[CONFORMED COPY WITH
EXHIBITS G-1 AND G-2
CONFORMED AS EXECUTED]
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CREDIT AGREEMENT
among
NORTHWEST AIRLINES CORPORATION,
NWA INC.,
NORTHWEST AIRLINES, INC.,
THE CHASE MANHATTAN BANK,
as Agent,
and
VARIOUS LENDING INSTITUTIONS
__________________________________
Dated as of May 12, 1998
__________________________________
$1,000,000,000
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TABLE OF CONTENTS
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SECTION 1. Xxxxxx and Terms of Credit . . . . . . . . . . . . . . . . . . . . .1
1.01 The Commitments. . . . . . . . . . . . . . . . . . . . . . . . .1
1.02 Minimum Amount of Each Borrowing, etc. . . . . . . . . . . . . .1
1.03 Notice of Borrowing. . . . . . . . . . . . . . . . . . . . . . .1
1.04 Disbursement of Funds. . . . . . . . . . . . . . . . . . . . . .2
1.05 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.06 Conversions. . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.07 Pro Rata Borrowings. . . . . . . . . . . . . . . . . . . . . . .3
1.08 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.09 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . .4
1.10 Increased Costs, Illegality, etc . . . . . . . . . . . . . . . .5
1.11 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . .7
1.12 Change of Lending Office . . . . . . . . . . . . . . . . . . . .7
1.13 Replacement of Banks . . . . . . . . . . . . . . . . . . . . . .8
SECTION 2. Fees; Reductions of Commitment . . . . . . . . . . . . . . . . . . .8
2.01 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
2.02 Voluntary Termination of Commitments . . . . . . . . . . . . . .9
2.03 Mandatory Reduction of Commitments . . . . . . . . . . . . . . .9
SECTION 3. Prepayments; Payments; Taxes . . . . . . . . . . . . . . . . . . . 10
3.01 Voluntary Prepayments. . . . . . . . . . . . . . . . . . . . . 10
3.02 Mandatory Repayments . . . . . . . . . . . . . . . . . . . . . 10
3.03 Method and Place of Payment. . . . . . . . . . . . . . . . . . 12
3.04 Net Payments . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4A. Conditions Precedent to Effective Date. . . . . . . . . . . . . . 14
4A.01 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4A.02 Officers' Certificate . . . . . . . . . . . . . . . . . . . . 14
4A.03 Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . 14
4A.04 Corporate Documents; Proceedings; etc . . . . . . . . . . . . 14
4A.05 Consent Letter. . . . . . . . . . . . . . . . . . . . . . . . 15
4A.06 Adverse Change, etc . . . . . . . . . . . . . . . . . . . . . 15
4A.07 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 15
4A.08 Financial Outlook . . . . . . . . . . . . . . . . . . . . . . 15
4A.09 Existing Credit Agreement . . . . . . . . . . . . . . . . . . 15
4A.10 Fees, etc . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(i)
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4A.11 Appraisal of Collateral . . . . . . . . . . . . . . . . . . . 15
4A.12 Security Documents. . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4B. Conditions Precedent to All Credit Events . . . . . . . . . . . . 16
4B.01 Notice of Borrowing.. . . . . . . . . . . . . . . . . . . . . 16
4B.02 No Default; Representations and Warranties. . . . . . . . . . 16
4B.03 Full Utilization of Existing Facilities . . . . . . . . . . . 17
4B.04 Security Matters. . . . . . . . . . . . . . . . . . . . . . . 17
4B.05 Effective Date. . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5. Representations, Warranties and Agreements . . . . . . . . . . . . 17
5.01 Corporate Status . . . . . . . . . . . . . . . . . . . . . . . 17
5.02 Corporate Power and Authority. . . . . . . . . . . . . . . . . 18
5.03 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.04 Governmental Approvals . . . . . . . . . . . . . . . . . . . . 18
5.05 Financial Statements; Financial Outlook. . . . . . . . . . . . 18
5.06 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.07 True and Complete Disclosure . . . . . . . . . . . . . . . . . 19
5.08 Use of Proceeds; Margin Regulations. . . . . . . . . . . . . . 19
5.09 Compliance with ERISA. . . . . . . . . . . . . . . . . . . . . 19
5.10 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.11 Investment Company Act . . . . . . . . . . . . . . . . . . . . 20
5.12 Compliance with Statutes, etc. . . . . . . . . . . . . . . . . 20
5.13 Air Carrier. . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.14 Security Interests . . . . . . . . . . . . . . . . . . . . . . 21
5.15 Year 2000 Reprogramming. . . . . . . . . . . . . . . . . . . . 21
SECTION 6. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . . 21
6.01 Information Covenants. . . . . . . . . . . . . . . . . . . . . 21
6.02 Books, Records and Inspections . . . . . . . . . . . . . . . . 23
6.03 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.04 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . 24
6.05 Consolidated Corporate Franchises. . . . . . . . . . . . . . . 24
6.06 Compliance with Statutes, etc. . . . . . . . . . . . . . . . . 24
6.07 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.08 Good Repair. . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.09 End of Fiscal Years; Fiscal Quarters . . . . . . . . . . . . . 25
6.10 Performance of Obligations . . . . . . . . . . . . . . . . . . 25
6.11 Air Carrier. . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.12 Security Interests . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . 26
7.01 Changes in Business. . . . . . . . . . . . . . . . . . . . . . 26
7.02 Consolidation, Merger, etc . . . . . . . . . . . . . . . . . . 26
(ii)
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7.03 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . 26
7.04 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.05 Distributions, etc . . . . . . . . . . . . . . . . . . . . . . 28
7.06 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.07 Transactions with Affiliates . . . . . . . . . . . . . . . . . 33
7.08 Consolidated Indebtedness to Consolidated EBITDAR. . . . . . . 33
7.09 Consolidated EBITDAR to Consolidated Fixed Charges . . . . . . 33
7.10 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.11 LAX TWO CORP . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.12 Existing Credit Agreement; Bridge Debt Agreement . . . . . . . 34
SECTION 8. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . 34
8.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.02 Representations, etc.. . . . . . . . . . . . . . . . . . . . . 34
8.03 Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.04 Default Under Other Agreements . . . . . . . . . . . . . . . . 34
8.05 Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . . . 35
8.06 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.07 Judgments. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.08 Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.09 Security Documents . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9. Definitions and Accounting Terms . . . . . . . . . . . . . . . . . 37
9.01 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 10. The Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
10.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . 51
10.02 Nature of Duties. . . . . . . . . . . . . . . . . . . . . . . 51
10.03 Lack of Reliance on Agent . . . . . . . . . . . . . . . . . . 51
10.04 Certain Rights of Agent . . . . . . . . . . . . . . . . . . . 52
10.05 Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
10.06 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 52
10.07 Agent in its Individual Capacity. . . . . . . . . . . . . . . 52
10.08 Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
10.09 Resignation by the Agent. . . . . . . . . . . . . . . . . . . 53
SECTION 11. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 53
11.01 Payment of Expenses, etc. . . . . . . . . . . . . . . . . . . 53
11.02 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . 54
11.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
11.04 Benefit of Agreement. . . . . . . . . . . . . . . . . . . . . 55
11.05 No Waiver; Remedies Cumulative. . . . . . . . . . . . . . . . 56
11.06 Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . 56
11.07 Calculations; Computations. . . . . . . . . . . . . . . . . . 57
(iii)
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11.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . 57
11.09 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 58
11.10 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . 59
11.11 Headings Descriptive. . . . . . . . . . . . . . . . . . . . . 59
11.12 Amendment or Waiver; etc. . . . . . . . . . . . . . . . . . . 59
11.13 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . 60
11.14 Domicile of Revolving Loans . . . . . . . . . . . . . . . . . 60
11.15 Limitation on Additional Amounts, etc.. . . . . . . . . . . . 60
11.16 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 60
11.17 Registry. . . . . . . . . . . . . . . . . . . . . . . . . . . 61
11.18 Newco Reorganization. . . . . . . . . . . . . . . . . . . . . 61
SECTION 12. Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
12.01 The Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . 63
12.02 Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . 63
12.03 Nature of Liability . . . . . . . . . . . . . . . . . . . . . 64
12.04 Independent Obligation. . . . . . . . . . . . . . . . . . . . 64
12.05 Authorization . . . . . . . . . . . . . . . . . . . . . . . . 64
12.06 Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.07 Subordination . . . . . . . . . . . . . . . . . . . . . . . . 64
12.08 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
12.09 Limitation on Enforcement . . . . . . . . . . . . . . . . . . 65
SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Subsidiaries
SCHEDULE IV Existing Indebtedness
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B Form of Revolving Note
EXHIBIT C Form of Section 3.04(b)(ii) Certificate
EXHIBIT D-1 Form of Opinion of Xxxxxxx X. Xxxxxxxxx, Esq.,
Senior Vice President, General Counsel
and Secretary of the Credit Parties
EXHIBIT D-2 Form of Opinion of Xxxxx & Xxxxxxx, Special Aviation Counsel to
the Credit Parties
EXHIBIT D-3 Form of Opinion of Xxxxxx & Xxxxxxx, Special
Counsel to the Borrower
EXHIBIT D-4 Form of Opinion of White & Case, Special
Counsel to the Agent
EXHIBIT E Form of Consent Letter
EXHIBIT F Form of Assignment and Assumption Agreement
EXHIBIT G-1 Form of Aircraft Mortgage and Security Agreement
(iv)
EXHIBIT G-2 Form of Route Security Agreement
(v)
CREDIT AGREEMENT, dated as of May 12, 1998, among NORTHWEST
AIRLINES CORPORATION, a Delaware corporation ("Holdings"), NWA INC., a
Delaware corporation ("NWA"), NORTHWEST AIRLINES, INC., a Minnesota
corporation (the "Borrower"), the lending institutions listed from time to
time on Schedule I hereto (each a "Bank" and, collectively, the "Banks"), and
THE CHASE MANHATTAN BANK, as agent (the "Agent"). Unless otherwise defined
herein, all capitalized terms used herein and defined in Section 10 are used
herein as so defined.
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Banks are willing to make available the credit facility provided
for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 THE COMMITMENTS. Subject to and upon the terms and
conditions set forth herein, each Bank severally agrees at any time and from
time to time on and after the Initial Borrowing Date and prior to the
Revolving Loan Maturity Date, to make a revolving loan or revolving loans
(each, a "Revolving Loan", and collectively, the "Revolving Loans") to the
Borrower, which Revolving Loans (i) shall, at the option of the Borrower, be
Base Rate Loans or Eurodollar Loans, PROVIDED that, (x) except as otherwise
specifically provided in Section 1.10(b), all Revolving Loans comprising the
same Borrowing shall at all times be of the same Type and (y) no Eurodollar
Loans may be incurred prior to June 1, 1998, (ii) may be repaid and
reborrowed in accordance with the provisions hereof, and (iii) shall not
exceed for any Bank at any time outstanding that aggregate principal amount
which equals the Revolving Loan Commitment of such Bank at such time.
1.02 MINIMUM AMOUNT OF EACH BORROWING, ETC. The aggregate
principal amount of each Borrowing shall not be less than $10,000,000 and, if
greater, shall be in integral multiples of $5,000,000. More than one
Borrowing may occur on the same date, but at no time shall there be
outstanding more than 20 Borrowings of Eurodollar Loans.
1.03 NOTICE OF BORROWING. (a) Whenever the Borrower desires to
make a Borrowing hereunder, it shall give the Agent at its Notice Office at
least one Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of each Base Rate Loan and at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in
writing) of each Eurodollar Loan to be made hereunder, PROVIDED that any such
notice shall be deemed to have been given on a certain day only if given
before 11:00 A.M. (New York time) on such day. Each such written notice or
written confirmation of telephonic notice (each, a "Notice of Borrowing"),
except as otherwise expressly provided in Section 1.10, shall be irrevocable
and shall be given by the Borrower in the form of Exhibit A, appropriately
completed to specify the aggregate principal amount of the Revolving Loans to
be made pursuant to such Borrowing, the date of such Borrowing (which shall
be a Business Day), and whether the Revolving Loans being
made pursuant to such Borrowing are to be initially maintained as Base Rate
Loans or Eurodollar Loans and, if Eurodollar Loans, the initial Interest
Period to be applicable thereto. The Agent shall promptly give each Bank
notice of such proposed Borrowing, of such Bank's proportionate share thereof
and of the other matters required by the immediately preceding sentence to be
specified in the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any Borrowing of Revolving Loans,
the Agent may act without liability upon the basis of telephonic notice of
such Borrowing, believed by the Agent in good faith to be from an Authorized
Officer of the Borrower prior to receipt of written confirmation.
1.04 DISBURSEMENT OF FUNDS. No later than 12:00 Noon (New York
time) on the date specified in each Notice of Borrowing, each Bank will make
available its PRO RATA portion of each Borrowing requested to be made on such
date. All such amounts shall be made available in Dollars and in immediately
available funds at the Payment Office of the Agent, and the Agent will make
available to the Borrower at the Payment Office the aggregate of the amounts
so made available by the Banks. Unless the Agent shall have been notified by
any Bank prior to the date of Borrowing that such Bank does not intend to
make available to the Agent such Bank's portion of any Borrowing to be made
on such date, the Agent may assume that such Bank has made such amount
available to the Agent on such date of Borrowing and the Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the
Agent by such Bank, the Agent shall be entitled to recover such corresponding
amount on demand from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify the Borrower and the Borrower shall immediately pay
such corresponding amount to the Agent. The Agent shall also be entitled to
recover on demand from such Bank or the Borrower, as the case may be,
interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Agent to the Borrower
until the date such corresponding amount is recovered by the Agent, at a rate
per annum equal to (i) if recovered from such Bank, the overnight Federal
Funds Rate and (ii) if recovered from the Borrower, the rate of interest
applicable to the respective Borrowing, as determined pursuant to Section
1.08. Nothing in this Section 1.04 shall be deemed to relieve any Bank from
its obligation to make Revolving Loans hereunder or to prejudice any rights
which the Borrower may have against any Bank as a result of any failure by
such Bank to make Revolving Loans hereunder.
1.05 NOTES. (a) The Borrower's obligation to pay the principal
of, and interest on, the Revolving Loans made by each Bank shall be evidenced
by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B with blanks appropriately completed in
conformity herewith (each, a "Revolving Note" and, collectively, the
"Revolving Notes").
(b) The Revolving Note issued to each Bank shall (i) be executed
by the Borrower, (ii) be payable to the order of such Bank and be dated the
Effective Date, (iii) be in a stated principal amount equal to the Revolving
Loan Commitment of such Bank and be payable
-2-
in the principal amount of the Revolving Loans evidenced thereby, (iv) mature
on the Revolving Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby and (vi) be subject
to mandatory repayment as provided in Section 3.02.
(c) Each Bank will note on its internal records the amount of each
Revolving Loan made by it and each payment in respect thereof and will prior
to any transfer of any of its Revolving Notes endorse on the reverse side
thereof the outstanding principal amount of Revolving Loans evidenced
thereby. Failure to make any such notation shall not affect the Borrower's
obligations in respect of such Revolving Loans.
1.06 CONVERSIONS. The Borrower shall have the option to convert,
on any Business Day, all or a portion equal to at least $10,000,000 (and, if
greater, in integral multiples of $5,000,000) of the outstanding principal
amount of Revolving Loans made pursuant to one or more Borrowings of one or
more Types of Revolving Loans into a Borrowing of another Type of Revolving
Loan, PROVIDED that (i) except as otherwise provided in Section 1.10(b),
Eurodollar Loans may be converted into Base Rate Loans only on the last day
of an Interest Period applicable to the Revolving Loans being converted and
no partial conversion of Eurodollar Loans shall reduce the outstanding
principal amount of such Eurodollar Loans made pursuant to a single Borrowing
to less than $10,000,000, (ii) Base Rate Loans may only be converted into
Eurodollar Loans if no Default or Event of Default is in existence on the
date of the conversion, (iii) no conversion pursuant to this Section 1.06
shall result in a greater number of Borrowings of Eurodollar Loans than is
permitted under Section 1.02 and (iv) prior to June 1, 1998, no Revolving
Loan may be converted into Eurodollar Loans. Each such conversion shall be
effected by the Borrower by giving the Agent at its Notice Office prior to
11:00 A.M. (New York time) at least three Business Days' prior notice (each,
a "Notice of Conversion") specifying the Revolving Loans to be so converted,
the Borrowing or Borrowings pursuant to which such Revolving Loans were made
and, if to be converted into Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Agent shall give each Bank prompt notice
of any such proposed conversion affecting any of its Revolving Loans.
1.07 PRO RATA BORROWINGS. All Borrowings of Revolving Loans under
this Agreement shall be incurred from the Banks PRO RATA on the basis of
their Revolving Loan Commitments. It is understood that no Bank shall be
responsible for any default by any other Bank of its obligation to make
Revolving Loans hereunder and that each Bank shall be obligated to make the
Revolving Loans provided to be made by it hereunder, regardless of the
failure of any other Bank to make its Revolving Loans hereunder.
1.08 INTEREST. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan from the date
the proceeds thereof are made available to the Borrower until the earlier of
(i) the maturity (whether by acceleration or otherwise) of such Base Rate
Loan and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan
pursuant to Section 1.06, at a rate per annum which shall be equal to the sum
of 1% plus the Base Rate in effect from time to time.
-3-
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date the proceeds thereof
are made available to the Borrower until the earlier of (i) the maturity
(whether by acceleration or otherwise) of such Eurodollar Loan and (ii) the
conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section
1.06, 1.09 or 1.10, as applicable, at a rate per annum which shall, during
each Interest Period applicable thereto, be equal to the sum of 2% plus the
Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Revolving Loan and any other overdue amount
payable hereunder shall, in each case, bear interest at a rate per annum
equal to the greater of (x) except as provided in Section 1.08(d)(y), 2% per
annum in excess of the rate otherwise applicable to Base Rate Loans from time
to time and (y) in the case of Eurodollar Loans, until the end of the
applicable Interest Period for such Eurodollar Loans, at a rate which is 2%
in excess of the rate then borne by such Eurodollar Loans, in each case with
such interest to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i)
in respect of each Base Rate Loan, quarterly in arrears on each Quarterly
Payment Date, (ii) in respect of each Eurodollar Loan, on the last day of
each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on each date occurring at three month
intervals after the first day of such Interest Period and (iii) in respect of
each Revolving Loan, on any repayment or prepayment (on the amount repaid or
prepaid), at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(e) Upon each Interest Determination Date, the Agent shall
determine the Eurodollar Rate for each Interest Period applicable to
Eurodollar Loans and shall promptly notify the Borrower and the Banks
thereof.
1.09 INTEREST PERIODS. (a) At the time it gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Loan (in the case of the initial Interest Period
applicable thereto) or on the third Business Day prior to the expiration of
an Interest Period applicable to such Eurodollar Loan (in the case of any
subsequent Interest Period), the Borrower shall have the right to elect, by
giving the Agent notice thereof, the interest period or interest periods
(each, an "Interest Period") applicable to such Eurodollar Loan (or any
portion thereof), which Interest Period shall, at the option of the Borrower,
be a one, two, three or six-month period, PROVIDED that:
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period (it being understood that one Borrowing may
be converted into more than one Borrowing as a result of the selection of
Interest Periods so long as in any event, after giving effect to such
conversions, all Banks are participating PRO RATA in such Borrowing and
Section 1.02 is complied with);
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Revolving Loan of a different Type)
and each Interest Period occurring thereafter
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in respect of such Eurodollar Loan shall commence on the day on which the
next preceding Interest Period applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins on
a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end on
the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; PROVIDED, HOWEVER, that if any Interest Period for
a Eurodollar Loan would otherwise expire on a day which is not a Business
Day but is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(v) no Interest Period may be selected at any time when a Default
or Event of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing shall be
selected which extends beyond the Revolving Loan Maturity Date; and
(vii) no Interest Period may be selected which would commence prior
to June 1, 1998.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrower has failed to elect, or is not permitted to
elect, a new Interest Period or Interest Periods to be applicable to such
Eurodollar Loans as provided above, the Borrower shall be deemed to have
elected to convert such Eurodollar Loans into Base Rate Loans effective as of
the expiration date of such current Interest Period.
1.10 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that any
Bank shall have determined (which determination shall, absent manifest error,
be final and conclusive and binding upon all parties hereto but, with respect
to clause (i) below, may be made only by the Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order, guideline or request
(such as, for example, but
-5-
not limited to a change in official reserve requirements, but, in all
events, excluding reserves required under Regulation D of the Board of
Governors of the Federal Reserve System to the extent included in the
computation of the Eurodollar Rate) and/or (y) other circumstances
(other than an adverse change in the credit quality of such Bank) since
the date of this Agreement affecting the interbank Eurodollar market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has become (x) unlawful by any law or governmental rule, regulation or
order, (y) impossible by compliance by any Bank in good faith with any
governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the date of this
Agreement which materially and adversely affects the interbank Eurodollar
market;
then, and in any such event, such Bank (or the Agent, in the case of clause
(i) above) shall promptly give notice (by telephone confirmed in writing) to
the Borrower and, except in the case of clause (i) above, to the Agent of
such determination (which notice the Agent shall promptly transmit to each of
the other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar
Loans shall no longer be available until such time as the Agent notifies the
Borrower and the Banks that the circumstances giving rise to such notice by
the Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans, which have
not yet been incurred (including by way of conversion) shall be deemed
rescinded by the Borrower, (y) in the case of clause (ii) above, the Borrower
shall, subject to the provisions of Section 11.15 (to the extent applicable)
pay to such Bank, upon written demand therefor, such additional amounts (in
the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Bank shall reasonably determine) as shall be
required to compensate such Bank for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the
additional amounts owed to such Bank, showing in reasonable detail the basis
for the calculation thereof, submitted to the Borrower by such Bank in good
faith shall, absent manifest error, be final and conclusive and binding on
all the parties hereto) and (z) in the case of clause (iii) above, the
Borrower shall take one of the actions specified in Section 1.10(b) as
promptly as possible and, in any event, within the time period required by
law. Each of the Agent and each Bank agrees that if it gives notice to the
Borrower of any of the events described in clause (i) or (iii) above, it
shall promptly notify the Borrower and, in the case of any such Bank, the
Agent, if such event ceases to exist. If any such event described in clause
(iii) above ceases to exist as to a Bank, the obligations of such Bank to
make Eurodollar Loans and to convert Base Rate Loans into Eurodollar Loans on
the terms and conditions contained herein shall be reinstated.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, cancel the respective
Borrowing by giving the Agent telephonic notice (confirmed in writing) on the
same date that the Borrower was notified by the affected Bank pursuant to
Section 1.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan is then
outstanding, upon at least three Business Days' written notice to
-6-
the Agent, require the affected Bank to convert such Eurodollar Loan into a
Base Rate Loan, PROVIDED that, if more than one Bank is affected at any time,
then all affected Banks must be treated the same pursuant to this Section
1.10(b).
(c) If at any time any Bank determines that the introduction after
the date of this Agreement of, or any change after the date of this Agreement
in, any applicable law or governmental rule, regulation, order, guideline,
directive or request (whether or not having the force of law) concerning
capital adequacy, or any change after the date of this Agreement in
interpretation or administration thereof by any governmental authority,
central bank or comparable agency, will have the effect of increasing the
amount of capital required or expected to be maintained by such Bank or any
corporation controlling such Bank based on the existence of such Bank's
Revolving Loan Commitment hereunder or its obligations hereunder, then the
Borrower shall, subject to the provisions of Section 11.15 (to the extent
applicable), pay to such Bank, upon its written demand therefor, such
additional amounts as shall be required to compensate such Bank or such other
corporation for the increased cost to such Bank or such other corporation or
the reduction in the rate of return to such Bank or such other corporation as
a result of such increase of capital. In determining such additional
amounts, each Bank will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable. Each Bank will
provide written notice thereof to the Borrower, which notice shall show the
basis for calculation of such additional amounts, although the failure to
give any such notice shall, subject to Section 11.15, not release or diminish
any of the Borrower's obligations to pay additional amounts pursuant to this
Section 1.10(c) upon receipt of such notice.
1.11 COMPENSATION. The Borrower shall, subject to the provisions of
Section 11.15 (to the extent applicable), compensate each Bank, upon its written
request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Loans but excluding any loss of anticipated profits) which
such Bank may sustain: (i) if for any reason (other than a default by such Bank
or the Agent) a Borrowing of, or conversion from or into, Eurodollar Loans does
not occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion (whether or not withdrawn by the Borrower or deemed withdrawn
pursuant to Section 1.10(a) or (b)); (ii) if any repayment (including, without
limitation, any repayment made pursuant to Section 3.01 or 3.02 or as a result
of an acceleration of the Revolving Loans pursuant to Section 8) or conversion
of any of its Eurodollar Loans occurs on a date which is not the last day of an
Interest Period with respect thereto; (iii) if any prepayment of any of its
Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of (x) any other default by the
Borrower to repay its Revolving Loans when required by the terms of this
Agreement or any Revolving Note held by such Bank or (y) any election made
pursuant to Section 1.10(b). No Bank shall be deemed to have any loss, expense
or liability incurred by the reason of the liquidation or reemployment of
deposits as a result of the Borrower repaying Eurodollar Loans prior to the end
of an Interest Period unless the Eurodollar Rate which would be applicable to
the Eurodollar Loan being repaid if such Eurodollar Rate were being determined
on the date of repayment (assuming for purposes of this determination that the
Interest Period or the maturity
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utilized in making such determination is the Interest Period or the maturity
originally applicable to such Eurodollar Loan) is less than the Eurodollar
Rate actually applicable to the Eurodollar Loan being repaid.
1.12 CHANGE OF LENDING OFFICE. Each Bank agrees that after
becoming aware of the occurrence of any event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), or Section 3.04 with respect
to such Bank, it will use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another lending office for any
Revolving Loans affected by such event, PROVIDED that such designation is
made on such terms that such Bank and its lending office suffer no material
economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section.
Nothing in this Section 1.12 shall affect or postpone any of the obligations
of the Borrower or the rights of any Bank provided in Sections 1.10 and 3.04,
PROVIDED that this sentence shall not limit the Borrower's rights and
remedies in connection with a breach of the immediately preceding sentence.
1.13 REPLACEMENT OF BANKS. If (x) any Bank defaults in its
obligations to make Revolving Loans, (y) any Bank refuses to give timely consent
to proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
11.12(b) or (z) any Bank is owed increased costs under Section 1.10 (by virtue
of the application of Section 1.11 or otherwise) or Section 3.04 which in the
judgment of the Borrower are material in amount and which are not otherwise
requested by Banks constituting at least the Super-Majority Banks, the Borrower
shall have the right, if no Event of Default then exists and, in the case of a
Bank described in clause (z) above, such Bank has not withdrawn its request for
such compensation or changed its applicable lending office with the effect of
eliminating or substantially decreasing (to a level which in the judgment of the
Borrower is not material) such increased cost, to replace such Bank (the
"Replaced Bank") with one or more other Eligible Transferee or Transferees
(collectively, the "Replacement Bank") with the consent of the Agent, which
consent shall not be unreasonably withheld or delayed, PROVIDED that (i) at the
time of any replacement pursuant to this Section 1.13, the Replacement Bank
shall enter into one or more Assignment and Assumption Agreements pursuant to
which the Replacement Bank shall acquire all of the Revolving Loan Commitment
and outstanding Revolving Loans of the Replaced Bank and, in connection
therewith, shall pay to the Replaced Bank in respect thereof an amount equal to
the sum of (a) an amount equal to the principal of, and all accrued interest on,
all outstanding Revolving Loans of the Replaced Bank and (b) an amount equal to
all accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant to
Section 2.01 hereof and (ii) all obligations of the Borrower owing to the
Replaced Bank (other than those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full to such Replaced Bank concurrently with such
replacement. Upon the execution of the respective assignment documentation, the
payment of amounts referred to in clauses (i) and (ii) above and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Revolving Note executed by the Borrower, the Replacement Bank shall
become a Bank hereunder and the Replaced Bank shall cease to constitute a Bank
hereunder, except with respect to indem-
-8-
nifications under this Agreement pursuant to Section 1.10, 1.11, 3.04, 11.01
and 11.06, which shall survive as to such Replaced Bank.
SECTION 2. FEES; REDUCTIONS OF COMMITMENT.
2.01 FEES. (a) The Borrower agrees to pay the Agent for
distribution to each Bank a commitment fee (the "Commitment Fee") for the
period from the Effective Date to and including the Revolving Loan Maturity
Date (or such earlier date as the Total Revolving Loan Commitment shall have
been terminated), computed at a per annum rate equal to .3750% multiplied by
the daily Unutilized Revolving Loan Commitment of such Bank. Accrued
Commitment Fees shall be due and payable quarterly in arrears on each
Quarterly Payment Date and on the Revolving Loan Maturity Date or such
earlier date upon which the Total Revolving Loan Commitment is terminated.
(b) The Borrower shall pay to the Agent, for its own account, such
other fees as have been agreed to in writing by the Borrower and the Agent.
2.02 VOLUNTARY TERMINATION OF COMMITMENTS. (a) Upon at least
three Business Days' prior written notice (or telephonic notice confirmed in
writing) to the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks), the Borrower shall have the right,
at any time or from time to time, without premium or penalty, to terminate
the Total Unutilized Revolving Loan Commitment, in whole or in part,
PROVIDED that any such partial reduction shall be in an amount of $5,000,000
or integral multiples of $1,000,000 in excess thereof, PROVIDED further that
each such reduction pursuant to this clause (a) shall apply proportionately
to permanently reduce the Revolving Loan Commitment of each Bank.
(b) In the event of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Banks as provided in
Section 11.12(b), the Borrower shall have the right, upon five Business Days'
prior written notice to the Agent at its Notice Office (which notice the
Agent shall promptly transmit to each of the Banks), to terminate the entire
Revolving Loan Commitment of such Bank, so long as all Revolving Loans,
together with accrued and unpaid interest, Fees and all other amounts, owing
to such Bank are repaid concurrently with the effectiveness of such
termination pursuant to Section 3.01(b) (at which time Schedule I shall be
deemed modified to reflect such changed amounts)), and at such time, such
Bank shall no longer constitute a "Bank" for purposes of this Agreement,
except with respect to indemnifications under this Agreement pursuant to
Sections 1.10, 1.11, 3.04, 11.01 and 11.06, which shall survive as to such
repaid Bank.
2.03 MANDATORY REDUCTION OF COMMITMENTS. (a) The Total Revolving
Loan Commitment and the Revolving Loan Commitment of each Bank shall
terminate in their entirety on the Revolving Loan Maturity Date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 2.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank) shall be reduced at the time any payment is
required to be made on the principal
-9-
amount of Revolving Loans (or would be required to be made if Revolving Loans
were then outstanding) pursuant to Section 3.02(b), (c), (d) or (e), by an
amount equal to the maximum amount of Revolving Loans that would be required
to be repaid pursuant to Section 3.02(b), (c) or (d) assuming that Revolving
Loans were outstanding in an aggregate principal amount equal to the Total
Revolving Loan Commitment.
(c) Each reduction to the Total Revolving Loan Commitment pursuant
to this Section 2.03 shall be applied proportionately to reduce the Revolving
Loan Commitment of each Bank.
SECTION 3. PREPAYMENTS; PAYMENTS; TAXES.
3.01 VOLUNTARY PREPAYMENTS. (a) The Borrower shall have the
right to prepay the Revolving Loans, without premium or penalty, in whole or
in part at any time and from time to time on the following terms and
conditions: (i) the Borrower shall give the Agent prior to 12:00 Noon (New
York time) at its Notice Office at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of its intent to
prepay such Revolving Loans, the amount of such prepayment and the Types of
Revolving Loans to be prepaid and, in the case of Eurodollar Loans, the
specific Borrowing or Borrowings pursuant to which made, which notice the
Agent shall promptly transmit to each of the Banks; (ii) each prepayment
(except any prepayment in full of a Borrowing) shall be in a minimum amount
of $1,000,000 and, if greater, shall be in integral multiples thereof,
PROVIDED that if any partial prepayment of Eurodollar Loans made pursuant to
any Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to
such Borrowing to an amount less than $10,000,000 then such Borrowing may not
be continued as a Borrowing of Eurodollar Loans and any election of an
Interest Period with respect thereto given by the Borrower shall have no
force or effect; (iii) at the time of any prepayment of Eurodollar Loans
pursuant to this Section 3.01 on any day other than the last day of an
Interest Period applicable thereto, the Borrower shall pay the amounts then
required pursuant to Section 1.11 and (iv) except as provided in clause (b)
of this Section 3.01, each prepayment in respect of any Revolving Loans made
pursuant to a Borrowing shall be applied PRO RATA among the Banks which made
such Revolving Loans.
(b) In the event of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Banks as provided in
Section 11.12(b), the Borrower shall have the right, upon five Business Days'
prior written notice to the Agent at its Notice Office (which notice the
Agent shall promptly transmit to each of the Banks) to repay all Revolving
Loans, together with accrued and unpaid interest, Fees and all other amounts,
owing to such Bank in accordance with said Section 11.12(b) so long as (A)
the Revolving Loan Commitment of such Bank is terminated concurrently with
such repayment pursuant to Section 2.02(b) (at which time Schedule I shall be
deemed modified to reflect the changed Revolving Loan Commitment) and (B) the
consents required by Section 11.12(b) in connection with the repayment
pursuant to this clause (b) shall have been obtained.
-10-
3.02 MANDATORY REPAYMENTS. (a) On any day on which the aggregate
outstanding principal amount of the Revolving Loans exceeds the Total
Revolving Loan Commitment as then in effect, the Borrower shall prepay on
such date the principal of Revolving Loans of the Banks in an amount equal to
such excess.
(b) In addition to any other mandatory repayments pursuant to this
Section 3.02, on each date after the Effective Date upon which Holdings or
any of its Subsidiaries receives any proceeds from any incurrence by Holdings
or any of its Subsidiaries of Indebtedness required to be applied pursuant to
this Section in accordance with Section 7.06(d) or 7.06(e), an amount equal
to the amount required by Section 7.06(d) or 7.06(e), as the case may be,
shall be applied as a mandatory repayment of principal of outstanding
Revolving Loans in accordance with the requirements of Sections 3.02(f).
(c) In addition to any other mandatory repayments pursuant to this
Section 3.02, on each date after the Effective Date upon which Holdings or
any of its Subsidiaries receives proceeds from any sale of assets required to
be applied pursuant to this Section in accordance with Section 7.03, an
amount equal to the amount required by Section 7.03 shall be applied as a
mandatory repayment of principal of outstanding Revolving Loans in accordance
with the requirements of Section 3.02(f).
(d) In addition to any other mandatory repayments pursuant to this
Section 3.02, upon the occurrence of an Event of Loss with respect to
Aircraft Collateral which the Borrower does not replace in accordance with
the provisions of Section 3.5(a) of the Aircraft Mortgage Agreement, an
amount equal to 70% of the value (as specified in the Appraisals) of such
Aircraft Collateral which is the subject of the Event of Loss shall be
applied as a mandatory repayment of principal of outstanding Revolving Loans
in accordance with the requirements of Section 3.02(f) on the date which is
the earlier of (x) the date on which the Borrower determines not to replace
such Collateral and (y) thirty (30) days from the date of occurrence of such
Event of Loss; PROVIDED that no mandatory repayment shall be required to the
extent that the aggregate value (as specified in the Appraisals) of Aircraft
which are or have been the subject of Events of Loss since the Effective Date
does not exceed $20 million and so long as the number of Aircraft which are
or have been since the Effective Date the subject of Events of Loss does not
exceed three (3).
(e) In addition to any other mandatory repayments pursuant to this
Section 3.02, upon the occurrence of an Event of Loss with respect to Route
Collateral which results in failure to be in compliance with the Coverage
Tests on the 30th day following the date of occurrence of such Event of Loss,
as such failure is determined based on Appraisals obtained by the Borrower
following such Event of Loss, an amount equal to the amount necessary for the
Coverage Tests to be complied with (based on the Collateral after giving
effect to such Event of Loss and the Appraisals obtained after such Event of
Loss) shall be applied as a mandatory repayment of principal of outstanding
Revolving Loans in accordance with the requirements of Section 3.02(f).
(f) With respect to each repayment of Revolving Loans required by
this Section 3.02, the Borrower may designate the Types of Revolving Loans
which are to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings pursuant to which made,
-11-
PROVIDED that: (i) if any repayment of Eurodollar Loans made pursuant to a
single Borrowing shall reduce the outstanding Eurodollar Loans made pursuant
to such Borrowing to an amount less than $10,000,000, such Borrowing shall be
converted at the end of the then current Interest Period into a Borrowing of
Base Rate Loans; and (ii) each repayment of any Revolving Loans made pursuant
to a Borrowing shall be applied PRO RATA among the Banks. In the absence of
a designation by the Borrower as described in the preceding sentence, the
Agent shall, subject to the above, make such designation in its sole
discretion.
3.03 METHOD AND PLACE OF PAYMENT. Except as otherwise
specifically provided herein, all payments under this Agreement or any
Revolving Note shall be made to the Agent for the account of the Bank or
Banks entitled thereto not later than 1:00 P.M. (New York time) on the date
when due and shall be made in Dollars in immediately available funds at the
Payment Office of the Agent. Whenever any payment to be made hereunder or
under any Revolving Note shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension.
3.04 NET PAYMENTS. (a) All payments made by the Guarantors or
the Borrower hereunder or under any Revolving Note will be made without
set-off, counterclaim or other defense. Except as provided in Section
3.04(b), all such payments will be made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or
hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, (i) any tax
imposed on or measured by the net income or profits of a Bank, or any
franchise tax based on the net income or profits of a Bank, in either case
pursuant to the laws of the United States of America or any political
subdivision or taxing authority thereof or therein or the jurisdiction in
which it is organized or in which the principal office or applicable lending
office of such Bank is located or any subdivision thereof or therein, and
(ii) in the case of any Bank organized under the laws of any jurisdiction
other than the United States of America or any State thereof (including the
District of Columbia), any taxes imposed by the United States of America by
means of withholding at the source unless such withholding results from a
change in applicable law or treaty subsequent to the date such Bank becomes a
Bank with respect to the Revolving Loan or portion thereof affected by such
change) and all interest, penalties or similar liabilities with respect
thereto (all such non-excluded taxes, levies, imports, duties, fees,
assessments or other charges being referred to collectively as "Taxes"). If
any Taxes are so levied or imposed, the Borrower agrees to pay the full
amount of such Taxes, and such additional amounts as may be necessary so that
every payment of all amounts due under this Agreement or under any Revolving
Note, after withholding or deduction for or on account of any Taxes, will not
be less than the amount provided for herein or in such Revolving Note. If
any amounts are payable in respect of Taxes pursuant to the preceding
sentence of this Section 3.04(a), then the Borrower agrees to reimburse each
Bank, upon the written request of such Bank, for taxes imposed on or measured
by the net income or profits of such Bank, or any franchise tax based on the
net income or profits of such Bank, in either case pursuant to the laws of
the jurisdiction in which the principal office or applicable lending office
of such Bank is located or under the laws of any
-12-
political subdivision or taxing authority of any such jurisdiction in which
the principal office or applicable lending office of such Bank is located and
for any withholding of income or similar taxes imposed by the United States
of America as such Bank shall determine are payable by, or withheld from,
such Bank in respect of such amounts so paid to or on behalf of such Bank
pursuant to the preceding sentence and in respect of any amounts paid to or
on behalf of such Bank pursuant to this sentence. Such written request shall
set forth the amount of net income or profits or franchise taxes payable by,
or withheld from, such Bank pursuant to the immediately preceding sentence
and shall be certified by an appropriate officer of such Bank. The Borrower
will pay any such Taxes required to be paid pursuant to this Section 3.04(a)
within the time allowed for such payment under applicable law and will
furnish to the Agent within 45 days after the date the payment of any Taxes
is made to the relevant taxation or other authority pursuant to applicable
law certified copies of tax receipts evidencing such payment by the Borrower.
The Borrower agrees to indemnify and hold harmless each Bank, and reimburse
such Bank upon its written request, for the amount of any Taxes so levied or
imposed and paid by such Bank.
(b) Each Bank which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Agent on or prior to the Effective Date or in the case of a Bank that is
an assignee or transferee of an interest under this Agreement pursuant to
Sections 1.13 or 11.04 (unless the respective Bank was already a Bank hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or Form 1001 (or successor
forms) certifying to such Bank's entitlement to a complete exemption from United
States withholding tax with respect to payments to be made under this Agreement
and under any Revolving Note, or (ii) if the Bank is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit C (any such certificate, a
"Section 3.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Revolving Note. In addition, each Bank agrees that from
time to time after the Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, it will deliver to the Borrower and the Agent two new accurate
and complete original signed copies of Internal Revenue Service Form 4224 or
1001, or Form W-8 and a Section 3.04(b)(ii) Certificate, as the case may be, and
such other forms as may be required in order to confirm or establish the
entitlement of such Bank to a continued exemption from or reduction in United
States withholding tax with respect to payments under this Agreement and any
Revolving Note, or it shall immediately notify the Borrower and the Agent of its
inability to deliver any such form or certificate. Notwithstanding anything to
the contrary contained in Section 3.04(a), but subject to Section 11.04(b) and
the immediately succeeding sentence, (x) the Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or similar
taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, fees or other amounts payable
hereunder for the account of any Bank which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income
tax purposes to the extent
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that such Bank has not provided to the Borrower U.S. Internal Revenue Service
Forms that establish a complete exemption from such deduction or withholding
and (y) the Borrower shall not be obligated pursuant to Section 3.04(a)
hereof to gross-up payments to be made to a Bank in respect of income or
similar taxes imposed by the United States (or any political subdivision or
taxing authority thereof or therein) if (I) such Bank has not provided to the
Borrower the Internal Revenue Service Forms and, if applicable, certificate
required to be provided to the Borrower pursuant to this Section 3.04(b) or
(II) in the case of a payment, other than interest, to a Bank described in
clause (ii) above, to the extent that such forms and, if applicable,
certificate do not establish a complete exemption from withholding of such
taxes. Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 3.04 and except as set forth in Section
11.04(b), the Borrower agrees to pay additional amounts and to indemnify each
Bank in the manner set forth in Section 3.04(a) (without regard to the
identity of the jurisdiction requiring the deduction or withholding) in
respect of any amounts deducted or withheld by it as described in the
immediately preceding sentence as a result of any changes after the Effective
Date in any applicable law, treaty, governmental rule, regulation, guideline
or order, or in the official interpretation thereof, relating to the
deducting or withholding of income or similar Taxes.
(c) The provisions of this Section 3.04 are subject to the
provisions of Section 11.15 (to the extent applicable).
SECTION 4A. CONDITIONS PRECEDENT TO EFFECTIVE DATE. The
occurrence of the Effective Date is subject to the satisfaction of the
following conditions:
4A.01 NOTES. On or prior to the Effective Date there shall have
been delivered to the Agent for the account of each of the Banks the
appropriate Revolving Note executed by the Borrower and in the amount and
maturity and as otherwise provided herein.
4A.02 OFFICERS' CERTIFICATE (a) On the Effective Date, the Agent
shall have received a certificate dated the Effective Date and signed by an
Authorized Officer of the Borrower stating that all of the applicable
conditions set forth in Sections 4A.06, 4A.07, 4A.11 and 4B.02 have been
satisfied as of such date.
(b) On the Effective Date, the Agent shall have received a
certificate dated the Effective Date and signed by an Authorized Officer of
Holdings (i) stating that Holdings is in compliance with Sections 7.08 and
7.09 as of the last day of the fiscal quarter ended March 31, 1998 and (ii)
setting forth the calculations required to establish such compliance.
4A.03 OPINIONS OF COUNSEL. On the Effective Date, the Agent shall
have received opinions, in form and substance satisfactory to the Agent,
addressed to the Agent and the Banks and dated the Effective Date, from (i)
Xxxxxxx X. Xxxxxxxxx, Esq., Senior Vice President, General Counsel and
Secretary of the Credit Parties, which opinion shall cover the matters
contained in Exhibit D-1 hereto, (ii) Xxxxx & Xxxxxxx, special aviation
counsel for the Agent, which opinion shall cover the matters contained in
Exhibit D-2 hereto, (iii) Xxxxxx & Xxxxxxx, special counsel for the Borrower,
which opinion shall cover the matters contained in
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Exhibit D-3 hereto and (iv) White & Case, special counsel to the Agent, which
opinion shall cover the matters contained in Exhibit D-4 hereto.
4A.04 CORPORATE DOCUMENTS; PROCEEDINGS; ETC. (a) On the
Effective Date, the Agent shall have received from each Credit Party a
certificate, dated the Effective Date, signed by an Authorized Officer, and
attested to by the Secretary or any Assistant Secretary, of such Credit
Party, (x) certifying that the certificate of incorporation and by-laws of
such Credit Party attached thereto are true and correct copies thereof and
(y) to the effect that such Credit Party is in good standing in its
respective state of incorporation.
(b) On the Effective Date, all corporate and legal proceedings and
all instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Credit Documents shall be
satisfactory in form and substance to the Agent, and the Agent shall have
received all information and copies of all certificates, documents and
papers, including records of corporate proceedings, governmental approvals,
good standing certificates and bring-down telegrams or facsimiles, if any,
which the Agent may have requested in connection therewith, such documents
and papers, where appropriate, to be certified by proper corporate or
governmental authorities.
4A.05 CONSENT LETTER. The Agent shall have received a letter from
CT Corporation System, presently located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, substantially in the form of Exhibit E, indicating its consent to its
appointment by each Credit Party as its agent to receive service of process
as specified in Section 11.08.
4A.06 ADVERSE CHANGE, ETC. On the Effective Date, nothing shall
have occurred which has had a material adverse effect on (i) the rights or
remedies of the Agent or the Banks, (ii) the ability of the Credit Parties to
perform their respective obligations to the Agent and the Banks or (iii) the
results of operations or financial condition of Holdings and its Subsidiaries
taken as a whole or the Borrower and its Subsidiaries taken as a whole,
provided, however, that neither a strike or other labor action with respect
to the Borrower nor the effects thereof shall be deemed to have such a
material adverse effect.
4A.07 LITIGATION. On the Effective Date, no actions, suits or
proceedings by any entity (private or governmental) shall be pending or
threatened (a) with respect to the Transaction or this Agreement or any
documentation executed in connection therewith, or (b) which has had a
materially adverse effect on (i) the Transaction, (ii) the results of
operations or financial condition of Holdings and its Subsidiaries taken as a
whole or of the Borrower and its Subsidiaries taken as whole or (iii) the
rights or remedies of the Banks hereunder or under any other Credit Document
or on the ability of any Credit Party to perform its respective obligations
to the Banks hereunder or under any other Credit Document.
4A.08 FINANCIAL OUTLOOK. The Banks shall have received the
Financial Outlook which shall be in form and substance reasonably
satisfactory to the Agent and the Required Banks.
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4A.09 EXISTING CREDIT AGREEMENT. On the Effective Date, the
Existing Credit Agreement shall have been amended in form, scope and
substance satisfactory to the Agent and the Required Banks.
4A.10 FEES, ETC. The Borrower shall have paid to the Agent and
the Banks all costs, fees and expenses (including, without limitation, legal
fees and expenses) payable to the Agent and the Banks to the extent then due.
4A.11 APPRAISAL OF COLLATERAL. (a) The Agent shall have received
Appraisals with respect to the Collateral setting forth the Appraised Value
of such Collateral as of the Effective Date, which Appraisals shall be in
form and substance satisfactory to the Agent.
(b)(i) The Appraised Value of the Collateral (using fair market
values with respect to the Route Collateral) shall be equal to or greater
than 1.75 times the Total Revolving Loan Commitment and (ii) the Appraised
Value of the Collateral (using "orderly liquidation" values with respect to
the Route Collateral) shall be equal to or greater than 1.5 times the Total
Revolving Loan Commitment (such calculations in clauses (i) and (ii), the
"Coverage Tests").
4A.12 SECURITY DOCUMENTS. On the Effective Date, the Borrower
shall have duly authorized, executed and delivered (i) an Aircraft Mortgage
and Security Agreement in the form of Exhibit G-1 hereto (as modified,
amended or supplemented from time to time in accordance with the terms
thereof and hereof, the "Aircraft Mortgage Agreement") and (ii) a Route
Security Agreement in the form of Exhibit G-2 hereto (as modified, amended or
supplemented from time to time in accordance with the terms thereof and
hereof, the "Route Security Agreement" and, together with the Aircraft
Mortgage Agreement, the "Security Documents"), in each case covering all of
the Aircraft Collateral or the Route Collateral, as the case may be, together
with:
(i) executed copies of proper financing statements to be filed under
the UCC in all jurisdictions required to perfect the security interests
purported to be created by the respective Security Documents;
(ii) evidence of the completion of all other recordings and filings
with respect to the Security Documents in order to perfect the security
interest created by the Security Documents, including without limitation,
all filings with the FAA;
(iii) evidence that all third party approvals, consents, or notices,
or all other actions required or deemed reasonably necessary by the Agent,
to perfect and protect the security interests created by the Security
Documents have been obtained or taken, as the case may be;
(iv) an independent insurance report (including confirmation of
coverage), in form and substance reasonably satisfactory to the Agent,
indicating compliance by the Borrower with the terms of the Security
Documents relating to insurance with respect to the Collateral; and
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(v) certified copies of a Request for Information or Copies (form
UCC-11) or equivalent reports, listing any financing statements relating to
the Collateral.
SECTION 4B. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The
obligation of each Bank to make Revolving Loans (including Revolving Loans
made on the Initial Borrowing Date) is subject, at the time of each such
Credit Event, to the satisfaction of the following conditions:
4B.01 NOTICE OF BORROWING. The Agent shall have received a Notice
of Borrowing meeting the requirements of Section 1.03(a).
4B.02 NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of
each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties contained herein or in any other Credit Document shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on the date of such Credit Event
(it being understood and agreed that any representation or warranty which by
its terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date).
4B.03 FULL UTILIZATION OF EXISTING FACILITIES. At the time of
such Credit Event, the Borrower shall have utilized all of the commitments
under each of the Existing Credit Agreement and the Bridge Debt Agreement.
4B.04 SECURITY MATTERS. On the Initial Borrowing Date, the Agent
shall have received a legal opinion, in form and substance satisfactory to
the Agent, addressed to the Agent and the Banks and dated the Initial
Borrowing Date, from Xxxxx & Xxxxxxx regarding priority of the Secured
Creditors' security interests in the Aircraft Collateral.
4B.05 EFFECTIVE DATE. On or prior to the Initial Borrowing Date,
the Effective Date shall have occurred.
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by each Credit Party to the Agent
and each of the Banks that all of the conditions specified in Section 4A and
in this Section 4B which are applicable to such Credit Event exist as of that
time. All of the Revolving Notes, certificates, legal opinions and other
documents and papers referred to in Section 4A and in this Section 4B, unless
otherwise specified, shall be delivered to the Agent at the Agent's Notice
Office for the account of each of the Banks and, except for the Revolving
Notes, in sufficient counterparts for each of the Banks and shall be
reasonably satisfactory in form and substance to the Banks.
SECTION 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to
induce the Banks to enter into this Agreement and to make the Revolving Loans,
each Credit Party makes the following representations and warranties to and
agreements with the Banks (in each case solely to the extent applicable to such
Credit Party or its Subsidiaries), all of which shall survive the execution and
delivery of this Agreement and the Revolving Notes and the making of
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the Revolving Loans, with the occurrence of each Credit Event on or after the
Effective Date being deemed to constitute a representation and warranty that
the matters specified in this Section 5 are true and correct in all material
respects on the date of such Credit Event (it being understood and agreed
that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material
respects only as of such specified date).
5.01 CORPORATE STATUS. Each Credit Party and each of its
Subsidiaries (i) is a duly organized and validly existing corporation or
other entity in good standing under the laws of the jurisdiction of its
organization, (ii) has the power and authority to own its property and assets
and to transact the business in which it is engaged and presently proposes to
engage and (iii) is duly qualified and is authorized to do business and is in
good standing in each jurisdiction where it is required to be so qualified
and where the failure to be so qualified would have a material adverse effect
on the results of operations or financial condition of Holdings and its
Subsidiaries taken as a whole or the Borrower and its Subsidiaries taken as a
whole.
5.02 CORPORATE POWER AND AUTHORITY. Each Credit Party has the
power and authority to execute, deliver and perform the terms and provisions
of each of the Credit Documents to which it is party and has taken all
necessary action to authorize the execution, delivery and performance by it
of each of such Credit Documents. Each Credit Party has duly executed and
delivered each of the Credit Documents to which it is party, and each of such
Credit Documents constitutes such Credit Party's legal, valid and binding
obligation enforceable in accordance with its terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally
affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
5.03 NO VIOLATION. Neither the execution, delivery or performance
by any Credit Party of the Credit Documents to which it is a party, nor
compliance by it with the terms and provisions thereof, (i) will contravene
in any material respect any provision of any material applicable law,
statute, rule or regulation or any applicable order, writ, injunction or
decree of any court or governmental instrumentality, (ii) will conflict in
any material respect with or result in any material breach of any of the
terms, covenants, conditions or provisions of, or constitute a material
default under, or result in the creation or imposition of (or the obligation
to create or impose) any Lien (except pursuant to the Security Documents)
upon any of the properties or assets of such Credit Party pursuant to the
terms of any material indenture, mortgage, deed of trust, credit agreement or
loan agreement, or any other material agreement, contract or instrument, to
which such Credit Party is a party or by which it or any of its property or
assets is bound or to which it may be subject or (iii) will violate any
provision of the certificate of incorporation or by-laws of such Credit Party.
5.04 GOVERNMENTAL APPROVALS. No material order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of any Credit
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Document (other than any such order, consent, approval, license,
authorization, validation, filing, recording, registration or exemption
required to be made or obtained after the Effective Date in the ordinary
course of business which the Borrower agrees to promptly obtain as and when
required under applicable law) or (ii) the legality, validity, binding effect
or enforceability of any Credit Document.
5.05 FINANCIAL STATEMENTS; FINANCIAL OUTLOOK. (a) The audited
consolidated balance sheets of each of Holdings and its Subsidiaries and the
Borrower and its Subsidiaries at December 31, 1997 and the related
consolidated statements of operations, of common stockholders' equity
(deficit) (in the case of Holdings and its Subsidiaries) and of cash flows of
such parties for the fiscal year ended as of said date, which financial
statements have been examined by Xxxxx & Xxxxx, who delivered an unqualified
opinion in respect therewith have heretofore been furnished to each Bank and
present fairly in all material respects the financial position of such
entities at the dates of said statements and the results of operations for
the periods covered thereby in accordance with GAAP consistently applied,
except to the extent provided in the notes to said financial statements.
Since December 31, 1997, there has been no material adverse change in the
financial condition or results of operations of the Borrower or either
Guarantor, provided that no strike or other labor action with respect to the
Borrower nor the effects thereof shall be deemed to be a material adverse
change in the financial condition or results of operations of the Borrower or
either Guarantor.
(b) On and as of the Effective Date, the Financial Outlook
1997-2002, dated as of December 4, 1997 (the "Financial Outlook"), previously
delivered to the Agent and the Banks, had been prepared on a basis consistent
with the financial statements referred to in Section 5.05(a) (other than as
set forth or presented in such Financial Outlook), and there are no
statements or conclusions in the Financial Outlook which are based upon or
include information known to any Credit Party to be misleading in any
material respect or which fail to take into account material information
regarding the matters reported therein. The Financial Outlook is based on
good faith estimates and assumptions believed by the Credit Parties to be
reasonable at the time made, which the Credit Parties continue to believe are
reasonable as of the Effective Date, it being recognized by the Banks that
the Financial Outlook as to future events is not to be viewed as facts and
that actual results during the period or periods covered by the Financial
Outlook may differ from the results set forth in the Financial Outlook.
5.06 LITIGATION. There are no actions, suits or proceedings
pending or threatened with respect to any Credit Party or any of its
Subsidiaries (i) that have had a material adverse effect on the financial
condition or results of operations of the Borrower or either Guarantor or
(ii) that affect the legality, validity, binding effect or enforceability of
any Credit Document.
5.07 TRUE AND COMPLETE DISCLOSURE. All factual information (taken as
a whole) furnished by or on behalf of any Credit Party in writing to the Agent
or any Bank for purposes of or in connection with this Agreement, the other
Credit Documents or any transaction contemplated herein or therein is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of any such Persons in writing to the Agent or any Bank will be, true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to
make such information
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(taken as a whole) not misleading in any material respect at such time in
light of the circumstances under which such information was provided.
5.08 USE OF PROCEEDS; MARGIN REGULATIONS. (a) All proceeds of
the Revolving Loans shall be used by the Borrower (i) to effect the
Transaction, (ii) to pay fees and expenses arising in connection with the
Transaction and (iii) for the working capital purposes of the Borrower and
its Subsidiaries.
(b) Not more than 25% of the value of the assets of the Borrower, or
of Holdings and its Subsidiaries on a consolidated basis, shall constitute
Margin Stock. Neither the making of any Revolving Loan nor the use of the
proceeds of any thereof will violate or be inconsistent with the provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve System.
5.09 COMPLIANCE WITH XXXXX. Each Pension Plan has been operated and
administered in compliance with all applicable requirements of ERISA and, if
intended to qualify under Section 401(a) or 403(a) of the Code, in compliance
with all applicable requirements of such provision except where the failure to
so comply would not result in, taking all instances in the aggregate, liability
in excess of $2,000,000. Full payment has been made by each Credit Party or any
of its ERISA Affiliates of all amounts which such Persons are required under the
terms of each Pension Plan and Multiemployer Plan to have paid as contributions
to such Pension Plan and Multiemployer Plan except where the failure to so
comply, taking all instances in the aggregate, would not result in liability in
excess of $2,000,000. None of the Pension Plans had an accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, as of the last day of the most recent plan year of such
Pension Plan. No Termination Event has occurred or, to the best knowledge of
any Credit Party, is expected by such Credit Party to occur with respect to any
Pension Plan or Multiemployer Plan such that any Credit Party or any of its
ERISA Affiliates would incur, taking all instances in the aggregate, liabilities
in excess of $10,000,000 (such liabilities to include, without limitation, any
liability to the PBGC or to any other party under Sections 4062, 4063 and 4064
of ERISA or to any Multiemployer Plan determined under Section 4201 ET SEQ. of
ERISA) resulting from or associated with all such Termination Events. No Credit
Party nor any of its ERISA Affiliates has engaged in any transaction in
connection with which any such entity has been or could be subjected to either a
tax imposed by Section 4975 of the Code or the corresponding civil penalty
assessed pursuant to Sections 502(i) and 502(l) of ERISA, which penalties and
taxes for all such transactions are in an aggregate amount in excess of
$2,500,000. Using actuarial assumptions and computation methods consistent with
Part 1 of subtitle E of Title IV of ERISA, the aggregate liabilities of Holdings
and its Subsidiaries, the Borrower and its Subsidiaries and their ERISA
Affiliates to all Multiemployer Plans in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each such
Multiemployer Plan ended prior to the date of the most recent Credit Event,
would not have a material adverse effect upon the results of operation or
financial condition of any Credit Party. No Credit Party nor any of its
Subsidiaries maintains or contributes to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) which provides benefits to retired employees
or other former employees (other than as required by Section 601 of ERISA) or
any employee pension benefit plan (as defined in Section
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3(2) of ERISA) the obligations with respect to which would have a material
adverse effect on the ability of any Credit Party to perform its respective
obligations under this Agreement.
5.10 SUBSIDIARIES. Schedule III correctly sets forth, as of the
Effective Date, the percentage ownership (direct and indirect) of Holdings,
NWA and the Borrower in each of their respective Subsidiaries.
5.11 INVESTMENT COMPANY ACT. None of the Credit Parties or any of
their respective Subsidiaries is an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended.
5.12 COMPLIANCE WITH STATUTES, ETC. Each Credit Party and each of
its Subsidiaries is in material compliance with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
businesses and the ownership of its properties (including applicable
statutes, regulations, orders and restrictions relating to environmental
standards and controls) except such noncompliances as would not, in the
aggregate, have a material adverse effect on the financial condition or
results of operations of Holdings and its Subsidiaries taken as a whole or of
the Borrower and its Subsidiaries taken as a whole.
5.13 AIR CARRIER. The Borrower is a Certificated Air Carrier.
5.14 SECURITY INTERESTS. (a) The security interests created in
favor of the Collateral Agent under the Security Documents will at all times
from and after the Initial Borrowing Date constitute, as security for the
obligations purported to be secured thereby, a legal, valid, enforceable and
perfected security interest in and Lien on all of the Collateral referred to
therein in favor of the Collateral Agent for the benefit of the Secured
Creditors, subject to no other Liens except Permitted Liens.
(b) The Borrower has legal and marketable title to all Collateral
covered by such Security Documents free and clear of all Liens (except
Permitted Liens). The Aircraft Collateral has been duly certified by the FAA
as to type and airworthiness and the Collateral has been insured by the
Borrower in accordance with the terms of the Security Documents. The
Collateral shall include a sufficient number of appropriate Engines to
operate each Airframe included in the Collateral as an Aircraft.
(c) No consents, filings or recordings are required in order to
perfect (or maintain the perfection or priority of) the security interests
purported to be created by any of the Security Documents, other than such as
have been obtained and which remain in full force and effect and other than
periodic UCC continuation filings.
5.15 YEAR 2000 REPROGRAMMING. A project to complete on a timely
basis all the reprogramming required to permit the proper functioning, in and
following the year 2000, of (i) Holdings' or any of its Subsidiaries' computer
systems and (ii) equipment containing embedded microchips (excluding systems and
equipment of third-parties with which Holdings' or any of its
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Subsidiaries' systems interface) and the testing of all such systems and
equipment, as so reprogrammed, has been implemented by Holdings and its
Subsidiaries. Neither Holdings nor any of its Subsidiaries believes that the
consequences of the year 2000 will pose significant operational problems for
its computer systems.
SECTION 6. AFFIRMATIVE COVENANTS. Each Credit Party hereby
covenants and agrees (in each case solely to the extent that any covenant or
agreement set forth in this Section 6 is expressly stated to be applicable to
such Credit Party and its Subsidiaries) that on and after the Effective Date
and until the Total Revolving Loan Commitment and the Revolving Loans and the
Revolving Notes together with interest, Fees and all other Obligations
incurred hereunder and thereunder, are paid in full:
6.01 INFORMATION COVENANTS. Holdings will furnish to each Bank:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available and in any
event within 120 days after the close of each fiscal year of Holdings, (i)
a copy of the SEC Form 10-K filed by Holdings with the SEC for such fiscal
year, or, if no such Form 10-K was so filed by Holdings for such fiscal
year, the consolidated balance sheet of Holdings and its Subsidiaries and
whether or not such Form 10-K was filed, of the Borrower and its
Subsidiaries, as at the end of such fiscal year and the related
consolidated statements of operations, of common stockholders' equity
(deficit) (in the case of Holdings and its Subsidiaries) and of cash flows
for such fiscal year, setting forth comparative consolidated figures as of
the end of and for the preceding fiscal year, and examined by Xxxxx & Xxxxx
(or (x) any other "Big Six" or "Big Four" accounting firm or (y) any other
firm of independent public accountants of recognized standing selected by
Holdings or the Borrower, as the case may be, and reasonably acceptable to
the Required Banks) whose opinion shall not be qualified as to the scope of
audit or as to the status of Holdings or the Borrower as a going concern,
and (ii) a certificate of such accounting firm stating that in the course
of its regular audit of the business of Holdings and the Borrower, which
audit was conducted in accordance with generally accepted auditing
standards, such accounting firm has obtained no knowledge of any Default or
Event of Default which has occurred and is continuing or, if in the opinion
of such accounting firm such a Default or Event of Default has occurred and
is continuing, a statement as to the nature thereof.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in any
event within 45 days after the close of each of the first three quarterly
accounting periods in each fiscal year of Holdings, a copy of the SEC Form
10-Q filed by Holdings with the SEC for such quarterly period, or, if no
such Form 10-Q was so filed by Holdings with respect to any such quarterly
period, the consolidated balance sheet of Holdings and its Subsidiaries,
and whether or not such Form 10-Q was filed, of the Borrower and its
Subsidiaries, as at the end of such quarterly period and the related
consolidated statements of operations for such quarterly period and for the
elapsed portion of the fiscal year ended with the last day of such
quarterly period and in each case setting forth comparative consolidated
figures as of the end of and for the related periods in the prior fiscal
year, all of which shall be
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certified by an Authorized Officer of Holdings or the Borrower, as the
case may be, subject to changes resulting from audit and normal year-end
audit adjustments.
(c) BUDGETS. Not more than 75 days following the commencement of
each fiscal year of the Borrower, a budget of the Borrower and its
Subsidiaries in reasonable detail for each fiscal month of such fiscal year
as is customarily prepared by management for its internal use setting
forth, with appropriate discussion, the principal assumptions upon which
such budget is based.
(d) OFFICER'S CERTIFICATES. At the time of the delivery of the
financial statements provided for in Section 6.01(a) and (b), a certificate
of an Authorized Officer of Holdings and the Borrower to the effect that no
Default or Event of Default exists or, if any Default or Event of Default
does exist, specifying the nature and extent thereof and which certificate
shall set forth the calculations required, if any, to establish whether
each Credit Party was in compliance with the provisions of Sections 7.02,
7.03, 7.04, 7.05, 7.06, 7.08 and 7.09 as at the end of such fiscal period
or year, as the case may be.
(e) NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any event
within three Business Days after any senior financial or legal officer of
any Credit Party obtains knowledge thereof, notice of (x) the occurrence of
any event which constitutes a Default or Event of Default which notice
shall specify the nature thereof, the period of existence thereof and what
action such Credit Party proposes to take with respect thereto and (y) any
litigation or governmental proceeding pending against or affecting Holdings
or any of its Subsidiaries which is likely to have a material adverse
effect on the financial condition or results of operations of Holdings and
its Subsidiaries taken as a whole or the Borrower and its Subsidiaries
taken as a whole.
(f) RATING CHANGES. Promptly after any senior financial or legal
officer of NWA or the Borrower obtains knowledge thereof, notice of any
change in the Rating assigned by either Rating Agency.
(g) OTHER INFORMATION. Promptly upon transmission thereof, copies of
any filings and registrations with, and reports to, the Securities and
Exchange Commission or any successor thereto (the "SEC") by Holdings or any
of its Subsidiaries (other than amendments to any registration statement
(to the extent such registration statement, in the form it becomes
effective, is delivered to the Banks), exhibits to any registration
statement and any registration statements on Form S-8) and, with reasonable
promptness, such other information or documents (financial or otherwise) as
the Agent on its own behalf or on behalf of the Required Banks may
reasonably request from time to time.
(h) NON-ORDINARY COURSE TRANSACTION. At any time after the Effective
Date that any Credit Party or any of its respective Subsidiaries proposes
to enter into any transaction (or series of related transactions) with any
Affiliate of any Credit Party or any of their respective Subsidiaries
outside the ordinary course of business (other than any transaction of a
nature described in the proviso to Section 7.07), the Borrower shall give
the Agent and the Banks (x) written notice of any such transaction at least
7 Business
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Days (or such shorter period as the Required Banks may agree) prior to the
earlier of (I) the consummation thereof or (II) the execution of a binding
agreement therefor, and (y) such other information related to the
transaction as the Agent or the Required Banks shall reasonably request.
(i) Prompt notice of any fact, event or circumstance relating to the
consequences of the year 2000 which it or any of its Subsidiaries is or
becomes aware of and that could be reasonably expected to (a) have a
material adverse impact on the implementation or anticipated July 1, 1999
date for completion of the reprogramming and testing project referred to in
Section 5.15 hereof, (b) have a material adverse impact on the proper
functioning of Holdings or any of its Subsidiaries' computer systems or
equipment containing embedded microchips on or after the year 2000 or (c)
result in a material adverse effect on the financial conditions or results
of operations of Holdings and its Subsidiaries taken as a whole or of the
Borrower and its Subsidiaries taken as a whole.
6.02 BOOKS, RECORDS AND INSPECTIONS. Each Credit Party will, and
will cause each of its Subsidiaries to, keep proper books of record and
account in which full, true and correct entries in conformity with GAAP and
all requirements of law shall be made of all dealings and transactions in
relation to its business and activities. Each Credit Party will, and will
cause each of its Subsidiaries to, permit, upon reasonable notice given by
the Agent to the Borrower on behalf of any Bank, officers and designated
representatives of any Bank (including without limitation, appraisers) to
visit and inspect any of the properties or assets of such Credit Party and
any of its Subsidiaries (including, without limitation, the Collateral and
any books, records or logs related thereto) and to examine the books of
account of such Credit Party and any of its Subsidiaries and discuss the
affairs, finances and accounts of such Credit Party and of any of its
Subsidiaries with its and their officers and independent accountants, all at
such reasonable times and intervals and to such reasonable extent as such
Bank may desire.
6.03 INSURANCE. Each Credit Party will, and will cause each of
its Subsidiaries to, at all times be covered by and maintain in full force
and effect insurance required by the Security Documents and other insurance
in such amounts, covering such risks and liabilities and with such
deductibles or self-insured retentions as are in accordance with normal
industry practice and as is required by law.
6.04 PAYMENT OF TAXES. Each Credit Party will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all material
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, prior to the
date on which material penalties attach thereto, and all material lawful
claims which, if unpaid, might become a Lien or charge upon any properties of
any Credit Party or any of its Subsidiaries, PROVIDED that no Credit Party
nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim (i) which is being contested in good faith
and by proper proceedings if it has maintained adequate reserves (in the good
faith judgment of the management of such Credit Party) with respect thereto
in accordance with GAAP or (ii) the nonpayment of which would not have a
material adverse effect on the financial condition or results of operations
of Holdings and its Subsidiaries taken as a whole or of the Borrower and its
Subsidiaries taken as a whole.
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6.05 CONSOLIDATED CORPORATE FRANCHISES. Each Credit Party will
do, and will cause each of its Subsidiaries to do, or cause to be done, all
things necessary to preserve and keep in full force and effect its existence
and its material rights, authority and franchises, unless the failure to keep
in full force and effect any such right, authority or franchise would not
have a material adverse effect on the financial condition or results of
operations of Holdings and its Subsidiaries taken as a whole or of the
Borrower and its Subsidiaries taken as a whole.
6.06 COMPLIANCE WITH STATUTES, ETC. Each Credit Party will, and
will cause each of its Subsidiaries to, comply in all material respects with
all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property
(including applicable statutes, regulations, orders and restrictions relating
to environmental standards and controls) other than those the non-compliance
with which would not have a material adverse effect on the financial
condition or results of operations of Holdings and its Subsidiaries taken as
a whole or the Borrower and its Subsidiaries taken as a whole.
6.07 ERISA. (a) As soon as practicable and in any event within
fifteen days after any Credit Party or any of its ERISA Affiliates knows or
has reason to know of the occurrence of any (i) Termination Event in
connection with any Pension Plan or Multiemployer Plan, (ii) non-exempt
"prohibited transaction" as described in Section 406 of ERISA or Section 4975
of the Code, (iii) accumulated funding deficiency or application to the
Secretary of the Treasury for a waiver or modification of the minimum funding
standard (including any required installment payments) or an extension of any
amortization period under Section 412 of the Code, (iv) institution pursuant
to Section 515 of ERISA to collect a delinquent contribution, or (v) material
liability by any Credit Party or any Subsidiary of any Credit Party pursuant
to any employee welfare benefit plan (as defined in Section 3(1) of ERISA)
that provides benefits to retired employees or other former employees (other
than as required by Section 601 of ERISA) or any employee pension benefit
plan (as defined in Section 3(2) of ERISA) in addition to the liability
existing on the Effective Date pursuant to any such welfare or pension plan
or plans in connection with any Pension Plan or Multiemployer Plan or any
trust created thereunder, if as a result of such event or transaction,
considered together with other such events and transactions occurring within
the prior two years, the Credit Parties and their ERISA Affiliates incur or
could reasonably expect to incur liabilities from all such events and
transactions in excess of $5,000,000, such Credit Party shall deliver to each
of the Banks a certificate, signed by an Authorized Officer of such Credit
Party, specifying the nature thereof, what action such Credit Party or such
ERISA Affiliate has taken, is taking or proposes to take with respect
thereto, and any action taken or threatened by the Internal Revenue Service,
Department of Labor, PBGC, Pension Plan or Multiemployer Plan, as applicable,
to be taken with respect thereto (together with copies of all relevant
notices or other communications received from such entity). For the purposes
of this Section 6.07, a Credit Party shall be deemed to have knowledge of all
facts known by the "plan administrator" (as defined in Section 3(16)(A) of
ERISA) of any Pension Plan of which such Credit Party or any of its ERISA
Affiliates is the "plan sponsor" (as defined in Section 3(16)(B) of ERISA).
-25-
(b) To the extent reasonably requested by any Bank, as soon as
practicable and in any event within 30 days after the filing of a Form 5500
series annual report by a Credit Party or any of its ERISA Affiliates with
the Internal Revenue Service with respect to each Pension Plan, such Credit
Party shall furnish to such Bank a copy of such Form 5500 series annual
report and the Schedule B (Actuarial Information) thereto (and shall make
available for inspection by such Bank at reasonable times copies of the full
annual report with respect to each Pension Plan).
6.08 GOOD REPAIR. Each Credit Party will, and will cause each of
its Subsidiaries to, ensure that its properties and equipment used or useful
in its business are kept in good repair, working order and condition, normal
wear and tear excepted, and that from time to time there are made in such
properties and equipment all needful and proper repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto, to
the extent and in the manner customary for companies in similar businesses,
except where the failure to keep such properties and equipment in good
repair, working order and condition or to make such repairs, renewals,
replacements, extensions, additions, betterments and improvements would not
have a material adverse effect on the financial condition or results of
operations of Holdings and its Subsidiaries taken as a whole or of the
Borrower and its Subsidiaries taken as a whole.
6.09 END OF FISCAL YEARS; FISCAL QUARTERS. Holdings and the
Borrower will, for financial reporting purposes, cause (i) each of its and
each of its Subsidiaries' fiscal years to end on December 31 of each year and
(ii) each of its and each of its Subsidiaries' fiscal quarters to end on
March 31, June 30, September 30 and December 31 of each year.
6.10 PERFORMANCE OF OBLIGATIONS. Each Credit Party will, and will
cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, indenture, security agreement and other debt
instrument by which it is bound, except such non-performances as would not
have a material adverse effect on the financial condition or results of
operations of Holdings and its Subsidiaries taken as a whole or of the
Borrower and its Subsidiaries taken as a whole.
6.11 AIR CARRIER. The Borrower will at all times be a
Certificated Air Carrier.
6.12 SECURITY INTERESTS. The Borrower shall perform any and all
acts and execute any and all documents (including, without limitation, the
execution, amendment or supplementation of any financing statement and
continuation statement) for filing under the provisions of the UCC or the
Federal Aviation Act and the rules and regulations thereunder, which are
necessary in order to maintain in favor of the Collateral Agent for the
benefit of the Secured Creditors a valid and perfected Lien on the
Collateral, subject to no other Liens except for Permitted Liens.
SECTION 7. NEGATIVE COVENANTS. Each Credit Party hereby covenants
and agrees (in each case solely to the extent that any covenant or agreement
set forth in this Section 7 is expressly stated to be applicable to such
Credit Party and its Subsidiaries) that on the Effective Date and thereafter,
for so long as this Agreement is in effect and until the Total Revolving Loan
Commitment has terminated, no Revolving Notes are outstanding and the
Revolving Loans, together with interest, Fees and all other Obligations
incurred hereunder, are paid in full:
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7.01 CHANGES IN BUSINESS. No Credit Party will make any material
change in the lines of business in which it was engaged on the Effective Date.
7.02 CONSOLIDATION, MERGER, ETC. No Credit Party will wind up,
liquidate or dissolve its affairs, or enter into any transaction of merger or
consolidation, sell or otherwise dispose of all or substantially all of its
property or assets or agree to do any of the foregoing at any future time,
except that so long as no Default or Event of Default exists, or would result
therefrom and PROVIDED that each Credit Party complies with Section 7.03 in
connection with such transaction to the extent such Section is applicable,
any Credit Party may merge or consolidate with, or sell or otherwise dispose
of all or substantially all of its assets to, any Person, PROVIDED that (i)
in the case of any merger or consolidation, the surviving corporation shall
be such Credit Party or (ii) the surviving corporation, if not such Credit
Party (or the successor corporation, in the case of a sale or other
disposition of all or substantially all of a Credit Party's assets), (A) is a
corporation organized and existing under the laws of the United States of
America or any State thereof, (B) is a Citizen of the United States, (C)
executes and delivers agreements assuming the obligations of such Credit
Party under this Agreement and the other Credit Documents to which such
Credit Party is a party, which assumption agreements and all related actions
and documentation shall be in form and substance reasonably satisfactory to
the Agent and (D) delivers to the Agent a certificate signed by an Authorized
Officer of such Credit Party and an opinion of counsel to such Person
satisfactory to the Agent, each stating that such transaction and such
assumption agreement comply with this Section and that all conditions
precedent herein provided for relating to such transaction have been complied
with.
7.03 SALE OF ASSETS. (I) No Credit Party will, nor will any
Credit Party permit any of its Subsidiaries to, sell, lease or otherwise
dispose of any assets, except:
(a) Holdings or any of its Subsidiaries may, in the ordinary course
of business and consistent with past practices, exchange, in any
transaction or series of related transactions, on a like value basis, (i)
its real property for real property owned by another Person, (ii) its
airplane engines for airplane engines owned by another Person, and (iii)
its airline routes, "airport gates" and/or "slots" for airline routes,
"airport gates" and/or "slots" owned by another Person; PROVIDED, HOWEVER,
that (x) in no event may Collateral be exchanged and (y) to the extent
Holdings or any of its Subsidiaries receives any cash and/or cash
equivalents from any such property exchange permitted pursuant to this
clause (a), the amount of such cash and/or cash equivalents shall be
applied in accordance with clause (f) of this Section 7.03(I);
(b) Holdings or any of its Subsidiaries may, in the ordinary course
of business and consistent with past practices, sell spare parts (which in
no event shall include aircraft or aircraft engines) and supplies
(including, without limitation, fuel) so long as each such sale is for an
amount at least equal to the fair market value thereof (as determined by
the Borrower);
-27-
(c) "parting out" of an aircraft engine shall be permitted by
Holdings or any of its Subsidiaries in the ordinary course of business and
consistent with past practices (but, with respect to the Collateral, only
to the extent permitted by the Security Documents);
(d) Holdings or any of its Subsidiaries may, in a transaction, sell
any of its aircraft (other than Collateral), which aircraft is then
substantially contemporaneously leased back to the respective seller,
PROVIDED that with respect to sale and leasebacks of aircraft owned on the
Effective Date, the stated expiration of the lease of such aircraft to
Holdings or one of its Subsidiaries is after the Revolving Loan Maturity
Date;
(e) Holdings or any of its Subsidiaries may sell airline tickets and
related services in the ordinary course of business;
(f) Holdings or any of its Subsidiaries may sell, lease or otherwise
dispose of any assets (other than Collateral), PROVIDED that to the extent
the gross proceeds received from all such transactions occurring after
December 15, 1995 (including cash or cash equivalent proceeds received
pursuant to Section 7.03(a)) exceeds $500,000,000, an amount equal to 50%
of the Net Sale Proceeds from all transactions which occur after such
$500,000,000 threshold is exceeded (including 50% of the Net Sale Proceeds
from that transaction in which such threshold is exceeded but only out of
that portion of the gross proceeds which exceeds such $500,000,000
threshold) shall be applied to repay Revolving Loans and reduce Revolving
Loan Commitments in accordance with Sections 3.02(c) and 2.03(b);
(g) Holdings or any of its Subsidiaries may, in the ordinary course
of business and consistent with industry practice, (i) trade the use of any
"slot" with another air carrier or (ii) lease or license any such "slot" to
another air carrier, in each case on a temporary basis and PROVIDED that
such transactions do not involve the transfer of title to such "slots"; and
(h) any Credit Party may dispose of its equity interests in (x)
GHI-CA Corporation, a Delaware corporation which owns all of the
outstanding shares of capital stock of Grand Holding, Inc., a Nevada
corporation, d/b/a Champion Air and/or (y) Express Air I owned by such
Credit Party on the Effective Date.
(II) The Borrower will not convey, sell, lease, transfer or
otherwise dispose of or remove or substitute, any Collateral (or any engine
included in the Collateral unless such engine is replaced by another working
engine or engines in which the Collateral Agent has a perfected security
interest subject to no Liens other than Permitted Liens) or take any action
that could materially diminish the fair market value of the Collateral taken
as a whole, or agree to do any of the foregoing at any future time, except as
may be permitted pursuant to the provisions of the Security Documents.
7.04 LIENS. None of the Credit Parties will, or will permit any of
their respective Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon or with respect to the Collateral or assign any right to receive
income from the Collateral, or file or permit the filing
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with respect to the Collateral of any financing statement under the UCC or
any similar notice of Lien under any similar recording or notice statute,
except (Liens described below are herein referred as "Permitted Liens"):
(a) Liens created by the Security Documents:
(b) Liens for taxes not yet due or Liens for taxes being contested in
good faith and by appropriate proceedings for which adequate reserves (in
the good faith judgment of the management of the Borrower) have been
established in accordance with GAAP;
(c) Liens (other than any Lien imposed by ERISA) in respect of the
Collateral imposed by law which were incurred in the ordinary course of
business and which have not arisen to secure Indebtedness for borrowed
money, such as carriers', warehousemen's and mechanics' Liens, statutory
landlord's Liens, and other similar Liens and governmental charges arising
in the ordinary course of business, and which either (x) do not in the
aggregate materially detract from the value of any Collateral or materially
impair the use thereof in the operation of the business of the Borrower or
any of its Subsidiaries or (y) are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the property or asset subject to such Lien; and
(d) Xxxxx (where there has been no execution or levy and no pledge or
delivery of Collateral as security therefor) arising out of judgments or
awards against the Borrower or any of its Subsidiaries with respect to
which an appeal or proceeding for review is being prosecuted in good faith
and which judgment or award shall be vacated, discharged, satisfied or
stayed or bonded pending appeal within 60 days from the entry thereof.
7.05 DISTRIBUTIONS, ETC. None of the Credit Parties will, or will
permit any of their respective Subsidiaries to, authorize, declare or pay any
dividends or return any capital to, its stockholders, partners or members, or
authorize or make any other distribution, payment or delivery of property or
cash to its stockholders, partners or members as such or redeem, retire,
purchase or otherwise acquire, directly or indirectly, for a consideration, any
shares of any class of its capital stock, any partnership interest or any
limited liability company interest (or any warrants for or options or stock
appreciation rights in respect of any of such shares, partnership interests or
limited liability company interests), now or hereafter outstanding, or set aside
any funds for any of the foregoing purposes, and none of the Credit Parties will
permit any of their respective Subsidiaries to purchase or otherwise acquire for
consideration any shares of any class of the capital stock, any partnership
interest or any limited liability company interests of any Credit Party or any
such Subsidiary, as the case may be (or any options or warrants or stock
appreciation rights issued by such Person with respect to its capital stock,
partnership interests or limited liability company interests), now or hereafter
outstanding (all of the foregoing "Distributions"), except that:
(a) any Subsidiary of Holdings may make cash Distributions to
Holdings or any Subsidiary of Holdings;
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(b) so long as no Default or Event of Default exists or would result
therefrom, Holdings or any of its Subsidiaries shall be permitted to
declare, make and pay cash Distributions to its respective shareholders in
an amount not to exceed the then Cumulative Net Income Amount less the sum
of (i) the amount of all such Distributions declared, made or paid pursuant
to this Section 7.05(b) prior to the date of determination and on or after
January 1, 1995 (other than pursuant to Section 7.05(b)(ii)) plus (ii) the
amount of all such Distributions made by Holdings pursuant to Section
7.05(g); PROVIDED, HOWEVER, that to the extent any non-Wholly- Owned
Subsidiary of Holdings pays a cash Distribution to its shareholders,
Holdings or its respective Subsidiary which owns the equity interest or
interests in the Subsidiary paying the cash Distribution receives at least
its proportionate share thereof (based upon its relative holdings of equity
interest in the Subsidiary paying such cash Distribution and taking into
account the relative preferences, if any, of the various classes of equity
interests in such Subsidiary); it being understood that the amount of
Distributions declared, made or paid to Holdings or any of its Subsidiaries
shall not be counted for purposes of determining whether the amount of
Distributions have exceeded the Cumulative Net Income Amount;
(c) Holdings or any of its Subsidiaries may declare and make stock
dividends on its capital stock with the same or a junior class of stock
with respect to which such stock dividend is being paid;
(d) Holdings or any of its Subsidiaries may repurchase or redeem its
capital stock solely through the issuance of additional shares of its
capital stock which is of the same or a junior class of such capital stock
being repurchased or redeemed;
(e) so long as no Default or Event of Default exists or would result
therefrom, Holdings may declare, make and pay Distributions in connection
with any redemption of its Series A Preferred Stock or Series B Preferred
Stock occurring on or before the Effective Date;
(f) so long as no Default or Event of Default exists or would result
therefrom, Holdings or any of its Subsidiaries or Affiliates may declare,
make and pay Distributions consisting of dividends on preferred securities
of any Subsidiary or Affiliate of Holdings issued in connection with the
incurrence of Indebtedness permitted by Section 7.06(l); and
(g) so long as no Default or Event of Default exists or would result
therefrom Holdings may on or before the Effective Date redeem, retire,
repurchase or otherwise acquire up to 27,000,000 shares of common stock of
Holdings owned by KLM for an aggregate consideration not in excess of
$1,300,000,000.
7.06 INDEBTEDNESS. None of the Credit Parties will, or will
permit any of their respective Subsidiaries to, contract, create, incur,
assume or suffer to exist any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
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(b) Indebtedness existing on the Effective Date listed on Schedule V,
including any refinancings or renewals thereof, but only to the extent that
such refinancing or renewal does not increase the principal amount of such
Indebtedness outstanding immediately prior to such refinancing or renewal;
(c) intercompany Indebtedness among Holdings and its Subsidiaries;
(d) additional unsecured Indebtedness of Holdings and its
Subsidiaries, PROVIDED that to the extent the gross proceeds received from
incurrences thereof after December 15, 1995 (other than any incurrence of
any unsecured Indebtedness of Holdings and its Subsidiaries the proceeds of
which Indebtedness is applied substantially contemporaneously to refinance
the outstanding principal amount of, premium, if any, and accrued but
unpaid interest on, any Indebtedness incurred pursuant to this clause (d)
or clause (e) below so long as the principal amount of such Indebtedness
being incurred does not exceed the principal amount of Indebtedness being
refinanced immediately prior to such refinancing), plus the amount of gross
proceeds received from incurrences of secured indebtedness pursuant to
clause (e) below (such gross proceeds being determined in accordance with
clause (e) below), exceed an amount equal to $600,000,000 (provided that
for purposes of determining whether the $600,000,000 threshold has been
exceeded Retired Unsecured Debt shall not be taken into account), an amount
equal to 50% of the Net Debt Proceeds from all incurrences of unsecured
Indebtedness after such threshold is exceeded (including 50% of the Net
Debt Proceeds from the incurrence in which such threshold is exceeded but
only out of that portion of such gross proceeds which exceeds such
threshold at such time) shall be applied to repay Revolving Loans and
reduce Revolving Commitments in accordance with Sections 3.02(b) and
2.03(b);
(e) additional secured Indebtedness of Holdings and its Subsidiaries,
PROVIDED that to the extent the gross proceeds received from incurrences
thereof after December 15, 1995 (other than any incurrence of any secured
Indebtedness of Holdings and its Subsidiaries the proceeds of which
Indebtedness is applied substantially contemporaneously to refinance the
outstanding principal amount of, premium, if any, and accrued but unpaid
interest on, any Indebtedness incurred pursuant to clause (d) above or this
clause (e) so long as the principal amount of such Indebtedness being
incurred does not exceed the principal amount of Indebtedness being
refinanced immediately prior to such refinancing), plus the amount of gross
proceeds received from incurrences of unsecured indebtedness pursuant to
clause (d) above in excess of $300,000,000 (such gross proceeds being
determined in accordance with clause (d) above), exceed an amount equal to
$300,000,000 (provided that for purposes of determining whether the
$300,000,000 threshold has been exceeded Retired Secured Debt shall not be
taken into account), an amount equal to 50% of the Net Debt Proceeds from
all incurrences of secured Indebtedness after such threshold is exceeded
(including 50% of the Net Debt Proceeds from the incurrence in which such
threshold is exceeded but only out of that portion of such gross proceeds
which exceeds such threshold at such time) shall be applied to repay
Revolving Loans and reduce Revolving Commitments in accordance with
Sections 3.02(b) and 2.03(b);
-31-
(f) Indebtedness incurred in connection with the financing of the
Narita Hotel Property and assets related to such hotel, PROVIDED that the
Liens securing such Indebtedness do not encumber any Collateral (or part
thereof) and the Indebtedness incurred in connection therewith does not
exceed the appraised value of the Narita Hotel Property;
(g) secured Indebtedness incurred to finance the acquisition of
hushkits heretofore or hereafter acquired by the Borrower or any of its
Subsidiaries or to refinance indebtedness incurred to finance the
acquisition of hushkits and any other secured Indebtedness incurred to
finance (or to pre-fund the financing of) the purchase after December 15,
1995 of aircraft and other assets and any refinancing thereof, PROVIDED
that the Liens securing such Indebtedness do not encumber any Collateral
(or part thereof) and the Indebtedness incurred in connection therewith
does not exceed the purchase price of the property being acquired or the
principal amount of the Indebtedness being refinanced;
(h) Indebtedness of Holdings and its Subsidiaries of the type
described in clause (v) of the definition of Indebtedness and in clause
(iii) thereof to the extent relating to Indebtedness of the type described
in clause (v) of the definition thereof;
(i) Indebtedness constituting Contingent Obligations of Holdings and
its Subsidiaries with respect to corporations, partnerships or joint
ventures formed with other airlines to conduct fueling, ticketing, terminal
operations, aeronautical radio communications, tariff publishing, industry
trade associations, local cartage and other similar airline activities
consistent with the Borrower's past business practice, where the services
provided are generally available to all or substantially all of the
airlines utilizing the facility served;
(j) Indebtedness of Holdings and its Subsidiaries incurred under and
in respect of credit enhancement letters of credit or other similar
backstop liquidity facilities to the extent any such letter of credit or
backstop liquidity facility, as the case may be, has not been drawn upon,
which letters of credit and liquidity facilities provide credit support
solely for the interest portion of Indebtedness incurred by Holdings and
its Subsidiaries and otherwise permitted to be incurred pursuant to this
Section 7.06;
(k) Indebtedness of Holdings and its Subsidiaries consisting of
standby letters of credit issued for the account of any Credit Party or any
of its respective Subsidiaries in the ordinary course of business and
reimbursement obligations with respect thereto, PROVIDED that the aggregate
amount of such Indebtedness shall not exceed $35,000,000 at any one time;
(l) unsecured Indebtedness of Holdings and its Subsidiaries incurred
directly or indirectly to finance any redemption pursuant to Section
7.05(e) and any refinancing thereof, PROVIDED that (i) any such refinancing
occurs substantially contemporaneously with payment of the Indebtedness
being refinanced (or, if not substantially contemporaneously with payment
of the Indebtedness being refinanced, on or prior to December 31, 1997) and
(ii) no such Indebtedness (other than a refinancing in accordance
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with clause (l)(i)) shall be incurred to finance any portion of the
redemption price paid in cash with respect to any such redemption;
(m) unsecured Indebtedness of Holdings or any of its Subsidiaries in
an aggregate original principal amount not in excess of $800,000,000
incurred to finance any redemption, retirement, repurchase or acquisition
pursuant to Section 7.05(g) (and in any event within 90 days after the
redemption, retirement, repurchase or acquisition being financed) and any
refinancing thereof that does not increase the outstanding principal amount
thereof;
(n) unsecured Indebtedness of Holdings or any of its Subsidiaries in
an aggregate original principal amount not in excess of $250,000,000
incurred to finance any loans, advances or dividends of the nature referred
to in the proviso to the definition of the term "Distribution" herein (and
in any event within 90 days after the loan, advance or dividend being
financed) and any refinancing thereof that does not increase the
outstanding principal amount thereof;
(o) additional secured Indebtedness (whether or not constituting
purchase money Indebtedness) of Holdings and its Subsidiaries incurred to
finance or secured by Boeing 757 aircraft N544US, N545US, N546US, N547US,
N548US and N549US so long as the principal amount of such Indebtedness
being incurred does not exceed the fair market value of such aircraft; and
(p) Indebtedness incurred pursuant to the Existing Credit Agreement
in an aggregate principal amount outstanding at any one time not to exceed
$1,000,000,000 less (i) the amount of Term Loans, under and as defined in
the Existing Credit Agreement, which are repaid after the Effective Date
and (ii) the amount of permanent commitment reductions after the Effective
Date.
7.07 TRANSACTIONS WITH AFFILIATES. None of the Credit Parties
will, or will permit any of their respective Subsidiaries to, enter into any
transaction or series of related transactions with any Affiliate of any
Credit Party or any of their respective Subsidiaries, other than on terms and
conditions substantially as favorable to such Credit Party or such Subsidiary
as would reasonably be obtained by such Credit Party or such Subsidiary at
that time in a comparable arm's-length transaction with a Person other than
an Affiliate, PROVIDED that the foregoing restrictions shall not apply to (a)
customary fees paid to members of the Board of Directors of Holdings and its
Subsidiaries, (b) Distributions permitted by Section 7.05 and (c)
Indebtedness permitted by Section 7.06(l).
7.08 CONSOLIDATED INDEBTEDNESS TO CONSOLIDATED EBITDAR. Holdings
will not permit the ratio of Consolidated Indebtedness as of the last day of
any fiscal quarter to Consolidated EBITDAR for the period of four consecutive
fiscal quarters ended on the last day of such fiscal quarter, to be greater
than 6.0:1.0.
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7.09 CONSOLIDATED EBITDAR TO CONSOLIDATED FIXED CHARGES. Holdings
will not permit the ratio of Consolidated EBITDAR to Consolidated Fixed
Charges for any period of four consecutive fiscal quarters ended on the last
day of any fiscal quarter, to be less than 1.5:1.0.
7.10 ERISA. None of the Credit Parties will, or will permit any of
their respective Subsidiaries or its ERISA Affiliates to:
(i) engage in any transaction in connection with which Holdings or
any of its ERISA Affiliates could be subject to either a tax imposed by
Section 4975(a) of the Code or the corresponding civil penalty assessed
pursuant to Section 502(i) of ERISA, which penalties and taxes for all such
transactions could be in an aggregate amount in excess of $2,500,000;
(ii) permit to exist any accumulated funding deficiency, for which a
waiver has not been obtained from the Internal Revenue Service, with
respect to any Pension Plan in an aggregate amount greater than $5,000,000;
or
(iii) permit to exist any failure to make contributions or any
unfunded benefits liability which creates, or with the passage of time
would create, a statutory lien or requirement to provide security under
ERISA or the Code in favor of the PBGC or any Pension Plan, Multiemployer
Plan or other entity in an aggregate amount in excess of $5,000,000.
7.11 LAX TWO CORP. At any time when Holdings directly or
indirectly owns more than 50% of the outstanding Voting Stock of LAX Two,
Holdings will not permit LAX Two or any of its Subsidiaries to engage in any
business other than the business engaged in by LAX Two and its Subsidiaries
as of December 15, 1995 or to change LAX Two's status as a non-profit
corporation to a for-profit corporation.
7.12 EXISTING CREDIT AGREEMENT; BRIDGE DEBT AGREEMENT. (a) The
Borrower will not voluntarily reduce or terminate any loan commitments under
the Existing Credit Agreement or the Bridge Debt Agreement.
(b) The Borrower will not voluntarily repay any outstanding loans
under the Existing Credit Agreement, at any time when any Revolving Loans are
outstanding hereunder and the Borrower will not voluntarily repay any
outstanding loans under the Bridge Debt Agreement at any time when any
Revolving Loans are outstanding hereunder or there shall exist any Revolving
Loan Commitments.
(c) The Borrower will not incur any loan under the Bridge Debt
Agreement with a maturity date that is earlier than the first anniversary of
the Effective Date.
(d) The Borrower will not amend the Existing Credit Agreement or
the "Credit Documents" (as such term is defined in the Existing Credit
Agreement).
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SECTION 8. EVENTS OF DEFAULT. Upon the occurrence of any of the
following specified events (each, an "Event of Default"):
8.01 PAYMENTS. The Borrower shall (i) default in the payment when
due of any principal of any Revolving Loan or any Revolving Note or (ii)
default, and such default shall continue unremedied for five or more Business
Days, in the payment when due of any interest on any Revolving Loan or
Revolving Note, or any Fees or any other amounts owing hereunder or
thereunder, PROVIDED that, in the case of this clause (ii), the Agent shall
have informed the Borrower of the amount owing; or
8.02 REPRESENTATIONS, ETC. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or
in any certificate delivered pursuant hereto or thereto shall prove to be
untrue in any material respect on the date as of which made or deemed made,
and such default shall continue unremedied for a period of 30 days after
written notice to the Borrower by the Agent or the Required Banks; or
8.03 COVENANTS. Any Credit Party shall (i) default in any
material respect in the due performance or observance by it of any term,
covenant or agreement contained in Section 7.02, 7.03 or 7.05 or (ii) default
in the due performance or observance by it of any term, covenant or agreement
contained in Section 7.08 or 7.09 and such default shall continue unremedied
for a period of 15 days after written notice to the Borrower by the Agent or
the Required Banks or (iii) default in any material respect in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement (other than as described in Section 8.01, 8.03(i)
or 8.03(ii)), and such default shall continue unremedied for a period of 30
days after written notice to the Borrower by the Agent or the Required Banks;
or
8.04 DEFAULT UNDER OTHER AGREEMENTS. (a) Any Credit Party or any of
its Subsidiaries shall (i) default in any payment of any Indebtedness (other
than the Obligations) which default is in excess of $10,000,000 beyond the
period of grace (not to exceed 10 days), if any, provided in the instrument or
agreement under which such Indebtedness was created or (ii) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Obligations) if such Indebtedness is in excess of
$25,000,000 in the case of any one issue of Indebtedness or in excess of
$50,000,000 in the case of all such Indebtedness when aggregated with all Lease
claims described in clause (c)(ii) or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause, any such Indebtedness to
become due prior to its stated maturity; or (b) any Indebtedness (other than the
Obligations), individually in excess of $25,000,000, or in the aggregate in
excess of $50,000,000 (when aggregated with all Lease claims described in clause
(c)(ii)), of any Credit Party or any of its Subsidiaries shall be declared to be
due and payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof; or (c) any Credit
Party or any of its Subsidiaries shall default in the observance or performance
of any agreement or condition relating to any Lease if (i) the default is with
respect to any payment in excess of $10,000,000 beyond the period of grace (not
to
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exceed 10 days), if any, provided in the Lease or (ii) the effect of such
default is to give the lessor pursuant to such Lease a claim against any
Credit Party (after deducting from such claim the value of the property
subject to such Lease) in excess of $25,000,000 in the case of any one Lease
or in excess of $50,000,000 in the case of all Leases and all Indebtedness
described in clause (a)(ii) or (b) of this Section 8.04; or
8.05 BANKRUPTCY, ETC. The Borrower or any Guarantor (each a
"Designated Party") shall commence a voluntary case concerning itself under
Title 11 of the United States Code entitled "Bankruptcy", as now or hereafter
in effect, or any successor thereto (the "Bankruptcy Code"); or an
involuntary case is commenced against a Designated Party and the petition is
not controverted within 10 days after service of notice of such case on such
Designated Party, or is not dismissed within 60 days after commencement of
the case; or a custodian (as defined in the Bankruptcy Code) is appointed
for, or takes charge of, all or substantially all of the property of a
Designated Party; or a Designated Party commences any other proceeding under
any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to a Designated Party; or there
is commenced against a Designated Party any such proceeding which remains
undismissed for a period of 60 days; or a Designated Party is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any
such case or proceeding is entered; or a Designated Party suffers any
appointment of any custodian or the like for it or any substantial part of
its property to continue undischarged or unstayed for a period of 60 days; or
a Designated Party makes a general assignment for the benefit of creditors;
or any corporate action is taken by a Designated Party for the purpose of
effecting any of the foregoing; or
8.06 ERISA. (i) Any "reportable event" as described in Section
4043 of ERISA or the regulations thereunder (excluding those events for which
the requirement for notice has been waived by the PBGC), or any other event
or condition, which the Required Banks determine constitutes reasonable
grounds under Section 4042 of ERISA for the termination of any Pension Plan
by the PBGC or for the appointment by the appropriate United States District
Court of a trustee to administer or liquidate any Pension Plan shall have
occurred; or
(ii) A trustee shall be appointed by a United States District
Court to administer any Pension Plan; or
(iii) The PBGC shall institute proceedings to terminate any
Pension Plan or to appoint a trustee to administer any Pension Plan; or
(iv) Holdings or any of its ERISA Affiliates shall become liable
to the PBGC or any other party under Section 4062, 4063 or 4064 of ERISA with
respect to any Pension Plan; or
(v) Holdings or any of its ERISA Affiliates shall become liable
to any Multiemployer Plan under Section 4201 ET SEQ. of ERISA; or
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(vi) Any Pension Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code; or
(vii) A contribution required to be made to a Pension Plan or a
Multiemployer Plan has not been timely made; or
(viii) Any Credit Party or any Subsidiary of Holdings or any ERISA
Affiliate has incurred or is likely to incur a liability to or on account of
a Plan under Section 502(i), or 502(l) of ERISA or Section 4975 of the Code;
or
(ix) Any Credit Party or any Subsidiary of any Credit Party has
incurred or is likely to incur liabilities pursuant to one or more employee
welfare benefit plans (as defined in Section 3(1) of ERISA) that provide
benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or employee pension benefit plans (as
defined in Section 3(2) of ERISA) other than Pension Plans;
if as of the date thereof or any subsequent date, the sum of each Credit
Party's and its ERISA Affiliates' various liabilities (such liabilities to
include, without limitation, any liability to the PBGC or to any other party
under Section 4062, 4063 or 4064 of ERISA with respect to any Pension Plan,
or to any Multiemployer Plan under Section 4201 ET SEQ. of ERISA, and to be
calculated after giving effect to the tax consequences thereof) as a result
of such events listed in subclauses (i) through (ix) above exceeds
$100,000,000; or
8.07 JUDGMENTS. One or more judgments or decrees shall be entered
against any Credit Party or any of its Subsidiaries involving a liability of
$25,000,000 or more in the case of any one such judgment or decree or
$50,000,000 or more in the aggregate for all such judgments and decrees (in each
case to the extent not paid or fully covered by insurance provided by a carrier
that has acknowledged coverage) and any such judgments or decrees shall not have
been vacated, discharged, satisfied or stayed or bonded pending appeal within 60
days from the entry thereof; or
8.08 GUARANTY. The Guaranty or any provision thereof shall cease
to be in full force or effect, or any Guarantor or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations
under the Guaranty or any Guarantor shall default in any material respect in
the due performance or observance of any term, covenant or agreement on its
part to be performed or observed pursuant to the Guaranty; or
8.09 SECURITY DOCUMENTS. Any of the Security Documents shall cease
to be in full force and effect or shall cease to give the Collateral Agent for
the benefit of the Secured Creditors the Liens, rights, powers and privileges
purported to be created thereby (including, without limitation, in all cases, a
perfected security interest in, and Lien on, all of the Collateral), in favor of
the Collateral Agent, superior to and prior to the rights of all third Persons
(except for Permitted Liens), or any Credit Party shall default in any material
respect in the due performance or observance of any term, covenant or agreement
on its part to be performed or observed
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pursuant to any of the Security Documents and such default shall continue
beyond any grace period specifically applicable thereto pursuant to the terms
of such Security Document;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Agent shall, upon the written request
of the Required Banks, by written notice to Holdings and the Borrower, take
any or all of the following actions, without prejudice to the rights of the
Agent or any Bank to enforce its claims against the Borrower, except as
otherwise specifically provided for in this Agreement (PROVIDED that if an
Event of Default specified in Section 8.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by
the Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Revolving Loan Commitment terminated, whereupon the Revolving Loan
Commitment of each Bank shall forthwith terminate immediately and all Fees
theretofore accrued shall forthwith become due and payable without any other
notice of any kind; (ii) declare the principal of and any accrued interest in
respect of all Revolving Loans and the Revolving Notes and all Obligations
owing hereunder and thereunder to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Credit Party; and
(iii) enforce, as Collateral Agent, any or all of the Liens and security
interests created pursuant to the Security Documents.
SECTION 9. Definitions and Accounting Terms.
9.01 DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the
sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing
(x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market
as published in the most recent Federal Reserve System publication entitled
"Select Interest Rates", published weekly on Form H.15 as of the date hereof,
or if such publication or a substitute containing the foregoing rate
information shall not be published by the Federal Reserve System for any
week, the weekly average offering rate determined by the Agent on the basis
of quotations for such certificates received by it from three certificate of
deposit dealers in New York of recognized standing or, if such quotations are
unavailable, then on the basis of other sources reasonably selected by the
Agent, by (y) a percentage equal to 100% minus the stated maximum rate of all
reserve requirements as specified in Regulation D of the Board of Governors
of the Federal Reserve System applicable on such day to a three-month
certificate of deposit of a member bank of the Federal Reserve System in
excess of $100,000 (including, without limitation, any marginal, emergency,
supplemental, special or other reserves), plus (2) the then daily net annual
assessment rate (expressed as a percentage) as estimated by the Agent for
determining the current annual assessment payable by the Agent to the Federal
Deposit Insurance Corporation for insuring three-month certificates of
deposit.
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"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person; PROVIDED, HOWEVER, that for
purposes of Section 7.07, an Affiliate of Holdings shall, in any event,
include any Person that directly or indirectly owns more than 5% of the
Voting Stock of Holdings and any officer or director of Holdings or any such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction
of the management and policies of such other Person, whether through the
ownership of Voting Stock, by contract or otherwise.
"Agent" shall have the meaning provided in the first paragraph of
this Agreement.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented or amended from time to time.
"Air Partners" shall mean Air Partners, L.P., a Texas limited
partnership.
"Aircraft" shall have the meaning provided in the Aircraft Mortgage
Agreement.
"Aircraft Collateral" shall mean all "Collateral" as defined in the
Aircraft Mortgage Agreement.
"Aircraft Mortgage Agreement" shall have the meaning provided in
Section 4A.12 hereof.
"Airframe" shall have the meaning provided in the Aircraft Mortgage
Agreement.
"Appraisal" shall mean an appraisal, dated the date of delivery
thereof to the Banks pursuant to the terms of this Agreement, by one or more
independent appraisal firms satisfactory, at the time of such Appraisal, to
the Borrower and the Agent (i) in the case of the Aircraft Collateral setting
forth the fair market value, as determined in accordance with the definition
of "fair market value" promulgated by the International Society of Transport
Aircraft Trading, as of the date of such appraisal and (ii) in the case of
the Route Collateral setting forth both the fair market value, and the
orderly liquidation value as of the date of such appraisal.
"Appraised Value" shall mean as of any date of determination (i)
with respect to the Aircraft Collateral, the aggregate fair market value as
of such date of each asset constituting Aircraft Collateral as provided in
the most recently delivered Appraisal, and (ii) with respect to the Route
Collateral, each of the aggregate "fair market value" and aggregate "orderly
liquidation value" as of such date of each asset constituting Route
Collateral as provided in the most recently delivered Appraisal.
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit F (appropriately
completed).
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"Authorized Officer" of any Credit Party shall mean the Chief
Executive Officer, the Chief Financial Officer or any Vice President and
above who reports directly or indirectly to the Chief Financial Officer.
"Bank" shall have the meaning provided in the first paragraph of
this Agreement.
"Bankruptcy Code" shall have the meaning provided in Section 8.05.
"Base Rate" at any time shall mean the higher of (i) 1/2 of 1% in
excess of the Adjusted Certificate of Deposit Rate and (ii) the Prime Lending
Rate.
"Base Rate Loan" shall mean each Revolving Loan designated or
deemed designated as such by the Borrower at the time of the incurrence
thereof or conversion thereto.
"Borrower" shall have the meaning provided in the first paragraph
of this Agreement.
"Borrowing" shall mean the borrowing of one Type of Revolving Loans
from all the Banks on a given date (or resulting from a conversion or
conversions on such date or resulting from a selection of an Interest Period
or Interest Periods on such date) having in the case of Eurodollar Loans the
same Interest Period, PROVIDED that Base Rate Loans incurred pursuant to
Section 1.10(b) shall be considered part of the related Borrowing of
Eurodollar Loans.
"Bridge Debt Agreement" shall mean the Amended and Restated Credit
Agreement dated as of October 11, 1996, among the Borrower, the lenders from
time to time party thereto, ABN Amro Bank N.V., as Documentation Agent,
Bankers Trust Company, as Administrative Agent, and Chase Securities Inc., as
Syndication Agent.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day
which shall be in Minneapolis, Minnesota or New York City a legal holiday or
a day on which banking institutions are authorized or required by law or
other government action to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause (i)
above and which is also a day for trading by and between banks in the
interbank Eurodollar market.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under GAAP, are or will be required to be capitalized on
the books of such Person, in each case taken at the amount thereof accounted
for as indebtedness in accordance with GAAP.
"Certificated Air Carrier" shall mean a Citizen of the United
States holding a carrier operating certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49, United States Code, for
aircraft capable of carrying ten or more individuals or 6,000 pounds or more
of cargo.
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"Citizen of the United States" shall have the meaning provided in
Section 40102(a)(15) of Title 49 of the United States Code.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and the rulings issued
thereunder. Section references to the Code are to the Code, as in effect at
the date of this Agreement, and to any subsequent provision of the Code,
amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all of the "Aircraft Collateral" and the
"Routes Collateral".
"Collateral Agent" shall mean the Agent acting as collateral agent
for the Secured Creditors pursuant to the Security Documents.
"Commitment Fee" shall have the meaning provided in Section 2.01(a).
"Consolidated EBITDAR" shall mean, for any period, the consolidated
operating income of Holdings and its Subsidiaries for such period plus (i)
consolidated aircraft operating rental expenses of Holdings and its
Subsidiaries for such period plus (ii) amortization and depreciation that
were deducted in arriving at the amount of such consolidated operating income
for such period plus (iii) interest income of Holdings and its Subsidiaries
during such period, all as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Fixed Charges" shall mean, for any period, the total
consolidated interest expense of Holdings and its Subsidiaries for such
period (calculated without regard to any limitations on the payment thereof,
but excluding all interest expense in connection with any Distribution
permitted by Section 7.05(f) and all interest expense in connection with
Indebtedness permitted by Section 7.06(l) except any such Indebtedness
incurred by the Borrower or any of its Subsidiaries which is not subordinated
to the Obligations) plus, without duplication, that portion of Capitalized
Lease Obligations of Holdings and its Subsidiaries representing the interest
factor for such period, plus the total consolidated aircraft operating rental
expenses of Holdings and its Subsidiaries for such period.
"Consolidated Indebtedness" shall mean, at any time, the sum of (i)
the aggregate outstanding principal amount of all Indebtedness (including,
without limitation, the current portion thereof, but excluding (1) all
Indebtedness of the type set forth in clause (v) of the definition of
Indebtedness, (2) all Indebtedness of the type set forth in clause (iii) of
the definition of Indebtedness to the extent relating to Indebtedness of the
type described in clause (v) of the definition thereof, (3) all Identified
Indebtedness, and (4) all Indebtedness permitted by Section 7.06(l) except
any such Indebtedness incurred by the Borrower or any of its Subsidiaries
which is not subordinated to the Obligations) and the principal component of
Capitalized Lease Obligations of Holdings and its Subsidiaries plus (ii) the
capitalized aircraft operating lease obligations of Holdings and its
Subsidiaries (calculated at any time of determination as the product of (x)
seven and (y) the aircraft operating rental expense of Holdings and its
Subsidiaries for the four fiscal quarters immediately preceding the date of
determination).
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"Consolidated Net Income" shall mean, for any period, net after tax
income of Holdings and its Subsidiaries determined on a consolidated basis in
accordance with GAAP.
"Continental" shall mean Continental Airlines, Inc., a Delaware
corporation.
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations")
of any other Person (other than Holdings or any of its Subsidiaries) (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii) to advance or supply funds (x) for
the purchase or payment of any such primary obligation or (y) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect
thereof; PROVIDED, HOWEVER, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Contingent Obligation shall be deemed
to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made (or, if
less, the maximum amount of such primary obligation for which such Person may
be liable pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.
"Coverage Tests" shall have the meaning provided in Section
4A.11(b).
"Credit Documents" shall mean this Agreement (including the
Guaranty herein), the Revolving Notes and each Security Document.
"Credit Event" shall mean the making of any Revolving Loan.
"Credit Party" shall mean Holdings, NWA and the Borrower, and, in
the event Newco becomes the owner of all of the outstanding shares of capital
stock of Holdings, Newco, except that Newco shall not be deemed to be a
Credit Party for purposes of Sections 5.09, 6.07 or 7.10 or for purposes of
the definitions of "Pension Plan" and "Termination Event" herein.
"Cumulative Net Income Amount" shall mean on any date of
determination, an amount equal to 50% of Consolidated Net Income (determined
on a cumulative basis) for the period commencing on January 1, 1995 and
ending on the date of determination.
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Designated Party" shall have the meaning provided in Section 8.05.
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"Distribution" shall have the meaning provided in Section 7.05,
PROVIDED that loans, advances or dividends by Holdings or any of its
Subsidiaries in an aggregate amount not in excess of $400,000,000 to Newco
the proceeds of which are used to acquire, directly or indirectly, shares of
capital stock of Continental shall be deemed not to be Distributions for all
purposes of this Agreement.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Effective Date" shall have the meaning provided in Section 11.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in
Regulation D of the Securities Act) other than an airline, a commercial air
carrier, an air freight forwarder, an entity engaged in the business of
parcel transport by air or other similar Person or a corporation or other
entity controlling, controlled by or under common control with such an
airline, commercial air carrier, air freight forwarder, entity engaged in the
business of parcel transport by air or other similar Person.
"Engine" shall have the meaning set forth in the Aircraft Mortgage
Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement, and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section
3(9) of ERISA) which together with Holdings or any of its Subsidiaries would
be deemed to be a "single employer" within the meaning of Section 414(b),
(c), (m) or (o) of the Code, PROVIDED that in no event shall Air Partners or
any of its Subsidiaries or Continental or any of its Subsidiaries be deemed
to be ERISA Affiliates for any purpose.
"Eurodollar Loan" shall mean each Revolving Loan designated as such
by the Borrower at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean, at the option of the Borrower, (a) (i)
the rate determined by the Agent to be the arithmetic average of the offered
quotation to first-class banks in the interbank Eurodollar market by each
Reference Bank for Dollar deposits of amounts in immediately available funds
comparable to the outstanding principal amount of the Eurodollar Loan of such
Reference Bank with maturities comparable to the Interest Period applicable to
such Eurodollar Loan commencing two Business Days thereafter as of 10:00 A.M.
(New York time) on the date which is two Business Days prior to the commencement
of such Interest Period, divided (and rounded off to the nearest 1/16 of 1%) by
(ii) a percentage equal to 100% minus the then stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves required by applicable law)
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applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D of the Board of Governors
of the Federal Reserve System (or any successor category of liabilities under
Regulation D), PROVIDED that if one or more of the Reference Banks fails to
provide the Agent with its aforesaid rate, then the Eurodollar Rate shall be
determined based on the rate or rates provided to the Agent by the other
Reference Bank or Banks, or (b) the arithmetic average of the offered rates
for deposits in Dollars for the applicable Interest Period (or the period
closest to such applicable Interest Period) which appear on the Reuters
Screen LIBO Page as of 10:00 A.M. (New York time) on the date which is two
Business Days prior to the commencement of such Interest Period.
"Event of Default" shall have the meaning provided in Section 8.
"Event of Loss" (x) with respect to an Aircraft, Airframe or Engine
shall mean any of the following events with respect to such property: (i)
the loss of such property or the use thereof due to the destruction of or
damage to such property which renders repair uneconomic or which renders such
property permanently unfit for normal use by the Borrower for any reason
whatsoever; (ii) any damage to such property which results in an insurance
settlement with respect to such property on the basis of a total loss, or a
constructive or compromised total loss; (iii) the theft or disappearance of
such property, or the confiscation, condemnation. or seizure of, or
requisition of title to, or use of, such property by any governmental or
purported governmental authority (other than a requisition for use by the
United States government or any other government of registry of such
Aircraft) or any agency or instrumentality of any thereof which in the case
of any event referred to in this clause (iii) (other than a requisition of
title) shall have resulted in the loss of possession of such property by the
Borrower for a period in excess of 180 consecutive days or, in the case of a
requisition of title, the requisition of title shall not have been reversed
within 90 days from the date of such requisition of title; and (iv) as a
result of any law, rule, regulation, order or other action by the FAA or
other governmental body of the government of registry of such Aircraft having
jurisdiction, the use of such property in the normal course of the business
of air transportation shall have been prohibited for a period of 180
consecutive days, PROVIDED that an Event of Loss with respect to an Aircraft
shall be deemed to have occurred if an Event of Loss occurs with respect to
the Airframe of such Aircraft; and (y) with respect to a Route shall mean the
loss by the Borrower of the right to use such Route.
"Existing Credit Agreement" shall mean the Credit Agreement among
Holdings, NWA, the Borrower, the lenders from time to time party thereto, ABN
Amro Bank N.V. as Compliance Agent, Bankers Trust Company as Administrative
Agent, Chase Securities Inc. as Syndication Agent, Citibank N.A. as
Documentation Agent, and National Westminster Bank plc and U.S. Bank National
Association (f/k/a First Bank National Association) as Agents, dated as of
December 15, 1995, as amended and restated as of October 16, 1996, as further
amended and restated as of December 29, 1997 and further amended as of
January 23, 1998.
"Express Air I" shall mean Express Airlines I, Inc., a Georgia
corporation, and Phoenix Airline Services, Inc., a Georgia corporation.
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"FAA" means the United States Federal Aviation Administration and
any agency or instrumentality of the United States government succeeding to
its functions.
"Federal Aviation Act" shall mean the Federal Aviation Act of 1958,
as amended and recodified in Title 49, United States Code, or any similar
legislation of the United States to supersede, amend or supplement such Act
and the rules and regulations promulgated thereunder.
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate equal for each day during such period to the weighted average
of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
Federal Funds brokers of recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 2.01.
"Financial Outlook" shall have the meaning provided in Section
5.05(b).
"GAAP" shall have the meaning provided in Section 11.07(a).
"Guarantor" shall mean each of Holdings and NWA (and, in the event
Newco becomes the owner all of the outstanding shares of capital stock of
Holdings, Newco).
"Guaranty" shall mean the guaranty of Holdings and NWA pursuant to
Section 12.
"Hedging Obligations" shall mean, as to any Person, all obligations
and liabilities of such Person under any Interest Rate Protection Agreement,
which are payable upon the termination of such agreement.
"Holdings" shall have the meaning provided in the first paragraph
of this Agreement.
"Identified Indebtedness" shall mean and include (i) Contingent
Obligations incurred pursuant to Section 7.06(i), (ii) Contingent Obligations of
Holdings in respect of the Xxxxx County Special Facilities Revenue Bonds;
PROVIDED that the maximum aggregate liability of Holdings and its Subsidiaries
in respect of all such Contingent Obligations shall not exceed $86,000,000 plus
interest thereon, (iii) Contingent Obligations of NATC for the benefit of a
third party in respect of its space lease in Grand Forks, North Dakota, PROVIDED
that the maximum aggregate liability of NATC in respect of all such Contingent
Obligations shall not exceed $2,500,000, (iv) Indebtedness of the type described
in clause (iii) of the definition thereof in connection with the Borrower's
pledge of its receivables generated through the Scheduled Airline Traffic Office
to secure Indebtedness incurred by the Scheduled Airline Traffic Office, the
proceeds of which are advanced to the Borrower on a non-recourse basis (other
than such pledged receivables) and (v) Indebtedness incurred pursuant to Section
7.06(j) but only to the
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extent that such credit enhancement letters of credit or backstop liquidity
facilities referred to therein are not drawn upon.
"Indebtedness" shall mean, as to any Person, without duplication,
(i) all indebtedness (including principal, interest, fees and charges) of
such Person for borrowed money or for the deferred purchase price of property
or services but excluding trade accounts payable and accrued expenses
incurred in the ordinary course of business, (ii) the maximum amount
available to be drawn under all letters of credit issued for the account of
such Person and all unpaid drawings in respect of such letters of credit,
(iii) all Indebtedness of the types described in clause (i), (ii), (iv), (v),
(vi) or (vii) of this definition secured by any Lien on any property owned by
such Person, whether or not such Indebtedness has been assumed by such Person
(to the extent of the value of the respective property), (iv) Capitalized
Lease Obligations, (v) all obligations of such person to pay a specified
purchase price for goods or services, whether or not delivered or accepted,
I.E., take-or-pay and similar obligations, (vi) all Contingent Obligations of
such Person and (vii) all Hedging Obligations under any Interest Rate
Protection Agreement; PROVIDED, HOWEVER, that neither (a) the Japanese Land
Financing Obligations nor (b) any obligations of Holdings to repurchase
shares of its common stock owned by KLM to the extent such repurchase would
be permitted in accordance with Section 7.05(g) shall constitute Indebtedness.
"Initial Borrowing Date" shall mean the date on which the initial
Credit Event occurs.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.
"Japanese Land Financing Obligations" shall mean all obligations of
the Borrower under that certain Second Amended and Restated Loan Agreement,
dated as of September 30, 1995, between the Borrower and Konan City Planning
Co., Ltd., but only to the extent that such obligations are non-recourse with
respect to all Credit Parties and their Subsidiaries and are secured solely
by the following real property: (i) the Azabu property, (ii) the Xxxxxx-xxx
property and (iii) the Sarugaku-cho property.
"KLM" shall mean Koninklijke Luchtvaart Maatschappij N.V., a
Netherlands corporation.
"LAX Two" shall mean LAX TWO CORP., a non-profit California mutual
benefit corporation.
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"Lease" shall mean any operating lease entered into by any Credit
Party or any of its Subsidiaries as lessee thereunder.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
security deposit arrangement, encumbrance, lien (statutory or other) or other
security agreement or lien of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement,
any financing or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any capital lease having
substantially the same economic effect as any of the foregoing).
"Margin Stock" shall have the meaning provided in Regulation U of
the Board of Governors of the Federal Reserve System.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., or any
successor corporation thereto.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA with respect to which the Borrower or any of its
ERISA Affiliates is an "employer" as defined in Section 3(5) of ERISA.
"Narita Hotel Property" shall mean the Narita International Hotel
and the "Flight Kitchen" located on the property on which such hotel is
located.
"NATC" shall mean Northwest Aerospace Training Corporation, a
Delaware corporation.
"Net Debt Proceeds" shall mean for any incurrence of Indebtedness,
the gross proceeds of such incurrence, net of (i) underwriting discounts and
commissions and other fees and costs associated therewith, (ii) any taxes
(including income taxes) currently paid or payable in the year of incurrence
or the following year as a result of such incurrence and (iii) in the case of
the incurrence of any such Indebtedness in connection with the substantially
contemporaneous refinancing of other Indebtedness, the aggregate amount of
the outstanding principal amount of, premium, if any, and accrued but unpaid
interest on, such other Indebtedness being refinanced with the proceeds of
such Indebtedness.
"Net Sale Proceeds" shall mean for any sale, lease, transfer or
other disposition of assets, the face amount of any promissory note,
receivable or other deferred payment and the gross cash proceeds plus the
fair market value of any other property received by Holdings or any of its
Subsidiaries from such sale, lease, transfer or other disposition, net of
reasonable transaction costs, the payment of the outstanding principal amount
of, premium, if any, and interest on any Indebtedness (other than the
Obligations) securing the assets being sold and required to be repaid as a
result thereof and the estimated marginal increase in income taxes which will
be payable by the Holdings' consolidated group with respect to the fiscal
year in which the sale occurs as a result of such sale.
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"Newco" shall mean a holding company that becomes the owner after
the Effective Date of all of the issued and outstanding shares of capital
stock of Holdings.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Agent located at Xxx
Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 10081, Attention: Xxxxx Xxxx, Loan
and Agency Services Group, 8th Floor, Facsimile: (000) 000-0000, or such
other office as the Agent may hereafter designate in writing as such to the
other parties hereto.
"NWA" shall have the meaning provided in the first paragraph of
this Agreement.
"Obligations" shall mean all amounts owing to the Agent or any Bank
pursuant to the terms of this Agreement or any other Credit Document.
"Payment Office" shall mean the office of the Agent located at Xxx
Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 10081 Attention: Xxxxx Xxxx, Loan
and Agency Services Group, 8th Floor, Facsimile: (000) 000-0000, or such
other office as the Agent may hereafter designate in writing as such to the
other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Pension Plan" means any plan (other than a Multiemployer Plan)
described in Section 4021(a) of ERISA, and not excluded pursuant to Section
4021(b) of ERISA, with respect to which any Credit Party or any of its ERISA
Affiliates is a "contributing sponsor" as defined in Section 4001(a)(13) of
ERISA and each such plan for the five year period immediately following the
last date on which the Borrower or any of its ERISA Affiliates contributed or
had an obligation to contribute to such plan.
"Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the
Total Revolving Loan Commitment at such time, PROVIDED that if the Percentage
of any Bank is to be determined after the Total Revolving Loan Commitment has
been terminated, then the Percentages of the Banks shall be determined
immediately prior (and without giving effect) to such termination.
"Permitted Liens" shall have the meaning set forth in Section 7.04
hereof.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, limited liability company, trust or other
enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Prime Lending Rate" shall mean the rate which the Agent announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime
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lending rate changes. The Prime Lending Rate is a reference rate and does
not necessarily represent the lowest or best rate actually charged to any
customer. The Agent may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Quarterly Payment Date" shall mean the fifteenth day of each
March, June, September and December occurring after the Effective Date.
"Rating" shall mean the senior unsecured debt rating of the
Borrower as rated by each Rating Agency.
"Rating Agency" shall mean each of S&P and Moody's.
"Reference Banks" shall mean three Banks that are acceptable to the
Borrower, PROVIDED that one such Bank shall be the Agent.
"Register" shall have the meaning set forth in Section 11.17.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Required Banks" shall mean Banks, the sum of whose outstanding
Revolving Loan Commitments (or after the termination thereof, outstanding
Revolving Loans) represent an amount greater than 50% of the Total Revolving
Loan Commitment (or after the termination thereof, the sum of the total
outstanding Revolving Loans at such time).
"Retired Secured Debt" shall mean (i) all secured letters of credit
issued for the account of Holdings or any of its Subsidiaries to the extent
same have been returned undrawn to the respective issuers of such letters of
credit or to the extent of any permanent reduction of the same without any
drawing thereunder, (ii) all secured Contingent Obligations of Holdings or
any of its Subsidiaries to the extent that such Contingent Obligations have
been terminated without any Credit Party or any of its respective
Subsidiaries making any payment in respect thereof, (iii) all secured Hedging
Obligations of Holdings or any of its Subsidiaries to the extent that such
Hedging Obligations have been terminated without any Credit Party or any of
its respective Subsidiaries making any payment in respect thereof and (iv)
all Indebtedness of the type described in clause (iii) of the definition of
Indebtedness of Holdings or any of its Subsidiaries to the extent that such
Indebtedness has been permanently extinguished and the Lien securing such
Indebtedness on the property of the respective Credit Party or any of its
Subsidiaries has been unconditionally released.
"Retired Unsecured Debt" shall mean (i) all unsecured letters of
credit issued for the account of Holdings or any of its Subsidiaries to the
extent same have been returned undrawn to the respective issuers of such
letters of credit or to the extent of any permanent reduction of the same
without any drawing thereunder, (ii) all unsecured Contingent Obligations of
Holdings or any of its Subsidiaries to the extent that such Contingent
Obligations have been terminated without any Credit Party or any of its
respective Subsidiaries making any payment in respect
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thereof and (iii) all unsecured Hedging Obligations of Holdings or any of its
Subsidiaries to the extent that such Hedging Obligations have been terminated
without any Credit Party or any of its respective Subsidiaries making any
payment in respect thereof.
"Reuters Screen LIBO Page" shall mean the display designated as
page "LIBO" on the Reuters Monitor Money Rates Service (or such other pages
as may replace the LIBO page on the service for the purpose of displaying
London interbank offered rates of major banks).
"Revolving Loan" shall have the meaning provided in Section 1.01.
"Revolving Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I hereto directly below the
column entitled "Revolving Loan Commitment", as the same may be (x) reduced
from time to time pursuant to Sections 2.02, 2.03 and/or 9 or (y) adjusted
from time to time as a result of assignments to or from such Bank pursuant to
Section 1.13 or 11.04(b).
"Revolving Loan Maturity Date" shall mean the date occurring 364
days after the Effective Date.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"Route Collateral" shall mean all of the "Collateral" as defined in
the Route Security Agreement.
"Route Security Agreement" shall have the meaning provided in
Section 4.A12 hereof.
"Routes" shall have the meaning provided in the Route Security
Agreement.
"S&P" shall mean Standard & Poor's Ratings Services or any
successor corporation thereto.
"SEC" shall have the meaning provided in Section 6.01(g).
"Section 3.04(b)(ii) Certificate" shall have the meaning provided
in Section 3.04(b).
"Secured Creditors" shall mean the Banks, the Agent and the
Collateral Agent.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Security Documents" shall have the meaning provided in Section
4A.12 hereof.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock having by the terms thereof ordinary voting power to
elect a majority of the directors of such corporation (irrespective of whether
or not at the time stock of any other class
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or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by such
Person and/or one or more Subsidiaries of such Person and (ii) any
partnership, limited liability company, association, joint venture or other
entity in which such Person and/or one or more Subsidiaries of such Person
has more than a 50% equity interest at the time; PROVIDED HOWEVER that
notwithstanding anything to the contrary, (x) LAX Two and its Subsidiaries
and (y) Air Partners and Continental and their Subsidiaries shall be deemed
not to be Subsidiaries of Holdings or any of its Subsidiaries for all
purposes of this Agreement (including, without limitation, the calculation of
the financial covenants and the definitions relating thereto) and the other
Credit Documents so long as, in the case of clause (y), Newco does not own,
directly or indirectly, more than 50% of the equity interest (i.e., the
economic interest rather than the voting interest) of Continental.
"Super-Majority Banks" shall mean Banks, the sum of whose
outstanding Revolving Loan Commitments (or after the termination thereof,
outstanding Revolving Loans) represent an amount greater than or equal to 80%
of the Total Revolving Loan Commitment (or after the termination thereof, the
sum of the total outstanding Revolving Loans at such time).
"Taxes" shall have the meaning provided in Section 3.04(a).
"Termination Event" means (i) a "reportable event" described in
Section 4043 of ERISA or in the regulations thereunder (excluding events for
which the requirement for notice of such reportable event has been waived
under subsection .13, .14, .16, .18, .19 or .20 of PBGC Regulation Section
2615), or (ii) the withdrawal of any Credit Party or any of its ERISA
Affiliates from a Pension Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or (iii)
the filing of a notice of intent to terminate a Pension Plan or the treatment
of a Pension Plan amendment as a termination under Section 4041 of ERISA, or
(iv) the institution of proceedings to terminate a Pension Plan by the PBGC,
or (v) any other event or condition which might constitute reasonable grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan, or (vi) the complete or partial
withdrawal (within the meaning of Sections 4203 and 4205, respectively, of
ERISA) of any Credit Party or any of its ERISA Affiliates from a
Multiemployer Plan, or (vii) the insolvency or reorganization (within the
meaning of Section 4245 and 4241, respectively, of ERISA) of any
Multiemployer Plan.
"Total Revolving Loan Commitment" shall mean, at any time, the sum
of the Revolving Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any
time, the sum of the Unutilized Revolving Loan Commitments of each of the
Banks.
"Transaction" shall mean (i) the incurrence of Revolving Loans
hereunder on the Initial Borrowing Date, (ii) the execution and delivery of
this Agreement and the other Credit Documents by the Credit Parties and (iii)
the payment of fees and expenses in connection with the foregoing.
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"Type" shall mean the type of Revolving Loan determined with regard
to the interest option applicable thereto, I.E., whether a Base Rate Loan or
a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time
in effect in the relevant jurisdiction.
"United States" and "U.S." shall each mean the United States of
America.
"Unutilized Revolving Loan Commitment" with respect to any Bank, at
any time, shall mean such Bank's Revolving Loan Commitment at such time less
the aggregate outstanding principal amount of Revolving Loans made by such
Bank.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
SECTION 10. THE AGENT.
10.01 APPOINTMENT. The Banks hereby designate The Chase Manhattan
Bank as Agent (for purposes of this Section 10, the term "Agent" shall
include The Chase Manhattan Bank in its capacity as Collateral Agent pursuant
to the Security Documents) to act as specified herein and in the other Credit
Documents. Each Bank hereby irrevocably authorizes, and each holder of any
Revolving Note by the acceptance of such Revolving Note shall be deemed
irrevocably to authorize, the Agent to take such action on its behalf under
the provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The
Agent may perform any of its duties hereunder by or through its respective
officers, directors, agents, employees or affiliates.
10.02 NATURE OF DUTIES. The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement and the
other Credit Documents. Neither the Agent nor any of its respective officers,
directors, agents, employees or affiliates shall be liable for any action
taken or omitted by it or them hereunder or under any other Credit Document
or in connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by reason
of this Agreement or any other Credit Document a fiduciary relationship in
respect of any Bank or the holder of any Revolving Note; and nothing in this
Agreement or
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any other Credit Document, expressed or implied, is intended to or shall be
so construed as to impose upon the Agent any obligations in respect of this
Agreement or any other Credit Document except as expressly set forth herein
or therein.
10.03 LACK OF RELIANCE ON AGENT. Independently and without
reliance upon the Agent, each Bank and the holder of each Revolving Note, to
the extent it deems appropriate, has made and shall continue to make (i) its
own independent investigation of the financial condition and affairs of
Holding and its Subsidiaries in connection with the making and the
continuance of the Revolving Loans and the taking or not taking of any action
in connection herewith and (ii) its own appraisal of the creditworthiness of
Holding and its Subsidiaries and, except as expressly provided in this
Agreement, the Agent shall not have any duty or responsibility, either
initially or on a continuing basis, to provide any Bank or the holder of any
Revolving Note with any credit or other information with respect thereto,
whether coming into its possession before the making of the Revolving Loans
or at any time or times thereafter. The Agent shall not be responsible to any
Bank or the holder of any Revolving Note for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of Holding and its Subsidiaries or be
required to make any inquiry concerning either the performance or observance
of any of the terms, provisions or conditions of this Agreement or any other
Credit Document, or the financial condition of Holding and its Subsidiaries
or the existence or possible existence of any Default or Event of Default.
10.04 CERTAIN RIGHTS OF AGENT. If the Agent shall request
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other
Credit Document, the Agent shall be entitled to refrain from such act or
taking such action unless and until it shall have received instructions from
the Required Banks; and the Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, neither any Bank
nor the holder of any Revolving Note shall have any right of action
whatsoever against the Agent as a result of the Agent acting or refraining
from acting hereunder or under any other Credit Document in accordance with
the instructions of the Required Banks.
10.05 RELIANCE. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made
by any Person that the Agent believed to be the proper Person, and, with
respect to all legal matters pertaining to this Agreement and any other
Credit Document and its duties hereunder and thereunder, upon advice of
counsel selected by the Agent.
10.06 INDEMNIFICATION. To the extent the Agent is not reimbursed and
indemnified by the Borrower, the Banks will reimburse and indemnify the Agent,
in proportion to their respective Percentages, for and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by the Agent in performing its
respective duties hereunder or under any other Credit Document, in any way
relating to or
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arising out of this Agreement or any other Credit Document; PROVIDED that no
Bank shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful
misconduct.
10.07 AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
obligation to make Revolving Loans under this Agreement, the Agent shall have
the rights and powers specified herein for a "Bank" and may exercise the same
rights and powers as though it were not performing the duties specified
herein; and the term "Banks," "Required Banks," "holders of Revolving Notes"
or any similar terms shall, unless the context clearly otherwise indicates,
include the Agent in its individual capacity. The Agent may accept deposits
from, lend money to, and generally engage in any kind of banking, trust or
other business with any Credit Party or any Affiliate of any Credit Party as
if it were not performing the duties specified herein, and may accept fees
and other consideration from the Borrower or any other Credit Party for
services in connection with this Agreement and otherwise without having to
account for the same to the Banks.
10.08 HOLDERS. The Agent may deem and treat the payee of any
Revolving Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the
case may be, shall have been filed with the Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Revolving Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as
the case may be, of such Revolving Note or of any Revolving Note or Revolving
Notes issued in exchange therefor.
10.09 RESIGNATION BY THE AGENT. (a) The Agent may resign from
the performance of all its functions and duties hereunder and/or under the
other Credit Documents at any time by giving 15 Business Days' prior written
notice to the Borrower and the Banks. Such resignation shall take effect
upon the appointment of a successor Agent pursuant to clauses (b) and (c)
below or as otherwise provided below.
(b) Upon any such notice of resignation, the Banks shall appoint a
successor Agent hereunder or thereunder who shall be a commercial bank or
trust company reasonably acceptable to the Borrower.
(c) If a successor Agent shall not have been so appointed within
such 15 Business Day period, the resigning Agent, with the consent of the
Borrower, shall then appoint a successor Agent who shall serve as Agent
hereunder or thereunder until such time, if any, as the Banks appoint a
successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause
(b) or (c) above by the 20th Business Day after the date such notice of
resignation was given by such Agent, such Agent's resignation shall become
effective and the Required Banks shall thereafter perform all the duties of
such Agent hereunder and/or under any other Credit Document until such time,
if any, as the Banks appoint a successor Agent as provided above.
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SECTION 11. MISCELLANEOUS.
11.01 PAYMENT OF EXPENSES, ETC. The Borrower shall: (i) whether
or not the transactions herein contemplated are consummated, pay all
reasonable and adequately documented fees and other out-of-pocket costs and
expenses (x) of the Agent (including, without limitation, the reasonable and
adequately documented fees and disbursements of White & Case LLP) arising in
connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents, the commitment letter, the term sheet and the
documents and instruments referred to herein and therein and any amendment,
waiver or consent relating hereto or thereto and of the Agent in connection
with its syndication efforts with respect to this Agreement (but excluding
attorneys' fees and disbursements) and (y) of the Agent and each of the Banks
in connection with the enforcement of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein
(including, without limitation, the reasonable and adequately documented fees
and disbursements of counsel for the Agent and for each of the Banks
including any reasonable allocated costs of in-house counsel); (ii) pay and
hold each of the Banks harmless from and against any and all present and
future stamp, excise and other similar taxes with respect to the foregoing
matters and save each of the Banks harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Bank) to pay such taxes; and (iii)
indemnify the Agent, each Bank and each of their respective affiliates, and
each of their respective officers, directors, employees, representatives and
agents from and hold each of them harmless against any and all liabilities,
obligations (including removal or remedial actions), losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses and
disbursements (including reasonable and adequately documented attorneys' and
consultants' fees and disbursements) incurred by, imposed on or assessed
against any of them as a result of, or arising out of, or in any way related
to, or by reason of, any investigation, litigation or other proceeding
(whether or not the Agent or any Bank is a party thereto) related to the
entering into and/or performance of this Agreement or any other Credit
Document, the commitment letter, the term sheet or the actual or proposed use
of the proceeds of any Revolving Loans hereunder or the consummation of any
transactions contemplated herein or in any other Credit Document or the
exercise of any of their rights or remedies provided herein or in the other
Credit Documents, including, without limitation, the reasonable and
adequately documented fees and disbursements of counsel and other consultants
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent arising or incurred by reason of (x) a violation of
laws or governmental regulations pertaining to lending by the Person to be
indemnified (or the Agent or the Bank of which such Person is an officer,
director, employee, representative or agent); PROVIDED, HOWEVER, that the
Person to be indemnified shall, in all events, be entitled to the indemnities
set forth in Sections 1.10, 1.11 and 3.04 to the extent provided therein, or
(y) the gross negligence or willful misconduct of the Person to be
indemnified). To the extent that the undertaking to indemnify, pay or hold
harmless any Person set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, the Borrower shall make
the maximum contribution to the payment and satisfaction of each of the
indemnified liabilities which is permissible under applicable law.
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11.02 RIGHT OF 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 and during the continuance of an Event
of Default, each Bank is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to any
Credit Party 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 such Bank
(including, without limitation, by branches and agencies of such Bank
wherever located) to or for the credit or the account of any Credit Party
against and on account of the Obligations and liabilities of any Credit Party
to such Bank under this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations purchased by such
Bank pursuant to Section 11.06(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other
Credit Document, irrespective of whether or not such Bank shall have made any
demand hereunder and although said Obligations, liabilities or claims, or any
of them, shall be contingent or unmatured.
11.03 NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to a Credit Party,
at the address specified opposite its signature below; if to the Agent, at
its Notice Office; if to any Bank, at the address specified for such Bank on
Schedule II hereto; or, at such other address as shall be designated by any
party in a written notice to the other parties hereto. All such notices and
communications shall, when mailed, telegraphed, telexed, telecopied, or
cabled or sent by overnight courier, be effective when received.
11.04 BENEFIT OF AGREEMENT. (a) This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; PROVIDED, HOWEVER, no Credit
Party may assign or transfer any of its rights, obligations or interest
hereunder or under any other Credit Document without the prior written
consent of the Banks and, PROVIDED FURTHER, that, although any Bank may
transfer, assign or grant participations in its rights hereunder, such Bank
shall remain a "Bank" for all purposes hereunder (and may not transfer or
assign all or any portion of its Commitments hereunder except as provided in
Section 11.04(b)) and the transferee, assignee or participant, as the case
may be, shall not constitute a "Bank" hereunder and, PROVIDED FURTHER, that
no Bank shall transfer or grant any participation under which the participant
shall have rights to approve any amendment to or waiver of this Agreement or
any other Credit Document except to the extent such amendment or waiver would
(i) extend the final scheduled maturity of any Revolving Loan or Revolving
Note in which such participant is participating, or reduce the rate or extend
the time of payment of interest or Fees thereon (except in connection with a
waiver of applicability of any post-default increase in interest rates) or
reduce the principal amount thereof, or increase the amount of the
participant's participation over the amount thereof then in effect (it being
understood that waivers or modifications of any conditions precedent,
covenants, Default or Event of Default or of a mandatory reduction in the
Total Revolving Loan Commitment shall not constitute a change in the terms of
such participation, and that an increase in any Revolving Loan Commitment or
Revolving Loan shall be permitted without the consent of any participant if
the participant's participation is not increased as a result thereof) or (ii)
consent to the assignment or transfer by
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the Borrower of any of its rights and obligations under this Agreement. In
the case of any such participation, the participant shall not have any rights
under this Agreement or any of the other Credit Documents (the participant's
rights against such Bank in respect of such participation to be those set
forth in the agreement executed by such Bank in favor of the participant
relating thereto) and all amounts payable by the Borrower hereunder shall be
determined as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its
Revolving Loan Commitment (and related outstanding Obligations hereunder),
and its outstanding Revolving Loans to its parent company and/or any
affiliate of such Bank or to one or more Banks or (y) assign all, or if less
than all, a portion equal to at least $5,000,000 or an integral multiple of
$1,000,000 in excess thereof, of such Revolving Loan Commitments and
outstanding principal amount of Revolving Loans hereunder to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Bank by execution of an Assignment and Assumption Agreement;
PROVIDED that, (i) at such time Schedule I shall be deemed modified to
reflect the Revolving Loan Commitments (and/or outstanding Revolving Loans,
as the case may be) of such new Bank and of the existing Banks, (ii) new
Revolving Notes will be issued, at the Borrower's expense, to such new Bank
and to the assigning Bank upon the request of such new Bank or assigning
Bank, such new Revolving Notes to be in conformity with the requirements of
Section 1.05 (with appropriate modifications) to the extent needed to reflect
the revised Revolving Loan Commitments (and/or outstanding Revolving Loans),
(iii) only with respect to any assignment pursuant to clause (y) of this
Section 11.04(b), the consent of the Agent and the Borrower shall be required
(which consents shall not be unreasonably withheld or delayed); PROVIDED,
HOWEVER, the consent of the Borrower shall not be required at any time after
an Event of Default shall have occurred and is then continuing, and (iv) the
Agent shall receive at the time of each such assignment, from the assigning
or assignee Bank, the payment of a non- refundable assignment fee of $3,500
and, PROVIDED FURTHER, that such transfer or assignment will not be effective
until recorded by the Agent on the Register pursuant to Section 11.17 hereof.
To the extent of any assignment pursuant to this Section 11.04(b), the
assigning Bank shall be relieved of its obligations hereunder with respect to
its assigned Revolving Loan Commitment. At the time of each assignment
pursuant to this Section 11.04(b) to a Person which is not already a Bank
hereunder and which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Bank shall provide to the Borrower and the Agent the
appropriate Internal Revenue Service Forms (and, if applicable a Section
3.04(b)(ii) Certificate) described in Section 3.04(b).
(c) Any Bank may at any time pledge or assign all or any portion
of its rights under this Agreement or any other Credit Document to any
Federal Reserve Bank without notice to or consent of any Credit Party. No
such pledge or assignment shall release the transferor Bank from its
obligations hereunder.
11.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of the Agent or any Bank or any holder of any Revolving Note in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the
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Borrower or any other Credit Party and the Agent or any Bank or the holder of
any Revolving Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any
other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which the Agent or any Bank or the holder of any Revolving Note would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the Agent or
any Bank or the holder of any Revolving Note to any other or further action
in any circumstances without notice or demand.
11.06 PAYMENTS PRO RATA. (a) Except as otherwise provided in
this Agreement, the Agent agrees that promptly after its receipt of each
payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its PRO RATA share of any such
payment) PRO RATA based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or
interest on, the Revolving Loans or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than
the total of such Obligation then owed and due to such Bank bears to the
total of such Obligation then owed and due to all of the Banks immediately
prior to such receipt, then such Bank receiving such excess payment shall
purchase for cash without recourse or warranty from the other Banks an
interest in the Obligations of the respective Credit Party to such Banks in
such amount as shall result in a proportional participation by all the Banks
in such amount; PROVIDED that if all or any portion of such excess amount is
thereafter recovered from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
11.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved (except as set forth in
the notes thereto or as otherwise disclosed in writing by the Borrower to the
Banks); PROVIDED that, except as otherwise specifically provided herein, all
computations determining compliance with Section 7 shall utilize accounting
principles and policies in conformity with those used to prepare the
historical financial statements delivered to the Banks pursuant to Section
5.05(a) (with the foregoing generally accepted accounting principles, subject
to the preceding proviso, herein called "GAAP").
(b) All computations of interest with respect to Base Rate Loans
shall be made on the basis of a year consisting of 365 (or, if applicable, 366)
days for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest
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is payable. All other computations of interest and all computations of Fees
hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day) occurring
in the period for which such interest or Fees are payable.
11.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
SITTING IN THE CITY OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
CREDIT PARTY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH CREDIT PARTY HEREBY DESIGNATES, APPOINTS AND EMPOWERS CT
CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 0000 XXXXXXXX, XXX
XXXX, XXX XXXX 00000, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE AND
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF
ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED
IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE
AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH CREDIT PARTY
AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON
THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT
UNDER THIS AGREEMENT. EACH CREDIT PARTY FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION
OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO ANY CREDIT PARTY AT ITS ADDRESS SET FORTH OPPOSITE
ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH
MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT UNDER THIS
AGREEMENT, ANY BANK OR THE HOLDER OF ANY REVOLVING NOTE TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION.
(b) EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE
AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
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SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
11.09 COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Agent.
11.10 EFFECTIVENESS. This Agreement shall become effective on the
date (the "Effective Date") on which (a) each Credit Party, the Agent and
each of the Banks shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered the same to the Agent at its
Notice Office or, in the case of the Banks, shall have given to the Agent
telephonic (confirmed in writing), written, telecopy or telex notice
(actually received) at such office that the same has been signed and mailed
to it and (b) the conditions set forth in Article 4A hereof are satisfied.
11.11 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
11.12 AMENDMENT OR WAIVER; ETC. (a) Neither this Agreement nor
any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party
thereto and the Required Banks, PROVIDED that no such change, waiver,
discharge or termination shall, without the consent of each Bank (with
Obligations being directly affected thereby in the case of the following
clause (i)), (i) extend the final scheduled maturity of any Revolving Loan or
Revolving Note, or reduce the rate or extend the time of payment of interest
or Fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates), or reduce the principal amount
thereof (except to the extent repaid in cash), (ii) release all or
substantially all of the Collateral (except as expressly provided in the
Security Documents), (iii) amend, modify or waive any provision of this
Section 11.12, (iv) reduce the percentage specified in the definition of
Required Banks (it being understood that, with the consent of the Required
Banks, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Banks on substantially the same
basis as the extensions of Revolving Loan Commitments are included on the
Effective Date), (v) release a Guarantor from its Guaranty or (vi) consent to
the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement; PROVIDED FURTHER, that no such change,
waiver, discharge or termination shall (x) increase the Revolving Loan Commit-
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ments of any Bank over the amount thereof then in effect without the consent
of such Bank (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default or of a mandatory
reduction in the Total Revolving Loan Commitment shall not constitute an
increase of the Revolving Loan Commitment of any Bank, and that an increase
in the available portion of any Revolving Loan Commitment of any Bank shall
not constitute an increase in the Commitment of such Bank) and (y) without
the consent of the Agent, amend, modify or waive any provision of Section 10
as same applies to the Agent or any other provision as same relates to the
rights or obligations of the Agent.
(b) If, in connection with any proposed change, waiver, discharge
or termination to any of the provisions of this Agreement as contemplated by
clause (a)(i) through (vi), inclusive, of the first proviso to Section
11.12(a), the consent of the Required Banks is obtained but the consent of
one or more of such other Banks whose consent is required is not obtained,
then the Borrower shall have the right, so long as each non-consenting Bank
whose individual consent is required is treated as described in either clause
(A) or (B) below, to either (A) replace such non-consenting Bank with one or
more Replacement Banks pursuant to Section 1.13 so long as at the time of
such replacement, each such Replacement Bank consents to the proposed change,
waiver, discharge or termination or (B) terminate such non-consenting Bank's
Revolving Loan Commitment and repay in full its outstanding Revolving Loans,
in accordance with Sections 2.02(b) and/or 3.01(b), PROVIDED that, unless the
Revolving Loan Commitment terminated and the Revolving Loans repaid pursuant
to preceding clause (B) are immediately replaced in full at such time through
the addition of new Banks or the increase of the Revolving Loan Commitments
and/or outstanding Revolving Loans of existing Banks (who in each case must
specifically consent thereto), then in the case of any action pursuant to
preceding clause (B) the Required Banks (determined both before and after
giving effect to the proposed action) shall specifically consent thereto,
PROVIDED FURTHER, that the Borrower shall not have the right to replace a
Bank solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to the second
proviso to Section 11.12(a).
11.13 SURVIVAL. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 3.04, 11.01 and 11.06 shall,
subject to Section 11.15 (to the extent applicable), survive the execution,
delivery and termination of this Agreement and the Revolving Notes and the
making and repayment of the Revolving Loans.
11.14 DOMICILE OF REVOLVING LOANS. Each Bank may transfer and
carry its Revolving Loans at, to or for the account of any office, Subsidiary
or Affiliate of such Bank. Notwithstanding anything to the contrary
contained herein, to the extent that a transfer of Revolving Loans pursuant
to this Section 11.14 would, at the time of such transfer, result in
increased costs under Section 1.10, 1.11 or 3.04 from those being charged by
the respective Bank prior to such transfer, then the Borrower shall not be
obligated to pay such increased costs (although the Borrower shall be
obligated to pay any other increased costs of the type described above
resulting from changes giving rise to such increased costs after the date of
the respective transfer).
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11.15 LIMITATION ON ADDITIONAL AMOUNTS, ETC. Notwithstanding
anything to the contrary contained in Section 1.10, 1.11 or 3.04 of this
Agreement, unless a Bank gives notice to the Borrower that it is obligated to
pay an amount under such Section within 180 days after the date the Bank
incurs the respective increased costs, Taxes, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on
capital, then such Bank shall only be entitled to be compensated for such
amount by the Borrower pursuant to said Section 1.10, 1.11 or 3.04, as the
case may be, to the extent the costs, Taxes, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital
are incurred or suffered on or after the date which occurs 180 days prior to
such Bank giving notice to the Borrower that it is obligated to pay the
respective amounts pursuant to said Section 1.10, 1.11 or 3.04, as the case
may be. This Section 11.15 shall have no applicability to any Section of
this Agreement other than said Sections 1.10, 1.11 and 3.04.
11.16 CONFIDENTIALITY. (a) Subject to the provisions of clause
(b) of this Section 11.16, each Bank shall hold all non-public information
obtained pursuant to the requirements of this Agreement which has been
identified as such by any Credit Party in accordance with its customary
procedure for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure reasonably to any bona fide prospective transferee or participant
in connection with the contemplated transfer of any Revolving Loan or
Revolving Loan Commitment or participation therein or as required or
requested by any governmental agency or representative thereof or pursuant to
legal process or to such Bank's attorneys, affiliates or independent
auditors; PROVIDED that, unless specifically prohibited by applicable law or
court order, each Bank shall notify Holdings of any request by any
governmental agency or representative thereof (other than any such request in
connection with an examination of the financial condition of such Bank by
such governmental agency) for disclosure of any such non-public information
prior to disclosure of such information; and PROVIDED FURTHER, that in no
event shall any Bank be obligated or required to return any materials
furnished by Holdings or any of its Subsidiaries, PROVIDED that in the case
of disclosure to any prospective transferee or participant, such Person
executes an agreement with such Bank containing provisions substantially the
same as to those contained in this Section 11.16.
(b) Each Credit Party hereby acknowledges and agrees that each
Bank may share with any of its affiliates any information related to Holdings
or any of its Subsidiaries (including, without limitation, any nonpublic
customer information regarding the creditworthiness of Holdings or any of its
Subsidiaries), PROVIDED such Persons shall be subject to the provisions of
this Section 11.16 to the same extent as such Bank.
11.17 REGISTRY. The Borrower hereby designates the Agent to serve as
the Borrower's agent, solely for purposes of this Section 11.17, to maintain a
register (the "Register") on which it will record the Revolving Loan Commitments
from time to time of each of the Banks, the Revolving Loans made by each of the
Banks and each repayment in respect of the principal amount of the Revolving
Loans of each Bank. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrower's obligations in respect of such
Revolving Loans. With respect to any Bank, the transfer of the Revolving Loan
Commitment of such Bank and the rights to the principal of, and interest on, any
Revolving Loan made pursuant
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to such Revolving Loan Commitment shall not be effective until such transfer
is recorded on the Register maintained by the Agent with respect to ownership
of such Revolving Loan Commitment and Revolving Loans and prior to such
recordation all amounts owing to the transferor with respect to such
Revolving Loan Commitment and Revolving Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Revolving Loan Commitment and Revolving Loans shall be recorded by the Agent
on the Register only upon the acceptance by the Agent of a properly executed
and delivered Assignment and Assumption Agreement pursuant to Section
11.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Agent for acceptance and registration of assignment or
transfer of all or part of a Revolving Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Revolving
Note evidencing such Revolving Loan, and thereupon one or more new Revolving
Notes in the same aggregate principal amount shall be issued to the assigning
or transferor Bank and/or the new Bank. The Borrower agrees to indemnify the
Agent from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by
the Agent in performing its duties under this Section 11.17.
11.18 NEWCO REORGANIZATION. In the event that Xxxxx owns all of
the outstanding shares of capital stock of Holdings:
(i) all references to "Holdings" in Section 3.02(b), 3.02(c), 5
(excluding, however, Sections 5.05, 5.09 and 5.10), 6 (excluding, however,
Sections 6.01(a) and 6.01(b)), 7 (excluding, however, Section 7.05(e)), 8,
9 (excluding, however, the definitions of "Credit Party", "Distribution,"
"Guarantor," "Holdings" and "Newco" and clause (ii) of the definition of
"Identified Indebtedness"), 10, and 11 of this Agreement shall be deemed to
refer to "Newco"; PROVIDED, HOWEVER, that the references to "Holdings" in
Sections 7.05(b) (second occurrence) and 7.05(g) hereof, together with the
reference to "Holdings" in clause (b) of the proviso to the definition of
"Indebtedness" in Section 9 hereof, shall be deemed to refer to "Newco
and/or Holdings" and all references to "either Guarantor" in this Agreement
shall be deemed to refer to "any Guarantor;"
(ii) Sections 6.01(a) and 6.01(b) hereof shall be amended in their
entireties to read as set forth below:
"(a) ANNUAL FINANCIAL STATEMENTS. As soon as available and
in any event within 120 days after the close of each fiscal year of
Newco, (i) a copy of the SEC Form 10-K filed by Newco with the SEC for
such fiscal year, or, if no such Form 10-K was so filed by Newco for
such fiscal year, the consolidated balance sheet of Newco and its
subsidiaries and whether or not such Form 10-K was filed, of each of
Holdings and its Subsidiaries and the Borrower and its Subsidiaries,
as at the end of such fiscal year and the related consolidated
statements of operations, of common stockholders' equity (deficit) (in
the case of Newco and its subsidiaries) and of cash flows for such
fiscal year, setting forth comparative consolidated figures as of the
end of and for the preceding fiscal year, and examined by Xxxxx &
Xxxxx (or (x) any other "Big Six" or "Big Four"
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accounting firm or (y) any other firm of independent public
accountants of recognized standing selected by Newco, Holdings or
the Borrower, as the case may be, and reasonably acceptable to the
Required Banks) whose opinion shall not be qualified as to the
scope of audit or as to the status of Newco, Holdings or the
Borrower as a going concern, and (ii) a certificate of such
accounting firm stating that in the course of its regular audit of
the business of Newco, Holdings and the Borrower, which audit was
conducted in accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge of any Default or
Event of Default which has occurred and is continuing or, if in the
opinion of such accounting firm such a Default or Event of Default
has occurred and is continuing, a statement as to the nature
thereof.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available
and in any event within 45 days after the close of each of the first
three quarterly accounting periods in each fiscal year of Newco, a
copy of the SEC Form 10-Q filed by Newco with the SEC for such
quarterly period, or, if no such Form 10-Q was so filed by Newco with
respect to any such quarterly period, the consolidated balance sheet
of Newco and its subsidiaries, and whether or not such Form 10-Q was
filed, of each of Holdings and its Subsidiaries and the Borrower and
its Subsidiaries, as at the end of such quarterly period and the
related consolidated statements of operations for such quarterly
period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period and in each case setting forth
comparative consolidated figures as of the end of and for the related
periods in the prior fiscal year, all of which shall be certified by
an Authorized Officer of Newco, Holdings or the Borrower, as the case
may be, subject to changes resulting from audit and normal year-end
audit adjustments."; and
(iii) Holdings shall, within five Business Days after the date on
which Xxxxx first owns all of such capital stock, cause Newco to furnish to
the Agent (x) counterparts of this Agreement executed on behalf of Newco
(or other appropriate documents making Newco a party hereto), (y) a
certificate of the Secretary or any Assistant Secretary of Newco as to the
matters set forth in Section 4A.04(a) of this Agreement with respect to
Newco and as to the incumbency and signatures of the Authorized Officers of
Newco, together with a letter from CT Corporation System with respect to
Newco, substantially in the form of Exhibit E hereto and (z) an opinion
from Xxxxxxx X. Xxxxxxxxx, Esq., Senior Vice President, General Counsel and
Secretary of Newco, which opinion shall be substantially in the form of
Exhibit D-1 hereto (except that references therein to "Holdings" shall be
references to "Newco"); the failure of Holdings to comply with the
foregoing provisions of this Section 11.18(iii) shall be an Event of
Default under and for all purposes of this Agreement.
SECTION 12. GUARANTY.
12.01 THE GUARANTY. In order to induce the Banks to enter into
this Agreement and to extend credit hereunder and in recognition of the
direct benefits to be received by the
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Guarantors from the proceeds of the Revolving Loans, each Guarantor hereby
jointly and severally agrees with the Agent and the Banks as follows: each
Guarantor hereby jointly and severally, unconditionally and irrevocably
guarantees as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, by acceleration or otherwise, of any
and all indebtedness of the Borrower to each of the Banks and of the Agent.
If any or all of the indebtedness of the Borrower to the Banks or the Agent
becomes due and payable hereunder, each Guarantor unconditionally promises on
a joint and several basis to pay such indebtedness to the Banks or the Agent,
as the case may be, or order, on demand, together with any and all expenses
which may be incurred by the Agent or the Banks in collecting any of the
indebtedness. The word "indebtedness" is used in this Section 12 to mean any
and all advances, debts, obligations and liabilities of the Borrower arising
in connection with this Agreement and any other Credit Document, in each
case, heretofore, now, or hereafter made, incurred or created, whether
voluntarily or involuntarily, absolute or contingent, liquidated or
unliquidated, determined or undetermined, whether or not such indebtedness is
from time to time reduced, or extinguished and thereafter increased or
incurred, whether the Borrower may be liable individually or jointly with
others, whether or not recovery upon such indebtedness may be or hereafter
become barred by any statute of limitations, and whether or not such
indebtedness may be or hereafter become otherwise unenforceable.
12.02 BANKRUPTCY. Additionally, each Guarantor jointly and
severally, unconditionally and irrevocably guarantees the payment of any and all
indebtedness of the Borrower to each of the Banks and the Agent whether or not
due or payable by the Borrower upon the occurrence in respect of the Borrower of
any of the events specified in Section 8.05, and unconditionally promises to pay
such indebtedness to each of the Banks and the Agents, or order, on demand, in
lawful money of the United States.
12.03 NATURE OF LIABILITY. The liability of each Guarantor hereunder
is exclusive and independent of any security for or other guaranty of the
indebtedness of the Borrower whether executed by each Guarantor, any other
guarantor or by any other party, and the liability of each Guarantor hereunder
shall not be affected or impaired by (a) any direction as to application of
payment by the Borrower or by any other party, or (b) any other continuing or
other guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the indebtedness of the Borrower, or (c) any payment on or in
reduction of any such other guaranty or undertaking, or (d) any dissolution,
termination or increase, decrease or change in personnel by the Borrower, or (e)
any payment made to the Agent or the Banks on the indebtedness which the Agents
or such Bank repay the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each Guarantor waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
12.04 INDEPENDENT OBLIGATION. The obligations of each Guarantor
hereunder are independent of the obligations of any other guarantor or the
Borrower, and a separate action or actions may be brought and prosecuted against
each Guarantor whether or not action is brought against any other guarantor or
the Borrower and whether or not any other guarantor or the Borrower be joined in
any such action or actions. Each Guarantor waives, to the fullest extent
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permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Borrower
or other circumstance which operates to toll any statute of limitations as to
the Borrower shall operate to toll the statute of limitations as to each
Guarantor.
12.05 AUTHORIZATION. Each Guarantor authorizes the Agent and the
Banks without notice or demand (except as shall be required by applicable
statute and which cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to (a) renew, compromise, extend,
increase, accelerate or otherwise change the time for payment of, or
otherwise change the terms of, the indebtedness or any part thereof in
accordance with this Agreement, including any increase or decrease of the
rate of interest thereon, (b) take and hold security from any guarantor or
any other party for the payment of this guaranty or the indebtedness and
exchange, enforce, waive and release any such security, (c) apply such
security and direct the order or manner of sale thereof as the Agent and the
Banks in their discretion may determine and (d) release or substitute any one
or more endorsers, guarantors, the Borrower or other obligors.
12.06 RELIANCE. It is not necessary for the Agent or the Banks to
inquire into the capacity or powers of the Borrower or its Subsidiaries or
the officers, directors, partners or agents acting or purporting to act on
its behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
12.07 SUBORDINATION. Any indebtedness of the Borrower now or
hereafter held by either Guarantor is hereby subordinated to the indebtedness
of the Borrower to the Agent and the Banks; and such indebtedness of the
Borrower to such Guarantor, if the Agent, after an Event of Default has
occurred and is continuing, so requests, shall be collected, enforced and
received by such Guarantor as trustee for the Banks and be paid over to the
Banks and the Agent on account of the indebtedness of the Borrower to the
Banks and the Agent, but without affecting or impairing in any manner the
liability of such Guarantor under the other provisions of this Guaranty.
Prior to the transfer by either Guarantor of any note or negotiable
instrument evidencing any indebtedness of the Borrower to such Guarantor,
such Guarantor shall mark such note or negotiable instrument with a legend
that the same is subject to this subordination.
12.08 WAIVER. (a) Each Guarantor waives any right (except as shall
be required by applicable statute and which cannot be waived) to require the
Agent or the Banks to (a) proceed against the Borrower, any other guarantor or
any other party, (b) proceed against or exhaust any security held from the
Borrower, any other guarantor or any other party or (c) pursue any other remedy
in the Agent's or the Banks' power whatsoever. Each Guarantor waives any
defense based on or arising out of any defense of the Borrower, any other
guarantor or any other party other than payment in full of the indebtedness,
including, without limitation, any defense based on or arising out of the
disability of the Borrower, any other guarantor or any other party, or the
unenforceability of the indebtedness or any part thereof from any cause, or the
cessation from any cause of the liability of the Borrower other than payment in
full of the indebtedness. The Agent and the Banks may, at their election,
foreclose on any security held by the Agent or the Banks by one or more judicial
or nonjudicial sales (to the extent such sale is permitted by
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applicable law), or exercise any other right or remedy the Agent and the
Banks may have against the Borrower or any other party, or any security,
without affecting or impairing in any way the liability of each Guarantor
hereunder except to the extent the indebtedness has been paid. Each
Guarantor waives any defense arising out of any such election by the Agent
and the Banks, even though such election operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of such
Guarantor against the Borrower or any other party or any security. Until all
indebtedness of the Borrower to the Banks and to the Agent shall have been
paid in full, each Guarantor agrees that it will not exercise any right of
subrogation, and waives any right to enforce any remedy which the Agent and
the Banks now have or may hereafter have against the Borrower, and waives any
benefit of, and any right to participate in, any security now or hereafter
held by the Agent and the Banks.
(b) Each Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional indebtedness. Each Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's
financial condition and assets, and of all other circumstances bearing upon
the risk of nonpayment of the indebtedness and the nature, scope and extent
of the risks which each Guarantor assumes and incurs hereunder, and agrees
that the Agent and the Banks shall have no duty to advise either Guarantor of
information known to them regarding such circumstances or risks.
12.09 LIMITATION ON ENFORCEMENT. The Banks agree that this
Guaranty may be enforced on their behalf only by the action of the Agent
acting upon the instructions of the Required Banks and that no Bank shall
have any right individually to seek to enforce or to enforce this Guaranty,
it being understood and agreed that such rights and remedies may be exercised
by the Agent for the benefit of the Banks upon the terms of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date
first above written.
Address:
--------
If by mail: NORTHWEST AIRLINES CORPORATION
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, XX 00000
If by courier: By: /s/ Xxxx X. Xxxxxxxx
0000 Xxxx Xxx Xxxxxxx -------------------------------------
Eagan, MN 55121 Title: Vice President - Finance and
Chief Accounting Officer
Tel: (000) 000-0000
Fax: (000) 000-0000 NWA INC.
Attn:
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Title: Vice President - Finance and
Chief Accounting Officer
NORTHWEST AIRLINES, INC.
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Title: Vice President - Finance and
Chief Accounting Officer
THE CHASE MANHATTAN BANK
Individually and as Agent
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Managing Director
ABN AMRO BANK N.V.,
CHICAGO BRANCH
By: /s/ Xxxx X. Xxxxx
--------------------------------------
Title: Senior Vice President
By: /s/ Xxxxx Van Der Xxxx
--------------------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST & SAVINGS
ASSOCIATION
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Title: Managing Director
BANK OF TOKYO - MITSUBISHI, LTD., CHICAGO
BRANCH
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------
Title: Deputy General Manager
BANKERS TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Title: Assistant Vice President
CITICORP USA, INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------------
Title: Attorney in Fact
CREDIT LYONNAIS, NEW YORK BRANCH
By: /s/ Xxxxxxxx Xxxxxxx
--------------------------------------
Title: Senior Vice President
CREDIT SUISSE FIRST BOSTON
By: /s/ Xxxxxx Xxxxxx
--------------------------------------
Title: Managing Director
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Title: Vice President
THE FUJI BANK, LIMITED
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------
Title: Joint General Manager
XXXXXX COMMERCIAL PAPER INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------
Title:
ROYAL BANK OF CANADA
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------------
Title: Senior Manager
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxx
--------------------------------------
Title: Vice-President
SCHEDULE I
COMMITMENTS
Revolving Loan
Bank Commitment
---- --------------
The Chase Manhattan Bank 86,000,000
Bankers Trust Company 84,000,000
Citicorp Securities, Inc. 83,000,000
ABN AMRO Bank, N.V. 83,000,000
US Bank 83,000,000
Bank of America 83,000,000
Credit Lyonnais 83,000,000
Royal Bank of Canada 83,000,000
The Fuji Bank, Limited 83,000,000
Credit Suisse First Boston 83,000,000
Xxxxxx Brothers 83,000,000
Bank of Tokyo Mitsubishi,Ltd. 83,000,000
Total 1,000,000,000
-------------
SCHEDULE II
BANK ADDRESSES
ABN AMRO N.V., Chicago Branch 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxx Der Hoef
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy To:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Bankers Trust Company 000 Xxxxx Xxxxxx Xxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
000 Xxxxx Xxxxxx Xxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
SCHEDULE II
Page 2
Citicorp USA, Inc. 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy To:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Portfolio Management
Tel: (000) 000-0000
Fax: (000) 000-0000
U.S. Bank National Association 000 Xxxxxx Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Attn: Xxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Bank of America National Trust & 000 Xxxxx XxXxxxx Xxxxxx
Savings Association, A National Banking Chicago, IL 60697
Association Attn: Xxxxxxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Credit Lyonnais
New York Branch 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxxx
SCHEDULE II
Page 3
Tel: (000) 000-0000
Fax: (000) 000-0000
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
SCHEDULE II
Page 4
Royal Bank of Canada New York Branch
Financial Square, 23rd Floor
00 Xxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-3531
Attn: Manager, Credit Admin.
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy To:
Xxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-1404
Attn: Xxxxxxx Xxxxx, Senior Manager
Tel: (000) 000-0000
Fax: (000) 000-0000
The Fuji Bank, Limited 000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy To:
000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
The Bank of Tokyo-Mitsubishi, Ltd. 000 Xxxx Xxxxxx Xxxxxx
Chicago Branch Suite 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000/4533
Copy To:
SCHEDULE II
Page 5
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx X. Xxxxxx XX
Tel: (000) 000-0000
Fax: (000) 000-0000/4533
Credit Suisse First Boston 00 Xxxxxxx Xxxxxx,
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Xxxxxx Brothers 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy To:
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0900
Attn: Xxxxx Xxxx
Tel: (000) 000-0000
SCHEDULE II
SUBSIDIARIES
(wholly-owned unless otherwise specified)
Northwest Airlines Corporation (Delaware corporation)
Newbridge Parent Corporation (Delaware corporation)
Newbridge Merger Corporation (Delaware corporation)
NWA Inc. (Delaware corporation)
Northwest Airlines, Inc. (Minnesota corporation)
NWA Fuel Services Corporation (Texas corporation)
Montana Enterprises, Inc. (Montana corporation)
Tomisato Shoji Hotel Business (Japanese corporation)
Republic Airlines, Inc. (Delaware corporation)*
Compass 315 LTD, Holding Company (U.K. corporation)
Tullion Limited (U.K. corporation)
Win-Win L.P. (Delaware limited partnership)*
NWA Worldclub, Inc. (Wisconsin corporation)
NWA Equity Holdings, Inc. (Texas corporation)
Wings Finance Company (Japanese corporation)
World Capital Management, Inc. (Minnesota corporation)
Northwest Aircraft Inc. (Delaware corporation)
Aircraft Foreign Sales, Inc. (U.S. Virgin Islands
corporation)
Northwest Aerospace Training Corporation (Delaware corporation)
MLT Inc. (Minnesota corporation)
NWA Retail Sales Inc. (Minnesota corporation)
NWA Aircraft Finance, Inc. (Delaware corporation)
Northwest Capital Funding Corp. (Delaware corporation)
Cardinal Insurance Company (Cayman) LTD. (Cayman Islands
corporation)
Northwest PARS Holdings, Inc. (Delaware corporation)
Northwest PARS, Inc. (Delaware corporation)
NWA Leasing Inc. (Minnesota corporation)
Express Airlines I, Inc.
Phoenix Airline Services, Inc.
--------------------
* Inactive
** Northwest Airlines, Inc. is 99% limited partner.
SCHEDULE IV
EXISTING INDEBTEDNESS *
[See Attached]
--------------------
* Existing Credit Agreement not to appear.
