BLOCKED ACCOUNT AGREEMENT
Exhibit 10.15
THIS BLOCKED ACCOUNT AGREEMENT (this “Agreement”) is made and entered into as of
December 30, 2003 by and among WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association
(“Bank”), WORLD AIRWAYS, INC., a Delaware corporation (“Company”), and CITIBANK,
N.A., as Collateral Agent (“Agent”), for the benefit of itself and the Lenders, the Board
and the Supplemental Guarantor (as such terms are defined in the Loan Agreement referenced below).
A. Pursuant to that certain Loan Agreement dated as of December 30, 2003 among the Company,
the Agent, the Board, the Lenders and the other parties signatory thereto (as amended, restated,
supplemented or otherwise modified from time to time, the “Loan Agreement”), the Lenders
have agreed to make loans and extend other financial accommodations to Company.
B. Company has established certain accounts with Bank as shown on Schedule 1 attached
hereto and incorporated herein by this reference (the “Blocked Accounts”).
C. The parties hereto desire to enter into this Agreement in order to set forth their relative
rights and duties with respect to the Blocked Accounts and all funds on deposit therein from time
to time.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
EFFECTIVENESS. This Agreement shall take effect immediately upon its execution by all parties
hereto and shall supersede any blocked account or similar agreement in effect with respect to the
Blocked Accounts.
SECURITY INTEREST; AGENCY. As collateral security for Company’s obligations to the Agent, the
Lenders, the Board and the Supplemental Guarantor under the Loan Agreement and the other Loan
Documents described therein, Company hereby grants to Agent, for the benefit of itself, the
Lenders, the Board and the Supplemental Guarantor, a present and continuing security interest in
(a) the Blocked Accounts, (b) all contract rights and privileges in respect of the Blocked
Accounts, and (c) all cash, checks, money orders and other items of value of Company now or
hereafter paid, deposited, credited, held (whether for collection, provisionally or otherwise) or
otherwise in the possession or under the control of, or in transit to, Bank or any agent, bailee or
custodian thereof (collectively, “Receipts”), and all proceeds of the foregoing, and Bank
acknowledges that this Agreement constitutes notice, in accordance with the Uniform Commercial
Code, of Agent’s security interest in such collateral; provided that the parties hereto
expressly acknowledge that Company’s deposit account with Bank bearing account number 2000017866280
is not a Blocked Account, is not considered a Receipt, and is not subject to the terms of this
Agreement. Agent hereby appoints Bank as Agent’s bailee and pledgee-in-possession for the Blocked
Accounts and all Receipts, and Bank hereby accepts such appointment and agrees to be bound by the
terms of this Agreement. Company hereby agrees to such appointment and further agrees that Bank,
on behalf of Agent, shall exercise, upon the
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written instructions of Agent, any and all rights which Agent may have under the Loan Agreement,
the other Loan Documents described therein or under applicable law with respect to the Blocked
Accounts, all Receipts and all other collateral described in this section.
THE BLOCKED ACCOUNTS. Bank represents and warrants to Agent that: (i) it maintains the Blocked
Accounts for Company, (ii) Exhibit A is a statement or statements produced by Bank in the ordinary
course of its business regarding the balance in each of the Blocked Accounts at the statement’s
date, and it does not know of any inaccuracy in the statement(s); and (iii) Bank does not know of
any claim to or interest in the Blocked Accounts, except for claims and interests of the parties
referred to in this agreement.
CONTROL OF BLOCKED ACCOUNTS. The parties agree that this Agreement is, among other things, a
“control” agreement under the Uniform Commercial Code in the State of Georgia. In accordance
therewith, the parties agree as follows: (i) the Blocked Accounts shall be under the sole dominion
and control of Agent; (ii) each Blocked Account shall be maintained by Bank in the name of the
Company; and (iii) to the extent the instructions are in conformity with the terms and conditions
of this Agreement, as determined by Bank in its sole discretion, Bank shall comply with
instructions originated by Agent with respect to this Agreement and the Blocked Account, without
any further consent of Company. All instructions from Agent to the Bank shall be reasonable and
shall be reasonably acceptable to the Bank, and the Bank shall have a reasonable time to comply
with such instructions. The Bank may rely upon any instructions from any person that the Bank
reasonably believes to be an authorized representative of Agent, provided, however, the Bank shall
not be obligated to comply with any instructions received from an “assignee” of Agent unless and
until the Bank shall have received written notice from Agent of such assignment.
DEBTOR’S RIGHTS IN BLOCKED ACCOUNTS. Until receipt of instructions originated by Agent directing
disposition of the funds in the Blocked Accounts, Company may withdraw funds and otherwise deal
with the Blocked Accounts in the ordinary course if its business, and Bank may honor Company’s
instructions with respect to the Blocked Accounts, without further consent of Agent. Upon delivery
to Bank of instructions originated by Agent that Agent is exercising its rights to direct
disposition of the funds in the Blocked Accounts (a “Notice of Exclusive Control”), Company
agrees that it will no longer be permitted to withdraw funds from or exercise any authority of any
kind with respect to funds in the Blocked Accounts, that Bank is authorized to, and Bank agrees to,
cease complying with directions of Company with respect to the Blocked Accounts, that Agent shall
have the exclusive authority to withdraw, or direct the withdrawal of, funds from the Blocked
Accounts, and Company shall have no rights to exercise any authority of any kind with respect to
the Blocked Accounts and the funds deposited therein. So long as this Agreement remains in effect,
the Blocked Accounts will be titled as directed by Agent. By their signatures to this Agreement,
Company hereby authorizes and directs Bank, and Bank agrees, to comply with the instructions of
Agent directing disposition of the funds without further consent of Company and, upon Agent’s
delivery of a Notice of Exclusive Control and Agent’s wire instructions to Bank, to forward
available funds to such account as may be designated by Agent to Bank in writing from time to time.
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FEES. Upon demand by Bank, Company agrees to pay all usual and customary service charges, transfer
fees and account maintenance fees (“Fees”) of Bank in connection with the Blocked Accounts.
In the event Company fails to timely make a payment to Bank of any Fees for which demand for
payment has been made, Bank may thereafter exercise its right of set-off against any Blocked
Account and any other account of Company maintained with Bank in order to recover payment of the
unpaid Fees – which set-off shall be superior to any security interests or liens of Agent. If for
any reason Bank is unable to recover payment in full of the unpaid Fees from any Blocked Account
and such other accounts through exercise of the right of set-off, including applicable law
prohibiting set-off against any of such accounts, then Agent shall pay the unpaid Fees to Bank
within fifteen (15) business days of receipt of written demand for payment from Bank.
UNCOLLECTED FUNDS. Bank shall send to Agent and Company copies of all returned and dishonored
Receipts within a commercially reasonable time following Bank’s receipt thereof. If any Receipt
deposited in any Blocked Account is returned unpaid or otherwise dishonored, Bank shall have the
right to both charge such returned or dishonored Receipt against any Blocked Account and any other
account of Company maintained with Bank and to demand reimbursement therefor directly from Company.
In the event Company fails to timely make a payment to Bank of any of returned or dishonored
Receipts for which demand for payment has been made, Bank may thereafter exercise its right of
set-off against any Blocked Account and any other account of Company maintained with Bank in order
to recover payment of the returned and dishonored Receipts – which set-off shall be superior to any
security interests or liens of Agent. If for any reason Bank is unable to recover payment in full
in the manner provided in the preceding sentence, then Agent shall pay the amount of such returned
or dishonored Receipt within fifteen (15) business days of receipt of written demand for payment
from Bank.
SET-OFF. Except to the extent expressly set forth in the sections “Fees” and “Uncollected Funds”
above, Bank agrees that prior to the effective date of a termination of this Agreement, Bank will
not exercise or claim any right of set-off or recoupment against any Blocked Account and the
Receipts. And, as to Agent, Bank hereby waives until the effective date of termination of this
Agreement, any right of set-off and any right of recoupment which it may have against the Receipts.
STATEMENTS, CONFIRMATIONS AND NOTICES OF ADVERSE CLAIMS. Upon Agent’s written request, Bank will
send copies of all statements and confirmations for the Blocked Accounts simultaneously to Company
and Agent. Bank will use reasonable efforts to notify promptly Agent and Company if any other
person claims that it has a property interest in the Blocked Accounts or funds therein.
BANK’S RESPONSIBILITY. Except for permitting a withdrawal, delivery or payment in violation of the
section entitled “Debtor’s Rights in Blocked Accounts,” Bank will not be liable to Agent for
complying with instructions or directions from Company that are received by Bank before Bank
receives and has a reasonable opportunity to act on a Notice of Exclusive Control. Bank will not be
liable to Company for complying with a Notice of Exclusive Control or with instructions or
directions originated by Agent, even if Company notifies Bank that Agent is not legally entitled to
issue the instructions or directions or Notice of Exclusive Control, unless Bank takes the action
after it is served with an injunction, restraining order or other legal process
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enjoining it from doing so, issued by a court of competent jurisdiction, and had a reasonable
opportunity to act on the injunction, restraining order or other legal process, or Bank acts in
collusion with Agent in violating Company’s rights.
This agreement does not create any obligation of Bank except for those expressly set forth in this
agreement. In particular, Bank need not investigate whether Agent is entitled under Agent’s
agreements with Company to give instructions or directions or a Notice of Exclusive Control. Bank
may rely on notices and communications which it believes have been given by the appropriate party.
EXCULPATION OF BANK; INDEMNITY; INTERPLEADER. The Bank undertakes to perform only such duties as
are expressly set forth in this Agreement and to deal with the Blocked Account with the degree of
skill and care that the Bank accords to all accounts and funds maintained and held by it on behalf
of its customers. Company and Agent agree that Bank shall have no liability to either of them, and
shall have no liability to any of their respective shareholders, directors, executives, officers,
members, managers, partners, employees or agents, for any claims, losses, damages and costs and
expenses that either, both or any combination of Company, Agent and their respective shareholders,
directors, executives, officers, members, managers, partners, employees or agents may suffer or
incur, either directly or indirectly, by reason of this Agreement or Bank’s performance or
non-performance under this Agreement, unless occasioned by the gross negligence or willful
misconduct of Bank. In no event shall Bank be liable for (i) any claims, losses, damages or costs
and expenses resulting from computer malfunctions, computer viruses or system intrusions,
interruption of communication facilities, labor difficulties, governmental actions affecting Bank
and other similarly situated financial institutions, acts of war, terrorism or civil disobedience,
acts typically falling within the concept of “Acts of God” or other causes beyond Bank’s reasonable
control and (ii) indirect, special, consequential or punitive damages.
Company agrees to indemnify and hold harmless Bank and its shareholders, directors, executives,
officers, employees and agents from and against any and all claims, losses, damages and costs and
expenses suffered or incurred by any one or more of Bank and its shareholders, directors,
executives, officers, employees or agents as a result of the assertion of any claim by any person
arising out of, or otherwise related to this Agreement or any transaction conducted or service
provided by Bank pursuant to this Agreement, other than those ultimately determined to be founded
on gross negligence or willful misconduct of Bank.
If a bankruptcy or insolvency proceeding shall be instituted by or against Company, or if any third
person should assert an adverse claim against any of the Blocked Accounts, whether such a claim
arises by tax lien, execution, attachment, garnishment, levy, the claim of a trustee in bankruptcy
or a debtor-in-possession, the claim of a competing lien creditor or otherwise, and Bank determines
that its interests may be prejudiced or harmed in any respect if it takes any one or more of the
actions contemplated by this Agreement with respect to the Blocked Accounts then Bank, in addition
to any other remedies it may possess under this Agreement, at law and in equity, may refrain from
taking any of such actions and may interplead into the registry of an appropriate state or federal
court situated in the State whose laws govern this Agreement as set forth below, all amounts then
on deposit in the Blocked Accounts, all Receipts then in its possession and all Receipts received
thereafter by Bank. The cost and expense of such
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interpleader shall be borne by Company. In the event of an interpleader in accordance with the
foregoing sentences of this subparagraph, Agent’s security interest in the Blocked Account shall
continue unaffected by the interpleader and Bank’s performance obligations under this Agreement
shall xxxxx except for forwarding of Receipts received by it to the court in which such
interpleader was brought. Upon such interpleader, the Bank will be fully acquitted and discharged
from all liability hereunder to Agent and Company for any obligation performable by the Bank for
the first time after the filing of such interpleader and the Bank, at any time after the filing of
the interpleader, may terminate all of its performance obligations under this Agreement by giving
notice of such termination to Agent and Company fifteen (15) calendar days prior to the effective
date of termination of its obligations, as specified in the notice. Upon receipt of notice from
Bank that it is terminating its performance obligations under this Agreement, Agent may, in
addition to its other rights and remedies and without terminating this Agreement, appoint another
person to succeed to Bank’s position under this Agreement.
TERMINATION; SURVIVAL. The rights and powers granted herein to Agent have been granted in order to
perfect its security interest in the Account, are powers coupled with an interest and will not be
affected by the bankruptcy of Company or by the lapse of time. Agent may terminate this agreement
by notice to Bank and Company. Bank may terminate this agreement on 30 days’ notice to Agent and
Company. In the event of the notice of termination of this Agreement by Bank, it shall promptly
deliver to Agent (or its nominee) all funds on deposit in the Account on the effective date of
termination. Any liability or obligation of Bank which arises prior to or upon the termination of
this Agreement shall survive the termination of this Agreement. If Agent notifies Bank that
Agent’s security interest in the Blocked Accounts has terminated, this agreement will immediately
terminate. The section entitled “Exculpation of Bank; Indemnity; Interpleader” will survive
termination of this Agreement.
MISCELLANEOUS PROVISIONS. Governing Law. This Agreement and the Blocked Accounts will be governed
by the laws of the State of Georgia. Bank and Company may not change the law governing the Blocked
Accounts without Agent’s express written agreement. Entire Agreement. This Agreement is the
entire agreement, and supersedes any prior agreements and contemporaneous oral agreements, of the
parties concerning its subject matter. Amendments. No amendment of, or waiver of a right under,
this Agreement will be binding unless it is in writing and signed by each party hereto.
Severability. To the extent a provision of this Agreement is unenforceable, this Agreement will be
construed as if the unenforceable provision were omitted. Successors and Assigns. A successor to
or assignee of Agent’s rights and obligations under the security agreement between Agent and
Company will succeed to Agent’s rights and obligations under this Agreement. Conflicting
Agreements. In the event of a conflict between this Agreement and any other agreement between Bank
and Company, the terms of this Agreement shall prevail. Notices. All notices, requests or other
communications given to Company, Bank or Agent shall be given in writing (including by facsimile)
at the address specified below:
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Agent:
|
Citibank, N.A., Agency and Trust | ||
| 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxx 0 | |||
| Xxx Xxxx, XX 00000 | |||
Attention:
|
Xxxxxxxx Xxxxxxx, AVP | ||
Telephone:
|
(000) 000-0000 | ||
Facsimile:
|
(000) 000-0000 | ||
Bank:
|
Wachovia Bank, National Association | ||
| 0000 Xxxxxxxxx Xxxx, XX0000 | |||
| Xxxxx 000 | |||
| Xxxxxxx, XX 00000 | |||
Attention:
|
Xxxxxxx X. Xxxxxx | ||
Telephone:
|
(404) 000- 0000 | ||
Facsimile:
|
(000) 000-0000 | ||
| and | |||
| Wachovia Bank, National Association | |||
| Mail Code VA7391 | |||
| 00 Xxxxx Xxxxxxxxx Xxxxxx | |||
| Xxxxxxx, XX 00000 | |||
Company:
|
World Airways, Inc. | ||
| HLH Building | |||
| 000 Xxxxx Xxxxx | |||
| Xxxxxxxxx Xxxx, XX 00000 | |||
| Attention: General Counsel | |||
| Telephone: (000) 000-0000 | |||
| Facsimile: (000) 000-0000 |
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the parties has executed and delivered this Blocked Account Agreement
as of the day and year first above set forth.
| WACHOVIA BANK, NATIONAL ASSOCIATION | ||||||
| By: Name: |
/s/ Xxxxxxx X. Xxxxxx
|
|||||
| Title: | Vice President | |||||
| WORLD AIRWAYS, INC. | ||||||
| By: Name: |
/s/ Xxxxxxxx X. Xxxxxx, Xx.
|
|||||
| Title: | Chief Financial Officer | |||||
| CITIBANK, N.A., as Agent | ||||||
| By: Name: |
/s/ Xxxxxxxx Xxxxxxx
|
|||||
| Title: | Assistant Vice President | |||||
Signature Page to Blocked Account Agreement
Schedule 1
| Account No. | Description | |
2050000594577
|
Master Account | |
2079900512986
|
Corporate Checking Controlled Disbursement Account | |
2079920018648
|
Payroll Account | |
2079920018651
|
Accounts Payable Account | |
2079930007733
|
Captains Checks | |
2079930007746
|
Maintenance Checks | |
2079930007759
|
Ground Operations | |
2050000598968
|
World Airways | |
5025492677
|
Trust Account |
EXHIBIT A
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