EXHIBIT 10
AMENDMENT NO. 1
TO
CREDIT AGREEMENT
AMENDMENT NO. 1 TO CREDIT AGREEMENT, dated as of May 31, 2005
(this "Amendment"), to the Credit Agreement, dated as of November 30, 2004 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among DELTA AIR LINES, INC., a Delaware corporation (the
"Borrower"), the other Credit Parties signatory thereto, GENERAL ELECTRIC
CAPITAL CORPORATION, as administrative agent for Revolving Lenders (in such
capacity, the "Revolving Facility Administrative Agent"), as administrative
agent for Term Lenders (in such capacity, the "Term Loan Administrative Agent")
and as collateral agent for Lenders (in such capacity, the "Collateral Agent"
and, collectively with the Revolving Facility Administrative Agent and the Term
Loan Administrative Agent, the "Agents"), and the Lenders and L/C Issuers
signatory thereto from time to time. Capitalized terms used herein without
definition shall have the respective meanings ascribed to those terms in the
Credit Agreement.
WITNESSETH:
WHEREAS, the Borrower has requested an amendment to the
Credit Agreement as herein set forth; and
WHEREAS, the Borrower, the Agents and the Lenders signatory
hereto have agreed to amend the Credit Agreement on the terms and subject to
the conditions herein provided; and
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Amendments to the Credit Agreement. As of the Effective
Date, the Credit Agreement is hereby amended by deleting Annex G to the Credit
Agreement in its entirety and inserting in lieu thereof Exhibit A attached
hereto.
Section 2. Conditions to Effectiveness. This Amendment shall become
effective as of the date hereof (the "Effective Date") upon receipt by the
Administrative Agents of the following:
(a) Counterparts of this Amendment duly executed by each
of the Agents, the Requisite Lenders and each of the Credit Parties;
(b) Such other items from the Credit Parties as the
Administrative Agents may reasonably request in writing; and
(c) All fees and expenses of the Agents and the Lenders
due and payable by the Borrower pursuant to the Loan Documents as of the date
hereof, including, without limitation, all costs, fees and expenses of the
Agents and Lenders in connection with the preparation, execution and delivery
of this Amendment, including the reasonable fees and out-of-pocket expenses of
counsel for the Agents with respect thereto.
Section 3. Representations and Warranties. Each Credit Party hereby
jointly and severally represents and warrants to the Agents and each Lender,
with respect to all Credit Parties, as follows:
(a) After giving effect to this Amendment, each of the
representations and warranties in the Credit Agreement and in the other Loan
Documents are true and correct in all material respects on and as of the date
hereof as though made on and as of such date, except to the extent that any
such representation or warranty expressly relates to an earlier date and except
for changes therein expressly permitted by the Credit Agreement.
(b) The execution, delivery and performance by each
Credit Party of this Amendment have been duly authorized by all requisite
corporate, limited liability company or limited partnership action on the part
of such Credit Party and will not violate any of the articles of incorporation
or bylaws (or other constituent documents) of such Credit Party.
(c) This Amendment has been duly executed and delivered
by each Credit Party, and each of this Amendment and the Credit Agreement as
amended hereby constitutes the legal, valid and binding obligation of such
Credit Party, enforceable against such Credit Party in accordance with their
terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally and by general principles of equity.
(d) After giving effect to this Amendment, no Default or
Event of Default has occurred and is continuing as of the date hereof.
Section 4. Reference to and Effect on the Loan Documents.
(a) As of the Effective Date, each reference in the
Credit Agreement and the other Loan Documents to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import shall mean and be a reference to the
Credit Agreement as amended hereby.
(b) Except to the extent amended hereby, the Credit
Agreement and all of the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any Default or Event of Default or
any right, power, privilege or remedy of the Administrative Agent, the
Collateral Agent, any Lender or any L/C Issuer under the Credit Agreement or
any Loan Document, or constitute a waiver of any
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provision of the Credit Agreement or any Loan Document, except as and to the
extent expressly set forth herein.
(d) The Credit Parties hereby confirm that the security
interests and liens granted pursuant to the Loan Documents continue to secure
the Obligations as set forth in the Loan Documents and that such security
interests and liens remain in full force and effect.
Section 5. Fees. As consideration for the execution of this Amendment,
the Borrower agrees to pay to the applicable Administrative Agent for the
account of each Lender for which such Administrative Agent shall have received
(by facsimile or otherwise) an executed signature page (or a release from
escrow of a signature page previously delivered in escrow) for this Amendment,
or a written consent to this Amendment, by 5 p.m. (New York Time) on May 27,
2005 (or such later date or time as the Administrative Agents and the Borrower
may agree), an amendment fee equal to 0.20% of such Lender's aggregate
Commitments then in effect.
Section 6. Costs and Expenses. As provided in Section 11.3 (Fees and
Expenses) of the Credit Agreement, the Borrower agrees to reimburse the Agents
for all reasonable fees, costs and expenses, including the reasonable fees,
costs and expenses of counsel or other advisors for advice, assistance or other
representation in connection with this Amendment.
Section 7. Governing Law. This Amendment and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
Section 8. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of
this Amendment for any other purposes.
Section 9. Counterparts. This Amendment 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 instrument. Receipt by the
Administrative Agents of a facsimile copy of an executed signature page hereof
shall constitute receipt by the Administrative Agents of an executed
counterpart of this Amendment.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this Amendment as of the
date first above written.
DELTA AIR LINES, INC.,
as Borrower
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President -
Treasurer
GENERAL ELECTRIC CAPITAL CORPORATION,
as Revolving Facility Administrative
Agent, Term Loan Facility
Administrative Agent, Collateral
Agent and Lender
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx
Duly Authorized Signatory
[THE AMENDMENT NO. 1 WAS ALSO EXECUTED
BY THE OTHER CREDIT PARTIES AND LENDERS]
ANNEX G (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrower shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP consistently applied:
(a) Maximum Net Capital Expenditures. Borrower and its Subsidiaries on
a consolidated basis shall not make Net Capital Expenditures during the any
Fiscal Quarter that exceed in the aggregate the amounts set forth opposite each
such Fiscal Quarter below:
Fiscal Quarter Net Capital Expenditures
-------------- ------------------------
(in millions)
November - December 2004 127.6
January - March 2005 155.3
April - June 2005 144.4
July - September 2005 138.9
October - December 2005 138.9
January - March 2006 188.3
April - June 2006 178.9
July - September 2006 175.8
October - December 2006 169.2
January - March 2007 167.4
April - June 2007 153.9
July - September 2007 160.9
October - November 2007 109.7
; provided, however, that the amount of Net Capital Expenditures referenced
above will be increased in any period by the positive amount (if any), equal to
the difference obtained by taking the Net Capital Expenditures limits specified
above for all prior periods minus the actual amount of any Net Capital
Expenditures expended during all such prior periods (the "Carry Over Amount").
(b) Minimum EBITDAR. Borrower and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Month set forth below,
EBITDAR for the 12-month period then ended (or with respect to each Fiscal Month
ended on or prior to October 31, 2005, the period commencing on November 1, 2004
and ending on the last day of such Fiscal Month) of not less than the amount set
forth below opposite such Fiscal Month (the "Required EBITDAR") unless (i) the
Excess Aggregate Cash On Hand as of such date is not less than $100,000,000 and
(ii) (A) the difference of (x) the Required EBITDAR for such period minus (y)
the actual EBITDAR for such period does not exceed (B) the lesser of (x) 50% of
the Excess Aggregate Cash On Hand and (y) (1) $175,000,000 for the period from
March 1, 2005 until October 31, 2005 and (2) $150,000,000 thereafter.
Fiscal Month EBITDAR
------------ -------
May 2005 $ 135,000,000
June 2005 $ 302,000,000
July 2005 $ 498,000,000
August 2005 $ 647,000,000
September 2005 $ 658,000,000
October 2005 $ 757,000,000
November 2005 $ 831,000,000
December 2005 $ 860,000,000
January 2006 $ 936,000,000
February 2006 $1,011,000,000
March 2006 $1,088,000,000
April 2006 $1,211,000,000
May 2006 $1,287,000,000
June 2006 $1,347,000,000
July 2006 $1,341,000,000
August 2006 $1,368,000,000
September 2006 $1,411,000,000
October 2006 $1,437,000,000
November 2006 $1,497,000,000
December 2006 $1,558,000,000
January 2007 $1,617,000,000
February 2007 $1,674,000,000
March 2007 $1,728,000,000
April 2007 $1,774,000,000
May 2007 $1,818,000,000
June 2007 $1,855,000,000
July 2007 $1,886,000,000
August 2007 $1,922,000,000
September 2007 $1,950,000,000
October 2007 $1,980,000,000
November 2007 $2,008,000,000
"Excess Aggregate Cash On Hand" means, as of any date, the amount by
which the actual Aggregate Cash On Hand as of such date exceeds the
minimum Aggregate Cash On Hand required to be maintained on such date
by Section (d) of this Annex G.
(c) Cash Collateral On Hand. The Credit Parties shall maintain
Cash Collateral On Hand of at least:
(i) at all times from the Initial Funding Date through
October 31, 2005, $650,000,000;
(ii) at all times from November 1, 2005 through February
28, 2006, $550,000,000; and
(iii) at all times thereafter until the Commitment
Termination Date, $650,000,000.
(d) Aggregate Cash On Hand. The Delta Companies shall maintain at
all times Aggregate Cash On Hand of at least $1,000,000,000.
If on any date of determination of Cash Collateral On Hand or
Aggregate Cash On Hand, any Delta Company has contractually agreed (i) to post
cash collateral for the benefit of any third party or (ii) that payments
otherwise owing to it by a third party shall be subject to a holdback, in each
case in an amount exceeding $125,000,000, such amount shall not be included in
any calculation of Cash Collateral On Hand or Aggregate Cash On Hand on such
date of determination to the extent such obligation to post cash collateral or
such holdback will become effective within ninety (90) days of such date of
determination; provided, that in no event shall any determination of Cash
Collateral On Hand or Aggregate Cash On Hand exclude the amount of cash
collateral or any holdback to be provided (x) in connection with any aircraft or
equipment financing or lease or (y) pursuant to any other agreement with GE
Capital or any of its affiliates until, in each case, actually so provided.
Unless otherwise specifically provided herein, any accounting term used in the
Agreement shall have the meaning customarily given such term in accordance with
GAAP, and all financial computations hereunder shall be computed in accordance
with GAAP consistently applied. That certain items or computations are
explicitly modified by the phrase "in accordance with GAAP" shall in no way be
construed to limit the foregoing. If any "Accounting Changes" (as defined below)
occur and such changes result in a change in the calculation of the financial
covenants, standards or terms used in the Agreement or any other Loan Document,
then Borrower, Administrative Agents and Lenders agree to enter into
negotiations in order to amend such provisions of the Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating Borrower's and its Subsidiaries' financial condition
shall be the same after such Accounting Changes as if such Accounting Changes
had not been made; provided, however, that the agreement of Requisite Lenders to
any required amendments of such provisions shall be sufficient to bind all
Lenders. "Accounting Changes" means (i) changes in accounting principles
required by the promulgation of any rule, regulation, pronouncement or opinion
by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants (or successor thereto or any agency with similar
functions), (ii) changes in accounting principles concurred in by Borrower's
certified public accountants; (iii) purchase accounting adjustments under A.P.B.
16 or 17 and EITF 88-16, and the application of the accounting principles set
forth in FASB 109, including the establishment of reserves pursuant thereto and
any subsequent reversal (in whole or in part) of such reserves; and (iv) the
reversal of any reserves established as a result of purchase accounting
adjustments. All such adjustments resulting from expenditures made subsequent to
the Closing Date (including capitalization of costs and expenses or payment of
pre-Closing Date liabilities) shall be treated as expenses in the period the
expenditures are made and deducted as part of the calculation of EBITDAR in such
period. If Administrative Agents, Borrower and Requisite Lenders agree upon the
required amendments, then after appropriate amendments have been executed and
the underlying
Accounting Change with respect thereto has been implemented, any reference to
GAAP contained in the Agreement or in any other Loan Document shall, only to the
extent of such Accounting Change, refer to GAAP, consistently applied after
giving effect to the implementation of such Accounting Change. If Administrative
Agents, Borrower and Requisite Lenders cannot agree upon the required amendments
within thirty (30) days following the date of implementation of any Accounting
Change, then all Financial Statements delivered and all calculations of
financial covenants and other standards and terms in accordance with the
Agreement and the other Loan Documents shall be prepared, delivered and made
without regard to the underlying Accounting Change. For purposes of Section 8.1,
a breach of a Financial Covenant contained in this Annex G shall be deemed to
have occurred as of any date of determination by Administrative Agents or as of
the last day of any specified measurement period, regardless of when the
Financial Statements reflecting such breach are delivered to Administrative
Agents.
