(Local Currency-Single Jurisdiction) (Multiparty)
ISDA
International Swap Dealers Association, Inc.
SCHEDULE
to the
Master Agreement
dated as of February 28, 2001
between
BANK OF AMERICA, N.A.
("Party A")
and
AIR T, INC.,
CSA AIR INC.,
MOUNTAIN AIR CARGO, INC.,
MOUNTAIN AIRCRAFT SERVICES, LLC, and
GLOBAL GROUND SUPPORT, LLC
(each individually, a "Party B Group Member" and collectively, "Party
B')
PART 1: Termination Provisions
"Credit Agreement" means any credit facility now or hereafter entered
into between Party A and Party B providing for the repayment of monies
loaned by Party A to Party B, as such credit facility may be amended,
modified, supplemented, restated or replaced from time to time,
including, but not limited to, the following: (i) the Loan Agreement
dated as of November 21, 2000, by and between Bank of America, N.A., as
Bank, and Air T, Inc., CSA Air, Inc., Mountain Air Cargo, Inc.,
Mountain Aircraft Services, LLC, and Global Ground Support, LLC, as
Borrowers, as amended, modified, supplemented, restated or replaced
from time to time with the consent of Party A; (ii) the Loan Agreement
dated as of August 31, 1998, by and between Bank of America, N.A., as
Bank, and Air Transportation Holding Company, Inc. (now known as Air T,
Inc.), CSA Air, Inc., Mountain Air Cargo, Inc., Mountain Aircraft
Services, LLC, and Global Ground Support, LLC, as Borrowers, as
amended, modified, supplemented, restated or replaced from time to time
with the consent of Party A; and (iii) the Agreement dated as of March
17, 1998, by and between NationsBank, N.A. (predecessor to Party A), as
Bank, and Air Transportation Holding Co., Inc. and affiliates, as
Borrowers, as amended, modified, supplemented, restated or replaced
from time to time with the consent of Party A.
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(b)
"Specified Entity" means in relation to Party A for the purpose
of:-
Section 5(a)(v) (Default under Specified Transaction), none;
Section 5(a)(vi) (Cross Default),
none; Section 5(a)(vii) (Bankruptcy),
none; and
Section 5(b)(ii) (Credit Event Upon Merger),
none;
in relation to Party B for the purpose of:-
Section 5(a)(v) (Default under Specified Transaction) Section
5(a)(vi) (Cross Default),
Section 5(a)(vii) (Bankruptcy),
Section 5(b)(ii) (Credit Event Upon Merger),
any Affiliate of Party B; any Affiliate of Party B; any
Affiliate of Party B; and any Affiliate of Party B.
(c)
"Specified Transaction " will have the meaning specified in
Section 12 of this Agreement, except that clause (a) of the
definition of "Specified Transaction" is revised by deleting the
words "between one party to this Agreement (or any Credit Support
Provider of such party or any applicable Specified Entity of such
party) and the other party to this Agreement (or any Credit
Support Provider of such other party or any applicable Specified
Entity of such other party)".
(d)
The "Cross-Default" provisions of Section 5(a)(vi) (as amended in
Part 4(k)) will apply to Party A
will apply to each Party B Group Member.
In connection therewith:
"Specified Indebtedness" will not have the meaning specified in
Section 12 of this Agreement and such definition shall be
replaced by the following: "any obligation in respect of the
payment of moneys (whether present or future, contingent or
otherwise, as principal or surety or otherwise), except that such
term shall not include obligations in respect of deposits
received in the ordinary course of a party's banking business."
"Threshold Amount" means with respect to Party A an amount equal
to three percent (3%) of the Shareholders' Equity of Bank of
America Corporation and, with respect to each Party B Group
Member, any amount.
"Shareholders' Equity" means, with respect to an entity, at any
time, the sum (as shown in its most recent annual audited
financial statements) of (i) its capital stock (including
preferred stock) outstanding, taken at par value, (ii) its
capital surplus and (iii) its retained earnings, minus (iv)
treasury stock, each to be determined in accordance with
generally accepted accounting principles.
Any default (howsoever defined) under the Credit Agreement shall
be an Event of Default under this Agreement with respect to Party
B.
(e)
The "Credit Event Upon Merger" provisions of Section 5 (b)(ii)
will apply to Party A
will apply to each Party B Group Member.
(f)
The "Automatic Early Termination" provision of Section 6(a)
will not apply to Party A
will not apply to Party B.
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(g)
Payments on Early Termination. For the purpose of Section 6(e):
(i)
Market Quotation will apply.
(ii)
The Second Method will apply.
(h)
"Termination Currency" means United States Dollars.
(i)
Additional Termination Event. Additional Termination Event will
apply. It shall be an additional Termination Event, Party B shall
be the Affected Party and Party A shall be the party entitled to
designate an Early Termination Date with respect to all
Transactions and determine the Settlement Amount under this
Agreement, if-
(1)
During the terms of this Agreement and thereafter for so long as
any obligation in respect of any Specified Transaction remains
outstanding ("Obligations"), Party B shall at any time (i) grant
or cause to be granted to any person a lien upon or security
interest in any property ("Collateral") as security for the
obligation of Party B under or in connection with any credit,
loan or other financing agreement or facility now existing or
hereafter entered into by Party B including, without limitation,
the Credit Agreement other than liens permitted under the Credit
Agreement (a "Lien"), and (ii) collateral in amount, form and
substance satisfactory to Party A (in its sole discretion) is not
provided by Party B to Party A to secure the Obligations at the
same time.
(2)
Party B fails to notify Party A of the granting of any Lien.
PART 2: Agreement to Deliver Documents
For the purpose of Section 4(a) of this Agreement, Party A and
each Party B Group Member agrees to deliver the following
documents:-
Party required
to deliver document
Party A and each Party B
Group Member
Party A and each Party B Group Member
Form/Document/Certificate
Certified copies of all corporate authorizations and any other
documents with respect to the power and authority of such person
or entity to execute, deliver and perform this Agreement, any
Transactions, and any Credit Support Document as applicable.
Certificate of incumbency and/or specimen signatures of
individuals executing this Agreement, any Credit Support
Document, and Confirmations.
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Date by which to be delivered
Upon execution and delivery of this Agreement
Upon execution and delivery of this Agreement and thereafter upon
request of the other party
Covered by Section 3(d) Representation
Yes
Yes
Party required
to deliver document
Form/Document/Certificate
Each Party B Group Member
Such other documents as Party A may reasonably request from time
to time.
Date by which to be delivered
Covered by Section 3(d) Representation
Upon request by Party A
Yes
PART 3: Miscellaneous
(a)
Address for Notices. For the purpose of Section 10(a) of this
Agreement:-
Address for notices or communications to Party A:
Bank of America, N.A.
Sears Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, IL1-003-27-20
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Swap Operations
Telex No.: 49663210 Answerback: NATIONSBANK CHA Reuters Dealing
Code: NBCH
with a copy to:
Bank of America, N.A.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇, ▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Capital Markets Documentation
(Telex: 669959; Answerback: NATIONSBK CHA) Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Address for notices or communications to Party B:
Air T, Inc., as agent for all Party B Group Members ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer Telephone: 828-
▇▇▇-▇▇▇▇
Facsimile:
(b)
Any notice, demand or other communication to be provided under
this Agreement to Party B (including, without limitation, any
notice, demand or communication pursuant to Sections 5 or 6 of
this Agreement) shall be sent to the address or facsimile number
provided in this Part 3 notwithstanding the death or mental
incapacity of any Party B Group Member (that is an individual) or
the appointment of a guardian, conservator, executor,
administrator or other similarly appointed person with respect to
the affairs of any Party B Group Member (that is an individual).
Any failure by any Party B Group Member or any guardian,
conservator, executor, administrator or other similarly appointed
person to receive any such notice, demand or communication shall
in no way abrogate, invalidate or otherwise affect the validity or
enforceability of the notice, demand or communication of the
matters set forth therein, including, without limitation, the
designation of an Early Termination Date or any other such matter.
Calculation Agent. The Calculation Agent is Party A.
32
(c)
Credit Support Document. Details of any Credit Support Document:-
Not applicable.
(d)
Credit Support Provider.
Credit Support Provider means in relation to Party A:
Not applicable.
Credit Support Provider mews in relation to Party B:
Not applicable.
(e)
Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without
reference to its conflict of laws doctrine).
(f)
Netting of Payments. All amounts payable on the same date, in
the same currency and in respect of the same Transaction shall be
netted in accordance with Section 2(c) of this Agreement. The
election contained in the last paragraph of Section 2(c) of this
Agreement shall not apply for the purposes of this Agreement.
PART 4: Other Provisions
(a)
References to Parties. Except as otherwise set forth in this
Agreement, references to a "party" shall refer to each Party B
Group Member and Party A individually, except that if the
reference to a "party" refers to that "party" taking any action
or making any payment or delivery to or indemnifying the other
"party", such reference shall be read to require all Party B
Group Members to perform such action or make such payment or
delivery or indemnity with respect to Party A only, and not with
respect to the other Party B Group Members. The reference to a
single agreement between the parties set forth in Section l(c) of
this Agreement refers to a single agreement between Party A, on
the one hand, and all the Party B Group Members as one Party B,
on the other. The intent is to net obligations owing between
Party A and Party B, not obligations among the Party B Group
Members or between Party A and any individual Party B Group
Member. No Party B Group Member may transfer its rights or
obligations under in this Agreement without the prior written
consent of Party A.
(b)
Joint and Several Liability. Each Party B Group Member agrees
that it shall be jointly and severally liable for the performance
of all obligations of Party B and each other Party B Group Member
under this Agreement (including, without limitation, for the
payment of all amounts due
Party A hereunder).
(c)
Party B Group Agent. Each Party B Group Member hereby appoints
Air T, Inc. (the "Party B Group Agent") to act as agent for it to
receive all payments or deliveries to be made by Party A to Party
B hereunder and to receive all notices to be sent by Party A to
Party B hereunder. The Party B Group Agent will promptly transmit
to each other Party B Group Member all payments and deliveries
and all notices so received. Upon delivery by Party A of any
payment or delivery or notice hereunder to the Party B Group
Agent on behalf of all Party B Group Members, Party A shall be
relieved of all further responsibility with respect thereto. The
Party B Group Agent may be changed by a written notice, signed by
all Party B Group Members, delivered to Party A. Any actions
taken by Party A prior to receiving notice of a change in the
agent shall be binding on all Party B Group Members. The
foregoing agency designation is made for the convenience of Party
A. Notwithstanding the foregoing agency designation for certain
purposes, each Party B Group Member remains authorized to enter
into any Transaction with Party A, to give instructions to Party
A, and to negotiate the terms of this Agreement, including the
terms of the Schedule and any Confirmation, on behalf of all
Party B Group Members; and all Party B Group Members shall be
bound by the actions of any Party B Group Member.
33
(d)
Delivery of Confirmations. For each Transaction entered into hereunder,
Party A shall promptly send to the Party B Group Agent (as defined
above) a Confirmation via telex or facsimile transmission. Party B
agrees to respond to such Confirmation within two (2) Local Business
Days, either confirming agreement thereto or requesting a correction of
any error(s) contained therein. Failure by Party A to send a
Confirmation or of Party B to respond within such period shall not
affect the validity or enforceability of such Transaction. Absent
manifest error, there shall be a presumption that the terms contained in
such Confirmation are the terms of the Transaction. Party A and each
Party B Group Member agree that any such exchange of telexes or
facsimile transmissions shall constitute a Confirmation for all purposes
hereunder.
(e)
Representations. Section 3 of this Agreement is amended to (i) delete
the words "Each party represents to the other party" which appear at the
beginning of that section and substitute in their place the words "Party
A represents to Party B, and each Party B Group Member represents to
Party A" and (ii) delete the word "party" which appears at the end of
the first line of that section and substitute therefor the words "of
them".
(f)
Obligations Binding. For the purpose of Section 3(a)(v) of this
Agreement, with respect to Party B, the words "against Party B, and his
or her heirs, distributees, executors, administrators, guardian,
conservator, successors and assigns, as applicable," are added between
"enforceable" and "in accordance with their respective terms".
(g)
Additional Representations. Section 3 is revised so as to add the
following Section (e) at the end thereof:
"(e) Relationship Between Parties. Party A represents to Party B
and each Party B Group Member represents to Party A, on each date on
which a Transaction is entered into, that (absent a written agreement
between the parties that expressly imposes affirmative obligations to
the contrary for that Transaction):
(i) Non-Reliance. It is acting for its own account, and it has
made its own independent decisions to enter into that Transaction and as
to whether that Transaction is appropriate or proper for it based upon
its own judgment and upon advice from such advisers as it has deemed
necessary. It is not relying on any communication (written or oral) of
the other party as investment advice or as a recommendation to enter
into that Transaction; it being understood that information and
explanations related to the terms and conditions of a Transaction shall
not be considered investment advice or a recommendation to enter into
that Transaction. No communication (written or oral) received from the
other party shall be deemed to be an assurance or guarantee as to the
expected results of that Transaction.
(ii) Assessment and Understanding. It is capable of assessing the
merits of and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms, conditions
and risks of that Transaction. It is also capable of assuming, and
assumes, the risks of that Transaction.
(iii) Status of Parties. The other party is not acting as a fiduciary
for or an adviser to it in respect of that Transaction."
(h)
Additional Representations of each Party B Group Member. Each Party B
Group Member represents and warrants to and for the benefit of Party A,
as of the date hereof and continuously until termination of this
Agreement, as follows:
(i) Legal Capacity. It has the legal capacity and right to execute,
deliver, and perform its obligations under, this Agreement, any Credit
Support Document to which it is a party, and each Transaction.
34
(ii) Knowledge and Sophistication. In connection with the negotiation
of, the entering into, and the execution, delivery, and performance of,
this Agreement, any Credit Support Document to which it is a party, and
each Transaction: (A) it understands that the Transactions entered into
hereunder and contemplated hereunder are subject to complex risks which
may arise without warning and may at times be volatile, and that losses
may occur quickly and in unanticipated magnitude; (B) it is a
sophisticated investor able to evaluate the risks of the Transactions
entered into hereunder and contemplated hereunder, is prepared to bear
and is capable of bearing (financially and otherwise and for an
indefinite period) all risks associated with the Transactions entered
into hereunder and contemplated hereunder; and (C) this Agreement and
each Transaction have been and will be entered into solely in connection
with the portfolio management, asset, risk, and liability management, or
hedging activities of Party B.
(iii)
Certain Understandings. It understands that:
(A) the "indicative" or "midmarket" valuations of a transaction that
may be provided to it by Party A from time to time may not represent (1)
the price at which a new Transaction may be entered into, (2) the price
at which the Transaction may be liquidated or unwound, (3) the price at
which the Transaction is or would be carried on such other party's
books; (4) the price at which a similar Transaction might be available
from another dealer in the market or (5) the calculation or estimate of
an amount that would be payable following the designation of an Early
Termination Date under Section 6(e) or otherwise of this Agreement;
(B) absent an express written agreement to the contrary, neither
party has undertaken an obligation to unwind or terminate a Transaction
prior to its scheduled termination date and the provision by Party A of
a valuation or indicative unwind price does not constitute an
undertaking to unwind or terminate any Transaction at that price unless
Party A expressly so indicates in connection with the provision of such
price;
(C) Party A has not undertaken an obligation to quote a price or
terms for entering into or unwinding or terminating a Transaction prior
to its scheduled termination date, and if Party A provides such a quote,
the price or other terms provided may not be the most favorable price or
terms available in the market; and
(D) except as expressly agreed in writing, the price and terms on
which a Transaction is entered into or unwound or terminated have been
or will be individually negotiated and no representations or warranties
are given with respect to such price or terms.
(i)
Agreements. Section 4 of this Agreement is amended to delete the words
"Each party agrees with the other" which appear at the beginning of that
section and substitute in their place the words: "Party A agrees with
Party B, and each Party B Group Member agrees with Party A".
(j)
Events of Default and Termination Events. Sections 5(a) and 5(b) of this
Agreement are hereby modified with respect to Party B, such that the
occurrence at any time with respect to any Party B Group Member or, if
applicable, any Specified Entity or Credit Support Provider of Party B,
of any of the events set forth in clauses (i) through (viii) of Section
5(a) or (i) through (iii) of Section 5(b), shall constitute an Event of
Default or Termination Event, as applicable, with respect to Party B and
each Party B Group Member.
35
(k)
Cross Default. Section 5(a)(vi) of this Agreement is amended to
add the following after the semicolon at the end thereof-
"provided, however, that notwithstanding the foregoing (but
subject to any provision to the contrary contained in any such
agreement or instrument), an Event of Default shall not occur
under either (1) or (2) above if the default, event of default or
other similar condition or event referred to in (1) or the
failure to pay referred to in (2) is caused not (even in part) by
the unavailability of funds but is caused solely due to a
technical or administrative error which has been remedied within
three Local Business Days after notice of such failure is given
to the party."
(l)
Bankruptcy. Section 5(a)(vii)(3) of this Agreement is hereby
amended by the substitution of the following therefor:
"(3) sends a notice convening a meeting to propose a voluntary
arrangement of creditors, or any class thereof, or makes a
general assignment, arrangement or composition with or for the
benefit of its creditors, or any class thereof;"
(m)
Set-off. Any amount (the "Early Termination Amount") payable to
one party (the Payee) by the other party (the Payer) under
Section 6(e), in circumstances where there is a Defaulting Party
or one Affected Party in the case where a Termination Event under
Section 5(b)(Iii) has occurred, will, at the option of the party
("X") other than the Defaulting Party or the Affected Party (and
without prior notice to the Defaulting Party or the Affected
Party), be reduced by its set-off against any amount(s) (the
"Other Agreement Amount") payable (whether at such time or in the
future or upon the occurrence of a contingency) by the Payee to
the Payer (irrespective of the currency, place of payment or
booking office of the obligation) under any other agreement(s)
between the Payee and the Payer or instrument(s) or
undertaking(s) issued or executed by one party to, or in favor
of, the other party (and the Other Agreement Amount will be
discharged promptly and in all respects to the extent it is so
set-off). X will give notice to the other party of any set-off
effected under this Part 4(n).
For this purpose, either the Early Termination Amount or the
Other Agreement Amount (or the relevant portion of such amounts)
may be converted by X into the currency in which the other is
denominated at the rate of exchange at which such party would be
able, acting in a reasonable manner and in good faith, to
purchase the relevant amount of such currency.
If an obligation is unascertained, X may in good faith estimate
that obligation and set-off in respect of the estimate, subject
to the relevant party accounting to the other when the obligation
is ascertained.
Nothing in this Part 4(n) shall be effective to create a charge
or other security interest This Part 4(n) shall be without
prejudice and in addition to any right of set-off, combination of
accounts, lien or other right to which any party is at any time
otherwise entitled (whether by operation of law, contract or
otherwise).
(n)
Notice by Facsimile Transmission. Section 10(a) is hereby amended
by inserting the words "2(b)," between the word "Section" and the
number "Y'.
(o)
Governing Law and Jurisdiction. With respect to Party B, all
references to a "party" in Section II of this Agreement shall be
deemed to be a reference to each Party B Group Member.
(p)
Waiver of Right to Trial by Jury. PARTY A AND EACH PARTY B GROUP
MEMBER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY
JURY WITH
36
RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(q)Recording of Conversations. Party A and each Party B Group
Member acknowledges and agrees to the tape recording of
conversations between trading and marketing personnel of them,
whether by one or the other or all of them or their agents, and
that any such tape recordings may be submitted in evidence in any
proceedings relating to the Agreement.
(r)
Waivers.
(i)
The obligations of each Party B Group Member hereunder are
independent of the obligations of each other Party B Group
Member, and a separate action or actions may be brought and
prosecuted against any Party B Group Member, whether action is
brought against any other Party B Group Member or whether any
Party B Group Member is joined in any such action. Each Party B
Group Member waives the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof.
(ii)
Each Party B Group Member waives any right to require Party A to
(A) proceed against any other Party B Group Member; (B) proceed
against or exhaust any security held for the obligations of Party
B; or (C) pursue any other remedy in Party A's power whatsoever.
Each Party B Group Member hereby waives any defense arising by
reason of any disability or other defense of any other Party B
Group Member, or the cessation of any cause whatsoever of the
liability of Party B, or any claim that the obligations of one
Party B Group Member exceed or are more burdensome than those of
another Party B Group Member. Until all obligations hereunder of
Party B to Party A have been paid in full, no Party B Group
Member shall have any right of subrogation, and each Party B
Group Member waives any right to enforce any remedy which Party B
now has or may hereafter have against Party A, and waives any
benefit of and any right to participate in any security now or
hereafter held by Party A. Each Party B Group Member waives all
presentments, demands for performance, notices of non-
performance, protests, notices of protests and notices of
dishonor with respect to the obligations of each other Party B
Group Member hereunder.
(iii)
Each Party B Group Member acknowledges that it has the sole
responsibility for obtaining from the other Party B Group Members
such information concerning such other Party B Group Members'
financial conditions or business operations as may be required by
such Party B Group Member, and that Party A has no duty at any
time to disclose to Party B any information relating to the
business operations or financial conditions of any Party B Group
Member.
(s)
Party References/Terms. Any use of the terms "if' or "its"
in this Agreement, when used to refer to a party herein shall be
deemed, in the case of a Party B Group Member only, to be "he",
"his" or "him" or "she" or "her", as appropriate, in the context
in which such terms are used.
(t)
Incorporation by Reference of Terms of Credit Agreement. The
covenants, terms and provisions of, including all representations
and warranties of Party B contained in the Credit Agreement, as
in effect as of the date of this Agreement, are hereby
incorporated by reference in, and made part of, this Agreement to
the same extent as if such covenants, terms, and provisions were
set forth in full herein. Party B hereby agrees that, during the
period commencing with the date of this Agreement through and
including such date on which all of Party B's obligations under
this Agreement are fully performed, Party B will (a) observe,
perform, and fulfill each and every such covenant, term, and
provision applicable to Party B, as such covenants, terms, and
provisions, may be amended from time to time after the date of
this Agreement with the consent of Party A, and (b) deliver to
Party A at the address for notices to Party A provided in Part 3
of
37
By:
Name:
Title:
Date:
this Schedule each notice, document, certificate or other writing
that Party B is obligated to furnish to any other party to the
Credit Agreement. In the event the Credit Agreement terminates or
becomes no longer binding on Party B prior to the termination of
this Agreement and any Transactions outstanding hereunder, such
covenants, terms, and provisions (other than those requiring
payments in respect of amounts owed under the Credit Agreement)
will remain in force and effect for purposes of this Agreement as
though set forth in fall herein until the date on which all of
Party Bs obligations under this Agreement are fully performed and
this Agreement is terminated.
Accepted and agreed:
BANK OF AMERICA, N.A.
By:
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ Title: Vice President
Date: 6/22/01
CSA AIR, INC.
By: -
Name: Title: , Date:
MOUNTAIN AIRCRAFT SERVICES, LLC
AIR T, INC.
By:
Name:
Title: CEO
Date: 5/31/01
~
MOUNTAIN AIR CARGO, INC.
By: , Name:
Title: Date:
GLOBAL GROUND SUPPORT, LLC
38