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Confidential Treatment requested by Atlantic Southeast Airlines, Inc., File No.
0-11097
EXHIBIT 10 (l)
Confidential treatment has been applied for with
respect to certain provisions of this Exhibit, which
provisions have been omitted from this Exhibit,
marked with an asterisk (*) and filed separately with
the XXX
0
XXXXXX XXXXXXXXX TO
CREDIT AGREEMENT
DATED DECEMBER 1, 1990
This Second Amendment To Credit Agreement (this "Second Amendment") is
made and entered into this 13th day of September, 1996, between ATLANTIC
SOUTHEAST AIRLINES, INC., a Georgia corporation ("Borrower") and WACHOVIA BANK
OF GEORGIA, N.A. ("Lender") with the express understanding that ASA
INVESTMENTS, INC., a Delaware Corporation ("ASAI") shall be a third party
beneficiary hereof.
W I T N E S S E T H:
WHEREAS, Borrower is indebted to Lender under the terms of that
certain Credit Agreement dated December 1, 1990 as amended by that certain
Amendatory Agreement dated July 6, 1993 (as so amended the "Credit Agreement");
and
WHEREAS, ASAI has undertaken those obligations imposed upon it under
that certain Guarantee dated December 1, 1990 (the "Guarantee") issued by ASAI
for the benefit of Lender and securing Borrower's performance of Borrower's
obligations under the Credit Agreement; and
WHEREAS, the Borrower desires to obtain the approval and consent of
the Lender to implement a corporate reorganization and an amendment to the
Credit Agreement which will result in (i) the Borrower and ASAI each becoming a
wholly owned subsidiary of a holding company, the stock of which holding
company will be owned by the Borrower's current shareholders and will be
publicly traded, (ii) ASAI being relieved of its responsibility under the
Guarantee, and (iii) Borrower being relieved of certain restrictions imposed
under the Credit Agreement;
WHEREAS, pursuant to the provisions of Section 11.04 of the Credit
Agreement, the parties desire to amend the Credit Agreement as hereinafter
provided.
NOW, THEREFORE, for and in consideration of each party's agreement to
be bound hereby and other good, valuable and adequate consideration, the
parties hereto do hereby agree as follows:
1. All capitalized terms not otherwise specifically defined
herein shall have the meanings ascribed to them under the provisions of the
Credit Agreement.
2. From and after the date hereof, ASAI shall not be considered a
subsidiary of Borrower for purposes of the application or interpretation of any
provision of the Credit Agreement. In addition, Lender specifically
acknowledges and agrees that the Guarantee is hereby terminated and shall be of
no further force or effect it being the express agreement of all parties that
ASAI shall be relieved of all obligations and responsibilities to Lender and
that Lender shall not have and hereby waives and releases any claim or cause of
action against ASAI under or
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in connection with the Credit Agreement, the credit extended to Borrower
thereunder, the Basic Documents, or the Guarantee. In addition, the definition
of "Guarantee", the definition of "Guarantor", and Exhibit "I" and all
references to the "Guarantee", the "Guarantor", and Exhibit "I" contained in
the Credit Agreement or the Basic Documents are hereby deleted. All parties
specifically agree that ASAI shall be a third party beneficiary of this
Agreement and more specifically the provisions of this Paragraph 2.
3. All references to the "Borrower" or any "subsidiary" or
"subsidiaries" of the Borrower under the Credit Agreement and all
determinations required to be made with respect thereto shall refer to and
include solely and exclusively the Borrower and any subsidiaries hereinafter
acquired and maintained by Borrower; provided, that in no event shall the
Borrower's subsidiaries include (i) ASAI, (ii) any parent or holding company
owning all or substantially all of the capital stock of the Borrower, (iii) any
Person utilized in the implementation of the Subject Reorganization (as
hereinafter defined) which Person, upon consummation of the Subject
Reorganization (as hereinafter defined), does not have substantial assets, or
(iv) any Person required to be included in any consolidated financial
statement, tax return or governmental filing covering the Borrower or under
any other statement prepared or determination made in conformity with GAAP
which Person does not otherwise constitute a subsidiary of the Borrower under
the provisions of the Credit Agreement.
4. The following definitions shall be added to Section 1.01 of
the Credit Agreement in the appropriate alphabetical order:
"1995 10-K": Borrower's annual report on Form 10-K for the
year ended December 31, 1995.
"1996 10-Qs": Borrower's quarterly reports on Form 10-Q for
the quarters ended March 31, 1996 and June 30, 1996.
"Recent SEC Filings": the 1995 10-K and 1996-10-Qs.
"Subject Reorganization": the pending proposed transaction
under which (i) Borrower shall form a wholly owned subsidiary ("Holding
Company"), (ii) Holding Company shall form a wholly owned subsidiary ("Second
Level Subsidiary"), (iii) Second Level Subsidiary shall merge with and into
Borrower with Borrower surviving and (a) Borrower's shareholders receiving
stock in the Holding Company in exchange for the outstanding stock in Borrower,
(b) the Holding Company receiving all capital stock in Borrower, and (c) all
capital stock in the Holding Company owned by Borrower being canceled, and (iv)
Borrower's subsequent dividend distribution to the Holding Company of all
capital stock in ASA Investments, Inc.; all of which transactions shall result
in Borrower and ASA Investments, Inc. becoming wholly owned subsidiaries of
Holding Company.
5. [*]
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6. The representations and warranties contained under Sections
5.01 through 5.15 of the Credit Agreement (as hereby amended) are hereby made
or re-affirmed (as applicable) by Borrower as of the date hereof. The
representations and warranties contained under Sections 5.04, 5.05, 5.07, and
5.13 are hereby amended and restated in their entirety as follows:
"SECTION 5.04 -- Litigation. Except as disclosed in the
Recent SEC Filings, there are no pending or (to the best of Borrower's
knowledge after due inquiry) threatened actions or proceedings before any court
or administrative agency which may be expected to have a materially adverse
effect on Borrower's business or financial condition or which seek to question
or set aside any of the transactions herein contemplated.
SECTION 5.05 -- Financial Statements. The audited balance
sheet as of December 31, 1995, and the unaudited balance sheet as of June 30,
1996, for Borrower and its consolidated subsidiaries, and the related results
of operations for the year and quarter then ended have been prepared in
accordance with GAAP and correctly present Borrower's financial condition as of
such dates and the results of operations for such periods, and since June 30,
1996, there has been no materially adverse change in Borrower's business,
assets, operations or condition (financial or otherwise).
SECTION 5.07 -- Status as "United States Citizen". Borrower
is a "citizen of the United States" as that term is used in 49 U.S.C. Section
40102(a)(15), and is an air carrier holding a valid air carrier operating
certificate issued pursuant to 49 U.S.C. Chapter 447 for aircraft capable of
carrying 10 or more individuals.
SECTION 5.13 -- [*]
7. The following representation and warranty is hereby added as a
new Section 5.15:
"SECTION 5.15 -- Subject Reorganization. Upon the
consummation of the Subject Reorganization, Borrower shall be and remain in
compliance with all applicable provisions of this Agreement including without
limitation, those covenants contained in Section 6.09 hereof."
8. Section 6.01 of the Credit Agreement is hereby amended,
effective upon the consummation of the Subject Reorganization, by (i) replacing
the phrase "and Borrower's Form 10-Q" with the phrase "and the Form 10-Q for
any parent holding company of Borrower" in the one place under Section 6.01(a)
where such former phrase appears and (ii) replacing the phrase "and Borrower's
Form 10-K" with the phrase "and the Form 10-K for any parent holding company of
Borrower" in the one place under Section 6.01(b) where such former phrase
appears.
9. [*].
10. [*]
11. [*]
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12. Section 8.01(b), (f), (g), (h), (j) and (l) are hereby amended
to delete all references to any one or more of the phrases "or Guarantor", "or
Guarantor's", "or the Guarantor", or "or Guarantor shall deny any further
liability under the Guarantee" in each and every place any one or more of such
phrases appear therein.
13. In accordance with the provisions of Section 11.02 of the
Credit Agreement, Borrower hereby notifies Lender of Borrower's designation of
the following address at which Borrower is to hereafter receive any and all
notices required to be provided Borrower under the Credit Agreement: Atlantic
Southeast Airlines, Inc., 000 Xxxxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxx 00000-0000, Attn: Xxxxxx X. Xxxx, Vice President - Finance.
14. Section 11.04 of the Credit Agreement is hereby amended to
delete the phrase ", the Guarantee," in the one place such phrase appears
therein.
15. The undersigned Lender hereby consents to the implementation
and consummation of the Subject Reorganization by Borrower and ASAI and hereby
waives (i) Borrower's or ASAI's compliance with any other provisions contained
under the Credit Agreement or any other Basic Document which are deemed,
interpreted or construed to prohibit, prevent or restrict Borrower's or ASAI's
undertaking of the Subject Reorganization or (ii) any default or breach of any
provision of either the Credit Agreement or any Basic Document resulting solely
from the implementation and consummation of the Subject Reorganization by
Borrower or ASAI; provided, that nothing contained under subclause (ii) hereof
shall be deemed, interpreted or construed to constitute a waiver by Lender of
any default or breach committed by Borrower under the Credit Agreement or any
Basic Document (as amended hereby) from and after the consummation of the
Subject Reorganization.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by their duly authorized officers as of the date first
above written.
WACHOVIA BANK OF GEORGIA, N.A. ATLANTIC SOUTHEAST AIRLINES, INC.
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxx
-------------------------------- -------------------------------
Title: Senior Vice President Title:Vice President-Finance
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