AMENDED AND RESTATED CREDIT AGREEMENT
dated as of March 27, 2006
Among
AMERICAN AIRLINES, INC.,
as Borrower,
AMR CORPORATION,
as Parent Guarantor,
CITICORP USA, INC.,
as Administrative Agent,
JPMORGAN CHASE BANK, N.A.,
as Syndication Agent,
and
the Other Lenders Party Thereto.
CITIGROUP GLOBAL MARKETS INC. and X.X. XXXXXX SECURITIES INC.,
as Joint Lead Arrangers and Joint Book-Running Managers
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS 2
SECTION 1.02. COMPUTATION OF TIME PERIODS; OTHER DEFINITIONAL
PROVISIONS 26
SECTION 1.03. ACCOUNTING TERMS 26
SECTION 1.04. DEEMED REFERENCES 26
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE ADVANCES 26
SECTION 2.02. MAKING THE ADVANCES 28
SECTION 2.03. FEES 30
SECTION 2.04. TERMINATION OR REDUCTION OF THE COMMITMENTS 30
SECTION 2.05. REPAYMENT OF ADVANCES 31
SECTION 2.06. INTEREST 32
SECTION 2.07. CONVERSION OF ADVANCES 33
SECTION 2.08. PREPAYMENTS OF ADVANCES 33
SECTION 2.09. INCREASED COSTS, ETC. 34
SECTION 2.10. ILLEGALITY 36
SECTION 2.11. PAYMENTS AND COMPUTATIONS 36
SECTION 2.12. TAXES 38
SECTION 2.13. SHARING OF PAYMENTS, ETC. 40
SECTION 2.14. EVIDENCE OF DEBT 41
SECTION 2.15. USE OF PROCEEDS 42
SECTION 2.16. MITIGATION, SUBSTITUTION OF LENDER 42
SECTION 2.17. DEFAULTING LENDERS 42
ARTICLE III
CONDITIONS OF EFFECTIVENESS
SECTION 3.01. CONDITIONS PRECEDENT TO EFFECTIVENESS 45
SECTION 3.02. CONDITIONS PRECEDENT TO EACH BORROWING 46
SECTION 3.03. DETERMINATIONS UNDER SECTION 3.01 47
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER 47
SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF THE PARENT
GUARANTOR 51
ARTICLE V
COVENANTS OF THE LOAN PARTIES
SECTION 5.01. AFFIRMATIVE COVENANTS 52
SECTION 5.02. NEGATIVE COVENANTS 63
SECTION 5.03. FINANCIAL COVENANTS 65
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT 66
ARTICLE VII
PARENT GUARANTY
SECTION 7.01. GUARANTY 70
SECTION 7.02. GUARANTY ABSOLUTE 70
SECTION 7.03. WAIVERS AND ACKNOWLEDGMENTS 71
SECTION 7.04. SUBROGATION 72
SECTION 7.05. CONTINUING GUARANTY; ASSIGNMENTS 73
ARTICLE VIII
THE AGENT
SECTION 8.01. AUTHORIZATION AND ACTION 73
SECTION 8.02. AGENT'S RELIANCE, ETC. 74
SECTION 8.03. CUSA AND AFFILIATES 75
SECTION 8.04. LENDER CREDIT DECISION 75
SECTION 8.05. INDEMNIFICATION 75
SECTION 8.06. SUCCESSOR AGENT 76
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS, ETC. 77
SECTION 9.02. NOTICES, ETC. 77
SECTION 9.03. NO WAIVER; REMEDIES 79
SECTION 9.04. COSTS AND EXPENSES 79
SECTION 9.05. RIGHT OF SET-OFF 81
SECTION 9.06. BINDING EFFECT 81
SECTION 9.07. ASSIGNMENTS AND PARTICIPATIONS 82
SECTION 9.08. CONFIDENTIALITY 85
SECTION 9.09. RELEASE OF COLLATERAL 86
SECTION 9.10. GOVERNING LAW 86
SECTION 9.11. EXECUTION IN COUNTERPARTS 86
SECTION 9.12. JURISDICTION, ETC. 86
SECTION 9.13. WAIVER OF JURY TRIAL 87
ii
SCHEDULES
Schedule I - Commitments and Applicable Lending
Offices
Schedule 1.01 - Existing Capacity Agreements
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, approvals, actions,
notices and filings
Schedule 4.01(f) - Litigation
EXHIBITS
Exhibit A-1 - Form of Revolving Credit 1 Note
Exhibit A-2 - Form of Term 1 Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D-1 - Form of Compliance Certificate for the
Borrower
Exhibit D-2 - Form of Compliance Certificate for the Parent
Guarantor
iii
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT (this
"Agreement") dated as of March 27, 2006 among American Airlines,
Inc., a Delaware corporation (the "Borrower"), AMR Corporation, a
Delaware corporation ("AMR"), the Lenders (as hereinafter
defined) signatories hereto, Citicorp USA, Inc. ("CUSA"), as
Administrative Agent (the "Agent") for the Lenders, JPMorgan
Chase Bank, N.A., as Syndication Agent (the "Syndication Agent")
and Citigroup Global Markets Inc. and X.X. Xxxxxx Securities
Inc., as Joint Lead Arrangers and Joint Book-Running Managers
(collectively, the "Lead Arrangers").
PRELIMINARY STATEMENTS:
(1) The Borrower, AMR, certain banks, financial institutions
and other institutional lenders from time to time party thereto
(collectively, the "Pre-Amendment Lenders"), the Agent and the
Syndication Agent have entered into a Credit Agreement dated as
of December 17, 2004 (such Credit Agreement, as so amended prior
to the Restatement Effective Date, the "Existing Credit
Agreement"; capitalized terms used in these Preliminary
Statements but not otherwise defined shall be used herein as
defined in this Agreement).
(2) The Borrower desires to (i) increase the aggregate amount of
the Term Commitment to $448,000,000, (ii) reduce the aggregate
amount of the Revolving Credit Commitments to $325,000,000, and
(iii) refinance (a) outstanding Term Advances under the Existing
Credit Agreement with a new class of Term 1 Advances under this
Agreement and (b) outstanding Revolving Credit Advances under the
Existing Credit Agreement with a new class of Revolving Credit 1
Advances under this Credit Agreement and with a portion of the
new class of Term 1 Advances.
(3) Each Term Lender who executes and delivers this Agreement
shall be deemed, upon the Restatement Effective Date, to have
exchanged its Term Commitment and Term Advances (which Term
Commitment and Term Advances shall thereafter be deemed
terminated and deemed repaid and refinanced in full) for a Term 1
Commitment in the same aggregate principal amount as such Term
Lender's Term Commitment, as so terminated, and a Term 1 Advance
in the same aggregate principal amount as such Term Lender's Term
Advance, as so repaid, and such Term Lender shall thereafter
become a Term 1 Lender.
(4) Each Revolving Credit Lender who executes and delivers this
Agreement shall be deemed, upon the Restatement Effective Date,
to have exchanged its Revolving Credit Commitment and Revolving
Credit Advance (which Revolving Credit Commitment and Revolving
Credit Advance shall thereafter be deemed terminated and deemed
repaid and refinanced in full) for a Revolving Credit 1
Commitment in an amount equal to such Revolving Credit Lender's
Exchange Ratio times the aggregate amount of Revolving Credit 1
Commitments and a Revolving Credit 1 Advance in an amount equal
to such Revolving Credit Lender's Exchange Ratio times the
aggregate principal amount of Revolving Credit 1 Advances made on
the Restatement Effective Date, and such Revolving Credit Lender
shall thereafter become a Revolving Credit 1 Lender.
(5) Each Person who executes and delivers this Agreement as an
Additional Term 1 Lender will make, on the Restatement Effective
Date, a Term 1 Advance to the Borrower, the proceeds of which
will be used by the Borrower (i) to refinance in full the
outstanding principal amount of Term Advances of Term Lenders, if
any, who do not execute and deliver this Agreement, it being
understood that, prior to the Restatement Effective Date, an
Additional Term 1 Lender may be a Term Lender, and (ii) if
necessary, to refinance in part the outstanding principal amount
of Revolving Credit Advances of Revolving Credit Lenders.
(6) Each Person who executes and delivers this Agreement as an
Additional Revolving Credit 1 Lender will make, on the
Restatement Effective Date, a Revolving Credit 1 Advance to the
Borrower, the proceeds of which will be used by the Borrower to
refinance in full the outstanding principal amount of Revolving
Credit Advances of Revolving Credit Lenders, if any, who do not
execute and deliver this Agreement, it being understood that,
prior to the Restatement Effective Date, an Additional Revolving
Credit 1 Lender may be a Revolving Credit Lender.
(7) On the Restatement Effective Date, the Borrower shall pay to
each Term Lender and Revolving Credit Lender, as the case may be,
all accrued and unpaid interest on, respectively, its Term
Advance and Revolving Credit Advance, to but excluding the
Restatement Effective Date.
(8) Citigroup Global Markets Inc. and X.X. Xxxxxx Securities
Inc. shall act as Joint Lead Arrangers and Joint Book-Running
Managers for this Agreement.
(9) The Borrower, AMR, the Pre-Amendment Lenders signatory
hereto, the Additional Term 1 Lenders, the Additional Revolving
Credit 1 Lenders, the Agent and the Syndication Agent have agreed
to amend and restate the Existing Credit Agreement in its
entirety to read as set forth in this Amended and Restated Credit
Agreement.
NOW THEREFORE, in consideration of the mutual covenants
and agreements herein contained, the parties hereto covenant and
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Term. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"AA Collateral" means, collectively, (a) the
"Collateral" as such term is defined in the Aircraft
Security Agreement and (b) the "Collateral" as such term is
defined in the SGR Security Agreement (it being understood
that "Collateral" under the SGR Security Agreement shall, in
any case for purposes of this Agreement, consist of the
Narita Collateral).
"Additional Revolving Credit 1 Advance" has the meaning
specified in Section 2.01(b)(iii).
2
"Additional Revolving Credit 1 Commitment" means, with
respect to an Additional Revolving Credit 1 Lender, the
commitment of such Additional Revolving Credit 1 Lender to
make Additional Revolving Credit 1 Advances beginning on the
Restatement Effective Date, in an amount set forth next to
the name of such Additional Revolving Credit 1 Lender in the
Register on the Restatement Effective Date. The aggregate
amount of the Additional Revolving Credit 1 Commitments
shall equal an amount equal to the excess of (i) the
aggregate Revolving Credit Commitments in effect immediately
prior to the Restatement Effective Date minus $200,000,000
over (ii) the aggregate amount of Revolving Credit 1
Commitments of the Revolving Credit Lenders that execute and
deliver this Agreement on or prior to the Restatement
Effective Date.
"Additional Revolving Credit 1 Lender" means a Person
with an Additional Revolving Credit 1 Commitment to make
Additional Revolving Credit 1 Advances to the Borrower
beginning on the Restatement Effective Date, it being
understood that an Additional Revolving Credit 1 Lender may
be a Revolving Credit Lender.
"Additional Term 1 Advance" has the meaning specified
in Section 2.01(a)(ii).
"Additional Term 1 Commitment" means, with respect to
an Additional Term 1 Lender, the commitment of such
Additional Term 1 Lender to make Additional Term 1 Advances
on the Restatement Effective Date, in an amount set forth
next to the name of such Additional Term 1 Lender in the
Register on the Restatement Effective Date. The aggregate
amount of the Additional Term 1 Commitments shall equal an
amount equal to the excess of (i) the sum of the aggregate
principal amount of the Term Facility immediately prior to
the Restatement Effective Date plus $200,625,000 over (ii)
the aggregate amount of Term 1 Commitments of the Term
Lenders that execute and deliver this Agreement on or prior
to the Restatement Effective Date.
"Additional Term 1 Lender" means a Person with an
Additional Term 1 Commitment to make Additional Term 1
Advances to the Borrower on the Restatement Effective Date,
it being understood that an Additional Term 1 Lender may be
a Term Lender.
"Advance" means a Term 1 Advance or a Revolving Credit
1 Advance.
"Affiliate" means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by or
is under common control with such Person. For purposes of
this definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control
with") of a Person means the possession, direct or indirect,
of the power to direct or cause the direction of the
management and policies of such Person, whether through the
ownership of Voting Interests, by contract or otherwise.
"Agent" has the meaning specified in the recital of
parties to this Agreement.
"Agent's Account" means the account of the Agent
maintained by the Agent at Citibank, N.A., at its office at
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account No.
00000000, ABA #000000000, Account Name: Medium Term Finance,
3
Reference: American Airlines, or such other account of the
Agent as is designated in writing from time to time by the
Agent to the Borrower and the Lenders for such purpose.
"Aggregate Collateral Value" means, at any time, the
sum of (without duplication):
(a) with respect to Eligible Aircraft, 50% of the Aircraft
Value thereof; and
(b) with respect to Eligible Cash Collateral, the Cash
Collateral Value thereof;
provided, however, that (i) the Aircraft Value of MD-80
Aircraft constituting Eligible Aircraft included in the
calculation of Aggregate Collateral Value shall not exceed
30% of the Aircraft Value of the Eligible Aircraft at such
time, (ii) the Aircraft Value of Eligible Aircraft in
Temporary Storage included in the calculation of Aggregate
Collateral Value shall not exceed 10% of the Aircraft Value
of the Eligible Aircraft at such time and (iii) there shall
be excluded from the calculation of Aggregate Collateral
Value any Aircraft in Deep Storage.
"Agreement" has the meaning specified in the
introductory paragraph hereto.
"Agreement Value" means, for each Hedge Agreement, on
any date of determination, an amount determined by the Agent
equal to: (a) in the case of a Hedge Agreement documented
pursuant to the Master Agreement (Multicurrency-Cross
Border) published by the International Swap and Derivatives
Association, Inc. (the "Master Agreement"), the amount, if
any, that would be payable by any Loan Party or any of its
Subsidiaries to its counterparty to such Hedge Agreement, as
if (i) such Hedge Agreement was being terminated early on
such date of determination, (ii) such Loan Party or
Subsidiary was the sole "Affected Party", and (iii) the
Agent was the sole party determining such payment amount
(with the Agent making such determination pursuant to the
provisions of the form of Master Agreement); (b) in the case
of a Hedge Agreement traded on an exchange, the xxxx-to-
market value of such Hedge Agreement, which will be the
unrealized loss on such Hedge Agreement to the Loan Party or
Subsidiary of a Loan Party party to such Hedge Agreement
determined by the Agent based on the settlement price of
such Hedge Agreement on such date of determination; or (c)
in all other cases, the xxxx-to-market value of such Hedge
Agreement, which will be the unrealized loss on such Hedge
Agreement to the Loan Party or Subsidiary of a Loan Party
party to such Hedge Agreement determined by the Agent as the
amount, if any, by which (i) the present value of the future
cash flows to be paid by such Loan Party or Subsidiary
exceeds (ii) the present value of the future cash flows to
be received by such Loan Party or Subsidiary pursuant to
such Hedge Agreement; capitalized terms used and not
otherwise defined in this definition shall have the
respective meanings set forth in the above described Master
Agreement.
"Aircraft" means at any time, the Airframes and Engines
set forth on Schedule 1 to the Aircraft Security Agreement,
as supplemented or amended from time to time in accordance
with Section 5.01(n), including from and after the Effective
Date, the Airframes and Engines described in the Security
Agreement Supplement originally executed and delivered under
4
the Aircraft Security Agreement and any Replacement Airframe
or Replacement Engine substituted for any collateral in
accordance with Section 5.01(n), whether or not, in the case
of any such Engines, such initial Engines or Replacement
Engines may from time to time be installed on such Airframe
or installed on any other airframe or any other aircraft.
The term "Aircraft" shall include any Replacement Aircraft.
"Aircraft Security Agreement" means the aircraft
security agreement in substantially the form of Exhibit D to
the Existing Credit Agreement, together with each other
security agreement and security agreement supplement
delivered from time to time pursuant to Section 5.01(n) of
the Existing Credit Agreement or Section 5.01(n) hereof, in
each case as amended.
"Aircraft Value" means, at any time, with respect to
any Aircraft, the current market value, as reflected in the
Appraisal Report then most recently delivered to the Agent
with respect to such Aircraft.
"Airframe" means (a) each of the Unencumbered Stage 3
Aircraft (except the Engines or engines from time to time
installed thereon) listed on Schedule 1 to the Aircraft
Security Agreement, as supplemented or amended from time to
time in accordance with Section 5.01(n) and (b) any and all
Parts so long as the same shall be incorporated or installed
in or attached to such aircraft.
"AMR" has the meaning specified in the recital of
parties to this Agreement.
"AMR Collateral" means the "Collateral" as such term is
defined in the Pledge Agreement.
"AMR Subsidiary" means any corporation of which AMR
owns or controls, directly or indirectly, more than 50% of
the Voting Interests.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of
a Base Rate Advance and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means (a) in respect of the Term 1
Facility, 3.25% per annum, in the case of Eurodollar Rate
Advances, and 2.25% per annum, in the case of Base Rate
Advances, and (b) in respect of the Revolving Credit 1
Facility a percentage per annum to be determined by
reference to the Pricing Level as set forth below:
5
Pricing Applicable Applicable
Level Margin for Margin for
Eurodollar Base Rate
Rate Advances
Advances
Xxxxx 0 2.50% 1.50%
Xxxxx 0 3.00% 2.00%
Xxxxx 0 3.50% 2.50%
Xxxxx 0 4.00% 3.00%
"Appraisal Report" means (a) with respect to any
Aircraft or Engine, an extended desktop appraisal prepared
by an Appraiser, which does not include any on-site
inspection of such Aircraft or Engine or its maintenance
records, and which assumes its physical condition is average
for an aircraft or engine of its type and age and its
maintenance time status is at mid-life, mid-time, and (b)
with respect to the Narita Collateral, an appraisal report
prepared by an Appraiser in form and substance reasonably
satisfactory to the Agent (it being agreed that an Appraisal
Report substantially in the form of the Appraisal Report
delivered on the Effective Date shall be deemed to be
reasonably satisfactory to the Agent).
"Appraiser" means, in the case of Aircraft and Engines,
Airclaims Ltd., and in the case of the Narita Collateral,
Simat, Helliesen & Xxxxxxx, Inc., or in either case, if for
any reason such Person ceases or is unable at such time to
provide an appraisal of the type set forth under the
definition of "Appraisal Report" (including, without
limitation, by virtue of the fact that such Person ceases to
exist), such other independent appraiser as may be selected
by the Agent with the reasonable consent of the Borrower;
provided that if the Agent fails to select such an
independent appraiser within 5 Business Days after a request
by the Borrower to do so, the Borrower may designate such an
independent appraiser by notice to the Agent.
"Appropriate Lender" means, at any time, with respect
to either the Term 1 Facility or the Revolving Credit 1
Facility, a Lender that has a Commitment with respect to
such Facility at such time.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an Eligible
Assignee, and accepted by the Agent, in accordance with
Section 9.07 and in substantially the form of Exhibit C
hereto.
"Bankruptcy Code" means Chapter 11 of the Bankruptcy
Code (11 U.S.C. 101 et seq.), as amended or any successor
statutes thereto.
"Base Rate" means a fluctuating interest rate per annum
in effect from time to time, which rate per annum shall at
all times be equal to the highest of:
(a) the rate of interest announced publicly by Citibank,
N.A. in New York, New York, from time to time,as Citibank, N.A.'s base
rate;
6
(b) 1/2 of 1% per annum above the Federal Funds Rate; and
(c) the sum (adjusted to the nearest 1/4 of 1% or,
if there is no nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of
1% per annum, plus (ii) the rate obtained by dividing (A) the latest
three-week moving average of secondary market morning offering
rates in the United States for three-month certificates of
deposit of major United States money market banks, such three-
week moving average (adjusted to the basis of a year of 360 days)
being determined weekly on each Monday (or, if such day is not a
Business Day, on the next succeeding Business Day) for the three-
week period ending on the previous Friday by Citibank, N.A. on
the basis of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of New York
or, if such publication shall be suspended or terminated, on the
basis of quotations for such rates received by Citibank, N.A.
from three New York certificate of deposit dealers of recognized
standing selected by Citibank, N.A., by (B) a percentage equal to
100% minus the average of the daily percentages specified during
such three-week period by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement)
for Citibank, N.A. with respect to liabilities consisting of or
including (among other liabilities) three-month U.S. dollar non-
personal time deposits in the United States, plus (iii) the
average during such three-week period of the annual assessment
rates estimated by Citibank, N.A. for determining the then
current annual assessment payable by Citibank, N.A. to the
Federal Deposit Insurance Corporation (or any successor) for
insuring the U.S. dollar deposits of Citibank, N.A. in the United
States.
"Base Rate Advance" means an Advance that bears
interest as provided in Section 2.06(a)(i).
"Benefit Arrangement" means at any time an employee
benefit plan within the meaning of Section 3(3) of ERISA
which is not a Plan or a Multiemployer Plan and which is
maintained or otherwise contributed to by any member of the
ERISA Group.
"Borrower" has the meaning specified in the recital of
parties to this Agreement.
"Borrower's Account" means the account of the Borrower
maintained by the Borrower with JPMorgan Chase Bank, N.A. at
its office at Xxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Account No. 000-0-000000, or such other account as the
Borrower shall specify in writing to the Agent.
"Borrowing" means a Term 1 Borrowing or a Revolving
Credit 1 Borrowing.
"Business Day" means a day of the year on which banks
are not required or authorized by law to close in New York
City and, if the applicable Business Day relates to any
Eurodollar Rate Advances, on which dealings are carried on
in the London interbank market.
7
"Cash Collateral Account" has the meaning set forth in
the Aircraft Security Agreement.
"Cash Collateral Value" means, with respect to any cash
and/or Permitted Investments in or being deposited in or
credited to the Cash Collateral Account at any time, the
face value thereof.
"Cash Flow Coverage Ratio" means, with respect to any
period, the ratio of Covenant Cash Flow for such period to
Fixed Charges for such period.
"Change in Control" means such time as at any time, (i)
AMR shall cease to own directly 100% of the Equity Interests
in the Borrower; (ii) a "person" or "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Exchange Act),
other than an Employee Benefit Plan or any AMR Subsidiary,
shall become the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
more than 25% of the total voting power of all classes then
outstanding of AMR's Voting Interests; (iii) one or more
Employee Benefit Plans shall become in aggregate the
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of more than 40% of
the total voting power of all classes then outstanding of
AMR's Voting Interests or (iv) during any period of 24
consecutive months, individuals who at the beginning of such
period constitute AMR's Board of Directors (together with
any new director whose election by AMR's Board of Directors
or whose nomination for election by AMR's stockholders was
approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the
beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason
(other than death or disability) to constitute a majority of
the directors then in office.
"Change in Tax Law" means, with respect to any Lender,
a change in or amendment to the Internal Revenue Code or a
change in, or amendment to, or the entering into of, an
income tax treaty between the United States of America and
the jurisdiction where such Lender is a tax resident, or a
change in or amendment to the treasury regulations, or the
issuance of any rulings, in each case that occurred after
such Lender became a Lender; provided that in the case of
any Lender claiming exemption from Indemnified Taxes under
Section 871(h) or 881(c) of the Internal Revenue Code,
"Change in Tax Law" shall be limited to a change in or
amendment to the Internal Revenue Code that occurred after
such Lender became a Lender.
"Collateral" means the AA Collateral and the AMR
Collateral.
"Collateral Documents" means the Aircraft Security
Agreement, the SGR Security Agreement, the Pledge Agreement,
each of the collateral documents, instruments and
supplements delivered pursuant to Section 5.01(n)
(including, without limitation, the Security Arrangements),
and each other agreement to which the Borrower or the Parent
Guarantor is a party that creates or purports to create a
Lien in favor of the Agent for the benefit of the Secured
Parties.
8
"Commitment" means a Term 1 Commitment, an Additional
Term 1 Commitment, a Revolving Credit 1 Commitment or an
Additional Revolving Credit 1 Commitment.
"Communications" has the meaning specified in Section
9.02(b).
"Confidential Information" means information that any
Loan Party furnishes to the Agent or any Lender in a writing
designated as confidential, but does not include any such
information that is or becomes generally available to the
public or that is or becomes available to the Agent or such
Lender from a source other than the Loan Parties.
"Consolidated" refers to the consolidation of accounts
in accordance with GAAP.
"Consolidated Net Income" means, for any period, the
consolidated net income of the Parent Guarantor and its
Subsidiaries for such period, before dividends.
"Contractual Obligation" means, as to any Person, any
provision of any agreement, instrument or other undertaking
to which such Person is a party or by which it or any of its
property is bound.
"Conversion", "Convert" and "Converted" each refer to a
conversion of Advances of one Type into Advances of the
other Type pursuant to Section 2.07 or 2.10.
"Covenant Cash Flow" means, for any period,
Consolidated Net Income for such period, (i) excluding
therefrom (A) any extraordinary items of gain or loss for
such period, (B) any gain or loss of any other Person for
such period accounted for on the equity method, except to
the extent of cash distributions received during such period
and (C) any non-cash gains or losses for such period, (ii)
plus cash payments received (or minus cash payments made) by
the Parent Guarantor and its consolidated Subsidiaries
during such period in respect of such non-cash gains or
losses recognized in any previous fiscal quarter, (iii) plus
the aggregate amounts deducted in determining Consolidated
Net Income for such period in respect of (w) interest
expense (less capitalized interest), (x) without
duplication, income taxes, (y) depreciation and amortization
expense and (z) Rentals.
"CUSA" has the meaning specified in the recital of
parties to this Agreement.
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money (including obligations to reimburse any bank in
respect of amounts paid under a letter of credit or similar
instrument), (ii) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade
accounts payable arising in the ordinary course of business,
(iv) all obligations of such Person as lessee which are
capitalized in accordance with generally accepted accounting
principles, (v) all Debt of others secured by a Lien on any
asset of such Person, whether or not such Debt is assumed by
such Person, (vi) all Debt of others Guaranteed by such
Person, (vii) all Obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in
respect of any Equity Interests in such Person or any other
9
Person or any warrants, rights or options to acquire such
Equity Interests, valued, in the case of Redeemable
Preferred Interests, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid
dividends, (viii) all Obligations of such Person in respect
of Hedge Agreements, valued at the Agreement Value thereof,
and (ix) all Off-Balance Sheet Obligations of such Person.
"Deep Storage" for any Aircraft means that such
Aircraft has been stored (1) with a low expectation of a
return to service, sale or lease within one year and (2) in
a manner intended to minimize over a period of more than one
year the rate of environmental degradation of the structure
and components of such Aircraft during such period, in each
case, as such storage status is reported in good faith by
the Borrower to the Agent at the time of the applicable
appraisal.
"Default" means any Event of Default or any event that
would constitute an Event of Default but for the requirement
that notice be given or time elapse or both.
"Defaulted Advance" means, with respect to any Lender
at any time, the portion of any Advance required to be made
by such Lender to the Borrower pursuant to Section 2.01 or
2.02 at or prior to such time that has not been made by such
Lender or by the Agent for the account of such Lender
pursuant to Section 2.02(d) as of such time. In the event
that a portion of a Defaulted Advance shall be deemed made
pursuant to Section 2.17(a), the remaining portion of such
Defaulted Advance shall be considered a Defaulted Advance
originally required to be made pursuant to Section 2.01 on
the same date as the Defaulted Advance so deemed made in
part.
"Defaulted Amount" means, with respect to any Lender at
any time, any amount required to be paid by such Lender to
the Agent or any other Lender hereunder or under any other
Financing Document at or prior to such time that has not
been so paid as of such time, including, without limitation,
any amount required to be paid by such Lender to (a) the
Agent pursuant to Section 2.02(d) to reimburse the Agent for
the amount of any Advance made by the Agent for the account
of such Lender, (b) any other Lender pursuant to
Section 2.13 to purchase any participation in Advances owing
to such other Lender and (c) the Agent pursuant to Section
8.05 to reimburse the Agent for such Lender's ratable share
of any amount required to be paid by the Lender to the Agent
as provided therein. In the event that a portion of a
Defaulted Amount shall be deemed paid pursuant to Section
2.17(b), the remaining portion of such Defaulted Amount
shall be considered a Defaulted Amount originally required
to be paid hereunder or under any other Financing Document
on the same date as the Defaulted Amount so deemed paid in
part.
"Defaulting Lender" means, at any time, any Lender
that, at such time, (a) owes a Defaulted Advance or a
Defaulted Amount or (b) shall take any action or be the
subject of any action or proceeding of a type described in
Section 6.01(f).
"Disclosure Documents" means, at any time, the annual
report of the Borrower on Form 10-K (or any successor form)
most recently filed by it with the Securities and Exchange
Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act and the quarterly and current reports of the
10
Borrower on Form 10-Q or 8-K (or any successor forms), if
any, so filed with the Securities and Exchange Commission
since the filing of such most recently filed annual report.
"Dollars" and the "$" sign each means lawful currency
of the United States of America.
"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in
the Assignment and Acceptance pursuant to which it became a
Lender, as the case may be, or such other office of such
Lender as such Lender may from time to time specify to the
Borrower and the Agent.
"DOT" has the meaning specified in the SGR Security
Agreement.
"Effective Date" means December 17, 2004.
"Eligible Aircraft" means the Aircraft set forth on
Schedule 1 to the Aircraft Security Agreement as of the
Effective Date and such further Unencumbered Stage 3
Aircraft designated by the Borrower (including, without
limitation, any such Replacement Aircraft); provided,
however, that no such Aircraft or additional aircraft shall
be considered to be an Eligible Aircraft at any time unless
the Aircraft Security Agreement and the related filings of
such Aircraft Security Agreement (or any supplement thereto)
create a valid and perfected lien or security interest in
such aircraft (and all components thereof) in favor of the
Agent, on behalf of the Secured Parties, securing the
Secured Obligations, free and clear of all other Liens,
other than Permitted Liens.
"Eligible Assignee" means (i) a Lender; (ii) an
Affiliate of a Lender or (iii) any other Person approved by
the Agent, such approval not to be unreasonably withheld or
delayed, and, unless an Event of Default has occurred and is
continuing at the time any assignment is effected in
accordance with Section 9.07, the Borrower, such approval
not to be unreasonably withheld or delayed; provided,
however, that neither the Borrower nor an Affiliate of the
Borrower shall qualify as an Eligible Assignee.
"Eligible Cash Collateral" means any cash and/or
Permitted Investments on deposit in or credited to the Cash
Collateral Account in which the Agent, for the benefit of
the Secured Parties, shall have a valid and perfected lien
or security interest, free and clear of any other Liens.
"Employee Benefit Plan" means any "employee benefit
plan" (as defined in Section 3(3) of ERISA) maintained by
the Borrower, AMR or any Subsidiary of any thereof, or any
separate investment fund or any trust or funding vehicle
maintained thereunder.
"Engine" means each of the engines listed by
manufacturer's serial number on Schedule 1 to the Aircraft
Security Agreement, as supplemented or amended from time to
11
time in accordance with Section 5.01(n), together, in each
case, with any and all Parts so long as the same shall be
incorporated or installed in or attached thereto.
"Environmental Action" means any action, suit, demand,
demand letter, claim, notice of non-compliance or violation,
notice of liability or potential liability, investigation,
proceeding, consent order or consent agreement relating in
any way to any Environmental Law, any Environmental Permit
or Hazardous Material or arising from alleged injury or
threat to health, safety or the environment, including,
without limitation, (a) by any governmental or regulatory
authority for enforcement, cleanup, removal, response,
remedial or other actions or damages and (b) by any
governmental or regulatory authority or third party for
damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"Environmental Law" means any federal, state, local or
foreign statute, law, ordinance, rule, regulation, code,
order, writ, judgment, injunction, decree or judicial or
agency interpretation, policy or guidance relating to
pollution or protection of the environment, health, safety
or natural resources, including, without limitation, those
relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous
Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization
required under any Environmental Law.
"Equity Interests" means, with respect to any Person,
shares of capital stock of (or other ownership interests in)
such Person, warrants, options or other rights for the
purchase or other acquisition from such Person of shares of
capital stock of (or other ownership or profit interests in)
such Person, securities convertible into or exchangeable for
shares of capital stock of (or other ownership interests in)
such Person or warrants, rights or options for the purchase
or other acquisition from such Person of such shares (or
such other interests), and other ownership interests in such
Person (including, without limitation, partnership, member
or trust interests therein), whether voting or nonvoting,
and whether or not such shares, warrants, options, rights or
other interests are authorized or otherwise existing on any
date of determination.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"ERISA Group" means the Borrower and all members of a
controlled group of corporations and all trades or
businesses (whether or not incorporated) under common
control which, together with the Borrower, are treated as a
single employer under Section 414(b), (c) or (m) of the
Internal Revenue Code.
"Escrow Bank" has the meaning specified in Section
2.17(c).
"Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
12
"Eurodollar Lending Office" means with respect to any
Lender, the office of such Lender specified as its
"Eurodollar Lending Office" opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to the
Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for
all Eurodollar Rate Advances comprising part of the same
Borrowing, an interest rate per annum equal to the rate per
annum obtained by dividing (a) the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in U.S. dollars at 11:00
A.M. (London time) two Business Days before the first day of
such Interest Period for a period equal to such Interest
Period (provided that, if for any reason such rate is not
available, the term "Eurodollar Rate" shall mean, for any
Interest Period for all Eurodollar Rate Advances comprising
part of the same Borrowing, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Reuters Screen LIBO Page as the London interbank offered
rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of
such Interest Period for a term comparable to such Interest
Period); provided, however, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates) by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears
interest as provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest
Period for all Eurodollar Rate Advances comprising part of
the same Borrowing means the reserve percentage applicable
two Business Days before the first day of such Interest
Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of
the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference
to which the interest rate on Eurodollar Rate Advances is
determined) having a term equal to such Interest Period.
"Event of Default" has the meaning specified in Section
6.01.
"Event of Loss" has the meaning set forth in the
Aircraft Security Agreement.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Exchange Ratio" of any amount in respect of any
Revolving Credit Lender means a fraction the numerator of
which is the amount of such Revolving Credit Lender's
Revolving Credit Commitment immediately prior to the
Restatement Effective Date and the denominator of which is
13
the aggregate amount of the Revolving Credit Commitments
immediately prior to the Restatement Effective Date.
"Existing Capacity Agreements" means each of the
capacity purchase agreements existing as of the Effective
Date and entered into by and among the Borrower and one or
more of the Borrower's Affiliates, as such capacity purchase
agreements are listed on Schedule 1.01 hereto.
"Existing Credit Agreement" has the meaning specified
in the preliminary statements hereto.
"FAA" means the Federal Aviation Administration.
"Facility" means the Term 1 Facility or the Revolving
Credit 1 Facility.
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of
the quotations for such day for such transactions received
by the Agent from three Federal funds brokers of recognized
standing selected by it.
"Financing Documents" means this Agreement, the Notes,
the Collateral Documents and the Parent Guaranty.
"Financing Vehicles" has the meaning specified in
Section 5.01(j).
"Fiscal Year" means a fiscal year of the Borrower and
its Consolidated subsidiaries ending on December 31 in any
calendar year.
"Fixed Charges" means, for any period, to the extent
deducted in determining Consolidated Net Income for such
period, interest expense (less capitalized interest) and
Rentals.
"GAAP" has the meaning specified in Section 1.03.
"Gate Leaseholds" has the meaning specified in the SGR
Security Agreement.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or
indirectly guaranteeing any Debt or other obligation of any
other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or
other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other
14
manner the obligee of such Debt or other obligation of the
payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), provided that the
term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding
meaning.
"Guaranteed Obligations" for the meaning specified in
Section 7.01(a).
"Hazardous Materials" means (a) petroleum or petroleum
products, by-products or breakdown products, radioactive
materials, asbestos-containing materials, polychlorinated
biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated
as hazardous or toxic or as a pollutant or contaminant under
any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or
collar agreements, interest rate future or option contracts,
currency swap agreements, currency future or option
contracts and other hedging agreements (including, without
limitation, any commodity and fuel hedging agreements).
"Indemnified Costs" has the meaning specified in
Section 8.05(a).
"Indemnified Party" has the meaning specified in
Section 9.04(b).
"Indemnified Taxes" means, with respect to any Agent or
Lender, any Taxes other than (a) any Tax imposed by the
state or foreign jurisdiction under the laws of which such
Lender or Agent, as the case may be, is organized or any
political subdivision thereof and, in the case of each
Lender, any tax that is imposed by the state or foreign
jurisdiction of such Lender's Applicable Lending Office or
any political subdivision thereof, (b) any Tax that would
not have been imposed but for a connection between such
Lender or Agent or its branch, affiliate, principal office
or Applicable Lending Office and the jurisdiction imposing
such Tax or any political subdivision thereof or therein
that is unrelated to the transactions contemplated by any
Financing Document or performing any obligations, receiving
any payments or enforcing any rights thereunder, (c) any Tax
attributable to such Lender or Agent's failure to comply
with Section 2.12(e) of this Credit Agreement or any form or
certificate delivered by such Lender or Agent being
incorrect, (d) any Tax attributable to such Lender changing
its Applicable Lending Office, (e) any Tax imposed as a
result of such Agent or Lender not being treated as a
beneficial owner of its Note for federal income tax purposes
or (f) any Tax arising as a result of the Agent making any
payment hereunder or under the Notes or the other Financing
Documents through an account or branch outside the United
States; provided that in the case of Taxes imposed by the
United States, Indemnified Taxes shall only include Taxes
imposed as a result of a Change in Tax Law except the
limitation set forth in this proviso shall not apply to the
extent that a Lender (its transferor or its assignor, if
any) was entitled at the time of designation of a new
Lending Office (or transfer or assignment) to receive
additional amounts from any Loan Party pursuant to Section
2.12 of this Agreement.
15
"Initial Extension of Credit" means the initial
borrowing made on the Effective Date under the Existing
Credit Agreement.
"Initial Lenders" means the banks, financial
institutions and other institutional lenders listed on the
signature pages hereto.
"Interest Period" means, for each Eurodollar Rate
Advance comprising part of the same Borrowing, the period
commencing on the date of such Eurodollar Rate Advance or
the date of the Conversion of any Base Rate Advance into
such Eurodollar Rate Advance, and ending on the last day of
the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period
commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below.
The duration of each such Interest Period shall be one, two,
three or six months as the Borrower may, upon notice
received by the Agent not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the first day
of such Interest Period, select; provided, however, that:
(a) the Borrower may not select any Interest Period with respect
to any Eurodollar Rate Advance under a Facility that ends after
any principal repayment installment date for such Facility
unless, after giving effect to such selection, the aggregate
principal amount of Base Rate Advances and of Eurodollar Rate
Advances having Interest Periods that end on or prior to such
principal repayment installment date for such Facility shall be
at least equal to the aggregate principal amount of Advances
under such Facility due and payable on or prior to such date;
(b) Interest Periods commencing on the same date for Eurodollar
Rate Advances comprising part of the same Borrowing shall be of
the same duration;
(c) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day; provided, however, that, if such extension would
cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
(d) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no
numerically corresponding day in the calendar month that succeeds
such initial calendar month by the number of months equal to the
number of months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding calendar
month.
"Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended from time to time.
"Lead Arrangers" has the meaning specified in the
recital of parties to this Agreement.
16
"Lenders" means the Term 1 Lenders, Revolving Credit 1
Lenders, the Additional Term 1 Lenders, the Additional
Revolving Credit 1 Lenders and each Person that shall become
a party hereto pursuant to Section 9.07 for so long as such
Term 1 Lender, Revolving Credit 1 Lender, Additional Term 1
Lender, Additional Revolving Credit 1 Lender or Person, as
the case may be, shall be a party to this Agreement.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of
any kind in respect of such asset. For the purposes of this
Agreement, the Borrower or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Loan Parties" means the Borrower and the Parent
Guarantor.
"Material Adverse Effect" means (i) a material adverse
effect on the business, assets, operations, properties or
condition (financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole, (ii) a material adverse
effect on the ability of the Borrower or the Parent
Guarantor to perform its obligations under the Financing
Documents or (iii) a material adverse effect on the rights
and remedies of the Agent or the Lenders under the Financing
Documents.
"Material Contract" means, with respect to any Person,
each contract (as in effect from time to time, as amended,
amended and restated, supplemented or otherwise modified) to
which such Person is a party and that is material to the
business, condition (financial or otherwise), operations,
performance or properties of such Person.
"Material Plan" means, at any time, a Plan or Plans
having aggregate Unfunded Liabilities in excess of
$25,000,000.
"Material Subsidiary" means any Subsidiary that
constitutes a "significant subsidiary" of the Borrower
within the meaning of Regulation S-X of the Securities and
Exchange Commission (as in effect on the date hereof).
"Moody's" means Xxxxx'x Investors Service, Inc. and any
successor thereto.
"Multiemployer Plan" means at any time an employee
pension benefit plan within the meaning of Section
4001(a)(3) of ERISA to which any member of the ERISA Group
is then making or accruing an obligation to make
contributions or has within the preceding five plan years
made contributions, including for these purposes any Person
which ceased to be a member of the ERISA Group during such
five year period.
"Narita Collateral" means all of the Borrower's Narita
Routes, Slots, Narita Slots, Gate Leaseholds and Supporting
Route Facilities.
"Narita Routes" has the meaning specified in the SGR
Security Agreement.
"Narita Slots" has the meaning specified in the SGR
Security Agreement.
17
"Net Worth" means the excess of total assets over total
liabilities.
"Note" means a Term 1 Note or a Revolving Credit 1
Note, as the context may require.
"Notice of Borrowing" has the meaning specified in
Section 2.02(a).
"Obligation" means, with respect to any Person, any
payment, performance or other obligation of such Person of
any kind, including, without limitation, any liability of
such Person on any claim, whether or not the right of any
creditor to payment in respect of such claim is reduced to
judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or
unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to
in Section 6.01(f). Without limiting the generality of the
foregoing, the Obligations of any Loan Party under the
Financing Documents include (a) the obligation to pay
principal, interest, charges, expenses, fees, attorneys'
fees and disbursements, indemnities and other amounts
payable by such Loan Party under any Financing Document and
(b) the obligation of such Loan Party to reimburse any
amount in respect of any of the foregoing that any Lender,
in its sole discretion, may elect to pay or advance on
behalf of such Loan Party.
"Off Balance Sheet Obligation" means, with respect to
any Person, without duplication of any clause within this
definition or within the definition of "Debt", all
(a) Obligations of such Person under any lease which is
treated as an operating lease for financial accounting
purposes and a financing lease for tax purposes (i.e., a
"synthetic lease"), (b) Obligations of such Person in
respect of transactions entered into by such Person, the
proceeds from which would be reflected on the financial
statements of such Person in accordance with GAAP as cash
flows from financings at the time such transaction was
entered into (other than as a result of the issuance of
Equity Interests) and (c) Obligations of such Person in
respect of other transactions entered into by such Person
that are not otherwise addressed in the definition of "Debt"
or in clause (a) or (b) above that are intended to function
primarily as a borrowing of funds (including, without
limitation, any minority interest transactions that function
primarily as a borrowing).
"Other Taxes" has the meaning specified in Section
2.12(b).
"Parent Guarantor" means AMR.
"Parent Guaranty" means the Guarantee of the Parent
Guarantor set forth in Article VII.
"Parts" has the meaning set forth in the Aircraft
Security Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation
(or any successor).
"Permitted Investments" means any Dollar denominated
investment in (i) direct obligations of the United States or
any agency thereof, or obligations guaranteed by the United
States or any agency thereof, (ii) commercial paper rated at
least A-2 by S&P and P-2 by Xxxxx'x or (iii) time deposits
18
with, including certificates of deposit issued by, any
office located in the United States of any bank or trust
company which is organized under the laws of the United
States or any state thereof and has capital, surplus and
undivided profits aggregating at least $500,000,000,
provided in the case of each of the investments referred to
in clauses (i) through (iii) above, (x) such investment
matures within six months from the date of acquisition
thereof by the Agent and (y) in order to provide the Agent,
for the benefit of the Secured Parties, with a perfected
security interest therein, each Permitted Investment shall
be either: (A) evidenced by negotiable certificates or
instruments, or if non-negotiable then issued in the name of
the Agent, which (together with any appropriate instruments
of transfer) are delivered to, and held by, the Agent or any
agent thereof (which shall not be the Borrower or any of its
affiliates) in the State of New York; or (B) in book-entry
form and issued by the United States and subject to pledge
under applicable state law and Treasury regulations and as
to which (in the opinion of counsel to the Agent)
appropriate measures shall have been taken for perfection of
the security interests created under the Aircraft Security
Agreement and (iv) such other investments of credit quality
not lower than that of the investments referred to in
clauses (i) through (iii) above and maturing within six
months from the date of acquisition thereof by the Agent, as
to which the Agent shall have received satisfactory
assurances that appropriate measures shall have been taken
for perfection of the security interests created under the
Aircraft Security Agreement.
"Permitted Liens" means:
(1) the respective rights and interests created
by or pursuant to or resulting from the Financing
Documents, and the respective rights of the Agent and
the Loan Parties as therein provided;
(2) the rights of others under agreements or
arrangements to the extent expressly permitted by
Sections 5.02(a) and 5.04(b) of the Aircraft Security
Agreement or by the terms of the SGR Security
Agreement;
(3) Liens for taxes either not yet due or being
contested in good faith (and for the payment of which
adequate reserves have been provided) by appropriate
proceedings so long as such proceedings do not involve
any substantial danger of the sale, forfeiture or loss
of any Airframe or any Engine, or any interest therein;
(4) materialmen's, mechanics', workers',
repairmen's, employees', or other Liens arising in the
ordinary course of business for amounts the payment of
which is either not yet delinquent or is being
contested in good faith (and for the payment of which
adequate reserves have been provided) by appropriate
proceedings so long as such proceedings do not involve
any substantial danger of the sale, forfeiture or loss
of any Airframe or any Engine, or any interest therein;
(5) Liens (other than Liens for taxes) arising
out of judgments or awards against any Loan Party with
respect to which at the time an appeal or proceeding
19
for review is being prosecuted in good faith and with
respect to which there shall have been secured a stay
of execution pending such appeal or proceeding for
review, and which such Liens relate to any Collateral
only as a result of a general Lien on the assets of
such Loan Party in one or more jurisdictions and are
not entitled to priority with respect to Collateral
over any Lien created by the Collateral Documents;
(6) salvage or similar rights of insurers under
insurance policies maintained pursuant to Section 5.06
of the Aircraft Security Agreement; and
(7) Liens arising after the Effective Date to
satisfy a condition for granting or modifying a waiver
of the minimum funding standards or extension of
amortization periods under Section 412 of the Internal
Revenue Code in respect of a Plan, provided the
interests and rights under such Liens are subordinated
to the claims, rights and interests of the Lenders and
Agent under the Financing Documents upon terms
reasonably satisfactory to the Agent.
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company,
joint stock company, trust, unincorporated association,
joint venture or other entity, or a government or any
political subdivision or agency thereof.
"Plan" means at any time an employee pension benefit
plan (other than a Multiemployer Plan) which is covered by
Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member
of the ERISA Group for employees of any member of the ERISA
Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person
which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member of
the ERISA Group.
"Platform" has the meaning specified in Section
9.02(c).
"Pledge Agreement" means a pledge agreement in
substantially the form of Exhibit F to the Existing Credit
Agreement, as amended.
"Preferred Interests" means, with respect to any
Person, Equity Interests issued by such Person that are
entitled to a preference or priority over any other Equity
Interests issued by such Person upon any distribution of
such Person's property and assets, whether by dividend or
upon liquidation.
"Pricing Level" means, as of any date of determination,
the level set forth as then in effect for the Borrower, as
determined in accordance with the following provisions of
this definition:
Level 1: Senior Secured Debt Rating of not lower that
BB by S&P and not lower than Ba3 by Xxxxx'x.
20
Level 2: Xxxxx 0 does not apply and a Senior Secured
Debt Rating of not lower than BB- by S&P and
not lower than B1 by Xxxxx'x.
Level 3: Xxxxx 0 and 2 do not apply and a Senior
Secured Debt Rating of not lower than B+ by
S&P and not lower than B2 by Xxxxx'x.
Level 4: Xxxxxx 0, 0 and 3 do not apply.
"Redeemable" means, with respect to any Equity
Interest, any such Equity Interest that (a) the issuer has
undertaken to redeem at a fixed or determinable date or
dates, whether by operation of a sinking fund or otherwise,
or upon the occurrence of a condition not solely within the
control of the issuer or (b) is redeemable at the option of
the holder.
"Register" has the meaning specified in Section
9.07(c).
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"Rentals" means the aggregate amounts payable by the
Parent Guarantor or any Subsidiary, as lessee, to a lessor
with respect to and pursuant to the terms of any operating
lease for a specified period.
"Replacement Aircraft" means any Unencumbered Stage 3
Aircraft of which a Replacement Airframe is part.
"Replacement Airframe" means an airframe (except
Engines or engines from time to time installed thereon)
constituting part of an Unencumbered Stage 3 Aircraft, which
shall have been added to Schedule 1 to the Aircraft Security
Agreement or made subject to the Lien of the Aircraft
Security Agreement pursuant to Section 5.01(n)(iii) or (v),
together with all Parts relating to such airframe.
"Replacement Engine" means an engine of make and model
suitable for use on any Airframe or Replacement Airframe,
which shall have been added to Schedule 1 to the Aircraft
Security Agreement pursuant to Section 5.01(n)(iii) or (v),
together with all Parts relating to such engine.
"Required Collateral Amount" means, at any time, the
sum of (a) the aggregate amount of the Revolving Credit 1
Commitments at such time, or if such Revolving Credit 1
Commitments shall have been terminated, an amount equal to
the aggregate unpaid principal amount of the Revolving
Credit 1 Advances, plus (b) an amount equal to the aggregate
unpaid principal amount of the Term 1 Advances.
"Required Lenders" means, at any time, Lenders owed or
holding at least a majority in interest of the sum of (a)
the aggregate principal amount of the Advances outstanding
at such time and (b) the aggregate unused Revolving Credit 1
Commitments at such time; provided, however, that if any
Lender shall be a Defaulting Lender at such time, there
21
shall be excluded from the determination of Required Lenders
at such time (A) the aggregate principal amount of the
Advances owing to such Lender (in its capacity as a Lender)
and outstanding at such time and (B) the unused Revolving
Credit 1 Commitment of such Lender at such time.
"Responsible Officer" means any senior executive
officer, senior accounting officer or treasurer of the
Borrower, or any vice president, director or managing
director of the Borrower having responsibility for the
administration of this Agreement.
"Restatement Effective Date" has the meaning specified
in Section 3.01.
"Restatement Initial Extension of Credit" means the
initial Borrowing on or after the Restatement Effective
Date.
"Revolving Credit Advance" has the meaning specified in
Section 1.01 of the Existing Credit Agreement.
"Revolving Credit Facility" has the meaning specified
in Section 1.01 of the Existing Credit Agreement.
"Revolving Credit Lender" has the meaning specified in
Section 1.01 of the Existing Credit Agreement.
"Revolving Credit Note" has the meaning specified in
Section 1.01 of the Existing Credit Agreement.
"Revolving Credit 1 Advance" means a revolving loan or
revolving loans made by a Revolving Credit 1 Lender pursuant
to Section 2.01(b)(i) or Section 2.01(b)(iii) or deemed made
pursuant to Section 2.01(b)(ii).
"Revolving Credit 1 Borrowing" means a borrowing
consisting of simultaneous Revolving Credit 1 Advances of
the same Type made by each of the Revolving Credit 1 Lenders
pursuant to Section 2.01(b).
"Revolving Credit 1 Commitment" means, collectively,
(a) with respect to each Revolving Credit Lender that
executes and delivers this Agreement on or prior to the
Restatement Effective Date, the amount set forth opposite
such Revolving Credit 1 Lender's name on Schedule I hereto
under the caption "Revolving Credit 1 Commitment", and
(b) with respect to each Additional Revolving Credit 1
Lender that is not a Revolving Credit Lender, its Additional
Revolving Credit 1 Commitment or, in each case, if such
Lender has entered into one or more Assignment and
Acceptances, the amount set forth for such Lender in the
Register maintained by the Agent pursuant to Section 9.07(c)
as such Lender's "Total Revolving Credit 1 Commitment", as
such amount may be reduced at or prior to such time pursuant
to Section 2.04.
"Revolving Credit 1 Facility" means, at any time, the
aggregate amount of the Revolving Credit 1 Lenders'
Revolving Credit 1 Commitments at such time.
22
"Revolving Credit 1 Lender" means, collectively, (a)
each Revolving Credit Lender that executes and delivers this
Agreement on or prior to the Restatement Effective Date and
(b) each Additional Revolving Credit 1 Lender that is not
otherwise referred to in clause (a) of this definition.
"Revolving Credit 1 Note" means a promissory note of
the Borrower payable to the order of any Revolving Credit 1
Lender, in substantially the form of Exhibit A-1 hereto,
evidencing the aggregate indebtedness of the Borrower to
such Revolving Credit 1 Lender resulting from the Revolving
Credit 1 Advances made or deemed made by such Revolving
Credit 1 Lender, as amended.
"S&P" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc. and any
successor thereto.
"Secured Obligations", in respect of the AA Collateral,
has the meaning specified in Section 2 of each of the
Aircraft Security Agreement and the SGR Security Agreement,
and, in respect of the AMR Collateral, has the meaning
specified in Section 2 of the Pledge Agreement.
"Secured Parties" means the Agent and the Lenders.
"Security Arrangements" has the meaning set forth in
Section 5.01(n)(ii).
"Security Opinions" means, with respect to any item
referred to in Section 5.01(n), (a) an opinion of the
General Counsel of the Borrower substantially in the form of
Exhibit H-1 to the Existing Credit Agreement and (b) an
opinion of Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx (or such other
counsel acceptable to the Required Lenders) substantially in
the form of Exhibit H-2 to the Existing Credit Agreement.
"Senior Secured Debt Rating" means, as of any date, the
senior secured debt rating that has been most recently
announced by Xxxxx'x or S&P for the Facilities. For
purposes of the foregoing, (a) if only one of S&P and
Xxxxx'x shall have in effect a Senior Secured Debt Rating,
the Applicable Margin shall be determined by reference to
the available rating; (b) if both S&P and Xxxxx'x shall not
have in effect a Senior Secured Debt Rating, the Applicable
Margin will be set in accordance with Level 4 under the
definition of "Applicable Margin"; (c) if any rating
established by S&P or Xxxxx'x shall be changed, such change
shall be effective as of the date on which such change is
first announced publicly by the rating agency making such
change; and (d) if S&P or Xxxxx'x shall change the basis on
which ratings are established, each reference to the Senior
Secured Debt Rating announced by S&P or Xxxxx'x, as the case
may be, shall refer to the then equivalent rating by S&P or
Xxxxx'x, as the case may be.
"SGR Security Agreement" means the slot, gate and route
security agreement in substantially the form of Exhibit F to
the Existing Credit Agreement, as amended.
"Short Term Investments" means, as of any date of
determination, any US dollar denominated investment in: (i)
direct obligations of the United States or any agency
thereof, or guaranteed by the United States or any agency
thereof; (ii) commercial paper issued by corporations,
23
sovereigns or special purpose entities (i.e., asset backed
commercial paper) rated at least A-1 by S&P and P-1 by
Xxxxx'x; (iii) certificates of deposit, time deposits and
bank notes of any bank or trust company rated not less than
A by S&P and A2 by Xxxxx'x; (iv) corporate or municipal
securities rated not less than A by S&P and A2 by Xxxxx'x;
and (v) mortgage backed and asset backed securities rated
not less than A by S&P and A2 by Xxxxx'x; provided in the
case of each of the investments referred to in clauses (i)
through (v) above, such investment matures within eighteen
months from the date of such determination.
"Slots" has the meaning specified in the SGR Security
Agreement.
"Subsidiary" means any corporation of which the
Borrower and/or one or more Subsidiaries at the time owns or
controls, directly or indirectly, more than 50% of the
shares of stock having general voting power under ordinary
circumstances to elect a majority of the board of directors,
managers or trustees of such corporation (irrespective of
whether or not at the time stock of any other class or
classes of such corporation shall have or might have voting
power by reason of the happening of any contingency).
"Supplemental Agent" has the meaning specified in
Section 8.01(c).
"Supporting Route Facilities" has the meaning specified
in the SGR Security Agreement.
"Syndication Agent" has the meaning specified in the
recital of parties to this Agreement.
"Taxes" means any present or future taxes, levies,
imposts, deductions, charges or withholdings imposed by any
governmental authority.
"Temporary Storage" for any Aircraft means that such
Aircraft (A) has been stored (1) without a scheduled or
planned return to active service, sale or lease and (2) in a
manner suitable for an aircraft expected to be returned to
service, sold or leased within one year, (B) has been in
such storage for less than one year, and (C) may be removed
from such storage without material cost for such removal, in
each case, as such storage status is reported in good faith
by the Borrower to the Agent at the time of the applicable
appraisal.
"Term Advance" has the meaning specified in Section
1.01 of the Existing Credit Agreement.
"Term Commitment" has the meaning specified in Section
1.01 of the Existing Credit Agreement.
"Term Lender" has the meaning specified in Section 1.01
of the Existing Credit Agreement.
"Term Note" has the meaning specified in Section 1.01
of the Existing Credit Agreement.
24
"Term 1 Advance" means a term loan or term loans made
by a Term 1 Lender pursuant to Section 2.01(a)(ii) or deemed
made pursuant to Section 2.01(a)(i).
"Term 1 Borrowing" means a borrowing consisting of
simultaneous Term 1 Advances of the same Type made by the
Term 1 Lenders pursuant to Section 2.01(a).
"Term 1 Commitment" means, collectively, (a) with
respect to each Term Lender that executes and delivers this
Agreement on or prior to the Restatement Effective Date, the
amount set forth opposite such Term Lender's name on
Schedule I hereto, under the caption "Term 1 Commitment",
and (b) with respect to each Additional Term 1 Lender that
is not a Term Lender, its Additional Term 1 Commitment or,
in each case, if such Lender has entered into one or more
Assignment and Acceptances, the amount set forth for such
Lender in the Register maintained by the Agent pursuant to
Section 9.07(c) as such Lender's "Total Term 1 Commitment".
"Term 1 Facility" means, at any time, the aggregate
amount of the Term 1 Lenders' Term 1 Commitments at such
time.
"Term 1 Lender" means, collectively, (a) each Term
Lender that executes and delivers this Agreement on or prior
to the Restatement Effective Date and (b) each Additional
Term 1 Lender that is not otherwise referred to in clause
(a) of this definition.
"Term 1 Note" means a promissory note of the Borrower
payable to the order of any Term 1 Lender, in substantially
the form of Exhibit A-2 hereto, evidencing the indebtedness
of the Borrower to such Lender resulting from the Term 1
Advances made or deemed made by such Lender, as amended.
"Termination Date" means the earlier of (a) the date of
termination in whole of the Commitments pursuant to Section
2.04 or 6.01 and (b) (i) for purpose of the Revolving Credit
1 Facility, June 17, 2009 and (ii) for purpose of the Term 1
Facility, December 17, 2010.
"Title 49" has the meaning specified in the SGR
Security Agreement.
"Transaction" means the transactions contemplated by
the Financing Documents.
"Type" refers to the distinction between Advances
bearing interest at the Base Rate and Advances bearing
interest at the Eurodollar Rate.
"Unencumbered Stage 3 Aircraft" means a "Stage 3
airplane" as defined in Title 14, Section 36.1(f)(6) of the
Code of Federal Regulations consisting of Boeing 737-800,
757-200, 767-200ER, 767-300ER and 777-200 aircraft and
XxXxxxxxx Xxxxxxx MD-80 aircraft, in each case owned by the
Borrower and unencumbered by any Lien, other than Permitted
Liens.
"Unfunded Liabilities" means, with respect to any Plan
at any time, the amount (if any) by which (i) the present
value of all benefits under such Plan exceeds (ii) the fair
market value of all Plan assets allocable to such benefits
(excluding any accrued but unpaid contributions), all
25
determined as of the then most recent valuation date for
such Plan, but only to the extent that such excess
represents a potential liability of a member of the ERISA
Group to the PBGC or any other Person under Title IV of
ERISA.
"United States Citizen" has the meaning specified in
Section 4.01(q).
"Voting Interests" means shares of capital stock issued
by a corporation, or equivalent Equity Interests in any
other Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election
of directors (or persons performing similar functions) of
such Person, even if the right so to vote has been suspended
by the happening of such a contingency.
SECTION 1.02. Computation of Time Periods; Other
Definitional Provisions. In this Agreement and the other Financing
Documents in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but
excluding". References in the Financing Documents to any
agreement or contract "as amended" shall mean and be a reference
to such agreement or contract as amended, amended and
restated, supplemented or otherwise modified from time to time
in accordance with its terms.
SECTION 1.03. Accounting Terms. All accounting terms
not specifically defined herein shall be construed in accordance
with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements
referred to in Sections 4.01(g)(i) and 4.02(e)(i), as applicable ("GAAP").
SECTION 1.04. Deemed References. Upon the Restatement
Effective Date, (i) all references to "Term Advance",
"Term Borrowing", "Term Commitment", "Term Facility", "Term Lender"
and "Term Note" in the Financing Documents (other than in this
Agreement) shall be deemed references to "Term 1 Advance", "Term 1
Borrowing", "Term 1 Commitment", "Term 1 Facility", "Term 1 Lender"
and "Term 1 Note", respectively; and (ii) all references to "Revolving
Credit Advance", "Revolving Credit Borrowing", "Revolving Credit
Commitment", "Revolving Credit Facility", "Revolving Credit
Lender", and "Revolving Credit Note" in the Financing Documents
(other than in this Agreement) shall be deemed references to
"Revolving Credit 1 Advance", "Revolving Credit 1 Borrowing",
"Revolving Credit 1 Commitment", "Revolving Credit 1 Facility",
"Revolving Credit 1 Lender" and "Revolving Credit 1 Note",
respectively.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. (a) The Term 1 Advances.
(i) Exchange. Notwithstanding anything to the
contrary in Sections 2.11 and 2.13, each Term 1 Lender with a
Term 1 Commitment severally agrees, on the terms and conditions
hereinafter set forth, to exchange its Term Advance for a Term 1
Advance with a principal amount equal to that of the exchanged
Term Advance on the Restatement Effective Date, and from and
after the Restatement Effective Date such Term Advance shall be
deemed repaid and refinanced in full and such Term 1 Advance
shall be deemed made hereunder. On the Restatement Effective
26
Date, each Term Lender shall deliver to the Borrower each
Term Note issued to it, if any.
(ii) The Additional Term 1 Advances. Each Additional
Term 1 Lender severally agrees, on the terms and conditions
hereinafter set forth, to make an advance (an "Additional Term 1
Advance") to the Borrower on the Restatement Effective Date in a
principal amount equal to its Additional Term 1 Commitment. The
Borrower shall use the proceeds of the Additional Term 1 Advances
to refinance (i) up to $200 million in Revolving Credit Advances
of the Revolving Credit Lenders and (ii) all Term Advances of
Term Lenders that do not execute and deliver this Agreement on
the Restatement Effective Date with the proceeds of the
Additional Term 1 Advances. Any Term 1 Advances made and repaid
or prepaid may not be reborrowed.
(iii) Interest. On the Restatement Effective Date
the Borrower shall pay all accrued and unpaid interest on the
Term Advances to the Term Lenders.
(b) (i) The Revolving Credit 1 Advances. Each Revolving
Credit 1 Lender severally agrees, on the terms and conditions
hereinafter set forth and after giving effect to Sections
2.01(b)(ii) and 2.01(b)(iii), to make advances to the Borrower
from time to time on any Business Day during the period from the
Restatement Effective Date until the Termination Date in an
amount for each such Advance not to exceed such Revolving Credit
1 Lender's Revolving Credit 1 Commitment at such time. Each
Revolving Credit 1 Borrowing shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess
thereof and shall consist of Revolving Credit 1 Advances of the
same Type made on the same day by the Revolving Credit 1 Lenders
ratably according to their respective Revolving Credit 1
Commitments.
(ii) Exchange. Notwithstanding anything to the
contrary in Sections 2.11 and 2.13, each Revolving Credit Lender
with a Revolving Credit 1 Commitment severally agrees, on the
terms and conditions hereinafter set forth, to (A) exchange its
Revolving Credit Advance for a Revolving Credit 1 Advance with a
principal amount equal to the product of the aggregate principal
amount of all outstanding Revolving Credit 1 Advances (without
giving effect to any Additional Revolving Credit 1 Advances)
times such Revolving Credit Lender's Exchange Ratio, and from and
after the Restatement Effective Date such Revolving Credit
Advance shall be deemed repaid and refinanced to the extent of
such Revolving Credit 1 Advance and such Revolving Credit 1
Advance shall be deemed made hereunder and (B) exchange its
Revolving Credit Commitment for a Revolving Credit 1 Commitment
in an amount equal to the product of the aggregate amount of all
Revolving Credit 1 Commitments (without giving effect to any
Additional Revolving Credit 1 Commitments) times such Revolving
Credit Lender's Exchange Ratio. On the Restatement Effective
Date, each Revolving Credit Lender shall deliver to the Borrower
each Revolving Credit Note issued to it, if any.
(iii) The Additional Revolving Credit 1 Advances.
Each Additional Revolving Credit 1 Lender severally agrees, on
the terms and conditions hereinafter set forth, to make an
advance (an "Additional Revolving Credit 1 Advance") to the
Borrower on the Restatement Effective Date in a principal amount
equal to its pro rata share (based on such Additional Revolving
27
Credit 1 Lender's portion of the aggregate Additional Revolving
Credit 1 Commitments) of the excess of (x) the Revolving Credit
Advances outstanding immediately prior to the Restatement
Effective Date over (y) the sum of (1) $200 million plus (2) the
Revolving Credit 1 Advances made by the Revolving Credit Lenders
on the Restatement Effective Date. The Borrower shall refinance
all Revolving Credit Advances of Revolving Credit Lenders that do
not execute and deliver this Agreement on the Restatement
Effective Date with the proceeds of the Additional Revolving
Credit 1 Advances and the Additional Term 1 Advances.
(iv) Interest. On the Restatement Effective Date the
Borrower shall pay all accrued and unpaid interest on the
Revolving Credit Advances to the Revolving Credit Lenders;
provided, however, it is understood that the existing Interest
Periods of the Revolving Credit Advances prior to the Restatement
Effective Date shall continue on and after the Restatement
Effective Date for the Revolving Credit 1 Advances, and the
Revolving Credit 1 Advances shall accrue interest at the
Eurodollar Rate or the Base Rate, as applicable, plus the
Applicable Margin in effect on and after the Restatement
Effective Date.
(v) Borrowings and Repayments/Prepayments. Within the
limits of each Revolving Credit 1 Lender's Revolving Credit 1
Commitment in effect from time to time, the Borrower may borrow
under this Section 2.01(b), repay or prepay pursuant to Section
2.05 and reborrow under this Section 2.01(b).
SECTION 2.02.Making the Advances. (a)(i)Each Borrowing
(other than a Borrowing consisting of Additional Term 1 Advances
or Additional RevolvingCredit 1 Advances) shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the third
Business Day priorto the date of the proposed Borrowing in the
case of a Borrowing consisting of Eurodollar Rate Advances or 11:00 A.M.
(New York City time) on the date of the proposed Borrowing in the
case of a Borrowing consisting of Base Rate Advances, by the Borrower
to the Agent, which shall give to each Appropriate Lender prompt
notice thereof by telecopier or telex. Each such notice of a
Borrowing (a "Notice of Borrowing") shall be by telephone,
confirmed immediately in writing, or telecopier or telex in
substantially the form of Exhibit B hereto, specifying therein
the requested (A) date of such Borrowing, (B) Facility under
which such Borrowing is to be made, (C) Type of Advances
comprising such Borrowing, (D) aggregate amount of such Borrowing
and (E) in the case of a Borrowing consisting of Eurodollar Rate
Advances, initial Interest Period for each such Advance. Each
Appropriate Lender shall, before 1:00 P.M. (New York City time)
on the date of such Borrowing, make available for the account of
its Applicable Lending Office to the Agent at the Agent's
Account, in same day funds, such Lender's ratable portion of such
Borrowing in accordance with the respective Commitments under the
applicable Facility of such Lender and the other Appropriate
Lenders. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article
III, the Agent will make such funds available to the Borrower by
crediting the Borrower's Account.
(ii) Except as otherwise provided in Section 2.02(b),
each Borrowing consisting of Additional Term 1 Advances or
Additional Revolving Credit 1 Advances shall be made on the
Restatement Effective Date; provided that notice shall have been
given to the Agent not later than 12:00 Noon (New York City time)
on the Business Day prior to the Restatement Effective Date of
28
such proposed Borrowing by the Borrower (and which notice the
Administrative Agent shall have given to each Additional Term 1
Lender and Additional Revolving Credit 1 Lender prompt notice
thereof by telex or telecopier). Each such notice of a Borrowing
consisting of Additional Term 1 Advances or Additional Revolving
Credit 1 Advances to be made on the Restatement Effective Date
shall have been by telephone, confirmed immediately in writing,
or telex or telecopier, in substantially the form of Exhibit B
hereto, specifying therein the requested (A) date of such
Borrowing, (B) Facility under which such Borrowing is to be made,
(C) Type of Advances comprising such Borrowing, and (D) aggregate
amount of such Borrowing. Each Additional Term 1 Lender and
Additional Revolving Credit 1 Lender shall, before 11:00 A.M.
(New York City time) on the Restatement Effective Date, make
available for the account of its Applicable Lending Office to the
Administrative Agent at the Administrative Agent's Account, in
same day funds, such Lender's ratable portion of such Borrowing
in accordance with the respective Commitments under the
applicable Facility of such Lender and the other Additional Term
1 Lenders and Additional Revolving Credit 1 Lenders,
respectively. After the Administrative Agent's receipt of such
funds, the Administrative Agent shall apply such funds to prepay
ratably the aggregate principal amount of any outstanding Term
Advances and Revolving Credit Advances of the Term Lenders and
the Revolving Credit Lenders, respectively, that are not Term 1
Lenders or Revolving Credit 1 Lenders, respectively, and shall
deposit any remaining funds, after giving effect to such
prepayments, in the Borrower's Account.
(b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate
Advances for any Borrowing if the aggregate amount of such
Borrowing is less than $10,000,000 or if the obligation of the
Appropriate Lenders to make Eurodollar Rate Advances shall then
be suspended pursuant to Section 2.07 or 2.10 and (ii) the Term
Advances may not be outstanding as part of more than six separate
Borrowings and the Revolving Credit Advances may not be
outstanding as part of more than six separate Borrowings.
(c) If the Borrower fails to borrow any Borrowing to be
comprised of Eurodollar Rate Advances after the related Notice of
Borrowing has been given to any Appropriate Lender in accordance
with Section 2.02(a), the Borrower shall, within 15 days after
demand by any Appropriate Lender, reimburse such Lender for any
resulting loss or expense incurred by it (or by an existing or
prospective participant in the related Advance), including
(without limitation) any loss incurred in obtaining, liquidating
or employing deposits from third parties, but excluding loss of
margin for the period after such failure to borrow, provided that
such Lender has delivered to the Borrower a certificate setting
forth in reasonable detail calculations as to the amount of such
loss or expense, which certificate shall be conclusive absent
manifest error.
(d) Unless the Agent shall have received notice from an
Appropriate Lender prior to the date of any Borrowing under a
Facility under which such Lender has a Commitment that such
Lender will not make available to the Agent such Lender's ratable
portion of such Borrowing, the Agent may assume that such Lender
has made such portion available to the Agent on the date of such
Borrowing in accordance with subsection (a) of this Section 2.02
and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount.
If and to the extent that such Lender shall not have so made such
29
ratable portion available to the Agent, such Lender and the
Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Agent, at
(i) in the case of the Borrower, the higher of (A) the interest
rate applicable at the time to Advances comprising such Borrowing
and (B) the cost of funds incurred by the Agent in respect of
such amount; provided, however, that (x) the Borrower shall have
received from the Agent notice that the Agent has made such
amount available to the Borrower pursuant to its right under this
Section 2.02(d) to assume receipt of such Lender's ratable
portion and (y) any payment by the Borrower of such amount shall
be without prejudice to its rights against such Lender under this
Agreement; and (ii) in the case of such Lender, the Federal Funds
Rate. If such Lender shall repay to the Agent such corresponding
amount, such amount so repaid shall constitute such Lender's
Advance as part of such Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Advance to be made by
it as part of any Borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make its Advance on the date
of such Borrowing, but no Lender shall be responsible for the
failure of any other Lender to make the Advance to be made by
such other Lender on the date of any Borrowing.
SECTION 2.03. Fees. (a) Commitment Fee. The Borrower agrees
to pay to the Agent for the account of each of the Revolving
Credit 1 Lenders, from the Restatement Effective Date, in the case
of each Revolving Credit 1 Lender that delivers this Agreement on
or prior to the Restatement Effective Date, and from the effective
date specified in the Assignment and Acceptance pursuant to which
it became a Revolving Credit 1 Lender, in the case of each other
Revolving Credit 1 Lender, until the Termination Date of the
Revolving Credit 1 Facility, payable in arrears on the last day
of each March, June, September and December commencing March 31,
2006 and on the Termination Date of the Revolving Credit 1
Facility, a commitment fee on the average daily unused Revolving
Credit 1 Commitment of such Revolving Credit 1 Lender at the
rate of 1/2 of 1% per annum; provided, however, that no commitment
fee shall accrue on any of the Revolving Credit 1 Commitments of
a Defaulting Lender so long as such Lender shall be a Defaulting
Lender.
(b) Agent's Fees. The Borrower shall pay to the Agent for its
own account such fees as may from time to time be agreed between
the Borrower and the Agent.
SECTION 2.04. Termination or Reduction of the Commitments.
(a) Optional. The Borrower shall have the right, upon at least
three Business Days' notice to the Agent, to terminate in whole
or reduce ratably in part the unused portions of the Revolving Credit
Commitments of the Lenders, provided that each partial reduction shall
be in the aggregate amount of $10,000,000 or an integral multiple
of $1,000,000 in excess thereof.
(b) Mandatory. (i) Term 1 Facility. On the date of the Term 1
Borrowing, after giving effect to such Term 1 Borrowing, the
aggregate Term 1 Commitments of the Term 1 Lenders shall be
automatically and permanently reduced to zero.
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(ii) Revolving Credit 1 Facility. On each date set forth below,
the Revolving Credit 1 Commitments shall be reduced by the amount
set forth opposite such date (with each such reduction of
Revolving Credit 1 Commitments to be made ratably among the
Revolving Credit 1 Lenders' Revolving Credit 1 Commitments):
Date Amount of
Reduction
June 17, 2006 $10,000,000
September 17, $10,000,000
2006
December 17, 2006 $10,000,000
March 17, 2007 $10,000,000
June 17, 2007 $10,000,000
September 17, $10,000,000
2007
December 17, 2007 $10,000,000
March 17, 2008 $0.00
June 17, 2008 $0.00
September 17, $0.00
2008
December 17, 2008 $0.00
March 17, 2009 $0.00
June 17, 2009 $255,000,000
SECTION 2.05. Repayment of Advances. (a) Term 1 Advances.
The Borrower shall repay to the Agent for the ratable account of
the Term 1 Lenders the aggregate outstanding principal amount of the
Term 1 Advances on the following dates in the amounts indicated (which
amounts shall be reduced as a result of the application of prepayments
in accordance with the order of priority set forth in Section 2.08):
Date Amount
June 17, 2006 $1,120,000
September 17, $1,120,000
2006
December 17, 2006 $1,120,000
March 17, 2007 $1,120,000
June 17, 2007 $1,120,000
September 17, $1,120,000
2007
December 17, 2007 $1,120,000
March 17, 2008 $1,120,000
June 17, 2008 $1,120,000
September 17, $1,120,000
2008
December 17, 2008 $1,120,000
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March 17, 2009 $1,120,000
June 17, 2009 $1,120,000
September 17, $1,120,000
2009
December 17, 2009 $1,120,000
March 17, 2010 $0.00
June 17, 2010 $0.00
September 17, $0.00
2010
December 17, 2010 $431,200,000
provided, however, that the final principal installment shall be
repaid on the Termination Date in respect of the Term 1 Facility
and in any event shall be in an amount equal to the aggregate
principal amount of the Term 1 Advances outstanding on such date.
(b) Revolving Credit 1 Advances. The Borrower shall repay to
the Agent for the ratable account of the Revolving Credit 1
Lenders on the Termination Date in respect of the Revolving
Credit 1 Facility the aggregate principal amount of the Revolving
Credit 1 Advances then outstanding.
SECTION 2.06. Interest. (a) Scheduled Interest.
The Borrower shall pay interest on the unpaid principal amount of each
Advance owing to each Lender from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is
a Base Rate Advance, a rate per annum equal at all times to the
sum of (x) the Base Rate in effect from time to time plus (y) the
Applicable Margin in effect from time to time, payable in arrears
quarterly on the last day of each March, June, September and
December during such periods and on the date such Base Rate
Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at
all times during each Interest Period for such Advance to the sum
of (x) the Eurodollar Rate for such Interest Period for such
Advance plus (y) the Applicable Margin in effect from time to
time, payable in arrears on the last day of such Interest Period
and, if such Interest Period has a duration of more than three
months, on each day that occurs during such Interest Period every
three months from the first day of such Interest Period and on
the date such Eurodollar Rate Advance shall be Converted or paid
in full.
(b) Default Interest. Upon the occurrence and during the
continuance of an Event of Default under Section 6.01(a), the
Borrower shall pay interest on (x) the unpaid principal amount of
each Advance owing to each Lender, payable in arrears on the
dates referred to in clause (a)(i) or (a)(ii) above and on
demand, at a rate per annum equal at all times to 2% per annum
above the rate per annum required to be paid on such Advance
pursuant to clause (a)(i) or (a)(ii) above and (y) to the fullest
extent permitted by law, the amount of any interest, fee or other
amount payable under the Financing Documents that is not paid
when due, from the date such amount shall be due until such
amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum
required to be paid, in the case of interest, on the Type of
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Advance on which such interest has accrued pursuant to clause
(a)(i) or (a)(ii) above and, in all other cases, on Base Rate
Advances pursuant to clause (a)(i) above.
(c) Notice of Interest Period and Interest Rate. Promptly after
receipt of a Notice of Borrowing pursuant to Section 2.02(a), a
notice of Conversion pursuant to Section 2.07 or a notice of
selection of an Interest Period pursuant to the terms of the
definition of "Interest Period", the Agent shall give notice to
the Borrower and each Appropriate Lender of the applicable
Interest Period and the applicable interest rate determined by
the Agent for purposes of clause (a)(i) or (a)(ii) above.
SECTION 2.07. Conversion of Advances. (a) Optional.
The Borrower may on any Business Day, upon notice given to the
Agent not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the date of the proposed Conversion and
subject to the provisions of Section 2.09, Convert all or any
portion of the Advances of one Type comprising the same Borrowing
into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall
be made only on the last day of an Interest Period for such Eurodollar
Rate Advances, any Conversion of Base Rate Advances into Eurodollar
Rate Advances shall be in an amount not less than the minimum amount
specified in Section 2.02(b), no Conversion of any Advances shall
result in more separate Borrowings than permitted under Section 2.02(b)
and each Conversion of Advances comprising part of the same Borrowing
under any Facility shall be made ratably among the Appropriate
Lenders in accordance with their Commitments under such Facility.
Each such notice of a Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii)
the Advances to be Converted and (iii) if such Conversion is into
Eurodollar Rate Advances, the duration of the initial Interest
Period for each such Advance. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any
Borrowing shall be reduced, by payment or prepayment or
otherwise, to less than $10,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance
with the provisions contained in the definition of "Interest
Period" in Section 1.01, the Agent will forthwith so notify the
Borrower and the Appropriate Lenders, whereupon each such
Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base
Rate Advance.
(iii) Upon the occurrence and during the continuance of any
Event of Default, (x) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance and (y) the
obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.
SECTION 2.08. Prepayments of Advances. (a) Optional.
The Borrower may, upon notice at least three Business Days' prior
to the date of such prepayment, in the case of Eurodollar Rate Advances,
and upon notice at least one Business Day prior to the date of such
prepayment, in the case of Base Rate Advances, to the Agent stating
the proposed date and aggregate principal amount of the prepayment,
33
and if such notice is given the Borrower shall, prepay the outstanding
principal amount of the Advances comprising part of the same
Borrowing in whole or ratably in part, together with accrued
interest to the date of such prepayment on the principal amount
prepaid, provided, however, that (x) each partial prepayment
shall be in an aggregate principal amount of $10,000,000 or an
integral multiple of $1,000,000 in excess thereof and (y) in the
event of any such prepayment of a Eurodollar Rate Advance, the
Borrower shall be obligated to reimburse the Lenders in respect
thereof pursuant to Section 9.04(c). Each such prepayment of any
Term 1 Advances shall be applied to the installments thereof in
inverse order of maturity.
(b) Mandatory. The Borrower shall, on each Business Day, prepay
an aggregate principal amount of the Revolving Credit 1 Advances
comprising part of the same Borrowings in an amount equal to the
amount by which (A) the aggregate principal amount of the
Revolving Credit 1 Advances then outstanding exceeds (B) the
Revolving Credit 1 Facility on such Business Day.
SECTION 2.09. Increased Costs, Etc.(a) If on or after the
date hereof, the adoption of any applicable law, rule or regulation,
or any change in any applicable law, rule or regulation,
or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance
by any Lender (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) shall subject any Lender (or its Applicable Lending Office)
to any tax, duty or other charge with respect to its Eurodollar
Rate Advances, its related Note or its Commitment or its
obligation to make Eurodollar Rate Advances, or shall change the
basis of taxation of payments to any Lender (or its Applicable
Lending Office) of the principal of or interest on its Eurodollar
Rate Advances or any other amounts due under this Agreement in
respect of its Eurodollar Rate Advances or its obligation to make
Eurodollar Rate Advances (except for changes in franchise taxes
or taxes on the overall net income of such Lender or its
Applicable Lending Office unless such taxes arise in whole or in
part by reason of the activities, presence or other connection of
the Borrower in or with the jurisdiction imposing such taxes); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by
the Board of Governors of the Federal Reserve System, but
excluding with respect to any Eurodollar Rate Advance any such
requirement included in an applicable Eurodollar Reserve
Percentage), special deposit, insurance assessment or similar
requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (or its Applicable Lending
Office) or shall impose on any Lender (or its Applicable Lending
Office) or on the London interbank market any other condition
affecting its Eurodollar Rate Advances, its related Note or its
obligation to make Eurodollar Rate Advances;
and the result of any of the foregoing is to increase the cost to
such Lender (or its Applicable Lending Office) of making or
maintaining any Eurodollar Rate Advance, or to reduce the amount
34
of any sum received or receivable by such Lender (or its
Applicable Lending Office) under this Agreement or under its Note
with respect thereto, by an amount deemed by such Lender to be
material, then, within 15 days after demand by such Lender (with
a copy to the Agent), the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for
such increased cost or reduction.
(b) If any Lender shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change in any applicable law,
rule or regulation regarding capital adequacy, or any change in
the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of
return on capital of such Lender (or any Person controlling such
Lender) as a direct consequence of such Lender's obligations
hereunder to a level below that which such Lender (or any Person
controlling such Lender) could have achieved but for such
adoption, change, request or directive (taking into consideration
its policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then, from time to time,
within 15 days after demand by such Lender (with a copy to the
Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender (or any Person
controlling such Lender) for such reduction (without duplication
of any amounts payable pursuant to subsection (a) above).
(c) Each Lender will notify the Borrower and the Agent of any
event occurring after the date of this Agreement which will
entitle such Lender to compensation pursuant to this Section 2.09
as promptly as practicable after it obtains knowledge thereof,
specifying the event giving rise to such claim and setting out in
reasonable detail an estimate (without prejudice) of the basis
and computation of such claim. Upon receipt of such notice and
of such further notice as may be required by this subsection (c),
the Borrower shall compensate such Lender in accordance with this
Section 2.09 from as of the date such costs are incurred
(including, without limitation, where such costs are
retroactively applied); provided that the Borrower shall not be
required to compensate a Lender for costs incurred earlier than
120 days prior to the date of the notice required to be delivered
to the Borrower pursuant to this subsection (c). As soon as
practicable after the delivery of the initial notice pursuant to
this subsection (c), such Lender will furnish the Borrower with a
certificate setting forth in reasonable detail the basis and
amount of each request by such Lender for compensation under this
Section 2.09, accompanied by such evidence of such Lender's
entitlement to make a claim under this Section 2.09 as the
Borrower may reasonably request.
(d) If, with respect to any Eurodollar Rate Advances, the
Required Lenders notify the Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect
the cost to such Lenders of making, funding or maintaining their
Eurodollar Rate Advances for such Interest Period, the Agent
shall forthwith so notify the Borrower and the Appropriate
Lenders, whereupon (i) each such Eurodollar Rate Advance under
such Facility will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate
Advance and (ii) the obligation of the Appropriate Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall
be suspended until the Agent shall notify the Borrower that such
35
Lenders have determined that the circumstances causing such
suspension no longer exist.
(e) The Borrower shall not be liable to any Lender in
respect of any withholding taxes (including, without limitation, Taxes)
under this Section.
SECTION 2.10. Illegality. Notwithstanding any other
provision of this Agreement, if the adoption of or any
change in or in the interpretation of any law or regulation shall
make it unlawful, or compliance by any Lender with any request or
directive of any central bank or other governmental authority
shall make it unlawful, for any Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar
Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances hereunder, then, on notice thereof and demand therefor
by such Lender to the Borrower through the Agent, (a) each
Eurodollar Rate Advance will automatically, upon such demand,
Convert into a Base Rate Advance or an advance that bears
interest at the Base Rate plus the Applicable Margin in effect
from time to time, as the case may be, and (b) the obligation of
the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Agent shall notify the
Borrower that such Lender has determined that the circumstances
causing such suspension no longer exist. Before giving any
notice through the Agent pursuant to this Section, such Lender
shall designate a different Eurodollar Lending Office if such
designation will avoid the need for giving such notice and will
not, in the judgment of such Lender, be otherwise disadvantageous
to such Lender.
SECTION 2.11. Payments and Computations. (a) The Borrower
shall make each payment hereunder not later than 11:00 A.M. (New York
City time) on the day when due in Dollars to the Agent at the
applicable Agent's Account in same day funds without counterclaim or
set-off. The Agent will promptly thereafter cause to be distributed
like funds relating to the payment of principal or interest or
facility fees ratably (other than amounts payable pursuant to Section
2.09, 2.12 or 9.04(c)) to the Lenders for the account of their
respective Applicable Lending Offices, and like funds relating to
the payment of any other amount payable to any Lender to such Lender
for the account of its Applicable Lending Office, in each case to
be applied in accordance with the terms of this Agreement. Upon
its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to
Section 9.07(c), from and after the effective date specified in
such Assignment and Acceptance, the Agent shall make all payments
hereunder in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment
and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly
between themselves.
(b) All computations of interest based on the Base Rate shall be
made by the Agent on the basis of a year of 365 or 366 days, as
the case may be, all computations of interest based on the
Eurodollar Rate or the Federal Funds Rate and of fees shall be
made by the Agent on the basis of a year of 360 days, in each
case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such
interest or facility fees are payable. Each determination by the
Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
36
(c) Whenever any payment hereunder shall be stated to be
due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of
interest or fee, as the case may be; provided, however, that, if
such extension would cause payment of interest on or principal of
Eurodollar Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding
Business Day.
(d) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the
Lenders hereunder that the Borrower will not make such payment in
full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due
such Lender. If and to the extent the Borrower shall not have so
made such payment in full to the Agent, each Lender shall repay
to the Agent forthwith on demand such amount distributed to such
Lender together with interest thereon, for each day from the date
such amount is distributed to such Lender until the date such
Lender repays such amount to the Agent, at the Federal Funds
Rate.
(e) Whenever any payment received by the Agent under this
Agreement or any of the other Financing Documents is insufficient
to pay in full all amounts due and payable to the Agent and the
Lenders under or in respect of this Agreement and the other
Financing Documents on any date, such payment shall be
distributed by the Agent and applied by the Agent and the Lenders
in the following order of priority:
(i) first, to the payment of all of the fees, indemnification
payments, costs and expenses that are due and payable to the
Agent (solely in its capacity as Agent) under or in respect of
this Agreement and the other Financing Documents on such date,
ratably based upon the respective aggregate amounts of all such
fees, indemnification payments, costs and expenses owing to the
Agent on such date;
(ii) second, to the payment of all of the indemnification
payments, costs and expenses that are due and payable to the
Lenders under Section 9.04 hereof, and any similar section of any
of the other Financing Documents on such date, ratably based upon
the respective aggregate amounts of all such indemnification
payments, costs and expenses owing to the Lenders on such date;
(iii) third, to the payment of all of the amounts that are
due and payable to the Agent and the Lenders under Sections 2.09
and 2.12 hereof on such date, ratably based upon the respective
aggregate amounts thereof owing to the Agent and the Lenders on
such date;
(iv) fourth, to the payment of all of the fees that are due and
payable to the Revolving Credit 1 Lenders under Section 2.03(a)
on such date, ratably based upon the respective aggregate
Revolving Credit 1 Commitments of the Revolving Credit 1 Lenders
under the Revolving Credit 1 Facility on such date;
(v) fifth, to the payment of all of the accrued and unpaid
interest on the Obligations of the Borrower under or in respect
of the Financing Documents that is due and payable to the Agent
and the Lenders under Section 2.06(b) on such date, ratably based
upon the respective aggregate amounts of all such interest owing
to the Agent and the Lenders on such date;
(vi) sixth, to the payment of all of the accrued and unpaid
interest on the Advances that is due and payable to the Agent and
the Lenders under Section 2.06(a) on such date, ratably based
37
upon the respective aggregate amounts of all such interest owing
to the Agent and the Lender on such date;
(vii) seventh, to the payment of the principal amount of all
of the outstanding Advances that is due and payable to the Agent
and the Lenders on such date, ratably based upon the respective
aggregate amounts of all such principal owing to the Agent and
the Lenders on such date; and
(viii) eighth, to the payment of all other Obligations of the
Loan Parties owing under or in respect of the Financing Documents
that are due and payable to the Agent and the other Secured
Parties on such date, ratably based upon the respective aggregate
amounts of all such Obligations owing to the Agent and the other
Secured Parties on such date.
(f) The Borrower hereby authorizes each Lender and each of its
Affiliates, if and to the extent payment owed to such Lender is
not made when due hereunder or, in the case of a Lender, under
the Note held by such Lender, to charge from time to time, to the
fullest extent permitted by law, against any or all of the
Borrower's accounts with such Lender or such Affiliate any amount
so due.
(g) Notwithstanding anything to the contrary in this
Section 2.11, (i) all of the gross proceeds of the Additional
Term 1 Advances and the Additional Revolving Credit 1 Advances
made on the Restatement Effective Date shall be used solely to
refinance Term Advances and Revolving Credit Advances of the Term
Lenders and the Revolving Credit Lenders, respectively, who are
not Term 1 Lenders or Revolving Credit 1 Lenders, (ii) no other
Lenders shall be entitled to share in any such payments and (iii)
the Agent is authorized to make distributions of such gross
proceeds to give effect to clauses (i) and (ii).
SECTION 2.12. Taxes. (a) Any and all payments by any
Loan Party to or for the account of any Lender or the Agent hereunder
or under the Notes or any other Financing Document shall be made,
in accordance with Section 2.11 or the applicable provisions of such
other Financing Document, if any, free and clear of and without
deduction for any and all Taxes, except to the extent required by
law. If any Loan Party shall be required by law to deduct any
Indemnified Taxes from or in respect of any sum payable hereunder
or under any Note or any other Financing Document to any Lender
or the Agent, (i) the sum payable by such Loan Party shall be
increased as may be necessary so that after such Loan Party and
the Agent have made all required deductions (including deductions
applicable to additional sums payable under this Section 2.12)
such Lender or such Agent, as the case may be, receives an amount
equal to the sum it would have received had no such deductions
been made, (ii) such Loan Party shall make all such deductions
and (iii) such Loan Party shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance
with applicable law.
38
(b) In addition, a Loan Party shall pay any present or future
stamp, documentary, excise, mortgage recording or similar taxes,
charges or levies that arise from any payment made by such Loan
Party hereunder or under any Notes or any other Financing
Documents or from the execution, delivery or registration of,
performance under, or otherwise with respect to, this Agreement,
the Notes or the other Financing Documents (hereinafter referred
to as "Other Taxes").
(c) The Loan Parties shall indemnify each Lender and the Agent
for and hold them harmless against the full amount of Indemnified
Taxes (including additional sums payable under this Section 2.12)
imposed as a result of the failure of a Loan Party or the Agent
to deduct such Indemnified Taxes from any payments hereunder or
under the Notes or the Other Financing Documents and pay such
amounts to the appropriate taxing authorities, and Other Taxes,
in each case imposed on or paid by such Lender or the Agent (as
the case may be) and any liability (including penalties,
additions to tax, interest and expenses) arising therefrom or
with respect thereto. This indemnification shall be made within
30 days from the date such Lender or the Agent (as the case may
be) makes written demand therefor.
(d) Within 30 days after the date of any payment of any
Indemnified Taxes, the appropriate Loan Party shall furnish to
the Agent, at its address referred to in Section 9.02, the
original or a certified copy of a receipt evidencing such
payment, to the extent such a receipt is issued therefor, or
other written proof of payment thereof that is reasonably
satisfactory to the Agent. In the case of any payment hereunder
or under the Notes or the other Financing Documents by or on
behalf of a Loan Party (other than by the Agent) through an
account or branch outside the United States or by or on behalf of
a Loan Party by a payor (other than by the Agent) that is not a
United States person, if such Loan Party determines that no
additional Taxes are payable in respect thereof, such Loan Party
shall furnish, or shall cause such payor to furnish, to the
Agent, at such address, an opinion of counsel acceptable to the
Agent to such effect. For purposes of subsections (d) and (e) of
this Section 2.12, the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the
Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each
Initial Lender, on or prior to the date of the Restatement
Effective Date in the case of each of the Additional Term 1
Lenders and Additional Revolving Credit 1 Lenders that was not a
Term Lender or a Revolving Credit Lender, respectively,
immediately prior to the Restatement Effective Date and on the
date of the Assignment and Acceptance pursuant to which it
becomes a Lender in the case of each other Lender and from time
to time thereafter as reasonably requested in writing by the
Borrower (but only so long thereafter as such Lender remains
lawfully able to do so), provide each of the Agent and the
Borrower with two original Internal Revenue Service Forms W-8BEN
(claiming the benefits of an income tax treaty) or W-8ECI or, in
the case of a Lender that is claiming exemption from Taxes under
Section 881(c) of the Code with respect to payments of "portfolio
interest", a Form W-8BEN (certifying that such Lender is a non-US
beneficial owner of such payments) and a certificate representing
that such Lender is not (i) a "bank" as defined in Section
881(c)(3)(A) of the Internal Revenue Code), (ii) a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the
Internal Revenue Code) of the Borrower or (iii) a controlled
foreign corporation related to the Borrower (within the meaning
of Section 864(d)(4) of the Internal Revenue Code), or any
39
successor or other form prescribed by the Internal Revenue
Service, certifying that such Lender is exempt from or entitled
to a reduced rate of United States withholding tax on payments
pursuant to this Agreement or the Notes or any other Financing
provided that if any form or certificate provided by a Lender
becomes invalid because of a change in the circumstances relating
to such Lender, such Lender will provide a new form certifying
that such Lender is exempt from or entitled to a reduced rate of
United States withholding tax on payments pursuant to this
Agreement or the Notes or any other Financing Document. Each
Lender and the Agent shall also deliver to each of the Borrower
and the Agent, at the Borrower's request and expense, to the
extent such Lender or Agent is legally able to do so, such other
forms, statements or certificates as may be required in order to
establish the legal entitlement of such Lender or Agent to an
exemption from, or a reduction in the amount of, any Indemnified
Taxes. If any form or document referred to in this subsection
(e) requires the disclosure of information, other than
information necessary to compute the tax payable and information
required on the date hereof by Internal Revenue Service Form
W-8BEN or W-ECI or the related certificate described above, that
the applicable Lender reasonably considers to be confidential,
such lender shall give notice thereof to the Borrower and shall
not be obligated to include in such form or document such
confidential information. If a Lender becomes subject to Taxes
because of its failure to deliver a form, certificate or other
document required hereunder, the Loan Parties shall take such
steps as such Lender shall reasonably request at such Lender's
expense to assist such lender to recover such Taxes; provided
that the Loan Party shall not have determined, in its sole
discretion, that such steps may be disadvantageous to any Loan
Party.
(f) If the Agent or any Lender determines, in its sole
reasonable discretion, that it has received a refund of any Taxes
as to which it has been indemnified by any Loan Party or with
respect to which any Loan Party has paid additional amounts
pursuant to this Section 2.12, it shall pay over such refund to
such Loan Party (but only to the extent of indemnity payments
made, or additional amounts paid, by such Loan Party under this
Section 2.12 with respect to Taxes giving rise to such refund),
net of all reasonable out-of-pocket expenses of the Agent or such
Lender and without interest (other than any interest paid by the
relevant taxing jurisdiction with respect to such refund, which
shall not be subject to the limitations set forth in the
immediately preceding parenthetical); provided that such Loan
Party, upon the request of the Agent or such Lender, agrees to
repay the amount paid over to such Loan Party (plus any interest
imposed by the relevant taxing jurisdiction) to the Agent or such
Lender in the event the Agent or such Lender is required to repay
such refund to such taxing jurisdiction.
(g) Upon the request and at the expense of any Loan Party, the
Agent and any Lender subject to Taxes in respect of which such
Loan Party is obligated to make payments under this Section 2.12
shall reasonably cooperate with such Loan Party in contesting
such Tax, provided that each of the agent and any such Lender
shall not have determined, in its sole discretion, that such
content may be disadvantageous to it.
(h) The Agent agrees to withhold Taxes from any amounts
paid by it hereunder or under the Notes or any other Financing
Document and to file such information returns with respect to such
payments and withholdings, in each case as required by law.
SECTION 2.13. Sharing of Payments, Etc.
If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off,
or otherwise) on account of the Advances owing to it
(other than pursuant to Section 2.09, 2.12 or 9.04(c)) (a) on
40
account of Obligations due and payable to such Lender hereunder
and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such
Obligations due and payable to such Lender at such time to (ii)
the aggregate amount of the Obligations due and payable to all
Lenders hereunder and under the Notes at such time) of payments
on account of the Obligations due and payable to all Lenders
hereunder and under the Notes at such time obtained by all the
Lenders at such time or (b) on account of Obligations owing (but
not due and payable) to all Lenders hereunder and under the Notes
at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations owing to such
Lender at such time to (ii) the aggregate amount of the
Obligations owing (but not due and payable) to all Lenders
hereunder and under the Notes at such time) of payments on
account of the Obligations owing (but not due and payable) to all
Lenders hereunder and under the Notes at such time obtained by
all of the Lenders at such time, on account such Lender shall
forthwith purchase from the other Lenders such participations in
the Advances owing to them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each
of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender the purchase
price to the extent of such Lender's ratable share (according to
the proportion of (i) the amount of such Lender's required
payment to (ii) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.13 may, to the
fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor
of the Borrower in the amount of such participation.
Notwithstanding anything to the contrary in this Section 2.13,
(i) all of the gross proceeds of the Additional Term 1 Advances
and the Additional Revolving Credit 1 Advances made on the
Restatement Effective Date shall be used to solely to refinance
Term Advances and Revolving Credit Advances of the Term Lenders
and the Revolving Credit Lenders, respectively, who are not Term
1 Lenders or Revolving Credit 1 Lenders, (ii) no other Lenders
shall be entitled to share in any such payments, and (iii) the
Agent is authorized to make distributions of such gross proceeds
to give effect to clauses (i) and (ii).
SECTION 2.14. Evidence of Debt.(a) Each Lender shall
maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Advance owing to such Lender from time to time,
including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder in respect of Advances. The
Borrower agrees that upon notice by any Lender to the Borrower (with a
copy of such notice to the Agent) to the effect that a Note is
required or appropriate in order for such Lender to evidence
(whether for purposes of pledge, enforcement or otherwise) the
Advances owing to, or to be made by, such Lender, the Borrower
shall promptly execute and deliver to such Lender a Note payable
to the order of such Lender in a principal amount up to the
Commitment of such Lender. All reference to Notes in the
Financing Documents shall mean Notes, if any, to the extent
issued hereunder.
(b) The Register maintained by the Agent pursuant to Section
9.07(c) shall include a control account, and a subsidiary account
for each Lender, in which accounts (taken together) shall be
recorded (i) the date and amount of each Borrowing made
41
hereunder, the Type of Advances comprising such Borrowing and, if
appropriate, the Interest Period applicable thereto, (ii) the
terms of each Assignment and Acceptance delivered to and accepted
by it, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each
Lender hereunder and (iv) the amount of any sum received by the
Agent from the Borrower hereunder and each Lender's share
thereof.
(c) Entries made in good faith by the Agent in the Register
pursuant to subsection (b) above, and by each Lender in its
account or accounts pursuant to subsection (a) above, shall be
prima facie evidence of the amount of principal and interest due
and payable or to become due and payable from the Borrower to, in
the case of the Register, each Lender and, in the case of such
account or accounts, such Lender, under this Agreement, absent
manifest error; provided, however, that the failure of the Agent
or such Lender to make an entry, or any finding that an entry is
incorrect, in the Register or such account or accounts shall not
limit or otherwise affect the obligations of the Borrower under
this Agreement.
SECTION 2.15. Use of Proceeds. The proceeds of the Advances
shall be available (and the Borrower agrees that it shall use such
proceeds) solely (i) to refinance the Term Loan Advances and the
Revolving Credit Advances, (ii) to pay transaction fees and expenses
and (iii) for general corporate purposes of the Borrower and its Subsidiaries.
SECTION 2.16. Mitigation, Substitution of Lender. If,
with respect to any Lender, a condition arises or an event occurs
which would, or would upon the giving of notice, result in the
payment of any additional costs pursuant to Section 2.09 or any
additional amounts pursuant to Section 2.12, such Lender, promptly
upon becoming aware of the same, shall notify the Borrower (with a
copy to the Agent) thereof and shall take such steps as may be
reasonable to it to mitigate the effects of such condition or event
including the designation of a different Applicable Lending Office or
furnishing of the proper certificates under any applicable tax laws,
tax treaties and conventions to the extent that such certificates
are legally available to such Lender, provided that such Lender shall
be under no obligation to take any step that, in its good-faith
opinion would (i) result in its incurring any additional costs in
performing its obligations hereunder unless the Borrower has
agreed to reimburse it therefore or (ii) be otherwise
disadvantageous to such Lender in a significant respect in the
reasonable judgment of such Lender. If (i) the obligation of any
Lender to make Eurodollar Rate Advances has been suspended
pursuant to Section 2.09, (ii) any Lender has demanded
compensation under Section 2.09 or 2.12, or (iii) any Lender
becomes a Defaulting Lender, the Borrower shall have the right,
so long as no Default shall have occurred and be continuing, to
seek a substitute one or more Eligible Assignees (which may be
one or more of the Lenders) to purchase the Note and assume the
Commitment of such Lender, in accordance with Section 9.07(a).
SECTION 2.17. Defaulting Lenders.(a) In the event that,
at any one time, (i) any Lender shall be a Defaulting Lender,
(ii) such Defaulting Lender shall owe a Defaulted Advance to the
Borrower and (iii) the Borrower shall be required to make any payment
hereunder or under any other Financing Document to or for the
account of such Defaulting Lender, then the Borrower may, so long
as no Default shall occur or be continuing at such time and to
the fullest extent permitted by applicable law, set off and otherwise
apply the Obligation of the Borrower to make such payment to or for the
account of such Defaulting Lender against the obligation of such
Defaulting Lender to make such Defaulted Advance. In the event
42
that, on any date, the Borrower shall so set off and otherwise
apply its obligation to make any such payment against the
obligation of such Defaulting Lender to make any such Defaulted
Advance on or prior to such date, the amount so set off and
otherwise applied by the Borrower shall constitute for all
purposes of this Agreement and the other Financing Documents an
Advance by such Defaulting Lender made on the date of such setoff
under the Facility pursuant to which such Defaulted Advance was
originally required to have been made pursuant to Section 2.01.
Such Advance shall be considered, for all purposes of this
Agreement, to comprise part of the Borrowing in connection with
which such Defaulted Advance was originally required to have been
made pursuant to Section 2.01, even if the other Advances
comprising such Borrowing shall be Eurodollar Rate Advances on
the date such Advance is deemed to be made pursuant to this
subsection (a). The Borrower shall notify the Agent at any time
the Borrower exercises its right of set-off pursuant to this
subsection (a) and shall set forth in such notice (A) the name of
the Defaulting Lender and the Defaulted Advance required to be
made by such Defaulting Lender and (B) the amount set off and
otherwise applied in respect of such Defaulted Advance pursuant
to this subsection (a). Any portion of such payment otherwise
required to be made by the Borrower to or for the account of such
Defaulting Lender which is paid by the Borrower, after giving
effect to the amount set off and otherwise applied by the
Borrower pursuant to this subsection (a), shall be applied by the
Agent as specified in subsection (b) or (c) of this Section 2.17.
(b) In the event that, at any one time, (i) any Lender shall be
a Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Amount to the Agent or any of the other Lenders and
(iii) the Borrower shall make any payment hereunder or under any
other Financing Document to the Agent for the account of such
Defaulting Lender, then the Agent may, on its behalf or on behalf
of such other Lenders and to the fullest extent permitted by
applicable law, apply at such time the amount so paid by the
Borrower to or for the account of such Defaulting Lender to the
payment of each such Defaulted Amount to the extent required to
pay such Defaulted Amount. In the event that the Agent shall so
apply any such amount to the payment of any such Defaulted Amount
on any date, the amount so applied by the Agent shall constitute
for all purposes of this Agreement and the other Financing
Documents payment, to such extent, of such Defaulted Amount on
such date. Any such amount so applied by the Agent shall be
retained by the Agent or distributed by the Agent to such other
Lenders, ratably in accordance with the respective portions of
such Defaulted Amounts payable at such time to the Agent and such
other Lenders and, if the amount of such payment made by the
Borrower shall at such time be insufficient to pay all Defaulted
Amounts owing at such time to the Agent and such other Lenders in
the following order of priority:
(i) first, to the Agent for any Defaulted Amounts then
owing to it, in its capacity as such; and
(ii) second, to any other Lenders for any Defaulted
Amounts then owing to such other Lenders, ratably in accordance
with such respective Defaulted Amounts then owing to such other
Lenders.
Any portion of such amount paid by the Borrower for the account of
such Defaulting Lender remaining, after giving effect to the amount
applied by the Agent pursuant to this subsection (b), shall be
applied by the Agent as specified in subsection (c) of this Section 2.17.
43
(c) In the event that, at any one time, (i) any Lender shall be
a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) the Borrower,
the Agent or any other Lender shall be required to pay or
distribute any amount hereunder or under any other Financing
Document to or for the account of such Defaulting Lender, then
the Borrower or such other Lender shall pay such amount to the
Agent to be held by the Agent, to the fullest extent permitted by
applicable law, in escrow or the Agent shall, to the fullest
extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Agent in escrow
under this subsection (c) shall be deposited by the Agent in an
account with a bank (the "Escrow Bank") selected by the Agent, in
the name and under the control of the Agent, but subject to the
provisions of this subsection (c). The terms applicable to such
account, including the rate of interest payable with respect to
the credit balance of such account from time to time, shall be
the Escrow Bank's standard terms applicable to escrow accounts
maintained with it. Any interest credited to such account from
time to time shall be held by the Agent in escrow under, and
applied by the Agent from time to time in accordance with the
provisions of, this subsection (c). The Agent shall, to the
fullest extent permitted by applicable law, apply all funds so
held in escrow from time to time to the extent necessary to make
any Advances required to be made by such Defaulting Lender and to
pay any amount payable by such Defaulting Lender hereunder and
under the other Financing Documents to the Agent or any other
Lender, as and when such Advances or amounts are required to be
made or paid and, if the amount so held in escrow shall at any
time be insufficient to make and pay all such Advances and
amounts required to be made or paid at such time, in the
following order of priority:
(i) first, to the Agent for any amounts then due and payable by
such Defaulting Lender to it, in its capacity as such;
(ii) second, to any other Lenders for any amount then due and
payable by such Defaulting Lender to such other Lenders
hereunder, ratably in accordance with such respective amounts
then due and payable to such other Lenders; and
(iii) third, to the Borrower for any Advance then required to
be made by such Defaulting Lender pursuant to a Commitment of
such Defaulting Lender.
In the event that any Lender that is a Defaulting Lender shall,
at any time, cease to be a Defaulting Lender, any funds held by
the Agent in escrow at such time with respect to such Lender
shall be distributed by the Agent to such Lender and applied by
such Lender to the Obligations owing to such Lender at such time
under this Agreement and the other Financing Documents ratably in
accordance with the respective amounts of such Obligations
outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under
this Section 2.17 are in addition to other rights and remedies
that the Borrower may have against such Defaulting Lender with
respect to the Defaulted Advance and that the Agent or any Lender
may have against such Defaulting Lender with respect to any
Defaulted Amount.
ARTICLE III
44
CONDITIONS OF EFFECTIVENESS
SECTION 3.01. Conditions Precedent to Effectiveness. This Agreement
shall become effective on and as of the first date (the "Restatement
Effective Date") on which the Agent shall have received (or receipt shall have
been waived of)the following, each dated such day (unless otherwise specified),
in form and substance satisfactory to the Agent (unless otherwise
specified) and (except for the Term 1 Notes and the Revolving
Credit 1 Notes) in sufficient copies for each Lender party to
this Agreement as of the Restatement Effective Date:
(a) Counterparts of this Agreement, duly executed and delivered
on behalf of each of (i) the Borrower, (ii) the Parent Guarantor,
(iii) the Administrative Agent, (iv) the Syndication Agent, (v)
the Required Lenders, (vi) each Term 1 Lender, (vii) each
Revolving Credit 1 Lender (or as to any of the foregoing parties,
the Agent shall have received advice satisfactory to the Agent
that any such foregoing party has executed a counterpart of this
Agreement).
(b) For any Term 1 Lender or Revolving Credit 1 Lender that so
requests, a Term 1 Note or Revolving Credit 1 Note, as
applicable, payable to the order of such Lender duly executed by
the Borrower evidencing such Lender's Term 1 Advance or Revolving
Credit 1 Advance, as applicable.
(c) Any necessary amendments or modifications to the Aircraft
Security Agreement, duly executed by the Borrower, together with
evidence of completion of all recordings and filings of or with
respect to such amendments or modifications.
(d) Any necessary amendments or modifications to the SGR
Security Agreement, duly executed by the Borrower.
(e) Any necessary amendments or modifications to the Pledge
Agreement, duly executed by the Parent Guarantor.
(f) Certified copies of the resolutions of the Board of
Directors of each Loan Party approving this Agreement, and of all
documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if
any, with respect to the Transaction.
(g) A certificate of each Loan Party signed on behalf of such
Loan Party by its President or a Vice President and its Secretary
or any Assistant Secretary, dated the date of the Restatement
Initial Extension of Credit (the statements made in which
certificate shall be true on and as of the date of the
Restatement Initial Extension of Credit, except to the extent
that any such representation or warranty relates to a specified
date, in which case such representation or warranty shall be or
was true and correct as of such date), certifying as to (i) the
45
truth of the representations and warranties contained in the
Financing Documents as though made on and as of the date of the
Restatement Initial Extension of Credit, except to the extent
that any such representation or warranty relates to a specified
date, in which case such representation or warranty shall be or
was true and correct as of such date, and (ii) the absence of any
event occurring and continuing, or resulting from the Restatement
Initial Extension of Credit, that constitutes a Default.
(h) A certificate of the Secretary or an Assistant Secretary of
each Loan Party certifying the names and true signatures of the
officers of such Loan Party authorized to sign each Financing
Document to which it is or is to be a party and the other
documents to be delivered hereunder and thereunder.
(i) A Notice of Borrowing relating to the Restatement Initial
Extension of Credit in accordance with the requirements of
Section 2.02(a)(ii) of this Agreement (giving effect to such
requirements as if the Restatement Effective Date had occurred)
with respect to the borrowing of the Additional Term 1 Advances
and the Additional Revolving Credit 1 Advances on the Restatement
Effective Date.
(j) A favorable opinion of the General Counsel for the Borrower
to the effect that this Agreement is a valid, binding and
enforceable agreement of the Borrower, and a favorable opinion of
the General Counsel for the Parent Guarantor to the effect that
this Agreement is a valid, binding and enforceable agreement of
the Parent Guarantor, and, in each case, restating the opinions
of such counsel dated December 17, 2004 delivered pursuant to
Section 3.01(a)(xv) of the Existing Credit Agreement that have
been reasonably requested by the Agent to be so restated, with
references to the "Borrower Financing Documents" and the "AMR
Financing Documents", respectively, to mean such documents as
amended or modified by this Agreement.
(k) A favorable opinion of Xxxxxxxxx Xxxxxx Xxxxxxxx, Xxxxxx &
Xxxxxx, FAA counsel to the Loan Parties, restating the opinions
of such counsel dated December 17, 2004 delivered pursuant to
Section 3.01(a)(xvi) of the Existing Credit Agreement that have
been reasonably requested by the Agent to be so restated.
(l) The Borrower shall have paid all invoiced accrued fees and
expenses of the Agent and the Lead Arrangers (including the fees
and expenses of counsel to the Agent and the Lead Arrangers).
SECTION 3.02. Conditions Precedent to Each Borrowing. The
obligation of each Appropriate Lender to make an Advance on the occasion
of each Borrowing (including the initial Borrowing) shall be subject to
the further conditions precedent that on the date of such Borrowing
the following statements shall be true (and each of the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower
of the proceeds of such Borrowing shall constitute a representation and
warranty by the Borrower that on the date of such Borrowing such
statements are true, except to the extent that any such representation
or warranty relates to a specified date, in which case such
representation or warranty shall be or was true and correct as of
such date):
(a) the representations and warranties contained in each
Financing Document are correct on and as of such date, before and
after giving effect to such Borrowing and to the application of
the proceeds therefrom, as though made on and as of such date,
46
other than any such representations or warranties that, by their
terms, refer to a specific date other than the date of such
Borrowing; and
(b) no Default has occurred and is continuing, or would result
from such Borrowing or from the application of the proceeds
therefrom.
SECTION 3.03. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section
3.01, each Lender shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable
or satisfactory to the Lenders unless an officer of the Agent
responsible for the transactions contemplated by the Financing Documents
shall have received notice from such Lender prior to the date
that the Borrower, by notice to the Lenders, designates as the
proposed Restatement Effective Date, specifying its objection thereto
and, if the Restatement Initial Extension of Credit consists of a
Borrowing, such Lender shall not have made available to the Agent
such Lender's ratable portion of such Borrowing. The Agent shall
promptly notify the Lenders of the occurrence of the Restatement
Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) Corporate Existence and Power. The Borrower (i) is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, (ii) is duly
qualified and in good standing as a foreign corporation in each
other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be
licensed, except where the failure to so qualify or be licensed
could not reasonably be expected to have a Material Adverse
Effect and (iii) has all corporate powers and all material
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
(b) Subsidiaries. Set forth on Schedule 4.01(b) hereto is a
complete and accurate list of all Material Subsidiaries of the
Borrower. All of the outstanding Equity Interests in the
Borrower's Material Subsidiaries have been validly issued, are
fully paid and non-assessable.
(c) Corporate Authorization; No Contravention. The execution,
delivery and performance by the Borrower of this Agreement and
the other Financing Documents to be delivered by it are within
the Borrower's corporate powers, have been duly authorized by all
necessary corporate action, and do not contravene, or constitute
a default under, any provision of applicable law or regulation or
of the certificate of incorporation or by-laws of the Borrower or
of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or result in the creation or
47
imposition of any Lien on any asset of the Borrower or any of its
Material Subsidiaries, other than Liens created pursuant to the
Financing Documents.
(d) Governmental, Third-Party Approvals or Consents. No
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any
other third party is required for (i) the due execution,
delivery, recordation, filing or performance by the Borrower of
any Financing Document to which it is or is to be a party, or for
the consummation of the Transaction, (ii) the grant by the
Borrower of the Liens granted by it pursuant to the Collateral
Documents, (iii) the perfection or maintenance of the Liens under
the laws of the United States, any State thereof or any political
subdivision or agency thereof created under the Collateral
Documents, subject only to Permitted Liens or (iv) as of the
Effective Date, the exercise by the Agent or any Lender of its
rights under the Financing Documents or the remedies in respect
of the Collateral pursuant to the Collateral Documents, except
for (a) the authorizations, approvals, actions, notices and
filings listed on Schedule 4.01(d) hereto, all of which have been
duly observed, taken, given or made and are in full force and
effect and (b) the authorizations, approvals, actions, notices
and filings contemplated by the SGR Security Agreement.
(e) Binding Effect. This Agreement constitutes, and the other
Financing Documents, when executed and delivered by the Borrower,
will constitute, valid and binding agreements of the Borrower,
enforceable against the Borrower in accordance with their
respective terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and by general
principles of equity.
(f) Litigation. Except as disclosed to the Lenders in Schedule
4.01(f) hereto, there is no action, suit, investigation,
litigation or proceeding pending against, or to the knowledge of
the Borrower threatened against or affecting, the Borrower or any
of its Material Subsidiaries before any court or arbitrator or
any governmental body, agency or official (i) which could
reasonably be expected to have a Material Adverse Effect or
(ii) which purports to affect the legality, validity or
enforceability of this Agreement or any Financing Documents or
the consummation of the transactions contemplated hereby.
(g) Financial Information. (i) The consolidated balance sheet
of the Borrower and its Subsidiaries as of December 31, 2005 and
the related consolidated statements of operations and cash flows
for the fiscal year then ended, reported on by Ernst & Young LLP
and set forth in the Borrower's report on Form 10-K for the year
ended December 31, 2005, a copy of which has been delivered to
each of the Lenders, fairly present, in conformity with generally
accepted accounting principles, the consolidated financial
position of the Borrower and its Subsidiaries as of such date and
their consolidated results of operations and cash flows for such
fiscal year.
(ii) Except as disclosed in the Disclosure Documents filed on or
prior to December 3, 2004, since the date of the financial
statements delivered to the Lenders pursuant to Section
4.01(g)(i), there has been no material adverse change in the
business, assets, operations, properties or condition (financial
48
or otherwise) of the Borrower and its Material Subsidiaries,
considered as a whole.
(iii) Neither any written information, exhibit or report, nor
the Disclosure Documents (as modified or supplemented by other
written information so furnished), taken as a whole, furnished by
or on behalf of any Loan Party to the Agent, the Lead Arrangers
or any Lender in connection with the negotiation and syndication
of the Financing Documents or pursuant to the terms of the
Financing Documents contained any untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements made therein not misleading in light of the
circumstances in which such information, exhibits and reports
were provided; provided that, with respect to projections, the
Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at
the time.
(h) Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of
ERISA and the Internal Revenue Code with respect to each Plan and
is in compliance in all material respects with the presently
applicable provisions of ERISA and the Internal Revenue Code with
respect to each Plan. No member of the ERISA Group has (i)
sought a waiver of the minimum funding standard under Section 412
of the Internal Revenue Code in respect of any Plan, (ii) failed
to make any contribution or payment to any Plan or Multiemployer
Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted
or could result in the imposition of a Lien or the posting of a
bond or other security under ERISA or the Internal Revenue Code
or (iii) incurred any liability under Title IV of ERISA other
than a liability to the PBGC for premiums under Section 4007 of
ERISA. Nothing in this paragraph (h) precludes a member of the
ERISA Group from seeking, after the Effective Date, a waiver of
the minimum funding standards under Section 412 of the Internal
Revenue Code in respect of any Plan, provided the requested
waiver complies in all other respects with the terms of this
Agreement.
(i) Environmental Matters. The Borrower has not received notice
to the effect, nor does any Responsible Officer have any actual
knowledge, that its operations are not in material compliance
with any applicable Environmental Laws or the subject of any
federal or state investigation evaluating whether any remedial
action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to
have a Material Adverse Effect.
(j) Margin Regulations. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U issued
by the Board of Governors of the Federal Reserve System), and no
proceeds of any Advance will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
49
(k) Investment Company Act; Public Utility Holding Company Act.
Neither the Borrower nor any of its Material Subsidiaries is an
"investment company" or "promoter" or "principal underwriter"
for, an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended. Neither the Borrower
nor any of its Material Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as
amended.
(l) Perfection, Etc. All filings and other actions necessary or
desirable to perfect (to the extent provided in the Collateral
Documents) and protect the security interest in the AA Collateral
created under the Collateral Documents have been duly made or
taken and are in full force and effect under the laws of the
United States, any State thereof or any political subdivision or
agency thereof, and the Collateral Documents create in favor of
the Agent for the benefit of the Secured Parties a valid and,
together with such filings and other actions, perfected security
interest in such AA Collateral, securing the payment of the
Secured Obligations, under the laws of the United States, any
State thereof or any political subdivision or agency thereof and
all filings and other actions necessary or desirable to perfect
and protect such security interest have been duly taken under the
laws of the United States, any State thereof or any political
subdivision or agency thereof. The Borrower is the legal and
beneficial owner of the Collateral (as such term is defined in
the Aircraft Security Agreement) free and clear of any Lien,
except for the liens and security interests created or permitted
under the Financing Documents. The Borrower is the holder of the
Narita Collateral free and clear of any Lien, except for the
liens and security interests created or permitted under the
Financing Documents.
(m) No Default. Neither the Borrower nor any Material
Subsidiary of the Borrower is in default under or with respect to
any Contractual Obligation that could, either individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
(n) Casualty, Etc. Neither the business nor the properties of
the Borrower or any of its Material Subsidiaries are affected by
any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or
of the public enemy or other casualty (whether or not covered by
insurance) that could reasonably be expected to have a Material
Adverse Effect.
(o) Taxes. The Borrower and each of its Material Subsidiaries
and Affiliates has filed, has caused to be filed or has been
included in all material tax returns (Federal, state, local and
foreign) required to be filed and has paid all taxes shown
thereon to be due and all material taxes otherwise due and
payable, together with applicable interest and penalties.
(p) Aircraft Value. Schedule 1 to the Aircraft Security
Agreement, as amended or supplemented from time to time, sets
forth a list of Unencumbered Stage 3 Aircraft with an Aircraft
Value, as set forth in the most recent Appraisal Report delivered
with respect thereto (a copy of which has been delivered to each
of the Lenders), equal to the amount set forth opposite such
Aircraft.
50
(q) Regulatory Status. The Borrower is an "air carrier" within
the meaning of Section 40102 of Title 49 and holds a certificate
under Section 41102 of Title 49. The Borrower holds an air
carrier operating certificate issued pursuant to Chapter 447 of
Title 49. The Borrower and the Parent Guarantor are each a
"citizen of the United States" as defined in Section 40102(a)(15)
of Title 49 and as that statutory provision has been interpreted
by DOT pursuant to its policies (a "United States Citizen"). The
Borrower possesses all necessary certificates, franchises,
licenses, permits, rights, designations, authorizations,
exemptions, concessions, frequencies, and consents to operate the
Narita Routes.
SECTION 4.02. Representations and Warranties of the Parent
Guarantor. The Parent Guarantor represents and warrants as follows:
(a) Corporate Existence and Power. The Parent Guarantor (i) is
a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, (ii) is duly
qualified and in good standing as a foreign corporation in each
other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be
licensed, except where the failure to so qualify or be licensed
could not reasonably be expected to have a Material Adverse
Effect and (iii) has all corporate powers and all material
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
(b) Corporate Authorization; No Contravention. The execution,
delivery and performance by the Parent Guarantor of this
Agreement and the other Financing Documents to be delivered by it
are within the Parent Guarantor's corporate powers, have been
duly authorized by all necessary corporate action, and do not
contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of
incorporation or by-laws of the Parent Guarantor or of any
agreement, judgment, injunction, order, decree or other
instrument binding upon the Parent Guarantor or result in the
creation or imposition of any Lien on any asset of the Parent
Guarantor or any of its Material Subsidiaries, other than Liens
created pursuant to the Financing Documents.
(c) Governmental, Third Party Approvals or Consents. No
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any
other third party is required for (i) the due execution,
delivery, recordation, filing or performance by the Parent
Guarantor of any Financing Document to which it is or is to be a
party, or for the consummation of the Transaction, (ii) the grant
by the Parent Guarantor of the Liens granted by it pursuant to
the Collateral Documents, (iii) the perfection or maintenance of
the Liens created under the Collateral Documents, subject only to
Permitted Liens or (iv) as of the Effective Date, the exercise by
the Agent or any Lender of its rights under the Financing
Documents or the remedies in respect of the Collateral pursuant
to the Collateral Documents, except for the authorizations,
approvals, actions, notices and filings listed on Schedule
4.01(d) hereto, all of which have been duly observed, taken,
given or made and are in full force and effect.
51
(d) Binding Effect. This Agreement constitutes, and the other
Financing Documents, when executed and delivered by the Parent
Guarantor, will constitute, valid and binding agreements of the
Parent Guarantor, enforceable against the Parent Guarantor in
accordance with their respective terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and
by general principles of equity.
(e) Financial Information. The consolidated balance sheet of
the Parent Guarantor and its Subsidiaries as of December 31, 2005
and the related consolidated statements of operations and cash
flows for the fiscal year then ended, reported on by Ernst &
Young LLP and set forth in the Parent Guarantor's report on Form
10-K for the year ended December 31, 2005, a copy of which has
been delivered to each of the Lenders, fairly present, in
conformity with generally accepted accounting principles, the
consolidated financial position of the Parent Guarantor and its
Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.
(f) Perfection, Etc. All filings and other actions necessary or
desirable to perfect (to the extent set forth in the Pledge
Agreement) and protect the security interest in the AMR
Collateral created under the Collateral Documents have been duly
made or taken and are in full force and effect, and the
Collateral Documents create in favor of the Agent for the benefit
of the Secured Parties a valid and, together with such filings
and other actions, perfected security interest in such AMR
Collateral, securing the payment of the Secured Obligations, and
all filings and other actions necessary or desirable to perfect
and protect such security interest have been duly taken. The
Parent Guarantor is the legal and beneficial owners of the AMR
Collateral free and clear of any Lien, except for the liens and
security interests created or permitted under the Financing
Documents.
ARTICLE V
COVENANTS OF THE LOAN PARTIES
SECTION 5.01. Affirmative Covenants. So long as any
principal, interest and premiums related to any Advances and any fees
hereunder shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower, and as to Sections 5.01(a)(iv),
5.01(a)(v), 5.01(a)(vi), 5.01(a)(ix), 5.01(a)(x), 5.01(a)(xvi), 5.01(b)(i)
and 5.01(h) the Parent Guarantor, will:
(a) Information. Deliver to the Agent for distribution to the
Lenders:
(i) as soon as available and in any event within 90 days (or
such longer period as is permitted for the filing of an
equivalent periodic report to the extent an extension thereof has
been obtained under Rule 12b-25 of the General Rules and
Regulations under the Securities Exchange Act of 1934, or any
successor rules) after the end of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal year and the related
consolidated statements of operations and cash flows for such
fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in the form filed with
52
the Securities and Exchange Commission accompanied by an opinion
of Ernst & Young LLP or other independent public accountants of
nationally recognized standing;
(ii) as soon as available and in any event within 45 days (or
such longer period as is permitted for the filing of an
equivalent periodic report to the extent an extension thereof has
been obtained under Rule 12b-25 of the General Rules and
Regulations under the Securities Exchange Act of 1934, or any
successor rules) after the end of each of the first three
quarters of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Subsidiaries as of the end
of such quarter and the related consolidated statements of
operations and cash flows for such quarter and for the portion of
the Borrower's fiscal year ended at the end of such quarter,
setting forth in each case in comparative form the figures for
the corresponding quarter and the corresponding portion of the
Borrower's previous fiscal year, all in the form filed with the
Securities and Exchange Commission and certified (subject to
normal year-end adjustments) as to fairness of presentation,
generally accepted accounting principles and consistency by the
chief financial officer or the chief accounting officer or the
treasurer of the Borrower;
(iii) within 90 days after the end of each fiscal year of the
Borrower and within 45 days after the end of each of the first
three quarters of each fiscal year of the Borrower (or, in each
case, such longer period as is permitted for the filing of an
equivalent underlying periodic report to the extent an extension
thereof has been obtained under Rule 12b-25 of the General Rules
and Regulations under the Securities Exchange Act of 1934, or any
successor rules), a certificate of the chief financial officer or
the chief accounting officer or the treasurer of the Borrower, in
substantially the form of Exhibit D-1 attached hereto, (A)
setting forth in reasonable detail the calculations required to
establish whether the Borrower was in compliance with the
requirements of Section 5.03(a) on the date of the financial
statements most recently delivered pursuant to clause (i) or (ii)
above, as applicable, (B) stating whether any Default exists on
the date of such certificate and, if any Default then exists,
setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto and
(C) as to such Collateral matters as provided for on Exhibit D-1
attached hereto, provided that in the event of any change in GAAP
used in the preparation of such financial statements, the
Borrower shall also provide, if necessary for the determination
of compliance with Section 5.03(a), a statement of reconciliation
conforming such financial statements to GAAP; provided, however,
that any such certificate delivered for the Fiscal Year ended
December 31, 2005 shall demonstrate compliance with the
requirements of Section 5.03(a) of the Existing Credit Agreement;
(iv) as soon as available and in any event within 90 days (or
such longer period as is permitted for the filing of an
equivalent periodic report to the extent an extension thereof has
been obtained under Rule 12b-25 of the General Rules and
Regulations under the Securities Exchange Act of 1934, or any
53
successor rules) after the end of each fiscal year of the Parent
Guarantor, a consolidated balance sheet of the Parent Guarantor
and its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of operations and cash flows for
such fiscal year, setting forth in each case in comparative form
the figures for the previous fiscal year, all in the form filed
with the Securities and Exchange Commission accompanied by an
opinion of Ernst & Young LLP or other independent public
accountants of nationally recognized standing;
(v) as soon as available and in any event within 45 days (or
such longer period as is permitted for the filing of an
equivalent periodic report to the extent an extension thereof has
been obtained under Rule 12b-25 of the General Rules and
Regulations under the Securities Exchange Act of 1934, or any
successor rules) after the end of each of the first three
quarters of each fiscal year of the Parent Guarantor, a
consolidated balance sheet of the Parent Guarantor and its
Subsidiaries as of the end of such quarter and the related
consolidated statements of operations and cash flows for such
quarter and for the portion of the Parent Guarantor's fiscal year
ended at the end of such quarter, setting forth in each case in
comparative form the figures for the corresponding quarter and
the corresponding portion of the Parent Guarantor's previous
fiscal year, all in the form filed with the Securities and
Exchange Commission and certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted
accounting principles and consistency by the chief financial
officer or the chief accounting officer or the treasurer of the
Parent Guarantor;
(vi) within 90 days after the end of each fiscal year of the
Parent Guarantor and within 45 days after the end of each of the
first three quarters of each fiscal year of the Parent Guarantor
(or, in each case, such longer period as is permitted for the
filing of an equivalent underlying periodic report to the extent
an extension thereof has been obtained under Rule 12b-25 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, or any successor rules), a certificate of the chief
financial officer, the chief accounting officer, the chief
executive officer or the treasurer of the Parent Guarantor, in
substantially the form of Exhibit D-2 hereto, (A) setting forth
in reasonable detail the calculations required to establish
whether the Parent Guarantor was in compliance with the
requirements of Section 5.03(b) on the date of the financial
statements most recently delivered pursuant to clause (iv) or (v)
above, as applicable, and (B) stating whether any Default exists
on the date of such certificate and, if any Default then exists,
setting forth the details thereof and the action which the Parent
Guarantor is taking or proposes to take with respect thereto,
provided that in the event of any change in GAAP used in the
preparation of such financial statements, the Parent Guarantor
shall also provide, if necessary for the determination of
compliance with Section 5.03(b), a statement of reconciliation
conforming such financial statements to GAAP; provided, however,
that any such certificate delivered for the Fiscal Year ended
December 31, 2005 shall demonstrate compliance with the
requirements of Section 5.03(b) of the Existing Credit Agreement;
54
(vii) within five Business Days after any Responsible Officer
obtains knowledge of any Default that is not reasonably likely to
be cured within the applicable grace period or of any Event of
Default, if such event or condition is then continuing, a
certificate of the chief financial officer or the chief
accounting officer or the treasurer of the Borrower setting forth
the details thereof and the action which the Borrower is taking
or proposes to take with respect thereto;
(viii) promptly after any Responsible Officer of the Borrower
obtains knowledge thereof, notice of all material actions, suits,
investigations, litigation and proceedings before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the Borrower or
any of its Material Subsidiaries of the type described in
Section 4.01(f);
(ix) promptly upon the mailing thereof to the shareholders of the
Borrower or the Parent Guarantor generally, copies of all
financial statements, reports and proxy statements so mailed;
(x) promptly after the furnishing thereof, copies of any notice
of default furnished to any holder of Debt securities or lenders
under any bank facility of the Parent Guarantor, the Borrower or
any of the Borrower's Material Subsidiaries in a principal amount
of over $40,000,000.
(xi) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms
10-K, 10-Q and 8-K (or their equivalents) which the Borrower or
the Parent Guarantor shall have filed with the Securities and
Exchange Commission;
(xii) if and when any member of the ERISA Group (i) gives or
is required to give notice to the PBGC of any "reportable event"
(as defined in Section 4043 of ERISA) with respect to any Plan
which might constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such
reportable event, promptly, but in no event later than 30 days
after the occurrence of such reportable event, a copy of the
notice of such reportable event given or required to be given to
the PBGC; (ii) receives notice of complete or partial withdrawal
liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, promptly upon receipt of such notice, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of
ERISA of an intent to terminate, impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer, any Plan, promptly upon receipt of such
notice, a copy of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the Internal
Revenue Code, promptly upon the filing of such application, a
copy of such application; (v) gives notice of intent to terminate
any Plan under Section 4041(c) of ERISA, promptly on giving such
55
notice, a copy of such notice and other information filed with
the PBGC; (vi) gives notice of withdrawal from any Plan pursuant
to Section 4063 of ERISA, promptly upon the giving of such
notice, a copy of such notice; or (vii) fails to make any payment
or contribution to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement or makes any amendment to any Plan or
Benefit Arrangement which has resulted or could result in the
imposition of a Lien or the posting of a bond or other security,
promptly upon the occurrence of such failure, a certificate of
the chief financial officer or the chief accounting officer of
the Borrower setting forth details as to such occurrence and
action, if any, which the Borrower or applicable member of the
ERISA Group is required or proposes to take;
(xiii) promptly after any Responsible Officer of the Borrower
obtains knowledge thereof, notice of any Environmental Action
against or of any noncompliance by the Borrower or any of its
Material Subsidiaries with any Environmental Law or Environmental
Permit that could reasonably be expected to have a Material
Adverse Effect;
(xiv) promptly after any Responsible Officer of the Borrower
obtains knowledge thereof, notice of any taxes, assessments and
governmental charges or liens imposed upon the Borrower or any of
its Material Subsidiaries or any of their properties, or any
action, suit, investigation or proceeding in respect thereof,
which, either individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect;
(xv) promptly after any Responsible Officer of the Borrower
obtains knowledge thereof, any announcement by Xxxxx'x or S&P of
any change in the Senior Secured Debt Rating; and
(xvi) from time to time such additional historical
information regarding the financial position or business of the
Parent Guarantor, the Borrower and the Borrower's Material
Subsidiaries as the Agent, at the request of any Lender, may
reasonably request; provided that requests for non-public
information shall be limited to items of significant importance
to the requesting Lender's credit monitoring process and that any
Lender receiving non-public materials furnished pursuant to this
clause shall be deemed Confidential Information for purposes of
this Agreement.
Reports required to be delivered pursuant to clauses
(i), (ii), (iv), (v) and (xi) above shall be deemed to have
been delivered on the date on which such report is posted on
the SEC's website at xxx.xxx.xxx, and such posting shall be
deemed to satisfy the reporting requirements of clauses (i),
(ii), (iv), (v) and (xi) above; provided that the Borrower
or the Parent Guarantor, as the case may be, shall deliver
copies of the reports referred to in clauses (i), (ii),
(iv), (v) and (xi) above to the Agent for distribution to
any Lender in accordance with Section 9.02(b) (it being
understood that to the extent Section 9.02(b) shall not be
applicable, paper copies of such reports shall be delivered
to the Agent for distribution to any Lender who requests
such paper copies until written notice to cease delivering
paper copies is given by the Agent or such Lender); provided
56
further that in every instance the Borrower or the Parent
Guarantor, as the case may be, shall provide paper copies of
the items described in clauses (iii), (vi), (vii), (viii),
(ix), (x), (xii), (xiii), (xiv), (xv) and (xvi) above to the
Agent.
(b) Maintenance of Existence. (i)Preserve, renew and keep in
full force and effect its corporate existence and (ii) maintain,
and cause each of its Material Subsidiaries to maintain, permits,
rights, privileges, licenses, franchises and approvals, except
where the failure to do so could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect; provided that nothing in this Section 5.01(b) shall
prohibit consolidations, mergers or sales of assets which comply
with Section 5.02(b).
(c) Compliance with Laws. Comply, and cause each of its
Material Subsidiaries to comply, in all material respects, with
all applicable laws (including, without limitation, ERISA and
Environmental Laws), rules, regulations and orders which are of
material importance to the conduct of the business, or the
ownership of the property, of the Borrower and its Material
Subsidiaries, except where the necessity of compliance therewith
is contested in good faith by appropriate proceedings.
(d) Insurance. Maintain, and cause each of its Material
Subsidiaries to maintain, insurance (including but not limited to
liability insurance) with responsible and reputable insurers in
such amounts and covering such risks as is usually carried by
companies engaged in a similar business and owning similar
properties and such other insurance as is required by law
(including, without limitation, war risk and terrorism insurance
on all its property and the property of its Material Subsidiaries
in an amount that is no less than the maximum amount available to
the Borrower and the Parent Guarantor from the DOT under the
Federal Aviation Insurance Program, as amended by the Air
Transportation Stabilization Act and Regulations and further
amended by the Homeland Security Act of 2002, and as further
amended by the Vision-100 Century of Aviation Reauthorization
Act, and as extended by Congress in November 2004).
(e) Use of Proceeds. Use the proceeds of the Advances solely
for the purposes set forth in Section 2.15.
(f) Payment of Taxes, Etc. Pay and discharge, and cause each of
its Material Subsidiaries to pay and discharge, before the same
shall become delinquent, (i) all taxes, governmental assessments
and governmental charges or levies imposed upon it or upon its
property and (ii) all lawful claims in respect of taxes,
governmental assessments, governmental charges and levies that,
if unpaid, might by law become a Lien upon its property;
provided, however, that neither the Borrower nor any of its
Material Subsidiaries shall be required to pay or discharge any
such tax, assessment, charge, levy or claim that is being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any
Lien resulting therefrom attaches to its property and becomes
enforceable against its other creditors and any such Liens shall
attach and become enforceable in respect of any such taxes,
assessments, charges, levies and claims, which either
individually or in the aggregate exceed $25,000,000.
57
(g) Inspection of Aircraft. Permit the Agent or any of the
Lenders, or any agent or representative thereof, to exercise its
inspection rights in accordance with Section 5.03 of the Aircraft
Security Agreement.
(h) Keeping of Books. Keep, and cause each of its Material
Subsidiaries to keep, proper books of record and account, in
which full and correct entries shall be made of all financial
transactions and the assets and business of the Borrower and each
such Subsidiary in accordance with generally accepted accounting
principles in effect from time to time.
(i) Maintenance of Equipment. Maintain, and cause each of its
Material Subsidiaries to maintain, substantially all of its
equipment (except surplus or obsolete equipment) in good
operating order, except where the failure to keep such equipment
in good operating order would not have a material adverse effect
on the financial conditions or results of operations of the
Borrower.
(j) Transactions with Affiliates. Conduct all transactions with
any of its Affiliates on terms that are fair and reasonable and
no less favorable to the Borrower than it would obtain in a
comparable arm's-length transaction with a Person not an
Affiliate. The following transactions shall be deemed to comply
with this Section 5.01(j): (i) any Existing Capacity Agreement
(or any amendments, renewals or replacements thereof to the
extent that any such Existing Capacity Agreement, as so amended,
renewed or replaced, shall be on terms (A) approved by the
Borrower's management upon a good faith determination that such
amendments, renewals or replacements are consistent with industry
norms at the time made, (B) that are reasonably consistent with
past practice and that, taken as a whole, are not materially less
favorable to the Borrower than such Existing Capacity Agreement,
or (C) that, taken as a whole together with other benefits
received at the time from the other party thereto, are not
materially less favorable to the Borrower than such Existing
Capacity Agreement); (ii) any transaction or arrangement (other
than Existing Capacity Agreements or any amendments, renewals or
replacements thereof) between or among any of the Parent
Guarantor and any of its direct or indirect subsidiaries
(including, without limitation, payment of dividends, guarantees
and making of inter-company loans); (iii) the entering into,
making payments pursuant to and otherwise performing
indemnification and contribution obligations in favor of any
Person who is or becomes a director, officer, agent or employee
of the Parent Guarantor or any of its direct or indirect
subsidiaries, in respect of liabilities (A) arising out of the
fact that any indemnitee was or is a director, officer, agent or
employee of the Parent Guarantor or any of its direct or indirect
subsidiaries, or is or was serving at the request of any such
corporation, as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or enterprise or
(B) to the fullest extent permitted by applicable law, arising
out of any breach or alleged breach by such indemnitee of his or
her fiduciary duty as a director or officer of the Parent
Guarantor or any of its direct or indirect subsidiaries; (iv) the
Borrower and its Subsidiaries may enter into, and may make
payments under, employment agreements, employee benefits plans,
stock option plans, indemnification provisions and other similar
compensatory arrangements with officers, employees and directors
of the Parent Guarantor and its direct or indirect subsidiaries
in the ordinary course of business; (v) performance by the
58
Borrower or any of its Subsidiaries under any customary or
commercially reasonable tax sharing agreements or arrangements;
(vi) ordinary course transactions approved by the Board of
Directors of Borrower or by Borrower's management that are
reasonably consistent with past practice and reasonable
modifications or extensions thereof; (vii) transactions with or
involving any special purpose entities, variable interest
entities and other similar entities formed in connection with any
bona fide financing transaction on terms necessary or appropriate
or customary for the relevant type of transaction (such entities,
"Financing Vehicles") and (viii) any transaction as to which the
Borrower has obtained an opinion from a financial advisor or
appraiser that the transaction is fair to the Borrower from a
financial point of view.
(k) Performance of Material Contracts. Perform and observe all
the terms and provisions of each Material Contract to be
performed or observed by it, except, in any case, where the
failure to do so, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
(l) Pari Passu. Ensure that all claims of the Lenders or the
Agent against the Borrower will be at all times at least pari
passu to the claims of other unsecured creditors of the Borrower
(except to the extent provided under bankruptcy, insolvency and
other similar laws of general applications relating to or
affecting the enforcement of creditors' rights).
(m) Appraisals. (i) Cause the Appraiser to conduct an appraisal
of the then current Aircraft Value of the Aircraft and to deliver
an Appraisal Report in respect thereof to the Lenders and the
Borrower (x) by no later than 45 days prior to each 6-month
anniversary of the Effective Date (it being understood that such
appraisal shall not have been conducted earlier than 90 days
prior to such 6-month anniversary) or (y) promptly at the request
of the Agent, upon the occurrence or continuation of an Event of
Default (but not more frequently than every 90 days following the
occurrence and during the continuance of any Event of Default);
and (ii) cause the Appraiser to conduct an appraisal of the then
current fair market value of the Narita Collateral and to deliver
an Appraisal Report in respect thereof to the Lenders, (x) by no
later than 45 days prior to each 12-month anniversary of the
Effective Date (it being understood that such appraisal shall not
have been conducted earlier than 90 days prior to such 12-month
anniversary) or (y) promptly at the request of the Agent, upon
the occurrence or continuation of an Event of Default (but not
more frequently than every 90 days following the occurrence and
during the continuance of any Event of Default).
(n) Security.
(i) Collateral Coverage. Cause, subject to the provisions set
forth in this Section 5.01(n), the Aggregate Collateral Value, as
determined pursuant to the Appraisal Report most recently
delivered to the Lenders pursuant to Section 5.01(m)(i), to be
equal to or greater than the Required Collateral Amount.
(ii) Delivery of Additional Aircraft Collateral. If the
Aggregate Collateral Value determined in accordance with the
Appraisal Report most recently delivered to the Lenders and the
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Borrower pursuant to Section 5.01(m)(i) is less than the Required
Collateral Amount, the Borrower shall, within 45 days of the
delivery to it of such Appraisal Report pursuant to Section
5.01(m)(i), (A) designate by a supplement to Schedule 1 to the
Aircraft Security Agreement delivered to each Lender additional
Unencumbered Stage 3 Aircraft with an Aircraft Value (as
determined by the Appraiser in an Appraisal Report with respect
thereto delivered prior to the required time of delivery of such
supplement), and/or deposit cash and/or Permitted Investments
into the Cash Collateral Account, such that, after giving effect
to such supplement and/or such deposit, the Aggregate Collateral
Value is not less than the Required Collateral Amount and (B) if
additional Unencumbered Stage 3 Aircraft are being pledged, (i)
execute and deliver to the Agent the Security Agreement
Supplements with respect to all Aircraft then being pledged and
assigned and (ii) within 10 days after receiving the executed
Security Agreement Supplement back from the Agent, take all
action necessary or desirable to cause the Liens created thereby
to be perfected and protected against all creditors and
transferees of the Borrower under applicable law (including
without limitation the applicable rules and regulations
promulgated under the Federal Aviation Act) subject to no prior
Liens (other than Permitted Liens) (such perfected and protected
interest, the "Security Arrangements") and furnish Security
Opinions with respect to all of such Aircraft and any other
collateral. If the Borrower fails to make any such Security
Arrangements within the 45-day period set forth above, the
Borrower shall prepay any Advances and, to the extent such
Advances are Revolving Credit Advances, reduce any corresponding
Revolving Credit Commitments in accordance with the terms hereof,
so that, after giving effect to such prepayment of Advances, the
Aggregate Collateral Value determined in accordance with the
Appraisal Report most recently delivered to the Lenders pursuant
to Section 5.01(m)(i), shall be equal to or greater than the
Required Collateral Amount.
(iii) Substitution and Release of Aircraft Collateral. (A)
The Borrower may, at any time and from time to time, provided no
Default under Section 6.01(a) or Section 6.01(f) and no Event of
Default shall have occurred and be continuing, substitute (x) one
or more Replacement Aircraft or Replacement Engines for one or
more Aircraft or Engines, respectively, designated by the
Borrower, (y) one or more Replacement Aircraft or Replacement
Engines for cash and/or Permitted Investments or (z) cash and/or
Permitted Investments for one or more Aircraft or Engines
designated by the Borrower. In the event that the Borrower
desires to effect any such substitution, the Borrower shall
deliver an amendment to Schedule 1 to the Aircraft Security
Agreement to all of the Lenders designating any Replacement
Aircraft or Replacement Engine to be added to such Schedule,
specifying any Aircraft or Engine to be removed from such
Schedule and specifying the amount of any cash and/or Permitted
Investments to be added to, or cash and/or Permitted Investments
to be removed from, the Cash Collateral Account; provided that
(I) such amendment is accompanied by (A) an Appraisal Report of
the Appraiser as to the Aircraft Value of the Replacement
Aircraft or Replacement Engines, as the case may be, to be
delivered in substitution and (B) an executed Security Agreement
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Supplement with respect to any such Replacement Aircraft or
Replacement Engine, and evidence satisfactory to the Agent that
such Replacement Aircraft or Replacement Engine has been made
subject to the Security Arrangements together with Security
Opinions with respect to such Replacement Aircraft or Replacement
Engine or, if the collateral delivered in substitution is cash
and/or Permitted Investments, deposit of such cash and/or
Permitted Investments with the applicable Cash Collateral Value
in the Cash Collateral Account and (II) the Aircraft Value of the
Replacement Aircraft or Replacement Engine, as the case may be,
to be delivered in substitution (as set forth in the Appraisal
Report delivered at such time), together with the Cash Collateral
Value of any cash and/or Permitted Investments deposited in the
Cash Collateral Account, equals or exceeds the Aircraft Value or
Cash Collateral Value, as the case may be, of the Aircraft,
Engines or cash and/or Permitted Investments being replaced.
(B) At any time when the Aggregate Collateral Value, determined
in accordance with the Appraisal Report most recently delivered
to the Lenders pursuant to Section 5.01(m)(i) exceeds the
Required Collateral Amount, provided that no Default under
Section 6.01(a) or Section 6.01(f) and no Event of Default shall
then have occurred and be continuing, the Borrower may deliver
notice to the Agent (which shall promptly send copies thereof to
each Lender) removing any Aircraft or Engine from Schedule 1 to
the Aircraft Security Agreement and requesting the release of
Aircraft, Engines or cash and/or Permitted Investments from the
Lien of the Aircraft Security Agreement, provided that the
Aggregate Collateral Value after giving effect to such removal or
release shall not be less than the Required Collateral Amount.
Such notice shall identify the Aircraft, Engines or cash and/or
Permitted Investments in the Cash Collateral Account to be
released.
(iv) Upon compliance with the foregoing provisions the Agent
shall, if the Security Arrangements have been effected, release
the item of collateral being replaced or released and any related
Warranty Rights (as defined in the Aircraft Security Agreement)
in accordance with the provisions of the Aircraft Security
Agreement.
(v) Event of Loss. (A) Upon the occurrence of an Event of Loss
with respect to any Airframe, the Borrower shall forthwith give
the Agent notice of such Event of Loss and, within 45 days
thereafter: (x) designate by a supplement to Schedule 1 to the
Aircraft Security Agreement delivered to each Lender a
Replacement Airframe (together with the same number of
Replacement Engines as the Engines relating to such Airframe at
the time such Event of Loss occurred unless such Engines did not
suffer such Event of Loss and are suitable for use on such
Replacement Airframe), such Replacement Airframe and Replacement
Engines (if any) to be free and clear of all Liens (other than
Permitted Liens) and/or (y) deposit cash and/or Permitted
Investments in the Cash Collateral Account in replacement for any
Aircraft of which such Airframe was a part, in each case
accompanied by (A) an Appraisal Report of the Appraiser as to the
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Aircraft Value of the Replacement Airframe and Replacement
Engines (if any) delivered in replacement, such value, together
with the Cash Collateral Value of any cash and/or Permitted
Investments deposited in the Cash Collateral Account pursuant to
clause (y) above, to be at least equal to the Aircraft Value of
the Airframe and Engines, if any, so replaced and (B) an executed
Security Agreement Supplement with respect to such Replacement
Airframe and Replacement Engines (if any), and evidence
satisfactory to the Agent that any such Replacement Airframes
and/or Replacement Engines have been made subject to the Security
Arrangements together with Security Opinions with respect to any
such Replacement Aircraft or Replacement Engines.
(B) Upon the occurrence of an Event of Loss with respect to an
Engine under circumstances in which there has not occurred an
Event of Loss with respect to any Airframe, the Borrower shall
forthwith give the Agent notice of such Event of Loss and, within
45 days thereafter: (x) designate by a supplement to Schedule 1
to the Aircraft Security Agreement delivered to each Lender a
Replacement Engine, such Replacement Engine to be free and clear
of all Liens (other than Permitted Liens) and to have an Aircraft
Value (as set forth in an Appraisal Report of the Appraiser
delivered to the Lenders at such time) at least equal to the
Aircraft Value of the Engine so replaced and (y) deliver a
Security Agreement Supplement with respect to such Replacement
Engine, and otherwise cause such Replacement Engine to become
subject to the Security Arrangements and Security Opinions to be
delivered with respect thereto.
(C) Upon compliance with the foregoing provisions, the Agent
shall release the item of collateral being replaced and any
related Warranty Rights (as defined in the Aircraft Security
Agreement) in accordance with the provisions of the Aircraft
Security Agreement.
(vi) Costs of Compliance. The Borrower shall bear all costs and
expenses of compliance with Section 5.01(m) and this Section
5.01(n).
(o) Further Assurances. Promptly upon request by the Agent, or
any Lender through the Agent, do, execute, acknowledge, deliver,
record, re-record, file, re-file, register and re-register any
and all such further acts, deeds, conveyances, pledge agreements,
assignments, financing statements and continuations thereof,
termination statements, notices of assignment, transfers,
certificates, assurances and other instruments as the Agent, or
any Lender through the Agent, may reasonably require from time to
time in order to (A) to the fullest extent permitted by
applicable law , subject any Loan Party's Collateral to the Liens
now or hereafter intended to be covered by any of the Collateral
Documents, (B) perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and any of the
Liens intended to be created thereunder and (C) assure, convey,
grant, assign, transfer, preserve, protect and confirm more
effectively unto the Secured Parties the rights granted or now or
hereafter intended to be granted (including, without limitation,
in respect of the exercise of any remedies under the Collateral
Documents) to the Secured Parties under any Financing Document or
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under any other instrument executed in connection with any
Financing Document to which any Loan Party is or is to be a
party, and cause each of its Material Subsidiaries to do so.
(p) FAA and DOT Matters; Citizenship. (i) Maintain at all times
its status at the DOT as an "air carrier" within the meaning of
Section 40102(a)(2) of Title 49, and hold a certificate under
Section 41102(a)(1) of Title 49; (ii) at all times hereunder be a
United States Citizen; (iii) maintain at all times its status at
the FAA as an air carrier and hold an air carrier operating
certificate and other operating authorizations issued by the FAA
pursuant to 14 C.F.R. Sections 119 and 121 as currently in effect
or as may be amended or recodified from time to time; and (iv)
possess and maintain all necessary certificates, exemptions,
franchises, licenses, permits, designations, rights, concessions,
authorizations, frequencies and consents which are material to
the operation of the Slots, the Narita Routes and the Narita
Slots flown by it and the conduct of its business and operations
as currently conducted except in any case described in this
clause (iv), where the failure to do so, either individually or
in the aggregate, could not reasonably be expected to have a
Material Adverse Effect (provided that nothing in this clause
(iv) shall prohibit transactions that otherwise comply with the
terms of the Collateral Documents).
SECTION 5.02. Negative Covenants. So long as any principal,
interest and premiums related to any Advances and any fees hereunder
shall remain unpaid or any Lender shall have any Commitment hereunder,
the Borrower will not, at any time:
(a) Liens, Etc. Create, incur or assume any Lien or suffer to
exist (for a period of 30 days after obtaining knowledge thereof)
any Lien on or with respect to any AA Collateral whether now
owned or hereafter acquired, or suffer to exist (for a period of
30 days after obtaining knowledge thereof) or file, under the
Uniform Commercial Code of any jurisdiction, a financing
statement that names the Borrower as debtor in respect of any AA
Collateral, or suffer to exist (for a period of 30 days after
obtaining knowledge thereof) or sign, any security agreement
authorizing any secured party thereunder to file such financing
statement, except:
(i) Liens created under the Financing Documents; and
(ii) Permitted Liens.
(b) Consolidation, Merger, Sale of Assets, Etc. Consolidate
with or merge with or into any Person, or convey, transfer or
lease substantially all of its assets as an entirety to any
Person, unless the following conditions are satisfied:
(i) except in the case of a merger in which the Borrower is the
surviving corporation, the entity formed by such consolidation or
into which the Borrower is merged, or the Person that acquires by
conveyance, transfer or lease substantially all of the assets of
the Borrower as an entirety, shall be a corporation organized and
existing under the laws of the United States of America or any
State thereof or the District of Columbia, shall be a United
States Citizen, and shall execute and deliver to the Agent, an
agreement, in form and substance satisfactory to the Agent,
containing an assumption by such successor corporation of the due
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and punctual performance and observance of each obligation,
covenant and condition of the Borrower under the Financing
Documents;
(ii) immediately after and after giving effect to such
transaction, no Default shall have occurred and be continuing,
and the Net Worth of the corporation formed by such consolidation
or into which the Borrower is merged, or of the Person that
acquired by conveyance, transfer or lease substantially all of
the assets of the Borrower as an entirety, shall not be less than
75% of the Net Worth of the Borrower prior to such consolidation,
merger, conveyance, transfer or lease; and
(iii) except in the case of the merger in which the Borrower
is the surviving corporation, the Borrower shall have delivered
to the Agent a certificate signed by the President, a Senior Vice
President or a Vice President of the Borrower, and an opinion of
counsel (which may be the Borrower's General Counsel), each
stating that such consolidation, merger, conveyance, transfer or
lease and such assumption agreement comply with this Section, and
that all conditions precedent herein provided for relating to
such transaction have been complied with; provided, however, that
any such opinion of counsel need not opine as to the matters set
forth in clause (ii) of this Section.
Upon any consolidation or merger, or any conveyance,
transfer or lease of substantially all of the assets of the
Borrower as an entirety in accordance with this Section, the
successor corporation formed by such consolidation or into
which the Borrower is merged, or to which such conveyance,
transfer or lease is made, shall succeed to, and be
substituted for, and may exercise every right and power of,
the Borrower under the Financing Documents with the same
effect as if such successor corporation had been named as
the Borrower herein. No such conveyance, transfer or lease
of substantially all of the assets of the Borrower as an
entirety shall have the effect of releasing the Borrower or
any successor corporation that shall theretofore have become
such in the manner prescribed in this Section from its
liability hereunder.
(c) Sales, Etc., of AA Collateral. Sell, lease, transfer or
otherwise dispose of, any AA Collateral, or grant any option or
other right to purchase, lease or otherwise acquire any AA
Collateral, except:
(i) (x) a sale of any AA Collateral (other than the Narita
Collateral) and (y) any other transfer or disposition (including
any transfer of possession, asset swaps, exchanges, interchanges
or pooling of assets) or lease of the AA Collateral to the extent
permitted by the Collateral Documents and Section 5.01(n) hereof,
provided that, in any case, before and after giving effect to any
such sale, lease, transfer or other disposition (A) no Event of
Default shall have occurred and be continuing, (B) in the case of
subclause (x) above, the Aggregate Collateral Value determined in
accordance with the Appraisal Report most recently delivered
pursuant to Section 5.01(m)(i) shall be equal to or greater than
the Required Collateral Amount and (C) the Borrower shall be in
compliance with the provisions of Section 5.01(n)(ii);
64
(ii) in a transaction authorized by Section 5.02(b); and
(iii) as otherwise consented to by the Agent (such consent
not to be unreasonably withheld).
(d) Accounting Changes. Make or permit, or permit any of its
Material Subsidiaries to make or permit, any change in (i)
accounting policies or reporting practices, except as required or
permitted by generally accepted accounting principles, or (ii)
Fiscal Year.
(e) Partnerships, Etc. Become a general partner in any limited
partnership, or permit any of its Material Subsidiaries to do so,
except (i) to the extent the Borrower or any of such Subsidiaries
shall have become a general partner in any such limited
partnership prior to the Effective Date or (ii) through a special
purpose entity.
(f) Payment Restrictions Affecting Subsidiaries. Directly or
indirectly, enter into or suffer to exist, or permit any of its
Material Subsidiaries to enter into or suffer to exist, any
agreement or arrangement limiting the ability of any of its
Material Subsidiaries (other than any Financing Vehicles) to
declare or pay dividends or other distributions in respect of its
Equity Interests or repay or prepay any Debt owed to, make loans
or advances to, or otherwise transfer assets to or invest in, the
Borrower or any Material Subsidiary of the Borrower (whether
through a covenant restricting dividends, loans, asset transfers
or investments, a financial covenant or otherwise), except (i)
the Financing Documents, (ii) any agreement in effect at the time
such Material Subsidiary becomes a Subsidiary of the Borrower, so
long as such agreement was not entered into solely in
contemplation of such Person becoming a Subsidiary of the
Borrower, (iii) applicable law (including regulatory
requirements), (iv) customary provisions restricting subletting
or assignment of any lease governing a leasehold interest of the
Borrower or a Material Subsidiary of the Borrower, (v) customary
provisions restricting assignment of any licensing agreement
entered into by the Borrower or a Material Subsidiary of the
Borrower in the ordinary course of business, (vi) customary
provisions restricting the transfer of assets (A) subject to
Liens or (B) pending disposition, (vii) provisions in charters,
bylaws, stockholders agreements, partnership agreements, joint
venture agreements, limited liability company agreements and
other similar agreements and (viii) provisions in financing
agreements customary for transactions of a similar nature with
counterparties that are similarly situated with the applicable
Material Subsidiary and constitute a similar credit.
SECTION 5.03. Financial Covenants. (a) Liquidity.
So long as any principal, interest and premiums related to any
Advances and any fees hereunder shall remain unpaid or any Lender
shall have any Commitment hereunder, the Borrower will maintain at
all times, for the periods indicated below, an amount of
liquidity consisting of (i) unencumbered cash, (ii) unencumbered
Short Term Investments and (iii) amounts available for drawing
under committed revolving credit facilities which have a final
maturity of at least 12 months after the date of determination,
of not less than $1.25 billion:
65
(b) Cash Flow Coverage. So long as any principal, interest and
premiums related to any Advances and any fees hereunder shall
remain unpaid or any Lender shall have any Commitment hereunder,
the Parent Guarantor will maintain, for each period indicated
below, a Cash Flow Coverage Ratio for any period of four
consecutive fiscal quarters of the Parent Guarantor most recently
ended, of not less than the amount specified below for such
period:
Period Ending Cash Flow
Coverage
Ratio
March 31, 2006 1.00:1.00
June 30, 2006 1.00:1.00
September 30, 2006 1.10:1.00
December 31, 2006 1.20:1.00
March 31, 2007 1.30:1.00
June 30, 2007 1.30:1.00
September 30, 2007 1.35:1.00
December 31, 2007 1.40:1.00
March 31, 2008 1.40:1.00
June 30, 2008 1.40:1.00
September 30, 2008 1.40:1.00
December 31, 2008 1.40:1.00
March 31, 2009 1.40:1.00
June 30, 2009 (and each 1.50:1.00
fiscal quarter thereafter)
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any
Advance within one Business Day after the same becomes due and
payable or (ii) the Borrower shall fail to pay any interest on
any Advance, or any Loan Party shall fail to make any other
payment under any Financing Document, in each case under this
clause (ii) within five Business Days after the same shall become
due and payable; or
(b) any representation or warranty made or deemed made herein by
any Loan Party or under or in connection with any Financing
Document, shall prove to have been false or misleading as of the
time made or deemed made or furnished in any material respect; or
(c) the Borrower shall default in the performance of any
covenant contained in Section 2.15, 5.01(a)(i), 5.01(a)(ii),
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5.01(a)(iii), 5.01(a)(iv), 5.01(a)(v), 5.01(a)(vi), 5.01(a)(vii),
5.01(b)(i), 5.01(m), 5.01(n), 5.02(a), 5.02(b), 5.02(c) or 5.03;
provided that no failure to deliver Appraisal Reports pursuant to
Section 5.01(m) shall constitute an Event of Default hereunder
for a period of 5 Business Days after the same shall become due
if the Appraiser in respect of such Appraisal Reports ceases or
is unable prior to such time to provide such Appraisal Reports;
or
(d) any Loan Party shall fail to perform or observe any other
term, covenant or agreement contained in any Financing Document
(other than as specified elsewhere in this Section 6.01) on its
part to be performed or observed if such failure shall remain
unremedied for 30 days after the earlier of the date on which (i)
any Responsible Officer of a Loan Party becomes aware of such
failure or (ii) written notice thereof shall have been given to
the Borrower by the Agent or any Lender; or
(e) the Borrower or any of its Subsidiaries or the Parent
Guarantor shall fail to pay any principal of, premium or interest
on any Debt of the Borrower, such Subsidiary or the Parent
Guarantor (as the case may be) that is outstanding in a principal
amount (or, in the case of any Hedge Agreement, an Agreement
Value) of at least $40,000,000 either individually or in the
aggregate for all of the Borrower, such Subsidiaries and the
Parent Guarantor (but excluding Debt outstanding hereunder), when
the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt;
or by virtue of (i) non-compliance by the Borrower, any of its
Subsidiaries or the Parent Guarantor with any of its obligations
under documents, agreements or instruments in respect of such
Debt or (ii) the occurrence of a change of control (or similar
event) in respect of the Borrower or the Parent Guarantor, any
other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall
continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the
holder thereof to cause, such Debt to mature; or by virtue of (i)
non-compliance by the Borrower, any of its Subsidiaries or the
Parent Guarantor with any of its obligations under documents,
agreements or instruments in respect of such Debt or (ii) the
occurrence of a change of control (or similar event) in respect
of the Borrower or the Parent Guarantor, any such Debt shall be
declared to be due and payable or required to be prepaid or
redeemed (other than by a regularly scheduled required prepayment
or redemption), purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required to be
made, in each case prior to the stated maturity thereof; or
(f) the Borrower or any of its Material Subsidiaries or the
Parent Guarantor shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or
against the Borrower or any of its Material Subsidiaries or the
Parent Guarantor seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it
67
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or
other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it) that is being diligently
contested by it in good faith, either such proceeding shall
remain undismissed or unstayed for a period of 30 days or any of
the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar
official for, it or any substantial part of its property) shall
occur; or the Borrower or any of its Material Subsidiaries or the
Parent Guarantor shall take any corporate action to authorize any
of the actions set forth above in this subsection (f); or
(g) a judgment or order for the payment of money in excess of
$25,000,000 shall be rendered against the Borrower, any of its
Subsidiaries or the Parent Guarantor and such judgment or order
shall continue unsatisfied and unstayed for a period of 30 days;
or
(h) any Financing Document after delivery thereof pursuant to
Section 3.01 or 5.01(n) shall for any reason cease to be valid
and binding on or enforceable in any material respect against any
Loan Party party to it, or any such Loan Party shall so state in
writing; or
(i) any Collateral Document or financing statement after
delivery thereof pursuant to Section 3.01 or 5.01(n) shall for
any reason (other than (x) pursuant to the terms thereof or (y)
as a result of any action or failure to act by the Agent in
respect of such Collateral Document or financing statement) cease
to create a valid and perfected first priority lien on and
security interest in the Collateral purported to be covered
thereby (subject only to Permitted Liens); or
(j) a Change of Control shall occur; or
(k) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $25,000,000 which it
shall have become liable to pay under Title IV of ERISA; or
notice of intent to terminate a Material Plan shall be filed
under Title IV of ERISA by any member of the ERISA Group, any
plan administrator or any combination of the foregoing; or the
PBGC shall institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer, any Material Plan; or a condition shall
exist under Section 4042(a)(1), (2) or (3) of ERISA (but not
Section 4042(a)(4) of ERISA) by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Material Plan
must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the
ERISA Group to incur a current payment obligation in excess of
$25,000,000; or
(l) the Borrower shall fail to carry and maintain insurance on
or with respect to the Aircraft in accordance with the provisions
of Section 5.06 of the Aircraft Security Agreement; provided
that, in the case of insurance with respect to which
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cancellation, change or lapse for nonpayment of premium shall not
be effective as to the Agent or any Lender for 30 days (seven
days, or such other period as may from time to time be
customarily obtainable in the industry, in the case of any war
risk and allied perils coverage) after receipt of notice by the
Agent or such Lender of such cancellation, change or lapse, no
such failure to carry and maintain insurance shall constitute an
Event of Default until the earlier of (i) the date such failure
shall have continued unremedied for a period of 20 days (five
days in the case of any war risk and allied perils coverage)
after receipt by the Agent or such Lender of the notice of
cancellation, change or lapse referred to in such Section 5.06,
or (ii) the date on which such insurance is not in effect as to
the Agent or any Lender; or
(m) any Loan Party shall operate any Aircraft at a time when
public liability insurance required by Section 5.06(a) of the
Aircraft Security Agreement shall not be in effect; or
(n) the Borrower shall fail to perform any term, covenant or
agreement contained in (x) Article V of the Aircraft Security
Agreement (other than Sections 5.02(b), 5.03, 5.05(a), 5.05(b),
5.06(a), 5.06(b), 5.06(c), 5.06(d) and 5.08 thereof), (y) Article
IX of the Aircraft Security Agreement or (z) the SGR Security
Agreement (other than Section 12 thereof) if such failure shall
remain unremedied for 30 days after the earlier of the date on
which (i) any Responsible Officer of the Borrower becomes aware
of such failure or (ii) written notice thereof shall have been
given to the Borrower by the Agent or any Lender; provided that
if such failure is capable of being remedied, no such failure
shall constitute an Event of Default hereunder for a period of 90
days after the earlier of any Responsible Officer becoming aware
of any such failure or such written notice so long as the
Borrower is diligently proceeding to remedy such failure;
then, and in any such event, the Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to
the Borrower, terminate the Commitments, whereupon the same shall
forthwith terminate, and (ii) shall at the request, or may with
the consent, of the Required Lenders, by notice to the Borrower,
declare the Advances, all interest thereon and all other amounts
payable under this Agreement and the other Financing Documents to
be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by
the Borrower; provided, however, that, in the event of an actual
or deemed entry of an order for relief with respect to the
Borrower under the Federal Bankruptcy Code, (A) the Commitments
shall automatically be terminated and (B) the Advances, all such
interest and all such amounts shall automatically become and be
due and payable, without presentment, demand, protest or any
notice of any kind, all of which are hereby expressly waived by
the Borrower.
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ARTICLE VII
PARENT GUARANTY
SECTION 7.01. Guaranty. (a) The Parent Guarantor
hereby absolutely, unconditionally and irrevocably guarantees the
punctual payment when due, whether at scheduled maturity or on
any date of a required prepayment or by acceleration, demand or
otherwise, of all Obligations of the Borrower now or hereafter
existing under or in respect of the Financing Documents (including,
without limitation, any extensions, modifications, substitutions,
amendments or renewals of any or all of the foregoing
Obligations), whether direct or indirect, absolute or contingent,
and whether for principal, interest, premiums, if any, fees,
indemnities, contract causes of action, costs, expenses or
otherwise (such Obligations being the "Guaranteed Obligations"),
and agrees to pay any an
d all expenses (including, without
limitation, reasonable fees and expenses of counsel) incurred by
the Agent or any other Secured Party in enforcing any rights
under this Parent Guaranty or any other Financing Document.
Without limiting the generality of the foregoing, the Parent
Guarantor's liability shall extend to all amounts that constitute
part of the Guaranteed Obligations and would be owed by the
Borrower to any Secured Party under or in respect of the
Financing Documents but for the fact that they are unenforceable
or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower.
(b) The Parent Guarantor hereby unconditionally and irrevocably
agrees that in the event any payment shall be required to be made
to any Secured Party under this Parent Guaranty or any other
guaranty, the Parent Guarantor will contribute, to the maximum
extent permitted by law, such amounts to each other guarantor so
as to maximize the aggregate amount paid to the Secured Parties
under or in respect of the Financing Documents.
SECTION 7.02. Guaranty Absolute. The Parent Guarantor
guarantees that the Guaranteed Obligations will be paid strictly
in accordance with the terms of the Financing Documents, regardless
of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of any Secured
Party with respect thereto. The Obligations of the Parent Guarantor
under or in respect of this Parent Guaranty are independent of the
Guaranteed Obligations or any other Obligations of the Borrower under
or in respect of the Financing Documents, and a separate action
or actions may be brought and prosecuted against the Parent
Guarantor to enforce this Parent Guaranty, irrespective of
whether any action is brought against the Borrower or any other
Loan Party or whether the Borrower is joined in any such action
or actions. The liability of the Parent Guarantor under this
Parent Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and, to the extent permitted by law, the Parent
Guarantor hereby irrevocably waives any defenses it may now have
or hereafter acquire in any way relating to, any or all of the
following:
(a) any lack of validity or enforceability of any Financing
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations or
any other Obligations of the Borrower under or in respect of the
Financing Documents, or any other amendment or waiver of or any
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consent to departure from any Financing Document, including,
without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to the Borrower
or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral or any other collateral, or any taking, release or
amendment or waiver of, or consent to departure from, any other
guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of Collateral or any other
collateral, or proceeds thereof, to all or any of the Guaranteed
Obligations, or any manner of sale or other disposition of any
Collateral or any other collateral for all or any of the
Guaranteed Obligations or any other Obligations of the Borrower
under the Financing Documents or any other assets of the Borrower
or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower or any of its
Subsidiaries;
(f) any failure of any Secured Party to disclose to any Loan
Party any information relating to the business, condition
(financial or otherwise), operations, performance, properties or
prospects of any other Loan Party now or hereafter known to such
Secured Party (the Parent Guarantor waiving any duty on the part
of the Secured Parties to disclose such information);
(g) the failure of any other Person to execute or deliver any
other guaranty or agreement or the release or reduction of
liability of any other guarantor or surety with respect to the
Guaranteed Obligations; or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by any Secured Party that might otherwise
constitute a defense available to, or a discharge of, any Loan
Party or any other guarantor or surety, except to the extent the
Guaranteed Obligations and all other amounts payable under this
Parent Guaranty shall have been paid in full in cash.
This Parent Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any
of the Guaranteed Obligations is rescinded or must otherwise be
returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of the Borrower or any
other Loan Party or otherwise, all as though such payment had not
been made.
SECTION 7.03. Waivers and Acknowledgments. (a) The Parent
Guarantor hereby unconditionally and irrevocably waives promptness,
diligence, notice of acceptance, presentment, demand for performance,
notice of nonperformance, default, acceleration, protest or dishonor
and any other notice with respect to any of the Guaranteed Obligations
and this Parent Guaranty and any requirement that any Secured Party
protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right or take any action against any Loan
Party or any other Person or any Collateral.
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(b) The Parent Guarantor hereby unconditionally and irrevocably
waives any right to revoke this Parent Guaranty and acknowledges
that this Parent Guaranty is continuing in nature and applies to
all Guaranteed Obligations, whether existing now or in the
future.
(c) The Parent Guarantor hereby unconditionally and irrevocably
waives (i) any defense arising by reason of any claim or defense
based upon an election of remedies by any Secured Party that in
any manner impairs, reduces, releases or otherwise adversely
affects the subrogation, reimbursement, exoneration, contribution
or indemnification rights of the Parent Guarantor or other rights
of the Parent Guarantor to proceed against the Borrower, any
other guarantor or any other Person or any Collateral and (ii)
any defense based on any right of set-off or counterclaim against
or in respect of the Obligations of the Parent Guarantor
hereunder.
(d) The Parent Guarantor acknowledges that the Agent may,
without notice to or demand upon the Parent Guarantor and without
affecting the liability of the Parent Guarantor under this Parent
Guaranty, foreclose under any mortgage by nonjudicial sale, and
the Parent Guarantor hereby waives any defense to the recovery by
the Agent and the other Secured Parties against the Parent
Guarantor of any deficiency after such nonjudicial sale and any
defense or benefits that may be afforded by applicable law.
(e) The Parent Guarantor hereby unconditionally and irrevocably
waives any duty on the part of any Secured Party to disclose to
the Parent Guarantor any matter, fact or thing relating to the
business, condition (financial or otherwise), operations,
performance, properties or prospects of any other Loan Party or
any of its Subsidiaries now or hereafter known by such Secured
Party.
(f) The Parent Guarantor acknowledges that it will receive
substantial direct and indirect benefits from the financing
arrangements contemplated by the Financing Documents and that the
waivers set forth in Section 7.02 and this Section 7.03 are
knowingly made in contemplation of such benefits.
SECTION 7.04. Subrogation. The Parent Guarantor hereby
unconditionally and irrevocably agrees not to exercise any rights
that it may now have or hereafter acquire against the Borrower
or any other insider guarantor that arise from the existence,
payment, performance or enforcement of the Parent Guarantor's Obligations
under or in respect of this Parent Guaranty or any other
Financing Document, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or
remedy of any Secured Party against the Borrower or any other
insider guarantor or any Collateral, whether or not such claim,
remedy or right arises in equity or under contract, statute or
common law, including, without limitation, the right to take or
receive from the Borrower or any other insider guarantor,
directly or indirectly, in cash or other property or by set-off
or in any other manner, payment or security on account of such
claim, remedy or right, unless and until all of the Guaranteed
Obligations and all other amounts payable under this Parent
Guaranty shall have been paid in full in cash and the Commitments
shall have expired or been terminated. If any amount shall be
paid to the Parent Guarantor in violation of the immediately
preceding sentence at any time prior to the later of (a) the
payment in full in cash of the Guaranteed Obligations and all
other amounts payable under this Parent Guaranty and (b) the
Termination Date, such amount shall be received and held in trust
for the benefit of the Secured Parties, shall be segregated from
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other property and funds of the Parent Guarantor and shall
forthwith be paid or delivered to the Agent in the same form as
so received (with any necessary endorsement or assignment) to be
credited and applied to the Guaranteed Obligations and all other
amounts payable under this Parent Guaranty, whether matured or
unmatured, in accordance with the terms of the Financing
Documents, or to be held as Collateral for any Guaranteed
Obligations or other amounts payable under this Parent Guaranty
thereafter arising. If (i) the Parent Guarantor shall make
payment to any Secured Party of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this Parent Guaranty shall have been paid
in full in cash and (iii) the Termination Date shall have
occurred, the Secured Parties will, at the Parent Guarantor's
request and expense, execute and deliver to the Parent Guarantor
appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by
subrogation to the Parent Guarantor of an interest in the
Guaranteed Obligations resulting from such payment made by the
Parent Guarantor pursuant to this Parent Guaranty.
SECTION 7.05. Continuing Guaranty; Assignments.
This Parent Guaranty is a continuing guaranty and
shall (a) remain in full force and effect until the latest of (i)
the payment in full in cash of the Guaranteed Obligations and all
other amounts payable under this Parent Guaranty and (ii) the
Termination Date, (b) be binding upon the Parent Guarantor, its
successors and assigns and (c) inure to the benefit of and be
enforceable by the Secured Parties and their successors,
transferees and assigns. Without limiting the generality of
clause (c) of the immediately preceding sentence, any Secured
Party may assign or otherwise transfer all or any portion of its
rights and obligations under this Agreement (including, without
limitation, all or any portion of its Commitments, the Advances
owing to it and the Note or Notes held by it) to any other Person
as permitted pursuant to Section 9.07, and such other Person
shall thereupon become vested with all the benefits in respect
thereof granted to such Secured Party herein or otherwise, in
each case as and to the extent provided in Section 9.07. The
Parent Guarantor shall not have the right to assign its rights
hereunder or any interest herein without the prior written
consent of the Secured Parties.
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action.(a) Each Lender
hereby appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion
under this Agreement and the other Financing Documents as are
delegated to the Agent by the termshereof, together with such
powers and discretion as are reasonably incidental thereto.
As to any matters not expressly provided for by the Financing Documents,
the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall
be binding upon all Lenders; provided, however, that the Agent
shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to this Agreement or
applicable law. The Agent agrees to give to each Lender prompt
notice of each notice given to it by the Borrower pursuant to the
terms of this Agreement.
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(b) In furtherance of the foregoing, each Lender hereby appoints
and authorizes the Agent to act as the agent of such Lender for
purposes of acquiring, holding and enforcing any and all Liens on
Collateral granted by any of the Loan Parties to secure any of
the Secured Obligations, together with such powers and discretion
as are reasonably incidental thereto. In this connection, the
Agent (and any Supplemental Agents appointed by the Agent
pursuant to Section 8.01(c) for purposes of holding or enforcing
any Lien on the Collateral (or any portion thereof) granted under
the Collateral Documents, or for exercising any rights or
remedies thereunder at the direction of the Agent), shall be
entitled to the benefits of this Article VIII (including, without
limitation, Section 8.05 as though such Supplemental Agents were
an "Agent" under the Financing Documents) as if set forth in full
herein with respect thereto.
(c) The Agent may execute any of its duties under this Agreement
or any other Financing Document (including for purposes of
holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents or of exercising
any rights and remedies thereunder at the direction of the Agent)
by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel and other consultants or experts
concerning all matters pertaining to such duties. The Agent may
also from time to time, when the Agent deems it to be necessary
or desirable, appoint one or more trustees, co-trustees,
collateral co-agents, collateral subagents or attorneys-in-fact
(each, a "Supplemental Agent") with respect to all or any part of
the Collateral; provided, however, that no such Supplemental
Agent shall be authorized to take any action with respect to any
Collateral unless and except to the extent expressly authorized
in writing by the Agent. Should any instrument in writing from
the Borrower or any other Loan Party be required by any
Supplemental Agent so appointed by the Agent to more fully or
certainly vest in and confirm to such Supplemental Agent such
rights, powers, privileges and duties, the Borrower shall, or
shall cause such Loan Party to, execute, acknowledge and deliver
any and all such instruments promptly upon request by the Agent.
If any Supplemental Agent, or successor thereto, shall die,
become incapable of acting, resign or be removed, all rights,
powers, privileges and duties of such Supplemental Agent, to the
extent permitted by law, shall automatically vest in and be
exercised by the Agent until the appointment of a new
Supplemental Agent. The Agent shall not be responsible for the
negligence or misconduct of any agent, attorney-in-fact or
Supplemental Agent that it selects in accordance with the
foregoing provisions of this Section 8.01(c) in the absence of
the Agen's gross negligence or willful misconduct.
SECTION 8.02. Agent's Reliance, Etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them
under or in connection with the Financing Documents, except for its or
their own gross negligence or willful misconduct. Without limitation
of the generality ofthe foregoing, the Agent: (i) may treat the payee
of any Note as the holder thereof until, in the case of the Agent,
the Agent receives and accepts an Assignment and Acceptance entered
into by the Lender that is the payee of such Note, as an assignor, and
an Eligible Assignee, as assignee; (ii) may consult with legal
counsel (including counsel for any Loan Party), independent
public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation
to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or
74
oral) made in or in connection with the Financing Documents; (iv)
shall not have any duty to ascertain or to inquire as to the
performance, observance or satisfaction of any of the terms,
covenants or conditions of any Financing Document on the part of
any Loan Party or the existence at any time of any Default under
the Financing Documents or to inspect the property (including the
books and records) of any Loan Party; (v) shall not be
responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of,
or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with,
any Financing Document or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability
under or in respect of any Financing Document by acting upon any
notice, consent, certificate or other instrument or writing
(which may be by telecopier, telegram or telex) believed by it to
be genuine and signed or sent by the proper party or parties.
SECTION 8.03. CUSA and Affiliates. With respect to its
Commitments, the Advances made by it and the Notes issued to it,
CUSA and its Affiliates shall have the same rights and powers under
the Financing Documents as any other Lender and may exercise the
same as though it were not an Agent; and the term "Lender" or
"Lenders" shall, unlessotherwise expressly indicated, include CUSA
in its individual capacity. CUSA and its respective affiliates may
accept deposits from, lend money to, act as trustee under indentures
of, accept investment banking engagements from and generally engage
in any kind of business with, any Loan Party, any of its Subsidiaries
and any Person that may do business with or own securities of any
Loan Party or any such Subsidiary, all as if CUSA were not an
Agent and without any duty to account therefor to the Lenders.
The Agent shall not have any duty to disclose any information
obtained or received by it or any of its Affiliates relating to
any Loan Party or any of its Subsidiaries to the extent such
information was obtained or recorded in any capacity other than
as Agent.
SECTION 8.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or any
other Lender and based on the financial statements referred to in
Section 4.01 or 4.02 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon the Agent or any other
Lender 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 this Agreement.
SECTION 8.05. Indemnification. (a) Each Lender severally
agrees to indemnify the Agent (to the extent not reimbursed by the
Borrower), from and against such Lender's ratable share (determined
as provided below) of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Agent in any way
relating to or arising out of the Financing Documents or any
action taken or omitted by the Agent under the Financing
Documents (collectively, the "Indemnified Costs"); provided that
no Lender shall be liable for any portion of the Indemnified
Costs resulting from the Agent's gross negligence or willful
misconduct as found in a final, non-appealable judgment by a
court of competent jurisdiction. Without limitation of the
foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any costs and expenses
(including, without limitation, fees and expenses of counsel)
incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or
75
enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that the
Agent is not reimbursed for such expenses by the Borrower. In
the case of any investigation, litigation or proceeding giving
rise to any Indemnified Costs, this Section 8.05 applies whether
any such investigation, litigation or proceeding is brought by
the Agent, any Lender or any other Person.
(b) For purposes of this Section 8.05, the Lenders' respective
ratable shares of any amount shall be determined, at any time,
according to the sum of (i) the aggregate principal amount of the
Advances outstanding at such time and owing to the respective
Lenders and (ii) their respective unused Revolving Credit 1
Commitments at such time. The failure of any Lender to reimburse
the Agent promptly upon demand for its ratable share of any
amount required to be paid by the Lenders to the Agent, as
provided herein shall not relieve any other Lender of its
obligation hereunder to reimburse the Agent for its ratable share
of such amount, but no Lender shall be responsible for the
failure of any other Lender to reimburse the Agent for such other
Lender's ratable share of such amount. Without prejudice to the
survival of any other agreement of any Lender hereunder, the
agreement and obligations of each Lender contained in this
Section 8.05 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the
other Financing Documents.
SECTION 8.06. Successor Agent. The Agent may resign at
any time by giving written notice thereof to the Lenders and the
Borrower and may be removed at any time with or without cause by
the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Agent,
which shall be a commercial bank organized or licensed under
the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $1,000,000,000.
If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within
30 days after the retiring Agent's giving of notice of resignation or
the Required Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a commercial bank organized or licensed
under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least
$1,000,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this
Article VIII shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this
Agreement. If within 45 days after written notice is given of
the retiring Agent's resignation or removal under this Section
8.06 no successor Agent shall have been appointed and shall have
accepted such appointment, then on such 45th day (a) the retiring
Agent's resignation or removal shall become effective, (b) the
retiring Agent shall thereupon be discharged from its duties and
obligations under the Financing Documents and (c) the Required
Lenders shall thereafter perform all duties of the retiring Agent
under the Financing Documents until such time, if any, as the
Required Lenders appoint a successor Agent as provided above.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver
of any provision of this Agreement or the Notes, nor consent to
any departure by any Loan Party therefrom, shall in any event be
effective unless the same shall be in writing and signed (or, in the
case of the Collateral Documents, consented to) by the Required Lenders,
and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that (a) no amendment, waiver or consent shall, unless
in writing and signed by all the Lenders (other than any Lender
that is, at such time, a Defaulting Lender), do any of the
following at any time: (i) waive any of the conditions specified
in Section 3.01, or, in the case of the Initial Extension of
Credit, Section 3.02, (ii) change the number of Lenders or the
percentage of (x) the Commitments or (y) the aggregate unpaid
principal amount of the Advances that, in each case, shall be
required for the Lenders or any of them to take any action
hereunder, (iii) reduce or limit the obligations of the Parent
Guarantor under Section 7.01 hereof or release the Parent
Guarantor or otherwise limit the Parent Guarantor's liability
with respect to the Obligations owing to the Agent and the
Lenders, (iv) release all or substantially all of the Collateral
in any transaction or series of related transactions or permit
the creation, incurrence, assumption or existence of any Lien on
all or substantially all of the Collateral in any transaction or
series of related transactions to secure any Obligations other
than Obligations owing to the Secured Parties under the Financing
Documents, or (v) amend Section 2.13 or this Section 9.01, (b) no
amendment, waiver or consent shall, unless in writing and signed
by all Lenders (other than any Lender that is, at such time, a
Defaulting Lender), (i) amend the definitions of "Aggregate
Collateral Value", "Aircraft Value", "Cash Collateral Value",
"Aircraft", "Eligible Aircraft", "Eligible Cash Collateral" or
"Required Collateral Amount" and (ii) amend Section 5.01(m) or
Section 5.01(n), and (c) no amendment, waiver or consent shall,
unless in writing and signed by the Required Lenders and each
Lender (other than any Lender that is, at such time, a Defaulting
Lender) that has a Commitment under, or is owed any amounts under
or in respect of, the Term Facility or the Revolving Credit
Facility if such Lender is directly affected by such amendment,
waiver or consent, (i) increase the Commitments of such Lender,
(ii) reduce the principal of, or interest on, the Advances held
by such Lender or any fees or other amounts payable hereunder to
such Lender, (iii) postpone any date fixed for any payment of
principal of, or interest on, the Advances held by such Lender or
any fees or other amounts payable hereunder to such Lender or
(iv) postpone any date fixed for the reduction of the Commitments
of any Lender; provided further that no amendment, waiver or
consent shall, unless in writing and signed by the Agent in
addition to the Lenders required above to take such action,
affect the rights or duties of the Agent under this Agreement or
the other Financing Documents.
SECTION 9.02. Notices, Etc.(a) All notices and other
communications provided for hereunder shall be either (x) in writing
(including telecopier, telegraphic or telex communication)
and mailed, telecopied, telegraphed, telexed or delivered or (y)
as and to the extent set forth in Section 9.02(b) and in the proviso
to this Section9.02(a), if to the Borrower, at its address at 0000
Xxxx Xxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxx 00000, Attention: Vice
President - Corporate Development and Treasurer (telecopy:
(000)000-0000); if to the Parent Guarantor, at its address at
0000 Xxxx Xxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxx 00000, Attention:
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Chief Financial Officer (telecopy: (000) 000-0000); if to any Initial
Lender, at its Domestic Lending Office specified opposite its
name on Schedule I hereto; if to any other Lender, at its
Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; and if to the Agent,
at its address at Xxx Xxxxx Xxx, Xxxxx 000, Xxx Xxxxxx, Xxxxxxxx
00000, Attention: Bank Loan Syndications Department, Xxxxxxxxx Xxxx
(telecopy: (000) 000-0000); or, as to the Borrower, the Parent
Guarantor or the Agent, at such other address as shall be
designated by such party in a written notice to the other parties
and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and
the Agent, provided that materials required to be delivered
pursuant to Section 5.01(a)(i), (ii), (iv), (v) and (xi) shall be
delivered to the Agent as specified in Section 9.02(b) or as
otherwise specified to the Borrower or the Parent Guarantor by
the Agent. All such notices and communications shall, when
mailed, telecopied, telegraphed or e-mailed, be effective when
deposited in the mails, telecopied, delivered to the telegraph
company or confirmed by e-mail, respectively, except that notices
and communications to the Agent pursuant to Article II, III or
VIII shall not be effective until received by the Agent.
Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the
Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed
counterpart thereof.
(b) Each of the Borrower and the Parent Guarantor hereby agrees
that it will provide to the Agent all information, documents and
other materials that it is obligated to furnish to the Agent
pursuant to the Financing Documents, including, without
limitation, all notices, requests, financial statements,
financial and other reports, certificates and other information
materials, but excluding any such communication that (i) relates
to a request for a new, or a Conversion of an existing Borrowing
or other extension of credit (including any election of an
interest rate or interest period relating thereto), (ii) relates
to the payment of any principal or other amount due under the
Financing Documents prior to the scheduled date therefor,
(iii) provides notice of any Default or Event of Default under
the Financing Documents or (iv) is required to be delivered to
satisfy any condition precedent to the effectiveness of the
Financing Documents and/or any Borrowing or other extension of
credit thereunder (all such non-excluded communications being
referred to herein collectively as "Communications"), by
transmitting the Communications in an electronic/soft medium in a
format reasonably acceptable to the Agent to
xxxxxxxxxxxxxxx@xxxxxxxxx.xxx. In addition, the Borrower and the
Parent Guarantor agree to continue to provide the Communications
to the Agent in the manner specified in the Financing Documents
but only to the extent reasonably requested by the Agent.
(c) The Borrower and the Parent Guarantor further agree that the
Agent may make the Communications available to the Lenders by
posting the Communications on Intralinks or a substantially
similar electronic transmission systems (the "Platform").
(d) THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE". THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR
COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE
PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS
IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED
OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR
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OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN CONNECTION
WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE
AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR
REPRESENTATIVES (COLLECTIVELY, "AGENT PARTIES") HAVE ANY
LIABILITY TO THE BORROWER, THE PARENT GUARANTOR ANY LENDER OR ANY
OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING,
WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT,
CONTRACT OR OTHERWISE) ARISING OUT OF THE BORROWER'S, THE PARENT
GUARANTOR'S OR THE AGENT'S TRANSMISSION OF COMMUNICATIONS THROUGH
THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT
PARTY IS FOUND BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED PRIMARILY FROM SUCH AGENT PARTY'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.
(e) The Agent agrees that the receipt of the Communications by
the Agent at its e-mail address set forth above shall constitute
effective delivery of the Communications to the Agent for
purposes of the Financing Documents. Each Lender agrees that
notice to it (as provided in the next sentence) specifying that
the Communications have been posted to the Platform shall
constitute effective delivery of the Communications to such
Lender for purposes of the Financing Documents. Each Lender
agrees (i) to notify the Agent in writing (including by
electronic communication) from time to time of such Lender's
e-mail address to which the foregoing notice may be sent by
electronic transmission and (ii) that the foregoing notice may be
sent to such e-mail address.
(f) Nothing herein shall prejudice the right of the Agent or any
Lender to give any notice or other communication pursuant to any
Financing Document in any other manner specified in such
Financing Document.
SECTION 9.03. No Waiver; Remedies. No failure on the
part of any Lender or the Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate
as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or
the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. Costs and Expenses. (a) The Borrower
agrees to pay on demand all reasonable costs and expenses of the
Agent in connection with the preparation, execution, delivery,
modification and amendment of the Financing Documents and the other
documents to be delivered hereunder, including, without limitation,
(A) all due diligence, collateral review, syndication (including
printing, distribution and bank meetings), transportation,
computer, duplication,appraisal, insurance obtained by any Lender in
accordance with the Collateral Documents, consultant search, filing and
recording fees, and audit expenses and (B) the reasonable fees and
expenses of counsel for the Agent with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under
the Financing Documents, with respect to negotiations with any
Loan Party or with other creditors of any Loan Party or any of
its Subsidiaries arising out of any Event of Default or any
Default that is not reasonably likely to be cured within the
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applicable grace period and with respect to presenting claims in
or otherwise participating in or monitoring any bankruptcy or
insolvency relating to any Loan Party or any of its Material
Subsidiaries as a debtor (or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto
in respect of any Loan Party or any of its Material Subsidiaries)
and (ii) all costs and expenses of the Agent and each Lender in
connection with the enforcement of the Financing Documents,
whether in any action, suit or litigation, or any bankruptcy,
insolvency or other similar proceeding affecting creditors'
rights generally (including, without limitation, the reasonable
fees and expenses of counsel for the Agent and each Lender with
respect thereto) in respect of such Financing Documents.
(b) The Borrower agrees to indemnify and hold harmless the
Agent, each Lead Arranger, the Syndication Agent and each Lender
and each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party")
from and against any and all claims, damages, losses, liabilities
and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out
of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or
proceeding or preparation of a defense in connection therewith)
this Agreement and the other Financing Documents, any of the
transactions contemplated hereby or thereby or the actual or
proposed use of the proceeds of the Advances, or the actual or
alleged presence of Hazardous Materials on any property of the
Borrower or any of its Subsidiaries or the Parent Guarantor or
any Environmental Action relating in any way to the Borrower or
any of its Subsidiaries or the Parent Guarantor except to the
extent such claim, damage, loss, liability or expense is found by
a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct;
provided the Borrower shall have no liability in respect of any
tax imposed with respect to this Agreement or any transaction
hereunder or thereunder except as specifically provided for in
Section 2.12, and provided further that the indemnity in this
Section 9.04(b) shall not cover any claims, damages, losses,
liabilities and expenses arising primarily out of the Aircraft
Security Agreement or relating to the Aircraft, all of which
shall be covered solely to the extent provided in Section 5.08 of
the Aircraft Security Agreement. In the case of an
investigation, litigation or other proceeding to which the
indemnity in this Section 9.04(b) applies, such indemnity shall
be effective whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors or its
equityholders or creditors, whether or not any Indemnified Party
is a party thereto and whether or not the transactions
contemplated hereby are consummated. The Agent, each of its
Affiliates and their officers, directors, employees, agents and
advisors agree to provide the Borrower with ten Business Days'
notice prior to the settlement of any claim under this Section
9.04(b); and each other Indemnified Party agrees to consult with
the Borrower prior to the settlement of any claim under this
Section 9.04(b). The Borrower also agrees not to assert any
claim against the Agent, any Lead Arranger, the Syndication
Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys and agents,
on any theory of liability, for special, indirect, consequential
or punitive damages (including, without limitation, any loss of
profits, business or anticipated savings) relating to the
Facilities, the actual or proposed use of the proceeds of the
Advances, the Financing Documents or any of the transactions
contemplated by the Financing Documents.
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(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the
account of a Lender other than on the last day of the Interest
Period for such Advance, as a result of a payment or Conversion
pursuant to Section 2.05, 2.07 or 2.09, acceleration of the
Advances pursuant to Section 6.01 or for any other reason or by
an Eligible Assignee to a Lender other than on the last day of
the Interest Period for such Advance upon an assignment of rights
and obligations under this Agreement pursuant to Section 9.07 as
a result of a demand by the Borrower pursuant to Section 9.07(a),
the Borrower shall, within 15 days after demand by such Lender,
reimburse such Lender for any resulting loss or expense incurred
by it (or by an existing or prospective participant in the
related Advance), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from
third parties, but excluding loss of margin for the period after
any such payment or failure to borrow, provided that such Lender
shall have delivered to the Borrower a certificate setting forth
in reasonable detail calculations as to the amount of such loss
or expense, which certificate shall be conclusive in the absence
of manifest error.
(d) Without prejudice to the survival of any other agreement of
the Borrower hereunder or under any other Financing Document, the
agreements and obligations of the Borrower contained in Sections
2.09, 2.12 and 9.04 shall survive the payment in full of
principal, interest and all other amounts payable hereunder or
under any other Financing Document.
(e) If any Loan Party fails to pay when due any costs, expenses
or other amounts payable by it under any Financing Document in
respect of any Collateral, including, without limitation, fees
and expenses of counsel and indemnities, such amount may be paid
on behalf of such Loan Party by the Agent, in its sole
discretion.
SECTION 9.05. Right of Set-off. Upon (i) the occurrence
and during the continuance of any Event of Default and (ii) the making
of the request or the granting of the consent specified by Section 6.01
to authorize the Agent to declare the Notes due and all interest
payable pursuant to the provisions of Section 6.01, the Agent and each
Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing
by the Agent, such Lender or such Affiliate to or for the credit
or the account of the Borrower against any and all of the
Obligations of the Borrower now or hereafter existing under the
Financing Documents, whether or not the Agent or such Lender
shall have made any demand under this Agreement or such Note or
Notes and although such Obligations may be unmatured. The Agent,
each Lender and each of their respective Affiliates agrees
promptly to notify the Borrower after any such set-off and
application; provided that the failure to give such notice shall
not affect the validity of such set-off and application. The
rights of the Agent, each Lender and each of their respective
Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off)
that such Lender may have.
SECTION 9.06. Binding Effect. This Agreement shall become
effective (other than Section 2.01, which shall only become effective
upon satisfaction of the conditions precedent set forth in Section 3.01)
when it shall have been executed by the Borrower, the Parent Guarantor
and the Agent and when the Agent shall have been notified by each
Initial Lender that such Initial Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the
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Borrower, the Parent Guarantor, the Agent and each Lender and
their respective successors and permitted assigns, except that,
subject to Section 5.02(b), neither the Parent Guarantor nor the
Borrower shall have the right to assign its rights hereunder or
any interest herein without the prior written consent of the
Lenders.
SECTION 9.07. Assignments and Participations. (a) Each
Lender may and, if demanded by the Borrower (following a demand
by such Lender pursuant to Section 2.09 or 2.12) upon at least 5
Business Days' notice to such Lender and the Agent, will assign to
one or more Persons all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a
portion of its Commitment and the Advances owing to it); provided,
however, that (i) each such assignment shall be of a constant, and
not a varying, percentage of all rights and obligations under any or
all Facilities, (ii) except in the case of an assignment to a
Person that, immediately prior to such assignment, was a Lender
or an assignment of all of a Lender's rights and obligations
under this Agreement, the amount of the Commitment of the
assigning Lender 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
$1,000,000 or an integral multiple of $1,000,000 in excess
thereof, (iii) each such assignment shall be to an Eligible
Assignee, (iv) each such assignment made as a result of a demand
by the Borrower pursuant to this Section 9.07(a) shall be
arranged by the Borrower after consultation with the Agent and
shall be either an assignment of all the rights and obligations
of the assigning Lender under this agreement or an assignment of
a portion of such rights and obligations made concurrently with
another such assignment or other such assignments that together
cover all of the rights and obligations of the assigning Lender
under this Agreement, (v) no Lender shall be obligated to make
any such assignment as a result of a demand by the Borrower
pursuant to this Section 9.07(a) unless and until such Lender
shall have received one or more payments from either the Borrower
or one or more Eligible Assignees in an aggregate amount at least
equal to the aggregate outstanding principal amount of the
Advances owing to such Lender, together with accrued interest
thereon to the date of payment of such principal amount and all
other amounts payable to such Lender under this Agreement, (vi)
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 and a processing and recordation fee of
$3,500, provided, however, that in the case of each assignment
made as a result of a demand by the Borrower, such recordation
fee shall be payable by the Borrower except that no such
recordation fee shall be payable in the case of an assignment
made at the request of the Borrower to an Eligible Assignee that
is an existing Lender, (vii) any Lender may, without the approval
of the Borrower and the Agent, but with notice to the Borrower
and the Agent, assign all or a portion of its rights to any of
its Affiliates and (viii) if the assignee is not incorporated
under the laws of the United States or a state thereof, it shall,
on the date of the assignment, deliver to the Borrower and the
Agent certification as to exemption from deduction or withholding
of any United States federal income taxes in accordance with
Section 2.12. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each
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 Lender
hereunder and (y) the Lender 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 (other than the rights under Sections 2.09, 2.12 and 9.04
to the extent any claim thereunder relates to an event arising
prior to such assignment) and be released from its obligations
82
under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto
as follows: (i) other than as provided in such Assignment and
Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with any Financing Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in
connection with, any Financing Document or any other instrument
or document furnished pursuant hereto; (ii) such assigning Lender
makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its
obligations under any Financing Document or any other instrument
or document furnished pursuant thereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section
4.01 and Section 4.02 and such other documents and information as
it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent,
such assigning Lender or any other Lender 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 this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf
and to exercise such powers and discretion under the Financing
Documents as are delegated to the Agent by the terms hereof,
together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations
that by the terms of this Agreement are required to be performed
by it as a Lender.
(c) The Agent, acting for this purpose (but only for this
purpose) as the agent of the Borrower, shall maintain at its
address referred to in Section 9.02 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 Lenders and the
Commitment of, and principal amount of the Advances owing to,
each Lender 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
Lenders shall treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee representing that it is an
Eligible Assignee, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of
Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower.
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(e) Each Lender may sell participations to one or more banks or
other entities (other than any Loan Party or any of its
Affiliates) in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation,
all or a portion of its Commitment and the Advances owing to it);
provided, however, that (i) such Lender's obligations under this
Agreement (including, without limitation, its Commitment to the
Borrower hereunder) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the Borrower, the
Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights
and obligations under this Agreement and (iv) no participant
under any such participation shall have any right to enforce the
obligations of the Loan Parties hereunder or to approve any
amendment or waiver of any provision of this Agreement, or any
consent to any departure by any Loan Party therefrom, except to
the extent that such amendment, waiver or consent would reduce
the principal of, or interest on, the Advances or any fees or
other amounts payable hereunder, in each case to the extent
subject to such participation, or postpone any date fixed for any
payment of principal of, or interest on, the Advances or any fees
or other amounts payable hereunder, in each case to the extent
subject to such participation, or release all or substantially
all of the Collateral.
(f) No Eligible Assignee or other transferee of any Lender's
rights shall be entitled to receive any greater payment under
Section 2.09 than such Lender would have been entitled to receive
with respect to the rights transferred, unless such transfer is
made with the Borrower's prior written consent or by reason of
the provision of Section 2.16 requiring such Lender to designate
a different Applicable Lending Office under certain
circumstances. The Borrower shall not be obligated to make any
greater payment under the Financing Documents than it would have
been required to make in the absence of any participation.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to
this Section 9.07, disclose to the assignee or participant or
proposed assignee or participant, any information relating to the
Borrower furnished to such Lender by or on behalf of the
Borrower; provided that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall
agree to preserve the confidentiality of any Confidential
Information received by it from such Lender.
(h) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest
in all or any portion of its rights under this Agreement
(including, without limitation, the Advances owing to it) in
favor of any Federal Reserve Bank in accordance with Regulation A
of the Board of Governors of the Federal Reserve System.
(i) Notwithstanding anything to the contrary contained herein,
any Lender that is a fund that invests in bank loans may create a
security interest in all or any portion of the Advances owing to
it to the trustee for holders of obligations owed, or securities
issued, by such fund as security for such obligations or
securities, provided that unless and until such trustee actually
becomes a Lender in compliance with the other provisions of this
Section 9.07, (i) no such pledge shall release the pledging
Lender from any of its obligations under the Financing Documents
and (ii) such trustee shall not be entitled to exercise any of
the rights of a Lender under the Financing Documents even though
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such trustee may have acquired ownership rights with respect to
the pledged interest through foreclosure or otherwise.
(j) If the Borrower wishes to replace Advances or the
Commitments under any Facility with ones having different terms,
it shall have the option, with the consent of the Agent and
subject to at least three Business Days' advance notice to the
Lenders under such Facility, instead of prepaying the Advances or
reducing or terminating the Commitments to be replaced, to (i)
require the Appropriate Lenders to assign such Advances or
Commitments to the Agent or its designees and (ii) amend the
terms thereof in accordance with Section 9.01 (with such
replacement, if applicable, being deemed to have been made
pursuant to Section 9.01(c)). Pursuant to any such assignment,
all Advances and Commitments to be replaced shall be purchased at
par (allocated among the Appropriate Lenders under such Facility
in the same manner as would be required if such Advances were
being optionally prepaid or such Commitments were being
optionally reduced or terminated by the Borrower), accompanied by
payment of any accrued interest, premiums (including any premiums
payable pursuant to Section 2.08(a), it being understood that any
assignment pursuant to this Section 9.07(j) shall be deemed an
optional prepayment under Section 2.08(a) for purposes of the
payment of such premiums) and fees thereon and any amounts owing
pursuant to Section 9.04(c). By receiving such purchase price,
the Appropriate Lenders under such Facility shall automatically
be deemed to have assigned their Commitments under such Facility
pursuant to the terms of the form of Assignment and Acceptance
attached hereto as Exhibit C, and accordingly no other action by
such Lenders shall be required in connection therewith. The
provisions of this paragraph are intended to facilitate the
maintenance of the perfection and priority of existing security
interests in the Collateral during any such replacement.
SECTION 9.08. Confidentiality. Neither the Agent nor any
Lender shall disclose any Confidential Information to any Person
without the consent of the Borrower, other than (a) to the
Agent's or such Lender's Affiliates and their officers, directors,
employees, agents and advisors and to actual or prospective Eligible
Assignees and participants, and then only on a confidential basis,
(b) as required by any law, rule or regulation, (c) as requested
or required by any state, Federal or foreign authority or examiner
(including the National Association of Insurance Commissioners or
any similar organization or quasi-regulatory authority)
regulating such Lender, (d) to any rating agency when required by
it, provided that, prior to any such disclosure, such rating
agency shall undertake to preserve the confidentiality of any
Confidential Information relating to the Loan Parties received by
it from such Lender, (e) in connection with any litigation or
proceeding to which the Agent or such Lender or any of its
Affiliates may be a party or as required by judicial process, or
(f) in connection with the exercise of any right or remedy under
this Agreement or any other Financing Document; provided that if
any party hereto (such party, the "Disclosing Party") is required
to disclose any Confidential Information pursuant to clause (e)
above, the Disclosing Party will, to the extent permitted by
applicable law, promptly notify the other parties hereto (such
other parties, the "Non-Disclosing Parties") prior to such
disclosure to enable the Non-Disclosing Parties to seek a
protective order or to take other action that the Non-Disclosing
Parties in their reasonable discretion deem appropriate, and the
Disclosing Party will use reasonable efforts to cooperate with
the Non-Disclosing Parties in their efforts to obtain a
protective order or other reasonable assurance that confidential
treatment will be accorded the Confidential Information.
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SECTION 9.09. Release of Collateral. Upon the sale, lease,
transfer or other disposition of any item of Collateral of any Loan
Party in accordance with the terms of the Financing Documents, the
Agent will, at the Borrower's expense, execute and deliver to such
Loan Party such documents as such Loan Party may reasonably request
to evidence the release of such item of Collateral from the assignment
and security interest granted under the Collateral Documents in
accordance with the terms of the Financing Documents.
SECTION 9.10. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the State
of New York.
SECTION 9.11. Execution in Counterparts. This Agreement 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 a signature page to this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of this
Agreement.
SECTION 9.12. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court
or federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of
the other Financing Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be
heard and determined in any such New York State court or, to the
extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other
Financing Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any of the other Financing
Documents to which it is a party in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or
proceeding in any such court.
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SECTION 9.13. Waiver of Jury Trial. Each of the
Borrower, the Parent Guarantor, the Agent and the Lenders hereby
irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any of the Financing Documents the
Advances or the actions of the Agent or any Lender in the negotiation,
administration, performance or enforcement thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
AMERICAN AIRLINES, INC.,
as Borrower
By
Name:
Title:
AMR CORPORATION,
as Parent Guarantor
By
Name:
Title:
CITICORP USA, INC.,
as Agent
By
Name:
Title:
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Revolving Term 1 Domestic Eurodollar
Lender Credit 1 Commitment Lending Lending
Commitment Office Office
