AMENDMENT NO. 2 TO WAIVER TO LOAN AGREEMENT
Exhibit 10.7
AMENDMENT NO. 2 TO WAIVER TO LOAN AGREEMENT
THIS AMENDMENT NO. 2 TO WAIVER TO LOAN AGREEMENT, dated as of December 15, 2005 (this
“Waiver”), is made and entered into by and among World Airways, Inc., a Delaware
corporation (the “Borrower”), North American Airlines, Inc., a Delaware corporation
(“North American”), World Air Holdings, Inc., a Delaware Corporation (the “Parent”)
and the Air Transportation Stabilization Board (the “Board”). Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such terms in the Loan
Agreement (as such term is defined below).
W I T N E S S E T H:
WHEREAS, the Borrower, North American, the Parent, World Airways Parts Company, LLC, Govco
Incorporated, as Primary Tranche A Lender, Citicorp North America, Inc., as Govco Administrative
Agent, the other lenders party thereto, Citibank, N.A., as Agent, Citibank, N.A., as Collateral
Agent, International Lease Finance Corporation, as Supplemental Guarantor, Phoenix American
Financial Services, Inc., as Loan Administrator and the Board are parties to that certain Loan
Agreement dated as of December 30, 2003 (the “Original Loan Agreement”), as amended by that
certain Amendment No. 1 and Waiver to the Loan Agreement dated as of April 27, 2005 (the
“Amendment”, and together with the Original Loan Agreement, the “Loan Agreement”);
WHEREAS, the Parent previously advised the Agent, the Loan Administrator and the Board that
the Obligors were in default of the covenants set forth in (i) Section 3.1(f) of each of Warrant
D-1-1 and Warrant D-1-4, each dated January 10, 2005 in favor of the Board (collectively referred
to hereinafter as the “Warrants”), (ii) Section 5.1(b)(i)(A) of the Loan Agreement and
(iii) Section 5.6 of the Loan Agreement, which each constitute an Event of Default under the Loan
Agreement pursuant to Section 7.1(e) thereof, in each case caused by the Obligors’ inability to
deliver a complete independent auditor review with respect to North American’s financial statements
(such defaults collectively referred to hereinafter as the “Initial Defaults”);
WHEREAS, the Parent requested that the Board waive the Initial Defaults and the Board granted
such waiver pursuant to that certain Waiver to Loan Agreement dated October 28, 2005 (the
“Initial Waiver”) for the period from the date of the Initial Waiver through November 21,
2005 (the “Initial Waiver Period”);
WHEREAS, the Parent requested that the Board extend the expiration date of the Initial Waiver
Period to December 15, 2005 (the “Subsequent Waiver Period”) and the Board granted such
waiver pursuant to that certain Amendment No. 1 to Waiver to Loan Agreement dated November 30, 2005
(the “First Amendment”);
WHEREAS, the Parent has advised the Agent, the Loan Administrator and the Board that that the
Obligors are in default of the covenants set forth in (i) Section 3.1(f) of each of the Warrants,
(ii) Section 5.1(b)(i)(A) of the Loan Agreement and (iii) Section 5.6 of the Loan Agreement, which
each constitute an Event of Default under the Loan Agreement pursuant to
Section 7.1(e) thereof, in each case caused by Holdings’ failure to file Form 10-Q for the
third quarter ended September 30, 2005 with the Securities and Exchange Commission (such defaults
collectively referred to hereinafter as the “Additional Defaults”);
WHEREAS, the Parent has advised the Agent, the Loan Administrator and the Board that the
Initial Defaults continue to exist and has requested that the Board amend the First Amendment in
order to extend the expiration date of the Subsequent Waiver Period to and to grant a waiver of the
Additional Defaults through January 4, 2006;
WHEREAS, pursuant to Section 10.1 of the Loan Agreement, so long as the Board Guarantee is in
full force and effect and has not been terminated without a payment having been made thereunder,
the Board may, in its sole discretion, consent to the amendment, modification or waiver of certain
provisions of (i) the Loan Agreement, including Section 5.1(b)(i)(A) and Section 5.6 thereof and
(ii) the Warrants, including Section 3.1(f) thereof; and
WHEREAS, the Board is willing to amend the First Amendment as requested by the Parent pursuant
to the terms and subject to the conditions set forth herein.
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants contained
herein, and for other good and valuable consideration, the receipt, adequacy and legal sufficiency
of which are hereby acknowledged, the parties do hereby agree as follows:
Section 1. Amendment. Subject to the terms and conditions of this Waiver, Section 1
of the First Amendment is hereby amended by substituting “January 4, 2006” for “December 15, 2005”.
Section 2. Limited Waiver. Subject to the terms and conditions of this Waiver, the
Board hereby waives the Additional Defaults during the period from the date hereof through January
4, 2006 (the “Additional Waiver Period”). The foregoing limited waiver shall not be
construed to impair the ability of the Board to enforce any of its rights, powers or remedies in
any manner except as set forth in the preceding sentence, including, without limitation: (i) after
the Additional Waiver Period, regardless of whether or not such enforcement relates to an event
taking place during the Additional Waiver Period, or (ii) during the Additional Waiver Period for
Defaults or Events of Default other than the Initial Defaults or the Additional Defaults.
Section 3. Representations and Warranties. The Obligors each represent and warrant to
the Board as follows:
(a) this Waiver has been duly authorized, executed and delivered by it and constitutes its
legal, valid and binding obligation, enforceable in accordance with its terms;
(b) all of the representations and warranties in the Loan Agreement, after giving effect to
this Waiver, are true and correct in all material respects (except that any representation and
warranty that is qualified as to “materiality” shall be true and correct in all respects) on and as
of the date hereof as if made on the date hereof (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific date); and
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(c) after giving effect to this Waiver, no Default or Event of Default has occurred and is
continuing.
Section 4. No Waiver; Remedies. Except as expressly set forth herein, this Waiver
shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect
the rights and remedies of the Board or the Obligors under the Loan Agreement or any other Loan
Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Loan Agreement, any other Loan Document or
the Board Guarantee, all of which are ratified and affirmed in all respects and shall continue in
full force and effect. Nothing contained herein shall be deemed to entitle the Obligors to a
consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions,
obligations, covenants or agreements contained in the Loan Agreement or any other Loan Document in
similar or different circumstances. This Waiver shall constitute a “Loan Document” for all
purposes of the Loan Agreement and the other Loan Documents.
Section 5. Headings. The headings set forth in this Waiver are and shall be without
substantive meaning or content of any kind whatsoever and are not a part of the agreement between
the parties hereto.
Section 6. Severability. In case any provision in or obligation under this Waiver
shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
Section 7. Counterparts. This Waiver may be executed in any number of counterparts
and by the 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.
Signature pages may be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are attached to the same document. Delivery of an executed
signature page of this Waiver by facsimile transmission shall be as effective as delivery of a
manually executed counterpart hereof.
Section 8. Governing Law. This Waiver and the rights and obligations of the parties
hereto shall be governed by, and construed in accordance with, the law of the State of New York;
provided, that the rights and obligations of the Board hereunder (whether as guarantor or
lender) shall be governed by, and construed in accordance with, the Federal law of the United
States of America, if and to the extent such Federal law is applicable, and otherwise in accordance
with the law of the State of New York.
Section 9. Fees and Expenses. The Obligors agree to promptly pay, upon request, all
costs and expenses (including the reasonable fees and expenses of counsel) reasonably incurred by
the Board in connection with this Waiver.
[REMAINDER OF INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Waiver to be duly executed as of the date
first written above.
| WORLD AIRWAYS, INC. | |||||||
| By: | /s/ Xxxxx Xxxxxxx
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| Title: Vice President/Controller | |||||||
| WORLD AIR HOLDINGS, INC. | |||||||
| By: | /s/ Xxxxxxxx Xxxxx
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| Title: Acting Chief Financial Officer | |||||||
| NORTH AMERICAN AIRLINES, INC. | |||||||
| By: | /s/ Xxxxxxxxx X. Xxxxx
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| Title: Vice President/Controller | |||||||
| AIR TRANSPORTATION STABILIZATION BOARD | |||||||
| By: | /s/ Xxxx X. Xxxxxx
|
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| Title: Executive Director | |||||||
