Execution Copy
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CREDIT AGREEMENT
dated as of July 24, 1997
among
AMERICAN TRANS AIR, INC.
AMTRAN, INC.
THE BANKS PARTY THERETO
and
NBD BANK, N.A., as Agent
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CREDIT AGREEMENT
This Credit Agreement is entered into as of July 24, 1997 among
AMERICAN TRANS AIR, INC., an Indiana corporation ("Borrower"), AMTRAN, INC., an
Indiana corporation ("Amtran"), each of the lenders listed on the signature
pages hereof or otherwise becoming a party hereto from time to time
(collectively the "Banks" and individually as a "Bank"), NBD BANK, N.A. ("NBD"),
a national banking association, as agent for the Banks (in such capacity,
together with its successors in such capacity, the "Agent").
RECITALS
A. The Borrower, Amtran, the Banks and other lenders and co-agent
party thereto and NBD Bank, N.A., as agent, entered into a Second Amended and
Restated Credit Agreement dated as of December 7, 1994 (as amended, the "Prior
Credit Agreement"), which Prior Credit Agreement amended and restated previous
credit agreements.
B. The parties desire to amend and restate the Prior Credit
Agreement as herein provided, and the parties are willing to so amend and
restate the Prior Credit Agreement in its entirety as herein provided.
AGREEMENT
In consideration of the premises and of the mutual agreements herein
contained, the Prior Credit Agreement is hereby amended and restated in its
entirety as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Definitions. In addition to the terms defined elsewhere
in this Agreement, the following terms have the meanings indicated for purposes
of this Agreement:
"Adjustment Date" shall mean the first day of each February
and October, commencing October 1, 1997.
"Adjusted Net Profit" shall mean, for any period, the
consolidated net income (after taxes), but excluding any gains or losses (net of
related tax benefits) from any sale of assets in excess of $250,000 for any
single transaction and $1,000,000 in the aggregate for multiple transactions or
any other extraordinary gain (or loss) items and their related tax benefits, of
Amtran and its Affiliates for such period, on a consolidated basis, determined
in accordance with GAAP.
"Advance" means a loan by the Banks to Borrower pursuant to
this Agreement.
"Affiliate" means, (i) with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control of such Person and (ii) which other Person in accordance
with generally accepted accounting principles is to be included in the
consolidated financial statements of Amtran. A Person shall be deemed to control
a corporation if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by contract or
otherwise. Notwithstanding anything in this definition to the contrary, neither
J. Xxxxxx Xxxxxxxxx nor any member of the board of directors of any Person that
is a corporation shall be deemed a Person as used in this Agreement.
"Aviation Property" shall mean:
(i) each of the Lockheed Model L-1011 aircraft
identified on Schedule 1 attached to this Agreement (the "L-1011
Aircraft"), together with all appliances, parts, instruments,
appurtenances, accessories and equipment (including, without limitation,
communications and radar equipment) owned by Borrower now or hereafter
incorporated or installed in or attached to any of the L-1011 Aircraft,
and all substitutions, replacements and renewals of any and all thereof
owned by Borrower and all other property owned by Borrower which shall
hereafter become physically incorporated or installed in or attached to
any of the L-1011 Aircraft, whether any of the foregoing is now owned by
Borrower or hereafter acquired by it;
(ii) each of the aircraft engines identified on Schedule
2 attached to this Agreement (the "L-1011 Engines") and any aircraft
engine described in any supplemental security agreement which shall be
hereafter delivered to the Banks pursuant to the provisions of the
Security Agreement covering any of the Aviation Property, together with
all appliances, parts, instruments, appurtenances, accessories and
equipment owned by Borrower now or hereafter incorporated, installed in or
attached to any of such engines or L-1011 Engines, and all substitutions,
replacements and renewals of any and all thereof owned by Borrower and all
other property owned by Borrower which shall hereafter become physically
incorporated or installed in or attached to any of such engines or L-1011
Engines, whether any of the foregoing is now owned by Borrower or
hereafter acquired by it;
(iii) all proceeds of any of and all the properties
described in (i) and (ii) above, including, without limitation, all
warranty and tort claims and all insurance proceeds (and Borrower's right
to receive any such proceeds) from any loss or damage to any of such
properties and all other assets subject to or otherwise described as
collateral in the Security Agreements at any time, provided, however that
notwithstanding anything contained in (i) and (ii) above, Aviation
Property shall not include any appliances, parts, instruments,
appurtenances, accessories, and equipment (including without limitation,
communication and radar equipment) removed from Aviation Property and for
which a comparable substitution, replacement or renewal has been made.
Notwithstanding the foregoing, L-1011 Aircraft and L-1011 Engines shall also
include any Lockheed Model L-1011 aircraft and the related engines,
respectively, acquired by the Borrower after the Closing Date, provided that (A)
appraisals for such aircraft and engines acceptable to the Agent are received by
the Agent, (B) such aircraft and engines and related assets become subject to
the Security Agreement and the Borrower delivers all agreements, opinions and
documents requested by the Agent in connection therewith, all in form and
substance satisfactory to the Agent, and (C) such aircraft and engines are
otherwise acceptable to the Agent.
"Avmark" shall mean Avmark, Inc., or its successors as may be
acceptable to the Agent.
"Banking Day" means a day on which banks are open for
substantially all of their banking functions in Indiana other than Saturdays,
Sundays or legal holidays.
"Borrowing Base" means, as of any date as of which the amount
thereof is to be determined, an amount equal to 75% of the value (as determined
pursuant to Section 2.01(c)) of the L-1011 Aircraft and the L-1011 Engines
constituting Aviation Property subject to the Security Agreement.
"Capital Expenditures" means, for any period, the aggregate of
all expenditures for plant, property and equipment and other capital
expenditures as determined under GAAP made by Amtran or any of its Affiliates,
as applied on an accrual basis, for such period.
"Capital Lease" means any lease which, in accordance with
GAAP, is or should be capitalized.
"Capital Lease Payments" means, for any period, the aggregate
payments due during such period on any Capital Lease of Amtran or any of its
Affiliates.
"Cash Equivalents" means, for any period, with respect to the
covenant contained in Section 6.11 hereof, the sum, as of the last day of such
period, of (i) the amount of cash in a deposit account at any Bank and
certificates of deposit of any Bank owned by Borrower and/or Amtran, provided
that each such certificate of deposit has a maturity date not later than one (1)
year by Borrower and/or Amtran, and provided, further, that any such cash or
certificate of deposit is not subject to any Lien (except any Lien in favor of
the Banks) or other restriction, such as any cash held in escrow to secure any
air traffic liability, plus (ii) the fair market value of securities owned by
Borrower and/or Amtran with maturities of one (1) year or less from the date of
acquisition and which are issued or fully guaranteed or insured by the United
States Government or any agency thereof, plus (iii) commercial paper of any
United States issuer rated at least investment grade by Standard & Poor's
Corporation and Xxxxx'x Investors Services, Inc. (i.e., rated at least BBB- by
Standard & Poor's Corporation or at least Baa3 by Xxxxx'x Investors Service,
Inc.) and in each case maturing within six (6) months after the date of
acquisition, plus (iv) repurchase agreements reasonably acceptable to the Agent
and with a term of less than thirty (30) days, plus (v) the net cash surrender
value of any life insurance policies for which the Borrower is sole beneficiary
after deduction for any loans owing by the Borrower and/or Amtran or any other
party, prepaid premiums or other amounts with respect thereto, minus all Letter
of Credit Advances including without limitation those which are cash
collateralized pursuant to Section 3.04 hereof.
"Cash Flow" means, as of any date as of which the amount
thereof is to be determined, the difference of (i) the sum of: (A) Adjusted Net
Profit for the twelve month period immediately preceding such date of
determination; (B) Non-Cash Expenses for the twelve month period immediately
preceding such date of determination; (C) Interest Expense for the twelve month
period immediately preceding such date of determination; (D) Projected Lease
Payments as of such date of determination; and (E) the amount of income taxes
paid by Amtran and its Affiliates for the twelve month period immediately
preceding such date of determination; and (ii) Dividends paid or payable for the
twelve month period immediately preceding such date of determination. In
calculating Cash Flow hereunder, any lease and/or rental obligations
constituting either deposits or reserves on aircraft engines and/or aircraft
frames which would be viewed as Projected Lease Payments shall not be included.
"Cash Flow Coverage Ratio" means the ratio of Cash Flow to the
sum of (a) Interest Expense plus (b) Projected Lease Payments.
"Closing Date" means the date of execution of this Agreement
by all parties hereto, which shall be the effective date of this Agreement.
"Commitment" shall mean, with respect to each Bank, the
commitment of each such Bank to make Advances and to participate in Letter of
Credit Advances made through the Agent, in amounts not exceeding an aggregate
principal amount outstanding at any time equal to the respective commitment
amounts for each such Bank set forth next to the name of each such Bank on the
signature pages hereof or otherwise established pursuant to an Assignment and
Acceptance under Section 10.03, as such amounts may be reduced and/or otherwise
adjusted from time to time pursuant hereto. As of the Closing Date, the
aggregate Commitments equal $50,000,000.
"Consolidated" or "consolidated" shall mean, when used with
reference to any financial term of this Agreement, the aggregate for two or more
Persons of the amounts signified by such term for all such Persons determined on
a consolidated basis in accordance with GAAP.
"Default" means an event which with notice or lapse of time or
both, would become an Event of Default.
"Disposition" shall mean the sale or other transfer to any
Person by Borrower of any of the Aviation Property.
"Dividends" of any Person shall mean any dividend, payment or
other distribution in respect of any class of its capital stock or any dividend,
payment or other distribution in connection with the redemption, purchase,
retirement or other acquisition, directly or indirectly, of any of its capital
stock. As used in this Agreement, capital stock shall include all capital stock
and any securities exchangeable for or convertible into capital stock and any
warrants, rights or other options to purchase or otherwise acquire capital stock
or such securities or any other form of equity securities or any other form or
ownership interest.
"Dollars" and "$" means the lawful money of the United States
of America.
"ERISA" means the Employee Retirement Income Security Act of
1974 and all the rules and regulations promulgated pursuant thereto, as amended
from time to time.
"Eurodollar Business Day" means, with respect to any
Eurodollar Rate Advance, a day which is both a Banking Day and a day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Eurodollar Interest Period" means, with respect to any
Eurodollar Rate Advance, the period commencing on the day such Eurodollar Rate
Advance is made or converted to a Eurodollar Rate Advance and ending on the date
one, two, three or six months thereafter, as the Borrower may elect under
Section 2.02(b) or 2.13, and each subsequent period commencing on the last day
of the immediately preceding Eurodollar Interest Period and ending on the date
one, two, three or six months thereafter, as the Borrower may elect under
Section 2.02 provided, however, that (a) any Eurodollar Interest Period which
commences on the last Eurodollar Business Day of a calendar month
(or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Eurodollar Business
Day of the appropriate subsequent calendar month, (b) each Eurodollar Interest
Period which would otherwise end on a day which is not a Eurodollar Business Day
shall end on the next succeeding Eurodollar Business Day or, if such next
succeeding Eurodollar Business Day falls in the next succeeding calendar month,
on the next preceding Eurodollar Business Day, and (c) no Eurodollar Interest
Period which would end after the Termination Date shall be permitted.
"Eurodollar Rate" means, with respect to any Eurodollar Rate
Advance and the related Eurodollar Interest Period, the per annum rate that is
equal to the sum of:
(a) the Margin, plus
(b) the rate per annum obtained by dividing (i) the per annum
rate of interest at which deposits in Dollars for such Eurodollar Interest
Period and in an aggregate amount comparable to the amount of such Eurodollar
Rate Advance to be made by the Administrative Agent in its capacity as a Bank
hereunder are offered to the Administrative Agent by other prime banks in the
London interbank market at approximately 11:00 a.m. London time on the second
Eurodollar Business Day prior to the first day of such Eurodollar Interest
Period by (ii) an amount equal to one minus the stated maximum rate (expressed
as a decimal) of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves) that is specified
on the first day of such Eurodollar Interest Period by the Board of Governors of
the Federal Reserve System (or any successor agency thereto) for determining the
maximum reserve requirement with respect to eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of such Board)
maintained by a member bank of such System;
all as conclusively determined by the Agent, such sum to be rounded up, if
necessary, to the nearest whole multiple of one one-hundredth of one percent
(1/100 of 1%).
"Eurodollar Rate Advance" means any Advance which bears
interest at the Eurodollar Rate.
"Event of Default" means any event set forth in Sections 8.01
to 8.10, inclusive, hereof.
"Federal Funds Rate" means, for any day, the average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published by the Federal
Reserve Bank of New York for such day, or, if such rate is not so published for
any day, the average of the quotations for such rates received by the Agent from
three federal funds brokers of recognized standing selected by the Agent in its
discretion from time to time as the opening federal funds rate paid or payable
by the Agent in its regional federal funds market for overnight borrowings from
other banks;
"Funded Indebtedness" of any person shall mean, as of any
date, the sum of all Indebtedness of such person for borrowed money which by its
terms has a final maturity, duration or payment date more than one year from
such date (including any such Indebtedness having a final maturity, duration or
payment date within one year from such date which, pursuant to the terms of a
revolving credit or similar agreement or otherwise, may be renewed or extended
for more than one year from such date, whether or not theretofore renewed or
extended), provided, however, that Funded
Indebtedness shall not include (i) Indebtedness of such person which is
subordinated to the Obligations pursuant to a Subordination Agreement
satisfactory in form and substance to the Agent, or (ii) any payment in respect
of Funded Indebtedness (whether installments, serial maturity or sinking fund
payments or otherwise) due within one year from such date.
"GAAP" means generally accepted accounting principles applied
on a basis consistent with that reflected in the financial statements referred
to in Section 5.13.
"Guarantors" shall mean, collectively Amtran and each present
and future subsidiary of Amtran or the Borrower, other than Amber Holdings,
Inc., or any other person executing a Guaranty at any time.
"Guaranty" shall mean any guaranty of any of the Obligations
executed by Amtran and its Affiliates, or any of them, at any time, as amended
or modified from time to time.
"Hazardous Material" means and includes any hazardous, toxic
or dangerous waste, substance or material defined as such in or for the purpose
of the Comprehensive Environmental Response, Compensation and Liability Act, any
so-called "Superfund" or "Superlien" law, or any other federal, state or local
statute, law, ordinance, code, rule, regulation, order, decree or other
requirement of any governmental authority regulating, relating to, or imposing
liability or standards of conduct concerning any hazardous, toxic or dangerous
waste or material, as now or at any time hereafter may be in effect.
"Hedging Agreement" means any agreement, or arrangement
entered into by the Borrower and any Bank providing for payments protecting the
Borrower against fluctuations of interest rates, including interest rate swaps,
interest rates caps or similar agreements.
"Indebtedness" of any Person means: (i) all obligations of
such Person (including without limitation all fees, costs or unpaid accrued
interest) for or with respect to borrowed money or for the deferred purchase
price of property or services (other than accounts payable in the ordinary
course of business); (ii) all obligations of such Person created or arising
under any conditional sale or other title retention agreement with respect to
any property acquired by such Person and all obligations created or arising
under such agreement even though the rights and remedies of the seller or lender
thereunder are limited to repossession or sale of such property in the event of
default; (iii) all obligations of such Person under Capital Leases; (iv) all
guarantees and other obligations (contingent or otherwise) of such Person to
assure a creditor against loss (including, without limitation, letters of
responsibility or comfort letters, arrangements to purchase or repurchase
property or obligations, pay for property, goods or services whether or not
delivered or rendered, maintain working capital, equity capital or other
financial statement condition of, or lend or contribute to or invest in, any
such Person) in respect of obligations of any other Person; (v) all endorsements
of such Person (other than in the case of instruments, for deposit or collection
in the ordinary course of business); (vi) all obligations of such Person for
extensions of credit to or on behalf of such Person, whether or not representing
obligations for borrowed money, including, without limitation, all reimbursement
obligations of such Person in respect of letters of credit, or similar
obligations and all obligations pursuant to any interest rate or currency swaps,
rate caps or similar transactions; (vii) all accrued, non-contingent liabilities
of such Person in respect of unfunded vested liabilities under any Plan of such
Person or of any member of a controlled group of which such Person is a member;
and (viii) all obligations or indebtedness described in clauses (i) through
(vii) secured by a Lien on any property owned by such Person, whether or not
such Person has assumed or become liable for the payment thereof.
"Independent Public Accountant" means Ernst & Young or other
public accounting firm of national reputation selected by Borrower and
acceptable to the Required Banks.
"Interest Expense" shall mean, for any period, the aggregate
gross interest expense paid or payable by Amtran and its Affiliates for such
period.
"Interest Payment Date" means (a) with respect to any
Eurodollar Rate Advance, the last day of each Eurodollar Rate Interest Period
with respect to such Eurodollar Rate Advance and, in the case of any Eurodollar
Interest Period exceeding three months, those days that occur during such
Eurodollar Interest Period at intervals of three months after the first day of
such Eurodollar Interest Period, and (b) in all other cases, the first Banking
Day of each month occurring after the date hereof, commencing with the first
such Banking Day occurring after the date of this Agreement.
"Investment" means: (i) any loan, advance, guarantee,
extension of credit (other than in the ordinary course of business to trade
customers) or contribution of capital by Amtran or any of its Affiliates to any
Person or the purchase of any Person's notes, stock, bonds or other securities,
(ii) advances by Amtran or any of its Affiliates to employees of a Person other
than in the ordinary course of business for the purpose of defraying travel,
relocation or business expenses and (iii) any contribution of capital or
property or services contributed or committed to be contributed by Amtran or any
of its Affiliates in connection with the purchase of debt or equity or other
ownership interests of any Person.
"Letter of Credit" shall mean a standby letter of credit
having a stated expiry date not later than the earlier of (i) one year after the
date of issuance thereof, and (ii) the Termination Date, issued by the Agent on
behalf of the Banks for the account of Borrower under an application and related
documentation acceptable to the Agent requiring, among other things, immediate
reimbursement by Borrower to the Agent in respect of all drafts or other demand
for payment honored thereunder and all expenses paid or incurred by the Agent
relative thereto. For purposes of this Agreement, the aggregate outstanding
principal amount of any unexpired or outstanding Letter of Credit or Letter of
Credit Advance shall be deemed the face amount of such Letter of Credit.
"Letter of Credit Advance" shall mean any issuance of a Letter
of Credit hereunder by the Agent in which each Bank shall acquire a pro rata
risk participation pursuant to Section 2.11.
"Letter of Credit Documents" shall have the meaning ascribed
thereto in Section 2.12.
"Leverage Ratio" means, as of any date as of which the amount
thereof is to be determined, the ratio of Total Adjusted Liabilities to Tangible
Net Worth.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to provide any
of the foregoing), any conditional sale or other title retention agreement or
any lease in the nature thereof, or any filing or agreement to file a financing
statement as debtor on any property leased to any Person under a lease which is
not in the nature of a conditional sale or title retention agreement.
"Loan Documents" means, collectively, this Agreement,the
Notes, the Security Agreement, the Guaranty, the Letter of Credit Documents,
Hedging Agreements and any other documents evidencing, guaranteeing or securing
the Obligations.
"Margin" shall mean the applicable percentage per annum, based
on the Cash Flow Coverage Ratio and Leverage Ratio of the Borrower, as
determined by reference to the following table:
Margin
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Letter of Non-Use
Credit Fee Fee Payable
Financial Prime Rate Eurodollar Payable Under Under
Ratios Advances Rate Advances Section 2.06(c) Section 2.06(b)
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If the (a) Cash Flow 0.0% 1.50% 1.125% 0.25%
Coverage Ratio is
greater than or equal
to 2.05 to 1.00 and (b)
Leverage Ratio is less
than 4.0 to 1.0
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If the (a) Cash Flow 0.0% 1.75% 1.25% 0.30%
Coverage Ratio is less
than 2.05 to 1.00 and
greater than or equal
to 1.80 to 1.00 and (b)
Leverage Ratio is less
than 4.0 to 1.0
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If the (a) Cash Flow 0.0% 2.00% 1.375% 0.35%
Coverage Ratio is less
than 1.80 to 1.00 and
greater than or equal
to 1.65 to 1.00 and (b)
Leverage Ratio is less
than 4.0 to 1.0
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If the Leverage Ratio 0.25% 2.25% 1.50% 0.40%
is equal to or greater
than 4.0 to 1.0 but
less than or equal to
4.5 to 1.0
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If the Leverage Ratio 0.375% 2.375% 1.625% 0.45%
is greater than 4.5 to
1.0 but less than 5.0
to 1.0
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If the Leverage Ratio 0.50% 2.50% 1.75% 0.50%
is equal to or greater
than 5.0 to 1.0
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For purposes of determining the Margin, the Cash Flow Coverage Ratio
and Leverage Ratio shall be determined on the last day of each fiscal quarter,
for the fiscal quarter then ending, and the Margin shall be adjusted on the
first day of the second fiscal quarter following each such fiscal quarter based
on the Cash Flow Coverage Ratio and Leverage Ratio for such fiscal quarter,
which Margin shall
remain in effect until the first day of the following fiscal quarter.
Notwithstanding the above, upon and during the continuance of any Event of
Default the Margin for each category shall be based upon the highest margin
possible in each category, regardless of the Cash Flow Coverage Ratio or
Leverage Ratio, upon and during the continuance of any Event of Default.
"Margin Stock" has the meaning ascribed to it in Regulation U
of the Board of Governors of the Federal Reserve System.
"Net Profit" shall mean, for any period, the consolidated net
income (after taxes) of Amtran and its Affiliates for such period, on a
consolidated basis, determined in accordance with GAAP.
"Net Worth" means consolidated total assets of Amtran and its
Affiliates less the consolidated total liabilities and reserves of Amtran and
its Affiliates, computed on a consolidated basis in accordance with GAAP.
"Non-Cash Expenses" shall mean, for any period, the sum of the
amount of depreciation and amortization expense during such period of Amtran and
its Affiliates, on a consolidated basis, to the extent deducted from Adjusted
Net Profit, all as determined in accordance with GAAP.
"Note" means any note executed by Borrower in the form of
Exhibit A hereto, as amended, supplemented or modified from time to time and
together with any promissory note or notes issued in exchange or replacement
therefor and "Notes" shall mean all of such notes.
"Obligations" means all present and future obligations,
indebtedness and liabilities of Borrower or Amtran under the Loan Documents.
"Operating Lease Payments" shall mean, for any period, the
aggregate payments due during such period on all operating leases of Amtran or
any of its Affiliates which individually originally have (or had) aggregate
payments paid or payable, from the original commencement of such lease until its
expiry, in excess of Two Hundred Fifty Thousand and 00/100 Dollars
($250,000.00).
"Overdue Rate" means (a) in respect of principal of Prime Rate
Advances a rate per annum that is equal to the sum of two percent (2%) per annum
plus the Prime Rate plus the Margin (b) in respect of principal of Eurodollar
Rate Advances, a rate per annum that is equal to the sum of two percent (2%) per
annum plus the per annum rate in effect thereon until the end of the then
current Eurodollar Interest Period for such Eurodollar Rate Advance and,
thereafter, a rate per annum that is equal to the sum of two percent (2%) per
annum plus the Prime Rate plus the Margin, and (c) in respect of all other
amounts payable by the Borrower hereunder (other than interest), a per annum
rate that is equal to the sum of two percent (2%) per annum plus the Prime Rate
plus the Margin.
"PBGC" means the Pension Benefit Guaranty Corporation created
under Section 4002(a) of ERISA or any successor thereto.
"Permitted Liens" means:
(i) Liens for taxes not yet due or which are being
actively contested in good faith by appropriate proceedings (in a
manner sufficient to prevent enforcement
of the matter under contest) and as to which adequate reserves have
been set aside in amounts determined in accordance with GAAP;
(ii) Other Liens incidental to the conduct of the
business of Amtran and its Affiliates or the ownership of their
respective properties and assets which were not incurred in
connection with the incurring of Indebtedness, and which do not
detract from the value of such property or assets or impair the use
thereof in the operation of Amtran's and its Affiliates' business
including, without limitation, Liens imposed by mechanics, laborers
or materialmen but only to the extent that such Liens are being
contested in good faith by the Borrower and the resolution thereof
is being diligently pursued by Borrower;
(iii) Liens on property or assets of an Affiliate to
secure obligations of such Affiliate to Borrower or another
Affiliate;
(iv) Liens existing on the Closing Date and approved in
writing by the Banks but no extension, modification or renewal of
any such Lien shall be permitted;
(v) Liens created pursuant to the Security Agreement and
Liens expressly permitted by the Security Agreement;
(vi) Purchase money mortgages for equipment, inventory,
spare parts and appliances used in the Borrower's ordinary course of
business provided that any such purchase will not result in a
violation of Section 7.01 of this Agreement;
(vii) Liens to Rolls Royce plc pursuant to a Security
Agreement dated as of May 20, 1993, as amended and restated as of
November 1, 1994, on certain spare parts and certain RB211 engines
bearing the following manufacturer serial numbers: 10388, 10426,
10502, 10519 and 10528;
(viii) Liens to First of America Bank-Indiana pursuant
to a Security Agreement dated May 31, 1989 as amended on September
30, 1991; and
(ix) Notwithstanding anything contained herein to the
contrary, Liens on Borrower's accounts, general intangibles or
inventory shall not be Permitted Liens except as set forth in
clauses (i) and (ii) above and Liens on any of the Aviation Property
shall not be Permitted Liens.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
governmental or political subdivision or an agent or instrumentality thereof.
"Plan" means any defined benefit plan maintained or
contributed to by Amtran or any of its Affiliates or by any trade or business
(whether or not incorporated) under common control with Amtran or any of its
Affiliates as defined in Section 4001(b) of ERISA and insured by the PBGC under
Title IV of ERISA.
"Prime Rate" means the per annum rate that is equal to the
greater of (i) the per annum rate of interest announced from time to time by NBD
as its "prime rate", which rate may not
necessarily be the lowest rate charged by NBD to any of its customers, or (ii)
the Federal Funds Rate plus one-half percent (1/2%) per annum. The Prime Rate
shall change simultaneously with any change in such "prime rate" or such Federal
Funds Rate, if applicable.
"Prime Rate Advance" means a loan made by the Banks to
Borrower under Section 2.01 and bearing interest at a rate equal to the Prime
Rate plus the Margin.
"Projected Lease Payments" means, as of any date as of which
the amount thereof is to be determined, the aggregate amount of all payments to
be paid in the future by the Borrower, Amtran or any of their Subsidiaries under
any operating or capital lease; provided, however, that such payments under any
such capital or operating lease shall only be included in this definition of
Projected Lease Payments only for the period of time commencing on such date of
determination of Projected Lease Payments and ending twelve months after such
date, and all such payments under any such capital or operating lease after such
one year period shall not be included in this definition of Projected Lease
Payments.
"Reportable Events" shall be as defined in ERISA.
"Required Banks" shall mean at any time while no Revolving
Credit Loans are outstanding, any combination of Banks having more than 60% of
the aggregate amount of the Commitments, and, at any time while Revolving Credit
Loans are outstanding, any combination of Banks holding more than 60% of the
outstanding aggregate principal amount of Revolving Credit Loans and Letter of
Credit Advances.
"Revolving Credit Loans" means the borrowing under Section
2.01 of this Agreement, which are on a revolving basis under the terms of this
Agreement.
"Security Agreement" means, collectively, the Security
Agreement and Chattel Mortgage dated the Closing Date and all other present and
future security agreements and other related documents, each in form and
substance acceptable to the Agent, pursuant to which the Banks are granted the
security interests described in Section 3.01, and any other present or future
collateral securing the Obligations, as the same are now or hereafter renewed,
extended, amended, modified, supplemented or restated.
"Senior Unsecured Debt Documents" means the Senior Unsecured
Indenture, the Senior Unsecured Notes and all of their agreements, documents and
instruments executed in connection therewith, as amended from time to time in
compliance with the terms of this Agreement.
"Senior Unsecured Indenture" means the Indenture dated the
Closing between the Borrower and __________, as trustee, as amended from time to
time in compliance with the terms of this Agreement.
"Senior Unsecured Notes" shall mean the ___% Senior Notes due
_________, 2004 in the aggregate principal amount of $100,000,000, as amended
from time to time in compliance with the terms of this Agreement.
"Tangible Net Worth" means Net Worth, less:
(i) goodwill (including the unallocated excess purchase
cost of assets acquired in a transaction accounted for as a purchase
over the aggregate fair market value thereof on the date of
acquisition), patents, trademarks, trade names, copyrights,
franchises, deferred charges, (including unamortized debt discount
and expense, deferred research and development expenses and
organizational costs), treasury stock and all other items that would
be treated as intangible assets under GAAP, except that in excluding
intangible assets, the excluded assets shall not include deferred
pre-operating costs of Borrower which do not exceed One Million and
00/100 Dollars ($1,000,000.00) in the aggregate;
(ii) any Investments of Amtran or any of its Affiliates
or any extensions of credit to stockholders, officers, directors, or
employees of Amtran or any of its Affiliates greater than Ten
Thousand and 00/100 Dollars ($10,000.00) to any one individual or
greater than one Hundred Thousand and 00/100 ($100,000.00) in the
aggregate; and
(iii) any write-up of assets of Amtran or any of its
Affiliates after the Closing Date other than a write-up of assets of
an Affiliate of Amtran in connection with the acquisition of such
Affiliate and in accordance with GAAP.
"Termination Date" means:
(a) the earlier to occur of
(i) April 1, 2001, or such extended date as may
be established in accordance with Section
2.18, or
(ii) the date on which the Commitments are
terminated, the Revolving Credit Loans
accelerated or both pursuant to Article
VIII.
"Total Adjusted Liabilities" shall mean, without duplication,
(A) the sum of (i) Funded Indebtedness of Amtran and its Affiliates, (ii) any
payment in respect of Funded Indebtedness of Amtran and its Affiliates due
within one year from any date of determination, (iii) the total accrued Interest
Expenses, and (iv) three and one-half (3 1/2) times Amtran's and its Affiliates'
projected capital and operating lease rental expenses for the immediately
succeeding twelve month period less (B) the total amount of all Cash
Equivalents.
1.02 Rules of Construction. All accounting terms used herein and not
expressly defined in this Agreement shall (unless otherwise expressly indicated)
have the respective meanings given to them in accordance with GAAP. All
financial computations made under this Agreement for the purpose of determining
compliance with the financial requirements of this Agreement shall be made, and
all financial information required under this agreement shall be prepared, in
accordance with GAAP, as in effect on the Closing Date, consistently applied.
All computations made under this Agreement for the purpose of determining
compliance with the financial covenants herein shall be made on a consolidated
basis. All defined terms used herein shall include both the singular and the
plural forms thereof and shall be construed accordingly.
ARTICLE II.
THE CREDIT
2.01 Revolving Credit Loans.
(a) Each Bank severally agrees, subject to the terms and
conditions of this Agreement, to make available to the Borrower, for the
purposes set forth in Section 6.01, Revolving Credit Loans and to participate in
Letter of Credit Advances to the Borrower which in an aggregate amount do not
exceed the Commitment of each Bank, provided, however, that the sum of the
aggregate amount of the Revolving Credit Loans and the maximum amount available
to be drawn on all outstanding Letters of Credit shall not exceed the lesser of
the Borrowing Base (as the Borrowing Base is reduced pursuant to Section 2.05 or
otherwise) or the Commitments; provided, however, that the aggregate amount of
Letter of Credit Advances (including, without limitation, the Letter of Credit
Advances cash collateralized pursuant to Section 3.04 hereof) outstanding at any
time shall not exceed Twenty-Five Million and 00/100 Dollars ($25,000,000).
Notwithstanding anything herein to the contrary, the Borrower may not obtain any
Advance or Letter of Credit Advance on the last day of any calendar quarter.
(b) Advances made pursuant to this Section 2.01 shall
constitute revolving credit, subject to the provisions of Section 2.10 hereof,
and prior to the Termination Date Borrower may borrow, repay and reborrow
Revolving Credit Loans.
(c) For the purpose of this Agreement, the value of Aviation
Property shall be based on the Appraisal Report of Aviation Property by Avmark
dated November 15, 1994. Such value shall be adjusted on a semi-annual basis on
each Adjustment Date based on Avmark's most recently published values of
L-1011-50 aircraft by the same percentage change in the base values of such
L-1011-50 aircraft which have occurred since the Avmark publication of November
15, 1994 through January, 1997. Within 120 days after the Closing Date, the
Agent will be having an appraisal of the Aviation Property by an independent
third party appraiser acceptable to the Required Banks and at the expense of the
Borrower, and the value of the Aviation Property shall be adjusted as determined
by the Agent based on the results of such appraisals. Upon the acquisition of
any aircraft or engines by the Borrower which are to be subject to the Security
Agreement and part of the Aviation Property, the Agent may require an appraisal
of such new Aviation Property by an independent third party appraiser acceptable
to the Required Banks and at the expense of the Borrower, and the value of such
new Aviation Property for the Borrowing Base shall be based on the results of
such appraisals. Additionally, if required by the Required Banks, 90 days after
each Adjustment Date the Required Banks may request an appraisal of the Aviation
Property by an independent third party appraiser acceptable to the Required
Banks and at the expense of the Borrower and the value of the Aviation Property
shall also be adjusted based on the results of such appraisals. In the event
that the aggregate Commitments become greater than the Borrowing Base determined
by the method described in the first sentence of this clause (c) and the
Required Banks have not requested an appraisal pursuant to the immediately
preceding sentence, Borrower may, at its own expense, have the Aviation Property
physically appraised by Avmark, or any other independent third party appraiser
acceptable to the Required Banks, within the thirty (30) day period following an
Adjustment Date to establish the value of Aviation Property and the value of the
Aviation Property shall be based on the results of such appraisals. If
acceptable to the Required Banks in their sole discretion, an appraisal report
from an independent third party appraiser other than Avmark may be substituted
for the appraisal report of Avmark for purposes of this Section 2.01(c).
(d) In the event Avmark fails or ceases to publish valuation
reports, the Agent shall establish a procedure to determine the value of the
Aviation Property for purposes of Section
2.01(c). Such procedure shall be acceptable to the Required Banks and based upon
a recognized independent third-party valuation source, and shall also be
established in consultation with the Borrower, but without the approval of the
Borrower.
(e) The Borrower shall have the right to terminate or reduce
the Commitments at any time and from time to time provided that (i) the Borrower
shall give three (3) Banking Days prior written notice of such termination or
reduction to the Agent specifying the amount and effective date thereof, (ii)
each partial reduction of the Commitments shall be in a minimum amount of
$5,000,000 and in an integral multiple of $1,000,000 and shall reduce the
Commitments of all of the Banks proportionately and in accordance with the
respective Commitment amounts for each Bank, (iii) no such termination or
reduction shall be permitted with respect any portion of the Commitments as to
which a request for an Advance or Letter of Credit Advance is pending and (iv)
the Commitments cannot be terminated if any Advance or Letter of Credit Advance
is then outstanding and may not be reduced below the principal amount of the
Advances and Letter of Credit Advances. The Commitments or any portion thereof
terminated or reduced may not be reinstated.
2.02 Requests for Advance.
(a) Subject to the terms and conditions of this Agreement,
Advances shall be made available to Borrower prior to the Termination Date,
provided that the Agent receives, at the time and in accordance with the terms
of this Section 2.02, a request ("Request") specifying the amount thereof. All
Advances shall be made on a pro rata basis in accordance with each Bank's
Commitment.
(b) The Borrower shall give the Agent notice of its Request
not later than (i) 11:30 a.m. Indianapolis time (A) three Eurodollar Business
Days prior to the date such Advance is requested to be made if such Advance is
to be made as a Eurodollar Rate Advance, and (B) one day prior to the date such
Advance is requested to be made if such Advance is to be made as a Prime Rate
Advance, which notice shall specify whether a Eurodollar Rate Advance or a Prime
Rate Advance is requested and, in the case of each requested Eurodollar Rate
Advance, the Eurodollar Interest Period to be initially applicable to such
Advance. The Agent, on the same day such Request is received, shall provide
notice of such Request to each Bank.
(c) Not later than 1:00 p.m. Indianapolis time, on the date of
the Advance, each Bank shall make available the amount of its pro rata share of
each Advance to be made on such date, in immediately available funds to the
Agent at its office specified herein.
(d) The Agent will thereupon advance to Borrower the amount so
requested unless the Banks shall determine that any condition precedent
applicable to the Advance set forth in Section 4.01 or 4.02 shall not be
fulfilled as of the date of such Advance and the Agent has so notified Borrower.
All Advances will be made to Borrower by a credit to Borrower's account with the
Agent.
(e) All notices (including Requests for Advances), made by
Borrower to the Agent and received by the Agent after 11:30 a.m., Indianapolis
time, (or such other time as is specified in any section hereof) on a Banking
Day shall be deemed received on the next succeeding Banking Day.
(f) Each Prime Rate Advance shall be in an aggregate amount of
One Million and 00/100 Dollars ($1,000,000) and each Eurodollar Rate Advance
shall be in an aggregate amount of Five Million and 00/100 Dollars ($5,000,000)
and, with respect to both types of Advances, Advances in excess of such amounts
shall be in integral multiples of One Million and 00/100 Dollars
($1,000,000); provided, however, that in the event that the amount available to
be borrowed is less than One Million and 00/100 Dollars ($1,000,000) in the case
of Prime Rate Advances or Five Million and 00/100 Dollars ($5,000,000) in the
case of Eurodollar Rate Advances, then the Advance shall be permitted in such
lesser amount.
(g) The failure of any Bank to make its pro rata portion of
any Advance available to the Agent shall not relieve any other Bank of its
obligations to make available its pro rata portion of such Advance on the date
such Advance is requested to be made, but no Bank shall be responsible for
failure of any other Bank to make such pro rata portion available to the Agent
on the date of any such Advance.
2.03 Evidence of Credit Extensions.
(a) The Revolving Credit Loans shall be evidenced by a Note
executed by Borrower payable to the order of each Bank in the amount of each
Bank's respective Commitment as set forth on the signature pages hereof dated
the Closing Date, and providing for the payment of principal and interest in
accordance with this Agreement. Each Bank shall record Advances, principal
payments thereof and whether the Advance is a Prime Rate Advance or a Eurodollar
Rate Advance on such Bank's records, and such Bank's record thereof shall
constitute prima facie evidence of the information so recorded. Any statement of
a Bank to Borrower setting forth Borrower's account with such Bank regarding its
share of Advances and payments shall be considered true and correct and binding
on Borrower unless such Bank is notified in writing by Borrower of any
discrepancy or exception within fifteen (15) days from the mailing by such Bank
to Borrower of any such monthly statement. Notwithstanding the foregoing, the
failure to make, or an error in making, a notation with respect to any Advance
shall not limit or otherwise affect the obligation of Borrower hereunder or
under the Notes.
2.04 Interest.
(a) Notwithstanding anything herein to the contrary, the
outstanding principal amount of the Revolving Credit Loans, other than during
the continuance of an Event of Default, shall bear interest at the following
rates per annum:
(i) During such periods that any Advance is a Prime Rate
Advance, the Prime Rate plus the Margin.
(ii) During such periods that any Advance is a
Eurodollar Rate Advance, the Eurodollar Rate applicable to such Advance
for each related Eurodollar Interest Period.
(b) Borrower shall pay interest on the principal amount of the
Revolving Credit Loans on each Interest Payment Date and at maturity (whether at
stated maturity, by acceleration or otherwise).
(c) Notwithstanding the foregoing paragraph (a), Borrower
shall pay interest on demand by the Agent at the Overdue Rate on the outstanding
principal amount of any Advance and any other amount payable by the Borrower
hereunder (other than interest) at any time on or after an Event of Default, if
required in writing by the Required Banks.
2.05 Periodic Mandatory Reductions of Borrowing Base.
The Borrowing Base shall automatically be reduced as follows:
(a) In the event of any Disposition of any Aviation Property,
the Borrowing Base shall be reduced by an amount equal to one hundred percent
(100%) of the appraised value, as of the most recent Adjustment Date, of such
disposed Aviation Property, and the Borrower shall prepay the Revolving Credit
Loans, or cash collateralize the Letter of Credit Advances if all of the
Revolving Credit Loans are or will be paid in full, by an amount equal to the
proceeds of such Disposition.
(b) Upon any loss or damage to any Aviation Property which
cannot or is not repaired in accordance with the terms of Section 2.09(e), the
Borrowing Base shall be reduced by an amount equal to such loss or damage, but
not in excess of the amount required under Section 2.05(a) upon Disposition of
such Aviation Property, and the Borrower shall prepay the Revolving Credit
Loans, or cash collateralize the Letter of Credit Advances if all of the
Revolving Credit Loans are or will be paid in full, by an amount equal to the
greater of the insurance proceeds of such loss or damage or the value of such
Aviation Property.
2.06 Fees.
(a) Borrower shall pay to the Agent and First Chicago Capital
Markets, Inc. (the "Arranger") for the benefit of the Agent and the Arranger
fees in amounts and at such times and for such periods as agreed to between the
Agent, the Arranger and Borrower.
(b) The Borrower shall pay to the Agent for the benefit of
each Bank, a non-use fee equal to the Margin of the difference between each
Bank's daily average Commitment during each fiscal quarter of the Borrower and
such Bank's share of the daily average outstanding Advances during such fiscal
quarter of the Borrower. Such fee shall be in addition to all other charges and
shall be paid on the fifteenth (15th) Banking Day following the end of each
fiscal quarter of Borrower. For purposes of calculating the non-use fee,
outstanding Letters of Credit shall not be deemed to be included in any Bank's
share of outstanding Advances.
(c) On or before the date of issuance of any Letter of Credit,
Borrower agrees (i) to pay to the Agent for the benefit of the Banks a fee
computed at the Margin of the maximum amount available to be drawn from time to
time under such Letter of Credit for the period from and including the date of
issuance of such Letter of Credit to and including the stated expiry date of
such Letter of Credit and (ii) to pay the Agent for its own account a fee
computed at the rate of one-eighth percent (1/8%) per annum of the maximum
amount available to be drawn from time to time under such Letter of Credit for
the period from and including the date of issuance of such Letter of Credit to
and including the stated expiry date of such Letter of Credit; provided,
however, that with respect to any Letter of Credit the face value of which
exceeds $250,000, such fee shall be payable initially, on or before the date of
issuance of such Letter of Credit for the period commencing with such date of
issuance through and including the last Banking Day of the first calendar
quarter occurring after the issuance thereof and thereafter, such fee shall be
payable on the last Banking day of each March, June, September and December
during the term of such Letter of Credit. Such fees are nonrefundable and
Borrower shall not be entitled to any rebate of any portion thereof if such
Letter of Credit does not remain outstanding through its stated expiry date or
for any other reason. The Borrower further agrees to pay to the Agent for its
own account, on demand, such other customary administrative fees, charges and
expenses of the Agent in respect of the issuance, negotiation, acceptance,
amendment, transfer and payment of such Letter of Credit or otherwise payable
pursuant to the application and related documentation under which such Letter of
Credit is issued.
2.07 Computations of Interest and Fees.
All computations of interest and fees under this Agreement
shall be made on the basis of a year of three hundred sixty (360) days and
calculated for the actual days elapsed. Interest shall accrue on any principal
balance outstanding from and including the date of an Advance to but excluding
the date on which such principal balance is repaid.
2.08 Method of Payment.
(a) Each payment of principal, interest and other sums due
under this Agreement shall be made to the Banks without set-off or counterclaim
in immediately available funds on a Banking Day not later than 11:30 a.m.,
Indianapolis time. All sum received after such time shall be deemed received on
the next Banking Day. Any payment due on a day that is not a Banking Day shall
be made on the next Banking Day.
(b) Borrower agrees that the Agent may debit any account of
Borrower maintained at the Agent for payments due under this Agreement and the
Agent may credit the any such account with the amount of any Advance.
2.09 Principal Payments and Prepayments.
(a) Unless earlier payment is required under this Agreement
the Borrower shall pay to the Banks on the Termination Date the entire
outstanding amount of the Revolving Credit Loans.
(b) Borrower may prepay all or any portion of the Revolving
Credit Loans provided that Borrower provides the Banks with one Banking Day
prior notice thereof and, further provided, that (i) Borrower may not prepay any
portion of any Revolving Credit Loan as to which an election for a continuation
of or a conversion to a Eurodollar Rate Advance is pending pursuant to Section
2.13, and (ii) unless earlier payment is required under this Agreement, any
Eurodollar Rate Advance may only be prepaid on the last day of the then current
Eurodollar Interest Period with respect to such Eurodollar Rate Advance.
(c) Any prepayment shall be in the amount of One Million and
00/100 Dollars ($1,000,000), any integral multiples thereof or the outstanding
balance if less than One Million and 00/100 Dollars.
(d) Borrower shall immediately prepay, without notice or
demand, any portion of the outstanding principal balance of the Revolving Credit
Loans, or cash collateralize Letter of Credit Advances if all of the Revolving
Credit Loans are or will be paid in full, by an amount which equals the amount
by which: (i) the sum of the aggregate outstanding principal balance of the
Revolving Credit Loans and the Letter of Credit Advances exceeds (ii) the lesser
of (A) the aggregate amount of the Commitments or (B) the Borrowing Base.
(e) If no Event of Default or Default has occurred and is
continuing and if the loss or damage to any Aviation Property is not total or
constructively total and can be repaired within two months from the date of loss
or damage with the proceeds of any casualty insurance policy applicable to such
Aviation Property, then any insurance proceeds recovered by the Borrower on
account of any loss or
damage to any Aviation Property may be applied by the Borrower solely to the
payment of the cost of any repairs to the Aviation Property, as further
described in the Security Agreement. If the foregoing conditions to repair any
loss or damage to any Aviation Property cannot be satisfied or if any Event of
Default or Default has occurred and is continuing, then upon the payment by any
insurer of any casualty insurance policy applicable to the Aviation Property of
proceeds under any such policy with respect to any Aviation Property, Borrower
shall immediately prepay the Revolving Credit Loans by the amount of any such
proceeds up to an amount equal to one hundred percent (100%) of the appraised
value, as of the most recent Adjustment Date, of the Aviation Property to which
the proceeds relate, for any such proceeds paid with respect to each L-1011
Aircraft and other Aviation Property, and if such proceeds exceed the Revolving
Credit Loans, the Borrower shall provide cash collateral for any outstanding
Letter of Credit in the amount of such excess.
2.10 Reborrowing of Prepaid Principal.
(a) Subject to the terms and conditions hereof, Borrower may
reborrow any portion of the prepaid principal as an Advance provided the sum of
all amounts so reborrowed plus the outstanding principal balance of the
Revolving Credit Loans and of the Letter of Credit Advances does not exceed the
lesser of the Commitments or the Borrowing Base.
2.11 Letters of Credit.
(a) Borrower may, from time to time hereafter request the
Agent to issue Letter(s) of Credit in an aggregate principal amount not to
exceed Twenty Five Million and 00/100 Dollars ($25,000,000.00). The Borrower
shall give the Agent notice of its request for a Letter of Credit Advance in
writing not later than 11:30 a.m. Indianapolis time three (3) Banking Days prior
to the date any Letter of Credit Advance is requested to be made and provide
such information as may be necessary for the issuance thereof by the Agent. The
Agent, not later than the Banking Day next succeeding the day such notice is
given, shall provide notice to each Bank of such requested Letter of Credit
Advance and the amount of risk participation therein by such Bank. Subject to
the terms and conditions of this Agreement, the Agent shall, on the date any
Letter of Credit Advance is requested to be made, issue the related Letter of
Credit on behalf of the Banks for the account of the Borrower. Notwithstanding
anything herein to the contrary, the Agent may decline to issue any requested
Letter of Credit on the basis that the beneficiary, the purpose of issuance or
the terms of the conditions of drawing are unacceptable to it in its reasonable
discretion. Upon such issuance by the Agent, each Bank shall automatically
acquire a pro rata risk participation interest in such Letter of Credit Advance
based on its respective Commitment. If the Agent shall honor a draft or other
demand for payment presented or made under any Letter of Credit, the Agent shall
provide notice thereof to each Bank on the date such draft or demand is honored
unless Borrower shall have satisfied its reimbursement obligation under Section
2.12 by payment to the Agent on such date. Each Bank, on such date, shall make
its pro rata share of the amount paid by the Agent available in immediately
available funds at the principal office of the Agent for the account of the
Agent. If and to the extent such Bank shall not have made such pro rata portion
available to the Agent, such Bank and Borrower severally agree to pay to the
Agent forthwith on demand such amount together with interest thereon, for each
day from the date such amount was paid by the Agent until such amount is so made
available to the Agent at a per annum rate equal to the interest rate applicable
during such period to the related Advance disbursed under Section 2.12 in
respect of the reimbursement obligation of Borrower. If such Bank shall pay such
amount to the Agent together with such interest, such amount so paid shall
constitute a Prime Rate Advance by such Bank in respect of the reimbursement
obligation of the Borrower under Section 2.12 for purposes of this Agreement.
The failure of any Bank to make its pro rata portion of any such amount paid by
the Agent available to the
Agent shall not relieve any other Bank of its obligation to make available its
pro rata portion of such amount, but no Bank shall be responsible for failure of
any other Bank to make such pro rata portion available to the Agent.
2.12 Letter of Credit Reimbursement Payments.
(a) Borrower agrees to pay to the Agent, on the day on which
the Agent shall honor a draft or other demand for payment presented or made
under any Letter of Credit, an amount equal to the amount paid by the Agent in
respect of such draft or other demand under such Letter of Credit and all
expenses paid or incurred by the Agent relative thereto. Unless Borrower shall
have made such payment to the Agent on such day, upon each such payment by the
Agent, the Agent shall be deemed to have disbursed to Borrower, and Borrower
shall be deemed to have elected to satisfy its reimbursement obligation by a
Prime Rate Advance for the account of the Agent in an amount equal to the amount
so paid by the Agent in respect of such draft or other demand under such Letter
of Credit. Such Advance shall be disbursed notwithstanding any failure to
satisfy any conditions for disbursement of any Advance set forth in Article IV
hereof and, to the extent of the Advance so disbursed, the reimbursement
obligation of Borrower under this Section 2.12 shall be deemed satisfied.
(b) The reimbursement obligation of Borrower under this
Section 2.12 shall be absolute, unconditional and irrevocable and shall remain
in full force and effect until all obligations of Borrower to the Banks and the
Agent hereunder shall have been satisfied, and such obligations of Borrower
shall not be affected, modified or impaired upon the happening of any event,
including without limitation, any of the following, whether or not with notice
to, or the consent of, Borrower:
(i) Any lack of validity or enforceability of any Letter
of Credit or any documentation relating to any Letter of Credit or
to any transaction related in any way to such Letter of Credit (the
"Letter of Credit Documents");
(ii) Any amendment, modification, waiver, consent, or
any substitution, exchange or release of or failure to perfect any
interest in collateral or security, with respect to any of the
Letter of Credit Documents:
(iii) The existence of any claim, setoff, defense or
other right which Borrower may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any
persons or entities for whom any such beneficiary or any such
transferee may be acting), the Agent or any Bank or any other person
or entity, whether in connection with any of the Letter of Credit
Documents, the transactions contemplated herein or therein or any
unrelated transactions;
(iv) Any draft or other statement or document presented
under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect by reason of any statement therein
being untrue or inaccurate in any respect;
(v) Payment by the Agent to the beneficiary under any
Letter of Credit against presentation of any documents which do not
comply with the terms of the Letter of Credit, including failure of
any documents to bear any reference or adequate reference to such
Letter of Credit;
(vi) Any failure, omission, delay or lack on the part of
the Agent or any party to any of the Letter of Credit Documents to
enforce, assert or exercise any right, power or remedy conferred
upon the Agent, any Bank or any such party under this Agreement or
any of the Letter of Credit Documents, or any other acts or
omissions on the part of the Agent or any such party;
(vii) Any other event or circumstance that would, in the
absence of this clause, result in the release or discharge by
operation of law or otherwise of Borrower from the performance or
observance of any obligation, covenant or agreement contained in
this Section 2.12.
(c) No setoff, counterclaim, reduction or diminution of any
obligation or any defense of any kind or nature which Borrower has or may have
against the beneficiary of any Letter of Credit shall be available hereunder to
Borrower against the Agent or any Bank.
2.13 Subsequent Elections as to Advances. The Borrower may elect (a)
to continue a Eurodollar Rate Advance as a Eurodollar Rate Advance or (b) may
elect to convert a Eurodollar Rate Advance, or a portion thereof, to a Prime
Rate Advance or (c) elect to convert a Prime Rate Advance, or a portion thereof,
to a Eurodollar Rate Advance, in each case by giving notice thereof to the Agent
not later than 11:30 a.m. Indianapolis time three Eurodollar Business Days prior
to the date any such continuation of or conversion to a Eurodollar Rate Advance
is to be effective and not later than 11:30 a.m. Indianapolis time on the day
prior to the day such continuation of or conversion to a Prime Rate Advance is
to be effective, provided that an outstanding Eurodollar Rate Advance may only
be converted on the last day of the then current Eurodollar Interest Period with
respect to such Advance, and provided, further, if a continuation of an Advance
as, or a conversion of an Advance to, a Eurodollar Rate Advance is requested,
such notice shall also specify the Eurodollar Interest Period to be applicable
thereto upon such continuation or conversion. The Agent, on the same day such
notice is given, shall provide notice of such election to the Banks. If the
Borrower shall not timely deliver such a notice with respect to any outstanding
Eurodollar Rate Advance, the Borrower shall be deemed to have elected to convert
such Eurodollar Rate Advance to a Prime Rate Advance on the last day of the then
current Eurodollar Interest Period with respect to such Advance.
2.14 Limitations of Requests and Elections. (a) Notwithstanding any
other provision of this Agreement to the contrary, if, upon receiving a request
for a Eurodollar Rate Advance pursuant to Section 2.02 or a request for a
continuation of a Eurodollar Rate Advance as a Eurodollar Rate Advance, or a
request for a conversion of a Prime Rate Advance to a Eurodollar Rate Advance
pursuant to Section 2.13, (i) deposits in Dollars for periods comparable to the
Eurodollar Interest Period elected by the Borrower are not available to any Bank
in the relevant interbank or secondary market, or (ii) will not adequately and
fairly reflect the cost to any Bank of making, funding or maintaining the
Eurodollar Rate Advance or (iii) by reason of national or international
financial, political or economic conditions or by reason of any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect, or the interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by any Bank with any guideline, request or directive of such
authority (whether or not having the force of law), including without limitation
exchange controls, it is impracticable, unlawful or impossible for any Bank (A)
to make or fund the relevant Eurodollar Rate Loan or (B) to continue such
Eurodollar Rate Advance as a Eurodollar Rate Advance, or (C) to convert an
Advance to such a Eurodollar Rate Advance, then the Borrower shall not be
entitled, so long as such circumstances continue, to request a Eurodollar Rate
Advance to Section 2.02 or a continuation of or conversion to a Eurodollar Rate
Advance pursuant to Section 2.13. In the
event that such circumstances no longer exist, the Banks shall again consider
requests for Eurodollar Rate Advances pursuant to Section 2.02, and requests for
continuations of and conversions to Eurodollar Rate Advances pursuant to Section
2.13.
(b) Not more than seven Eurodollar Rate Advances may be
outstanding at any one time.
2.15 Additional Costs. (a) In the event that any applicable law,
treaty or other international agreements, rule or regulation (whether domestic
or foreign) now or hereafter in effect and whether or not presently applicable
to any Bank or the Agent, or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Bank or the Agent with any guideline, request or
directive of any such authority (whether or not having the force of law), shall
(i) affect the basis of taxation of payments to any Bank or the Agent of any
amounts payable by the Borrower under this Agreement (other than taxes imposed
on the overall net income of the Bank or the Agent, by the jurisdiction, or by
any political subdivision or taxing authority of any such jurisdiction, in which
any Bank or the Agent, as the case may be, has its principal office), or (ii)
shall impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any Bank or the Agent, or (iii) shall impose any other condition
with respect to this Agreement, or any of the Commitments, the Notes or the
Advances, and the result of any of the foregoing is to increase the cost to any
Bank or the Agent, as the case may be, of making, funding or maintaining any
Eurodollar Rate Advance or to reduce the amount of any sum receivable by any
Bank or the Agent, as the case may be, thereon, then the Borrower shall pay to
such Bank or the Agent, as the case may be, from time to time, upon request by
such Bank (with a copy of such request to be provided to the Agent) or the
Agent, additional amounts sufficient to compensate such Bank or the Agent, as
the case may be, for such increased cost or reduced sum receivable to the
extent, in the case of any Eurodollar Rate Advance, such Bank or the Agent is
not compensated therefor in the computation of the interest rate applicable to
such Eurodollar Rate Advance. A statement as to the amount of such increased
cost or reduced sum receivable, prepared in good faith and in reasonable detail
by such Bank or the Agent, as the case may be, and submitted by such Bank or the
Agent, as the case may be, to the Borrower, shall be conclusive and binding for
all purposes absent manifest error in computation.
(b) In the event that any applicable law, treaty or other
international agreement, rule or regulation (whether domestic or foreign) now or
hereafter in effect and whether or not presently applicable to any Bank or the
Agent, or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by any Bank or the Agent with any guideline, request or directive of
any such authority (whether or not having the force of law), including any
risk-based capital guidelines, affects or would affect the amount of capital
required or expected to be maintained by such Bank or the Agent (or any
corporation controlling such Bank or the Agent) and such Bank or the Agent, as
the case may be, determines that the amount of such capital is increased by or
based upon the existence of such Bank's or Agent's Loans or obligations
hereunder and such increase has the effect of reducing the rate of return on
such Bank's or Agent's (or such controlling corporation's) capital as a
consequence of such obligations hereunder to a level below that which such Bank
or Agent (or such controlling corporation) could have achieved but for such
circumstances (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Bank or Agent to be material, then the
Borrower shall pay to such Bank or Agent, as the case may be, from time to time,
upon request by such Bank (with a copy of such request to be provided to Agent)
or Agent, additional amounts sufficient to compensate such Bank or Agent (or
such controlling corporation) for any increase in the amount of capital and
reduced rate of return which such Bank or Agent reasonably determines to be
allocable to the existence of such Bank's or Agent's obligations
hereunder. A statement as to the amount of such compensation, prepared in good
faith and in reasonable detail by such Bank or Agent, as the case may be, and
submitted by such Bank or Agent to the Borrower, shall be conclusive and binding
for all purposes absent manifest error in computation.
2.16 Illegality and Impossibility. In the event that any applicable
law, treaty or other international agreement, rule or regulation (whether
domestic or foreign) now or hereafter in effect and whether or not presently
applicable to any Bank, or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Bank with any guideline, request or directive of
such authority (whether or not having the force of law), including without
limitation exchange controls, shall make it unlawful or impossible for any Bank
to maintain any Eurodollar Rate Advance under this Agreement, the Borrower shall
upon receipt of notice thereof from such Bank, repay in full the then
outstanding principal amount of each Eurodollar Rate Advance so affected,
together with all accrued interest thereon to the date of payment and all
amounts owing to such Bank under Section 2.17, (a) on the last day of the then
current Eurodollar Interest Period applicable to such Eurodollar Rate Advance if
such Bank may lawfully continue to maintain such Eurodollar Rate Advance to such
day, or (b) immediately if such Bank may not continue to maintain such
Eurodollar Rate Advance to such day.
2.17 Indemnification. If the Borrower makes any payment of principal
with respect to any Eurodollar Rate Advance on any other date than the last day
of an Eurodollar Interest Period applicable thereto (whether pursuant to
Sections 2.05(b), Section 2.16, Article VIII or otherwise), or if the Borrower
fails to borrow any Eurodollar Rate Advance after notice has been given to the
Banks in accordance with Section 2.02, or if the Borrower fails to make any
payment of principal or interest in respect of a Eurodollar Rate Advance when
due, the Borrower shall reimburse each Bank on demand for any resulting loss or
expense incurred by each such Bank, including without limitation any loss
incurred in obtaining, liquidating or employing deposits from third parties,
whether or not such Bank shall have funded or committed to fund such Eurodollar
Rate Advance. A statement as to the amount of such loss or expense, prepared in
good faith and in reasonable detail by such Bank and submitted by such Bank to
the Borrower, shall be conclusive and binding for all purposes absent manifest
error in computation. Calculation of all amounts payable to such Bank under this
Section 2.17 shall be made as though such Bank shall have actually funded or
committed to fund the relevant Eurodollar Rate Advance through the purchase of
an underlying deposit in an amount equal to the amount of such Eurodollar Rate
Advance in the relevant market and having a maturity comparable to the related
Eurodollar Interest Period and, through the transfer of such deposit to a
domestic office of such Bank in the United States; provided, however, that such
Bank may fund any Eurodollar Rate Advance in any manner it sees fit and the
foregoing assumption shall be utilized only for the purpose of calculation of
amounts payable under this Section 2.17.
2.18 Extension of Termination Date. The Termination Date and the
obligation, pursuant to Section 2.09(a) to make mandatory repayment of the
outstanding principal amount of the Loans on the Termination Date shall be
subject to an annual extension, as set forth in this Section 2.18.
(a) Request for Extension of Termination Date. Notwithstanding
anything contained in this Agreement to the contrary, not later than December 1,
2000 and each December 1 thereafter, the Borrower may, by delivery of a duly
completed Extension Request to the Agent in the form of Exhibit B hereto,
irrevocably request that each Bank extend, for a single one year period, the
Termination Date relating to such Bank's Commitment.
(b) Consent to Extension of Termination Date. (i) The Agent
shall, promptly, but not later than 5 days after receipt of any such Extension
Request, pursuant to subsection (a) above, notify each Bank by providing them a
copy of the Extension Request.
(ii) Each Bank shall, within 30 days of receipt of the
Extension Request, notify the Agent whether it consents to the request of
the Borrower set forth in such Extension Request, such consent to be in
the sole discretion of such Bank. Each Bank hereby acknowledges and agrees
that its consent to the Borrower' request to extend the Termination Date
shall also be deemed to be a consent by such Bank to an extension of its
obligations to participate, pursuant to Section 2.01, in the Letter of
Credit Advances. If any Bank does not so notify the Agent of its decision
within such 30 day period, such Bank shall be deemed not to have consented
to such requests of the Borrower.
(iii) The Agent shall promptly notify the Borrower
whether the Banks have consented to such request. If the Agent does not so
notify the Borrower by April 1, 1998, and each April 1 thereafter, the
Agent shall be deemed to have notified the Borrower that the Banks have
not consented to the Borrower' request.
(iv) Each Bank that elects not to extend the Termination
Date or fails to so notify the Agent of such consent (a "Non-Consenting
Bank") hereby agrees that if any other Bank or financial institution
acceptable to the Borrower and the Agent offers to purchase such
Non-Consenting Bank's Commitment for a purchase price equal to the sum of
all amounts then owing with respect to the Loans and all other amounts
accrued for the account of such Non-Consenting Bank, such Non-Consenting
Bank will promptly assign, sell and transfer all of its right, title,
interest and obligations with respect to the foregoing to such other Bank
or financial institution pursuant to and on the terms specified in the
form of Assignment and Acceptance attached hereto as Exhibit C.
(v) The pro rata share of the remaining Banks which have
consented to an extension of their Commitment hereunder shall be adjusted
accordingly by the Agent, based on such Banks' pro rata share of the
remaining Commitments as it may be adjusted pursuant to clause 2.18
(b)(iv) above or otherwise.
(vi) In the event that the Advances of any
Non-Consenting Bank are not purchased pursuant to clause (iv) above, then
all of the Banks shall be deemed not to have consented to the Borrower
request and on the Termination Date the outstanding Advances shall be due
and payable.
2.19 Substitution of Bank. If (a) the obligation of any Bank to make
Eurodollar Rate Advances has been suspended pursuant to Section 2.16 when all
Banks have not suspended such obligation or (b) any Bank has demanded
compensation under Section 2.15 when all Banks have not demanded such
compensation, the Borrowers shall have the right to seek a satisfactory
substitute bank (which may be one or more of the other Banks) to purchase the
Note(s) and assume the Commitment(s), if any, of such Bank, with the consent of
the Agent, provided that all amounts owing to such Bank have been paid in full
and such substitution shall be made pursuant to an Assignment and Acceptance in
the form attached hereto as Exhibit C.
ARTICLE III.
SECURITY INTEREST
3.01 Security for Borrowing. (a) As security for the Obligations,
Borrower shall execute and deliver to the Banks and the Agent the Security
Agreement and Chattel Mortgage dated the Closing Date and in form and substance
acceptable to the Agent, as amended or modified from time to time and together
with any other security agreement or other agreement executed in replacement
therefor, granting a first priority, enforceable and perfected lien and security
interest in the Aviation Property and all other assets described in such
Security Agreement and Chattel Mortgage. The Borrower may also execute and
deliver to the Banks and Agent such other Security Agreements and other
agreements and documents, each in form and substance acceptable to the Agent,
granting liens and security interests on other assets of the Borrower at any
time.
(b) In addition, the Borrower agrees to execute and deliver
such amendments, modifications and/or additional Security Agreements and other
documents and agreements as the Agent may request in order to reaffirm and/or
perfect the security interests intended to be granted by Borrower pursuant to
such Security Agreements and other documents and agreements, or otherwise to
xxxxx x xxxx and security interest in additional collateral granted pursuant to
this Agreement.
3.02 Release upon Prepayment. Upon prepayment of the Revolving
Credit Loans in accordance with Section 2.05 from any sale or other transfer of
any Aviation Property, the security interest in such Aviation Property shall be
released and the Borrowing Base shall be reduced, in addition to other required
reductions hereunder, by the amount of such proceeds.
3.03 Guaranty of Amtran and Affiliates. Amtran and all of its
Subsidiaries will unconditionally guarantee all of the Obligations, and execute
the Guaranty. Any future Subsidiaries of Amtran or the Borrower shall also
unconditionally guarantee all the Obligations, and Amtran and the Borrower shall
cause any such Subsidiary formed or acquired after the date of this Agreement to
execute a Guaranty and deliver such other documents and opinions requested by
the Agent in connection therewith.
3.04 Cash Collateral. The Borrower may (and shall if required under
Article VIII and also shall on the Termination Date) provide the Agent with cash
collateral (the "Cash Collateral") in a deposit or an investment in United
States government securities with the Agent which is acceptable to the Agent and
which is in the name of the Borrower but under the sole and exclusive dominion
and control of the Agent and with respect to which the Borrower has no authority
to withdraw from, to draw upon, or otherwise exercise any authority of any kind,
to cover the contingent reimbursement and other obligations of the Borrower
pursuant to any Letter of Credit. The Borrower hereby grants a security interest
in the Cash Collateral to the Agent, for the benefit of itself and the Banks, to
secure the same obligations as secured by the Security Agreement. If there is
any draw, or other liability of the Agent or any Bank under any Letter of
Credit, the Agent shall apply the Cash Collateral in reimbursement of any such
draw or other liability. The Borrower agrees to execute all agreements,
documents and instruments requested by the Agent to further evidence the
security interest granted in the Cash Collateral pursuant to this Section 3.04.
ARTICLE IV.
CONDITIONS PRECEDENT
4.01 Conditions Precedent to Closing. In addition to the
requirements set forth in Section 4.02, the obligation of the Banks to make the
initial Revolving Credit Loans and of the Agent to issue the first Letter of
Credit is subject to the condition precedent that the following shall have been
delivered to the Agent in form and substance satisfactory to the Agent and its
counsel:
(a) Borrower's Incorporation Papers. A copy of the certificate
of incorporation and by-laws, including all amendments thereto, of Borrower,
certified by the Secretary or an Assistant Secretary as being in full force and
effect on the Closing Date.
(b) Borrower's Corporate Resolutions. Copies of resolutions
passed by the Board of Directors of Borrower, certified by the Secretary or an
Assistant Secretary of Borrower as being in full force and effect on the Closing
Date, authorizing the borrowings provided for herein and the execution, delivery
and performance of this Agreement, the Notes, and any other Loan Document,
instrument or agreement required of Borrower hereunder.
(c) Incumbency Certificates. Certificates, signed by the
Secretary or an Assistant Secretary of Borrower, dated the Closing Date, as to
the incumbency, and containing the specimen signatures, of the Persons
authorized to execute and deliver this Agreement, the Notes, and any other
instrument or agreement required hereunder.
(d) Loan Documents. This Agreement, the Security Agreement and
the Notes, payable to the order of the Banks in the aggregate amount of the
Commitments each dated the Closing Date, the Security Agreement and the
Guaranty, each executed in connection with the Prior Credit Agreement, and any
modifications to Security Agreement and the Financing Statements and duly
executed by Borrower as required by the Agent.
(e) Certificates of Good Standing/Existence. Existence and/or
good standing certificates for Borrower in the state of its incorporation, duly
certified by the Secretary of State or other appropriate official of each state
as of a maximum of five (5) days before the Closing Date.
(f) Other Documents. Such other documents or evidence as the
Agent may reasonably request to consummate the transactions contemplated hereby
and by the other Loan Documents, the taking of all necessary actions in any
proceedings in connection herewith or therewith and compliance with the
conditions set forth in this Agreement or any other Loan Document.
(g) Opinion of Counsel. An opinion of counsel for Borrower
(which may be in-house counsel), in form and substance satisfactory to the
Agent.
(h) Opinion of Special Counsel. An opinion of special counsel
on the enforceability, perfection and priority of the security interests of the
Banks in the Aviation Property and a review by such special counsel of the Loan
Documents.
(i) Guarantors' Incorporation Papers. A copy of the
certificate of incorporation and by-laws, including all amendments thereto, of
each Guarantor (or certifying as to the certificate of incorporation and by-laws
previously delivered, certified by a Secretary or an Assistant Secretary as
being in full force and effect on the Closing Date.
(j) Guarantors' Corporate Resolutions. Copies of resolutions
passed by the Board of Directors of each Guarantor, certified by a Secretary or
an Assistant Secretary of each Guarantor as being in full force and effect on
the Closing Date, authorizing the execution, delivery and performance of the
Guaranty and any other Loan Document, instrument or agreement required of any
Guarantor hereunder.
(k) Incumbency Certificates. Certificates, signed by a
Secretary or an Assistant Secretary of each Guarantor, dated the Closing Date,
as to the incumbency, and containing the specimen signatures, of the Persons
authorized to execute and deliver the Guaranty and any other instrument or
agreement required hereunder.
(l) Certificates of Good Standing/Existence. Existence and/or
good standing certificates for each Guarantor in the state of its incorporation,
duly certified by the Secretary of State or other appropriate official of each
such state.
(m) Senior Unsecured Notes. Evidence satisfactory to the Agent
that the Borrower has received proceeds from the issuance of the Senior
Unsecured Notes in an amount equal to or greater than $____________, in
accordance with the Senior Unsecured Debt Documents, all Senior Unsecured Debt
Documents shall have been delivered to the Agent and shall be in form and
substance satisfactory to the Agent and all transactions contemplated pursuant
to the Senior Unsecured Debt Documents shall have been completed.
(n) Payment of Indebtedness. The Agent shall have received
such payoff letters and assignments from lenders that were parties to the Prior
Credit Agreement but which are not parties to this Agreement, and evidence
satisfactory to the Agent that all indebtedness, obligations and liabilities
owing pursuant to the Prior Credit Agreement or described on Schedule 4.01(n)
are being paid in full on the Closing Date.
(m) Other Documents. Such other documents and agreements as
the Agent shall reasonably request.
4.02 Conditions Precedent to Each Borrowing. The obligation of the
Banks to make any Advance hereunder and the obligation of the Agent to issue any
Letter of Credit hereunder are subject to the following conditions precedent:
(a) The representations and warranties contained in Article V
hereof and in the Security Agreement and the Guaranty shall be true and correct
on and as of the date of such Advance or Letter of Credit Advance, as the case
may be, is made (both before and after such Advance or Letter of Credit Advance
is made) as if such representations and warranties were made on and as of such
date.
(b) No Default or Event of Default shall exist or shall have
occurred and be continuing on the date such Advance or Letter of Credit Advance
is made (whether before or after such Advance or Letter of Credit Advance is
made).
(c) In the case of any Letter of Credit Advance, Borrower
shall deliver to the Agent an application for the related Letter of Credit and
other related documentation requested by and acceptable to the Agent
appropriately completed and duly executed on behalf of Borrower.
(d) All fees, expenses and other amounts due and payable to or
for the benefit of the Banks and the Agent under this Agreement or any other
Loan Document shall have been paid.
The Borrower shall be deemed to have made a representation and warranty to the
Agent and the Banks at the time of the making of, and the continuation and
conversion of, each Advance and Letter of Credit Advance to the effects set
forth in clauses (a) and (b) of this Section 4.02, and the Borrower shall
deliver such notices and other certificates, documents and opinions in
connection with any request for an Advance or Letter of Credit Advance as
required by the Agent.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Banks on the date hereof and
shall be deemed to have made such representations and warranties to the Banks on
the date of any Advance or Letter of Credit Advance hereunder that:
5.01 Corporate Existence. Each of Amtran and Borrower is a
corporation duly organized and existing under the laws of the state of its
incorporation, and is duly qualified as a foreign corporation and is properly
licensed and in good standing in each jurisdiction where the failure to qualify
or be licensed would have a material adverse effect on its business, properties
or conditions (financial or otherwise).
5.02 Affiliates' Existence. Schedule 5.02 attached hereto contains a
list of all of Amtran's Affiliates as of the Closing Date, showing, as to each,
its jurisdiction of incorporation and principal place of business. Borrower will
notify the Agent of each Person which becomes an Affiliate after the Closing
Date within 45 days of the date such Person becomes an Affiliate. Each such
Affiliate, other than Borrower, together with Amtran, are all of the Affiliates
of Borrower. All of the outstanding shares of stock of each of the Affiliates
have been validly issued, are fully paid and non-assessable and except for
directors' qualifying shares are owned by Amtran or another Affiliate of Amtran
free and clear of all Liens. Each Affiliate is duly organized and existing under
the laws of the jurisdiction of its incorporation, and is properly licensed and
in good standing in each jurisdiction in which the failure to quality or be
licensed would have a material adverse effect on the business, properties or
financial condition of Amtran or of such Affiliate. Amber Holdings, Inc. does
not own, or have any rights with respect to, any assets.
5.03 Corporate Powers. The execution, delivery and performance of
this Agreement, the Notes and the Security Agreement and any instrument or
agreement required to be delivered by Borrower hereunder are within Borrower's
corporate power have been duly authorized by all requisite corporate action, and
are not in conflict with the terms of any charter, by-law or other organization
papers of Borrower, or any instrument or agreement to which Borrower is a party
or by which Borrower is bound or affected.
5.04 Power of Officers. The officers of Borrower executing this
Agreement, the Notes, the Security Agreement, and any certificate, instrument or
agreement required to be delivered by Borrower hereunder or thereunder have been
duly elected or appointed and were fully authorized to execute the same at the
time such agreement, certificate or instrument was executed.
5.05 Government and Other Approvals. No approval, consent, exemption
or other action by, or notice to or filing with, any governmental authority is
necessary in connection with the execution, delivery or performance of the Loan
Documents.
5.06 Compliance with Laws: Environmental Matters. There is no law,
rule or regulation, nor is there any judgement, decree or order of any court of
governmental authority binding on Borrower which would be contravened by the
execution, delivery or performance of the Loan Documents. Borrower is in
compliance with all laws and regulations, including all requirements of
applicable federal, state and local aviation, environmental, health and safety
statutes and regulations and is not the subject of any federal, state or local
investigation evaluating whether any remedial action is needed to respond to a
release on any Hazardous Material and to the best of Borrower's knowledge,
neither the Borrower nor any other Person, has ever caused or permitted any
Hazardous Material to be disposed of on or under any property of Borrower and no
such property has been used as a dump or disposal site for any Hazardous
Material.
5.07 Enforceability of Agreement. This Agreement is the legal, valid
and binding agreement of Borrower, and the Notes when executed and delivered
will be, the legal, valid and binding agreements of Borrower, enforceable
against Borrower in accordance with their respective terms, and the Security
Agreement and any other exhibit, instrument or agreement required hereunder,
when executed and delivered, will be similarly legal, valid, binding and
enforceable in accordance with its terms.
5.08 Title to and Condition of Property. The Borrower has good and
marketable title to its properties and assets free and clear of Liens except for
Permitted Liens. The execution, delivery and performance of this Agreement, the
Notes or any other instrument or agreement required to be delivered by Borrower
hereunder will not result in the creation of any Lien except as provided for
herein. All of the facilities and properties of Borrower are in good operating
condition and repair except for facilities and properties (i) which are obsolete
or otherwise not required for the conduct of its business, or (ii) which are
being repaired in the ordinary course business.
5.09 Litigation. There are no suits, proceedings, claims or disputes
pending or, to the actual knowledge of Borrower, threatened against or affecting
Amtran or any of its Affiliates or their properties which is material in nature,
including but not limited to litigation claiming damages in excess of Two
Hundred Fifty Thousand and 00/100 Dollars ($250,000.00), the adverse
determination of which individually or in the aggregate might materially
adversely affect the business, properties or condition (financial or otherwise)
of Borrower or impair Borrower's ability to perform its obligations hereunder,
under any other Loan Document or under any instrument or agreement required
hereby, except as otherwise disclosed on Schedule 5.09 attached hereto.
5.10 Events of Default, Etc. No Default or Event of Default has
occurred and is continuing or would result from the execution or performance of
any Loan Document or the incurring of the Obligations by Borrower. Borrower is
not in default under (i) any charter instrument or by-law, or under any loan
agreement, indenture or other agreement or instrument with respect to any
Indebtedness of the Borrower or any Guarantor, including without limitation the
Senior Unsecured Debt Documents, or (ii) any other material agreement or
instrument to which it is a party or by which it or its properties are bound,
and the making of any Revolving Credit Loan or Letter of Credit Advance will not
cause any such default. No "Event of Default" as defined in the Senior Unsecured
Debt Documents or other default under the Senior Unsecured Debt Documents or any
other event or circumstance which, with notice or lapse of time or both, could
become such an "Event of Default" under the Senior Unsecured Debt Documents or
other event which could entitle the holders of the Senior Unsecured Notes to
cause the
Senior Unsecured Notes to be accelerated or prepaid or defeased has occurred and
is continuing or will result from the making of any Advance or Letter of Credit
Advance or the granting of any lien or security interest by the Borrower or any
of the Guarantors pursuant to any Security Agreement. Without limiting the
foregoing, each Advance and Letter of Credit Advance is made in full compliance
with all of the terms and provisions of the Senior Unsecured Debt Documents,
including without limitation the requirement that the book value of the assets
of Amtran not subject to any Lien (other than liens described in clauses (i)
through (iv), (xiii) and (xvi) of the definition of "Permitted Liens" contained
in the Senior Unsecured Indenture) shall not be less than $125,000,000. All
representations and warranties contained in the Senior Unsecured Debt Documents
are true and correct.
5.11 Investment Company Act of 1940. Borrower is not, and will by
such acts as may be necessary continue not to be, an investment company within
the meaning of the Investment Borrower Act of 1940.
5.12 Regulation U. The proceeds of the Advances and the Letter of
Credit Advances will not be used, directly or indirectly, to purchase or carry
any Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock. After applying the proceeds of each Advance and
Letter of Credit Advance, Margin Stock will not constitute more than twenty-five
percent (25%) of the value of the assets (either of the Borrower alone or of the
Borrower and any of its Affiliates on a consolidated basis) that are subject to
any provisions of this Agreement or the Security Agreement that may cause the
Advances or any Letter of Credit Advance to be deemed secured, directly or
indirectly, by Margin Stock.
5.13 Financial Information.
(a) The consolidated balance sheets of Amtran and its
Affiliates which present the Consolidated financial condition of Amtran and its
Affiliates dated as of December 31, 1996 (complete and accurate copies of which
have been delivered by Borrower to the Agent for the benefit of the Banks) and
all other information and data furnished by Borrower to the Agent for the
benefit of the Banks are materially complete and correct, and such financial
statements have been prepared in accordance with GAAP, consistently applied, and
fairly present the consolidated financial condition and results of operations of
Amtran and its Affiliates as of such dates and the results of operations for the
respective periods then ended. Neither Amtran nor any Affiliate has any
undisclosed contingent obligations, unbooked liabilities for taxes or other
outstanding financial obligations as at December 31, 1996.
(b) Since December 31, 1996, there has not been and Borrower
does not know or have reason to know of any development or threatened
development (other than general economic conditions) of a nature which may cause
any material adverse change in the financial condition or operations of Amtran
and its Affiliates sufficient to impair Borrower's ability to repay the
Revolving Credit Loans and otherwise perform the Obligations in accordance with
the terms of this Agreement.
5.14 ERISA. No fact or circumstance, including but not limited to
any Reportable Event, exists in connection with any Plan of Amtran or any of its
Affiliates which would constitute grounds for the termination of any such Plan
by the PBGC or for the appointment by the appropriate United States District
Court of a trustee to administer any such Plan and which would result in the
termination of a Plan and the incurrence of material liability by Amtran or its
Affiliates to the Plan, the PBGC, participants, beneficiaries or a trustee under
ERISA. For the purposes of this representation and
warranty Amtran or such Affiliate, if not the Plan administrator, shall be
deemed to have knowledge of all facts attributable to the Plan administrator
designated pursuant to ERISA.
5.15 Condition of Aviation Property. None of the Aviation Property
has been lost, stolen, seized, confiscated, damaged or destroyed or has suffered
any other material and unrepaired casualty or harm. All of the Aviation Property
is in good operating condition and repair, ordinary wear and tear excepted, and
has received all maintenance required to have been completed to date by
applicable governmental regulations.
5.16 Certification. Borrower is, and at all times will be a "citizen
of the United States" as defined in Section 40102(a)(15) of 49 U.S.C., an air
carrier as to which the provisions of Section 1110 of the United States
Bankruptcy Code apply, and an air carrier certificated under Sections 41102(a)
and 44705 of 49 U.S.C, and the Borrower has all other certifications required by
applicable law or regulation for the Aviation Property.
5.17 Liens on Aviation Property. There are no Liens on any of the
Aviation Property other than those in favor of the Agent for the benefit of
itself and the Banks securing the Obligations. The Security Agreement grants to
the Agent, for the benefit of itself and the Banks, a first priority,
enforceable and perfected lien and security interest in the Aviation Property
and other collateral described therein, which liens and security interests
secure the Obligations.
5.18 Valid Issuance of Senior Unsecured Notes. Borrower has the
corporate power and authority to issue the Senior Unsecured Notes. The Senior
Unsecured Notes are legally valid and binding obligations of Borrower,
enforceable against Borrower in accordance with their respective terms. The
Senior Unsecured Notes, when issued and sold in accordance with the terms of the
Indenture, will either have been registered or qualify under applicable federal
and state securities laws or be exempt therefrom.
ARTICLE VI.
AFFIRMATIVE COVENANTS
The Borrower and Amtran covenants and agrees that so long as
the Commitments shall remain available and until all Obligations have been paid
in full it will:
6.01 Use of Proceeds. Use the proceeds of the Revolving Credit Loans
for Borrower's ongoing working capital and general corporate purposes.
6.02 Notices. Promptly give written notice to the Agent of:
(a) all litigation which is material in nature, including but
not limited to all litigation claiming damages affecting Borrower or any of its
Affiliates where the amount claimed in any one instance or in the aggregate for
all such litigation is Five Hundred Thousand Dollars ($500,000) or more in
excess of insurance coverage or where the insurance carrier has denied or failed
to accept its responsibility as to an amount claimed of Five Hundred Thousand
Dollars ($500,000) or more;
(b) any Reportable Event under Section 4043(b)(5), (6), or (9)
of ERISA with respect to any Plan, any decision to terminate or withdraw from a
Plan, any finding made with respect to a Plan under Section 4401(c) or (3) of
ERISA, the commencement of any proceeding with
respect to a Plan under section 4042 ERISA, or any material increase in the
actuarial present value of unfunded vested benefits under all plans over the
preceding year;
(c) any strikes, work-stoppages, slow-downs or other labor
disputes or grievances involving Borrower or an Affiliate which could have
material adverse effect on the operations or financial condition of Borrower and
its Affiliates, taken as a whole;
(d) the acquisition of any Affiliate by Borrower together with
financial statements of such Affiliate before giving effect to the acquisition;
(e) any Default or Event of Default, specifying the nature and
the period of existence thereof and what action Borrower has or proposes to take
with respect thereto; and
(f) any other event which, in Borrower's reasonable judgment,
might have a material adverse effect on the business, properties, operations,
prospects of condition (financial or otherwise) of Borrower.
6.03 Financial Statements, Reports, Etc. Deliver to the Agent:
(a) As soon as available but not later than forty-five (45)
days after the close of each fiscal quarter of Amtran the consolidated and
consolidating balance sheets of Amtran and its Affiliates as of the close of
such quarter, and Amtran and its Affiliates' consolidated and consolidating
statements, statements of income and cash flow of such fiscal quarter and that
portion of the fiscal year of Amtran ending with such quarter, all prepared in
accordance with GAAP, consistently applied, certified by the Vice
President-Controller or Chief Financial Officer of Borrower as being complete
and correct and fairly presenting the consolidated and consolidating financial
condition of Amtran and its Affiliates and results of operations as of the end
of such quarter and for that portion of the fiscal year of Amtran ending with
such quarter, accompanied by a statement from the vice president and treasurer
of Borrower stating that as of the end of such quarter no Default or Event of
Default existed or, if such did exist, a statement describing such Default or
Event of Default and the action Borrower is taking or proposes to take with
respect thereto;
(b) as soon as available but not later than one hundred twenty
(120) days after the close of each fiscal year of Amtran, Amtran and its
Affiliates' consolidated and consolidating balance sheets as of the close of
such year, and consolidated and consolidating statements, statements of income
and retained earnings and cash flow for such year, prepared in accordance with
GAAP, consistently applied, together with the notes thereon and the report of
the Independent Public Accountant thereof, audited and reported on by an
Independent Public Accountant. Such Independent Public Accountant's report shall
state that the consolidated statements present fairly the financial position of
Amtran and its Affiliates in accordance with GAAP, and shall be free from
exceptions, reservations or qualifications as a result of which such Independent
Public Accountant is unable to conclude that the financial statements fairly
present or adequately disclose the financial condition of Amtran and its
Affiliates and shall not be limited because of restricted or limited access by
such Independent Public Accountant to any material portion of Amtran's or any of
its Affiliates' records and shall be accompanied by a statement from such
Independent Public Accountant that during the examination no Default or Event of
Default came to their attention. Such report shall also be accompanied by a
certificate from the vice president and treasurer of Borrower stating that as of
the end of such year no Default or Event of Default existed or, if such did
exist, a statement describing such Default or Event of Default and the action
Borrower has taken or proposes to take with respect thereto;
(c) at the time Borrower furnishes each set of financial
statements required by paragraph (a) above, a certificate of the senior
financial officer of Borrower (i) to the effect that no Default has occurred and
is continuing (or, if any Default has occurred and is continuing describing the
same in reasonable detail), (ii) setting forth the computations necessary to
determine whether Borrower is in compliance with Section 6.09, 6.10 and 6.11
hereof and (iii) setting forth the value of the Aviation Property as set forth
on the most recent Appraisal Report of Aviation Property by Avmark;
(d) promptly upon receipt thereof, any management letters
provided to Borrower by the Independent Public Accountant containing any
reference to any material inadequacy, defect, problem, qualification or other
lack of satisfactory accounting controls utilized by Borrower or any of its
Affiliates;
(e) Promptly after sending or filing thereof, copies of all
reports, proxy statements and financial statements which Amtran and its
Affiliates sends to any securities exchange or to the Securities and Exchange
Commission or any successor agency thereof; and
(f) as soon as available but not later than twenty-five (25)
days after the end of each month, the quarterly cash forecast, as most recently
updated and in form and substance satisfactory to the Agent, of Amtran and its
Affiliates;
(g) as soon as available but not later than forty-five (45)
days after the close of each fiscal quarter of Amtran, a quarterly line of
business report, profit and loss report, including a comparison of plan vs.
actual results for Amtran and its Affiliates in form and substance satisfactory
to the Agent; and
(h) such other statements or reports as the Agent may
reasonably request in form and detail satisfactory to the Agent.
6.04 Existence, Etc. Maintain and preserve, and cause Amtran and its
other Affiliates to maintain and preserve, its existence and all rights
privileges and franchises now enjoyed and necessary for the operation of its
business and keep all its properties in good working order and condition, normal
wear and tear for property of that age excepted, except properties Borrower or
an Affiliate reasonably determine to be surplus, obsolete or otherwise not
necessary or useful in the conduct of its business; provided, that, Affiliates
of Amtran (other than the Borrower) shall not be required to comply with this
Section 6.04 so long as there is no default under Section 7.04 hereof.
6.05 Payment of Obligations. Pay all taxes, assessments,
governmental charges and other obligations when due, except such as may be
contested in good faith or as to which a bona fide dispute may exist, and for
which adequate reserve have been established in an amount determined in
accordance with GAAP.
6.06 Compliance with Laws. At all times comply, and cause Amtran and
its other Affiliates to at all times comply, in all material respects with all
laws, rules, regulations, orders and directions of any governmental authority
having jurisdiction over its business.
6.07 Insurance. Maintain and pay, and cause Amtran and its other
Affiliates to maintain and pay, all premiums with regard to insurance (including
without limitation, liability and
casualty insurance) with responsible insurance companies against such risks, on
such properties and in at least such amounts as is customarily maintained by
similar businesses in the exercise of reasonable business judgment; at the
request of the Agent deliver to the Agent a list, in reasonable detail, of the
insurance policies then in effect, stating the names of the insurance companies,
the amounts and rates of insurance, the dates of the expiration thereof and the
properties and risks covered thereby.
6.08 Adequate Books. Maintain, and cause Amtran and its other
Affiliates to maintain, adequate books, accounts and records in order to provide
financial statements in accordance with GAAP and maintain a fiscal year on a
calendar year basis, and, if requested by any Bank, permit employees or
representatives of such Bank at any reasonable time and upon reasonable notice
to inspect and audit its properties, to examine or audit such books, accounts
and respective affairs, finances and accounts with Borrower's respective
Independent Public Accountants (and by these provisions Borrower authorizes such
accountants to discuss with any Bank, the finances and affairs of Borrower).
6.09 Tangible Net Worth. Maintain Tangible Net Worth, determined in
accordance with GAAP, of not less than the sum of (a) $50,000,000 plus (b) fifty
percent (50%) of the Net Profits, such fifty percent (50%) of Net Profits to be
added effective as of the end of each fiscal quarter of Amtran in an amount
equal to such fifty percent (50%) of Net Profit for such fiscal quarter,
commencing with the fiscal quarter of Amtran ending March 31, 1997; provided,
however, that if Net Profit is negative for any fiscal quarter, such negative
Net profit may be subtracted only from the amount of such fifty percent (50%) of
net Profit that has been added, if any, pursuant to clause (b) above for a
fiscal quarter occurring in the same fiscal year as such fiscal quarter for
which Net Profit was negative, and shall not be subtracted from any other amount
required to be maintained by this Section 6.09: provided, further, that the
amount of such negative Net Profit subtracted shall be in an amount equal to
fifty percent (50%) of such negative Net Profit.
6.10 Cash Flow Coverage Ratio. Maintain a Cash Flow Coverage Ratio
as of the last day of each fiscal quarter of Amtran, as calculated for the
fiscal quarter then ended plus the three immediately preceding fiscal quarters,
of not less than 1.65 to 1.0 at any time after the date hereof; provided,
however, notwithstanding the actual Adjusted Net Profit for the fiscal quarters
ending September 30, 1996 and December 31, 1996, the Cash Flow Coverage Ratio
for such two quarters shall be calculated as if the Adjusted Net Profit for such
two quarters was $-0-.
6.11 Total Adjusted Liabilities/Tangible Net Worth Ratio. Maintain a
ratio of the Total Adjusted Liabilities to Tangible Net Worth of not more than
(a) 6.0 to 1.0 as of the last day of each fiscal quarter ending on or before
December 31, 1997, (b) 5.25 to 1.0 as of the last day of each fiscal quarter
ending after December 31, 1997 but on or before December 31, 1998 and (c) 4.5 to
1.0 as of the last day of each fiscal quarter thereafter.
6.12 ERISA. Make prompt payment of contributions required to meet
the minimum funding standards set forth in ERISA except (a) to the extent waived
or deferred by the PBGC and (b) unfunded contributions required to be paid by
Affiliates of Borrower acquired after the date hereof, which unfunded
contributions existed at the time of the acquisition of such Affiliates and do
not in the aggregate, together with unfunded contributions of all other
Affiliates of Borrower, exceed $3,000,000 at any time, so long as no criminal or
material civil penalty is incurred in connection therewith.
6.13 Hazardous Materials. (a) Comply with all laws, regulations and
orders with respect to the discharge and removal of any Hazardous Material, (b)
not release or dispose of any Hazardous Material on or under any of the
properties of Borrower or its Affiliates, (c) indemnify and hold the Banks and
their officers, employees and consultants harmless from and against all losses,
costs,
damages and expenses (including reasonable attorneys' fees and expenses) any
such Person may sustain in connection with the use, disposal or release of any
Hazardous Material by Borrower or any of its Affiliates or in connection with
the existence of any Hazardous Material on or under any of the properties of
Borrower or any of its Affiliates.
6.14 Additional Covenants. If, at any time, Amtran or the Borrower
shall enter into or be a party to any instrument or agreement with respect to
any Indebtedness, including all such instruments or agreements in existence as
of the date hereof and all such instruments or agreements entered into after the
date hereof, relating to or amending any terms or conditions applicable to any
of such Indebtedness which includes covenants, terms, conditions or defaults not
substantially provided for in this Agreement or more favorable to the lender or
lenders thereunder than those provided for in this Agreement, then the Borrower
shall promptly so advise the Agent and the Banks. Thereupon, if the Agent shall
request, the Borrower, Amtran, the Agent and the Banks shall enter into an
amendment to this Agreement or an additional agreement (as the Agent may
request), providing for substantially the same covenants, terms, conditions and
defaults as those provided for in such instrument or agreement to the extent
required and as may be selected by the Agent. In addition to the foregoing, any
covenants, terms, conditions or defaults in the Senior Unsecured Debt Documents
not substantially provided for in this Agreement or more favorable to the
holders of the Indebtedness issued in connection therewith are hereby
incorporated by reference into this Agreement to the same extent as if set forth
fully herein, and no subsequent amendment, waiver, termination or modification
thereof shall effect any such covenants, terms, conditions or defaults as
incorporated herein.
ARTICLE VII.
NEGATIVE COVENANTS
The Borrower and Amtran covenant and agree that, so long as the
Commitments shall remain available and until the full and final payment of all
Obligations, it will not and will not permit any Affiliate to, except with the
prior written consent of the Required Banks:
7.01 Indebtedness. Except for Indebtedness under this Agreement,
create, incur, assume or in any manner become liable in respect of, or suffer to
exist, any Indebtedness which would result in a violation by the Borrower and
its Affiliates of any of Sections 6.09, 6.10, 6.11 and 7.07.
7.02 Liens. (a) Create, assume or suffer to exist any Lien on any of
its or its Affiliates' properties whether now owned or hereafter acquired,
except (i) Permitted Liens, (ii) Liens other than Permitted Liens securing an
amount not exceeding an amount equal to 15% of the Tangible Net Worth in the
aggregate; provided, however, that (A) no Liens shall be permitted on Aviation
Property (other than that in favor of the Agent for the benefit of itself and
the Banks securing the Obligations) and (B) such Liens permitted under this
clause (ii) shall not be permitted if after giving effect to any such Lien the
book value of the assets of Amtran not subject to any Lien (other than liens
described in clauses (i) through (iv), (xiii) and (xvi) of the definition of
"Permitted Liens" contained in the Senior Unsecured Indenture) would be less
than $150,000,000, (iii) Liens on the assets described on Schedule 7.02(a)
attached hereto, but no increase in the amount secured by such Liens shall be
permitted, and (iv) Liens solely in favor of the Agent for the benefit of itself
and the Banks, (b) enter into any agreement with any Person (other than that of
the Banks pursuant to this Agreement) which restricts the right of Borrower or
any of its Affiliates to create, assume or suffer Liens on any of its assets
other than the existing agreements described on Schedule 7.02(b) hereof, without
an amendment or modification thereof, or (c) assign, sell or transfer any
Permitted Lien to any other Person.
7.03 Change in Business. Engage in any business activities or
operation substantially different from and unrelated to present business
activities and operations conducted by Borrower on the Closing Date.
7.04 Mergers, Sales of Assets, Etc. Liquidate, dissolve, or enter
into any consolidation, merger, partnership, joint venture or any other
combination which results in the sale, lease, assignment or other disposition of
any assets or sell, lease, assign, transfer or otherwise dispose of any assets,
whether now owned or hereafter acquired, in a single transaction or in a series
of transactions or enter into any sale and leaseback transactions, other than
(a) any of the foregoing which individually does not result in
the sale, lease, assignment, transfer or other disposition of any assets with a
fair market value in excess of $1,000,000, provided that all of the foregoing
shall not in the aggregate, on an annual basis, result in the sale, lease,
assignment, transfer of the disposition of any assets with a fair market value
in excess of $2,000,000;
(b) the sale of equipment and inventory in the ordinary course
of business;
(c) the sale or other disposition of property no longer used
or useful in the conduct of its business;
(d) any merger in which Borrower is the legal surviving
corporation if there is no Default or Event of Default after the consummation
thereof;
(e) the merger or consolidation of any Affiliate (other than
Borrower or Amtran) into any other Affiliate (other than Borrower or Amtran) or
the transfer of the business or assets of any Affiliate (other than Borrower or
Amtran) to Borrower or to any other Affiliate.
(f) The sale and leaseback transactions described on Schedule
7.04 hereto.
Notwithstanding the foregoing, without the prior written consent of the Required
Banks, the Borrower may not sell, lease, (other than leases which are permitted
by, and subject to, the Security Agreement), assign, transfer or otherwise
dispose of any Aviation Property.
7.05 Advances to Officers, Employees and Others.
Make any loans or advances and/or extensions of credit to (i) any of
its officers and/or directors and shareholders in excess of One Million and
00/100 ($1,000,000.00) in the aggregate so long as any Obligations are
outstanding or the Commitments are outstanding or (ii) to its employees in
excess of Five Hundred Thousand and 00/100 Dollars ($500,000.00), provided that
in all of the foregoing cases Tangible Net Worth is reduced by the amount of
such extensions of credit.
7.06 Investments in Affiliates.
Make any Investment in any Person or J. Xxxxxx Xxxxxxxxx or any
member of the board of directors of any Person that is a corporation if the
aggregate outstanding amount of all Investments, including the Investment to be
made, is in excess of ten percent (10%) of Tangible Net Worth.
7.07 Capital Expenditures.
(a) Make or incur obligations for Capital Expenditures
(excluding expenditures incurred for the improvement or maintenance of aircraft
owned by the Borrower in the form of engine overhauls and upgrades, capitalized
repairs, additions and modifications, and the acquisition of parts and equipment
directly related thereto) in excess of $10,000,000 in any calendar year; or
(b) Purchase or lease additional aircraft or aircraft engines
or parts if the effect of such acquisition causes a default under any provision
of this Agreement.
7.08 Dividends. Pay or declare any Dividends in any fiscal year in
excess of twenty percent (20%) of cumulative Net Profit (with deduction for any
negative Net Profit) subsequent to the Closing Date; provided, however, that no
such Dividend may be paid or declared unless, both before and after giving
effect to such proposed Dividend (a) no Default or Event of Default has occurred
and is continuing, (b) all representations and warranties contained in Article V
hereof and in the Security Agreements and in the Guaranty shall be true and
correct on and as of the date of such Dividend as if such representations and
warranties were made on and as of such date, and (c) the Borrower is able to
borrow additional Revolving Credit Loans of at least $10,000,000.
7.09 Limitation on More Restrictive Covenants. The Borrower shall
not enter into any new debt agreement that would contain, nor enter into any
amendment, supplement or other modification to any indenture, instrument or
other agreement concerning any of its Indebtedness or any refinancing thereof,
if such indenture, instrument or other agreement at the time entered into or
after giving effect to any such amendment, supplement or other modification
thereto, would contain any covenant or event of default that is more restrictive
on the Borrower than those set forth in this Agreement.
7.10 Payments and Modification of Debt. Make any optional payment,
defeasance (whether a covenant defeasance, legal defeasance or other
defeasance), prepayment or redemption, directly or indirectly, of any of the
Indebtedness outstanding pursuant to the Senior Unsecured Debt Documents or
other Indebtedness or amend or modify, or consent or agree to any amendment or
modification of, any Senior Unsecured Debt Document, or enter into any agreement
or arrangement providing for any defeasance of any kind of any of the
Indebtedness outstanding pursuant to the Senior Unsecured Debt Documents;
provided, however, that the Borrower may redeem up to, but not in excess of, an
aggregate principal amount of the Senior Unsecured Notes of $10,000,000,
provided that both before and after giving effect to such redemption (a) no
Default or Event of Default has occurred and is continuing, (b) all
representations and warranties contained in Article V hereof and in the Security
Agreements and in the Guaranty shall be true and correct on and as of the date
of such redemption as if such representations and warranties were made on and as
of such date, (c) the Borrower is able to borrow additional Revolving Credit
Loans of at least $10,000,000 and (d) the book value of the assets of Amtran not
subject to any Lien (other than liens described in clauses (i) through (iv),
(xiii) and (xvi) of the definition of "Permitted Liens" contained in the Senior
Unsecured Indenture) shall not be less than $150,000,000
7.11 Amber Holdings, Inc. Permit Amber Holdings, Inc. to own, or
otherwise have any rights with respect to, any assets.
ARTICLE VIII.
EVENTS OF DEFAULT
Regardless of the terms of the Notes issued hereunder, upon the
occurrence and continuation of any of the following events, the Agent may and,
upon being directed to do so by the Required Banks, shall, terminate the
Commitments, declare all outstanding principal and accrued and unpaid interest
and all other sums outstanding under or in respect of this Agreement to be
immediately due and payable, and/or demand immediate delivery of Cash
Collateral, and Borrower agrees to deliver such Cash Collateral upon demand, in
an amount equal to the maximum amount that may be available to be drawn at any
time prior to the stated expiry of all outstanding Letters of Credit, or any one
or more of the foregoing, without notice of default, presentment or demand for
payment, protest or notice of nonpayment or dishonor, or other notices or
demands of any kind or character, except as hereinafter specified, provided,
however, that the occurrence of any of the events set forth in Sections 8.04 or
8.05 shall automatically terminate the Banks' Commitments and automatically
accelerate the amounts due hereunder, including such Cash Collateral, and under
the Notes, without notice of default, presentment or demand for payment, protest
or notice of nonpayment or dishonor, or other notice or demands for payment of
any kind or character.
8.01 Nonpayment. Borrower shall fail to pay when due any installment
of principal or of interest or any other sum due under this Agreement in
accordance with the terms hereof or of any Note issued under this Agreement and
such failure continues for five (5) days.
8.02 Representation or Warranty. Any written representation or
warranty herein or in any of the Loan Documents or any other agreement,
instrument or certificate executed pursuant hereto shall prove to have been
false or misleading in any material respect when made or when deemed to have
been made.
8.03 Other Defaults. (i) Borrower or Amtran shall fail duly or
promptly to perform or observe the covenants contained in Sections 6.09, 6.10
and 6.11 hereof or any of the other covenants, agreements or conditions
contained in any Loan Document and such default in such other covenants,
agreements or conditions shall continue unremedied for a period of thirty (30)
days after written notice thereof is delivered to Borrower from the Agent, or
(ii) any Default or Event of Default (however designated) shall have occurred
under any of the other Loan Documents and shall not have been cured within the
applicable grace or cure period, if any.
8.04 Voluntary Bankruptcy. The Borrower or Amtran or any of Amtran's
other Affiliates shall generally fail to pay or admit in writing its inability
to pay its debts as they come due, or shall file any petition or action for
relief as to itself under any bankruptcy, reorganization, insolvency or
moratorium law, or any other similar law or laws for the relief of, or relating
to, debtors, or shall apply for or consent to a receiver, trustee or custodian
for it or a substantial portion of its property, or shall make a general
assignment for the benefit of creditors.
8.05 Involuntary Bankruptcy. An involuntary petition shall be filed
under any bankruptcy or similar statute against Borrower or Amtran or any of
Amtran's other Affiliates or a custodian, receiver, trustee, assignee for the
benefit of creditors (or other similar official) shall be appointed to take
possession, custody or control of the properties of Borrower or Amtran or any of
Amtran's other Affiliates unless such petition or appointment is set aside or
withdrawn or ceases to be in effect within sixty (60) days from the date of said
filing or appointment.
8.06 Cross Default. Any material breach or default shall have
occurred (after giving effect to any applicable cure period or waiver) under any
other agreement or agreements relating to Indebtedness under which Borrower or
any of its Affiliates may be obligated in an aggregate amount in excess of
$5,000,000 as borrower, guarantor or lessee if such default consists of (i) the
failure by Borrower to pay an Indebtedness when due or the failure of the
Borrower or any of its Affiliates to perform or observe any other term, covenant
or agreement with respect to any such Indebtedness and following any applicable
cure period, permits the holder or any trustee thereof to cause the acceleration
of such Indebtedness (including without limitation permitting the holder or any
trustee thereof to require any mandatory prepayment or defeasance of such
Indebtedness) or the termination of any commitment to lend or permits a lessor
to terminate the applicable lease, including without limitation any "Event of
Default" under any of the Senior Unsecured Debt Documents or the occurrence of
any event or condition which would permit the holders of the Senior Unsecured
Notes to cause the prepayment or defeasance of the Senior Unsecured Notes, in
whole or in part, or (ii) the failure by Borrower to pay an Indebtedness at the
maturity thereof (whether at stated maturity or otherwise).
8.07 ERISA. Any Plan of Borrower shall be terminated within the
meaning of Title IV of ERISA except as permitted by section 4044(d) of ERISA, or
a trustee shall be appointed by the appropriate United States District Court to
administer any Plan of Borrower, or the PBGC shall institute proceedings to
terminate any Plan.
8.08 Aviation Property. Any of the Aviation Property shall be
condemned, confiscated, seized, or otherwise expropriated, or the management
thereof assumed, by any government or any officer or instrumentality thereof and
shall be retained for any period of thirty (30) consecutive calendar days,
unless within such thirty (30) day period the Agent shall receive assurances,
satisfactory in all respects to the Agent, that Borrower will be compensated
therefore in amount, time and manner satisfactory in all respects to the Agent
or, after giving effect to any event described herein and the deletion of such
affected Aviation Property from the Borrowing Base and any payments made on the
Advances in connection therewith, the aggregate Advances and Letter of Credit
Advances would not exceed the Borrowing Base.
8.09 Ownership. J. Xxxxxx Xxxxxxxxx or his heirs shall own
beneficially and of record, free and clear of all Liens, less than fifty-one
percent (51%) of the outstanding capital stock or other ownership interest of
each class having ordinary voting power or analogous rights for the election of
a majority of directors and any other control of management of Amtran, or Amtran
shall own, beneficially and of record, free and clear of all Liens, less than
fifty-one percent (51%) of the outstanding capital stock or other ownership
interest of each class having ordinary voting power or analogous rights for the
election of a majority of directors and any other control of management of the
Borrower or any "Change of Control" as defined in the Senior Unsecured Debt
Documents.
8.10 Judgments. One or more judgments or orders for the payment of
money in an aggregate amount of $1,000,000 shall be rendered against Amtran or
any of its Affiliates, or any other judgment or order (whether or not for the
payment of money) shall be rendered against or shall affect Amtran or any of its
Affiliates which causes or could cause a material adverse change in the
business, properties, operations or condition, financial or otherwise, of Amtran
or any of its Affiliates or which does or could have a material adverse effect
on the legality, validity or enforceability of this Agreement, the Notes, the
Guaranty or the Security Agreement, and either (i) such judgment or order shall
have remained unsatisfied and Amtran or such Affiliate shall not have taken
action necessary to stay enforcement thereof by reason of pending appeal or
otherwise, prior to the expiration of the applicable period of limitations for
taking such action or, if such action shall have been taken, a final order
denying
such stay shall have been rendered, or (ii) enforcement proceedings shall have
been commenced by any creditor upon any such judgment or order.
ARTICLE IX.
RELATIONSHIP OF THE BANKS/AND THE AGENT
9.01 Appointment and Authorization. Each Bank hereby irrevocably
authorizes the Agent to take such action as agent on its behalf and to exercise
such rights, powers and discretions as are specifically delegated in this
Agreement, the Notes and the Security Documents as are delegated to the Agent by
the terms hereof or thereof, together with all rights, powers and discretions as
are reasonably incidental thereto. The Agent agrees to notify the Banks of each
reduction in the Commitments, specifying the amount of such reduction and the
payments, if any, required by the Borrower due to such reduction, and agrees to
forward to the Banks the financial statements received by the Agent pursuant to
Section 6.03 hereof and such other financial information received by the Agent
as reasonably requested by the Banks. The Agent may perform any of its
respective functions and duties under this Agreement by or through agents or its
directors, officers of employees. In performing its functions and duties under
this Agreement, the Agent shall not be deemed to have a fiduciary relationship
in respect of, or other responsibility to (other than responsibilities expressly
stated herein), any Bank or to have assumed any relationship of agency or trust
with or for Borrower.
9.02 Pro Rata Sharing. All payments or collections of principal and
interest on the Revolving Credit Loans shall be shared by the Banks on a pro
rata basis based upon the share of outstanding Indebtedness of the Borrower to
each Bank at the time of such payment or collection. On the day the Agent
receives any payments hereunder, the Agent shall remit to the Banks their pro
rata share of such payments in immediately available funds.
9.03 Sharing of Setoff. Any Bank which shall receive payment of or
on account of all or part of its share of the Obligations by voluntary payment
by Borrower or through the exercise of any right of setoff, counterclaim,
banker's lien, secured claim under any bankruptcy statute or otherwise in a
greater proportion than the proportionate amount of the Obligations due it under
this Agreement shall be deemed to have purchased immediately prior to such
payment participations in the portions of the Obligations held by the other
Banks so that all recoveries of the Obligations shall be shared by Banks in
accordance with their pro rata interests in the Obligations existing on the date
immediately prior to such recovery. If all or any portion of such excess payment
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
(except to the extent of such Bank is required to pay interest). All sums
received by a Bank through the exercise of any right of setoff, counterclaim,
banker's lien, secured claim under any bankruptcy statute or otherwise shall be
deemed to be first applied to such Bank's portion of the indebtedness under this
Agreement until payment thereof in full and any balance remaining thereafter
shall be deemed applied to any other Indebtedness of the Borrower to such Bank.
9.04 Approvals. Except as provided in this Section 9.04, upon any
occasion requiring or permitting an approval, consent, waiver, election or other
action on the part of the Banks, action shall be taken by the Agent for and on
behalf or for the benefit of all Banks upon the direction of the Required Banks,
and any such action shall be binding on all Banks. No amendment, modification,
consent or waiver shall be effective which:
(a) increases the Commitment of any Bank,
(b) reduces the amount of interest, principal or fees owing
hereunder or reduces the interest rate or fees payable by Borrower,
(c) extends the fixed date on which any sum is due hereunder,
or extends the Termination Date,
(d) waives a Default arising from a failure to pay principal
of or interest on an Advance within the applicable grace period,
(e) changes the provisions of this Section 9.04,
(f) releases or substitutes all or substantially all of the
collateral, other than substitutions of collateral where the collateral to be
added is of approximately equal or greater value than the collateral being
released,
(g) modifies the definition of "Required Banks",
(h) releases any material Guarantor from the Guaranty, or
(i) waives any violation of the advance rate on Aviation
Property or changes such advance rate.
unless all Banks agree in writing thereto; provided, however, that any
amendment, modification, consent or waiver which affects the rights, duties or
obligations of the Agent shall not be effective unless consented to in writing
by the Agent.
9.05 Exculpation. The Agent shall not be liable or answerable for
anything whatsoever in connection with this Agreement or any instrument or
agreement required hereunder, including responsibility with respect to the
execution, construction or enforcement of this Agreement or any such instrument
or agreement, except for its own respective willful misconduct or gross
negligence, and the Agent shall not have any duties or obligations other than as
provided herein and therein. The Agent shall be entitled to rely on any opinion
of counsel (including counsel for Borrower) in relation to this Agreement and
any instrument or agreement required hereunder, and upon statements and
communications received from Borrower, or from any other person, believed by it
to be authentic, and shall not be liable for any action taken or omitted in good
faith on such reliance.
9.06 Indemnification.
Each Bank agrees to indemnify the Agent to the extent not reimbursed
by Borrower, ratably according to its proportionate interest in the Revolving
Credit Loans (or, if there are no outstandings hereunder, in the Commitments),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or any
instrument or agreement required hereunder or any action taken or omitted by the
Agent in such role under this Agreement or any such instrument or agreement;
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever resulting from the
Agent's willful misconduct or gross negligence.
9.07 The Agent as Bank. The Agent shall have the same rights and
powers hereunder as any other Bank and may exercise the same as though it were
not the Agent; and the Term "Banks" shall include the Agent in its individual
capacity.
9.08 Notices of Transfer. The Agent and Borrower may deem and treat
a Bank which is a party to this Agreement as the owner of such Bank's Note for
all purposes hereof unless and until a written notice of the assignment or
transfer, thereof (if any is permitted) executed by such Bank shall have been
received by the Agent and Borrower.
9.09 Credit Decision. Each Bank represents that it has made and
agrees that it shall continue to make its own independent investigation of the
financial condition and affairs of Borrower and its own appraisal of the
creditworthiness of the Borrower in connection with the making of the
continuance of its Commitments and the Advances. The Agent has no any duty or
responsibility, either initially or on a continuing basis, to provide any Bank
with any credit or other information (other than obtained pursuant to this
Agreement) with respect thereto, whether coming into its possession before the
date hereof or at any time thereafter unless furnished respectively to the Agent
by Borrower for delivery to the Banks. The Agent shall provide the Banks with
copies of all notices required by the Agreement provided to Agent respectively
by or to Borrower.
9.10 Resignation of the Agent. The Agent may resign at any time by
giving written notice to the Banks and Borrower. Upon any such resignation, the
Required Banks with the prior written consent of Borrower which shall not be
unreasonably withheld, shall have the right to appoint a successor from among
the Banks. If no successor shall have accepted such appointment within
forty-five (45) days after the retiring Agent's giving of notice of resignation,
the retiring Agent may, on behalf of the Banks, appoint a successor thereto with
the prior written consent of Borrower, which shall not be unreasonably withheld,
and such successor Agent shall be a bank or trust company organized under the
laws of the United States or any state thereof. Upon the acceptance by such
successor of its appointment hereunder, such successor shall succeed to and
become vested with all the rights and obligations of the retiring Agent, and the
retiring Agent shall be discharged from its obligations under this Agreement
except with respect to any liability with respect to a breach of any obligation
hereunder prior to such resignation. The provisions of this Section 9.11 shall
inure to the benefit of the retiring Agent as to any actions taken or omitted to
be taken by it while it held such position under this Agreement.
ARTICLE X.
MISCELLANEOUS
10.01 Notices. Any communications between the parties hereto or
notices or requests provided herein to be given may be given by mailing the
same, first class postage prepaid, or by telex or electronic transmission to
each party at its address set forth on the signature pages thereto (with a copy
to each address indicated for notices), or to such other address as any party
may in writing hereafter indicate to Borrower and the Banks. Notices shall be
effective on the date sent by electronic transmission and telex and three (3)
Banking Days after the date sent by U.S. mail.
10.02 Successors and Assigns. This Agreement shall bind and inure to
the benefit of the parties hereto and their respective permitted successors and
assigns; provided, however, that Borrower shall not assign this Agreement or any
of its rights hereunder without the prior written consent of the Banks.
10.03 Participations and Assignments. (a) This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, provided that the Borrower may not, without the prior
consent of the Banks, assign its rights or obligations hereunder or under any
other Loan Document and the Banks shall not be obligated to make any Loan
hereunder to any entity other than the Borrower.
(b) Any Bank may sell to any bank, financial institution or
institutions or other entity, and such bank, financial institution or
institutions or other entity may further sell, a participation interest
(undivided or divided) in, the Loans and such Bank's rights and benefits under
this Agreement, the Notes and the Guaranties, and to the extent of that
participation interest such participant or participants shall have the same
rights and benefits against the Borrower under Section 2.15 and 2.17 as it or
they would have had if such participant or participants were the Bank making the
Loans to the Borrower hereunder, provided, however, that (i) such Bank's
obligations under this Agreement shall remain unmodified and fully effective and
enforceable against such Bank, (ii) such Bank shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii) such
Bank shall remain the holder of its Notes for all purposes of this Agreement,
(iv) the Borrower, the Agent and the other Banks shall continue to deal solely
and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement, and (v) such Bank shall not grant to its
participant any rights to consent or withhold consent to any action taken by
such Bank or the Agent under this Agreement other than action requiring the
consent of all of the Banks hereunder.
(c) Each Bank may, with the prior consent of the Agent, assign
to one or more banks or other entities all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Loans owing to it and the Note or Notes held by
it); provided, however, that (i) each such assignment shall be of a uniform, and
not a varying, percentage of all rights and obligations, (ii) except in the case
of an assignment of all of a Bank's rights and obligations under this Agreement,
(A) the amount of the Commitment of the assigning Bank being assigned pursuant
to each such assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than
$5,000,000, and in integral multiples of $1,000,000 thereafter, or such lesser
amount as the Agent may consent to and (B) after giving effect to each such
assignment, the amount of the Commitment of the assigning Bank shall in no event
be less than $5,000,000, (iii) the parties to each such assignment shall execute
and deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance in the form of Exhibit C hereto (an "Assignment and
Acceptance"), together with any Note or Notes subject to such assignment and, a
processing and recordation fee of $3,000, and (iv) any Bank may without the
consent of the Borrower or the Agent, assign to any Affiliate of such Bank that
is a bank or financial institution all of its rights and obligations under this
Agreement. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder and (y) the Bank
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all of the remaining portion
of an assigning Bank's rights and obligations under this Agreement, such Bank
shall cease to be a party hereto).
(d) The Agent shall maintain at its address designated on the
signature pages hereof a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Banks and the Commitment of, and principal amount of the Loans owing to,
each Bank from time to time (the "Register"). The entries in the Register shall
be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Bank and an assignee, together with any Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. Within ten Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the Agent
in exchange for the surrendered Note or Notes a new Note to the order of such
assignee in an amount equal to the Commitment assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Bank has retained a Commitment
hereunder, a new Note to the order of the assigning Bank in an amount equal to
the Commitment retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of Exhibit C
hereto.
(f) The Banks may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
10.03, disclose to the assignee or participant or proposed assignee or
participant any public information relating to the Borrower and, provided that
such proposed assignee or participant executes a confidentiality letter, any
other information relating to the Borrower.
10.04 Delays and Waivers. No delay or omission by the Banks to
exercise any right under this Agreement shall impair any such right, nor shall
it be construed to be a waiver thereof. No waiver of any single breach or
default under this Agreement shall be deemed a waiver of any other breach or
default. Any waiver, modification, amendment, consent or approval relating to
this Agreement or the Notes, must be in writing to be effective and must be
signed by or on behalf of the Banks.
10.05 Costs and Expenses. (a) The Borrower agrees to pay on demand
to the Banks all costs and expenses incurred by the Banks including, without
limitation, reasonable attorneys' and consultants' fees (i) in connection with
the enforcement of this Agreement or any instrument or agreement required
hereunder or in connection with any proposed refinancing or restructuring of the
credit provided in this Agreement in the nature of a "work-out" and (ii) for all
stamp, registration and other duties and imposts to which this Agreement and any
instrument or agreement required hereunder may be subject. The Borrower agrees
to pay or to reimburse the Agent upon demand for reasonable attorneys' fees and
other expenses incurred in connection with the preparation, drafting and
negotiation of this Agreement, the Notes, and the Loan Documents, any
amendments, consents, or waivers hereto or thereto. The Borrower shall indemnify
the Banks against any and all liabilities and penalties resulting from any delay
in payment, or failure to pay, any such duties and imposts upon written notice
from the Banks that such amounts have been assessed.
(b) Borrower agrees to indemnify the Agent and each Bank,
their respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee at any time
in connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a
party thereto) brought or threatened relating to or arising out of the Loan
Documents, any actual or proposed use of proceeds of the Loans or the Letter of
Credit Advances, any transactions relating to any of the foregoing, any act or
omission of Borrower or any Guarantor or any environmental liability of Borrower
or any Guarantor; provided that no Indemnitee shall have the right to be
indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
10.06 Entire Agreement. This Agreement and any agreement, document
or instrument attached hereto or referred to herein integrate all the terms and
conditions mentioned herein or incidental hereto, and supersede all oral
negotiations and prior writings in respect to the subject matter hereof. In the
event of any conflict between the terms, conditions and provisions of this
Agreement and any such agreement, document or instrument, the terms, conditions
and provisions of this Agreement shall prevail.
10.07 Prior Agreement. Upon the execution of this Agreement, the
Commitments of the banks pursuant to the Prior Agreement shall terminate and be
deemed superseded by the Commitments under this Agreement, and this Agreement is
an amendment and restatement of the Prior Credit Agreement, without novation
thereof. The Borrower and Amtran acknowledge they have no setoff, defense, claim
or other dispute in connection with any of the indebtedness or other liabilities
owing pursuant to the Prior Agreement or otherwise in connection with the Prior
Agreement. Any Indebtedness outstanding under the Prior Agreement after the
Closing Date shall be deemed Indebtedness outstanding under this Agreement. All
liens and security interests granted with respect to the Aviation Property in
connection with the Prior Credit Agreement shall continue in full force and
effect and secure the Obligations and other indebtedness and liabilities
described in the Security Agreement, and all filings with the FAA and all UCC
financing statements filed shall continue in full force and effect.
10.08 Governing Law. This Agreement is a contract made under, and
shall be governed by and construed in accordance with, the laws of the State of
Michigan applicable to contracts made and to be performed entirely within such
State and without giving effect to the choice of law principles of such State.
10.09 Section Headings. Section headings are for reference only, and
shall not affect the interpretation or meanings of any provision of this
Agreement.
10.10 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
10.11 Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, all of which taken together will constitute one
agreement, and any one of the parties hereto may execute this Agreement by
signing any such counterpart.
10.12 Waiver of Jury Trial. The Agent, the Banks, Amtran and the
Borrower, after consulting or having had the opportunity to consult with
counsel, each knowingly, voluntarily and intentionally waive any right any of
them may have to a trial by jury in any litigation based upon or arising out of
this Agreement or any related instrument or agreement or any of the transactions
contemplated by this Agreement or any course of conduct, dealing, statements
(whether oral or written)
or actions of any of them. Neither the Agent, the Banks, Amtran nor the Borrower
shall seek to consolidate, by counterclaim or otherwise, any such action in
which a jury trial has been waived with any other action in which a jury trial
cannot be or has not been waived. These provisions shall not be deemed to have
been modified in any respect or relinquished by the Agent, the Agent, the Banks,
Amtran or the Borrower except by a written instrument executed by all of them.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
by their duly authorized officers as of the date and year first above written.
AMERICAN TRANS AIR, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Its: Executive Vice President and
Chief Financial Officer
Address: 0000 Xxxx Xxxxxxxxxx Xx.
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Executive Vice
President and Chief
Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
AMTRAN, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Its: Executive Vice President and
Chief Financial Officer
Address: 0000 Xxxx Xxxxxxxxxx Xx.
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Executive Vice
President and Chief
Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
NBD BANK, N.A., as a Bank and as Agent
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Its: Vice President
-------------------------------------
Address: Xxx Xxxxxxx Xxxxxx, Xxx. 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Commitment: $12,500,000 Attention: Xxxxx X. Xxxxxxxx
Percentage: 25% Telephone: (000) 000-0000
Telecopy: (000) 000-0000
FORT XXXXX NATIONAL BANK
By:
-----------------------------------------
Its:
-------------------------------------
Address: 000 X. Xxxxx Xx., X.X. Xxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Commitment: $10,000,000 Attention: Xxxxxxx Xxxxx
Percentage: 20% Telephone: (000) 000-0000
Telecopy: (000) 000-0000
NBD BANK, N.A., as a Bank and as Agent
By:
-----------------------------------------
Its:
-------------------------------------
Address: Xxx Xxxxxxx Xxxxxx, Xxx. 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Commitment: $12,500,000 Attention: Xxxxx X. Xxxxxxxx
Percentage: 25% Telephone: (000) 000-0000
Telecopy: (000) 000-0000
FORT XXXXX NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx
Its: Vice President
-------------------------------------
Address: 000 X. Xxxxx Xx., X.X. Xxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Commitment: $10,000,000 Attention: Xxxxxxx Xxxxx
Percentage: 20% Telephone: (000) 000-0000
Telecopy: (000) 000-0000
NATIONAL BANK OF CANADA
By: /s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
-----------------------------------------
Its: AVP VP
-------------------------------------
Address: 000 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Commitment: $10,000,000 Attention: Xxxxxx Xxxxxxxx
Percentage: 20% Telephone: (000) 000-0000
Telecopy: (000) 000-0000
FIRST OF AMERICA BANK - INDIANA
By:
-----------------------------------------
Its:
-------------------------------------
Address: 000 X. Xxxx Xx., Xxx. 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Commitment: $10,000,000 Attention: Xxxxx Xxxxx
Percentage: 20% Telephone: (000) 000-0000
Telecopy: (000) 000-0000
NATIONAL CITY BANK, INDIANA
By:
-----------------------------------------
Its:
-------------------------------------
Address: 000 X. Xxxxxxxxxx Xx. 000 Xxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Commitment: $7,500,000 Attention: Xxx Xxxx
Percentage: 15% Telephone: (000) 000-0000
Telecopy: (000) 000-0000
NATIONAL BANK OF CANADA
By:
-----------------------------------------
Its:
-------------------------------------
Address: 000 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Commitment: $10,000,000 Attention: Xxxxxx Xxxxxxxx
Percentage: 20% Telephone: (000) 000-0000
Telecopy: (000) 000-0000
FIRST OF AMERICA BANK - INDIANA
By: /s/ [ILLEGIBLE]
-----------------------------------------
Its: Vice President
-------------------------------------
Address: 000 X. Xxxx Xx., Xxx. 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Commitment: $10,000,000 Attention: Xxxxx Xxxxx
Percentage: 20% Telephone: (000) 000-0000
Telecopy: (000) 000-0000
NATIONAL CITY BANK, INDIANA
By:
-----------------------------------------
Its:
-------------------------------------
Address: 000 X. Xxxxxxxxxx Xx. 000 Xxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Commitment: $7,500,000 Attention: Xxx Xxxx
Percentage: 15% Telephone: (000) 000-0000
Telecopy: (000) 000-0000
NATIONAL BANK OF CANADA
By:
-----------------------------------------
Its:
-------------------------------------
Address: 000 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Commitment: $10,000,000 Attention: Xxxxxx Xxxxxxxx
Percentage: 20% Telephone: (000) 000-0000
Telecopy: (000) 000-0000
FIRST OF AMERICA BANK - INDIANA
By: /s/ [ILLEGIBLE] [ILLEGIBLE]
-----------------------------------------
Its: AVP V.P.
-------------------------------------
Address: 000 X. Xxxx Xx., Xxx. 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Commitment: $10,000,000 Attention: Xxxxx Xxxxx
Percentage: 20% Telephone: (000) 000-0000
Telecopy: (000) 000-0000
NATIONAL CITY BANK, INDIANA
By:
-----------------------------------------
Its:
-------------------------------------
Address: 000 X. Xxxxxxxxxx Xx. 000 Xxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Commitment: $7,500,000 Attention: Xxx Xxxx
Percentage: 15% Telephone: (000) 000-0000
Telecopy: (000) 000-0000
EXHIBIT A
PROMISSORY NOTE
$__________ July ___, 1997
FOR VALUE RECEIVED, AMERICAN TRANS AIR, INC., an Indiana corporation
(the "Borrower"), hereby unconditionally promises to pay to the order of
____________________, a _______________ (the "Bank"), at the principal banking
office of NBD Bank, N.A., a national banking association, in lawful money of the
United States of America and in immediately available funds, the principal sum
of __________ Million Dollars ($__,000,000), or such lesser amount as is
recorded on the schedule attached hereto, or in the books and records of the
Bank, on the Termination Date; and to pay interest on the unpaid principal
balance hereof from time to time outstanding, in like money and funds, for the
period from the date hereof until the Advances evidenced hereby shall be paid in
full, at the rates per annum and on the dates provided in the Credit Agreement
referred to below.
The Bank is hereby authorized by the Borrower to record on the
schedule attached to this Note, or on its books and records, the date, amount
and type of each Advance, the amount of each payment or prepayment of principal
thereon and the other information provided for on such schedule, which schedule
or such books and records, as the case may be, shall constitute prima facie
evidence of the information so recorded, provided, however, that any failure by
the Bank to record any such information shall not relieve the Borrower of its
obligation to repay the outstanding principal amount of such Advances, all
accrued interest thereon and any amount payable with respect thereto in
accordance with the terms of this Note and the Credit Agreement.
The Borrower and each endorser or guarantor hereof waives demand,
presentment, protest, diligence, notice of dishonor and any other formality in
connection with this Note. Should the indebtedness evidenced by this Note or any
part thereof be collected in any proceeding or be placed in the hands of
attorneys for collection, the Borrower agrees to pay, in addition to the
principal, interest and other sums due and payable hereon, all costs of
collecting this Note; including attorneys' fees and expenses.
This Note evidences one or more Advances made under a Credit
Agreement, dated as of the date hereof (the "Credit Agreement"), by and among
the Borrower, the banks (including the Bank) named therein and NBD Bank, N.A.,
as agent, to which reference is hereby made for a statement of the circumstances
under which this Note is subject to prepayment and under which its due date may
be accelerated and for a description of the collateral and security securing
this Note.
This Note is issued in exchange and substitution for certain
promissory notes previously issued by the Borrower and evidences the same
liabilities and obligations under such promissory notes and shall not be deemed
a novation or satisfaction thereof. Capitalized terms used but not defined in
this Note shall have the respective meanings assigned to them in the Credit
Agreement.
PROMISSORY NOTE
This Note is made under, and shall be governed by and construed in
accordance with, the laws of the State of Michigan applicable to contracts made
and to be performed entirely within such State and without giving effect to
choice of law principles of such State.
AMERICAN TRANS AIR, INC.
By:
--------------------------------
Its:
-------------------------------
PROMISSORY NOTE
Schedule to Note, dated
____________, 1997, made by American Trans Air, Inc.
in favor of __________________
Principal
Trans- Principal Amount Principal
action Amount of Interest Paid or Balance Notation
Date Loan Rate Prepaid Outstanding Made by
----- --------- -------- --------- ----------- --------
PROMISSORY NOTE
EXHIBIT B
EXTENSION REQUEST
NBD Bank, N.A., as Agent ______________, _____
Xxx Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
This Extension Request is delivered to you in connection with
Section 2.18 of the Credit Agreement, dated as of ___________, 1997 (together
with all amendments and other modifications, if any, from time to time hereafter
made thereto, the "Credit Agreement"), among American Trans Air, Inc., Amtran,
Inc., (collectively, the "Borrower"), the banks that are parties thereto and NBD
Bank, N.A., as agent. Unless otherwise defined, terms used herein have the
meanings provided in the Credit Agreement.
The Borrower hereby requests that the Termination Date be extended
from April 1, 199_ to ______________, ______.
IN WITNESS WHEREOF, the Borrower has caused this Extension Request
to be executed and delivered by thereof duly authorized officer this ___ day of
____________, 19__.
AMERICAN TRANS AIR, INC.
By:
-------------------------------
Its:
-----------------------------
AMTRAN, INC.
By:
-------------------------------
Its:
-----------------------------
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of ___________,
1997 (the "Credit Agreement") among AMERICAN TRANS AIR, INC., (the "Borrower"),
AMTRAN, INC. ("Amtran"), the banks party thereto (the "Banks"), NBD BANK, N.A.,
as agent for the Banks (the "Agent"). Terms defined in the Credit Agreement are
used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns (without recourse) to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement as of the date hereof equal to the amounts specified on Schedule 1 of
all outstanding rights and obligations under the Credit Agreement. After giving
effect to such sale and assignment, the Assignee's Commitment and the amounts of
the Advances owing to the Assignee will be as set forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, perfection, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other instrument or document
furnished pursuant thereto; (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any Guarantor or the performance or observance by the Borrower or
any Guarantor of any of their obligations under the Credit Agreement or any
other instrument or document furnished pursuant thereto; and (iv) attaches the
Note held by the Assignor and requests that the Agent exchange such Note for a
new Note payable to the order of the Assignee in an amount equal to the
Commitment assumed by the Assignee pursuant hereto and the Assignor in an amount
equal to the Commitment retained by the Assignor under the Credit Agreement,
respectively, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 5.13 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Credit Agreement as are delegated to the Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental thereto;
(iv) agrees that it will perform in accordance with their terms of all of the
obligations that by the terms of the Credit Agreement are required to be
performed by it as a Bank; and (v) if the Assignee is organized under the laws
of a jurisdiction outside the United States, attaches the forms prescribed by
the Internal Revenue Service of the United States certifying as to the
Assignee's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to
the Assignee under the Credit Agreement and the Note or such other documents as
are necessary to indicate that all such payments are subject to such taxes at a
rate reduced by an applicable tax treaty.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1.
5. Upon consent hereto by the Borrower and the Agent and such
acceptance and recording by the Agent, as of the Effective Date, (i) the
Assignee shall be a party to the Credit Agreement and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a Bank
thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after
the Effective Date, the Agent shall make all payments under the Credit Agreement
and the Note in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Michigan.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by facsimile shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
ASSIGNMENT AND ACCEPTANCE
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
[ASSIGNOR]
By:
-------------------------------
Its:
-----------------------------
[ASSIGNEE]
By:
-------------------------------
Its:
-----------------------------
SCHEDULE 1
L-1011 Aircraft
The following aircraft:
Manufacturer U.S.
Manufacturer Model Serial No. Registry No.
------------ ----- ---------- ------------
Lockheed L-1011-385-1 193C-1052 N185AT
Lockheed L-1011-385-1 193C-1057 N192AT
Lockheed L-1011-385-1 193C-1071 N193AT
Lockheed L-1011-385-1 193C-1074 N186AT
Lockheed L-1011-385-1 193C-1081 N189AT
Lockheed L-1011-385-1 193C-1084 N191AT
Lockheed L-1011-50 193C-1077 N187AT
Lockheed L-1011-385-1 193C-1041 N197AT
Lockheed L-1011-385-1 193C-1086 N190AT
Lockheed L-1011-385-1 193B-1076 N196AT
Lockheed L-1011-385-1 193P 1082 N197AT
Lockheed L-1011-385-1 193C-1078 N188AT
SCHEDULE 2
L-1011 Engines
The following engines, each of said engines being 750 or more rated takeoff
horsepower or its equivalent:
Manufacturer
Manufacturer Model Serial No.
------------ ----- ----------
Rolls Royce RB211-22B-02 10353
Rolls Royce RB211-22B-02 10279
Rolls Royce RB211-22B-02 10259
Rolls Royce RB211-22B-02 10254
Rolls Royce RB211-22B-02 10238
Rolls Royce RB211-22B-02 10383
Rolls Royce RB211-22B-02 10354
Rolls Royce RB211-22B-02 10341
Rolls Royce RB211-22B-02 10362
Rolls Royce RB211-22B-02 10236
Rolls Royce RB211-22B-02 10255
Rolls Royce RB211-22B-02 10347
Rolls Royce RB211-22B-02 10251
Rolls Royce RB211-22B-02 10208
Rolls Royce RB211-22B-02 10286
Rolls Royce RB211-22B-02 10331
Rolls Royce RB211-22B-02 10260
Rolls Royce RB211-22B-02 10258
Rolls Royce RB211-22B 10219
Rolls Royce RB211-22B 10274
Rolls Royce RB211-22B 10323
Rolls Royce RB211-22B 10319
Rolls Royce RB211-22B 10357
Rolls Royce RB211-22B 10561
Rolls Royce RB211-22B-02 10311
Rolls Royce RB211-22B-02 10273
Rolls Royce RB211-22B-02 10358
Rolls Royce RB211-22B 10348
Rolls Royce RB211-22B 10349
Rolls Royce RB211-22B 10351
Rolls Royce RB211-22B 10503
Rolls Royce RB211-22B 10300
Rolls Royce RB211-22B 10466
Rolls Royce RB211-22B 10335
Rolls Royce RB211-22B 10235
Rolls Royce RB211-22B 10394
Schedule 4.01(n)
All indebtedness, obligations and liabilities currently outstanding under
the Prior Credit Agreement.
SCHEDULE 5.02
AMTRAN, INC. AFFILIATES
Date
Incorporated
------------
American Trans Air, Inc. 9/24/73
Ambassadair Travel Club, Inc. 7/29/82
ATA Vacations, Inc. (formerly Amber Tours, Inc.) 3/25/87
Amber Travel, Inc. 3/27/89
American Trans Air Training Corporation 9/8/88
American Trans Air ExecuJet, Inc. 4/21/89
Amber Air Freight Corporation 6/3/91
Amber Holdings, Inc. 7/26/95
SCHEDULE 5.09
NONE
SCHEDULE 7.02(a)
EXCLUDED LIENS INCLUDE:
1. Midway Hangar leased from Chicago Airport Authority
2. Word System leased from Xxxxxx Financial Service
3. GDAS Aircraft scheduling system leased from General Dimensions
Corp.
4. Pre-delivery payments made pursuant to aircraft and engine
Purchase Agreements
5. Monthly credits available under 1994 Boeing Purchase Agreement
and 1994 Rolls-Royce Purchase Agreement
6. An existing lien on a Boeing 727 aircraft and related engines
to NBD Bank, N.A., provided that the indebtedness secured
thereby shall be paid in full on July 24, 1997 and such liens
subsequently discharged.
No increase in the amount secured by any of the above Liens shall be permitted.
Schedule 7.02(b)
1. Senior Unsecured Indenture.
SCHEDULE 7.04
PERMITTED SALE LEASEBACK TRANSACTIONS:
1. A sale leaseback of an existing Boeing 727 aircraft, provided
that the proceeds thereof are used to pay in full any existing
Lien on such aircraft and no Event of Default or Default
exists or would be caused thereby under the Credit Agreement.
2. Any other sale leaseback of any aircraft acquired after the
Closing Date of the Credit Agreement provided that each of the
following conditions is satisfied: (a) such sale leaseback is
completed within 12 months after the date of the acquisition
of such aircraft, (b) no Default or Event of Default exists
under the Credit Agreement or would be caused thereby and (c)
after giving effect to such sale leaseback, the book value of
the assets of Amtran not subject to any Lien (other than liens
described in clauses (i) through (iv), (xiii) and (xvi) of the
definition of "Permitted Liens" contained in the Senior
Unsecured Indenture) would not be less than $150,000,000.
