EXHIBIT 10.1
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$1,900,000,000
AMENDED AND RESTATED
SECURED SUPER-PRIORITY DEBTOR IN POSSESSION
CREDIT AGREEMENT
DATED AS OF MARCH 27, 2006
AMONG
DELTA AIR LINES, INC.,
A DEBTOR AND DEBTOR IN POSSESSION,
AS BORROWER,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
EACH A DEBTOR AND DEBTOR IN POSSESSION,
AS CREDIT PARTIES,
THE LENDERS SIGNATORY HERETO FROM TIME TO TIME,
AS LENDERS,
AND
GENERAL ELECTRIC CAPITAL CORPORATION,
AS ADMINISTRATIVE AGENT AND LENDER
* * *
GE CAPITAL MARKETS, INC.,
AS SOLE LEAD ARRANGER AND SOLE BOOK RUNNER FOR
TERM LOAN A AND TERM LOAN B
* * *
GE CAPITAL MARKETS, INC.
AND
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
AS JOINT LEAD ARRANGERS AND JOINT BOOK RUNNERS FOR
TERM LOAN C
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TABLE OF CONTENTS
Page
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1. AMOUNT AND TERMS OF CREDIT........................................... 2
1.1 Credit Facilities.............................................. 2
1.2 Prepayments.................................................... 3
1.3 Priority and Application of Payments........................... 5
1.4 Use of Proceeds................................................ 6
1.5 Interest and Applicable Margins................................ 6
1.6 Term A Borrowing Base.......................................... 8
1.7 [Reserved.].................................................... 8
1.8 Fees........................................................... 8
1.9 Receipt of Payments............................................ 8
1.10 Loan Account and Accounting.................................... 8
1.11 Indemnity...................................................... 9
1.12 Access......................................................... 10
1.13 Taxes.......................................................... 11
1.14 Capital Adequacy; Increased Costs; Illegality.................. 12
1.15 Regulation D Compensation...................................... 14
2. CONDITIONS PRECEDENT................................................. 14
2.1 Conditions to Effectiveness of Section 6.7(e).................. 14
2.2 Conditions to Effectiveness Generally.......................... 15
2.3 Conditions to Effectiveness of Certain Other Provisions........ 16
3. REPRESENTATIONS AND WARRANTIES....................................... 17
3.1 Corporate Existence; Compliance with Law....................... 17
3.2 Executive Offices, Collateral Locations, FEIN.................. 17
3.3 Corporate Power, Authorization, Enforceable Obligations........ 18
3.4 Financial Statements and Projections........................... 18
3.5 Material Adverse Effect; Burdensome Restrictions; Default...... 19
3.6 Ownership of Property; Real Estate; Liens...................... 19
3.7 Labor Matters.................................................. 20
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness................................................... 21
3.9 Government Regulation.......................................... 21
3.10 Margin Regulations............................................. 21
3.11 Taxes.......................................................... 21
3.12 ERISA.......................................................... 22
3.13 No Litigation.................................................. 23
3.14 Intellectual Property.......................................... 23
3.15 Full Disclosure................................................ 23
3.16 Environmental Matters.......................................... 23
3.17 Insurance...................................................... 24
3.18 Use of Proceeds................................................ 24
3.19 Deposit........................................................ 24
3.20 Trade Relations................................................ 25
3.21 Compliance With Industry Standards............................. 25
3.22 Post-Petition Skymiles Facility................................ 25
3.23 Secured, Super-Priority Obligations............................ 25
3.24 Certificated Air Carrier....................................... 26
3.25 U.S. Citizen................................................... 26
3.26 Spare Parts.................................................... 26
3.27 Aircraft; Engines.............................................. 26
3.28 Slots, Primary Gates and Routes................................ 26
4. FINANCIAL STATEMENTS AND INFORMATION................................. 27
4.1 Reports and Notices............................................ 27
4.2 Communication with Accountants................................. 27
5. AFFIRMATIVE COVENANTS................................................ 27
5.1 Maintenance of Existence and Conduct of Business............... 27
5.2 Payment of Charges............................................. 28
5.3 Books and Records.............................................. 28
5.4 Insurance; Damage to or Destruction of Collateral.............. 29
5.5 Compliance with Laws........................................... 30
5.6 Intellectual Property.......................................... 31
5.7 Environmental Matters.......................................... 31
5.8 Landlords' Agreements; Bailee Letters.......................... 32
5.9 [Reserved.].................................................... 32
5.10 Notices........................................................ 32
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5.11 Further Assurances............................................. 32
5.12 Additional Guaranties and Collateral Documents................. 32
5.13 Pledged Spare Parts............................................ 35
5.14 Aircraft Mortgage; Spare Parts Mortgage; SGR Security
Agreement...................................................... 35
5.15 Slot Utilization............................................... 35
5.16 ERISA/Labor Matters............................................ 35
5.17 Maintenance of Liens and Collateral............................ 36
5.18 Use of Proceeds................................................ 36
5.19 Cash Management Systems........................................ 36
5.20 Appraisals..................................................... 37
6. NEGATIVE COVENANTS................................................... 37
6.1 Mergers, Subsidiaries, Etc..................................... 37
6.2 Investments; Loans and Advances................................ 37
6.3 Indebtedness................................................... 39
6.4 Affiliate Transactions......................................... 42
6.5 Capital Structure and Business................................. 42
6.6 Guaranteed Indebtedness........................................ 42
6.7 Liens.......................................................... 42
6.8 Sale of Stock and Assets....................................... 44
6.9 [Reserved.].................................................... 46
6.10 Financial Covenants............................................ 46
6.11 Hazardous Materials............................................ 46
6.12 Sale-Leasebacks................................................ 46
6.13 Restricted Payments............................................ 47
6.14 Change of Corporate Name or Location; Change of Fiscal Year.... 47
6.15 No Impairment of Intercompany Transfers........................ 47
6.16 Limitation on Negative Pledge Clauses.......................... 48
6.17 No Speculative Transactions.................................... 48
6.18 Real Estate Purchases and Leases............................... 48
6.19 Changes Relating to Permitted Subordinated Indebtedness and
Post-Petition Skymiles Facility Documents...................... 49
6.20 Cancellation of Indebtedness................................... 49
7. TERM................................................................. 50
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7.1 Termination.................................................... 50
7.2 Survival of Obligations Upon Termination of Financing
Arrangements................................................... 50
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES............................... 50
8.1 Events of Default.............................................. 50
8.2 Remedies....................................................... 54
8.3 Waivers by Credit Parties...................................... 54
9 GUARANTY............................................................. 55
9.1 Guaranty of Obligations of Borrower............................ 55
9.2 Demand by Secured Parties...................................... 56
9.3 Enforcement of Guaranty........................................ 56
9.4 Waiver......................................................... 56
9.5 Benefit of Guaranty............................................ 56
9.6 Modification of Obligations, Etc............................... 57
9.7 Waiver of Subrogation, Etc..................................... 57
9.8 Election of Remedies........................................... 58
10 SECURITY............................................................. 58
10.1 Security....................................................... 58
10.2 Perfection of Security Interests............................... 60
10.3 Rights of Lender; Limitations on Lenders' Obligations.......... 62
10.4 Covenants of the Credit Parties with Respect to Collateral..... 63
10.5 Performance by Administrative Agent of the Credit Parties'
Obligations.................................................... 67
10.6 Limitation on Administrative Agent's duty in Respect of
Collateral..................................................... 67
10.7 Remedies; Rights Upon Default.................................. 67
10.8 The Administrative Agent's Appointment as Attorney-in-Fact..... 74
10.9 [Reserved]..................................................... 75
10.10 Intercreditor Issues........................................... 75
10.11 Release of Collateral.......................................... 76
11. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF ADMINISTRATIVE AGENT... 77
11.1 Assignment and Participations.................................. 77
11.2 Appointment of Administrative Agent............................ 79
11.3 Administrative Agent's Reliance, Etc........................... 80
11.4 GE Capital and Affiliates...................................... 81
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11.5 Lender Credit Decision......................................... 81
11.6 Indemnification................................................ 81
11.7 Successor Agents............................................... 82
11.8 Setoff and Sharing of Payments................................. 82
11.9 Payments; Non-Funding Lenders; Information; Actions in
Concert........................................................ 83
12. SUCCESSORS AND ASSIGNS............................................... 84
12.1 Successors and Assigns......................................... 84
13. MISCELLANEOUS........................................................ 85
13.1 Complete Agreement; Modification of Agreement.................. 85
13.2 Amendments and Waivers......................................... 85
13.3 Fees and Expenses.............................................. 88
13.4 No Waiver...................................................... 89
13.5 Remedies....................................................... 90
13.6 Severability................................................... 90
13.7 Conflict of Terms.............................................. 90
13.8 Confidentiality................................................ 90
13.9 GOVERNING LAW.................................................. 91
13.10 Notices........................................................ 92
13.11 Section Titles................................................. 93
13.12 Counterparts................................................... 93
13.13 WAIVER OF JURY TRIAL........................................... 93
13.14 Press Releases and Related Matters............................. 94
13.15 [Reserved]..................................................... 94
13.16 Advice of Counsel.............................................. 94
13.17 No Strict Construction......................................... 94
INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 1.1(a)) - Letters of Credit
Annex C (Section 5.19) - Cash Management Systems
Annex D (Section 2.2(c)) - Closing Checklist
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Annex E (Section 4.1(a)) - Financial Statements and
Projections -- Reporting
Annex F (Section 4.1(b)) - Collateral Reports
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 11.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 13.10) - Notice Addresses
Annex J (from Annex A -
Commitments Definition) - Commitments as of Closing Date
Annex K (from Annex A-
Permitted Investments Definition) - Investments Guidelines
Exhibit 1.1 - Form of Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 11.1(a) - Form of Assignment Agreement
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations, FEIN
Disclosure Schedule 3.4(a) - Financial Statements
Disclosure Schedule 3.6 - Real Estate and Leases:
Part 1 - Owned Real Estate
Part 2 - Material Real Estate Contracts
Part 3 - Leases Affecting Owned Real Estate
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding
Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.14 - Intellectual Property
Disclosure Schedule 3.16 - Environmental Matters
Disclosure Schedule 3.17 - Insurance:
Part 1 - Insurance Policies
Part 2 - Those Insurance Policies with respect to
Collateral
Disclosure Schedule 3.19 - Deposit
Disclosure Schedule 3.20 - Trade Relations
Disclosure Schedule 3.26 - Spare Parts
Disclosure Schedule 3.27 - Eligible Aircraft; Eligible Engines
Disclosure Schedule 3.28 - Primary Slots and Primary Routes
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.2 - Existing Investments
Disclosure Schedule 6.3 - Existing Indebtedness
Disclosure Schedule 6.7 - Existing Liens
Disclosure Schedule 6.15 - Restrictions on Intercompany Transfers
Disclosure Schedule 6.16 - Negative Pledge Clauses
Disclosure Schedule 10.1 - Commercial Tort Claims
Disclosure Schedule 10.4 - Pledged Collateral
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Part 1 - Pledged Shares
Part 2 - Pledged Indebtedness
Exhibit A - Form of Power of Attorney
Exhibit B - Form of Aircraft Mortgage
Exhibit C - Form of Copyright Security Agreements
Exhibit D - Form of Mortgage
Exhibit E - Form of SGR Security Agreement
Exhibit F - Form of Spare Parts Mortgage
Exhibit G - Form of Trademark Security Agreements
Exhibit H - Form of Pledge Amendment
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This AMENDED AND RESTATED SECURED SUPER-PRIORITY DEBTOR IN POSSESSION
CREDIT AGREEMENT (this "Agreement"), dated as of March 27, 2006, among DELTA AIR
LINES, INC., a Delaware corporation, as a debtor and debtor in possession under
chapter 11 of the Bankruptcy Code (as defined below) ("Borrower"); the other
Credit Parties signatory hereto, each as a debtor and debtor in possession under
chapter 11 of the Bankruptcy Code; GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation (in its individual capacity, "GE Capital"), for itself, as
Lender, and as administrative agent and collateral agent for the Lenders (in
such capacity, the "Administrative Agent"); and the other Lenders signatory
hereto from time to time, amends and restates the Existing Credit Agreement (as
defined below).
RECITALS
WHEREAS, on September 14, 2005, (the "Petition Date"), Borrower and
each of the other Credit Parties filed voluntary petitions for relief
(collectively, the "Cases") under chapter 11 of the Bankruptcy Code with the
United States Bankruptcy Court for the Southern District of New York (the
"Bankruptcy Court"); and
WHEREAS, Borrower and the other Credit Parties are continuing to
operate their respective businesses and manage their respective properties as
debtors and debtors in possession under sections 1107 and 1108 of the Bankruptcy
Code; and
WHEREAS, the Borrower, the other Credit Parties signatory thereto, GE
Capital, as administrative agent and collateral agent for the lenders, and the
other lenders signatory thereto are parties to the Secured Super-Priority Debtor
in Possession Credit Agreement, dated as of September 16, 2005 as amended on
October 7, 2005 pursuant to Amendment No. 1 thereto (as amended, modified or
supplemented prior to the date hereof, the "Existing Credit Agreement");
WHEREAS, (a) this Agreement, on the terms and subject to the
conditions set forth herein, shall amend and restate the Existing Credit
Agreement in its entirety as of the Effective Date, (b) this Agreement shall not
constitute a novation of the obligations and liabilities existing under the
Existing Credit Agreement or evidence payment of all or any of such obligations
and liabilities and (c) from and after the Effective Date, the Existing Credit
Agreement shall be of no further force or effect, except to evidence the
Obligations (as defined therein) incurred, the representations and warranties
made and the actions or omissions performed or required to be performed
thereunder prior to the Effective Date; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in Annex A and, for purposes of this Agreement and the
other Loan Documents, the rules of construction set forth in Annex A shall
govern. All Annexes, Schedules, Exhibits and other attachments (collectively,
"Appendices") hereto, or expressly identified to this Agreement, are
incorporated herein by reference, and taken together with this Agreement, shall
constitute but a single agreement. These Recitals shall be construed as part of
the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facilities.
(a) Term Loan A.
(i) On the Effective Date the aggregate principal amount of Term
Loan A (as defined in the Existing Credit Agreement) outstanding under the
Existing Credit Agreement is $600,000,000 and shall be deemed outstanding under
this Agreement (collectively, the "Term Loan A"). The Borrower may from time to
time deposit the proceeds of the Term Loan A in the L/C Cash Collateral Account.
Unless a Default or an Event of Default shall have occurred and be continuing,
the L/C Cash Collateral may be withdrawn by the Borrower from the L/C Cash
Collateral Account from time to time upon 3 Business Days' notice to the
Administrative Agent, provided that the aggregate amount of L/C Cash Collateral
held in the L/C Cash Collateral Account thereafter would not be less than an
amount equal to 100% of the aggregate face amount of all outstanding Letters of
Credit. The obligations of each Term A Lender hereunder shall be several and not
joint. The Term Loan A shall, upon the request of any Lender pursuant to Section
1.10, be evidenced by promissory notes substantially in the form of Exhibit 1.1
(each a "Note" and collectively the "Notes"), and, upon such request as provided
in Section 1.10, Borrower shall execute and deliver each Note to the applicable
Term A Lender. Each Note shall represent the obligation of Borrower to pay the
amount of the applicable Term A Lender's Term Loan A, together with interest
thereon as prescribed in Section 1.5.
(ii) The aggregate outstanding principal balance of the Term Loan
A (including the portion of the Term Loan A the proceeds of which are held by
the Administrative Agent in the L/C Cash Collateral Account) shall be due and
payable in full in immediately available funds on the Maturity Date, if not
sooner paid in full. No payment with respect to the Term Loan A may be
reborrowed. The deposit of proceeds of the Term Loan A in the L/C Cash
Collateral Account as provided in Section 1.1(a)(i) above, is not and shall not
be deemed to be a repayment of the Term Loan A.
(iii) Each payment of principal with respect to the Term Loan A
shall be paid to the Administrative Agent for the ratable benefit of each Term A
Lender, ratably in proportion to each such Term A Lender's respective Term A
Commitment.
(iv) Subject to and in accordance with the terms and conditions
contained herein and in Annex B, unless a Default or an Event of Default shall
have occurred and be continuing, each L/C Issuer agrees to issue one or more
Letters of Credit at the request of the Borrower from time to time during the
period commencing on the Effective Date and ending on the earlier of the
Maturity Date and 30 days prior to the Scheduled Maturity Date, up to a maximum
amount of $200,000,000 (the "L/C Subfacility").
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(b) Term Loan B.
(i) On the Effective Date the aggregate principal amount of Term
Loan B (as defined in the Existing Credit Agreement) outstanding under the
Existing Credit Agreement is $700,000,000 and shall be deemed outstanding under
this Agreement (collectively, the "Term Loan B"). The obligations of each Term B
Lender hereunder shall be several and not joint. The Term Loan B shall, upon the
request of any Lender pursuant to Section 1.10, be evidenced by a Note, and,
upon such request as provided in Section 1.10, Borrower shall execute and
deliver each Note to the applicable Term B Lender. Each Note shall represent the
obligation of Borrower to pay the amount of the applicable Term B Lender's Term
Loan B, together with interest thereon as prescribed in Section 1.5.
(ii) The aggregate outstanding principal balance of the Term Loan
B shall be due and payable in full in immediately available funds on the
Maturity Date, if not sooner paid in full. No payment with respect to the Term
Loan B may be reborrowed.
(iii) Each payment of principal with respect to the Term Loan B
shall be paid to the Administrative Agent for the ratable benefit of each Term B
Lender, ratably in proportion to each such Term B Lender's respective Term B
Commitment.
(c) Term Loan C.
(i) On the Effective Date the aggregate principal amount of Term
Loan C (as defined in the Existing Credit Agreement) outstanding under the
Existing Credit Agreement is $600,000,000 and shall be deemed outstanding under
this Agreement (collectively, the "Term Loan C"). The obligations of each Term C
Lender hereunder shall be several and not joint. The Term Loan C shall, upon the
request of any Lender pursuant to Section 1.10, be evidenced by a Note, and,
upon such request as provided in Section 1.10, Borrower shall execute and
deliver each Note to the applicable Term C Lender. Each Note shall represent the
obligation of Borrower to pay the amount of the applicable Term C Lender's Term
Loan C, together with interest thereon as prescribed in Section 1.5.
(ii) The aggregate outstanding principal balance of the Term Loan
C shall be due and payable in full in immediately available funds on the
Maturity Date, if not sooner paid in full. No payment with respect to the Term
Loan C may be reborrowed.
(iii) Each payment of principal with respect to the Term Loan C
shall be paid to the Administrative Agent for the ratable benefit of each Term C
Lender, ratably in proportion to each such Term C Lender's respective Term C
Commitment.
1.2 Prepayments.
(a) Voluntary Prepayments. Borrower may at any time on at least three
(3) Business Days' prior written notice to the Administrative Agent, voluntarily
prepay all or part of
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the Term Loan; provided that any such prepayment shall be in a minimum amount of
$5,000,000 and integral multiples of $250,000 in excess of such amount and shall
be accompanied by payment of any LIBOR funding breakage costs in accordance with
Section 1.11(b); provided, further, that any such prepayment shall be applied
pursuant to Section 1.3.
(b) Mandatory Prepayments.
(i) If at any time the aggregate outstanding principal amount of
the Term Loan A exceeds the Term A Borrowing Base, Borrower shall immediately
repay the aggregate outstanding amount of the Term Loan A to the extent required
to eliminate such excess.
(ii) Upon receipt by any Credit Party of Net Cash Proceeds
arising from an Asset Sale (other than an Asset Sale of Skymiles Collateral) or
Property Loss Event, Borrower shall immediately prepay the Loans in an amount
equal to 100% of such Net Cash Proceeds; provided, that, immediately upon
receipt by any Credit Party of such Net Cash Proceeds, Borrower may, at its
option, deposit 100% of such Net Cash Proceeds in the Cash Collateral Account,
in each case, to be applied in accordance with Section 1.2(c).
(c) Application of Net Cash Proceeds. Any Net Cash Proceeds received
by Borrower or any other Credit Party or the Administrative Agent under any Loan
Document (except as otherwise expressly provided herein or therein) shall be
applied pursuant to Section 1.3; provided, however, that, in the event Borrower
has elected to deposit such Net Cash Proceeds in the Cash Collateral Account in
accordance with Section 1.2(b)(ii):
(i) upon any Asset Sale of Collateral included in the Term A
Borrowing Base, the Administrative Agent shall (A) upon receipt of a
Borrowing Base Certificate prior to the Prepayment Date that includes one
or more assets (the "Replacement Borrowing Base Assets" and which, other
than in the case of Aircraft or Engines, may consist of any type of asset
eligible to be included in the Term A Borrowing Base and, in the case of
Aircraft or Engines, shall consist of Additional Aircraft or Additional
Engines, as the case may be) replacing the asset or assets (the "Original
Borrowing Base Assets") giving rise to such Net Cash Proceeds, release to
Borrower an amount equal to (1) such Net Cash Proceeds minus (2) the
amount, if any, by which (x) the Allocated Amount for the Original
Borrowing Base Assets exceeds (y) the Allocated Amount for the Replacement
Borrowing Base Assets and (B) on the earlier of (1) the election by the
Administrative Agent, the Requisite Term A Lenders, the Requisite Term B
Lenders or the Requisite Term C Lenders following the occurrence of any
Event of Default and (2) the Prepayment Date, apply the balance of such Net
Cash Proceeds pursuant to Section 1.3;
(ii) upon a Reinvestment Event, all or a portion of such Net Cash
Proceeds, as specified in a Reinvestment Notice, shall be used to acquire
or construct Permitted Reinvestment Collateral (the "Reinvestment Deferred
Amount") and such Reinvestment Deferred Amount shall, within five (5)
Business Days of delivery of a Reinvestment Release Request, be released to
Borrower to acquire or construct such
4
Permitted Reinvestment Collateral until the Reinvestment Prepayment Date
corresponding thereto, on which date the remaining Net Cash Proceeds, if
any, shall be applied pursuant to Section 1.3;
(iii) upon a Property Loss Event involving any Aircraft or
Engines, Borrower shall comply with the applicable notice provisions and
requirements for Replacement Aircraft or Replacement Engines as set forth
in the Aircraft Mortgage; and
(iv) upon a Property Loss Event involving any Real Estate subject
to a Mortgage, Borrower shall comply with the applicable provisions and
requirements set forth in such Mortgage.
(d) No Implied Consent. Nothing in this Section 1.2 shall be construed
to constitute the Administrative Agent's or Lender's consent to any transaction
that is not permitted by other provisions of this Agreement or the other Loan
Documents.
1.3 Priority and Application of Payments.
So long as no Event of Default has occurred and is continuing,
payments matching specific scheduled or required payments then due shall be
applied to those scheduled or required payments. As to any other payment and as
to all payments made when an Event of Default has occurred and is continuing or
following the Maturity Date, Borrower hereby irrevocably waives the right to
direct the application of any and all payments received from or on behalf of
Borrower, and Borrower and each Secured Party hereby irrevocably agrees that the
Administrative Agent shall have the continuing exclusive right to apply any and
all such payments against the Obligations as follows: first, to Fees and
reimbursable expenses of the Administrative Agent then due and payable pursuant
to any of the Loan Documents; second, to Fees and reimbursable expenses of Term
A Lenders and Letter of Credit Obligations of L/C Issuers then due and payable
pursuant to any of the Loan Documents; third, to interest then due and payable
on the Term Loan A; fourth, to prepay the remaining principal amount of the Term
Loan A, until the Term Loan A shall have been paid in full; fifth, to all other
Obligations then due and payable to the Term A Lenders; sixth, to Fees and
reimbursable expenses of Term B Lenders then due and payable pursuant to any of
the Loan Documents; seventh, to interest then due and payable on the Term Loan
B; eighth, to prepay the remaining principal amount of the Term Loan B, until
the Term Loan B shall have been paid in full; ninth, to all other Obligations
then due and payable to the Term B Lenders; tenth, to Fees and reimbursable
expenses of Term C Lenders then due and payable pursuant to any of the Loan
Documents; eleventh, to interest then due and payable on the Term Loan C;
twelfth, to prepay the remaining principal amount of the Term Loan C, until the
Term Loan C shall have been paid in full; and last, to all other Obligations
then due and payable to the Term C Lenders. All payments and prepayments applied
to a particular Loan shall be applied ratably to the portion thereof held by
each Lender as determined by its Pro Rata Share. Notwithstanding anything herein
to the contrary, no Credit Party shall be obligated to make any payment to any
Secured Party under any Loan Document from the proceeds of Skymiles Collateral
at any time after the delivery to Borrower of a Notice of Actionable Default and
until the withdrawal of all pending Notices of Actionable Default except as and
to the extent set forth in the Skymiles Intercreditor Agreement.
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1.4 Use of Proceeds.
Borrower shall utilize the proceeds of the Loans and Letters of Credit
solely for the general corporate purposes of the Credit Parties.
1.5 Interest and Applicable Margins.
(a) Borrower shall pay interest to the Administrative Agent, for the
ratable benefit of Lenders in accordance with the various Loans being made by
each Lender, in arrears on each applicable Interest Payment Date, at the
following rates: (i) with respect to the Term Loan A, at the election of
Borrower, (A) the Index Rate plus the Applicable Term A Index Margin per annum
or (B) at the election of Borrower, the applicable LIBOR Rate plus the
Applicable Term A LIBOR Margin per annum; (ii) with respect to the Term Loan B,
at the election of Borrower, (A) the Index Rate plus the Applicable Term B Index
Margin per annum or (B) the applicable LIBOR Rate plus the Applicable Term B
LIBOR Margin per annum; and (iii) with respect to the Term Loan C, at the
election of Borrower, (A) the Index Rate plus the Applicable Term C Index Margin
per annum or (B) the applicable LIBOR Rate plus the Applicable Term C LIBOR
Margin per annum.
The applicable margins are as follows:
Applicable Term A Index Margin .. 2.00%
Applicable Term A LIBOR Margin .. 2.75%
Applicable Term B Index Margin .. 4.00%
Applicable Term B LIBOR Margin .. 4.75%
Applicable Term C Index Margin .. 6.75%
Applicable Term C LIBOR Margin .. 7.50%
(b) If any payment on any Loan becomes due and payable on a day other
than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of interest shall be made by the Administrative
Agent on the basis of a 360-day year (or, in the case of interest calculated
based on the Index Rate, a 365/366 day year), in each case for the actual number
of days occurring in the period for which such interest is payable. The Index
Rate is a floating rate determined for each day. Each determination by the
Administrative Agent of interest rates hereunder shall be presumptive evidence
of the correctness of such rates.
(d) So long as an Event of Default has occurred and is continuing
under Section 8.1(a), or so long as any other Event of Default has occurred and
is continuing and at
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the election of any of (i) the Administrative Agent, (ii) the Requisite Term A
Lenders, (iii) the Requisite Term B Lenders or (iv) the Requisite Term C Lenders
confirmed by written notice from the Administrative Agent to Borrower, (A) the
interest rates applicable to the Loans shall be increased by two percentage
points (2%) per annum above the rates of interest otherwise applicable to such
Loans hereunder (the "Default Rate"), and (B) all other outstanding Obligations
shall bear interest at the Default Rate applicable to the Term Loan C. Interest
at the Default Rate shall accrue from the initial date of such Event of Default
until that Event of Default is cured or waived and shall be payable upon demand.
(e) So long as no Event of Default has occurred and is continuing,
Borrower shall have the option to (i) convert at any time all or any part of
outstanding Loans from Index Rate Loans to LIBOR Loans, (ii) convert any LIBOR
Loan to an Index Rate Loan, subject to payment of LIBOR breakage costs in
accordance with Section 1.11(b) if such conversion is made prior to the
expiration of the LIBOR Period applicable thereto, or (iii) continue all or any
portion of any Loan as a LIBOR Loan upon the expiration of the applicable LIBOR
Period and the succeeding LIBOR Period of that continued Loan shall commence on
the first day after the last day of the LIBOR Period of the Loan to be
continued. Any Loan or group of Loans having the same proposed LIBOR Period to
be made or continued as, or converted into, a LIBOR Loan must be in a minimum
amount of $5,000,000 and integral multiples of $500,000 in excess of such
amount. Any such election must be made by 11:00 a.m. (New York time) on the
third Business Day prior to (1) the date of any proposed borrowing which is to
bear interest at the LIBOR Rate, (2) the end of each LIBOR Period with respect
to any LIBOR Loans to be continued as such, or (3) the date on which Borrower
wishes to convert any Index Rate Loan to a LIBOR Loan for a LIBOR Period
designated by Borrower in such election. If no election is received with respect
to a LIBOR Loan by 11:00 a.m. (New York time) on the third Business Day prior to
the end of the LIBOR Period with respect thereto (or if an Event of Default has
occurred and is continuing), that LIBOR Loan shall be converted to an Index Rate
Loan at the end of its LIBOR Period. Borrower must make such election by notice
to the Administrative Agent in writing, by telecopy or overnight courier. In the
case of any conversion or continuation, such election must be made pursuant to a
written notice (a "Notice of Conversion/Continuation") in the form of Exhibit
1.5(e).
(f) Notwithstanding anything to the contrary set forth in this Section
1.5, if a court of competent jurisdiction determines in a final order that the
rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by the Administrative
Agent, on behalf of applicable Lenders, is equal to the total interest that
would have been received had the interest rate payable hereunder been (but for
the operation of this paragraph) the interest rate payable since the Closing
Date as otherwise provided in this Agreement. In no event shall the total
interest received by any Lender pursuant to the terms hereof exceed the amount
that such Lender could lawfully have received had the interest due hereunder
been calculated for the full term hereof at the Maximum Lawful Rate.
7
1.6 Term A Borrowing Base.
The Administrative Agent shall have the right to modify or eliminate
Reserves against Eligible Accounts, Eligible Unbilled Accounts and Eligible
Refundable Ticket Accounts, Eligible Real Estate, Eligible Aircraft, Eligible
Engines, Eligible Spare Parts, Eligible Ground Service Equipment, Eligible
Flight Simulators and Eligible Tooling from time to time in its reasonable
credit judgment. In addition, the Administrative Agent reserves the right, at
any time and from time to time after the Closing Date, to adjust any of the
eligibility criteria and to establish new eligibility criteria, and to adjust
advance rates with respect to Eligible Accounts, Eligible Unbilled Accounts and
Eligible Refundable Ticket Accounts, Eligible Real Estate, Eligible Aircraft,
Eligible Engines, Eligible Spare Parts, Eligible Ground Service Equipment,
Eligible Flight Simulators and Eligible Tooling, in its reasonable credit
judgment, reflecting changes in the collectibility or realization values (in the
case of Accounts) or changes in the Fair Market Value or Net Orderly Liquidation
Value (in the case of the other components of the Term A Borrowing Base), in
each case, arising or discovered by the Administrative Agent after the Closing
Date, subject to the approval of each of the Supermajority Term A Lenders, the
Requisite Term B Lenders and the Requisite Term C Lenders in the case of
adjustments or new eligibility criteria, reductions in the amount of the
Reserves in effect on the Closing Date or changes in advance rates which have
the effect of making more credit available.
1.7 [Reserved.]
1.8 Fees.
Borrower shall pay to GE Capital the Fees specified in the Fee
Letters.
1.9 Receipt of Payments.
Borrower shall make each payment under this Agreement not later than
2:00 p.m. (New York time) on the day when due in immediately available funds in
Dollars to the Collection Account. For purposes of computing interest as of any
date, all payments shall be deemed received on the Business Day on which
immediately available funds therefor are received in the Collection Account
prior to 2:00 p.m. New York time. Payments received after 2:00 p.m. New York
time on any Business Day or on a day that is not a Business Day shall be deemed
to have been received on the following Business Day.
1.10 Loan Account and Accounting.
The Administrative Agent shall maintain a loan account (the "Loan
Account") on its books to record each of Term Loan A, Term Loan B and Term Loan
C, all payments made by Borrower with respect to such Term Loan, and all other
debits and credits as provided in this Agreement with respect to such Term Loan
or any other Obligations with respect to such Term Loan. All entries in the Loan
Account shall be made in accordance with the Administrative Agent's customary
accounting practices as in effect from time to time. The balance in the Loan
Account, as recorded on the Administrative Agent's most recent printout or other
written statement, shall, absent manifest error, be presumptive evidence of the
amounts due and owing to the Administrative Agent and the Lenders by Borrower;
provided, that any failure to so record or any error in so recording shall not
limit or otherwise affect Borrower's duty to pay the
8
Obligations with respect to the Term Loans. The Administrative Agent shall
render to Borrower a monthly accounting of transactions with respect to each
Term Loan setting forth the balance of the Loan Account for the immediately
preceding month. Any Lender may elect, by notice to Borrower and the
Administrative Agent, to have such Lender's Term Loan be evidenced by a Note
issued to that Lender. If no such Note is requested, such Lender may rely on the
Term Loan Account as evidence of the amount of Obligations with respect to the
Term Loan from time to time owing to it. Unless Borrower notifies the
Administrative Agent in writing of any objection to any such accounting
(specifically describing the basis for such objection), within thirty (30) days
after the date thereof, each and every such accounting shall be presumptive
evidence of all matters reflected therein. Only those items expressly objected
to in such notice shall be deemed to be disputed by Borrower.
1.11 Indemnity.
(a) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and hold harmless each of the Administrative Agent, Lenders
and their respective Affiliates, and each such Person's respective officers,
directors, employees, attorneys, agents and representatives (each, an
"Indemnified Person"), from and against any and all suits, actions, proceedings,
claims, damages, losses, liabilities and expenses (including reasonable
attorneys' fees and disbursements and other costs of investigation or defense,
including those incurred upon any appeal) that may be instituted or asserted
against or incurred by any such Indemnified Person as the result of credit
having been extended, suspended or terminated under this Agreement and the other
Loan Documents and the administration of such credit, and in connection with or
arising out of the transactions contemplated hereunder and thereunder and any
actions or failures to act in connection therewith, including any and all
Environmental Liabilities and legal costs and expenses arising out of or
incurred in connection with disputes between or among any parties to any of the
Loan Documents, and associated with Electronic Transmissions or E-Systems as
well as failures caused by Borrower's equipment, software, services or otherwise
used in connection therewith (collectively, "Indemnified Liabilities");
provided, that no such Credit Party shall be liable for any indemnification to
an Indemnified Person to the extent that any such suit, action, proceeding,
claim, damage, loss, liability or expense results from that Indemnified Person's
gross negligence or willful misconduct. NO INDEMNIFIED PERSON SHALL BE
RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR,
ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING
CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN
EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY
OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on the terms
provided herein, if (i) any LIBOR Loans are repaid in whole or in part prior to
the last day of any applicable LIBOR Period (whether that repayment is made
pursuant to any provision of this Agreement or any other Loan Document or occurs
as a result of acceleration, by operation of law or otherwise); (ii) Borrower
shall default in payment when due of the principal amount of or interest on any
LIBOR Loan; (iii) Borrower shall refuse to accept any borrowing of, or shall
9
request a termination of any borrowing, conversion into or continuation of LIBOR
Loans after Borrower has given notice requesting the same in accordance
herewith; or (iv) Borrower shall fail to make any prepayment of a LIBOR Loan
after Borrower has given a notice thereof in accordance herewith, then Borrower
shall indemnify and hold harmless each Lender from and against any loss or
expense arising from the reemployment of funds obtained by it or from fees
payable to terminate deposits from which such funds were obtained. For the
purpose of calculating amounts payable to a Lender under this subsection, each
Lender shall be deemed to have actually funded its relevant LIBOR Loan through
the purchase of a deposit bearing interest at the LIBOR Rate in an amount equal
to the amount of that LIBOR Loan and having a maturity comparable to the
relevant LIBOR Period; provided, that each Lender may fund each of its LIBOR
Loans in any manner it sees fit, and the foregoing assumption shall be utilized
only for the calculation of amounts payable under this subsection. This covenant
shall survive the termination of this Agreement and the payment of the Notes and
all other amounts payable hereunder. As promptly as practicable under the
circumstances, each Lender shall provide Borrower with its written calculation
of all amounts payable pursuant to this Section 1.11(b), and such calculation
shall be binding on the parties hereto unless Borrower shall object in writing
within thirty (30) days of receipt thereof, specifying the basis for such
objection in detail.
1.12 Access.
(a) Each Credit Party shall, during normal business hours, from time
to time upon five (5) Business Days' prior notice as frequently as the
Administrative Agent reasonably determines to be appropriate (and subject to
such other restrictions on inspections set forth in the Aircraft Mortgage with
respect to Aircraft and Engines or the Spare Parts Mortgage with respect to
Spare Parts): (i) provide the Administrative Agent and any of its officers,
employees and agents access to its officers and employees, and with prior notice
and the opportunity to be present, advisors of each Credit Party, (ii) permit
the Administrative Agent, and any of its officers, employees and agents, to
inspect, audit and make extracts from any Credit Party's Books and Records
(subject to requirements under any confidentiality agreements, if applicable) ,
and (iii) permit the Administrative Agent, and any of its officers, employees
and agents, to have access to properties, facilities and to the Collateral and
to inspect, audit, review, evaluate, conduct field examinations and make test
verifications and counts of the Accounts, Inventory and other Collateral of any
Credit Party; provided, that so long as no Event of Default has occurred and is
continuing, such access and inspections shall not be permitted more frequently
than (A) once in any calendar quarter with respect to any Collateral of the type
described in clauses (d) through (m) of the definition of "Term A Borrowing
Base," (B) twice every calendar year with respect to any Collateral of the type
described in clauses (a) through (c) of the definition of "Term A Borrowing
Base," and (C) as set forth in the other applicable Collateral Documents.
Representatives of other Lenders may accompany the Administrative Agent's
representatives on regularly scheduled audits at no charge to Borrower. Each
Credit Party shall make available to the Administrative Agent and its counsel
reasonably promptly originals or copies of all Books and Records (subject to
requirements under any confidentiality agreements, if applicable) that the
Administrative Agent may reasonably request. Each Credit Party shall deliver any
document or instrument necessary for the Administrative Agent, as it may from
time to time request, to obtain records from any service bureau or other Person
that maintains records for such Credit Party and shall maintain supporting
documentation on media, including computer
10
tapes and discs owned by such Credit Party. The Administrative Agent will give
Lenders at least five (5) days' prior written notice of regularly scheduled
audits.
(b) If an Event of Default has occurred and is continuing, each such
Credit Party shall provide such access as set forth in clause (a) above to the
Administrative Agent and to each Lender at all times and without advance notice.
Furthermore, so long as any Event of Default has occurred and is continuing,
Borrower shall provide the Administrative Agent and each Lender with access,
with prior notice and opportunity for Borrower to be present, to its suppliers,
service providers and customers.
1.13 Taxes.
(a) Any and all payments by Borrower hereunder or under the Notes
shall be made, in accordance with this Section 1.13, free and clear of and
without deduction for any and all present or future Taxes. If Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under the Notes, (i) unless such Taxes are imposed as the result of
a determination that an applicable Certificate of Exemption (as defined in
Section 1.13(c)) did not entitle a Foreign Lender to an exemption from such
Taxes at the time such Foreign Lender became a Lender hereunder, the sum payable
shall be increased as much as shall be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 1.13) the Administrative Agent or Lenders, as applicable,
receive an amount equal to the sum they would have received had no such
deductions been made, (ii) Borrower shall make such deductions, and (iii)
Borrower shall pay the full amount deducted to the relevant taxing or other
authority in accordance with applicable law. Within thirty (30) days after the
date of any such payment of Taxes, Borrower shall furnish to the Administrative
Agent the original or a certified copy of a receipt evidencing payment thereof.
(b) Borrower shall indemnify and, within ten (10) days of demand
therefor, pay the Administrative Agent and each Lender for the full amount of
Taxes paid by the Administrative Agent or such Lender, as appropriate, with
respect to payments received from Borrower hereunder and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted unless
such Taxes are imposed as the result of a determination that establishes that an
applicable Certificate of Exemption did not in fact entitle a Foreign Lender to
an exemption from such Taxes at the time such Foreign Lender became a Lender
hereunder.
(c) Each Person organized under the laws of a jurisdiction outside the
United States (a "Foreign Person") as to which payments to be made under this
Agreement or under the Notes are completely exempt from United States
withholding tax under an applicable statute or tax treaty shall provide to
Borrower and the Administrative Agent a properly completed and executed IRS Form
W-8ECI or Form W-8BEN or other applicable form, certificate or document
prescribed by the IRS or the United States certifying as to such Foreign
Person's entitlement to such complete exemption (a "Certificate of Exemption").
Any Foreign Person that seeks to become a Lender under this Agreement shall
provide a Certificate of Exemption to Borrower and the Administrative Agent
prior to becoming a Lender hereunder. No Foreign Person may become a Lender
hereunder if such Foreign Person fails to deliver a Certificate of Exemption in
advance of becoming a Lender. For the avoidance of doubt, (i) any Sale described
in Section
11
11.1(a) to a Foreign Person shall only become effective upon delivery by the
party to whom such Sale is made to the Borrower and the Administrative Agent of
a Certificate of Exemption, and (ii) any participant or SPV described in Section
11.1(e) shall not be entitled to any benefit under Section 1.13 unless such
participant or SPV delivers to Borrower and the Administrative Agent a
Certificate of Exemption. In addition, any Lender that is not a Foreign Person
and that is a partnership or trust for U.S. federal income tax purposes shall
not be entitled to any payment by Borrower pursuant to Section 1.13(b) with
respect to any Taxes paid by such Lender with respect to any Foreign Person that
is a partner or owner of an interest in such Lender unless such Lender had
obtained a Certificate of Exemption from such Foreign Person at the later of the
times (i) such Lender became a Lender hereunder and (ii) such Foreign Person
became a partner or owner of an interest in such Lender.
(d) Each Lender agrees that, as promptly as practicable after it
becomes aware of any circumstance that would result in any additional payment by
Borrower pursuant to Section 1.13(a) or (b), such Lender shall, to the extent
not inconsistent with such Lender's internal policies of general application use
reasonable commercial efforts to mitigate any Taxes that would result in such
payments by Borrower. If Borrower is required to pay additional amounts to or
for the account of any Lender pursuant to this Section 1.13, then such Lender,
at the request of Borrower and at Borrower's expense, will change the
jurisdiction of its lending office if such change (i) will eliminate or reduce
any such additional payment which may thereafter accrue and (ii) as determined
by such Lender in its sole discretion, is not otherwise materially
disadvantageous to such Lender, provided, that the mere existence of fees,
charges, costs or expenses that such Borrower has offered and agreed to pay on
behalf of a Lender shall not be deemed to be disadvantageous to such Lender.
1.14 Capital Adequacy; Increased Costs; Illegality.
(a) If any law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline or order regarding capital adequacy, reserve requirements
or similar requirements or compliance by any Lender with any request or
directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law), in each case, adopted
after the Closing Date, from any central bank or other Governmental Authority
increases or would have the effect of increasing the amount of capital, reserves
or other funds required to be maintained by such Lender and thereby reducing the
rate of return on such Lender's capital as a consequence of its obligations
hereunder, then Borrower shall from time to time upon demand by such Lender
(with a copy of such demand to the Administrative Agent) pay to the
Administrative Agent, for the account of such Lender, additional amounts
sufficient to compensate such Lender for such reduction. A certificate as to the
amount of that reduction and showing the basis of the computation thereof
submitted by such Lender to Borrower and to the Administrative Agent shall be
presumptive evidence of the matters set forth therein.
(b) If, due to either (i) the introduction of or any change in any law
or regulation (or any change in the interpretation thereof) other than in
respect of taxes (including income taxes) or (ii) the compliance with any
guideline or request from any central bank or other non-tax Governmental
Authority (whether or not having the force of law), in each case occurring after
the Closing Date, there shall be any increase in the cost to any Lender of
agreeing to make or making, funding or maintaining any Loan, then Borrower shall
from time to time, upon
12
demand by such Lender (with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to Borrower and
to the Administrative Agent by such Lender, shall be presumptive evidence of the
matters set forth therein. Each Lender agrees that, as promptly as practicable
after it becomes aware of any circumstances referred to above which would result
in any such increased cost, the affected Lender shall, to the extent not
inconsistent with such Lender's internal policies of general application, use
reasonable commercial efforts to minimize costs and expenses incurred by it and
payable to it by Borrower pursuant to this Section 1.14(b).
(c) Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) after the Closing Date shall make it unlawful, or any
central bank or other Governmental Authority shall assert that it is unlawful,
for any Lender to agree to make or to make or to continue to fund or maintain
any LIBOR Loan, then, unless that Lender is able to make or to continue to fund
or to maintain such LIBOR Loan at another branch or office of that Lender
without, in that Lender's reasonable opinion, materially and adversely affecting
it or its Loans or the income obtained therefrom, on notice thereof and demand
therefor by such Lender to Borrower through the Administrative Agent, (i) the
obligation of such Lender to agree to make or to make or to continue to fund or
maintain LIBOR Loans shall terminate and (ii) Borrower shall forthwith prepay in
full all outstanding LIBOR Loans owing to such Lender, together with interest
accrued thereon, unless Borrower, within five (5) Business Days after the
delivery of such notice and demand, converts all LIBOR Loans into Index Rate
Loans.
(d) Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Lender's right to demand compensation with respect to such period or any
other period, provided, that Borrower shall not be required to compensate a
Lender pursuant to this Section 1.14 for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender notifies Borrower
of the circumstance giving rise to such increased costs or reductions and of
such Lender's intention to claim compensation therefor.
(e) Within thirty (30) days after receipt by Borrower of written
notice and demand from any Lender (an "Affected Lender") for payment of
additional amounts or increased costs as provided in Sections 1.13(a), 1.13(b),
1.14(a) or 1.14(b), Borrower may, at its option, notify the Administrative Agent
and such Affected Lender of its intention to replace the Affected Lender. So
long as no Default or Event of Default has occurred and is continuing, Borrower,
with the consent of the Administrative Agent, may obtain, at Borrower's expense,
a replacement Lender ("Replacement Lender") for the Affected Lender, which
Replacement Lender must be reasonably satisfactory to the Administrative Agent.
If Borrower obtains a Replacement Lender within ninety (90) days following
notice of its intention to do so, the Affected Lender must sell and assign its
Loans and Commitments to such Replacement Lender for an amount equal to the
principal balance of all Loans held by the Affected Lender and all accrued and
unpaid interest and Fees with respect thereto through the date of such sale and
such assignment shall not require the payment of an assignment fee to the
Administrative Agent; provided, that Borrower shall have reimbursed such
Affected Lender for the additional amounts or increased
13
costs that it is entitled to receive under this Agreement through the date of
such sale and assignment. Notwithstanding the foregoing, Borrower shall not have
the right to obtain a Replacement Lender if the Affected Lender rescinds its
demand for increased costs or additional amounts within fifteen (15) days
following its receipt of Borrower's notice of intention to replace such Affected
Lender. Furthermore, if Borrower gives a notice of intention to replace and does
not so replace such Affected Lender within ninety (90) days thereafter,
Borrower's rights under this Section 1.14(e) shall terminate with respect to
such Affected Lender and Borrower shall promptly pay all increased costs or
additional amounts demanded by such Affected Lender pursuant to Sections
1.13(a), 1.13(b), 1.14(a) or 1.14(b).
1.15 Regulation D Compensation.
If and so long as a reserve requirement of the type referred to in
clause (i)(B) below is prescribed by the Federal Reserve Board (or any
successor), each Lender subject to such requirement may require Borrower to pay,
contemporaneously with each payment of interest on each such Lender's LIBOR
Loans, additional interest on such LIBOR Loan at a rate per annum determined by
such Lender up to but not exceeding the excess of (i) (A) the applicable LIBOR
Rate divided by (B) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is two (2) LIBOR Business Days prior to
the beginning of such LIBOR Period (including basic, supplemental, marginal and
emergency reserves under any regulations of the Federal Reserve Board or other
Governmental Authority having jurisdiction with respect thereto, as now and from
time to time in effect) for Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board) that
are required to be maintained by a member bank of the Federal Reserve System
over (ii) the applicable LIBOR Rate.
2. CONDITIONS PRECEDENT
2.1 Conditions to Effectiveness of Section 6.7(e).
The amendment and restatement set forth herein of Section 6.7(e) of
the Existing Credit Agreement and the corresponding amendments to Annex A to add
definitions for "GECAS Facilities", "Letter of Intent" and "U.S. Bank" reflected
in this Agreement shall become effective on the date on which each of the
following conditions precedent is satisfied or provided for in a manner
reasonably satisfactory to the Administrative Agent, or duly waived in writing
in accordance with Section 13.2:
(a) Credit Agreement. The Administrative Agent shall have received
counterparts of this Agreement duly executed by each of Borrower, the other
Credit Parties, the Administrative Agent and the Requisite Lenders or, with
respect to the Requisite Lenders, Administrative Agent shall have received a
separate written consent approving the above referenced amendment and
restatement of Section 6.7(e) and the corresponding amendments to Annex A to add
definitions for "GECAS Facilities", "Letter of Intent" and "U.S. Bank" reflected
in this Agreement, or authorizing the Administrative Agent to enter into this
Agreement on behalf of the Requisite Lenders.
14
(b) Amex Consent. Amex shall have amended the Post-Petition Skymiles
Facility Documents to permit the incurrence of the Liens permitted by Section
6.7(e) hereof.
2.2 Conditions to Effectiveness Generally.
Other than as provided in Section 2.1 hereof and the amendment and
restatement set forth herein of (i) Section 1.3 of the Existing Credit
Agreement, (ii) Section 1.5 of the Existing Credit Agreement and (iii) those
provisions of the Existing Credit Agreement relating to Letters of Credit
(including Annex B thereto), this Agreement shall become effective on the date
(the "Effective Date") on which each of the following conditions precedent is
satisfied or provided for in a manner reasonably satisfactory to the
Administrative Agent, or duly waived in writing in accordance with Section 13.2:
(a) Credit Agreement. The Administrative Agent shall have received
counterparts of this Agreement duly executed by each of Borrower, the other
Credit Parties, the Administrative Agent and the Requisite Lenders or, with
respect to the Requisite Lenders, Administrative Agent shall have received a
separate written consent approving the above referenced amendment and
restatement and authorizing the Administrative Agent to enter into this
Agreement on behalf of the Requisite Lenders.
(b) Reaffirmation. The Administrative Agent shall have received
reaffirmation of the Collateral Documents, duly executed and delivered by each
Credit Party.
(c) Loan Documents. The Administrative Agent shall have received such
documents, instruments and agreements listed on Annex D, and such other
documents, instruments and agreements as the Administrative Agent shall request,
in its discretion exercised reasonably in accordance with its customary business
practices for comparable debtor in possession transactions, in connection with
the transactions contemplated by this Agreement and the other Loan Documents,
each in form and substance reasonably satisfactory to the Administrative Agent.
(d) Approvals. The Administrative Agent shall have received (i)
satisfactory evidence that the Credit Parties have obtained all required
consents and approvals of all Persons, including all requisite Governmental
Authorities, to the execution and delivery of this Agreement and the other Loan
Documents, (ii) satisfactory evidence that the Credit Parties have obtained all
material governmental and third party approvals or waivers necessary in
connection with the performance and consummation of this Agreement and the other
Loan Documents and the continuing operations of Borrower and its Subsidiaries
shall have been obtained and be in full force and effect, or (iii) an officer's
certificate in form and substance reasonably satisfactory to the Administrative
Agent affirming that no such consents or approvals are required.
(e) Payment of Fees. Borrower shall have paid to the Administrative
Agent and the Lenders, the Fees required to be paid on or prior to the Effective
Date in the respective amounts specified in the Fee Letters, and shall have
reimbursed the Administrative Agent and the Arrangers for all fees, costs and
expenses of closing presented as of the Effective Date.
15
(f) No Material Adverse Effect. There has been no Material Adverse
Effect since the date of Borrower's Form 10-Q for the six-month period ended
June 30, 2005 as updated by subsequent public filings prior to September 10,
2005.
(g) No Default. No Default or Event of Default under this Agreement or
any other Loan Document shall have occurred and be continuing.
(h) Final Order. The Final Order shall be in full force and effect and
shall not have been vacated, reversed, modified, amended or stayed without the
prior written consent of the Administrative Agent, the Arrangers and the
Requisite Lenders.
2.3 Conditions to Effectiveness of Certain Other Provisions.
(a) The amendment and restatement set forth herein of Section 1.3 of
the Existing Credit Agreement shall become effective on the date on which (x)
each of the conditions in Section 2.2 shall have been satisfied and (y) the
Administrative Agent shall have received counterparts of this Agreement duly
executed by the Term A Lenders, the Term B Lenders and the Term C Lenders, or a
separate written consent approving the above referenced amendment and
restatement and authorizing the Administrative Agent to enter into this
Agreement on behalf of the Term A Lenders, the Term B Lenders and Term C
Lenders, respectively.
(b) The amendment and restatement set forth herein of (i) Section 1.5
of the Existing Credit Agreement to the extent that it purports to reduce the
Applicable Term A Index Margin or the Applicable Term A LIBOR Margin and (ii)
those provisions of the Existing Credit Agreement relating to Letters of Credit
(including Annex B thereto) shall not be effective until the date on which (x)
each of the conditions in Section 2.2 shall have been satisfied and (y) the
Administrative Agent shall have received counterparts of this Agreement duly
executed by the Term A Lenders or a separate written consent approving the above
referenced amendment and restatement and authorizing the Administrative Agent to
enter into this Agreement on behalf of the Term A Lenders.
(c) The amendment and restatement set forth herein of Section 1.5 of
the Existing Credit Agreement to the extent that it purports to reduce the
Applicable Term B Index Margin or the Applicable Term B LIBOR Margin shall not
be effective until the date on which (x) each of the conditions in Section 2.2
shall have been satisfied and (y) the Administrative Agent shall have received
counterparts of this Agreement duly executed by the Term B Lenders or a separate
written consent approving the above referenced amendment and restatement and
authorizing the Administrative Agent to enter into this Agreement on behalf of
the Term B Lenders.
(d) The amendment and restatement set forth herein of Section 1.5 of
the Existing Credit Agreement to the extent that it purports to reduce the
Applicable Term C Index Margin or the Applicable Term C LIBOR Margin shall not
be effective until the date on which (x) each of the conditions in Section 2.1
shall have been satisfied and (y) the Administrative Agent shall have received
counterparts of this Agreement duly executed by the Term C Lenders or a separate
written consent approving the above referenced amendment and restatement and
16
authorizing the Administrative Agent to enter into this Agreement on behalf of
the Term C Lenders.
3. REPRESENTATIONS AND WARRANTIES
To induce the Lenders and the Administrative Agent to enter into this
Agreement, the Credit Parties executing this Agreement, jointly and severally,
make the following representations and warranties to the Administrative Agent
and each Lender with respect to all Credit Parties, each and all of which shall
survive the execution and delivery of this Agreement.
3.1 Corporate Existence; Compliance with Law.
Each Credit Party (a) is a corporation, limited liability company or
limited partnership duly organized, validly existing and in good standing under
the laws of its respective jurisdiction of incorporation or organization set
forth in Disclosure Schedule 3.1; (b) is duly qualified to conduct business and
is in good standing in each other jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not result in losses or liabilities
which could reasonably be expected to have a Material Adverse Effect; (c) has
the requisite power and authority to own, pledge, mortgage or otherwise encumber
and operate its properties, to lease the property it operates under lease and to
conduct its business as now conducted or proposed to be conducted; (d) subject
to specific representations regarding Environmental Laws, has all licenses,
permits, consents or approvals from or by, and has made all filings with, and
has given all notices to, all Governmental Authorities having jurisdiction, to
the extent required for such ownership, operation and conduct, except where the
failure to do so would not result in losses or liabilities which could
reasonably be expected to have a Material Adverse Effect; (e) is in compliance
with its charter and bylaws or partnership or operating agreement, as
applicable; and (f) subject to specific representations set forth herein
regarding ERISA, Environmental Laws, tax and other laws, is in compliance with
all applicable provisions of law, except to the extent permitted by Bankruptcy
Code or where the failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
3.2 Executive Offices, Collateral Locations, FEIN.
As of the Closing Date, each Credit Party's name as it appears in
official filings in its state of incorporation or organization, state of
incorporation or organization, organization type, organization number, if any,
issued by its state of incorporation or organization, and the location as of the
Closing Date of each Credit Party's chief executive office, principal place of
business and location and the hangars, terminals, maintenance facilities,
warehouses and premises at which any Collateral is located as of the Closing
Date are set forth in Disclosure Schedule 3.2, and none of such Collateral has
been kept at any location other than the locations listed on Disclosure Schedule
3.2 within four (4) months preceding the Closing Date (or since its acquisition
if less than four (4) months prior to the Closing Date). In addition, Disclosure
Schedule 3.2 lists the federal employer identification number of each Credit
Party as of the
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Closing Date. Each Credit Party has only one jurisdiction of existence,
incorporation or organization, as applicable.
3.3 Corporate Power, Authorization, Enforceable Obligations.
Upon the entry by the Bankruptcy Court of the Final Order, the
execution, delivery and performance by each Credit Party of the Loan Documents
to which it is a party and the creation of all Liens provided for therein: (a)
are within such Person's power; (b) have been duly authorized by all necessary
corporate, limited liability company or limited partnership action; (c) do not
contravene any provision of such Person's charter, bylaws or partnership or
operating agreement as applicable; (d) do not violate any law or regulation, or
any order or decree of any court or Governmental Authority; (e) do not conflict
with or result in the breach or termination of, constitute a default under or
accelerate or permit the acceleration of any performance required by, any
material lease, material agreement or other material instrument entered into or
assumed by such Person after the commencement of the Cases to which such Person
is a party or by which such Person or any of its property is bound; (f) do not
result in the creation or imposition of any Lien upon any of the property of
such Person other than those in favor of the Administrative Agent for the
benefit of the Secured Parties, pursuant to the Loan Documents and the Final
Order; and (g) do not require the consent or approval of any Governmental
Authority or any other Person, except (i) those referred to in Section 2.2(d),
all of which will have been duly obtained, made or complied with prior to the
Closing Date and (ii) any consents, notices or approvals pursuant to the Federal
Assignment of Claims Act of 1940 or any applicable state, county or municipal
law restricting the assignment of any Accounts for which the Account Debtor is
the United States government or a political subdivision thereof or any state,
county or municipality or department, agency or instrumentality thereof. Each of
the Loan Documents shall be duly executed and delivered by each Credit Party
that is a party thereto and each such Loan Document shall constitute a legal,
valid and binding obligation of such Credit Party enforceable against it in
accordance with its terms.
3.4 Financial Statements and Projections.
Except for the Projections, all Financial Statements concerning
Borrower and its Subsidiaries that are referred to below have been prepared in
accordance with GAAP consistently applied throughout the periods covered (except
as disclosed therein and except, with respect to unaudited Financial Statements,
for the absence of footnotes and normal year-end audit adjustments) and present
fairly in all material respects the consolidated financial position of Borrower
and its Subsidiaries as at the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended.
(a) Financial Statements. The following Financial Statements attached
hereto as Disclosure Schedule 3.4(a) have been delivered on the date hereof:
(i) The audited consolidated balance sheet at December 31, 2004
of Borrower and its Subsidiaries and the related consolidated statements of
operations, cash flows and shareowners' (deficit) equity for the Fiscal Year
then ended, reported on by Deloitte Touche LLP.
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(ii) The unaudited consolidated balance sheet at June 30, 2005 of
Borrower and its Subsidiaries and the related consolidated statements of
operations and cash flows for the six (6) months then ended.
(b) Projections. The Projections delivered to Lenders prior to the
date hereof have been prepared by Borrower and reflect projections for the
period beginning on August 1, 2005 on a month-by-month basis through December
31, 2007. The Projections are based upon the same accounting principles (other
than adjustments related to the impact of the Cases) as those used in the
preparation of the financial statements described above and are based on
assumptions believed by Borrower to be reasonable at the time such Projections
were delivered in light of conditions and facts known to Borrower as of the date
thereof (it being understood that projections by their nature are inherently
uncertain, the Projections are not a guaranty of future performance, and actual
results may differ materially from the Projections).
3.5 Material Adverse Effect; Burdensome Restrictions; Default.
Since the date of Borrower's Form 10-Q for the six-month period ended
June 30, 2005 as updated by subsequent public filings prior to September 10,
2005, (a) no Credit Party has incurred any obligations, contingent or
noncontingent liabilities, liabilities for Charges, long-term leases or unusual
forward or long-term commitments that are not reflected in the Projections
delivered to Lenders prior to the date hereof and that, alone or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, (b)
no contract, lease or other agreement or instrument has been entered into by any
Credit Party or has become binding upon any Credit Party's assets and no law or
regulation applicable to any Credit Party has been adopted that has or could
reasonably be expected to have a Material Adverse Effect, and (c) no Credit
Party is in default and to the best of Borrower's knowledge no third party is in
default under any material contract, lease or other agreement or instrument,
that alone or in the aggregate could reasonably be expected to have a Material
Adverse Effect. Since the date of Borrower's Form 10-Q for the six-month period
ended June 30, 2005 as updated by subsequent public filings prior to September
10, 2005, no event has occurred, that alone or together with other events, could
reasonably be expected to have a Material Adverse Effect.
3.6 Ownership of Property; Real Estate; Liens.
(a) Each Credit Party warrants that it has good, marketable, legal and
valid title to, or legal and valid leasehold interests in, all of its personal
property constituting Collateral.
(b) As of the Closing Date, the real estate listed in Part 1 of
Disclosure Schedule 3.6 ("Owned Real Estate") constitutes substantially all of
the real property owned by any Credit Party. As of the Closing Date, Borrower
reasonably believes the leases and other agreements listed in Part 2 of
Disclosure Schedule 3.6 constitute all of the Material Real Estate Contracts.
Each Credit Party owns good and marketable fee simple title to all of its Owned
Real Estate. As of the Closing Date, Borrower has valid and enforceable
leasehold interests in all of its material leased real estate, excluding any
leased real estate that is occupied on a month to month or "at will" basis (such
material leased real estate of the Credit Parties, together with the Owned Real
Estate, being herein collectively referred to as "Real Estate"). As of the
Closing
19
Date, there are no purchase options, rights of first refusal or similar
contractual rights that exist with respect to the Owned Real Estate, except as
disclosed in Part 1 of Disclosure Schedule 3.6. As of the Closing Date, true,
correct and complete copies of all Material Real Estate Contracts and leases,
usufructs, use agreements or other occupancy or facility agreements affecting
the Owned Real Estate have been delivered to the Administrative Agent. Part 3 of
Disclosure Schedule 3.6 describes all of the leases, usufructs, use agreements
or other occupancy or facility agreements by a Credit Party for any Owned Real
Estate with respect to which such Credit Party is a landlord as of the Closing
Date. As of the Closing Date, none of the properties and assets of any Credit
Party are subject to any Liens other than Permitted Encumbrances and other Liens
permitted by Section 6.7. As of the Closing Date, no portion of any Credit
Party's Owned Real Estate has suffered any material damage by fire or other
casualty loss since September 10, 2005 that has not heretofore been repaired and
restored in all material respects to its original condition or otherwise
remedied. As of the Closing Date, Borrower reasonably believes all material
permits required to have been issued or appropriate to enable the Owned Real
Estate to be lawfully occupied and used for all of the purposes for which it is
currently occupied and used have been lawfully issued and are in full force and
effect. Since November 30, 2004, there have been no changes or improvements to
the Owned Real Estate that would require a change in any Credit Party's current
certificates of occupancy.
(c) [Reserved.]
(d) As of the Closing Date, each Credit Party that is party to the
Spare Parts Mortgage has established and is maintaining reasonable safeguards
against theft of the Spare Parts and the Spare Parts are located at the
Designated Spare Parts Location, except to the extent permitted under the Spare
Parts Mortgage.
3.7 Labor Matters.
Except as set forth on Disclosure Schedule 3.7: (a) no strikes are
pending against any Credit Party (i) in the United States and (ii) outside of
the United States, except those that, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on the operations of such Credit
Party; (b) no other material labor disputes against any Credit Party are pending
or, to any Credit Party's knowledge, threatened, except those that, in the
aggregate, would not reasonably be expected to have a Material Adverse Effect;
(c) hours worked by and payment made to employees of each Credit Party to such
Credit Party's knowledge, comply with the Fair Labor Standards Act and each
other federal, state, local or foreign law applicable to such matters except to
the extent that non-compliance could not reasonably be expected to have a
Material Adverse Effect; (d) as of the Closing Date, no Credit Party is a party
to or bound by any domestic collective bargaining agreement (and true and
complete copies of any agreements described on Disclosure Schedule 3.7 have been
delivered to the Administrative Agent); (e) there is no organizing activity
involving any Credit Party pending or, to any Credit Party's knowledge,
threatened by any labor union or group of employees, except those that, in the
aggregate, would not reasonably be expected to have a Material Adverse Effect;
(f) there are no representation proceedings pending or, to any Credit Party's
knowledge, threatened with the National Mediation Board, and no labor
organization or group of employees of any Credit Party has made a pending demand
for recognition, except those that, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect; and (g) there are no material
complaints or charges
20
against any Credit Party pending or, to any Credit Party's knowledge, threatened
to be filed with any Governmental Authority or arbitrator based on, arising out
of, in connection with, or otherwise relating to the employment or termination
of employment by any Credit Party of any individual, except those that, in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness.
Except as set forth in Disclosure Schedule 3.8, as of the Closing
Date, no Credit Party has any Subsidiaries, is engaged in any joint venture or
partnership with any other Person, or is an Affiliate of any other Person. As of
the Closing Date, all of the issued and outstanding Stock of each Credit Party
is owned by each of the Stockholders and in the amounts set forth in Disclosure
Schedule 3.8. Except as set forth in Disclosure Schedule 3.8, as of the Closing
Date, there are no outstanding rights to purchase, options, warrants or similar
rights or agreements pursuant to which any Credit Party may be required to
issue, sell, repurchase or redeem any of its Stock or other equity securities or
any Stock or other equity securities of its Subsidiaries. All outstanding
Indebtedness and Guaranteed Indebtedness of each Credit Party as of the Closing
Date (except for the Obligations) is described in Section 6.3 (including
Disclosure Schedule 6.3).
3.9 Government Regulation.
No Credit Party is required to register as an "investment company" as
such term is defined in the Investment Company Act of 1940. No Credit Party is
subject to regulation under the Public Utility Holding Company Act of 1935 that
restricts or limits its ability to incur Indebtedness or to perform its
obligations hereunder. The making of the Loans by Lenders to Borrower, the
issuance of any Letter of Credit on behalf of Borrower, the application of the
proceeds thereof and repayment thereof will not violate any provision of any
such statute or any rule, regulation or order issued by the Securities and
Exchange Commission.
3.10 Margin Regulations.
No Credit Party is engaged, nor will it engage, principally or as one
of its important activities, in the business of extending credit for the purpose
of "purchasing" or "carrying" any "margin stock" as such terms are defined in
Regulation U of the Federal Reserve Board as now and from time to time hereafter
in effect (such securities being referred to herein as "Margin Stock"). None of
the proceeds of the Loans or other extensions of credit under this Agreement
will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any Indebtedness that
was originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulations T, U or X of the Federal Reserve Board.
3.11 Taxes.
Except as provided on Disclosure Schedule 3.11, (and except as
otherwise permitted by the Bankruptcy Court and the Bankruptcy Code) all Federal
and other material tax returns, reports and statements, including information
returns, required by any Governmental
21
Authority to be filed by any Credit Party have been filed with the appropriate
Governmental Authority, all such returns, reports and statements are true and
correct in all material respects and, subject to the automatic stay, all Charges
shown to be due and payable on such returns, reports and statements have been or
will be timely paid prior to the date on which any fine, penalty, interest or
late charge may be added thereto for nonpayment thereof, excluding Charges or
other amounts being contested in accordance with Section 5.2(b) and unless the
failure to so file or pay would not be reasonably expected to result in a
Material Adverse Effect. Proper and accurate amounts have been withheld by each
Credit Party from amounts paid to its respective employees for all periods in
full and complete compliance in all material respects with all applicable
federal, state, local and foreign laws and such withholdings have been or will
be timely paid, subject to the automatic stay, to the respective Governmental
Authorities. Except as provided on Disclosure Schedule 3.11, to each Credit
Party's knowledge, as of the Closing Date, none of the Credit Parties and their
respective predecessors are liable for any Charges: (a) under any agreement
(including any tax sharing agreements) or (b) as a transferee. As of the Closing
Date, no Credit Party has agreed or been requested to make any adjustment under
IRC Section 481(a), by reason of a change in accounting method or otherwise,
which would reasonably be expected to have a Material Adverse Effect.
3.12 ERISA.
(a) Disclosure Schedule 3.12(a) lists as of the Closing Date, all
Pension Plans, including Title IV Plans, Multiemployer Plans, ESOPs and all
Retiree Welfare Plans. Copies of all such listed Plans, together with a copy of
the latest form IRS/DOL 5500-series for each such Plan have been delivered to
the Administrative Agent. Except with respect to Multiemployer Plans, each
Qualified Plan has been determined by the IRS to qualify under Section 401 of
the IRC, the trusts created thereunder have been determined to be exempt from
tax under the provisions of Section 501 of the IRC and to the knowledge of any
Credit Party, nothing has occurred that would cause the loss of such
qualification or tax-exempt status. To the knowledge of any Credit Party and
except for non-compliance to the extent permitted under the Bankruptcy Code,
each Plan is in compliance in all material respects with the applicable
provisions of ERISA and the IRC. Each Credit Party and all ERISA Affiliates have
made all material contributions and paid all material amounts due as required by
either Section 412 of the IRC or Section 302 of ERISA prior to the date of
commencement of the Cases.
(b) Except as set forth in Disclosure Schedule 3.12(b) or which would
reasonably be expected not to have a Material Adverse Effect, as of the Closing
Date (i) no Title IV Plan has any material Unfunded Pension Liability; (ii)
other than the Cases, no ERISA Event or event described in Section 4062(e) of
ERISA with respect to any Title IV Plan has occurred or is reasonably expected
to occur; (iii) there are no pending, or to the knowledge of any Credit Party,
threatened material claims (other than claims for benefits in the normal
course), sanctions, actions or lawsuits, asserted or instituted against any Plan
or any Person as fiduciary or sponsor of any Plan; (iv) no Credit Party or ERISA
Affiliate has incurred or reasonably expects to incur any material liability as
a result of a complete or partial withdrawal from a Multiemployer Plan; (v)
within the last five years no Title IV Plan of any Credit Party or ERISA
Affiliate has been terminated pursuant to a "standard termination" as that term
is used in Section 4041 of ERISA, nor has any Title IV Plan of any Credit Party
or ERISA Affiliate (determined at any time within the past five years) with
material Unfunded Pension Liabilities been transferred outside of the
22
"controlled group" (within the meaning of Section 4001(a)(14) of ERISA) of any
Credit Party or ERISA Affiliate; and (vi) except in the case of any ESOP, Stock
of all Credit Parties and their ERISA Affiliates makes up, in the aggregate, no
more than 10% of the fair market value of the assets of any Plan measured on the
basis of fair market value as of the latest valuation date of any Plan.
3.13 No Litigation.
Other than the Cases, no unstayed action, claim, lawsuit, demand,
investigation or proceeding is now pending or, to the knowledge of any officer
of such Credit Party, threatened against any Credit Party, before any
Governmental Authority or before any arbitrator or panel of arbitrators
(collectively, "Litigation") that, individually or in the aggregate, (a)
challenges any Credit Party's right or power to enter into or perform any of its
obligations under the Loan Documents to which it is a party, or the validity or
enforceability of any Loan Document or any action taken thereunder or (b) could
reasonably be expected to have a Material Adverse Effect.
3.14 Intellectual Property.
Each Credit Party owns or has rights to use all Intellectual Property
necessary to continue to conduct its business as now conducted by it or
presently proposed to be conducted by it, and each U.S. registered Patent, U.S.
registered Trademark, U.S. registered Copyright and U.S. License in effect on
the Closing Date is listed, together with application or registration numbers,
as applicable, in Disclosure Schedule 3.14. To the knowledge of any Credit
Party, each Credit Party conducts its business and affairs without infringement
of or interference with any Intellectual Property of any other Person in any
material respect and no material claim or litigation regarding any of the
foregoing is pending or threatened. Except as set forth in Disclosure Schedule
3.14, as of the Closing Date, no Credit Party is aware of any infringement claim
by any other Person with respect to any material Intellectual Property.
3.15 Full Disclosure.
No information contained in this Agreement, any of the other Loan
Documents, Financial Statements or Collateral Reports or other written reports
from time to time prepared by any Credit Party and delivered hereunder or any
written statement prepared by any Credit Party and furnished by or on behalf of
any Credit Party to the Administrative Agent or Lender pursuant to the terms of
this Agreement (other than any Projections) contains or will contain, when taken
as a whole, any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made
and as of the date when made. Projections from time to time delivered hereunder
are or will be based upon the estimates and assumptions stated therein, all of
which Borrower believed at the time of delivery to be reasonable in light of the
conditions and facts known to Borrower as of such delivery date (it being
understood that projections by their nature are inherently uncertain, such
Projections are not a guaranty of future performance and actual results may
differ materially from those set forth in such Projections).
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3.16 Environmental Matters.
(a) Except as set forth in Disclosure Schedule 3.16 or for any matter
for which notice has been given under Section 5.7, and except for any matter
that would not reasonably be expected to result in any Credit Party incurring
Environmental Liabilities in excess of $500,000 individually or $2,500,000 in
the aggregate in a Fiscal Year, as of the Closing Date: (i) the Owned Real
Estate is free of contamination from any Hazardous Material; (ii) no Credit
Party has caused or suffered to occur any material Release of Hazardous
Materials on, at, in, under, above, to, from or about any of its Real Estate;
(iii) the Credit Parties are and have been in compliance with all Environmental
Laws; (iv) the Credit Parties have obtained, and are in compliance with, all
Environmental Permits required by Environmental Laws for the operations of their
respective businesses as presently conducted or as proposed to be conducted,
which compliance includes obtaining, maintaining and complying with required
Environmental Permits and all such Environmental Permits are valid, uncontested
and in good standing; (v) no Credit Party knows of any existing circumstances or
conditions, including any Releases of Hazardous Materials, which is likely to
result in an Environmental Liability; (vi) there is no unstayed Litigation
arising under or related to any Environmental Laws, Environmental Permits or
Hazardous Material that seeks damages, penalties, fines, costs or expenses or
injunctive relief against, or that alleges criminal misconduct by, any Credit
Party; (vii) no notice has been received by any Credit Party identifying it as a
"potentially responsible party" or requesting information under CERCLA or
analogous state statutes; and (viii) the Credit Parties have provided to the
Administrative Agent copies of all existing environmental reports, reviews and
audits in their possession, custody or control relating to the Owned Real Estate
and material written information pertaining to any Environmental Liabilities of
any Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that the
Administrative Agent (i) is not now, and has not ever been, in control of any of
the Real Estate or any Credit Party's affairs, and (ii) does not have the
capacity through the provisions of the Loan Documents or otherwise to influence
any Credit Party's conduct with respect to the ownership, operation or
management of any of its Real Estate or compliance with Environmental Laws or
Environmental Permits.
(c) None of the items set forth on Disclosure Schedule 3.16 either
individually or in the aggregate would be reasonably likely to have a Material
Adverse Effect.
3.17 Insurance.
Part 1 of Disclosure Schedule 3.17 lists all insurance policies of any
nature maintained, as of the Closing Date, for current occurrences by each
Credit Party, as well as a summary of the scope and term of each such policy.
Part 2 of Disclosure Schedule 3.17 identifies those insurance policies which
relate to the Collateral.
3.18 Use of Proceeds.
The proceeds of the Loans and the Letters of Credit are being used by
Borrower for general corporate purposes of the Credit Parties.
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3.19 Deposit.
Disclosure Schedule 3.19 lists, as of the Closing Date, all banks and
other financial institutions at which any Credit Party maintains deposit or
other accounts in the United States, and such Schedule correctly identifies the
name, address and telephone number of each depository, the name in which the
account is held and the complete account number therefor.
3.20 Trade Relations.
As of the Closing Date and except as set forth in Disclosure Schedule
3.20 or resulting directly from the commencement of the Cases, there exists no
actual or, to the knowledge of any Credit Party, threatened termination or
cancellation of, or any material adverse modification or change in the business
relationship (including, without limitation, any code sharing arrangements) of
any Credit Party with any service provider or supplier whose services during the
preceding twelve (12) months caused them to be ranked among the ten largest
service providers or suppliers of the Credit Parties taken as a whole.
3.21 Compliance With Industry Standards.
Borrower maintains its Books and Records, Aircraft, Engines, Spare
Parts and other assets and properties that are used in the conduct of its
business in compliance in all material respects with applicable law, including
but not limited to all rules, regulations and standards of the FAA or any other
applicable Aviation Authority.
3.22 Post-Petition Skymiles Facility.
All of the Post-Petition Skymiles Facility Documents have been
provided to the Administrative Agent on or prior to the Closing Date and contain
all of the material terms related to the Advance Payment arrangements described
therein as of the Closing Date, other than terms relating generally to Amex's
purchase of Skymiles from Delta set forth in the American Express Co-Branded
Credit Card Program Agreement and the Membership Rewards Agreement, each as
amended and supplemented from time to time, that do not relate to the Advance
Payments (as defined in the Post-Petition Skymiles Facility Documents).
3.23 Secured, Super-Priority Obligations.
(a) On and after the Closing Date, the provisions of the Loan
Documents and the Final Order are effective to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, legal, valid and
perfected Liens on and security interests (having the priority provided for
herein and in the Final Order) in all right, title and interest in the
Collateral, enforceable against each Credit Party that owns an interest in such
Collateral.
(b) Pursuant to subsections 364(c)(2) and (3) of the Bankruptcy Code
and the Final Order, all amounts owing by the Borrower under the Loan and by the
Guarantors in respect thereof will be secured by a first priority perfected Lien
on the Collateral, subject only to (i) the Liens of the Skymiles Agent in the
Skymiles Collateral pursuant to an order of the Bankruptcy Court in form and
substance satisfactory to the Administrative Agent, (ii) valid, perfected,
nonavoidable and enforceable Liens existing as of the Petition Date, (iii) valid
liens in existence
25
at the commencement of the Cases to the extent perfected subsequent to such
commencement as permitted by Section 546(b) of the Code (iv) the Carve-Out and
(v) Permitted Liens permitted pursuant to Section 6.7(a), (c), (e), (f), (i),
(j) (subject, in the case of Amex, to the Skymiles Intercreditor Agreement),
(n), (o), (q), (r) or (s).
(c) Pursuant to section 364(c)(i) of the Bankruptcy Code and the Final
Order, all obligations of the Borrower and the obligations of the Guarantors
under the Guaranty in respect thereof at all times will constitute allowed
Super-Priority Claim in each of the Cases having priority over all
administrative expenses of the kind specified in sections 503(b) or 507(b) of
the Bankruptcy Code, subject only to the Carve-Out.
(d) The Final Order and the transactions contemplated hereby and
thereby, are in full force and effect and have not been vacated, reversed,
modified, amended or stayed in any manner that affects the rights or duties of
the Administrative Agent, the Arrangers or the Lenders, in each case, without
the prior written consent of the Administrative Agent.
3.24 Certificated Air Carrier.
Each Air Carrier is a Certificated Air Carrier and possesses all
necessary certificates, franchises, licenses, permits, rights, designations,
authorizations, exemptions, concessions and consents which are material to the
operation of the routes flown by it and the conduct of its business and
operations as currently conducted (the "Permits"). Neither the DOT nor FAA nor
any other Aviation Authority has taken any action or proposed or, to such Air
Carrier's knowledge, threatened to take any action, to amend, modify, suspend,
revoke, terminate, cancel, or otherwise affect such Permits and Op Specs, in
each case, in an adverse manner.
3.25 U.S. Citizen.
Each Air Carrier is a "citizen of the United States" as defined in
Section 40102(a)(15) of Title 49.
3.26 Spare Parts.
Set forth on Disclosure Schedule 3.26, is a true, correct and complete
list of each Designated Spare Parts Location as of the Closing Date.
3.27 Aircraft; Engines.
Set forth on Disclosure Schedule 3.27 is a true, correct and complete
list of Eligible Aircraft and Eligible Engines as of the Closing Date.
3.28 Slots, Primary Gates and Routes.
(a) Set forth on Disclosure Schedule 3.28 is a complete and accurate
list, as of the Closing Date, of all Primary Slots and Primary Routes of the
Credit Parties, except those that are licensed for less than one (1) IATA
season. Such Disclosure Schedule 3.28 shall be revised from time to time by
Borrower, or as reasonably requested by the Administrative Agent, to
26
reflect all Primary Slots and Primary Routes of such Credit Parties. Each such
Credit Party, if applicable, represents and warrants that it holds each of the
FAA Slots pursuant to authority granted by the FAA pursuant to Title 14 of the
United States Code.
(b) As of the Closing Date, the Credit Parties are utilizing, or
causing to be utilized, in all material respects, the Slots, Primary Gates and
Routes as required by the applicable Governmental Authority, Airport Authority
or Foreign Aviation Authority. As of the Closing Date, except as disclosed in
Borrower's Form 10-K for the Fiscal Year ended December 31, 2004, none of the
Credit Parties has received any notice from any Governmental Authority, Airport
Authority or Foreign Aviation Authority or is aware of any other event or
circumstance, that would be reasonably likely to impair its right to hold and
use Primary Gates, Slots and Routes in any material respect, except that which
would not reasonably be expected to result in a Material Adverse Effect.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices.
(a) Borrower hereby agrees that from and after the Closing Date and
until the Termination Date, it shall deliver to the Administrative Agent and
Lenders, as required, the Financial Statements, notices, Projections and other
information at the times, to the Persons and in the manner set forth in Annex E.
(b) Borrower hereby agrees that from and after the Closing Date and
until the Termination Date, it shall deliver to the Administrative Agent and
Lenders, as required, the various Collateral Reports (including Borrowing Base
Certificates in the form of Exhibit 4.1(b)) at the times, to the Persons and in
the manner set forth in Annex F.
4.2 Communication with Accountants.
Each Credit Party executing this Agreement authorizes (a) the
Administrative Agent and (b) so long as an Event of Default has occurred and is
continuing, each Lender, to communicate, with prior notice to Borrower and
Borrower's opportunity to be present, directly with its independent registered
public accountants and authorizes and shall instruct those accountants to
communicate to the Administrative Agent and such Lender, with notice to
Borrower, information relating to any Credit Party with respect to the business,
results of operations and financial condition of any Credit Party as the
Administrative Agent or such Lender shall reasonably request.
5. AFFIRMATIVE COVENANTS
Each Credit Party agrees that from and after the Closing Date and
until the Termination Date:
5.1 Maintenance of Existence and Conduct of Business.
Except as otherwise required by the Bankruptcy Code, each Credit Party
shall (a) except as otherwise permitted by Section 6.1 or Section 6.8, do or
cause to be done all things
27
necessary to preserve and keep in full force and effect its legal existence, all
rights, permits, licenses, approvals and privileges (including all Permits)
necessary in the conduct of its business, and its material rights and franchises
entered into or assumed after the commencement of the Cases, and; (b) at all
times maintain, preserve and protect all of its assets and properties (including
all Collateral) used or useful and necessary in the conduct of its business, and
keep the same in good repair, working order and condition in all material
respects (taking into consideration ordinary wear and tear) and from time to
time make, or cause to be made, all necessary or appropriate repairs,
replacements and improvements thereto consistent with industry practices except
as otherwise permitted in the applicable Loan Documents; and (c) except where
failure to do so could not reasonably be expected to have a Material Adverse
Effect, transact business only in such corporate and trade names as are set
forth in Disclosure Schedule 5.1.
5.2 Payment of Charges.
(a) Unless payment thereof is precluded by the Cases and subject to
Section 5.2(b), each Credit Party shall pay and discharge or cause to be paid
and discharged promptly all Charges arising after the Petition Date payable by
it, including (i) Charges imposed upon it, its income and profits, or any of its
operations, its property (real, personal or mixed) and all Charges with respect
to tax, social security and unemployment withholding with respect to its
employees, (ii) lawful claims for labor, materials, supplies and services or
otherwise, and (iii) all storage or rental charges payable to warehousemen and
bailees, in each case, before any thereof shall become past due, except in each
case, where the failure to pay or discharge such Charges would not result in
aggregate liabilities in excess of $5,000,000.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges, Taxes or claims described in
Section 5.2(a); provided, that (i) adequate reserves with respect to such
contest are maintained on the books of such Credit Party, in accordance with
GAAP; (ii) no Lien shall be imposed to secure payment of such Charges that is
superior to any of the Liens securing payment of the Obligations and such
contest is maintained and prosecuted continuously and with diligence and
operates to suspend collection or enforcement of such Charges (except where the
failure to pay or discharge such Charges would not result in aggregate
liabilities or Liens in excess of $5,000,000); (iii) none of the Collateral
becomes subject to forfeiture or loss as a result of such contest; and (iv) such
Credit Party shall promptly pay or discharge such contested Charges, Taxes or
claims and all additional charges, interest, penalties and expenses and shall
deliver to the Administrative Agent evidence reasonably acceptable to the
Administrative Agent of such compliance, payment or discharge, if such contest
is terminated or discontinued adversely to such Credit Party or the conditions
set forth in this Section 5.2(b) are no longer met.
(c) Notwithstanding the foregoing, this Section 5.2 shall not be
construed to require Borrower to pay any obligation arising under any agreement
with respect to Section 1110 Assets unless Borrower is approved by the
Bankruptcy Court to make such payment.
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5.3 Books and Records.
Each Credit Party shall keep adequate Books and Records with respect
to its business activities in which proper entries, reflecting all financial
transactions, are made in accordance with GAAP and on a basis consistent with
the Financial Statements attached as Disclosure Schedule 3.4(a). Upon reasonable
request of the Administrative Agent, each Credit Party shall deliver any
requested Chattel Paper or Instrument to the Administrative Agent (in each case,
accompanied by instruments of transfer executed in blank), and shall, if
requested by the Administrative Agent, ▇▇▇▇ any Chattel Paper or Instrument that
has not been delivered to the Administrative Agent with a legend that provides
that the writing and the obligations evidenced or secured thereby are subject to
the security interest of the Administrative Agent for the benefit of the Secured
Parties.
5.4 Insurance; Damage to or Destruction of Collateral. Except as set
forth in the Aircraft Mortgage and the Spare Parts Mortgage with respect to the
Collateral addressed therein:
(a) The Credit Parties shall, at their sole cost and expense, maintain
insurance at all times against such risks as is customary for companies of the
same or similar size in the same or similar business and industry or as
otherwise required in the Collateral Documents. Such policies of insurance as in
effect on the Closing Date are described, collectively, in Part 1 and Part 2 of
Disclosure Schedule 3.17. Except for policies of insurance relating to
Collateral addressed by the Aircraft Mortgage and the Spare Parts Mortgage, the
policies of insurance (or the loss payable and additional insured endorsements
delivered to the Administrative Agent) described in Part 2 of Disclosure
Schedule 3.17, which lists those policies relating to the Collateral, shall
contain provisions pursuant to which the insurer agrees to provide thirty (30)
days' prior written notice to the Administrative Agent in the event of any
non-renewal, cancellation or material adverse amendment of any such insurance
policy. If any Credit Party at any time or times hereafter shall fail to obtain
or maintain any of the policies of insurance listed in Part 2 of Disclosure
Schedule 3.17 or to pay all premiums relating thereto, the Administrative Agent
may at any time or times thereafter obtain and maintain such policies of
insurance and pay such premiums and take any other action with respect thereto
that the Administrative Agent deem advisable. The Administrative Agent shall
have no obligation to obtain insurance for any Credit Party or pay any premiums
therefor. By doing so, the Administrative Agent shall not be deemed to have
waived any Default or Event of Default arising from any Credit Party's failure
to maintain such insurance or pay any premiums therefor. All sums so disbursed,
including reasonable attorneys' fees, court costs and other charges related
thereto, shall be payable on demand by Borrower to the Administrative Agent and
shall be additional Obligations hereunder secured by the Collateral.
(b) The Administrative Agent reserves the right at any time upon any
change in any Credit Party's risk profile (including any change in the product
mix maintained by any Credit Party or any laws affecting the potential liability
of such Credit Party) to require, upon prior written notice to such Credit
Party, additional forms and limits of insurance, in the Administrative Agent's
reasonable opinion, to adequately protect both the Administrative Agent's and
the Lenders' interests in all or any portion of the Collateral needed to ensure
that each Credit Party is protected by insurance in amounts and with coverage
customary for its
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industry with respect to such Collateral; such additional forms and limits of
insurance to be obtained and in effect within thirty (30) days of such written
notice. If reasonably requested by the Administrative Agent, each Credit Party
shall deliver to the Administrative Agent from time to time a report of a
reputable insurance broker reasonably satisfactory to the Administrative Agent,
with respect to its insurance policies.
(c) Borrower on behalf of each Credit Party shall deliver to the
Administrative Agent, in form and substance reasonably satisfactory to the
Administrative Agent, with respect to the insurance policies listed on Part 2 of
Disclosure Schedule 3.17, endorsements to (i) all "All Risk" property and
business interruption insurance naming the Administrative Agent for the benefit
of Secured Parties, as lender loss payee as its interests may appear; provided,
that, with respect to business interruption insurance only, so long as no Event
of Default has occurred or is continuing, the Administrative Agent shall
promptly release to Borrower any insurance proceeds received in connection with
such business interruption insurance, and (ii) all general liability and other
liability policies naming the Administrative Agent for the benefit of Secured
Parties, as an additional insured as its interests may appear. Borrower on
behalf of each Credit Party irrevocably makes, constitutes and appoints the
Administrative Agent (and all officers, employees or agents designated by the
Administrative Agent), so long as the anticipated insurance proceeds exceed
$5,000,000, as Borrower's and each Credit Party's true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims under
such "All Risk" property policies of insurance, endorsing the name of Borrower
or such Credit Party on any check or other item of payment for the proceeds of
such "All Risk" property policies of insurance and for making all determinations
and decisions with respect to such "All Risk" property policies of insurance.
The Administrative Agent shall have no duty to exercise any rights or powers
granted to them pursuant to the foregoing power-of-attorney. Borrower shall
promptly notify the Administrative Agent of any loss, damage, or destruction to
the Collateral in the amount of $1,000,000 or more, whether or not covered by
insurance. All Net Cash Proceeds from insurance required under the Loan
Documents shall be applied in accordance with Section 1.2.
(d) Notwithstanding the foregoing, subject to the Final Order, where
casualty or condemnation proceeds are required to be applied to the repair or
restoration of the affected property, which does not constitute Collateral
included in the Term A Borrowing Base, or to be delivered to a third party or
deposited in an escrow or similar account, by the express terms of any lease,
usufruct, use agreement or other occupancy or facility agreement to which
Borrower or any Credit Party is a party and that either (i) constitutes a Lien
permitted hereunder having priority over the Administrative Agent's Liens, for
the benefit of Secured Parties or (ii) affects leased real estate or usufruct or
pursuant to the express terms of documents entered into in connection with ARB
Indebtedness, either existing as of the Closing Date or permitted under this
Agreement, then the Administrative Agent's rights under this Agreement with
respect to any casualty or condemnation proceeds or insurance policies required
to be maintained under any such lease, usufruct, use agreement or other
occupancy or facility agreement or other document entered into in connection
with such ARB Indebtedness to which Borrower or any Credit Party is a party
shall be subject to the terms and conditions of such agreement, including
without limitation the settlement of claims, the repair and restoration
obligations of Borrower or any Credit Party and the delivery or deposit of any
casualty or condemnation proceeds for repair or restoration.
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5.5 Compliance with Laws.
Except as otherwise permitted by the Bankruptcy Code, each Credit
Party shall comply with all federal, state, local and foreign laws and
regulations applicable to it, including labor laws, and Environmental Laws and
Environmental Permits, and laws and regulations of any Aviation Authority
applicable to it, except to the extent that the failure to comply, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect (including, without limitation, as a result of the loss of any material
Permit).
5.6 Intellectual Property.
Subject to Section 6.8(i), each Credit Party shall own or have rights
to use all Intellectual Property necessary to continue to conduct its business
as now conducted by it or presently proposed to be conducted by it. Each Credit
Party shall do or cause to be done all things necessary to preserve and keep in
full force and effect at all times all material registered Patents, Trademarks,
trade names, Copyrights and service marks necessary in the conduct of its
business. Each Credit Party shall conduct its business and affairs without
infringement of or interference with any Intellectual Property of any other
Person in any material respect.
5.7 Environmental Matters.
Except as otherwise required by the Bankruptcy Code, each Credit Party
shall and shall cause each Person within its control to: (a) conduct its
operations and keep and maintain its Real Estate in compliance with all
Environmental Laws and Environmental Permits other than noncompliance that could
not reasonably be expected to have a Material Adverse Effect; (b) implement any
and all investigation, remediation, removal and response actions that are
necessary to comply in all material respects with Environmental Laws and
Environmental Permits pertaining to the presence, generation, treatment,
storage, use, disposal, transportation or Release of any Hazardous Material on,
at, in, under, above, to, from or about any of its Real Estate; (c) notify the
Administrative Agent promptly after such Credit Party becomes aware of any
violation of Environmental Laws or Environmental Permits or any Release on, at,
in, under, above, to, from or about any Real Estate that is reasonably likely to
result in any Credit Party incurring Environmental Liabilities in excess of
$500,000 individually or $2,500,000 in the aggregate in a Fiscal Year; and (d)
promptly forward to the Administrative Agent a copy of any order, notice,
request for information or any communication or report received by such Credit
Party in connection with any such violation or Release or any other matter
relating to any Environmental Laws or Environmental Permits that could
reasonably be expected to result in any Credit Party incurring Environmental
Liabilities in excess of $500,000 individually or $2,500,000 in the aggregate in
a Fiscal Year. If the Administrative Agent at any time has a reasonable basis to
believe that there may be a violation of any Environmental Laws or Environmental
Permits by any Credit Party or any Environmental Liability arising thereunder,
or a Release of Hazardous Materials on, at, in, under, above, to, from or about
any of its Real Estate, that, in each case, could reasonably be expected to have
a Material Adverse Effect, then each Credit Party shall, upon the Administrative
Agent's written request (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrower's expense, as the Administrative Agent may
from time to time reasonably request, which shall be conducted by
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reputable environmental consulting firms reasonably acceptable to the
Administrative Agent and shall be in form and substance reasonably acceptable to
the Administrative Agent, and (ii) permit the Administrative Agent or their
representatives to have access to all Real Estate (subject, in the case of
leased Real Estate, to the terms of the applicable lease or other agreement
which governs rights of access to leased Real Estate) for the purpose of
conducting such environmental audits and testing as the Administrative Agent
deem appropriate, including subsurface sampling of soil and groundwater;
provided, that the Administrative Agent shall use commercially reasonable
efforts to cause such audits or testing to be conducted in a manner that does
not unreasonably interfere with the operations of the relevant Credit Party.
Borrower shall reimburse the Administrative Agent for the reasonable costs of
such audits and tests and the same will constitute a part of the Obligations
secured hereunder.
5.8 Landlords' Agreements; Bailee Letters.
If requested by the Administrative Agent in its reasonable discretion,
each Credit Party shall use commercially reasonable efforts to obtain a
landlord's agreement or bailee letter, as applicable, from the lessor of each
leased property or bailee with respect to any warehouse, processor or converter
facility, maintenance facilities or other location where Collateral with an
aggregate book value in excess of $10,000,000 is stored or located, in each
case, to the extent the Liens and other unstayed rights of the applicable
warehouseman, bailee or lessor are senior to or pari passu with the Liens of the
Administrative Agent (each such location, a "Material Location"), which
agreement or letter shall contain a waiver or subordination of all Liens or
claims that the landlord or bailee may assert against the Collateral at that
location, and shall otherwise be reasonably satisfactory in form and substance
to the Administrative Agent. With respect to each Material Location leased or
owned on or after the Closing Date, if the Administrative Agent has requested
but, within sixty (60) days following such request, has not received a landlord
agreement or bailee letter, Borrower's Eligible Spare Parts, Eligible Ground
Service Equipment and Eligible Tooling at that location shall, in the
Administrative Agent's discretion, be subject to such Reserves as may be
established by the Administrative Agent in its reasonable credit judgment. Each
Credit Party shall timely and fully pay and perform its material obligations
under all leases and other agreements entered into or assumed after the
commencement of the Cases in all respects with respect to Material Locations.
5.9 [Reserved.]
5.10 Notices.
Promptly after the sending or filing thereof, Borrower shall send
Administrative Agent copies of all material notices, certificates or reports
delivered pursuant to, or in connection with, any Post-Petition Skymiles
Facility Document.
5.11 Further Assurances.
Subject to Section 5.12(b), each Credit Party executing this Agreement
agrees that it shall, at such Credit Party's expense and upon the reasonable
request of the Administrative Agent, duly execute and deliver, or cause to be
duly executed and delivered, to the Administrative Agent such further
instruments and do and cause to be done such further acts as
32
may be necessary or proper in the reasonable opinion of the Administrative
Agent, in accordance with its customary business practices for comparable debtor
in possession transactions, to carry out more effectively the provisions and
purposes of this Agreement and each Loan Document.
5.12 Additional Guaranties and Collateral Documents.
(a) Except as otherwise set forth in the Aircraft Mortgage, to the
extent not delivered to the Administrative Agent on or before the Closing Date
(including in respect of after-acquired property, other than real estate and
interests in real estate that are not Owned Real Estate, and Persons that become
Subsidiaries of any Credit Party after the Closing Date), Borrower agrees
promptly to do, or cause each Subsidiary of Borrower (other than Excluded
Subsidiaries) to do, each of the following, unless otherwise agreed by the
Administrative Agent:
(i) deliver to the Administrative Agent such duly executed
supplements and amendments to this Agreement, in each case in form and
substance reasonably satisfactory to the Administrative Agent and as the
Administrative Agent reasonably deems necessary in order to ensure that
each Domestic Subsidiary of Borrower (other than Excluded Subsidiaries),
guaranties, as primary obligor and not as surety, the full and punctual
payment when due of the Obligations or any part thereof;
(ii) deliver to the Administrative Agent such duly executed
supplements and amendments to any of the Collateral Documents, in each case
in form and substance reasonably satisfactory to the Administrative Agent
and as the Administrative Agent reasonably deems necessary in order to (A)
effectively grant to the Administrative Agent for the benefit of the
Secured Parties, a valid, perfected and enforceable security interest in
all assets, personal property or property interests that constitute
Collateral owned by any Credit Party and (B) effectively grant to the
Administrative Agent for the benefit of the Secured Parties, a valid,
perfected and enforceable security interest in all Stock and other debt
Securities of any Credit Party and each direct Subsidiary of each Credit
Party (other than the Stock of the Excluded Issuers); provided, however,
that, in no event shall (x) more than 65% of the outstanding voting Stock
of any Subsidiary which is not a Domestic Subsidiary be pledged to secure
the Obligations or (y) the Stock of any joint venture company be pledged to
the extent that such pledge is restricted by legally binding arrangements
between the joint venture parties;
(iii) deliver to the Administrative Agent all certificates,
instruments and other documents representing all Collateral required to be
pledged and delivered under the Collateral Documents and all other Stock
and other debt Securities being pledged pursuant to the joinders,
amendments and supplements executed pursuant to clause (ii) above;
(iv) to the extent permitted hereunder, if any Credit Party
acquires a fee simple ownership interest in real estate after the Closing
Date, or discovers that it owns any fee simple interest in real estate not
constituting Owned Real Estate, within ninety (90) days thereof, execute
and deliver to the Administrative Agent, a Mortgage granting the
Administrative Agent for the benefit of Secured Parties a valid, perfected
and
33
enforceable first priority Lien on such real estate and, if reasonably
required by the Administrative Agent, environmental audits, mortgage title
insurance policy, real property survey, local counsel opinion(s),
supplemental casualty insurance and flood insurance, and such other
documents, instruments or agreements reasonably requested by the
Administrative Agent, in each case, in form and substance reasonably
satisfactory to the Administrative Agent (it being understood and agreed
that each such real estate so acquired shall be considered "Owned Real
Estate" for purposes of this Agreement from and after the date of its
acquisition);
(v) if such Subsidiary is party to a Case, to obtain an order of
the Bankruptcy Court confirming in such Case extension of the terms of the
Final Order to such new Subsidiary as a debtor and debtor in possession;
(vi) to take such other actions as the Administrative Agent
reasonably deems necessary to ensure the validity or continuing validity of
the guaranties required to be given pursuant to clause (i) above or to
create, maintain or perfect the security interest required to be granted
pursuant to clause (ii) above, including the filing of financing statements
or other recordations in such jurisdictions as may be required by the
Collateral Documents, the Code, the FAA or applicable law, or as may be
reasonably requested by the Administrative Agent; and
(vii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above
in connection with the addition of any Guarantor or Collateral acquired
after the date hereof, which opinions shall be in form and substance
consistent with those delivered on the Closing Date and from counsel
reasonably satisfactory to the Administrative Agent.
(b) Notwithstanding the foregoing, (i) prior to the occurrence of any
Event of Default, the Administrative Agent shall not take any security interest
in or require any actions to be taken with respect to (A) those assets as to
which the Administrative Agent shall determine, in their reasonable discretion,
that the cost of obtaining such security interest or taking such action are
excessive in relation to the benefit to Lenders afforded thereby, (B) property
the acquisition or construction of which was financed through Indebtedness
(existing as of the Closing Date (other than Gates) or as permitted by Section
6.3(a)), and (C) any property to the extent that the granting of such a security
interest would constitute a breach or violation of a valid and effective
restriction in favor of a third party (including, without limitation, mandatory
consent rights), that would result in the termination of any Credit Party's
interest in such Collateral or give rise to any indemnification obligations or
any right to terminate or commence the exercise of remedies under such
restrictions, (ii) the Administrative Agent shall not take any security interest
in, or require any Credit Party to take any action referred to in Section
5.12(a)(iv) with respect to, real estate, or require the execution or delivery
of any Aircraft Mortgage or Spare Parts Mortgage, or require any Credit Party to
take any actions with respect to the FAA relating to any of the 737-800 aircraft
described in Section 6.8(m) hereof or with respect to any asset (A) until the
expiration of 90 days after the date of acquisition thereof, unless Borrower
shall have given the Administrative Agent notice that it does not intend to
finance such acquisition as permitted by Section 6.3(a)(i), and (B) previously
securing or financed by Existing Secured Indebtedness until the expiration of 90
days after such Existing Secured Indebtedness has been repaid, unless
34
Borrower shall have given the Administrative Agent notice that it does not
intend to finance such asset as permitted by Section 6.3(a)(v), and (iii) Liens
required to be granted and actions required to be taken pursuant to this Section
5.12 shall all be subject to exceptions and limitations (including Liens
permitted pursuant to Section 6.7) consistent with those set forth herein and in
the Collateral Documents as in effect on the Closing Date.
5.13 Pledged Spare Parts.
Each Credit Party shall segregate all of its Pledged Spare Parts from
any Spare Parts which are subject to any consignment arrangement, and shall keep
all Spare Parts not so subject to a consignment arrangement in Designated Spare
Parts Locations, except to the extent permitted in the Spare Parts Mortgage. The
Pledged Spare Parts will be maintained by or on behalf of the Air Carriers that
are Credit Parties, as required by the Spare Parts Mortgage.
5.14 Aircraft Mortgage; Spare Parts Mortgage; SGR Security Agreement.
Each Air Carrier that is a Credit Party shall execute the Aircraft
Mortgage, the Spare Parts Mortgage and the SGR Security Agreement.
5.15 Slot Utilization.
(a) Subject to transfers, exchanges and other dispositions permitted
by this Agreement and the SGR Security Agreement, from and after the Closing
Date Borrower shall cause the FAA Slots to have sufficient Slot Utilization, for
purposes of 14 C.F.R. 93.227 (the "Slot Utilization Regulations") and shall at
the end of Week 4 of any respective Two-Month FAA Reporting Period for FAA Slots
present to each Administrative Agent (i) if, during Week 1, Week 2, Week 3 or
Week 4, the FAA or any applicable Foreign Aviation Authority has revoked,
terminated or canceled any Credit Parties' right to utilize any Primary Slot, a
list of all such Primary Slots and (ii) a certification from Borrower that
either:
(i) the FAA Slots have been utilized at the following rates (a
week shall be deemed to be seven (7) days for purposes of this Section
5.14): (x) sixty-five percent (65%) for each hourly period for Weeks 1-4 of
the respective Two-Month FAA Reporting Period for Slots in DCA and LGA; (y)
sixty-five percent (65%) for each half hour period for Weeks 1-4 of the
respective Two-Month FAA Reporting Period for arrival Slots in DCA and LGA;
or
(ii) Borrower intends to effectuate full compliance with all of
the slot utilization covenants pursuant to exchanging slots at such
airports with third party air carriers and such officer has no reason to
believe that Borrower will fail to comply with the Slot Utilization
Regulations.
(b) Subject to transfers, exchanges and other dispositions permitted
by this Agreement and the SGR Security Agreement, utilize the Foreign Slots in a
manner consistent in all material respects with applicable regulations and
contracts in order reasonably to preserve its right to hold and operate the
Foreign Slots, taking into account any waivers or other relief granted by any
applicable Aviation Authority.
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5.16 ERISA/Labor Matters.
Borrower shall furnish the Administrative Agent (with sufficient
copies for each of Lenders) each of the following:
(a) promptly and in any event within thirty (30) days of filing or
receipt by Borrower, with respect to any Title IV Plan, copies of the most
recent annual reports or returns (IRS Form 5500), audited or unaudited financial
statements and actuarial valuations with respect to such Plans;
(b) promptly and in any event within ten (10) days after Borrower, any
Subsidiary of Borrower or any ERISA Affiliate knows or has reason to know that a
request for a minimum funding waiver under Section 412 of the Code has been
filed with respect to any Title IV Plan or Multiemployer Plan, a written
statement of an officer of Borrower describing such waiver request and the
action, if any, Borrower, its Subsidiaries and ERISA Affiliates propose to take
with respect thereto and a copy of any notice filed with the PBGC or the IRS
pertaining thereto;
(c) simultaneously with the date that Borrower, any Subsidiary of
Borrower or any ERISA Affiliate files a notice of intent to terminate any Title
IV Plan, a copy of each notice;
(d) promptly and in any event within three (3) days after Borrower,
any Subsidiary of Borrower or any ERISA Affiliate receives any adverse
communication from a Governmental Authority which could result in an increase to
or accelerate the payment of any liability with respect to a Pension Plan, a
copy of such notice; and
(e) simultaneously with the date that any Credit Party (i) commences
or terminates negotiations with any collective bargaining agent for the purpose
of materially changing any collective bargaining agreement; (ii) reaches an
agreement with any collective bargaining agent prior to ratification for the
purpose of materially changing any collective bargaining agreement; (iii)
ratifies any agreement reached with a collective bargaining agent for the
purpose of materially changing any collective bargaining agreement; or (iv)
becomes subject to a "cooling off period" under the auspices of the National
Mediation Board, notification of the commencement or termination of such
negotiations, a copy of such agreement or notice of such ratification or a
"cooling off period," as the case may be.
5.17 Maintenance of Liens and Collateral.
Each Credit Party, subject to Section 5.12, shall do or cause to be
done all things necessary to preserve and keep in full force and effect at all
times the Liens securing the Obligations as provided in the Loan Documents.
5.18 Use of Proceeds.
The proceeds of the Loans and the Letters of Credit will be used by
Borrower for the general corporate purposes of the Credit Parties.
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5.19 Cash Management Systems.
Borrower will establish and will maintain until the Termination Date,
the Cash Management Systems as described in Annex C.
5.20 Appraisals.
Each Credit Party shall provide the Administrative Agent access to its
properties and to the Collateral in accordance with Section 1.12 and permit the
Administrative Agent to have an Appraiser conduct appraisals as set forth in
Annex F.
6. NEGATIVE COVENANTS
Each Credit Party agrees that from and after the Closing Date until
the Termination Date:
6.1 Mergers, Subsidiaries, Etc.
No Delta Company shall directly or indirectly, by operation of law or
otherwise, merge or consolidate with any Person or acquire Stock of any Person;
provided, that (a) any Subsidiary may merge or consolidate with (i) Borrower or
a Guarantor in a transaction in which Borrower or any Guarantor is the surviving
Person and (ii) if such Subsidiary is not a Guarantor, any other Delta Company,
(b) Borrower may merge or consolidate with, or acquire Stock of, any Person to
effectuate an Investment permitted by Section 6.2 in a transaction in which
Borrower is the surviving Person, (c) any Subsidiary may merge or consolidate
with, or acquire Stock of, any Person to effectuate an Investment permitted by
Section 6.2 in a transaction in which a Subsidiary is the surviving Person and
(d) any Subsidiary may merge or consolidate with another Person in connection
with any sale or other disposition of such Subsidiary permitted pursuant to
Section 6.8; provided, that such merger, consolidation or acquisition shall not
result in the acquisition of Stock located outside of the United States in an
amount in excess of $25,000,000 in the aggregate.
6.2 Investments; Loans and Advances.
Except as otherwise expressly permitted by this Section 6.2, no Delta
Company shall make or permit to exist any investment in, or make, accrue or
permit to exist loans or advances of money to, any Person, through the direct or
indirect lending of money, holding of securities or otherwise (all of the
foregoing, "Investments"), except (without duplication):
(a) each Delta Company may hold Investments comprised of notes
payable, or stock or other securities issued by Account Debtors to such Delta
Company pursuant to negotiated agreements with respect to settlement of such
Account Debtor's Accounts in the ordinary course of business, consistent with
past practices;
(b) each Delta Company may maintain its existing investments in its
Subsidiaries as of the Closing Date summarized on Disclosure Schedule 3.8 or
6.2;
37
(c) each Delta Company may make investments, subject to Section 5.19,
in Permitted Investments;
(d) each Delta Company may maintain its Investments existing as of the
Closing Date summarized on Disclosure Schedule 6.2;
(e) Investments (i) may be made by any Credit Party in any other
Credit Party, (ii) may be made by any Delta Company that is not a Credit Party
in any other Delta Company, subject to compliance with Section 6.3(a)(vii) and
(iii) constituting capital contributions or intercompany loans or advances may
be made to Aero Assurance, Ltd. or New Sky, Ltd. for the purpose of cash
collateralizing letters of credit issued for the account of such captive
insurance Subsidiaries to the extent permitted under Section 6.3(a)(xiii);
(f) each Delta Company may make Investments with the funds held in the
Excluded Accounts;
(g) each Delta Company may make Investments consisting of (i) currency
swap agreements, currency future or option contracts and other similar
agreements designed to hedge against fluctuations in foreign interest rates and
currency values, (ii) interest rate swap, cap or collar agreements and interest
rate future or option contracts, and (iii) fuel ▇▇▇▇▇▇ and other derivatives
contracts, in each case, to the extent that such agreement or contract is
permitted by Section 6.3 and Section 6.17 and entered into in the ordinary
course of business;
(h) the Delta Companies, in the aggregate, may make Investments in an
amount not to exceed $10,000,000 outstanding at any time in travel or airline
related businesses made in connection with marketing and promotion agreements,
alliance agreements, distribution agreements, agreements with respect to fuel
consortiums, agreements relating to flight training, agreements relating to
insurance arrangements, agreements relating to parts management systems and
other similar agreements;
(i) the Delta Companies may make advances to their respective
officers, directors and employees in an amount not to exceed (i) $10,000
outstanding at any time to any individual officer, director or employee and (ii)
$7,000,000 in the aggregate outstanding at any time for all such advances;
(j) the Delta Companies may make advances in respect of (i) signing
bonuses for newly hired officers, directors or employees of any Delta Company in
an amount not to exceed $250,000 individually outstanding at any time and (ii)
relocation expenses for newly hired officers, directors or employees of any
Delta Company in an amount not to exceed $5,000,000 in the aggregate outstanding
at any time;
(k) the Delta Companies may make Investments in the form of foreign
cash equivalents in the ordinary course of business and consistent with past
practices;
(l) [Reserved];
(m) the Delta Companies may make additional Investments in
Subsidiaries that are not Credit Parties in an aggregate amount at any one time
not to exceed $5,000,000;
38
(n) the Delta Companies may make any Investment consisting of the
acquisition of Stock of any Person; provided, that (i) such Person becomes a
Credit Party or is merged with or into Borrower or a Credit Party immediately
upon consummation of such acquisition and (ii) such acquisition is permitted by
Section 6.10;
(o) the Delta Companies may make any Investment consisting of the
acquisition of equity interests permitted pursuant to Section 6.13(d) and (e);
and
(p) the Delta Companies may make other Investments in an aggregate
amount outstanding at any one time not to exceed $25,000,000 for all Investments
made pursuant to this clause (p).
The term "Investments" shall not include deposits to secure the performance of
leases.
6.3 Indebtedness.
(a) No Delta Company shall create, incur, assume or permit to exist
any Indebtedness, except (without duplication):
(i) Indebtedness secured by purchase money security interests and
Capital Leases (including in the form of sale-leaseback, synthetic lease or
similar transactions or created solely in connection with the restructuring of
any operating lease of Non-1110 Aviation Assets or Section 1110 Assets which
existed on the Petition Date) to the extent such Indebtedness was incurred in
connection with the restructuring of existing operating leases as provided in
the parenthetical above or finance the acquisition or construction of aircraft,
equipment and real estate to the extent permitted by Section 6.10 or ARB
Indebtedness; provided, that the amount of such Indebtedness does not exceed
100% of the purchase price or construction cost (including any capitalized
interest and issuance fees) of the subject asset;
(ii) the Loans and the other Obligations;
(iii) [Reserved];
(iv) Indebtedness existing as of the Closing Date described in
Disclosure Schedule 3.12(b) or 6.3;
(v) Indebtedness incurred after the Closing Date; provided, that
(A) such indebtedness is (x) secured by (or finances) assets which, as of the
Closing Date, secured (or were financed by) other Indebtedness outstanding on
the Closing Date described in Disclosure Schedule 6.3 (the "Existing Secured
Indebtedness"), (y) incurred within one hundred eighty (180) days after the
repayment in full of such Existing Secured Indebtedness and (z) is in an
aggregate principal amount not exceeding the maximum principal amount of such
Existing Secured Indebtedness outstanding at any time on or prior to the Closing
Date and (B) such Existing Secured Indebtedness shall have been repaid in full
on the scheduled maturity date thereof (a "Permitted Secured Financing");
39
(vi) Indebtedness under the Post-Petition Skymiles Facility in an
aggregate principal amount not to exceed $350,000,000;
(vii) Indebtedness consisting of intercompany loans and advances
made (A) among Credit Parties, (B) among Delta Companies that are not Credit
Parties and (C) by a Credit Party to Aero Assurance, Ltd. or New Sky Ltd.
permitted pursuant to Section 6.2(e)(iii), provided, that (A) to the extent any
such loan or advance is evidenced by a promissory note (the "Intercompany
Notes") held by any Credit Party, the applicable Credit Party shall have pledged
and delivered such note to the Administrative Agent pursuant to this Agreement
as additional collateral security for the Obligations, (B) each applicable
Credit Party shall record all intercompany transactions on its Books and Records
in the ordinary course of business and (C) the obligations of any Credit Party
under any such intercompany loans to any other Delta Company shall be
subordinated to the Obligations of such Credit Party under the Loan Documents in
a manner reasonably satisfactory to the Administrative Agent;
(viii) Indebtedness owed to any Lender (or any of its affiliates)
or any other Person in connection with Investments permitted under Section
6.2(g);
(ix) Indebtedness in respect of any overdrafts and related
liabilities arising from treasury, depository and cash management services or in
connection with any automated clearing house transfers of funds (but subject to
compliance with Section 5.19);
(x) Indebtedness consisting of take-or-pay obligations contained
in supply agreements entered into in the ordinary course of business and
consistent with past practices;
(xi) Indebtedness to credit card processors in connection with
credit card processing services incurred in the ordinary course of business and
consistent with past practices;
(xii) Indebtedness owing by the Credit Parties to Citibank, N.A.
and its banking Affiliates, arising in the ordinary course of business,
providing netting services with respect to intercompany Indebtedness permitted
to be incurred and outstanding pursuant to this Agreement so long as such
Indebtedness does not remain outstanding for more than three (3) Business Days
from the date of its incurrence and does not exceed an aggregate outstanding
amount of $50,000,000;
(xiii) Indebtedness in respect of letters of credit in an
aggregate outstanding amount not to exceed $150,000,000;
(xiv) surety and appeal bonds in an aggregate outstanding amount
not to exceed $80,000,000;
(xv) other unsecured Indebtedness incurred subsequent to the
Closing Date; provided, that no principal payments shall be required thereunder
(except upon acceleration) on or prior to the Scheduled Maturity Date;
40
(xvi) Permitted Subordinated Indebtedness;
(xvii) Indebtedness constituting a Permitted Refinancing of
Indebtedness referred to in clauses (i), (iv), (v), (vi) or (xvi) above;
(xviii) unsecured Indebtedness (including letters of credit)
incurred subsequent to the Closing Date to provide credit support for (x)
obligations arising in the ordinary course of business and consistent with past
practices in connection with credit card processing services and (y) the
Indebtedness described in clause (ix) above;
(xix) other unsecured Indebtedness incurred subsequent to the
Closing Date in an aggregate amount not to exceed $25,000,000 outstanding at any
time; and
(xx) refinancings, replacements and restructurings of
Indebtedness (outstanding on the Petition Date and permitted by Section
6.3(a)(iv)) secured directly or indirectly by "equipment" described in Section
1110(a)(3) of the Bankruptcy Code or by any equipment that would have qualified
as such equipment had it been placed in service after October 22, 1994
(collectively, "Section 1110-Type Indebtedness"); provided, that (A) the
principal amount of such existing Indebtedness shall not be increased above the
principal amount thereof outstanding immediately prior to such refinancing,
replacement or restructuring unless (1) the interest expense, if any, on any
scheduled payments deferred as a result of such refinancing is not paid
currently but is recapitalized as principal or (2) such refinancing increases
the principal amount of such refinanced Section 1110-Type Indebtedness but the
overall effect on the aggregate amount of existing Indebtedness secured directly
or indirectly by "equipment" described in Section 1110(a)(3) of the Bankruptcy
Code or by equipment that would have qualified as such equipment had it been
placed in service after October 22, 1994 is reduced or remains the same, or the
financing expenses in connection with all such Indebtedness is reduced (it being
understood that any such increase in Indebtedness may not be granted
Super-Priority Claim status pursuant to Section 364(c)(1) of the Bankruptcy
Code), (B) after giving effect thereto, the average maturity of all the
then-outstanding Section 1110-Type Indebtedness shall not be shortened as a
result of such refinancing, replacement or restructuring, (C) the weighted
average life to maturity of all such existing Section 1110-Type Indebtedness
shall not be reduced as a result of such refinancing, replacement or
restructuring, and (D) the direct and contingent obligors therefor shall not be
changed, as a result of or in connection with such refinancing, replacement or
restructuring.
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount in respect of any post-petition Indebtedness prior to its
scheduled maturity, other than (i) the Obligations; (ii) Indebtedness secured by
a Lien permitted under Section 6.7 if the asset securing such Indebtedness on a
first-priority basis has been sold or otherwise disposed of in accordance with
Section 6.8; (iii) Indebtedness upon any Permitted Refinancing; (iv) other
Indebtedness (excluding Permitted Subordinated Indebtedness) not in excess of
$10,000,000; (v) Indebtedness incurred subsequent to the Closing Date permitted
under Section 6.3(a) other than Indebtedness
41
permitted under Section 6.3(a)(iv), (vi), (xv), (xvi) or any Permitted
Refinancing of Indebtedness permitted by any of the foregoing; (vi) as otherwise
permitted in Section 6.13; and (vii) ARB Indebtedness in order to minimize, in
Borrower's reasonable judgment upon opinion of counsel, such Credit Party's
potential liability arising from a loss of the tax exempt status of such
Indebtedness.
6.4 Affiliate Transactions.
None of the Credit Parties will sell or transfer any property or
assets to, or otherwise engage in any other material transactions with, any of
its Affiliates (other than the other Credit Parties), except transactions (a) at
prices and on terms and conditions no less favorable to such Credit Party than
could be obtained on an arm's length basis from unrelated third parties, (b)
reasonable and customary fees and compensation paid to, and indemnity provided
on behalf of, officers, directors or employees of such Credit Party and other
transactions permitted by Section 6.2(i) and (j), (c) any dividends, other
distributions or payments permitted by Section 6.13, (d) any Investment in a
Delta Company permitted by Section 6.2 or intercompany transactions with a Delta
Company permitted by Section 6.3, and (e) provision of legal, accounting or
administrative services to any Delta Company in the ordinary course of business
in accordance with past practices.
6.5 Capital Structure and Business.
No Credit Party shall amend its charter or bylaws in a manner that
would adversely affect the Administrative Agent or Lenders, or such Credit
Party's duty or ability to repay the Obligations, in any material respect. No
Credit Party shall engage in any business other than the businesses currently
engaged in by it and businesses that are reasonably related thereto.
6.6 Guaranteed Indebtedness.
No Credit Party shall create, incur, assume or permit to exist any
Guaranteed Indebtedness, except (without duplication) (a) by endorsement of
instruments or items of payment for deposit to the general account of any Credit
Party in the ordinary course of business, (b) Guaranteed Indebtedness incurred
for the benefit of any other Credit Party if the primary obligation is expressly
permitted by this Agreement, (c) Guaranteed Indebtedness to the extent
constituting Indebtedness permitted by Section 6.3 and (d) to the extent
existing on the Closing Date as set forth in Disclosure Schedule 6.3.
6.7 Liens.
No Credit Party shall create, incur, assume or permit to exist any
Lien on or with respect to the Collateral or any of its other properties or
assets (whether now owned or hereafter acquired), except for:
(a) Permitted Encumbrances;
(b) Liens in existence as of the Closing Date and summarized on
Disclosure Schedule 6.7;
42
(c) Liens created after the Closing Date by conditional sale or other
title retention agreements (including Capital Leases) or in connection with
purchase money Indebtedness, in each case, permitted in Section 6.3(a)(i);
provided, that such Liens attach only to the assets (including related leases
and subleases thereof and other assets integral to the use thereof including
security deposits from any sublessee collaterally assigned for the benefit of
lessors) subject to such purchase money debt and such Indebtedness is incurred
within one hundred eighty (180) days following such purchase and does not exceed
100% of the purchase price of the subject assets;
(d) Liens (having the priority set forth in the Skymiles Intercreditor
Agreement) securing the "Obligations" as defined in the Post-Petition Skymiles
Facility Documents, so long as the Skymiles Intercreditor Agreement is in full
force and effect;
(e) Liens on assets that are the subject of the GECAS Facilities
(including any arising as a result of any cross-collateralization thereof
authorized at any time by the Bankruptcy Court);
(f) Liens on assets that are the subject of a Permitted Secured
Financing; provided, that such Liens attach only to the assets subject to the
Existing Secured Indebtedness related thereto;
(g) other Liens securing Indebtedness permitted by Section 6.3(a)(ix)
and (xii);
(h) Liens on the Excluded Accounts and amounts on deposit therein in
favor of the beneficiaries of the amounts on deposit therein to the extent such
Liens secure obligations owed to such beneficiaries;
(i) any interest or title of a licensor, lessor or sublessor granted
to others, but only to the extent permitted by any of the Collateral Documents;
(j) Liens in favor of credit card processors securing obligations in
connection with credit card processing services incurred in the ordinary course
of business and consistent with past practices;
(k) Liens on cash deposits that do not constitute Collateral in an
aggregate amount not in excess of $150,000,000;
(l) Liens on cash deposits pledged as collateral for Indebtedness
permitted under Section 6.3(a)(viii) in connection with Investments permitted
under Section 6.2(g)(iii), to the extent that the aggregate amount of such cash
deposits at any time does not exceed the greater of (i) $300,000,000 and (ii)
15% of the then outstanding unrestricted cash balance of the Delta Companies;
(m) Liens on Margin Stock, if and to the extent the value of all
Margin Stock of Borrower and its Subsidiaries exceeds 25% of the total assets
subject to this Section 6.7;
43
(n) Liens on real and personal property acquired in connection with
acquisitions permitted by this Article 6 to the extent such Liens exist on such
acquired property at the time of acquisition; provided, that such Liens attach
only to the assets (including related leases thereof and, in the case of
personal property, other assets integral to the use thereof including security
deposits from any sublessee collaterally assigned for the benefit of lessors)
subject to such acquisition;
(o) Liens securing a Permitted Refinancing of Indebtedness, to the
extent such Indebtedness being refinanced was originally secured in accordance
with this Section 6.7; provided that such Lien does not attach to any additional
property or assets of Borrower or any Subsidiary;
(p) Liens securing the Loans and the other Obligations;
(q) any Lien on any Non-1110 Aviation Assets or Section 1110 Assets
securing Indebtedness permitted under Section 6.3(a)(xx) or created as a result
of the restructuring of any operating lease of Non-1110 Aviation Assets or
Section 1110 Assets permitted under Section 6.3(a)(i); provided, that such Liens
attach only to the assets securing the applicable Indebtedness permitted under
Section 6.3(a)(i) or (a)(iv);
(r) Liens created after the Closing Date in connection with operating
Leases; provided, that, except in the case of Liens arising under Section
6.7(e), such Liens attach only to the assets subject to such Lease (including
any sublease thereof, other assets integral to the use thereof and security
deposits from any sublessee collaterally assigned for the benefit of lessors);
and
(s) other Liens so long as the value of the property subject to such
Liens, and the Indebtedness and other obligations secured thereby, do not
exceed, in the aggregate, $2,000,000.
No Credit Party shall grant, or permit any of its Subsidiaries to
grant, except as expressly permitted by this Agreement, any Lien on any of its
respective assets securing the Senior Claims or the Junior Claims (as each such
term is defined in the Skymiles Intercreditor Agreement), as the case may be, to
any Person other than each of the Administrative Agent and the Skymiles Agent on
behalf of the applicable Secured Parties (as defined in the Skymiles
Intercreditor Agreement), subject to the relative priorities set forth in the
Skymiles Intercreditor Agreement.
6.8 Sale of Stock and Assets.
No Credit Party shall sell, transfer, convey, assign or otherwise
dispose of any of its properties or other assets, including the Stock of any of
its Subsidiaries (whether in a public or a private offering or otherwise) or any
of its Accounts (any such disposition being an "Asset Sale"), other than
(without duplication):
(a) sales and other dispositions of assets (excluding those assets
subject to clause (c) or (i) below), and swaps, exchanges, interchange or
pooling of assets (subject to the limitations set forth in the Collateral
Documents), in the ordinary course of business;
44
(b) sales or dispositions of surplus, obsolete, negligible or
uneconomical assets no longer used in the business of Borrower and the
Guarantors;
(c) the sale or other disposition of any Collateral consisting of (i)
up to fifteen (15) 767-200 aircraft or (ii) other Collateral included in the
Term A Borrowing Base having a book value not exceeding $50,000,000 in the
aggregate in any Fiscal Year; provided, that, in each case, any disposition of
any such Collateral included in the Term A Borrowing Base (other than DFW
Assets) may only be sold for value in excess of the Allocated Amount for such
Collateral;
(d) Excluded Sales;
(e) all sales of assets of DLMS securing its obligations under the
Skymiles Facility;
(f) dispositions of Section 1110 Assets or Non-1110 Aviation Assets,
consisting of the return thereof to the party that had provided financing
therefor; provided, that such dispositions, in the aggregate, shall not
materially and adversely affect the operations of the Delta Companies, taken as
a whole;
(g) sales or dispositions of assets among (i) Borrower and the
Guarantors or (ii) Subsidiaries that are not Guarantors;
(h) sales or dispositions of other assets in arm's length transactions
at fair market value in an aggregate amount not to exceed $50,000,000 in the
aggregate in any Fiscal Year;
(i) (i) abandonment of Intellectual Property; provided, that such
abandonment is (A) in the ordinary course of business consistent with past
practices and (B) with respect to Intellectual Property that is not material to
the business of Borrower and the Guarantors and (ii) licensing or sublicensing
of Intellectual Property in the ordinary course of business consistent with past
practices;
(j) dispositions of assets located outside of the United States in an
aggregate amount not to exceed $5,000,000;
(k) the sale or discount of Accounts to a collection agency in
connection with collections of delinquent receivables;
(l) (i) abandonment of Slots, Gates, Routes or Supporting Route
Facilities; provided, that such abandonment is (A) in connection with the
downsizing of any hub or other facility located in Cincinnati as reflected in
the Projections, (B) in connection with the downsizing of any other hub or
facility as reflected in the Projections, which does not materially and
adversely affect the business of Borrower and the Guarantors, taken as a whole,
or (C) in the ordinary course of business consistent with past practices and
does not materially and adversely affect the business of Borrower and the
Guarantors, taken as a whole, (ii) transfer or other disposition of Slots to the
extent permitted by Section 7(b) of the SGR Security Agreement in an aggregate
amount not to exceed $25,000,000, (iii) exchange of Slots to the extent
permitted by
45
Section 7(c) of the SGR Security Agreement and (iv) assignments of leases or
granting of leases of (x) Aircraft or Engines to the extent permitted pursuant
to the Aircraft Mortgage and (y) other aircraft or engines (that do not
constitute Collateral) in the ordinary course of business;
(m) the sale or other disposition of any 737-800 aircraft
substantially concurrently with the consummation of the purchase of such
aircraft to the extent such purchase occurs pursuant to a purchase agreement to
which a Delta Company was a party as of the Closing Date;
(n) sale-leaseback, synthetic lease or similar transactions to the
extent not prohibited by Section 6.12;
(o) to the extent not prohibited by Section 6.18 or any of the
Collateral Documents, the disposition of leasehold or similar interests in Real
Estate that is not Owned Real Estate, including through assignment, sublease or
lease termination or rejection, in whole or in part, or the return, surrender,
exchange or abandonment of any property subject thereto;
(p) any sale of Margin Stock for fair value as determined in good
faith by Borrower; and
(q) any Property Loss Event (without giving effect to the thresholds
set forth in the definition thereof);
(r) rejection of executory contracts in accordance with an order of
the Bankruptcy Court to the extent such rejections do not, individually or in
the aggregate, materially and adversely affect the business of Borrower and the
Guarantors, taken as a whole; and
(s) sale of Excluded Properties; provided, that, if such Excluded
Properties are included in the Term A Borrowing Base, the sale price shall be in
excess of the Allocated Amount for such Excluded Properties.
6.9 [Reserved.]
6.10 Financial Covenants.
Borrower shall not breach or fail to comply with any of the Financial
Covenants.
6.11 Hazardous Materials.
No Credit Party shall cause or knowingly permit a Release of any
Hazardous Material on, at, in, under, above, to, from or about any of the Real
Estate where such Release would (a) violate in any respect, or form the basis
for any Environmental Liabilities under, any Environmental Laws or Environmental
Permits or (b) otherwise adversely impact the value or marketability of any of
the Real Estate or any of the Collateral, other than in the case of each of
clauses (a) and (b), such violations, Releases or Environmental Liabilities that
could not reasonably be expected to have a Material Adverse Effect.
46
6.12 Sale-Leasebacks.
No Credit Party shall engage in any sale-leaseback, synthetic lease or
similar transaction involving any of its Primary Gates, Primary Routes, Primary
Slots or owned assets (including without limitation, any aircraft), except (i)
any sale-leaseback, synthetic lease or similar transaction permitted by Section
6.3(a)(i), (ii) in connection with Section 1110 Assets or Non-1110 Aviation
Assets and (iii) any sale-leaseback or similar transaction of any owned asset
that constitutes a fixture on, or that is used primarily in the operation of,
leased Real Estate, to the extent that such sale-leaseback occurs in connection
with an assignment or rejection of the lease of such Real Estate followed by a
lease-back of all or a portion of such Real Estate.
6.13 Restricted Payments.
No Credit Party shall make any Restricted Payment, except (a) payments
of principal of and interest on intercompany loans and advances between Borrower
and Guarantors to the extent permitted by Section 6.3, (b) dividends and
distributions by Subsidiaries of Borrower, (c) dividends and distributions by
Borrower with respect to its Stock payable solely in additional shares of its
common Stock, (d) pursuant to stock option plans or other benefit plans for
management or employees of Borrower and its Subsidiaries in a maximum aggregate
amount not to exceed $2,000,000, (e) the redemption of the Class B shares of
Delta Benefits Management Inc. held by Aon Group, Inc., pursuant to put and call
rights existing on the date hereof (f) scheduled payments of interest with
respect to Permitted Subordinated Indebtedness and any Permitted Refinancing
thereof (or, subject to any applicable subordination terms, upon acceleration),
and (g) scheduled payments of principal and interest with respect to, and
payment of fees and other charges required by the terms of, the Post-Petition
Skymiles Facility (or, subject to the Skymiles Intercreditor Agreement, upon
acceleration), provided that no such payments shall be made from proceeds of
Collateral other than Skymiles Collateral (A) from and after the issuance of any
Notice of Actionable Default and until the withdrawal of all pending Notices of
Actionable Default or (B) during the period in which the Excess Aggregate Cash
on Hand is lower than the lesser of (x) $200 million and (y) the aggregate
amount of "Obligations" (as defined in the Post-Petition Skymiles Facility
Documents) arising in connection with the Bankruptcy Loans (as defined in the
Post-Petition Skymiles Facility Documents) outstanding at such time; provided
that such Restricted Payments in clause (a) shall be permitted so long as no
Event of Default has occurred and is continuing or would result after giving
effect to such Restricted Payments and the Administrative Agent shall not have
notified Borrower to stop such payments.
6.14 Change of Corporate Name or Location; Change of Fiscal Year.
No Credit Party shall (a) change its name as it appears in official
filings in the state of its incorporation or other organization, (b) change its
chief executive office, principal place of business, corporate offices or
warehouses, hangars, terminals, maintenance facilities or other locations at
which Collateral with book value in excess of $5,000,000, individually or in the
aggregate, is held or stored, or the location of its records concerning such
Collateral, (c) change the type of entity that it is, (d) change its
organization identification number, if any, issued by its state of incorporation
or other organization, or (e) change its state of incorporation or organization,
in each case, without at least thirty (30) days' prior written notice to the
47
Administrative Agent; provided, that (i) in the case of clauses (b) or (e), any
such new location shall be in the continental United States and (ii) the Credit
Parties shall be in compliance with the Spare Parts Mortgage at all times. No
Credit Party shall change its Fiscal Year.
6.15 No Impairment of Intercompany Transfers.
No Credit Party shall directly or indirectly enter into or become
contractually bound by any agreement, instrument, indenture or other obligation
(other than this Agreement, the other Loan Documents and the Post-Petition
Skymiles Facility Documents) that could directly or indirectly restrict,
prohibit or require the consent of any Person with respect to the payment of
dividends or distributions by a Credit Party or the making or repayment of
intercompany loans by a Subsidiary of Borrower to Borrower; other than (a)
prohibitions or restrictions existing on the Closing Date and listed on
Disclosure Schedule 6.15, and any extension or renewal thereof on terms no less
favorable to such Credit Party and (b) prohibitions or restrictions set forth in
the Loan Documents or the Post-Petition Skymiles Facility Documents (to the
extent consistent with such provisions in the Loan Documents).
6.16 Limitation on Negative Pledge Clauses.
No Credit Party will enter into any agreement (other than the Loan
Documents) with any Person which prohibits or limits the ability of such Credit
Party to create, incur, assume or suffer to exist any Lien securing the
Obligations upon any of its properties, assets or revenues, whether now owned or
hereafter acquired, other than agreements that contain (a) prohibitions or
limitations existing on the Closing Date and listed on Disclosure Schedule 6.16,
and any extension or renewal thereof on terms no less favorable to the Credit
Parties, (b) prohibitions set forth in the Loan Documents and the Post-Petition
Skymiles Facility Documents, (c) customary prohibitions, restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending
such sale; provided, that such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder, (d)
prohibitions or restrictions imposed by any agreement relating to secured
Indebtedness or other obligations permitted by this Agreement if such
restriction or condition applies only to property secured or financed by such
Indebtedness or other obligations and (e) restrictions prohibiting Liens
contained in agreements relating to the use and occupancy of airport premises
and facilities, operating leases, Capital Leases or Licenses with respect to
properties subject thereto and interests created therein.
6.17 No Speculative Transactions.
No Credit Party shall engage in any transaction involving commodity
options, futures contracts or similar transactions, except solely to hedge in
the ordinary course of business.
6.18 Real Estate Purchases and Leases.
No Credit Party shall purchase a fee simple ownership interest in real
estate with an aggregate purchase price in excess of $30,000,000. No Credit
Party shall modify, amend, extend, cancel, terminate or otherwise change in any
materially adverse manner any term, covenant or condition of any lease,
sublease, usufruct, use agreement or other occupancy or
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facility agreement affecting its Real Estate as of the Closing Date, and no
Credit Party shall hereafter enter into any new lease, sublease, usufruct, use
agreement or other occupancy or facility agreement granting such Credit Party
possessory, use or similar rights in or to any real estate, unless such
modification, amendment, extension, cancellation, termination or other change,
or such new lease, sublease, usufruct, use agreement or other occupancy or
facility agreement, (a) is not prohibited by the Collateral Documents, (b) would
not have a Material Adverse Effect, and (c) would not materially and adversely
affect the Administrative Agent's Liens, for the benefit of Secured Parties, in
the Collateral stored or located at the location to which such modification or
other change, or such new lease or other agreement relates. Further, no Credit
Party shall assign, sublet or otherwise dispose of any such lease, sublease,
usufruct, use agreement or other occupancy or facility agreement to which such
Credit Party is now or hereafter a counterparty, except for an assignment,
subletting or disposition that (x) is not prohibited by Section 6.8 or the
Collateral Documents, (y) would not have a Material Adverse Effect and (z) would
not materially and adversely affect the Administrative Agent's Liens, for the
benefit of Secured Parties, in the Collateral stored or located at such
location.
6.19 Changes Relating to Permitted Subordinated Indebtedness and
Post-Petition Skymiles Facility Documents.
(a) No Credit Party shall change or amend the terms of any Permitted
Subordinated Indebtedness (or any indenture or agreement in connection
therewith) if the effect of such amendment is to: (i) increase the interest rate
on such Permitted Subordinated Indebtedness; (ii) change the dates upon which
payments of principal or interest are due on such Permitted Subordinated
Indebtedness other than to extend such dates; (iii) change any default or event
of default other than to delete or make less restrictive any default provision
therein with respect to such Permitted Subordinated Indebtedness; (iv) change
the redemption or prepayment provisions of such Permitted Subordinated
Indebtedness other than to extend the dates therefor or to reduce the premiums
payable in connection therewith; (v) grant any security or collateral to secure
payment of such Permitted Subordinated Indebtedness; or (vi) change or amend any
other term, in each case, if such change or amendment would materially increase
the obligations of the Credit Party thereunder or confer additional material
rights on the holder of such Permitted Subordinated Indebtedness, in each case,
in a manner adverse to any Credit Party, the Administrative Agent or any Lender.
(b) No Credit Party shall change or amend the terms of the
Post-Petition Skymiles Facility Documents, if the effect of such amendment is
to: (i) increase the interest rate on the Post-Petition Skymiles Facility; (ii)
change the dates upon which payments of principal or interest are due on the
Post-Petition Skymiles Facility other than to extend such dates; (iii) change
any default or event of default other than to delete or make less restrictive
any default provision therein with respect to the Post-Petition Skymiles
Facility; (iv) change the redemption or prepayment provisions of the
Post-Petition Skymiles Facility other than to extend the dates therefor or to
reduce the premiums payable in connection therewith; (v) grant any security or
collateral to secure payment of the Post-Petition Skymiles Facility; or (vi)
change or amend any other term if such change or amendment would materially
increase the obligations of the Credit Party thereunder or confer additional
material rights on the holder of the Post-Petition Skymiles Facility, in each
case, in a manner adverse to any Credit Party, the Administrative Agent or any
Lender.
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6.20 Cancellation of Indebtedness.
No Credit Party shall, nor shall they permit any of its Subsidiaries
to, cancel any claim or Indebtedness owed to any of them except (i) in the
ordinary course of business consistent with past practice, (ii) in respect of
intercompany Indebtedness among the Credit Parties or (iii) negotiated on an
arm's-length basis and for consideration reasonably deemed by the Borrower to be
reasonable.
7. TERM
7.1 Termination.
The financing arrangements contemplated hereby shall be in effect
until the Maturity Date, and the Loans and all other Obligations shall be
automatically due and payable in full on such date.
7.2 Survival of Obligations Upon Termination of Financing
Arrangements.
Except as otherwise expressly provided for in the Loan Documents, no
termination or cancellation (regardless of cause or procedure) of any financing
arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of the
Administrative Agent and the Lenders relating to any unpaid portion of the Loans
or any other Obligations, due or not due, liquidated, contingent or unliquidated
or any transaction or event occurring prior to such termination, or any
transaction or event, the performance of which is required after the Maturity
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of the
Administrative Agent and each Lender, all as contained in the Loan Documents,
shall not terminate or expire, but rather shall survive any such termination or
cancellation and shall continue in full force and effect until the Termination
Date; provided, that the provisions of Article 13, the payment obligations under
Sections 1.13 and 1.14, and the indemnities contained in the Loan Documents
shall survive the Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 Events of Default.
The occurrence of any one or more of the following events (regardless
of the reason therefor) shall constitute an "Event of Default" hereunder:
(a) Borrower (i) fails to make any payment of principal of the Loans
or any Letter of Credit Obligation when due and payable, (ii) fails to make any
payment of interest on, or Fees owing in respect of, the Loans or any of the
other Obligations within three (3) Business Days of the date when due and
payable, or (iii) fails to pay or reimburse the Administrative Agent or any L/C
Issuer or Lender for any expense reimbursable hereunder or under any other Loan
Document within ten (10) days following the demand for such reimbursement or
payment of expenses.
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(b) Any Credit Party fails or neglects to perform, keep or observe any
of the provisions of Sections 1.2, 1.3, 1.4, 5.4, 5.14, 5.16 or Article 6, the
reporting requirements of Section 5.15, the insurance provisions in the
Collateral Documents or any of the provisions set forth in Annexes C or G,
respectively.
(c) Borrower fails or neglects to perform, keep or observe any of the
provisions of Section 4.1 or any provisions set forth in Annexes E or F,
respectively, and the same shall remain unremedied for three (3) Business Days
or more.
(d) (x) Borrower fails to perform or observe any covenant, condition
or agreement to be performed or observed by it under the Aircraft Mortgage, and
such failure continues unremedied for a period of sixty (60) days after receipt
by Borrower of a notice thereof from the Administrative Agent (such failure, a
"Maintenance Default"); provided that, if Borrower shall have undertaken to cure
any such failure which arises under Sections 7.02 or 7.04 of the Aircraft
Mortgage as those sections relate to maintenance, service, repair or overhauls
and such failure is capable of being remedied, no such failure shall constitute
an Event of Default for a period of ninety (90) days after such notice is
received by Borrower ("Maintenance Cure Period") so long as Borrower is
diligently proceeding to remedy such failure; provided further that, if not
cured, such failure shall constitute an Event of Default if not remedied within
180 days after receipt by Borrower of such notice of a Maintenance Default or
(y) any Credit Party fails or neglects to perform, keep or observe any other
provision of this Agreement, any of the other Loan Documents or the Collateral
Documents (other than any provision embodied in or covered by any other clause
of this Section 8.1) and the same shall remain unremedied for thirty (30) days
or more.
(e) Except for defaults resulting directly from the commencement of
the Cases and defaults resulting from obligations (other than the Obligations)
with respect to which the Bankruptcy Code prohibits any Credit Party from
complying or permits an Credit Party not to comply, a default or breach occurs
under any other agreement, document or instrument to which any Credit Party is a
party that is not cured within any applicable grace period therefor, and such
default or breach (i) involves the failure to make any payment when due in
respect of any post-petition Indebtedness or Guaranteed Indebtedness (other than
the Obligations) of any Credit Party in excess of $25,000,000 in the aggregate
(including (x) undrawn committed or available amounts and (y) amounts owing to
all creditors under any combined or syndicated credit arrangements), or (ii)
causes, or permits any holder of such Indebtedness or Guaranteed Indebtedness or
a trustee to cause, post-petition Indebtedness or Guaranteed Indebtedness or a
portion thereof in excess of $25,000,000 in the aggregate to become due prior to
its stated maturity or prior to its regularly scheduled dates of payment, or
cash collateral to be demanded in respect thereof, in each case, regardless of
whether such default is waived, or such right is exercised, by such holder or
trustee.
(f) Any information contained in any Borrowing Base Certificate is
untrue or incorrect in any material respect, or any representation or warranty
herein or in any Loan Document or in any written statement, report, financial
statement or certificate (other than a Borrowing Base Certificate) made or
delivered to the Administrative Agent or any Lender by any Credit Party is
untrue or incorrect in any material respect, in each case, as of the date when
made or deemed made.
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(g) [Reserved].
(h) The Loan Documents and the Final Order shall, for any reason,
cease to create a valid Lien on any of the Collateral purported to be covered
thereby or such Lien shall cease to be a perfected Lien having the priority
provided for herein and in the Final Order, or any Credit Party shall so allege
in any pleading filed in any court or any material provision of any Loan
Document shall, for any reason, cease to be valid and binding on each Credit
Party party thereto (or any Credit Party shall challenge the enforceability of
any Loan Document or shall assert in writing, or engage in any action or
inaction based on any such assertion, that any provision of any of the Loan
Documents has ceased to be or otherwise is not valid, binding and enforceable in
accordance with its terms).
(i) A final unstayed judgment or judgments for the payment of money in
excess of $10,000,000 in the aggregate at any time are outstanding against one
or more of the Credit Parties (which judgments are not covered by insurance
policies as to which liability has been accepted by the insurance carrier), and
the same are not, within thirty (30) days after the entry thereof, discharged or
bonded pending appeal, or such judgments are not discharged prior to the
expiration of any such stay.
(j) Suspension of all or substantially all of the Credit Parties'
flight and other operations for longer than two days (excluding, however, any
such suspension as a result of an order by an Aviation Authority due to a force
majeure or any other extraordinary event similarly affecting all major U.S.
commercial carriers) or entry of an order by the Bankruptcy Court authorizing
the same.
(k) Any Change of Control occurs.
(l) Any Air Carrier shall cease to be a Certificated Air Carrier or a
"citizen of the United States" as defined in Section 40102(a)(15) of Title 49.
(m) (i) In the case of any Primary Route, any applicable Aviation
Authority revokes, terminates or cancels any Credit Party's Permits to use,
occupy or maintain such Primary Route, whether as a result of any revocation,
termination or cancellation of any Primary Gate, Primary Slot or otherwise; (ii)
in the case of any Primary Slot, any applicable Aviation Authority revokes,
terminates or cancels any Credit Party's Permits to use, occupy or maintain such
Primary Slot or any Credit Party surrenders such Primary Slot to the applicable
Aviation Authority; provided, that an Event of Default shall not occur under
this clause (m)(ii) if the aggregate value of all such Primary Slots that have
been revoked, terminated, surrendered or canceled does not exceed an amount
equal to the sum of (i) $25,000,000 plus (ii) the lesser of (x) the amount of
cash and Cash Equivalents held in the SGR Cash Collateral Account and (y)
$25,000,000; provided, further, that, in the event the Administrative Agent, in
its reasonable discretion, determines that the aggregate value of all such
Primary Slots that have been revoked, terminated, surrendered or canceled
exceeds $25,000,000, the Administrative Agent shall promptly request an
appraisal from an Appraiser, and each Credit Party shall permit such appraisals
to be conducted, for purposes of determining such value.
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(n) In the case of any other Slots, Gates or Routes, any applicable
Aviation Authority modifies, suspends, revokes, terminates, cancels or otherwise
takes any action that adversely affects any Credit Party's Permits or any Credit
Party's use or occupation or maintenance of such Slots, Gates and Routes due to
any Credit Party's failure to abide by applicable law or any contract governing
the use of such Slots, Gates and Routes, or any Credit Party otherwise ceases to
use, occupy or maintain such Slots, Gates and Routes, and any event referred to
in this clause (n) could reasonably be expected to have a Material Adverse
Effect.
(o) Any Lien shall arise on the assets of any Credit Party in favor of
the PBGC or an ERISA Plan and such lien has not been stayed pursuant to the
Bankruptcy Code, but only to the extent that such Lien could reasonably be
expected to result in liability to any Credit Party in an amount which would
exceed $1,000,000.
(p) Any of the Cases shall be dismissed (or the Bankruptcy Court shall
make a ruling requiring the dismissal of the Cases) or converted to a case under
chapter 7 of the Bankruptcy Code (except to the extent the disposition of assets
upon such liquidation would be permitted under Section 6.8), or any Credit Party
shall file any pleading requesting any such relief; a trustee under chapter 7 or
chapter 11 of the Bankruptcy Code, a responsible officer or an examiner with
enlarged powers relating to the operation of the business (powers beyond those
set forth in section 1106(a)(3) and (4) of the Bankruptcy Code) under section
1106(b) of the Bankruptcy Code shall be appointed in any of the Cases; or an
application shall be filed by any Credit Party for the approval of, or the Court
shall enter an order granting, (i) other than any Claim of Amex under the
Post-Petition Skymiles Facility Documents with respect to the Skymiles
Collateral, any other Claim having priority senior to or pari passu with the
claims of the Administrative Agent and the Lenders under the Loan Documents or,
without the prior written consent of the Administrative Agent, any other claim
having priority over any or all administrative expenses of the kind specified in
sections 503(b) or 507(b) of the Bankruptcy Code (other than the Carve-Out) or
(ii) any Lien on the Collateral having a priority senior to or pari passu with
the Liens and security interests granted herein, except the Liens on Skymiles
Collateral securing the obligations under the Post-Petition Skymiles Facility
and except as otherwise expressly provided herein.
(q) Any Credit Party shall file a motion seeking, or the Bankruptcy
Court shall enter, an order (i) approving any payment (as adequate protection or
otherwise) on account of any Claim against any Credit Party arising or deemed to
have arisen prior to the Petition Date, other than a Permitted Prepetition
Payment, (ii) approving any other First Day Order not reasonably acceptable to
the Administrative Agent, (iii) granting relief from the automatic stay
applicable under section 362 of the Bankruptcy Code to any holder of any
security interest to permit foreclosure or obtain liens on any assets which have
a value in excess of $10,000,000 (it being understood that neither the
relinquishment by the Borrower or Guarantors of Section 1110 Assets, nor the
foreclosure of security interests in Section 1110 Assets (or in property in the
possession of the applicable secured party) as to which defaults have not been
cured pursuant to Section 1110 of the Bankruptcy Code, shall be considered to be
included in this paragraph) provided that, if any Credit Party would otherwise
be permitted under this Agreement to make a payment to the holder of a security
interest in cash or Cash Equivalents ("Cash Collateral"), and the obligation to
make such payment is secured by such Cash Collateral, then in lieu of making
such payment, such Credit Party may direct or authorize such secured party to,
and such secured
53
party may, apply such Cash Collateral to satisfy such payment obligation
(including by way of setoff against or foreclosure on such Cash Collateral),
(iv) authorizing the sale of all or substantially all of Borrower's assets
(unless such order contemplates payment in full in cash of the Obligations upon
consummation of such sale, whether pursuant to a Plan of Reorganization or
otherwise) or (v) except to the extent the disposition of assets upon such
liquidation would be permitted under Section 6.8, approving the implementation
of liquidation under chapter 11 of the Bankruptcy Code in any Case; or
(r) (i) The Final Order shall cease to be in full force and effect, or
(ii) any Credit Party shall fail to comply with the terms of the Final Order in
any material respect, or (iii) the Final Order shall be amended, supplemented,
stayed, reversed, vacated or otherwise modified (or any of the Credit Parties
shall apply for authority to do so) in any manner that affects the rights or
duties of the Administrative Agent, the Arrangers or the Lenders, in each case,
without the prior written consent of the Administrative Agent.
8.2 Remedies.
(a) If any Event of Default has occurred and is continuing, without
further order of, application to, or action by, the Bankruptcy Court, the
Administrative Agent may (and at the written request of any of the Requisite
Term A Lenders, the Requisite Term B Lenders or the Requisite Term C Lenders
shall), without notice except as otherwise expressly provided herein, increase
the rate of interest applicable to the Loans to the Default Rate.
(b) If any Event of Default has occurred and is continuing, without
further order of, application to, or action by, the Bankruptcy Court, (i) the
Administrative Agent may (and at the written request of (A) the Requisite
Lenders or (B) after 120 days following the occurrence of such Event of Default,
any of the Requisite Term A Lenders, the Requisite Term B Lenders or the
Requisite Term C Lenders, shall), without notice, declare all or any portion of
the Obligations, including all or any portion of any Loan to be forthwith due
and payable, all without presentment, demand, protest or further notice of any
kind, all of which are expressly waived by Borrower and each other Credit Party;
or (ii) the Administrative Agent may (and at the written request of the
Requisite Lenders, shall), without notice except as required by the Final Order,
exercise any rights and remedies provided to the Administrative Agent under the
Loan Documents or at law or equity, including all remedies provided under the
Code.
(c) In addition, subject solely to any requirement of the giving of
notice by the terms of the Final Order, the automatic stay provided in section
362 of the Bankruptcy Code shall be deemed automatically vacated without further
action or order of the Bankruptcy Court and the Administrative Agent and the
Lenders shall be entitled to exercise all of their respective rights and
remedies under the Loan Documents, including, without limitation, all rights and
remedies with respect to the Collateral and the Guarantors.
8.3 Waivers by Credit Parties.
Except as otherwise provided for in this Agreement, by applicable law
or the Final Order, each Credit Party waives: (a) presentment, demand and
protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default,
54
nonpayment, maturity, release, compromise, settlement, extension or renewal of
any or all commercial paper, accounts, contract rights, documents, instruments,
chattel paper and guaranties at any time held by the Administrative Agent on
which any Credit Party may in any way be liable, and hereby ratifies and
confirms whatever the Administrative Agent may do in this regard, (b) all rights
to notice and a hearing prior to the Administrative Agent's taking possession or
control of, or to the Administrative Agent's replevy, attachment or levy upon,
the Collateral or any bond or security that might be required by any court prior
to allowing the Administrative Agent to exercise any of their remedies, and (c)
the benefit of all valuation, appraisal, marshaling and exemption laws.
9. GUARANTY
9.1 Guaranty of Obligations of Borrower. Each Guarantor hereby jointly
and severally unconditionally guarantees to Secured Parties, and their
respective successors, endorsees, transferees and assigns, the prompt payment
(whether at stated maturity, by acceleration or otherwise) and performance of
the Obligations of Borrower. Guarantors agree that this Agreement is a guaranty
of payment and performance and not of collection, and that their obligations
under this Agreement shall be primary, absolute and unconditional, irrespective
of, and unaffected by:
(a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in any other Loan Document or any other
agreement, document or instrument to which any Credit Party and/or Guarantors
are or may become a party;
(b) the absence of any action to enforce any other Loan Document or
the waiver or consent by any Secured Party with respect to any of the provisions
thereof;
(c) the existence, value or condition of, or failure to perfect its
Lien against, any Collateral for the Obligations or any action, or the absence
of any action, by Secured Parties in respect thereof (including, without
limitation, the release of any such security);
(d) the insolvency of any Credit Party; or
(e) any other action or circumstances which might otherwise constitute
a legal or equitable discharge or defense of a surety or guarantor,
it being agreed by each Guarantor that its obligations under this Agreement
shall not be discharged until the Termination Date. Each Guarantor shall be
regarded, and shall be in the same position, as principal debtor with respect to
the Obligations. Each Guarantor agrees that any notice or directive given at any
time to Secured Parties which is inconsistent with the waiver in the immediately
preceding sentence shall be null and void and may be ignored by Secured Parties,
and, in addition, may not be pleaded or introduced as evidence in any litigation
relating to this Agreement for the reason that such pleading or introduction
would be at variance with the written terms of this Agreement, unless Secured
Parties have specifically agreed otherwise in writing. It is agreed among each
Guarantor and Secured Parties that the foregoing waivers are of the essence of
the transaction contemplated by the Loan Documents and that, but for this
Agreement and such waivers, Secured Parties would decline to enter into this
Agreement.
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9.2 Demand by Secured Parties. In addition to the terms of the
Guaranty set forth in Section 9.1 hereof, and in no manner imposing any
limitation on such terms, it is expressly understood and agreed that, if, at any
time, the outstanding principal amount of the Obligations under this Agreement
(including all accrued interest thereon) is declared to be immediately due and
payable, then Guarantors shall, without demand (except as required by the Final
Order), pay to the holders of the Obligations the entire amount of the
outstanding Obligations due and owing to such holders. Payment by Guarantors
shall be made to Administrative Agent in immediately available federal funds to
the Cash Collateral Account and applied to the Obligations in accordance with
Section 1.3.
9.3 Enforcement of Guaranty. In no event shall any Secured Party have
any obligation (although it is entitled, at its option) to proceed against
Borrower or any other Credit Party or any Collateral pledged to secure
Obligations before seeking satisfaction from any or all of the Guarantors, and
Secured Parties may proceed, prior or subsequent to, or simultaneously with, the
enforcement of Secured Parties' rights hereunder, to exercise any right or
remedy which it may have against any Collateral, as a result of any Lien it may
have as security for all or any portion of the Obligations.
9.4 Waiver. In addition to the waivers contained in Section 9.1
hereof, Guarantors waive, and agree that they shall not at any time insist upon,
plead or in any manner whatever claim or take the benefit or advantage of, any
appraisal, valuation, stay, extension, marshaling of assets or redemption laws,
or exemption, whether now or at any time hereafter in force, which may delay,
prevent or otherwise affect the performance by Guarantors of their Obligations
under, or the enforcement by Secured Parties of, this Agreement. Guarantors
hereby waive diligence, presentment and demand (whether for non-payment or
protest or of acceptance, maturity, extension of time, change in nature or form
of the Obligations, acceptance of further security, release of further security,
composition or agreement arrived at as to the amount of, or the terms of, the
Obligations, notice of adverse change in Borrower's financial condition or any
other fact which might increase the risk to Guarantors) with respect to any of
the Obligations or all other demands whatsoever and waive the benefit of all
provisions of law which are or might be in conflict with the terms of this
Agreement. Guarantors represent, warrant and jointly and severally agree that,
as of the date of this Agreement, their obligations under this Agreement are not
subject to any offsets or defenses against Secured Parties or any Credit Party
of any kind. Guarantors further jointly and severally agree that their
obligations under this Agreement shall not be subject to any counterclaims or
offsets or defenses against Secured Parties or against any Credit Party of any
kind which may arise in the future.
9.5 Benefit of Guaranty. The provisions of this Agreement are for the
benefit of Secured Parties and their respective successors, transferees,
endorsees and assigns, and nothing herein contained shall impair, as between any
Credit Party and Secured Parties, the obligations of any Credit Party under the
Loan Documents. In the event all or any part of the Obligations are transferred,
indorsed or assigned by any Secured Party to any Person or Persons, any
reference to "Secured Party" herein shall be deemed to refer equally to such
Person or Persons.
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9.6 Modification of Obligations, Etc. Each Guarantor hereby
acknowledges and agrees that Secured Parties may at any time or from time to
time, with or without the consent of, or notice to, Guarantors or any of them:
(a) change or extend the manner, place or terms of payment of, or
renew or alter all or any portion of, the Obligations;
(b) take any action under or in respect of the Loan Documents in the
exercise of any remedy, power or privilege contained therein or available to it
at law, equity or otherwise, or waive or refrain from exercising any such
remedies, powers or privileges;
(c) amend or modify, in any manner whatsoever, the Loan Documents,
other than this Article 9;
(d) extend or waive the time for any Credit Party's performance of, or
compliance with, any term, covenant or agreement on its part to be performed or
observed under the Loan Documents, or waive such performance or compliance or
consent to a failure of, or departure from, such performance or compliance;
(e) take and hold Collateral for the payment of the Obligations
guaranteed hereby or sell, exchange, release, dispose of, or otherwise deal
with, any property pledged, mortgaged or conveyed, or in which Secured Parties
have been granted a Lien, to secure any Obligations;
(f) release anyone who may be liable in any manner for the payment of
any amounts owed by other Guarantors or any other Credit Party to any Secured
Party;
(g) modify or terminate the terms of any intercreditor or
subordination agreement pursuant to which claims of other creditors of any
Guarantor or any Credit Party are subordinated to the claims of Secured Parties;
and/or
(h) apply any sums by whomever paid or however realized to any amounts
owing by any other Guarantor or any other Credit Party to any Secured Party in
such manner as any Secured Party shall determine in its discretion;
and Secured Parties shall not incur any liability to Guarantors as a result
thereof, and no such action shall impair or release the Obligations of
Guarantors or any of them under this Agreement.
9.7 Waiver of Subrogation, Etc. Notwithstanding anything to the
contrary in this Agreement, or in any other Loan Document, each Guarantor
hereby:
(a) expressly and irrevocably waives, on behalf of itself and its
successors and assigns (including any surety), any and all rights at law or in
equity to subrogation, to reimbursement, to exoneration, to contribution, to
indemnification, to set off or to any other rights that could accrue to a surety
against a principal, to a guarantor against a principal, to a guarantor against
a maker or obligor, to an accommodation party against the party accommodated, to
a holder or transferee against a maker, or to the holder of any claim against
any Person, and which such Guarantor may have or hereafter acquire against any
Credit Party in
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connection with or as a result of such Guarantor's execution, delivery and/or
performance of this Agreement, or any other documents to which such Guarantor is
a party or otherwise; and
(b) acknowledges and agrees that this waiver is intended to benefit
Secured Parties and shall not limit or otherwise effect any Guarantor's
liability hereunder or the enforceability of this Agreement and their rights
under this Section 9.7 shall survive payment in full of the Obligations.
9.8 Election of Remedies. If Administrative Agent may, under
applicable law, proceed to realize benefits under any of the Loan Documents
giving Secured Parties a Lien upon any Collateral owned by any Credit Party,
either by judicial foreclosure or by non-judicial sale or enforcement,
Administrative Agent may, at its sole option, determine which of such remedies
or rights it may pursue without affecting any of such rights and remedies under
this Agreement. If, in the exercise of any of its rights and remedies,
Administrative Agent shall forfeit any of its rights or remedies, including its
right to enter a deficiency judgment against any Credit Party, whether because
of any applicable laws pertaining to "election of remedies" or the like,
Guarantors hereby consent to such action by Administrative Agent and waive any
claim based upon such action, even if such action by Administrative Agent shall
result in a full or partial loss of any rights of subrogation which Guarantors
might otherwise have had but for such action by Administrative Agent. Any
election of remedies which results in the denial or impairment of the right of
Administrative Agent to seek a deficiency judgment against any Credit Party
shall not impair each Guarantor's obligation to pay the full amount of the
Obligations. In the event Administrative Agent shall bid at any foreclosure or
trustee's sale or at any private sale permitted by law or the Loan Documents,
Administrative Agent may bid all or less than the amount of the Obligations and
the amount of such bid need not be paid by Administrative Agent but shall be
credited against the Obligations in accordance with Section 1.3. The amount of
the successful bid at any such sale shall be conclusively deemed to be the fair
market value of the Collateral and the difference between such bid amount and
the remaining balance of the Obligations shall be conclusively deemed to be the
amount of the Obligations guaranteed under this Agreement, notwithstanding that
any present or future law or court decision or ruling may have the effect of
reducing the amount of any deficiency claim to which Secured Parties might
otherwise be entitled but for such bidding at any such sale.
10. SECURITY
10.1 Security.
(a) To secure the prompt and complete payment, performance and
observance of all of the Obligations, in addition to other "Collateral" upon
which a Lien is granted under the other Collateral Documents, each Credit Party
hereby grants, assigns, conveys, mortgages, pledges, hypothecates and transfers
to Administrative Agent, for itself and for the benefit of the Secured Parties,
a first priority Lien (subject only to (i) the Liens of the Skymiles Agent in
the Skymiles Collateral pursuant to an order of the Bankruptcy Court in form and
substance satisfactory to the Administrative Agent, (ii) valid, perfected,
nonavoidable and enforceable Liens existing as of the Petition Date, (iii) valid
liens in existence at the commencement of the Cases to the extent perfected
subsequent to such commencement as permitted by Section 546(b) of the Code, (iv)
the Carve-Out and (v) Permitted Liens permitted pursuant to ▇▇▇▇▇▇▇ ▇.▇(▇), (▇),
▇▇
(▇), (▇), (▇), (▇) (subject, in the case of Amex, to the Skymiles Intercreditor
Agreement), (n), (o), (q), (r) or (s)) in accordance with sections 364(c)(2) and
364(c)(3) of the Bankruptcy Code upon all of the following property now owned or
at any time hereafter acquired by a Credit Party or in which such Credit Party
now has or at any time in the future may acquire any right, title or interest
(capitalized terms contained in this section, unless the context indicates
otherwise, or unless defined elsewhere herein, have the meanings provided for in
the Code to the extent the same is used or defined therein):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Documents;
(iv) all General Intangibles (including payment intangibles and
Software);
(v) all Goods, Inventory and Equipment, including spare parts,
Flight Simulators and Tooling, and other personal property, whether
tangible or intangible or wherever located;
(vi) all Instruments;
(vii) all Investment Property;
(viii) all Vehicles;
(ix) all real property (subject to Section 5.12(b));
(x) the commercial tort claims described on Disclosure Schedule
10.1;
(xi) all Deposit Accounts of any Credit Party, including all
Blocked Accounts, Concentration Accounts and all other bank accounts and
all deposits therein;
(xii) all money, cash or cash equivalents of any Credit Party;
(xiii) all Supporting Obligations and Letter of Credit Rights of
any Credit Party;
(xiv) to the extent not otherwise included, all monies and other
property of any kind which is, after the Petition Date, received by such
Credit Party in connection with refunds with respect to taxes, assessments
and governmental charges imposed on such Credit Party or any of its
property or income;
(xv) to the extent not otherwise included, all causes of action
(other than claims of the Credit Parties under Sections 502(d), 544, 545,
547, 548 and 550 of the
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Bankruptcy Code) and all monies and other property of any kind received
therefrom, and all monies and other property of any kind recovered by any
Credit Party; and
(xvi) all property of any Credit Party held by the Administrative
Agent or any other Secured Party, including all property of every
description, in the possession or custody of or in transit to the
Administrative Agent or such Secured Party for any purpose, including
safekeeping, collection or pledge, for the account of such Credit Party or
as to which such Credit Party may have any right or power;
(xvii) to the extent not otherwise included, all Proceeds of each
of the foregoing, tort claims, insurance claims and other rights to payment
not otherwise included in the foregoing and products of the foregoing and
all accessions to, substitutions and replacements for, and rents and
profits of, each of the foregoing;
provided, that "Collateral" shall not include (i) the Excluded
Collateral provided that if and when any property shall cease to be Excluded
Collateral, such property shall be deemed at all times from and after the date
such property ceased to be Excluded Collateral to constitute Collateral and (ii)
any General Intangibles or other rights arising under any contract, instrument,
license or other document if the grant of a security interest therein would
constitute a breach or violation of a valid and effective restriction in favor
of a third party, but only to the extent, and for so long as, in the case of
clause (ii) such restriction is not terminated or rendered unenforceable or
otherwise deemed ineffective by any applicable law.
(b) [Reserved].
(c) To the extent a security interest hereunder would be created in
any asset in which a security interest is created under any Collateral Document,
the rights, remedies and obligations of the relevant Credit Party and the
Secured Parties with respect to such asset shall be governed by such Collateral
Document and not this Agreement.
10.2 Perfection of Security Interests.
(a) At any time and from time to time, upon the reasonable request of
the Administrative Agent and at the sole expense of the Credit Parties, each
Credit Party shall promptly and duly execute and deliver any and all such
further instruments and documents and take such further actions as the
Administrative Agent may deem desirable to obtain the full benefits of any
security interest granted or purported to be granted by such Credit Party
hereunder and of the rights and powers herein granted, including (i) upon the
reasonable request of the Administrative Agent, using its commercially
reasonable efforts to secure all consents and approvals necessary or appropriate
for the assignment to or for the benefit of Administrative Agent of any License
or Contract held by such Credit Party and to enforce the security interests
granted hereunder, (ii) unless Administrative Agent shall otherwise consent in
writing (which consent may be revoked), delivering to Administrative Agent all
Collateral consisting of negotiable Documents and certificated securities (in
each case, accompanied by stock powers, allonges or other instruments of
transfer executed in blank) promptly after such Credit Party receives the same,
(iii) delivering any requested Chattel Paper or Instrument to Administrative
Agent (in each case accompanied by instruments of transfer executed in blank),
(iv) obtaining or
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using commercially reasonable efforts to obtain, (A) waivers
or subordinations of Liens from landlords at locations required by Section 5.8
of this Agreement and (B) signed acknowledgements of Administrative Agent's
Liens from bailees at locations required by Section 5.8 of this Agreement having
possession of any Credit Party's Goods that they hold for the benefit of Secured
Parties, (v) to the extent required by this Agreement and not waived by
Administrative Agent in writing (which waiver may be revoked) obtaining
authenticated Control Letters from each issuer of uncertificated securities,
securities intermediary, or commodities intermediary issuing or holding any
financial assets or commodities, in each case constituting Collateral, to or for
any Credit Party; provided, that the Administrative Agent shall not deliver a
notice that it is exercising exclusive control over any financial assets or
commodities to any such issuer, securities intermediary or commodities
intermediary unless an Event of Default has occurred and is continuing, (vi) in
accordance with and to the extent required by Annex C to this Agreement,
obtaining a blocked account or similar agreement with each bank or financial
institution holding a Deposit Account for such Credit Party; provided, that the
Administrative Agent shall not deliver a notice that it is exercising exclusive
control over any Deposit Account to any such bank or financial institution
unless an Event of Default has occurred and is continuing, (vii) for each Credit
Party that is or becomes the beneficiary of a letter of credit with a face
amount in excess of $1,000,000, promptly, and in any event within two (2)
Business Days after becoming a beneficiary, notifying Administrative Agent
thereof and thereafter, unless the related Letter-of-Credit Rights constitute a
Supporting Obligation for which Administrative Agent's security interest is
perfected, using its commercially reasonable efforts to cause the issuer and/or
confirmation bank with respect to such Letter-of-Credit Rights to enter into a
tri-party agreement with Administrative Agent assigning such Letter-of-Credit
Rights to Administrative Agent and directing all payments thereunder to a
Blocked Account, all in form and substance reasonably satisfactory to
Administrative Agent, (viii) taking all steps necessary to grant the
Administrative Agent control of all electronic chattel paper in accordance with
the Code and all "transferable records" as defined in each of the Uniform
Electronic Transactions Act and the Electronic Signatures in Global and National
Commerce Act, (ix) promptly, and in any event within five (5) Business Days
after the same is acquired by it, notifying the Administrative Agent of any
commercial tort claim (as defined in the Code) involving a claim of more than
$1,000,000 acquired by it and if requested by the Administrative Agent, entering
into a supplement to this Agreement, granting to Administrative Agent a Lien in
such commercial tort claim, (x) maintaining complete and accurate stock records,
(xi) except as otherwise provided in clause (vii) hereof, delivering to the
Administrative Agent all documents, certificates and Instruments necessary or
desirable to perfect the Administrative Agent's Lien on letters of credit on
which such Credit Party is named as beneficiary and all acceptances issued in
connection therewith and (xii) taking such other steps as are deemed necessary
or desirable to maintain the Administrative Agent's security interest in the
Collateral.
(b) Each Credit Party hereby irrevocably authorizes the Administrative
Agent at any time and from time to time to file in any filing office in any
Uniform Commercial Code jurisdiction any initial financing statements and
amendments thereto that (a) indicate the Collateral (i) as all assets of such
Credit Party or words of similar effect, regardless of whether any particular
asset comprised in the Collateral falls within the scope of Article 9 of the
Code in such jurisdiction, or (ii) as being of an equal or lesser scope or with
greater detail, and (b) contain any other information required by part 5 of
Article 9 of the Code for the sufficiency or filing office acceptance of any
financing statement or amendment, including (i) whether such Credit
61
Party is an organization, the type of organization and any organization
identification number issued to such Credit Party, and (ii) in the case of a
financing statement filed as a fixture filing, a sufficient description of real
property to which the Collateral relates. Each Credit Party agrees to furnish
any such information to the Administrative Agent promptly upon request. Each
Credit Party also ratifies its authorization for the Administrative Agent to
have filed in any Uniform Commercial Code jurisdiction any initial financing
statements or amendments thereto if filed prior to the date hereof.
(c) Notwithstanding subsections (a) and (b) of this Section 10.2, or
any failure on the part of any Credit Party or the Administrative Agent to take
any of the actions set forth in such subsections, the Liens and security
interests granted herein shall be deemed valid, enforceable and perfected by
entry of the Final Order. No financing statement, notice of lien, mortgage, deed
of trust or similar instrument in any jurisdiction or filing office need be
filed or any other action taken in order to validate and perfect the Liens and
security interests granted by or pursuant to this Agreement or the Final Order.
10.3 Rights of Lender; Limitations on Lenders' Obligations.
(a) Subject to each Credit Party's rights and duties under the
Bankruptcy Code (including section 365 of the Bankruptcy Code), it is expressly
agreed by each Credit Party that, anything herein to the contrary
notwithstanding, each such Credit Party shall remain liable under each of its
Contracts and each of its Licenses to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, unless such Credit
Party determines in its reasonable good faith judgment that such Contract or
License is no longer valuable to such Credit Party's business, economically or
otherwise. Neither the Administrative Agent nor any Secured Party shall have any
obligation or liability under any Contract or License by reason of or arising
out of this Agreement or the granting herein of a Lien thereon or the receipt by
Administrative Agent or any Secured Party of any payment relating to any
Contract or License pursuant hereto. Neither Administrative Agent nor any
Secured Party shall be required or obligated in any manner to perform or fulfill
any of the obligations of any Credit Party under or pursuant to any Contract or
License, or to make any payment, or to make any inquiry as to the nature or the
sufficiency of any payment received by it or the sufficiency of any performance
by any party under any Contract or License, or to present or file any claims, or
to take any action to collect or enforce any performance or the payment of any
amounts which may have been assigned to it or to which it may be entitled at any
time or times.
(b) Subject to Section 10.5 hereof, the Administrative Agent
authorizes each Credit Party to collect its Accounts, provided that such
collection is performed in accordance with such Credit Party's customary
procedures, and the Administrative Agent may, upon the occurrence and during the
continuation of any Event of Default and without notice, other than any
requirement of notice provided in the Final Order, limit or terminate said
authority at any time.
(c) Subject to any requirement of notice provided in the Final Order,
the Administrative Agent may at any time after an Event of Default has occurred
and is continuing without prior notice to any Credit Party, notify Account
Debtors and other Persons obligated on the Collateral that Administrative Agent
has a security interest therein, and that payments shall
62
be made directly to Administrative Agent. Subject to any requirement of notice
provided in the Final Order, upon the reasonable request of Administrative
Agent, each Credit Party shall so notify Account Debtors and other Persons
obligated on Collateral. Once any such notice has been given to any Account
Debtor or other Person obligated on the Collateral, the affected Credit Party
shall not give any contrary instructions to such Account Debtor or other Person
without Administrative Agent's prior written consent. Subject to any requirement
of notice provided in the Final Order, upon the occurrence and during the
continuation of an Event of Default, the Administrative Agent may in its own
name, or in the name of others, communicate with such parties to such Accounts,
Contracts, Instruments, Investment Property and Chattel Paper to verify with
such Persons to the Administrative Agent's reasonable satisfaction the
existence, amount and terms of any such Accounts, Contracts, Instruments,
Investment Property or Chattel Paper.
(d) Subject to any requirement of notice provided in the Final Order,
Administrative Agent may at any time in Administrative Agent's own name, in the
name of a nominee of Administrative Agent or in the name of any Credit Party
communicate (by mail, telephone, facsimile or otherwise) with Account Debtors to
verify with such Persons, to Administrative Agent's satisfaction, the existence,
amount, terms of, and any other matter relating to, Accounts and/or payment
intangibles comprising Collateral; provided that unless an Event of Default
shall have occurred and be continuing, the Administrative Agent shall not do any
of the foregoing except during normal business hours and after giving such
Credit Party reasonable prior notice and opportunity to be present. If an Event
of Default shall have occurred and be continuing, each Credit Party, at its own
expense, shall cause the independent certified public accountants then engaged
by such Credit Party to prepare and deliver to Administrative Agent and each
Secured Party at any time and from time to time promptly upon Administrative
Agent's written request the following reports with respect to each Credit Party:
(i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial
balances; and (iv) a test verification of such Accounts as Administrative Agent
may request. Administrative Agent may at any time in Administrative Agent's own
name, in the name of a nominee of Administrative Agent or in the name of any
Credit Party communicate (by mail, telephone, facsimile or otherwise) with
parties to Contracts and obligors in respect of Instruments to verify with such
Persons, to Administrative Agent's satisfaction, the existence, amount, terms
of, and any other matter relating to, Instruments, Chattel Paper and/or payment
intangibles comprising Collateral; provided that unless an Event of Default
shall have occurred and be continuing, the Administrative Agent shall not do any
of the foregoing except during normal business hours and after giving such
Credit Party reasonable prior notice and opportunity to be present. Each Credit
Party, at its own expense, shall deliver to Administrative Agent the results of
each physical verification, if any, which such Credit Party may in its
discretion have made, or caused any other Person to have made on its behalf, of
all or any portion of its Inventory.
10.4 Covenants of the Credit Parties with Respect to Collateral. Each
Credit Party covenants and agrees with Administrative Agent, for the benefit of
Secured Parties, that from and after the date of this Agreement and until the
Termination Date:
(a) Maintenance of Records. Credit Parties shall keep and maintain, at
their own cost and expense, satisfactory and complete records of the Collateral,
including a record of any and all payments received and any and all credits
granted with respect to the Collateral and
63
all other dealings with the Collateral, in each case in a manner consistent with
past practice. Upon request by the Administrative Agent, Credit Parties shall
▇▇▇▇ their books and records pertaining to the Collateral to evidence this
Agreement and the Liens granted hereby. If any Credit Party retains possession
of any Chattel Paper or Instruments with Administrative Agent's consent, such
Chattel Paper and Instruments shall, if requested by Administrative Agent, be
marked with the following legend: "This writing and the obligations evidenced or
secured hereby are subject to the security interest of General Electric Capital
Corporation, as Administrative Agent, for the benefit of Secured Parties."
(b) Covenants Regarding Patent, Trademark and Copyright Collateral.
(i) Credit Parties shall notify Administrative Agent promptly if
they know or have reason to know that any application or registration
relating to any material Patent, Trademark or Copyright (now or hereafter
existing) may become abandoned or dedicated, or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent
and Trademark Office, the United States Copyright Office or any court)
regarding any Credit Party's ownership of any material Patent, Trademark or
Copyright, its right to register the same, or to keep and maintain the
same.
(ii) Promptly after any Credit Party, either itself or through
the Administrative Agent, employee, licensee or designee, files an
application for the registration of any Patent, Trademark or Copyright with
the United States Patent and Trademark Office or the United States
Copyright Office, Credit Party shall give Administrative Agent written
notice of such filing and, upon request of Administrative Agent, Credit
Party shall execute and deliver any and all Patent Security Agreements,
Copyright Security Agreements or Trademark Security Agreements as
Administrative Agent may request to evidence Administrative Agent's Lien on
such Patent, Trademark or Copyright, and the General Intangibles of such
Credit Party relating thereto or represented thereby.
(iii) Credit Parties shall take all actions necessary or
requested by Administrative Agent to maintain and pursue each application,
to obtain the relevant registration and to maintain the registration of
each of the Patents, Trademarks and Copyrights (now or hereafter existing),
including the filing of applications for renewal, affidavits of use,
affidavits of noncontestability and opposition and interference and
cancellation proceedings unless such Credit Party reasonably determines
that such Patent, Trademark or Copyright Collateral is in no way material
to the conduct of its business or operations,
(iv) In the event that any of the Patent, Trademark or Copyright
Collateral is infringed upon, or misappropriated or diluted by a third
party, such Credit Party shall comply with Section 10.2(a)(ix) of this
Agreement. Such Credit Party shall, unless such Credit Party reasonably
determines that such Patent, Trademark or Copyright Collateral is in no way
material to the conduct of its business or operations, promptly ▇▇▇ for
infringement, misappropriation or dilution and to recover any and all
damages for such infringement, misappropriation or dilution, and shall take
such other actions as
64
Administrative Agent shall deem appropriate under the circumstances to
protect such Patent, Trademark or Copyright Collateral.
(c) [Reserved].
(d) Further Identification of Collateral. In addition to any other
requirements herein, Credit Parties will, if so requested by Administrative
Agent, furnish to Administrative Agent, as often as Administrative Agent
reasonably requests, statements and schedules further identifying and describing
the Collateral as Administrative Agent may reasonably request, all in such
detail as Administrative Agent may specify.
(e) Notices. Credit Parties will advise Administrative Agent promptly,
in reasonable detail of any Lien or claim made or asserted against any of the
Collateral other than in respect of Permitted Liens.
(f) Terminations; Amendments Not Authorized. Except to the extent
permitted by clause (g), each Credit Party acknowledges that it is not
authorized to file any financing statement or amendment or termination statement
with respect to any financing statement relating to the Collateral and filed
pursuant to the terms hereof without the prior written consent of Administrative
Agent and agrees that it will not do so without the prior written consent of
Administrative Agent, subject to such Credit Party's rights under Section
9-509(d)(2) of the Code.
(g) Authorized Terminations and Subordinations. Administrative Agent
will promptly deliver to each Credit Party for filing or authorize each Credit
Party to prepare and file termination statements and releases in respect of any
sales, transfers, conveyances, assignments or other dispositions of Collateral
made in accordance with Section 6.8 of this Agreement. Administrative Agent
will, upon request of any Credit Party, expressly subordinate, in form and
substance reasonably satisfactory to the Administrative Agent the Liens granted
hereunder to any prior Lien permitted under Section 6.7 of this Agreement.
(h) Motor Vehicles. Upon request, each Credit Party shall deliver to
Administrative Agent a motor vehicle certificate of title, if any, for all motor
vehicles from time to time owned by it and shall cause those title certificates
to be filed (with Administrative Agent's Lien noted thereon) in the appropriate
state motor vehicle filing office.
(i) Pledged Collateral.
(i) All certificates and all promissory notes and instruments
evidencing the Pledged Collateral shall be delivered to and held by or on
behalf of Administrative Agent, for itself and the benefit of Secured
Parties, pursuant hereto. All Pledged Shares shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to Administrative Agent and all promissory notes or
other instruments evidencing the Pledged Indebtedness shall be endorsed by
the applicable Credit Party.
(ii) Without the prior written consent of Administrative Agent,
no Credit Party will sell, assign, transfer, pledge, or otherwise encumber
any of its rights in
65
or to the Pledged Collateral, or any unpaid dividends, interest or other
distributions or payments with respect to the Pledged Collateral or ▇▇▇▇▇ ▇
▇▇▇▇ in the Pledged Collateral, unless otherwise expressly permitted by
this Agreement;
(iii) Each Credit Party will, at its expense, promptly execute,
acknowledge and deliver all such instruments and take all such actions as
Administrative Agent from time to time may reasonably request in order to
ensure to Administrative Agent and Secured Parties obtain the benefits of
the Liens in and to the Pledged Collateral intended to be created by this
Agreement, including the filing of any necessary Code financing statements,
which may be filed by Administrative Agent with or (to the extent permitted
by law) without the signature of Credit Party, and will cooperate with
Administrative Agent, at such Credit Party's expense, in obtaining all
necessary approvals and making all necessary filings under federal, state,
local or foreign law in connection with such Liens or any sale or transfer
of the Pledged Collateral; provided that Administrative Agent shall not,
prior to the occurrence of any Event of Default, require any actions to be
taken with respect to (i) those assets as to which Administrative Agent
shall determine, in its reasonable discretion, that the cost of obtaining
such security interest or taking such action are excessive in relation to
the benefit to Lenders afforded thereby, (ii) property the acquisition or
construction of which was financed through Indebtedness (existing as of the
Closing Date or as permitted by Section 6.3(a) of this Agreement), and
(iii) all property to the extent that the granting of such a security
interest or taking such action would constitute a breach or violation of a
valid and effective restriction in favor of a third party (including,
without limitation, mandatory consent rights), or give rise to any
indemnification obligations or any right to terminate or commence the
exercise of remedies under such restrictions;
(iv) Each Credit Party has and will defend the title to the
Pledged Collateral and the Liens of Administrative Agent in the Pledged
Collateral against the claim of any Person (other than the holder of a
Permitted Lien) and will maintain and preserve such Liens (it being
understood that nothing in this clause (iv) will prevent such Credit Party
from disposing of Pledged Collateral as otherwise permitted by Section
6.8); and
(v) Each Credit Party will, upon obtaining ownership of any
additional Stock of a Pledged Entity or promissory notes or instruments
representing Pledged Indebtedness or Stock or promissory notes or
instruments otherwise required to be pledged to Administrative Agent
pursuant to any of the Loan Documents, which Stock, notes or instruments
are not already Pledged Collateral, promptly (and in any event within five
(5) Business Days) deliver to Administrative Agent a Pledge Amendment, duly
executed by such Credit Party, in substantially the form of Exhibit H
hereto (a "Pledge Amendment") in respect of any such additional Stock,
notes or instruments, pursuant to which such Credit Party shall pledge to
Administrative Agent all of such additional Stock, notes and instruments;
provided that such Credit Party shall be required to do the foregoing with
respect to any such promissory note or instrument only if requested to do
so by the Administrative Agent pursuant to Section 10.2(a)(ii) of this
Agreement. Credit Party hereby authorizes Administrative Agent to attach
each Pledge Amendment to this Agreement and agrees that all Pledged Shares
and Pledged
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Indebtedness listed on any Pledge Amendment delivered to Administrative
Agent shall for all purposes hereunder be considered Pledged Collateral.
This clause (v) shall not apply to any Excluded Equity.
10.5 Performance by Administrative Agent of the Credit Parties'
Obligations. If any Credit Party fails to perform or comply with any of its
agreements contained herein and the Administrative Agent, as provided for by the
terms of this Agreement, shall itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the expenses of the
Administrative Agent incurred in connection with such performance or compliance,
together with interest thereon at the rate then in effect in respect of Term
Loan C, shall be payable by such Credit Party to the Administrative Agent on
demand and shall constitute Obligations secured by the Collateral. Performance
of such Credit Party's obligations as permitted under this Section 10.5 shall in
no way constitute a violation of the automatic stay provided by section 362 of
the Bankruptcy Code and each Credit Party hereby waives applicability thereof.
Moreover, the Administrative Agent shall in no way be responsible for the
payment of any costs incurred in connection with preserving or disposing of
Collateral pursuant to section 506(c) of the Bankruptcy Code and the Collateral
may not be charged for the incurrence of any such cost.
10.6 Limitation on Administrative Agent's duty in Respect of
Collateral. The Administrative Agent and each Secured Party shall use reasonable
care with respect to the Collateral in its possession or under its control.
Neither the Administrative Agent nor any Secured Party shall have any other duty
as to any Collateral in its possession or control or in the possession or
control of any agent or nominee of the Administrative Agent or such Secured
Party, or any income thereon or as to the preservation of rights against prior
parties or any other rights pertaining thereto.
10.7 Remedies; Rights Upon Default.
(a) In addition to all other rights and remedies granted to it under
the other Loan Documents and under any other instrument or agreement securing,
evidencing or relating to any of the Secured Obligations, if any Event of
Default shall have occurred and be continuing, the Administrative Agent may
exercise all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, each Credit Party expressly agrees
that in any such event the Administrative Agent, without demand of performance
or other demand, advertisement or notice of any kind (except the notice required
by the Final Order or the notice specified below of time and place of public or
private sale) to or upon such Credit Party or any other Person (all and each of
which demands, advertisements and notices are hereby expressly waived to the
maximum extent permitted by the Code and other applicable law), may, to the
maximum extent permitted by law, forthwith enter upon the premises of such
Credit Party where any Collateral is located through self-help, without judicial
process, without first obtaining a final judgment or giving such Credit Party or
any other Person notice and opportunity for a hearing on the Administrative
Agent's claim or action and may collect, receive, assemble, process, appropriate
and realize upon the Collateral, or any part thereof, and may forthwith sell,
lease, license, assign, give an option or options to purchase, or sell or
otherwise dispose of and deliver said Collateral (or contract to do so), or any
part thereof, in one or more parcels at a public or private sale or sales, at
any exchange at such prices as it may deem acceptable, for cash or on credit or
for future delivery without assumption of any credit risk. The Administrative
67
Agent or any Secured Party shall have the right upon any such public sale or
sales and, to the extent permitted by law, upon any such private sale or sales,
to purchase for the benefit of Secured Parties, the whole or any part of said
Collateral so sold, free of any right or equity of redemption, which equity of
redemption each Credit Party hereby releases. Such sales may be adjourned and
continued from time to time with or without notice. The Administrative Agent
shall have the right to conduct such sales on any Credit Party's premises or
elsewhere and shall have the right to use any Credit Party's premises without
charge for such time or times as the Administrative Agent may deem necessary or
advisable. EACH CREDIT PARTY HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS
ADMINISTRATIVE AGENT AS THE PROXY AND ATTORNEY-IN-FACT OF SUCH CREDIT PARTY WITH
RESPECT TO THE PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE THE PLEDGED
SHARES, WITH FULL POWER OF SUBSTITUTION TO DO SO. THE APPOINTMENT OF
ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST
AND SHALL BE IRREVOCABLE UNTIL THE TERMINATION DATE. IN ADDITION TO THE RIGHT TO
VOTE THE PLEDGED SHARES, THE APPOINTMENT OF ADMINISTRATIVE AGENT AS PROXY AND
ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS,
PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE PLEDGED SHARES WOULD BE
ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS,
CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH
PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION
(INCLUDING ANY TRANSFER OF ANY PLEDGED SHARES ON THE RECORD BOOKS OF THE ISSUER
THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED SHARES OR ANY
OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF AN EVENT OF DEFAULT.
NOTWITHSTANDING THE FOREGOING, (X) ADMINISTRATIVE AGENT SHALL NOT HAVE ANY DUTY
TO EXERCISE ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR
ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO AND (Y) ADMINISTRATIVE AGENT
SHALL NOT EXERCISE ANY SUCH RIGHT WITH RESPECT TO ANY REGULATED SUBSIDIARY
UNLESS ANY AND ALL REGULATORY APPROVALS REQUIRED UNDER APPLICABLE LAW SHALL HAVE
BEEN OBTAINED.
(b) If any Event of Default shall have occurred and be continuing,
each Credit Party further agrees, at Administrative Agent's request, to assemble
the Collateral and make it available to Administrative Agent at a place or
places designated by Administrative Agent which are reasonably convenient to
Administrative Agent and such Credit Party, whether at such Credit Party's
premises or elsewhere. Until Administrative Agent is able to effect a sale,
lease, or other disposition of Collateral, the Administrative Agent shall have
the right to hold or use Collateral, or any part thereof, to the extent that it
deems appropriate for the purpose of preserving Collateral or its value or for
any other purpose deemed appropriate by Administrative Agent. The Administrative
Agent shall have no obligation to any Credit Party to maintain or preserve the
rights of Credit Party as against third parties with respect to Collateral while
Collateral is in the possession of the Administrative Agent. The Administrative
Agent may, if it so elects, seek the appointment of a receiver or keeper to take
possession of Collateral and to enforce any of the Administrative Agent's
remedies (for the benefit of Secured Parties), with respect to such appointment
without prior notice or hearing as to such appointment. The
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Administrative Agent shall deposit the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale to the Cash Collateral
Account and such net proceeds shall be applied in accordance with Section 1.3.
To the maximum extent permitted by applicable law, each Credit Party waives all
claims, damages, and demands against the Administrative Agent or any Secured
Party arising out of the repossession, retention or sale of the Collateral
except such as arise solely out of the gross negligence or willful misconduct of
the Administrative Agent or such Secured Party as finally determined by a court
of competent jurisdiction. Each Credit Party agrees that ten (10) days prior
notice by Administrative Agent of the time and place of any public sale or of
the time after which a private sale may take place is reasonable notification of
such matters. Credit Parties shall remain liable for any deficiency if the
proceeds of any sale or disposition of the Collateral are insufficient to pay
all Secured Obligations, including any attorneys' fees and other expenses
incurred by Administrative Agent or any Secured Party to collect such
deficiency.
(c) Except as otherwise specifically provided herein, each Credit
Party hereby waives presentment, demand, protest or any notice (to the maximum
extent permitted by applicable law) of any kind in connection with this
Agreement or any Collateral.
(d) To the extent that applicable law imposes duties on the
Administrative Agent to exercise remedies in a commercially reasonable manner,
each Credit Party acknowledges and agrees that it is not commercially
unreasonable for the Administrative Agent (i) to fail to incur expenses
reasonably deemed significant by the Administrative Agent to prepare Collateral
for disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (ii) to fail to
obtain third party consents for access to Collateral to be disposed of, or to
obtain or, if not required by other law, to fail to obtain governmental or third
party consents for the collection or disposition of Collateral to be collected
or disposed of, (iii) to fail to exercise collection remedies against Account
Debtors or other Persons obligated on Collateral or to remove Liens on or any
adverse claims against Collateral, (iv) to exercise collection remedies against
Account Debtors and other Persons obligated on Collateral directly or through
the use of collection agencies and other collection specialists, (v) to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (vi) to
contact other Persons, whether or not in the same business as the Credit
Parties, for expressions of interest in acquiring all or any portion of such
Collateral, (vii) to hire one or more professional auctioneers to assist in the
disposition of Collateral, whether or not the Collateral is of a specialized
nature, (viii) to dispose of Collateral by utilizing internet sites that provide
for the auction of assets of the types included in the Collateral or that have
the reasonable capacity of doing so, or that match buyers and sellers of assets,
(ix) to dispose of assets in wholesale rather than retail markets, (x) to
disclaim disposition warranties, such as title, possession or quiet enjoyment,
(xi) to purchase insurance or credit enhancements to insure the Administrative
Agent against risks of loss, collection or disposition of Collateral or to
provide to the Administrative Agent a guaranteed return from the collection or
disposition of Collateral, or (xii) to the extent deemed appropriate by the
Administrative Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist the Administrative Agent
in the collection or disposition of any of the Collateral. Each Credit Party
acknowledges that the purpose of this Section 10.7(d) is to provide
non-exhaustive indications of what actions or omissions by the Administrative
Agent would not be commercially unreasonable in the Administrative Agent's
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exercise of remedies against the Collateral and that other actions or omissions
by the Administrative Agent shall not be deemed commercially unreasonable solely
on account of not being indicated in this Section 10.7(d). Without limitation
upon the foregoing, nothing contained in this Section 10.7(d) shall be construed
to grant any rights to any Credit Party or to impose any duties on the
Administrative Agent that would not have been granted or imposed by this
Agreement or by applicable law in the absence of this Section 10.7(d).
(e) Neither the Administrative Agent nor any Secured Party shall be
required to make any demand upon, or pursue or exhaust any of their rights or
remedies against, any Credit Party, any other obligor, guarantor, pledgor or any
other Person with respect to the payment of the Secured Obligations or to pursue
or exhaust any of their rights or remedies with respect to any Collateral
therefore or any direct or indirect guarantee thereof. Neither the
Administrative Agent nor the Secured Parties shall be required to marshal the
Collateral or any guarantee of the Secured Obligations or to resort to the
Collateral or any such guarantee in any particular order, and all of its and
their rights hereunder or under any other Loan Document shall be cumulative. To
the extent it may lawfully do so, each Credit Party absolutely and irrevocably
waives and relinquishes the benefit and advantage of, and covenants not to
assert against the Administrative Agent or any Secured Party, any valuation,
stay, appraisement, extension, redemption or similar laws and any and all rights
or defenses it may have as a surety now or hereafter existing which, but for
this provision, might be applicable to the sale of any Collateral made under the
judgment, order or decree of any court, or privately under the power of sale
conferred by this Agreement, or otherwise.
(f) Upon the occurrence of an Event of Default and during the
continuation of such Event of Default, and concurrently with written notice to
Credit Parties, Administrative Agent is hereby authorized and empowered to
transfer and register in its name or in the name of its nominee the whole or any
part of the Pledged Collateral, to exchange certificates or instruments
representing or evidencing Pledged Collateral for certificates or instruments of
smaller or larger denominations, to exercise the voting and all other rights as
a holder with respect thereto, to collect and receive all cash dividends,
interest, principal and other distributions made thereon, to sell in one or more
sales after ten (10) days' notice of the time and place of any public sale or of
the time at which a private sale is to take place (which notice Credit Parties
agree is commercially reasonable) the whole or any part of the Pledged
Collateral and to otherwise act with respect to the Pledged Collateral as though
Administrative Agent was the outright owner thereof in each case provided that
no such action shall be taken with respect to the Stock of any Regulated
Subsidiary unless any and all regulatory approvals required under applicable law
shall have been obtained. Any sale shall be made at a public or private sale at
Administrative Agent's place of business, or at any place to be named in the
notice of sale, either for cash or upon credit or for future delivery at such
price as Administrative Agent may deem fair, and Administrative Agent may be the
purchaser of the whole or any part of the Pledged Collateral so sold and hold
the same thereafter in its own right free from any claim of such Credit Party or
any right of redemption. Each sale shall be made to the highest bidder, but
Administrative Agent reserves the right to reject any and all bids at such sale
which, in its discretion, it shall deem inadequate. Demands of performance,
except as otherwise herein specifically provided for, notices of sale,
advertisements and the presence of property at sale are hereby waived and any
sale hereunder may be conducted by an auctioneer or any officer or agent of
Administrative Agent.
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(g) If, at the original time or times appointed for the sale of the
whole or any part of the Pledged Collateral, the highest bid, if there be but
one sale, shall be inadequate to discharge in full all the Secured Obligations,
or if the Pledged Collateral has been offered for sale in lots, and if at any of
such sales, the highest bid for the lot offered for sale would indicate to
Administrative Agent, in its discretion, that the proceeds of the sales of the
whole of the Pledged Collateral would be unlikely to be sufficient to discharge
all the Secured Obligations, the Administrative Agent may, on one or more
occasions and in its sole discretion, postpone effectuating any of said sales by
public announcement at the time of sale or the time of previous postponement of
sale, and no other notice of such postponement or postponements of sale need be
given, any other notice being hereby waived; provided, however, that any sale or
sales made after such postponement shall be after ten (10) days' notice to such
Credit Party.
(h) If, at any time when Administrative Agent in its sole discretion
determines, following the occurrence and during the continuance of an Event of
Default, that, in connection with any actual or contemplated exercise of its
rights (when permitted under this Section 10.7(h) to sell the whole or any part
of the Pledged Shares hereunder, it is necessary or advisable to effect a public
registration of all or part of the Pledged Collateral pursuant to the Securities
Act of 1933, as amended (or any similar statute then in effect) (the "Act"),
such Credit Party shall, in an expeditious manner, cause the Pledged Entities
to:
(i) Prepare and file with the Securities and Exchange Commission
(the "Commission") a registration statement with respect to the Pledged
Shares and in good faith use commercially reasonable efforts to cause such
registration statement to become and remain effective;
(ii) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Act with
respect to the sale or other disposition of the Pledged Shares covered by
such registration statement whenever Administrative Agent shall desire to
sell or otherwise dispose of the Pledged Shares;
(iii) Furnish to Administrative Agent such numbers of copies of a
prospectus and a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as Administrative Agent
may request in order to facilitate the public sale or other disposition of
the Pledged Shares by Administrative Agent;
(iv) Use commercially reasonable efforts to register or qualify
the Pledged Shares covered by such registration statement under such other
securities or blue sky laws of such jurisdictions within the United States
and Puerto Rico as Administrative Agent shall request, and do such other
reasonable acts and things as may be required of it to enable
Administrative Agent to consummate the public sale or other disposition in
such jurisdictions of the Pledged Shares by Administrative Agent;
(v) Furnish, at the request of Administrative Agent, on the date
that shares of the Pledged Collateral are delivered to the underwriters for
sale pursuant to such registration or, if the security is not being sold
through underwriters, on the date that the
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registration statement with respect to such Pledged Shares becomes
effective, (A) an opinion, dated such date, of the independent counsel
representing such registrant for the purposes of such registration,
addressed to the underwriters, if any, and in the event the Pledged Shares
are not being sold through underwriters, then to Administrative Agent, in
customary form and covering matters of the type customarily covered in such
legal opinions; and (B) a comfort letter, dated such date, from the
independent certified public accountants of such registrant, addressed to
the underwriters, if any, and in the event the Pledged Shares are not being
sold through underwriters, then to Administrative Agent, in a customary
form and covering matters of the type customarily covered by such comfort
letters and as the underwriters or Administrative Agent shall reasonably
request. The opinion of counsel referred to above shall additionally cover
such other legal matters with respect to the registration in respect of
which such opinion is being given as Administrative Agent may reasonably
request. The letter referred to above from the independent certified public
accountants shall additionally cover such other financial matters
(including information as to the period ending not more than five (5)
Business Days prior to the date of such letter) with respect to the
registration in respect of which such letter is being given as
Administrative Agent may reasonably request; and
(vi) Otherwise use commercially reasonable efforts to comply with
all applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable but not later
than 18 months after the effective date of the registration statement, an
earnings statement covering the period of at least 12 months beginning with
the first full month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Act.
(i) All expenses incurred in complying with Section 10.7(h) hereof,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the National Association of Securities Dealers,
Inc.), printing expenses, fees and disbursements of counsel for the registrant,
the fees and expenses of counsel for Administrative Agent, expenses of the
independent certified public accountants (including any special audits incident
to or required by any such registration) and expenses of complying with the
securities or blue sky laws or any jurisdictions, shall be paid by Credit
Parties.
(j) If, at any time when Administrative Agent shall determine to
exercise its right to sell the whole or any part of the Pledged Collateral
hereunder, such Pledged Collateral or the part thereof to be sold shall not, for
any reason whatsoever, be effectively registered under the Act, Administrative
Agent may, in its discretion (subject only to applicable requirements of law),
sell such Pledged Collateral or part thereof by private sale in such manner and
under such circumstances as Administrative Agent may deem necessary or
advisable, but subject to the other requirements of this Section 10.7, and shall
not be required to effect such registration or to cause the same to be effected.
Without limiting the generality of the foregoing, in any such event,
Administrative Agent in its discretion (x) may, in accordance with applicable
securities laws, proceed to make such private sale notwithstanding that a
registration statement for the purpose of registering such Pledged Collateral or
part thereof could be or shall have been filed under said Act (or similar
statute), (y) may approach and negotiate with a single possible purchaser to
effect such sale, and (z) may restrict such sale to a purchaser who is an
accredited investor under the
72
Act and who will represent and agree that such purchaser is purchasing for its
own account, for investment and not with a view to the distribution or sale of
such Pledged Collateral or any part thereof. In addition to a private sale as
provided above in this Section 10.7, if any of the Pledged Collateral shall not
be freely distributable to the public without registration under the Act (or
similar statute) at the time of any proposed sale pursuant to this Section 10.7,
then Administrative Agent shall not be required to effect such registration or
cause the same to be effected but, in its discretion (subject only to applicable
requirements of law), may require that any sale hereunder (including a sale at
auction) be conducted subject to restrictions:
(i) as to the financial sophistication and ability of any Person
permitted to bid or purchase at any such sale;
(ii) as to the content of legends to be placed upon any
certificates representing the Pledged Collateral sold in such sale,
including restrictions on future transfer thereof;
(iii) as to the representations required to be made by each
Person bidding or purchasing at such sale relating to that Person's access
to financial information about such Credit Party and such Person's
intentions as to the holding of the Pledged Collateral so sold for
investment for its own account and not with a view to the distribution
thereof; and
(iv) as to such other matters as Administrative Agent may, in its
discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance
with the Bankruptcy Code and other laws affecting the enforcement of
creditors' rights and the Act and all applicable state securities laws.
(k) Each Credit Party recognizes that Administrative Agent may be
unable to effect a public sale of any or all the Pledged Collateral and may be
compelled to resort to one or more private sales thereof in accordance with
clause (j) above. Each Credit Party also acknowledges that any such private sale
may result in prices and other terms less favorable to the seller than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any
such private sale shall not be deemed to have been made in a commercially
unreasonable manner solely by virtue of such sale being private. Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged
Collateral for the period of time necessary to permit the Pledged Entity to
register such securities for public sale under the Act, or under applicable
state securities laws, even if such Credit Party and the Pledged Entity would
agree to do so.
(l) Each Credit Party agrees to the maximum extent permitted by
applicable law that following the occurrence and during the continuance of an
Event of Default it will not at any time plead, claim or take the benefit of any
appraisal, valuation, stay, extension, moratorium or redemption law now or
hereafter in force in order to prevent or delay the enforcement of this
Agreement, or the absolute sale of the whole or any part of the Pledged
Collateral or the possession thereof by any purchaser at any sale hereunder, and
each Credit Party waives the benefit of all such laws to the extent it lawfully
may do so. Each Credit Party agrees that it will
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not interfere with any right, power and remedy of Administrative Agent provided
for in this Agreement or now or hereafter existing at law or in equity or by
statute or otherwise, or the exercise or beginning of the exercise by
Administrative Agent of any one or more of such rights, powers or remedies. No
failure or delay on the part of Administrative Agent to exercise any such right,
power or remedy and no notice or demand which may be given to or made upon
Credit Parties by Administrative Agent with respect to any such remedies shall
operate as a waiver thereof, or limit or impair Administrative Agent's right to
take any action or to exercise any power or remedy hereunder, without notice or
demand, or prejudice its rights as against any Credit Party in any respect.
(m) Each Credit Party further agrees that a breach of any of the
covenants contained in this Section 10.7 will cause irreparable injury to
Administrative Agent, that Administrative Agent shall have no adequate remedy at
law in respect of such breach and, as a consequence, agrees that each and every
covenant contained in this Section 10.7 shall be specifically enforceable
against the Credit Parties, and each Credit Party hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that the Secured Obligations are not then due and
payable in accordance with the agreements and instruments governing and
evidencing such Obligations.
(n) To the extent that any rights and remedies under this Section 10.7
would otherwise be in violation of the automatic stay of section 362 of the
Bankruptcy Code, such stay shall be deemed modified, as set forth in the Final
Order, as applicable, to the extent necessary to permit the Administrative Agent
to exercise such rights and remedies.
10.8 The Administrative Agent's Appointment as Attorney-in-Fact.
(a) On the Closing Date each Credit Party executed and delivered to
Administrative Agent a power of attorney (the "Power of Attorney") substantially
in the form attached hereto as Exhibit A. The power of attorney granted pursuant
to the Power of Attorney is a power coupled with an interest and shall be
irrevocable until the Termination Date. The powers conferred on Administrative
Agent, for the benefit of Secured Parties, under the Power of Attorney are
solely to protect Administrative Agent's interests (for the benefit of Secured
Parties) in the Collateral and shall not impose any duty upon the Administrative
Agent or any Secured Party to exercise any such powers. Administrative Agent
agrees that (a) except for the powers granted in clause (h) of the Power of
Attorney, it shall not exercise any power or authority granted under the Power
of Attorney unless an Event of Default has occurred and is continuing, and (b)
Administrative Agent shall account for any moneys received by the Administrative
Agent in respect of any foreclosure on or disposition of Collateral pursuant to
the Power of Attorney provided that neither the Administrative Agent nor any
Secured Party shall have any duty as to any Collateral, and Administrative Agent
and the Secured Parties shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers. NEITHER THE ADMINISTRATIVE
AGENT, THE SECURED PARTIES NOR THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL BE RESPONSIBLE TO ANY CREDIT PARTY
FOR ANY ACT OR FAILURE TO ACT UNDER ANY POWER OF ATTORNEY OR OTHERWISE, EXCEPT
IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A
74
COURT OF COMPETENT JURISDICTION, NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR
CONSEQUENTIAL DAMAGES.
(b) The Administrative Agent agrees that it will forbear from
exercising the power of attorney or any rights granted to the Administrative
Agent pursuant to this Section 10.8, except upon the occurrence or during the
continuation of an Event of Default. The Credit Parties hereby ratify, to the
extent permitted by law, all that said attorneys shall lawfully do or cause to
be done by virtue hereof. Exercise by the Administrative Agent of the powers
granted hereunder is not a violation of the automatic stay provided by section
362 of the Bankruptcy Code and each Credit Party waives applicability thereof.
The power of attorney granted pursuant to this Section 10.8 is a power coupled
with an interest and shall be irrevocable until the Obligations are indefeasibly
paid in full.
(c) The powers conferred on the Administrative Agent hereunder are
solely to protect the Administrative Agent's and the Lenders' interests in the
Collateral and shall not impose any duty upon it to exercise any such powers.
The Administrative Agent shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers and neither it nor any of
its officers, directors, employees or agents shall be responsible to any Credit
Party for any act or failure to act, except for its own gross negligence or
willful misconduct.
(d) Each Credit Party also authorizes the Administrative Agent, at any
time and from time to time upon the occurrence and during the continuation of
any Event of Default or as otherwise expressly permitted by this Agreement, (i)
to communicate in its own name or the name of its Subsidiaries with any party to
any Contract with regard to the assignment of the right, title and interest of
such Credit Party in and under the Contracts hereunder and other matters
relating thereto and (ii) to execute any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral.
(e) All Obligations shall constitute, in accordance with section
364(c)(1) of the Bankruptcy Code, claims against the Borrower and each Credit
Party in their respective Cases which are administrative expense claims having
priority over any all administrative expenses of the kind specified in sections
503(b) or 507(b) of the Bankruptcy Code.
10.9 [Reserved].
10.10 Intercreditor Issues.
Notwithstanding anything herein to the contrary, for so long as the
Post-Petition Skymiles Facility Documents are in effect, if any Credit Party is
in compliance with any requirements relating to SkyMiles Collateral imposed by
the Post-Petition Skymiles Collateral Documents which are equivalent to
requirements set forth in this Agreement (other than creation and, with respect
to Collateral which is not Control Collateral (as defined below), perfection, of
any Lien hereunder), such Credit Party need not comply with (and shall be deemed
to have satisfied) such requirements of this Agreement. Without limiting the
foregoing:
(a) any covenant hereunder requiring (or any representation or
warranty hereunder to the extent that it would have the effect of requiring) the
delivery of possession or
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control to the Administrative Agent of Control Collateral that is SkyMiles
Collateral shall be deemed to have been satisfied (or such representation and
warranty shall be deemed to be true) if such possession or control shall have
been delivered to SkyMiles Agent as provided in the Post-Petition Skymiles
Facility Documents (as used herein, "Control Collateral" shall mean any
Collateral (including, without limitation, any Collateral consisting of any
Deposit Account, Investment Property, Letter-of-Credit Rights, electronic
chattel paper or money) as to which a Lien therein may be perfected through
possession or other control by any secured party or any agent therefor);
(b) if any provision hereof shall require any Credit Party to take any
action with respect to any SkyMiles Collateral if requested to do so by the
Administrative Agent, such Credit Party shall be required to take such action
only if and to the extent that the SkyMiles Agent shall have requested the
Credit Party to take such action pursuant to the corresponding provision of the
Post-Petition Skymiles Facility Documents;
(c) if any provision hereof shall require any Credit Party to take any
action with respect to any SkyMiles Collateral unless the Administrative Agent
shall have otherwise provided its consent or a waiver, such Credit Party shall
not be required to take such action if and to the extent that the SkyMiles Agent
shall have provided its consent or a waiver to the Credit Party not taking such
action pursuant to the corresponding provision of the Post-Petition Skymiles
Facility Documents; and
(d) if any provision hereof permits any Credit Party to take any
action with respect to any SkyMiles Collateral only upon receiving the
Administrative Agent's consent to do so, the Administrative Agent shall be
deemed to have provided such consent if and to the extent that the SkyMiles
Agent shall have provided its consent to such Credit Party taking such action
pursuant to the corresponding provision of the Post-Petition Skymiles Facility
Documents.
10.11 Release of Collateral.
(a) The Liens granted pursuant to this Agreement shall automatically
terminate, and all the Collateral shall be automatically released, without
further action by the Administrative Agent and without any further notice or
consent to or of any Secured Party, on the Termination Date.
(b) Immediately upon (i) any sale, transfer, conveyance, assignment or
other disposition by any Credit Party of any Collateral permitted by this
Agreement (or pursuant to a valid waiver or consent to any transaction otherwise
prohibited by this Agreement), (ii) any part of the Collateral becoming subject
to a Lien permitted by Section 6.7(f) or (iii) any Pledged Collateral being
cancelled, replaced or repaid in accordance with the terms of this Agreement,
such Collateral shall be automatically released from the security interest
granted pursuant to this Agreement and the Lien on such Collateral in favor of
the Administrative Agent, for itself and for the benefit of the Secured Parties,
shall automatically terminate (and, if such Collateral consists of all of the
equity interest in a Subsidiary Guarantor, such Subsidiary Guarantor shall be
released from its Guaranty), in each case without further action by the
Administrative Agent and without any further notice or consent to or of any
Secured Party.
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(c) At the request of the Borrower, the Administrative Agent shall,
and each of the Secured Parties hereby authorizes and directs the Administrative
Agent (without any further notice or consent to or of any Secured Party) to,
promptly release or subordinate, as requested by the holders of any Lien
permitted by ▇▇▇▇▇▇▇ ▇.▇(▇), (▇), (▇), (▇), (▇), (▇) (subject, in the case of
Amex, to the Skymiles Intercreditor Agreement), (n), (o), (q), (r) or (s), any
part of the Collateral that is subject to a Lien permitted by such section.
(d) At the request of the Borrower, the Administrative Agent shall,
and each of the Secured Parties hereby authorizes and directs the Administrative
Agent (without further notice or consent to or of any Secured Party) to, execute
and deliver or file such termination or partial release statements and take such
other actions (including return of Collateral) as are necessary to terminate,
release or subordinate Liens pursuant to this Section 10.11 promptly upon the
effectiveness of any such termination, release or subordination. The
Administrative Agent and the Secured Parties hereby acknowledges and agree that
the Credit Parties may use the Collateral to the extent permitted under the
Credit Agreement.
11. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF ADMINISTRATIVE AGENT
11.1 Assignment and Participations.
(a) Right to Assign. Each Lender may sell, transfer, negotiate or
assign all or a portion of its rights and obligations hereunder (including all
or a portion of its Commitments and its rights and obligations with respect to
Loans) to (i) any existing Lender, (ii) any Affiliate or Approved Fund of any
existing Lender or (iii) any other Person acceptable (which acceptance shall not
be unreasonably withheld or delayed) to the Administrative Agent and, as long as
no Event of Default is continuing, the Borrower; provided, that (x) such Sales
do not have to be ratable between the Term Loans but must be ratable among the
obligations owing to and owed by such Lender with respect to a Term Loan and (y)
for each Term Loan, the aggregate outstanding principal amount (determined as of
the effective date of the applicable Assignment) of the Loans and Commitments
subject to any such Sale shall be an integral multiple of $1,000,000, unless
such Sale is made to an existing Lender or an Affiliate or Approved Fund of any
existing Lender, is of the assignor's (together with its Affiliates and Approved
Funds) entire interest in such Term Loan or is made with the prior consent of
the Borrower and the Administrative Agent. In the case of any assignment of Term
Loan A, the proceeds of any L/C Cash Collateral held by the Administrative Agent
shall not be released in connection with any such assignment, but shall instead
continue to be held by the Administrative Agent for application as provided by
Annex B.
(b) Procedure. The parties to each Sale made in reliance on clause (a)
above (other than those described in clause (e) below) shall execute and deliver
to the Administrative Agent (which shall keep a copy thereof) an Assignment,
together with any existing Note subject to such Sale (or any affidavit of loss
therefor acceptable to the Administrative Agent), any Certificates of Exemption
required to be delivered pursuant to Section 1.13 (which shall also be delivered
to Borrower) and, except with respect to any assignment by any Arranger (or any
Affiliate or Related Person of such Arranger) of the Commitments or Loans held
on the Closing Date by such Person to the extent such assignment is made as part
of the primary syndication of
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the applicable Term Loan, payment by the assignee of an assignment fee in the
amount of $3,500. Upon receipt of all the foregoing, and conditioned upon such
receipt and upon the Administrative Agent consenting to such Assignment, from
and after the effective date specified in such Assignment, the Administrative
Agent shall record or cause to be recorded in the Loan Account the information
contained in such Assignment.
(c) Effectiveness. Effective upon the entry of such record in the Loan
Account, (i) such assignee shall become a party hereto and, to the extent that
rights and obligations under the Loan Documents have been assigned to such
assignee pursuant to such Assignment, shall have the rights and obligations of a
Lender, (ii) any applicable Note shall be transferred to such assignee through
such entry and (iii) the assignor thereunder shall, to the extent that rights
and obligations under this Agreement have been assigned by it pursuant to such
Assignment, relinquish its rights (except for those surviving the termination of
the Commitments and the payment in full of the Obligations) and be released from
its obligations under the Loan Documents, other than those relating to events or
circumstances occurring prior to such assignment, and, in the case of an
Assignment covering all or the remaining portion of an assigning Lender's rights
and obligations under the Loan Documents, such Lender shall cease to be a party
hereto.
(d) Grant of Security Interests. In addition to the other rights
provided in this Section 11.1, each Lender may grant a security interest in, or
otherwise assign as collateral, any of its rights under this Agreement, whether
now owned or hereafter acquired (including rights to payments of principal or
interest on the Loans), to (A) any federal reserve bank (pursuant to Regulation
A of the Federal Reserve Board), without notice to the Administrative Agent or
(B) any holder of, or trustee for the benefit of the holders of, such Lender's
Securities by notice to the Administrative Agent; provided, that no such holder
or trustee, whether because of such grant or assignment or any foreclosure
thereon (unless such foreclosure is made through an assignment in accordance
with clause (b) above), shall be entitled to any rights of such Lender hereunder
and no such Lender shall be relieved of any of its obligations hereunder.
(e) Participants and SPVs. In addition to the other rights provided in
this Section 11.1, each Lender may, (x) with notice to the Administrative Agent,
grant to an SPV the option to make all or any part of any Loan that such Lender
would otherwise be required to make hereunder (and the exercise of such option
by such SPV and the making of Loans pursuant thereto shall satisfy the
obligation of such Lender to make such Loans hereunder) and such SPV may assign
to such Lender the right to receive payment with respect to any Obligation and
(y) without notice to or consent from the Administrative Agent or the Borrower,
sell participations to one or more Persons in or to all or a portion of its
rights and obligations under the Loan Documents; provided, that, whether as a
result of any term of any Loan Document or of such grant or participation, (i)
no such SPV or participant shall have a commitment, or be deemed to have made an
offer to commit, to make Loans hereunder, and, except as provided in the
applicable option agreement, none shall be liable for any obligation of such
Lender hereunder, (ii) such Lender's rights and obligations, and the rights and
obligations of the Credit Parties and the Secured Parties towards such Lender,
under any Loan Document shall remain unchanged and each other party hereto shall
continue to deal solely with such Lender, which shall remain the holder of the
Obligations in the Register, except that (A) each such participant and SPV shall
be entitled to the benefit of Section 1.11, Section 1.13 and Section 1.14, but,
in the case of Section
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1.13, only to the extent Borrower and the Administrative Agent receive a
Certificate of Exemption with respect to any such participant or SPV that is a
Foreign Person and in each such case only to the extent of any amount to which
such Lender would be entitled in the absence of any such grant or participation
and (B) each such SPV may receive other payments that would otherwise be made to
such Lender with respect to Loans funded by such SPV to the extent provided in
the applicable option agreement and set forth in a notice provided to the
Administrative Agent by such SPV and such Lender; provided, that in no case
(including pursuant to clause (A) or (B) above) shall an SPV or participant have
the right to enforce any of the terms of any Loan Document, and (iii) the
consent of such SPV or participant shall not be required (either directly, as a
restraint on such Lender's ability to consent hereunder or otherwise) for any
amendments, waivers or consents with respect to any Loan Document or to exercise
or refrain from exercising any powers or rights such Lender may have under or in
respect of the Loan Documents (including the right to enforce or direct
enforcement of the Obligations), except for those described in clauses (viii)(B)
and (viii)(C) of Section 13.2(a) with respect to amounts, or dates fixed for
payment of amounts, to which such participant or SPV would otherwise be entitled
and, in the case of participants, except for those described in Section
13.2(a)(xii) (or amendments, consents and waivers with respect to Section 10.10
to release all or substantially all of the Collateral). No party hereto shall
institute (and Borrower shall cause each other Credit Party not to institute)
against any SPV grantee of an option pursuant to this clause (e) any bankruptcy,
reorganization, insolvency, liquidation or similar proceeding, prior to the date
that is one year and one day after the payment in full of all outstanding
commercial paper of such SPV; provided, however, that each Lender having
designated an SPV as such agrees to indemnify each Indemnified Person against
any Liability that may be incurred by, or asserted against, such Indemnified
Person as a result of failing to institute such proceeding (including a failure
to get reimbursed by such SPV for any such Liability). The agreement in the
preceding sentence shall survive the termination of the Commitments and the
payment in full of the Obligations.
11.2 Appointment of Administrative Agent.
GE Capital is hereby appointed to act as the Administrative Agent on
behalf of the Lenders and the Secured Parties under this Agreement and the other
Loan Documents. The provisions of this Section 11.2 are solely for the benefit
of the Administrative Agent and Lenders and no Credit Party nor any other Person
shall have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement and the
other Loan Documents, the Administrative Agent shall act solely as an agent of
the Lenders, and the Administrative Agent does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Credit Party or any other Person. The Administrative Agent shall
have no duties or responsibilities except for those expressly set forth in this
Agreement and the other Loan Documents. The duties of the Administrative Agent
shall be mechanical and administrative in nature, and the Administrative Agent
shall not have, or be deemed to have, by reason of this Agreement, any other
Loan Document or otherwise a fiduciary relationship in respect of any Lender.
Except as expressly set forth in this Agreement and the other Loan Documents,
the Administrative Agent shall not have any duty to disclose, and shall not be
liable for failure to disclose, any information relating to any Credit Party or
any of their respective Subsidiaries or any Account Debtor that is communicated
to or obtained by GE Capital or any of its Affiliates in any capacity. Neither
the
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Administrative Agent nor any of its Affiliates nor any of their respective
officers, directors, employees, agents or representatives shall be liable to any
Lender for any action taken or omitted to be taken by it hereunder or under any
other Loan Document, or in connection herewith or therewith, except for damages
caused by its or their own gross negligence or willful misconduct.
If the Administrative Agent shall request instructions from Requisite
Lenders, Requisite Term A Lenders, Requisite Term B Lenders, Requisite Term C
Lenders, Supermajority Term A Lenders, all Lenders or all affected Lenders with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Loan Document, then the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from Requisite Lenders,
Requisite Term A Lenders, Requisite Term B Lenders, Requisite Term C Lenders,
Supermajority Term A Lenders, all Lenders or all affected Lenders, as the case
may be, and the Administrative Agent shall not incur liability to any Person by
reason of so refraining. The Administrative Agent shall be fully justified in
failing or refusing to take any action hereunder or under any other Loan
Document (a) if such action would, in the opinion of the Administrative Agent,
be contrary to law or the terms of this Agreement or any other Loan Document,
(b) if such action would, in the opinion of the Administrative Agent, expose the
Administrative Agent to Environmental Liabilities or (c) if the Administrative
Agent shall not first be indemnified to its satisfaction against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder or
under any other Loan Document in accordance with the instructions of Requisite
Lenders, Requisite Term A Lenders, Requisite Term B Lenders, Requisite Term C
Lenders, Supermajority Term A Lenders, all Lenders or all affected Lenders, as
applicable.
11.3 Administrative Agent's Reliance, Etc. None of the Administrative
Agent or any of its Affiliates or any of their respective directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
by it or them under or in connection with this Agreement or the other Loan
Documents, except for damages caused by its or their own gross negligence or
willful misconduct. Without limiting the generality of the foregoing, the
Administrative Agent: (a) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives written notice of the assignment or
transfer thereof signed by such payee and in form reasonably satisfactory to the
Administrative Agent; (b) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Credit Party or to inspect the Collateral (including the Books and Records to
the extent not prohibited by a confidentiality agreement in favor of a third
party) of any Credit Party; (e) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (f) shall incur no liability
under
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or in respect of this Agreement or the other Loan Documents by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
11.4 GE Capital and Affiliates.
With respect to its Commitments hereunder, GE Capital shall have the
same rights and powers under this Agreement and the other Loan Documents as any
other Lender and may exercise the same as though it were not the Administrative
Agent; and the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated, include GE Capital in its individual capacity. GE Capital and its
Affiliates may lend money to, invest in, and generally engage in any kind of
business with, any Credit Party, any of their Affiliates and any Person who may
do business with or own securities of any Credit Party or any such Affiliate,
all as if GE Capital were not the Administrative Agent and without any duty to
account therefor to Lenders. GE Capital and its Affiliates may accept fees and
other consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each
Lender acknowledges the potential conflict of interest between GE Capital as a
Lender holding disproportionate interests in the Loans (including the L/C Cash
Collateral) and GE Capital as the Administrative Agent.
11.5 Lender Credit Decision.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on the
Financial Statements referred to in Section 3.4(a) and such other documents and
information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative 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 credit decisions in taking or not taking action under this
Agreement. Each Lender acknowledges the potential conflict of interest of each
other Lender as a result of Lenders holding disproportionate interests in the
Loans (including the L/C Cash Collateral), and expressly consents to, and waives
any claim based upon, such conflict of interest.
11.6 Indemnification.
Lenders agree to indemnify the Administrative Agent (to the extent not
reimbursed by Credit Parties and without limiting the Obligations of Credit
Parties hereunder), ratably according to their respective Pro Rata Shares, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
any other Loan Document or any action taken or omitted to be taken by the
Administrative Agent in connection therewith; provided, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's gross negligence or willful misconduct. Without
limiting the foregoing, each Lender agrees to reimburse the Administrative Agent
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promptly upon demand for its ratable share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that the Administrative Agent is not reimbursed for such expenses by
Credit Parties.
11.7 Successor Agents.
The Administrative Agent may resign at any time by giving not less
than thirty (30) days' prior written notice thereof to Lenders and Borrower.
Upon any such resignation, the Requisite Lenders shall have the right to appoint
a successor the Administrative Agent. If a successor Administrative Agent shall
not have been so appointed by the Requisite Lenders and shall not have accepted
such appointment within thirty (30) days after the resigning Administrative
Agent's giving notice of resignation, then such resigning Administrative Agent
on behalf of the Lenders may appoint a successor Administrative Agent, which
shall be a Lender, if such Lender is willing to accept such appointment, or
otherwise shall be a commercial bank or financial institution or a subsidiary of
a commercial bank or financial institution if such commercial bank or financial
institution is organized under the laws of the United States of America or of
any State thereof and has a combined capital and surplus of at least
$300,000,000. If a successor Administrative Agent has not been appointed
pursuant to the foregoing, within thirty (30) days after the date such notice of
resignation was given by such resigning Administrative Agent, such resignation
shall become effective and the Requisite Lenders shall thereafter perform all
the duties of the Administrative Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor Administrative Agent as provided above.
Any successor Administrative Agent appointed by Requisite Lenders hereunder
shall be subject to the approval of Borrower, such approval not to be
unreasonably withheld or delayed; provided, that such approval shall not be
required if a Default or an Event of Default has occurred and is continuing.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Administrative Agent. Upon the earlier of (i) the acceptance of
any appointment as Administrative Agent hereunder by a successor Administrative
Agent or (ii) the effective date of the resigning Administrative Agent's
resignation, such resigning Administrative Agent shall be discharged from its
duties and obligations under this Agreement and the other Loan Documents, except
that any indemnity rights or other rights in favor of such resigning
Administrative Agent shall continue. After any Administrative Agent's
resignation hereunder, the provisions of this Article 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent under this Agreement and the other Loan Documents.
11.8 Setoff and Sharing of Payments.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, each Lender is hereby
authorized upon the occurrence and during the continuance of any Event of
Default and subject to Section 11.9(d), at any time or from time to time,
without prior notice to any Credit Party or to any Person other than the
Administrative Agent (except as otherwise required by the Final Order), any such
notice being
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hereby expressly waived, to offset and to appropriate and to apply any and all
balances held by it at any of its offices for the account of Borrower or any
Guarantor (regardless of whether such balances are then due to Borrower or any
Guarantor) and any other properties or assets at any time held or owing by that
Lender or that holder to or for the credit or for the account of Borrower or any
Guarantor against and on account of any of the Obligations that are not paid
when due; provided, that the Lender exercising such offset rights shall give
notice thereof to the affected Credit Party, except as otherwise required by the
Final Order, promptly after exercising such rights. Any Lender exercising a
right of setoff or otherwise receiving any payment on account of the Obligations
in excess of its Pro Rata Share thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender's
or holder's Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share the amount so offset or otherwise received with each other
Lender or holder in accordance with their respective Pro Rata Shares, (other
than offset rights exercised by any Lender with respect to Sections 1.11, 1.13
or 1.14). Each Term A Lender's obligation under this Section 11.8 shall be in
addition to and not in limitation of its obligations to purchase a participation
in an amount equal to its Pro Rata Share of the Letter of Credit Obligations as
provided in Annex B. Borrower and each Guarantor agrees, to the fullest extent
permitted by law, that (a) any Lender may exercise its right to offset with
respect to amounts in excess of its Pro Rata Share of the Obligations and may
sell participations in such amounts so offset to other Lenders and holders and
(b) any Lender so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of offset,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of the Loans and the
other Obligations in the amount of such participation. Notwithstanding the
foregoing, if all or any portion of the offset amount or payment otherwise
received is thereafter recovered from the Lender that has exercised the right of
offset, the purchase of participations by that Lender shall be rescinded and the
purchase price restored without interest.
11.9 Payments; Non-Funding Lenders; Information; Actions in Concert.
(a) Payments. Not less than once during each calendar month or more
frequently at the Administrative Agent's election (each, a "Settlement Date"),
the Administrative Agent shall advise each Lender by telephone, or telecopy of
the amount of such Lender's Pro Rata Share of principal, interest and Fees paid
for the benefit of Lenders with respect to each applicable Loan. Provided that
each Lender has funded all payments and Loans required to be made by it and
purchased all participations required to be purchased by it under this Agreement
and the other Loan Documents as of such Settlement Date, the Administrative
Agent shall pay to each Lender such Lender's Pro Rata Share of principal,
interest and Fees paid by Borrower since the previous Settlement Date for the
benefit of such Lender on the Loans held by it. To the extent that any Lender (a
"Non-Funding Lender") has failed to fund all such payments and Loans or failed
to fund the purchase of all such participations, the Administrative Agent shall
be entitled to set off the funding short-fall against that Non-Funding Lender's
Pro Rata Share of all payments received from Borrower. Such payments shall be
made by wire transfer to such Lender's account (as specified by such Lender in
Annex H or the applicable Assignment Agreement) not later than 2:00 p.m. (New
York time) on the next Business Day following each Settlement Date.
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(b) Return of Payments.
(i) If the Administrative Agent pays an amount to a Lender under
this Agreement in the belief or expectation that a related payment has been or
will be received by the Administrative Agent from Borrower and such related
payment is not received by the Administrative Agent, then the Administrative
Agent will be entitled to recover such amount from such Lender on demand without
setoff, counterclaim or deduction of any kind.
(ii) If the Administrative Agent determines at any time that any
amount received by the Administrative Agent under this Agreement must be
returned to Borrower or paid to any other Person pursuant to any insolvency law
or otherwise, then, notwithstanding any other term or condition of this
Agreement or any other Loan Document, the Administrative Agent will not be
required to distribute any portion thereof to any Lender. In addition, each
Lender will repay to the Administrative Agent on demand any portion of such
amount that the Administrative Agent has distributed to such Lender, together
with interest at such rate, if any, as the Administrative Agent is required to
pay to Borrower or such other Person, without setoff, counterclaim or deduction
of any kind.
(c) Dissemination of Information. The Administrative Agent shall use
reasonable efforts to provide Lenders with any notice of Default or Event of
Default received by the Administrative Agent from, or delivered by the
Administrative Agent to, any Credit Party, with notice of any Event of Default
of which the Administrative Agent has actually become aware and with notice of
any action taken by the Administrative Agent following any Event of Default;
provided, that the Administrative Agent shall not be liable to any Lender for
any failure to do so, except to the extent that such failure is attributable to
the Administrative Agent's gross negligence or willful misconduct. Lenders
acknowledge that Borrower is required to provide Financial Statements and
Collateral Reports to Lenders in accordance with Annexes E and F hereto and
agree that the Administrative Agent shall not have the duty to provide the same
to Lenders.
(d) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of the Administrative Agent and Requisite
Lenders, it being the intent of Lenders that any such action to protect or
enforce rights under this Agreement and the Notes shall be taken in concert and
at the direction or with the consent of the Administrative Agent or Requisite
Lenders.
12. SUCCESSORS AND ASSIGNS
12.1 Successors and Assigns.
This Agreement and the other Loan Documents shall be binding on and
shall inure to the benefit of each Credit Party, the Administrative Agent,
Lenders and their respective successors and assigns (including, in the case of
any Credit Party, a debtor-in-possession on behalf of such Credit Party), except
as otherwise provided herein or therein. No Credit Party may assign, transfer,
hypothecate or otherwise convey its rights, benefits, obligations or duties
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hereunder or under any of the other Loan Documents without the prior express
written consent of the Administrative Agent and Lenders. Any such purported
assignment, transfer, hypothecation or other conveyance by any Credit Party
without the prior express written consent of the Administrative Agent and
Lenders shall be void. The terms and provisions of this Agreement are for the
purpose of defining the relative rights and obligations of each Credit Party,
the Administrative Agent and Lenders with respect to the transactions
contemplated hereby and no Person shall be a third party beneficiary of any of
the terms and provisions of this Agreement or any of the other Loan Documents.
13. MISCELLANEOUS
13.1 Complete Agreement; Modification of Agreement.
The Loan Documents constitute the complete agreement between the
parties with respect to the subject matter thereof and may not be modified,
altered or amended except as set forth in Section 13.2. Any letter of interest,
commitment letter, fee letter or confidentiality agreement, if any, between any
Credit Party and the Administrative Agent or any Lender or any of their
respective Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement. Notwithstanding the foregoing, the Fee Letters and all obligations of
Borrower with respect to syndication contained in the GE Capital Commitment
Letter shall survive the execution and delivery of this Agreement and shall
continue to be binding obligations of the parties.
13.2 Amendments and Waivers.
(a) Except as otherwise expressly provided in this Agreement, the
Requisite Lenders (or the Administrative Agent with the prior written consent of
the Requisite Lenders), on the one hand, and Borrower, on the other hand, may
from time to time enter into written amendments, supplements or modifications
for the purpose of adding, deleting or modifying any provision of any Loan
Document or changing in any manner the rights, remedies, obligations and duties
of the parties thereto, and with the written consent of the Requisite Lenders,
the Administrative Agent, on behalf of Lenders, may execute and deliver a
written instrument waiving, on such terms and conditions as may be specified in
such instrument, any of the requirements applicable to the Credit Parties, as
the case may be, party to any Loan Document, or any Default or Event of Default
and its consequences; provided, that:
(i) the Requisite Term A Lenders (or the Administrative Agent
with the prior written consent of the Requisite Term A Lenders), on the one
hand, and Borrower, on the other hand, may amend, supplement or otherwise
modify or waive any of the terms and provisions (and related definitions)
(A) related solely to the borrowings (including any conditions to such
borrowings) and payment procedures with respect to the Term Loan A and (B)
solely affecting the relative rights, remedies, obligations and priorities
among Term A Lenders, which does not adversely affect any Term B Lender or
Term C Lender (in each case, except to the extent any such amendment,
supplement, modification or waiver would result in an increase of the
aggregate Term A Commitment or the aggregate outstanding principal amount
of the Term Loan A);
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(ii) the Requisite Term B Lenders (or the Administrative Agent
with the prior written consent of the Requisite Term B Lenders), on the one
hand, and Borrower, on the other hand, may amend, supplement or otherwise
modify or waive any of the terms and provisions (and related definitions)
(A) related solely to the borrowings (including any conditions to such
borrowings) and payment procedures with respect to the Term Loan B and (B)
solely affecting the relative rights, remedies, obligations and priorities
among Term B Lenders, which does not adversely affect any Term A Lender or
Term C Lender (in each case, except to the extent any such amendment,
supplement, modification or waiver would result in an increase of the
aggregate Term B Commitment or the aggregate outstanding principal amount
of the Term Loan B);
(iii) the Requisite Term C Lenders (or the Administrative Agent
with the prior written consent of the Requisite Term C Lenders), on the one
hand, and Borrower, on the other hand, may amend, supplement or otherwise
modify or waive any of the terms and provisions (and related definitions)
(A) related solely to the borrowings (including any conditions to such
borrowings) and payment procedures with respect to the Term Loan C and (B)
solely affecting the relative rights, remedies, obligations and priorities
among Term C Lenders, which does not adversely affect any Term A Lender or
Term B Lender (in each case, except to the extent any such amendment,
supplement, modification or waiver would result in an increase of the
aggregate Term C Commitment or the aggregate outstanding principal amount
of the Term Loan C);
(iv) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to Lenders required above to
take such action, affect the rights or duties of the Administrative Agent
under this Agreement or the other Loan Documents; and
(v) the Administrative Agent may, with the consent of Borrower,
amend, modify or supplement any Loan Document to cure any ambiguity,
typographical error, defect or inconsistency;
provided, further, that no amendment, supplement, modification or waiver shall
be effective to:
(vi) without the prior written consent of each of the Requisite
Term A Lenders, the Requisite Term B Lenders and the Requisite Term C
Lenders, (A) amend, supplement, modify or waive any provision of paragraph
(c) (Aggregate Cash on Hand) of Annex G, (B) unless expressly permitted by
this Agreement, release or permit any Credit Party to sell or otherwise
dispose of assets in an aggregate amount in excess of $75,000,000 or (C)
increase the Commitment of any Lender or extend any scheduled final
maturity of any Loan; or
(vii) without the prior written consent of each of the
Supermajority Term A Lenders, the Requisite Term B Lenders and the
Requisite Term C Lenders, amend, supplement, modify or waive any of the
terms and
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provisions (and related definitions) related to the Term A Borrowing Base
(including advance rates and eligibility criteria) if more credit would be
available to Borrower thereafter; provided, that Borrower's consent will
not be required with respect to any modifications made in accordance with
Section 1.6;
provided, further, that no such amendment, supplement, modification or waiver
shall be effective to, without the prior written consent, in addition to Lenders
required above to take such action, of each Lender directly affected thereby:
(viii) (A) modify the Commitment of such Lender or subject such
Lender to any additional obligation, (B) extend any scheduled final
maturity of any Loan owing to such Lender, (C) waive or reduce, or postpone
or cancel any scheduled date fixed for the payment of (it being understood
that any mandatory prepayment required under Section 1.2(b) does not
constitute any scheduled date fixed for payments), principal of or interest
on any such Loan or any fees owing to such Lender, (D) reduce, or release
Borrower from its obligations to repay, any other Obligation owed to such
Lender or (E) consent to the assignment or transfer by Borrower of any of
its rights and obligations under this Agreement;
(ix) amend, modify or waive any provision of Section 1.2, 1.3 or
11.8;
(x) subordinate any of the Obligations or Liens securing the
Obligations, except as permitted by this Agreement and the Skymiles
Intercreditor Agreement; or
(xi) (A) amend, modify or waive this Section 13.2 or any other
provision specifying the Administrative Agent, Lenders or group of Lenders
required for any amendment, modification or waiver thereof or (B) change
the respective percentages specified in the definition of "Requisite
Lenders," "Requisite Term A Lenders," "Requisite Term B Lenders,"
"Requisite Term C Lenders," or "Supermajority Term A Lenders"; or
provided, further, that no such amendment, supplement, modification or waiver
shall be effective to, without the prior written consent of all Lenders:
(xii) (A) release any Guarantor from the obligations provided for
in the Collateral Documents, except as otherwise permitted herein or in the
other Loan Documents, or (B) release or permit any Credit Party to sell or
otherwise dispose of all or substantially all of the Collateral provided
for in the Collateral Documents; provided, however, that no waiver,
amendment, supplement or modification shall be required for the
Administrative Agent to take additional Collateral pursuant to any Loan
Document.
(b) Any waiver, amendment, supplement or modification pursuant to this
Section 13.2 shall apply equally to each of Lenders and shall be binding upon
Lenders and all future holders of any of the Loans, the Notes, the Letter of
Credit Obligations and all other Obligations.
87
(c) To the extent (a) the consent or vote of any Lender in its
capacity as a Term A Lender, a Term B Lender or a Term C Lender, as applicable,
is required, but not obtained (any such Lender whose consent is not obtained as
described in this Section 13.2(c) being referred to as a "Non-Consenting
Lender") in connection with any proposed amendment, modification, supplement,
waiver or exercise of remedies (a "Proposed Change") and (b) the Administrative
Agent shall have consented to such Proposed Change, at the request of Borrower
and with the consent of the Administrative Agent (not to be unreasonably
withheld), any Person reasonably acceptable to such Administrative Agent (which
Person may be the Lender acting as such Administrative Agent and shall have
consented to such Proposed Change) shall have the right (but not the obligation)
to purchase from such Non-Consenting Lender, and such Non-Consenting Lender
shall, upon the request of such Administrative Agent, sell and assign to such
Person all of the applicable Commitments and Loans of such Non-Consenting Lender
for an amount equal to the principal balance of all applicable Loans held by
such Non-Consenting Lender and all accrued and unpaid interest and fees with
respect thereto through the date of such sale and purchase (the "Purchase
Amount"); provided, however, that such sale and purchase (and the corresponding
assignment) shall not be effective until (A) such Administrative Agent shall
have received from such Person an agreement in form and substance satisfactory
to such Administrative Agent whereby such Person shall agree to be bound by the
terms hereof and (B) such Non-Consenting Lender shall have received the Purchase
Amount from such Person. Each Lender agrees that, if it becomes a Non-Consenting
Lender, it shall execute and deliver to the Administrative Agent the Note or
Notes evidencing such Commitments or Loans and an Assignment Agreement to
evidence such sale and assignment; provided, however, that the failure of any
Non-Consenting Lender to deliver such Note or Notes or execute an Assignment
Agreement shall not render such sale and purchase (and the corresponding
assignment) invalid.
(d) Upon the Termination Date, the Administrative Agent shall deliver
to Borrower termination statements, mortgage releases, reconveyances and other
documents necessary or appropriate to evidence the termination of the Liens
securing payment of the Obligations.
13.3 Fees and Expenses.
Borrower shall reimburse (i) the Administrative Agent for all fees,
costs and expenses (including the reasonable fees and expenses of all of its
counsel, advisors, consultants and auditors) and (ii) the Administrative Agent
(and, with respect to clauses (b), (c) and (d) below, all Lenders) for all fees,
costs and expenses, including the reasonable fees, costs and expenses of counsel
or other advisors (including environmental and management consultants and
appraisers) incurred in connection with the negotiation, preparation and filing
and/or recordation of the Loan Documents and incurred in connection with:
(a) any amendment, modification or waiver of, or consent with respect
to, or termination of, any of the Loan Documents or advice in connection with
the syndication and administration of the Loans made pursuant hereto or its
rights hereunder or thereunder;
(b) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by the Administrative Agent, any Lender, any Credit Party or
any other Person and whether as a party, witness or otherwise) in any way
relating to the Collateral, any of the Loan
88
Documents or any other agreement to be executed or delivered in connection
herewith or therewith, including any litigation, contest, dispute, suit, case,
proceeding or action, and any appeal or review thereof, in connection with a
case commenced by or against any or all of the Credit Parties or any other
Person that may be obligated to the Administrative Agent by virtue of the Loan
Documents, including any such litigation, contest, dispute, suit, proceeding or
action arising in connection with any work-out or restructuring of the Loans
during the pendency of one or more Events of Default; provided, that in the case
of reimbursement of counsel for Lenders other than the Administrative Agent,
such reimbursement shall be limited to one counsel for all such Lenders;
provided, further, that no Person shall be entitled to reimbursement under this
clause (b) in respect of any litigation, contest, dispute, suit, proceeding or
action to the extent any of the foregoing results from such Person's gross
negligence or willful misconduct;
(c) any attempt to enforce any remedies of the Administrative Agent or
any Lender against any or all of the Credit Parties or any other Person that may
be obligated to the Administrative Agent or any Lender by virtue of any of the
Loan Documents, including any such attempt to enforce any such remedies in the
course of any work-out or restructuring of the Loans during the pendency of one
or more Events of Default; provided, that in the case of reimbursement of
counsel for Lenders other than the Administrative Agent, such reimbursement
shall be limited to one counsel for all such Lenders;
(d) any workout or restructuring of the Loans during the pendency of
one or more Events of Default; and
(e) efforts to (i) monitor the Loans or any of the other Obligations,
(ii) evaluate, observe or assess any of the Credit Parties or their respective
affairs, and (iii) verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of any of the Collateral, in each case pursuant
to and in accordance with the terms of the Loan Documents;
including, as to each of clauses (a) through (e) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in connection with or
relating to any of the events or actions described in this Section 13.3, all of
which shall be payable, on demand, by Borrower to the Administrative Agent.
Without limiting the generality of the foregoing, such expenses, costs, charges
and fees may include: fees, costs and expenses of accountants, environmental
advisors, appraisers, investment bankers, management and other consultants and
paralegals; court costs and expenses; photocopying and duplication expenses;
court reporter fees, costs and expenses; long distance telephone charges; air
express charges; telegram or telecopy charges; secretarial overtime charges;
charges for any E-System; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal or other advisory
services.
13.4 No Waiver.
The Administrative Agent's or any Lender's failure, at any time or
times, to require strict performance by the Credit Parties of any provision of
this Agreement or any other Loan Document shall not waive, affect or diminish
any right of the Administrative Agent or such
89
Lender thereafter to demand strict compliance and performance herewith or
therewith. Any suspension or waiver of an Event of Default shall not suspend,
waive or affect any other Event of Default whether the same is prior or
subsequent thereto and whether the same or of a different type. Subject to the
provisions of Section 13.2, none of the undertakings, agreements, warranties,
covenants and representations of any Credit Party contained in this Agreement or
any of the other Loan Documents and no Default or Event of Default by any Credit
Party shall be deemed to have been suspended or waived by the Administrative
Agent or any Lender, unless such waiver or suspension is by an instrument in
writing signed by an officer of or other authorized employee of the
Administrative Agent and the applicable required Lenders and directed to
Borrower specifying such suspension or waiver.
13.5 Remedies.
The Administrative Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that the Administrative Agent or any Lender may have under any other agreement,
including the other Loan Documents, by operation of law or otherwise. Recourse
to the Collateral shall not be required.
13.6 Severability.
Wherever possible, each provision of this Agreement and the other Loan
Documents shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement or any other Loan
Document shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement or such other Loan Document.
13.7 Conflict of Terms.
Except as otherwise provided in this Agreement or any of the other
Loan Documents by specific reference to the applicable provisions of this
Agreement, if any provision contained in this Agreement conflicts with any
provision in any of the other Loan Documents, the provision contained in this
Agreement shall govern and control.
13.8 Confidentiality.
The Administrative Agent and Lender agree to use commercially
reasonable efforts (equivalent to the efforts the Administrative Agent or Lender
applies to maintain the confidentiality of its own confidential information) to
maintain as confidential all confidential information provided to them by the
Credit Parties and designated as confidential for a period of two (2) years
following receipt thereof, except that the Administrative Agent and Lender may
disclose such information (a) to Persons employed or engaged by the
Administrative Agent or Lender; (b) to any bona fide assignee or participant or
potential assignee or participant that has agreed to comply with the covenant
contained in this Section 13.8 (and any such bona fide assignee or participant
or potential assignee or participant may disclose such information to Persons
employed or engaged by them as described in clause (a) above); (c) as required
or requested by any Governmental Authority or reasonably believed by the
Administrative Agent or
90
Lender to be compelled by any court decree, subpoena or legal or administrative
order or process; (d) as, on the advice of the Administrative Agent's or
Lender's counsel, is required by law; (e) in connection with the exercise of any
right or remedy under the Loan Documents or in connection with any Litigation to
which the Administrative Agent or Lender is a party related to the Loan
Documents or the Loans or other Obligations thereunder; (f) that ceases to be
confidential through no fault of the Administrative Agent or Lender; (g) to its
affiliates and its and their directors, officers, employees, advisors,
representatives or agents, and (h) to ratings agencies.
13.9 GOVERNING LAW.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS,
IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY CONSENTS AND
AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ SHALL HAVE NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND
LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO
ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS; PROVIDED, THAT THE ADMINISTRATIVE AGENT, LENDERS AND THE CREDIT
PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF NEW YORK COUNTY AND; PROVIDED, FURTHER THAT NOTHING IN
THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE ADMINISTRATIVE AGENT
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE ADMINISTRATIVE AGENT.
EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY
WAIVES, TO THE EXTENT PERMITTED BY LAW, ANY OBJECTION THAT SUCH CREDIT PARTY MAY
HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS, TO THE EXTENT PERMITTED BY LAW, TO THE GRANTING
OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH
CREDIT PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, PERSONAL SERVICE OF
THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT
91
THE ADDRESS SET FORTH IN ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO
MADE SHALL, TO THE EXTENT PERMITTED BY LAW, BE DEEMED COMPLETED UPON THE EARLIER
OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN
THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
13.10 Notices.
(a) Except as otherwise provided herein, whenever it is provided
herein that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other parties, or whenever any of the parties desires to give or serve upon any
other parties any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be deemed to have been validly served, given or
delivered (a) upon the earlier of actual receipt and three (3) Business Days
after deposit in the United States Mail, registered or certified mail, return
receipt requested, with proper postage prepaid, (b) upon transmission, when sent
by telecopy or other similar facsimile transmission (with such telecopy or
facsimile promptly confirmed by delivery of a copy by personal delivery or
United States Mail as otherwise provided in this Section 13.10); (c) one (1)
Business Day after deposit with a reputable overnight courier with all charges
prepaid or (d) when delivered, if hand-delivered by messenger, all of which
shall be addressed to the party to be notified and sent to the address or
facsimile number indicated in Annex I or to such other address (or facsimile
number) as may be substituted by notice given as herein provided. The giving of
any notice required hereunder may be waived in writing by the party entitled to
receive such notice. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to any
Person (other than Borrower or the Administrative Agent) designated in Annex I
to receive copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other communication.
(b) Subject to the provisions of Section 13.10(a), each of the
Administrative Agent, Borrower, the Lenders, the L/C Issuers and each of their
Related Persons is authorized (but not required) to transmit, post or otherwise
make or communicate, in its sole discretion, Electronic Transmissions in
connection with any Loan Document and the transactions contemplated therein;
provided, that notices to any Credit Party shall not be made by any posting to
an Internet or extranet based site or other equivalent service but may be made
by e-mail or E-fax, if available, so long as such notices are also sent in
accordance with Section 13.10(a). Each Credit Party and each Secured Party
hereby acknowledges and agrees that the use of Electronic Transmissions is not
necessarily secure and that there are risks associated with such use, including
risks of interception, disclosure and abuse and each indicates it assumes and
accepts such risks by hereby authorizing the transmission of Electronic
Transmissions.
(c) Subject to the provisions of Section 13.10(a), (i)(A) no posting
to any E-System shall be denied legal effect merely because it is made
electronically, (B) each E Signature on any such posting shall be deemed
sufficient to satisfy any requirement for a "signature" and (C) each such
posting shall be deemed sufficient to satisfy any requirement for a "writing",
in each case including pursuant to any Loan Document, any applicable provision
of any Uniform Commercial Code, the federal Uniform Electronic Transactions Act,
the Electronic Signatures in Global and National Commerce Act and any
substantive or procedural Requirement of Law governing such subject matter, (ii)
each such posting that is not readily
92
capable of bearing either a signature or a reproduction of a signature may be
signed, and shall be deemed signed, by attaching to, or logically associating
with such posting, an E-Signature, upon which each Secured Party and Credit
Party may rely and assume the authenticity thereof, (iii) each such posting
containing a signature, a reproduction of a signature or an E-Signature shall,
for all intents and purposes, have the same effect and weight as a signed paper
original and (iv) each party hereto or beneficiary hereto agrees not to contest
the validity or enforceability of any posting on any E-System or E-Signature on
any such posting under the provisions of any applicable Requirement of Law
requiring certain documents to be in writing or signed; provided, however, that
nothing herein shall limit such party's or beneficiary's right to contest
whether any posting to any E-System or E-Signature has been altered after
transmission.
(d) All uses of an E-System shall be governed by and subject to, in
addition to this Section 13.10, separate terms and conditions posted or
referenced in such E-System and related contractual obligations executed by
Secured Parties and Delta Companies in connection with the use of such E-System.
(e) ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED "AS
IS" AND "AS AVAILABLE". NONE OF THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED
PERSONS WARRANTS THE ACCURACY, ADEQUACY OR COMPLETENESS OF ANY E-SYSTEMS OR
ELECTRONIC TRANSMISSION AND DISCLAIMS ALL LIABILITY FOR ERRORS OR OMISSIONS
THEREIN. NO WARRANTY OF ANY KIND IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF
ITS RELATED PERSONS IN CONNECTION WITH ANY E SYSTEMS OR ELECTRONIC
COMMUNICATION, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM
VIRUSES OR OTHER CODE DEFECTS. The Credit Parties agree (and Borrower shall
cause each other Credit Party to agree) that the Administrative Agent has no
responsibility for maintaining or providing any equipment, software, services or
any testing required in connection with any Electronic Transmission or otherwise
required for any E-System.
13.11 Section Titles.
The Section titles and Table of Contents contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
13.12 Counterparts.
This Agreement may be executed in any number of separate counterparts,
each of which shall collectively and separately constitute one agreement.
13.13 WAIVER OF JURY TRIAL.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN
93
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE
ADMINISTRATIVE AGENT, LENDERS AND ANY CREDIT PARTY ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS RELATED THERETO.
13.14 Press Releases and Related Matters.
Each Credit Party executing this Agreement agrees that neither it nor
its Affiliates will in the future issue any press releases or other public
disclosure using the name of the Administrative Agent or any Arranger or its
affiliates or referring to this Agreement, the other Loan Documents without at
least two (2) Business Days' prior notice to the Administrative Agent or such
Arranger, as the case may be, and without the prior written consent of the
Administrative Agent or such Arranger, as the case may be, unless (and only to
the extent that) such Credit Party or Affiliate is required to do so under law
and then, in any event, such Credit Party or Affiliate will consult, to the
extent permitted by law, with the Administrative Agent or such Arranger, as the
case may be, before issuing such press release or other public disclosure. Each
Credit Party consents to the publication by the Administrative Agent, any
Arranger or Lender of advertising material relating to the financing
transactions contemplated by this Agreement using Borrower's name, product
photographs, logo or trademark. The Administrative Agent, any Arranger or any
Lender shall provide a draft of any advertising material to each Credit Party
for review and comment at least two (2) Business Days prior to the publication
thereof. Each of the Administrative Agent and the Arrangers reserves the right
to provide to industry trade organizations information necessary and customary
for inclusion in league table measurements.
13.15 [Reserved].
13.16 Advice of Counsel.
Each of the parties represents to each other party hereto that it has
discussed this Agreement and, specifically, the provisions of Sections 13.9 and
13.13, with its counsel.
13.17 No Strict Construction.
The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
94
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95
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
DELTA AIR LINES, INC., as Borrower
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent and
Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Duly Authorized Signatory
Signature Page to Credit Agreement
The following Persons are signatories to this Agreement in their capacity
as Credit Parties and not as Borrower.
ASA HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
COMAIR HOLDINGS, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
COMAIR, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
COMAIR SERVICES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Treasurer
CROWN ROOMS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Treasurer
Signature Page to Credit Agreement
DAL AIRCRAFT TRADING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
DAL GLOBAL SERVICES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Treasurer
DAL MOSCOW, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Treasurer
DELTA AIRELITE BUSINESS JETS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Treasurer
DELTA BENEFITS MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Treasurer
Signature Page to Credit Agreement
DELTA CONNECTION ACADEMY, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Treasurer
DELTA CORPORATE IDENTITY, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Treasurer
DELTA LOYALTY MANAGEMENT SERVICES, LLC
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
DELTA TECHNOLOGY, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Secretary
DELTA VENTURES III, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President - Tax
Signature Page to Credit Agreement
EPSILON TRADING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer and Comptroller
KAPPA CAPITAL MANAGEMENT, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and Treasurer
SONG, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Treasurer
Signature Page to Credit Agreement
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings and all references to Sections, Exhibits, Schedules or Annexes in the
following definitions shall refer to Sections, Exhibits, Schedules or Annexes of
or to the Agreement:
"Account Debtor" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel Paper
or General Intangibles (including a payment intangible).
"Accounting Changes" has the meaning ascribed thereto in Annex G.
"Accounts" means all "accounts," as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper or Instruments), (including
any such obligations that may be characterized as an account or contract right
under the Code), (b) all of each Credit Party's rights in, to and under all
purchase orders or receipts for goods or services, (c) all of each Credit
Party's rights to any goods represented by any of the foregoing (including
unpaid sellers' rights of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed goods), (d) all
healthcare insurance receivables, and (e) all collateral security of any kind,
now or hereafter in existence, given by any Account Debtor or other Person with
respect to any of the foregoing.
"Additional Aircraft" shall have the meaning ascribed to it in the
Aircraft Mortgage.
"Additional Engine" shall have the meaning ascribed to it in the
Aircraft Mortgage.
"Administrative Agent" has the meaning ascribed to it in the Preamble.
"Affected Lender" has the meaning ascribed to it in Section 1.14(e).
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 20% or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, and (c)
each of such Person's joint venturers and partners who are Affiliates under
clause (a) hereof. For the purposes of this definition, "control" of a Person
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of its management or policies,
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whether through the ownership of voting securities, by contract or otherwise;
provided, that the term "Affiliate," when used with reference to a Credit Party,
shall specifically exclude the Administrative Agent and each Lender.
"Aggregate Cash On Hand" means the amount of cash and Cash Equivalents
of the Delta Companies that may be classified, in accordance with GAAP, as
"unrestricted" on the consolidated balance sheets of Borrower.
"Agreement" means this Agreement, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Air Carrier" means each of Borrower and Comair, Inc.
"Aircraft" shall have the meaning ascribed to it in the Aircraft
Mortgage.
"Aircraft Mortgage" means the Aircraft Mortgage and Security Agreement
in the form of Exhibit B hereto entered into by and among the Administrative
Agent for the benefit of the Secured Parties and each Credit Party that is a
signatory thereto, as amended, modified or supplemented from time to time.
"Airport Authority" shall have the meaning ascribed to it in the SGR
Security Agreement.
"Allocated Amount" means, with respect to any asset, the amount
allocated to such asset in the most recent Borrowing Base Certificate delivered
by Borrower to the Administrative Agent in accordance with Annex F.
"Amended and Restated Arrangement Fee Letter" means the Amended and
Restated Fee Letter, dated March 15, 2006, between GE Capital and Borrower.
"Amex" means American Express Travel Related Services Company, Inc.
and each of its affiliates party to the Post-Petition Skymiles Facility
Documents.
"Appendices" has the meaning ascribed to it in the recitals to the
Agreement.
"Applicable Term A Index Margin" means the per annum interest rate
from time to time in effect and payable in addition to the Index Rate applicable
to the Term Loan A, as determined by reference to Section 1.5(a).
"Applicable Term A LIBOR Margin" means the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Term Loan A, as determined by reference to Section 1.5(a).
"Applicable Term B Index Margin" means the per annum interest rate
from time to time in effect and payable in addition to the Index Rate applicable
to the Term Loan B, as determined by reference to Section 1.5(a).
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"Applicable Term B LIBOR Margin" means the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Term Loan B, as determined by reference to Section 1.5(a).
"Applicable Term C Index Margin" means the per annum interest rate
from time to time in effect and payable in addition to the Index Rate applicable
to the Term Loan C, as determined by reference to Section 1.5(a).
"Applicable Term C LIBOR Margin" means the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Term Loan C, as determined by reference to Section 1.5(a).
"Appraisers" shall mean Simat, Helliesen & ▇▇▇▇▇▇▇, Inc., Sage
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ (with respect to the Owned Real Estate
appraised on or before the Closing Date), or such other appraisers acceptable to
the Administrative Agent.
"Approved Fund" means, with respect to any Lender, any Person (other
than a natural Person) that (a) is or will be engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business and (b) is advised or managed by
(i) such Lender, (ii) any Affiliate of such Lender or (iii) any Person (other
than an individual) or any Affiliate of any Person (other than an individual)
that administers or manages such Lender.
"ARB Indebtedness" means, with respect to any Delta Company, without
duplication, all Indebtedness or obligations of such Delta Company created or
arising with respect to any limited recourse revenue bonds issued for the
purpose of financing or refinancing improvements to, or the construction or
acquisition of, airport and other related facilities and equipment, the use or
construction of which qualifies and renders such bonds exempt from certain
federal or state taxes.
"Arrangers" shall mean, collectively, (a) with respect to Term Loan A
and Term Loan B, GE Capital Markets, Inc. and (b) with respect to Term Loan C,
GE Capital Markets, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc.
"Asset Sale" has the meaning ascribed to it in Section 6.8.
"Assignment Agreement" has the meaning ascribed to it in Section
11.1(a).
"Aviation Authority" means any nation or government or national or
governmental authority of any nation, state, province or other political
subdivision thereof, and any agency, department, regulator, airport authority,
air navigation authority or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
in respect of the regulation of commercial aviation or the registration,
airworthiness or operation of civil aircraft and having jurisdiction over the
Credit Parties including, without limitation, the FAA or DOT.
"Avoidance Actions" shall mean the Credit Parties' claims and causes
of action arising under Section 502(d), 544, 545, 547, 548 or 550 of the
Bankruptcy Code or any other
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avoidance action under the Bankruptcy Code; provided, that "Avoidance Actions"
shall not include any Proceeds of such property.
"Bankruptcy Code" means the provisions of Title 11 of the United
States Code, 11 U.S.C. Sections 101 et seq.
"Bankruptcy Court" has the meaning ascribed to it in the Preamble or
shall mean any other court having competent jurisdiction over the Cases.
"Blocked Account" means any account of any Credit Party that is
subject to a Blocked Account Agreement or a Control Letter pursuant to Annex C.
"Blocked Account Agreement" means a control agreement, in form and
substance satisfactory to the Administrative Agent, among any Credit Party, the
Administrative Agent for the benefit of Secured Parties and the applicable bank
or financial institution. Any Blocked Account Agreement substantially in the
form of any Blocked Account Agreement in effect on the Closing Date shall be
deemed to be satisfactory to the Administrative Agent.
"Books and Records" means books and records of the Credit Parties,
including financial, corporate, operations and sales books, records, books of
account, sales and purchase records, lists of suppliers and customers, formulae,
business reports, plans and projections and all other documents, logs, surveys,
plans, files, records, assessments, correspondence, and other data and
information, financial or otherwise, and all aircraft manuals, log books and
other documents and records, including all data and information stored on
computer-related or other electronic media.
"Borrower" has the meaning ascribed thereto in the preamble to the
Agreement.
"Borrowing Base Certificate" means a certificate to be executed and
delivered from time to time by Borrower in the form attached to the Agreement as
Exhibit 4.1(b).
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which banks are required or permitted to be closed in the State of New York
and in reference to LIBOR Loans shall mean any such day that is also a LIBOR
Business Day.
"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring period, net of cash amounts received by
Borrower and its Subsidiaries from other Persons during such period in
reimbursement of Capital Expenditures made by Borrower and its Subsidiaries and
excluding interest capitalized during construction, for any fixed assets or
improvements or for replacements, substitutions or additions thereto, that have
a useful life of more than one year and that are required to be capitalized
under GAAP (including equipment which in the ordinary course of business is
purchased simultaneously with the trade-in or exchange of existing equipment
owned by Borrower or any of its Subsidiaries to the extent of the gross amount
of such purchase price less the book value of the equipment being traded in or
exchanged at such time), but excluding expenditures made in connection with the
replacement or restoration of assets to the extent reimbursed or financed from
(x) insurance proceeds paid on account of the
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loss of or the damage to the assets being replaced or restored, or (y) awards of
compensation arising from the taking by condemnation or eminent domain of such
assets being replaced.
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease of
any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Carve-Out" means claims of the following parties for the following
amounts: (i) the unpaid fees of the U.S. Trustee or the Clerk of the Bankruptcy
Court pursuant to 28 U.S.C. Section 1930(a) and (ii) after the occurrence and
during the continuance of an Event of Default, the aggregate allowed unpaid fees
and expenses payable under sections 330 and 331 of the Bankruptcy Code to
professional persons retained pursuant to an order of the Bankruptcy Court by
any Credit Party or any Committee not to exceed $35,000,000 (plus all unpaid
professional fees and disbursements accrued or incurred prior to the occurrence
of an Event of Default and reflected on the most recent Borrowing Base
Certificate and reserved against the Term A Borrowing Base, or otherwise
reported in writing to the Administrative Agent, to the extent allowed by the
Bankruptcy Court at any time) in the aggregate; provided, that the Carve-Out
shall not include, apply to or be available for any fees or expenses incurred by
any party, including any Credit Party or any Committee, in connection with the
initiation or prosecution of any claims, causes of action, adversary proceedings
or other litigation against the Administrative Agent, the Lenders or the L/C
Issuers, including challenging the amount, validity, perfection, priority or
enforceability of or asserting any defense, counterclaim or offset to, the
Obligations or the security interests and Liens of the Secured Parties in
respect thereof; provided, further, that (a) as long as no Event of Default
shall have occurred and be continuing, the Credit Parties shall be permitted to
pay compensation and reimbursement of expenses allowed and payable under
sections 330 and 331 of the Bankruptcy Code, as the same may be due and payable,
and the same shall not reduce the Carve-Out and (b) in the event the Carve-Out
is reduced by any amount during an Event of Default, upon the effectiveness of
any cure or waiver of such Event of Default pursuant to the terms of this
Agreement, the Carve-Out shall be increased by such amount.
"Cases" has the meaning ascribed to it in the Preamble.
"Cash Collateral Account" means a cash collateral account in the name
of Borrower and subject to a Blocked Account Agreement, into which the Net Cash
Proceeds of the Collateral, including Collateral included in the Term A
Borrowing Base and, at the election of Borrower, cash or Cash Equivalents are
deposited pursuant to the Agreement, the Collateral Documents and any other Loan
Document.
"Cash Equivalents" means Permitted Investments and such other cash and
cash equivalents acceptable to the Administrative Agent.
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"Cash Management Systems" has the meaning ascribed to it in Section
1.7.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.).
"Certificated Air Carrier" shall mean an "air carrier" within the
meaning of Section 40102 of Title 49, holding a certificate of public
convenience and necessity under Section 41102 of Title 49 and an air carrier
certificate under Section 44705 of Title 49 and Subpart C of 14 C.F.R. Part 119
of the Federal Aviation Regulations authorizing its operations to/from/within
the United States under 14 C.F.R. Part 121 of the Federal Aviation Regulations.
"Change of Control" means any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 40% or more of the issued and outstanding shares of
capital Stock of Borrower having the right to vote for the election of directors
of Borrower under ordinary circumstances other than any employee benefit plan of
Borrower or any of its Subsidiaries or any Person organized, appointed or
established by borrower or any of its Subsidiaries for, or pursuant to, the
terms of any such employee benefit plan; or (b) during any period of twelve
consecutive calendar months, individuals who at the beginning of such period
constituted the board of directors of Borrower (together with any new directors
whose election by the board of directors of Borrower or whose nomination for
election by the Stockholders of Borrower was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason other than death or disability to
constitute a majority of the directors then in office.
"Charges" means all federal, state, county, city, municipal, local,
foreign or other governmental taxes (including taxes owed to the PBGC at the
time due and payable), levies, assessments, charges, liens, claims or
encumbrances (including interest and penalties relating thereto) upon or
relating to (a) the Collateral, (b) the Obligations, (c) the employees, payroll,
income or gross receipts of any Credit Party, (d) any Credit Party's ownership
or use of any properties or other assets, or (e) any other aspect of any Credit
Party's business.
"Chattel Paper" means any "chattel paper," as such term is defined in
the Code, including electronic chattel paper, now owned or hereafter acquired by
any Credit Party, wherever located.
"Citibank Cash Collateral Account" means the Cash Collateral Account
as defined in the Security Agreement dated as of September 1, 2004 between
Borrower and Citibank, N.A. and the cash, cash equivalents and other investment
property and financial assets credited thereto, and all proceeds thereof, in an
amount not to exceed $20,000,000.
"Claim" has the meaning ascribed to such term in Section 101(5) of the
Bankruptcy Code.
"Closing Date" means September 16, 2005.
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"Closing Checklist" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as Annex D.
"Code" means the Uniform Commercial Code as the same may, from time to
time, be enacted and in effect in the State of New York; provided, that to the
extent that the Code is used to define any term herein or in any Loan Document
and such term is defined differently in different Articles or Divisions of the
Code, the definition of such term contained in Article or Division 9 shall
govern; provided, further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Administrative Agent's or Lender's Lien on any
Collateral is governed by the Uniform Commercial Code as enacted and in effect
in a jurisdiction other than the State of New York, the term "Code" shall mean
the Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by any Credit Party in or upon which a
Lien is granted under this Agreement or any Collateral Documents.
"Collateral Documents" means this Agreement, the Mortgage, the
Aircraft Mortgage, the SGR Security Agreement, the Spare Parts Mortgage and all
similar agreements entered into guaranteeing payment of, or granting a Lien upon
property as security for payment of, the Obligations.
"Collateral Reports" means the reports with respect to the Collateral
referred to in Annex F.
"Collection Account" means that certain account of the Administrative
Agent, account number ▇▇▇-▇▇▇-▇▇ in the name of the Administrative Agent at
DeutscheBank Trust Company Americas in New York, New York ABA No. 021 001 033,
Account Name: GECC/CAF Depository, Reference: CFN5803/Term Loan, or such other
account as may be specified in writing by the Administrative Agent as the
"Collection Account."
"Commitments" means (a) as to any Lender, the aggregate of such
Lender's Term A Commitment, Term B Commitment and Term C Commitment as set forth
on Annex J to the Agreement or in the most recent Assignment Agreement executed
by such Lender and (b) as to all Lenders, the aggregate of all Lenders' Term A
Commitments, Term B Commitments and Term C Commitments, as to each of clauses
(a) and (b), as such Commitments may be reduced, amortized or adjusted from time
to time in accordance with the Agreement.
"Committee" means the official statutory committee of unsecured
creditors approved in the Cases pursuant to section 1102 of the Bankruptcy Code.
"Compliance Certificate" has the meaning ascribed to it in Section (b)
of Annex E.
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"Concentration Account" has the meaning ascribed to it in Section (c)
of Annex C.
"Contracts" means all "contracts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, in any event,
including all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) in or under which any
Credit Party may now or hereafter have any right, title or interest, including
any agreement relating to the terms of payment or the terms of performance of
any Account.
"Control Letter" means a letter agreement, in form and substance
satisfactory to the Administrative Agent, between Administrative Agent and (i)
the issuer of uncertificated securities with respect to uncertificated
securities in the name of any Credit Party, (ii) a securities intermediary with
respect to securities, whether certificated or uncertificated, securities
entitlements and other financial assets held in a securities account in the name
of any Credit Party, (iii) a futures commission merchant or clearinghouse, as
applicable, with respect to commodity accounts and commodity contracts held by
any Credit Party, whereby, among other things, the issuer, securities
intermediary or futures commission merchant limits any security interest in the
applicable financial assets in a manner reasonably satisfactory to the
Administrative Agent, acknowledges the Lien of Administrative Agent for the
benefit of Secured Parties on such financial assets, and agrees to follow the
instructions or entitlement orders of the Administrative Agent without further
consent by the affected Credit Party. Any Control Letter substantially in the
form of any Control Letter in effect on the Closing Date shall be deemed to be
satisfactory to the Administrative Agent.
"Copyright License" means any and all rights now owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.
"Copyright Security Agreements" means the Copyright Security
Agreements made in favor of Administrative Agent for the benefit of the Secured
Parties, by each applicable Credit Party substantially in the form of Exhibit C
hereto.
"Copyrights" means all of the following now owned or hereafter adopted
or acquired by any Credit Party: (a) all copyrights and General Intangibles of
like nature (whether registered or unregistered), all registrations and
recordings thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof.
"Credit Card" means any agreement or plan relating to a credit card,
debit card, charge card or other similar system, including but not limited to
the American Express Card, Diners Club, MasterCard, Visa Card, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and
Discover Card.
"Credit Card Receivables" means any right to payment in Dollars
(including, but not limited to, rights to payment for goods, services,
insurance, fees, taxes, prepayment penalties
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and finance charges) from (i) any issuer of a Credit Card arising from goods or
services provided or to be provided by a Credit Party or (ii) to the extent that
the right to such payment described in clause (i) has been transferred in whole
or part to U.S. Bank, National Association ("USB") or any other settlement
and/or processing system, or, alternatively, to the extent USB or any other
settlement and/or processing system has received any collections with respect to
such right of payment, any right to payment from USB or any other settlement
and/or processing system arising from the transfer to or by USB or any other
settlement and/or processing system of such claims against an issuer of a Credit
Card.
"Credit Parties" means Borrower and each of the Guarantors.
"Default" means any event that, with the passage of time or notice or
both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section 1.5(d).
"Delta Company" means Borrower and each of its Subsidiaries.
"Deposit Accounts" means all "deposit accounts" as such term is
defined in the Code, now or hereafter held in the name of any Credit Party.
"Designated Spare Parts Locations" means the locations set out in
Disclosure Schedule 3.26 and such other locations as are permitted by the Spare
Parts Mortgage.
"Desk-top Aircraft Appraisal Methodology" means, in determining an
opinion as to the Net Orderly Liquidation Value of Eligible Aircraft or Eligible
Engines, including but not limited to, taking at least the following actions:
(i) reviewing the most recent Collateral Report; (ii) reviewing the Appraiser's
internal value database for values applicable to such Aircraft or Engines; and
(iii) checking other sources, such as manufacturers, other airlines and U.S.
government procurement data, for orderly liquidation prices of such Aircraft or
Engines.
"Desk-top Ground Service Equipment Appraisal Methodology" means, in
determining an opinion as to the Net Orderly Liquidation Value of Eligible
Ground Service Equipment, including but not limited to, taking at least the
following actions: (i) reviewing the most recent Collateral Report; (ii)
reviewing the Appraiser's internal value database for values applicable to such
Ground Service Equipment; and (iii) checking other sources, such as
manufacturers, other airlines and U.S. government procurement data, for orderly
liquidation prices of such Ground Service Equipment.
"Desk-top Spare Parts Appraisal Methodology" means, in determining an
opinion as to the Net Orderly Liquidation Value of Eligible Spare Parts,
including but not limited to, taking at least the following actions: (i)
reviewing the most recent Collateral Report; (ii) reviewing the Appraiser's
internal value database for values applicable to Spare Parts; (iii) developing a
representative sampling of a reasonable number of the different Spare Parts for
which a market check will be conducted; (iv) checking other sources, such as
manufacturers, other airlines, U.S. government procurement data and airline
parts pooling price lists, for orderly liquidation prices of the sample parts
referred to in clause (iii); (v) conducting a limited review of the inventory
reporting system applicable to the Spare Parts, including checking information
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reported in such system against information determined through physical
inspection; and (vi) reviewing a sampling of the Spare Parts' serviceability
tags, books and records (including tear-down reports).
"Desk-top Tooling Appraisal Methodology" means, in determining an
opinion as to the Net Orderly Liquidation Value of Eligible Tooling, including
but not limited to, taking at least the following actions: (i) reviewing the
most recent Collateral Report; (ii) reviewing the Appraiser's internal value
database for values applicable to such Tooling; and (iii) checking other
sources, such as manufacturers, other airlines and U.S. government procurement
data, for orderly liquidation prices of such Tooling.
"DFW Assets" means assets located at the Dallas/Fort Worth hub
facilities which are disposed of in connection with the closing of such hub
facilities as disclosed in Borrower's public disclosures on or prior to the
Closing Date.
"DIP Fee Letter" means the Fee Letter, dated September 14, 2005, among
GE Capital, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. and Borrower.
"DLMS" means Delta Loyalty Management Services, Inc.
"Documents" means any "documents," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of
America.
"Domestic Subsidiary" means a Subsidiary of Borrower organized under
the laws of any jurisdiction within the United States of America.
"DOT" shall mean the United States Department of Transportation or any
analogous successor agency.
"E-Fax" means any system used to receive or transmit faxes
electronically.
"E-Signature" means the process of attaching to or logically
associating with an Electronic Transmission an electronic symbol, encryption,
digital signature or process (including the name or an abbreviation of the name
of the party transmitting the Electronic Transmission) with the intent to sign,
authenticate or accept such Electronic Transmission.
"E-System" means any electronic system, including Intralinks(R) and
any other Internet or extranet-based site, whether such electronic system is
owned, operated or hosted by the Administrative Agent, any of its Related
Persons or any other Person, providing for access to data protected by passcodes
or other security system.
"EBITDAR" means, with respect to any Person for any fiscal period,
without duplication, an amount equal to (a) consolidated net income of such
Person for such period, determined in accordance with GAAP, minus (b) the sum of
(i) income tax credits, (ii) interest income, (iii) gain from extraordinary
items for such period, (iv) any aggregate net gain during such period arising
from the sale, exchange or other disposition of capital assets by such Person
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(including any fixed assets, whether tangible or intangible, all inventory sold
in conjunction with the disposition of fixed assets and all securities) (a
"Capital Asset Sale"), and (v) any other non-cash gains that have been added in
determining consolidated net income, in each case to the extent included in the
calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication, plus (c) the sum of (i) any
provision for income taxes, (ii) Interest Expense, (iii) loss from extraordinary
items for such period, (iv) depreciation and amortization for such period, (v)
amortized debt discount for such period, (vi) the amount of any deduction to
consolidated net income as the result of any grant to any employee of such
Person of any Stock, (vii) depreciation, amortization and aircraft rent expense
for such period, in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP,
(viii) any aggregate net loss during such period arising from a Capital Asset
Sale, (ix) all other non-cash charges for such period, (x) costs and expenses,
including fees, incurred directly in connection with the consummation of the
transactions contemplated under the Loan Documents to the extent included in the
calculation of consolidated net income and (xi) expenses incurred with respect
to the Chapter 11 reorganization as set forth on the Parent's consolidated
statement of income for such period, including (A) professional and other fees,
(B) key employee retention program payments, (C) financing fees, (D) severance
costs and (E) any litigation expenses incurred during or in connection with the
Cases. For purposes of this definition, the following items shall be excluded in
determining consolidated net income of a Person: (1) the income (or deficit) of
any other Person accrued prior to the date it became a Subsidiary of, or was
merged or consolidated into, such Person or any of such Person's Subsidiaries;
(2) the income (or deficit) of any other Person (other than a Subsidiary) in
which such Person has an ownership interest, except to the extent any such
income has actually been received by such Person in the form of cash dividends
or distributions; (3) any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was made out of income
accrued during such period; (4) any write-up of any asset; (5) any net gain from
the collection of the proceeds of life insurance policies; (6) any net gain
arising from the acquisition of any securities, or the extinguishment, under
GAAP, of any Indebtedness, of such Person; (7) in the case of a successor to
such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets; and (8) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary.
"Effective Date" has the meaning ascribed to it in Section 2.2.
"Electronic Transmission" means each notice, request, instruction,
demand, report, authorization, agreement, document, file, information and any
other communication transmitted, posted or otherwise made or communicated by
e-mail, E-Fax, Internet or extranet-based site or any other equivalent
electronic service, whether owned, operated or hosted by the Administrative
Agent, any Affiliate of the Administrative Agent or any other Person.
"Eligible Accounts" means all of the Accounts owned by the Credit
Parties and reflected in the most recent Borrowing Base Certificate delivered by
Borrower to the Administrative Agent shall be "Eligible Accounts" for purposes
of this Agreement, except, without duplication, any Account of the Credit
Parties:
A-11
(a) that does not arise from the air transportation of
passengers, freight and cargo or the sale of goods or performance of
services by the Credit Parties in the ordinary course of its business;
(b) (i) upon which any Credit Party's right to receive payment is
not absolute or is contingent upon the fulfillment of any condition
whatsoever or (ii) as to which any Credit Party is not able to bring
suit or otherwise enforce its remedies against the Account Debtor
through judicial process, or (iii) if the Account represents a
progress billing consisting of an invoice for goods sold or used or
services rendered pursuant to a contract under which the Account
Debtor's obligation to pay that invoice is subject to any Credit
Party's completion of further performance under such contract or is
subject to the equitable lien of a surety bond issuer; provided, that
clauses (i) and (iii) above shall not apply to receivables in respect
of the transportation of passengers in the ordinary course of
business;
(c) to the extent that any defense, counterclaim, setoff or
dispute is asserted as to such Account;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for goods and
services sold to or services rendered, or to be rendered with respect
to receivables in respect of the transportation of passengers, and
goods accepted by the applicable Account Debtor;
(e) Eligible Unbilled Accounts;
(f) that is owed by any director, officer, other employee or
Affiliate of any Credit Party;
(g) that is the obligation of an Account Debtor that is the
United States government or a political subdivision thereof, or any
state, county or municipality or department, agency or instrumentality
thereof unless the Credit Party, if necessary or desirable, has
complied with respect to such obligation with the Federal Assignment
of Claims Act of 1940, or any applicable state, county or municipal
law restricting the assignment thereof with respect to such obligation
and such assignment has been accepted and acknowledged by the
appropriate governmental officers;
(h) that is the obligation of an Account Debtor located in (x)
with respect to Credit Card Receivables, Korea or Brazil and (y) with
respect to all other receivables, a foreign country other than Canada
unless payment thereof is assured by a letter of credit assigned and
delivered to the Administrative Agent, satisfactory to the
Administrative Agent as to form, amount and issuer;
(i) with respect to receivables in respect of the transportation
of passengers, to the extent any Credit Party owed the applicable
Account Debtor for services sold or rendered by such Account Debtor to
such Credit Party but only to
A-12
the extent of the potential offset, including, without limitation
under code share arrangements, interline agreements or other
agreements between airlines in which tickets may be purchased on one
airline and honored by another airline;
(j) that is in default and such default is reasonably likely to
result in such Account Debtor's failure to make payment with respect
to such Account; provided, that, without limiting the generality of
the foregoing, an Account shall be deemed in default upon the
occurrence of any of the following:
(i) the Account is not paid within ninety (90) days following
its original invoice date;
(ii) the Account Debtor obligated upon such Account suspends
business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come
due; or
(iii) a petition is filed by or against any Account Debtor
obligated upon such Account under any bankruptcy law or any
other federal, state or foreign (including any provincial)
receivership, insolvency relief or other law or laws for the
relief of debtors;
(k) that is the obligation of an Account Debtor if fifty percent
(50%) or more of the Dollar amount of all Accounts owing by that
Account Debtor are ineligible under the other criteria set forth in
clause (j) above;
(l) as to which the Lien of the Administrative Agent for the
benefit of the Secured Parties is not a first priority perfected Lien;
(m) as to which any of the representations or warranties in the
Loan Documents with respect to such specific Account are untrue;
(n) to the extent such Account is evidenced by a judgment,
Instrument or Chattel Paper;
(o) to the extent such Account exceeds any credit limit
established by the Administrative Agent, in its reasonable credit
judgment;
(p) except with respect to Credit Card Receivables, to the extent
that such Account, together with all other Accounts owing by such
Account Debtor and its Affiliates as of any date of determination
exceed 10% of all Eligible Accounts;
(q) that is payable in any currency other than Dollars;
(r) that arises from interline activity including services and
▇▇▇▇▇▇▇▇ performed between airlines (but excluding the transportation
of passengers) and
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the payment of which is handled through third party domestic or
foreign clearing houses;
(s) that arises from the sale of Delta Skymiles through DLMS to
Amex;
(t) that are Ineligible Refundable Ticket Accounts or Eligible
Refundable Ticket Accounts; or
(u) of any Credit Party which Credit Party has not been subject
to a field examination.
"Eligible Aircraft" means all of the Aircraft, except any Ineligible
Term A Borrowing Base Collateral, owned by the Credit Parties; provided, that
(i) a valid and enforceable first priority Lien on such Aircraft (subject only
to Permitted Encumbrances and other Liens approved by the Administrative Agent)
shall have been granted by the applicable Credit Party in favor of
Administrative Agent for the benefit of the Secured Parties pursuant to the
Aircraft Mortgage and (ii) the Liens described in clause (i) above shall be in
full force and effect in favor of Administrative Agent for the benefit of the
Secured Parties at such time.
"Eligible Engines" means all of the Engines, except any Ineligible
Term A Borrowing Base Collateral, owned by the Credit Parties; provided, that
(i) a valid and enforceable first priority Lien on such Engine (subject only to
Permitted Encumbrances and other Liens approved by the Administrative Agent)
shall have been granted by the applicable Credit Party in favor of
Administrative Agent for the benefit of the Secured Parties pursuant to the
Aircraft Mortgage and (ii) the Liens described in clause (i) above shall be in
full force and effect in favor of Administrative Agent for the benefit of the
Secured Parties at such time.
"Eligible Flight Simulators" means all of the Flight Simulators,
except any Ineligible Term A Borrowing Base Collateral, owned by the Credit
Parties; provided that (i) a valid and enforceable first priority Lien on such
Flight Simulators (subject only to Permitted Encumbrances and other Liens
approved by the Administrative Agent) shall have been granted by the applicable
Credit Parties in favor of Administrative Agent for the benefit of the Secured
Parties pursuant to the Loan Documents and (ii) the Liens described in clause
(i) above shall be in full force and effect in favor of Administrative Agent for
the benefit of the Secured Parties at such time.
"Eligible Ground Service Equipment" means all Ground Service Equipment
owned by Credit Parties and reflected in the most recent Term A Borrowing Base
Certificate delivered by Borrower to the Administrative Agent, except any
Ineligible Term A Borrowing Base Collateral.
"Eligible Real Estate" means any parcel of Owned Real Estate, except
any Ineligible Term A Borrowing Base Collateral, in the United States owned in
fee simple by the Credit Parties as to which each of the following conditions
has been satisfied at such time:
(a) a valid and enforceable first priority Lien on such parcel of
Real Estate (subject only to Permitted Encumbrances and other Liens
approved by the
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Administrative Agent) shall have been granted by Borrower in favor of
Administrative Agent for the benefit of the Secured Parties pursuant
to a Mortgage;
(b) except as otherwise permitted by the Administrative Agent
and, where applicable, the relevant title insurance company shall have
received in form and substance satisfactory to the Administrative
Agent, all Mortgage Supporting Documents in respect of such parcel;
(c) the Administrative Agent shall have received a FIRREA
appraisal with respect to such parcel of Real Estate in form and
substance satisfactory to the Administrative Agent and performed by an
appraiser that is satisfactory to the Administrative Agent;
(d) no casualty shall have occurred affecting the use, operation
or value of such parcel of Real Estate if such casualty has not been
restored or repaired by the mortgagor under the Mortgage encumbering
such parcel of Real Estate;
(e) no condemnation or taking by eminent domain shall have
occurred nor shall any notice of any pending or threatened
condemnation or other proceeding against such parcel of Real Estate
have been delivered to the owner or lessee of such parcel of Real
Estate that would materially affect the use, operation or value of
such parcel of Real Estate;
(f) the mortgagor under the relevant Mortgage encumbering such
parcel of Real Estate shall comply in all material respects with the
terms of such Mortgage;
(g) each written lease, license or other use or occupancy
agreement, other than the lease between Borrower and Worldspan L.P.
and the lease between Borrower and Verizon Airfone Inc. f/k/a GTE
Airfone Incorporated (both of which leases are disclosed on Part 3 of
Disclosure Schedule 3.6), now or hereafter affecting all or any
portion of such parcel of Real Estate shall, by its express terms, be
subject and subordinate to the relevant Mortgage; and
(h) each lease, license, or other use or occupancy agreement
between a Credit Party, as landlord, and its Affiliate, as tenant, now
or hereafter affecting all or any portion of such parcel of Real
Estate shall be subject and subordinate to the relevant Mortgage or
shall be terminable (without fee) on 60 days' prior written notice by
the owner of such Real Estate.
"Eligible Refundable Ticket Accounts" means Eligible Accounts arising
from the sale of refundable tickets that are to be used within 30 days from the
date of issuance of such ticket.
"Eligible Spare Parts" means all of the Pledged Spare Parts owned by
Credit Parties and reflected in the most recent Term A Borrowing Base
Certificate delivered by
A-15
Borrower to the Administrative Agent, except for any Ineligible Term A Borrowing
Base Collateral.
"Eligible Tooling" means all of the Tooling owned by Credit Parties
and reflected in the most recent Term A Borrowing Base Certificate delivered by
Borrower to the Administrative Agent, except any Ineligible Term A Borrowing
Base Collateral.
"Eligible Unbilled Accounts" means Eligible Accounts with respect to
which an invoice, reasonably acceptable to the Administrative Agent in form and
substance, (it being understood that the form of invoice customarily used by the
applicable Credit Party on the Closing Date shall be deemed to be satisfactory
to the Administrative Agent) has not been sent to the applicable Account Debtor.
"Engines" shall have the meaning ascribed to it in the Aircraft
Mortgage.
"Environmental Laws" means all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, standards and regulations, now
or hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include CERCLA; the
Hazardous Materials Transportation Authorization Act of 1994 (49 U.S.C. Sections
5101 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
Sections 136 et seq.); the Solid Waste Disposal Act (42 U.S.C. Sections 6901 et
seq.); the Toxic Substance Control Act (15 U.S.C. Sections 2601 et seq.); the
Clean Air Act (42 U.S.C. Sections 7401 et seq.); the Federal Water Pollution
Control Act (33 U.S.C. Sections 1251 et seq.); the Occupational Safety and
Health Act (29 U.S.C. Sections 651 et seq.); and the Safe Drinking Water Act (42
U.S.C. Sections 300(f) et seq.), and any and all regulations promulgated
thereunder, and all analogous state, local and foreign counterparts or
equivalents and any transfer of ownership notification or approval statutes.
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, arising under or related to
any Environmental Laws, Environmental Permits, or in connection with any Release
or threatened Release or presence of a Hazardous Material whether on, at, in,
under, from or about or in the vicinity of any real or personal property.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
A-16
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any trade
or business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) any "reportable event" described in Section 4043 of ERISA with
respect to a Title IV Plan (other than a "reportable event" to which the 30-day
notice is waived under PBGC Regulation Section 4043); (b) the withdrawal of any
Credit Party or ERISA Affiliate from a Title IV Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any
Credit Party or any ERISA Affiliate from any Multiemployer Plan; (d) the filing
of a notice of intent to terminate a Title IV Plan or the treatment of a plan
amendment as a termination under Section 4041 of ERISA; (e) the institution of
proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f)
the failure by any Credit Party or ERISA Affiliate to make when due required
contributions to a Multiemployer Plan or Title IV Plan unless such failure is
cured within thirty (30) days; (g) any other event or condition that would
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Title IV Plan
or Multiemployer Plan or for the imposition of liability under Section 4069 or
4212(c) of ERISA; (h) the termination of a Multiemployer Plan under Section
4041A of ERISA or the reorganization or insolvency of a Multiemployer Plan under
Section 4241 or 4245 of ERISA; or (i) the loss of a Qualified Plan's
qualification or tax exempt status; or (j) the termination of a Plan described
in Section 4064 of ERISA.
"Escrow Accounts" shall mean (1) accounts of Borrower or any
Subsidiary, solely to the extent any such accounts hold funds set aside by
Borrower or any Subsidiary to manage the collection and payment of amounts
collected, withheld or incurred by Borrower or such Subsidiary for the benefit
of third parties relating to: (a) federal income tax withholding and backup
withholding tax, employment taxes, transportation excise taxes and security
related charges; (b) any and all state and local income tax withholding,
employment taxes and related charges and fees and similar taxes, charges and
fees, including, but not limited to, state and local payroll withholding taxes,
unemployment and supplemental unemployment taxes, disability taxes, ▇▇▇▇▇▇▇'▇ or
workers' compensation charges and related charges and fees; (c) state and local
taxes imposed on overall gross receipts, sales and use taxes, fuel excise taxes
and hotel occupancy taxes; (d) passenger facility fees and charges collected on
behalf of and owed to various administrators, institutions, authorities,
agencies and entities; and (e) other similar federal, state or local taxes,
charges and fees (including without limitation any amount required to be
withheld or collected under applicable law); in each case, held in escrow
accounts, trust funds or other segregated accounts in an aggregate amount for
all of such escrow accounts, trust funds and other segregated accounts not in
excess of $300,000,000, plus accrued interest; provided, that such amount may be
increased upon an increase in any of the foregoing taxes, fees and charges for
which Borrower's or any Subsidiary's officers and directors may have personal
liability if not paid; or (2) accounts, capitalized interest accounts, debt
service reserve accounts and other similar accounts or funds established in
connection with the ARB Indebtedness.
A-17
"ESOP" means a Pension Plan that is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section 8.1.
"Excess Aggregate Cash On Hand" means, as of any date, the amount by
which the actual Aggregate Cash On Hand as of such date exceeds the minimum
Aggregate Cash On Hand required to be maintained on such date by Section (c) of
Annex G.
"Excluded Accounts" shall mean (i) the Escrow Accounts, (ii)
Restricted Accounts; and (iii) accounts located outside the United States;
provided, that the aggregate amount held in all such accounts under this clause
(iii) at any time does not exceed $100,000,000.
"Excluded Collateral" means, collectively, (i) Excluded Accounts
(other than the Credit Parties' rights to receive any excess funds remaining in
the Escrow Accounts following the payment in full of the taxes, fees and charges
payable from such Escrow Accounts and other than the Credit Parties' rights to
receive any excess funds remaining in the Restricted Accounts), (ii) Excluded
Equity, (iii) JV Interests, (iv) Excluded Equipment, (v) Section 1110 Assets,
(vi) Avoidance Actions, (vii) any asset subject to the restrictions on Liens set
forth in Section 5.12(b), (viii) any asset excluded as Collateral in the SGR
Security Agreement (other than any Proceeds thereof that any Credit Party is
entitled to receive) and, to the extent the Administrative Agent has otherwise
consented in writing, in any other Collateral Documents.
"Excluded Equipment" means Equipment financed, in whole or in part, by
ARB Indebtedness or otherwise to the extent the granting of a security interest
in such Equipment would constitute a breach or violation of a valid and
effective restriction in favor of a third party or give rise to any
indemnification obligations or any right to terminate or commence the exercise
of remedies under such restrictions, in each case, to the extent not subject to
the automatic stay; provided, that "Excluded Equipment" shall not include
Proceeds, substitutions or replacements of Excluded Equipment (unless such
Proceeds, substitutions or replacements would constitute Excluded Equipment),
but only to the extent, and for so long as, such restriction is not terminated
or rendered unenforceable or otherwise deemed ineffective by the Code or any
other applicable law.
"Excluded Equity" means, collectively, (i) equity interests in the
Excluded Issuers and in any public company and (ii) any Voting Stock in excess
of 65% of the total outstanding Voting Stock of any Foreign Subsidiary of any
Credit Party. For purposes of this definition, "Voting Stock" means, as to any
issuer, the issued and outstanding shares of each class of capital stock or
other membership interests of such issuer entitled to vote (within the meaning
of Treasury Regulations Section 1.956-2(c)(2)).
"Excluded Issuer" means (i) Delta Air Lines, Inc. and Pan American
World Airways, Inc., GMBH, (ii) Guardant, Inc., (iii) Delta Air Technology,
Ltd., (iv) Aero Assurance Ltd. and (v) New Sky, Ltd.
"Excluded Obligations" means contingent indemnification and expense
reimbursement obligations.
A-18
"Excluded Properties" means the three real properties set forth on
Part 1 of Disclosure Schedule 3.6, the sale of which is permitted in accordance
with the Agreement.
"Excluded Sales" means (i) the sales of spare engines and related
inventory with respect to the MD-11 aircraft sold prior to the Closing Date,
(ii) the sale of the business of DAL Global Services LLC, Delta Technology, LLC,
Delta AirElite Business Jets, Inc., Delta Connection Academy, Inc. and the
technical operations (aircraft maintenance) division of Borrower, (iii) the
disposition of any Skymiles Collateral, (iv) the sale of the reservation
operations of Borrower, (v) the sale or other disposition of Permitted
Investments for cash or in exchange for Permitted Investments and (vi) the sale
of Inventory in the ordinary course of business.
"Excluded Subsidiaries" means (i) Aero Assurance, Ltd. and its
subsidiaries and (ii) Guardant, Inc.
"Existing Credit Agreement" has the meaning ascribed to it in the
recitals hereto.
"Existing Letters of Credit" has the meaning ascribed to it in
paragraph (b)(iii) of Annex B.
"Existing Secured Indebtedness" has the meaning ascribed to it in
Section 6.3(a)(v) hereof.
"FAA" means the Federal Aviation Administration of the United States
of America, and any successor Governmental Authority.
"FAA Slots" has the meaning ascribed to it in the SGR Security
Agreement.
"Fair Labor Standards Act" means the Fair Labor Standards Act, 29
U.S.C. Section 201 et seq.
"Fair Market Value" means (a) with respect to any asset or group of
assets (other than a marketable Security) at any date, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm's length and arranged in
an orderly manner over a reasonable period of time having regard to the nature
and characteristics of such asset, as reasonably determined by the Chief
Financial Officer or Treasurer or, if such asset shall have been the subject of
an appraisal within the last twelve months by an independent third party
appraiser, the basic assumptions underlying which have not materially changed
since its date, the value set forth in such appraisal and (b) with respect to
any marketable Security at any date, the closing sale price of such Security on
the Business Day next preceding such date, as appearing in any published list of
any national securities exchange or the NASDAQ Stock Market or, if there is no
such closing sale price of such Security, the final price for the purchase of
such Security at face value quoted on such Business Day by a financial
institution of recognized standing regularly dealing in Securities of such type
and selected by the Administrative Agent.
"Federal Funds Rate" means, for any day, a floating rate equal to the
weighted average of the rates on overnight federal funds transactions among
members of the Federal
A-19
Reserve System, as determined by the Administrative Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Fee Letters" means, collectively, the Amended and Restated
Arrangement Fee Letter and the DIP Fee Letter.
"Fees" means any and all fees payable to the Administrative Agent or
any Lender pursuant to the Agreement or any of the other Loan Documents.
"Final Order" means an order, approving or authorizing this Agreement
and the other Loan Documents and the incurrence by the Credit Parties hereunder
of post-petition secured and super-priority Indebtedness in an aggregate
principal amount of not less than $1,900,000,000 in accordance with this
Agreement, issued by the Bankruptcy Court in form and substance satisfactory to
the Administrative Agent, the Arrangers and the Requisite Lenders.
"Financial Covenants" means the financial covenants set forth in Annex
G.
"Financial Statements" means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Borrower delivered in
accordance with Section 3.4 and Annex E.
"First Day Orders" means all orders entered by the Bankruptcy Court in
respect of motions filed on the Petition Date or within five Business Days
thereafter.
"Fiscal Month" means any of the monthly accounting periods of
Borrower.
"Fiscal Quarter" means any of the quarterly accounting periods of
Borrower, ending on March 31, June 30, September 30 and December 31 of each
year.
"Fiscal Year" means any of the annual accounting periods of Borrower
ending on December 31 of each year.
"Fixtures" means all "fixtures" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party.
"Flight Simulators" means the flight simulators and flight training
devices of Borrower or any Subsidiary.
"Foreign Aviation Authority" shall have the meaning ascribed to it in
the SGR Security Agreement.
"Foreign Subsidiary" means any Subsidiary which is a "controlled
foreign corporation" within the meaning of the Internal Revenue Code of 1986, as
amended from time to time.
A-20
"Foreign Slots" has the meaning ascribed to it in the SGR Security
Agreement.
"GAAP" means generally accepted accounting principles in the United
States of America, consistently applied, as such term is further defined in
Annex G to the Agreement.
"Gates" shall have the meaning ascribed to it in the SGR Security
Agreement.
"GECAS Facilities" means, collectively, (i) the Reimbursement
Agreement, dated as of May 1, 2003, among Borrower, GE Capital (or its
subsidiary, affiliate, associated company, owner, trustee or permitted assignee)
and the lenders signatory thereto, as the same may be amended, restated,
supplemented or otherwise modified from time to time, and each of the Operative
Documents referred to therein, as the same may be amended, restated,
supplemented or otherwise modified from time to time; (ii) the Amended and
Restated Credit Agreement (Spare Parts), dated as of July 7, 2004, among
Borrower, GE Capital (or its subsidiary, affiliate, associated company, owner,
trustee or permitted assignee) and U.S. Bank, as the same may be amended,
restated, supplemented or otherwise modified from time to time, and each of the
Operative Documents referred to therein, as the same may be amended, restated,
supplemented or otherwise modified from time to time; (iii) the Amended and
Restated Loan Agreement (Engines), dated as of July 7, 2004, among GE Capital
(or its subsidiary, affiliate, associated company, owner, trustee or permitted
assignee), Borrower and U.S. Bank, as the same may be amended, restated,
supplemented or otherwise modified from time to time, and each of the Operative
Documents referred to therein, as the same may be amended, restated,
supplemented or otherwise modified from time to time; (iv) the Amended and
Restated Loan Agreement (Aircraft), dated as of July 7, 2004, among Borrower, GE
Capital (or its subsidiary, affiliate, associated company, owner, trustee or
permitted assignee) and U.S. Bank, as the same may be amended, restated,
supplemented or otherwise modified from time to time, and each of the Operative
Documents referred to therein, as the same may be amended, restated,
supplemented or otherwise modified from time to time; (v) the Amended and
Restated Payment and Indemnity Agreement, dated as of November 30, 2004, between
Borrower and the Beneficiaries identified therein, as the same may be amended,
restated, supplemented or otherwise modified from time to time, and each of the
Operative Documents referred to therein, as the same may be amended, restated,
supplemented or otherwise modified from time to time; (vi) the CRJ Put
Agreement, dated as of November 30, 2004, between GE Capital (or its subsidiary,
affiliate, associated company, owner, trustee or permitted assignee) and
Borrower and the twelve leases and related agreements to which Borrower is a
party, as each may be amended, restated, supplemented or otherwise modified from
time to time; (vii) the CRJ Put Agreement II, to be entered into by Aviation
Financial Services Inc. and Borrower pursuant to the Letter of Intent, and the
leases and related agreements to be entered into by Borrower pursuant to the CRJ
Put Agreement II, as each may be amended, restated, supplemented or otherwise
modified from time to time; and (viii) the Second Restructuring Agreement to be
entered into by GE Capital (or its subsidiary, affiliate, associated company,
owner, trustee or permitted assignee), Borrower and U.S. Bank in connection with
the Letter of Intent, as the same may be amended or otherwise modified from time
to time.
"GE Capital" means General Electric Capital Corporation, a Delaware
corporation.
A-21
"GE Capital Commitment Letter" means the Commitment Letter, dated
September 10, 2005, between GE Capital and Borrower.
"General Intangibles" means "general intangibles," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, Software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, rights to receive tax
refunds and other payments, rights to receive dividends, distributions, cash,
Instruments and other property in respect of or in exchange for pledged Stock
and Investment Property, rights of indemnification, all Books and Records,
correspondence, credit files, invoices and other papers, including without
limitation all tapes, cards, computer runs and other papers and documents in the
possession or under the control of such Credit Party or any computer bureau or
service company from time to time acting for such Credit Party.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including but not limited to, any
Aviation Authority.
"Granting Lender" has the meaning ascribed to it in Section 11.1(e).
"Ground Service Equipment" means ground service equipment, de-icers,
ground support equipment, aircraft cleaning devices, materials handling
equipment and other similar equipment used to service equipment.
"Guaranteed Indebtedness" means, as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness ("primary obligation") of any other Person (the "primary obligor")
in any manner, including any obligation or arrangement of such Person to (a)
purchase or repurchase any such primary obligation, (b) advance or supply funds
(i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, (d) protect the
beneficiary of such arrangement from loss (other than product warranties given
in the ordinary course of business) or (e) indemnify the owner of such primary
obligation against loss in respect thereof. The amount of any Guaranteed
Indebtedness at any
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time shall be deemed to be an amount equal to the lesser at such time of (x) the
stated or determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.
"Guarantors" means each Domestic Subsidiary of Borrower, other than
the Excluded Subsidiaries, and each other Person, if any, that executes a
guaranty or other similar agreement in favor of Administrative Agent for the
benefit of the Secured Parties in connection with the transactions contemplated
by the Agreement and the other Loan Documents.
"Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
"IATA" means International Air Transport Association.
"Indebtedness" means, with respect to any Person, without duplication
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property payment for which is deferred six (6) months or more,
but excluding obligations to trade creditors incurred in the ordinary course of
business that are not overdue by more than six (6) months unless being contested
in good faith, (b) all reimbursement and other obligations with respect to
letters of credit, bankers' acceptances and surety bonds, whether or not
matured, (c) all obligations evidenced by notes, bonds, debentures or similar
instruments, (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Capital Lease Obligations and the present value (discounted
at the Index Rate as in effect on the Closing Date) of future rental payments
under all synthetic leases, (f) all obligations of such Person under commodity
purchase or option agreements or other commodity price hedging arrangements, in
each case whether contingent or matured, (g) all obligations of such Person
under any foreign exchange contract, currency swap agreement, interest rate
swap, cap or collar agreement or other similar agreement or arrangement designed
to alter the risks of that Person arising from fluctuations in currency values
or interest rates, in each case whether contingent or matured, (h) all
Indebtedness referred to above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property or other assets (including accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, and (i) the Obligations, but
excluding any claims arising upon the rejection of unexpired leases and other
executory contracts.
"Indemnified Liabilities" has the meaning ascribed to it in Section
1.11(a).
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"Indemnified Person" has the meaning ascribed to it in Section
1.11(a).
"Index Rate" means, for any day, a floating rate equal to the higher
of (i) the rate publicly quoted from time to time by The Wall Street Journal as
the "prime rate" (or, if The Wall Street Journal ceases quoting a prime rate,
the highest per annum rate of interest published by the Federal Reserve Board in
Federal Reserve statistical release H.15 (519) entitled "Selected Interest
Rates" as the Bank prime loan rate or its equivalent), and (ii) the Federal
Funds Rate plus 50 basis points per annum. Each change in any interest rate
provided for in the Agreement based upon the Index Rate shall take effect at the
time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing interest by
reference to the Index Rate.
"Ineligible Refundable Ticket Accounts" means Accounts arising from
the sale of refundable tickets that are to be used later than 30 days from the
date of issuance of such ticket.
"Ineligible Term A Borrowing Base Collateral" means any Aircraft,
Engines, Tooling, Flight Simulators, Ground Service Equipment and Spare Parts
that:
(a) is not subject to a valid and enforceable first priority Lien on
such Collateral (subject only to Permitted Encumbrances and other Liens
approved by the Administrative Agent) granted by the applicable Credit
Party in favor of Administrative Agent for the benefit of the Secured
Parties pursuant to a Collateral Document;
(b) is not located on premises (i) leased by Credit Party or (ii)
owned by Credit Party and subject to a valid and enforceable first priority
Mortgage in favor of Administrative Agent for the benefit of the Secured
Parties pursuant to a Collateral Document;
(c) is placed on consignment, is in transit or out for repair, except
for Collateral (other than Spare Parts) in transit between domestic
locations of Credit Parties as to which Liens of Administrative Agent for
the benefit of the Secured Parties have been perfected at origin and
destination;
(d) is covered by a negotiable document of title, unless such document
has been delivered to the Administrative Agent with all necessary
endorsements,
(e) is not of a type used in the ordinary course of Credit Parties'
business;
(f) as to which any of the representations or warranties pertaining to
Collateral set forth in the Loan Documents are untrue;
(g) consists of Hazardous Materials or goods that can be transported
or sold only with licenses that are not readily available;
(h) is not covered by casualty insurance required to be maintained
under the Collateral Documents;
A-24
(i) is subject to any patent or trademark license requiring the
payment of royalties or fees or requiring the consent of the licensor for a
sale thereof by the Administrative Agent;
(j) constitutes Technology Equipment;
(k) has not been appraised in accordance with Section 5.20 of the
Agreement; or
(l) with respect to any Aircraft or Engine, as to which Borrower fails
to cure a Maintenance Default during the Maintenance Cure Period.
"Instruments" means all "instruments," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located,
and, in any event, including all promissory notes and other evidences of
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks, and
Technology.
"Intercompany Notes" has the meaning ascribed to it in Section
6.3(a)(vii).
"Interest Expense" means, with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date.
"Interest Payment Date" means (a) as to any Index Rate Loan, the first
Business Day of each month to occur while such Loan is outstanding, and (b) as
to any LIBOR Loan, the last day of the applicable LIBOR Period; provided, that
in the case of any LIBOR Period greater than three months in duration, interest
shall be payable at three month intervals and on the last day of such LIBOR
Period; and provided, further that, in addition to the foregoing, each of (x)
the date upon which all of the Commitments have been terminated and the Loans
have been paid in full and (y) the Maturity Date shall be deemed to be an
"Interest Payment Date" with respect to any interest that has then accrued under
the Agreement.
"Inventory" means any "inventory," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located, and
in any event including inventory, merchandise, goods and other personal property
that are held by or on behalf of any Credit Party for sale or lease or are
furnished or are to be furnished under a contract of service, or that constitute
raw materials, work in process, finished goods, returned goods, supplies or
materials of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded Software.
"Investment Property" means all "investment property" as such term is
defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund
A-25
shares; (ii) all securities entitlements of any Credit Party, including the
rights of such Credit Party to any securities account and the financial assets
held by a securities intermediary in such securities account and any free credit
balance or other money owing by any securities intermediary with respect to that
account; (iii) all securities accounts of any Credit Party; (iv) all commodity
contracts of any Credit Party; and (v) all commodity accounts held by any Credit
Party.
"Investments" has the meaning ascribed to it in Section 6.2.
"IRC" means the Internal Revenue Code of 1986, as amended, and all
regulations promulgated thereunder.
"IRS" means the Internal Revenue Service.
"JV Interests" means any joint venture interest held by any Credit
Party to the extent such Credit Party is restricted from assigning or pledging
such interest pursuant to legally binding arrangements between the joint venture
parties; provided, that "JV Interests" shall not include any Proceeds of such
property.
"L/C Cash Collateral" means the cash and Cash Equivalents deposited
from time to time by the Borrower in the L/C Cash Collateral Account.
"L/C Cash Collateral Account" means a cash collateral account
maintained at a bank or financial institution acceptable to the Administrative
Agent, subject to a Blocked Account Agreement, into which cash or Cash
Equivalents are deposited pursuant to Section 1.1(a)(i).
"L/C Issuer" has the meaning ascribed to it in Annex B.
"L/C Reimbursement Amount" has the meaning ascribed to it in Annex B.
"L/C Subfacility" has the meaning ascribed to it in Section
1.1(a)(iv).
"Letter of Credit" means each documentary or standby letters of credit
issued under the Loan Documents for the account of Borrower or any of the Credit
Parties by any L/C Issuer.
"Letter of Credit Obligations" means the sum, without duplication, of
(i) the amount available for drawing under all outstanding Letters of Credit and
(ii) the aggregate unpaid amount of all outstanding reimbursement obligations in
respect of previous drawings under Letters of Credit.
"Letter of Credit Rights" means "letter-of-credit rights" as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
including rights to payment or performance under a letter of credit, whether or
not such Credit Party, as beneficiary, has demanded or is entitled to demand
payment or performance.
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"Letter of Intent" means the Letter of Intent, dated as of December
14, 2005, between GE Capital and Borrower, as amended or otherwise modified from
time to time.
"Lenders" means GE Capital, the other Lenders named on the signature
pages of the Agreement and, if any such Lender shall decide to assign all or any
portion of the Obligations in accordance with Section 11.1(a), such term shall
include any assignee of such Lender.
"Liabilities" means all claims, actions, suits, judgments, damages,
losses, liability, obligations, responsibilities, fines, penalties, sanctions,
costs, fees, taxes, commissions, charges, disbursements and expenses, in each
case of any kind or nature (including interest accrued thereon or as a result
thereto and fees, charges and disbursements of financial, legal and other
advisors and consultants), whether joint or several, whether or not indirect,
contingent, consequential, actual, punitive, treble or otherwise.
"LIBOR Business Day" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower pursuant to the
Agreement and ending one, two, three or six months thereafter, as selected by
Borrower's irrevocable notice to the Administrative Agent as set forth in
Section 1.5(e); provided, that the foregoing provision relating to LIBOR Periods
is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR Period into another calendar month in which event such
LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the Maturity
Date shall end on or prior to such date;
(c) any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such LIBOR Period) shall end on the
last LIBOR Business Day of a calendar month; and
(e) Borrower shall select LIBOR Periods so that there shall be no more
than 5 separate LIBOR Loans in existence at any one time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest
determined by the Administrative Agent equal to the offered rate for deposits in
United States Dollars for the applicable LIBOR Period that appears on Telerate
Page 3750 as of 11:00 a.m. (London time), on the second full LIBOR Business Day
next preceding the first day of such LIBOR Period (unless such date is not a
Business Day, in which event the next succeeding Business Day will be used).
A-27
If such interest rates shall cease to be available from Telerate News Service,
the LIBOR Rate shall be determined from such financial reporting service or
other information as shall be mutually acceptable to the Administrative Agent
and Borrower.
"License" means any Copyright License, Patent License, Trademark
License or other similar license of rights or interests now held or hereafter
acquired by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any capital
lease or conditional sale agreement, and any financing lease having
substantially the same economic effect as any of the foregoing).
"Litigation" has the meaning ascribed to it in Section 3.13.
"Loan" means any loan made by any Lender pursuant to this Agreement.
"Loan Account" has the meaning ascribed to it in Section 1.10.
"Loan Documents" means the Agreement, the Notes, the Collateral
Documents, the Fee Letters, Borrowing Base Certificates and all other
agreements, instruments, documents and certificates executed and delivered to,
or in favor of, the Administrative Agent or any Lender in connection with the
Agreement and the transactions contemplated thereby and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, letter
of credit agreements and all other written agreements whether heretofore, now or
hereafter executed by or on behalf of any Credit Party and delivered to the
Administrative Agent or any Lender in connection with the Agreement or the
transactions contemplated thereby. Any reference in the Agreement or any other
Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to the Agreement or such Loan Document as
the same may be in effect at any and all times such reference becomes operative.
"Maintenance Cure Period" has the meaning ascribed to it in Section
8.1(d).
"Maintenance Default" has the meaning ascribed to it in Section
8.1(d).
"Margin Stock" has the meaning ascribed to it in Section 3.10.
"Master Documentary Agreement" means the Master Agreement for
Documentary Letters of Credit between Borrower, as Applicant, and GE Capital, as
L/C Issuer, to be executed prior to issuance of any Letter of Credit, in form
and substance reasonably satisfactory to the Administrative Agent.
"Master Standby Agreement" means the Master Agreement for Standby
Letters of Credit between Borrower, as Applicant, and GE Capital, as L/C Issuer,
to be executed prior to issuance of any Letter of Credit, in form and substance
reasonably satisfactory to the Administrative Agent.
A-28
"Material Adverse Effect" means a material adverse effect on (i) the
business, assets, operations or financial or other condition or prospects of (x)
Borrower or (y) the Credit Parties taken as a whole (other than the commencement
of the Cases and events customarily leading up to and following the commencement
of the Cases or otherwise reflected in the operating budget dated September 9,
2005 provided to the Administrative Agent), (ii) the ability of Borrower or
Guarantors to pay any of the Loans or any of the other Obligations in accordance
with the terms of the Agreement, (iii) the Collateral, the Liens of
Administrative Agent for the benefit of the Secured Parties on the Collateral,
or the priority of such Liens, or (iv) the Administrative Agent's or Lender's
rights and remedies under the Agreement and the other Loan Documents.
"Material Location" has the meaning ascribed to it in Section 5.8.
"Material Real Estate Contracts" means (for purposes of the Agreement
only) any lease, usufruct, use agreement, license, permit or other occupancy or
facility use agreement under which a Credit Party is a tenant or counterparty,
that has a remaining term of three (3) years or more as of the Closing Date and
(i) subject to receipt of any necessary consents, could be assigned to another
user for a cash payment in excess $10,000,000 with a novation of such Credit
Party, or (ii) relates to major facilities required for a Credit Party's
operations, the loss of the lease, usufruct, use agreement, license, permit or
other occupancy or facility use agreement with respect thereto would materially
and adversely affect a Credit Party's ability to conduct its business as now
being conducted.
"Maturity Date" the earliest of (a) Scheduled Maturity Date, (b) the
effective date of a Plan of Reorganization and (c) the date of termination of
Lenders' obligations to permit existing Loans to remain outstanding pursuant to
Section 8.2(b).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means each of the mortgages, deeds to secured debt, deeds
of trust or other real estate security documents delivered by any Credit Party
to the Administrative Agent on behalf of itself and Lenders with respect to the
Owned Real Estate, substantially in the form attached as Exhibit D hereto.
"Mortgage Supporting Documents" means, with respect to a Mortgage for
a parcel of Real Estate, each of the following:
(a) (i) evidence in form and substance reasonably satisfactory to the
Administrative Agent that the recording of counterparts of such Mortgage in
the recording offices specified in such Mortgage will create a valid,
perfected and enforceable first priority lien on property described therein
in favor of Administrative Agent for the benefit of the Secured Parties (or
in favor of such other trustee as may be required or desired under local
law) subject only to (A) Permitted Encumbrances and (B) such other Liens as
the Administrative Agent may reasonably approve and (ii) an opinion of
counsel in each state in which any such Mortgage is to be recorded in form
and substance and from counsel reasonably satisfactory to the
Administrative Agent;
A-29
(b) if requested by the Administrative Agent in its reasonable
discretion, (i) a mortgagee's title policy (or policies) or marked-up
unconditional binder (or binders) for such insurance (or other evidence
reasonably acceptable to the Administrative Agent proving ownership
thereof) ("Mortgagee's Title Insurance Policy"), dated a date satisfactory
to the Administrative Agent, and shall (A) be in an amount equal to 110% of
the appraised value (determined by reference to the initial FIRREA
appraisals) of such parcel of Real Estate, (B) be issued at ordinary rates,
(C) insure that the Lien granted pursuant to the Mortgage insured thereby
creates a valid first priority Lien on such parcel of Real Estate free and
clear of all defects and encumbrances, except for Permitted Encumbrances
and for such defects and encumbrances as may be approved by the
Administrative Agent, (D) name Administrative Agent for the benefit of the
Secured Parties as the insured thereunder, (E) be in the form of ALTA Loan
Policy - 1992 (or such local equivalent thereof as is reasonably
satisfactory to the Administrative Agent), (F) contain such endorsements
and affirmative coverage as the Administrative Agent may request to the
extent available in the applicable jurisdictions (including but not limited
to a comprehensive lender's endorsement, a zoning endorsement and a
floating rate endorsement), (G) be issued by Lawyers Title Insurance
Corporation, Chicago Title Insurance Company or any other title company
reasonably satisfactory to the Administrative Agent (including any such
title companies acting as co-insurers or reinsurers), (H) delete the
general survey exception, and (I) be otherwise in form and substance
reasonably satisfactory to the Administrative Agent and (ii) a copy of all
documents referred to, or listed as exceptions to title, in such title
policy (or policies) in each case in form and substance reasonably
satisfactory to the Administrative Agent;
(c) as-built surveys of such parcel of Real Estate certified to and
received by (in a manner reasonably satisfactory to each of them)
Administrative Agent for the benefit of the Secured Parties and, if the
Administrative Agent requires a Mortgage Title Insurance Policy pursuant to
clause (a) above, the title insurance company issuing the Mortgagee's Title
Insurance Policy for such Mortgage, dated a date reasonably satisfactory to
the Administrative Agent and such title insurance company, by an
independent professional licensed land surveyor reasonably satisfactory to
the Administrative Agent and such title insurance company, which maps or
plats and the surveys on which they are based shall be made in form and
substance reasonably satisfactory to the Administrative Agent;
(d) evidence in form and substance reasonably satisfactory to the
Administrative Agent that all premiums in respect of each Mortgagee's Title
Insurance Policy, all recording fees and stamp, documentary, intangible or
mortgage taxes, if any, in connection with the Mortgage have been paid;
(e) a Phase I environmental report with respect to such parcel of Real
Estate, dated a date not more than one year prior to November 30, 2004,
showing no material condition of environmental concern and otherwise in
form and substance reasonably satisfactory to the Administrative Agent; and
A-30
(f) such other agreements, documents and instruments in form and
substance reasonably satisfactory to the Administrative Agent as the
Administrative Agent deems necessary or appropriate to create, register or
otherwise perfect, maintain, evidence the existence, substance, form or
validity of, or enforce a valid and enforceable first priority lien on such
parcel of Real Estate in favor of Administrative Agent for the benefit of
the Secured Parties (or in favor of such other trustee as may be required
or desired under local law) subject only to Permitted Encumbrances.
"Mortgagee's Title Insurance Policy" has the meaning ascribed to it in
the definition of "Mortgage Supporting Documents".
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is
making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"Net Capital Expenditures" means, for any period, Capital Expenditures
for such period plus (without duplication) (i) any increases in the aggregate
amount of advances or deposits made in connection with Capital Expenditures
during such period, and (ii) the amount by which the aggregate principal amount
of any Indebtedness incurred pursuant to Section 6.3(a)(i) ("Purchase Money
Debt") was reduced in connection with any refinancing of interim Purchase Money
Debt during such period, minus (without duplication) (x) the aggregate principal
amount of any Purchase Money Debt incurred during such period, including without
limitation in connection with any increase in Purchase Money Debt incurred in
connection with any refinancing of interim Purchase Money Debt, and (y) any
decreases in advances or deposits made in connection with Capital Expenditures
during such period.
"Net Cash Proceeds" means proceeds received by any Credit Party after
the Closing Date in cash or Cash Equivalents from:
(a) (i) Asset Sales permitted under Section 6.8(a) in excess of
$5,000,000, individually or in the aggregate, for any Fiscal Year (other than
(x) Asset Sales of Aircraft and (y) any single Asset Sale resulting in gross
proceeds not exceeding $5,000), (ii) Asset Sales of any Collateral included in
the Term A Borrowing Base permitted under Section 6.8(c)(ii), (iii) any Excluded
Sales permitted under Section 6.8(d) and of the type described in clause (ii) or
(iv) of the definition thereof, to the extent resulting in gross proceeds in
excess of $50,000,000, individually or in the aggregate, and (iv) any other
Asset Sale (other than (A) any Asset Sale permitted under Sections 6.8(c)(i),
(d) (except, for the avoidance of doubt, to the extent required by clause (iii)
above), (e), (f), (g), (i), (j), (k), (l), (n) (other than sales of Section 1110
Assets or Non-1110 Aviation Assets) or (o) or (B) any single Asset Sale
resulting in gross proceeds not exceeding $5,000), in excess of $5,000,000,
individually or in the aggregate, for any Fiscal Year for all such Asset Sales,
in each case, net of (1) the reasonable cash costs of sale, assignment or other
disposition, (2) taxes paid or reasonably estimated to be payable as a result
thereof, (3) reserves provided, to the extent required by GAAP, against any
liabilities that are directly attributed to such Asset Sale (clauses (1), (2)
and (3) collectively referred to herein as the "Sale Costs") and (4) any amount
required to be paid or prepaid on Indebtedness or other obligations
A-31
(other than the Obligations) secured by the assets subject to such Asset Sale,
or otherwise required to be repaid as a result of such Asset Sale; provided,
that, in the case of any Asset Sale of fuel that has been pre-ordered in the
ordinary course of business occurring substantially concurrently with the
purchase of such fuel subject to such Asset Sale, "Net Cash Proceeds" shall be
deemed net of the purchase price of such fuel; and
(b) Property Loss Event, net of (1) the costs of collection (the
"Collection Costs" and, together with the Sale Costs, "Costs"), (2) the amounts
required to be applied pursuant to the terms of any ARB Indebtedness in respect
of any asset subject thereto, (3) any amounts required to be applied as
described in Section 5.4(d) and (4) any amount required to be paid or prepaid on
Indebtedness or other obligations (other than the Obligations) secured by the
assets subject to such Property Loss Event, or otherwise required to be repaid
as a result of such Property Loss Event;
provided, that, if the aggregate Costs related to any Asset Sale or
any Property Loss Event exceeds $500,000, evidence of each such Costs shall be
provided to the Administrative Agent, in form and substance reasonably
satisfactory to them.
"Net Orderly Liquidation Value" shall mean with regard to any Eligible
Aircraft, Eligible Engines, Eligible Spare Parts, Eligible Ground Service
Equipment, Eligible Flight Simulators or Eligible Tooling, the net orderly
liquidation value of such Eligible Aircraft, Eligible Spare Parts, Eligible
Ground Service Equipment, Eligible Flight Simulators or Eligible Tooling, as the
case may be, as determined by reference to the most recent appraisal of the
applicable Credit Party.
"Non-Funding Lender" has the meaning ascribed to it in Section
11.9(a).
"Non-1110 Agreement" shall mean any agreement related to property that
would have qualified as "equipment," as such term is used in Section 1110(a)(3)
of the Bankruptcy Code if it had been placed in service on or prior to October
22, 1994, including, without limitation, security agreements, mortgages, trusts,
leases, conditional sale agreements or other instruments applicable to such
property.
"Non-1110 Aviation Assets" shall mean (a) property that would have
qualified as "equipment," as such term is used in Section 1110(a)(3) of the
Bankruptcy Code if it had been placed in service on or prior to October 22, 1994
and all Non-1110 Agreements, to the extent that the Credit Parties are
prohibited from granting liens thereon or assignments thereof under the terms of
any such agreements in effect at the commencement of the Cases (and to the
extent permitted by this Agreement, as such Non-1110 Agreement may be amended,
modified, refinanced or restructured), (b) any other asset with respect to which
the granting of any lien would cause a default, directly or indirectly, of any
such Non-1110 Agreements, (c) any deposits and reserves held or maintained
pursuant to such agreement or (d) property referred to in the previous clauses
that the Borrower or any of the Guarantors elects to return to the party
providing financing therefor in exchange for a discharge of the related
indebtedness; provided, that Non-1110 Aviation Assets shall not include any
Proceeds of such property (but only to the extent that the Credit Parties are
entitled to such Proceeds).
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"Non-Stayed Order" means an order of the Bankruptcy Court which is in
full force and effect, as to which no stay has been entered and which has not
been reversed, modified, vacated or overturned.
"Note" has the meaning assigned to it in Section 1.1(a).
"Notice of Actionable Default" has the meaning ascribed to it in the
Skymiles Intercreditor Agreement.
"Notice of Conversion/Continuation" has the meaning ascribed to it in
Section 1.5(e).
"Obligations" means all loans, advances, debts, liabilities and
obligations, for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to the Administrative Agent or any Lender, and all covenants and duties
regarding such amounts, of any kind or nature, present or future, whether or not
evidenced by any note, agreement, letter of credit agreement or other
instrument, arising under the Agreement or any of the other Loan Documents. This
term includes all principal, interest (including all interest that accrues after
the commencement of any case or proceeding by or against any Credit Party in
bankruptcy, whether or not allowed in such case or proceeding), Fees, expenses,
attorneys' fees and any other sum chargeable to any Credit Party under the
Agreement or any of the other Loan Documents.
"Op Specs" means Operating Specifications issued by the FAA under Part
121 of the Federal Aviation Regulations authorizing an air carrier's operations
to/from/within the United States.
"Original Borrowing Base Assets" has the meaning ascribed to it in
Section 1.2(c)(i).
"Owned Real Estate" has the meaning ascribed to it in Section 3.6(b)
and Section 5.12(a)(iv).
"Patent License" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.
"Patent Security Agreements" means the Patent Security Agreements made
in favor of Administrative Agent for the benefit of the Secured Parties by each
applicable Credit Party.
"Patents" means all of the following in which any Credit Party now
holds or hereafter acquires any interest: (a) all letters patent of the United
States or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or of any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State or any other country, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
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"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan which is an "employee pension benefit
plan" described in Section 3(2) of ERISA.
"Permits" has the meaning ascribed to it in Section 3.24.
"Permitted Encumbrances" means the following encumbrances: (a) Liens
for taxes or assessments or other governmental Charges not yet due and payable
or which are being contested in accordance with Section 5.2(b); (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases (other than leases of aircraft) to which any Credit Party is a
party as lessee made in the ordinary course of business; (d) workers',
mechanics' or similar liens arising in the ordinary course of business, so long
as such Liens are inchoate and unperfected and attach only to Tooling, Fixtures
and/or real estate or being contested in accordance with Section 5.2(b); (e)
carriers', warehousemen's, suppliers' or other similar possessory liens arising
in the ordinary course of business so long as such Liens are inchoate and
unperfected and attach only to Inventory or being contested in accordance with
Section 5.2(b); (f) deposits securing, or in lieu of, surety, appeal or customs
bonds in proceedings to which any Credit Party is a party; (g) any attachment or
judgment lien not constituting an Event of Default under Section 8.1(i); (h)
zoning restrictions, easements, licenses, or other restrictions on the use of
any real estate or interests of any Credit Party in real estate or other minor
irregularities in title (including leasehold title) thereto, so long as the same
do not materially impair the use or the value of any parcel of Owned Real
Estate; (i) presently existing or hereafter created Liens in favor of
Administrative Agent for the benefit of the Secured Parties; (j) statutory and
common law landlords' liens under leases to which any Credit Party is a party
(subject to the requirements of Section 5.8); (k) (i) leases, subleases,
licenses, permits and similar use rights, entered into in the ordinary course of
business with respect to the Owned Real Estate, that are by their express terms
subject and subordinate to Administrative Agent's Liens, for the benefit of
Secured Parties, in the Owned Real Estate, and do not, in the aggregate,
materially detract from the value of the any parcel of Owned Real Estate and
(ii) leases, subleases, licenses, permits and similar use rights, entered into
in the ordinary course of business with respect to any leased real estate, to
the extent they are not prohibited by the Collateral Documents and would not
have a Material Adverse Effect and would not materially and adversely affect the
Administrative Agent's Liens, for the benefit of Secured Parties, in Collateral
stored or located at such location; (l) with respect to Real Estate, other
defects and encumbrances as may be approved by the Administrative Agent,
including, with respect to the Eligible Real Estate, any matters shown as title
exceptions in the Mortgagee's Title Insurance Policy, (m) liens imposed by
applicable law on the assets of any Credit Party located at an airport for the
benefit of an Aviation Authority; (n) Liens (including leases) permitted
pursuant to the Aircraft Mortgage and (o) subject, with respect to Blocked
Accounts, to the Blocked Account Agreements, Liens in favor of depositary banks
(including set-off rights) arising as a matter of law.
"Permitted Investments" means Investments made in accordance with the
Investment Guidelines set forth on Annex K.
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"Permitted Liens" means (i) Liens granted by the Credit Parties under
the Collateral Documents and (ii) any other Liens permitted to be created or
assumed or to exist pursuant to Section 6.7 of this Agreement.
"Permitted Prepetition Payment" means a payment (as adequate
protection or otherwise) on account of any Claim against any Credit Party
arising or deemed to have arisen prior to the Petition Date, which payments are
(i) authorized by the Bankruptcy Court pursuant to First Day Orders or other
Non-Stayed Orders reasonably satisfactory to the Administrative Agent in amounts
approved by the Bankruptcy Court and the Administrative Agent, (ii) made
pursuant to Section 1110 Agreements or Non-1110 Agreements, (iii) made in
connection with the assumption of executory contracts and unexpired leases or
(iv) made in respect of accrued payroll and related expenses and employee
benefits as of the Petition Date.
"Permitted Refinancing" means, with respect to any Person, any
modification, refinancing, refunding, renewal, extension or replacement
(collectively, a "refinancing") of any Indebtedness of such Person; provided,
that (a) the principal amount (or accreted value, if applicable) thereof does
not exceed 100% (or, to the extent no payment of principal thereof (except upon
acceleration) is required on or prior to the Scheduled Maturity Date, 105%) of
the principal amount (or accreted value, if applicable) of the Indebtedness so
refinanced, except by an amount equal to the unpaid accrued interest and premium
thereon; (b) such refinancing has a final maturity date equal to or later than
the final maturity of the Indebtedness being refinanced, (c) such refinancing
does not reduce the weighted average life to maturity of the Indebtedness being
refinanced, (d) if the Indebtedness being refinanced is subordinated in right of
payment to the Obligations, such refinancing is subordinated in right of payment
to the Obligations on terms at least as favorable to Lenders as those contained
in the documentation governing the Indebtedness being refinanced. Permitted
Refinancings shall include any refinancing financed with proceeds from or
exchanges into Stock issued by Borrower.
"Permitted Reinvestment Collateral" means, with respect to any
Collateral, (i) replacement assets useful in Borrower's (or, in the case of any
asset owned by any Subsidiary, such Subsidiary's) business or, in the case of
any Property Loss Event, repairs to the applicable Collateral, (ii) in the case
of any Property Loss Event with respect to any Collateral included in the Term A
Borrowing Base (other than Aircraft or Engines), replacement assets consisting
of like-kind assets and the Allocated Amount for which exceeds the Allocated
Amount for the Original Borrowing Base Assets after replacement or repair, as
the case may be, and (iii) in the case of Aircraft or Engines, Replacement
Aircraft or Replacement Engines, as the case may be; provided, that, in each
case, any replacement asset shall be subject to a first priority Lien of
Administrative Agent for the benefit of Secured Parties to the extent that the
original asset was subject to a first priority Lien of Administrative Agent for
the benefit of Secured Parties.
"Permitted Secured Financing" has the meaning ascribed to it in
Section 6.3(a)(v) hereof.
"Permitted Subordinated Indebtedness" means any unsecured Indebtedness
of any Delta Company that (a) is expressly subordinated to the prior payment in
full in cash of the Obligations on terms reasonably acceptable to the
Administrative Agent, (b) will not mature prior to the date that is ninety-one
(91) days after the Scheduled Maturity Date, and (c) does not
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require payments of principal prior to the date which is ninety-one (91) days
after the Scheduled Maturity Date, except pursuant to acceleration.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, state, county, city, municipal, local, foreign, or
otherwise, including any instrumentality, division, agency, body or department
thereof).
"Petition Date" has the meaning ascribed to it in the Preamble.
"Physical Aircraft Appraisal Methodology" means, in determining an
opinion as to the Net Orderly Liquidation Value of Eligible Aircraft or Eligible
Engines, including but not limited to, taking at least the following actions:
(i) reviewing the most recent Collateral Report; (ii) reviewing the Appraiser's
internal value database for values applicable to such Aircraft or Engines; and
(iii) checking other sources, such as manufacturers, other airlines and U.S.
government procurement data, for orderly liquidation prices of such Aircraft or
Engines.
"Physical Ground Service Equipment Appraisal Methodology" means, in
determining an opinion as to the Net Orderly Liquidation Value of Eligible
Ground Service Equipment, including but not limited to, taking at least the
following actions: (i) reviewing the most recent Collateral Report; (ii)
reviewing the Appraiser's internal value database for values applicable to such
Ground Service Equipment; (iii) checking other sources, such as manufacturers,
other airlines and U.S. government procurement data, for orderly liquidation
prices of such Ground Service Equipment and (iv) physical inspection of such
Ground Service Equipment.
"Physical Flight Simulator Appraisal Methodology" means, in
determining an opinion as to the Net Orderly Liquidation Value of Eligible
Flight Simulators, including but not limited to, taking at least the following
actions: (i) reviewing the most recent Collateral Report; (ii) reviewing the
Appraiser's internal value database for values applicable to such Flight
Simulators; (iii) checking other sources, such as manufacturers, other airlines
and U.S. government procurement data, for orderly liquidation prices of such
Flight Simulators and (iv) physical inspection of such Flight Simulators.
"Physical Spare Parts Appraisal Methodology" means, in determining an
opinion as to the Net Orderly Liquidation Value of Eligible Spare Parts,
including but not limited to, taking at least the following actions: (i)
reviewing the most recent Collateral Report; (ii) reviewing the Appraiser's
internal value database for values applicable to Spare Parts; (iii) developing a
representative sampling of a reasonable number of the different Spare Parts for
which a market check will be conducted; (iv) checking other sources, such as
manufacturers, other airlines, U.S. government procurement data and airline
parts pooling price lists, for orderly liquidation prices of the sample parts
referred to in clause (iii); (v) visiting the Designated Spare Parts Locations
selected by the Appraiser where the Spare Parts are kept by any Credit Party;
(vi) conducting a limited review of the inventory reporting system applicable to
the Spare Parts, including checking information reported in such system against
information determined through physical inspection pursuant to the preceding
clause (v); and (vii) reviewing a sampling of the
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Spare Parts serviceability tags, books and records (including tear-down
reports). The physical sampling will be completed at the necessary Designated
Spare Parts Locations where in the aggregate up to 80% (by measure of appraised
NOLV) of the Pledged Spare Parts are kept by the Credit Parties.
"Physical Tooling Appraisal Methodology" means, in determining an
opinion as to the Net Orderly Liquidation Value of Eligible Tooling, including
but not limited to, taking at least the following actions: (i) reviewing the
most recent Collateral Report; (ii) reviewing the Appraiser's internal value
database for values applicable to such Tooling; (iii) checking other sources,
such as manufacturers, other airlines and U.S. government procurement data, for
orderly liquidation prices of such Tooling and (iv) physical inspection of such
Tooling.
"Plan" means, at any time, a Pension Plan, ESOP, Multiemployer Plan,
Qualified Plan, Title IV Plan or Retiree Welfare Plan that any Credit Party or
ERISA Affiliate maintains or to which such Credit Party contributes or has an
obligation to contribute.
"Plan of Reorganization" means a plan of reorganization in the Cases
under chapter 11 of the Bankruptcy Code.
"Pledged Collateral" means all of the following property now owned or
at anytime acquired by a Credit Party or in which such Credit Party now has or
at any time in the future may acquire any right, title or interest:
(a) the Pledged Shares and the certificates representing the Pledged
Shares, and all dividends, distributions, cash, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Shares; and
(b) such portion, as determined by Administrative Agent as provided in
Section 10.4(i)(v) of this Agreement, of any additional shares of stock of
a Pledged Entity from time to time acquired by Credit Party in any manner
(which shares shall be deemed to be part of the Pledged Shares), and the
certificates representing such additional shares, and all dividends,
distributions, cash, instruments and other property or proceeds from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such stock; and
(c) the Pledged Indebtedness and the promissory notes or instruments
evidencing the Pledged Indebtedness, and all interest, cash, instruments
and other property and assets from time to time received, receivable or
otherwise distributed in respect of the Pledged Indebtedness; and
(d) all additional Indebtedness arising after the Closing Date and
owing to Credit Party and evidenced by promissory notes or other
instruments, together with such promissory notes and instruments, and all
interest, cash, instruments and other property and assets from time to time
received, receivable or otherwise distributed in respect of that
Indebtedness.
"Pledged Entity" means an issuer of Pledged Shares or Pledged
Indebtedness.
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"Pledged Indebtedness" means the Indebtedness evidenced by promissory
notes and instruments listed on Part 2 of Disclosure Schedule 10.4 hereto.
"Pledged Shares" means those shares listed on Part 1 of Disclosure
Schedule 10.4 hereto.
"Pledged Spare Parts" shall have the meaning ascribed to it in the
Spare Parts Mortgage.
"Post-Petition Skymiles Facility" means the provisions related to the
Advance Payments (as defined in the Post-Petition Skymiles Facility Documents)
in the Post-Petition Skymiles Facility Documents.
"Post-Petition Skymiles Facility Documents" means the "SkyMiles
Documents" as defined in the Skymiles Intercreditor Agreement and includes the
Skymiles Collateral Documents.
"Power of Attorney" shall have the meaning ascribed to it in Section
10.8.
"Prepayment Date" means, with respect to any Net Cash Proceeds from
any Collateral, the earlier of (i) the date occurring 180 days after the date on
which such Net Cash Proceeds were deposited into the Cash Collateral Account
(unless, prior to such date, the applicable Credit Party has (A) acquired any
Replacement Borrowing Base Asset, (B) entered into an agreement for such
acquisition or (C) commenced the construction of the Replacement Borrowing Base
Assets or the repair of the Original Borrowing Base Assets) and (ii) the date
that is five (5) Business Days after the date on which Borrower shall have
notified the Administrative Agent of Borrower's determination not to acquire
replacement assets useful in any Credit Party's business (or, in the case of a
Property Loss Event, not to effect repairs).
"Primary Gates" shall have the meaning ascribed to it in the SGR
Security Agreement.
"Primary Routes" shall have the meaning ascribed to it in the SGR
Security Agreement.
"Primary Slots" shall have the meaning ascribed to it in the SGR
Security Agreement.
"Proceeds" means "proceeds," as such term is defined in the Code,
including (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to any Credit Party from time to time with respect to any
asset, (b) any and all payments (in any form whatsoever) made or due and payable
to any Credit Party from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of such
property by any Governmental Authority (or any Person acting under color of
governmental authority), (c) any claim of any Credit Party against third parties
(i) for past, present or future infringement of any Patent or Patent License, or
(ii) for past, present or future infringement or dilution of any Copyright,
Copyright License, Trademark or Trademark License, or for injury to the goodwill
associated with any Trademark or Trademark License, (d) any recoveries by any
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Credit Party against third parties with respect to any litigation or dispute
concerning such property including claims arising out of the loss or
nonconformity of, interference with the use of, defects in, or infringement of
rights in, or damage to, such property, (e) all amounts collected on, or
distributed on account of, other property, including dividends, interest,
distributions and Instruments with respect to Investment Property and pledged
Stock, and (f) any and all other amounts, rights to payment or other property
acquired upon the sale, lease, license, exchange or other disposition of such
property and all rights arising out of such property.
"Projections" means Borrower's forecasted consolidated (a) balance
sheets, (b) profit and loss statements and (c) cash flow statements consistent
with the historical Financial Statements of Borrower (other than adjustments
related to the impact of the Cases), together with appropriate supporting
details and a statement of underlying assumptions.
"Property Loss Event" means (a) any loss of or damage to property of
any Credit Party that results in the receipt by such Person of proceeds of
insurance in excess of $5,000,000, individually or in the aggregate, (b) any
taking of property of any Credit Party that results in the receipt by such
Person of a compensation payment in respect thereof that exceeds $5,000,000,
individually or in the aggregate, or (c) an "Event of Loss" (as such term is
defined in the Aircraft Mortgage or the Spare Parts Mortgage).
"Proposed Change" has the meaning ascribed to it in Section 13.2(c).
"Pro Rata Share" means with respect to all matters relating to any
Lender (a) with respect to the Term Loan A, the percentage obtained by dividing
(i) the Term A Commitment of that Lender by (ii) the aggregate Term A
Commitments of all Lenders, as such percentage may be adjusted by assignments
permitted pursuant to Section 11.1, (b) with respect to the Term Loan B, the
percentage obtained by dividing (i) the Term B Commitment of that Lender by (ii)
the aggregate Term B Commitments of all Lenders as such percentage may be
adjusted by assignments permitted pursuant to Section 11.1, (c) with respect to
the Term Loan C, the percentage obtained by dividing (i) the Term C Commitment
of that Lender by (ii) the aggregate Term C Commitments of all Lenders as such
percentage may be adjusted by assignments permitted pursuant to Section 11.1,
(d) with respect to all Loans, the percentage obtained by dividing (i) the
aggregate Commitments of that Lender by (ii) the aggregate Commitments of all
Lenders and, on and after the Maturity Date, the percentage obtained by dividing
(i) the aggregate outstanding principal balance of all Loans held by that Lender
by (ii) the outstanding principal balance of all Loans held by all Lenders, in
each case, as any such percentages may be adjusted by assignments permitted
pursuant to Section 11.1.
"Purchase Amount" has the meaning ascribed to it in Section 13.2(c).
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Real Estate" has the meaning ascribed to it in Section 3.6(b).
"Regulated Subsidiary" means each of Comair Holdings, LLC and Crown
Rooms, Inc.
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"Reinvestment Deferred Amount" has the meaning ascribed to it in
Section 1.2(c)(ii).
"Reinvestment Event" means the date on which the Net Cash Proceeds of
(x) any Asset Sale of assets not included in the Term A Borrowing Base or (y)
any Property Loss Event, which in each case are deposited in the Cash Collateral
Account.
"Reinvestment Notice" means a written notice executed by the Chief
Financial Officer of Borrower stating that no Event of Default has occurred and
is continuing and that Borrower (directly or indirectly through one of the
Guarantors or the applicable Subsidiary) intends and expects to use the
Reinvestment Deferred Amount for Permitted Reinvestment Collateral as specified
therein.
"Reinvestment Prepayment Date" means, with respect to any Net Cash
Proceeds of any Reinvestment Event, (i) involving any Collateral (other than in
respect of Collateral subject to the Aircraft Mortgage), the earliest of (a) the
date occurring 180 days after such Reinvestment Event, unless, prior to any such
date, Borrower or the applicable Subsidiary has (x) entered into an agreement
for the acquisition of Permitted Reinvestment Collateral or (y) commenced the
construction of Permitted Reinvestment Collateral or the repair of the original
assets constituting Permitted Reinvestment Collateral, (b) the date that is five
(5) Business Days after the date on which Borrower shall have notified the
Administrative Agent of Borrower's determination not to acquire Permitted
Reinvestment Collateral with all or any portion of the relevant Reinvestment
Deferred Amount for such Net Cash Proceeds and (c) the occurrence of any Event
of Default, (ii) arising from a Property Loss Event involving any Aircraft or
Engine, the Loss Payment Date (as defined in the Aircraft Mortgage), or (iii)
arising from a Property Loss Event involving any Engine (not involving the
related Airframe (as defined in the Aircraft Mortgage)), the date upon which
such Engine is required to be replaced in accordance with Section 7.05(b) of the
Aircraft Mortgage.
"Reinvestment Release Request" means a written notice executed by the
Chief Financial Officer of Borrower stating that no Event of Default has
occurred and is continuing and that Borrower (directly or indirectly through one
of the Guarantors or the applicable Subsidiary) requests the release of the
Reinvestment Deferred Amount from the Cash Collateral Account for Permitted
Reinvestment Collateral as specified therein.
"Related Person" means, with respect to any Person, any Affiliates,
officers, employees, agents, directors or other Persons acting for or in concert
with such Person.
"Relationship Bank" has the meaning ascribed to it in Section (b) of
Annex C.
"Release" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
"Replacement Aircraft" shall have the meaning ascribed to it in the
Aircraft Mortgage.
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"Replacement Borrowing Base Assets" has the meaning ascribed to it in
Section 1.2(c)(i).
"Replacement Engine" shall have the meaning ascribed to it in the
Aircraft Mortgage.
"Replacement Lender" has the meaning ascribed to it in Section
1.14(e).
"Requirement of Law" means, with respect to any Person, the common law
and all federal, state, local and foreign laws, treaties, rules and regulations,
orders, judgments, decrees and other legal requirements or determinations of any
Governmental Authority or arbitrator, applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Requisite Lenders" means Lenders having 51% or more of the aggregate
outstanding amount of all Loans.
"Requisite Term A Lenders" means Lenders having 51% or more of the
aggregate outstanding amount of the Term Loan A.
"Requisite Term B Lenders" means Lenders having 51% or more of the
aggregate outstanding amount of the Term Loan B.
"Requisite Term C Lenders" means Lenders having 51% or more of the
aggregate outstanding amount of the Term Loan C.
"Reserves" means (a) reserves established by the Administrative Agent
from time to time in its reasonable credit judgment, against Eligible Tooling,
Eligible Aircraft, Eligible Engines, Eligible Real Estate, Eligible Spare Parts,
Eligible Flight Simulators and Eligible Ground Service Equipment, including, but
not limited to, pursuant to Section 5.8, and (b) reserves established by the
Administrative Agent from time to time in its reasonable credit judgment against
Eligible Accounts, Eligible Unbilled Accounts and Eligible Refundable Ticket
Accounts including, but not limited to, a reserve in the amount of Fifty Million
Dollars ($50,000,000) for maintenance of Collateral and liquidation expenses and
for the Carve-Out. Without limiting the generality of the foregoing, Reserves
established to ensure the payment of accrued Interest Expenses or Indebtedness
shall be deemed to be a reasonable exercise of the Administrative Agent's credit
judgment.
"Restricted Accounts" means (i) the Citibank Cash Collateral Account;
(ii) the accounts identified as Restricted Accounts on Disclosure Schedule 3.19;
and (iii) any deposit account holding cash and cash equivalents subject to Liens
permitted under Section 6.7(j) (except to the extent securing any obligations
under the Post-Petition Skymiles Facility), Section 6.7(k) or Section 6.7(l) or
securing surety or appeal bonds permitted under Section 6.3(a)(xiv).
"Restricted Payment" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's
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Stock or any other payment or distribution made in respect thereof, either
directly or indirectly; (c) any payment or prepayment of principal of, premium,
if any, or interest, fees or other charges on or with respect to, and any
redemption, purchase, retirement, defeasance, sinking fund or similar payment
and any claim for rescission with respect to, any Permitted Subordinated
Indebtedness or the Post-Petition Skymiles Facility; and (d) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Credit
Party now or hereafter outstanding.
"Retiree Welfare Plan" means, at any time, a Plan which is an
"employee welfare benefit plan" as described in Section 3(1) of ERISA that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.
"Routes" has the meaning ascribed to it in the SGR Security Agreement.
"S&P" means Standard & Poor's Ratings Group.
"Scheduled Maturity Date" means March 16, 2008.
"Sell" means, with respect to any property, to sell, convey, transfer,
assign, license, lease or otherwise dispose of, any interest therein or to
permit any Person to acquire any such interest, including, in each case, through
a Sale and Leaseback Transaction or through a sale, factoring at maturity,
collection of or other disposal, with or without recourse, of any notes or
accounts receivable. Conjugated forms thereof and the noun "Sale" have
correlative meanings.
"Section 1110 Agreement" means any agreement related to property that
qualifies as "equipment," as such term is used in Section 1110(a)(3) of the
Bankruptcy Code, including, without limitation, security agreements, mortgages,
trusts, leases, conditional sale agreements or other instruments applicable to
such property.
"Section 1110 Assets" shall mean (a) property that qualifies as
"equipment," as such term is used in Section 1110(a)(3) of the Bankruptcy Code
and all Section 1110 Agreements, to the extent that the Credit Parties are
prohibited from granting liens thereon or assignments thereof under the terms of
any Section 1110 Agreement in effect at the commencement of the Cases (and, to
the extent permitted by this Agreement), as such Section 1110 Agreement may be
amended, modified, refinanced or restructured) under which the applicable
secured party, lessor or seller is entitled to the protections afforded under
Section 1110 of the Bankruptcy Code with respect to such property or agreements,
(b) any other asset with respect to which the granting of any lien would cause a
default, directly or indirectly, of any Section 1110 Agreement, (c) any deposits
and reserves held or maintained pursuant to such agreement or (d) property
referred to in the previous clauses that the Borrower or any of the Guarantors
elects to return to the party providing financing therefor in exchange for a
discharge of the related indebtedness; provided, that Section 1110 Assets shall
not include any Proceeds of such property (but only to the extent that the
Credit Parties are entitled to such Proceeds).
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"Secured Obligations" means, in the case of Borrower, the Obligations
and, in the case of any other Credit Party, the obligations of such Credit Party
under the Guaranties and the other Loan Documents to which it is a party.
"Secured Parties" means the Lenders, the Administrative Agent, any L/C
Issuer and any other holder of any Secured Obligation.
"Security" means any Stock, voting trust certificate, bond, debenture,
note or other evidence of Indebtedness, whether secured, unsecured, convertible
or subordinated, or any certificate of interest, share or participation in, any
temporary or interim certificate for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing, but shall not
include any evidence of the Obligations.
"Settlement Date" has the meaning ascribed to it in Section 11.9(a).
"SGR Cash Collateral Account" means a cash collateral account
maintained at a bank or financial institution acceptable to the Administrative
Agent, subject to a Blocked Account Agreement, into which cash or Cash
Equivalents are deposited pursuant to Section 8.1(m).
"SGR Security Agreement" means the Slot, Gate and Route Security and
Pledge Agreement from Borrower in favor of the Administrative Agent for the
benefit of the Secured Parties substantially in the form of Exhibit E hereto, as
amended, modified or supplemented from time to time.
"Skymiles Agent" has the meaning ascribed to it in the Skymiles
Intercreditor Agreement.
"Skymiles Collateral" has the meaning ascribed to it in the Skymiles
Intercreditor Agreement.
"Skymiles Collateral Documents" has the meaning ascribed to it in the
Skymiles Intercreditor Agreement.
"Skymiles Intercreditor Agreement" means the Intercreditor Agreement
of even date herewith entered into by and among Amex and the Administrative
Agent in form and substance satisfactory to the Arrangers.
"Slots" has the meaning ascribed to it in the SGR Security Agreement.
"Slot Utilization" means, with respect to any Slot, (a) a Slot which
is used for a take-off or landing operation; (b) if, by regulation or other
regulatory notice, the FAA considers such Slot as "used" for purposes of the
Slot Utilization Regulations, regardless whether or not such Slot was, in fact,
used (e.g., holidays, labor actions); (c) if, by waiver, the FAA considers such
Slot as "used" for purposes of the Slot Utilization Regulations; or (d) if the
FAA otherwise waives the utilization requirement of the Slot Utilization
Regulations.
"Slot Utilization Regulations" has the meaning ascribed to it in
Section 5.14(a).
A-43
"Software" shall mean computer programs whether in source code or
object code form, together with all related documentation.
"Spare Parts" means all of the Spare Parts as defined in the Spare
Parts Mortgage.
"Spare Parts Mortgage" means the Spare Parts Security Agreement
substantially in the form of Exhibit F entered into by and among the
Administrative Agent for the benefit of the Secured Parties and each Credit
Party that is a signatory thereto, in each case, as amended, modified or
supplemented from time to time.
"SPC" has the meaning ascribed to it in Section 11.1(e).
"SPV" means any special purpose funding vehicle identified as such in
a writing by any Lender to the Administrative Agent.
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934).
"Stockholder" means, with respect to any Person, each holder of Stock
of such Person.
"Subsidiary" means, with respect to any Person, (a) any domestic
corporation of which an aggregate of more than 50% of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, Stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly,
owned legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of more than 50% of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any domestic partnership or limited
liability company in which such Person and/or one or more Subsidiaries of such
Person shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of Borrower.
"Supermajority Term A Lenders" means Lenders having (a) 66-2/3% or
more of the Term A Commitments of all Lenders, or (b) if the Term A Commitments
have been terminated, 66-2/3% or more of the aggregate outstanding amount of the
Term Loan A.
"Super-Priority Claim" shall mean a claim against any Credit Party in
any of the Cases which is an administrative expense claim having priority over
any or all administrative expenses of the kind specified in sections 503(b) or
507(b) of the Bankruptcy Code.
A-44
"Supporting Route Facilities" has the meaning ascribed to it in the
SGR Security Agreement.
"Taxes" means taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of the Administrative Agent or a Lender by the
jurisdictions under the laws of which the Administrative Agent and Lenders are
organized or conduct business or any political subdivision thereof.
"Technology" means, collectively, all designs, formulas, algorithms,
procedures, methods, techniques, ideas, know-how, programs, subroutines, tools,
inventions, creations, improvements, works of authorship, Software, other
similar materials, and all recordings, graphs, drawings, reports, analyses,
other writings, and any other embodiment of the above, in any form whether or
not specifically listed herein, and all related technology, that are used in,
incorporated in, embodied in or displayed by any of the foregoing, or used or
useful in the design, development, reproduction, maintenance or modification of
any of the foregoing.
"Technology Equipment" means technology assets including mainframe
computers, servers, general computer equipment, printers, monitors, hard drives,
memory, storage devices and call centers/ACD systems but excluding Flight
Simulators, as more fully described in the appraisal with respect thereto
prepared as of July 14, 2004 by American Appraisal Associates.
"Term A Borrowing Base" means, as of any date of determination by the
Administrative Agent, from time to time, an amount equal to the sum at such time
of:
(a) up to 80% of the book value of the Credit Parties' Eligible
Accounts as of the date set forth in the most recently delivered
Borrowing Base Certificate; plus
(b) up to 50% of the book value of the Credit Parties' Eligible
Unbilled Accounts as of the date set forth in the most recently
delivered Borrowing Base Certificate; plus
(c) the lesser of 50% of the book value of the Credit Parties'
Eligible Refundable Ticket Accounts as of the date set forth in
the most recently delivered Borrowing Base Certificate and
$30,000,000; plus
(d) the lesser of 50% of the Fair Market Value of Eligible Real
Estate and $100,000,000, plus
(e) the lesser of 50% of the Net Orderly Liquidation Value of
Eligible Aircraft (other than the Aircraft described in clause
(f) below) and $250,000,000, plus
(f) the lesser of 30% of the Net Orderly Liquidation Value of
Eligible Aircraft consisting of Comair CRJ-100ERs aircraft and
$13,500,000; plus
A-45
(g) the lesser of 40% of the half life Net Orderly Liquidation Value
of Eligible Engines consisting of the Comair CF34-3A1 engines and
CF34-3B1 engines and $13,500,000; plus
(h) the lesser of 65% of the half life Net Orderly Liquidation Value
of Eligible Engines consisting of the Comair CF34-8C1 engines and
$5,100,000; plus
(i) the lesser of 50% of the Net Orderly Liquidation Value of
Eligible Flight Simulators and $25,000,000, plus
(j) the lesser of 25% of the Net Orderly Liquidation Value of
Eligible Spare Parts and $7,000,000, plus
(k) the lesser of 25% of the Net Orderly Liquidation Value of
Eligible Ground Service Equipment and $25,000,000, plus
(l) the lesser of 25% of the Net Orderly Liquidation Value of
Eligible Tooling (excluding Technology Equipment) and
$25,000,000, plus
(m) the aggregate amount held in the Cash Collateral Account and the
▇▇ ▇▇▇▇ Collateral Account minus 100% of the aggregate face
amount of all outstanding Letters of Credit,
in each case, less any Reserves established by the Administrative Agent at such
time and provided, that the availability from the sum of clauses (a), (b) and
(c) above shall not exceed $400,000,000 at any time.
"Term A Commitment" means (a) as to any Lender with a Term A
Commitment, the commitment of such Lender to make its Pro Rata Share of the Term
Loan A as set forth on Annex J to the Agreement or in the most recent Assignment
Agreement executed by such Lender, and (b) as to all Lenders with a Term A
Commitment, the aggregate commitment of all Lenders to make the Term Loan A,
which aggregate commitment shall be Six Hundred Million Dollars ($600,000,000)
on the Effective Date. After advancing the Term Loan A, each reference to a
Lender's Term A Commitment shall refer to that Lender's Pro Rata Share of the
outstanding Term Loan A.
"Term A Lenders" means, as of the date of determination, those Lenders
having Term A Commitments.
"Term A Termination Date" means the date on which (a) the Term Loan A
has been repaid in full, (b) all other monetary Obligations (other than Excluded
Obligations) arising under the Term Loan A pursuant to the Agreement and the
other Loan Documents have been completely discharged, and (c) the Term A
Commitment shall have expired or irrevocably been terminated under the
Agreement.
"Term B Commitment" means (a) as to any Lender with a Term B
Commitment, the commitment of such Lender to make its Pro Rata Share of the Term
Loan B as set forth on Annex J to the Agreement or in the most recent Assignment
Agreement executed by such
A-46
Lender, and (b) as to all Lenders with a Term B Commitment, the aggregate
commitment of all Lenders to make the Term Loan B, which aggregate commitment
shall be Seven Hundred Million Dollars ($700,000,000) on the Effective Date.
After advancing the aggregate amount of the Term B Commitment, each reference to
a Lender's Term B Commitment shall refer to that Lender's Pro Rata Share of the
outstanding Term Loan B.
"Term B Lenders" means, as of the date of determination, those Lenders
having Term B Commitments.
"Term B Termination Date" means the date on which (a) the Term Loan B
has been repaid in full, (b) all other monetary Obligations (other than Excluded
Obligations) arising under the Term Loan B pursuant to the Agreement and the
other Loan Documents have been completely discharged, and (c) the Term B
Commitment shall have expired or irrevocably been terminated under the
Agreement.
"Term C Commitment" means (a) as to any Lender with a Term C
Commitment, the commitment of such Lender to make its Pro Rata Share of the Term
Loan C as set forth on Annex J to the Agreement or in the most recent Assignment
Agreement executed by such Lender, and (b) as to all Lenders with a Term C
Commitment, the aggregate commitment of all Lenders to make the Term Loan C,
which aggregate commitment shall be Six Hundred Million Dollars ($600,000,000)
on the Effective Date. After advancing the aggregate amount of the Term C
Commitment, each reference to a Lender's Term C Commitment shall refer to that
Lender's Pro Rata Share of the outstanding Term Loan C.
"Term C Lenders" means, as of the date of determination, those Lenders
having Term C Commitments.
"Term C Termination Date" means the date on which (a) the Term Loan C
has been repaid in full, (b) all other monetary Obligations (other than Excluded
Obligations) arising under the Term Loan C pursuant to the Agreement and the
other Loan Documents have been completely discharged, and (c) the Term C
Commitment shall have expired or irrevocably been terminated under the
Agreement.
"Term Loan" means the collective reference to the Term Loan A, the
Term Loan B and the Term Loan C.
"Term Loan A" has the meaning assigned to it in Section 1.1(a).
"Term Loan B" has the meaning assigned to it in Section 1.1(b).
"Term Loan C" has the meaning assigned to it in Section 1.1(c).
"Term Loan Commitment" means each of the Term A Commitments, the Term
B Commitments and the Term C Commitments.
"Termination Date" means the date on which (a) the Loans have been
repaid in full, (b) all other monetary Obligations (other than Letter of Credit
Obligations and Excluded Obligations) pursuant to the Agreement and the other
Loan Documents have been completely
A-47
discharged, (c) all Letter of Credit Obligations have been cash collateralized
(after repayment in full of any amounts of the Term Loan A that may theretofore
have been used as L/C Cash Collateral), cancelled or backed by standby letters
of credit in accordance with this Agreement (including Annex B), and (d)
Borrower shall not have any further right to borrow any monies under the
Agreement.
"Title 49" means Title 49 of the United States Code, which, among
other things, recodified and replaced the Aviation Act of 1958, as amended, and
the regulations promulgated pursuant thereto or any subsequent legislation that
amends, supplements, or supersedes such provisions.
"Title IV Plan" means a Pension Plan (other than a Multiemployer
Plan), that is covered by Title IV of ERISA, and that any Credit Party or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
"Tooling" means tooling inventory, including but not limited to dies,
molds, tooling, casting patterns, gauges, jigs, racks and stands for engines,
cowls, radome and wheels, aircraft jacks, test benches, test equipment, lathes,
welders, grinders, presses, punches and hoists and other similar items (whether
or not completed or fixed or handheld).
"Trademark Security Agreements" means the Trademark Security
Agreements made in favor of Administrative Agent for the benefit of the Secured
Parties by each applicable Credit Party substantially in the form of Exhibit G.
"Trademark License" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right to use any
Trademark.
"Trademarks" means all of the following now owned or hereafter adopted
or acquired by any Credit Party: (a) all trademarks, trade names, corporate
names, business names, trade styles, service marks, logos, other source or
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state or territory thereof, or any
other country or any political subdivision thereof; (b) all reissues, extensions
or renewals thereof; and (c) all goodwill associated with or symbolized by any
of the foregoing.
"Two-Month FAA Reporting Period" means the period for which air
carriers provide slot utilization reports to the FAA pursuant to 14 C.F.R.
Section 93.227(i).
"Unfunded Pension Liability" means, at any time, the aggregate amount,
if any, of the sum of (a) the amount by which the present value of all accrued
benefits under each Title IV Plan exceeds the fair market value of all assets of
such Title IV Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for each such Title
IV Plan using the actuarial assumptions for funding purposes in effect under
such Title IV Plan, and (b) for a period of five (5) years following a
transaction which might reasonably be
A-48
expected to be covered by Section 4069 of ERISA, the liabilities (whether or not
accrued) that could be avoided by any Credit Party or any ERISA Affiliate as a
result of such transaction.
"Uniform Commercial Code jurisdiction" means any jurisdiction that has
adopted all or substantially all of Article 9 as contained in the 2000 Official
Text of the Uniform Commercial Code, as recommended by the National Conference
of Commissioners on Uniform State Laws and the American Law Institute, together
with any subsequent amendments or modifications to the Official Text.
"U.S. Bank" means U.S. Bank Trust National Association as trustee
under certain of the GECAS Facilities.
"Vehicles" means all vehicles covered by a certificate of title law of
any state.
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth in Annex G. All
other undefined terms contained in any of the Loan Documents shall, unless the
context indicates otherwise, have the meanings provided for by the Code to the
extent the same are used or defined therein; in the event that any term is
defined differently in different Articles or Divisions of the Code, the
definition contained in Article or Division 9 shall control. Unless otherwise
specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained in
the Agreement. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to the Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in the Agreement or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
A-49
ANNEX B (SECTION 1.1(A)(IV))
TO
CREDIT AGREEMENT
[Intentionally Omitted]
B-1
ANNEX C (SECTION 5.19)
TO
CREDIT AGREEMENT
[Intentionally Omitted]
C-1
ANNEX D (SECTION 2.2(C))
TO
CREDIT AGREEMENT
[Intentionally Omitted]
D-1
ANNEX E (SECTION 4.1(A))
TO
CREDIT AGREEMENT
[Intentionally Omitted]
E-1
ANNEX F (SECTION 4.1(B))
TO
CREDIT AGREEMENT
[Intentionally Omitted]
F-1
ANNEX G (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrower shall not breach or fail to comply with any of the following
financial covenants, each of which shall be calculated in accordance with GAAP
consistently applied:
(a) Maximum Net Capital Expenditures. Borrower and its Subsidiaries on a
consolidated basis shall not make Net Capital Expenditures during the any Fiscal
Quarter that exceed in the aggregate the amounts set forth opposite each such
Fiscal Quarter below:
Fiscal Quarter Net Capital Expenditures
-------------- ------------------------
(in millions)
October - December 2005 145
January - March 2006 131
April - June 2006 138
July - September 2006 108
October - December 2006 121
January - March 2007 152
April - June 2007 132
July - September 2007 108
October - December 2007 106
January - March 2008 106
; provided, however, that the amount of Net Capital Expenditures referenced
above will be increased in any period by the positive amount (if any), equal to
the difference obtained by taking the Net Capital Expenditures limits specified
above for all prior periods minus the actual amount of any Net Capital
Expenditures expended during all such prior periods (the "Carry Over Amount").
(b) Minimum EBITDAR. At the end of each Fiscal Month set forth below, the
amount equal to the sum of (i) EBITDAR for the 12-month period then ended of
Borrower and its Subsidiaries on a consolidated basis plus (ii) the lesser of
(A) 100% of the Excess Aggregate Cash On Hand as of such date and (B)
$250,000,000 shall not be less than the amount set forth below opposite such
Fiscal Month (the "Required EBITDAR").
G-1
Fiscal Month EBITDAR
------------ -------------
(in millions)
October 2005 571
November 2005 628
December 2005 644
January 2006 672
February 2006 681
March 2006 704
April 2006 745
May 2006 779
June 2006 830
July 2006 907
August 2006 1,015
September 2006 1,104
October 2006 1,210
November 2006 1,290
December 2006 1,372
January 2007 1,560
February 2007 1,625
March 2007 1,691
April 2007 1,731
May 2007 1,769
June 2007 1,806
July 2007 1,843
August 2007 1,875
September 2007 1,903
October 2007 1,935
November 2007 1,963
December 2007 1,988
January 2008 2,000
February 2008 2,000
March 2008 2,000
(c) Aggregate Cash On Hand. The Delta Companies shall maintain Aggregate
Cash On Hand of at least:
(i) at all times from the Closing Date through May 31, 2006,
$750,000,000;
(ii) at all times from June 1, 2006 through November 30, 2006,
$1,000,000,000;
(iii) at all times from December 1, 2006 through February 28, 2007,
$750,000,000; and
(iv) at all times thereafter until the Termination Date,
$1,000,000,000.
G-2
If on any date of determination of Aggregate Cash On Hand, any Delta
Company has contractually agreed (i) to post cash collateral for the benefit of
any third party or (ii) that payments otherwise owing to it by a third party
shall be subject to a holdback, in each case in an amount exceeding
$125,000,000, such amount shall not be included in any calculation of Aggregate
Cash On Hand on such date of determination to the extent such obligation to post
cash collateral or such holdback will become effective within ninety (90) days
of such date of determination; provided, that in no event shall any
determination of Aggregate Cash On Hand exclude the amount of cash collateral or
any holdback to be provided (x) in connection with any aircraft or equipment
financing or lease or (y) pursuant to any other agreement with GE Capital or any
of its affiliates until, in each case, actually so provided.
Unless otherwise specifically provided herein, any accounting
term used in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be computed
in accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Borrower, Administrative Agent and Lenders agree to enter into
negotiations in order to amend such provisions of the Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating Borrower's and its Subsidiaries' financial condition
shall be the same after such Accounting Changes as if such Accounting Changes
had not been made; provided, however, that the agreement of Requisite Lenders to
any required amendments of such provisions shall be sufficient to bind all
Lenders. "Accounting Changes" means (i) changes in accounting principles
required by the promulgation of any rule, regulation, pronouncement or opinion
by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants (or successor thereto or any agency with similar
functions), (ii) changes in accounting principles concurred in by Borrower's
certified public accountants; (iii) purchase accounting adjustments under A.P.B.
16 or 17 and EITF 88-16, and the application of the accounting principles set
forth in FASB 109, including the establishment of reserves pursuant thereto and
any subsequent reversal (in whole or in part) of such reserves; and (iv) the
reversal of any reserves established as a result of purchase accounting
adjustments. All such adjustments resulting from expenditures made subsequent to
the Closing Date (including capitalization of costs and expenses or payment of
pre-Closing Date liabilities) shall be treated as expenses in the period the
expenditures are made and deducted as part of the calculation of EBITDAR in such
period. If Administrative Agent, Borrower and Requisite Lenders agree upon the
required amendments, then after appropriate amendments have been executed and
the underlying Accounting Change with respect thereto has been implemented, any
reference to GAAP contained in the Agreement or in any other Loan Document
shall, only to the extent of such Accounting Change, refer to GAAP, consistently
applied after giving effect to the implementation of such Accounting Change. If
Administrative Agent, Borrower and Requisite Lenders cannot agree upon the
required amendments within thirty (30) days following the date of implementation
of any Accounting Change, then all Financial Statements delivered and all
calculations of financial covenants and other standards and terms in accordance
with the Agreement and the other Loan Documents shall be prepared, delivered and
made without regard to the underlying Accounting Change. For purposes of Section
8.1, a breach of a Financial Covenant contained in this Annex G shall be deemed
to have
G-3
occurred as of any date of determination by Administrative Agent or as of the
last day of any specified measurement period, regardless of when the Financial
Statements reflecting such breach are delivered to Administrative Agent.
G-4
ANNEX H (SECTION 1.1(D))
TO
CREDIT AGREEMENT
[Intentionally Omitted]
H-1
ANNEX I (SECTION 13.10)
TO
CREDIT AGREEMENT
[Intentionally Omitted]
I-1
ANNEX J (FROM ANNEX A - COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
[Intentionally Omitted]
J-1
ANNEX K (FROM ANNEX A - PERMITTED INVESTMENTS DEFINITION)
TO
CREDIT AGREEMENT
[Intentionally Omitted]
K-1
ANNEX L (FROM ANNEX B - PARAGRAPH (B)(III))
[Intentionally Omitted]
K-2