EXHIBIT 99.1
LOAN AGREEMENT, dated as of May 26, 2000, between HAWAIIAN AIRLINES,
INC., a Hawaiian corporation (the "BORROWER"), and KREDITANSTALT FUR
WIEDERAUFBAU (the "LENDER").
IT IS HEREBY AGREED as follows:
SECTION 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. In this Agreement, unless the context requires
another meaning:
"ADVANCE PAYMENT" means, for any Advance Payment Date for any
Aircraft, the advance payment payable by the Borrower to the Manufacturer
pursuant to the Purchase Agreement.
"ADVANCE PAYMENT BASE PRICE" means, for any Aircraft, the Advance
Payment Base Price for such Aircraft set forth in the Delivery Schedule.
"ADVANCE PAYMENT DATE" means, for any Aircraft, the date that is the
third Business Day of the 18th, 12th or 6th month prior to the scheduled
delivery month of such Aircraft, as set forth in the Delivery Schedule, except
that Advance Payment Dates in the month of May, 2000 will fall on the 31st.
"AIRCRAFT" means all or any of the 13 Boeing Model 717-22A aircraft,
each equipped with BR 715 A1-30 engines, to be manufactured by the Manufacturer
and sold to the Borrower pursuant to the Purchase Agreement on a firm basis.
"APPLICABLE LAW" means all applicable laws, treaties, judgments,
decrees, injunctions, writs and orders of any court, governmental agency or
authority and rules, regulations, orders, directives, licenses and permits of
any governmental body, instrumentality, agency or authority.
"ASSIGNEE" has the meaning specified in Section 7.8.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement, in
substantially the form of Exhibit E, providing for the assignment by the Lender
of all or part of its rights under this Agreement pursuant to Section 7.8.
"AVIATION ACT" means the Federal Aviation Act of 1958, as repealed
and restated in subtitle VII of Title 49 of the United States Code.
"BORROWER" means Hawaiian Airlines, Inc., a Hawaiian corporation.
"BORROWER DEFAULT" means any condition or event that constitutes a
Borrower Event of Default or that with the giving of notice, lapse of time,
determination of materiality or fulfilment of condition (or any combination of
the foregoing) would, unless cured or waived, become a Borrower Event of
Default.
"BORROWER EVENT OF DEFAULT" means any Event of Default other than an
Event of Default specified in Section 6.1(k) or 6.1(l).
"BUSINESS DAY" means any day except a Saturday, Sunday or other day
on which commercial banks in Xxx Xxxx Xxxx, Xxxxxx, Xxxxxxx or Frankfurt am
Main, Germany are closed for business.
"CODE" means the Internal Revenue Code of 1986.
"COMMITMENT" means the commitment of the Lender to make Loans up to
an initial amount of $___________, as such amount may be reduced from time to
time pursuant to Section 2.6.
"COMMITMENT COMMISSION" means the commitment commission payable by
the Borrower to the Lender under Section 2.6(a).
"COMMONLY CONTROLLED ENTITY" means an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"CONSENT" means Letter Agreement No. 1-1005-JSW-1319 among the
Manufacturer, the Guarantor and the Borrower.
"DEFAULT" means any condition or event that constitutes an Event of
Default or that with the giving of notice, lapse of time, determination of
materiality or fulfilment of condition (or any combination of the foregoing)
would, unless cured or waived, become an Event of Default.
"DELIVERY SCHEDULE" means the schedule agreed to by the Borrower and
the Manufacturer listing the scheduled delivery month for each Aircraft, as such
schedule may be amended or supplemented from time to time pursuant to Section
2.7. A copy of the Delivery Schedule, as in effect as of the date hereof, is
attached as Schedule I.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"EVENT OF DEFAULT" has the meaning specified in Section 6.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
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"FEE PAYMENT DATE" means the third Business Day of each calendar
month.
"FINAL MATURITY DATE" means the earlier of (a) the date the last
Aircraft is delivered to the Borrower under the Purchase Agreement and (b)
December 31, 2002, or such later date as the Lender, in its sole discretion, has
agreed in writing at the request of the Borrower.
"FINANCED ADVANCE PAYMENT" means that portion of an Advance Payment
that is to be financed by a Loan under this Agreement, as set forth in the
Delivery Schedule.
"FORMER PLAN" means any employee benefit plan which at any time
within the last six years has been maintained, or contributed to, by any person
which was at such time a Commonly Controlled Entity for employees of any person
which was at such time a Commonly Controlled Entity.
"GAAP" means generally accepted accounting principles in the United
States as in effect from time to time.
"GUARANTOR" means Rolls-Royce Deutschland GmbH, a limited liability
company organized under the laws of Germany.
"GUARANTY" means the Guaranty Agreement, dated on or about May 26,
2000, between the Guarantor and the Lender in respect of the Borrower's
obligations under this Agreement.
"INTEREST PAYMENT DATE" means, for any Loan, the last day of each
Interest Period relating to such Loan or, if different, the date such Loan is
repaid or prepaid.
"INTEREST PERIOD" means, for any Loan, a period of one month's
duration, or such shorter duration requested by the Borrower and agreed to by
the Lender, that begins on the date of such Loan and thereafter, on the last day
of the immediately preceding Interest Period, PROVIDED that:
(a) an Interest Period that would otherwise extend beyond the
Scheduled Repayment Date for such Loan or the Final Maturity Date shall
end on such Scheduled Repayment Date or the Final Maturity Date, as the
case may be; and
(b) if any Interest Period would end on a day that is not a Business
Day, such Interest Period shall be extended to the next following Business
Day.
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"INTEREST RATE" means, for any Interest Period, LIBOR for such
Interest Period ___________.
"LENDER" means Kreditanstalt fur Wiederaufbau and each Assignee that
becomes a Lender pursuant to Section 7.8.
"LENDING OFFICE" means, as to the Lender, its office located at its
address set forth in Section 7.1 or such other office or affiliate as the Lender
may hereafter designate as its Lending Office by notice to the Borrower and the
Guarantor.
"LIBOR" means, for any Interest Period, (i) the rate for deposits in
Dollars for a period comparable to such Interest Period which rate appears on
Telerate Page 3750 as at 11:00 a.m., London time, two Business Days prior to the
date such Interest Period begins, or (ii) if no such rate appears on such
Telerate Page 3750, the arithmetic mean (rounded upward, if necessary, to the
nearest 1/16th of 1%) of the rates for deposits in Dollars for a period
comparable to such Interest Period quoted to the Lender in London by The Chase
Manhattan Bank, Citibank, N.A., and Barclays Bank plc at or about 11:00 a.m.,
London time, two Business Days prior to the date such Interest Period begins.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
"LOAN" means a loan made by the Lender to the Borrower under Section
2.1, as may be reduced from time to time by prepayment or repayment or
reborrowed in accordance with Section 2.1.
"LOAN LIMIT" means, at any time, the sum of, without duplication:
(a) an amount equal to ____ of the aggregate Advance Payment Base
Price of those Aircraft scheduled to be delivered between (i) the date
that is 18 months and (ii) the date that is a day more than 12 months,
after such time;
(b) an amount equal to ____ of the aggregate Advance Payment Base
Price of those Aircraft scheduled to be delivered between (i) the date
that is 12 months and (ii) the date that is a day more than six months,
after such time; and
(c) an amount equal to _____ of the aggregate Advance Payment Base
Price of those Aircraft scheduled to be delivered within six months after
such time,
calculated on the basis of the then current Delivery Schedule.
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"LOAN REQUEST" means an irrevocable written notice by the Borrower
requesting the Lender to disburse one or more Loans, substantially in the form
of Exhibit B.
"MANUFACTURER" means XxXxxxxxx Xxxxxxx Corporation, a Maryland
corporation.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
ability of the Borrower to perform any of its obligations under the Transaction
Documents or in connection with any transaction contemplated herein or thereby
or (b) the validity or enforceability of any of the Transaction Documents.
"MATERIAL SUBSIDIARY" means, on any date of determination, any
Subsidiary of the Borrower that meets either of the following requirements:
(a) the Subsidiary has any indebtedness, dividend or other
obligation in a principal amount not less than $5,000,000 that the
Borrower has guaranteed or in effect guaranteed in any manner,
whether directly or indirectly; or
(b) the Subsidiary has assets with a net book value in excess of
5% of the aggregate net book value of all assets of the Borrower and
its Subsidiaries at the end of the most recently completed fiscal
year of the Borrower, or during that fiscal year, has produced net
income exceeding 5% of the consolidated net income of the Borrower
and its Subsidiaries for that fiscal year.
"MULTIEMPLOYER PLAN" means a plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NOTE" means a promissory note, substantially in the form of Exhibit
A.
"OBLIGORS" means the Borrower, the Guarantor, and the Parent
Guarantor, and "OBLIGOR" means any of them.
"OFFICER'S CERTIFICATE" means a certificate signed by the president,
a vice president, the secretary, the chief financial officer or the treasurer of
the Borrower.
"PARENT GUARANTEE" means the Guarantee, dated on or about May 26,
2000, given by the Parent Guarantor in favor of the Lender in respect of the
Guarantor's obligations under the Guaranty.
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"PARENT GUARANTOR" means Rolls-Royce plc, a company organized under
the laws of England.
"PARTICIPANT" has the meaning specified in Section 7.8(b).
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"PLAN" means any employee benefit plan (as defined in Section 3(3) of
ERISA) in respect of which the Borrower or a Commonly Controlled Entity is an
"employer" as defined in Section 3(5) of ERISA other than a Multiemployer Plan.
"PURCHASE AGREEMENT" means Purchase Agreement No. 2252, dated as of
December 31, 1999 (including all exhibits thereto and all letter agreements then
or thereafter entered into that by their terms constitute part of such purchase
agreement), relating to the sale by the Manufacturer of the Aircraft.
"REGULATORY CHANGE" has the meaning specified in Section 2.9(b).
"REIMBURSEMENT AGREEMENT" means the Secured Reimbursement Agreement,
dated on or about May 26, 2000, between the Guarantor and the Borrower relating
to the Guaranty.
"REPORTABLE EVENT" means a reportable event as defined in Section
4043 of ERISA and the regulations issued under such section with respect to a
Plan, excluding, however, such events as to which the PBGC by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, PROVIDED, HOWEVER, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"SCHEDULED REPAYMENT DATE" means, for any Loan, the first Business
Day of the month immediately following the scheduled delivery month for the
Aircraft to which such Loan relates, as indicated on the Delivery Schedule.
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"SECURITIES AND EXCHANGE COMMISSION" means the Securities and
Exchange Commission or any other US federal agency at the time administering the
Exchange Act.
"SECURITY AGREEMENT" means the Security Agreement, dated on or about
May 26, 2000, between the Guarantor and the Borrower in respect of the
Borrower's obligations under the Reimbursement Agreement.
"SINGLE EMPLOYER PLAN" means any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.
"SUBSIDIARY" means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by
such Person.
"TAXES" shall mean any and all fees (including but not limited to
documentation, license and registration fees), taxes (including but not limited
to income, franchise, gross receipts, sales, rental, use, value added, turnover,
excise, property, user, capital, doing business, transfer and stamp taxes),
levies, imposts, licenses, duties, recording charges or fees, assessments or
withholdings of any kind or nature whatsoever, including any payments in lieu
thereof, together with any penalties, fines, assessments or interest thereon or
other additions thereto.
"TELERATE 3750" means the display designated as "Page 3750" on the
Dow Xxxxx Telerate Service, or, as determined from time to time by the Lender,
such other page as may replace that page on that service or such other service
as may be nominated by the British Bankers' Association as the information
vendor for the purpose of displaying the London interbank offered rate for
Dollar deposits fixed by the British Bankers' Association.
"TRANSACTION DOCUMENTS" means (i) this Agreement, (ii) the Note,
(iii) the Guaranty, (iv) the Parent Guarantee, (v) the Reimbursement Agreement,
(vi) the Security Agreement, (vii) the Consent and (viii) all other agreements,
documents and certificates relating to the Borrower's obligations under this
Agreement or the Reimbursement Agreement, or that are required to be delivered
hereunder or thereunder; and "TRANSACTION DOCUMENT" means any one of them.
1.2 INTERPRETATION. In this Agreement, unless the context otherwise
requires:
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(a) Headings are for convenience only and do not affect the
interpretation of this Agreement.
(b) Words importing the singular include the plural and vice versa.
The word "OR" is not exclusive.
(c) The words "HEREOF," "HEREIN," and "HEREUNDER" and words of
similar import refer to this Agreement as a whole and not to any
particular provision.
(d) "DOLLARS" and "$" denote the lawful currency of the United
States.
(e) Any reference to a Section, party, Exhibit, Annex or Schedule is
a reference to that Section of, or that party, Exhibit, Annex or Schedule
to this Agreement.
(f) Any reference to an agreement or document is to such agreement or
document as amended, supplemented, replaced, novated or modified in
accordance with the terms of such agreement or document, and in accordance
with the Transaction Documents.
(g) Any reference to an act, regulation, code, any Applicable Law,
any statutory instrument or any provision of the foregoing shall be
construed so as to include such act, regulation, code, Applicable Law,
statutory instrument or provision as amended, modified, re-enacted or
replaced from time to time.
(h) References to a Person include that Person's successors and
permitted assigns.
(i) The term "INCLUDING" means "INCLUDING WITHOUT LIMITATION" and any
list of examples following such term shall in no way restrict or limit the
generality of the word or provision in respect of which such examples are
provided.
(j) "UNITED STATES" refers to the United States of America.
1.3 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with GAAP, applied on a
basis consistent (except for changes concurred in by the Borrower's independent
public accountants) with the most recent audited consolidated financial
statements of the Borrower and its Subsidiaries delivered to the Lender.
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SECTION 2
AGREEMENT FOR THE LOAN
2.1 THE LOANS. (a) The Lender agrees, from time to time on each
Advance Payment Date for each Aircraft but no later than the Final Maturity
Date, on the terms and conditions set forth in this Agreement, to make a Loan to
the Borrower in an amount equal to the amount of the Financed Advance Payment
for such Aircraft required to be made on such Advance Payment Date, PROVIDED,
HOWEVER, that the aggregate outstanding principal amount of all Loans shall at
no time exceed either (i) the amount of the Commitment or (ii) the Loan Limit,
in each case at such time, and PROVIDED FURTHER that once repaid or prepaid,
such Loans may be reborrowed upon the terms and conditions of this Agreement.
(b) DIRECT PAYMENT. Each Loan will be disbursed by the Lender
directly to the Manufacturer on behalf of the Borrower, not later than 11:00
a.m., New York time, on the applicable Advance Payment Date for the applicable
Aircraft, in immediately available funds, to the account of the Manufacturer at:
The Chase Xxxxxxxxx Xxxx
Xxx Xxxx, XX 00000
ABA# 000000000
Account of: The Boeing Company
Account No.:_____________
Reference: Hawaiian Airlines Advance Payments
or to such other account of the Manufacturer as may be designated by at least
five Business Days' notice in writing given to the Lender in accordance with
Section 7.1, in each case as payment of the Advance Payment for such Aircraft
due on such date.
(c) LOAN REQUEST. Whenever the Borrower desires to borrow one or more
Loans hereunder, it shall give the Lender a Loan Request appropriately completed
to specify:
(i) the amount of the requested Loan or Loans which:
(A) must be equal to the Financed Advance Payment or Financed
Advance Payments for the Aircraft to which such Loan or Loans relate,
payable on the proposed disbursement date; and
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(B) together with all other outstanding Loans as at the proposed
disbursement date, shall not exceed the Commitment or Loan Limit at
such time; and
(ii) the proposed disbursement date, which:
(A) shall be a Business Day and an Advance Payment Date for the
Aircraft to which the requested Loan or Loans relate;
(B) shall not fall after the Final Maturity Date; and
(C) shall be no less than three Business Days from the date of
the Loan Request,
and shall have attached thereto a copy of the most recent Delivery Schedule, to
the extent there has been a change to the Delivery Schedule previously delivered
to the Lender.
(d) MINIMUM LOAN. No single Loan shall be in an amount less than
$50,000.
2.2 NOTE. (a) The Loans shall be evidenced by a single Note payable
to the order of the Lender for the account of its Lending Office in an amount
equal to the lesser of (i) the amount of the Commitment and (ii) the aggregate
unpaid principal amount of all Loans, with interest thereon as prescribed in
Section 2.3. The Lender is hereby authorized to record the date and amount of
each Loan made by the Lender and the date and amount of each payment or
prepayment of principal thereof on the schedule annexed to and constituting a
part of the Note or on a continuation thereof which shall be attached thereto
and made a part thereof.
(b) The failure of the Lender to make any such recording shall not in
any way affect the obligations of the Borrower under this Agreement or under the
Note.
2.3 INTEREST. (a) Each Loan shall bear interest during each Interest
Period for that Loan at the Interest Rate for that Interest Period.
(b) Such interest shall accrue from day to day and is payable in
arrears on each Interest Payment Date.
(c) Any overdue principal of and overdue interest on any Loan or any
other overdue amount payable under this Agreement shall bear interest, payable
by the
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Borrower on demand by the Lender from time to time, for each day from the due
date until paid (to the extent permitted by applicable law after as well as
before judgment) at a rate per annum equal to ___ above the then applicable
Interest Rate or, if higher, LIBOR for such successive periods as the Lender
may direct plus ___ per annum, but if the Lender determines that deposits in
the currency of the overdue amount are not at the relevant time being made
available to it by leading banks in the London interbank market, the default
rate will be determined by reference to the cost of funds to the Lender from
whatever sources it may select, acting in a commercially reasonable manner.
2.4 REPAYMENT. (a) The Borrower shall repay each Loan on the
earliest of:
(i) its Scheduled Repayment Date;
(ii) the date of actual delivery of the Aircraft to which such Loan
relates;
(iii) the date the order for the Aircraft to which such Loan relates
or the whole or any part of the Purchase Agreement with respect to such
Aircraft is canceled or terminated;
(iv) the date on which any agreement between the Borrower and the
Guarantor is canceled or terminated, other than due to expiration in the
ordinary course or termination by either of them through the exercise of
an early termination option that is not based on a default;
(v) the date seven Business Days after the Manufacturer has
terminated its obligation to provide permanent financing for the Aircraft
to which such Loan relates; and
(vi) the Final Maturity Date.
(b) If on any date (the "RELEVANT DATE"), the Advance Payment Date
for the Advance Payment to which a Loan relates would fall after the relevant
date for any reason (including an amendment of the Delivery Schedule pursuant to
Section 2.7), the Borrower shall repay such Loan within five Business Days of
the relevant date.
(c) The Borrower will notify the Lender in writing immediately upon
receiving notice from the Manufacturer of the actual date of scheduled delivery
for each Aircraft under the Purchase Agreement and any change in the delivery
date thereafter.
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(d) Subject to Section 2.12, the Borrower may prepay the Loans for
any Aircraft in whole upon at least five Business Days' irrevocable prior notice
to the Lender. Any such notice of prepayment shall be irrevocable.
(e) The Borrower shall give the Lender written notice (in reasonable
detail) of any circumstances giving rise to the obligation of the Borrower to
repay any Loan under Section 2.4(a)(ii), (iii), (iv) or (v) or Section 2.4(b)
promptly upon becoming aware thereof.
(f) All repayments and prepayments under this Agreement shall be made
together with accrued interest on the amount repaid or prepaid.
(g) Notwithstanding any other term hereof, from time to time the
Borrower will immediately repay one or more Loans if necessary to insure that at
no time will the aggregate outstanding amount of the Loans exceed the amount of
the Commitment.
(h) Any Loan prepaid or repaid may be re-borrowed upon the terms and
conditions of this Agreement.
2.5 MANNER AND TIME OF PAYMENTS. (a) All payments of principal,
interest and all other amounts payable hereunder shall be in Dollars in
immediately available funds not later than 11:00 a.m., New York time on the date
due, at account number __________ at Citibank N.A., 000 Xxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx, or such other account in the United States as the Lender may
designate. Funds received by the Lender after 11:00 a.m., New York time on the
date due shall be deemed to have been paid by the Borrower on the next
succeeding Business Day. Upon its acceptance of an Assignment Agreement and
recording of the information contained therein in the Register pursuant to
Section 7.8(c), from and after the effective date specified in such Assignment
Agreement, the Borrower will make all payments hereunder in respect of the
interest assigned thereby to the Assignee thereunder and the parties to such
Assignment Agreement shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) Except as otherwise provided in this Agreement, whenever any
payment to be made hereunder is due on a day which is not a Business Day, the
payment shall be made on the next succeeding Business Day and (if interest is
otherwise stated to accrue on such payment) such extension of time shall be
included in the computation of the payment of interest hereunder.
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(c) Amounts payable in respect of costs, expenses and taxes and the
like are payable in the currency in which they are incurred. Any other amount
payable under the Transaction Documents is, except as otherwise provided,
payable in Dollars.
(d) All payments made by the Borrower under the Transaction Documents
shall be made without set-off or counterclaim.
2.6 COMMITMENT COMMISSION, FEES, VOLUNTARY REDUCTIONS OF COMMITMENTS.
(a) The Borrower agrees to pay to the Lender a commitment commission for the
period from the date hereof until the Final Maturity Date (or such earlier date
as the Commitment shall have been terminated) computed at a rate equal to ____%
per annum on the daily average unutilized, uncancelled Commitment. Accrued
Commitment Commission shall be due and payable in arrears (i) on each Fee
Payment Date and (ii) on the Final Maturity Date or upon such earlier date as
the Commitment shall be terminated, and (iii) if any part of the undrawn
Commitment is cancelled, on the cancelled amount at the time such cancellation
takes effect.
(b) The Borrower shall have the right, at any time and from time to
time, to reduce permanently the Commitment by an aggregate amount not to exceed
the amount by which the Commitment exceeds the aggregate outstanding principal
amount of all Loans at such time. The Borrower shall give not less than five
Business Days' prior written notice to the Lender, specifying the amount of any
reduction and the date (which shall be a Business Day) such reduction shall
become effective. Such reduction shall be effective as of the date so specified.
Any partial reduction of the Commitment shall be in an aggregate minimum amount
of $1,000,000.
(c) Any fee or commission referred to in this Section 2.6 is
exclusive of any value added or any other Tax which, as a result of a Regulatory
Change after the date hereof, is chargeable in connection with that fee or
commission. If any such Tax is so chargeable, the Borrower shall pay such Tax at
the same time as it pays the relevant fee or commission.
2.7 AMENDMENT OF DELIVERY SCHEDULE. (a) Subject to the consent of the
Guarantor (if required under any applicable Transaction Document in which case a
copy of such consent must be provided to the Lender), the Borrower may from time
to time amend the Delivery Schedule to the extent necessary to give effect to
changes in the scheduled delivery dates of the Aircraft, but only if:
(i) the aggregate outstanding principal amount of all Loans at no
time may exceed the Commitment at such time;
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(ii) no Scheduled Repayment Date may extend beyond the Final
Maturity Date; and
(iii) any Loan for any Aircraft that would not have been permitted to
be made if the rescheduled delivery date for such Aircraft had been the
originally-scheduled delivery date for such Aircraft shall be prepaid
within five Business Days of the amendment of the Delivery Schedule.
In addition, any amendment to the Delivery Schedule will take effect and be
binding upon the Lender upon delivery to the Lender of written notice from the
Borrower, together with an Officer's Certificate attaching the changed Delivery
Schedule.
(b) Concurrently with any amendment of the Delivery Schedule pursuant
to this Section 2.7, the Borrower will amend the Delivery Schedule to reset the
Advance Payment Dates for the Aircraft affected by such amendment of the
Delivery Schedule so as to correspond to the third Business Day of the 18th,
12th and 6th months, respectively, before the first day of the scheduled
delivery month of such Aircraft specified in the Delivery Schedule, as so
amended.
2.8 REGISTER. The Lender shall maintain at its address at which
notices are to be given to it pursuant to Section 7.1 (i) a register for the
recording of the names and addresses of, the Lender and the Loans owing from
time to time to the Lender (the "REGISTER"), and (ii) a copy of each Assignment
Agreement. The entries made by the Lender in the Register shall be conclusive in
the absence of manifest error, and the Borrower may treat each Person whose name
is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower at any
reasonable time and from time to time upon reasonable prior written notice.
2.9 ADDITIONAL COSTS; ILLEGALITY. (a) REGULATORY CHANGE. In the event
of any Regulatory Change (as hereinafter defined) which imposes on the Lender
any reserve, special deposit, minimum capital, capital ratio or other form of
banking or monetary control or similar requirements on the Lender with respect
to this Agreement, any Loan made hereunder or the manner in which the Lender
carries such Loan on its books; and any such Regulatory Change results in an
increase in the cost to the Lender of entering into or performing or making or
maintaining its obligations under this Agreement or in a reduction in the
amounts receivable by the Lender hereunder, or in a reduction in the effective
return to the Lender under this Agreement (to the extent attributable to this
Agreement) on its capital, or results in the Lender making any payment, or
foregoing any
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interest or other return (such increased costs and reductions in amounts
receivable being herein referred to as "ADDITIONAL COSTS"), then, upon
written notice from the Lender specifying in reasonable detail such
Additional Costs, the Borrower shall on demand pay the Lender, upon notice
given in accordance with Section 2.9(c), an amount equal to such Additional
Costs, to the extent reasonably allocable to this Agreement and the Loans
made hereunder; but the Borrower will not be required to pay any Additional
Costs incurred by the Lender more than 60 days before the date of notice to
the Borrower of such costs. The Borrower shall make payment to the Lender for
Additional Costs incurred by the Lender from time to time forthwith upon
demand.
(b) DEFINITION OF REGULATORY CHANGE. As used in this Section, the
term "REGULATORY CHANGE" shall mean, with respect to the Lender, (i) any change
after the date of this Agreement in any Applicable Law, rule or regulation
applicable to the Lender or in any order or request (whether or not having the
force of law) by any court or governmental or monetary authority having
jurisdiction or (ii) the adoption or making after such date of interpretations,
directives or requests applicable to a class of banks including the Lender
(whether or not having the force of law) by any court or governmental or
monetary authority having jurisdiction.
(c) NOTICE. The Lender will notify the Borrower of any event
occurring after the date of this Agreement which entitles the Lender to
compensation for Additional Costs pursuant to Section 2.9(a) as promptly as
practicable after it obtains knowledge thereof.
(d) ILLEGALITY. If it shall become unlawful for the Lender to
maintain the Loans (or any part thereof), then, by written notice to the
Borrower specifying in reasonable detail the nature and effective date of such
illegality, the Lender may require all Loans, together with accrued and unpaid
interest thereon, and all other sums then due and payable to the Lender
hereunder to become, and the same shall thereupon become, forthwith due and
payable and the Commitment shall be cancelled; PROVIDED that, if lawful, the
same shall not become due and payable until the last Interest Payment Date
preceding the effective date of such illegality.
2.10 MITIGATION. If, with respect to the Lender, a condition arises
or an event occurs which would, or would upon the giving of notice, result in
(x) any Additional Costs or illegality pursuant to Section 2.9 or (y) any
additional amounts becoming payable to the Lender pursuant to Section 2.11, the
Lender, promptly upon becoming aware of the same, shall, in consultation with
the Borrower, take such steps as may reasonably be open to it to mitigate the
effects of such condition or event, PROVIDED that the Lender shall be under no
obligation to take any step that, in its good faith opinion,
15
would (a) result in its incurring any Additional Costs in performing its
obligations hereunder (unless the Borrower has agreed to reimburse it for the
same) or (b) be otherwise adverse to the Lender in a material respect or (c)
would be contrary to the Lender's general policies.
2.11 NET PAYMENTS. (a) Except as otherwise provided in this Section
2.11, all payments made by Borrower hereunder or under any Note will be made
free and clear of, and without deduction or withholding for or on account of,
any present or future Taxes, now or hereafter imposed by way of withholding or
deduction with respect to such payments, but excluding:
(i) any Tax imposed that would not have been imposed but for a
present or former connection between the jurisdiction of the government or
taxing authority imposing such Tax and the Lender or any Person related to
the Lender, other than a connection arising solely from the Lender having
executed, delivered, performed its obligations or received a payment
under, or enforced, this Agreement or any Note;
(ii) any Tax on the Lender's overall net income imposed in the
jurisdiction in which its principal office is situated; and
(iii) any Tax to the extent such Tax would not have been imposed if
the Lending Office had at all times been the Lender's office set forth in
Section 7.1,
(any non-excluded Tax, an "INDEMNIFIED WITHHOLDING TAX").
(b) If any Indemnified Withholding Taxes are so levied or imposed,
the Borrower agrees to pay the full amount of such Indemnified Withholding
Taxes, and such additional amounts as may be necessary so that every payment of
all amounts due under this Agreement or under any Note, after withholding or
deduction for or on account of any Indemnified Withholding Taxes, will not be
less than the amount provided for herein or in such Note. The Borrower will
furnish to the Lender, within 15 days after the date the payment of any
withholding Taxes in respect of payments hereunder is due pursuant to Applicable
Law, certified copies of tax receipts (if available) evidencing such payment by
the Borrower. In accordance with the foregoing, the Borrower agrees to indemnify
and hold harmless the Lender, and reimburse the Lender upon its written request,
for the amount of any Indemnified Withholding Taxes levied or imposed and paid
by the Lender.
(c) The Lender shall provide to the Borrower on or prior to the date
of the initial Loan hereunder (and any Assignee that becomes a Lender shall
provide before becoming entitled to receive payments free of Indemnified
Withholding Taxes as
16
provided in this Section 2.11) two accurate and complete (including the
Lender's United States taxpayer identification number) original signed copies
of Internal Revenue Service Form W-8BEN (or a successor form) demonstrating a
complete exemption from United States Federal income tax. To the extent
legally entitled to do so, upon request by the Borrower made not more often
than reasonably required, the Lender shall provide to the Borrower such forms
as may be required to obtain exemption from or a reduction of United States
Federal income tax. Notwithstanding anything to the contrary contained in
Section 2.11(b), the Borrower shall not be obligated to pay any additional
amounts to the Lender under Section 2.11(b) on account of any United States
Federal income tax (and such tax shall not be an Indemnified Withholding Tax)
unless such United States Federal income tax is payable as a result of any
change after the date hereof in the Income Tax Treaty between the United
States and Germany (or any other relevant jurisdiction, in the case of an
Assignee), in effect currently (or in the case of or in the case of the
treaty between the United States and any other applicable jurisdiction, on
the effective date of the applicable assignment), or in the provisions of the
Code or the Treasury Regulations promulgated thereunder.
(d) If the Borrower pays under Section 2.11(b) any additional amount
(a "TAX PAYMENT") and the Lender effectively obtains a refund of tax or credit
against tax by reason of that Tax Payment (a "TAX CREDIT"), and the Lender is
able to identify the Tax Credit as being attributable to the Tax Payment, then
the Lender shall reimburse the Borrower such amount as the Lender determines to
be in the proportion of the Tax Credit as will leave the Lender (after that
reimbursement) in no better or worse position than it would have been if the Tax
Payment has not been required. Nothing in this Section 2.11 (d) interferes with
the right of the Lender to arrange its tax affairs in whatever manner it thinks
fit and, without prejudice to the foregoing, the Lender is under no obligation
to claim a Tax Credit, or to claim a Tax Credit in priority to any other claim,
relief, credit or deduction available to it. The Lender is not obliged to
disclose any information regarding its tax affairs or computation to the
Borrower.
(e) The Borrower shall pay and forthwith indemnify the Lender from
and hold the Lender harmless against any transfer taxes, documentary taxes,
assessments or other similar charges made by any United States governmental
authority or any political subdivision or taxing authority thereof or therein by
reason of the execution, delivery, performance and enforcement of this Agreement
or the Note.
2.12 FUNDING COSTS. If (a) any interest on or principal of any Loan
shall be paid on a date other than the last day of an Interest Period in respect
of such Loan or (b) the Borrower fails to borrow any Loan as specified in the
Loan Request in respect thereof and fails to notify the Lender at least three
Business Days prior to the scheduled date of borrowing, the Borrower shall
indemnify the Lender against any loss or liability which
17
the Lender incurs and shall pay on demand all costs and expenses that are in
the nature of funding breakage costs, loss of margin, costs of redeployment
of funds and any other related expense incurred by the Lender and notified to
the Borrower (with documentation showing in reasonable detail the computation
thereof, which will be conclusive and binding absent manifest error).
SECTION 3
CONDITIONS
3.1 CONDITIONS PRECEDENT TO INITIAL LOAN. The obligation of the
Lender to make the initial Loan hereunder is subject to the satisfaction of the
following conditions precedent (or the waiver thereof):
(a) the Lender shall have received an opinion of (x) Xxx X. Xxxxx,
general counsel of the Borrower and (y) Akin, Gump, Strauss, Xxxxx & Xxxx,
L.L.P., special counsel to the Borrower, in the forms set out as Exhibits
C-1 and C-2 respectively, and covering such other matters incident to the
transactions contemplated by this Agreement as the Lender may reasonably
request, addressed to the Lender and dated the date of the initial Loan;
(b) the Lender shall have received an opinion of (x) Debevoise &
Xxxxxxxx, special U.S. counsel to the Guarantor, (y) an in-house counsel
for the Guarantor, (z) an in-house counsel for the Parent Guarantor, in
the forms set out as Exhibits X-0, X-0 and D-3 respectively, and covering
such other matters incident to the transactions contemplated hereby as the
Lender may reasonably request, addressed to the Lender and dated the date
of the initial Loan;
(c) the Guaranty and the Parent Guarantee shall have been duly
authorized, executed and delivered to the Lender, in form and substance
satisfactory to the Lender, and the Guaranty and the Parent Guarantee
shall be in full force and effect; and the Lender shall have received a
fully executed original copy of the Guaranty and the Parent Guarantee;
(d) the Lender shall have received (i) documents it may reasonably
request relating to the existence of the Borrower, the Guarantor and the
Parent Guarantor, (ii) a copy of the organizational documents of each
Obligor, duly certified by a director or officer of such Obligor, (iii) a
copy of the relevant resolutions of the board of directors of the Borrower
duly certified by a director or officer of the Borrower, and
18
such evidence of the due authorization of the Guaranty and the Parent
Guarantee as the Lender may reasonably request, (iv) a copy of specimen
signatures of the duly authorized officers of each Obligor executing the
Transaction Documents to which such Obligor is a party, duly certified by
a director or officer of such Obligor, and (v) an Officer's Certificate
confirming that the borrowing of the Commitment in full would not cause
any borrowing limit bidning on the Borrower to be exceeded, and all such
documents and all proceedings relating thereto shall be in form and
substance reasonably satisfactory to the Lender and its special counsel;
(e) the Lender shall have received from the Borrower for its own
account a duly executed Note of the Borrower dated the date of the initial
Loan;
(f) the Lender shall have received a notification from the Guarantor
to the effect that the conditions set forth in Section 3.1 of the
Reimbursement Agreement have been fulfilled to the satisfaction of the
Guarantor or waived by the Guarantor; and
(g) the Borrower shall have paid the fees and expenses referred to in
Section 7.3(a).
3.2 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of the Lender
to make any Loan is subject to the satisfaction of the following conditions
precedent (or the waiver thereof):
(a) the Lender shall have received a Loan Request in the manner
contemplated by Section 2.1;
(b) the representations and warranties of the Borrower contained in
this Agreement, and of the Guarantor contained in the Guaranty, and those
otherwise made in writing by or on behalf of the Borrower in connection
with the transactions contemplated by this Agreement shall be correct in
all material respects at the time of such Loan (or if stated to have been
made solely as of an earlier date, shall have been true and correct as of
such date), and at the time of such Loan, no Event of Default or Default
shall have occurred and be continuing or might result from the making of
such Loan;
(c) the Lender shall have received written confirmation from the
Manufacturer at least two Business Days prior to the proposed date of such
Loan, that the Borrower shall have made to the Manufacturer all payments
(other than the Financed Advance
19
Payment due on the proposed date of such Loan) required to be made in
respect of the Aircraft to which such Loan relates;
(d) the Lender shall not have received a direction from the Guarantor
not to make any further Loan under this Agreement because an "Event of
Default" under the Reimbursement Agreement shall have occurred and be
continuing;
(e) there shall not have occurred any event or circumstance that has
or could reasonably be expected to have, a Material Adverse Effect; and
(f) there shall not have occurred any event, condition or
circumstance that results in:
(i) the Manufacturer ceasing to provide, or terminating its
commitment to provide, any financing to the Borrower with respect to
the Borrower's order of Aircraft under the Purchase Agreement; or
(ii) the cancellation, termination or assignment of the Purchase
Agreement (except (A) an assignment (x) as collateral under the
Security Agreement, (y) in connection with a merger or consolidation
permitted under the Transaction Documents or (z) with respect to any
Aircraft which has been delivered under the Purchase Agreement and as
to which the Loans and other amounts due under this Loan Agreement
have been paid in full and (B) a termination of the Purchase
Agreement with respect to an Aircraft pursuant to Article 7 of the
AGTA (as defined in the Purchase Agreement) if the principal of and
accrued interest, if any, on all Loans relating to such Aircraft
shall have been paid not later than 10 days after such termination).
SECTION 4
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to the Lender that:
(a) CORPORATE ORGANIZATION, ETC. (i) The Borrower is a corporation
duly organized and validly existing in good standing under the laws of Hawaii
and has the corporate power and authority to own or hold its assets and carry on
its business as it is
20
being conducted and to enter into and perform its obligations under this
Agreement and all other Transaction Documents to which it is a party.
(ii) The Borrower is duly qualified to do business as a foreign
corporation in each state of the United States in which it has a principal
office or in which failure so to qualify would have a Material Adverse Effect.
(iii) The Borrower is an "air carrier" within the meaning of the
Aviation Act operating under a certificate of public convenience and necessity
issued pursuant to Section 41101 thereof, and certificated under Section 44705
of the Aviation Act.
(iv) The Borrower is not the Subsidiary of any Person.
(b) DUE AUTHORIZATION. The execution, delivery and performance by the
Borrower of this Agreement and each of the Transaction Documents to which it is
a party:
(i) have been duly authorized by all necessary corporate action and
do not require any stockholder approval or the approval or consent of or
notice to any trustee or holder of any indebtedness or obligations of the
Borrower that have not been obtained or given;
(ii) do not conflict with or result in any violation of the
certificate of incorporation or by-laws of the Borrower;
(iii) do not and will not contravene any Applicable Law by which the
Borrower is bound or conflict with or breach, violate or contravene or
constitute a default under, or result in the creation of any Lien (other
than as permitted under this Agreement or the Security Agreement) upon the
property of the Borrower under any indenture, mortgage, lease, instrument
or other agreement to which the Borrower is a party or by which it may be
bound or affected; and
(iv) do not require the authorization, consent or approval of, the
giving of notice to, the registration with or the taking of any other
action by or in respect of, any Federal, state or foreign governmental
authority, agency or judicial body, or the taking of any other action
under any Applicable Law, except for the Consent and the filing of Uniform
Commercial Code financing statements referred to in the Reimbursement
Agreement and the Security Agreement.
21
(c) LITIGATION. Except as disclosed by the Borrower in the Form 10-K
for the fiscal year ended December 31, 1999, as filed with the Securities and
Exchange Commission and delivered to the Lender and the Guarantor, there are no
pending or, to the knowledge of the Borrower, threatened actions or proceedings
before any court or administrative agency or arbitrator that individually or in
the aggregate, could be expected to have a Material Adverse Effect.
(d) FINANCIAL STATEMENTS. The audited consolidated balance sheet of
the Borrower and its Subsidiaries, if any, as of the end of its fiscal year
ended December 31, 1999, and the related consolidated statements of income,
shareholders' equity and cash flows for such year, including the notes thereto,
copies of which have been furnished to the Lender and the Guarantor, have been
prepared in accordance with GAAP and fairly present the consolidated financial
condition of the Borrower and its Subsidiaries, if any, as of their respective
dates and the results of their operations for such periods, and between December
31, 1999 and the date of the Borrower's making of the representation and
warranty under this clause (d), there has been no change in the financial
condition, operations, business, properties or prospects of the Borrower or any
of its Subsidiaries except those changes that individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect. The
financial statements referred to herein do not as of the date thereof contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein (as of the date thereof) not
misleading.
(e) TAXES. The Borrower has filed or caused to be filed all material
tax returns which are required to be filed by it and has paid or caused to be
paid all Taxes which have been shown to be due and payable by such returns or
(except to the extent being contested in good faith and for the payment of which
adequate reserves have been provided) Tax assessments received by the Borrower
to the extent that such Taxes have become due and payable.
(f) NO DEFAULT. No Borrower Event of Default or Borrower Default has
occurred and is continuing or would result from making any Loan, and no other
event is outstanding which constitutes (or with the giving of notice, lapse of
time, determination of materiality or the fulfilment of any other applicable
condition or any combination of the foregoing, would constitute) a default under
any document which is binding on the Borrower or any of its Subsidiaries or any
asset of the Borrower or any of its Subsidiaries to an extent or in a manner
which might have a Material Adverse Effect.
(g) INVESTMENT COMPANY ACT; MARGIN REGULATIONS. Neither the Borrower
nor any Subsidiary of the Borrower is an "investment company" or a company
controlled by
22
an "investment company" within the meaning of the Investment Company Act of
1940, as amended. None of the transactions contemplated in this Agreement
(including, without limitation, the borrowings hereunder and the use of the
proceeds thereof) will violate or result in a violation of Section 7 of the
Exchange Act (or any regulations issued pursuant thereto, including
Regulations T, U and X).
(h) PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower nor any
of its Subsidiaries is a "holding company," or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company," within the meaning of
the Public Utility Holding Company Act of 1935.
(i) LEGAL, VALID AND BINDING AGREEMENTS. This Agreement and each
other Transaction Document to which the Borrower is a party constitute or, when
executed and delivered by the Borrower will constitute, the legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting the rights of creditors generally and by general principles
of equity.
(j) COMPLIANCE WITH ERISA. (i) The Borrower intends to file a
voluntary compliance resolution request with the Internal Revenue Service
concerning contributions under the Hawaiian Airlines, Inc. 401(k) Plan for
Flight Attendants, for which a resolution has been achieved and the Borrower has
taken adequate reserves. Except as disclosed in the previous sentence, the
Borrower and each Commonly Controlled Entity are in compliance in all material
respects with the presently applicable provisions of ERISA and the Code, and the
applicable regulations thereunder, with respect to each Plan and none of them
has engaged in any prohibited transaction in connection with which the Borrower
or any Commonly Controlled Entity could be subjected to (in the case of any such
breach) liabilities for damages or (in the case of any such prohibited
transaction) either a civil penalty assessed under ERISA or a tax, which
liabilities, penalty or tax could be expected to have a Material Adverse Effect.
(ii) No Reportable Event has occurred with respect to any Plan, and
no steps have been taken to reorganize or terminate any Plan or by the
Borrower or any Commonly Controlled Entity to effect a complete or partial
withdrawal from any Multiemployer Plan that could result in a liability
that could be expected to have a Material Adverse Effect.
(k) CHOICE OF LAW. Subject as provided in any legal opinion delivered
to the Lender pursuant to this Agreement, the choice by the Borrower of New York
law to
23
govern this Agreement and each other Transaction Document to which it is a
party and its submission hereunder and thereunder to the non-exclusive
jurisdiction of the courts of New York are valid and binding.
(l) TAXES ON PAYMENTS. If the Lender has complied with the document
delivery requirements under Section 2.11(c), all amounts payable by the Borrower
hereunder may be made free and clear of and without deduction for or on account
of any Tax.
(m) NO IMMUNITY. The Borrower is subject to civil and commercial law
with respect to its obligations under this Agreement and each other Transaction
Document to which it is a party; the entry into and performance of this
Agreement and each other Transaction Document to which it is a party by the
Borrower constitute private and commercial acts; and neither the Borrower nor
any of its assets enjoys any right of immunity from set-off, suit or execution
in respect of their obligations under this Agreement and each other Transaction
Document to which it is a party.
4.2 TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES. The
representations and warranties set out in Section 4.1 are (a) made on the date
of this Agreement and (b) deemed to be repeated by the Borrower on the date of
each Loan Request and the proposed date of such Loan with reference to the facts
and circumstances then existing.
SECTION 5
COVENANTS
5.1 COVENANTS. The Borrower covenants and agrees that, so long as
this Agreement shall be in effect or any amount payable hereunder shall remain
unpaid or any obligation required to be performed hereunder shall remain
unperformed, and unless the Lender shall otherwise consent in writing:
(a) PERFORMANCE OF OBLIGATIONS. The Borrower shall perform all of its
obligations under this Agreement.
(b) COMPLIANCE WITH LAWS. The Borrower shall comply with all
Applicable Laws in connection with the performance of its obligations
under this Agreement and each other Transaction Document, the
non-compliance with which would have a Material Adverse Effect, except any
Applicable Law the validity or applicability of which is being contested
in good faith by proper proceedings promptly initiated and
24
diligently conducted and for which such reserves or other appropriate
provision, if any, as shall be required by GAAP shall have been made
therefor.
(c) CERTIFICATED AIR CARRIER. The Borrower shall maintain at all
times its certificate of public convenience and necessity under Section
41101 of the Aviation Act, as and for so long as such certificate is a
condition to the applicability of Section 1110 of the United States
Bankruptcy Code to aircraft owned or leased by the Borrower.
(d) NOTICE OF BORROWER DEFAULT AND BORROWER EVENT OF DEFAULT. The
Borrower shall promptly on the occurrence of a Borrower Default or a
Borrower Event of Default hereunder, provide the Lender and the Guarantor
with an Officer's Certificate specifying the nature and period of
existence thereof and what action the Borrower is taking or proposes to
take with respect thereto.
(e) FINANCIAL STATEMENTS AND OTHER REPORTS. The Borrower shall
furnish to the Lender the following described financial statements,
reports, notices and information:
(i) QUARTERLY FINANCIAL STATEMENTS. Within 60 days after the end of
each of the first three fiscal quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its
consolidated subsidiaries, if any, at the end of such period and the
related consolidated statements of income, stockholders' equity and cash
flow of the Borrower and its consolidated subsidiaries, if any, for such
fiscal quarter, setting forth in each case in comparative form the
consolidated figures for the corresponding periods of the previous fiscal
year of the Borrower, all in reasonable detail and certified by a
principal financial officer of the Borrower as presenting fairly the
financial condition of the Borrower and its consolidated subsidiaries as
of the dates indicated and the results of their operations and cash flow
for the periods indicated in conformity with GAAP applied to quarterly
financial statements on a basis consistent with prior quarters (except as
otherwise stated therein), subject to changes resulting from audit and
normal year-end adjustment; PROVIDED that so long as the Borrower shall
have any securities registered under the Exchange Act, delivery to the
Lender within such time period of the Borrower's Quarterly Report on Form
10-Q (together with all documents incorporated by reference therein that
contain financial information otherwise required to be stated therein) as
filed with the Securities and Exchange Commission shall satisfy the
requirements of this clause (i).
(ii) ANNUAL FINANCIAL STATEMENTS. Within 90 days after the end of
each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its con-
25
solidated subsidiaries, if any, at the end of such year and the related
consolidated statements of income, stockholders' equity and cash flow of
the Borrower and its consolidated subsidiaries, if any, for such fiscal
year, setting forth in each case in comparative form the consolidated
figures for the previous year, all in reasonable detail and accompanied
by a report thereon of independent certified public accountants of
recognized national standing selected by the Borrower which shall state
that such consolidated financial statements present fairly the financial
position of the Borrower and its consolidated subsidiaries, if any, as
of the dates indicated and the results of their operations and cash
flow for the periods indicated in conformity with GAAP on a basis
consistent with prior years (except as otherwise stated therein) and that
the examination of such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards; PROVIDED that so long as the Borrower shall have any
securities registered under the Exchange Act, delivery to the Lender
within such time period of the Borrower's Annual Report on Form 10-K
(together with all documents incorporated by reference therein that
contain financial information otherwise required to be stated therein) as
filed with the Securities and Exchange Commission shall satisfy the
requirements of this clause (ii).
(iii) PUBLIC REPORTS. Promptly upon their becoming available, copies
of all other financial statements, reports, notices and proxy statements
sent by the Borrower to its security holders, and of all periodic and
current reports on Form 10-K, 10-Q or 8-K filed by the Borrower with any
securities exchange or with the Securities and Exchange Commission or any
governmental authority succeeding to any of its functions.
(iv) OFFICER'S CERTIFICATE. Together with each delivery of financial
statements or reports required by clause (i) or (ii) above, an Officer's
Certificate of the Borrower, to the effect that the signer is familiar
with or has reviewed the relevant terms of this Agreement and has made, or
caused to be made under his or her supervision, a review of the
transactions and condition of the Borrower during the period covered by
such financial statements, and that such review has not disclosed the
existence during such period, nor does the signer have knowledge of the
existence as at the date of such certificate, of any condition or event
which constitutes a Borrower Event of Default or Borrower Default
hereunder or, if any such condition or event existed or exists, specifying
the nature and period of existence thereof and what action the Borrower
has taken, is taking or proposes to take with respect thereto.
26
(v) OTHER INFORMATION. Such other information regarding the
business affairs or financial condition of the Borrower as the Lender
may from time to time reasonably request, promptly upon receipt of such
request.
(vi) LITIGATION. Promptly upon becoming aware of them, details of
any litigation, arbitration or administrative proceedings which are
current, threatened or pending, and which might, if adversely determined,
have a Material Adverse Effect.
(f) PRESERVATION OF CORPORATE EXISTENCE, ETC. (i) The Borrower shall
maintain and preserve at all times its corporate existence. The Borrower shall
not merge or consolidate with or into any other Person or convey, transfer or
lease all or substantially all its assets as an entirety to any other Person,
whether in a single transaction or a series of related transactions, unless:
(A) the Borrower has obtained the Lender's prior written
consent, which consent shall not be unreasonably withheld; or
(B) the Borrower has not obtained such consent from the Lender
but:
(1) the surviving corporation is organized and existing
under the laws of any state of the United States and is a United
States air carrier as to which there is in force a certificate
issued pursuant to Section 41101 of the Federal Aviation Act,
and an air carrier operating certificate issued pursuant to Part
121 of the Federal Aviation Regulations;
(2) the surviving corporation has executed an assumption
agreement, in form and substance reasonably satisfactory to the
Lender, pursuant to which such surviving corporation has agreed
to assume all of the Borrower's obligations under the
Transaction Documents;
(3) immediately after such merger or consolidation, no
Borrower Event of Default shall have occurred and be continuing;
and
(4) the net worth of the surviving corporation shall be at
least equal to the lesser of:
(x) the Borrower's net worth immediately prior to
such merger or consolidation; and
27
(y) the greater of (i) 75% of the Borrower's net
worth immediately prior to such merger or consolidation,
and (ii) $75,000,000.
The Borrower shall not voluntarily suspend all or substantially all of its
commercial airline operations.
(ii) The Borrower will do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate rights, powers,
privileges and franchises, except for any corporate right, power, privilege or
franchise that it determines is no longer necessary or desirable in the conduct
of its business.
(g) USE OF PROCEEDS. The Borrower agrees to apply the proceeds of
each Loan for each Aircraft solely and exclusively to installments of the
purchase price of such Aircraft to be purchased under the Purchase Agreement.
(h) PARI PASSU RANKING. The Borrower shall ensure that its
obligations hereunder do and will rank at least pari passu with all its other
present and future unsecured obligations, except for obligations mandatorily
preferred by law applying to companies generally.
SECTION 6
DEFAULTS
6.1 EVENTS OF DEFAULT. If one or more of the following events (each,
an "EVENT OF DEFAULT") shall have occurred and be continuing:
(a) the Borrower shall fail to pay any principal amount of any Loan
required to be paid under this Agreement when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
acceleration or otherwise;
(b) the Borrower shall fail to make payment of any interest payable
under this Agreement after the same shall have become due and payable for
more than three Business Days after the due date; or the Borrower shall
fail to make any payment of any amount (other than principal or interest)
payable under this Agreement within six Business Days after the same shall
have become due and payable;
28
(c) the Borrower shall fail to perform or comply with any term
contained in Sections 5(f) through 5(g), inclusive, of this Agreement;
(d) the Borrower shall fail to perform or comply with any other
covenant or agreement to be performed or observed by it under this
Agreement and, if capable of remedy, such failure shall continue
unremedied for a period of 30 days after the earlier of written notice
thereof shall have been given by the Lender to the Borrower and the
Borrower becoming aware of such default;
(e) any representation or warranty of the Borrower contained in this
Agreement or in any document or certificate delivered in connection
herewith or pursuant hereto shall at any time prove to have been incorrect
or incomplete in any material respect at the time made or repeated;
(f) the Borrower or any of its Material Subsidiaries shall consent to
the appointment of or taking possession by a receiver, assignee,
custodian, sequestrator, trustee or liquidator (or other similar official)
of itself or of all or a substantial part of its property, or the Borrower
or any of its Material Subsidiaries shall admit in writing its inability
to pay its debts generally as they come due or shall fail generally to pay
its debts as they become due, or shall make a general assignment for the
benefit of its creditors, or the Borrower or any of its Material
Subsidiaries shall file a voluntary petition in bankruptcy or a voluntary
petition or answer seeking liquidation, reorganization or other relief
with respect to itself or its debts under the Federal bankruptcy laws, as
now or hereafter constituted or any other applicable Federal or State
bankruptcy, insolvency or other similar law, or shall consent to the entry
of an order for relief in an involuntary case under any such law or the
Borrower or any of its Subsidiaries shall file an answer admitting the
material allegations of a petition filed against it in any such
proceeding, or otherwise seek relief under the provisions of any existing
or future Federal or State bankruptcy, insolvency or other similar law
providing for the reorganization or winding-up of corporations, or
providing for an arrangement, agreement, composition, extension or
adjustment with its creditors, or the Borrower or any of its Material
Subsidiaries shall take or publicly announce its intention to take
corporate action in furtherance of any of the foregoing;
(g) an order, judgment or decree shall be entered in any proceeding
by any court of competent jurisdiction appointing, without the consent of
the Borrower or any of its Material Subsidiaries, a receiver, trustee or
liquidator of the Borrower or any of its Material Subsidiaries (as the
case may be) or of all or any substantial part of its property, or all or
any substantial part of the property of the Borrower or any of its
Material Subsidiaries shall be sequestered, and any such order, judgment
of decree of
29
appointment or sequestration shall remain in force undismissed, unstayed
or unvacated for a period of 60 days after the date of entry thereof;
(h) a petition against the Borrower or any of its Material
Subsidiaries in a proceeding under the Federal bankruptcy laws or other
insolvency laws, as now or hereafter in effect, shall be filed and shall
not be withdrawn or dismissed within 60 days thereafter, or a decree in
respect of the Borrower or any of its Material Subsidiaries shall be
entered by a court of competent jurisdiction in an involuntary case under
the Federal bankruptcy laws, as now or hereafter constituted, and such
decree shall remain unstayed and in effect for a period of 60 days, or,
under the provisions of any law providing for reorganization or winding-up
of corporations which may apply to the Borrower or any of its Material
Subsidiaries, any court of competent jurisdiction shall assume
jurisdiction, custody or control of the Borrower or any of its Material
Subsidiaries or of all or any substantial part of its property and such
jurisdiction, custody or control shall remain in force unrelinquished,
unstayed or unterminated for a period of 60 days;
(i) (i) the Borrower shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is reasonably likely to result in
the termination of such Plan for purposes of Title IV of ERISA (other than
a standard termination pursuant to Section 4041(b) of ERISA), (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA,
(v) the Borrower or any Commonly Controlled Entity shall, or is reasonably
likely to, incur any liability in connection with a withdrawal from, or
the insolvency or reorganization of, a Multiemployer Plan, (vi) the
occurrence or expected occurrence of any event or condition which results
or is reasonably likely to result in the Borrower or any Commonly
Controlled Entity becoming responsible for any liability in respect of a
Former Plan, or (vii) any other event or condition shall occur or exist
with respect to a Plan; and in each case in clauses (i) through (vii)
above, such event or condition, together with all other such events or
conditions, if any, would result in liability which would have a Material
Adverse Effect;
30
(j) the Lender shall have received notice from the Guarantor that
there shall have occurred and be continuing an "Event of Default" under
the Reimbursement Agreement;
(k) the Guaranty or the Parent Guarantee ceases to confer on the
Lender the guarantee it purports to create unless within 10 Business Days
of the Borrower's becoming aware of the same an alternative guarantee
acceptable to the Lender in its absolute discretion is put in place; or
(l) any "Buy-Out Event" occurs and is continuing under the Guaranty
and the Guarantor shall have failed to purchase, as requested by the
Lender, all then outstanding Loans as provided in Section 5(d) of the
Guaranty;
then, and in every such event, the Lender may by notice to the Borrower (x)
terminate its Commitment to make Loans hereunder and (y) declare all Loans to
be, and all Loans, together with accrued interest and all other amounts, shall
thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; PROVIDED that in the case of any of the Events of Default specified in
clauses (f), (g), (h) and (j) above with respect to the Borrower, without any
notice to the Borrower or any other act by the Lender, all Loans shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower.
SECTION 7
MISCELLANEOUS
7.1 NOTICES. All notices, requests and other communications to any
Person hereunder shall be in writing (including bank wire, facsimile
transmission or similar writing) and shall be given to such party at its address
or facsimile number set forth below or such other address or facsimile number as
such Person may hereafter specify for the purpose by notice to the Lender and
the Borrower:
31
If to the Borrower:
Hawaiian Airlines, Inc.
0000 Xxxxxxx Xxxxxx, X-000
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Executive Vice President and
Chief Financial Officer
Telecopier: (000) 000-0000
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopier: (000) 000-0000
If to the Lender:
Kreditanstalt fur Wiederaufbau
Xxxxxxxxxxxxxxxxxxx 0-0
00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
Attention: Export and Project Finance--Aerospace
Telecopier: 49-69-7431-2944
If to the Guarantor:
Rolls-Royce Deutschland GmbH
Xxxxxxxxx 00
00000 Xxxxxxxxx
Xxxxxxx
Attention: Head of Finance
Telecopier: 49-33-708-63633
32
with a copy to:
Rolls-Royce plc
00 Xxxxxxxxxx Xxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attention: Director of Treasury
Telecopier: 00-0000-000 981
Each such notice, request or other communication shall be effective when
received by the addressee.
7.2 NO WAIVERS; REMEDIES CUMULATIVE. No failure or delay by the
Lender in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
7.3 EXPENSES; DOCUMENTARY TAXES; INDEMNIFICATION. (a) The Borrower
shall be liable to pay on demand (i) all reasonable fees and disbursements of
counsel to the Lender in connection with the preparation of all of the
Transaction Documents, and all reasonable out-of-pocket expenses of the Lender,
including reasonable fees and disbursements of counsel, in connection with any
waiver or consent thereunder or any amendment thereof or any Borrower Default or
alleged Borrower Default hereunder, excluding (unless incurred following the
occurrence of a Borrower Event of Default) any expenses in connection with any
assignment of or grant of a participation in the Lender's interest herein
pursuant to Section 7.8 and (ii) if a Borrower Default occurs, all reasonable
out-of-pocket expenses incurred by the Lender, including reasonable fees and
disbursements of counsel, in enforcing or preserving its rights hereunder in
connection with such Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
(b) The Borrower shall indemnify the Lender and hold the Lender
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the fees and disbursements
of counsel, that may be incurred by the Lender in connection with any
investigative, administrative or judicial proceeding (whether or not the Lender
shall be designated a party thereto) (other than with respect to
33
Taxes, but without limiting the Borrower's obligations under Section 2.11)
relating to or arising out of this Agreement or any actual or proposed use of
the proceeds of any Loan hereunder; PROVIDED that the Lender shall not have
the right to be indemnified hereunder for (i) its own gross negligence or
willful misconduct as determined by a court of competent jurisdiction or (ii)
for liabilities, losses, damages, costs or expenses incurred in connection
with any dispute or proceeding among the Lender and its assignees.
(c) If the Lender receives an amount in respect of the Borrower's
liability under the Transaction Documents or if that liability is converted into
a claim, proof, judgment or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be payable under the
relevant Transaction Document, (i) the Borrower shall indemnify the Lender as an
independent obligation against any loss or liability arising out of or as a
result of the conversion, (ii) if the amount received by the Lender, when
converted into the contractual currency at a market rate in the usual course of
its business is less than the amount owed in the contractual currency, the
Borrower shall forthwith on demand pay to the Bank an amount in the contractual
currency equal to the deficit, and (iii) the Borrower shall forthwith on demand
pay to the Lender any exchange costs and taxes payable in connection with any
such conversion.
7.4 TRANSACTION EVIDENCE AND CALCULATIONS. Accounts maintained by the
Lender in connection with this Agreement are prima facie evidence of the matters
to which they relate. Any certification or determination by the Lender of a rate
or amount under the Transaction Documents is, in the absence of manifest error,
conclusive evidence of the matters to which it relates. Interest and the fee
payable under Sections 2.3 and 2.6 accrue from day to day and are calculated on
the basis of the actual number of days elapsed and a year of 360 days.
7.5 SETOFF. In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such rights,
upon the occurrence of an Event of Default, the Lender is hereby authorized at
any time or from time to time, without presentment, demand, protest or other
notice of any kind to the Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other indebtedness at any time held or
owing by the Lender (including, without limitation, by branches and agencies of
the Lender wherever located) to or for the credit or the account of the Borrower
against and on account of the obligations and liabilities of the Borrower to the
Lender under this agreement, including, without limitation, all claims of any
nature or description arising out of or connected with this Agreement or any
other Transaction Document to which the Borrower is a party, irrespective of
whether or not the Lender
34
shall have made any demand hereunder and although said obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
7.6 SEVERABILITY. If a provision of any Transaction Document is or
becomes illegal, invalid or unenforceable in any jurisdiction, that shall not
affect the validity or enforceability in that jurisdiction of any other
provision of the Transaction Documents or the validity or enforceability in
other jurisdictions of that or any other provision of the Transaction Documents.
7.7 AMENDMENTS AND WAIVERS. The Delivery Schedule may be amended as
provided in Section 2.7. Any other provision of this Agreement may be amended or
waived, or any provision of the Guaranty may be waived if, but only if, such
amendment or waiver is in writing and is signed by the Lender, and in the case
of this Agreement, by the Borrower.
7.8 SUCCESSORS AND ASSIGNS. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of the Lender, unless such assignment or transfer is
pursuant to a merger or consolidation or a conveyance, transfer or lease of all
or substantially all its assets, each permitted under the Transaction Documents.
Except as set forth in Section 7.8(c), the Lender may not assign any part of its
rights or obligations under this Agreement.
(b) The Lender may at any time grant to one or more banks or other
institutions (each a "PARTICIPANT") participating interests in its Loans and all
other interests hereunder. In the event of any such grant by the Lender of a
participating interest to a Participant, whether or not upon notice to the
Borrower, the Lender shall remain solely responsible for the performance of its
obligations hereunder, and the Borrower shall continue to deal solely and
directly with the Lender in connection with the Lender's rights and obligations
under this Agreement. Any agreement pursuant to which the Lender may grant such
a participating interest shall provide that the Lender shall retain the sole
right and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; PROVIDED that such participation
agreement may provide that the Lender will not agree to any modification,
amendment or waiver of this Agreement, without the consent of the Participant,
which would (i) subject the Lender to any additional obligation, (ii) reduce the
principal of or rate of interest on any Loan hereunder, (iii) postpone the date
fixed for any payment of principal of or interest on any Loan hereunder (except
as provided for in Section 2.7) or (iv) change the aggregate unpaid
35
principal amount of any Loan hereunder. An assignment or other transfer that
is not permitted by subsection (c) below shall be given effect for purposes
of this Agreement only to the extent of a participating interest granted in
accordance with this subsection (b).
(c Solely in connection with a purchase of Loans by the Guarantor or
its designee pursuant to Section 5 of the Guaranty or, following such a
purchase, the assignment of the interest of the Guarantor or its designee in
such Loans to one or more subsequent assignees designated by the Guarantor, the
Lender shall assign to the Guarantor or such assignees, as the case may be,
(each an "ASSIGNEE") all, or a proportionate part of all, of its rights under
this Agreement, pursuant to an Assignment Agreement executed by such Assignee
and the Lender; PROVIDED that the parties to each such assignment shall deliver
to the Lender, for recording in the Register, the Assignment Agreement between
the parties. Upon execution and delivery of such an Assignment Agreement and
payment by such Assignee to the Lender of an amount equal to the purchase price
agreed between the Lender and such Assignee, such Assignee shall be a "Lender"
party to this Agreement and shall have all the rights of a "Lender" with Loans
as set forth in such instrument of assumption and the obligations of a "Lender"
hereunder to the extent assumed by such Assignee, and the Lender shall be
released from its obligations, if any, hereunder to the extent such obligations
are expressly assumed by the Assignee, and no further consent or action by any
party shall be required. By executing and delivering an Assignment Agreement,
the Assignee confirms for the benefit of the Borrower that it agrees to be bound
by the terms of this Agreement and that it will perform the obligations of a
"Lender" in accordance with the terms hereof.
(d The Borrower agrees that each Participant or other transferee
under this Section 7.8 shall (to the extent, in the case of a Participant,
provided in its participation agreement) be entitled to the benefits of Section
2.9, Section 2.11 and Section 2.12 with respect to such Participant's or
transferee's interest, but no Participant or other transferee shall be entitled
to receive any greater payment under Section 2.9, Section 2.11 or Section 2.12
than the Lender which was an original party hereto would have been entitled to
receive with respect to the rights transferred to such Participant or
transferee.
(e Upon its receipt of an Assignment Agreement executed by the Lender
and an Assignee, the Lender shall record the information contained therein in
the Register and give prompt written notice thereof to the Borrower.
7.9 GOVERNING LAW; SUBMISSION TO JURISDICTION. (a) This Agreement is
being delivered in the State of New York and shall be governed by and construed
in accordance with the laws of the State of New York.
36
(b The Borrower hereby irrevocably and unconditionally agrees that
any suit, action or proceeding with respect to this Agreement or the Note, or
any action or proceeding to execute or otherwise enforce any judgment in respect
of any breach thereof, brought by the Lender against the Borrower or any of its
property, may be brought by the Lender in any court of the State of New York or
any Federal court sitting in the Borough of Manhattan, the City of New York, and
by the execution and delivery of this Agreement or the Note, the Borrower
irrevocably submits to the non-exclusive jurisdiction of each such court; and,
without limitation of any other method of service permitted by law, agrees that
process served either personally or by registered mail sent in accordance with
Section 7.1 shall constitute adequate service of process in any such suit.
(c Without limiting the foregoing, the Borrower hereby appoints, in
the case of any such action or proceeding brought in the courts of or in the
State of New York, CT Corporation System of 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, to receive, for it and on its behalf, service of process
in the State of New York with respect thereto (with a copy to Hawaiian Airlines,
Inc., 0000 Xxxxxxx Xxxxxx, X-000, Xxxxxxxx, Xxxxxx 00000, Attn: Xxx X. Xxxxx,
Vice President and General Counsel).
(d In addition, the Borrower hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue in any suit, action or proceeding arising out of or
relating to this Agreement or the Note, brought in any such courts, and hereby
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
(e Nothing herein shall in any way be deemed to limit the ability of
the Lender to serve any such writs, process or summonses, in such manner, and to
obtain jurisdiction over the Borrower in such other jurisdictions, as may be
permitted by Applicable Law.
7.10 COUNTERPARTS; INTEGRATION. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement constitutes the entire agreement and understanding among the parties
hereto and supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof.
7.11 WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE LENDER HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
37
7.12 CONFIDENTIALITY. The Lender agrees that it will treat the terms
of this Agreement and the Purchase Agreement as confidential and including
without limitation, all information that it receives regarding advance payments
due under the Purchase Agreement, the purchase price of the Aircraft, and any
financing arrangements with respect thereto and will not, without the prior
written consent of the Borrower, disclose, or cause to be disclosed, the terms
hereof or thereof to any Person except to its counsel and auditors and to the
Guarantor, or except (a) as may be required by Applicable Law or pursuant to an
order issued by any court or governmental agency or authority having
jurisdiction over the Lender, as the case may be, or (b) as necessary to enable
the Lender to make assignments or grant participations in its interest, in each
case as permitted hereunder; PROVIDED that in each case described in clause (b),
the Lender will use its best efforts to limit disclosure to such third persons
on a need-to-know basis and to obtain the written agreement of each such third
person to whom such terms are disclosed that such person shall not further
disclose such terms, except as permitted by clauses (a) and (b).
7.13 PAYMENTS UNDER GUARANTY. The Lender agrees that any payment made
by the Guarantor under the Guaranty in respect of amounts owed by the Borrower
hereunder shall, as between the Borrower and the Lender, be deemed a payment of
the amount owed hereunder for all purposes of this Agreement.
38
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
HAWAIIAN AIRLINES, INC.
By /s/
--------------------------------
Title:
By /s/
--------------------------------
Title:
KREDITANSTALT FUR WIEDERAUFBAU
By /s/
--------------------------------
Title:
By /s/
--------------------------------
Title:
SCHEDULE I
DELIVERY SCHEDULE
REDACTED IN ITS ENTIRETY.
EXHIBIT A
FORM OF NOTE
New York, New York
________, 2000
For value received, Hawaiian Airlines, Inc., a Hawaiian corporation
(the "Borrower"), promises to pay to
KREDITANSTALT FUR WIEDERAUFBAU,
or its registered assigns (the "Lender"), for the account of such Lending Office
as the Lender may designate, the lesser of Twenty-Two Million Five Hundred
Thousand Dollars and the unpaid principal amount of each Loan made by the Lender
to the Borrower pursuant to the Loan Agreement referred to below on the date
provided for in the Loan Agreement. The Borrower promises to pay interest on the
unpaid principal amount of each such Loan on the dates and at the rate or rates
provided for in the Loan Agreement. All such payments of principal and interest
shall be made in United States dollars in immediately available funds to the
Lender, at 109 260 93 Citibank N.A., 000 Xxxx Xxxxxx 21st Floor, New York, New
York, or such other account as the Lender may designate.
All Loans made by the Lender and all repayments of the principal
thereof shall be recorded by the Lender and appropriate notations to evidence
the foregoing information with respect to each such Loan then outstanding shall
be endorsed by the Lender on the schedule attached hereto, or on a continuation
of such schedule attached to and made a part hereof; PROVIDED that the failure
of the Lender to make any such recordation or endorsement shall not in any way
affect the obligations of the Borrower hereunder or under the Loan Agreement and
the Borrower shall not be bound by any entry not made in accordance with the
Loan Agreement.
This note is the Note referred to in the Loan Agreement, dated as of
________, 2000 (as amended from time to time, the "LOAN AGREEMENT"), among the
Borrower and Kreditanstalt fur Wiederaufbau (the "LENDER") and the Guaranty
Agreement, dated as of ________, 2000, between Rolls-Royce Deutschland GmbH and
the Lender. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Loan Agreement.
In case an Event of Default shall occur and be continuing, the
principal of and accrued interest on this Note may be declared to be due and
payable, or shall be automatically due and payable as provided in the Loan
Agreement, in the manner and with the effect provided in the Loan Agreement.
The Borrower may at its option prepay all or any part of the
principal of any Loan before maturity upon the terms provided in the Loan
Agreement and the holder of this Note agrees by acceptance of this Note to apply
the amounts received in prepayment to the Loan specified in any prepayment
notice.
This Note may not be assigned or transferred except in accordance
with the terms of the Loan Agreement. This Note is a registered Note, and the
Borrower may deem and treat the registered holder of this Note as the absolute
owner and holder hereof for all purposes whether or not this Note is overdue and
shall not be affected by any notice to the contrary. The Borrower acknowledges
that participation in this Note may be sold by the holder hereof as provided in
the Loan Agreement.
This Note is being delivered in the State of New York and shall be
governed by and construed in accordance with the laws of the State of New York.
HAWAIIAN AIRLINES, INC.
By
-----------------------------------
Title:
By
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Title:
NOTE (CONT'D)
LOANS
AND
PAYMENTS OF PRINCIPAL
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EXHIBIT B
LOAN REQUEST
[for borrowing under Loan Agreement]
Kreditanstalt fur Wiederaufbau
Xxxxxxxxxxxxxxxxxxx 0-0
00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
Attention: Export and Project Finance--Aerospace
Gentlemen:
The undersigned, Hawaiian Airlines, Inc., refers to the Loan
Agreement, dated as of ________, 2000 (as amended from time to time, the "Loan
Agreement," the terms defined therein being used herein as therein defined),
among the undersigned and you, and hereby gives you notice, irrevocable,
pursuant to Section 2.1(c) of the Loan Agreement, that the undersigned hereby
requests that Loans be made under the Agreement as follows:
(i) The day of the proposed Loans is _______ __, ____ (the "PROPOSED
LOAN DATE"), which is an Advance Payment Date for Aircraft #_________ and
Aircraft #________.
(ii) Please disburse an aggregate principal amount of $_____________,
consisting of a Loan $___________ relating to Aircraft #____ and a Loan
$_______________, relating to Aircraft #________, which is equal to the
Financed Advance Payment for such Aircraft required to be made on the
Proposed Loan Date pursuant to the Purchase Agreement.
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Loan:
(A) the representations and warranties contained in Section 4 of the
Loan Agreement are correct, before and after giving effect to the proposed
Loans and to the application of the proceeds thereof, as though made on
and as of such date;
(B) no Borrower Default or Borrower Event of Default has occurred and
is continuing, or would result from such proposed Loans or from the
application of the proceeds thereof;
(C) each of the conditions set forth in clauses (b), (c), (e) and (f)
of Section 3.2 of the Loan Agreement is satisfied; and
(D) after giving effect to the proposed Loans, the aggregate
principal amount of all outstanding Loans shall not exceed either (i) the
amount of the Commitment or (ii) the Loan Limit, in each case at such
time.
[There has been no change to the Delivery Schedule since the Delivery
Schedule previously delivered to you.] /[There has been a change to the Delivery
Schedule since the Delivery Schedule previously delivered to you; attached is a
copy of the most recent Delivery Schedule.] The undersigned understands that the
making of the proposed Loans (to be received by the Manufacturer no later than
11:00 a.m., New York time, on [insert Proposed Loan Date]) is conditional upon
your receipt from the Manufacturer by facsimile transmission to the Guarantor's
facsimile number (49-33708) 6-3633 (to the attention of X. Xxxxxxx), and to your
facsimile number (00-00) 0000-0000 (to the attention of M. Zechannig and X.
Xxxxxxx), with copies by e-mail addressed to xxxxx.xxxxxxx@xxx.xx and
xxxxxx.xxxxxxxxx@xxx.xx no later than 11:00 a.m., New York time, on [insert date
that is two Business Days prior to the Proposed Loan Date], of a confirmation of
the undersigned's satisfaction of Section 3.2(c) of the Loan Agreement.
Very truly yours,
Hawaiian Airlines, Inc.
By
-------------------------------------
Title:
EXHIBIT C-1
[Form of Opinion of General Counsel of the Borrower]
EXHIBIT C-2
[Form of Opinion of Special Counsel to Borrower]
EXHIBIT D-1
[Form of Opinion of Special U.S. Counsel to the Guarantor]
___________, 1999
Kreditanstalt fur Wiederaufbau
Xxxxxxxxxxxxxxxxxxx 0-0
00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
ROLLS-ROYCE DEUTSCHLAND GMBH
Dear Sirs:
We have acted as counsel to Rolls-Royce Deutschland GmbH, a limited
liability company organized under the laws of Germany (the "Guarantor"), in
connection with the transactions contemplated by the Guaranty Agreement, dated
as of _________, 2000 (the "Guaranty Agreement"), by the Guarantor for the
benefit of Kreditanstalt fur Wiederaufbau (the "Lender"). Capitalized terms used
herein without definition shall have the meanings specified or referenced in the
Guaranty Agreement.
In so acting, we have participated in the preparation of the Guaranty
Agreement, and have examined and relied upon the representations and warranties
as to factual matters contained therein and upon the originals, or copies
certified or otherwise identified to our satisfaction, of such records,
documents and other instruments as in our judgment are necessary or appropriate
to enable us to render the opinion expressed below.
Based on the foregoing, we are of the following opinion:
1. The Guaranty Agreement constitutes the legal, valid and binding
obligation of the Guarantor, enforceable against the Guarantor in accordance
with its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, and except that we express no
opinion as to the enforceability of (a) Section 18 of the Guaranty Agreement,
insofar as such provision relates to the subject matter jurisdiction of the
United States District Court for the Southern District of New York to adjudicate
any controversy or (b) the waiver of inconvenient forum set forth in Section 18
of the Guaranty Agreement, with respect to any action commenced in the United
States District Court for the Southern District of New York.
2. Neither the execution and delivery by the Guarantor of the
Guaranty Agreement nor the performance of the obligations thereunder by the
Guarantor
(a) requires the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
governmental authority or agency of the United States or the State of New York
or (b) contravenes any law, rule or regulation of the United States or the State
of New York, except that we express no opinion as to any Federal or state
securities law.
3. The choice by the Guarantor of the laws of the State of New York
as the governing law of the Guaranty Agreement will be recognized and given
effect to in any action brought before any court of the State of New York or any
United States federal court in the State of New York.
In giving the opinion expressed herein, we have assumed with your
permission that the Guarantor is a company duly organized and validly existing
under the laws of Germany and has all requisite corporate power and authority to
enter into and to carry out the terms of the Guaranty Agreement and that the
Guaranty Agreement has been duly authorized by all necessary corporate action on
the part of the Guarantor and has been duly executed and delivered by the
Guarantor
We are members of the Bar of the State of New York and, with your
permission, our opinion expressed above is limited to the laws of the State of
New York and the Federal laws of the United States.
Very truly yours,
EXHIBIT D-2
[Form of Opinion of the Guarantor's In-House Counsel]
___________, 2000
Kreditanstalt fur Wiederaufbau
Xxxxxxxxxxxxxxxxxxx 0-0
00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
Dear Sirs:
I am the internal counsel of Rolls-Royce Deutschland GmbH, a limited
liability company organized under the laws of Germany (the "Guarantor"), and
have acted as such in connection with the Guaranty Agreement, dated as of
_________, 2000 (the "Guaranty Agreement"), executed by the Guarantor for the
benefit of Kreditanstalt fur Wiederaufbau (the "Lender") in connection with a
Loan Agreement, dated as of _______, 2000 (the "Loan Agreement"), between
Hawaiian Airlines, Inc. (the "Borrower") and the Lender.
In so acting, I have examined the Guaranty Agreement, the Loan
Agreement, a current excerpt from the Commercial Register, the Articles of
Incorporation dated September 5, 1980 and lastly revised on __________, 2000,
the Shareholders' Committee Resolution dated ____________, 2000, and have
examined and relied upon the representations and warranties as to factual
matters contained therein and upon the originals, or copies certified or
otherwise identified to my satisfaction, of such records, documents and other
instruments as in my judgment are necessary or appropriate to enable me to
render the opinion expressed below.
Based upon the foregoing, I am of the following opinion:
1. The Guarantor is a limited liability company duly organized,
validly existing and registered under the laws of Germany. The Guarantor has the
corporate power and authority to enter into and perform its obligations under
the Guaranty Agreement.
2. The Guaranty Agreement has been duly executed and delivered by the
Guarantor. The execution, delivery and performance by the Guarantor of the
Guaranty Agreement have been duly authorized by all necessary corporate action
on the part of the
Guarantor (including any required approval of shareholders of the Guarantor)
and do not require any approval or consent of any trustee or holder of any
indebtedness or obligations of the Guarantor known to me, and neither the
execution and delivery of the Guaranty Agreement by the Guarantor nor the
consummation of the transactions contemplated thereby nor the compliance by
the Guarantor with any of the terms and provisions thereof, to the best of my
knowledge, will contravene any judgment or order applicable to or binding on
the Guarantor, or contravene any constitutional document of the Guarantor or
any law, governmental rule or regulation applicable to or binding on the
Guarantor.
3. Neither the execution and delivery by the Guarantor of the
Guaranty Agreement, nor the consummation of any of the transactions by the
Guarantor contemplated thereby, requires the consent or approval of, the giving
of notice to, the registration with, or the taking of any other action in
respect of, any German governmental authority, agency or judicial body.
With your permission, my opinion is limited to the laws of Germany.
Very truly yours,
EXHIBIT D-3
[Form of Opinion of the Parent Guarantor's In-House Counsel]
___________, 2000
Kreditanstalt fur Wiederaufbau
Xxxxxxxxxxxxxxxxxxx 0-0
00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
Dear Sirs:
I am the General Counsel of Rolls-Royce plc, a company organised
under the laws of England ("Rolls-Royce"), and have acted as such in connection
with the Guarantee, dated as of _________, 2000 (the "Guarantee"), executed by
Rolls-Royce for the benefit of Kreditanstalt fur Wiederaufbau in connection with
a Guaranty Agreement, dated as of _______, 2000 (the "Guaranty Agreement"),
executed by Rolls-Royce Deutschland GmbH for the benefit of Kreditanstalt fur
Wiederaufbau.
In so acting, I have examined the Guarantee and the Guaranty
Agreement, and have examined and relied upon the representations and warranties
as to factual matters contained therein or made pursuant thereto and upon the
originals, or copies certified or otherwise identified to my satisfaction, of
such records, documents and other instruments as in my judgment are necessary or
appropriate to enable me to render the opinion expressed below.
Based upon the foregoing, and subject to matters not disclosed to me
and to matters of fact which would affect the conclusions set out below, I am of
the following opinion:
1. Rolls-Royce is a company duly organised, validly existing and
registered under the laws of England. Rolls-Royce has the corporate power and
authority to enter into and perform its obligations under the Guarantee.
2. The Guarantee has been duly executed and delivered by Rolls-Royce.
The execution, delivery and performance by Rolls-Royce of the Guarantee have
been duly authorised by all necessary corporate action on the part of
Rolls-Royce and do not require any approval of shareholders of Rolls-Royce or
any approval or consent of any trustee or holder of any indebtedness or
obligations of Rolls-Royce known to me, and neither the execution and delivery
of the Guarantee by Rolls-Royce nor the consummation of the transactions
contemplated thereby nor the compliance by Rolls-Royce with any of the terms and
provisions thereof will contravene any judgment or order known to me to be
applicable to or binding on Rolls-Royce, or contravene the memorandum or
articles of association of Rolls-Royce or any English law, governmental rule or
regulation applicable to or binding on Rolls-Royce.
3. Neither the execution and delivery by Rolls-Royce of the
Guarantee, nor the consummation of any of the transactions by Rolls-Royce
contemplated thereby, requires the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect of, any
English governmental authority, agency or judicial body.
This opinion is furnished by me to you and is solely for your
benefit. My opinion is limited to the laws of England.
Very truly yours,
EXHIBIT E
[Form of Assignment Agreement]
Reference is made to the Loan Agreement, dated as of ________, 2000
(as amended or supplemented from time to time, the "Loan Agreement"), between
Hawaiian Airlines, Inc., as Borrower, and Kreditanstalt fur Wiederaufbau, as
Lender. Capitalized terms used herein without definition shall have the same
meanings ascribed in the Loan Agreement.
The Assignor named below hereby sells and assigns, without recourse,
to the Assignee named below, and the Assignee hereby purchases and assumes,
without recourse, as of the Assignment Date set forth below, the interests set
forth herein (the "Assigned Interest") in the Assignor's rights and obligations
under the Loan Agreement, including, without limitation, the interests set forth
herein in the Commitment of the Assignor on the Assignment Date and the Loans
owing to the Assignor which are outstanding on the Assignment Date, together
with the corresponding interests of the Assignor under the Guaranty Agreement
and the Parent Guarantee, but excluding accrued interest and fees to and
excluding the Assignment Date. The Assignee hereby acknowledges receipt of a
copy of the Loan Agreement, the Guaranty Agreement and the Parent Guarantee and
after the Assignment Date, (i) the Assignee shall be a party to and be bound by
the terms of the Loan Agreement (including, without limitation, Section 7.8
thereof), the Guaranty Agreement and the Parent Guarantee and, to the extent of
the Assigned Interest, have rights and obligations of a Lender thereunder and
(ii) the Assignor, to the extent of the Assigned Interest, relinquish its rights
and be released from its obligations thereunder.
This Assignment Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
("Assignment Date"):
Facility Principal Amount Assigned
-------- -------------------------
Loans $
Commitment $
The terms set forth above hereby agreed to:
, as Assignor
-------------------
By
-----------------------------
Name:
Title:
, as Assignee
-------------------
By
-----------------------------
Name:
Title:
The Guarantor acknowledges receipt of a copy of the within assignment and
confirms that the Guaranty Agreement remains in full force and effect for the
benefit of the Assignee to the extent of the Assigned Interest.
Rolls-Royce Deutschland GmbH
By
----------------------------------
Name:
Title:
The Parent Guarantor acknowledges receipt of a copy of the within assignment and
confirms that the Parent Guarantee remains in full force and effect for the
benefit of the Assignee to the extent of the Assigned Interest.
Rolls-Royce plc
By
----------------------------------
Name:
Title:
EXECUTION COPY
===============================================================================
HAWAIIAN AIRLINES, INC.,
Borrower
KREDITANSTALT FUR WIEDERAUFBAU,
Lender
LOAN AGREEMENT
$
------------
----------------
Dated as of May 26, 2000
----------------
===============================================================================
TABLE OF CONTENTS
PAGE
SECTION 1 DEFINITIONS AND INTERPRETATION....................................................... 1
1.1 Definitions.......................................................................... 1
1.2 Interpretation....................................................................... 8
1.3 Accounting Terms and Determinations.................................................. 8
SECTION 2 AGREEMENT FOR THE LOAN............................................................... 9
2.1 The Loans............................................................................ 9
2.2 Note................................................................................. 10
2.3 Interest............................................................................. 10
2.4 Repayment............................................................................ 11
2.5 Manner and Time of Payments.......................................................... 12
2.6 Commitment Commission, Fees, Voluntary Reductions of Commitments..................... 12
2.7 Amendment of Delivery Schedule....................................................... 13
2.8 Register............................................................................. 14
2.9 Additional Costs; Illegality......................................................... 14
2.10 Mitigation........................................................................... 15
2.11 Net Payments......................................................................... 15
2.12 Funding Costs........................................................................ 17
SECTION 3 CONDITIONS........................................................................... 17
3.1 Conditions Precedent to Initial Loan................................................. 17
3.2 Conditions Precedent to All Loans.................................................... 19
SECTION 4 REPRESENTATIONS AND WARRANTIES....................................................... 20
4.1 Representations and Warranties....................................................... 20
(a) Corporate Organization, etc.................................................. 20
(b) Due Authorization............................................................ 20
(c) Litigation................................................................... 21
(d) Financial Statements......................................................... 21
(e) Taxes........................................................................ 21
(f) No Default................................................................... 22
(g) Investment Company Act; Margin Regulations................................... 22
(h) Public Utility Holding Company Act........................................... 22
(i) Legal, Valid and Binding Agreements.......................................... 22
(j) Compliance with ERISA........................................................ 22
(k) Choice of Law................................................................ 23
PAGE
(l) Taxes on Payments............................................................ 23
(m) No Immunity.................................................................. 23
4.2 Times for Making Representations and Warranties...................................... 23
SECTION 5 COVENANTS............................................................................ 23
5.1 Covenants............................................................................ 23
(a) Performance of Obligations................................................... 23
(b) Compliance with Laws......................................................... 24
(c) Certificated Air Carrier..................................................... 24
(d) Notice of Borrower Default and Borrower Event of Default..................... 24
(e) Financial Statements and Other Reports....................................... 24
(f) Preservation of Corporate Existence, etc..................................... 26
(g) Use of Proceeds.............................................................. 27
(h) Pari Passu Ranking........................................................... 27
SECTION 6 DEFAULTS............................................................................. 27
6.1 Events of Default.................................................................... 27
SECTION 7 MISCELLANEOUS........................................................................ 30
7.1 Notices.............................................................................. 30
7.2 No Waivers; Remedies Cumulative...................................................... 32
7.3 Expenses; Documentary Taxes; Indemnification......................................... 32
7.4 Transaction Evidence and Calculations................................................ 33
7.5 Setoff............................................................................... 33
7.6 Severability......................................................................... 33
7.7 Amendments and Waivers............................................................... 33
7.8 Successors and Assigns............................................................... 33
7.9 Governing Law; Submission to Jurisdiction............................................ 35
7.10 Counterparts; Integration............................................................ 36
7.11 WAIVER OF JURY TRIAL................................................................. 36
7.12 Confidentiality...................................................................... 36
7.13 Payments Under Guaranty.............................................................. 36
Schedule I -- Delivery Schedule
Exhibit A -- Form of Note
Exhibit B -- Form of Loan Request
Exhibit C-1 -- Form of Opinion of General Counsel of the Borrower
Exhibit C-2 -- Form of Opinion of Special Counsel to the Borrower
Exhibit D-1 -- Form of Opinion of Special U.S. Counsel to the Guarantor
Exhibit D-2 -- Form of Opinion of In-House Counsel of the Guarantor
Exhibit D-3 -- Form of Opinion of General Counsel of the Parent Guarantor
Exhibit E -- Form of Assignment Agreement
SECURED REIMBURSEMENT AGREEMENT, dated as of May 26, 2000, between
HAWAIIAN AIRLINES, INC., a Hawaiian corporation (the "BORROWER"), and
ROLLS-ROYCE DEUTSCHLAND GMBH, a limited liability company organized under the
laws of Germany (the "GUARANTOR").
WHEREAS:
(A) The Borrower has entered into Purchase Agreement No. 2252, dated
as of December 31, 1999 (the "PURCHASE AGREEMENT"), with XxXxxxxxx Xxxxxxx
Corporation (the "MANUFACTURER") providing for, among other things, the
manufacture and sale of certain Model 717-22A aircraft described therein.
(B) Concurrently herewith, the Borrower is entering into a Loan
Agreement (the "LOAN AGREEMENT") with Kreditanstalt fur Wiederaufbau (the
"LENDER") providing for the financing of certain pre-delivery payments due the
Manufacturer under the Purchase Agreement.
(C) The Guarantor will, subject to the conditions set forth in
Section 3, enter into a Guaranty Agreement (the "GUARANTY AGREEMENT") with the
Lender providing for the guaranty by the Guarantor of the Borrower's obligations
to pay certain scheduled principal and interest payments and certain other
payments under the Loan Agreement (the "GUARANTEED PAYMENTS").
(D) Rolls-Royce plc (the "PARENT GUARANTOR") will enter into a
Guarantee (the "PARENT GUARANTEE") in favor of the Lender providing for the
guaranty of the Guarantor's obligations under the Guaranty Agreement.
(E) To induce the Guarantor to enter into the Guaranty Agreement and
the Parent Guarantor to enter into the Parent Guarantee, the Borrower is
entering into this Agreement providing for, among other things, the
reimbursement by the Borrower to the Guarantor of all payments made by the
Guarantor under the Guaranty Agreement with respect to the Guaranteed Payments.
(F) As a condition precedent to the Guarantor entering into the
Guaranty Agreement and the Parent Guarantor entering into the Parent Guarantee
and to secure performance by the Borrower of its obligation to repay amounts
paid by the Guarantor to the Lender and the Borrower's other obligations under
this Agreement, whether direct or indirect, absolute or contingent, now or
hereafter existing or due or to become due, the Borrower is, concurrently with
the execution and delivery of this Agreement, granting to the Guarantor a first
priority security interest in the Purchase Agreement pursuant to and
1
subject to the terms of a Security Agreement (the "SECURITY AGREEMENT")
between the Borrower and the Guarantor.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, receipt
of which is hereby acknowledged, the parties agree as follows:
SECTION 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. (a) In this Agreement, unless the context
requires another meaning:
"AFFILIATE" means, as to any Person, any other Person directly or
indirectly controlling, or controlled by or under common control with such
Person, including without limitation any Person owning 10% or more of any class
of voting securities of such Person ("control" meaning the power to direct the
management of a Person, whether by the ownership of securities or by contract or
otherwise).
"CAPITAL LEASE" means any lease that has been or should be
capitalized in accordance with GAAP.
"CONSISTENT BASIS" means, in reference to the application of GAAP,
the accounting principles observed in the period referred to are comparable in
all material respects to those applied in the preparation of the audited
financial statements of the Borrower referred to in Section 5.1(e).
"EVENT OF DEFAULT" means any event specified in Section 6.1.
"INDEBTEDNESS FOR MONEY BORROWED" means, with respect to any Person,
without duplication, all indebtedness in respect of money borrowed, including
all Capital Leases and the deferred purchase price of any property or asset,
evidenced by a promissory note, bond, debenture or similar written obligation
for the payment of money (including conditional sales or similar title retention
agreements), other than accounts and trade payables incurred in the ordinary
course of business.
2
"LIBOR" means, for any period, (I) the rate for deposits in Dollars
for a period comparable to such period which rate appears on Telerate Page 3750
as of 11:00 a.m., London time, two Business Days prior to the date such period
begins, or (II) if no such rate appears on such Telerate Page 3750, the rate
quoted by a bank, as determined by the Guarantor, to other banks in the London
eurodollar market at or about 11:00 a.m. London time, two Business Days prior to
the date such period begins, for deposits in Dollars for a period comparable to
such period.
"REIMBURSEMENT OBLIGATIONS" means all amounts payable by the Borrower
under Sections 2.1, 2.2 and 2.7.
(b) Capitalized terms used in this Agreement without definition are
as defined in the Loan Agreement.
1.2 INTERPRETATION. Section 1.2 of the Loan Agreement and the rules
of interpretation set forth therein are hereby incorporated by reference in this
Agreement as if set forth fully herein.
1.3 ACCOUNTING AND FINANCIAL DETERMINATIONS. Except as otherwise
required by the terms and provisions hereof, all accounting terms used in this
Agreement and the Security Agreement shall be construed, and all financial
calculations made for purposes hereof and thereof and all other determinations
relating generally to the financial condition or operations of the Borrower
shall be made, in accordance with GAAP applied on a basis consistent (except for
changes concurred in by the Borrower's independent public accountants) with the
most recent audited financial statements of the Borrower and its Subsidiaries
delivered to the Guarantor.
SECTION 2
REIMBURSEMENT
2.1 REIMBURSEMENT OBLIGATION OF THE BORROWER. If the Guarantor shall
make any payment to the Lender, or any other payment (including withholding
taxes) for the benefit of the Lender, under the Guaranty Agreement with respect
to the Guaranteed Payments (as defined therein), whether made directly or by
means of a set-off, the Borrower shall immediately, on demand, pay to the
Guarantor, or, at the direction of the Guarantor if the Parent Guarantor has
made a payment referred to in the next sentence, to the Parent Guarantor, an
amount or amounts equal to the amount of such payment. For all purposes
3
hereof, all payments made by the Parent Guarantor to the Lender under the
Parent Guarantee in satisfaction of the Guarantor's obligations under the
Guaranty Agreement shall be deemed made by the Guarantor to the Lender under
the Guaranty Agreement.
2.2 INTEREST. The Borrower will pay the Guarantor interest at the
rate of LIBOR for such successive periods as the Guarantor may select plus ____
on:
(a) any and all amounts paid by the Guarantor under the Guaranty
Agreement with respect to the Guaranteed Payments; and
(b) all amounts payable to the Guarantor under Section 2.7,
from, in the case of clause (a), the date such amounts were paid by the
Guarantor or, in the case of clause (b), the date such amounts are payable to
the Guarantor, to but not including the date of reimbursement or payment in full
by the Borrower.
2.3 METHOD AND PLACE OF PAYMENT. All payments by the Borrower to the
Guarantor under this Agreement shall be made in Dollars in immediately available
funds not later than 11:00 a.m. on the scheduled due date, New York City time,
to the Guarantor's account (_____________) maintained with Trinkaus & Xxxxxxxxx
Dusseldorf (Swift Code XXXXXXXX) or as otherwise directed by the Guarantor from
time to time. Concurrently with making any such payment, the Borrower will give
the Guarantor written notice of the amount of such payment. Whenever any payment
by the Borrower to the Guarantor hereunder shall be due on a day that is not a
Business Day, the date for payment thereof shall be extended to the next
following Business Day, and no interest or penalty shall be payable thereon if
paid on such following Business Day.
2.4 OBLIGATIONS ABSOLUTE. The obligations of the Borrower under this
Agreement shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including the following circumstances:
(a) any lack of validity or enforceability of or termination of or
default under this Agreement, the Loan Agreement, the Purchase Agreement,
the Security Agreement, the Guaranty Agreement, the Parent Guarantee or
any other Transaction Document;
(b) the existence of any claim, set-off, defense or other rights that
the Borrower may at any time have against the Manufacturer, the Lender,
the Guarantor, the Parent
4
Guarantor or their respective Affiliates, whether in connection with the
transactions contemplated by this Agreement, the Loan Agreement, the
Purchase Agreement, the Security Agreement, the Guaranty Agreement, the
Parent Guarantee, any other Transaction Document or otherwise, and whether
asserted by cross-claim, claim for contribution, in tort, contract or
otherwise, provided that nothing herein shall prevent the assertion of any
such claim by separate suit or compulsory counterclaim;
(c) any statement contained in, or document delivered in connection
with, this Agreement, the Loan Agreement, the Purchase Agreement, the
Security Agreement, the Guaranty Agreement, the Parent Guarantee or any
other Transaction Document proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(d) any amendment or waiver of or consent to or departure from any
provisions of this Agreement, the Loan Agreement, the Purchase Agreement,
the Security Agreement, the Guaranty Agreement, the Parent Guarantee or
any other Transaction Document whether or not consented to by the
Borrower;
(e) payment by the Guarantor under the Guaranty Agreement or by the
Parent Guarantor under the Parent Guarantee in a manner which does not
strictly comply with the terms thereof; or
(f) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
Notwithstanding the foregoing, the Guarantor agrees that:
(i) following any request by the Lender to the Guarantor under
Section 5(d) of the Guaranty Agreement to purchase the outstanding Loans
because of the occurrence of a Buy-Out Event (as defined in the Guaranty
Agreement), so long as no Default or Event of Default under this Agreement
shall have occurred and be continuing, (A) the Guarantor will purchase, or
cause to be purchased, all, but not less than all, of the outstanding
Loans and assume, or cause to be assumed, all of the rights and
obligations of the Lender under the Loan Agreement, all as provided in
Section 5(c) of the Guaranty Agreement, before any acceleration of the
Loans or termination of the Commitment, and (B) the Guarantor will not
accelerate the maturity of the Loans or terminate the Commitment, or
permit the maturity of the Loans to be accelerated or the Commitment to be
terminated, as a result of such Buy-Out Event; PROVIDED that if for any
reason the maturity of the Loans has been
5
accelerated or the Commitment has been terminated as a result of such
Buy-Out Event before the Guarantor shall have made such purchase and
assumption or caused such purchase and assumption to be made, and provided
that no Default or Event of Default under this Agreement shall have
occurred and be continuing, the Guarantor will, or will provide that, as a
condition precedent to the purchase of the outstanding Loans by any other
Person, such Person will, immediately rescind such acceleration and
continue the Loans and restore the Commitment outstanding under the Loan
Agreement as if no such acceleration or termination had occurred
(and notify the Borrower and the Manufacturer of such rescission and
restoration);
(ii) if the Lender makes any demand for repayment of any or all
of the outstanding Loans as a result of the existence of an event
described in Section 6.1(k) or (l) of the Loan Agreement, so long as no
Default or Event of Default shall have occurred and be continuing, (A) the
Guarantor will promptly purchase, or cause to be purchased, all, but not
less than all, of the outstanding Loans and assume, or cause to be
assumed, all of the rights and obligations of the Lender under the Loan
Agreement, all as provided in Section 5(c) of the Guaranty Agreement,
before any acceleration of the maturity of the Loans or termination of the
Commitment, and (B) the Guarantor will not accelerate the maturity of the
Loans or terminate the Commitment, or permit the maturity of the Loans to
be accelerated or the Commitment to be terminated, as a result of such
event described in such Section 6.1(k) or (l); PROVIDED that if for any
reason the maturity of the Loans has been accelerated or the Commitment
has been terminated as a result of such event before the Guarantor shall
have made such purchase and assumption or caused such purchase and
assumption to be made, and provided that no Default or Event of Default
under this Agreement shall have occurred and be continuing, the Guarantor
will, or will provide that, as a condition precedent to the purchase of
the outstanding Loans by any other Person, such Person will, immediately
rescind such acceleration and continue the Loans and restore the
Commitment outstanding under the Loan Agreement as if no such acceleration
or termination had occurred (and notify the Borrower and the Manufacturer
of such rescission and restoration); and
(iii) if the Lender refuses to make a Loan solely because of any
failure by the Guarantor or the Parent Guarantor to satisfy the conditions
precedent relating to the Guarantor or the Parent Guarantor set forth in
Section 3.1 or 3.2 of the Loan Agreement, the Guarantor will promptly make
such loan or cause such loan to be made.
2.5 WITHHOLDINGS. (a) Except as otherwise provided in this Section
2.5, all payments made by Borrower to the Guarantor or the Parent Guarantor
hereunder or under
6
any other Transaction Document to which it is a party, will be made free and
clear of, and without deduction or withholding for or on account of, any
present or future Taxes, now or hereafter imposed by way of withholding or
deduction or with respect to such payments, but excluding:
(i) any Tax imposed that would not have been imposed but for a present
or former connection between the jurisdiction of the government or taxing
authority imposing such Tax and the Guarantor or the Parent Guarantor or
any Person related to the Guarantor or the Parent Guarantor, other than a
connection arising solely from the Guarantor or the Parent Guarantor
having executed, delivered, performed its obligations or received a
payment under, or enforced, this Agreement or any other Transaction
Document to which the Guarantor or the Parent Guarantor is a party;
(ii) any Tax on the Guarantor's or the Parent Guarantor's overall net
income imposed by the jurisdiction in which its principal office is
situate; and
(iii) any Tax to the extent such Tax would not have been imposed if the
principal office of the Guarantor or the Parent Guarantor, as the case may
be, had at all times been located in the same country as the office set
forth in Section 8.3, in the case of the Guarantor, or such office of the
Parent Guarantor as originally set forth in the Parent Guarantee
(any non-excluded Tax, an "INDEMNIFIED WITHHOLDING TAX").
(b) If any Indemnified Withholding Taxes are so levied or imposed,
the Borrower agrees to pay the full amount of such Indemnified Withholding
Taxes, and such additional amounts as may be necessary so that every payment of
all amounts due under this Agreement or under any other Transaction Document to
which it is a party, after withholding or deduction for or on account of any
Indemnified Withholding Taxes, will not be less than the amount provided for
herein or therein. The Borrower will furnish to the Guarantor or the Parent
Guarantor within 15 days after the date the payment of any withholding Taxes in
respect of payments hereunder is due pursuant to applicable law certified copies
of tax receipts (if available) evidencing such payment by the Borrower. In
accordance with the foregoing, the Borrower agrees to indemnify and hold
harmless the Guarantor and the Parent Guarantor, and reimburse each of the
Guarantor and the Parent Guarantor upon its written request, for the amount of
any Indemnified Withholding Taxes levied or imposed and paid by it.
7
(c) Each of the Guarantor and the Parent Guarantor shall provide to
the Borrower on or prior to the date of the initial Loan two accurate and
complete (including the United States taxpayer identification number of the
Guarantor or the Parent Guarantor, as the case may be) original signed copies of
Internal Revenue Service Form W-8BEN (or a successor form) demonstrating a
complete exemption from United States Federal income tax. To the extent legally
entitled to do so, upon request by the Borrower made not more often than
reasonably required, the Guarantor and the Parent Guarantor shall provide to the
Borrower such forms as may be required to obtain exemption from or a reduction
of United States Federal income tax.
(d) If the Borrower pays under clause (b) any additional amount (a
"TAX PAYMENT") and the Guarantor or the Parent Guarantor effectively obtains a
refund of tax or credit against tax by reason of that Tax Payment (a "TAX
CREDIT"), and the Guarantor or the Parent Guarantor, as the case may be, is able
to identify the Tax Credit as being attributable to the Tax Payment, then the
Guarantor or the Parent Guarantor, as the case may be, shall reimburse the
Borrower such amount as the Guarantor or the Parent Guarantor, as the case may
be, determines to be in the proportion of the Tax Credit as will leave the
Guarantor or the Parent Guarantor, as the case may be (after that reimbursement)
in no better or worse position than it would have been if the Tax Payment has
not been required. Nothing in this clause (d) interferes with the right of each
of the Guarantor and the Parent Guarantor to arrange its tax affairs in whatever
manner it thinks fit and, without prejudice to the foregoing, each of the
Guarantor and the Parent Guarantor is under no obligation to claim a Tax Credit,
or to claim a Tax Credit in priority to any other claim, relief, credit or
deduction available to it. Neither the Guarantor nor the Parent Guarantor is
obliged to disclose any information regarding its tax affairs or computation to
the Borrower.
2.6 MITIGATION. If, with respect to the Guarantor, a condition arises
or an event occurs which would, or would upon the giving of notice, result in
any additional amounts becoming payable to the Guarantor pursuant to Section
2.5, the Guarantor, promptly upon becoming aware of the same, shall, in
consultation with the Borrower, take such steps as may reasonably be open to it
to mitigate the effects of such condition or event, PROVIDED that the Guarantor
shall be under no obligation to take any step that, in its good faith opinion,
would (A) result in its incurring any additional costs in performing its
obligations hereunder (unless the Borrower has agreed to reimburse for the same)
or (b) be otherwise adverse to the Guarantor in a material respect or (C) would
be contrary to the Guarantor's general policies.
8
2.7 FACILITY FEE. If the Borrower fails to borrow any Loan under the
Loan Agreement by June 30, 2000 for any reason (other than the failure of the
condition precedent specified in Section 3.1(c) or the failure of any other
condition precedent to the making of any Loan relating to the Guarantor or the
Parent Guarantor), it shall pay to the Guarantor __________, being the amount of
facility fee the Guarantor paid to the Lender on the Borrower's behalf to
procure the Lender's agreement to make the Loans.
SECTION 3
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF THE GUARANTOR
3.1 CONDITIONS PRECEDENT. The obligation of the Guarantor to execute
and deliver the Guaranty Agreement is subject to the fulfillment to the
satisfaction of the Guarantor of the following conditions precedent:
(a) TRANSACTION DOCUMENTS. Each Transaction Document and the Purchase
Agreement and all other instruments in connection with the transactions
contemplated hereby and thereby shall have been duly authorized, executed and
delivered by the respective party or parties thereto and shall be in the forms
provided and otherwise reasonably satisfactory in form and substance to the
Guarantor and an executed original of each such document or instrument (or
certified copy in the case of the Purchase Agreement) shall have been delivered
to the Guarantor.
(b) CERTIFICATES AS TO RESOLUTIONS AND CORPORATE PROCEEDINGS. The
Guarantor shall have received copies, certified by the Secretary or an Assistant
Secretary of the Borrower, of the following documents:
(i) resolutions of the Board of Directors of the Borrower duly
authorizing (x) the execution, delivery and performance by the Borrower of
this Agreement, the Loan Agreement, the Security Agreement, and the
Purchase Agreement and all other transactions contemplated hereby or
thereby and (y) specified officers of the Borrower to execute and deliver
on behalf of the Borrower each such document;
(ii) certificates of incumbency and signatures of duly authorized
officers of the Borrower executing the documents referred to in item (x)
of clause (i) above; and
(iii) such other documents and instruments with respect to the
Borrower as the Guarantor may reasonably request in order to establish the
consummation of the
9
transactions contemplated hereby, the taking of all necessary corporate
action in connection herewith and compliance with all the conditions set
forth in this Section 3.1.
(c) COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND AGREEMENTS, ETC.
On and as of the date of the execution and delivery of the Guaranty Agreement:
(i) no Event of Default or Default shall have occurred and be
continuing hereunder;
(ii) the representations and warranties contained, or incorporated
by reference, herein and in the Security Agreement shall be true and
correct in all material respects as though made on and as of such date,
except to the extent that such representations and warranties relate
solely to an earlier date (in which case such representations and
warranties shall have been true and correct as of such earlier date); and
(iii) none of the following shall have occurred and be continuing:
(x) a default (including any payment default) under any purchase
agreement, spare parts agreement, lease, financing arrangement or
other contract with or guaranteed by the Guarantor, or any of its
Affiliates;
(y) any event, condition or circumstance which results in the
Manufacturer ceasing to provide, or terminating its commitment to
provide, any financing to the Borrower with respect to the Borrower's
order for or acquisition of the aircraft under the Purchase
Agreement, under the terms of such commitment or as permitted by
Applicable Law; or
(z) the public announcement by the Borrower of its intention to
file a petition initiating bankruptcy proceedings under the United
States Bankruptcy Code or similar insolvency or reorganization
proceedings or arrangements,
and the Guarantor shall have received an Officer's Certificate of the Borrower,
dated as of such date, with respect to each of the matters set forth in clauses
(i) through (iii).
(d) APPROVALS. All approvals and consents of any shareholder, trustee
or holder of any indebtedness or other obligation of the Borrower which are
required in connection with any of the transactions contemplated hereby or the
purchase of the aircraft under the Purchase Agreement shall have been duly
obtained, and the Borrower shall have
10
delivered to the Guarantor an Officer's Certificate to which all such
approvals and consents and other evidence thereof requested by the Guarantor
are attached, satisfactory in form and substance to the Guarantor.
(e) GOVERNMENT ACTION. All appropriate action (if any) required to
have been taken in connection with any of the transactions contemplated by this
Agreement, the Loan Agreement, the Security Agreement and the purchase of the
aircraft pursuant to the Purchase Agreement, shall have been duly taken by each
governmental authority or agency having jurisdiction, and the Borrower shall
have furnished the Guarantor with satisfactory evidence of all such governmental
approvals.
(f) PAYMENTS. The Borrower shall have paid the fees and expenses
referred to in Section 8.7.
(g) OPINION OF THE BORROWER'S COUNSEL. The Borrower shall have
furnished the Guarantor with a favorable opinion of Akin, Gump, Strauss, Xxxxx &
Xxxx, L.L.P., special counsel to the Borrower, and Xxx X. Xxxxx, General Counsel
of the Borrower, each in form and substance satisfactory to the Guarantor.
(h) ILLEGALITY. No change in Applicable Law shall have occurred after
the date of this Agreement which would make it illegal for the Guarantor to
participate in the transactions contemplated hereby.
(i) LITIGATION. No action or proceeding shall have been commenced or
threatened before any court or government agency, and no order, judgment or
decree shall have been issued by any court or government agency, to set aside,
restrain, enjoin or prevent the execution, delivery or performance of this
Agreement, the Loan Agreement, the Security Agreement, the Purchase Agreement,
the Guaranty Agreement, the Parent Guarantee or any other Transaction Document
or the consummation of the transactions hereby or thereby contemplated.
(j) LIEN SEARCHES. The Guarantor shall have received the results of a
recent search by a Person satisfactory to the Guarantor, of the Uniform
Commercial Code, judgment and tax lien filings which may have been filed with
respect to personal property of the Borrower, and the results of such search
shall be reasonably satisfactory to the Guarantor.
(k) FINANCING STATEMENTS. The Borrower shall have delivered to the
Guarantor UCC-1 financing statements covering the Security (as defined in the
Security Agreement)
11
subject to the Security Agreement, duly completed and executed by the
Borrower, to the Guarantor's satisfaction, and showing the Borrower as debtor
and the Guarantor as secured party. Each such financing statement shall have
been duly filed in all such public offices as may be necessary or advisable
to perfect the security interests granted to the Guarantor under the Security
Agreement.
SECTION 4
REPRESENTATIONS AND WARRANTIES
4.1. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to the Guarantor that, as of the date hereof and as of each time
referred to in Section 4.2 of the Loan Agreement:
(a) the representations and warranties contained in Section 4.1 of
the Loan Agreement are true and correct to the same extent as if set forth
in full herein (except to the extent such representations and warranties
relate to an earlier date in which case they shall be true and correct as
of such earlier date), and all such representations and warranties are
hereby incorporated by reference herein with the same effect as if they
were set forth in full herein; and
(b) no default by the Borrower (including any payment default
involving any payment in an amount in excess of ___________) under any
purchase agreement, spare parts agreement, lease, financing arrangement or
other contract with or guaranteed by the Guarantor, or any of its
Affiliates or any entity in which the Guarantor or any of its Affiliates
directly or indirectly holds at least 40% of the aggregate equity interest
(an "INTERESTED ENTITY") has occurred and is continuing after the
expiration of any applicable grace period thereunder or, in the absence of
an applicable grace period, three Business Days after written notice
thereof has been given by the Guarantor to the Borrower.
12
SECTION 5
COVENANTS
5.1 COVENANTS. The Borrower covenants and agrees that, so long as
this Agreement shall be in effect or any Liabilities (as defined in the Security
Agreement) shall remain outstanding or shall remain unperformed, and unless the
Guarantor shall otherwise consent in writing:
(a) PERFORMANCE OF OBLIGATIONS. The Borrower shall perform all of its
obligations under this Agreement, the Security Agreement, the Loan
Agreement, the Purchase Agreement and any other Transaction Document to
which it is a party.
(b) COMPLIANCE WITH LAWS. The Borrower shall comply with all
Applicable Laws in connection with the Security (as defined in the
Security Agreement) under the Security Agreement and the performance of
its obligations under this Agreement and each other Transaction Document
to which it is a party, the non-compliance with which would have a
Material Adverse Effect, except any Applicable Law the validity or
applicability of which is being contested in good faith by proper
proceedings promptly initiated and diligently conducted and for which such
reserves or other appropriate provision, if any, as shall be required by
GAAP shall have been made therefor.
(c) CERTIFICATED AIR CARRIER. The Borrower shall maintain at all
times its certificate of public convenience and necessity under Section
41101 of the Aviation Act, or any successor provision, as and for so long
as such certificate is a condition to the applicability of Section 1110 of
the United States Bankruptcy Code to aircraft owned or leased by the
Borrower.
(d) NOTICE OF EVENT OF DEFAULT. The Borrower shall promptly on the
occurrence of an Event of Default hereunder, provide the Guarantor with an
Officer's Certificate specifying the nature and period of existence
thereof and what action the Borrower is taking or proposes to take with
respect thereto.
(e) FINANCIAL STATEMENTS AND OTHER REPORTS. The Borrower shall
furnish to the Guarantor and the Parent Guarantor the following described
financial statements, reports, notices and information:
13
(i) QUARTERLY FINANCIAL STATEMENTS. Within 60 days after the end of
the first three fiscal quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its consolidated
subsidiaries, if any, at the end of such period and the related
consolidated statements of income, stockholders' equity and cash flow of
the Borrower and its consolidated subsidiaries, if any, for such fiscal
quarter, setting forth in each case in comparative form the consolidated
figures for the corresponding periods of the previous fiscal year of the
Borrower, all in reasonable detail and certified by a principal financial
officer of the Borrower that they fairly present the financial condition
of the Borrower and its consolidated subsidiaries as of the dates
indicated and the results of their operations and cash flow for the
periods indicated in conformity with GAAP applied to quarterly financial
statements on a basis consistent with prior quarters (except as otherwise
stated therein), subject to changes resulting from audit and normal
year-end adjustment; PROVIDED that so long as the Borrower shall have any
securities registered under the Exchange Act, delivery to the Guarantor
and the Parent Guarantor within such time period of the Borrower's
Quarterly Report on Form 10-Q (together with all documents incorporated by
reference therein that contain financial information otherwise required to
be stated therein) as filed with the Securities and Exchange Commission
shall satisfy the requirements of this clause (i).
(ii) ANNUAL FINANCIAL STATEMENTS. Within 90 days after the end of
each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its consolidated subsidiaries, if any, at the end of such
year and the related consolidated statements of income, stockholders'
equity and cash flow of the Borrower and its consolidated subsidiaries, if
any, for such fiscal year, setting forth in each case in comparative form,
the consolidated figures for the previous year, all in reasonable detail
and accompanied by a report thereon of independent certified public
accountants of recognized national standing selected by the Borrower which
shall state that such consolidated financial statements present fairly the
financial position of the Borrower and its consolidated subsidiaries, if
any, as of the dates indicated and the results of their operations and
cash flow for the periods indicated in conformity with GAAP on a basis
consistent with prior years (except as otherwise stated therein) and that
the examination of such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards; PROVIDED that so long as the Borrower shall have any
securities registered under the Exchange Act, delivery to the Guarantor
and the Parent Guarantor within such time period of the Borrower's Annual
Report on Form 10-K (together with all documents incorporated by reference
therein that contain financial information
14
otherwise required to be stated therein) as filed with the Securities and
Exchange Commission shall satisfy the requirements of this clause (ii).
(iii) PUBLIC REPORTS. Promptly upon their becoming available, copies
of all other financial statements, reports, notices and proxy statements
sent by the Borrower to its security holders, all other regular and
periodic reports and all current reports on Form 10-K, 10-Q or 8-K filed
by the Borrower with any securities exchange or with the Securities and
Exchange Commission or any governmental authority succeeding to any of its
functions.
(iv) OFFICER'S CERTIFICATE. Together with each delivery of financial
statements or reports required by clause (i) or (ii) above, an Officer's
Certificate of the Borrower, to the effect that the signer is familiar
with or has reviewed the relevant terms of this Agreement, the Security
Agreement, the Loan Agreement and the Purchase Agreement and has made, or
caused to be made under his or her supervision, a review of the
transactions and condition of the Borrower during the period covered by
such financial statements, and that such review has not disclosed the
existence during such period, nor does the signer have knowledge of the
existence as at the date of such certificate, of any condition or event
which constitutes an Event of Default or Default hereunder or under the
Loan Agreement or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action the
Borrower has taken, is taking or proposes to take with respect thereto.
(v) OTHER INFORMATION. Such other data or information regarding the
business, affairs or financial condition of the Borrower as the Guarantor
may from time to time reasonably request, promptly upon receipt of such
request.
(vi) LITIGATION. Promptly upon becoming aware of them, details of
any litigation, arbitration or administrative proceedings which are
current, threatened or pending, and which might, if adversely determined,
have a Material Adverse Effect.
(f) NOTICES. The Borrower shall furnish to the Guarantor, and the
Guarantor shall be entitled to rely on, each notice, Officer's Certificate
and other document or instrument delivered to the Lender under the Loan
Agreement simultaneously with delivery thereof to the Lender (to the
extent such notice, Officer's Certificate or other document is not
furnished under the terms of this Agreement).
(g) PRESERVATION OF CORPORATE EXISTENCE. (i) Except as permitted by
Section 5.1(h), the Borrower shall maintain and preserve at all times its
corporate existence.
15
The Borrower shall not voluntarily suspend all or substantially all of its
commercial airline operations.
(ii) The Borrower will do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate rights,
powers, privileges and franchises, except for any corporate right, power,
privilege or franchise that it determines is no longer necessary or
desirable in the conduct of its business.
(h) MERGER AND CONSOLIDATION. The Borrower shall not merge or
consolidate with or into any other Person or convey, transfer or lease all
or substantially all its assets as an entirety to any other Person,
whether in a single transaction or a series of related transactions,
unless:
(i) the Borrower has obtained the Guarantor's prior written
consent, which consent shall not be unreasonably withheld; or
(ii) the Borrower has not obtained such consent from the
Guarantor but:
(1) the surviving corporation is organized and existing
under the laws of any state of the United States and is a United
States air carrier as to which there is in force a certificate
issued pursuant to Section 41101 of the Federal Aviation Act,
and an air carrier operating certificate issued pursuant to Part
121 of the Federal Aviation Regulations;
(2) the surviving corporation has executed an assumption
agreement, in form and substance reasonably satisfactory to the
Guarantor, pursuant to which such surviving corporation has
agreed to assume all of the Borrower's obligations under the
Transaction Documents;
(3) immediately after such merger or consolidation, no
Event of Default shall have occurred and be continuing; and
(4) the net worth of the surviving corporation shall be at
least equal to the lesser of:
(x) the Borrower's net worth immediately prior to
such merger or consolidation; and
16
(y) the greater of (i) 75% of the Borrower's net
worth immediately prior to such merger or consolidation,
and (ii) $75,000,000.
Upon any consolidation or merger, or any conveyance, transfer or lease of
all or substantially all the assets of the Borrower as an entirety in
accordance with this clause (h), the successor corporation formed by such
consolidation or merger or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every
right and power of, the Borrower under this Agreement, the Loan Agreement
and the Security Agreement with the same effect as if such successor
corporation had been named as the Borrower herein and therein.
(i) NO INCONSISTENT AGREEMENTS. The Borrower shall not enter into any
agreement containing any term or provision which will be violated,
contravened or breached by the Borrower's performance of its obligations
hereunder and under the Security Agreement, the Loan Agreement and the
Purchase Agreement.
(j) USE OF PROCEEDS. The Borrower agrees to apply the proceeds of
each Loan for each Aircraft solely and exclusively to installments of the
purchase price of such Aircraft to be purchased under the Purchase
Agreement.
(k) AMENDMENTS OF LOAN AGREEMENT. (i) Without the prior written
consent of the Guarantor, the Borrower shall not amend, modify or waive
any term of the Loan Agreement.
(ii) The Borrower may from time to time, without the Guarantor's
written consent, amend the Delivery Schedule to give effect to changes in
the delivery dates of Aircraft permitted under clause (l), PROVIDED that
the Borrower shall cause the Manufacturer to supply a revised delivery
schedule for the affected Aircraft acceptable to the Guarantor as promptly
as practicable after it becomes likely that any event will give rise to a
delay in the delivery date for an Aircraft. The Borrower may from time to
time amend the Delivery Schedule to give effect to amendments of the
Purchase Agreement permitted by clause (l).
(l) CONSENTS, WAIVERS ETC. The Borrower shall not, without the
Guarantor's prior written consent, give any consent, waiver (including a
waiver of a breach of or default under the Purchase Agreement) or approval
under the Purchase Agreement or take any other action in connection with
the Purchase Agreement that has the effect of (i) increasing the purchase
price of any Aircraft, (ii) materially changing the
17
specifications of any Aircraft or (iii) increasing the risk or exposure
of the Guarantor under the Guaranty Agreement.
(m) NO ADDITIONAL INDEMNITIES. The Borrower shall not, without the
Guarantor's prior written consent, which consent is not to be unreasonably
withheld, agree to reimburse the Lender for any amounts pursuant to
Section 2.10 of the Loan Agreement.
SECTION 6
EVENTS OF DEFAULT
6.1 EVENTS OF DEFAULT. If one or more of the following events shall
have occurred and be continuing:
(a) the Borrower shall fail to make any payment required to be made
under this Agreement with respect to the Reimbursement Obligations when
the same becomes due and payable; or
(b) the Borrower shall fail to perform or comply with any term
contained in Section 5.1(g)(i), 5.1(h), 5.1(j), 5.1(k), 5.1(l) or 5.1(m);
or
(c) the Borrower shall fail to perform or comply with any covenant or
agreement to be performed or observed by it under this Agreement, the
Security Agreement or the Loan Agreement and if capable of remedy, such
failure shall continue unremedied for a period of 30 days after the
earlier of written notice thereof shall have been given by the Guarantor
to the Borrower and the Borrower becoming aware of such default; or
(d) any representation or warranty of the Borrower in this Agreement,
the Security Agreement or the Loan Agreement or in any instrument or
certificate delivered in connection herewith or therewith or pursuant
hereto or thereto shall at any time prove to have been incorrect or
incomplete in any material respect at the time made or repeated; or
(e) an "Event of Default" (other than one specified in Section 6.1(k)
or (l) of the Loan Agreement or, if caused solely by an "Event of Default"
specified in Section 6.1(k) or (l) of the Loan Agreement, Section 6.1(a)
or (b) of the Loan Agreement) of the Loan Agreement shall have occurred
and be continuing; or
18
(f) (i) the Borrower or any of its Material Subsidiaries is in
default (as principal or as guarantor or other surety) in the payment of
any principal or premium or make-whole amount or interest on any
Indebtedness for Money Borrowed that is outstanding in an aggregate
principal amount of at least ____________ beyond any period of grace
provided with respect thereto, or (ii) the Borrower or any of its Material
Subsidiaries is in default in the performance or compliance with any term
of any evidence of Indebtedness for Money Borrowed in an aggregate
outstanding principal amount of at least ___________ or of any mortgage,
indenture, or any other agreement relating thereto or any other condition
exists, as a consequence of such default or condition of Indebtedness for
Money Borrowed has become, or has been declared (or one or more Persons
are entitled to declare such Indebtedness for Money Borrowed to be), due
and payable before its stated maturity or before the regularly scheduled
dates of payment, or (iii) as a consequence of the occurrence or
continuation of any event or condition (other than the passage of time or
the right of the holder of Indebtedness for Money Borrowed to convert such
Indebtedness for Money Borrowed into equity interests), (x) the Borrower
or any of its Material Subsidiaries has become obligated to purchase or
repay Indebtedness for Money Borrowed before its regular maturity or
before its regularly scheduled dates of payment in an aggregate
outstanding principal amount of at least _________, or (y) one or more
Persons have the right to require the Borrower or any of its Material
Subsidiaries so to purchase or repay such Indebtedness for Money Borrowed;
or
(g) a default by the Borrower (including any payment default
involving any payment in an amount in excess of __________) under any
purchase agreement, spare parts agreement, lease, financing arrangement or
other contract with or guaranteed by the Guarantor, or any of its
Affiliates or any entity in which the Guarantor or any of its Affiliates
directly or indirectly holds at least 40% of the aggregate equity interest
(an "INTERESTED ENTITY") shall have occurred and be continuing after the
expiration of any applicable grace period thereunder or, in the absence of
an applicable grace period, three Business Days after written notice
thereof shall have been given by the Guarantor to the Borrower (without
prejudice to any rights or remedies the Guarantor or any of its Affiliates
or any interested entity may have under such contract); or
(h) any event, condition or circumstance which results in the
cancellation, termination or assignment of the Purchase Agreement (except
(A) an assignment (x) under the Security Agreement, (y) in connection with
a merger or consolidation permitted under Section 5.1(h) or (z) with
respect to any Aircraft which has been
19
delivered under the Purchase Agreement and as to which the principal of
and accrued interest on the Loans relating to such Aircraft have been paid
in full or (B) a termination of the Purchase Agreement with respect to an
Aircraft pursuant to Article 7 of the AGTA (as defined in the Purchase
Agreement) if the principal of and accrued interest on all Loans relating
to such Aircraft shall have been paid not later than 10 days after such
termination); or the Guarantor shall have received a "Seller Notice"
pursuant to Section 3 of the Consent; or
(i) the Borrower or any of its Material Subsidiaries shall consent to
the appointment of or taking possession by a receiver, assignee,
custodian, sequestrator, trustee or liquidator (or other similar official)
of itself or of a substantial part of its property; or the Borrower or any
of its Material Subsidiaries shall admit in writing its inability to pay
its debts generally as they come due or shall fail generally to pay its
debts as they become due or shall make a general assignment for the
benefit of its creditors; or the Borrower or any of its Material
Subsidiaries shall file a voluntary petition in bankruptcy or a voluntary
petition or answer seeking liquidation, reorganization or other relief
with respect to itself or its debts under the Federal bankruptcy laws, as
now or hereafter constituted or any other applicable Federal or State
bankruptcy, insolvency or other similar law, or shall consent to the entry
of an order for relief in an involuntary case under any such law; or the
Borrower or any of its Material Subsidiaries shall file an answer
admitting the material allegations of a petition filed against the
Borrower or any of its Material Subsidiaries in any such proceeding, or
otherwise seek relief under the provisions of any existing or future
Federal or State bankruptcy, insolvency or other similar law providing for
the reorganization or winding-up of corporations, or providing for an
arrangement, agreement, composition, extension or adjustment with its
creditors; or the Borrower or any of its Material Subsidiaries shall take
or publicly announce its intention to take corporate action in furtherance
of any of the foregoing; or
(j) an order, judgment or decree shall be entered in any proceeding
by any court of competent jurisdiction appointing, without the consent of
the Borrower or any of its Material Subsidiaries, a receiver, trustee or
liquidator of the Borrower or any of its Material Subsidiaries or of any
substantial part of its property, or any substantial part of the property
of the Borrower or any of its Material Subsidiaries shall be sequestered,
and any such order, judgment of decree of appointment or sequestration
shall remain in force undismissed, unstayed or unvacated for a period of
60 days after the date of entry thereof; or
(k) a petition against the Borrower or any of its Material
Subsidiaries in a proceeding under the Federal bankruptcy laws or other
insolvency laws, as now or
20
hereafter in effect, shall be filed and shall not be withdrawn or
dismissed within 60 days thereafter; or a decree in respect of the
Borrower or any of its Material Subsidiaries shall be entered by a
court of competent jurisdiction in an involuntary case under the
Federal bankruptcy laws, as now or hereafter constituted, and such
decree shall remain unstayed and in effect for a period of 60 days; or,
under the provisions of any law providing for reorganization or winding-up
of corporations which may apply to the Borrower or any of its Material
Subsidiaries, any court of competent jurisdiction shall assume
jurisdiction, custody or control of the Borrower or any of its Material
Subsidiaries or of any substantial part of its property and such
jurisdiction, custody or control shall remain in force unrelinquished,
unstayed or unterminated for a period of 60 days; or assets of the
Borrower or any of its Subsidiaries with an aggregate value in excess of
___________ shall be attached, seized, levied upon or subjected to a writ
or distress warrant, or come within the possession of any receiver,
trustee, custodian or assignee appointed for the benefit of creditors of
the Borrower or any of its Subsidiaries, and such attachment, seizure,
levy, writ or appointment shall remain unstated and undismissed for 60
consecutive days; or
(l) a final judgment or judgments for the payment of money
aggregating in excess of ____________ are rendered against one or more of
the Borrower and its Material Subsidiaries and which judgments are not,
within 60 days after entry thereof, bonded, discharged or stayed pending
appeal, or are not discharged within 60 days after the expiration of such
stay; or
(m) the Guarantor shall fail to have a valid and duly perfected first
priority security interest in the Security (as defined in the Security
Agreement) as security for all of the Liabilities (as defined in the
Security Agreement); or
(n) the Borrower shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is reasonably likely to result in
the termination of such Plan for purposes of Title IV of ERISA (other than
a standard termination pursuant to Section 4041(b) of ERISA), (iv) any
Single Employer Plan
21
shall terminate for purposes of Title IV of ERISA, (v) the Borrower or
any Commonly Controlled Entity shall, or is reasonably likely to, incur
any liability in connection with a withdrawal from, or the insolvency or
reorganization of, a Multiemployer Plan, (vi) the occurrence or expected
occurrence of any event or condition which results or is reasonably likely
to result in the Borrower's or any Commonly Controlled Entity's becoming
responsible for any liability in respect of a Former Plan, or (vii) any
other event or condition shall occur or exist with respect to a Plan; and
in each case in clauses (i) through (vii) above, such event or condition,
together with all other such events or conditions, if any, would be
reasonably expected to result in liability which would have a Material
Adverse Effect,
then, and in every such Event of Default, the Guarantor may do any or all of the
following: (v) direct the Lender not to make any further Loan under the Loan
Agreement because such Event of Default has occurred and is continuing, (w) give
notice to the Borrower and the Lender that the Commitment of the Lender is to be
terminated, and the Loans for all Aircraft, together with all accrued interest
and all other amounts payable by the Borrower under the Loan Agreement, are to
become immediately due and payable because such Event of Default has occurred
and is continuing (PROVIDED that in the case of any of the Events of Default
specified in clause (i), (j) or (k) above with respect to the Borrower, without
any notice to the Borrower or any other act by the Guarantor, all Loans for all
Aircraft shall become immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower), (x) exercise any rights and remedies under the Security Agreement,
(y) take whatever action at law or in equity may appear necessary or desirable
in its judgment to collect the amounts due and thereafter to become due under
this Agreement or the Security Agreement or to enforce performance and
observance of any obligation, agreement or covenant under this Agreement or the
Security Agreement, or (z) proceed to enforce all other remedies available to it
at law, in equity or by contract.
SECTION 7
INDEMNIFICATION
22
7.1 GENERAL INDEMNITY. (a) The Borrower hereby agrees, whether or not
any of the transactions hereby contemplated shall be consummated, to assume full
liability for, and does hereby indemnify and agree to protect, save and keep
harmless the Guarantor, its respective successors and assigns, and the
respective Affiliates, directors, officers, employees, servants and agents
thereof (each, an "INDEMNIFIED PARTY"), on an after-tax basis, from and against,
and pay or reimburse each such Indemnified Party for, any and all Claims in any
way relating to or arising out of the Guarantor's or the Parent Guarantor's
execution, delivery and performance of any of the Transaction Documents (other
than the Purchase Agreement). For purposes hereof, "CLAIMS" means liabilities,
obligations, losses, damages, penalties (including civil or criminal), Taxes
(other than Taxes on, based on, measured by or with respect to the net or gross
income, capital, net worth, net or gross receipts, franchise or conduct of
business (other than sales, use or similar Taxes) of any Indemnified Party (a
"BUSINESS TAX") imposed by (X) the United States or (Y) any taxing authority
other than the United States by or in which such Indemnified Party is subject to
a Business Tax without regard to the transactions contemplated by the
Transaction Documents), claims, actions, suits, costs, expenses and
disbursements (including reasonable legal fees and expenses and costs of
investigation) of any kind and nature whatsoever, whether or not resulting from
third party claims, including without limitation those arising in contract, tort
or by strict or absolute liability or otherwise, and whether or not arising out
of, or occasioned in whole or in part by, the negligence of an Indemnified
Party, whether active, passive, or imputed, which may be imposed on, incurred by
or asserted against any Indemnified Party (except for (i) Claims arising out of
the gross negligence, fraud or willful misconduct of such Indemnified Party;
(ii) any Claim to the extent attributable to the breach of any contractual
obligation by or the falsity or inaccuracy of any representation of, such
Indemnified Party; (iii) any Claim to the extent attributable to the voluntary
offer, sale or disposition by or on behalf of such Indemnified Person of its
interest in the Transaction Documents or any part thereof or any security
therefore other than following the occurrence of an Event of Default; (iv) any
Claim (other than with respect to Taxes) to the extent that it is an ordinary
and usual operating or overhead expense other than any such expense incurred by
such Indemnified Party in connection with an Event of Default; (v) any expenses
payable by the Guarantor under Section 16 of the Guaranty Agreement; and (vi)
any Claim arising from any dispute or proceeding between the Guarantor and the
Lender following a transfer of the Loans pursuant to Section 5 of the Guaranty).
Payments due from the Borrower to each Indemnified Party pursuant to this
Section 7 shall be made directly to such Indemnified Party in immediately
available funds.
(b) CLAIMS PROCEDURE. An Indemnified Party shall promptly notify the
Borrower of any Claim as to which indemnification is sought; PROVIDED that no
delay in notifying
23
the Borrower of any such Claim shall derogate from the Borrower's
indemnification obligations hereunder so long as and to the extent that such
failure does not result in any material adverse consequence to the Borrower.
Subject to the rights of insurers under policies of insurance maintained by
the Borrower, the Borrower shall have the right to investigate, and the right
in its sole discretion to defend or compromise any Claim for which
indemnification is sought under this Section 7, and the Indemnified Party
shall cooperate, at the Borrower's expense, with all reasonable requests of
the Borrower in connection therewith. Where the Borrower or the insurers
under a policy of insurance maintained by the Borrower undertake the defense
of an Indemnified Party with respect to a Claim, no additional legal fees or
expenses of such Indemnified Party in connection with the defense of such
Claim shall be indemnified hereunder unless such fees or expenses were
incurred at the written request of the Borrower or such insurers PROVIDED,
HOWEVER, that if (i) in the written opinion of counsel to such Indemnified
Party, an actual or potential material conflict of interest exists where it
is advisable for such Indemnified Party to be represented by separate counsel
or (ii) such Indemnified Party has been indicted or otherwise charged in a
criminal complaint and such Indemnified Party informs the Borrower that such
Indemnified Party desires to be represented by separate counsel, the
reasonable fees and expenses of any such separate counsel shall be borne by
the Borrower. Subject to the requirements of any policy of insurance
applicable to a Claim, an Indemnified Party may participate at its own cost
and expense in any judicial proceeding controlled by the Borrower or its
insurers pursuant to the preceding provisions, PROVIDED that such party's
participation does not, in the opinion of the independent counsel appointed
by the Borrower or its insurers to conduct such proceedings, significantly
interfere with such control; and such participation shall not constitute a
waiver of the indemnification provided in this Section 7. Nothing contained
in this Section 7 shall be deemed to require an Indemnified Party to contest
any Claim or to assume responsibility for or control of any judicial
proceeding with respect thereto. This clause (b) shall not apply to Claims
with respect to Taxes.
(c) SUBROGATION. To the extent that a Claim indemnified by the
Borrower under this Section 7 is in fact paid by the Borrower and/or an insurer
under a policy of insurance maintained by the Borrower, the Borrower and/or such
insurer as the case may be shall be subrogated to the extent of such payment to
the rights and remedies of the Indemnified Party on whose behalf such Claim was
paid with respect to the transaction or event giving rise to such Claim. Should
an Indemnified Party receive any refund, in whole or in part, with respect to
any Claim paid by the Borrower hereunder, it shall promptly pay over the amount
refunded (but not an amount in excess of the amount the Borrower or any of its
insurers has paid to such Indemnified Party in respect to such Claim).
24
(d) CERTAIN LIMITATIONS. The general indemnification provisions of
this Section 7 are not intended to waive or supersede any specific provisions
of, or any rights or remedies of the Borrower under or with respect to, any
Transaction Document to the extent such provisions, rights or remedies apply to
any Claim.
(e) WAIVER. The Borrower will not have any claim whatsoever against
the Guarantor in respect of the Manufacturer's exercise of its rights and
remedies under the Purchase Agreement against the Borrower, including without
limitation the giving of any "Seller Notice" referred to in the Consent; the
Borrower's sole recourse, if any, will be against the Manufacturer.
7.2 EFFECT OF OTHER INDEMNITIES. The indemnification obligations of
the Borrower under this Section 7 shall be those of a primary obligor whether or
not an Indemnified Party shall also be indemnified with respect to the same
matter under the terms of any other instrument, and the Indemnified Party
seeking indemnification from the Borrower pursuant to this Section 7 may proceed
directly against the Borrower without first seeking to enforce any other right
of indemnification. Upon the payment in full by the Borrower of any
indemnification provided for under this Section 7, the Borrower shall be
subrogated to any right of the Indemnified Party in respect to the matter as to
which such indemnification was paid.
7.3 SURVIVAL OF INDEMNITIES. Notwithstanding any other term or
condition of any Transaction Document, the indemnities and agreements of the
Borrower provided for in this Section 7 and Section 8.7 and the Borrower's
obligations under any and all thereof, shall survive the repayment of any Loan,
the sale and transfer of any Loan to the Guarantor pursuant to the Guaranty
Agreement and the expiration or other termination of this Agreement, any other
Transaction Document or the Purchase Agreement for the benefit of the
Indemnified Parties at the time of such expiration or other termination.
SECTION 8
MISCELLANEOUS
8.1 FURTHER ACTS AND ASSURANCES. The Borrower shall promptly and duly
execute and deliver to the Guarantor, and to such other persons as the Guarantor
shall reasonably designate, such further instruments and shall take such further
action as may be required by law or as the Guarantor may from time to time
reasonably request in order more effectively to carry out and accomplish the
intent and purpose of this Agreement
25
and to protect the rights and remedies created or intended to be created in
favor of the Guarantor hereunder.
8.2 WAIVERS, AMENDMENTS. The provisions of this Agreement may from
time to time be amended, modified, discharged or waived, but only if such
amendment, modification, discharge or waiver is in writing and signed by each
party to this Agreement. No failure or delay on the part of the Guarantor in
exercising any right, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. Notice to or demand on the
Borrower made by the Guarantor in one case or circumstance shall not entitle the
Borrower to any notice or demand in any similar or other case or circumstance.
This Agreement and the Security Agreement embody the entire agreement and
understanding between the parties hereto and supersede all prior agreements and
understandings relating to the subject matter hereof and thereof.
8.3 NOTICES, COMMUNICATIONS AND INFORMATION. All notices,
communications and other information provided under this Agreement shall be in
writing and shall be given by personal delivery, first-class airmail, postage
prepaid, or by cable, telex, teletype, facsimile or any other customary means of
written communication, addressed as follows:
The Borrower:
Hawaiian Airlines, Inc.
0000 Xxxxxxx Xxxxxx, X-000
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Executive Vice
President and Chief Financial Officer
Telecopier: (000) 000-0000
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
26
Attention: Xxxxxx X. Xxxxxxxx
Telecopier: (000) 000-0000
The Guarantor:
Rolls-Royce Deutschland GmbH
Xxxxxxxxx 00
00000 Xxxxxxxxx
Xxxxxxx
Attention: Head of Finance
Telecopier: (00) 00-000-00000
with a copy to:
Rolls-Royce plc
00 Xxxxxxxxxx Xxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attention: Director of Treasury
Telecopier: (00) 0000-000 981
or as to any party hereto at such other address as shall be notified by such
party to the other party. Any notice shall be deemed given when received by the
addressee.
8.4 SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, or affecting the
validity or enforceability of such provision in any other jurisdiction. To the
full extent permitted by applicable law, the Borrower hereby waives any
provision of law that renders any provision hereof prohibited or unenforceable
in any respect.
8.5 REMEDIES CUMULATIVE. All rights and remedies existing under this
Agreement and the Security Agreement are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
27
8.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
parties hereto and their respective permitted successors and assigns and shall
inure to the benefit of the parties hereto and the Indemnified Parties. The
Borrower shall not be entitled, without the prior written consent of the
Guarantor, to assign or transfer any of the Borrower's rights hereunder except
as permitted under Section 5.1(h). The Guarantor shall be entitled, without the
prior written consent of the Borrower, to assign or transfer all or any portion
of its rights hereunder to any Person who assumes its obligations under the
Guaranty Agreement, but no assignee of the Guarantor will be entitled to the
provisions of Section 2.5(b) unless it has provided the Borrower with the forms
required to be furnished by the Guarantor under Section 2.5(b).
8.7 TRANSACTION EXPENSES. The Borrower hereby agrees, whether or not
any of the transactions contemplated by this Agreement are consummated, and
without limiting the generality of Section 7, to pay promptly on demand (a) all
reasonable out-of-pocket costs and expenses incurred by the Guarantor and the
Parent Guarantor or any of their permitted assignees or transferees, including
all reasonable fees and expenses of Debevoise & Xxxxxxxx, special counsel to the
Guarantor and the Parent Guarantor, in connection with (i) the negotiation,
preparation, execution and delivery of this Agreement, the Security Agreement,
the Loan Agreement, the Guaranty Agreement and the Parent Guarantee and the
closing of the financing transactions herein contemplated and (ii) all future
waivers, amendments, modifications, approvals or other agreements relating to
any Transaction Document or the Purchase Agreement or the transactions
contemplated hereby or thereby which are either (x) requested by the Borrower or
(y) required by Applicable Law or required to effectuate the intent of the
Transaction Documents, PROVIDED that the Borrower shall have no liability for
any costs or expenses incurred by the Guarantor, any Parent Guarantor, or any of
its permitted assignee in connection with the transfer or assignment by the
Guarantor, any Parent Guarantor, or the Lender (other than any transfer or
assignment following the occurrence of an Event of Default by the Borrower
hereunder or under the Loan Agreement) of any part of its interest in the
Transaction Documents, and (b) all fees payable in connection with the recording
or filing of UCC-1 financing statements.
8.8 SURVIVAL OF AGREEMENTS AND WARRANTIES. All agreements, covenants,
representations, warranties and indemnities contained herein or made in writing
by or on behalf of the Borrower in connection with the transactions contemplated
hereby shall survive the execution and delivery of this Agreement, the Security
Agreement, the Loan Agreement, the Purchase Agreement, the Guaranty Agreement
and the Parent Guarantee and the making of any Loan.
28
8.9 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement is
being delivered in the State of New York and shall in all respects be governed
by, and construed and enforced in accordance with, the laws of the State of New
York without reference to any principles of conflict of laws. The Borrower
hereby irrevocably and unconditionally agrees that any suit, action or
proceeding with respect to this Agreement or the Security Agreement, or any
action or proceeding to execute or otherwise enforce any judgment in respect of
any breach thereof, brought by the Guarantor against the Borrower or any of its
property, may be brought by the Guarantor in any court of the State of New York
or any Federal court sitting in the Borough of Manhattan, the City of New York,
and by the execution and delivery of this Agreement, the Borrower irrevocably
submits to the non-exclusive jurisdiction of each such court; and, without
limitation of any other method of service permitted by law, agrees that process
served either personally or by registered mail sent in accordance with Section
8.3 shall constitute adequate service of process in any such suit. Without
limiting the foregoing, the Borrower hereby appoints, in the case of any such
action or proceeding brought in the courts of or in the State of New York, CT
Corporation System of 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
to receive, for it and on its behalf, service of process in the State of New
York with respect thereto (with a copy to Hawaiian Airlines, Inc., 0000 Xxxxxxx
Xxxxxx, X-000, Xxxxxxxx, Xxxxxx 00000, Attn: Xxx X. Xxxxx, Vice President and
General Counsel). In addition, the Borrower hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue in any suit, action or proceeding arising out of or
relating to this Agreement or the Security Agreement, brought in any such
courts, and hereby irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
Nothing herein shall in any way be deemed to limit the ability of the Guarantor
to serve any such writs, process or summonses, in such manner, and to obtain
jurisdiction over the Borrower in such other jurisdictions, as may be permitted
by Applicable Law.
8.10 WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE BORROWER AND THE GUARANTOR HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
8.11 DISCLOSURE OF TERMS. The Borrower and the Guarantor understand
that certain commercial and financial information contained in this Agreement
and in the Security Agreement, the Loan Agreement, the Purchase Agreement and
the Guaranty Agreement, including in Exhibits and Schedules thereto and any
information provided to
29
the Guarantor pursuant to any Transaction Document which has been marked
"confidential," is considered by each of them as confidential. The Borrower
and the Guarantor each agree that it will treat this Agreement, the Security
Agreement, the Loan Agreement, the Purchase Agreement, the Guaranty Agreement
and the Parent Guarantee as confidential and will not, without the prior
written consent of the other, disclose, or cause to be disclosed, the terms
hereof or thereof to any Person, except to its counsel and auditors, or
except (A) as may be required by Applicable Law or pursuant to an order
issued by any court or governmental agency or authority having jurisdiction
over the Borrower or the Guarantor, as the case may be, or (B) as necessary
by the Borrower to finance the acquisition of the Aircraft under the Purchase
Agreement, or (C) as necessary to enable the Guarantor to make transfers,
assignments or other dispositions to potential transferees, assignees or
participants of or in the rights and obligations of the Guarantor in and to
any portion of this Agreement; PROVIDED that in each case described in clause
(b) and (c), the Borrower and the Guarantor will each use its reasonable
efforts (and its best efforts, in the case of the Purchase Agreement) to
limit disclosure to such third persons on a need-to-know basis and to obtain
the written agreement of each such third person to whom such terms are
disclosed that such person shall not further disclose such terms, except as
permitted by clauses (a), (b) and (c).
Each of the Borrower and the Guarantor will also be entitled to
disclose to lenders or potential lenders to themselves or their respective
Affiliates, credit rating agencies and underwriters then engaged in the offering
of securities of the Guarantor, the Borrower or their respective Affiliates, and
their respective counsel, that (I) with respect to the Borrower, it has received
financing commitments from the Lender guaranteed as to principal and interest by
the Guarantor and (II) with respect to the Guarantor, it has received a security
interest in assets of the Borrower securing the Borrower's obligations to the
Guarantor under this Agreement; PROVIDED that (X) neither the Guarantor nor the
Borrower will, without the prior written consent of the other, disclose any
other details relating thereto, and (Y) each of the Guarantor and the Borrower
will use its best efforts to limit any such disclosure to a need-to-know basis
and to obtain the agreement of such Person to treat such information as
confidential.
8.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
shall together constitute but one and the same agreement.
8.13 CONTINUING OBLIGATION. The obligations of the Borrower under
this Agreement shall continue until the date upon which the Guaranty Agreement
shall have
30
been terminated and the Borrower shall have paid the Guarantor all amounts
payable to the Guarantor hereunder.
8.14 CERTAIN AGREEMENTS OF THE GUARANTOR. (a)Without the prior
written consent of the Borrower, the Guarantor shall not amend, modify or waive
any term of the Guaranty Agreement in such a way so as to increase the
Borrower's obligations hereunder. The Guarantor agrees to give the Borrower a
copy of any amendment, modification or waiver promptly after the execution
thereof.
(b) Nothing contained herein or in any other Transaction Document
shall be deemed to waive any rights or remedies the Borrower may have against
the Guarantor in its capacity as manufacturer of engines or be deemed to create
any rights or indemnities in favor of the Guarantor in its capacity as
manufacturer.
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
HAWAIIAN AIRLINES, INC.
By /s/
----------------------------------
Title:
By /s/
----------------------------------
Title:
ROLLS-ROYCE DEUTSCHLAND GmbH
By /s/
----------------------------------
Title:
By /s/
----------------------------------
Title:
32
===============================================================================
SECURED REIMBURSEMENT AGREEMENT
dated as of
May 26, 2000
between
HAWAIIAN AIRLINES, INC.
and
ROLLS-ROYCE DEUTSCHLAND GmbH
===============================================================================
TABLE OF CONTENTS
Page
----
SECTION 1 DEFINITIONS AND INTERPRETATION....................................................... 2
1.1 Definitions.......................................................................... 2
1.2 Interpretation....................................................................... 3
1.3 Accounting and Financial Determinations.............................................. 3
SECTION 2 REIMBURSEMENT........................................................................ 3
2.1 Reimbursement Obligation of the Borrower............................................. 3
2.2 Interest............................................................................. 4
2.3 Method and Place of Payment.......................................................... 4
2.4 Obligations Absolute................................................................. 4
2.5 Withholdings......................................................................... 6
2.6 Mitigation........................................................................... 8
2.7 Facility Fee......................................................................... 8
SECTION 3 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE GUARANTOR............................. 8
3.1 Conditions Precedent................................................................. 8
(a) Transaction Documents.......................................................... 9
(b) Certificates as to Resolutions and Corporate Proceedings....................... 9
(c) Compliance with Representations, Warranties and Agreements, etc................ 9
(d) Approvals...................................................................... 10
(e) Government Action.............................................................. 10
(f) Payments....................................................................... 10
(g) Opinion of the Borrower's Counsel.............................................. 10
(h) Illegality..................................................................... 11
(i) Litigation..................................................................... 11
(j) Lien Searches.................................................................. 11
(k) Financing Statements........................................................... 11
SECTION 4 REPRESENTATIONS AND WARRANTIES....................................................... 11
4.1. Representations and Warranties....................................................... 11
SECTION 5 COVENANTS............................................................................ 12
5.1 Covenants............................................................................ 12
(a) Performance of Obligations..................................................... 12
(b) Compliance With Laws........................................................... 12
(c) Certificated Air Carrier....................................................... 12
i
Page
----
(d) Notice of Event of Default..................................................... 13
(e) Financial Statements and Other Reports......................................... 13
(f) Notices........................................................................ 14
(g) Preservation of Corporate Existence............................................ 15
(h) Merger and Consolidation....................................................... 15
(i) No Inconsistent Agreements..................................................... 16
(j) Use of Proceeds................................................................ 16
(k) Amendments of Loan Agreement................................................... 16
(l) Consents, Waivers etc.......................................................... 16
(m) No Additional Indemnities...................................................... 17
SECTION 6 EVENTS OF DEFAULT.................................................................... 17
6.1 Events of Default.................................................................... 17
SECTION 7 INDEMNIFICATION...................................................................... 21
7.1 General Indemnity.................................................................... 21
7.2 Effect of Other Indemnities.......................................................... 23
7.3 Survival of Indemnities.............................................................. 24
SECTION 8 MISCELLANEOUS........................................................................ 24
8.1 Further Acts and Assurances.......................................................... 24
8.2 Waivers, Amendments.................................................................. 24
8.3 Notices, Communications and Information.............................................. 24
8.4 Severability......................................................................... 26
8.5 Remedies Cumulative.................................................................. 26
8.6 Successors and Assigns............................................................... 26
8.7 Transaction Expenses................................................................. 26
8.8 Survival of Agreements and Warranties................................................ 27
8.9 Governing Law; Submission to Jurisdiction............................................ 27
8.10 WAIVER OF JURY TRIAL................................................................. 27
8.11 Disclosure of Terms.................................................................. 28
8.12 Counterparts......................................................................... 29
8.13 Continuing Obligation................................................................ 29
8.14 Certain Agreements of the Guarantor.................................................. 29
ii
