counter-Guarantors, the Loan Administrator and the Agent stating the proposed
date and aggregate principal amount of the prepayment, elect to prepay the
outstanding principal amount of the Loan ratably as to Tranche A and Tranche B,
in whole or in part (but not less than a minimum amount of $2,500,000), together
with accrued interest to the date of such prepayment on the principal amount
prepaid; provided, however, that upon any prepayment of all or a portion of the
Loan by the Borrower, or if the Borrower revokes such notice at any time within
such fifteen (15) days, the Borrower shall also pay any amounts owing pursuant
to Section 2.9(e); provided, further, that if the Borrower prepays all or a
portion of the Loan, the Borrower shall also pay any Prepayment Premium owing
pursuant to subsection (d) below.
(b) Amounts Due upon Notice. Upon the giving of any notice of
prepayment under Section 2.4(a), the principal amount of the Loan specified to
be prepaid together with accrued and unpaid interest thereon, and any Prepayment
Premium payable pursuant to subsection (d) below, shall (subject to the first
proviso below) become due and payable on the date specified for such prepayment;
provided, however, that any failure to make any such prepayment in full on such
date shall be deemed to be an automatic revocation of the notice of prepayment
given under Section 2.4(a) and such failure shall not constitute a Default or an
Event of Default hereunder; provided, further, however, that the Borrower shall
be obligated to pay on such date any amounts owing under Section 2.9(e) due to
such failure to prepay.
(c) Application of Optional Prepayments. Any partial prepayment of the
Loan under this Section 2.4 (other than (i) a prepayment of Tranche B-2 as
provided under subsection (e) below and (ii) any Prepayment Premium payable
under subsection (d) below) shall be applied to the outstanding principal amount
of the Loan ratably as to each Lender and, with respect to each Lender, pro rata
across the remaining scheduled principal payments on the Loan owing to each such
Lender (and not in the inverse order of maturity). Any such prepayment shall be
paid to the Agent for application as provided in Section 2.8, other than any
Prepayment Premium which shall be paid by the Agent on a pro rata basis to the
holders of the portions of the Loan which respect to which such Prepayment
Premium was payable as provided in subsection (d) below. The Borrower shall have
no right to optionally prepay the principal amount of the Loan other than as
provided in this Section 2.4, Section 2.9(b) or Section 2.9(d).
36
(d) Prepayment Premium. In addition to amounts which the Borrower is
required to pay in connection with an optional prepayment of the Loan as
provided above, the Borrower shall also pay on the date of such prepayment a
premium (the "Prepayment Premium") on the prepaid portion of the Loan calculated
in the manner set forth below; provided, however, that the Borrower shall not be
required to pay a Prepayment Premium with respect to the amount of the
prepayment attributable to (i) such portion of the Loan which is then held by
the Initial Lender, (ii) such portion of Tranche A which is then held by the
Board in connection with a payment by the Board under the Board Guaranty, (iii)
such portion of Tranche ▇-▇, ▇▇▇▇▇▇▇ ▇-▇ or Tranche B-3 which is then held by
the applicable Counter-Guarantor in connection with a payment by such
Counter-Guarantor under its Counter-Guarantee, (iv) such portion of Tranche A,
Tranche B-1, Tranche B-2 or Tranche B-3 then held by a permitted assignee of the
Initial Lender (or a permitted assignee thereof) if and to the extent that such
assigned portion of the Loan continues to be guaranteed under the Board Guaranty
or the applicable Counter-Guarantee, as the case may be, following such
assignment, or (v) a prepayment, in whole or in part, of Tranche B-2 pursuant to
subsection (e) below. The Prepayment Premium on the portion of the Loan with
respect to which it is payable shall be calculated as follows:
DATE OF SUCH PREPAYMENT PREPAYMENT PREMIUM
--------------------------------------------- --------------------------------------
Effective Date through September 26, 2006 2% of the applicable prepayment amount
September 27, 2006 through September 26, 2007 1% of the applicable prepayment amount
Thereafter None
(e) Prepayment of Tranche B-2. Anything to the contrary contained
herein notwithstanding, the Borrower may elect to prepay the outstanding
principal amount of Tranche B-2 of the Loan, in whole or in part, together with
accrued interest to the date of such prepayment on the principal amount prepaid
and any amounts owing pursuant to Section 2.9(e) (but without any prepayment
premium under subsection (d) above). For the avoidance of doubt, any such
prepayment shall be applied to prepay the outstanding principal amount of
Tranche B-2 only, shall not be applied to prepay the outstanding principal
amount of any other Tranches of the Loan, and shall be paid directly to the
Tranche B-2 Lender notwithstanding anything to the contrary contained herein.
Any prepayment of Tranche B-2 under this subsection (e) shall be applied to the
outstanding principal amount of Tranche B-2 pro rata across the remaining
scheduled principal payments on Tranche B-2.
SECTION 2.5. MANDATORY PREPAYMENTS.
(a) Certain Future Issuances within Six Months of Effective Date.
Subject to subsection (i) below, upon receipt by an Obligor of any Cash Proceeds
from any Future Issuance of Indebtedness convertible into Capital Stock (or
convertible into warrants, options or other rights to acquire Capital Stock)
which is consummated no later than six (6) months after the Effective Date, the
Borrower shall prepay the Loan in the manner provided below in an amount equal
to the product of (x) the Loan Prepayment Percentage and (y) an amount equal to
fifty percent (50%) of the Net Issue Proceeds of such Future Issuance; provided
that the Borrower shall not be obligated to so prepay the Loan if and to the
extent that the Future Issuance is of Permitted Refinancing Indebtedness. Any
prepayment of the Loan under this subsection shall be made on the Business Day
following the receipt by such Obligor of the proceeds of the applicable Future
Issuance.
(b) Replacement Secured Financing. Upon receipt by an Obligor of any
Cash Proceeds from any Future Issuance constituting a Replacement Secured
Financing, the Borrower shall prepay the Loan from the proceeds thereof in the
manner provided below in an aggregate amount equal to the Collateral Release
Value for each item or category (as applicable) of Collateral subject to such
Replacement Secured Financing; provided, however, that the Borrower shall not be
obligated to so prepay the Loan if and to the extent that such Cash Proceeds are
required to be utilized to prepay the US Airways
37
Loan pursuant to the US Airways Loan Agreement. Any prepayment of the Loan under
this subsection shall be made on the Business Day following the receipt by such
Obligor of the proceeds of the applicable Future Issuance.
(c) Other Future Issuances. Subject to subsection (i) below, upon
receipt by an Obligor of any Cash Proceeds from any Future Issuances other than
a Future Issuance described in (or excluded from prepayment pursuant to)
subsections (a) and (b) above, the Borrower shall prepay the Loan in the manner
provided below in an amount equal to the product of (x) the Loan Prepayment
Percentage and (y) 100% of the Net Issue Proceeds of such transaction; provided
that:
(i) with respect to Future Issuances of Capital Stock or warrants,
options or other rights to acquire Capital Stock consummated after the
Effective Date (excluding Indebtedness which is convertible into Capital
Stock), the Borrower (A) shall not be obligated to prepay the Loan from the
first $75,000,000 of Net Issue Proceeds therefrom, and (B) thereafter,
shall be obligated to prepay the Loan in an amount equal to the product of
(x) the Loan Prepayment Percentage and (y)(1) 25% on a dollar-for-dollar
basis of Net Issue Proceeds from the next $75,000,000 of Net Issue Proceeds
and (2) 50% on a dollar-for-dollar basis of Net Issue Proceeds in excess of
$150,000,000, with all calculations of Net Issue Proceeds for the purpose
of this clause (i) being made on a cumulative basis from the Effective Date
through the life of the Loan;
(ii) with respect to Net Issue Proceeds from a Future Issuance of
Indebtedness incurred to refinance any Aircraft Related Equipment that is
not (and is not required to be pursuant to the terms of the Loan Documents)
Collateral, the Borrower shall only be required to pay an amount equal to
the product of (x) the Loan Prepayment Percentage and (y) an amount equal
to fifty percent (50%) of the Net Issue Proceeds from such Future Issuance;
provided that the Obligors shall not be required to prepay the Loan as
provided in this clause (ii) if such Future Issuance is a refinancing of
Aircraft Related Equipment acquired by the Obligors within the twenty-four
(24) months preceding the date of such Future Issuance; and
(iii) the Borrower shall not be obligated to so prepay the Loan (A) if
and to the extent that the Future Issuance is (x) Permitted Refinancing
Indebtedness or (y) Permitted Acquisition Financing, (B) if and to the
extent that an Obligor applies the proceeds of a Future Issuance of
Indebtedness to make pre-delivery payments, deposits or progress payments
(or other similar payments) with respect to the acquisition of Aircraft
Related Equipment (or reimburses itself or any other Obligor for any such
payment or deposit) (including After-Acquired Section 1110 Equipment), an
Obligor applies such proceeds to purchase (or reimburse itself or any other
Obligor for the purchase of) Aircraft Related Equipment (including
After-Acquired Section 1110 Equipment), or an Obligor otherwise sets aside
such proceeds (through an escrow account or otherwise) for a period not to
exceed twelve (12) months for the express purpose of making any of the
payments described above in this subclause (iii)(B) and the Obligor makes
such payment within such period, or (C) with the Net Issue Proceeds of (x)
the Juniper Financing or (y) the Airbus Financing, it being understood
that, subject to subsection (c)(ii) above, the Loan Prepayment Percentage
of all Net Issue Proceeds in excess of amounts otherwise applied in
accordance with clause (iii)(A) or (iii)(B) above, as applicable, shall be
applied to prepay the Loan.
Any prepayment of the Loan under this subsection (c) shall be made on the
Business Day following the receipt by such Obligor of the proceeds of the
applicable Future Issuance.
38
(d) Asset Sales. Subject to subsection (i) below, upon receipt by an
Obligor of any Cash Proceeds from an Asset Sale permitted under Section 6.13,
the Borrower shall prepay the Loan as follows:
(i) with respect to Net Cash Proceeds from an Asset Sale in a
sale-leaseback transaction of (A) Aircraft Related Equipment that is not
(and is not required to be pursuant to the terms of the Loan Documents)
Collateral or (B) After-Acquired Section 1110 Equipment which has been
pledged as Collateral but is subject to release pursuant to Section 5.8(b),
the Borrower shall prepay the Loan in an amount equal to the product of (x)
the Loan Prepayment Percentage and (y) an amount equal to fifty percent
(50%) of the Net Cash Proceeds of such sale-leaseback; provided that the
Obligors shall not be required to prepay the Loan with the Net Cash
Proceeds from any such sale-leaseback transaction entered into within
twenty-four (24) months of the acquisition of such Aircraft Related
Equipment or After-Acquired Section 1110 Equipment (as applicable);
(ii) with respect to all other Asset Sales, the Borrower shall prepay
the Loan in an aggregate amount equal to one hundred percent (100%) of the
Net Cash Proceeds from such Asset Sales; provided, however, that the
Borrower shall not be obligated to so prepay the Loan (A) if and to the
extent that the Borrower furnishes to the Agent and the Board on or prior
to the date such prepayment is otherwise required to be made an Officer's
Certificate certifying that it or another Obligor intends to replace the
assets from which such Net Cash Proceeds derived, and does so (or enters
into a definitive agreement committing to do so) within one (1) year of
receipt thereof (it being understood that any Net Cash Proceeds retained by
the Borrower but not actually expended within such year or pursuant to such
agreement to replace the assets from which such Net Cash Proceeds derived
shall be used to prepay the Loan on the expiration of such year), (B) with
Net Cash Proceeds from Asset Sales to the extent such Net Cash Proceeds do
not exceed $1,000,000 in the aggregate per Fiscal Year, or (C) from the
sale or disposition of Investments permitted to be made pursuant to Section
6.2 hereof, other than the Investments permitted under clauses (viii), (x)
and (xii) of Section 6.2, (D) with Net Cash Proceeds from Designated Asset
Sales, or (E) if and to the extent that such Cash Proceeds are required to
be utilized to prepay the US Airways Loan pursuant to the US Airways Loan
Agreement.
Any prepayment of the Loan under this subsection (d) shall be made no later than
three (3) Business Days following the receipt by such Obligor of the proceeds of
such Asset Sale.
(e) Insurance/Condemnation Proceeds. Subject to subsection (i) below,
no later than three (3) Business Days following (x) the date of receipt by an
Obligor of any Net Insurance Proceeds or Net Condemnation Proceeds, or (y) if
applicable, the end of the one (1) year period described in the proviso below or
in the case of the Collateral, such other time as provided in the applicable
Collateral Document (as contemplated in the proviso below), the Borrower shall
prepay the Loan in an amount equal to the amount by which the aggregate amount
of the sum of such Net Insurance Proceeds and Net Condemnation Proceeds in any
Fiscal Year (excluding any amounts used to repair, restore or replace assets in
accordance with the immediately following proviso or any Collateral Document)
exceeds $5,000,000; provided the Borrower shall not be obligated to so prepay
the Loan if and to the extent that (i) the Borrower furnishes to the Board and
the Agent on or prior to the date such prepayment is otherwise required to be
made an Officer's Certificate certifying that it or another Obligor intends to
repair, restore or replace the assets from which such Net Insurance Proceeds or
Net Condemnation Proceeds derived, and does so (or enters into a definitive
agreement committing to do so) within one (1) year of receipt thereof, (ii) in
the case of proceeds derived from Collateral, the Obligor uses such proceeds to
repair, replace or restore such Collateral in accordance with the applicable
provisions of the applicable Collateral Document, including any time frames
contemplated thereby (it being understood that any Net Insurance
39
Proceeds or Net Condemnation Proceeds retained by an Obligor but not actually
expended within such year or such other time as provided in an applicable
Collateral Document or pursuant to such agreement to repair, restore or replace
the assets from which such Net Insurance Proceeds or Net Condemnation Proceeds
derived shall be used to prepay the Loan on the expiration of such year or such
other time as provided in an applicable Collateral Document), or (iii) such Cash
Proceeds are required to be utilized to prepay the US Airways Loan pursuant to
the US Airways Loan Agreement.
(f) Change of Control. Upon the occurrence of a Change of Control, the
Borrower shall promptly give the Agent, the Lenders, the Board, each
Counter-Guarantor and the Loan Administrator written notice thereof, and the
Controlling Creditor shall have the right, by written notice to the Borrower
(with a copy to the Agent and each Lender) given not more than thirty (30) days
following its or their receipt of the notice of the Change of Control, to
require the Borrower to prepay the Loan in full, together with accrued interest
thereon to the date of such prepayment, on the date specified in such notice
(which date shall be a Business Day not less than ten (10) nor more than twenty
(20) Business Days after the date of such notice), and upon the specified
payment date, the Borrower shall so prepay the then outstanding principal amount
of the Loan together with such accrued interest thereon.
(g) Gate Leases. In the event that the Obligors shall not have pledged
to the Collateral Agent the Gate Leases at both LGA and DCA (with the consent of
the lessors thereof) by January 1 of any year, the Borrower shall prepay the
Loan on such date in the amount of $10,000,000; provided that the Borrower shall
not be obligated to so prepay the Loan if and to the extent that US Airways is
required to prepay the US Airways Loan on such date pursuant to Section 2.8(g)
of the US Airways Loan Agreement.
(h) Collateral Value Deficiency. Upon the occurrence and during the
continuance of a Collateral Value Deficiency under Section 5.8(d), the Borrower
shall prepay the Loan if and to the extent required thereunder; provided,
however, that the Borrower shall not be obligated to so prepay the Loan if and
to the extent that the Borrower or another Obligor is required to prepay the US
Airways Loan pursuant to Section 5.8(d) of the US Airways Loan Agreement to cure
a Collateral Value Deficiency thereunder (and as defined therein).
(i) Option of Lenders to Decline Mandatory Prepayments. At least five
(5) Business Days prior to any date (for purposes of this subsection, a
"Mandatory Prepayment Date") on which any mandatory prepayment of the Loan
would, but for the provisions of this subsection (i), otherwise be required to
be made pursuant to subsections (a), (c), (d) or (e) of this Section 2.5, the
Borrower shall deliver a loan prepayment notice to the Agent and the Board
setting forth the amount of such mandatory prepayment (or a good faith estimate
thereof if such amount is not then known), and the date upon which the Borrower
expects to make such prepayment; provided, that the Borrower's obligation to
make such prepayment shall, in the case of a prepayment under subsections (a),
(c) or (d) of this Section 2.5, be subject to the consummation of the
transaction giving rise to such prepayment and the Borrower's timely receipt of
the Net Issue Proceeds or Net Cash Proceeds (as the case may be) therefrom. Upon
receipt of such notice, the Agent shall (i) promptly notify each Lender, the
Board and each Counter-Guarantor of the contents thereof and of the prepayment
that each Lender will be entitled to receive if it accepts prepayment of its
portion of the Loan in accordance with this subsection, (ii) request that each
such Lender notify the Agent in writing, no later than the third (3rd) Business
Day prior to the Mandatory Prepayment Date, whether such Lender will elect to
accept or not accept its pro rata share of such prepayment and (iii) inform such
Lender that the failure by such Lender to give such notice shall be deemed an
acceptance of such prepayment. No later than two (2) Business Day prior to the
Mandatory Prepayment Date, the Agent shall notify the Borrower of the Lenders'
elections and the aggregate amount of the prepayment required to be made as a
result thereof. The Borrower shall thereafter prepay the Loan on such Mandatory
Prepayment Date in the amount of such prepayment (after giving effect to the
40
Lenders' elections), which the Agent shall apply as a prepayment of such
portions of the Loan held by each of the Lenders that shall have accepted (or
been deemed to have accepted) such prepayment. The foregoing notwithstanding, if
and to the extent that Tranche A, Tranche B-1, Tranche B-2 or Tranche B-3 is
then guaranteed under the Board Guaranty or a Counter-Guarantee (as applicable),
none of the Tranche A Lender, Tranche B-1 Lender, Tranche B-2 Lender or Tranche
B-3 Lender shall elect to decline its pro rata amount of any such prepayment of
the Loan without the consent of the Board (in the case of such portion of
Tranche A then guaranteed under the Board Guaranty) or the applicable
Counter-Guarantor (in the case of such portion of Tranche ▇-▇, ▇▇▇▇▇▇▇ ▇-▇ or
Tranche B-3 then guaranteed under such Counter-Guarantor's Counter-Guarantee).
(j) Application of Prepayments. Any partial prepayments of the Loan
made by the Borrower in accordance with this Section 2.5 shall be applied to the
outstanding principal balance of the Loan ratably as to each Lender and, with
respect to each Lender, pro rata across the remaining scheduled principal
payments on the Loan owing to each such Lender (and not in the inverse order of
maturity). Subject to the Borrower's right to elect the Prepayment Breakage
Avoidance Procedure, the Borrower shall also pay any amounts owing pursuant to
Section 2.9(e) in connection with any prepayment under this Section 2.5. All
prepayments under this Section 2.5 shall be paid to the Agent for application as
provided in Section 2.8.
SECTION 2.6. INTEREST.
(a) Rate of Interest. Except as otherwise provided in Section 2.6(c)
and Section 2.9, the Loan shall bear interest on the unpaid principal amount
thereof from the first day of the initial Interest Period hereunder until paid
in full at the Applicable Interest Rate; provided, that interest on Tranche A
and Tranche B of the Loan from the first day of the initial Interest Period
hereunder until the Effective Date shall accrue at the Applicable Interest Rate
(including the default rates, as applicable), provided for in the Original Loan
Agreement.
(b) Interest Payments. Interest accrued on the Loan shall be payable
in arrears on each Interest Payment Date, upon the payment or prepayment thereof
in whole or in part, and, if not previously paid in full, at maturity (whether
by acceleration or otherwise). Interest on the Loan shall be calculated on the
basis of a year of 360 days and actual number of days elapsed.
(c) Default Interest. Notwithstanding the rate of interest specified
in Section 2.6(a), if any principal of or interest on the Loan is not paid when
due, whether at stated maturity, upon acceleration, by mandatory prepayment or
otherwise (but other than any voluntary prepayment), such overdue amount shall
bear interest at a rate which is two percent (2.0%) per annum in excess of the
then applicable interest rate(s) on the Loan (or portions thereof).
(d) Assignment of Loan During an Interest Period. If some or all of
the Loan is assigned in compliance with Section 9.2 on a date which is not the
first day of an Interest Period and the Applicable Interest Rate on the portion
so assigned will be adjusted as a result thereof (as provided in the definition
of "Applicable Interest Rate"), then interest on the portion of the Loan so
assigned shall accrue at the adjusted Applicable Interest Rate from and
including the effective date of such assignment until paid in full.
SECTION 2.7. FEES.
(a) Agency Fees. The Borrower agrees to pay to the Agent on the
Interest Payment Date falling on or about December 31 of each year (beginning
with the Interest Payment Date falling on
41
or about December 31, 2005) an agency fee in an amount equal to $25,000 per
annum for so long as the Loan shall remain outstanding.
(b) Loan Administrator Fee. The Borrower agrees to pay the Loan
Administrator the fees provided for in the Loan Administration Agreement.
(c) Guarantee Fees. The Borrower agrees to pay to the Agent for the
account of the Board quarterly in advance on each Interest Payment Date for so
long as the Board Guaranty shall remain in effect the Guarantee Fee set forth in
Section 2.06 of the Board Guaranty.
(d) Counter-Guarantee Fees. The Borrower agrees to pay to the Agent
for the account of each Counter-Guarantor quarterly in advance on each Interest
Payment Date (beginning with the Interest Payment Date falling on or about
December 31, 2005) the Counter-Guarantee Fees for so long as, and to the extent
that, such Counter-Guarantor's Counter-Guarantee shall remain in effect;
provided, that the Counter-Guarantee Fees payable on the Interest Payment Date
falling on or about December 31, 2005 shall be reduced by a pro rata portion of
the Counter-Guarantee Fees which the Borrower paid on or about January 18, 2005
which relates to the period between the Interest Payment Date falling on or
about December 31, 2005 and the anniversary of the Closing Date.
(e) Supplemental Facility Fees. The Borrower agrees to pay to the
Agent for the account of the Initial Lender quarterly in advance on each
Interest Payment Date (beginning with the Interest Payment Date falling on or
about December 31, 2005) the Supplemental Facility Fees for so long as, and to
the extent that, the Initial Lender shall be a Lender hereunder; provided, that
the Supplemental Facility Fees payable on the Interest Payment Date falling on
or about December 31, 2005 shall be reduced by a pro rata portion of the
Supplemental Facility Fees which the Borrower paid on or about January 18, 2005
which relates to the period between the Interest Payment Date falling on or
about December 31, 2005 and the anniversary of the Closing Date.
(f) Collateral Agent Fee. The Borrower agrees to pay to the Agent for
the account of the Collateral Agent, (i) a setup fee on the Effective Date in
the amount of $7,500, and (ii) on the Effective Date and annually thereafter on
each Interest Payment Date occurring on or about September 30th of each year
(beginning September 30, 2006), a collateral agency fee in an amount equal to
$42,500 per annum for so long as the Loan shall remain outstanding.
(g) Lazard Fee. The Borrower agrees to pay to Lazard Freres & Co. on
the Effective Date a fee in the amount of $1,000,000 for advisory services
provided to the Board in connection with the Merger and the restructuring of the
Loan.
(h) Liquidity Fee. The Borrower agrees that if (i) at any time after
the Closing Date the Regulations are amended, modified or supplemented such that
the Board's consent shall be necessary in order for a Lender to sell a
participation in the Loan to any Person the sale of a participation to which
would not require the Board's consent if the Regulations were then as in effect
on the Closing Date and (ii) the Initial Lender seeks the Board's consent to
sell such a participation and such consent is not granted, then the Initial
Lender shall so notify the Borrower and the Agent and the Borrower shall
thereafter pay to the Agent for the account of the Initial Lender a liquidity
fee equal to 0.10% per annum of the principal amount of Tranche A of the Loan
then guaranteed under the Board Guaranty, such liquidity fee to accrue from the
date of such notice from the Initial Lender and to be payable on each Interest
Payment Date.
(i) Distribution of Fees. On the Effective Date and upon the Agent's
receipt thereof, the Agent shall distribute to the Person entitled thereto each
of the fees referred to in this Section 2.7
42
payable on such date. Thereafter, the Agent will distribute any and all fees
payable under this Section 2.7 in accordance with Section 2.8(d) or (e) hereof,
as applicable.
(j) Fees Non-refundable. All fees paid under this Section 2.7 shall be
non-refundable.
(k) Interest on Fees. If any fee or other amount payable by the
Borrower hereunder is not paid when due, such overdue amount shall bear interest
at a rate which is two percent (2.0%) per annum in excess of the Applicable
Interest Rate as in effect from time to time.
SECTION 2.8. PAYMENTS AND COMPUTATIONS.
(a) Payments. The Borrower shall make each payment hereunder
(including fees and expenses) not later than 12:00 noon (New York City time) on
the day when due, in Dollars, to the Agent at Citibank, N.A., ABA #▇▇▇▇▇▇▇▇▇,
Account No. 3041-9849, Account Name: Project Finance, Ref: America West
Airlines, in immediately available funds without set-off, defense, recoupment or
counterclaim. All payments in respect of any Obligations shall at all times be
made to the Agent, whether or not a demand shall have been made or paid under
the Board Guaranty. The Agent will promptly cause all such payments received by
it to be distributed to the Person entitled thereto in accordance with the
priorities of payment set forth below in Section 2.8(d) or (e), or both, as
applicable. Payments received by the Agent after 12:00 noon (New York City time)
shall be deemed to be received on the next Business Day.
(b) Computation. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) Payments on Business Days. Whenever any payment hereunder shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fees, as the case
may be.
(d) Application of Payments - No Event of Default. So long as no Event
of Default under any of clauses (a) (including any failure to pay all amounts
hereunder upon acceleration as a result of any other Event of Default), (f) or
(g) of Section 7.1 has occurred and is continuing or would result therefrom, the
Agent shall apply all payments in respect of any Obligations (except with
respect to payments made pursuant to Section 2.4(d) and (e)) in the following
order:
(i) first, to pay any fees then due and payable under Section 2.7(a),
(b) and (f) to the Agent, the Collateral Agent and the Loan Administrator,
as the case may be, on a pro rata basis;
(ii) second, to pay interest then due and payable in respect of the
Loan to the Lenders on a pro rata basis, provided that, so long as the
Board Guaranty is in effect, to the extent that any amounts received by the
Agent constitute interest accrued on any overdue principal of or interest
on Tranche A in accordance with Section 2.6(c), such amounts shall be
distributed to the Board under this clause (ii) as if it were a Lender (it
being understood that following the Board's honoring of a demand for
payment in accordance with the Board Guaranty and until the Board is
reimbursed for the amount of all payments thereunder, all amounts paid in
respect of Tranche A shall be distributed to the Board and amounts paid in
respect of Tranche B shall be distributed to the Tranche B Lenders, all on
a pro rata basis);
43
(iii) third, to pay principal then due and payable on the Loan to the
Lenders, on a pro rata basis (it being understood that following the
Board's honoring of a demand for payment in accordance with the Board
Guaranty and until the Board is reimbursed for the amount of all payments
thereunder, the amounts paid in respect of Tranche A shall be distributed
to the Board and amounts paid in respect of Tranche B shall be distributed
to the Tranche B Lenders, in each case on a pro rata basis);
(iv) fourth, to pay any fees then due and payable under Section
2.7(c), (d), (e) and (h) to the Board, the Counter-Guarantors and the
Initial Lender, as the case may be, on a pro rata basis; and
(v) fifth, to pay any other Obligations then due and payable to the
Agent, the Collateral Agent, the Loan Administrator, the Board, the
Counter-Guarantors and the Lenders, on a pro rata basis.
(e) Application of Payments After Event of Default. After the
occurrence and during the continuance of an Event of Default under any of
clauses (a) (including any failure to pay all amounts hereunder upon
acceleration as a result of any other Event of Default), (f) or (g) of Section
7.1, the Agent shall apply all payments in respect of any Obligations (including
amounts received by the Collateral Agent upon the exercise of remedies under the
Collateral Documents) in the following order:
(i) first, to pay Obligations in respect of any expenses, fees,
indemnities or other sums owing hereunder then due to the Agent, the
Collateral Agent and the Loan Administrator, on a pro rata basis;
(ii) second, to pay Obligations in respect of any expenses, fees,
indemnities or other sums owing hereunder not referred to in clauses (iii)
through (v) below then due to the Board, the Lenders and the
Counter-Guarantors, on a pro rata basis;
(iii) third, to pay on a pro rata basis (A) interest then due and
payable in respect of the Loan to the Lenders, provided that so long as the
Board Guaranty is in effect, to the extent that any amounts received by the
Agent constitute interest accrued on any overdue principal or interest on
Tranche A in accordance with Section 2.6(c), such amounts shall be
distributed to the Board under this clause (iii) as if it were a Lender and
(B) in the event that any fees payable to the Board, the Counter-Guarantors
and the Initial Lender, under Section 2.7(c), (d), (e) and (h) were not
paid when due thereunder, the portion of such unpaid fees which is equal to
the amount which such Person would have been then entitled to receive if
the fee payable under Section 2.7(c), (d), (e) and (h) (as applicable) were
payable daily in arrears (instead of quarterly or annually in advance, as
the case may be) (including interest accrued thereon through the date of
payment in accordance with Section 2.7(k), on a pro rata basis (it being
understood that following the Board's honoring of a demand for payment in
accordance with the Board Guaranty and until the Board is reimbursed for
the amount of all payments thereunder, all amounts paid in respect of
Tranche A shall be distributed to the Board and amounts paid in respect of
Tranche B shall be distributed to the Tranche B Lenders, all on a pro rata
basis);
(iv) fourth, to pay or prepay principal payments on the Loan to the
Lenders, on a pro rata basis (it being understood that following the
Board's honoring of a demand for payment in accordance with the Board
Guaranty and until the Board is reimbursed for the amount of all payments
thereunder, amounts paid in respect of Tranche A shall be distributed to
the Board and amounts paid in respect of Tranche B shall be distributed to
the Tranche B Lenders, in each case on a pro rata basis); and
44
(v) fifth, to pay any fees due and payable under Section 2.7(c), (d),
(e) and (h) hereof to the Board, the Counter-Guarantors and the Initial
Lender, as the case may be, on a pro rata basis (including interest accrued
thereon through the date of payment in accordance with Section 2.7(k) and
not otherwise paid pursuant to clause (iii) above.
(f) Assignment to Board of Lender's Interest in Loan. Upon the
assignment to the Board of any Tranche A Lender's right, title and interest in
and to its pro rata portion of the principal of and interest on Tranche A in
accordance with the Board Guaranty, the Board shall have the rights and
privileges of a Tranche A Lender with respect to such payment (to the extent of
the interests in Tranche A so assigned to the Board). No payment by the Board or
any Counter-Guarantor to the Agent or any Lender under the Board Guaranty or any
Counter-Guarantee, as the case may be, shall reduce, discharge, satisfy, modify
or terminate the corresponding payment or any other obligation of the Borrower
under this Agreement or the Notes, which obligations shall remain in full force
and effect.
(g) Funding Defaults. Unless the Borrower has notified the Agent,
prior to the date any payment is required to be made by it to the Agent
hereunder, that the Borrower will not make such payment, the Agent may assume
that the Borrower has timely made such payment and may (but shall not be so
required to), in reliance thereon, make available a corresponding amount to the
Person entitled thereto. If and to the extent that such payment was not in fact
made to the Agent in immediately available funds, then each Lender (or the
Board, if applicable) shall forthwith on demand repay to the Agent the portion
of such assumed payment that was made available to such Lender (or the Board, if
applicable) in immediately available funds, together with interest thereon in
respect of each day from and including the date such amount was made available
by the Agent to such Lender (or the Board, if applicable) to the date such
amount is repaid to the Agent in immediately available funds, at the applicable
Federal Funds Rate (as defined in the definition of "Base Rate Loan") from time
to time in effect. A notice of the Agent to the Borrower with respect to any
amount owing under this subsection (g) shall be conclusive, absent manifest
error.
SECTION 2.9. CERTAIN PROVISIONS GOVERNING THE LOAN.
(a) Determination of Interest Rate. LIBOR for each Interest Period for
the Loan shall be determined by the Agent pursuant to the procedures set forth
in the definition of "LIBOR", and shall promptly thereafter be notified to the
Borrower and each Lender together with the Applicable Interest Rate for such
Interest Period.
(b) Interest Rate Unascertainable, Inadequate or Unfair. In the event
that: (i) the Agent determines that adequate and fair means do not exist for
ascertaining the applicable interest rates by reference to which the LIBOR then
being determined is to be fixed or (ii) the Requisite Lenders notify the Agent
that the LIBOR for any Interest Period will not adequately reflect the cost to
the relevant Lenders of making or maintaining the Loan for such Interest Period,
the Agent shall forthwith so notify the Borrower, the Board, the Loan
Administrator and the Lenders, whereupon during the thirty (30) days following
the date of any such notice the Borrower, the Agent and the Lenders shall
negotiate in good faith (subject to the consent of the Board) in order to arrive
at a mutually acceptable alternative basis for determining the interest rate
from time to time applicable to the Loan (the "Substitute Basis"). If within the
twenty (20) days following the date of any such notice the Borrower, the Agent
and the Lenders shall agree upon, and the Board shall consent to, a Substitute
Basis, such Substitute Basis shall be retroactive to and effective from the
first day of the then current Interest Period until and including the last day
of such Interest Period. If after twenty (20) days from the date of such notice,
the Borrower, the Agent and the Lenders shall have failed to agree upon, or the
Board shall have failed to consent to, a Substitute Basis, then the Agent (upon
instructions from the Requisite Lenders) shall certify in writing to the
Borrower (such certification to be conclusive and binding on all Lenders and all
other parties hereto absent manifest
45
error) the interest rate at which such Lenders are prepared to maintain their
portion of the Loan for such Interest Period, it being understood that such
Lenders' interest rate shall be at a rate per annum equal to a rate which
adequately and fairly reflects the cost to such Lenders of obtaining the funds
necessary to maintain their portion of the Loan for such Interest Period. If no
Substitute Basis is established, upon receipt of notice of the interest rates at
which the Requisite Lenders are prepared to maintain their respective portion of
the Loan, the Borrower shall have the right exercisable upon ten (10) Business
Days' prior notice to the Lenders, the Board and the Loan Administrator through
the Agent (i) to continue to borrow the Loan at the interest rate so advised by
the Agent (as such rate may be modified, from time to time, at the outset of
each subsequent Interest Period), (ii) to convert the Loan to a Base Rate Loan,
or (iii) to prepay in full the Loan together with accrued but unpaid interest
thereon at the interest rate certified in writing by the Requisite Lenders as
provided above and all other amounts due under the Loan Documents, whereupon the
Loan shall become due and payable on the date specified by the Borrower in such
notice.
(c) Increased Costs. If at any time any Lender or Counter-Guarantor
shall determine that as a result of the introduction of or any change after the
date hereof in or in the interpretation of any law, treaty or governmental rule,
regulation or order or the compliance by such Lender or Counter-Guarantor with
any guideline, request or directive after the date hereof from any central bank
or other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to such Lender or Counter-Guarantor of
agreeing to make or making, funding, guaranteeing or maintaining any portion of
the Loan or its Counter-Guarantee (except in respect of Taxes), then the
Borrower shall from time to time, within five (5) Business Days of a demand
(which demand shall be accompanied by a statement setting forth the basis for
such demand and a calculation of the amount thereof in reasonable detail) by
such Lender or Counter-Guarantor (with a copy of such demand to the Agent, the
Board and the Loan Administrator), pay to the Agent for the account of such
Lender or Counter-Guarantor additional amounts sufficient to compensate such
Lender or Counter-Guarantor for such increased cost; provided that no Lender or
Counter-Guarantor shall be entitled to claim any such additional amount for
amounts incurred more than six (6) months prior to the making of such demand. A
certificate as to the amount of such increased cost, submitted to the Borrower
(and the Agent and the Board) by such Lender or Counter-Guarantor shall be
conclusive and binding for all purposes, absent manifest error. Each Lender or
Counter-Guarantor shall promptly notify in writing the Borrower, the Agent and
the Board of any event of which such Lender or Counter-Guarantor has knowledge,
occurring after the date hereof, which would entitle such Lender or
Counter-Guarantor to compensation pursuant to this Section 2.9(c) and will
designate a different lending office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment of
such Lender or Counter-Guarantor, be otherwise materially disadvantageous to it.
(d) Illegality. Notwithstanding any other provision of this Agreement,
if any Lender determines that the introduction of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement shall make it unlawful, or any central bank or
other Governmental Authority shall assert that it is unlawful, for such Lender
to maintain its portion of the Loan, then, on notice thereof by such Lender to
the Borrower through the Agent (with a copy to the Board and the Loan
Administrator), the obligation of such Lender to continue to fund or maintain
its portion of the Loan shall be terminated and the Borrower shall either (i)
convert the affected portion of the Loan of such Lender to a Base Rate Loan,
either on the last day of the Interest Period therefor, if such Lender may
lawfully continue to maintain its portion of the Loan based on LIBOR to such
day, or immediately, if such Lender may not lawfully continue to maintain such
portion of the Loan based on LIBOR or (ii) prepay such affected portion of the
Loan to such Lender together with accrued but unpaid interest thereon and all
other sums payable hereunder with respect thereto on the last day of the then
current Interest Period or earlier if necessary to avoid such illegality. Any
such partial prepayment
46
of the Loan shall be applied ratably to the then unpaid installments thereof in
accordance with the amount of each such unpaid installment.
(e) Breakage Costs. In addition to all amounts required to be paid by
the Borrower pursuant to Section 2.5, the Borrower shall compensate each Lender
or each Counter-Guarantor upon demand, for all losses, expenses and liabilities
(including any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender or
Counter-Guarantor or the termination of any other financial arrangement it may
have entered into to fund or maintain or support such Lender's portion of the
Loan or its Counter-Guarantee, but excluding Taxes) which that Lender or
Counter-Guarantor may sustain (i) subject to the Borrower's right to utilize the
Prepayment Breakage Avoidance Procedure, if for any reason any portion of the
Loan is prepaid (including mandatorily pursuant to Section 2.5 or this Section
2.9) or a payment is made with respect to a Counter-Guarantee on a date which is
not the last day of the applicable Interest Period or (ii) as a consequence of
any failure by a Borrower to repay any portion of the Loan or make payment with
respect to a Counter-Guarantee when required by the terms hereof. The Lender or
Counter-Guarantor making demand for such compensation shall deliver to the
Borrower (with a copy to the Agent, the Board and the Loan Administrator)
concurrently with such demand a written statement as to such losses, expenses
and liabilities, and this statement shall be conclusive as to the amount of
compensation due to that Lender or Counter-Guarantor absent manifest error, and
such compensation shall be paid to the Agent for the account of such Lender.
SECTION 2.10. CAPITAL ADEQUACY. If at any time any Lender or
Counter-Guarantor determines that (a) the adoption of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement regarding capital adequacy, (b) compliance with
any such law, treaty, rule, regulation, or order or (c) compliance with any
guideline or request or directive from any central bank or other Governmental
Authority or any accounting board or authority (whether or not a Governmental
Authority) which is responsible for the establishment or interpretation of
national or international accounting principles (in each case, whether or not
having the force of law) shall have the effect of reducing the rate of return on
such Lender's or Counter-Guarantor's (or any corporation controlling such
Lender's or Counter-Guarantor's) capital as a consequence of its obligations
hereunder (other than with respect to Taxes) to a level below that which such
Lender, Counter-Guarantor or corporation could have achieved but for such
adoption, change, compliance or interpretation, then, upon demand from time to
time by such Lender or Counter-Guarantor (with a copy of such demand to the
Agent and the Board), the Borrower shall within five (5) Business Days of such
demand pay to the Agent for the account of such Lender or Counter-Guarantor from
time to time as specified by such Lender or Counter-Guarantor additional amounts
sufficient to compensate such Lender or Counter-Guarantor for such reduction;
provided that the Borrower shall not be required to compensate a Lender or
Counter-Guarantor pursuant to this Section 2.10 for any amounts incurred more
than six (6) months prior to the date of such demand. A certificate as to such
amounts submitted to the Borrower (and the Agent and the Board) by such Lender
or Counter-Guarantor shall be conclusive and binding for all purposes absent
manifest error. Each Lender or Counter-Guarantor shall promptly notify the
Borrower, the Agent and the Board of any event of which such Lender or
Counter-Guarantor has knowledge, occurring after the date hereof, which would
entitle such Lender or Counter-Guarantor to compensation pursuant to this
Section 2.10 and, in the case of a Lender, will designate a different lending
office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to it. For the avoidance of doubt, any interpretation of
Accounting Research Bulletin No. 51 by FASB (including Interpretation No. 46 -
Consolidation of Variable Interest Entities) shall constitute an adoption,
change, request or directive, and any implementation thereof shall be, subject
to this Section 2.10.
47
SECTION 2.11. TAXES.
(a) No Withholding, etc. Except as otherwise provided in the next
sentence and Section 9.2, any and all payments by the Obligors under each Loan
Document shall be made free and clear of and without deduction for any and all
Taxes, excluding (i) in the case of each Lender, the Loan Administrator, each
Counter-Guarantor, each Participant and the Agent, Taxes measured by its net
income and franchise Taxes, in each case if imposed on it as a result of such
Person being organized under the laws of the jurisdiction imposing such Taxes or
doing business in such jurisdiction unrelated to the transactions contemplated
by the Original Loan Agreement or any Loan Document, (ii) in the case of each
Lender and each Participant, Taxes measured by its net income and franchise
Taxes imposed on it by the jurisdiction in which its Lending Office is located
or in which it booked its participation for tax accounting purposes, (iii) in
the case of each Counter-Guarantor, net income and franchise taxes imposed by
the jurisdiction to which the Borrower is directed to make payments to the
Counter-Guarantor pursuant to the Loan Documents, (iv) in the case of each
Lender, the Loan Administrator, each Counter-Guarantor, each Participant and the
Agent, Taxes imposed on it as a result of its failure to comply with its
obligations under Section 2.11(g), Section 2.11(h) or Section 9.2, (v) in the
case of each Lender, the Loan Administrator, each Participant, each
Counter-Guarantor and the Agent (A) that is a party hereto or Participant, as
the case may be, on the Effective Date, United States federal withholding Taxes
except to the extent imposed as a result of a change in applicable law,
including income tax conventions, after the Effective Date and (B) that becomes
a party hereto or Participant, as the case may be, after the Effective Date,
United States federal withholding Taxes except to the extent imposed as a result
of a change in applicable law, including income tax conventions, after the date
of the Assignment and Acceptance pursuant to which it becomes a Lender or after
the date such Person becomes a Participant, the Loan Administrator or the Agent,
as applicable, and (vi) Taxes imposed as a result of such Person's gross
negligence or willful misconduct (all such non-excluded Taxes being hereinafter
referred to as "Indemnified Taxes"). If any Indemnified Taxes shall be required
by law to be deducted from or in respect of any sum payable under any Loan
Document to any Lender, the Loan Administrator, any Counter-Guarantor or the
Agent (1) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.11) such Lender, the Loan Administrator, such
Counter-Guarantor or the Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (2) the
Obligors shall make such deductions, and (3) the Obligors shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable law.
(b) Counter-Guarantee Taxes. If any Taxes (other than Taxes imposed as
a result of the failure of the Counter-Guarantor to comply with its obligations
under Section 2.11(g)) shall be required by law to be deducted from or in
respect of any sum payable under any Counter-Guarantee to any Counter-Guarantor
("Counter-Guarantee Taxes"), (i) the Agent shall make such deductions and shall
so notify the Borrower (such notice shall be accompanied by a statement setting
forth the basis for such deductions and a calculation of the amount thereof in
reasonable detail), (ii) the Agent shall pay the full amount deducted to the
relevant taxing authority or other authority in accordance with applicable law,
and (iii) the Borrower shall pay to such Counter-Guarantor such amounts as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.11) such
Counter-Guarantor receives an amount equal to the sum it would have received had
no such deductions been made. Further, if any Taxes are required by law to be
deducted from or in respect of any sum payable under any Counter-Guarantee by
any Counter-Guarantor to the Agent, any Lender or any Participant and such
Counter-Guarantor in accordance with the terms of its Counter-Guarantee pays
such amounts as may be necessary so that after making all required deductions
the Agent, such Lender or such Participant, as the case may be, receives an
amount equal to the sum it would have received had no such deduction been made,
the Borrower shall pay the amount thereof to the Agent for the account of
48
such Counter-Guarantor (together with any additional amounts such that the
Counter-Guarantor receives, after deduction for all Taxes required to be
withheld, the amount so paid by the Counter-Guarantor).
(c) Other Taxes. In addition, the Obligors agree to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies of the United States or any political subdivision thereof or
any applicable foreign jurisdiction which arise from any payment made under any
Loan Document or Counter-Guarantee or from the execution, delivery or
registration of, or otherwise with respect to, any Loan Document or
Counter-Guarantee (collectively, "Other Taxes") to the Agent for the account of
the affected party.
(d) Tax Indemnity. The Obligors will indemnify each Lender, the Agent,
each Counter-Guarantor and the Loan Administrator for the full amount of
Indemnified Taxes, Counter-Guarantee Taxes or Other Taxes (including any Taxes
imposed by any jurisdiction on amounts payable under this Section 2.11) paid by
such Lender, the Loan Administrator, each Counter-Guarantor or the Agent (as the
case may be) and any liability (including for penalties, interest and expenses)
arising therefrom or with respect thereto, other than any liability, including
for penalties, interest and expenses, arising from the gross negligence or
willful misconduct of the Lender, the Loan Administrator, each Counter-Guarantor
or the Agent, as the case may be. This indemnification shall be made to the
Agent for account of the relevant Lender, Counter-Guarantor, the Loan
Administrator or the Agent, as the case may be, within 30 days from the date
such Lender, the Loan Administrator, Counter-Guarantor or the Agent (as the case
may be) makes written demand therefor (with a copy to the Agent if made by a
Lender, Counter-Guarantor or the Loan Administrator and accompanied by a
statement setting forth the basis for such taxation and the calculation of the
amount thereof in reasonable detail).
(e) Evidence of Payment. Within 30 days after the date of any payment
of Indemnified Taxes or Other Taxes, the Obligors will furnish to the Agent the
original or a certified copy of a receipt evidencing payment thereof or other
documentation reasonably satisfactory to the Agent.
(f) Survival. Without prejudice to the survival of any other agreement
of the Obligors hereunder, the agreements and obligations of the parties
contained in this Section 2.11 shall survive the payment in full of the
Obligations.
(g) Certain Withholding Tax Matters. Each Lender, each
Counter-Guarantor, each Participant, the Loan Administrator and the Agent that
is a Non-U.S. Person and that is entitled at such time to an exemption from
United States withholding tax, or that is subject to such tax at a reduced rate
under an applicable tax treaty, shall, on or prior to the Effective Date or on
or prior to the date of the Assignment and Acceptance pursuant to which it
becomes a Lender or on or prior to the date such Person becomes a
Counter-Guarantor, a Participant, the Loan Administrator or the Agent, as
applicable, and from time to time thereafter if requested by the Agent, a
Counter-Guarantor or the Obligors, provide the Agent and the Obligors, and, in
the case of each Lender, each Participant and the Agent, provide each
Counter-Guarantor, with two completed copies of either IRS Form W-8BEN or W-8ECI
or other applicable form, certificate or document prescribed by the IRS
certifying as to such Non-U.S. Person's entitlement to such exemption from
United States withholding tax or reduced rate with respect to all payments to be
made to such Non-U.S. Person under the Loan Documents. In addition, each Lender,
each Counter-Guarantor, each Participant, the Loan Administrator and the Agent
that is a Non-U.S. Person, as the case may be, shall deliver to the Obligors and
the Agent, and, in the case of each Lender, each Participant and the Agent,
deliver to each Counter-Guarantor, notice of any event (other than a change in
applicable law, including income tax conventions) requiring a change in the most
recent form previously delivered by such Person to the Obligors and the Agent or
the Counter-Guarantors, as the case may be. Each Lender, each Counter-Guarantor,
each Participant, the Loan Administrator and Agent (other than an entity treated
as a corporation for U.S. federal income tax purposes) that is a "United States
person" within the meaning
49
of Section 7701(a)(30) of the Internal Revenue Code shall deliver two duly
signed and completed copies of IRS Form W-9 to the Agent and the Obligors, at
the times and in the manner described above with respect to IRS Forms W-8.
Unless the Agent and the Obligors have received forms or other documents
satisfactory to them indicating that payments under the Loan Documents or
Counter-Guarantee to or for a Non-U.S. Person are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the Agent or the Obligors shall, notwithstanding the provisions of
Section 2.11(a), (b) and (d) and without impairing any obligation of the
Obligors under this Section 2.11 with respect to such tax, withhold such United
States withholding taxes from such payments at the appropriate rate; provided
that if such Person is a Lender, Counter-Guarantor, Participant, Agent or Loan
Administrator and shall have satisfied the requirement of this Section 2.11(g)
on the date it became a Lender, Counter-Guarantor, Participant, Agent or Loan
Administrator, nothing in this Section 2.11(g) shall relieve the Obligors of
their obligation to pay any amounts pursuant to this Section 2.11 in the event
that, as a result of any change in any applicable law, treaty or governmental
rule, regulation or order, or any change in governmental interpretation,
administration or application thereof, such Lender, Counter-Guarantor,
Participant, Agent or Loan Administrator is no longer properly entitled to
deliver forms, certificates or other evidence at a subsequent date establishing
that it is not subject to withholding or is subject to withholding at a reduced
rate. The obligation of the Obligors under this Section 2.11 shall survive the
repayment of all other Obligations hereunder and the resignation of the Agent.
(h) Mitigation. Any Lender claiming any additional amounts payable
pursuant to this Section 2.11 shall use its reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which would
be payable or may thereafter accrue and would not, in the reasonable judgment of
such Lender, be otherwise materially disadvantageous to such Lender.
(i) Participants. Each Participant will be entitled to the benefits
and subject to the requirements of this Section 2.11 to the same extent as if
such Person were a Lender.
ARTICLE III
CONDITIONS PRECEDENT TO EFFECTIVENESS
This Agreement shall become effective on the date hereof (the
"Effective Date") subject to the satisfaction (in the judgment of the Agent, the
Board, each Counter-Guarantor and the Initial Lender (except as otherwise
provided below in this Article III)) of all of the following conditions
precedent:
(a) Certain Agreements and Documents. The Agent, the Collateral Agent,
the Initial Lender, each Counter-Guarantor and the Board shall have received on
or prior to the Effective Date each of the following (with only the Agent
receiving an original of the Notes), each dated as of the Effective Date, in
form and substance satisfactory to the Agent, the Collateral Agent, the Board,
the Initial Lender and each Counter-Guarantor:
(i) this Agreement, duly executed and delivered by the parties hereto;
(ii) the Notes, duly executed by the Borrower and conforming to the
requirements set forth in Section 2.3(d);
(iii) the Second Lien Guaranty, duly executed and delivered by the
parties thereto;
50
(iv) the Board Guaranty, duly executed and delivered by the parties
thereto;
(v) the Counter-Guarantees, duly executed and delivered by the parties
thereto;
(vi) the Warrants, duly executed and delivered by Group;
(vii) Collateral Documents specified in clauses (i) through (vii) of
the definition thereof, duly executed and delivered by the parties thereto,
together with (A) financing statements in form and substance reasonably
acceptable to the Board, as may be required or advisable to grant, continue
and maintain an enforceable security interest in the Collateral (subject to
the terms hereof and of the other Loan Documents) in accordance with the
UCC as enacted in all relevant jurisdictions; (B) such Collateral Documents
(together with any other necessary documents, instruments, affidavits or
certificates) as may be required in order to perfect and maintain the
security interest in the Collateral, perfection of a security interest in
which requires a filing for recordation with the FAA, in proper form for
recordation with the FAA; (C) insurance certificates and brokers' reports
evidencing the insurance coverages required under the Loan Documents,
including with respect to the Collateral (in accordance with the
requirements of the Collateral Documents) naming the Collateral Agent as
loss payee and otherwise in form and substance reasonably acceptable to the
Collateral Agent; (D) a Collateral Value Certificate, together with
Appraisal Reports in respect of the Appraised Collateral in form and
substance reasonably acceptable to the Board; (E) any other necessary
documents, certificates, forms and filing fees as may be required in order
to perfect and maintain the security interest in the Collateral in the
records of the appropriate Governmental Authorities' offices of the various
land records offices located in Pennsylvania; (F) Control Agreements with
respect to the deposit accounts and securities accounts of the Obligors
(except to the extent not required pursuant to Section 5.13 hereof); and
(G) evidence that the original stock certificates representing the
Obligors' interests in each of the entities listed on Schedule 3(a)(vii)
(being all entities listed on Schedule 4.1(c) whose securities are
certificated), together with undated stock powers executed in blank have
been delivered to the Collateral Agent under the US Airways Loan Agreement;
(viii) the Loan Administration Agreement, duly executed and delivered
by the parties thereto;
(ix) the favorable opinions of (A) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP and/or its affiliates, special counsel to the Obligors, (B) ▇▇▇▇▇▇
& ▇▇▇▇▇▇ LLP, special counsel to the Obligors; (C) ▇▇▇▇▇ ▇. ▇▇▇▇▇ III,
Senior Vice President and General Counsel of the Borrower, (D) ▇▇▇▇▇
▇▇▇▇▇▇▇, Vice President - Deputy General Counsel of US Airways, (E) ▇▇▇▇▇▇▇
▇▇▇▇▇▇, special Pennsylvania real estate counsel to the Obligors, (F)
Daugherty, Fowler, Peregrin & ▇▇▇▇▇▇, special FAA counsel; (G) O'Melveny &
▇▇▇▇▇ LLP, special counsel to the Obligors; (H) ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, legal
counsel to the Board (which need be addressed and delivered only to the
Agent and Tranche A Lenders), and (I) ▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇▇▇▇, Colt & Mosle
LLP, special New York counsel to the Board (which need be addressed and
delivered only to the Agent and the Tranche A Lenders);
(x) a copy of the certificate of incorporation of each Obligor,
certified as of a recent date by the Secretary of State of the state of its
incorporation or organization, together with a "long-form" certificate of
such official attesting to the good standing of such Person;
(xi) a certificate of each Obligor signed on behalf of such Person by
its Secretary or an Assistant Secretary certifying (A) the names and true
signatures of each officer of such Person who has been authorized to
execute and deliver each Loan Document required to be executed and
51
delivered on or prior to the Effective Date by or on behalf of such Person
hereunder or thereunder, (B) the by-laws of such Person as in effect on the
date of such certification, (C) the resolutions of such Person's board of
directors approving and authorizing the execution, delivery and performance
of each Loan Document to which it is a party and (D) that there have been
no changes in the certificate of incorporation of such Person from the
certificate of incorporation delivered pursuant to the immediately
preceding clause;
(xii) an Officer's Certificate of the Borrower certifying (A) that all
representations and warranties in Article IV hereof (other than the
representation set forth in Section 4.3(b)(i) are true and correct in all
material respects on and as of the Effective Date after giving effect to
the Consummation of the Plan, as though made on and as of such date, (B)
that no Default or Event of Default has occurred and is continuing and (C)
as to the matters specified in subsection (r) of this Article III; and
(xiii) an Officer's Certificate of the Borrower certifying that as of
the Effective Date, the written information furnished to the Board by or on
behalf of the Obligors for use in connection with negotiation and closing
of the transaction contemplated by this Agreement is true and complete in
all material respects; provided that with respect to pro forma and
projected financial information and other forward-looking statements, the
Borrower represents only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time.
(b) Other Agreements. The Agent, the Board, the Initial Lender and
each Counter-Guarantor shall have received on or before the Effective Date
evidence that the Obligors have consummated the transactions contemplated by the
following agreements (which agreements shall be in form and substance reasonably
satisfactory to the Board, the Initial Lender, each Counter-Guarantor and the
Agent): (i) the US Airways Loan Agreement and the other "Loan Documents" (under
and as defined therein) which are required to be executed and delivered by the
parties thereto on the effective date thereof, and (ii) the other agreements
listed on Schedule 3.1(b).
(c) Fees and Expenses Paid. The Borrower shall have paid all fees due
and payable on the Effective Date (including, without limitation, the fees
referenced in Section 2.7), and all expenses of the Agent and its Affiliates,
the Initial Lender, the Board, each Counter-Guarantor, the Collateral Agent and
the Loan Administrator due and payable on or before the Effective Date.
(d) Consents, Etc. The Obligors shall have received all consents and
authorizations required pursuant to any material Contractual Obligation with any
other Person in form and substance reasonably satisfactory to the Board and the
Initial Lender and shall have obtained all consents, waivers and authorizations
of, and effected all notices to and filings with, the New York Stock Exchange,
the SEC and any other Governmental Authority as may be necessary (i) in
connection with the effectiveness of the Plan of Reorganization and (ii) to
allow the Obligors lawfully to execute, deliver and perform, in all material
respects, their obligations under the Loan Documents to which they are, or shall
be, a party and each other agreement or instrument to be executed and delivered
by them, pursuant thereto or in connection therewith.
(e) No Illegality. No law or regulation shall be applicable in the
judgment of the Agent or the Board that restrains, prevents or imposes
materially adverse conditions upon the transactions contemplated hereby.
(f) Representations and Warranties of the Obligors. All
representations and warranties set forth in Article IV hereof shall be true and
correct in all material respects on and as of the
52
Effective Date after giving effect to the Consummation of the Plan as though
made on and as of such date (except to the extent any such representation or
warranty by its terms is made as of a different specified date in which event
such representation or warranty shall be true and correct in all material
respects as of such specified date).
(g) Representation and Warranties of Counter-Guarantors. All
representations and warranties of each Counter-Guarantor in its
Counter-Guarantee are true and correct on and as of the Effective Date.
(h) No Event of Default. After giving effect to the Consummation of
the Plan, no Default or Event of Default shall have occurred and be continuing.
(i) Corporate and Other Proceedings. All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to the Agent, the Board, the Initial Lender
and each Counter-Guarantor.
(j) Counter-Guarantees. Each Counter-Guarantee and any and all
Counter-Guarantor Letters of Credit and parent guarantees, to the extent
required thereby, shall be in full force and effect and no default in the
performance of any thereof shall have occurred and be continuing.
(k) No Material Adverse Change. Since the August 9, 2005, no material
adverse change shall have occurred in the financial condition, assets,
liabilities, business or results of operations of the Obligors taken as a whole
(excluding any such changes resulting from (i) changes or conditions generally
affecting the U.S. economy or financial markets, (ii) changes or conditions
generally affecting any of the segments of the airline industry in which any of
the Obligors, operate to the extent such conditions or changes do not
disproportionately impact the Obligors, or (iii) the announcement or
consummation of the Merger) or in the Borrower's ability to repay the Loan or
perform its obligations under the Loan Documents.
(l) Plan of Reorganization. (i) The Plan of Reorganization shall be
reasonably satisfactory to the Initial Lender, each Counter-Guarantor and the
Board, (ii) all conditions precedent to the occurrence of the effective date of
the Plan of Reorganization shall have been satisfied and the Plan of
Reorganization shall have become effective, subject only to consummation of the
transactions contemplated under the Loan Documents, and (iii) no Obligor shall
be in default with respect to any material obligation under the Plan of
Reorganization and the Consummation of the Plan shall have occurred, subject
only to consummation of the transactions under the Loan Documents.
(m) Confirmation Order. (i) The Confirmation Order shall be in form
and substance reasonably satisfactory to the Initial Lender, each
Counter-Guarantor and the Board and shall not have been stayed by the Bankruptcy
Court (or by any court having jurisdiction to issue any such stay) or reversed,
vacated, amended, supplemented or modified, (ii) the time to appeal the
Confirmation Order shall have expired, (iii) no appeal or petition for review,
rehearing, or certiorari with respect to the Confirmation Order shall be
pending, and (iv) the Confirmation Order shall otherwise be in full force and
effect.
(n) Projections. The Initial Lender, each Counter-Guarantor and the
Board shall have received satisfactory projections and pro forma financial
information for Group (on a consolidated basis) for the fiscal years 2005
through and including 2008, which projections shall be certified by the Chief
Executive Officer or the Chief Financial Officer of Group as being reasonable
estimates as of the
53
Effective Date of future financial performance and based upon assumptions that
are reasonable in light of conditions and facts known to Group as of the
Effective Date.
(o) Jurisdiction of Bankruptcy Court. The Initial Lender, each
Counter-Guarantor and the Board shall be satisfied that the Bankruptcy Court's
retention of jurisdiction under the Confirmation Order will not govern the
enforcement of the Loan Documents or any rights or remedies relating thereto,
except as may be otherwise consented to by them.
(p) Certificates of Incorporation. The certificates of incorporation
or other applicable governing documents of the Obligors, as provided for in the
Plan or the Merger Agreement, shall be reasonably satisfactory to the Initial
Lender, each Counter-Guarantor and the Board, and shall have been filed with and
accepted by the Secretary of State or other appropriate Governmental Authority
in the applicable jurisdictions and shall have become effective.
(q) Merger. The Effective Time (as defined in the Merger Agreement)
shall have occurred.
(r) Unrestricted Cash and Cash Equivalents. After the Consummation of
the Plan, the Obligors shall have on a pro forma basis as of the Effective Date,
taking into account net cash proceeds of the Stock Offering, the Convertible
Note Offering, the Juniper Financing and the Airbus Financing expected to be
received within seven (7) days of the Effective Date, unrestricted cash and Cash
Equivalents (as determined in accordance with GAAP) of not less than
$1,250,000,000.
(s) Equity Investment Agreements. The Obligors shall have consummated
the transactions contemplated by the Equity Investment Agreements and in
connection therewith shall have received Cash Proceeds of no less than
$565,000,000.
(t) Warrants. The Warrants shall have been validly issued to the Board
and the Airbus Counter-Guarantor.
(u) Other Documents and Information. The Agent, the Initial Lender,
each Counter-Guarantor and the Board shall have received such other
certificates, documents, agreements and information respecting the Obligors as
each of them may have reasonably requested.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the other parties (excluding any other Obligors) to enter
into this Agreement and to induce the Counter-Guarantors to amend and restate
their respective Counter-Guarantees, each of the Obligors represents and
warrants to each other party hereto (excluding any other Obligors) and to each
Counter-Guarantor that, on and as of the Effective Date, after giving effect to
the Consummation of the Plan (references to "Obligors" contained in this Article
IV shall be limited to Obligors as of the Effective Date):
SECTION 4.1. ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING,
BUSINESS, SUBSIDIARIES, THE ACT AND THE REGULATIONS.
(a) Organization, Power and Authority. Each Obligor is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Each Obligor has all requisite corporate power and
authority to own and operate its properties, to carry on its
54
business as now conducted and as proposed to be conducted, to enter into the
Loan Documents to which it is a party and to carry out the transactions
contemplated hereby and thereby.
(b) Foreign Qualification; "Air Carrier Status". Each Obligor is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing could not reasonably be expected to have a Material Adverse
Effect. The Borrower is an "air carrier" within the meaning of the Act and holds
a certificate under Section 41102 of Title 49. Each of the Borrower and any
other Obligor engaged in operations as an "air carrier" is a "citizen of the
United States" within the meaning of Section 40102(a)(15) of Title 49, as
interpreted by the United States Department of Transportation (a "United States
Citizen") and holds an air carrier operating certificate issued pursuant to
Chapter 447 of Title 49 for aircraft capable of carrying 10 or more individuals
or 6,000 pounds or more of cargo. Each Obligor possesses all necessary
certificates, franchises, licenses, permits, rights and concessions and consents
which are material to the conduct of its business and operations as currently
conducted (including in the case of each Obligor engaged in operations as an
"air carrier", the operation of the routes flown by it), a true and complete
list of which are set forth on Schedule 4.1(b).
(c) Subsidiaries. All of the Subsidiaries of each Obligor and all
other Persons in which any Obligor owns any Capital Stock, in each case, as of
the Effective Date, are identified in Schedule 4.1(c). Schedule 4.1(c) correctly
sets forth as of the Effective Date the equity and voting interest of Group in
each of the Subsidiaries identified therein. There are no limitations on the
rights of Group to vote the Capital Stock it owns of any Person listed on
Schedule 4.1(c). Airways Assurance Limited, a Bermuda corporation, is a
wholly-owned Subsidiary of Group whose business is limited to securing insurance
for the Obligors. AWHQ LLC, an Arizona limited liability company, is a
wholly-owned Subsidiary of the Obligors, owned 99% by Holdings and 1% by the
Borrower, whose business is limited to acting as a real estate holding company.
America West Company Store LLC, an Arizona limited liability company, is a
wholly-owned Subsidiary of the Borrower whose business is limited to operation
of the America West company store.
SECTION 4.2. AUTHORIZATION OF LOAN DOCUMENTS, ETC.
(a) Authorization. Each Obligor has duly authorized by all necessary
corporate action the execution, delivery and performance of the Loan Documents
to which it is a party.
(b) No Conflicts. After giving effect to the Consummation of the Plan,
the execution, delivery and performance by each Obligor of the Loan Documents
and the consummation of the transactions contemplated by the Loan Documents to
which it is a party do not and will not (i) violate any provision of any law or
any governmental rule or regulation applicable to any Obligor, the certificate
or articles of incorporation or bylaws of any Obligor or any order, judgment or
decree of any court or other agency of government binding on any Obligor, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default or require any payment under (A) any Loan Document or
(B) any other Contractual Obligation of any Obligor, except that with respect to
clause (B), for any such conflict, breach, default or requirement of payment
which could not reasonably be expected to have a Material Adverse Effect, (iii)
result in or require the creation or imposition of any Lien upon any of the
properties or assets of any Obligor (other than the Liens created under the
Collateral Documents) or (iv) require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of any
Obligor, except for such approvals or consents (A) which will have been obtained
on or before the Effective Date and have been disclosed in writing to the Agent,
the Initial Lender, each Counter-Guarantor and the Board or (B) with respect to
any Contractual Obligation, which if not obtained, could not reasonably be
expected to have a Material Adverse Effect.
55
(c) No Consents, Approvals, etc. The execution, delivery and
performance by each Obligor of the Loan Documents to which it is a party and the
consummation of the transactions contemplated by the Loan Documents to which
such Obligor is a party do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by, any
federal, state or other Governmental Authority or regulatory body or any other
Person which is required to be obtained or made on or prior to the Effective
Date and which has not been obtained or made, except as is disclosed on Schedule
4.2(c).
(d) Execution, Delivery, Enforceability. Each Obligor has duly
executed and delivered each of the Loan Documents to which it is party and after
giving effect to the Consummation of the Plan, each such Loan Document is the
valid and binding obligation of such Obligor, enforceable against such Obligor
in accordance with its respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws relating to or affecting the enforcement of creditors' rights generally,
including materiality, reasonableness, good faith and fair dealing, and by
general principles of equity (regardless of whether considered in a proceeding
in equity or at law).
SECTION 4.3. FINANCIAL CONDITION.
(a) The Borrower has heretofore delivered to the Agent, the Board,
each Counter-Guarantor and the Loan Administrator (i) the audited consolidated
balance sheets of US Airways and Group as at December 31, 2004, and the related
consolidated statements of income, stockholders' equity and cash flows of US
Airways and Group for the Fiscal Year then ended, (ii) the unaudited
consolidated balance sheets of US Airways and Group as at June 30, 2005 and the
related unaudited consolidated statements of income, stockholders' equity and
cash flows of US Airways and Group for the six months then ended, and (iii)
audited consolidated balance sheets of AWA Holdings and the Borrower as at
December 31, 2004, and the related consolidated statements of income,
stockholders' equity and cash flows of AWA Holdings and the Borrower for the
Fiscal Year then ended, and (iv) the unaudited consolidated balance sheets of
AWA Holdings and the Borrower as at June 30, 2005 and the related unaudited
consolidated statements of income, stockholders' equity and cash flows of AWA
Holdings and the Borrower for the six months then ended. All such financial
statements were prepared in accordance with GAAP (except that any unaudited
financial statements are subject to normal year-end adjustments and may not be
accompanied by footnotes) and fairly present, in all material respects, the
consolidated financial position of such Persons as at the date thereof and the
consolidated results of operations and cash flows of such Person for the period
then ended.
(b) After giving effect to the Consummation of the Plan, (i) the
Obligors taken as a whole are Solvent and (ii) no Obligor has any material
liability, including reasonably likely contingent liability or liability for
taxes, long-term lease or any unusual forward or long-term commitment of a type
required to be reflected in financial statements prepared in conformity with
GAAP, that is not reflected in the projections and pro forma financial
information delivered pursuant to clause (n) of Article III or, in the case of a
Reporting Obligor, taken into account in the preparation of the annual report on
Form 10-K for the fiscal year ended December 31, 2004 of such Reporting Obligor.
(c) Each Reporting Obligor maintains disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the Obligors and has (i) caused such disclosure
controls and procedures to be designed to ensure that material information
relating to the Obligors is reported internally, (ii) caused such internal
controls over financial reporting to be designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP, (iii)
evaluated the effectiveness of such
56
disclosure controls and procedures and presented as required in the Reporting
Obligors' Annual Report on Form 10-K for the Fiscal Year ended December 31,
2004, conclusions about the effectiveness of the disclosure controls and
procedures, and (iv) disclosed as required in such Annual Report any change in
such internal control over financial reporting that occurred during the relevant
reporting period that has materially affected, or is reasonably likely to
materially affect, their internal control over financial reporting.
(d) Other than as disclosed on Schedule 4.3(d) or as disclosed in the
Annual Report on Form 10-K for the Fiscal Year ended December 31, 2004 of any
Obligor, no Obligor is a party to any "off-balance sheet arrangement" (within
the meaning of Item 303(a)(4) of Regulation S-K under the Securities Act and the
Exchange Act, as amended by SEC Release No. 33-8182 (January 28, 2003)).
SECTION 4.4. NO MATERIAL ADVERSE CHANGE; NO RESTRICTED PAYMENTS. Since
August 9, 2005, no material adverse change has occurred in the financial
condition, assets, liabilities, business or results of operations of the
Obligors, taken as a whole (excluding any such changes resulting from (i)
changes or conditions generally affecting the U.S. economy or financial markets,
(ii) changes or conditions generally affecting any of the segments of the
airline industry in which any of the Obligors operate, to the extent such
conditions or changes do not disproportionately impact the Obligors, or (iii)
the announcement or consummation of the Merger), or in the Borrower's ability to
repay the Loan or perform its obligations under the Loan Documents or with
respect to the matters included in the financial projections delivered to the
Board and the Agent on July 28, 2005. Since August 9, 2005, no Obligor has
directly or indirectly declared, ordered, paid or made, or set apart any sum or
property for, any Restricted Payment or agreed to do so except as would have
been permitted by Section 6.3, as if such section were in effect at all times
after such date. After giving effect to the Consummation of the Plan, no event
or occurrence which would constitute a Default or Event of Default has occurred
and is continuing.
SECTION 4.5. TITLE TO PROPERTIES; LIENS. Each Obligor has (i) good and
insurable fee title to (in the case of fee interests in real property), (ii)
valid, and in the case of leasehold interests in real property, insurable,
leasehold interests in (in the case of leasehold interests in real or personal
property) or (iii) good title to (in the case of all other personal property)
all of the properties and assets necessary to the conduct of its business
including property and assets reflected in the financial statements referred to
in Section 4.3, except for assets disposed of since the date of such financial
statements in the ordinary course of business or pursuant to the restructuring
contemplated by the Plan of Reorganization. Except as otherwise permitted by
this Agreement and the Collateral Documents, all such properties and assets are
free and clear of Liens.
SECTION 4.6. LITIGATION; ADVERSE FACTS. There are no actions, suits,
proceedings, arbitrations or investigations (whether or not purportedly on
behalf of Group, the Borrower or any other Obligor) at law or in equity or
before or by any Governmental Authority pending or, to the knowledge of any
Responsible Officer of any Principal Obligor, threatened against or affecting
(in either case, whether asserted or unasserted) any of the Obligors or any
property of the Obligors that, individually or in the aggregate, (a) except for
matters disclosed on Schedule 4.6, in the reasonable judgment of the Obligors
could be expected to have a Material Adverse Effect, or (ii) challenge the
legality, validity or binding effect of, or seeks to restrain or enjoin any
Obligor from entering into or performing under, any Loan Document including,
without limitation, this Agreement or any Collateral Document. No Obligor is
subject to any final judgments, writs, injunctions or decrees of any court or
any Governmental Authority, compliance with which could reasonably be expected
to have a Material Adverse Effect, or is in default with respect to any such
judgments, writs, injunctions or decrees, which default could reasonably be
expected to have a Material Adverse Effect.
57
SECTION 4.7. PAYMENT OF TAXES.
(a) Except as otherwise set forth on Schedule 4.7(a): (i) the Obligors
have timely filed all material Tax returns and reports required to have been
filed, and have paid or made adequate provision for payment of all material
Taxes levied or imposed upon them or their properties (including the
Collateral), income or assets that have become due and payable, except (A) in
those instances in which such Taxes are being contested in good faith by
appropriate proceedings diligently conducted and for which adequate reserves
have been made in accordance with GAAP and (B) that the Debtors' obligations to
pay Taxes that relate to a Tax period (or portion thereof) ending on or before
the commencement of the Bankruptcy Cases and which first became due and payable
after the time of the commencement of the Bankruptcy Cases, have been stayed or
enjoined pursuant to the Plan of Reorganization, the Confirmation Order or the
Bankruptcy Code, it being understood that the exception in this clause (B) does
not affect the Obligors' representation that they have made adequate provision
for such Taxes; (ii) there is no proposed Tax assessment against any Obligor
that relates to a material amount of Taxes, and neither Group nor the Borrower
knows of any basis for any such assessment; and (iii) no Obligor is party to any
Tax sharing agreement with any Person other than another Obligor, other than tax
indemnity agreements in leasing transactions entered into in the ordinary course
of business.
(b) Schedule 4.7(b) is a true and complete list of each claim of a
governmental unit of the kind entitled to priority in payment, as specified in
section 502(i) and 507(a)(8) of the Bankruptcy Code, that the Debtors will or
expect to pay or to be required to pay during the six (6) years immediately
following the Effective Date.
SECTION 4.8. PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
(a) No Default. After giving effect to the Consummation of the Plan,
no Obligor is in default in the performance, observance or fulfillment of any
Contractual Obligations other than defaults which are not reasonably expected to
have a Material Adverse Effect, and no condition exists that, with the giving of
notice or the lapse of time or both, would constitute such a default; it being
understood that the existence on the Effective Date of any default under (i)
certain executory contracts and unexpired leases that the Obligors are entitled
to reject in accordance with the Plan of Reorganization or prior order of the
Bankruptcy Court and (ii) certain other contracts relating to property that any
Obligor has abandoned pursuant to an order of the Bankruptcy Court shall be
deemed not to be a breach of this Section 4.8(a).
(b) No Adverse Agreements. No Obligor is a party to or is otherwise
subject to any agreements or instruments or any charter or other internal
restrictions which, individually or in the aggregate, could reasonably be
expected to impair the ability of the Obligors, taken as a whole, to perform
their payment or other material obligations under the Loan Documents.
(c) Other Agreements. Except as disclosed on Schedule 4.8(c), no
Obligor is a party to or is otherwise subject to any agreement or arrangement,
including, but not limited to, agreements relating to Indebtedness, lease
agreements or Guarantees, that provide for early payment, additional collateral
support, changes in terms or acceleration of maturity, or the creation of an
additional financial obligation, as a result of any of (i) an adverse change in
the credit rating of an Obligor, (ii) an adverse change in the financial ratios,
earnings, cash flow or stock price of an Obligor or (iii) changes in the value
of underlying, linked or indexed assets, except to the extent that such
agreements or arrangements could not reasonably be expected to have a Material
Adverse Effect.
SECTION 4.9. GOVERNMENTAL REGULATION. No Obligor is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act
58
of 1940 or under any other federal or state statute or regulation (other than
the Bankruptcy Code) which may limit its ability to incur Indebtedness or which
may otherwise render all or any portion of its Obligations unenforceable.
SECTION 4.10. SECURITIES ACTIVITIES. No Obligor owns or is engaged
principally in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock (as defined below), and no proceeds of the Loan were
used to purchase or carry Margin Stock or to extend credit to any Person for the
purpose of purchasing or carrying any Margin Stock in a manner that violated or
caused a violation of Regulations T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors. For
purposes of this Section 4.10, the term "Margin Stock" has the meaning assigned
to that term in Regulation T, U or X of the Board of Governors of the Federal
Reserve System as in effect from time to time.
SECTION 4.11. EMPLOYEE BENEFIT PLANS.
(a) Schedule 4.11(a) lists each Plan and each Multiemployer Plan
maintained or contributed to, or required to be contributed to, by Group or any
of its ERISA Affiliates as of the Effective Date. Each Plan has been operated
and administered in compliance with all applicable requirements of ERISA, and,
if intended to qualify under Section 401(a) or 403(a) of the Internal Revenue
Code, in compliance with all applicable requirements of such provisions except
where the failure to do so could not reasonably be expected to have, taking all
instances in the aggregate, a Material Adverse Effect.;
(b) Full payment has been made by Group or any of its ERISA Affiliates
of all minimum amounts which such entities are required to pay under the terms
of each Plan and Multiemployer Plan except where the failure to so comply,
taking all instances in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.;
(c) No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to have a Material
Adverse Effect.;
(d) Neither Group nor any of its ERISA Affiliates maintains or
contributes to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) which provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any employee pension benefit
plan (as defined in Section 3(2) of ERISA), other than a Plan the obligations
with respect to which, when taken together with the projected contributions
thereto reflected in the projections and pro forma financial information
delivered pursuant to clause (n) of Article III, could not reasonably be
expected to have a Material Adverse Effect.;
(e) After giving effect to the Consummation of the Plan, no Plan
maintained by Group or any ERISA Affiliate is underfunded (based on the present
value of all accumulated benefit obligations thereunder) except to the extent
that the aggregate amount of underfunding with respect to all such plans, when
taken together with the projected contributions thereto reflected in the
projections and pro forma financial information delivered pursuant to clause (n)
of Article III, could not reasonably be expected to have a Material Adverse
Effect during the scheduled term of the Loan.
SECTION 4.12. ENVIRONMENTAL PROTECTION.
(a) Compliance with Environmental Laws. All Facilities and operations
of each Obligor are, and have been to the knowledge of each Principal Obligor,
in compliance with all
59
Environmental Laws except for any noncompliance which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(b) Hazardous Materials Activity. Except as disclosed on Schedule
4.12(b), there are no, and have been no, conditions, occurrences, or Hazardous
Materials Activity (i) arising at any Facilities or (ii) arising in connection
with the operations of the Obligors or of past or current Affiliates of any
Obligor (while under the control of a Principal Obligor or otherwise to the
knowledge of a Principal Obligor) (including the transportation of Hazardous
Materials in accordance with applicable regulations), which conditions,
occurrences or Hazardous Materials Activity could reasonably be expected to form
the basis of an Environmental Claim against any Obligor and which, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(c) Environmental Claims. Except as disclosed on Schedule 4.12(c),
there are no pending or, to the knowledge of any Principal Obligor, threatened
Environmental Claims against any Obligor, and no Principal Obligor has received
any notices, inquiries, or requests for information with respect to any
Environmental Claims which could reasonably be expected to have a Material
Adverse Effect.
(d) Orders, Decrees, etc. No Obligor is currently operating or
required to be operating under any compliance order, schedule, decree or
agreement, any consent decree, order or agreement, and/or any corrective action
decree, order or agreement issued or entered into under any Environmental Law
the failure to comply with which could reasonably be expected to have a Material
Adverse Effect.
SECTION 4.13. DISCLOSURE.
(a) No representation or warranty or certification of any Obligor or
of any Responsible Officer of the Borrower or Group or any other Officer of any
Obligor contained in this Agreement, any other Loan Document or in any other
document, certificate or written statement furnished to the Board, the Agent,
any Counter-Guarantor or the Lenders by or on behalf of any Obligor (as modified
or supplemented by other written information so furnished) for use in connection
with the negotiation and closing of the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein at the time, and in light
of the circumstances under which they were made, not misleading; provided that
with respect to projected financial information contained in any such document
or furnished to any party hereto by or on behalf of the Obligors, the Obligors
represent only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time, it being recognized that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered thereby may differ from the
projected results.
(b) None of the Reporting Obligors' filings under the Exchange Act (as
amended or supplemented through the date hereof) nor the Disclosure Statement
(as amended or supplemented through the date hereof) contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
SECTION 4.14. COMPLIANCE WITH LAWS. Each Obligor is in compliance with
all laws, statutes, rules, regulations and orders binding on or applicable to
such Obligor, and all of its properties,
60
except to the extent failure to so comply (either individually or in the
aggregate) could not reasonably be expected to have a Material Adverse Effect.
SECTION 4.15. INDEBTEDNESS. Schedule 4.15 correctly sets forth the
consolidated Indebtedness of Group and its Subsidiaries as of the Effective Date
and identifies each primary obligor and each guarantor or other secondary
obligor thereof, if any.
SECTION 4.16. INSURANCE. The properties, business and operations of
the Obligors are insured or reinsured with financially sound and reputable
insurance companies or by the United States of America, in such amounts, with
such deductibles and covering such risks as are insured against (including, but
not limited to, war risk and third party liability) and carried in accordance
with applicable law and prudent industry practice by major U.S. commercial air
carriers similarly situated with the Obligors and owning or operating similar
properties, aircraft and engines.
SECTION 4.17. PERFECTED SECURITY INTERESTS. The Collateral Agent, on
behalf of the Lenders, the Counter-Guarantors and the Board, has valid security
interests in the Collateral, with such priority and perfected to such extent as
is provided in the Collateral Documents.
SECTION 4.18. COMPLIANCE WITH THE PLAN OF REORGANIZATION. No Obligor
is in default with respect to any material obligation under the Plan of the
Reorganization.
SECTION 4.19. ABSENCE OF LABOR DISPUTES. No strikes, boycotts, work
stoppages or lockouts with respect to any of the Obligors exist, and no Obligor
has received written notice, sanctioned by any collective bargaining unit
representing employees of such Obligor, threatening a strike, boycott or work
stoppage.
SECTION 4.20. COMPLIANCE WITH CERTAIN GATE LEASES. After giving effect
to the Consummation of the Plan, each Obligor is in compliance in all material
respects with all Gate Leases with respect to the airports listed on Schedule
4.20.
SECTION 4.21. SLOT UTILIZATION. Each Obligor which holds or operates
Slots is utilizing its Slots in a manner consistent with the Slot Regulations in
order to avoid the withdrawal of any Slot (other than Slots of the type
referenced in clauses (f) through (i) of the definition of "Secondary Slots") by
the FAA, taking into account any waivers or other relief granted by the FAA in
connection with the failure to utilize Slots. None of the Obligors has received
any notice of withdrawal from the FAA, nor (other than with respect to Slots of
the type referenced in clauses (d) and (f) through (i) of the definition of
"Secondary Slots") is any Obligor aware of any other event or circumstance
(other than any proposed change of law, regulation or rule, including the
scheduled removal of slot restrictions at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ International Airport
and LGA on January 1, 2007), that could reasonably be expected to result in the
withdrawal of any Slot or otherwise impair any of the Slots or the value thereof
(it being understood, however, that the Slot Regulations provide for withdrawal
in certain circumstances other than for failure to utilize Slots, and the FAA
has asserted the right to withdraw and reallocate "pool" Slots (within the
meaning of 14 C.F.R. Section 93.226(e)), including those identified on Schedule
1.1(a) hereto, at its discretion). The Obligors maintain personnel, policies,
procedures and a computer database for the monitoring, utilization and
management of the Slots in compliance with the Slot Regulations so as to ensure,
to the greatest extent operationally feasible, that the Slot Regulations are
complied with and no Slot becomes subject to withdrawal by the FAA.
SECTION 4.22. DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS. Schedule 4.22
contains a true, complete and correct list of all deposits accounts and
securities accounts of the Obligors, including, with respect to each account,
the name of such account, the account number, the bank or financial
61
institution with which such account is maintained, and the balance therein as of
a specified date (which shall be no earlier than August 31, 2005), indicating
thereon whether each such account is subject to a Control Agreement in favor of
the Collateral Agent.
SECTION 4.23. UNRESTRICTED CASH AND CASH EQUIVALENTS. After the
Consummation of the Plan, the Obligors have on a pro forma basis as of the
Effective Date, taking into account net cash proceeds of the Stock Offering, the
Convertible Note Offering, the Juniper Financing and the Airbus Financing
expected to be received within seven (7) days of the Effective Date,
unrestricted cash and Cash Equivalents (as determined in accordance with GAAP)
of not less than $1,250,000,000.
ARTICLE V
AFFIRMATIVE COVENANTS
To induce the other parties to enter into this Agreement (excluding
any other Obligor) and to induce the Counter-Guarantors to amend and restate
their respective Counter-Guarantees, the Obligors agree with each other party
hereto (excluding any other Obligor) and the Counter-Guarantors that, so long as
any of the Obligations (other than contingent indemnification obligations)
remain outstanding:
SECTION 5.1. ACCOUNTING CONTROLS; FINANCIAL STATEMENTS AND OTHER
REPORTS.
(a) Accounting Controls. Each Obligor will maintain a system of
accounting established and administered in accordance with sound business
practices and applicable law, rules and regulations issued by any Governmental
Authority to permit preparation of financial statements in conformity with GAAP
, including, without limitation, as set forth in Section 4.3(c).
(b) Financial Certificates; Information. Group will deliver to the
Agent, the Loan Administrator and the Board:
(i) Quarterly Financials: within two (2) Business Days after the date
on which a Reporting Obligor files or is required to file its Form 10-Q
under the Exchange Act (after giving effect to any extension pursuant to
Rule 12b-25 under the Exchange Act (or any successor rule)), (A) the
consolidated balance sheets of such Person as at the end of such fiscal
quarter and the related consolidated statements of income of such Person
for such fiscal quarter for the period from the beginning of the then
current Fiscal Year to the end of such fiscal quarter and cash flows of
such Person for the period from the beginning of the then current Fiscal
Year to the end of such fiscal quarter, setting forth in each case in
comparative form the corresponding figures from the corresponding dates and
periods of the previous Fiscal Year, all prepared in accordance with GAAP
(except that any unaudited financial statements are subject to normal
year-end adjustments and may not be accompanied by footnotes) and in
reasonable detail and certified by the Chief Financial Officer, Controller,
Chief Executive Officer or Treasurer of such Person that they fairly
present in all material respects the consolidated financial condition of
such Person as at the dates indicated and the results of its operations and
its cash flows for the periods indicated, and (B) a narrative report
describing the operations of such Person in the form prepared for
presentation to senior management for such fiscal quarter and for the
period from the beginning of the then current Fiscal Year to the end of
such fiscal quarter; provided that delivery of such Person's Form 10-Q for
such fiscal quarter shall be deemed to satisfy all of the requirements of
this clause (i); provided, further, that in lieu of delivering a hard copy
of Form 10-Q hereunder, Group may transmit by e-mail an electronic copy of
such document or a link to an electronic copy of such document on the ▇▇▇▇▇
database (or a comparable service) or an Obligor's website;
62
(ii) Monthly Reporting: within 45 days after the end of each of the
first twenty-four (24) calendar months following the Effective Date, the
consolidated balance sheets of each Reporting Obligor as at the end of such
month and the related consolidated statements of income of such Person for
such calendar month and for the period from the beginning of the then
current Fiscal Year to the end of such month and cash flows of each such
Person for the period from the beginning of the then current Fiscal Year to
the end of such calendar month, and together therewith, a statement of the
Adjusted Cash Amount as of the last Business Day of such calendar month,
all prepared in accordance with GAAP (except that any unaudited financial
statements are subject to normal year-end adjustments and may not be
accompanied by footnotes) and in reasonable detail and certified by the
Chief Financial Officer, Chief Executive Officer, Controller or Treasurer
of such Person that they fairly present in all material respects the
consolidated financial condition of such Person as at the dates indicated
and the results of its operations and its cash flows for the periods
indicated;
(iii) Year-End Financials: within two (2) Business Days after the date
on which a Reporting Obligor files or is required to file its Form 10-K
under the Exchange Act (after giving effect to any extension pursuant to
Rule 12b-25 under the Exchange Act (or any successor rule)), (A) the
consolidated balance sheets of such Person at the end of such Fiscal Year
and the related consolidated statements of income, stockholders' equity and
cash flows of such Person for such Fiscal Year, setting forth in each case
in comparative form the corresponding figures for the previous Fiscal Year
and the corresponding figures from the annual financial plan delivered
pursuant to clause (ix) of this Section 5.1(b) for the Fiscal Year covered
by such financial statements of such Person, all in reasonable detail, and
certified by the Chief Financial Officer or the Chief Executive Officer of
such Person that they fairly present in all material respects the
consolidated financial condition of such Person as at the date indicated
and the results of its operations and its cash flows for the periods
indicated, (B) a narrative report describing the operations of such Person
in the form prepared for presentation to senior management for such Fiscal
Year, and (C) an accountant's report thereon of KPMG LLP or other
independent certified public accountants of recognized national standing
selected by the Borrower or Group, as the case may be, which report (1)
shall be unqualified as to scope, (2) shall not, for each Fiscal Year
commencing with the Fiscal Year ending December 31, 2006, contain a going
concern qualification, and (3) shall state that such consolidated financial
statements fairly present the consolidated financial position of such
Person as at the dates indicated and the results of their operations and
their cash flows for the periods indicated in conformity with GAAP applied
on a basis consistent with prior years, and that the examination by such
accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards;
provided that (x) references in such report to changes in GAAP, changes in
accounting standards, highlighting contents of footnotes, limitations in
the scope of the audit or exclusions from the audit information not
required by GAAP that are, in each case, customary in industry practice and
not prejudicial to the opinion stated therein shall not be deemed to be
"qualifications" for the purpose of clause (C) of this Section 5.1(b)(iii)
and (y) delivery of such Person's Form 10-K for such Fiscal Year, and which
satisfy the requirements of clause (C) above, shall be deemed to satisfy
the requirements of this Section 5.1(b)(iii); provided, further, that in
lieu of delivering a hard copy of Form 10-K hereunder, Group may transmit
by e-mail an electronic copy of such document or a link to an electronic
copy of such document on the ▇▇▇▇▇ database (or a comparable service) or an
Obligor's website;
(iv) Officers' Certificates: together with each delivery of financial
statements pursuant to clauses (i) and (iii) above, an Officer's
Certificate of the Borrower (which certificate may incorporate the
Collateral Value Certificate and schedule of deposit accounts and
securities accounts of the Obligors deliverable on such date pursuant to
clauses (xix) and (xxii) of this
63
Section 5.1(b), respectively) (I) stating that the signer has made, or
caused to be made under his or her supervision, a review of the terms of
this Agreement and of the transactions and condition of the Obligors during
the accounting period covered by such financial statements and that such
review has not disclosed the existence, and that the signer does not have
knowledge of the existence as at the date of such Officer's Certificate, of
any condition or event that constitutes a Default or an Event of Default,
or, if any such condition or event existed at the date of the certificate,
specifying the nature and period of existence thereof and what action the
Obligors have taken, are taking and propose to take with respect thereto,
(II) demonstrating in reasonable detail compliance (or noncompliance)
during and at the end of the applicable accounting periods with the
restrictions contained in Section 6.3 and Section 6.4, and (III) with
respect to the delivery of financial statements pursuant to clause (iii)
above, stating whether any change in GAAP or in the application thereof has
occurred since the date of delivery of the preceding year-end financial
statements, and if any such change has occurred, describing the effect of
such change on the financial statements of Group and the Borrower;
(v) SEC Filings and Press Releases: promptly upon their filing, copies
of (A) all financial statements, reports, notices and proxy statements sent
or made available generally by a Reporting Obligor to its security holders
and (B) all regular, periodic and current reports (including all Form 8-K
reports) and all registration statements and prospectuses, if any, filed by
any Reporting Obligor with any securities exchange or with the SEC or any
Governmental Authority or private regulatory authority; provided that in
lieu of delivering a hard copy of any such document, Group may transmit by
e-mail an electronic copy of such document or a link to an electronic copy
of such document on the ▇▇▇▇▇ database (or a comparable service) or an
Obligor's website;
(vi) Notice of Events of Default, etc.: promptly upon any Responsible
Officer of a Principal Obligor obtaining knowledge of (A) any condition or
event that constitutes a Default or an Event of Default or (B) the
occurrence of any event or change that has had, or is reasonably expected
to have, a Material Adverse Effect (disregarding for purposes of this
clause (vi) publicly known facts, circumstances, events or conditions
applicable to the airline and travel industries generally), an Officer's
Certificate of Group specifying the nature and period of existence of such
Default or Event of Default or condition, event or change and what action
the Obligors have taken, are taking and propose to take with respect
thereto;
(vii) Litigation or Other Proceedings: to the extent not otherwise
disclosed pursuant to this Section 5.1, promptly upon any Responsible
Officer of a Principal Obligor obtaining knowledge of (A) the institution
of, or threat of, any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration against
or affecting any Obligor or any property of any Obligor, unless Group's
general counsel or outside legal counsel has determined that a favorable
outcome to such Obligor is reasonably likely (collectively, "Proceedings")
or (B) any material development in any Proceeding that, in either case:
(1) if adversely determined, would be reasonably likely to have a
Material Adverse Effect;
(2) seeks to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the
transactions contemplated hereby; or
(3) challenges or calls into question in any material respect the
reliability or accuracy of a Reporting Obligor's SEC filings;
64
written notice thereof together with such other information as may be
reasonably available to the Obligors to enable the Agent, the Lenders, the
Counter-Guarantors and the Board, and their respective counsel to evaluate
such matters;
(viii) ERISA Reports: promptly after the receipt by the Borrower of a
request therefor by the Agent, the Loan Administrator, any Lender, any
Counter-Guarantor or the Board, copies of any annual and other reports
(including Schedule B thereto) with respect to a Plan filed by an Obligor
or any ERISA Affiliate with the United States Department of Labor, the IRS
or the PBGC;
(ix) Financial Plan and Projections: annually, as soon as practicable
after preparation thereof in the ordinary course of business but in no
event later than February 28 of each year, copies of the Principal
Obligors' annual financial plans and projections, together with a
reconciliation of actual results to projected results for such periods;
(x) Environmental Audits and Assessments: as soon as practicable
following receipt thereof by a Principal Obligor, copies of all
environmental audits and assessments, whether prepared by personnel of an
Obligor or by independent consultants (except to the extent protected by
the "attorney work product" privilege or similar privilege expressly
granted by statute with respect to the work product of environmental
consultants), with respect to material environmental matters at any
Facility or which relate to an Environmental Claim which could reasonably
be expected to have a Material Adverse Effect;
(xi) Ratings Change: promptly after any public release by S&P or
▇▇▇▇▇'▇ raising or lowering (i) an Obligor's general unsecured credit
rating or (ii) a credit rating on the Loan obtained pursuant to Section
5.19 hereof, notice (which may be sent by e-mail) of such change;
(xii) Insurance Reports: No later than January 30 of each year,
insurance brokers reports with respect to all insurance maintained by the
Obligors, together with schedules detailing the type and amount of coverage
provided and the insurance carrier;
(xiii) Insurance/Condemnation Proceeds: in addition to any similar
reporting obligations under the Collateral Documents but without the
duplication of any such obligation, upon (A) a Responsible Officer of a
Principal Obligor obtaining knowledge of the occurrence of an event of loss
or damage to, or any taking, condemnation or requisition by any
Governmental Authority of, any property of any Obligor having fair market
value in excess of $5,000,000 whether or not such loss or damage is
expected to result in receipt of insurance or condemnation proceeds or of
any other event of loss or damage that the Obligors reasonably expect to
result in proceeds reasonably estimated by them to exceed $5,000,000 and
(B) the receipt of insurance proceeds or condemnation proceeds from an
event of loss or material damage to, or any taking, condemnation or
requisition by any Governmental Authority of, any property of any Obligor
giving rise to a mandatory prepayment obligation under Section 2.5, notice
of such occurrence;
(xiv) Future Issuance and Asset Sales: without prejudice to the
Obligors' notice obligations under Section 2.5(i), prior to an Obligor
consummating any Future Issuance or Asset Sale greater than $1,000,000 in
an individual transaction or series of related transactions giving rise to
a mandatory prepayment obligation under Section 2.5, notice of such event;
provided that in the case of a Replacement Secured Financing, the
applicable Obligor shall give no less than fifteen (15) Business Days'
prior notice of such event and include therein (A) a specific
identification of the Collateral proposed to be pledged, (B) the Collateral
Release values therefor together with copies of the Appraisal Reports upon
which such Collateral Release Values are
65
based, if applicable, and (C) a detailed summary of the terms and
conditions of such Replacement Secured Financing;
(xv) Plan Audits and Liabilities: promptly after (A) an Obligor or any
ERISA Affiliate contacts the IRS or the PBGC for the purpose of
participating in a closing agreement or any voluntary resolution program
with respect to a Plan or Multiemployer Plan which could reasonably be
expected to have a Material Adverse Effect, or (B) a Responsible Officer of
a Principal Obligor knows or has reason to know that any event with respect
to any Plan or Multiemployer Plan occurred that could reasonably be
expected to have a Material Adverse Effect, notice of such contact or the
occurrence of such event;
(xvi) Funding Changes and New Plan Benefits: promptly after the
change, a notification of any material increases in the benefits, or
material change in funding method, with respect to which an Obligor may
have any liability, under any Plan or Multiemployer Plan or the
establishment of any material new Plan or Multiemployer Plan with respect
to which an Obligor may have any liability or the commencement of
contributions to any Plan or Multiemployer Plan to which an Obligor or any
ERISA Affiliate was not previously contributing, except to the extent that
such an event could not reasonably be expected to have a Material Adverse
Effect;
(xvii) Claims and Proceedings: promptly after receipt of written
notice of commencement thereof, notification of all (A) claims made by
participants or beneficiaries with respect to any Plan and (B) actions,
suits and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting an Obligor or any ERISA Affiliate with respect to any Plan,
except those which, in the aggregate, if adversely determined, could not
reasonably be expected to have a Material Adverse Effect;
(xviii) ERISA Event: promptly after the occurrence of any ERISA Event
(A) that could reasonably be expected to have a Material Adverse Effect or
(B) that relates to the occurrence or existence of an event or condition
that could reasonably be expected to have a Material Adverse Effect, notice
of such ERISA Event;
(xix) Collateral Value Certificates: no later than the date upon which
an Officer's Certificate is required to be delivered under clause (iv) of
this Section 5.1(b) with respect to each of the four fiscal quarters of
each Fiscal Year (and, in the case of the last fiscal quarter of each
Fiscal Year, no later than the first Interest Payment Date occurring after
the end of such Fiscal Year), a Collateral Value Certificate certifying the
Collateral Value (based on the most recently completed Appraisal Report),
in each case as of a date no earlier than the end of the fiscal quarter or
the Fiscal Year to which such Officer's Certificate relates, together with
the Appraisal Report upon which such Collateral Value Certificate is based;
(xx) Slot Utilization Reports: as soon as available, but in any event
no later than the date on which each report referred to in clause (A) below
is submitted to the FAA, each of the following: (A) a true and complete
copy of each Slot utilization report required to be delivered to the FAA
under the Slot Regulations, (B) any related requests for waivers or other
documentation provided to the FAA in connection therewith, and (C) a
summary report, in the form of Exhibit L, of Slot utilization during the
period covered by the report to the FAA referred to in (A) above;
(xxi) Adjusted Cash Amount: within one Business Day following the end
of each calendar week, by e-mail, the Adjusted Cash Amount as of the last
Business Day of the prior calendar week and for each Business Day in such
prior calendar week; provided that if the Obligors do not have current
information regarding the Obligors' aggregate outstanding air traffic
66
liability for purposes of calculating the Adjusted Cash Amount,
such weekly reports may be based on a good-faith estimate of the Obligors'
aggregate then outstanding air traffic liability based on all available
data;
(xxii) Deposit Accounts and Securities Accounts: no later than the
date upon which an Officer's Certificate is required to be delivered under
clause (iv) of this Section 5.1(b) with respect to each Fiscal Year and
each fiscal quarter of each Fiscal Year, a schedule of all deposits
accounts and securities accounts of the Obligors, including, with respect
to each account, the name of such account, the account number, the bank or
financial institution with which such account is maintained and the balance
therein as of the end of the accounting period covered by the financial
statements deliverable with such Officer's Certificate, indicating thereon
whether each such account is subject to a Control Agreement in favor of the
Collateral Agent;
(xxiii) Cash Forecast: if for a period of five (5) consecutive
Business Days the Adjusted Cash Amount is less than 125% of the Minimum
Adjusted Cash Amount required to be maintained at such time pursuant to
Section 6.4(a), no later than Wednesday of each week thereafter, a rolling
13-week cash forecast including reports, in form, detail and substance
reasonably satisfactory to the Board (so long as the Board is either a
guarantor of Tranche A or a Lender hereunder), or thereafter, the Agent,
which show the Obligors' sources and uses of cash from the prior week, and
material variances associated therewith; and
(xxiv) Other Information: with reasonable promptness, such other
information and data with respect to an Obligor as from time to time may be
reasonably requested by the Agent, the Loan Administrator, any Lender, any
Counter-Guarantor or the Board.
Promptly upon its receipt of any such notice, report, certificate or other
information from Group or any Obligor pursuant to this Section 5.1(b), the Agent
shall provide a copy of such notice, report, certificate or other information to
each Lender and Counter-Guarantor (which may be sent by e-mail), other than a
Lender or Counter-Guarantor who has notified the Agent that it does not wish to
receive any such notice, report, certificate or other information.
SECTION 5.2. CORPORATE EXISTENCE. Except as permitted by Section 6.9,
each Obligor will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and the corporate,
partnership or other existence of each Obligor and the material rights, permits,
licenses (charter and statutory) and franchises of each Obligor; provided that
subject to Section 5.10, no Obligor shall be required to preserve any such
right, permit, license or franchise, and, subject to compliance with Section
6.9, as applicable, no Obligor shall be required to preserve any such corporate,
partnership or other existence, if in each case, the Chief Executive Officer of
Group or the Borrower shall determine in the exercise of his or her business
judgment that the preservation thereof is no longer desirable in the conduct of
the business of the Obligors taken as a whole and that abandonment of any such
right, permit, license or franchise or failure to preserve such existence could
not reasonably be expected to have a Material Adverse Effect.
SECTION 5.3. PAYMENT OF TAXES AND CLAIMS. Each Obligor will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material Taxes levied or imposed upon an Obligor or upon the
income, profits or property of an Obligor except (a) that this Section 5.3 shall
not require the Obligors who were debtors in the Bankruptcy Cases to pay Taxes
that relate to a Tax period (or portion thereof) ending on or before the
commencement of the Bankruptcy Cases and which first became due and payable
after the time of the commencement of the Bankruptcy Cases, to the extent that,
and for so long as, such Taxes are stayed or enjoined pursuant to the Plan of
Reorganization, the Confirmation Order or the Bankruptcy Code, it being
understood that
67
notwithstanding the exception in this clause (a), such Obligors shall make
adequate reserves in accordance with GAAP for Taxes stayed or enjoined pursuant
to the Plan of Reorganization, the Confirmation Order or the Bankruptcy Code, or
(b) where the amount, applicability or validity of such Taxes are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been made in accordance with GAAP and (ii) all lawful claims for
labor, materials and supplies that, if unpaid, might by law become a Lien on the
property of an Obligor. No Obligor will file or consent to the filing of, any
consolidated income tax return with any Person (other than any other Obligor or
any Subsidiary of any Obligor).
SECTION 5.4. MAINTENANCE OF PROPERTIES; INSURANCE.
(a) Maintenance of Properties. Each Obligor will maintain all
properties used or useful in the conduct of the business of the Obligors in good
condition, repair and working order (ordinary wear and tear excepted) and supply
such properties with all necessary equipment and make all necessary repairs,
renewals, replacements, betterments and improvements thereto, all as in the
reasonable judgment of an Obligor may be necessary so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times; provided, however, that no Obligor shall be restricted from discontinuing
the operation and maintenance of any such properties if such discontinuance is,
in the good faith judgment of Group, desirable in the conduct of the business of
such Obligor and could not reasonably be expected to have a Material Adverse
Effect, but subject in each case to all applicable provisions of the Collateral
Documents.
(b) Insurance. Each Obligor will insure and keep insured or reinsured
with financially sound and reputable insurance companies that are not Affiliates
of the Obligors or by the United States of America, their businesses and
operations and such of their respective properties, in such amounts, with such
deductibles and covering such risks as are insured against (including, but not
limited to, war risk and third party liability) and carried in accordance with
applicable law and prudent industry practice by U.S. commercial air carriers
similarly situated with the Obligors and owning or operating similar properties,
aircraft and engines, including such insurance coverage as is required to be
maintained under the Collateral Documents, and providing for not less than
thirty (30) days' (or in the case of war risk coverage, the maximum time as is
available) prior notice to the Agent, the Board, the Loan Administrator and the
Collateral Agent of termination, lapse or cancellation of such insurance or
reinsurance; provided that this Section 5.4(b) shall not prohibit any Obligor
from procuring and maintaining all or any portion of its insurance through
Airways Assurance Limited LLC so long as Airways Assurance Limited LLC reinsures
100% of such risk as provided above in this Section 5.4(b) and such reinsurance
policies contain a cut-through endorsement.
SECTION 5.5. INSPECTION. Each Obligor will permit any authorized
representatives designated by the Agent, any Lender, the Loan Administrator, any
Counter-Guarantor or the Board to visit and inspect any of the properties of the
Obligors, including their financial and accounting records, and to make copies
and take extracts therefrom, and to discuss their affairs, finances and accounts
with its and their officers and independent public accountants (it being
understood that a representative of an Obligor will be present), at the
Borrower's expense, all upon reasonable notice and at such reasonable times
during normal business hours and as often as may be reasonably requested;
provided that so long as the Controlling Creditor is not exercising material
remedies under the Loan Documents, such inspection shall not be disruptive to
the business of the Obligors. Without limiting the generality of the foregoing,
the Obligors will meet with the Loan Administrator on a quarterly basis (in
person or, if deemed appropriate by the Loan Administrator, telephonically) to
review the Obligors' financial and accounting records and will make their
officers and independent public accountants available to discuss with the Loan
Administrator the Obligors' affairs, financial condition, results of operations,
business plan, prospects, projections, accounts and other related matters
(including, without limitation, the integration of
68
the Borrower and US Airways), and otherwise will cooperate with the Loan
Administrator and provide such information as it may reasonably request to
enable it to perform the services described in the Loan Administration
Agreement.
SECTION 5.6. COMPLIANCE WITH LAWS, ETC. Each Obligor will comply with
all applicable statutes, rules, regulations, orders, restrictions and
Governmental Authorizations of any applicable Governmental Authority, in respect
of the conduct of the businesses of the Obligors and the ownership of their
respective properties (including, without limitation, Gate Leases and Slots),
except such as are being contested in good faith by appropriate proceedings and
except for such noncompliance as could not in any case or in the aggregate
reasonably be expected to have a Material Adverse Effect. None of the Obligors
shall conduct any Hazardous Materials Activity at any Facility or at any other
location in a manner that does not comply in all material respects with
Environmental Laws. Each Obligor will use commercially reasonable efforts to
cause all other Persons operating or occupying any of their properties to comply
in all material respects with Environmental Laws.
SECTION 5.7. REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
(a) To the extent required by Environmental Laws, each Obligor will
take any and all necessary remedial action (except to the extent that such
remedial action is taken by other Persons responsible for such remedial action
through contractual arrangements with an Obligor) in connection with the
presence, storage, use, disposal, transportation, Release or threatened Release
of any Hazardous Materials on, under or about any Facility in order to comply
timely with all applicable Environmental Laws and Governmental Authorizations
except for such non-compliance as could not in any case or in the aggregate
reasonably be expected to have a Material Adverse Effect. In the event any
Obligor undertakes any remedial action with respect to any Hazardous Materials
on, under or about any Facility, Group, Borrower or such Obligor will conduct
and complete such remedial action (or will cause such action to be taken
pursuant to contractual rights of such Obligor against third parties) in
compliance with all applicable Environmental Laws, and in accordance with the
policies, orders and directives of all federal, state and local Governmental
Authorities except when, and only to the extent that, such Obligor's liability
for such presence, storage, use, disposal, transportation or discharge of any
Hazardous Materials is being contested in good faith and by appropriate
proceedings diligently conducted by such Obligor or except for such
non-compliance as could not in any case or in the aggregate reasonably be
expected to have a Material Adverse Effect.
(b) The Requisite Lenders or the Board may request (i) from time to
time, if and when such Person(s) have reason to believe that an Environmental
Claim or Release of Hazardous Materials which could reasonably be expected to
have a Material Adverse Effect may exist at or with respect to any Facility, and
(ii) not more than once during any twelve month period for the purpose of
determining whether there is belief that an Environmental Claim or Release of
Hazardous Materials which could reasonably be expected to have a Material
Adverse Effect exists at or with respect to any Facility, and in the case of any
such request, the Borrower will provide to the Lenders and the Board, within
sixty (60) days after such request, at the expense of the Borrower, an
environmental site assessment report for any of its, or any other Obligor's
properties described in such request, prepared by an environmental consulting
firm reasonably acceptable to the Board evaluating the Environmental Claim or
Release of Hazardous Materials and estimating the cost of any required
compliance, removal or remedial action in connection with the Environmental
Claim or Release of Hazardous Materials. Without limiting the generality of the
foregoing clause (b), if the Agent determines at any time that a material risk
exists that any such report will not be provided in the time referred to above,
the Agent may retain an environmental consulting firm to prepare such report at
the expense of the Borrower, and each Obligor hereby agrees to grant at the time
of such request, to the Agent, the Lenders, the Board, such firm and any
69
agents or representatives thereof an irrevocable non-exclusive license, subject
to the rights of tenants, to enter into their respective properties to undertake
such an assessment.
SECTION 5.8. ADDITIONAL OBLIGORS; COLLATERAL.
(a) With reasonable promptness (and in any event within 30 days)
following the formation or acquisition by any Obligor of a Subsidiary or of any
Capital Stock of any other Person, the Borrower (i) shall provide the Agent, the
Loan Administrator, the Counter-Guarantors, and the Board the name, corporate
structure and allocation of Voting Stock and equity interests of such Subsidiary
or other Person, (ii) in the case of any such Subsidiary that is not a CFC,
shall cause such Subsidiary to execute and deliver to the Agent and the Board a
Subsidiary Joinder in the form of Exhibit M hereto, pursuant to which such
Subsidiary shall become a party to this Agreement, and a joinder to the Second
Lien Guaranty pursuant to which such Subsidiary shall become a guarantor
thereunder, and (iii) shall deliver to the Agent and the Board documents of the
types referred to in clauses (a)(x) and (a)(xi) of Article III, all in form,
content and scope reasonably satisfactory to the Agent and the Board.
(b) Each Obligor (including, without limitation, each Subsidiary
created or acquired after the Effective Date that is required to be a Subsidiary
Guarantor) will cause all of its properties and assets as of the Effective Date
(or the date such Person was created or acquired) and all properties and assets
acquired thereafter (including, without limitation, the Capital Stock of each
Subsidiary created or acquired and the Capital Stock of each other Person
acquired after the Effective Date) other than Excluded Property to be pledged to
the Collateral Agent on a perfected first priority basis (subject to the
Intercreditor Agreement and the Liens permitted by Section 6.1, including the
prior Liens securing the First Lien Obligations (as defined in the Intercreditor
Agreement)) to secure the Obligations; provided that if the Borrower or another
Obligor enters into an agreement to finance any pledged After-Acquired Section
1110 Equipment, the Collateral Agent shall, and is hereby directed to, release
its Lien on such After-Acquired Section 1110 Equipment upon its receipt from the
Borrower (with a copy to the Agent and the Board) of an Officer's Certificate
describing in reasonable detail the Section 1110 Equipment proposed to be
financed and certifying that such transaction complies with this Section.
(c) The Borrower shall obtain one or more Appraisal Reports
establishing the value of the Appraised Collateral as of (i) the last day of
each Fiscal Year beginning December 31, 2005, (ii) the date upon which any
additional property or assets that constitutes Appraised Collateral is pledged
as Collateral to the Collateral Agent pursuant to Section 5.8(d) to secure the
Obligations, but only with respect to such additional Collateral, (iii) in
connection with a Replacement Secured Financing of aircraft and spare engines,
and (iv) no more than once during any twelve (12) month period, a date which is
no later than 60 days after the Controlling Creditor has requested that the
Borrower obtain an Appraisal Report (it being understood that the obligation
herein of the Borrower to periodically obtain Appraisal Reports shall be in
addition to any rights or obligations under the Collateral Documents); provided
that no more than one Appraisal Report shall be required with respect to any
item of Appraised Collateral within any 60 day period. Such Appraisal Reports
may be based on desktop appraisals unless the Controlling Creditor shall have
requested that an Appraisal Report be based on physical inspection.
(d) If as of the end of any fiscal quarter (each such date a
"Collateral Value Test Date") there exists a Collateral Value Deficiency, the
Borrower shall do one of the following to the extent (but only to the extent)
necessary to eliminate such Collateral Value Deficiency: (i) prepay the Loan in
an amount equal to Group's Adjusted Excess Cash Flow for the period commencing
on the Effective Date and ending on such Collateral Value Test Date (which
payment shall be made on the Interest Payment Date first occurring on or after
delivery of the Collateral Value Certificate that evidences such Collateral
Value Deficiency); (ii) pledge additional Eligible Collateral to the Collateral
Agent pursuant to a Collateral Document Supplement or other Collateral Document,
in each case on terms and conditions as
70
are reasonably satisfactory to the Agent, the Board and the Collateral Agent, or
(iii) prepay the Loan as provided in clause (i) above and pledge additional
Eligible Collateral as provided in clause (ii) above; provided that if Group's
Adjusted Excess Cash Flow for such period, together with all Eligible Collateral
that is available to be pledged is not sufficient to eliminate such Collateral
Value Deficiency, the Borrower shall continue to prepay the Loan in an amount
equal to Group's Adjusted Excess Cash Flow for the period commencing on the
Effective Date and ending on the last day of each fiscal quarter following the
Collateral Value Test Date as of which the Collateral Value Deficiency was
established (which payments shall be made on the Interest Payment Dates
respectively relating to the Interest Periods first occurring after each such
fiscal quarter) and pledge all additional Eligible Collateral to the Collateral
Agent as it becomes available until the Collateral Value Deficiency no longer
exists (whether as a result of prepayments of the Loan, pledge of additional
collateral, or increase in Collateral Value or any combination of the
foregoing). The foregoing notwithstanding, the Borrower shall not be required to
prepay the Loan or pledge additional Eligible Collateral as provided above if
and to the extent that US Airways or any other Obligor is required to prepay the
US Airways Loan or pledge additional Eligible Collateral pursuant to the US
Airways Loan Agreement to cure a Collateral Value Deficiency thereunder (and as
defined therein).
(e) If additional Collateral is being pledged in accordance with
Section 5.8(d), such additional Collateral shall be free and clear of any Liens
(other than as permitted under the applicable Collateral Document) and the
pledgor(s) shall execute and deliver to the Collateral Agent such applicable
Collateral Document Supplements or Collateral Documents (in form and substance
reasonably satisfactory to the Agent and the Board) necessary to grant a
security interest (subject to the Intercreditor Agreement) to the Collateral
Agent and shall take all other actions (as are in the reasonable judgment of the
Agent or the Controlling Creditor) necessary or desirable to cause the Liens
created thereby to be perfected first priority Liens under applicable law
(subject to the Intercreditor Agreement and except as otherwise provided under
the applicable Collateral Document), and, if requested by the Controlling
Creditor, furnish favorable legal opinions to the Collateral Agent with respect
to such additional Collateral, including the perfection and priority of the
Collateral Agent's Lien thereon and evidence of applicable filings to the Loan
Administrator, and shall otherwise comply with the provisions of the applicable
Collateral Documents that apply to a pledge of such Collateral.
(f) In connection with each prepayment or pledge of additional
Eligible Collateral pursuant to subsection (d) of this Section 5.8, the Borrower
shall deliver to the Collateral Agent, the Loan Administrator and the Board
either (i) a Collateral Value Certificate which establishes that the applicable
Collateral Value Deficiency no longer exists, or (ii) an Officer's Certificate
of Group that certifies (A) the amount of Group's Excess Cash Flow since the
Effective Date, and (B) that Group has identified to the Collateral Agent and
the Board all of its material property (other than Excluded Property) that is
not subject to a Lien in favor of the Collateral Agent under a Collateral
Document.
(g) Any partial prepayment of the Loan under subsection (d) of this
Section 5.8 shall be applied as provided in Section 2.5(j). Any such prepayment
shall be paid to the Agent for application as provided in Section 2.8.
(h) No later than ninety (90) days after the Effective Date, the
Borrower shall cause the applicable Obligor to grant a first priority mortgage
(subject to the Intercreditor Agreement and the Liens permitted by Section 6.1,
including the prior Liens securing the First Lien Obligations (as defined in the
Intercreditor Agreement)) in the real property located at ▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and known as the ▇▇▇▇▇ Saver Building for the
benefit of the Collateral Agent. Such mortgage shall be substantially in the
form of Exhibit H hereto (with such other changes which result from the
application of Arizona law thereto and other changes necessary to reflect the
fee ownership thereof).
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SECTION 5.9. EMPLOYEE BENEFIT PLANS. Each Obligor will ensure that the
Plans and Multiemployer Plans with respect to which the Obligors may have any
liability are operated in compliance with all applicable laws, except to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
SECTION 5.10. FAA MATTERS; CITIZENSHIP. The Borrower shall at all
times hereunder be an "air carrier" within the meaning of the Act and hold a
certificate under 49 U.S.C. Section 41102(a)(1) as currently in effect or as may
be amended or recodified from time to time. The Borrower and each other Obligor
engaged in operations as an "air carrier" will at all times hereunder be a
United States Citizen holding an air carrier operating certificate issued
pursuant to Chapter 447 of Title 49 for aircraft capable of carrying 10 or more
individuals or 6,000 pounds or more of cargo.
SECTION 5.11. BOARD GUARANTY. Each Obligor will comply with all of the
terms, requirements and conditions applicable to it under the Act and the
Regulations, or as may otherwise be imposed by, or agreed with, the Board in
connection with the issuance of the Board Guaranty, and shall promptly furnish
the Board, the Loan Administrator and the Agent (with a copy to the
Counter-Guarantors) all such information as may be reasonably requested by the
Board, the Loan Administrator or the Agent in connection with the Board
Guaranty. Each Obligor will execute such documents and take such actions in
furtherance of its obligations under the Act and the Regulations as the Board,
the Loan Administrator or the Agent may request.
SECTION 5.12. AUDITS AND REVIEWS. Each Obligor will permit and
cooperate in the conduct of such audits and reviews during the period that both
(i) the Loan is outstanding and (ii) the Board is a guarantor of Tranche A or a
Lender hereunder, and for three (3) years thereafter, as the Board may deem
appropriate, by an independent auditor acceptable to the Board or the United
States Comptroller General. To the extent requested by the Board or the Loan
Administrator, each Obligor will provide reasonable access to the officers and
employees, books, records, accounts, documents, correspondence, and other
information of the Obligors, financial advisors, consultants and independent
certified accountants that the Board or the United States Comptroller General
considers necessary.
SECTION 5.13. CONTROL OF DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS.
Except as otherwise provided in this Section 5.13, the Obligors shall maintain
deposit accounts and securities accounts (other than with respect to Excluded
Cash) only with banks or financial institutions with which they and the
Collateral Agent have entered into control agreements in form and substance
reasonably satisfactory to the Collateral Agent and the Controlling Creditor
(each, a "Control Agreement"), unless the Collateral Agent's security interest
in any such account is otherwise perfected; provided that until the US Airways
Loan has been paid in full, the Collateral Agent under the US Airways Loan
Agreement may also be a party thereto and have priority with respect to the
control of any such securities account or deposit account thereunder. In
furtherance thereof, with respect to any deposit account or securities account
listed on Schedule 5.13 in existence on the Effective Date, and thereafter prior
to establishing any other deposit account or securities account at any financial
institution (other than with respect to Excluded Cash), each Obligor shall enter
into a Control Agreement with such financial institution and the Collateral
Agent (subject to the proviso to the preceding sentence), except that the
Obligors shall not be obligated to enter into Control Agreements (or otherwise
provide for the perfection the Collateral Agent's security interest) with
respect to (i) payroll, trust, or fiduciary accounts, including the Trust
Accounts, (ii) zero balance cash management accounts through which disbursements
are made and settled on a daily basis with no balance remaining overnight, and
disbursement accounts for the clearing of drafts, holding only funds in respect
of drafts already made or issued, and (iii) deposit accounts and securities
accounts that have an average weekly aggregate balance of less than $2,000,000;
provided that the aggregate amount of all deposit accounts and securities
accounts not subject to Control Agreements (or otherwise perfected) in reliance
on clause (iii) above shall not, in the case of such accounts located outside
the United Sates,
72
exceed $25,000,000 at any time in the aggregate, and in the case of all such
accounts (including accounts located outside the United Sates), exceed
$35,000,000 in the aggregate at any time.
SECTION 5.14. LOWER-TIER COVERED TRANSACTION. If and for so long as
the Board is a guarantor of Tranche A or a Lender hereunder, in the event that
any Obligor enters into any "lower-tier covered transaction" (as such term is
defined in 31 C.F.R. Section 19.110, as amended or modified from time to time
and not excepted therefrom by 31 C.F.R. Section 19.200(c)) in respect of the
transactions contemplated hereunder, each Obligor will include the clause
entitled "Certificate Regarding Debarment, Suspension, Ineligibility and
Voluntary Exclusion - Lower Tier Covered Transactions" as set forth in Appendix
B to Part 19 of title 31 of the C.F.R. in such lower-tier covered transaction
and each Obligor will obtain a certification from the other Person or Persons
party to such lower-tier covered transaction to the effect that each such other
Person (and each "principal" thereof, as such term is defined in 31 C.F.R.
Section 19.105, as amended or modified from time to time) is not presently
debarred, suspended, proposed for debarment, declared ineligible, or voluntarily
excluded from participation in such transaction by any Federal department or
agency, or an explanation why such Person is unable to so certify. Further, no
Obligor will enter into a lower-tier covered transaction with a Person who has
been proposed for debarment under 48 C.F.R. Section 9.4, debarred or suspended
unless granted an exception for such lower-tier covered transaction pursuant to
31 C.F.R. Section 19.215.
SECTION 5.15. CONTRACTUAL OBLIGATIONS. Each Obligor will perform,
observe or fulfill the obligations, covenants and conditions contained in each
of its Contractual Obligations, provided that a failure to so perform, observe
or fulfill such obligations, covenants and conditions that (i) could not (either
individually or in the aggregate) reasonably be expected to have a Material
Adverse Effect or (ii) does not preclude continued operations by the Obligors at
any of the airport terminals listed on Schedule 4.20 shall not constitute a
breach of this Section 5.15.
SECTION 5.16. SLOT UTILIZATION. Each Obligor holding or operating
Slots shall utilize its Slots in a manner consistent with the Slot Regulations
so as to avoid the withdrawal of any Slot by the FAA or other revocation or
termination for failure to comply with the Slot Regulations, taking into account
any waivers or other relief granted by the FAA or otherwise under the Slot
Regulations; provided, however, that the Obligors shall not be required to so
utilize Secondary Slots to the extent the Obligors determine that such Secondary
Slots are no longer commercially required. The Obligors shall maintain
personnel, policies, procedures and a computer database for the monitoring,
utilization and management of the Slots in compliance with the Slot Regulations
so as to ensure, to the greatest extent operationally feasible, that no Slot
becomes subject to withdrawal by the FAA or is otherwise revoked or terminated
based upon the failure to comply with the Slot Regulations.
SECTION 5.17. STOCK EXCHANGE LISTING. Group (a) will use reasonable
efforts to list its common stock on the New York Stock Exchange or another
national securities exchange or for quotation on a national automated
interdealer quotation system, and (b) after the effectiveness of such listing,
will comply in all material respects with all applicable corporate governance
listing standards of such national securities exchange or national automated
interdealer quotation system, including standards relating to the composition,
duties and responsibilities, and functioning of boards of directors and board
committees.
SECTION 5.18. FURTHER ASSURANCES. Promptly upon the request of the
Board, any Counter-Guarantor or the Agent, each Obligor will, at its expense,
promptly execute, acknowledge and deliver such further documents and do such
other acts and things as the Board, such Counter-Guarantor, the Loan
Administrator or the Agent may reasonably request in order to effect fully the
purposes of the Loan Documents and to maintain and ensure the validity,
effectiveness, priority and perfection of the Collateral Agent's Liens pursuant
to the Collateral Documents.
73
SECTION 5.19. CREDIT RATING OF LOAN. The Borrower agrees to obtain by
December 31, 2005, and maintain for the term of the Loan, if available, and at
the expense of the Borrower, credit and recovery ratings on the Loan from S&P or
▇▇▇▇▇'▇, which ratings shall assess both (x) the risk of default and ultimate
recovery on the Loan and (y) the likely recovery or loss given a default on the
Loan (in each case, without regard to the Board Guaranty or any
Counter-Guaranty). The credit and recovery ratings shall be available to the
Agent, the Collateral Agent, the Loan Administrator, the Lenders and the Board.
ARTICLE VI
NEGATIVE COVENANTS
To induce the other parties to enter into this Agreement (excluding
any other Obligor) and to induce the Counter-Guarantors to amend and restate
their respective Counter-Guarantees, the Obligors agree with each other party
hereto (excluding any other Obligor) and the Counter-Guarantors that, so long as
any of the Obligations (other than contingent indemnification obligations)
remain outstanding:
SECTION 6.1. LIENS AND RELATED MATTERS.
(a) Prohibition on Liens. No Obligor will, nor will it permit any
other Obligor to, directly or indirectly create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of any Obligor, whether now owned or hereafter acquired, or any
income or profits therefrom, or file or consent to the filing of any financing
statement or other similar notice of any Lien with respect to any such property,
asset, income or profits under the UCC of any state or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) (A) Liens existing on the Effective Date on Aircraft Related
Equipment securing Indebtedness used to acquire such Aircraft Related
Equipment, (B) Liens on Aircraft Related Equipment acquired after the
Effective Date created or incurred in connection with the financing of such
Aircraft Related Equipment (including a financing transaction referred to
in the proviso to Section 5.8(b) with respect to After-Acquired Section
1110 Equipment), (C) Liens on Aircraft Related Equipment and related
property as contemplated under the Airbus Financings, the GE Financings,
the GE 2001 Credit Agreement and the GE Expendables Mortgage, (D) leases
and/or subleases of Aircraft Related Equipment to any Obligor or any US
Airways Express affiliate that is not an Obligor and operates such Aircraft
Related Equipment for the Borrower or another Obligor pursuant to a
services agreement with the Borrower or such Obligor, which lease or
sublease is entered into in connection with the debt financing or leasing
of such Aircraft Related Equipment, as applicable, and the assignment of
any such lease or sublease and the proceeds thereof, in the case of a
lease, to any Person owed Indebtedness used to acquire such Aircraft
Related Equipment or, in the case of a sublease, to any Person leasing such
Aircraft Related Equipment to the Borrower or such Obligor, (E) Liens on
Aircraft Related Equipment securing Permitted Refinancing Indebtedness in
respect of Indebtedness previously secured by such Aircraft Related
Equipment in accordance with subclause (A) or (B) above, including in each
case, Liens securing special facility revenue bonds that finance Aircraft
Related Facilities, (F) Liens on Aircraft Related Equipment securing
refinancing Indebtedness of the type described in Section 2.5(c)(ii) so
long as the Borrower shall have complied with its prepayment obligations
thereunder, (G) Liens incurred or deposits made in the ordinary course of
business to secure the
74
performance of contracts for the purchase of aircraft, (H) Liens in
existence on the Effective Date (1) on aircraft and engines (other than
Collateral covered by Aircraft Mortgages) and (2) securing special facility
revenue bonds, and (I) Liens on an Obligor's interest as lessee or
sublessor in respect of any Aircraft Related Equipment or interests related
thereto (including without limitation subleases, refunds or rebates,
security deposits, rent, supplemental rent, reserves, or return condition
adjustment payments);
(iii) other Liens on assets acquired after the Effective Date securing
or relating to Indebtedness and other liabilities and obligations in each
case not otherwise prohibited under this Agreement in an aggregate amount
not to exceed $5,000,000 at any time outstanding;
(iv) Liens described in Schedule 6.1(a);
(v) judgment and attachment Liens not (A) giving rise to an Event of
Default or (B) relating to an action or judgment giving rise to an Event of
Default under Section 7.1(h);
(vi) Liens on the assets of any entity or on any asset existing at the
time such entity or asset is acquired by an Obligor, whether by merger,
consolidation, purchase of assets or otherwise; provided that (A) such
Liens are not created, incurred or assumed by such entity in contemplation
of or in connection with the financing of such entity's being acquired by
an Obligor, (B) such Liens were created to secure the financing of Aircraft
Related Equipment or other specific assets, (C) such Liens do not extend to
any other assets of any Obligor other than the assets acquired with such
financing and (D) the Indebtedness secured by such Liens is permitted
pursuant to this Agreement;
(vii) leases or subleases of real or personal property granted by any
Obligor to other Persons not interfering in any material respect with the
ordinary conduct of the business of the Obligors, taken as a whole;
(viii) Liens on cash and Cash Equivalents securing (A) reimbursement
obligations in respect of letters of credit issued for the account of any
Obligor in the ordinary course of business and consistent with past
practice, so long as the aggregate amount of such cash and Cash Equivalents
does not exceed 115% of the maximum available amount under the secured
letters of credit, (B) reimbursement or other margin requirements in
connection with, in the case of Liens contemplated in this clause (B),
transactions contemplated by the proviso in Section 6.12, and (C) prepaid
fuel and healthcare expenses in the ordinary course of business and
consistent with past practice;
(ix) Liens securing the First Lien Obligations (as defined in the
Intercreditor Agreement) and any refinancing, refunding, or replacement
thereof (but only if the collateral agent thereunder is party to the
Intercreditor Agreement or a replacement intercreditor agreement in
accordance with Section 8.19 of the Intercreditor Agreement);
(x) Liens on assets pledged in connection with a Replacement Secured
Financing; provided that the Borrower prepays the Loan with the Net Issue
Proceeds of such Replacement Secured Financing to the extent provided in
Section 2.5(b);
(xi) Liens on assets pledged to secure a Permitted Acquisition
Financing; provided, that the Liens attach only to assets acquired in
connection with the acquisition financed by such Permitted Acquisition
Financing; and
75
(xii) any renewal or substitution of any Lien for any of the preceding
clauses (ii), (iv) or (vi); provided that any such Liens are not extended
to additional assets;
provided that the Obligors will not create, incur, assume or permit to exist any
Lien permitted under any of clauses (ii) or (iii) above on any property of an
Obligor already constituting Collateral (which, for the avoidance of doubt, does
not apply to Liens permitted under clause (x) above).
(b) No Restrictions on Subsidiary Distributions. Except (i) as
provided herein or in the other Loan Documents, (ii) as described on Schedule
6.1(b), (iii) for restrictions on the use of proceeds from a permitted financing
of Aircraft Related Equipment, or (iv) Payment Restrictions contained in
refinancings or replacements of the financings listed in clause (a)(ii) above
that are not more restrictive in a material respect than the corresponding
Payment Restrictions in the original financing, no Obligor will, nor will it
permit any other Obligor to, create or otherwise cause to exist any Payment
Restriction with respect to any Subsidiary of any Obligor.
SECTION 6.2. INVESTMENTS. No Obligor will, nor will it permit any
other Obligor to, make any Investment other than (i) Investments consisting of
Cash Equivalents; (ii) accounts receivable if credited or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; (iii) payroll advances and advances for business and
travel expenses in the ordinary course of business; (iv) Investments made by way
of any endorsement of negotiable instruments received by any Obligor in the
ordinary course of its business and presented by it to any bank for collection
or deposit; (v) stock, obligations or securities received in settlement of
amounts owing to any Obligor in the ordinary course of business or in a
distribution received in respect of an Investment permitted hereunder; (vi)
Investments made in connection with the Trust Agreements; (vii) in addition to
any other permitted investments, any other Investments by the Obligors in an
aggregate outstanding amount not exceeding $25,000,000 at any time; (viii)
Investments pursuant to and in compliance with Section 6.5 or Section 6.9; (ix)
Investments made in Excluded Subsidiaries consistent with past practice; (x) the
Merger; (xi) Investments in travel or airline related businesses made in
connection with Marketing and Service Agreements, alliance agreements,
distribution agreements, agreements with respect to fuel consortium, agreements
relating to flight training, agreements relating to insurance arrangements,
agreements relating to spare parts management systems and other similar
agreements which Investments under this clause (xi) (excluding Investments
existing on the date hereof) shall not exceed $50,000,000 in the aggregate at
any time outstanding; and (xii) Investments constituting non-cash consideration
received in respect of a transaction pursuant to and in compliance with Section
6.13.
SECTION 6.3. RESTRICTED PAYMENTS. No Obligor will, nor will it permit
any other Obligor to, directly or indirectly, declare, order, pay, make or set
apart, or be obligated to declare, order, pay, make or set apart, any sum for
any Restricted Payment; except that:
(a) the Obligors may prepay (i) Indebtedness which is secured by a
Lien on property or assets sold in an Asset Sale which is permitted hereunder or
subject to a condemnation, taking, temporary or permanent requisition, or change
of grade, or a covered loss under a casualty insurance policy, in each case in
this clause (a)(i), to the extent that such Indebtedness is required by its
terms to be paid as a result of such Asset Sale, condemnation, taking, temporary
or permanent requisition, change of grade, or covered loss, as applicable, (ii)
Indebtedness with the proceeds of Permitted Refinancing Indebtedness, or (iii) a
Capital Lease of property which is obsolete, worn out or no longer required in
the businesses of the Obligors;
(b) the Obligors may purchase or redeem (i) the Warrants held by the
Board or the Airbus Counter-Guarantor and (ii) Capital Stock (including options
on any such Capital Stock or related stock appreciation rights or similar
securities) that was issued as compensation from their officers,
76
directors and employees (or their estates or beneficiaries under their estates)
upon death, disability, retirement, termination of employment or pursuant to the
terms of any plan or any other agreement under which such Capital Stock or
related rights were issued, in an amount not to exceed $1,000,000 per Fiscal
Year; and
(c) the Obligors may pay after the date hereof $125,000,000 to General
Electric Capital Corporation or its Affiliates pursuant to the GE Merger MOU.
SECTION 6.4. FINANCIAL COVENANTS.
(a) Group shall not, at the close of any Business Day during the
periods set forth in the tables below, permit (i) the aggregate amount of
Pledged Cash less (ii) the sum of (A) the amount by which all outstanding
advances to the Obligors by credit card processors exceeds twenty percent (20%)
of the Obligors' aggregate outstanding air traffic liability (as determined in
accordance with GAAP, but excluding air traffic liability associated with the
Obligors' frequent flyer, affinity card and like programs) and (B) $285,000,000
less the Pre-Funded Amount (the amount, if any, by which (i) exceeds (ii) being
the "Adjusted Cash Amount") to be less than the lesser of (x) the Fixed Cash
Amount (as defined in clause (i) below) for such period and (y) the Variable
Cash Amount (as defined in clause (ii) below) at such time (such lesser amount,
the "Minimum Adjusted Cash Amount").
(i) The term "Fixed Cash Amount" means, for each period, the amount
set forth in the table below across from such period:
PERIOD FIXED CASH AMOUNT
------ -----------------
Effective Date through March 31, 2006 $525,000,000
April 1, 2006 through September 30, 2006 $500,000,000
October 1, 2006 through March 31, 2007 $475,000,000
April 1, 2007 through September 30, 2007 $450,000,000
October 1, 2007 through March 31, 2008 $400,000,000
April 1, 2008 through September 30, 2008 $350,000,000
(ii) The term "Variable Cash Amount" means:
(x) with respect to the remainder of any period following a
prepayment of the Loan and the US Airways Loan pursuant to Section 2.5(a)
and (c) of this Agreement and of the US Airways Loan Agreement with the
proceeds of any Future Issuance, an amount equal to the product of (A) the
cash coverage percentage for such period set forth in the table below and
(B) the difference of (I) the sum of the aggregate principal amounts of the
Loan and the US Airways Loan scheduled to be outstanding at the start of
such period as set forth in the table below less (II) the aggregate amount
of mandatory prepayments of the Loan and the US Airways Loan made in all
periods prior to such period pursuant to Section 2.5(a) and (c) of this
Agreement and of the US Airways Loan Agreement with the proceeds of Future
Issuances:
SCHEDULED PRINCIPAL CASH COVERAGE
PERIOD AMOUNT PERCENTAGE
------ ------------------- -------------
Effective Date through March 31, 2006 $840,250,558.77 68.7%
April 1, 2006 through September 30, 2006 $771,500,000.00 71.3%
October 1, 2006 through March 31, 2007 $728,600,000.00 71.7%
April 1, 2007 through September 30, 2007 $685,700,000.00 72.2%
October 1, 2007 through March 31, 2008 $553,800,000.00 79.5%
April 1, 2008 through September 30, 2008 $446,900,000.00 86.1%
77
and (y) for each period subsequent to the period referred to in
clause (x) above, the amount determined in accordance with paragraph (x)
less the amount set forth in the table below across from such subsequent
period:
PERIOD REDUCTION AMOUNT
------ ----------------
April 1, 2006 through September 30, 2006 $ 25,000,000
October 1, 2006 through March 31, 2007 $ 50,000,000
April 1, 2007 through September 30, 2007 $ 75,000,000
October 1, 2007 through March 31, 2008 $125,000,000
April 1, 2008 through September 30, 2008 $175,000,000
(b) Group shall not permit its ratio of Consolidated EBITDAR to
Consolidated Fixed Charges for the four consecutive fiscal quarters ending on
the dates specified below, to be less than the applicable ratio specified below:
PERIOD APPLICABLE RATIO
------ ----------------
December 31, 2006 0.900:1.00
March 31, 2007 0.929:1.00
June 30, 2007 0.958:1.00
September 30, 2007 0.986:1.00
December 31, 2007 1.015:1.00
March 31, 2008 1.061:1.00
June 30, 2008 1.108:1.00
SECTION 6.5. RESTRICTION ON ACQUISITIONS; CHANGE IN FISCAL YEAR.
(a) No Obligor will, nor will it permit any other Obligor to, acquire
by purchase or otherwise all or substantially all of the business, property or
assets of any Person or any division or line of business of any Person
(excluding purchases and acquisitions in the ordinary course of business by an
Obligor of property from any Person not constituting all or substantially all of
the property of such Person), or all or substantially all of the Capital Stock
or other evidence of beneficial ownership of any Person, or acquire any Person
as a new Subsidiary, other than the Merger, except that the Obligors may make
acquisitions of Capital Stock, the assets and/or the business of another Person
(including any division or line of business of such Person) or acquire any
Person as a new Subsidiary so long as (i) the acquisition primarily involves the
acquisition of assets to be used in the business of an Obligor as engaged in by
such Obligor on the date hereof, (ii) immediately before and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing,
(iii) immediately after giving effect to the acquisition, the Obligors shall be
in compliance on a Pro Forma Basis with Section 6.4 (in the case of Section
6.4(b), based on Consolidated EBITDAR for the four quarters ended as of the end
of the most recently ended fiscal quarter) and such compliance shall be
evidenced by an Officer's Certificate of the Borrower demonstrating such
compliance, (iv) prior to the consummation of such acquisition, neither S&P nor
▇▇▇▇▇'▇ shall have lowered the corporate credit rating of the Obligors by more
than one notch as a result of such acquisition (whether or not in combination
with other factors), (v) the aggregate purchase price in connection with all
such acquisitions (including therein any Indebtedness assumed in connection with
such acquisitions) consummated after the date hereof, together with all
Investments
78
pursuant to clause (xi) of Section 6.2, does not exceed $50,000,000 during any
twelve (12) month period and $150,000,000 in the aggregate during the term of
the Loan, (vi) if the acquisition is structured as a consolidation or merger, it
complies with Section 6.9, and (vii) the Obligors comply with their obligations
under Section 5.8(a) and/or (b) with respect to the properties, assets or Person
so acquired (as applicable).
(b) No Principal Obligor shall change its Fiscal Year.
SECTION 6.6. SALES-LEASEBACKS. Except with respect to Aircraft Related
Equipment, no Obligor will, nor will it permit any other Obligor to, directly or
indirectly, become liable after the Effective Date as lessee or as a guarantor
or other surety with respect to any lease, whether an Operating Lease or a
Capital Lease, of any property (whether real, personal or mixed), whether now
owned or hereafter acquired, in each case which (i) an Obligor has sold or
transferred or is to sell or transfer to any other Person (other than another
Obligor) or (ii) an Obligor intends to use for substantially the same purpose as
any other property which has been or is to be sold or transferred by such
Obligor to any Person (other than another Obligor) in connection with such
lease; provided that after the Effective Date the Obligors may become and remain
liable as lessee, guarantor or other surety with respect to any such lease if
and to the extent that (A) the annual aggregate rentals under all such leases
(other than leases with respect to Aircraft Related Equipment) shall not exceed
$20,000,000 and (B) the Obligors comply with any prepayment obligations under
Section 2.5(d); and provided, further, that the restrictions contained in this
Section 6.6 shall not apply to the transactions described on Schedule 6.6.
SECTION 6.7. TRANSACTIONS WITH AFFILIATES.
(a) No Obligor shall, directly or indirectly, (i) sell, lease,
transfer or otherwise dispose of any of its properties or assets, or issue
securities to, (ii) purchase any property, assets or securities from, (iii) make
any Investment in or (iv) enter into any contract or agreement with or for the
benefit of, any Affiliate or holder of 5% or more of any class of Capital Stock
(and any Affiliate of such holder) of any Obligor (an "Affiliate Transaction"),
other than (x) Affiliate Transactions permitted under Section 6.7(b) and (y)
Affiliate Transactions (including lease transactions) which are on fair and
reasonable terms no less favorable to such Obligor than those as might
reasonably have been obtainable at such time from an unaffiliated party;
provided that if an Affiliate Transaction or series of related Affiliate
Transactions involves or has a value in excess of $10,000,000, such Obligor
shall not enter into such Affiliate Transaction or series of Affiliate
Transactions unless a majority of the disinterested members of the board of
directors of Group shall reasonably and in good faith determine that such
Affiliate Transaction is fair and reasonable to such Obligor or is on terms no
less favorable to such Obligor than those that might reasonably have been
obtained at such time from an unaffiliated party. For purposes of this Section
6.7, Section 9.9 notwithstanding, the determination of whether a transaction is
"fair" shall be governed by the Delaware General Corporation Law, including
decisional law thereunder.
(b) The provisions of Section 6.7(a) shall not apply to (i) the
agreements listed on Schedule 6.7(b) as in effect on the Effective Date or any
transaction contemplated thereby; (ii) any payments or other transactions
pursuant to any tax sharing agreement between any Obligor and any other Obligor
or Excluded Subsidiary and any other transaction solely between or among
Obligors (subject to Section 6.14(a), if applicable) and between or among any
Obligors and an Excluded Subsidiary (including the guaranty of obligations of
other Obligors, but not including the guaranty of obligations of Excluded
Subsidiaries) provided that such transactions are not otherwise prohibited by
this Agreement; (iii) reasonable and customary fees and compensation paid to,
and indemnity provided on behalf of, officers, directors and employees of any
Obligor or Excluded Subsidiary, as determined by the board of directors of such
Obligor or the senior management of the Borrower or Group in good faith; (iv)
any Restricted Payments permitted by Section 6.3; (v) transactions contemplated
by the Marketing and Service Agreements; (vi) transactions between any Obligor
with any employee labor unions or other
79
employee groups of such Obligor provided such transactions are not otherwise
prohibited by this Agreement; (vii) the Loan Documents and the transactions
contemplated thereby; and (viii) transactions expressly contemplated by the Plan
of Reorganization, without giving affect to any subsequent amendments to the
terms governing such transactions. The Obligors rights under clause (ii) of this
subsection (b) notwithstanding, the Obligors expressly acknowledge and agree
that, in the case of any sale, transfer or other disposition of assets or
property which are Collateral from one Obligor to another Obligor (or to an
Excluded Subsidiary), whether pursuant to this Section 6.7, Section 6.9 or
otherwise, the Lien of the Collateral Agent in such assets or property
immediately prior to such sale, transfer or other disposition shall continue and
survive such transaction and remain attached to (and perfected in) such assets
or property following such transaction, and each Obligor which takes title to
such assets or property acknowledges and agrees that such title is subject to
the Lien of the Collateral Agent.
SECTION 6.8. CONDUCT OF BUSINESS. From and after the date hereof, (a)
no Obligor shall engage in any principal line of business other than (i) the
businesses engaged in by the Obligors on the date hereof and related businesses
and (ii) such other lines of business as may be consented to by the Board and
the Requisite Lenders, and (b) each of the Excluded Subsidiaries shall not
engage in any business other than the business engaged in by it on the Effective
Date.
SECTION 6.9. MERGER OR CONSOLIDATION. No Obligor will consolidate with
or merge with any other Person or convey, lease or transfer its properties and
assets substantially as an entirety to any Person, other than the Merger,
unless: (i) (a) in the case of a consolidation or merger involving the Borrower
or US Airways, the Borrower or US Airways (as applicable) is the surviving
entity or if the Borrower or US Airways (as applicable) is not the surviving
entity, such surviving entity or the Person that acquires by conveyance, lease
or transfer the properties and assets of the Borrower or US Airways (as
applicable) substantially as an entirety, shall be a corporation organized and
existing under the laws of the United States of America or any State thereof or
the District of Columbia and can make the representations contained in Section
4.1(b), and shall expressly assume, by an agreement executed and delivered to
the Agent and the Board in form and substance reasonably satisfactory to the
Agent and the Board, the Borrower's obligations to repay the Loan (in the case
of the Borrower) and all (other) obligations of the Borrower or US Airways (as
applicable) under the Loan Documents, or (b) in the case of a consolidation or
merger involving Group, Group is the surviving entity or if Group is not the
surviving entity, such surviving entity or the Person that acquires by
conveyance, lease or transfer the properties and assets of Group substantially
as an entirety, shall be a corporation organized and existing under the laws of
the United States of America or any State thereof or the District of Columbia,
and shall expressly assume, by an agreement executed and delivered to the Agent
and the Board, in form and substance reasonably satisfactory to the Agent and
the Board, all of Group's obligations under each Loan Document to which it is a
party; (ii) immediately before and after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing and
immediately after giving effect to such transaction, Group or if applicable, its
successor, shall be in compliance, on a Pro Forma Basis, with Section 6.4 (in
the case of Section 6.4(b), based on Consolidated EBITDAR for the four quarters
ended as of the end of the most recently ended fiscal quarter); (iii) if Section
6.14(b) is applicable to such transaction, the Obligors shall comply therewith;
and (iv) the Borrower has delivered to the Agent an Officer's Certificate and an
opinion of counsel from counsel reasonably satisfactory to the Agent, in form
and substance reasonably satisfactory to the Agent, stating that such
consolidation, merger, conveyance, lease or transfer and such agreement comply
with this Section 6.9 and that all conditions precedent herein provided for
relating to such transaction have been complied with and addressing such other
matters as may be reasonably requested by the Board and the Agent.
Notwithstanding anything to the contrary contained in this Section 6.9 but
subject to Section 6.14(a)(i) and (b) (in each case, if applicable), (A) any
Obligor may merge or consolidate with any other Obligor; provided that in the
case of each such merger or consolidation involving a Principal Obligor, if such
Principal Obligor shall not be the continuing or surviving Person, the surviving
Obligor shall comply with clauses (i)(a) or (i)(b) (as applicable) and (iii)
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above, and (B) any Obligor (other than a Principal Obligor, except in compliance
with the preceding clause (i)) may convey, lease or transfer its properties and
assets substantially as an entirety to any other Obligor.
SECTION 6.10. LIMITATIONS ON AMENDMENTS.
(a) No Obligor shall amend, waive or modify, nor shall it consent to
or request any amendment, waiver or modification, of any of the material terms,
conditions, representations and covenants contained in any Indebtedness for
borrowed money that (i) shortens the final maturity date of such Indebtedness
(without giving effect to any amendment, waiver or modification, the "Initial
Indebtedness") or (ii) requires the acceleration of the final scheduled maturity
date and/or any principal payments, including but not limited to scheduled
payments and mandatory prepayments, and/or increases the principal amount
payable on any date (including, without limitation, pursuant to mandatory
prepayments) prior to the dates of analogous payments of such Initial
Indebtedness; provided, however, that this Section 6.10(a) shall not prohibit
the incurrence of Permitted Refinancing Indebtedness, the repayment of the
Indebtedness being refinanced, or any amendment, waiver or modification of the
terms of the Indebtedness being refinanced necessary to effect such repayment.
No Obligor shall amend, waive or modify, nor shall it consent to or request any
amendment, waiver or modification, of the US Airways Loan Agreement unless such
amendment, waiver or modification is permitted by and in compliance with the
Intercreditor Agreement.
(b) No Obligor will, nor will it permit any other Obligor to, amend,
adopt or terminate any Plan (i) unless such action could not reasonably be
expected to have a Material Adverse Effect, or (ii) in any manner that could
reasonably be expected to give the PBGC a sound and just basis to commence
Proceedings against the Obligors on the basis that such action constitutes a
subsequent change in connection with the Obligor's termination or replacement of
the defined benefit Retirement Income Plan for Pilots of US Airways, Inc. with
the 2003 Pilots Defined Contribution Plan.
(c) No Obligor shall amend, restate, supplement or modify (or consent
to or permit any amendment, restatement, supplement or modification of) its
Investment Guidelines without the prior written consent of the Controlling
Creditor; provided that, for the avoidance of doubt, this Section 6.10(c) shall
not be deemed to prohibit the adoption of the Investment Guidelines by any
Obligor.
SECTION 6.11. NO FURTHER NEGATIVE PLEDGES. Except with respect to (a)
specific property encumbered to secure payment of particular Indebtedness or to
be sold pursuant to an executed agreement with respect to a permitted Asset Sale
(including sale-leaseback transactions not prohibited by this Agreement), (b)
restrictions by reason of customary provisions restricting pledges, Liens,
assignments, subletting or other transfers contained in leases, licenses and
similar agreements entered into in the ordinary course of business (provided
that such restrictions are limited to the property or assets secured by such
Liens or the property or assets subject to such leases, licenses or similar
agreements, as the case may be), (c) negative pledges contained in the Airbus
Financings and the GE Financings (and any replacements or refinancings of any
thereof), and (d) permitted refinancings or replacements of Indebtedness
outstanding on the Effective Date, after the date hereof, no Obligor will, nor
will it permit any other Obligor to, enter into any agreement prohibiting the
creation or assumption of any Lien to secure the Obligations upon any of its
properties or assets, whether now owned or hereafter acquired to the extent that
such properties or assets are required to be pledged to secure the Obligations.
SECTION 6.12. SPECULATIVE TRANSACTIONS. No Obligor will, nor will it
permit any other Obligor to, become a general partner in any general or limited
partnership or joint venture engaged or involved in, nor will any Obligor engage
in any transaction involving, commodity options or future contracts or any
similar speculative transactions; provided, however, that the following
transactions shall
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not be prohibited by this Section 6.12: (i) transactions designed to hedge
against fluctuations in fuel costs, entered into in the ordinary course of
business, consistent with past business practice or then current industry
practice, and not entered into for speculative purposes, (ii) transactions
designed to hedge interest rates entered into with respect to notional amounts
not to exceed actual or anticipated Indebtedness and not entered into for
speculative purposes and (iii) transactions designed to hedge against risks
associated with fluctuations in currencies entered into in the ordinary course
of business.
SECTION 6.13. ASSET SALES. No Obligor will, nor will it permit any
other Obligor to, directly or indirectly, consummate any Asset Sale unless (i)
the consideration received in respect of such Asset Sale is at least equal to
the Fair Market Value of the assets subject to such Asset Sale and (ii) at least
85% of the value of the consideration received by such Obligor in respect of
such Asset Sale (net of the amount of any Indebtedness secured by the assets
sold in such Asset Sale which is assumed by the purchaser thereof) is in the
form of cash or Cash Equivalents; provided that without the prior written
consent of the Controlling Creditor, the Obligors shall not consummate any Asset
Sales if and to the extent that the aggregate Net Cash Proceeds from all such
Asset Sales would exceed $10,000,000 per Fiscal Year, other than (x) Designated
Asset Sales and (y) sale-leasebacks not prohibited by Section 6.6 (subject to
compliance with Section 2.5(d), if applicable).
SECTION 6.14. SPARE PARTS.
(a) No Obligor shall (i) sell, lease, transfer or otherwise dispose of
its spare parts which are Collateral to another Obligor if such other Obligor
has pledged spare parts which are not Collateral to secure any other
Indebtedness or obligation, other than in the ordinary course of business as
though between unaffiliated air carriers (including pursuant to interchange,
pooling, exchange and other similar arrangements customary in the airline
industry and consistent with Section 3.4(f) of the Aircraft Mortgages (as
defined in clause (ii) of the definition of Collateral Documents) or (ii)
commingle at any location its spare parts which are Collateral with the spare
parts of another Obligor if such other Obligor has pledged spare parts which are
not Collateral to secure any other Indebtedness or obligation, unless the
ownership of each such commingled spare part can be definitively determined at
all times by reference to the Obligors' spare parts tracking numbers and system;
provided that spare parts that are segregated on a separate shelf or in a
separate storage bin or other storage unit shall not be considered as having
been commingled even though such spare parts are present at the same location so
long the Obligors install signs on each such shelf, bin or other storage unit
containing Collateral bearing the inscription: "Property of US Airways, Inc. (or
other applicable Obligor), Mortgaged to Wilmington Trust Company, as Collateral
Agent" (such sign to be replaced if there is a successor Collateral Agent).
(b) No Obligor who has pledged spare parts as Collateral will
consolidate or merge with, or convey, lease or transfer its properties and
assets substantially as an entirety to, or liquidate into, or otherwise combine
with, any other Obligor if such other Obligor has pledged spare parts which are
not Collateral to secure any other Indebtedness or obligation, unless (i)
following such transaction the Lien of the Collateral Agent in such spare parts
Collateral will remain perfected with the same priority as existed immediately
prior to such transaction, (ii) the surviving Obligor has established adequate
tracking and other systems to ensure that the spare parts which are Collateral
are not commingled with the surviving Obligor's other spare parts which are not
Collateral, (iii) at all times following such transaction the surviving Obligor
will be required to maintain spare parts subject to the Lien of the Collateral
Agent having an aggregate Appraised Value of at least 75% of the Appraised Value
of the spare parts Collateral set forth in the Baseline Appraisal, (iv) the
Obligors have provided thirty (30) days' prior written notice of such
transaction to the Agent, Collateral Agent, Loan Administrator and the Board
describing in reasonable detail the actions the Obligors will take to ensure
compliance with clauses (i) and (ii) above, and (v) no later than thirty (30)
days following the consummation of such transaction, Group has provided
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an Officer's Certificate to the Agent (with a copy to the Collateral Agent, Loan
Administrator and the Board) certifying that such transaction complies with this
Section 6.14(b).
(c) Notwithstanding the foregoing clauses (a) and (b), the Borrower
may, on behalf of the other Obligors, from time to time propose amendments to
this Section 6.14 designed to both adequately protect the Collateral Agent's
interest in the spare parts Collateral and, to the extent consistent therewith,
maximize the Obligors' operational flexibility, and the Obligors, the Agent, and
the Board (so long as the Board is either a guarantor of Tranche A or a Lender
hereunder) shall have the ability by written consent to adopt any such proposal
and amend this Agreement to reflect the same without the consent of any other
Person, without regard to the provisions of Section 9.1(a).
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1. EVENTS OF DEFAULT. Each of the following events shall
constitute an "Event of Default":
(a) (i) failure by the Borrower to pay any installment of principal of
the Loan when due, whether at stated maturity, by acceleration, by mandatory
prepayment or otherwise or (ii) failure by the Borrower to pay any interest on
the Loan or any fee or any other amount due under this Agreement or any other
Loan Document within five (5) Business Days after the date due; or
(b) any Obligor (i) fails to make when due (after giving effect to
applicable cure or grace periods, and whether as primary obligor or as guarantor
or other surety) payments in respect of rents, principal, interest or premium or
other payments, if any, under or in respect of one or more Capital Leases or
other Indebtedness or Operating Leases (other than Indebtedness referred to in
clause (a) of this Section 7.1) and the aggregate amount of all payment defaults
(after giving effect to applicable cure or grace periods) then existing in
respect of Indebtedness and aggregate amounts under Operating Leases shall equal
or exceed $25,000,000 (for clarification it shall be an Event of Default if the
applicable Obligor fails to pay when due the payment to General Electric Capital
Corporation or its applicable Affiliate referred to in Section 6.3(c)) or (ii)
fails to duly observe, perform or comply with any agreement with any Person or
any term or condition of any instrument, if such failure, either individually or
in the aggregate, shall have (A) resulted in the acceleration of, or entitles
any Person to accelerate, the payment of Indebtedness owed by such Obligor
which, together with all other accelerated Indebtedness and Indebtedness that is
entitled to be accelerated, has a principal amount that equals or exceeds
$25,000,000, (B) given rise under one or more Operating Leases to obligations
by, or rights of any other Person(s) to require, an Obligor to make payments
that equal or exceed, or to return assets leased by an Obligor and having a fair
market value that equals or exceeds, $25,000,000 or (C) resulted in the
termination of or given rise to rights of any other Person(s) to terminate one
or more Operating Leases under which the aggregate net present value of the
remaining basic rent payments (as determined in accordance with the formulas for
calculating "net present value" under the applicable leases or for leases
without such formulas, in accordance with formulas under leases for comparable
terms and comparable amounts) equals or exceeds $25,000,000; provided that the
failure by an Obligor to make one or more payments that are attributable to and
relate solely to return conditions under aircraft leases shall not constitute an
Event of Default under this Section 7.1(b) so long as the Obligor is, in good
faith, disputing the amount of such payments; or
(c) failure by an Obligor to perform or comply with any term or
condition contained in Section 5.2, Section 5.10 or Article VI of this Agreement
(other than Section 6.4);
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(d) any representation, warranty, certification or other statement
made by any Obligor in any Loan Document or in any statement or certificate at
any time given by any Obligor in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect on the
date as of which made; or
(e) any default by any Obligor in the performance of or compliance
with any provision contained in this Agreement or any of the other Loan
Documents required to be performed or complied with by it (other than any such
provision referred to in any other clause of this Section 7.1), and (i) with
respect to a default under Section 6.4(a), such default shall not have been
waived within two (2) Business Days after the date of such default and (ii) with
respect to any other default, such default shall not have been remedied or
waived within thirty (30) days after the earliest of (A) a Responsible Officer
of a Principal Obligor obtaining knowledge of such default (which, in the case
of Section 6.4(b), will be presumed to have occurred no later than the date of
the delivery of financial statements pursuant to Section 5.1 for the end of the
accounting period as of which such default exists) or (B) receipt by the
Borrower of notice from the Agent or the Board of such default; or
(f) (i) a court shall enter a decree or order for relief in respect of
any Obligor in an involuntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
any other relief described in clause (ii) below or other similar relief shall be
granted under any applicable federal or state law; or (ii) an involuntary case
shall be commenced against any Obligor seeking (A) relief under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, (B) the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
such Obligor, or over all or a substantial part of its property, or (C) the
appointment of an interim receiver, trustee or other custodian of any Obligor
for all or a substantial part of its property, and any such event described in
this clause (ii) against such Obligor shall continue for 60 days without being
dismissed or discharged; or (iii) a warrant of attachment, execution or similar
process shall have been issued against all or any substantial part of the
property of any Obligor; or
(g) (i) any Obligor shall have an order for relief entered with
respect to it or commence a voluntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian of all or a substantial part of its
property; or (ii) any Obligor shall make any assignment for the benefit of
creditors; or (iii) the board of directors of any Obligor (or any committee
thereof) shall adopt any resolution to approve any of the actions referred to in
clauses (i) or (ii) above; or
(h) (i) one or more final judgments or orders for the payment of money
in an aggregate amount in excess of $25,000,000 and which are not covered by
insurance (treating any deductibles, self-insurance (except to the extent
reinsured) or retention as not so covered) or (ii) one or more non-monetary
judgments or orders that could reasonably be expected to have a Material Adverse
Effect shall have been entered against one or more Obligors and shall remain
undischarged or unstayed, by reason of a pending appeal or otherwise, for a
period in excess of sixty (60) days; or
(i) the Board Guaranty shall for any reason (other than by reason of
Sections 2.03, 2.04, 2.05 or 2.06 of the Board Guaranty) cease to be in full
force and effect or the Board shall assert that any of its obligations
thereunder are invalid or unenforceable; or
(j) Any Counter-Guarantee shall for any reason cease to be in full
force and effect or any Counter-Guarantor shall fail to perform its obligations
under its Counter-Guarantee or shall, in
84
writing, repudiate such Counter-Guarantee or deny that its obligations
thereunder are valid, binding and enforceable; or
(k) Any Counter-Guarantor Letter of Credit shall for any reason cease
to be in full force and effect other than in accordance with its express terms
and the terms of the related Counter-Guarantee or the issuer of such
Counter-Guarantor Letter of Credit shall fail to perform its obligation
thereunder or shall, in writing, repudiate such Counter-Guarantor Letter of
Credit or deny that its obligations thereunder are valid, binding and
enforceable; or
(l) any order, judgment or decree shall be entered against any Obligor
decreeing the dissolution of such Obligor and such order shall remain
undischarged or unstayed for a period in excess of thirty (30) days; or
(m) (i)(A) any of the Loan Documents shall cease to be in full force
and effect or (B) any Obligor shall so assert or (ii) any Lien under the
Collateral Documents on any material portion of the Collateral shall cease to be
enforceable and of the same effect and priority purported to be created thereby,
and except in the case of clause (i)(A) of this subsection (m), such default
shall continue unremedied for a period of ten (10) days; or
(n) any of the insurance coverages required to be maintained by the
Obligors pursuant hereto or under the Collateral Documents shall lapse,
terminate or otherwise cease to be in full force and effect, other than coverage
of losses and liabilities that in the aggregate are reasonably expected to be
immaterial to the operations or financial condition of the Obligors taken as a
whole; or
(o) any Obligor shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or
(p) (i) Slots, other than Secondary Slots which the Obligors have
determined are no longer commercially required, (x) shall have been withdrawn by
the FAA or otherwise revoked or terminated during the term of the Loan as the
result of failure to comply with the Slot Regulations and (y) the aggregate
Appraised Value of such Slots (in each case, as of the date of such withdrawal,
revocation or termination) shall have exceeded $10,000,000; or (ii) any Obligor
implements a cessation, cancellation or curtailment of flight operations or a
change in flight schedules which, assuming no subsequent further action (such as
the sale, lease or trade of the affected Slots or their allocation to new or
additional flights) is taken, could reasonably be expected to result in the
withdrawal by the FAA or other revocation or termination based upon failure to
comply with the Slot Regulations of Slots, other than Secondary Slots, the
aggregate Appraised Value of which (as of the date of such cessation,
cancellation or curtailment) exceeds $10,000,000; it being understood, however,
that an Event of Default shall not have occurred under this clause (ii) if the
Slots otherwise affected are sold, leased or traded in arm's length transactions
or allocated to new or additional flights prior to the implementation of such
cessation, cancellation or curtailment of flight operations or change in flight
schedules; or
(q) any default by any Obligor in the performance of or compliance
with Section 5.14 of this Agreement and such default shall not have been
remedied or waived within 180 days after the earlier of (i) a Responsible
Officer of Group or the Borrower obtaining knowledge of such default or (ii)
receipt by the Borrower of notice from the Agent or the Board of such default.
SECTION 7.2. REMEDIES. During the continuance of any Event of Default,
the Agent shall, solely at the request of the Controlling Creditor by notice to
the Borrower (with a copy to the Board and the Loan Administrator), declare that
the Loan, all interest thereon and all other amounts and Obligations payable
under this Agreement to be immediately due and payable, whereupon the Loan, all
85
such interest and all such amounts and Obligations shall become and be
immediately due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided, however, that upon the occurrence of an Event of Default specified in
clause (f) or (g) of Section 7.1, the Loan, all such interest and all such
amounts and Obligations shall automatically become and be immediately due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower. Remedies exercisable by the
Agent or the Collateral Agent hereunder or under any Collateral Document shall
be exercised solely upon instructions received by the Agent or the Collateral
Agent from the Controlling Creditor in writing.
ARTICLE VIII
THE AGENT AND THE COLLATERAL AGENT
The parties hereto agree as follows:
SECTION 8.1. AUTHORIZATION AND ACTION. Each Lender and the Board
hereby appoints and authorizes each of the Agent and the Collateral Agent to
take such action as administrative agent and collateral agent, respectively, on
its behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated by such Lender to it as Agent or Collateral Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto, and each of the Agent and the Collateral Agent hereby
accepts such authorization and appointment. The Agent and the Collateral Agent
shall be obligated to perform such duties and only such duties as are
specifically set forth in this Agreement and the other Loan Documents and no
implied covenants or obligations shall be read into this Agreement or any other
Loan Document against the Agent or the Collateral Agent. Except with respect to
any matter as to which the Agent or the Collateral Agent is expressly directed
to take any specific action (or refrain from taking any specific action) by the
terms of this Agreement or any other Loan Documents, neither the Agent nor the
Collateral Agent shall be required to take any action (including making any
determination) or refrain from taking any action except upon the written
instructions of the Controlling Creditor, and neither the Agent nor the
Collateral Agent shall be required to exercise any discretion vested in the
Agent or the Collateral Agent under this Agreement or any other Loan Document,
but each of the Agent and the Collateral Agent shall be required to act or to
refrain from acting with regard to any such action (and shall be fully protected
in, and shall have no liability for, so acting or refraining from action) upon
such written instructions of the Controlling Creditor (including, without
limitation, with respect to matters arising under the Collateral Documents and
the other Loan Documents), and such instructions shall be binding upon all
Lenders and the Board; provided, however, that neither the Agent nor the
Collateral Agent shall be required to take any action which could reasonably be
expected to expose either the Agent or the Collateral Agent to liability or
which is contrary to this Agreement, the Board Guaranty, any Counter-Guarantee,
any Counter-Guarantor Letter of Credit, the Notes any other Loan Document or
applicable law. As to any provisions of this Agreement or any other Loan
Document under which action may be taken or approval given by less than all of
the Lenders or the Board or both, as the case may be, the action taken or
approval given by the required Lenders or the Board or both, as the case may be,
shall be binding upon all Lenders and the Board to the same extent and with the
same effect as if each Lender and the Board had joined therein. Each of the
Agent and the Collateral Agent shall be entitled to rely upon any note, notice,
consent, certificate, affidavit, letter, telegram, teletype message, facsimile
transmission, statement, order or other document, instrument or writing believed
by it to be genuine and to have been signed or sent by the proper person or
persons and, in respect of legal matters, upon the opinion of counsel selected
by the Agent or the Collateral Agent. Each of the Agent and the Collateral Agent
may deem and treat the payee of the Notes as the owner thereof for all purposes
hereof unless and until a written notice of the assignment or transfer thereof
shall have been filed with the Agent and the Collateral Agent. Any request,
authority or consent of any Person who at the time of making such request or
giving such authority or consent is the holder of the Loan shall
86
be conclusive and binding on any subsequent holder, transferee or assignee of
the Loan. Upon any delivery of any instructions to the Collateral Agent by the
Requisite Lenders pursuant to this Agreement, the Agent shall certify to the
Collateral Agent that the Lenders delivering such instructions constitute the
Requisite Lenders under the Agreement and (i) the Collateral Agent may but shall
be under no obligation to follow such instructions until the Agent shall certify
to the Collateral Agent that the Lenders delivering such instructions constitute
the Requisite Lenders under the Agreement and (ii) the Collateral Agent shall be
fully protected in, and shall have no liability for, following such instructions
whether or not the Agent shall have made the certification referred to in clause
(i) above or declining to follow such instructions until the Agent shall have
made the certification referred to in clause (i) above. Each Lender and the
Board hereby authorizes and directs the Collateral Agent to enter into the
Collateral Documents on its behalf, and acknowledges and agrees to all of the
terms and conditions thereof and agrees to be bound thereby. No provision of
this Agreement or any other Loan Document shall be deemed to impose any duty or
obligation on the Collateral Agent to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal or in which the Collateral Agent shall be
unqualified or incompetent to perform any such act or acts or to exercise any
such right, power, duty or obligation or if such performance or exercise would
constitute doing business by the Collateral Agent in such jurisdiction or impose
a tax on the Collateral Agent by reason thereof or to risk its own funds or
otherwise incur any financial liability in the performance of its duties
hereunder.
SECTION 8.2. RELIANCE, ETC. Neither the Agent nor the Collateral Agent
nor any of their respective Affiliates, directors, officers, agents or employees
shall be liable to any Lender, the Loan Administrator or the Board for any
action taken or omitted to be taken by it or by such directors, officers, agents
or employees under or in connection with this Agreement, the Notes or any other
Loan Document, except for its or their own gross negligence or willful
misconduct as actually and finally determined by a final, non-appealable
judgment of a court of competent jurisdiction and only to the extent of direct
(as opposed to special, indirect, consequential or punitive) damages. Without
limitation of the generality of the foregoing, each of the Agent and the
Collateral Agent: (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to any
Lender, the Loan Administrator or the Board for any action taken or omitted to
be taken in good faith by it in accordance with the advice of such experts; (ii)
makes no warranty or representation to any Lender, the Loan Administrator or,
except, with respect to the Agent as expressly provided in the Board Guaranty,
the Board, and shall not be responsible to any Lender, the Loan Administrator
or, except, with respect to the Agent as expressly provided in the Board
Guaranty, the Board, for any statements, warranties or representations (whether
oral or written) made in or in connection with this Agreement, the Notes or any
other Loan Document; (iii) shall not have any duty, and shall incur no liability
for its failure, to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement, the Notes or any
other Loan Document on the part of any Obligor or to inspect the property
(including the books and records) of any Obligor; (iv) shall not be responsible
to any Lender, the Loan Administrator or the Board for any recitals, statements,
representations or warranties in this Agreement, the Notes or any other Loan
Document, or any other instrument or document furnished pursuant thereto, or for
the validity, perfection, priority or enforceability of the liens or security
interests in any of the Collateral created or intended to be created by any Loan
Document, or for the validity or sufficiency of the Collateral or any Loan
Document, or for insuring the Collateral or for any payment of taxes, charges,
assessments, or liens upon the Collateral or otherwise as to the maintenance of
the Collateral, for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the Notes or any other Loan
Document, or any other instrument or document furnished pursuant thereto; (v)
shall incur no liability under or in respect to this Agreement, the Notes or any
other Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, facsimile transmission, cable
or telex) believed by it to be genuine and signed or sent by the proper party or
parties; and (vi) may deem and treat each Lender which makes a loan hereunder as
the holder of the indebtedness resulting therefrom for all purposes hereof until
the Agent receives and accepts an
87
Assignment and Acceptance entered into by such Lender, as assignor, and an
eligible assignee as provided in Section 9.2. The Collateral Agent shall be
under no obligation or duty to take any action under this Agreement or any other
Loan Document or otherwise if taking such action (i) would subject the
Collateral Agent to a tax in any jurisdiction where it is not then subject to a
tax or (ii) would require the Collateral Agent to qualify to do business in any
jurisdiction where it is not then so qualified, unless in each such case the
Collateral Agent shall receive security, or indemnity satisfactory to it against
such tax and any liability resulting from such qualification, in each case as
results from the taking of such action under this Agreement or any other Loan
Document. The Collateral Agent may execute any of the trusts or powers hereof
and perform any duty hereunder, or under any other Loan Document, either
directly or by or through agents or attorneys-in-fact. The Collateral Agent
shall be entitled to the advice of counsel concerning all matters pertaining to
such trusts, powers and duties and shall not be liable to any Lender, the Loan
Administrator or the Board for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel. The Collateral Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it without gross negligence or willful misconduct.
The Collateral Agent shall not be liable for interest on any money or assets
received by it except as the Collateral Agent may agree in writing. Assets held
by the Collateral Agent pursuant to this Agreement or any Collateral Document
need not be segregated from other assets except to the extent expressly required
hereunder or thereunder or required by law. Notwithstanding anything to the
contrary in this Agreement or any other Loan Document, (i) if any provision of
this Agreement or any other Loan Document provides that the Collateral Agent
shall act at the direction of the Agent, the Collateral Agent shall be fully
protected in, and shall have no liability for, taking any action pursuant to
such direction, and (ii) if the Collateral Agent shall request instructions from
the Controlling Creditor with respect any act or action (including the failure
to act) in connection with this Agreement or any other Loan Document, the
Collateral Agent shall be entitled to refrain from such act or taking such
action unless and until the Collateral Agent shall have received written
instructions from the Controlling Creditor and the Collateral Agent shall not
incur any liability to any Person by reason of so refraining and shall be fully
protected in following any such written instructions. Whenever in the
administration of this Agreement or any other Collateral Document, the
Collateral Agent shall deem it necessary or desirable that a factual matter be
proved or established in connection with the Collateral Agent taking, suffering
or omitting any action hereunder or thereunder, such matter (unless other
evidence in respect thereof is specifically prescribed) may be deemed to be
conclusively proved and established by a certificate of a Responsible Officer of
the Borrower (with a copy to the Agent), the Agent or the Controlling Creditor
delivered to the Collateral Agent, and such certificate shall be full warrant to
the Collateral Agent for any action taken, suffered or omitted in reliance
thereon and the Collateral Agent shall be fully protected in connection
therewith and shall have no liability therefor.
SECTION 8.3. AFFILIATES. If and so long as the Agent or the Collateral
Agent shall remain a Lender, the Agent or the Collateral Agent, as applicable,
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the Agent or the
Collateral Agent, and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include the Agent and the Collateral Agent, each in its
individual capacity. Unrelated to its role as Agent or Collateral Agent as set
forth herein, the Agent and the Collateral Agent and their respective Affiliates
may accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, any Obligor and any Person who
may do business with or own securities of any Obligor, all as if it were not the
Agent or the Collateral Agent, as applicable, hereunder and without any duty to
account therefor to the Lenders.
SECTION 8.4. REPRESENTATIONS OF THE LENDERS AND THE BOARD. Each
Lender, the Loan Administrator and the Board's representatives have actively
engaged in the negotiation of all of the terms of this Agreement. The Board's
representatives have met with the Obligors to discuss the business,
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affairs, financial condition and prospects of the Obligors. Except as otherwise
expressly provided in this Agreement or any of the other Loan Documents, neither
the Agent nor the Collateral Agent shall have any duty or responsibility, either
initially or on a continuing basis, under this Agreement or any other Loan
Document, to provide any Lender, the Loan Administrator or the Board with any
credit or other information with respect to the Borrower whether coming into its
possession as of the date of this Agreement or at any time thereafter, or to
notify any Lender, the Loan Administrator or the Board of any Default or Event
of Default except as provided in Section 8.5. This Agreement and all instruments
or documents delivered in connection with this Agreement have been reviewed and
approved by each Lender, the Loan Administrator and the Board and none of the
Lenders, the Loan Administrator or the Board has relied on the Agent or the
Collateral Agent as to any legal or factual matter in connection therewith or in
connection with the transactions contemplated thereunder.
SECTION 8.5. EVENTS OF DEFAULT; TERMINATION OF BOARD GUARANTY.
(a) In the event of the occurrence of any Default or Event of Default,
any Lender, any Counter-Guarantor or the Board knowing of such event may (but
shall have no duty to), or any Principal Obligor pursuant to Section 5.1(b)(vi)
hereof shall, give the Agent and the Collateral Agent written notice specifying
such Default or Event of Default and expressly stating that such notice is a
"notice of default". Neither the Agent nor the Collateral Agent shall be deemed
to have knowledge of such events unless the Agent or the Collateral Agent, as
applicable, has received such notice or, with respect to the Agent only, unless
the Default or Event of Default consists of a failure of payment of principal or
interest on the Loan. In the event that the Agent or the Collateral Agent
receives such a notice of the occurrence of a Default or Event of Default, the
Agent or the Collateral Agent, as applicable, shall give written notice thereof
to the Lenders, the Counter-Guarantors, the Board and the Loan Administrator. In
the event that such notice is a notice of an Event of Default or such Default
matures into an Event of Default, the Agent and the Collateral Agent shall take
such action with respect to such Default or Event of Default as shall be
directed in writing by the Controlling Creditor, as provided in Section 7.2;
provided, however, that, unless and until the Agent or the Collateral Agent
shall have received such directions, the Agent and the Collateral Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable and
in the best interest of the Lenders and the Board.
(b) In the event the Agent or the Collateral Agent shall receive
written notice from the Board to the effect that (i) the Board has the right to
terminate the Board Guaranty under Sections 2.04 and 2.05 thereof, (ii) any
portion of the Board Guaranty has terminated under Section 2.03 thereof or
otherwise or (iii) the Board Guaranty shall for any reason have ceased to be in
full force and effect or the Board shall have asserted that any of its
obligations thereunder is invalid or unenforceable, the Agent or the Collateral
Agent, as applicable shall promptly give written notice thereof to the Lenders
and the Counter-Guarantors. Neither the Agent nor the Collateral Agent shall be
deemed to have knowledge of any such event unless the Agent or the Collateral
Agent, as applicable, has received such notice (except with respect to the Agent
if any such event results from the failure of the Agent to perform any of its
obligations under the Board Guaranty).
SECTION 8.6. AGENT'S AND COLLATERAL AGENT'S RIGHT TO INDEMNITY. The
Agent and the Collateral Agent shall be fully justified in failing or refusing
to take any action hereunder on behalf of any Lender or the Board unless it
shall first be indemnified to its satisfaction by such Lender or the Board, as
the case may be, against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
SECTION 8.7. INDEMNIFICATION OF AGENT AND COLLATERAL AGENT. The
Lenders hereby agree to indemnify the Agent and the Collateral Agent and all of
their respective affiliates, directors,
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officers, employees, advisors and representatives thereof (to the extent not
reimbursed by the Borrower), ratably as most recently in effect prior to the
date indemnification is sought, from and against any and all costs, losses,
liabilities, claims, damages or expenses which may be incurred by or asserted or
awarded against the Agent or the Collateral Agent in any way relating to or
arising out of this Agreement and/or the other Loan Documents or any action
taken or omitted by the Agent or the Collateral Agent under this Agreement
and/or the other Loan Documents; provided, however, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's or the Collateral Agent's gross negligence or willful
misconduct as actually and finally determined by a final, non-appealable
judgment of a court of competent jurisdiction and only to the extent of direct
(as opposed to special, indirect, consequential or punitive) damages. Without
limiting the foregoing, each Lender agrees to reimburse the Agent and the
Collateral Agent promptly upon demand for its ratable share of any reasonable
out-of-pocket expenses (including reasonable counsel fees) incurred by the Agent
or the Collateral Agent in connection with the administration or enforcement of,
or the preservation of any rights under, this Agreement (including this Section
8.7) and/or the other Loan Documents, to the extent that the Agent or the
Collateral Agent is not reimbursed for such expenses by the Borrower. The
agreements in this Section 8.7 shall survive the termination of the other
provisions of this Agreement and the other Loan Documents and the resignation or
removal of the Collateral Agent hereunder.
SECTION 8.8. SUCCESSOR AGENT AND COLLATERAL AGENT. Each of the Agent
and the Collateral Agent may resign at any time by giving written notice thereof
to the Lenders, the Board, the Counter-Guarantors, the Loan Administrator and
the Borrower and may be removed at any time with cause by the Controlling
Creditor and, so long as the Board is a guarantor of Tranche A or a Lender
hereunder, with or without cause by the Board. Any such resignation or removal
shall be effective upon appointment and acceptance of a successor Agent or
Collateral Agent, as applicable, in accordance with this Section 8.8. Upon any
such resignation or removal, the Borrower shall have the right to appoint a
successor agent, subject to confirmation by the Controlling Creditor. If no
successor agent shall have been appointed and accepted such appointment within
sixty (60) days after the retiring Agent's or Collateral Agent's, as applicable,
giving of notice of resignation or the Controlling Creditor's removal of the
Agent or the Collateral Agent, the Agent or the Collateral Agent, as applicable,
may, with the consent (not to be unreasonably withheld) of the Controlling
Creditor and, so long as no Event of Default shall have occurred and be
continuing, the Borrower, appoint a successor Agent or Collateral Agent, as
applicable, who shall be willing to accept such appointment. Each successor
agent appointed hereunder shall be a commercial bank organized under the laws of
the United States of America or of any State thereof and shall have a combined
capital and surplus of at least $1,000,000,000. Upon the acceptance of any
appointment as Agent or Collateral Agent hereunder by a successor Agent or
Collateral Agent, such successor Agent or the Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Agent or Collateral Agent, and the retiring or
removed Agent or Collateral Agent shall be discharged from its duties and
obligations as agent under this Agreement. After any Agent's or Collateral
Agent's resignation or removal hereunder as Agent or Collateral Agent, as
applicable, the provisions of this Article VIII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent or Collateral
Agent under this Agreement.
SECTION 8.9. RELEASE OF LIENS ON COLLATERAL AND SUBSIDIARY GUARANTORS.
The Lenders and the Board irrevocably authorize and instruct the Collateral
Agent to release any Lien on any property granted to or held by the Collateral
Agent under any Collateral Document and to release any Subsidiary Guarantor from
its obligations under the Second Lien Guaranty and the other Loan Documents to
which such Subsidiary may be a party (i) upon payment in full of all Obligations
(other than contingent indemnification obligations), (ii) upon the transfer of
property as part of or in connection with any Asset Sale that complies with
Section 6.13 and with respect to which the relevant Obligor complies with
Section 2.5(d), as applicable, (iii) upon the pledge, sale, transfer or other
disposition of property as part of
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or in connection with any Replacement Secured Financing with respect to which
the relevant Obligor complies with Section 2.5(b), (iv) to the extent release of
any Lien is otherwise permitted under this Agreement or any Collateral Document
(including, without limitation, in the proviso to Section 5.8(b) hereof), or (v)
subject to Section 9.1, if approved, authorized or ratified in writing by the
Controlling Creditor; provided, that the Collateral Agent shall not be obligated
to release any Lien pursuant to this Section 8.9 until its receipt from the
Borrower of an Officer's Certificate certifying that such release complies with
this Section 8.9, and upon receipt of such Officer's Certificate the Collateral
Agent shall release such Lien in accordance with such Officer's Certificate and
shall be fully protected in connection therewith. The Borrower shall send a copy
of any such Officer's Certificate to the Agent, the Board and the Loan
Administrator at the same time that it sends such Officer's Certificate to the
Collateral Agent.
SECTION 8.10. CO-COLLATERAL AGENT; SEPARATE COLLATERAL AGENT.
(a) If at any time or times it shall be necessary or prudent in order
to conform to any law of any jurisdiction in which any of the Collateral shall
be located, or to avoid any violation of law or imposition on the Collateral
Agent of taxes by such jurisdiction not otherwise imposed on the Collateral
Agent, or the Collateral Agent shall be advised by legal counsel that it is
necessary or prudent in the interest of the Lenders, or the Collateral Agent
shall deem it desirable for its own protection in the performance of its duties
hereunder, the Collateral Agent and the Borrower shall promptly execute and
deliver all instruments and agreements necessary or proper to constitute another
bank or trust company, or one or more persons approved by the Collateral Agent
and the Borrower (with the consent, not to be unreasonably withheld, of the
Controlling Creditor), either to act as Collateral Agent or co-Collateral Agents
of all or any of the Collateral under this Agreement, jointly with the
Collateral Agent originally named herein or therein or any successor Collateral
Agent, or to act as separate Collateral Agent or Collateral Agents of any of the
Collateral.
(b) Every separate Collateral Agent and every co-Collateral Agent,
other than any successor Collateral Agent appointed pursuant to Section 8.8,
shall, to the extent permitted by law, be appointed and act and be such, subject
to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred upon such
Collateral Agent in respect of the custody, control and management of
moneys, papers or securities shall be exercised by such Collateral Agent or
any agent appointed by such Collateral Agent;
(ii) all rights, powers, duties and obligations conferred or imposed
upon the Collateral Agent hereunder shall be conferred or imposed and
exercised or performed by the Collateral Agent and such separate Collateral
Agent or separate Collateral Agents or co-Collateral Agent or co-Collateral
Agents, jointly, as shall be provided in the instrument appointing such
separate Collateral Agent or separate Collateral Agents or co-Collateral
Agent or co-Collateral Agents, except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Collateral Agent shall be incompetent or unqualified to perform such
act or acts, or unless the performance of such act or acts would result in
the imposition of any tax on the Collateral Agent which would not be
imposed absent such joint act or acts, in which event such rights, powers,
duties and obligations shall be exercised and performed by such separate
Collateral Agent or separate Collateral Agents or co-Collateral Agent or
co-Collateral Agents;
(iii) except as provided in clause (ii) above, no power given hereby
to, or which it is provided herein or therein may be exercised by, any such
co-Collateral Agent or co-Collateral Agents or separate Collateral Agent or
separate Collateral Agents shall be exercised hereunder or thereunder by
such co-Collateral Agent or co-Collateral Agents or separate Collateral
Agent or
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separate Collateral Agents except jointly with, or with the consent in
writing of, the Collateral Agent, anything contained herein to the contrary
notwithstanding;
(iv) no Collateral Agent hereunder shall be personally liable by
reason of any act or omission of any other Collateral Agent hereunder; and
(v) the Borrower and the Collateral Agent, at any time by an
instrument in writing executed by them jointly (with the consent, not to be
unreasonably withheld, of the Controlling Creditor), may accept the
resignation of or remove (for any reason or no reason at all) any such
separate Collateral Agent or co-Collateral Agent and, in that case by an
instrument in writing executed by them jointly, may appoint a successor to
such separate Collateral Agent or co-Collateral Agent, as the case may be,
anything contained herein to the contrary notwithstanding.
SECTION 8.11. COLLATERAL AGENTS' LIEN. Notwithstanding anything to the
contrary in this Agreement or in any other Loan Document, as security for the
payment of its fee under Section 2.7(f) and all other amounts payable to the
Collateral Agent hereunder including, without limitation, any and all expenses
and any amounts for which the Collateral Agent is entitled to reimbursement or
indemnification, (i) the Collateral Agent is hereby granted a lien on all
Collateral and (ii) the Collateral Agent shall have the right to use and apply
any of the funds held by the Collateral Agent to cover all such fees and other
amounts.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. AMENDMENTS, WAIVERS, ETC.
(a) Amendments and Waivers. No amendment, modification or waiver of
any provision of this Agreement or any other Loan Document nor consent to any
departure by any Obligor therefrom shall in any event be effective unless the
same shall be in writing and (x) signed by the Controlling Creditor and (y)
permitted by Section 5.3 of the Intercreditor Agreement (if applicable), and
then any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that:
(i) no amendment, modification, waiver or consent shall, unless in
writing and signed by each Lender and Counter-Guarantor affected thereby
and the Board (so long as the Board is either a guarantor of Tranche A or a
Lender hereunder), do any of the following:
(1) subject the Lenders, the Counter-Guarantors or the Board to
any additional obligations;
(2) change the scheduled final maturity of the Loan or change the
amount of or any date fixed for payment of any principal of the Loan;
(3) change the principal amount of the Loan (other than by
payment or prepayment thereof or in connection with a Loan Discharge
Exercise);
(4) change the rate of interest on the Loan or any fee, indemnity
or other amount payable to such Lender, Counter-Guarantor or the
Board;
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(5) change any date fixed for payment of such interest, indemnity
or other amount or fees;
(6) amend the definition of "Requisite Lenders," "Controlling
Creditor" or this Section 9.1;
(7) waive, amend, modify or release the Second Lien Guaranty
except as provided herein; and
(8) modify the application of payments to the Loan under Section
2.8.
(ii) no (A) amendment or modification of any material provision of
Article II, Article III, Article IV, Article VIII, Section 5.1 (other than
Section 5.1(b)(ii)), Section 5.2, Section 5.5, Section 6.1(a)(ii), Section
6.3, Section 6.4, Section 7.1 (other than to add Events of Default),
Section 9.2, Section 9.3, Section 9.4, Section 9.5, Section 9.6, Section
9.7, Section 9.9, Section 9.10, Section 9.11, Section 9.12, Section 9.16,
Section 9.17 or any of the definitions as relevant thereto, (B) release of
all or substantially all of the Collateral, or any dilution or
subordination of the Liens on any Collateral having a material value, or
(C) waiver, amendment or modification of the Intercreditor Agreement in a
manner adverse to the Second Lien Claimholders (under and as defined
therein), in each case shall be effective unless in writing and signed by
(I) the Initial Lender, so long as it continues to hold Tranche B-4, (II)
each Counter-Guarantor so long as it is either a guarantor of Tranche ▇-▇,
▇▇▇▇▇▇▇ ▇-▇ or Tranche B-3, respectively, or a Lender hereunder, and (IV)
the Board, so long as the Board is either a guarantor of Tranche A or a
Lender hereunder; and
(iii) no amendment, modification, waiver or consent shall, unless in
writing and signed by the Agent, the Collateral Agent or the Loan
Administrator, as applicable, in addition to the Persons required above to
take such action, affect the rights or duties of the Agent, the Collateral
Agent or the Loan Administrator, as the case may be, under this Agreement,
the other Loan Documents, any Counter-Guarantee or the Board Guaranty.
(b) Execution of Amendments and Waivers by the Agent. The Agent may,
but shall have no obligation to, with the written concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of that Lender.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances.
(c) Non-Consenting Lenders. In connection with any proposed amendment,
modification, waiver or termination requiring the consent of all affected
Lenders, if the consent of Requisite Lenders is obtained, but the consent of
other Lenders whose consent is required is not obtained (any such Lender whose
consent is not obtained as described in this Section 9.1 being referred to as a
"Non-Consenting Lender"), then, so long as the Lender that is acting as the
Agent is not a Non-Consenting Lender, at the Borrower's request, the Agent or an
Eligible Lender that is acceptable to the Agent, the Board and, so long as no
Event of Default shall have occurred and be continuing, the Borrower, shall have
the right with the Agent's consent and in the Agent's sole discretion (but shall
have no obligation) to purchase from such Non-Consenting Lender, and such
Non-Consenting Lender agrees that it shall, upon the Agent's request, sell and
assign to the Lender that is acting as the Agent or such Eligible Lender, all of
the portion of the Loan of such Non-Consenting Lender for an amount equal to the
principal balance of such portion of the Loan held by the Non-Consenting Lender
and all accrued interest
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and fees with respect thereto through the date of sale, such purchase and sale
to be consummated pursuant to an executed Assignment and Acceptance.
SECTION 9.2. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS AND ASSIGNS.
(a) Assignment. Each Lender may sell, transfer, negotiate or assign
either in whole or in part to one or more Eligible Lenders its rights and
obligations hereunder and under the Notes and the other Loan Documents; provided
that (i) the assigning Lender shall give prompt written notice to the Agent, the
Borrower, the Board and the Loan Administrator of the terms of and the parties
to any such assignment, (ii) the proposed assignee shall provide to the Agent,
the Borrower and the Board all documentation and certificates as required by the
Agent, the Borrower and the Board to confirm to the Agent's and the Board's
satisfaction that such proposed assignee is an Eligible Lender, (iii) the
Borrower will not be obligated to pay any greater amount under Section 2.9(c) or
Section 2.11 (in respect of increased costs or Indemnified Taxes or Other Taxes
imposed pursuant to applicable law in effect on the date of such assignment) to
the assignee than the Borrower is then obligated to pay to the assigning Lender
under such Sections, (iv) any sale, transfer or assignment of a Tranche A
Lender's rights, interests or obligations under the Board Guaranty shall be
subject to Sections 2.04 and 5.04 of the Board Guaranty, (v) any sale, transfer
or assignment of the rights, interests or obligations of the Tranche B-1 Lender,
Tranche B-2 Lender or Tranche B-3 Lender under the applicable Counter-Guarantee
shall be subject to the applicable provisions of such Counter-Guarantee, (vi)
without the consent of the Borrower (in its sole discretion), no right,
obligation or interest hereunder or under any Note or other Loan Document may be
sold, transferred, negotiated or assigned to (A) an airline, a commercial
aircraft operator, an air freight forwarder or an entity principally engaged in
the business of parcel transport by air (any such Person, a "Prohibited
Transferee"), (B) an Affiliate of a Prohibited Transferee or (C) a maintenance
provider for aircraft airframes, engines or related parts or a manufacturer of
engines or of parts related to airframes or engines, and (vii) no right,
obligation or interest hereunder or under any Note or other Loan Document may be
sold, transferred, negotiated or assigned to a manufacturer of aircraft
airframes.
(b) Deliveries in Connection with Assignment. The parties to each
assignment under this Section 9.2 shall execute and deliver to the Agent, for
its acceptance and recording, an Assignment and Acceptance, and the assignee, if
a Non-U.S. Person, shall deliver to the Borrower, the Agent and each
Counter-Guarantor (if such assignment is of Tranche B), on or prior to the date
of the assignment, two completed copies of IRS Form ▇-▇, ▇-▇▇▇▇ or W-8ECI or
other applicable form, certificate or document required to satisfy the
requirements of Section 2.11. Upon such execution, delivery and acceptance and
the receipt by the Agent of an assignment fee in the amount of $3,500 (which fee
shall be payable by the assignor, or if the assignor is the Board, the
Borrower), the Agent shall record such Assignment and Acceptance and from and
after the effective date specified in such Assignment and Acceptance (i) the
assignee thereunder of all or any portion of the Loan shall become a party
hereto and, to the extent that rights and obligations under the Loan Documents
have been assigned to such assignee pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender and (ii) the assignor thereunder
shall, to the extent that rights and obligations under this Agreement have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except those rights with respect to indemnification which survive the payment
in full of the Obligations) and be released from its obligations under the Loan
Documents, other than those relating to events or circumstances occurring prior
to such assignment (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under the Loan Documents, such Lender shall cease to be a party hereto).
(c) Agent's Duties Upon Assignment. Upon its receipt of an Assignment
and Acceptance executed by an assigning Lender and an assignee, the Agent shall,
if such Assignment and Acceptance has been completed, (i) accept such Assignment
and Acceptance, (ii) record the information
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contained therein in the Register, (iii) give prompt notice thereof to the
Borrower and (iv) shall give prompt written notice of the terms of and parties
to any such assignment to the Borrower, the Board, the Counter-Guarantors and
the Loan Administrator.
(d) Assignments to Federal Reserve Bank. In addition to the other
assignment rights provided in this Section 9.2, each Lender may assign, without
the prior consent of the Borrower, the Agent or the Board as collateral or
otherwise, any of its rights under this Agreement to any Federal Reserve Bank
pursuant to Regulation A of the Federal Reserve Board, provided, however, that
no such assignment shall release the assigning Lender from any of its
obligations hereunder.
(e) Participations. Each Lender may, without the prior consent of the
Borrower or any other Person, sell participations, to the extent permitted by
the Regulations, in or to all or a portion of its rights and obligations
hereunder and under the Notes and the other Loan Documents (any such purchaser
of a participation being referred to as a "Participant"); provided that (i)
neither the Notes nor the Board Guaranty nor any applicable Counter-Guarantee is
assigned, conveyed, sold or transferred in whole or in part, (ii) in the case of
an assignment of Tranche A, the Board's ability to assert any and all defenses
available to it under the Board Guaranty and the law is not adversely affected,
and in the case of an assignment of Tranche B (other than Tranche B-4), the
applicable Counter-Guarantor's ability to assert any and all defenses available
to it under the applicable Counter-Guarantee and the law is not adversely
affected, (iii) the Borrower will not be obligated to pay any greater amount
under Section 2.9(c) or Section 2.11 (in respect of increased costs, Indemnified
Taxes or Other Taxes) to the Participant than the Borrower is then obligated to
pay to the selling Lender under such Sections, (iv) any such participation with
respect to Tranche ▇-▇, ▇▇▇▇▇▇▇ ▇-▇ or Tranche B-3 shall be subject to the
applicable provisions of any applicable Counter-Guarantee, (v) no Participant
shall, without the consent of the Borrower (such consent to be in the Borrower's
sole discretion), be a (x) Prohibited Transferee, (y) an Affiliate of a
Prohibited Transferee or (z) a maintenance provider for aircraft airframes,
engines or related parts or a manufacturer of engines or of parts related to
airframes or engines, and (vi) no Participant shall be a manufacturer of
aircraft airframes. In the event of the sale of any participation by any Lender,
(A) such Lender's obligations under the Loan Documents shall remain unchanged,
(B) such Lender shall remain solely responsible to the other parties for the
performance of such obligations, (C) such Lender shall remain the holder of such
Obligations for all purposes of this Agreement, (D) the Borrower, the Agent, the
Board, the applicable Counter-Guarantor (as applicable) and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, and (E) each
Participant, shall deliver to the Borrower, the Agent and each Counter-Guarantor
(if such participation is of Tranche B), on or prior to the date of the sale of
the participation, two completed copies of IRS Form ▇-▇, ▇-▇▇▇▇ or W-8ECI or
other applicable form, certificate or document required to satisfy the
requirements of Section 2.11. Any Participant will be entitled to the benefits
of Section 2.9(c), Section 2.9(e), Section 2.10 and Section 2.11 to the same
extent as if such Person were a Lender.
(f) Assignment of Tranche A at the Direction of the Board. The Tranche
A Lender agrees that if and to the extent that the Board Guaranty remains in
effect, the Board shall have the right, upon ten (10) Business Days' prior
notice to the Tranche A Lender (with a copy to the Agent and the Borrower) to
require the Tranche A Lender to sell, transfer and assign Tranche A, in whole or
in part (but in no event in excess of the amount then guaranteed under the Board
Guaranty), and with or without the benefit of the Board Guaranty (which, if
without, shall be fully and irrevocably released upon the closing and to the
extent of such purchase), to a Person designated by the Board, for a purchase
price equal to 100% of the principal amount of such portion of Tranche A to be
sold, transferred and assigned, together with all accrued and unpaid interest
thereon through the date of purchase (which purchase price may include a payment
under the Board Guaranty) and payment of any losses, expenses and liabilities
under Section 2.9(e) hereof attributable to such sale, transfer and assignment
(it being acknowledged and agreed
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that any premium paid by such purchaser for such portion of the Loan shall be
for the benefit of the Board); provided, that the Tranche A Lender (to the
extent commercially reasonable) and the Borrower shall cooperate with the Board
to minimize any such losses, expenses and liabilities so long as any such action
would not result in the Tranche A Lender incurring any additional costs or
otherwise be disadvantageous to the Tranche A Lender in its sole judgment; and
provided, further that the Tranche A Lender shall also be entitled to payment of
all other unpaid Obligations owing to it through the date of purchase from the
Obligors, including, without limitation, fees, expenses, indemnities and other
amounts which are then due and payable pursuant to the terms of the Loan
Documents, which amounts the Obligors agree to pay to the Tranche A Lender on
the date of purchase. The closing of the Tranche A assignment shall be
consummated pursuant to an Assignment and Acceptance and such other
documentation as the Tranche A Lender, the Board and such assignee shall
mutually agree is reasonably necessary. Any such sale, transfer or assignment
under this subsection (f) shall be subject to the conditions specified in
clauses (i), (ii), (iii) and (vi) of the proviso in subsection (a) of this
Section 9.2.
(g) Assignment of Tranche B at the Direction of a Counter-Guarantor.
Each of the Tranche B-1 Lender, Tranche B-2 Lender and Tranche B-3 Lender agrees
that if and to the extent that the applicable Counter-Guarantee is and remains
in effect, the applicable Counter-Guarantor shall have the right, upon ten (10)
Business Days' prior notice to such Tranche B-1 Lender, Tranche B-2 Lender and
Tranche B-3 Lender, as the case may be (with a copy to the Agent and the
Borrower), to require such Tranche B Lender to sell, transfer and assign such
portion of Tranche ▇-▇, ▇▇▇▇▇▇▇ ▇-▇ and Tranche B-3 (as the case may be), in
whole or in part (but in no event in excess of the amount then guaranteed under
the applicable Counter-Guarantee), and with or without the benefit of the
applicable Counter-Guarantee (which, if without, shall be fully and irrevocably
released upon the closing and to the extent of such purchase), to a Person
designated by such Counter-Guarantor, for a purchase price equal to 100% of the
principal amount of such portion of Tranche ▇-▇, ▇▇▇▇▇▇▇ ▇-▇ and Tranche B-3 (as
the case may be) to be sold, transferred and assigned, together with all accrued
and unpaid interest thereon through the date of purchase (which purchase price
may include a payment under the applicable Counter-Guarantee) and payment of any
losses, expenses and liabilities under Section 2.9(e) hereof attributable to
such sale, transfer and assignment (it being acknowledged and agreed that any
premium paid by such purchaser for such portion of the Loan shall be for the
benefit of the applicable Counter-Guarantor); provided, that such the Tranche B
Lender (to the extent commercially reasonable) and the Borrower shall cooperate
with the applicable Counter-Guarantor to minimize any such losses, expenses and
liabilities so long as any such action would not result in the Tranche B Lender
incurring any additional costs or otherwise be disadvantageous to such Tranche B
Lender in its sole judgment; and provided, further that the Tranche B-1 Lender,
Tranche B-2 Lender and Tranche B-3 Lender shall also be entitled to payment of
all other unpaid Obligations owing to it through the date of purchase from the
Obligors, including, without limitation, fees, expenses, indemnities and other
amounts which are then due and payable pursuant to the terms of the Loan
Documents, which amounts the Obligors agree to pay to such Tranche B Lender on
the date of purchase. The closing of the Tranche ▇-▇, ▇▇▇▇▇▇▇ ▇-▇ or Tranche B-3
assignment shall be consummated pursuant to an Assignment and Acceptance and
such other documentation as the Tranche B-1 Lender, Tranche B-2 Lender or
Tranche B-3 Lender (as the case may be) and such assignee shall mutually agree
is reasonably necessary. Any such sale, transfer or assignment under this
subsection (f) shall be subject to the conditions specified in clauses (i),
(ii), (iii) and (vi) of the proviso in subsection (a) of this Section 9.2.
(h) Reimbursement of Fees upon Certain Assignments. If during any
Interest Period some or all of the Loan is assigned in compliance with this
Section 9.2 and as a result of such assignment the Applicable Interest Rate on
the portion of the Loan so assigned will accrue at the rate specified in the
proviso of the definition of "Applicable Interest Rate," then the Board (in the
case of an assignment of Tranche A), the applicable Counter-Guarantor (in the
case of an assignment of Tranche ▇-▇, ▇▇▇▇▇▇▇ ▇-▇ or Tranche B-3) or the Initial
Lender (in the case of an assignment of Tranche B-4) shall reimburse the
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Borrower on or prior to the first day of the next Interest Period for a pro rata
amount of the Guarantee Fee, Counter-Guarantee Fee or Supplemental Facility Fee,
as the case may be, paid by the Borrower to the Board, such Counter-Guarantor or
the Initial Lender for such Interest Period, which amount shall be equal to the
product of (x) the amount of the Guarantee Fee, Counter-Guarantee Fee or
Supplemental Facility Fee attributable to the portion of the Loan so assigned
and (y) a fraction, the numerator of which is the number of days in such
Interest Period during which the assignee held such assigned portion of the Loan
and the denominator of which is the total number of days in such Interest
Period.
(i) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, provided that except as otherwise expressly provided herein,
no Obligor may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Board, the Lenders and the
Agent (and any attempted assignment or transfer by an Obligor without such
consent shall be null and void).
SECTION 9.3. COSTS AND EXPENSES. Whether or not the transactions
contemplated hereby shall be consummated, the Obligors agree to pay promptly (i)
all reasonable costs and expenses incurred by the Loan Administrator, the Board,
the Initial Lender, each Counter-Guarantor, the Agent and the Collateral Agent
in connection with the negotiation, preparation, execution and delivery of the
Loan Documents, the Board Guaranty and all documents relating thereto (including
reasonable legal fees and expenses), (ii) all reasonable costs and expenses
incurred by the Loan Administrator, the Board, the Lenders, the
Counter-Guarantors, any Participant, the Agent and the Collateral Agent in
connection with any consents, amendments, waivers or other modifications hereto
(including reasonable legal fees and expenses) and (iii) all costs and expenses,
including reasonable legal fees and expenses incurred by the Agent, the
Collateral Agent, the Lenders, each Counter-Guarantor, any Participant, the Loan
Administrator and the Board in enforcing any Obligations of, or in collecting
any payments due from, the Obligors hereunder or under the other Loan Documents,
including any such costs and expenses incurred after the filing of a bankruptcy
or insolvency proceeding with respect to any Obligor.
SECTION 9.4. INDEMNITIES. Whether or not the transactions contemplated
hereby shall be consummated, the Obligors agree to defend, indemnify, pay and
hold harmless the Board, the Agent, the Collateral Agent, the
Counter-Guarantors, the Lenders, the Loan Administrator and their respective
Affiliates, officers, directors, employees, agents and advisors (collectively
called the "Indemnitees") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including without limitation
the reasonable fees and disbursements of counsel for such Indemnitees, but
excluding Taxes), whether direct, indirect or consequential and whether based on
any federal, state or foreign laws, statutes, rules or regulations (including
without limitation securities and commercial laws, statutes and rules or
regulations), on common law or equitable cause or on contract or otherwise, that
may be imposed on, incurred by, or asserted against any such Indemnitee, in any
manner arising out of this Agreement, the other Loan Documents, any
Counter-Guarantee or the transactions contemplated hereby or thereby (including,
without limitation, the use or intended use of the proceeds of the Loan) or any
breach or default by the Obligors of any provision of the Loan Documents
(collectively called the "Indemnified Liabilities"); provided that the Obligors
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise (i)
from the gross negligence or willful misconduct of that Indemnitee (as actually
and finally determined by a final and non-appealable judgment of a court of
competent jurisdiction) and only to the extent that such Indemnified Liabilities
constitute direct (as opposed to special, indirect, punitive or consequential)
damages or (ii) constitute ordinary and usual operating or overhead expenses of
an Indemnitee (excluding, without limitation, costs and expenses of any outside
counsel, consultant or agent). To the extent that the undertaking to defend,
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, each of the
Obligors
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shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them. No Indemnitee shall have
any liability (whether direct or indirect, in contract, tort or otherwise) to
any Obligor or any of its security holders or creditors for or in connection
with the transactions contemplated hereby, except to the extent such liability
is determined in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted primarily from such Indemnitee's gross negligence
or willful misconduct. In no event, however, shall any Indemnitee be liable on
any theory of liability for any special, indirect, consequential or punitive
damages (including, without limitation, any loss of profits, business or
anticipated savings). Without limitation of the generality of the foregoing,
each Indemnitee (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to any
Obligor or any of its security holders or creditors for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
experts and (ii) shall incur no liability under or in respect to this Agreement,
the Notes or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telegram, facsimile
transmission, cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties. The agreements in this Section 9.4 shall survive
the termination of the other provisions of this Agreement and the other Loan
Documents and, in the case of the Collateral Agent, shall survive the
resignation or removal of the Collateral Agent hereunder.
SECTION 9.5. RIGHT OF SET-OFF. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
to the fullest extent permitted by law, each Lender is hereby authorized by the
Obligors at any time or from time to time, with notice to the Obligors and to
each other Lender, the Board, the Agent, the Collateral Agent and the Loan
Administrator, to set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, Indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
Indebtedness at any time held or owing by that Lender to or for the credit or
the account of any Obligor against and on account of the obligations and
liabilities of such Obligor to that Lender under this Agreement, the Second Lien
Guaranty, the Notes and the other Loan Documents, including, but not limited to,
all claims of any nature or description arising out of or connected with this
Agreement, the Second Lien Guaranty, the Notes, or any other Loan Document,
irrespective of whether or not (i) that Lender shall have made any demand
hereunder or (ii) the principal of or the interest on the Loan or any other
amounts due hereunder shall have become due and payable pursuant to Section 7.2
and although said obligations and liabilities, or any of them, may be contingent
or unmatured.
SECTION 9.6. SHARING OF PAYMENTS, ETC. The Lenders and the Board
hereby agree among themselves that if any of them shall, whether by voluntary
payment, by realization upon security, through the exercise of any right of
set-off or banker's lien, by counterclaim or cross action or by the enforcement
of any right under the Loan Documents or otherwise, or as adequate protection of
a deposit treated as cash collateral under the Bankruptcy Code, receive payment
or reduction of a proportion of the aggregate amount of principal, interest,
fees and other amounts then due and owing to the Lenders and the Board hereunder
or under the other Loan Documents (collectively, the "Aggregate Amounts Due")
which is greater than the proportion received by any other Lender or the Board
in respect of the Aggregate Amounts Due to such other Lender or the Board, then
the Lender or the Board receiving such proportionately greater payment shall (i)
notify the Agent and each other Lender and the Board of the receipt of such
payment and (ii) (A) in the case of a Lender, (1) apply a portion of such
payment to purchase participations equal to the portion of the Aggregate Amounts
Due to the other Lenders and (2) pay to the Board the portion of the Aggregate
Amounts Due to it or (B) in the case of the Board, pay to each Lender the
portion of the Aggregate Amounts Due to it (which participations shall be deemed
to have been purchased and payments made simultaneously upon the receipt by the
seller or the Board of its portion of such payment, and which participations
will be permitted notwithstanding any prohibition) to
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the contrary in Section 9.2(e)) so that all such recoveries of Aggregate Amounts
Due shall be shared by all Lenders and the Board in proportion to the Aggregate
Amounts Due to them, provided that if all or part of such proportionately
greater payment received by such purchasing Lender or the Board is thereafter
recovered from such Lender or the Board upon the bankruptcy or reorganization of
the Borrower or otherwise, those purchases or other payments shall be rescinded
and the purchase prices paid for such participations or other payments shall be
returned to such purchasing Lender or the Board ratably to the extent of such
recovery, but without interest. The Borrower expressly consents to the foregoing
arrangement and agrees that any holder of a participation so purchased may
exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by the Borrower to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
SECTION 9.7. NOTICES, ETC. Unless otherwise specifically provided
herein, any notice, request or other communication herein required or permitted
to be given shall be in writing and may be personally served or sent by
telefacsimile or courier service and shall be deemed to have been given when
delivered in person or by courier service, or upon receipt of telefacsimile
(promptly confirmed in writing). For the purposes hereof, the address of each
party hereto and each Counter-Guarantor shall be as set forth under such party's
name on Annex A or such other address as shall be designated by such party in a
written notice delivered to the Agent. A copy of any and all notices, requests,
communications, demands, reports, documents or other materials (including,
without limitation, any of the materials delivered by the Obligors under Section
5.1(b)) delivered or sent by any party pursuant to the terms of this Agreement
shall also be given to the Loan Administrator. Anything to the contrary
contained herein notwithstanding, the Obligors shall not be required to provide
the Board with any notices or certificates required to be delivered to the Board
hereunder and under the other Loan Documents if, at the time such notice is
required to be delivered, the Board is neither a guarantor of Tranche A nor a
Lender hereunder.
SECTION 9.8. NO WAIVER; REMEDIES. No failure on the part of the Board,
any Lender or the Agent to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 9.9. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (AND, TO THE EXTENT
APPLICABLE, THE BANKRUPTCY CODE); PROVIDED THAT THE RIGHTS AND OBLIGATIONS OF
THE BOARD HEREUNDER (WHETHER AS GUARANTOR OR LENDER) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE FEDERAL LAW OF THE UNITED STATES OF AMERICA,
IF AND TO THE EXTENT SUCH FEDERAL LAW IS APPLICABLE, AND OTHERWISE IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK.
SECTION 9.10. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.
(a) Submission to Jurisdiction. BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OBLIGOR HEREBY AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT AGAINST IT
IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. THE PARTIES
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HERETO HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH ANY OF
THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING
IN SUCH RESPECTIVE JURISDICTIONS.
(b) Service of Process. EACH OF THE OBLIGORS HEREBY IRREVOCABLY
CONSENTS TO THE SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND
DOCUMENTS IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE UNITED STATES OF
AMERICA ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS BY THE MAILING (BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID)
OR DELIVERING OF A COPY OF SUCH PROCESS TO IT IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 9.7.
(c) No Limitation. Nothing contained in this Section 9.10 shall affect
the right of the Agent or any Lender or other party hereto to serve process in
any other manner permitted by law or commence legal proceedings or otherwise
proceed against any Obligor in any other jurisdiction.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH OBLIGOR IRREVOCABLY WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT.
SECTION 9.12. MARSHALING; PAYMENTS SET ASIDE. Neither the Agent nor
any Lender shall be under any obligation to marshal any assets in favor of any
Obligor or any other party or against or in payment of any or all of the
Obligations. To the extent that any Obligor makes a payment or payments to the
Agent for the account of the Board, the Loan Administrator, any Lender or any
Counter-Guarantor (each, a "Payee") or any Payee receives payment from exercise
of their rights of setoff, and such payment or payments or the proceeds of such
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party, then (i) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all rights
and remedies therefor, shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not
occurred and (ii) each Payee shall pay and return such amount to the Agent as
the Agent may be required to disgorge or otherwise pay to a trustee, receiver or
any other party in respect of the portion of the payment from such Obligor
distributed by the Agent to such Payee hereunder.
SECTION 9.13. SECTION TITLES. The Section titles and subtitles
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
SECTION 9.14. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are attached to the same
document. Delivery of an executed signature page of this Agreement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all parties
shall be lodged with the Borrower and the Agent.
SECTION 9.15. SEVERABILITY. In case any provision in or obligation
under this Agreement, the Notes or the other Loan Documents shall be invalid,
illegal or unenforceable in any
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jurisdiction the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 9.16. CONFIDENTIALITY.
(a) Each party hereto (other than the Board) and each
Counter-Guarantor shall, and shall procure that its respective officers,
employees and agents shall, keep confidential and shall not, without the prior
written consent of the other parties, disclose to any third party this
Agreement, any other Loan Document or any of the information, reports or
documents supplied by or on behalf of such other party not otherwise publicly
available, except that a party shall be entitled to disclose this Agreement, any
other Loan Document, and any such information, reports or documents:
(i) in connection with any proceeding arising out of or in connection
with this Agreement, any of the other Loan Documents, the Board Guaranty or
any Counter-Guarantee to the extent that such party may reasonably consider
necessary to protect its interest;
(ii) to any potential assignee or transferee of any party's rights
under this Agreement or any of the Loan Documents or any
Counter-Guarantor's rights under its Counter-Guarantee or any other person
proposing to enter into contractual arrangements with any party in relation
to this Agreement, any of the other Loan Documents, the Board Guaranty or
any Counter-Guarantee subject to the relevant party obtaining an
undertaking from such potential assignee or transferee or other person in
corresponding terms to this Section 9.16;
(iii) pursuant to any applicable laws, ordinances, judgments, decrees,
injunctions, writs, rules, regulations, orders, interpretations, licenses,
permits and orders of any competent court, arbitrator or governmental
agency or authority in any relevant jurisdiction;
(iv) to bank examiners or any other regulatory authority or rating
agencies or similar entities, if requested to do so;
(v) to its auditors, legal, tax or to other professional advisers; or
(vi) to its Affiliates and their respective directors, officers,
employees and agents.
(b) The provisions of this Section 9.16 shall survive any termination
of this Agreement or any other Loan Document or any assignment, transfer or
participation under this Agreement or any other Loan Document.
SECTION 9.17. THIRD PARTY BENEFICIARY. Each Counter-Guarantor shall be
an express third party beneficiary of this Agreement to the extent the
provisions of this Agreement by their terms confer upon such Counter-Guarantor
any right or remedy and shall be entitled to rely on each representation and
warranty of the Borrower hereunder as fully and with the same force and effect
as if made expressly to such Counter-Guarantor, and the execution and delivery
of its Counter-Guarantee to the Agent shall constitute such Counter-Guarantor's
agreement to the provisions of Section 9.16 and further agreement to be bound by
the terms and conditions hereof applicable to the Counter-Guarantors (including,
without limitation, Section 2.4, Section 2.7, Section 2.8, Section 9.12, Section
9.16, Section 9.18 and Section 9.22 hereof) in asserting any right or remedy
hereunder.
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SECTION 9.18. ACKNOWLEDGMENT REGARDING FEDERAL AUTHORITY.
(a) Each of the parties hereto and each Counter-Guarantor acknowledges
and agrees that:
(i) the operations and assets of the Obligors (including, without
limitation, Aircraft Related Equipment and other assets that constitute
Collateral) are subject, directly and indirectly, to the actions, inaction
and policies of various Governmental Authorities, including, in particular
but without limitation, the United States Department of Transportation (of
which the FAA is a component) and the United States Department of Justice;
(ii) Governmental Authorities, in discharging their current and future
statutory or regulatory responsibilities, may act, decline to act, or adopt
policies resulting in material adverse effects on (A) the business,
condition (financial or otherwise), operations, performance, prospects,
assets or properties of the Obligors, (B) the ability of the Obligors to
perform their payment or other material obligations under the Loan
Documents, and (C) the value of the Collateral or the practical ability of
the Collateral Agent to realize such value in the event of a Default or an
Event of Default;
(iii) no Governmental Authority, in discharging its statutory or
regulatory responsibilities, has or shall have any obligation whatsoever to
the Obligors, or to any secured party by reason of such Governmental
Authority's representation on the Board, the Board's issuance of the Board
Guaranty, or the Board's participation as a party to the other Loan
Documents, to consider the potential that any of the material adverse
effects referred to in clause (ii) above may result from such Governmental
Authority's discharge of its statutory or regulatory responsibilities; and
(iv) neither the Board, in discharging its rights and
responsibilities, or in exercising its discretion, under the Act, the
Regulations, the Board Guaranty or the other Loan Documents, nor any of the
Board's members, acting in their capacities as such, has or shall have any
obligation whatsoever to the Obligors or to any of the secured parties to
take any action in connection with a Governmental Authority's discharge of
its statutory or regulatory responsibilities which may have any of the
material adverse effects referred to in clause (ii) above, and the Board
may not take any action depriving a Governmental Authority of its rights
and powers to discharge its statutory and regulatory responsibilities in
any manner that may have any of the material adverse effects referred to in
clause (ii) above.
(b) Without limiting the generality of the foregoing, the parties
acknowledge and agree that (i) the Department of Transportation, through the
FAA, has broad authority under Title 49 of the United States Code to regulate
the use of the navigable airspace of the United States so as to ensure its safe
and efficient utilization, (ii) the exercise of such authority may substantially
impair or eliminate altogether the utility to the Obligors and value to the
secured parties of Aircraft Related Equipment pledged as Collateral and other
assets of the Obligors such as Gate Leases and Slots utilized at airports, (iii)
nothing in this Agreement or in the Slot Security Agreement (as defined in
clause (iii) of the definition of "Collateral Documents") shall be construed or
asserted by any of the parties to impede or interfere with the FAA's exercise of
its authority under the Slot Regulations, and (iv) no assurance, express or
implied, has been given by any Governmental Authority, including the Board, to
the Obligors or to any secured party, nor has any of the Obligors or any secured
party relied upon any such assurance, with respect to any future action,
inaction or policy of the FAA or any other Governmental Authority relating to
any such Collateral or other assets.
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SECTION 9.19. INDEPENDENCE OF REPRESENTATIONS, WARRANTIES AND
COVENANTS. All representations and warranties made in and covenants under this
Agreement shall be given independent effect so that (a) if a particular
representation and warranty is unqualified, the fact that another representation
and warranty is qualified shall not affect the operation of the former
provision; and (b) if a particular action or condition is not permitted by any
of such covenants, the fact that it would be permitted by an exception to, or
would otherwise be within the limitations of, another covenant shall not avoid
the occurrence of an Event of Default or Default if such action is taken or
condition exists.
SECTION 9.20. ACKNOWLEDGMENT REGARDING SECOND LIEN. Each of the
Lenders, the Counter-Guarantors and the Board (i) acknowledges and agrees that
the Liens of the Collateral Agent in the Collateral pursuant to the Collateral
Documents are junior and subordinate to the Liens for the benefit of the First
Lien Claimholders in such Collateral to the extent provided in the Intercreditor
Agreement, (ii) agrees and consents to the terms of the Intercreditor Agreement
and (iii) agrees to be bound the terms of the Intercreditor Agreement as if it
were a party thereto.
SECTION 9.21. BOARD ACKNOWLEDGMENT. The Board acknowledges and agrees
for the benefit of the Initial Lender that as of the date hereof the Board
Guaranty remains in full force and effect and is hereby ratified and confirmed.
SECTION 9.22. COUNTER-GUARANTOR ACKNOWLEDGMENT. Each Counter-Guarantor
by execution and delivery of its Counter-Guarantee acknowledges and agrees for
the benefit of the Initial Lender that as of the date hereof such
Counter-Guarantor's Counter-Guarantee remains in full force and effect and is
hereby ratified and confirmed.
SECTION 9.23. GE ACKNOWLEDGEMENT. Nothing in this Agreement or in any
other Loan Document shall be construed as preventing any party from performing
any of the transactions contemplated by the GE Merger MOU, and the transactions
contemplated by the "Original MOU" as defined therein, as such GE Merger MOU and
Original MOU have been amended, supplemented or otherwise modified to the date
hereof, regardless of whether such transactions occur on, before or after the
Effective Date.
[SIGNATURE PAGES TO FOLLOW]
103
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
AMERICA WEST AIRLINES, INC.
US AIRWAYS GROUP, INC.
AMERICA WEST HOLDINGS CORPORATION
US AIRWAYS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Financial Officer of each
person listed above
MATERIAL SERVICES COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and Chief Executive
Officer
PSA AIRLINES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and Chief Executive
Officer
[Signature page to Loan Agreement]
PIEDMONT AIRLINES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive
Officer
[Signature page to Loan Agreement]
CITIBANK, N.A.
as Initial Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President - Structured
Portfolio Management
CITIBANK, N.A.,
as Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President - Structured
Portfolio Management
WILMINGTON TRUST COMPANY,
as Collateral Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Financial Services Officer
AIR TRANSPORTATION STABILIZATION BOARD
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Director
[Signature page to Loan Agreement]
ANNEX A
NOTICE ADDRESSES; PAYMENT INSTRUCTIONS
If to the Borrower, Group or the other Obligors:
US Airways Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice President and Treasurer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
US Airways Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇ III, Senior Vice President and General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
If to the Initial Lender:
Citibank, N.A.
▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ Racer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇.▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
If to the Agent:
Citibank, N.A.
▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ Racer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇.▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
Annex A-1
If to the Loan Administrator:
Capstone Advisory Group, LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
If to the Collateral Agent:
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
If to the Board:
Air Transportation Stabilization Board
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Executive Director
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇.▇▇▇▇▇▇@▇▇.▇▇▇▇▇.▇▇▇
with a copy to:
United States Department of the Treasury
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Deputy Assistant Secretary for Government Financial Policy
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇.▇▇▇▇▇@▇▇.▇▇▇▇▇.▇▇▇
If to the Airbus Counter-Guarantor:
AFS Cayman Limited
c/o M&C Corporate Services Limited
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 309
▇▇▇▇▇▇ Town, Grand Cayman, Cayman Islands
with a
copy to:
Airbus Financial Services
▇▇▇▇▇ ▇-▇
▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇
Attention: Managing Director
Phone: ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇
E-mail:
If to the GECC Counter-Guarantor:
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Senior - Vice President -
Corporate Treasury and Global Funding Operation
Phone:
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail:
with a copy to:
General Electric Capital Corporation
c/o GE Commercial Aviation Services
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Contracts Leader
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail:
Annex ▇-▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Annex B-1
ANNEX C
GUARANTEE RATE SCHEDULE
INTEREST PAYMENT GUARANTEE RATE
DATE FALLING IN THE PERIOD (PER ANNUM)
-------------------------- --------------
Effective Date - January 17, 2006 8.00%
January 18, 2006 - January 17, 2007 8.05%
January 18, 2007 - January 17, 2008 8.10%
January 18, 2008 - Maturity Date 8.15%
Annex C-1
EXHIBIT A
ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE dated as of _________, ____, between
______________ (the "Assignor") and ______________ (the "Assignee"). Reference
is made to the Loan Agreement, dated as of September 27, 2005 (as the same may
be amended, restated, supplemented or otherwise modified from time to time, the
"Loan Agreement"), among America West Airlines, Inc., US Airways Group, Inc.,
the other Obligors from time to time party thereto, Citibank, N.A., as Initial
Lender, Citibank, N.A., as Agent, Wilmington Trust Company, as Collateral Agent
and Air Transportation Stabilization Board. Capitalized terms used herein and
not otherwise defined herein are used herein as defined in the Loan Agreement.
The Assignor and the Assignee hereby agree as follows:
(i) The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, [all of] [a __%
interest in] the Assignor's rights and obligations under the Loan Agreement
as a Tranche [A][B][-1][-2][-3][-4] Lender. The principal amount of Tranche
[A][B][-1][-2][-3][-4] of the Loan assigned to the Assignee are set forth
in Section 1 of Schedule I [and the principal amount of Tranche
[A][B][-1][-2][-3][-4] of the Loan retained by the Assignor after giving
effect to such sale and assignment are set forth in Section 2 of Schedule
I]. [The Tranche A interest being assigned to the Assignor hereunder [is/is
not] being assigned together with a corresponding interest under the Board
Guaranty.] Such sale and assignment is without recourse to the Assignor or
any of its representatives or agents (including any placement agent), and,
except for those representations and warranties by the Assignor expressly
set forth in this Assignment and Acceptance, without representation or
warranty by any such Person.
(ii) The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any lien, encumbrance or any adverse
claim; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Agreement or any
other Loan Document or any other instrument or document furnished pursuant
thereto or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Agreement or any other Loan Document or
any other instrument or document furnished pursuant thereto or any
collateral thereunder; and (iii) makes no representation or warranty and
assumes no responsibility with respect to (A) the financial condition of
the Borrower, any other Obligor or any other Person obligated under any
Loan Document or any other instrument or document furnished pursuant
thereto or (B) the performance or observance by the Borrower, any other
Obligor or any other Person obligated under any Loan Document or any other
instrument or document furnished pursuant thereto of any of their
respective obligations under any Loan Document or any other instrument or
document furnished pursuant thereto.
(iii) The Assignee (i) agrees that it will, independently and without
reliance upon the Agent, the Collateral Agent, the Assignor, the Board or
any other Lender, or any of their respective representatives or agents
(including any placement agent), and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Loan
Agreement; (ii) appoints and authorizes the Agent and the Collateral to
take such action as administrative agent or collateral agent, respectively,
on its behalf and to exercise such powers under the Loan Agreement and the
other Loan Documents as are delegated to the Agent or the Collateral Agent
by the terms thereof, together with such powers as are reasonably
incidental thereto; (iii) agrees that it will perform in
Exhibit A-1
accordance with their terms all of the obligations which by the terms of
the Loan Agreement are required to be performed by it as a Lender; (iv)
represents and warrants that it is an Eligible Lender; (v) confirms it has
received and had an opportunity to review a copy of the Loan Agreement and
the other Loan Documents, together with copies of the most recent financial
statements delivered pursuant to Article 5.1(b) thereof, and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance
and to purchase the interest being assigned hereunder on the basis of which
it has made such analysis and decision independently and without reliance
on the Agent, the Collateral Agent, the Assignor, the Board or any other
Lender, or any of their respective representatives or agents (including any
placement agent); (vi) specifies as its Lending Office (and address for
notices) the office set forth beneath its name on the signature pages
hereof; and (vii) acknowledges and agrees to the terms of the Loan
Documents, including, without limitation, the terms of the Intercreditor
Agreement.
(iv) Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Agent (with a copy
to the Board) for acceptance and recording by the Agent, together with an
assignment fee of $3,500 payable by the [Assignor]. The effective date of
this Assignment and Acceptance shall be __________ [or such later date as
of which the Board shall have consented to the sale and assignment of [all
of] [a __% interest in] the Assignor's rights and obligations under the
Loan Agreement and the other Loan Documents to the Assignee as provided
herein and as evidenced by its signed confirmation thereof set forth on the
signature pages hereof] (the "Effective Date").
(v) Upon such acceptance and recording by the Agent, then, as of the
Effective Date, (i) the Assignee shall be a party to the Loan Agreement
and, to the extent provided in this Assignment and Acceptance, have the
rights and obligations under the Loan Agreement of a Lender and (ii) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights (except those which survive the payment in full of
the Obligations) other than those relating to events or circumstances
occurring prior to the Effective Date and be released from its obligations
under the Loan Documents.
(vi) Upon such acceptance and recording by the Agent, from and after
the Effective Date, the Agent shall make all payments under the Loan
Documents in respect of the interest assigned hereby (i) to or for the
account of the Assignee, in the case of amounts accrued with respect to any
period on or after the Effective Date and (ii) to or for the account of the
Assignor, in the case of amounts accrued with respect to any period prior
to the Effective Date.
(vii) This Assignment and Acceptance shall be governed by, and be
construed in accordance with, the law of the State of New York.
(viii) This Assignment and Acceptance may be executed in any number of
counterparts and by different parties on separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same agreement. Delivery of
an executed counterpart of this Assignment and Acceptance by telecopier
shall be effective as delivery of a manually executed counterpart of this
Assignment and Acceptance.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
Exhibit A-2
[Assignor]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[Assignee]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Lending Office (and address for
notices): [Address]
----------------------------------------
Accepted this _____________ day
of ________________________, ____
CITIBANK, N.A.,
as Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[The Board hereby confirms its consent to this Assignment and Acceptance in
accordance with the provisions of Section 9.2 of the Loan Agreement
AIR TRANSPORTATION STABILIZATION BOARD
By:
---------------------------------
Name:
-------------------------------
Title:]
-----------------------------
[The Borrower hereby confirms its consent to this Assignment and Acceptance in
accordance with the provisions of Section 9.2 of the Loan Agreement.
AMERICA WEST AIRLINES, INC.
By:
---------------------------------
Name:
-------------------------------
Title:]
-----------------------------
Exhibit A-3
SCHEDULE I
TO
ASSIGNMENT AND ACCEPTANCE
SECTION 1.
Aggregate Outstanding Principal
Amount of Tranche [A][B][-1][-2][-3]
[-4] Assigned to Assignee: $_______________________________________
SECTION 2.
Aggregate Outstanding Principal
Amount of Tranche [A][B][-1][-2][-3]
[-4] retained by Assignor: $_______________________________________
I-1
EXHIBIT B-1
FORM OF TRANCHE A NOTE
$ [_] September 27, 2005
FOR VALUE RECEIVED, the undersigned AMERICA WEST AIRLINES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay CITIBANK, N.A. as Agent, or
its registered assigns, for the account of CITIBANK, N.A., as Tranche A Lender,
the principal amount set forth above, or, if less, the aggregate unpaid
principal amount of Tranche A, payable at such times, and in such amounts, as
are specified in the Loan Agreement (as defined below). The Borrower hereby
promises to pay interest on the unpaid principal amount of Tranche A from the
date hereof until such principal amount is paid in full, at the rate or rates,
and payable at such times as are specified in the Loan Agreement.
This Tranche A Note shall be payable at the principal office of the Agent
presently located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
This Tranche A Note is the "Tranche A Note" referred to in that certain
Loan Agreement, dated as of September 27, 2005 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Loan
Agreement"), among the Borrower, US Airways Group, Inc., the other Obligors from
time to time party thereto, Citibank, N.A., as Initial Lender, Citibank, N.A.,
as Agent, Wilmington Trust Company, as Collateral Agent and Air Transportation
Stabilization Board. Capitalized terms used herein and not defined herein are
used herein as defined in the Loan Agreement.
Demand, diligence, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower. This Tranche A Note may be prepaid
solely as provided in the Loan Agreement and may be accelerated in whole or in
part as provided in the Loan Agreement.
This Tranche A Note shall be governed by, and construed in accordance with,
the law of the State of New York (and to the extent applicable, the Bankruptcy
Code); provided that the rights and obligations of the Board hereunder shall be
governed by, and construed in accordance with, the Federal law of the United
States of America, if and to the extent such Federal law is applicable, and
otherwise in accordance with the law of the State of New York.
IN WITNESS WHEREOF, the Borrower has caused this Tranche A Note to be
executed and delivered by its duly authorized officer as of the date and at the
place set forth above.
AMERICA WEST AIRLINES, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
B1-1
EXHIBIT ▇-▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇-▇ NOTE
$[_] September 27, 2005
FOR VALUE RECEIVED, the undersigned AMERICA WEST AIRLINES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay CITIBANK, N.A. as Agent, or
its registered assigns, for the account of CITIBANK, N.A., as Tranche B-1
Lender, the principal amount set forth above, or, if less, the aggregate unpaid
principal amount of Tranche B-1, payable at such times, and in such amounts, as
are specified in the Loan Agreement (as defined below). The Borrower hereby
promises to pay interest on the unpaid principal amount of Tranche B-1 from the
date hereof until such principal amount is paid in full, at the rate or rates,
and payable at such times as are specified in the Loan Agreement.
This Tranche B-1 Note shall be payable at the principal office of the Agent
presently located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
This Tranche B-1 Note is the "Tranche B-1 Note" referred to in that certain
Loan Agreement, dated as of September 27, 2005 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Loan
Agreement"), among the Borrower, US Airways Group, Inc., the other Obligors from
time to time party thereto, Citibank, N.A., as Initial Lender, Citibank, N.A.,
as Agent, Wilmington Trust Company, as Collateral Agent and Air Transportation
Stabilization Board. Capitalized terms used herein and not defined herein are
used herein as defined in the Loan Agreement.
Demand, diligence, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower. This Tranche B-1 Note may be prepaid
solely as provided in the Loan Agreement and may be accelerated in whole or in
part as provided in the Loan Agreement.
This Tranche B-1 Note shall be governed by, and construed in accordance
with, the law of the State of New York (and to the extent applicable, the
Bankruptcy Code); provided that the rights and obligations of the Board
hereunder shall be governed by, and construed in accordance with, the Federal
law of the United States of America, if and to the extent such Federal law is
applicable, and otherwise in accordance with the law of the State of New York.
IN WITNESS WHEREOF, the Borrower has caused this Tranche B-1 Note to be
executed and delivered by its duly authorized officer as of the date and at the
place set forth above.
AMERICA WEST AIRLINES, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
B2-1
EXHIBIT ▇-▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇-▇ NOTE
$[_] September 27, 2005
FOR VALUE RECEIVED, the undersigned AMERICA WEST AIRLINES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay CITIBANK, N.A. as Agent, or
its registered assigns, for the account of CITIBANK, N.A., as Tranche B-2
Lender, the principal amount set forth above, or, if less, the aggregate unpaid
principal amount of Tranche B-2, payable at such times, and in such amounts, as
are specified in the Loan Agreement (as defined below). The Borrower hereby
promises to pay interest on the unpaid principal amount of Tranche B-2 from the
date hereof until such principal amount is paid in full, at the rate or rates,
and payable at such times as are specified in the Loan Agreement.
This Tranche B-2 Note shall be payable at the principal office of the Agent
presently located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
This Tranche B-2 Note is the "Tranche B-2 Note" referred to in that certain
Loan Agreement, dated as of September 27, 2005 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Loan
Agreement"), among the Borrower, US Airways Group, Inc., the other Obligors from
time to time party thereto, Citibank, N.A., as Initial Lender, Citibank, N.A.,
as Agent, Wilmington Trust Company, as Collateral Agent and Air Transportation
Stabilization Board. Capitalized terms used herein and not defined herein are
used herein as defined in the Loan Agreement.
Demand, diligence, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower. This Tranche B-2 Note may be prepaid
solely as provided in the Loan Agreement and may be accelerated in whole or in
part as provided in the Loan Agreement.
This Tranche B-2 Note shall be governed by, and construed in accordance
with, the law of the State of New York (and to the extent applicable, the
Bankruptcy Code); provided that the rights and obligations of the Board
hereunder shall be governed by, and construed in accordance with, the Federal
law of the United States of America, if and to the extent such Federal law is
applicable, and otherwise in accordance with the law of the State of New York.
IN WITNESS WHEREOF, the Borrower has caused this Tranche B-2 Note to be
executed and delivered by its duly authorized officer as of the date and at the
place set forth above.
AMERICA WEST AIRLINES, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
B3-1
EXHIBIT ▇-▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇-▇ NOTE
$[_] September 27, 2005
FOR VALUE RECEIVED, the undersigned AMERICA WEST AIRLINES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay CITIBANK, N.A. as Agent, or
its registered assigns, for the account of CITIBANK, N.A., as Tranche B-3
Lender, the principal amount set forth above, or, if less, the aggregate unpaid
principal amount of Tranche B-3, payable at such times, and in such amounts, as
are specified in the Loan Agreement (as defined below). The Borrower hereby
promises to pay interest on the unpaid principal amount of Tranche B-3 from the
date hereof until such principal amount is paid in full, at the rate or rates,
and payable at such times as are specified in the Loan Agreement.
This Tranche B-3 Note shall be payable at the principal office of the Agent
presently located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
This Tranche B-3 Note is the "Tranche B-3 Note" referred to in that certain
Loan Agreement, dated as of September 27, 2005 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Loan
Agreement"), among the Borrower, US Airways Group, Inc., the other Obligors from
time to time party thereto, Citibank, N.A., as Initial Lender, Citibank, N.A.,
as Agent, Wilmington Trust Company, as Collateral Agent and Air Transportation
Stabilization Board. Capitalized terms used herein and not defined herein are
used herein as defined in the Loan Agreement.
Demand, diligence, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower. This Tranche B-3 Note may be prepaid
solely as provided in the Loan Agreement and may be accelerated in whole or in
part as provided in the Loan Agreement.
This Tranche B-3 Note shall be governed by, and construed in accordance
with, the law of the State of New York (and to the extent applicable, the
Bankruptcy Code); provided that the rights and obligations of the Board
hereunder shall be governed by, and construed in accordance with, the Federal
law of the United States of America, if and to the extent such Federal law is
applicable, and otherwise in accordance with the law of the State of New York.
IN WITNESS WHEREOF, the Borrower has caused this Tranche B-3 Note to be
executed and delivered by its duly authorized officer as of the date and at the
place set forth above.
AMERICA WEST AIRLINES, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
B4-1
EXHIBIT ▇-▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇-▇ NOTE
$[_] September 27, 2005
FOR VALUE RECEIVED, the undersigned AMERICA WEST AIRLINES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay CITIBANK, N.A. as Agent, or
its registered assigns, for the account of CITIBANK, N.A., as Tranche B-4
Lender, the principal amount set forth above, or, if less, the aggregate unpaid
principal amount of Tranche B-4, payable at such times, and in such amounts, as
are specified in the Loan Agreement (as defined below). The Borrower hereby
promises to pay interest on the unpaid principal amount of Tranche B-4 from the
date hereof until such principal amount is paid in full, at the rate or rates,
and payable at such times as are specified in the Loan Agreement.
This Tranche B-4 Note shall be payable at the principal office of the Agent
presently located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
This Tranche B-4 Note is the "Tranche B-4 Note" referred to in that certain
Loan Agreement, dated as of September 27, 2005 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Loan
Agreement"), among the Borrower, US Airways Group, Inc., the other Obligors from
time to time party thereto, Citibank, N.A., as Initial Lender, Citibank, N.A.,
as Agent, Wilmington Trust Company, as Collateral Agent and Air Transportation
Stabilization Board. Capitalized terms used herein and not defined herein are
used herein as defined in the Loan Agreement.
Demand, diligence, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower. This Tranche B-4 Note may be prepaid
solely as provided in the Loan Agreement and may be accelerated in whole or in
part as provided in the Loan Agreement.
This Tranche B-4 Note shall be governed by, and construed in accordance
with, the law of the State of New York (and to the extent applicable, the
Bankruptcy Code); provided that the rights and obligations of the Board
hereunder shall be governed by, and construed in accordance with, the Federal
law of the United States of America, if and to the extent such Federal law is
applicable, and otherwise in accordance with the law of the State of New York.
IN WITNESS WHEREOF, the Borrower has caused this Tranche B-4 Note to be
executed and delivered by its duly authorized officer as of the date and at the
place set forth above.
AMERICA WEST AIRLINES, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
B5-1
EXHIBIT I
FORM OF COLLATERAL VALUE CERTIFICATE
Reference is made to the Loan Agreement dated as of September 27, 2005
by and among America West Airlines, Inc. (the "Borrower"), US Airways Group,
Inc. ("Group"), the Subsidiaries of Group parties thereto from time to time,
Citibank, N.A., as Initial Lender, Citibank, N.A., as Agent, Wilmington Trust
Company, as Collateral Agent and Air Transportation Stabilization Board (as the
same may be amended, restated or supplemented or otherwise modified from time to
time, the "Loan Agreement"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Loan
Agreement.
The undersigned, being a Responsible Officer of the Borrower, does
hereby certify as of the date hereof that the Collateral Value is as follows:
APPRAISED COLLATERAL (A - B) $______________
A = Appraised Value based on the Appraisal Report(s) attached hereto as
Schedule I: $_______________, of which $_____________ is the Appraised Value
of spare parts
B = Ineligible Assets (as identified and described on Schedule II attached
hereto): $_______________
ELIGIBLE ACCOUNTS (A * B) $______________
A = Eligible Accounts: $_______________
B = 85%
TOTAL COLLATERAL VALUE (Appraised Collateral + Eligible Accounts) $______________
COLLATERAL VALUE DEFICIENCY ((135% of the sum of ((A +B) - C) - Total Collateral
Value)
$______________
A = Outstanding principal and accrued interest on the Loan:
$_______________
B = Outstanding principal and accrued interest on the US Airways Loan:
$_______________
C = required Minimum Adjusted Cash Amount: $_______________
In addition, the undersigned hereby certifies as of the date hereof as
follows:
1. None of the Collateral included in the calculation of the Collateral
Value is subject to any event of loss, damage or other casualty that
(i) has materially and adversely affected the value of such
Collateral, whether insured or not, or (ii) is not disclosed in a
schedule referenced above and attached hereto.
2. The Appraised Value of spare parts counted in the computation of
Collateral Value [is] [is not] less than $_______, which amount is
equal to 75% of the Appraised Value of the spare parts set forth in
the Baseline Appraisal.
3. [No Collateral Value Deficiency exists/A Collateral Value Deficiency
exists].
The undersigned hereby certifies that all statements made in this
Collateral Value Certificate are true and correct as of the date hereof.
Date:
-------------------------------
AMERICA WEST AIRLINES, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT K
[RESERVED]
-4-
EXHIBIT L
FORM OF SLOT UTILIZATION REPORT
Reference is made to the Loan Agreement dated as of September 27,
2005 by and among America West Airlines, Inc., US Airways Group, Inc., the
Subsidiaries of Group parties thereto from time to time, Citibank, N.A., as
Initial Lender, Citibank, N.A., as Agent, Wilmington Trust Company, as
Collateral Agent and Air Transportation Stabilization Board (as the same may be
amended, restated or supplemented or otherwise modified from time to time, the
"Loan Agreement"). This Slot Utilization Report is being delivered pursuant to
Section 5.1(b)(xx) of the Loan Agreement. Capitalized terms used but not defined
herein have the meanings assigned to them in the Loan Agreement.
REPORTING PERIOD: _____________________
I. SLOT USAGE*
Airport: ________________________
Slot Time Total Held Total Used Pct. Usage (%) Departure/Arrival
--------- ---------- ---------- -------------- -----------------
II. RECALLED SLOTS
(a) Slots recalled by the FAA or otherwise revoked or terminated during the
current reporting period for failure to comply with Slot Regulations:
Slot Time Slot ID Date Recalled Appraised Value
--------- ------- ------------- ---------------
(b) Slots recalled by the FAA or otherwise revoked or terminated in all prior
reporting periods during the term of the Loan for failure to comply with
Slot Regulations:
Slot Time Slot ID Date Recalled Appraised Value
--------- ------- ------------- ---------------
(c) If any Slot identified in II(a) above is a Secondary Slot, establish in
reasonable detail why the applicable Obligor determined that maintaining
such Slot was no longer commercially required (within the meaning of
Section 7.1(p)(i) of the Loan Agreement).
III. ATTACHMENTS
----------
* A separate chart should be provided for each airport at which any of the
Obligors holds or utilizes Slots.
-5-
Attached to this report is a true and complete copy of each Slot
utilization report required to be delivered to the FAA under the Slot
Regulations for the two month reporting period summarized herein [together
with any requests for waivers or other documentation provided to the FAA in
connection therewith].
IV. CERTIFICATION**
The undersigned Responsible Officer of Group hereby certifies that the
foregoing is true and correct in all material respects.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
----------
** Certification required to be made by a Responsible Officer of Group.
-6-
EXHIBIT M
FORM OF SUBSIDIARY JOINDER
JOINDER AGREEMENT, dated as of ___________ ___, 200___ (this
"Joinder") by ______________________ (the "New Subsidiary") to the Loan
Agreement dated as of September 27, 2005 (as the same may be amended, restated
or supplemented or otherwise modified from time to time, the "Loan Agreement")
among America West Airlines, Inc., as Borrower, US Airways Group, Inc., the
other Obligors from time to time party thereto, Citibank, N.A., as Initial
Lender, Citibank, N.A., as Agent, Wilmington Trust Company, as Collateral Agent
and Air Transportation Stabilization Board. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms in
the Loan Agreement.
RECITALS
WHEREAS, Section 5.8(a) of the Loan Agreement provides that, following
the formation or acquisition by any Obligor of a Subsidiary that is not a CFC,
such Obligor shall cause such Subsidiary to execute and deliver to the Agent and
the Board a Subsidiary Joinder, pursuant to which such Subsidiary shall become a
party to the Loan Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the New Subsidiary, the New Subsidiary, intending legally to be
bound, hereby agrees as follows:
1. Joinder. By the execution of this Joinder, the New Subsidiary
hereby agrees that it is, and shall be deemed for all purposes to be, a
Subsidiary Guarantor under the Loan Agreement, and agrees that it is bound by
the terms, conditions and obligations set forth therein, with the same force and
effect as if the New Subsidiary had been an original signatory thereto.
2. Notice. The address of the New Subsidiary set forth below its
signature hereto shall be its address for all purposes of the Loan Agreement as
if set forth on Annex A thereto.
3. Governing Law. This Joinder shall be construed in accordance with,
and shall be governed by, the laws of the State of New York.
4. Further Assurances. The New Subsidiary agrees to perform any
further acts and execute and deliver any additional documents and instruments
that may be necessary or reasonably requested by the Agent or the Board (so long
as the Board is either guarantor of Tranche A or a Lender under the Loan
Agreement) to carry out the provisions of this Joinder.
-7-
IN WITNESS WHEREOF, the New Subsidiary has executed this Joinder
Agreement as of the date first above written.
[NEW SUBSIDIARY]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address and Contact Information:
Attn:
----------------------------------
Tel:
-----------------------------------
Fax:
-----------------------------------
ACKNOWLEDGED:
CITIBANK, N.A.,
as Agent
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
AIR TRANSPORTATION STABILIZATION BOARD
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
-8-