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EXHIBIT 10(K)
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CREDIT AGREEMENT
dated as of
April 19, 1991
among
ATLANTIC SOUTHEAST AIRLINES, INC.,
Borrower,
THE FIRST NATIONAL BANK OF ATLANTA,
Agent,
and
THE FIRST NATIONAL BANK OF ATLANTA and
THE BANK OF TOKYO, LTD., ATLANTA AGENCY,
Lenders.
Up to Four Embraer Model EMB-120 Brasilia Aircraft
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS; REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Use of Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 1.03 Section and Exhibit References, etc. . . . . . . . . . . . . . . . . . . . . 11
ARTICLE II
PURCHASE OF NOTES AND CERTIFICATES;
PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.01 Purchase of Notes and Certificates . . . . . . . . . . . . . . . . . . . . . 11
Section 2.02 Procedure for Purchase of Notes
and Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.03 Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.04 Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.05 Payments by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE III
SECURITY FOR BORROWER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . 13
Section 3.01 Security Interest in Collateral . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.02 Set-Off Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IV
PAYMENTS UNDER THE NOTES AND OTHER
AMOUNTS PAYABLE BY BORROWER . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.01 How Payments Are Made . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.02 Right to Prepay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.03 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.04 Mandatory Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.05 Amount of Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.06 Interest on Past Due Amounts . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.07 Payment of Accrued Interest Supplements . . . . . . . . . . . . . . . . . . 16
Section 4.08 Reduction in Net Interest Payable
by Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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ARTICLE V
BORROWER'S REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 17
Section 5.01 Corporate Standings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.02 Corporate Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.03 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.04 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.05 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.06 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.07 Status as United States Citizen and
Air Carrier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.08 Location of Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.09 Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.10 Condition of Aircraft . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.11 Absence of ERISA Liability . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.12 Delta Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.13 Subsidiaries; Stock Ownership . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.14 Investment Company Status . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.15 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VI
AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.01 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.02 Inspection of Collateral and Records . . . . . . . . . . . . . . . . . . . . 21
Section 6.03 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.04 Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.05 Citizenship and Air Carrier Status . . . . . . . . . . . . . . . . . . . . . 23
Section 6.06 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.07 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.08 Performance of Delta Agreement . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.09 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.10 Certificate of No Default . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.11 Insurance on Fleet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VII
CONDITIONS OF PRECEDENT TO THE PURCHASE OF THE
NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.01 Conditions Precedent to the Purchase
of the Initial Note . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.02 Conditions Precedent to the Purchase
of All Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.02 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE IX
BORROWER'S INDEMNITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 9.01 General Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 9.02 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.03 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE X
YIELD PROTECTION; ILLEGALITY . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.01 Additional Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.02 Breakage Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.03 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE XI
AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 11.01 Appointment; Powers and Indemnities;
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 11.02 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 11.03 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 11.04 Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 11.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.06 Nonreliance on Agent or Lenders . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.07 Failure to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.08 Resignation of Agent; Successor Agent . . . . . . . . . . . . . . . . . . . 40
Section 11.09 Investment of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.10 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . 42
Section 11.11 No Claims Against Agent, etc. . . . . . . . . . . . . . . . . . . . . . . . 43
Section 11.12 Form of Certificates; Issuance, Transfer, and
Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 11.13 Action Upon Written Instructions . . . . . . . . . . . . . . . . . . . . . . 45
Section 11.14 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 11.15 Procedures for Disposing of Collateral . . . . . . . . . . . . . . . . . . . 46
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ARTICLE XII
RECEIPT, DISTRIBUTION, AND APPLICATION
OF INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 12.01 Payment by Agent Generally . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 12.02 Application of Payments After
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 12.03 Payments After Event of Default . . . . . . . . . . . . . . . . . . . . . . 47
Section 12.04 Application of Indemnity and
Certain Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 12.05 Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 12.06 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 12.07 Payments From Proceeds From Borrower . . . . . . . . . . . . . . . . . . . . 50
Section 12.08 Termination of Certificates . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE XIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 13.01 No Waivers; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . 50
Section 13.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 13.03 Transaction Expenses; Agent's Fees . . . . . . . . . . . . . . . . . . . . . 50
Section 13.04 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 13.05 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 13.06 First Atlanta's Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 13.07 Bank of Tokyo's Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 13.08 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 13.09 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 13.10 Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 13.11 Survival of Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 13.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 13.13 Finex Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 13.14 Agent Not Acting in Individual Capacity . . . . . . . . . . . . . . . . . . 56
Annex A Procedures for Purchasing Aircraft,
Notes, and Certificates; Documentation
Exhibit A Form of Note
Exhibit B Form of Finex Agreement
Exhibit C Form of Mortgage
Exhibit D Form of Purchase Agreement Assignment
Exhibit E Form of Consent
Exhibit F Form of opinion of Borrower's counsel
Exhibit G Form of opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ (Aircraft)
Exhibit H Form of opinion of counsel to Embraer
Exhibit I Form of opinion of ▇▇▇▇▇▇ Barros Sobral e Xavier
Exhibit J Form of Guarantee
Exhibit K Forms of Certificates
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CREDIT AGREEMENT
This Credit Agreement is entered into as of April 19, 1991 among (i)
Atlantic Southeast Airlines, Inc. ("Borrower"), a Georgia corporation, (ii)
The first National Bank of Atlanta, a national banking association, in its
individual capacity, and The Bank of Tokyo, Ltd., Atlanta Agency, a Georgia
agency of a Japanese banking corporation, as lenders (the "Lenders"), and (iii)
The First National Bank of Atlanta, a national banking association, not in its
individual capacity (except as otherwise expressly stated) but solely as agent
(in such representative capacity "Agent").
Borrower, the Lenders, and Agent agree as follows:
Article I
DEFINITIONS; REFERENCES
Section 1.01 -- Definitions. The following terms, when capitalized as
below, have the following meanings:
"Act": the Federal Aviation Act of 1958, as amended, or its
successor.
"Agent": The First National Bank of Atlanta, not in its individual
capacity but solely in its capacity as agent for Lenders, or the successor
agent pursuant to section 11.08 hereof.
"Agreement": this Credit Agreement.
"Alternative LIBO Rate": defined in section 3.02 of the Finex
Agreement.
"Aircraft": up to four Embraer EMB-120 Brasilia aircraft to be
delivered under the Purchase Agreement and in each case designated by Borrower
(by notice to Agent (which Agent agrees to the Purchase Date therefor, and not
revoked by notice to Agent (which Agent agrees to relay promptly to each
Lender) on or before the Purchase Date therefor) as an "Aircraft" to be
financed under this Agreement.
"Bank LIBOR" for any Interest Period: a rate per annum (calculated
on the basis of a 360-day year and the actual number of days elapsed) equal to
the consensus rate at which 180-day deposits in Dollars appear on the Reuters
Screen LIBO Page at approximately 11:00 a.m. London, England time, on the day
that is two Business Days before the first day of that Interest Period.
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"Bank of Tokyo": The Bank of Tokyo, Ltd., Atlanta Agency.
"Basic Documents": this Agreement, the Purchase Agreement, the Finex
Agreement(s), the Guarantee, and the Mortgage; and each Certificate, Note,
Purchase Agreement Assignment, Consent, and Mortgage Supplement as executed and
delivered.
"Book Net Worth": defined in section 6.09.
"Borrower Interest Rate" with respect to any Interest Period: an
interest rate equal to Bank LIBOR for such Interest Period, plus (x) 0.60% per
annum from the Purchase Date to the fifth Interest Payment Date for the related
Note, (6) 0.875% per annum after the fifth Interest Payment Date through the
tenth Interest Payment Date for the related Note, and (z) 1.05% for the
remainder of the term of the related Note (computed on the basis of a year of
360 days), based on actual days elapsed.
"Business Day": any day, other than a Saturday or Sunday, on which
commercial banks are open for business in ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
and Sao Paulo, Brazil, and Agent is open for business in Atlanta, Georgia, and
if such day is a Purchase Date or Interest Payment Date or relates to a notice
by Borrower with respect to any Purchase Date, which is also a day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Capitalized Lease": a capitalized lease of any tangible real or
personal property, as determined pursuant to GAAP.
"Certificate": a Long-Term Certificate, Medium-Term Certificate, or
Short-Term Certificate.
"Change in Control": the acquisition by any Person (other than Delta
Air Lines, Inc., directly or indirectly) or group (within the meaning of Rule
13d-5 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934), or by two or more Persons acting in concert,
of beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Securities and Exchange Act of
1934) of either (i) 33-1/3% or more of the outstanding shares of voting stock
of Borrower or (ii) the power to direct or cause the direction of the
management and policies of Borrower, whether through the ownership of voting
securities, by contract, or otherwise.
"Code": the Internal Revenue Code of 1986, as amended from time to
time, including effective date and transition rules (whether or not codified).
Any reference to a specific section of
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the Code shall be deemed to include a reference to any corresponding provision
of future law.
"Collateral": the "Collateral" under the Mortgage.
"Commitment": Agent's commitment to purchase the Notes, and each
Lender's commitment to participate, through the purchase of Certificates, in
the Agent's purchase of notes, in the amount set forth opposite each Lender's
name in section 2.01, for an aggregate amount of up to $21,250,000; Borrower
may reduce such amount upon 30 days' prior written notice to Agent (which Agent
agrees to relay promptly to each Lender) and in the event of such reduction in
the total commitment, each Lender's commitment will be reduced pro rata based
on the relation of each Lender's commitment to the total commitment.
"Commitment Fee": the fee required to be paid by Borrower to Agent,
for the benefit of the Lenders, pursuant to section 2.03.
"Commitment Period": the period from the date of execution of this
Agreement to and including the earliest of (w) September 30, 1991, (x) the date
upon which the fourth Aircraft is delivered to and accepted by Borrower
pursuant to the Purchase Agreement, (y) the date on which the remaining
Commitment is terminated pursuant to section 8.02, and (z) a date set by
Borrower pursuant to a notice sent to Agent (which Agent agrees to relay
promptly to each Lender) at lease 30 days prior to such date.
"Consent": a Consent and Agreement, substantially in the form of
Exhibit E, relating to a Purchase Agreement Assignment and dated the same date
as that Purchase Agreement Assignment.
"Current Maturities of Long-Term Debt": the amounts due, within the
12-month period following any fiscal quarter end of Borrower, under long-term
debt instruments of Borrower, as determined pursuant to GAAP.
"Default": any event or condition that would become an Event of
Default upon the giving of notice or lapse so time or both, or any Event of
Default.
"Delta Agreement": the agreement between Delta Air Lines, Inc. and
Borrower, dated June 1, 1986, relating to joint marketing or code sharing for
interconnecting flights.
"Depreciation and Amortization Expense": the total expenses for
depreciation and amortization incurred by Borrower in the 12-month period
preceding any fiscal quarter end of Borrower, as determined pursuant to GAAP.
"Dollars" and "S": United States dollars.
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"Downpayment": as to the first Aircraft financed under this
Agreement, 15% of Equipment Cost for the first $6,400,000 of Equipment Cost,
and 100% of Equipment Cost in excess of $6,400,000, for an Equipment Portion
and, as to the other Aircraft financed under this Agreement, 15% of the
Equipment Cost for the first 6,200,000 of Equipment Cost, and 100% of Equipment
Cost in excess of $6,200,000, for an Equipment Portion, minus, in any case, any
amounts that Borrower paid to Vendor before the relevant Purchase Date
(including deposits applied to such Equipment Portion), pursuant to the
Purchase Agreement, relating to such Equipment Portion.
"Earnings Before Tax": the total earnings from all sources, excluding
extraordinary items, of Borrower in the 24-month period preceding any fiscal
quarter end of Borrower, prior to any deduction for federal and state income
taxes, as determined pursuant to GAAP, divided by 2.
"Embraer": Embraer-Empresa Brasileira de Aeronautica S. A., a
Brazilian corporation, and its successors and assigns.
"Environmental Complaint": any complaint, proceeding, or order under
any federal, state, or local statutes, laws, ordinances, codes, rules, or
regulations (including consent decrees and administrative orders) relating to
public health and safety and protection of the environment.
"Equipment Cost": the purchase price for an Equipment Portion, as set
forth in (and as adjusted pursuant to) the Purchase Agreement.
"Equipment Portion": as to the first Aircraft financed under this
Agreement, the Aircraft and the Spare Parts purchased with that Aircraft and,
as to each of the other Aircraft financed under this Agreement, the Aircraft
but not the Spare Parts, if any, purchased with that Aircraft.
"ERISA": defined in section 5.11.
"Event of Default": defined in section 8.01.
"Event of Loss": defined in section 1.01 of the Mortgage.
"FAA": the Federal Aviation Administration of the United States, or
any instrumentality of the United States succeeding to its function.
"Facility Fee": defined in section 2.04.
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"Financed Amount": the amount determined pursuant to the second
sentence of section 2.01.
"Finex Agreement": an agreement substantially in the form of Exhibit
B.
"Finex Bank": Banco de Credito Nacional S.A., New York Branch (or any
other Person selected by Borrower and accepted by Agent in accordance with
section 13.13 to serve as a Finex bank under a Finex Agreement), in its
capacity as Finex bank under the Finex Agreement, and its successors in such
capacity.
"Finex Interest Payments": the Finex Interest Payments described in
section 3.01 of the Finex Agreement.
"Finex Interest Rate" for a Note: a fixed interest rate equal to the
Finex LIBO Rate for its Purchase Date, minus 2% per annum (computed on the
basis of a year of 360 days), based on actual days elapsed, or such other
interest rate as Borrower is actually required to pay on such Note under the
Finex Program.
"Finex LIBOR" or "Finex LIBO Rate" for any Purchase Date: (x) the
interest rate for such Purchase Date, published by Banco Central do Brasil two
Business Days before that Purchase Date, as the 180-day interest rate
applicable to transactions under the Finex Program, or (y) when applicable, the
Alternative LIBO Rate established pursuant to section 3.02 of the Finex
Agreement.
"Finex Program": the export support program (Fundo de Financiamento a
Exportaceo) of the Federative Republic of Brazil, as established by Resolution
No. 509 of January 24, 1979 of Banco Central do Brasil and in Circular
Cacex/Finex No. 10 of the Carteira de Comercio Exterior (Cacex) of Banco do
Brasil S.A., dated September 21, 1982, as from time to time supplemented or
amended.
"First Atlanta": The First National Bank of Atlanta, in its
individual capacity and not as agent.
"GAAP": generally accepted accounting principles as in effect in the
United States and applied on a basis consistent with that used in the
preparation of the financial statements referred to in section 5.05, except for
changes therein with which Borrower's independent public accountants concur
that are disclosed in the notes to the relevant financial statements.
"Guarantee": the document by that name, executed by ASA Investments,
Inc., in substantially the form of Exhibit J.
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"Hazardous Substance": (a) any "hazardous substance", as defined by
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as in effect from time to time; (b) any "hazardous waste", as defined by
the Resource Conservation and Recovery Act, as in effect from time to time; (c)
any petroleum product; or (d) any pollutant or contaminant or hazardous,
dangerous, or toxic chemical, material, or substance within the meaning of any
other applicable federal, state, or local law, regulation, ordinance, or
requirement (including consent decrees and administrative orders) relating to
or imposing liability or standards of conduct concerning any hazardous, toxic,
or dangerous waste, substance, or material, all as amended or hereafter
amended.
"herein", "hereof", "hereunder", etc.: in, of, or under, etc. this
Agreement (and not merely in, of, under, etc. the section or provision where
that reference appears)
"Illegality Event": defined in section 10.03.
"including": containing, embracing, or involving the enumerated
items(s), but not necessarily limited to such item(s).
"Indemnitee": Agent (individually and in its agency capacity) or a
Lender, or any agent (other than Finex Bank), employee, director, successor, or
permitted assign of any of the foregoing.
"Indebtedness": (a) total liabilities (as determined pursuant to
GAAP) of Borrower and its subsidiaries on a consolidated basis plus (b) any
debt of a Person that is not included in clause (a) above and that is
guaranteed by Borrower or one or more of its subsidiaries, plus (c) 70% of all
Operating Lease Obligations.
"Interest Expense": amounts paid by or due from Borrower for interest
accrued on Borrower's debts during the 12-month period preceding any fiscal
quarter end of Borrower, as determined pursuant to GAAP.
"Interest Payment Date" for a Note: each date occurring after the
Purchase Date for that Note that is a "180-day anniversary" of such Purchase
Date; except that, for purposes of payment and of determining the beginning and
end of each Interest Period (but not for the purpose of determining the
following Interest Payment Date), any Interest Payment Date), any Interest
Payment Date that falls on a day which is not a Business Day shall instead
occur on the following Business Day, unless payment on such Business Day would
cause such payment to be made in the next calendar month, in which case such
Interest Payment date shall occur on the preceding
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Business Day. For avoidance of doubt, the "180-day anniversary" of a date
shall be the 180th day after that date.
"Interest Period" for a Note: each period beginning on the day after
an Interest Payment Date for that Note (or, in the case of the first Interest
Period for that Note, beginning on its Purchase Date) and ending on the
following Interest Payment Date for that Note.
"Interest Supplement" for a Note during an Interest Period: (a) the
amount of principal of that Note outstanding during such Interest Period
multiplied by (b) the Borrower Interest Rate for such Interest Period minus the
Finex Interest Rate for that Note multiplied by (c) the actual number of days
in such Interest Period divided by 360; provided that if the Borrower Interest
Rate for such Interest Period is equal to or less than the Finex Interest Rate
for that Note, the Interest Supplement for that Interest Period shall be zero.
"Lender": First Atlanta or Bank of Tokyo, or a successor or assign
of either.
"Liabilities": defined ins section 9-01.
"Lien": any mortgage, pledge, assignment, encumbrance, lien
(statutory or other), or other security interest of any kind or nature
whatsoever (including any conditional sale or other title retention agreement,
or any lease in the nature thereof).
"Long-Term Certificate": a Certificate substantially in the form of
Exhibit K-1, or any loan certificate issued in exchange or replacement for such
Certificate.
"Majority Lenders": Lenders who, at the pertinent time, have a
66-2/3% or more interest in the sum of (x) all outstanding Certificates and (4)
the unused Commitments outstanding of all Lenders, excluding any Certificates
then held by, or in which a participation has been granted to, Borrower or any
affiliate of Borrower.
"Materially Adverse Change" or "Materially Adverse Effect": any
event, act, condition, or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding) that, singly or in conjunction with any other event(s), act(s),
conditions(s), occurrence(s), whether or not related, results in a materially
adverse change in, or has a materially adverse effect upon, any of (a) the
financial condition, operations, business,
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properties or prospects of Borrower, (b) the rights and remedies of Agent or
any Lender under the Basic Documents, or Borrower's ability to perform its
obligations under the Basic Documents; or (c) the legality, validity, or
enforceability of any Basic Document.
"Medium-Term Certificate": a Certificate substantially in the form of
Exhibit K-2, or any loan certificate issued in exchange or replacement of such
Certificate.
"Mortgage": the Security Agreement and Chattel Mortgage between
Borrower and Agent, substantially in the form of Exhibit C.
"Mortgage Supplement": defined in section 3.01.
"Note": Borrower's promissory note, in the form of Exhibit A, issued
in connection with a designated Aircraft, or a note issued in exchange or
replacement for such a note.
"1988 Purchase Agreement": Purchase Agreement No. 162-COV/88
(including all attachments, exhibits, and letter agreements thereto) dated
November 21, 1988, between Vendor and Borrower.
"1990 Purchase Agreement": Purchase Agreement No. 154-DOC/AC/90
(including all attachments, exhibits, and letter agreements thereto) dated
August 27, 1990, between Vendor and Borrower.
"1990 10-K": Borrower's annual report on Form 10-K for the year
ended December 31, 1990.
"1990 10-Q": Borrower's quarterly report on Form 10-Q for the quarter
ended September 30, 1990.
"Officer's Certificate": a certificate signed in the name of Borrower
(or, with respect to section 6.04(c), of the Successor) by the chairman of the
board, the president, a vice president, or the treasurer of Borrower (or the
Successor).
"Operating Lease": a lease of tangible real or personal property,
other than a Capitalized Lease, requiring aggregate payments of $100,000 or
more during the fiscal year of the lessee.
"Operating Lease Obligations": the amount equal to the aggregate of
all scheduled lease payments (that will become due after any fiscal quarter end
of Borrower for purposes of the term "Indebtedness" as used in section 6.09(a),
but that were due during the 12-month period preceding any fiscal quarter end
of Borrower
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for purposes of section 6.09(b)) under the terms of all of Borrower's Operating
Leases.
"or": at lease one, but not necessarily only one, of the alternatives
enumerated.
"Participation Percentage": a particular Lender's Commitment as a
percentage of the total Commitment of Lenders, as set forth opposite such
Lender's name in section 2.01.
"Permitted Lessee": defined in the Mortgage.
"Permitted Lien": defined in the Mortgage.
"Person": any individual, corporation, partnership, joint venture, or
other legal or governmental entity.
"Prepayment Event": the occurrence of any of the following events
(with respect to the specific Aircraft involved in the case of clauses (a),
(b), (c), or (d) below):
(a) Borrower fails to keep each Aircraft registered with the FAA;
(b) Agent fails or cease to have a perfected first-priority
security interest in each Aircraft, except when the Note
relating to such Aircraft has been fully paid;
(c) a Lien, other than a Permitted Lien, on an Aircraft exits;
(d) Borrower fails to obtain an FAA standard airworthiness
certificate for an Aircraft within four weeks following the
Purchase Date for such Aircraft;
(e) the expiration of 120 days after a Change in Control, provided
that (subject to confidentiality requirements under the
securities laws) Borrower shall notify Agent as soon as it
becomes aware of an actual or impending Change in Control
event, and Agent, acting in good faith, will notify Borrower
promptly after Agent reaches a tentative conclusion that it
will exercise its rights under section 4.04 (and this
Prepayment Event shall be separate and distinct from and does
not affect the affirmative covenant regarding merger described
in section 6.04 hereof);
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(f) the expiration of 120 days after both (i) the Delta Agreement
is fundamentally amended or terminated (other than a
termination that is an Event of Default under section 8.01(d))
and (ii) Delta Air Lines, Inc. and its affiliates transfer all
or substantially all of their beneficial ownership of the
Borrower to a Person not affiliated with Delta Air Lines,
Inc., provided, that Borrower shall notify Agent as soon as
it becomes aware of any of the events described in (i) or
(ii), and Agent, acting in good faith, will notify Borrower
promptly after Agent reaches a tentative conclusion
that it will exercise its rights under section 4.04; or
(g) Borrower ceases to be an "air carrier" within the meaning of
the Act.
"Prime Rate": the interest rate so denominated and set by First
Atlanta from time to time as an interest rate basis for borrowings. The Prime
Rate is one of several interest rate bases used by First Atlanta. First
Atlanta lends at interest rates above and below the Prime Rate.
"Purchase Agreement": when used in connection with a specific
Aircraft or Equipment Portion, either the 1988 Purchase Agreement or the 1990
Purchase Agreement, depending on which agreement the Aircraft or Equipment
Portion was purchased under; when otherwise used, the 1988 Purchase Agreement
and 1990 Purchase Agreement, collectively.
"Purchase Agreement Assignment": a document by that name,
substantially in the form of Exhibit D, executed and delivered on a Purchase
Date with respect to the Aircraft then being delivered.
"Purchase Date": a date on which Borrower purchases an Aircraft and,
simultaneously, the Lenders purchase the related Certificates and Agent
purchases the related Note.
"Regulatory Change": any change after the date of this Agreement in
federal, state, or Japanese law or regulations or the adoption or making after
such date of any interpretations or directives applying to a class of banks
including any Lender of or under any federal, state, or Japanese law or
mandatory regulations by any court or governmental or monetary authority
charged with the interpretation or administration thereof.
"Reuters Screen LIBO Page": the display designated as page "LIBO" on
the Reuter Monitor Money Rates Service (or such other
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page as may replace the LIBO Page on that service for the purpose of displaying
London interbank offered rates for Dollar deposits).
"SEC Filings": the 1990 10-K and the 1990 10-Q.
"Secured Obligations": defined in section 1.01 of the Mortgage.
"Series of Certificates": the Certificates issued in connection with
an Aircraft, or (if the context so requires) two or more Aircraft.
"Short-Term Certificate": a Certificate substantially in the form of
Exhibit K-3, or any loan certificate issued in exchange or replacement for such
Certificate.
"Spare Parts": the appliances, spare parts, and other items of
equipment purchased with the Aircraft under the Purchase Agreement.
"Successor": defined in section 6.04(a).
"Tangible Net Worth": defined in section 6.09.
"Taxes": defined in the last sentence of section 9.02(a).
"Taxing Authorities": defined in the first sentence of section
9.02(a).
"Vendor": Embraer.
Section 1.02 -- Use of Defined Terms. Any defined term used in the
plural preceded by "the" encompasses all members of the relevant class. Any
defined term used in the singular preceded by "any" indicates any number of the
members of the relevant class. Any agreement or instrument referred to in
section 1.01 means such agreement or instrument as from time to time
supplemented and amended. A definition in singular form applies to the plural
form of the term, and vice versa.
Section 1.03 -- Section and Exhibit References, etc.
References to Articles, sections, exhibits, and the like refer to those in or
attached to this Agreement unless otherwise specified.
Article II
PURCHASE OF NOTES AND CERTIFICATES; PAYMENTS
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Section 2.01 -- Purchase of Notes and Certificates. Subject to the
satisfaction of the conditions precedent set forth in Article VII, and on the
terms and conditions set forth in this Article II, on the Purchase Date for
each Aircraft, (i) Borrower shall issue the related Note to Vendor (who will
simultaneously sell that Note to Finex Bank), (ii) Agent shall purchase that
Note from Finex Bank, (iii) First Atlanta will purchase from Agent a Long-Term
Certificate, equal in face amount to 50% of the related Note, Term Certificate,
equal in face amount to 50% of the related Note, and (iv) Bank of Tokyo will
purchase from Agent a Medium-Term Certificate and a Short-Term Certificate,
each equal in face amount to 25% of the related Note. The Financed Amount for
each Aircraft shall be 85% of the Equipment Cost for the related Equipment
Portion, so that the total Equipment Cost for such Aircraft shall be paid 15%
by Borrower and 85% by the related Note, provided, that the Financed Amount for
the first Aircraft financed under this Agreement shall not exceed 85% of
$6,400,000 (and Borrower shall pay 100% of Equipment Cost in excess of
$6,400,000) and that the 100% of Equipment Cost in excess of $6,400,000) and
that the Financed Amount for the other Aircraft shall not exceed 85% of
$6,200,000 (and Borrower shall pay 100% of Equipment Cost for any such Aircraft
in excess of $6,200,000). Each Note and each Series of Certificates shall be
purchased for its face amount, and the total face amount of each Series of
Certificates, and the face amount of each Note, each shall equal the Financed
Amount for the related Aircraft. Each Lender's Commitment, pro rata share of
such Financed Amount in accordance with its Participation Percentage, and pro
rata share of Equipment Cost (x) for the first Aircraft financed under this
Agreement shall be as set forth below:
Commitment for Participation Percentage of
Name of Lender First Aircraft Percentage Equipment Cost
------------- -------------- ---------- --------------
Bank of Tokyo $2,720,000.00 50% 42.5%
First Atlanta $2,720,000.00 50% 42.5%
and, (y) for each other Aircraft shall be as set forth below:
Commitment Participation Percentage of
Name of Lender Per Aircraft Percentage Equipment Cost
------------- -------------- ------------- --------------
Bank of Tokyo $2,635,000.00 50% 42.5
First Atlanta $2,635,000.00 50% 42.5%
Agent's and each Lender's Commitment shall expire at 3:00 p.m., Atlanta,
Georgia time, on the last day of the Commitment Period.
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Section 2.02 -- Procedure for Purchase of Notes and Certificates. The
procedure to be followed in the purchase of Notes and Certificates is described
in Annex A. Neither Agent nor any Lender shall have any duty to pay the pro
rata share of the Financed Amount on any Purchase Date for any Lender who fails
to provide its pro rata share of such Financed Amount. At Agent's offices at ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (or such other location as
Agent shall designate in writing), not later than 2:00 p.m. (Atlanta, Georgia
time) on the appropriate Purchase Date, upon fulfillment of the conditions set
forth in Article VII and compliance with the procedures set forth in Annex A,
Agent will purchase from Finex Bank (who will have purchased such Note
simultaneously from Vendor) the Note related to the Aircraft that Borrower
purchased on that date, and each Lender will purchase from Agent the
appropriate related Certificate(s), in each case for a purchase price equal to
the face amount thereof (as set forth in section 2.01).
Section 2.03 -- Commitment Fee. In partial consideration of the
Lenders' agreement to fund Agent's purchase of the Notes, Borrower shall pay to
Agent, for the benefit of the Lenders, a Commitment Fee ("Commitment Fee")
during the Commitment Period, payable in arrears on the first day of each
quarter or partial quarter (for the prior quarter or partial quarter) after the
execution and delivery of this Agreement, with a final payment on the last day
of the Commitment Period, and computed at a rate per annum (calculated on the
basis of a 360-day year and actual days elapsed) of 0.25% of the average daily
unused portion of the Lenders' Commitment. The term "quarter" as used in this
section shall mean the relevant calendar quarter ending on one of the following
dates: March 31, June 30, September 30, or December 31.
Section 2.04 -- Facility Fee. In partial consideration of the
Lenders' agreement to finance the Aircraft pursuant to this Agreement, Borrower
shall pay to Agent, for the benefit of the Lenders, a fee ("Facility Fee") of
$13,281.25 (.0625% of the Commitment) within three days after the date of the
execution of this Agreement.
Section 2.05 -- Payments by Agent. Agent shall hold and disburse all
amounts that it receives under the Basic Documents in accordance with the terms
of this Agreement, including Article XII.
Article III
SECURITY FOR BORROWER'S OBLIGATIONS
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Section 3.01 -- Security Interest in Collateral. To secure Borrower's
obligations to Agent (in its individual and agency capacities) and the Lenders
under each Note and the other Basic Documents to which Borrower is or becomes a
party, Borrower shall execute and deliver to Agent, on each Purchase Date, a
supplement to the Mortgage (a "Mortgage Supplement"), substantially in the form
of Schedule A to the Mortgage, granting to Agent, for the benefit of Agent (in
its individual and agency capacities) and the Lenders, a perfected purchase
money security interest in the Aircraft being purchased from Vendor on such
Purchase Date.
Section 3.02 -- Set-Off Rights. If Borrower becomes insolvent, or any
Event of Default occurs, any indebtedness that any Lender then owes to Borrower
and any other property of Borrower that any Lender then holds may be offset and
applied toward the payment of any principal of or interest on any Note to the
extent of such Lender's beneficial interest therein represented by
Certificate(s), or any obligation of Borrower to such Lender under the Basic
Documents, whether or not any such other obligation is then due. Any Lender
exercising its rights under this section shall promptly notify Borrower and
Agent thereof, provided, that such Lender's failure to give such notice shall
not affect the validity thereof. Each Lender agrees that if it shall obtain
payment, pursuant to the exercise of its rights under this section, of a
proportion of Borrower's aggregate indebtedness to it hereunder and under the
Notes beneficially owned by such Lender which is greater than such Lender's
proportion of the aggregate indebtedness hereunder and under the Notes
beneficially owned by it, (a) it shall simultaneously purchase from any other
Lender for cash an interest in such indebtedness beneficially held by such
other Lender so that the aggregate unpaid amount of such indebtedness and
interest thereon beneficially held by each such Lender shall be proportionate
to the aggregate unpaid amount of such indebtedness and interest thereon
beneficially held by each such Lender shall be proportionate to the aggregate
unpaid indebtedness beneficially owing to it by Borrower immediately before
such payment and (b) such other adjustments shall be made from time to time as
shall be equitable to ensure that each Lender shares such payment pro rata in
accordance with the principal outstanding under the Certificates which it has
purchased hereunder; provided, that if all or any portion of such payment is
thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and the purchasing Lender restored to the extent of such recovery,
but without interest; provided further, that nothing in this section shall in
any way affect the right of any Lender to obtain payment of indebtedness other
than indebtedness hereunder or under the Notes or Certificates. Borrower
consents to the foregoing arrangements and participation in Borrower's
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indebtedness may, to the extent permitted by applicable law, exercise any and
all rights of set-off as fully as if such holder were a beneficial holder of
such indebtedness in the amount of such interest or other participation. If,
under any bankruptcy, insolvency, or other similar law, any Lender receives a
secured claim in lieu of a set-off to which this section 3.02 applies, such
Lender shall, to the extent practicable, exercise its rights in respect to such
secured claim in a manner consistent with the rights of the Lenders entitled
under this section 3.02 to share in the benefits of any recovery on such
secured claim.
Article IV
PAYMENTS UNDER THE NOTES
AND OTHER AMOUNTS PAYABLE BY BORROWER
Section 4.01 -- How Payments Are Made. Borrower shall make its
payments and prepayments of principal and interest due on the Notes, all
amounts due as Interest Supplements or as Commitment Fees or a Facility Fee
hereunder, and all other amounts payable by Borrower to Agent or any Lender
under the Basic Documents, to Agent, (ABA # 0610-0001-0) at ▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, for credit to account no. ▇▇▇▇▇▇▇▇,
Reference: Atlantic Southeast Airlines/Georgia Corporate Division (or at such
other place or account as Agent from time to time notifies Borrower), in
immediately available funds and in Dollars, no later than 12:00 noon (Atlanta,
Georgia time) on the date when due. In addition to the payments that Borrower
is obligated to make under each Note, Borrower agrees to pay to Agent, on each
Interest Payment Date, the Interest Supplement for each Note for the Interest
Period then ending. Any payment made by Borrower to Agent after 12:00 noon
(Atlanta, Georgia time) on any day shall be deemed to have been made on the
following Business Day. If any payment due under the Basic Documents comes due
on a day which is not a Business Day, such payment shall instead be made on the
following Business Day, and interest, Interest Supplements, or Commitment Fees,
as the case may be, shall accrue at the applicable rate to the day of payment.
As between Borrower and the Lenders, any payment made to Agent shall be deemed
to be payment to the Lenders. Agent will distribute to each Lender its
distributable share of each such payment in accordance with Article XII hereof.
Section 4.02 -- Right to Prepay. Unless a Default exists, Borrower
shall have the right to prepay in full (but not in part) the outstanding
principal amount of the Note issued with respect to any designated Aircraft,
without premium or penalty, and upon such prepayment pursuant to this section,
Agent shall prepay in full the
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Certificates issued with respect to such Aircraft in the manner set forth in
Article XII hereof. Any prepayment under this section 4.02 of the Note issued
with respect to a designated Aircraft shall be made only on an Interest Payment
Date for such Note, and Borrower shall give to Agent (which Agent agrees to
relay promptly to each Lender) at least 15 days' prior written notice (which
notice shall be irrevocable) of such prepayment. Upon any prepayment of any
Note under this section 4.02, Borrower shall pay all accrued and unpaid
interest on the principal of such Note to the date of prepayment, together with
all other amounts payable under section 10.02 with respect to such prepayment.
Section 4.03 -- Mandatory Prepayments. Following the occurrence of an
Event of Loss with respect to any Aircraft, Borrower shall prepay the Note
executed in connection with that Aircraft, in accordance with section 7.01 of
the Mortgage, and shall pay all other amounts payable under section 10.02 with
respect to such prepayment. Upon acceleration of the Notes pursuant to section
8.02, Borrower shall prepay such Notes, and shall pay all other amounts payable
under section 10.02 with respect to such prepayment.
Section 4.04 -- Mandatory Purchase. Upon the occurrence of a
Prepayment Event, Agent shall have the right to require Borrower to purchase or
cause the purchase of (x) in the case of a Prepayment Event described in
clauses (a) through (d) of the definition of such term in section 1.01, the
Series of Certificates related to the Aircraft to which such Prepayment Event
relates and (y) in the case of any other Prepayment Event, all outstanding
Certificates, in either case, for a purchase price equal to (a) the cumulative
then-outstanding principal amount of such Series of Certificates, plus all
accrued but unpaid interest on such Series of Certificates to the date of such
purchase, plus (b) all amounts payable under section 10.02 with respect to such
purchase. The payment described in the preceding sentence and the payment
described in section 4.07 shall be due 10 days after Agent notifies Borrower
that a Prepayment Event has occurred (if that Prepayment Event has not been
cured by then), and shall be made in the manner prescribed by section 4.01.
Upon such a purchase of a Series of Certificates, Agent shall endorse the
related Note in favor of the purchaser and deliver it to such purchaser.
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Section 4.05 -- Amount of Prepayment. Subject to section 4.07, a Note
shall be deemed satisfied in full upon the prepayment of all principal of such
Note, the payment of the interest due on or with respect to such Note on such
prepayment date, the payment pf all past-due interest on or with respect to
such Note, and the payment of all amounts payable under section 10.02 with
respect to such prepayment.
Section 4.06 -- Interest on Past Due Amounts. Any amounts past due
(by acceleration or otherwise) and at any time outstanding under any Note or
from Borrower under any other Basic Document shall (to the extent permitted by
law) bear interest, payable on demand, from the due date until payment in full,
at a rate equal to 2% per annum above the Prime Rate.
Section 4.07 -- Payment of Accrued Interest Supplements. Upon the
occurrence of the prepayment or mandatory purchase of a Note under section
4.02, 4.03, or 4.04, Borrower shall pay to Agent, for the benefit of the
Lenders, all past due Interest Supplements, and any accrued portion of an
Interest Supplement, relating to such Note, with interest on past-due Interest
Supplements computed in accordance with section 4.06.
Section 4.08 -- Reduction in Net Interest Payable by Borrower. If the
Finex Interest Rate for a Note exceeds the Borrower Interest Rate for an
Interest Period for that Note, the amount of interest due from Borrower under
that Note for such Interest Period shall be automatically reduced by an amount
equal to (a) the amount of principal of that Note outstanding during such
Interest Period multiplied by (b) the Finex Interest Rate for that Note minus
the Borrower Interest Rate for such Interest Period multiplied by (c) the
actual number of days in such Interest Period divided by 360.
Article V
BORROWER'S REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants as follows:
Section 5.01 -- Corporate Standing. Borrower is a duly organized
corporation existing in good standing under the laws of Georgia, has the
corporate power and legal authority to own or lease its properties and to carry
on its business as now conducted and as now proposed to be conducted, and is
duly qualified to do business in all jurisdictions wherein such qualification
is necessary (except in any jurisdictions in which the failure to qualify would
have no materially adverse effect on its business or
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on its ability to carry out its obligations under the Basic Documents to which
it is (or is to become) a party).
Section 5.02 -- Corporate Powers. Borrower's execution, delivery, and
performance of the Basic Documents to which it is (or is to become) a party are
within Borrower's corporate powers; and the Basic Documents to which it is (or
is to become) a party have been duly authorized by all necessary corporate
action on Borrower's part, and do not contravene, result in a breach of, or
require any consent under any law, judgment, decree, order, or contractual
restriction binding on Borrower or any agreement or instrument to which
Borrower is a party or to which it or any of its property is subject, except
that the legality and validity of each Purchase Agreement Assignment is subject
to the execution and delivery of the related Consent.
Section 5.03 -- Binding Effect. The Basic Documents to which Borrower
is (or is to become) a party are (or will be when executed and delivered)
legal, valid, and binding obligations of Borrower enforceable against Borrower
in accordance with their terms, except as may be limited by bankruptcy,
insolvency, or other similar laws affecting enforcement of creditors' rights
generally.
Section 5.04 -- Litigation. Except as disclosed in the SEC Filings,
there are no pending or (to the best of Borrower's knowledge after due inquiry)
threatened actions or proceedings before any court or administrative agency
which may be expected to have a Materially Adverse Effect or which seek to
question or set aside any of the transactions herein contemplated.
Section 5.05 -- Financial Statements. The audited balance sheet as of
December 31, 1990 and unaudited balance sheet as of September 30, 1990 for
Borrower and its consolidated subsidiaries, and the related results of
operations for the year and quarter then ended, have been prepared in
accordance with GAAP and correctly present Borrower's financial condition as of
such dates and results of operations for such periods, and since December 31,
1990, there has been no Materially Adverse Change.
Section 5.06 -- Taxes. Borrower has filed all tax returns which it is
or was required to file, and has paid all taxes shown to be due and payable on
those returns or on any assessment received by it, except such taxes of
Borrower, if any, as are being contested diligently in good faith, and by
appropriate proceedings, and as to which adequate reserves have been provided
in accordance with GAAP.
Section 5.07 -- Status as United States Citizen and Air Carrier.
Borrower is a "citizen of the United States" as that term is used in section
1010(16) of the Act, and is a duly certified "air carrier" within the meaning
of the Act.
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Section 5.08 -- Location of Offices. Borrower's chief executive
office and principal place of business, and the place where Borrower keeps its
financial records concerning the Collateral, is located at its address referred
to in section 13.02.
Section 5.09 -- Governmental Consents. Neither the execution,
delivery, and performance of any of the Basic Documents (other than the Finex
Agreement), nor the consummation of any of the transactions contemplated
thereby by Borrower or Vendor (including the importation of the Aircraft into
the United States from Brazil), requires the consent or approval of, giving of
notice to, registration with, or taking of any other action in respect of any
federal, state, or foreign governmental authority or agency (including any
judicial body) except for (a) the filing and recording of the Mortgage, and of
the FAA ▇▇▇▇ of sale, the FAA application for registration, and the Mortgage
Supplement for each Aircraft with the FAA: (b) the filing and recording of
UCC-1 financing statements for each Aircraft with the Superior Court Clerk
Offices in ▇▇▇▇, ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ County, Georgia, and in the appropriate
places in Texas and Arkansas; (c) the registration of each Aircraft with the
FAA pursuant to the Act; (d) the filing of any necessary documents with customs
officials; and (e) any necessary action with respect to the Finex Program.
Section 5.10 -- Condition of Aircraft. On each Purchase Date, the
Aircraft to be delivered on such Purchase Date shall be in such condition as is
sufficient to enable Borrower to obtain a standard U.S. certificate of
airworthiness for such Aircraft and to enable such airworthiness certificate to
be maintained in good standing; and, to Borrower's knowledge (which shall be
based on acceptance tests by Borrower in accordance with it usual practices, to
the extent permitted under the Purchase Agreement), such Aircraft shall
otherwise conform in all material respects to the specifications for such
Aircraft set forth in the Purchase Agreement.
Section 5.11 -- Absence of ERISA Liability. Each employee pension
benefit plan (as defined in section 3(2) of the Employee Retirement Income
Security Act of 1974, as from time to time amended ("ERISA")) of Borrower is in
compliance with the applicable provisions of ERISA and of the Internal Revenue
Code of 1986, as from time to time amended, in all respects, except to the
extent that noncompliance would not be materially adverse to Borrower's
business, assets, financial condition, or ability to perform its obligations
under the Basic Documents.
Section 5.12 -- Delta Agreement. The Delta Agreement is (a) the only
agreement between Delta Air Lines, Inc. and Borrower relating to joint
marketing or code sharing for interconnecting
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flights, and (b) in full force and effect. There exists no default under the
terms of the Delta Agreement and there has not occurred any event that would
ripen into a default upon the giving of notice or passage of time.
Section 5.13 -- Subsidiaries; Stock Ownership. Borrower owns 100% of
the outstanding stock of ASA Investments, Inc. and Borrower has no material
stock or other equity investment in any other corporation, partnership, or
other Person.
Section 5.14 -- Investment Company Status. Borrower is not an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
Section 5.15 -- Solvency. Borrower (i) has sufficient capital to
carry on all businesses and transactions in which it engages or is about to
engage, (ii) owns property having a value both at fair valuation and at present
fair salable value greater than the amount required to pay Borrower's debts,
(iii) is solvent, (iv) will continue to be solvent after the creation of the
security interests in the Collateral by the Basic Documents, and after assuming
all obligations related to the Basic Documents, and (v) is able to pay its
debts as they mature.
Article VI
AFFIRMATIVE COVENANTS
So long as any Note, or any amount owed by Borrower under any other
Basic Document, remains outstanding or unpaid or Agent or any Lender has any
Commitment hereunder:
Section 6.01 -- Financial Statements. Borrower shall furnish to Agent
and each Lender:
(a) within 45 days after the end of each of the first
three quarters in each fiscal year, consolidated statements of
operations of Borrower and its consolidated subsidiaries for the
period from the beginning of the then-current fiscal year to the end
of such quarterly period, and balance sheets of Borrower and its
consolidated subsidiaries, on a consolidated basis, as of the end of
such quarter prepared in accordance with GAAP and setting forth in
each case in comparative form figures for the corresponding period in
the preceding year, all in reasonable detail and certified by the
Chief Financial Officer of Borrower, subject to changes resulting from
year-end adjustments, and Borrower's Form 10-Q for such period;
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(b) within 90 days after the end of each fiscal year,
consolidated statements of operations of Borrower and its consolidated
subsidiaries, for such year, and the balance sheets of Borrower and
its consolidated subsidiaries, on a consolidated basis, as of the end
of such year, setting forth in each case in comparative form
corresponding figures from the preceding annual audit, all in
reasonable detail, and certified to Borrower by its independent
certified public accountants and to each Lender by Borrower's Chief
Financial Officer, as presenting fairly the financial position and
results of operations of Borrower and its consolidated subsidiaries
and as having been prepared in accordance with GAAP, and Borrower's
Form 10-K for such period;
(c) within two Business Days after any officer of
Borrower obtains knowledge of any Default, an Officer's Certificate
specifying its nature, the period of its existence, and what action
Borrower proposes to take with respect to it; and
(d) promptly upon request, such other data or information
(financial or otherwise) regarding Borrower or the Collateral as Agent
from time to time reasonably requests.
Section 6.02 -- Inspection of Collateral and Records. Borrower shall
permit any person(s) from time to time designated in writing by Agent, at the
Lenders' expense (or at Borrower's expense if a Default exists at the time), to
visit and inspect any of the Collateral and Borrower's (or any Permitted
Lessee's) records with respect to the Collateral, at such times as Agent
reasonably requests, and to discuss Borrower's affairs, finances, and accounts
with Borrower's officers. No such inspection shall unreasonably interfere with
Borrower's (or any Permitted Lessee's) operations or maintenance. The Lenders
and Agent shall have no duty to make any such inspection and shall not incur
any liability or obligation by reason of not making any such inspection. Upon
Agent's request, Borrower shall promptly notify Agent of the maintenance
operations then scheduled on the Aircraft for the six-month period following
such request.
Section 6.03 -- Corporate Existence. Except as permitted by section
6.04, Borrower shall maintain its corporate existence in good standing in the
state of its incorporation and in all jurisdictions where qualification is then
necessary (except in any jurisdiction in which the failure to qualify would
have no materially adverse effect on its business or on its ability to carry
out its obligations under the Basic Documents to which it is (or is to become)
a party). Borrower shall preserve and renew its
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rights (charter and statutory), patents, and franchises, unless Borrower
determines in good faith that the preservation thereof is no longer necessary
or desirable in the conduct of its business and that the loss thereof will not
adversely affect Agent's or the Lenders' rights or Borrower's business, assets,
operations, condition (financial or otherwise).
Section 6.04 -- Merger, etc. Without limiting the requirements
regarding mandatory purchase of Certificates contained in Section 4.04 hereof,
Borrower shall not consolidate with or merge into any other corporation, or
convey, transfer, or lease all or substantially all of its assets as an
entirety to any Person, unless:
(a) the corporation formed by such consolidation or the
Person who acquires by conveyance, transfer, or lease all or
substantially all of Borrower's assets as an entirety (the
"Successor") or, in the case of a merger, Borrower (as the surviving
corporation), (i) is a corporation organized and existing under the
laws of the United States of America or any state or the District of
Columbia, (ii) is a "citizen of the United States" as defined in
section 101(16) of the Act, and (iii) is an air carrier (within the
meaning of section 101(3) of the Act) certificated under section
604(b) of the Act; and, in the case of such a consolidation,
conveyance, transfer, or lease, the Successor, (x) executes and
delivers to Agent and the Lenders an agreement, in form and substance
satisfactory to Majority Lenders containing an assumption by the
Successor of the due and punctual performance and observance of
Borrower's obligations under the Basic Documents to which Borrower is
then a party, and (y) makes such filings and recordings, including any
filing or recording with the FAA pursuant to the Act or any filing
under the UCC, as are necessary to evidence such consolidation,
merger, conveyance, transfer, or lease with or to the Successor;
(b) immediately after giving effect to such transaction, (i)
no Default exists and (ii) Borrower's or the Successor's, as the
case may be, business, assets, operations, condition (financial
or otherwise), and financial and other ability to perform its
obligations under the Basic Documents will not be adversely affected
by such transaction in any material respect; and
(c) Borrower or the Successor delivers to Agent and each
Lender, promptly upon consummation of such transaction, an Officer's
Certificate stating that the conditions precedent set forth in clause
(a) have been complied with and an opinion
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of counsel for Borrower or for the Successor, in form and
substance satisfactory to Majority Lenders, stating that the
agreements entered into to effect such consolidation, merger,
conveyance, transfer, or lease and such assumption agreements have
been duly authorized, executed, and delivered by the Successor (or in
the case of a merger, by Borrower) and that they (and the Basic
Documents so assumed) constitute legal, valid an binding obligations
of the Successor (or in the case of a merger, of Borrower),
enforceable in accordance with their terms (to the same extent as the
Basic Documents so assumed were enforceable against Borrower
immediately prior to such transaction); and that all conditions
precedent which are legal in nature provided for in this Agreement and
relating to such transaction have been fulfilled.
Upon any such consolidation, conveyance, transfer, or lease, the
Successor shall succeed to, shall be substituted for, and may exercise every
right and power of Borrower under the Basic Documents to which Borrower is a
party, with the same effect as if the successor had been named as Borrower
therein. No such conveyance, transfer, or lease of substantially all
Borrower's assets as an entirety shall have the effect of releasing Borrower
(or any Successor) from its liability under the Basic Document to which it is a
party. Nothing in this section shall permit any lease, sublease, or other
arrangement for the use, operation, or possession of the Aircraft except in
compliance with the applicable provisions of this Agreement and the Mortgage.
Section 6.05 -- Citizenship and Air Carrier Status. Borrower will at
all times remain a "citizen of the United States" as defined in section 101(16)
of the Act and an "air carrier" within the meaning of the Act.
Section 6.06 -- Compliance with ERISA.
(a) Borrower will, at all times, make prompt payment of
contributions that it is required to make to any employee benefit plan
to which it is a party as are necessary to meet the minimum funding
standards for such an employee benefit plan, as required by ERISA.
(b) Within two Business Days after the occurrence of any
event or circumstance, including any event which is classified as a
"Reportable Event" under ERISA, in connection with any employee
benefit plan to which it is a party, that might constitute grounds for
termination of an employee benefit plan to which Borrower is a party
by the Pension Benefit Guaranty Corporation or might result in the
appointment of a trustee by a United States District Court under
section 4042 of ERISA to administer such employee benefit plan,
Borrower will provide Agent and each Lender with an Officer's
Certificate describing the event or circumstance, stating the reasons
for any such action by the Pension Benefit Guaranty Corporation or a
United States District Court, and specifying the action Borrower
proposes to take with respect thereto.
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Section 6.07 -- Disposition of Assets. Borrower will not dispose of
any of its assets, other than in the ordinary course of its business, unless it
receives full, fair, and reasonable consideration for such assets; and Borrower
will not during any twelve-month period dispose of assets, other than in the
ordinary course of its business, which have an aggregate book value in excess
of $5,000,000; provided, that Borrower shall have the right to dispose of any
aircraft for at least such aircraft's book value and such sale of an aircraft
for at least book value will not be included in the calculation of the
$5,000,000 of assets sold in a twelve-month period. The book value of an
aircraft shall be determined in accordance with GAAP. For avoidance of doubt,
the "ordinary course" of Borrower's business generally shall include (x)
acquisitions or dispositions of marketable securities (other than acquisitions
or dispositions exceeding 5% of any class of "equity security", as defined in
the Securities Exchange Act of 1934) and (y) the disposition of parts of
discontinued aircraft, engines, or propellers not constituting part of a
program to reduce Borrower's fleet in any material respect.
Section 6.08 -- Performance of Delta Agreement. Borrower shall
faithfully perform all obligations it has under the Delta Agreement.
Section 6.09 -- Financial Covenants.
(a) Borrower shall not permit at any fiscal quarter end
of Borrower on a consolidated basis (consolidating Borrower and its
subsidiaries) its ratio of Indebtedness to Tangible Net Worth to
exceed 3.25 to 1. "Tangible Net Worth" shall mean Book Net Worth
minus (a) the amount, if any, of Borrower's and its subsidiaries'
assets which would be treated as intangibles under generally accepted
accounting principles, (b) any write-up in the book value of any fixed
asset resulting from a revaluation thereof, and (c) the amount, if
any, at which shares of stock of Borrower appear on the asset side of
the Borrower's balance sheet. "Book Net Worth" shall mean the book
value of Borrower's and its subsidiaries' total assets located in the
United States of America (exclusive) of an indebtedness owed to
Borrower or its subsidiaries by any affiliate of Borrower) minus
Borrower's and its subsidiaries' total liabilities. For avoidance of
doubt, the phrase "total assets located in the United States of
America" shall include marketable securities and commercial paper
issued by a foreign entity but held in the United States of America by
Borrower or any of its subsidiaries.
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(b) Borrower shall not permit at any fiscal quarter end
of Borrower, on a consolidated basis (consolidating Borrower and its
consolidated subsidiaries), its ratio of (i) Earnings Before Tax plus
Interest Expense plus Depreciation and Amortization Expense plus
Operating Lease Obligations to (ii) Interest Expense plus Current
Maturities of Long-Term Debt plus Operating Lease Obligations, to be
less than 1.55 to 1.
Section 6.10 -- Certificate of No Default. Along with Borrower's
delivery of the quarterly financial statements and annual financial statements
required by sections 6.01(a) and 6.01(b), Borrower shall furnish to each Lender
a certificate of Borrower's Chief Financial Officer certifying that to the best
of his or her knowledge no Default exists (or, if a Default does exist, a
statement as to its nature and the action that Borrower proposes to take with
respect to it.
Section 6.11 -- Insurance on Fleet. Borrower will at all times
maintain, with insurers of recognized responsibility, insurance on each
aircraft in its fleet substantially similar (as to type, amounts, and risks
covered) to the insurance Borrower is required to maintain on the Aircraft
under the terms of sections 6.01 and 6.05 of the Mortgage, provided, that
Borrower shall not be required to carry hull insurance for any aircraft (other
than an Aircraft) that has a fair market value of less than $1,000,000.
Article VII
CONDITIONS PRECEDENT TO THE PURCHASE OF NOTES
Section 7.01 -- Conditions Precedent to the Purchase of the Initial
Note. Each Lender's obligation and Agent's obligation to purchase the initial
Series of Certificates and the initial Note on the first Purchase Date are
subject to the satisfaction of the following conditions precedent and Agent's
receipt on or before such initial Purchase Date of the following, in form and
substance satisfactory to Agent:
(a) a certificate of Borrower's secretary, dated the
Purchase Date, certifying attached copies of the resolutions of
Borrower's board of directors evidencing approval of the
transactions contemplated by the Basic Documents to which it is (or is
to become) a party, and showing the names and specimen signature(s)
(or copies thereof) of Borrower's officer(s) authorized to sign this
Agreement and the related documents to which it is (or is to become) a
party.
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(b) an executed Finex Agreement,
(c) an executed Mortgage,
(d) an executed Guarantee,
(e) an Officer's Certificate certifying attached copies
of the 1990 Purchase Agreement and the 1990 Purchase
Agreement, and
(f) copies of the SEC Filings,
In addition, Borrower's obligation to close on the first Purchase Date
is subject to its receipt of an executed letter agreement among Borrower, the
Lenders, and Agent, in form and substance satisfactory to each, concerning
sections 4.02(d)(i) and 6.05 of the Mortgage, and concerning the availability
of the Finex Program and potential future changes in the terms of the Finex
Agreement.
Section 7.02 -- Conditions Precedent to the Purchase of All Notes.
Each Lender's obligation and Agent's obligation to purchase each Series of
Certificates and each related Note (including the initial Series of
Certificates and the initial Note) is subject to the additional conditions
precedent that:
(a) Agent shall have received the following, each dated
as of the pertinent Purchase Date, in form and substance satisfactory
to Agent:
(i) the Note for the relevant Aircraft, executed
by Borrower and endorsed by Vendor (without recourse) to the
order of Finex Bank who in turn has endorsed (without
recourse) to the order of Agent,
(ii) an executed Mortgage Supplement with respect
to the relevant Aircraft,
(iii) an executed Purchase Agreement Assignment,
with the related executed Consent, with respect to the
relevant Aircraft,
(iv) an Officer's Certificate to the effect that:
(1) Borrower's representations and warranties in Article V of
this Agreement and section 6 of the relevant Purchase
Agreement Assignment are true and accurate as though made on
the Purchase Date, and (2) no Default exists or will result
from Agent's purchase of such Note,
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(v) a certificate of insurance describing the
insurance describing the insurance maintained by Borrower with
respect to the Aircraft being purchased and stating that such
policies conform to the requirements of the Mortgage,
(vi) an opinion from Borrower's counsel
substantially in the form of Exhibit F,
(vii) an opinion from ▇▇▇▇▇ & ▇▇▇▇▇▇▇, special FAA
counsel, substantially in the form of Exhibit G, covering the
Aircraft that is the subject of the Note being purchased,
(viii) an opinion of counsel to Embraer,
substantially in the form of Exhibit H,
(ix) an opinion of Brazilian counsel
substantially in the form of Exhibit I, and
(x) such additional opinion(s) (including, if
requested, from ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇) and document(s) as
Agent requests.
(b) Agent shall have received copies of the necessary FAA
Application for Aircraft Registration and FAA ▇▇▇▇ of Sale pertaining
to the Aircraft being purchased;
(c) Borrower's representations and warranties in the
Basic Documents shall be true and accurate as though made on and as of
such Purchase Date;
(d) no Default shall exist or shall result from Agent's
purchase of such Note;
(e) all filings, recordings, and other actions necessary
to establish, protect, preserve, and perfect Agent's and the Lenders'
interests under the Mortgage shall have been duly made or taken;
(f) all necessary consents, approvals, licenses, permits,
declarations, or registrations then required in connection with the
execution, delivery, performance, validity, and enforceability of the
Basic Documents and the transactions contemplated thereby shall have
been obtained;
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(g) Agent shall have received a copy of the approval of
the application for coverage of the purchase of the Aircraft by the
Finex Program;
(h) in Agent's reasonable judgment, since December 31,
1990, no Materially Adverse Change shall have occurred;
(i) each Lender shall have made available the amount of
its Participations Percentage of the Financed Amount for the relevant
Aircraft in accordance with Article II hereof; and
(j) each Lender shall have received (c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇▇▇▇) the following, each dated as of the pertinent Purchase Date,
in form and substance reasonably satisfactory to each Lender;
(i) the Certificate(s) issuable to it with
respect to the relevant Aircraft, duly executed by Agent, and
(ii) an executed copy of each document referred
to in section 7.02(a)(ii) through (x).
Article VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.01 -- Events of Default. Each of the following shall
constitute an "Event of Default":
(a) Borrower fails to make any payment due from Borrower
on any Note or under any other Basic Document (including any Interest
Supplement and any amount due under section 4.04 hereof) when due;
(b) any representation or warranty made by Borrower in
the Basic Documents, or in any certificate or other document that it
furnishes pursuant to the Basic Documents, proves to have been
incorrect in any material respect when made;
(c) Borrower fails to maintain the insurance required by
the terms of the Mortgage;
(d) the Delta Agreement is voluntarily terminated by
Borrower, or is amended to the detriment of Borrower (this Event of
Default being separate and distinct from and not affect the Prepayment
Event relating to the Delta Agreement
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described in clause (f) of the definition of "Prepayment Event");
(e) Borrower fails to provide Agent and each Lender with
the Officer's Certificate required by section 6.01(c) or 6.06(b)
within 10 days after any of Borrower's officers obtains notice of a
Default or the ERISA-related event or circumstance occurs,
respectively;
(f) Borrower fails in any material respect to perform any
other covenant or agreement in the Basic Documents (including section
6.09 hereof), and (if remediable) such failure to perform continues
for 30 days after Borrower's receipt of notice of such default from
Agent or any Lender;
(g) Borrower (1) applies for or consents to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of all or a majority of its
property, (2) makes a general assignment for the benefit of its
creditors, (3) commences a voluntary case under the federal Bankruptcy
Code (as now or hereafter in effect), (4) files a petition seeking to
take advantage (as debtor) of any other law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or readjustment
of debts, or (5) fails to controvert in a timely manner, or
acquiesces in writing to, any petition filed against it in an
involuntary case under the federal Bankruptcy Code;
(h) a proceeding or case is commenced, without Borrower's
application or consent, in any court of competent jurisdiction,
seeking (1) its liquidation, reorganization, dissolution, or
winding-up, or the composition or readjustment of its debts, (2) the
appointment of a trustee, receiver, custodian, liquidator, or the like
of Borrower or of all or a majority of all its assets, or (3) similar
relief in respect of Borrower under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment
of debts, and such proceeding or case continues undismissed, or an
order, judgment, or decree approving or ordering any of the foregoing
is entered and continues unstayed and in effect, for a period of 60
days; or an order for relief against Borrower is entered in an
involuntary case under the federal Bankruptcy Code;
(i) loan, lease, or deferred purchase obligations of
Borrower totalling more than $1 million are in default after the
expiration of any applicable grace period, if the effect of such
default is to permit such obligations to be
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accelerated or otherwise declared to be due and payable prior
to their stated maturity, or Borrower defaults in the payment when due
of more than $1 million of loan, lease, or deferred purchase
obligations, or Borrower defaults in the payment of any amount when
due under the terms of any financing with any Lender, provided such
financing was, at any time, for an amount in excess of $1 million;
(j) one or more judgment(s) is/are rendered by one or
more court(s) of competent jurisdiction against Borrower for a total
of more than $1 million and is/are not stayed or discharged, or fully
bonded against, within 60 days of the date of entry;
(k) any "Reportable Event" under ERISA shall have
occurred, or any finding or determination shall be made with respect
to an employee benefit plan to which Borrower is a party under section
4041(c) or (e) of ERISA, or any fact or circumstance shall occur with
respect to an employee benefit plan to which Borrower is a party,
that, in the opinion of Majority Lenders, provides grounds for
the commencement of any proceeding under section 4042 of ERISA, or any
proceeding shall be commenced under section 4042 of ERISA with respect
to an employee benefit plan to which Borrower is a party; or
(l) Borrower shall deny any further liability under any
Note or under any other Basic Document.
Section 8.02 -- Remedies. If an Event of Default (other than
under section 8.01 (g) or (h) exists, Agent may (and upon its receipt of
written request by Majority Lenders shall) declare all Notes to be immediately
due and payable, whereupon (i) all Notes shall become and be immediately due
and payable without presentment, demand, protest, or other notice of any kind,
all of which Borrower hereby waives, (ii) the Interest Supplement for any
partial Interest Period will become immediately due and payable, and (iii) the
Commitment shall terminate. If an Event of Default under section 8.01(g) or
(h) occurs, all Notes automatically shall become immediately due and payable
and the Commitment automatically shall immediately terminate, without
presentment, demand, protest, or notice of any kind, all of which Borrower
hereby waives. Upon the occurrence of any Event of Default, Agent may (and
upon its receipt of written request by Majority Lenders shall) exercise any of
its rights and remedies under the Basic Documents, including the Mortgage.
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Article IX
BORROWER'S INDEMNITIES
Section 9.01 -- General Indemnity. Borrower assumes liability for,
and agrees to indemnify each Indemnitee against, and on written demand to
pay, or to reimburse each Indemnitee for the payment of, any and all
liabilities.
"Liabilities" means any and all liabilities, obligations, losses,
damages, penalties, claims (including claims involving strict liability in
tort), suits, actions, costs, expenses, and disbursements, including legal fees
and expenses, of whatsoever kind and nature imposed on, incurred by, or
asserted against any Indemnitee relating to or arising out of any Basic
Document, the enforcement against Borrower of any of the terms of the Basic
Documents, or any lease or relinquishment of possession of the Aircraft or any
part thereof or any action or inaction of Borrower or of any lessee, assignee,
or transferee of Borrower in connection therewith, the purchase of the Aircraft
and the Spare Parts under the Purchase Agreement, the ownership of the
Aircraft, the acquisition, delivery, nondelivery, acceptance, nonacceptance,
rejection, registration, deregistration, insuring, storage, manufacture,
assembly, transportation, importation, exportation, maintenance, condition,
modification, testing, repair, fitness for use, merchantability, sale,
abandonment, lease, sublease, assignment, transfer, transfer of title,
possession, repossession, use, operation, return or other application or
disposition of the Aircraft and the Spare Parts or any component thereof, the
condition upon return thereof after repossession following the occurrence of an
Event of Default or following the exercise of remedies under the Mortgage,
including latent or other defects, whether or not discoverable, loss of or
damage to any property or the environment, death or injury of any person, and
any claim for patent, trademark, copyright, or mask work infringement and the
violation or infringement by Borrower of any laws, rules, or regulations, or
(without limiting any of the foregoing) any breach by Borrower of,
noncompliance by Borrower with, or misrepresentation made or deemed made by or
on behalf of Borrower in, under, or in connection with the Purchase Agreement
or an Purchase Agreement Assignment or any warranty, certificate, or agreement
made or delivered in, under, or in connection with the Purchase Agreement or
any Purchase Agreement Assignment without limiting the generality of the
foregoing, "Liabilities" shall in any event include any and all losses, damages
(including all foreseeable and unforeseeable consequential damages), costs,
claims, liabilities, penalties, fees, injuries, or expenses of whatever kind or
nature (including reasonable counsel fees and
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costs) that an Indemnitee sustains or incurs in connection with: any
Environmental Complaint, any Hazardous Substance release, disposal, recycling,
storage, handling, treatment or exposure, or response action) in connection
with or relating to (i) any property that Borrower or any of its affiliates now
or in the past or future shall own, operate or use, or (ii) any operations of
Borrower or any of its affiliates, whether such operations took place before or
after the date of this Agreement.
However, this section 9.01 shall not require Borrower to pay or
indemnify any Indemnitee under this section (i) for any Liability to the extent
resulting from such Indemnitee's acts of gross negligence or willful
misconduct; (ii) for any Taxes (Borrower's duties in respect of Taxes being set
forth in section 9.02) or for any cost or expense relating to the preparation,
execution, delivery, or enforcement of the Basic Documents (Borrower's duties
in respect of such costs and expenses being set forth in section 13.03); (iii)
for any Liability that such Indemnitee incurs to the extent resulting from its
breach of any of its representations, warranties, or covenants in any Basic
Document; (iv) for any Liability to the extent resulting from a claim against
such Indemnitee not related to (x) any Equipment Portion; (y) any action or
inaction of Borrower or any lessee, assignee, or transferee of Borrower, or (z)
any of the transactions contemplated by the Basic Document; (v) for any
Liability with respect to transfer taxes or other expenses payable with respect
to the transfer of any Note or any Certificate, other than a transfer after the
occurrence of an Event of Default; or (vi) for any violation or purported
violation of any law relating to usury or the charging or collecting of excess
interest or finance charges.
If any Indemnitee obtains knowledge of any claim or liability required
to be indemnified against under this section 9.01, such Indemnitee shall
promptly notify Borrower, but the failure to do so shall not relieve Borrower
from any liability that it otherwise would have to such Indemnitee under this
section. Upon an Indemnitee's request, the defense of any Liability for which
Borrower would be required to indemnify such Indemnitee hereunder shall be
conducted by Borrower, with counsel selected by Borrower and satisfactory to
Lender. However, if the defense of any such Liability is conducted by Agent or
any Lender, Agent or such Lender shall select the counsel to conduct it, but
shall consult with Borrower as to such selection; provided, that the decision
as to which counsel to select shall be and remain Agent or such Lender's.
Borrower shall be obligated under this section 9.01 irrespective of
whether the Indemnitee is also indemnified with
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respect to the same matter under any other Basic Document or other document by
any other Person, and the Indemnitee may proceed directly against Borrower
under this section 9.01 without first resorting to any such rights of
indemnification. Upon the payment in full of any indemnities due and owing
under this section 9.01, Borrower shall be subrogated to any right of the
Indemnitee in respect of the matter against which indemnity has been given.
Borrower's indemnities in this section shall survive expiration or termination
of the Mortgage and payment in full of the Notes.
Any payment or indemnity pursuant to this section 9.01 shall include
the amount, if any, necessary to hold the Indemnitee harmless on an after-tax
basis from all taxes required to be paid by such recipient with respect to such
payment or indemnity under laws of any federal, state, or local government or
taxing authority in the United States or by any foreign government or any
political subdivision or taxing authority thereof. The amount of any payment
or indemnity required under this section shall be determined by the Indemnitee
reasonably and in good faith, and that determination shall be conclusive. Upon
Borrower's request and at Borrower's expense, the Indemnitee will provide
Borrower with a summary explanation of the basis for the Indemnitee's
computations.
Section 9.02 -- Taxes.
(a) Indemnity. Except as provided in section 9.02(b), Borrower
agrees to indemnify each Indemnitee against, and on written demand to pay or
reimburse each Indemnitee for the payment of, any and all Taxes imposed upon or
asserted against any Indemnitee, any equipment Portion or any part thereof or
interest therein, any Basic Document, any lease of any Aircraft or any part
thereof, or the rentals received under such a lease, by any federal, state, or
local government or other taxing authority in the United States (including any
territory or possession of the United States)or by any foreign government or
any political subdivision or taxing authority thereof where any part of an
Equipment Portion is located, used, or registered ("Taxing Authorities") upon
or with respect to (i) the construction, mortgaging, financing, refinancing by
or at the request of Borrower, purchase, acquisition, acceptance,
nonacceptance, rejection, delivery, nondelivery, transport, insuring,
ownership, registration, deregistration, assembly, possession, repossession,
operation, use, condition, maintenance, modification, repair, fitness for use,
merchantability, testing, return, abandonment, storage, manufacture, leasing,
subleasing, importation, exportation, sale, assignment, transfer, transfer of
title, or other application or disposition of, or the imposition of any Lien
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(other than a Permitted Lien) or the incurrence of any liability to refund or
pay over any amount as a result of any Lien (other than a Permitted Lien) on
any Equipment Portion or any part thereof or interest therein, (ii) any amount
paid or payable by Borrower or Finex Bank under the Basic Documents or the
receipts for earnings arising from or received with respect to any Equipment
Portion or any part thereof or interest therein, (iii) any Equipment Portion or
any part thereof or interest therein, (iv) any of the Basic Documents and any
other documents contemplated thereby or the execution, sale, delivery,
acquisition, or filing of the Basic Documents, or (v) otherwise with respect to
or in connection with the transactions effective under the Basic Documents.
The term "Taxes" shall mean any and all fees, taxes, levies, imposts, duties,
charges, assessments, or withholdings of any nature whatsoever, together with
any and all penalties, fines, additions to tax, and interest thereon or
computed by reference thereto.
(b) Exclusions from Indemnity. The provisions of section 9.02(a)
shall not apply to:
(i) any Tax based on, or measured by, net income,
capital, franchise, or net worth (other than sales taxes), including
related surcharges and withholding taxes, or any withholding taxes on
an Indemnitee's gross income, to the extent that such withholding
taxes are imposed solely because that Indemnitee has a place of
business outside the United States or holds its Certificate(s) outside
the United States; provided, that the provisions of this clause (b)(i)
shall not apply to any Taxes imposed in respect of the receipt or
accrual of any indemnity payment made or payable pursuant to this
Section 9.02;
(ii) any Tax based on or measured by the value of such
Indemnitee's interest in any Basic Document, except to the extent
imposed without regard to the presence of the Indemnitee, or any Note,
in the jurisdiction of the Taxing Authority imposing that Tax;
(iii) any Tax imposed on the Indemnitee as a result of a
transfer or other disposition, by such Indemnitee or any of its
predecessors in interest, of any interest in the Aircraft or any Basic
Document, unless such transfer or disposition occurs after the
occurrence of an Event of Default; or
(iv) any Tax in the nature of a penalty, an addition to
tax, interest, or fines resulting from the negligence or
misconduct of the Indemnitee in connection with the preparation or
filing of (or failure to prepare or file) tax returns, or the payment
of or failure to pay its taxes, but in each case not if in any way
attributable to Borrower's failure to notify
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such Indemnitee of its obligations to prepare and file its
returns in respect of Taxes indemnified pursuant to this section 9.02
or to provide any information necessary for the preparation or filing
of such returns or the conduct of such proceedings or otherwise to
perform its duties and responsibilities pursuant to the Basic
Documents.
(c) Calculation of General Tax Indemnity Payments. Any payment
which Borrower is required to make to or for the account of any Indemnitee with
respect to any Tax which is subject to indemnification under this section 9.02
shall be made on a net basis, taking into account offsetting credits or
deductions available to such Indemnitee as a result of the payment of such Tax,
and shall include the amount necessary to hold such Indemnitee harmless on an
after-tax basis from the net amount of all Taxes required to be paid by such
Indemnitee as the result of such payment (including any Taxes imposed on such
indemnity payment) pursuant to the laws of any Taxing Authority. The amount of
any payment or indemnity required under this section shall be determined by the
Indemnitee reasonably and in good faith, and that determination shall be
conclusive. Upon Borrower's request and at Borrower's expense, the Indemnitee
will provide Borrower with a summary explanation of the basis for the
Indemnitee's computations.
(d) Reports. If Borrower shall timely file any report, return, or
statement required to be filed with respect to any Tax which is subject to
indemnification under this section 9.02, except for any such report, return, or
statement which an Indemnitee has notified Borrower that it intends to file.
Borrower shall file such report, return, or statement and send a copy to Agent
and each Indemnitee affected by such report, return, or statement. Each
Indemnitee shall promptly forward to Borrower any notice, ▇▇▇▇, or advice
received by it concerning any Tax.
Section 9.03 -- Survival. The requirements in this Article IX shall
survive termination of this Agreement and the other Basic Documents and the
payment of the Notes and the Certificates.
Article X
YIELD PROTECTION; ILLEGALITY
Section 10.01 -- Additional Costs.
(a) Borrower shall pay directly to each Lender from time to time
such amounts as are necessary to compensate such Lender, on an after-tax basis,
for any costs which are attributable to its
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purchase of or obligation to purchase any Certificates hereunder, or any
reduction in any amount receivable by such Lender in respect of any of such
Certificates or such obligation (excluding payments under the Finex Agreement),
resulting from any Regulatory Change which imposes or modifies any reserve,
special deposit, minimum capital, capital ratio, or similar requirements
relating to any extensions of credit or other assets of, or any deposits with
or other liabilities of, such Lender, or the manner in which such Lender funds
(or allocates funds, on its books, for) its investments in any of the
Certificates.
(b) Determinations and allocations by any Lender for purposes of
this section 10.01 of the effect of any Regulatory Change pursuant to section
10.01(a) on such Lender's costs or rate of return of maintaining or its
obligations to purchase any Certificate, or on amounts receivable by it in
respect of any Certificate, and of amounts required to compensate such Lender
under this section 10.01, shall be made by such Lender reasonably and in good
faith and shall be conclusive. Upon Borrower's request and at Borrower's
expense, such Lender will provide Borrower with a summary explanation of the
basis for such Lender's computations.
Section 10.02 -- Breakage Costs. Borrower shall pay to each Lender,
upon such Lender's request, such amount as is sufficient, in such Lender's
opinion, to compensate it for any loss, cost, or expense which is attributable
to:
(a) any payment, purchase, or conversion of any Note or
Certificate in which such Lender has any interest for any reason (including the
acceleration of the maturity of the Notes pursuant to section 8.02 and the
mandatory purchase of Certificates pursuant to section 4.04 or 10.03, but
excluding any other transfer of a Certificate by any Lender) on a date other
than an Interest Payment Date; or
(b) any failure by Vendor for any reason (including the failure of
any of the conditions precedent specified in Article VII to be satisfied) to
endorse and deliver any Note to Finex Bank on the Purchase Date specified in
the relevant notice to Agent given pursuant to section 2.02.
Such amount payable by Borrower (x) shall not include losses, costs, or
expenses attributable to any date more than 180 days after the date of such
payment, purchase, or conversion or such Purchase Date, and (y) shall be
determined by the affected Lender reasonably and in good faith, which
determination shall be conclusive. Upon Borrower's request and at Borrower's
expense, such affected Lender
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will provide Borrower with a summary explanation of the basis for such Lender's
computations.
Section 10.03 -- Illegality. If at any time, any change in any
applicable state, federal or Japanese law or in any interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency in the United States or Japan charged with the interpretation
or administration thereof, or any reversal by any such entity of an
interpretation thereof by any Lender or any compliance by any Lender with any
official request or directive in respect of or constituting such a change
(whether or not having the force of law) of any such entity, shall make it
unlawful or contrary to such interpretation or administration for any Lender to
make, fund, maintain or hold its Certificate(s) in the method described herein
or to give effect to all or any part of its obligations with respect thereto
under this Agreement or any of the other Basic Documents (each such event being
an "Illegality Event"), then such Lender shall promptly notify Borrower thereof
in writing, and Borrower shall purchase or cause a Person to purchase such
Lender's Certificates for an amount determined in accordance with section 4.04,
on or prior to the earlier of (i) the Business Day immediately prior to the
last day such Lender is allowed to take corrective action with respect to such
Illegality Event, or (ii) the first Interest Payment Date to occur at least 60
days after the date of notice of the Illegality Event has been sent to the
Borrower by such Lender.
Article XI
AGENT
Section 11.01 -- Appointment; Powers and Indemnities; Compensation
(a) Each Lender hereby irrevocably appoints and authorizes Agent
to act as agent hereunder and in respect of the other Basic Documents, with the
power to execute and deliver this Agreement and the other Basic Documents to
which it is a party, including the Certificates, and any other agreements,
instruments, or documents (including UCC-1 financing statements) in which Agent
is shown as a party in the forms delivered from time to time by the Lenders to
Agent for execution and delivery and, subject to the terms of this Agreement,
to exercise its rights and perform its duties under such documents in
accordance with their terms, and with such other powers as are reasonably
incidental thereto. Except with respect to any representation, warranty, or
covenant expressly made by Agent in any Basic Document, Agent shall have not
duties or responsibilities except those expressly set forth in this Agreement,
and shall not,
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by reason of this Agreement or any other Basic Document, be a trustee for any
Lender. Agent shall not be responsible to any Lender (or to any other party)
for any recitals, statements, representations, or warranties contained in this
Agreement or any other Basic Document, or in any certificate or other document
referred to or provided for in, or received by any of them under, this
Agreement or any other Basic Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of this Agreement or
any other Basic Document, or any other document referred to or provided for
herein or therein or for any failure by Borrower or any third party to perform
any of its obligations hereunder or thereunder. Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
Neither Agent nor any of its directors, officers, employees, or agents shall be
liable or responsible for any action taken or omitted to be taken by it or them
hereunder or under any other Basic Document, or in connection herewith or
therewith, except for its or their own gross negligence or willful misconduct.
(b) Agent shall not be obligated to take any action or refrain
from taking any action under any Basic Document that might in its reasonable
judgment involve it in any expense or liability unless it is indemnified, in
form and substance satisfactory to Agent, which indemnity may be furnished by
any Lender.
(c) Agent shall not have any duty or obligation to manage,
control, use, operate, store, lease, sell, dispose of, or otherwise deal with
the Aircraft or any part of the Collateral, or otherwise to take or refrain
from taking any action under, or in connection with, any Basic Document to
which Agent is a party, except as expressly provided by the terms hereof or any
other Basic Document, or as specified in written instructions from Majority
Lenders.
Section 11.02 -- Reliance by Agent. Agent may rely upon, and shall
not be bound or obligated to make any investigation into the facts or matters
stated in, any certificate, notice, or other communication (including any
thereof by telephone, telex, telegram, or cable) believed by it to be genuine
and correct and to have been made, signed, or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of outside legal
counsel, independent accountants, and other experts selected by Agent, (and
Agent shall not be liable for anything that it does, suffers, or omits in good
faith in accordance with the advise or opinion of any such counsel,
accountants, or experts within such Person's or Persons' particular area of
competence, provided that Agent has exercised due care in selecting such
counsel, accountants, or other experts). As to any matters not expressly
provided for by this
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Agreement, Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed by
Majority Lenders and such instructions of Majority Lenders and any action taken
or failure to act pursuant thereto shall be binding on all Lenders.
Section 11.03 -- Defaults. Agent shall not be deemed to have
knowledge of the occurrence of a Default unless Agent has received actual
written notice from a Lender or from Borrower, specifying such Default and
stating that such notice is a "Notice of Default". If Agent receives actual
notice of the occurrence of a Default, Agent shall give prompt notice thereof
to each Lender and to Borrower. Agent shall (subject to section 11.07) take
action with respect to such Default as directed by Majority Lenders; provided,
that, unless and until Agent receives such directions, Agent may take such
action, or refrain from taking such action, with respect to such Default as it
deems advisable in the best interest of the Lenders.
Section 11.04 -- Rights as a Lender. With respect to its Commitment
and the loans made by it, First Atlanta, in its capacity as a Lender hereunder,
shall have the same rights, powers, and obligations hereunder as any other
Lender and may exercise the same as though it were not acting as Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise requires,
include First Atlanta in its individual capacity. First Atlanta and its
affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money (on a secured or unsecured basis) to, and generally
engage in any kind of banking, trust, or other business with Borrower, and any
of Borrower's affiliates, as if First Atlanta were not acting as agent
hereunder, and First Atlanta may accept fees and other consideration from
Borrower or any of its affiliates for services in connection with other loan
agreements or otherwise without having to account for same to any Lender.
Section 11.05 -- Indemnification. Each Lender shall indemnify Agent
(to the extent not reimbursed under Article IX hereof but without limiting the
obligations under Article IX), ratably in accordance with the aggregate
principal amount of the Certificates held by such Lender, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements of any kind and nature whatsoever that
may be imposed on, incurred by, or asserted against Agent in any way relating
to or arising out of this Agreement or any other document contemplated by or
referred to herein or the transactions contemplated hereby or the enforcement
of any of the terms hereof or of any such other documents; provided, that no
Lender shall be
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liable for any of the foregoing to the extent they arise from Agent's gross
negligence or willful misconduct.
Section 11.06 -- Nonreliance on Agents or Lenders. Each Lender agrees
that it has, independently and without reliance on Agent or any other Lender
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of Borrower and its own decision to become a lender
under the Basic Documents and that such Lender will, independently and without
reliance upon Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking action under this Agreement and the Basic
Documents to which it is a party. Agent shall not be required to keep itself
informed as to the performance or observance by Borrower of any other document
referred to (directly or indirectly) or provided for herein or therein or to
inspect the properties or books of any such entity. Except for notices,
reports, and other documents and information expressly required to be furnished
to the Lenders by Agent hereunder, Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition, or business of Borrower or any of
its affiliates that may come into the possession of Agent or any of its
affiliates. Except as otherwise specifically required herein, Agent shall not
be required to forward to the Lenders any notices, reports, or other documents
and information otherwise required to be forwarded to the Lenders by any other
party to the Basic Documents.
Section 11.07 -- Failure to Act. Except for action expressly required
of Agent hereunder, Agent shall in all cases by fully justified in failing or
refusing to act unless it is indemnified to its satisfaction by the Lenders
against any and all liability and expenses which may be incurred by it by
reason of taking or continuing to take any such action.
Section 11.08 -- Resignation of Agent; Successor Agent. Subject to
the appointment and acceptance of a successor Agent as provided below, Agent
may resign at any time by giving notice thereof to the Lenders and Borrower,
provided, that Agent shall not, at the time of such resignation, take any
actions to impair the rights or obligations of any party to the Finex
Agreement. Upon any such resignation, Majority Lenders shall have the right to
appoint a successor Agent, who shall be either an affiliate of First Atlanta or
a Person reasonably acceptable to Borrower, and who shall be a bank having a
combined capital, surplus, and undivided profits of not less than $100,000,000
and having its principal office in the United States of America. If, within 30
calendar days after the retiring Agent's giving of notice of resignation, a
successor Agent
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is not so appointed or does not accept such appointment, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent, who shall be
either an affiliate of First Atlanta or a Person reasonably acceptable to
Borrower and who shall be a bank having combined capital, surplus, and
undivided profits of not less than $100,000,000 and having its principal office
in the United States of America. Upon the acceptance of any appointment as
agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges, and
duties of the retiring Agent and the retiring Agent shall be discharged from
its duties and obligations hereunder. If no Person meeting the foregoing
qualifications is willing to accept such appointment, any Lender or Agent may
apply to a court of competent jurisdiction to appoint such a successor or to
relieve Agent of its duties as agent hereunder.
Section 11.09 -- Investment of Funds.
(a) Except as otherwise provided in section 7.03 of the Mortgage,
any money held by Agent hereunder as part of the Collateral shall, until paid
out by Agent as herein provided, be held by Agent in a collateral account for
the purposes for which held, and Agent shall not have any liability for
interest upon any such money, and such money need not be invested or reinvested
except as provided in section 11.09(b) below.
(b) Any amounts held by Agent pursuant to this section 11.09 shall
be invested by Agent from time to time (unless the costs of the investment
would exceed the gains reasonably anticipated therefrom) in obligations of, or
fully secured by, the United States government maturing in not more than 30
calendar days; provided, that if Majority Lenders so request of Agent in
writing and no Default exists, Agent shall invest such amounts in (i)
marketable direct obligations of the United States of America or marketable
obligations directly guaranteed by the United States of America maturing, in
each case, not later than 30 days from the date of acquisition thereof, (ii)
repurchase obligations maturing not later than 30 days from the date of
acquisition thereof, collateralized by obligations of the nature referred to in
clause (i) of this paragraph issued by any Lender, or any other commercial bank
organized and existing under the laws of the United States of America or any
state thereof, in either case having combined capital, surplus, and undivided
profits of not less than $100,000,000, if Agent holds such obligations, or has
written evidence from the holder of such obligations, that such obligations are
held by a Federal Reserve bank or a commercial bank with combined capital,
surplus, and undivided profits of no less than $100,000,000 and a perfected
security interest under the Uniform
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Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306.1 et seq.
or 31 C.F.R. 305.0 et seq. in such obligations, is created for the benefit of
Agent; (iii) certificates of deposit and bankers' acceptances issued by any
Lender, or by any commercial bank organized and existing under the laws of the
United States of America or any state thereof, in either case having combined
capital, surplus, and undivided profits of not less than $100,000,000, or
commercial paper (other than any issued by Borrower, any Lender, or an
affiliate of either) rated A-1 by Standard & Poor's Corporation, Inc. and P-1
by ▇▇▇▇▇'▇ Investors Service, Inc., if (in any such case specified above in
this proviso) Agent receives a written agreement of Majority Lenders
satisfactory to Agent that Majority Lenders will be liable for and will pay to
Agent on demand an amount equal to any expense or loss (including any loss on
such investment after taking into account any gain) incurred in connection with
any investment of funds pursuant to this proviso; and provided, further, that
so long as a Default exists, Agent may invest such amounts only in investments
described in clause (i) of this section on 11.09. Agent shall have no liability
for any loss resulting from any such investment. Agent may sell any such
investment (without regard to maturity date) whenever necessary to make any
distribution required by any provisions of Article XII. Except as otherwise
provided in section 7.03 of the Mortgage, Agent shall hold and apply any income
realized as a result of any investment pursuant to this section 11.09 in the
same manner as the payments held by Agent pursuant to Article XII.
Section 11.10 -- Representations and Warranties.
(a) Neither any Lender nor Agent makes any representations or
warranty as to the sufficiency, validity, legality, or enforceability of any
Basic Document, or as to the correctness of any statement contained in any
thereof, except as expressly set forth in this Agreement. Neither any Lender
nor Agent makes any representation as to the value or condition of the
Collateral or any part thereof, or as to the title thereto or as to the
security afforded thereby or hereby, or as to the validity or genuineness of
any security at any time pledged and deposited with Agent hereunder.
(b) Neither Agent nor anyone authorized to act on its behalf has
directly or indirectly offered any beneficial interest or security interest
relating to any Aircraft or any interest in any Note or Certificate for sale
to, or solicited any offer to acquire any such interest or security from, any
Persons other than the Lenders in such a manner as to require any of the Notes,
Certificates, or documents signifying security interests to be registered under
the Securities Act of 1933, as amended, or any state securities law; provided,
that the foregoing shall not be deemed to impose responsibility with respect to
any such offer, sale, or solicitation by any other Person.
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(c) Agent is a national banking association duly organized,
validly existing, and in good standing under the laws of the United States, and
has all corporate power, authority, and legal right under the laws of the
United States to execute, deliver, and carry out the terms of each of the Basic
Documents to which it is a party.
(d) Agent has duly authorized, executed, and delivered this
Agreement and the other Basic Documents to which it is a party in its capacity
as Agent.
(e) First Atlanta is a "citizen of the United States" within the
meaning of section 101(16) of the Act and will, subject to the provisions of
this Agreement, resign as agent hereunder promptly after an officer having
direct responsibility for administering this Agreement obtains actual knowledge
that Agent has ceased to be such a citizen.
(f) The execution and delivery by Agent, in its capacity as agent,
of this Agreement and each other Basic Document to which it is a party will not
result in any violation of, or be in conflict with, or constitute a default
under, any of the provisions of its charter or by-laws, or of any indenture,
mortgage, chattel mortgage, deed of trust, conditional sales contract, lease,
note or bond purchase agreement, license, bank loan, credit agreement, or other
agreement to which it is a party or by which it is bound, or any law, judgment,
governmental rule, regulation, or order of any federal government or
governmental authority or agency governing the banking or trust powers of
Agent.
(g) Neither the execution and delivery by Agent, in its capacity
as agent, of this Agreement or the Basic Documents to which it is a party, nor
the consummation of any of the transactions contemplated thereby, requires the
consent or approval of, giving of notice to, or registration with any federal
governmental authority or agency pursuant to any federal governmental law
governing the banking or trust powers of Agent.
Section 11.11 -- No Claims Against Agent, etc. Nothing contained in
this Agreement shall constitute any consent or request by Agent or any Lender,
express or implied, for the performance of any labor or services or the
furnishing of any materials or other property, nor be deemed to give Borrower
any right, power, or authority to contract for or permit the performance of any
labor or services or the furnishing of any materials or other property in such
fashion as would permit the making of any claim against Agent or the Lenders in
respect thereof or any claim that any Lien (other than any Permitted Lien that
is not a Lien resulting from an action of Agent or a Lender for which neither
Agent nor any Lender is
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entitled to be indemnified under any Basic Document) based on the performance
of any such labor or services or the furnishing of any such materials or other
property is prior to the Lien of the Mortgage, except as expressly permitted in
the Basic Documents; provided, that if any such claim is made against Agent or
any Lender, Borrower shall obtain the release of such claim within 30 calendar
days after the claim is made.
Section 11.12 -- Form of Certificates; Issuance, Transfer, and
Exchange of Certificates.
(a) Authorization. The Lenders hereby authorize and direct Agent
to do the following, and Agent agrees for the benefit of the Lenders that Agent
will do the following, on the Purchase Date for each Aircraft, subject to due
compliance with the terms of paragraph (b) below:
(i) to the extent received by Agent from the Lenders,
transfer the Financed Amount for such Aircraft to Vendor on Borrower's
behalf;
(ii) upon receipt of each Lender's Commitment for such
Aircraft, issue to First Atlanta the Long-Term Certificate in the
full amount of First Atlanta's Commitment for such Aircraft and issue
to Bank of Tokyo the Medium-Term and Short-Term Certificates each in
one-half of the full amount of Bank of Tokyo's Commitment for such
Aircraft; and
(iii) execute and deliver all such other instruments,
documents, or certificates, and take all such other actions in
accordance with the directions of Majority Lenders, as Majority
Lenders deem necessary or advisable in connection with the
transactions contemplated hereby, such execution and delivery or the
taking of any such action by Agent in the presence of Majority Lenders
to evidence, conclusively, the direction of Majority Lenders.
(b) Conditions Precedent. Agent's right and obligation to take
the actions required by paragraph (a) on the Purchase Date shall be subject to
each Lender's having made the full amount of its Commitment available to Agent
in immediately available funds in accordance with sections 2.01 and 2.02 and
Annex A of this Agreement, and to the satisfaction or waiver of the conditions
set forth or referred to in section 2.02 and Annex A of this Agreement.
(c) Form of Certificates. The Long-Term Certificate shall be
substantially in the form of Exhibit K-1 and the Medium-Term and Short-Term
Certificates shall be substantially in the form of
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Exhibits K-2 and K-3, respectively. Interest and principal on each Certificate
shall be payable by Agent, upon receipt of the corresponding amounts from
Borrower, as set forth in such Certificates.
(d) Terms of the Certificates. In connection with each Aircraft,
(a) Agent shall issue to First Atlanta a Long-Term Certificate in a principal
amount equal to its Commitment for that Aircraft, bearing interest at the rate
stated in such Long-Term Certificate, designated as having been issued in
connection with that Aircraft, and otherwise in the form of Exhibit K-1; and
(b) Agent shall issue to Bank of Tokyo a Medium-Term Certificate and a
Short-Term Certificate each in a principal amount equal to one-half of its
Commitment for that Aircraft, bearing interest at the rates stated on each such
Certificate, designated as having been issued in connection with that Aircraft,
and otherwise in the forms of Exhibits K-2 and K-3, respectively.
(e) Lost or Damaged Certificates. If any Certificate becomes
mutilated, defaced, lost, stolen, or destroyed, then on the terms set forth in
this section (and not otherwise), and upon the written request of the holder
thereof, Agent shall execute and deliver a new Certificate of the same series,
principal amount, and terms as the mutilated, defaced, lost, stolen, or
destroyed Certificate, in exchange and substitution for and upon cancellation
of the mutilated or defaced Certificate, or in lieu of and in substitution for
the lost, stolen, or destroyed Certificate. The applicant for a new
Certificate shall furnish to Agent evidence to Agent's reasonable satisfaction
of the loss, theft, or destruction of such Certificate alleged to have been
lost, stolen, or destroyed, and of the ownership and authenticity of such
mutilated, defaced, lost, stolen, or destroyed Certificate, and also such
security and indemnity as Agent reasonably requires (provided, that the written
undertaking of one of the original Lenders, or any other institutional holder
of a Certificate having a net worth (or in the case of a bank, having combined
capital, surplus, and undivided profits) of at least $50,000,000 shall be
sufficient security and indemnity), and shall pay all expenses and charges of
such substitution or exchange. All Certificates shall be issued, held, and
owned upon the express condition that the foregoing provisions are exclusive in
respect of the replacement of mutilated, defaced, lost, stolen, or destroyed
Certificates and shall preclude (to the extent lawful) any and all other rights
and remedies, any present or future law or statute to the contrary
notwithstanding.
SECTION 11.13 -- Action Upon Written Instructions. Subject to the
terms of sections 11.03, 11.14, and 11.15, upon the written instructions at any
time and from time to time of Majority Lenders,
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Agent will take such actions as are specified in such instructions, including
the following actions: (1) give such notice or direction or exercise such
right, remedy, or power hereunder or under any of the Basic Documents to which
Agent is a party, or in respect of all or any part of the Collateral, or take
such other action as is specified in such instructions; (ii) take such action
to preserve or protect the Collateral (including the discharge of any Liens) as
is specified in such instructions; and (iii) approve as satisfactory to it all
matters required by the terms of the Basic Documents to be satisfactory to
Agent, it being understood that, except as otherwise provided in Section 11.03
or in the last sentence of this section 11.13, without written instructions of
Majority Lenders, Agent shall not approve any such matter as satisfactory to
it. Upon the written instructions of Majority Lenders, Agent will execute and
file any financing statement (and any continuation statement with respect to
any such financing statement) or similar document relating to the security
interests and assignments created by the Basic Documents as is specified in
such instructions and accompanies such instructions (and Agent shall have no
duty to execute or file any financing statement, continuation statement, or any
other documents of the type referred to in this sentence unless it receives
such written instructions and an execution form of such statement or document).
If Agent is unsure of the application of any provision of this Agreement or any
other agreement relating to the transactions contemplated hereby, Agent may
request and rely upon instructions of Majority Lenders, but if Agent does not
receive instructions from Majority Lenders within 20 days after the date of
such request, until instructed otherwise Agent may, but shall be under no duty
to, take or refrain from taking such action as it deems advisable in the best
interests of Majority Lenders.
SECTION 11.14 -- Expenses.
(a) Expenses After Default. While an Event of Default exists,
Agent shall not be under any obligation to take any action under any of the
Basic Documents (including action under section 11.15) if Agent reasonably
determines, or is advised by independent counsel, that such action is contrary
to the terms of the Basic Documents to which Agent is a party, or is otherwise
contrary to law, unless and until requested in writing to do so by Majority
Lenders and furnished, from time to time as it may require, with reasonable
security and indemnity, satisfactory to Agent, from such Majority Lenders
against the costs, expenses, and liabilities which it might incur in compliance
with such requests or direction.
(b) Expenses for Actions Upon Written Instructions. Agent shall
not be required to take any action under sections 11.03 or 11.13 unless Agent
shall have been furnished, from time to time as
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it may require, with reasonable security and indemnity, satisfactory to Agent,
from Majority Lenders directing Agent to take or refrain from taking action
under section 11.03 or 11.13, against the costs, expenses, and liabilities
which it might incur in complying with sections 11.03 or 11.13.
SECTION 11.15 -- Procedures for Disposing of Collateral.
(a) If an Event of Default exists, Agent shall, upon written
instructions from Majority Lenders, declare all the Secured Obligations due and
payable as provided in section 9.02 of the Mortgage. Thereafter, Majority
Lenders shall have the sole responsibility for directing Agent in the
enforcement of rights and remedies, pursuant to the Basic Documents, including
the time and manner of repossessing and remarketing of the Collateral.
(b) If Agent obtains an offer from a third party for the purchase
of the Collateral for a purchase price that is less than the amount necessary
to pay in full (i) the aggregate principal amount of the Certificates, (ii)
accrued but unpaid interest on such unpaid principal amount to the date of
distribution, (iii) interest on overdue principal and, to the extent permitted
by applicable law, overdue interest, and (iv) all other sums due and owing to
Agent or any Lender pursuant to any Basic Document, then before accepting any
such offer, Agent shall notify the Lenders and shall sell such Collateral for
such price only after obtaining the written consent of Majority Lenders.
(c) Any assignment, sale, transfer, or other conveyance of the
Collateral by Agent made pursuant to the terms hereof or of the other Basic
Documents to which it is a party shall bind the Lenders and shall be effective
to assign, sell, transfer, or convey all right, title and interest of Agent and
the Lenders that it purports to assign, sell, transfer, or otherwise convey in
and to the Collateral. No purchaser or other grantee shall be required to
inquire as to the authorization, necessity, expediency, or regularity of such
assignment, sale, transfer, or conveyance or as to the application of any sale
or other process with respect thereto by Agent.
Article XII
RECEIPT, DISTRIBUTION, AND APPLICATION OF INCOME
Section 12.01 -- Payment by Agent Generally. Subject to sections
12.02, 12.03, 12.04, and 12.05 hereof, all payments (including prepayments
under section 4.02 and the first sentence of 4.03 of this Agreement) of
principal of and interest on any Note,
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and of Interest Supplements, received by Agent shall be paid to the holders of
the Certificates related to such Note pro rata in accordance with the principal
and interest then due on such Certificates; the payment of the Facility Fee
received by Agent shall be paid one-half to each Lender; and all payments of
the Commitment Fee received by Agent shall be paid to the Lenders pro rata in
accordance with the outstanding Commitment of each.
Section 12.02 -- Application of Payments After Default. During the
continuance of a Default that is not an Event of Default, any amounts that, but
for this section 12.02, would be payable under section 12.01 by Agent to the
Lenders shall be held by Agent until the occurrence of one of the following
events: (i) all Defaults shall have been cured, in which event such amounts
shall, to the extent not theretofore applied as provided herein, be applied as
provided in section 12.01 hereof, (ii) an Event of Default shall have occurred
and be continuing, in which event such amounts shall be applied as provided in
section 12.03 hereof, or (iii) such amounts shall have been continuously held
for a period in excess of 90 days (during which period Agent or the Lenders
shall not have been stayed or otherwise precluded by operation of law from
taking action to accelerate the Notes or to declare this Agreement in default
or to exercise any remedies hereunder or under the Mortgage), in which event
such amounts shall, to the extent not theretofore applied as provided herein,
be distributed as provided in section 12.01 hereof.
Section 12.03 -- Payments After Event of Default. During the
continuance of any Event of Default, all payments received by Agent and all
amounts then held by Agent on behalf of Lenders shall be applied in the
following order of priority:
First, to pay all proper fees, charges, expenses, or advances
made or incurred by Agent in the collection or distribution of such
payment or otherwise in accordance with the provisions of this
Agreement or the Mortgage, and of any and all other sums then owing to
Agent by Borrower under the Basic Documents (including any amount
payable by or for the account of Agent under section 9.04(b) of the
Mortgage);
Second, to pay to the then-existing and prior holders of the
Certificates all proper fees, charges, expenses (including expenses
under Section 13.03 hereof, and all amounts payable under Article IX
hereof), and advances made or incurred by such then-existing and prior
holders of Certificates and for which Borrower is responsible pursuant
to the Basic Documents (to the extent not previously reimbursed),
without priority of one such then-existing or prior holder of
Certificates over any other,
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in the proportion of the aggregate amount of such fees,
charges, expenses and advances made or incurred by each such
then-existing or prior holder of Certificates bears to the aggregate
amount of such fees, charges, expenses, and advances made or incurred
by all such then-existing and prior holders of Certificates;
Third, to pay in full the unpaid interest on the Certificates
due to the date of distribution (as well as interest on overdue
principal and, to the extent permitted by applicable law, overdue
interest at the rate set forth in section 4.06 hereof), and the
then-outstanding principal of the Certificates, without
priority of one Lender over any other, in the proportion that the
outstanding principal of each Lender's Certificate(s) on such date of
application bears to the outstanding principal of all the Certificates
outstanding on such date of application;
Fourth, to pay all other amounts then due by Borrower to the
Lenders under the Basic Documents;
Fifth, the balance, if any, of such payments remaining
thereafter shall be distributed to Borrower.
Section 12.04 -- Application of Indemnity and Certain Other Payments.
(a) Any indemnity payment under Article IX hereof received by Agent
shall, if owed to Agent, be applied to any such indemnity amounts owing to it,
but if owed to another Indemnitee, be paid to the appropriate Indemnitee.
(b) Except as otherwise provided in this Article XII, any payment
received by Agent for which provision as to the application thereof is made in
this Credit Agreement or the Mortgage, other than in this Article XII, shall be
forthwith applied as provided in such other provision of this Credit Agreement
or the Mortgage.
(c) If a Default exists when Agent receives any payment referred
to in section 12.04(b) or (d), Agent may hold such payment as part of the
Collateral, and Agent shall cease to hold such payment and shall apply and
distribute it as provided in such section if and when no Default exists.
(d) If an Indemnitee receives a refund of any amount that Borrower
indemnified such Indemnitee for, that Indemnitee shall pay to Borrower an
amount equal to that refund; provided, that any
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subsequent loss of that refund by the Indemnitee shall be treated as a loss
subject to indemnification by Borrower.
Section 12.05 -- Other Payments.
(a) Provided no Default exists, any money that Agent receives with
respect to any right or obligation contained in the Basic Documents, and that
the Basic Documents do not specify how to apply, shall be applied to any
Secured Obligations then due, and the balance shall be distributed to Borrower.
(b) Any payments received and amounts realized by Agent with
respect to the Aircraft or otherwise to the extent received or realized, or
remaining, at any time after payment in full of the Secured Obligations, as
well as any other amounts remaining as part of the Collateral after payment in
full of the Secured Obligations, shall be distributed to Borrower.
Section 12.06 -- Method of Payment. Agent shall make distributions or
cause distributions to be made to the Lenders and Borrower by wire transfer of
immediately available funds, to the respective bank accounts specified in
writing to Agent by such Persons, not later than 2:00 p.m. (Atlanta, Georgia
time) on the date they are received by Agent (if received by 12:00 noon
(Atlanta, Georgia time), or, if received later, as soon as practicable but not
later than 11:00 a.m. (Atlanta, Georgia time) on the next Business Day), or
with commercially reasonably promptness after receipt in the case of payments
to bank accounts located outside the United States.
Section 12.07 -- Payments From Proceeds from Borrower. All payment to
be made by Agent under the Certificates and this Agreement shall be made only
from the proceeds received by Agent under the Basic Documents. Each holder of
a Certificate, by its acceptance of such Certificate, agrees that it will look
solely to the proceeds received by Agent under the Basic Documents to the
extent available for distribution to such holder as herein provided, and that
Agent is not personally liable to the holder of any Certificate under such
Certificate or this Agreement.
Section 12.08 -- Termination of Certificates. A holder of a
Certificate shall have no further interest in, or other right with respect to,
the proceeds received by Agent under the Basic Documents when and if all
Secured Obligations payable to such holder have been paid in full.
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Article XIII
MISCELLANEOUS
Section 13.01 -- No Waivers; Cumulative Remedies. No failure or delay
in exercising any power or right under any Basic Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power preclude other or further exercise thereof or the exercise of any other
right or power under any Basic Document. No notice to or demand on any party
in any case shall, of itself, entitle such party to any other or further notice
or demand in similar or other circumstances.
Section 13.02 -- Notices. All communications and notices provided for
under this Agreement shall be in writing (including telex, telegraph, and
telecopy), shall be in English, and shall be mailed by certified mail (return
receipt requested) or otherwise delivered to the parties at the addresses set
forth by their signatures hereto, or, as to each party, at such other address
as it designates by notice to each other party. Each such notice shall be
effective upon delivery.
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Section 13.03 -- Transaction Expenses; Agent's Fees.
(a) Borrower will pay on demand all out-of-pocket expenses in
connection with the preparation, execution, delivery, administration, and
enforcement of the Basic Documents, or in connection with any scheduled closing
that is postponed or cancelled, including (i) all fees and expenses of (x)
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel to the Lenders, (y) Castro, Barros,
Sobral e Xavier, special Brazilian counsel, and (z) ▇▇▇▇▇ & ▇▇▇▇▇▇▇, special
FAA counsel; (ii) all FAA and UCC filing and lien search fees; (iii) all fees
and expenses (including legal fees and expenses)of each Lender and Agent in
connection with actual or proposed amendments, waivers, or consents to or under
this Agreement or the other Basic Documents (except for such amendments,
waivers, or consents initiated by any Lender or Agent; provided that any such
amendment, waiver, or consent initiated by Agent or the Lenders in connection
with a matter relating to the Finex Program, Finex Agent, or Finex Interest
Payments that is initiated for the benefit of Borrower or at the request of
Borrower shall not be included in this exception); and (iv) all fees and
expenses (including legal fees and expenses) of each Lender and Agent in
connection with the actual or proposed enforcement of any Basic Document
against Borrower during the existence of any Default. The "legal fees and
expenses" of the Lenders and Agent referred to in clauses (iii) and (iv) may
not include those of a Lender's or Agent's in-house counsel.
(b) Agent shall be entitled to receive reimbursement, within five
Business Days after its request, for all reasonable expenses incurred or made
by it in accordance with this Agreement or any other Basic Document. Under
section 2.01 of the Mortgage, Agent is granted, and such obligations are
secured by, a Lien on the Collateral entitling Agent to priority as to payment
thereof (by virtue of section 12.03 of this Agreement) over payment to any
other Person under this Agreement. Borrower shall pay to Agent, in its
individual capacity, the amounts to which Agent is entitled under this section
13.03(b).
Section 13.04 -- Amendments. Any provision of the Basic Documents,
other than the Purchase Agreement, the Guarantee, or the Finex Agreement, may
be amended, terminated, waived, or otherwise modified only in writing by
Borrower and Majority Lenders, and any such amendment, termination, waiver, or
other modification shall bind all of the Lenders to the same extent and with
the same effect as if each Lender had joined therein; provided, that no
provision of the Finex Agreement shall be amended, modified, or waived except
as permitted therein; provided, further, that the written consent of Agent in
its individual capacity shall be required to effect any amendment, termination,
waiver, or other modification of the Basic
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Documents that affects the rights or duties of Agent (as agent or in its
individual capacity (but not in its capacity as Lender)). Notwithstanding the
foregoing, no amendment, modification, or waiver of the Basic Documents shall,
unless in writing and signed by each Lender, be effective to (a) increase such
Lender's Commitment or subject such Lender to any additional obligation, (b)
reduce the principal of or interest on the Notes or such Lender's Certificates,
or any fees or other amounts payable to such Lender hereunder (whether under
Article IX or otherwise), or change the ratable distribution of funds received
by Agent for account of the Lenders hereunder (including under Article IV
hereof), (c) postpone any date fixed for any payment of the principal of, or
interest on, the Notes or such Lender's Certificates or any fees or other
amounts payable to such Lender hereunder, (d) change the definition of
"Majority Lenders" as set for in section 1.01, or amend, modify, or waive this
section 13.04, (e) change section 11.13 of this Agreement, (f) increase the
Financed Amount to be secured by the Collateral under the Mortgage, (g) alter
the right of any Lender to transfer any Certificate or add or alter
restrictions upon such transfer, or (h) the release of any Lien with respect to
the Collateral other than in accordance with the Basic Documents.
Section 13.05 -- Successors and Assigns.
(a) Binding Effect; Consent to Assignment. This Agreement shall
bind and benefit each Lender, Agent, and Borrower and their successors and
assigns, except that Borrower may not assign or transfer its rights under this
Agreement without Agent's prior written consent.
(b) Limitations on Transfers. No Lender shall assign, convey, or
otherwise transfer any of its interest in the Basic Documents, or offer to do
any of the foregoing, (i) in any manner that would result in a violation of the
Act, the Securities Act of 1933, ERISA, or any other law, or (ii) if, as a
result of such assignment, conveyance, or other transfer, more than two Persons
other than Bank of Tokyo and affiliates of First Atlanta would have
Certificates issued with respect to any particular Aircraft.
(c) Transfer. Agent shall maintain at its office a register for
the purpose of registering transfers and exchanges of registered Certificates
and in which shall be entered the names and addresses of the owners of such
registered Certificates and particulars of the registered Certificates owned by
them. The holder of any registered Certificate wishing to transfer such
Certificate shall, in person or by a duly authorized attorney, surrender to
Agent at its office such Certificate, duly endorsed by the registered holder or
such attorney, or accompanied by a written instrument of transfer duly
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executed by the registered holder or by such attorney, in form reasonably
satisfactory to Agent. Upon presentation to Agent of any Certificate for
transfer, Agent will execute and deliver to the transferee thereof in exchange
therefor a new Certificate or Certificates of the same series and in the same
aggregate principal amount and with the same terms as the Certificate so
surrendered, in registered form and in any domination of $100,000 or more (or
the aggregate principal amount of all Certificates of such series held by such
transferee, whichever is less) as is specified in such instrument of transfer.
Nothing in this paragraph shall be interpreted as (i) giving Bank of Tokyo the
right or power to transfer one or more of its Certificates or to transfer any
right or interest in such Certificates to another Person, other than First
Atlanta or Borrower, without the prior written consent of First Atlanta and
Borrower (which shall not be unreasonably withheld) or (ii) giving First
Atlanta the right or power to transfer one or more of its Certificates or to
transfer any right or interest in such Certificates to any Person other than an
affiliate of First Atlanta, without the prior written consent of Borrower
(which shall not be unreasonably withheld).
(d) Exchange. The holder of one or more Certificates may at any
time surrender such Certificate or Certificates for exchange at Agent's office
and shall be entitled to receive in exchange therefor a new Certificate or
Certificates, of the same series and in the same aggregate principal amount
with the same terms as the Certificate or Certificates surrendered, in
registered form and in any denomination of $100,000 or more (or the aggregate
principal amount of all such Certificates of the same series held by such
holder, whichever is less).
(e) Effect of Transfer or Exchange. All Certificates issued upon
any transfer or exchange of Certificates shall be the valid obligations of
Agent evidencing the same respective obligations, and entitled to the same
security and benefits under this Agreement, as the Certificates surrendered
upon such transfer or exchange. Agent shall make a notation on each new
Certificate of the date to which interest on the replaced Certificate(s) has
been paid.
(f) Evidence of Ownership. Agent and Borrower shall deem and
treat the Person in whose name any registered Certificate is registered as the
absolute owner and holder of such Certificate for the purpose of mailing
payment of all amounts payable by Agent or Borrower with respect to such
Certificate and for all other purposes, and Agent and Borrower shall not be
affected by any notice to the contrary.
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(g) Expenses, Taxes, etc. The transferring or exchanging Lender
shall pay all expenses incurred in connection with the transfer or exchange of
a Certificate, including Agent's expenses (including legal fees), stamp taxes,
transfer taxes, sales taxes, governmental fees and charges, broker's fees and
commissions, any other fees and charges of the same or similar type as any of
the foregoing, and other fees and expenses associated with amendments,
supplements, waivers, or consents required as a result of any transfer or sale
of a Certificate after the Purchase Date. In addition, for any transfer or
exchange of a Certificate, Agent may require the transferor to pay a sum
sufficient to cover any stamp tax or other governmental charge connected
therewith.
(h) No Transfer Within Three Days Before Payment Date. Agent
shall not be required to transfer or exchange any Certificate during the
three-day period preceding the due date of any payment on such Certificate.
Section 13.06 -- First Atlanta's Representations and Warranties.
First Atlanta represents and warrants that:
(a) it is a national banking association duly organized, validly
existing, and in good standing under the laws of the United States, and has all
corporate power, authority, and legal right under the laws of the United States
to execute, deliver, and carry out the terms of each of the Basic Documents to
which it is a party either individually or as Agent;
(b) it has duly authorized, executed, and delivered this Agreement and
the other Basic Documents to which it is a party either individually or as
Agent;
(c) neither it nor anyone authorized to act on its behalf has
directly or indirectly offered any beneficial interest in the Notes or the
Certificates for sale to, or solicited any offer to acquire any such interest
in the Notes or the Certificates from, any Person in such a manner as to
require any of the Notes or the Certificates to be registered under the
Securities Act of 1933, as amended, or any state securities law; provided, that
the foregoing shall not be deemed to extend any such offer, sale, or
solicitation by or on behalf of Borrower or any other Person; and
(d) no part of the funds used by it to purchase its Certificates
hereunder constitutes the assets of any "employee benefit plan" within the
meaning of ERISA or any "plan" as such a term is defined in Section 406 of
ERISA or Section 4975 of the Code.
Section 13.07 -- Bank of Tokyo's Representations and Warranties.
(a) it is an agency licensed under Georgia law of a Japanese
banking corporation and in good standing under the laws of Georgia, and has all
corporate power, authority, and legal right under the laws of the United States
to execute, deliver, and carry out the terms of each of the Basic Documents to
which it is a party;
(b) it has duly authorized, executed, and delivered this Agreement
and the other Basic Documents to which it is a party;
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(c) neither it nor anyone authorized to act on its behalf has
directly or indirectly offered any beneficial interest in the Notes or the
Certificates for sale to, or solicited any offer to acquire any such interest
in the Notes or the Certificates from, any Person in such a manner as to
require any of the Notes or the Certificates to be registered under the
Securities Act of 1933, as amended, or any state securities law; provided, that
the foregoing shall not be deemed to extend any such offer, sale, or
solicitation by or on behalf of Borrower or any other Person; and
(d) no part of the funds used by it to purchase its Certificates
hereunder constitutes the assets of any "employee benefit plan" within the
meaning of ERISA or any "plan" as such a term is defined in Section 406 of
ERISA or Section 4975 of the Code.
Section 13.08 -- Governing Law. This Agreement shall be governed by
the laws of Georgia.
Section 13.09 -- Headings. Article and section headings used in this
Agreement are for convenience only and are not a substantive part of this
Agreement.
Section 13.10 -- Execution in Counterparts. This Agreement may be
executed in separate counterparts.
Section 13.11 -- Survival of Representations and Warranties. All
representations and warranties contained in this Agreement or made in writing
in connection with this Agreement shall survive the execution and delivery of
this Agreement and the Mortgage.
Section 13.12 -- Severability. If any part of any provision contained
in this Agreement, or any document contemplated hereby, is or becomes invalid
or unenforceable under applicable law, that part shall be ineffective to the
extent of such invalidity only, without in any way affecting the remaining
parts of that provision of the remaining provisions.
Section 13.13 -- Finex Agreement. So long as no Default exists, Agent
shall forward any payments that it receives under the Finex Agreement as Finex
Interest Payments, or interest thereon, or as indemnification or reimbursement
under the Finex Agreement, and not relating to any loss or expense suffered by
Agent or any Lender, to Borrower at First American Bank of Georgia, N.A., 2000
Riveredge Airlines, Inc. (account #5100130970). Agent shall use its good faith
efforts to forward any such payments to Borrower on the Business Day following
their receipt by Agent. At the cost and expense of Borrower, Agent or any
Lender shall use its
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good faith efforts to take such action with respect to the Finex Agreement as
Borrower shall reasonably request, provided that Agent and the Lenders shall
not be required to independently solicit offers from any bank to guarantee
Finex Interest Payments or to take any action which adversely affects the
interests of any of them; provided that a reduction in the amount of Finex
Interest Payments resulting from the guarantee of such Finex Interest Payments
by Finex Bank shall not be considered an action adversely affecting Agent's or
any Lender's interest; provided, further, that the replacement of the Finex
Bank with another bank shall not be considered an action adversely affecting
Agent's or any Lender's interest if (a) the Agent consents in writing to such
replacement bank acting as the Finex bank under the Finex Agreement or (b) such
replacement bank meets the following qualifications; (i) it is a bank having
offices in New York City and Brazil; (ii) it is authorized to act as a Finex
agent under the Finex Program; and (iii) it is a bank with which Agent has the
capability to transact business in the ordinary course through Agent's
then-existing correspondent banking relationships. However, all risks
associated with the Finex Program are Borrower's, and Agent and the Lenders
shall have not responsibility for any Finex Interest Payments not actually
received by Agent or any Lender from Finex Bank. So long as no Default exists,
Agent and Lenders shall not enter into any amendment of the Finex Agreement
without Borrower's consent, such consent not to be unreasonably withheld.
Section 13.14 -- Agent Not Acting in Individual Capacity. In acting
hereunder, unless otherwise expressly provided, The First National Bank of
Atlanta, when referred to as "Agent", acts solely as agent and not in its
individual capacity; and, except as otherwise provided herein or in any other
Basic Document to which The First National Bank of Atlanta, as "Agent", is a
party, all Persons having any claim against The First National Bank of Atlanta,
as "Agent", by reason of the transactions contemplated hereby shall look only
to the Collateral for payment or satisfaction thereof.
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IN WITNESS WHEREOF, Agent, Borrower, and Lenders have executed
this Credit Agreement.
"BORROWER"
ATLANTIC SOUTHEAST AIRLINES, INC.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President-Finance By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
and Treasurer -----------------------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Title: Vice President - Finance & Treasurer
--------------------------------------
"AGENT"
THE FIRST NATIONAL BANK OF
ATLANTA, not in its individual
capacity but solely as agent
▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Georgia Corporate Division
Reference: Atlantic Southeast By: /s/ (illegible)
Airlines, Inc. ----------------------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Title: Vice President
-------------------------------------
"LENDERS"
THE FIRST NATIONAL BANK OF
ATLANTA, in its individual capacity
▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇.▇. By: /s/ (illegible)
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ----------------------------------------
Attn: Georgia Corporate Division Title: Vice President
Reference: Atlantic Southeast -------------------------------------
Airlines, Inc.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE BANK OF TOKYO, LTD.,
ATLANTA AGENCY
5050 Georgia Pacific Center
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇ ----------------------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Title: Vice President and Manager
-------------------------------------
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