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CREDIT AGREEMENT
BY AND AMONG
HAWAIIAN HOLDINGS, INC.
AS PARENT AND GUARANTOR
AND
HAWAIIAN AIRLINES, INC.
AS BORROWER,
THE LENDERS THAT ARE SIGNATORIES HERETO
AS THE LENDERS,
AND
XXXXX FARGO FOOTHILL, INC.
AS THE ARRANGER AND ADMINISTRATIVE AGENT
DATED AS OF JUNE 2, 2005
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement"), is entered into as of June 2,
2005, by and among the lenders identified on the signature pages hereof (such
lenders, together with their respective successors and permitted assigns, are
referred to hereinafter each individually as a "Lender" and collectively as the
"Lenders"), XXXXX FARGO FOOTHILL, INC., a California corporation, as the
arranger and administrative agent for the Lenders (in such capacity, together
with its successors and assigns in such capacity, "Agent"), and HAWAIIAN
HOLDINGS, INC., a Delaware corporation ("Parent"), and HAWAIIAN AIRLINES, INC.,
a Delaware corporation ("Borrower").
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. Capitalized terms used in this Agreement shall have the
meanings specified therefor on Schedule 1.1.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Borrower" is used in respect of a financial covenant or a related
definition, it shall be understood to mean Borrower and its Subsidiaries on a
consolidated basis, unless the context clearly requires otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein; provided, however, that to the extent that the Code is used to define
any term herein and such term is defined differently in different Articles of
the Code, the definition of such term contained in Article 9 of the Code shall
govern.
1.4 CONSTRUCTION. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms "includes"
and "including" are not limiting, and the term "or" has, except where otherwise
indicated, the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in any other Loan
Document to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). Any reference herein or in any
other Loan Document to the satisfaction or repayment in full of the Obligations
shall mean the repayment in full in cash (or cash collateralization in
accordance with the terms hereof) of all Obligations other than unasserted
contingent indemnification Obligations. Any reference herein to any Person shall
be construed to include such Person's successors and assigns. Any requirement of
a writing contained herein or in any other Loan Document shall be satisfied by
the transmission of a Record and any Record so transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits attached to
this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this Agreement, and during
the term of this Agreement, each Lender with a Revolver Commitment agrees
(severally, not jointly or jointly and severally) to make advances ("Advances")
to Borrower in an amount at any one time outstanding not to exceed such Lender's
Pro Rata Share of an amount equal to the lesser of (i) the Maximum Revolver
Amount less the Letter of Credit Usage at such time, or (ii) the Borrowing Base
at such time less the Letter of Credit Usage at such time.
(b) Anything to the contrary in this Section 2.1 notwithstanding,
Agent shall have the right to establish reserves against the Borrowing Base in
such amounts, and with respect to such matters, as Agent in its Permitted
Discretion shall deem necessary or appropriate, including reserves with respect
to (i) sums that Borrower is required to pay by any Section of this Agreement or
any other Loan Document (such as taxes, assessments, insurance premiums, or, in
the case of leased assets, rents or other amounts payable under such leases) and
has failed to pay (after giving effect to any applicable grace periods set forth
in this Agreement or any other Loan Document), and (ii) amounts owing by Parent,
Borrower, or Borrower's Subsidiaries to any Person to the extent secured by a
Lien on, or trust over, any of the Collateral (other than a Permitted Lien),
which Lien or trust, in the Permitted Discretion of Agent likely would have a
priority superior to the Agent's Liens (such as Liens or trusts in favor of
landlords, warehousemen, carriers, mechanics, materialmen, laborers, or
suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes
where given priority under applicable law) in and to such item of the
Collateral, provided that the Agent shall not (x) impose reserves in respect of
Dilution other than the EA Dilution Reserve or the MA Dilution Reserve or (y)
establish any reserve that is duplicative of a reserve that has already been
established.
(c) So long as no Event of Default has occurred and is continuing or
would result therefrom, Borrower has the option, upon not less than 10 days
prior written notice to Agent, to reduce the Maximum Revolver Amount by
$5,000,000 once during the term of this Agreement. Amounts borrowed pursuant to
this Section 2.1 may be repaid and, subject to the terms and conditions of this
Agreement, reborrowed at any time during the term of this Agreement.
2.2 TERM LOAN.
(a) Subject to the terms and conditions of this Agreement, on the
Closing Date each Lender with a Term Loan Commitment agrees (severally, not
jointly or jointly and severally) to make term loans (collectively, the "Term
Loan") to Borrower in an amount equal to such Lender's Pro Rata Share of the
Term Loan Amount. The principal of the Term Loan shall be repaid on the
following dates and in the following amounts:
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Date Installment Amount
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September 1, 2005 $2,083,333
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December 1, 2005 $2,083,333
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March 1, 2006 $2,083,333
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June 1, 2006 $2,083,333
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September 1, 2006 $2,083,333
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December 1, 2006 $2,083,333
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March 1, 2007 $2,083,333
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June 1, 2007 $2,083,333
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September 1, 2007 $2,083,333
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December 1, 2007 $2,083,333
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March 1, 2008 $2,083,333
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June 1, 2008 $2,083,333
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(b) The outstanding unpaid principal balance and all accrued and
unpaid interest on the Term Loan shall be due and payable on the earliest of (i)
the Maturity Date, (ii) the date of the acceleration of the Term Loan in
accordance with the terms hereof, and (iii) the date of termination of this
Agreement pursuant to Section 8.1(c). All principal of, interest on, and other
amounts payable in respect of the Term Loan shall constitute Obligations.
(c) Borrower has the option, at any time, upon not less than 10 days
prior written notice to Agent, to prepay all or any portion of the Term Loan.
Each such prepayment of the Term Loan shall be applied pro rata against the
remaining installments of the principal of the Term Loan. Any principal amount
of the Term Loan that is repaid or prepaid pursuant to the provisions of this
Agreement may not be reborrowed.
2.3 BORROWING PROCEDURES AND SETTLEMENTS.
(a) PROCEDURE FOR BORROWING. Each Borrowing shall be made by an
irrevocable written request by an Authorized Person delivered to Agent. Unless
Swing Lender is not obligated to make a Swing Loan pursuant to Section 2.3(b)
below, such notice must be received by Agent no later than 10:00 a.m.
(California time) on the Business Day that is the requested Funding Date
specifying (i) the amount of such Borrowing, and (ii) the requested Funding
Date, which shall be a Business Day; provided, however, that if Swing Lender is
not obligated to make a Swing Loan as to a requested Borrowing, such notice must
be received by Agent no later than 10:00 a.m. (California time) on the Business
Day prior to the date that is the requested Funding Date. At Agent's election,
in lieu of delivering the above-described written request, any Authorized Person
may give Agent telephonic notice of such request by the required time. In such
circumstances, Borrower agrees that any such telephonic notice will be confirmed
in writing within 24 hours of the giving of such telephonic notice, but the
failure to provide such written confirmation shall not affect the validity of
the request.
(b) MAKING OF SWING LOANS. In the case of a request for an Advance and
so long as either (i) the aggregate amount of Swing Loans made since the last
Settlement Date plus the amount of the requested Advance does not exceed
$5,000,000, or (ii) Swing Lender, in its sole discretion, shall agree to make a
Swing Loan notwithstanding the foregoing limitation, Swing Lender shall make an
Advance in the amount of such Borrowing (any such Advance made solely by Swing
Lender pursuant to this Section 2.3(b) being referred to as a "Swing Loan" and
such Advances being referred to collectively as "Swing Loans") available to
Borrower on the Funding Date applicable thereto by transferring immediately
available funds to Borrower's Designated Account. Each Swing Loan shall be
deemed to be an Advance hereunder and shall be subject to all the terms and
conditions applicable to other Advances, except that all payments on any Swing
Loan shall be payable to Swing Lender solely for its own account. Subject to the
provisions of Section 2.3(d)(ii), Swing Lender shall not make and shall not be
obligated to make any Swing Loan if Swing Lender has actual knowledge that (i)
one or more of the applicable conditions precedent set forth in Section 3 will
not be satisfied on the requested Funding Date for the applicable Borrowing, or
(ii) the requested Borrowing would exceed the Availability on such Funding Date.
Swing Lender shall not otherwise be required to determine whether the applicable
conditions precedent set forth in Section 3 have been satisfied on the Funding
Date applicable thereto prior to making any Swing Loan. The Swing Loans shall be
secured by the Agent's Liens, constitute
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Obligations hereunder, and bear interest at the rate applicable from time to
time to Advances that are Base Rate Loans.
(c) MAKING OF LOANS.
(i) In the event that Swing Lender is not obligated to make a
Swing Loan, then promptly after receipt of a request for a Borrowing pursuant to
Section 2.3(a), Agent shall notify the Lenders, not later than 1:00 p.m.
(California time) on the Business Day immediately preceding the Funding Date
applicable thereto, by telecopy, telephone, or other similar form of
transmission, of the requested Borrowing. Each Lender shall make the amount of
such Lender's Pro Rata Share of the requested Borrowing available to Agent in
immediately available funds, to Agent's Account, not later than 10:00 a.m.
(California time) on the Funding Date applicable thereto. After Agent's receipt
of the proceeds of such Advances, Agent shall make the proceeds thereof
available to Borrower on the applicable Funding Date by transferring immediately
available funds equal to such proceeds received by Agent to Borrower's
Designated Account; provided, however, that, subject to the provisions of
Section 2.3(d)(ii), Agent shall not request any Lender to make, and no Lender
shall have the obligation to make, any Advance if Agent shall have actual
knowledge that (1) one or more of the applicable conditions precedent set forth
in Section 3 will not be satisfied on the requested Funding Date for the
applicable Borrowing unless such condition has been waived, or (2) the requested
Borrowing would exceed the Availability on such Funding Date.
(ii) Unless Agent receives notice from a Lender prior to 9:00
a.m. (California time) on the date of a Borrowing, that such Lender will not
make available as and when required hereunder to Agent for the account of
Borrower the amount of that Lender's Pro Rata Share of the Borrowing, Agent may
assume that each Lender has made or will make such amount available to Agent in
immediately available funds on the Funding Date and Agent may (but shall not be
so required), in reliance upon such assumption, make available to Borrower on
such date a corresponding amount. If and to the extent any Lender shall not have
made its full amount available to Agent in immediately available funds and Agent
in such circumstances has made available to Borrower such amount, that Lender
shall on the Business Day following such Funding Date make such amount available
to Agent, together with interest at the Defaulting Lender Rate for each day
during such period. A notice submitted by Agent to any Lender with respect to
amounts owing under this subsection shall be conclusive, absent manifest error.
If such amount is so made available, such payment to Agent shall constitute such
Lender's Advance on the date of Borrowing for all purposes of this Agreement. If
such amount is not made available to Agent on the Business Day following the
Funding Date, Agent will notify Borrower of such failure to fund and, within 2
Business Days of a demand by Agent, Borrower shall pay such amount to Agent for
Agent's account, together with interest thereon for each day elapsed since the
date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Advances composing such Borrowing. The failure of
any Lender to make any Advance on any Funding Date shall not relieve any other
Lender of any obligation hereunder to make an Advance on such Funding Date, 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 any Funding Date.
(iii) Agent shall not be obligated to transfer to a Defaulting
Lender any payments made by Borrower to Agent for the Defaulting Lender's
benefit, and, in the absence of such transfer to the Defaulting Lender, Agent
shall transfer any such payments to each other non-Defaulting Lender member of
the Lender Group ratably in accordance with their Commitments (but only to the
extent that such Defaulting Lender's Advance was funded by the other members of
the Lender Group) or, if so directed by Borrower and if no Default or Event of
Default had occurred and is continuing (and to the extent such Defaulting
Lender's Advance was not funded by the Lender Group), retain same to be
re-advanced to Borrower as if such Defaulting Lender had made Advances to
Borrower. Subject to the foregoing, Agent may hold and, in its Permitted
Discretion, re-lend to Borrower for the account of such Defaulting Lender the
amount of all such payments received and retained by Agent for the account of
such Defaulting Lender. Solely for the purposes of voting or consenting to
matters with respect to the Loan Documents, such Defaulting Lender shall be
deemed not to be a "Lender" and such Lender's Commitment shall be deemed to be
zero. This Section shall
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remain effective with respect to such Lender until (x) the Obligations under
this Agreement shall have been declared or shall have become immediately due and
payable, (y) the non-Defaulting Lenders, Agent, and Borrower shall have waived
such Defaulting Lender's default in writing, or (z) the Defaulting Lender makes
its Pro Rata Share of the applicable Advance and pays to Agent all amounts owing
by Defaulting Lender in respect thereof. The operation of this Section shall not
be construed to increase or otherwise affect the Commitment of any Lender, to
relieve or excuse the performance by such Defaulting Lender or any other Lender
of its duties and obligations hereunder, or to relieve or excuse the performance
by Borrower of its duties and obligations hereunder to Agent or to the Lenders
other than such Defaulting Lender. Any such failure to fund by any Defaulting
Lender shall constitute a material breach by such Defaulting Lender of this
Agreement and shall entitle Agent at its option to arrange for a substitute
Lender to assume the Commitment of such Defaulting Lender; provided, however,
that in the absence of notification by Agent to Borrower that Agent has arranged
for a substitute Lender, Borrower may, at its option, upon written notice to
Agent, arrange for a substitute Lender to assume the Commitment of such
Defaulting Lender, such substitute Lender to be reasonably acceptable to Agent.
In connection with the arrangement of such a substitute Lender, the Defaulting
Lender shall have no right to refuse to be replaced hereunder, and agrees to
execute and deliver a completed form of Assignment and Acceptance in favor of
the substitute Lender (and agrees that it shall be deemed to have executed and
delivered such document if it fails to do so) subject only to being repaid its
share of the outstanding Obligations without any premium or penalty of any kind
whatsoever; provided, however, that any such assumption of the Commitment of
such Defaulting Lender shall not be deemed to constitute a waiver of any of the
Lender Groups' or Borrower's rights or remedies against any such Defaulting
Lender arising out of or in relation to such failure to fund.
(d) PROTECTIVE ADVANCES AND OPTIONAL OVERADVANCES.
(i) Agent hereby is authorized by Borrower and the Lenders, from
time to time in Agent's sole discretion, (A) after the occurrence and during the
continuance of a Default or an Event of Default or at any time that any of the
other applicable conditions precedent set forth in Section 3 are not satisfied,
to make Advances to Borrower on behalf of the Lenders that Agent, in its
Permitted Discretion, deems necessary or desirable to preserve or protect the
Collateral, or any portion thereof, or (B) after the occurrence and during the
continuance of an Event of Default, to make Advances to Borrower on behalf of
the Lenders that Agent, in its Permitted Discretion, deems necessary or
desirable to pay any other amount chargeable to Borrower pursuant to the terms
of this Agreement, including Lender Group Expenses and the costs, fees, and
expenses described in Section 9 (unless such amounts are the subject of a
Permitted Protest) (any of the Advances described in this Section 2.3(d)(i)
shall be referred to as "Protective Advances").
(ii) Any contrary provision of this Agreement notwithstanding,
the Lenders hereby authorize Agent or Swing Lender, as applicable, and either
Agent or Swing Lender, as applicable, may, but is not obligated to, knowingly
and intentionally, continue to make Advances (including Swing Loans) to Borrower
notwithstanding that an Overadvance exists or thereby would be created, so long
as (A) after giving effect to such Advances, the outstanding Revolver Usage does
not exceed the Borrowing Base by more than $2,500,000, and (B) after giving
effect to such Advances, the outstanding Revolver Usage (except for and
excluding amounts charged to the Loan Account for interest, fees, or Lender
Group Expenses) does not exceed the Maximum Revolver Amount. In the event Agent
obtains actual knowledge that the Revolver Usage exceeds the amounts permitted
by the immediately foregoing provisions, regardless of the amount of, or reason
for, such excess, Agent shall notify the Lenders as soon as practicable (and
prior to making any (or any additional) intentional Overadvances (except for and
excluding amounts charged to the Loan Account for interest, fees, or Lender
Group Expenses) unless Agent determines that prior notice would result in
imminent harm to the Collateral or its value), and the Lenders with Revolver
Commitments thereupon shall, together with Agent, jointly determine the terms of
arrangements that shall be implemented with Borrower intended to reduce, within
a reasonable time, the outstanding principal amount of the Advances to Borrower
to an amount permitted by the preceding paragraph. In such circumstances, if any
Lender with a Revolver Commitment objects to the proposed terms of reduction or
repayment of any Overadvance, the terms of reduction or repayment thereof shall
be implemented according to the determination of the Required Lenders. Each
Lender
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with a Revolver Commitment shall be obligated to settle with Agent as provided
in Section 2.3(e) for the amount of such Lender's Pro Rata Share of any
unintentional Overadvances by Agent reported to such Lender, any intentional
Overadvances made as permitted under this Section 2.3(d)(ii), and any
Overadvances resulting from the charging to the Loan Account of interest, fees,
or Lender Group Expenses.
(iii) Each Protective Advance and each Overadvance shall be
deemed to be an Advance hereunder, except that no Protective Advance or
Overadvance shall be eligible to be a LIBOR Rate Loan and all payments on the
Protective Advances shall be payable to Agent solely for its own account. The
Protective Advances and Overadvances shall be repayable on demand, secured by
the Agent's Liens, constitute Obligations hereunder, and bear interest at the
rate applicable from time to time to Advances that are Base Rate Loans. The
provisions of this Section 2.3(d) are for the exclusive benefit of Agent, Swing
Lender, and the Lenders and are not intended to benefit Borrower in any way.
(iv) Notwithstanding anything to the contrary contained in this
Agreement, the aggregate amount of Protective Advances and Overadvances
outstanding under this Agreement shall not exceed, at any one time, $3,500,000
without the consent of all Lenders.
(e) SETTLEMENT. It is agreed that each Lender's funded portion of the
Advances is intended by the Lenders to equal, at all times, such Lender's Pro
Rata Share of the outstanding Advances. Such agreement notwithstanding, Agent,
Swing Lender, and the other Lenders agree (which agreement shall not be for the
benefit of Borrower) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among the Lenders as to the
Advances, the Swing Loans, and the Protective Advances shall take place on a
periodic basis in accordance with the following provisions:
(i) Agent shall request settlement ("Settlement") with the
Lenders on a weekly basis, or on a more frequent basis if so determined by Agent
(1) on behalf of Swing Lender, with respect to the outstanding Swing Loans, (2)
for itself, with respect to the outstanding Protective Advances, and (3) with
respect to Borrower's or its Subsidiaries' Collections received, as to each by
notifying the Lenders by telecopy, telephone, or other similar form of
transmission, of such requested Settlement, no later than 2:00 p.m. (California
time) on the Business Day immediately prior to the date of such requested
Settlement (the date of such requested Settlement being the "Settlement Date").
Such notice of a Settlement Date shall include a summary statement of the amount
of outstanding Advances, Swing Loans, and Protective Advances for the period
since the prior Settlement Date. Subject to the terms and conditions contained
herein (including Section 2.3(b)(iii)): (y) if a Lender's balance of the
Advances (including Swing Loans and Protective Advances) exceeds such Lender's
Pro Rata Share of the Advances (including Swing Loans and Protective Advances)
as of a Settlement Date, then Agent shall, by no later than 12:00 p.m.
(California time) on the Settlement Date, transfer in immediately available
funds to a Deposit Account of such Lender (as such Lender may designate), an
amount such that each such Lender shall, upon receipt of such amount, have as of
the Settlement Date, its Pro Rata Share of the Advances (including Swing Loans
and Protective Advances), and (z) if a Lender's balance of the Advances
(including Swing Loans and Protective Advances) is less than such Lender's Pro
Rata Share of the Advances (including Swing Loans and Protective Advances) as of
a Settlement Date, such Lender shall no later than 12:00 p.m. (California time)
on the Settlement Date transfer in immediately available funds to the Agent's
Account, an amount such that each such Lender shall, upon transfer of such
amount, have as of the Settlement Date, its Pro Rata Share of the Advances
(including Swing Loans and Protective Advances). Such amounts made available to
Agent under clause (z) of the immediately preceding sentence shall be applied
against the amounts of the applicable Swing Loans or Protective Advances and,
together with the portion of such Swing Loans or Protective Advances
representing Swing Lender's Pro Rata Share thereof, shall constitute Advances of
such Lenders. If any such amount is not made available to Agent by any Lender on
the Settlement Date applicable thereto to the extent required by the terms
hereof, Agent shall be entitled to recover for its account such amount on demand
from such Lender together with interest thereon at the Defaulting Lender Rate.
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(ii) In determining whether a Lender's balance of the Advances,
Swing Loans, and Protective Advances is less than, equal to, or greater than
such Lender's Pro Rata Share of the Advances, Swing Loans, and Protective
Advances as of a Settlement Date, Agent shall, as part of the relevant
Settlement, apply to such balance the portion of payments actually received in
good funds by Agent with respect to principal, interest, fees payable by
Borrower and allocable to the Lenders hereunder, and proceeds of Collateral. To
the extent that a net amount is owed to any such Lender after such application,
such net amount shall be distributed by Agent to that Lender as part of such
next Settlement.
(iii) Between Settlement Dates, Agent, to the extent no
Protective Advances or Swing Loans are outstanding, may pay over to Swing Lender
any payments received by Agent, that in accordance with the terms of this
Agreement would be applied to the reduction of the Advances, for application to
Swing Lender's Pro Rata Share of the Advances. If, as of any Settlement Date,
Collections of Parent, Borrower, or Borrower's Subsidiaries received since the
then immediately preceding Settlement Date have been applied to Swing Lender's
Pro Rata Share of the Advances other than to Swing Loans, as provided for in the
previous sentence, Swing Lender shall pay to Agent for the accounts of the
Lenders, and Agent shall pay to the Lenders, to be applied to the outstanding
Advances of such Lenders, an amount such that each Lender shall, upon receipt of
such amount, have, as of such Settlement Date, its Pro Rata Share of the
Advances. During the period between Settlement Dates, Swing Lender with respect
to Swing Loans, Agent with respect to Protective Advances, and each Lender
(subject to the effect of agreements between Agent and individual Lenders) with
respect to the Advances other than Swing Loans and Protective Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the daily amount of funds employed by Swing Lender, Agent, or the
Lenders, as applicable.
(f) NOTATION. Agent shall record on its books the principal amount of
the Advances owing to each Lender, including the Swing Loans owing to Swing
Lender, and Protective Advances owing to Agent, and the interests therein of
each Lender, from time to time and such records shall, absent manifest error,
conclusively be presumed to be correct and accurate.
(g) LENDERS' FAILURE TO PERFORM. All Advances (other than Swing Loans
and Protective Advances) shall be made by the Lenders contemporaneously and in
accordance with their Pro Rata Shares. It is understood that (i) no Lender shall
be responsible for any failure by any other Lender to perform its obligation to
make any Advance (or other extension of credit) hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligations hereunder, and (ii) no failure by
any Lender to perform its obligations hereunder shall excuse any other Lender
from its obligations hereunder.
2.4 PAYMENTS.
(a) PAYMENTS BY BORROWER.
(i) Except as otherwise expressly provided herein, all payments
by Borrower shall be made to Agent's Account for the account of the Lender Group
and shall be made in immediately available funds, no later than 11:00 a.m.
(California time) on the date specified herein. Any payment received by Agent
later than 11:00 a.m. (California time) shall be deemed to have been received on
the following Business Day and any applicable interest or fee shall continue to
accrue until such following Business Day.
(ii) Unless Agent receives notice from Borrower prior to the date
on which any payment is due to the Lenders that Borrower will not make such
payment in full as and when required, Agent may assume that Borrower has made
(or will make) such payment in full to Agent on such date in immediately
available funds and Agent may (but shall not be so required), in reliance upon
such assumption, distribute to each Lender on such due date an amount equal to
the amount then due such Lender. If and to the extent Borrower does not make
such payment in full to Agent on the date when due, each Lender severally shall
repay to Agent on demand such amount distributed to such Lender, together with
interest thereon at the
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Defaulting Lender Rate for each day from the date such amount is distributed to
such Lender until the date repaid.
(b) APPORTIONMENT AND APPLICATION.
(i) Except as otherwise provided with respect to Defaulting
Lenders and except as otherwise provided in the Loan Documents (including
agreements between Agent and individual Lenders), aggregate principal and
interest payments shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Obligations to which such payments relate
held by each Lender) and payments of fees and expenses (other than fees or
expenses that are for Agent's separate account, after giving effect to any
agreements between Agent and individual Lenders) shall be apportioned ratably
among the Lenders having a Pro Rata Share of the type of Commitment or
Obligation to which a particular fee relates. All payments shall be remitted to
Agent and all such payments, and all proceeds of Collateral received by Agent,
shall be applied as follows (provided that so long as no Event of Default has
occurred and is continuing, Agent shall be entitled to apply the proceeds of
Collections to reduce the balance of the Advances outstanding):
(A) first, ratably to pay any Lender Group Expenses then due
to Agent or any of the Lenders under the Loan Documents, until paid in full,
(B) second, ratably to pay any fees or premiums then due to
Agent or any of the Lenders under the Loan Documents until paid in full,
(C) third, to pay interest due in respect of all Protective
Advances until paid in full,
(D) fourth, to pay the principal of all Protective Advances
until paid in full,
(E) fifth, ratably to pay interest due in respect of the
Advances (other than Protective Advances), the Swing Loans, and the Term Loan
until paid in full,
(F) sixth, ratably to pay all principal amounts then due and
payable (other than as a result of an acceleration thereof) with respect to the
Term Loan until paid in full,
(G) seventh, to pay the principal of all Swing Loans until
paid in full,
(H) eighth, so long as no Event of Default has occurred and
is continuing, to pay the principal of all Advances until paid in full,
(I) ninth, if an Event of Default has occurred and is
continuing, ratably (i) to pay the principal of all Advances until paid in full,
and (ii) to Agent, to be held by Agent, for the ratable benefit of Issuing
Lender and those Lenders having a Revolver Commitment, as cash collateral in an
amount up to 105% of the Letter of Credit Usage,
(J) tenth, if an Event of Default has occurred and is
continuing, to pay the outstanding principal balance of the Term Loan (in the
inverse order of the maturity of the installments due thereunder) until the Term
Loan is paid in full,
(K) eleventh, if an Event of Default has occurred and is
continuing, to pay any other Obligations, and
(L) twelfth, to Borrower (to be wired to the Designated
Account) or such other Person entitled thereto under applicable law.
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(ii) Agent promptly shall distribute to each Lender, pursuant to
the applicable wire instructions received from each Lender in writing, such
funds as it may be entitled to receive, subject to a Settlement delay as
provided in Section 2.3(e).
(iii) In each instance, so long as no Event of Default has
occurred and is continuing, Section 2.4(b)(i) shall not apply to any payment
made by Borrower to Agent and specified by Borrower to be for the payment of
specific Obligations then due and payable (or prepayable) under any provision of
this Agreement.
(iv) For purposes of Section 2.4(b)(i), "paid in full" means
payment of all amounts owing under the Loan Documents according to the terms
thereof, including loan fees, service fees, professional fees, interest (and
specifically including interest accrued after the commencement of any Insolvency
Proceeding), default interest, interest on interest, and expense reimbursements,
whether or not any of the foregoing would be or is allowed or disallowed in
whole or in part in any Insolvency Proceeding.
(v) In the event of a direct conflict between the priority
provisions of this Section 2.4 and any other provision contained in any other
Loan Document, it is the intention of the parties hereto that such provisions be
read together and construed, to the fullest extent possible, to be in concert
with each other. In the event of any actual, irreconcilable conflict that cannot
be resolved as aforesaid, the terms and provisions of this Section 2.4 shall
control and govern.
(c) MANDATORY PREPAYMENTS.
(i) Immediately upon any voluntary or involuntary sale or
disposition of property or assets of Parent (other than Stock owned by Parent
that is not the Stock of Borrower or any of Borrower's Subsidiaries), Borrower,
or any of Borrower's Subsidiaries (including casualty losses or condemnations
but excluding sales or dispositions which qualify as Permitted Dispositions),
Borrower shall prepay the outstanding principal balance of the Term Loan in
accordance with Section 2.4(d) in an amount equal to 100% of the Net Cash
Proceeds in excess of $250,000 per year received by all such Persons, in the
aggregate, in connection with such sales or dispositions; provided that, so long
as (A) no Event of Default shall have occurred and is continuing, (B) Borrower
shall have given Agent prior written notice of Parent's, Borrower, or Borrower's
Subsidiaries' intention to apply such Net Cash Proceeds to the costs of
replacement of the properties or assets which are the subject of such sale or
disposition or the cost of purchase or construction of other assets useful in
the business of Parent and Borrower and its Subsidiaries, (C) such Net Cash
Proceeds are held in a Deposit Account in which Agent has a perfected
first-priority security interest, and (D) Parent, Borrower, and Borrower's
Subsidiaries complete such replacement, repair, purchase or construction within
180 days after the initial receipt of such Net Cash Proceeds (or enter into a
commitment for such replacement, repair, purchase or construction within 180
days after the initial receipt of such Net Cash Proceeds so long as such
replacement, purchase, or construction is completed within 270 days after the
initial receipt of such Net Cash Proceeds), Parent, Borrower and Borrower's
Subsidiaries shall have the option to apply such Net Cash Proceeds to the costs
of replacement or repair of the property or assets which are the subject of such
sale or disposition or the costs of purchase or construction of other assets
useful in the business of Parent, Borrower, and Borrower's Subsidiaries unless
and to the extent that (x) such applicable period shall have expired without
such replacement, repair, purchase or construction being made or completed or
(y) any Event of Default occurs and is continuing (and in the case of either (x)
or (y), any amounts remaining in the cash collateral account shall be paid to
Agent and applied as set forth above). Nothing contained in this subclause (i)
shall permit Parent, Borrower, or any of Borrower's Subsidiaries to sell or
otherwise dispose of any property or assets other than in accordance with
Section 6.4.
(ii) After the occurrence and during the continuation of an Event
of Default, and immediately upon the receipt by Parent, Borrower, or any of
Borrower's Subsidiaries of any Extraordinary Receipts, Borrower shall prepay the
outstanding principal balance of the Term Loan in accordance with clause (d)
below in an amount equal to 100% of such Extraordinary Receipts, net of any
fees, commissions, and
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expenses incurred (including taxes paid, payable, or estimated to be payable) in
collecting or receiving such Extraordinary Receipts.
(iii) Immediately upon the issuance or incurrence by Parent,
Borrower or any of their respective Subsidiaries of any Indebtedness permitted
under Section 6.1(k), to the extent that such Indebtedness is incurred on or
after January 1, 2006, Borrower shall prepay the outstanding principal balance
of the Term Loan in accordance with clause (d) below, in an amount equal to 100%
of the Net Cash Proceeds of such Indebtedness.
(d) APPLICATION OF PAYMENTS. Each such prepayment of the Term Loan
pursuant to Sections 2.4(c)(i), 2.4(c)(ii) or 2.4(c)(iii) hereof shall be
applied against the remaining installments of principal of the Term Loan in the
inverse order of their maturity.
2.5 OVERADVANCES. If, at any time or for any reason, the amount of
Obligations owed by Borrower to the Lender Group pursuant to Section 2.1 or
Section 2.12 is greater than any of the limitations set forth in Section 2.1 or
Section 2.12, as applicable (an "Overadvance"), Borrower immediately shall pay
to Agent, in cash, the amount of such excess, which amount shall be used by
Agent to reduce the Obligations in accordance with the priorities set forth in
Section 2.4(b). In addition, Borrower hereby promises to pay the Obligations
(including principal, interest, fees, costs, and expenses) in Dollars in full as
and when due and payable under the terms of this Agreement and the other Loan
Documents.
2.6 INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND
CALCULATIONS.
(a) INTEREST RATES. Except as provided in clause (c) below, all
Obligations (except for undrawn Letters of Credit) that have been charged to the
Loan Account pursuant to the terms hereof shall bear interest on the Daily
Balance thereof as follows (i) if the relevant Obligation is a LIBOR Rate Loan,
at a per annum rate equal to the LIBOR Rate plus the LIBOR Rate Margin, and (ii)
otherwise, at a per annum rate equal to the Base Rate plus the Base Rate Margin.
The foregoing notwithstanding, at no time shall any portion of the
Obligations bear interest on the Daily Balance thereof at a per annum rate less
than 5.0%. To the extent that interest accrued hereunder at the rate set forth
herein would be less than the foregoing minimum daily rate, the interest rate
chargeable hereunder for such day automatically shall be deemed increased to the
minimum rate.
(b) LETTER OF CREDIT FEE. Borrower shall pay Agent (for the ratable
benefit of the Lenders with a Revolver Commitment, subject to any agreements
between Agent and individual Lenders), a Letter of Credit fee (in addition to
the charges, commissions, fees, and costs set forth in Section 2.12(e)) which
shall accrue at a rate equal to 2.0% per annum times the Daily Balance of the
undrawn amount of all outstanding Letters of Credit.
(c) DEFAULT RATE. Upon the occurrence and during the continuation of
an Event of Default (and at the election of Agent or the Required Lenders),
(i) all Obligations (except for undrawn Letters of Credit) that
have been charged to the Loan Account pursuant to the terms hereof shall bear
interest on the Daily Balance thereof at a per annum rate equal to 2 percentage
points above the per annum rate otherwise applicable hereunder, and
(ii) the Letter of Credit fee provided for in Section 2.6(b)
shall be increased to 2 percentage points above the per annum rate otherwise
applicable hereunder.
(d) PAYMENT. Except as provided to the contrary in Section 2.11 or
Section 2.13(a), interest, Letter of Credit fees, and all other fees payable
hereunder shall be due and payable, in arrears, on the first day of each month
at any time that Obligations or Commitments are outstanding. Borrower hereby
authorizes Agent, from time to time without prior notice to Borrower, to charge
all interest and fees (when due
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and payable), all Lender Group Expenses (as and when incurred), all charges,
commissions, fees, and costs provided for in Section 2.12(e) (as and when
accrued or incurred), all fees and costs provided for in Section 2.11 (as and
when accrued or incurred), and all other payments as and when due and payable
under any Loan Document (including the amounts due and payable with respect to
the Term Loan) to the Loan Account, which amounts thereafter shall constitute
Advances hereunder and shall accrue interest at the rate then applicable to
Advances that are Base Rate Loans, provided, however, that so long as no Event
of Default has occurred and is continuing, Agent shall not be authorized to
charge the Loan Account for any such payment until Agent has provided Borrower
with notice that such payment is due and such payment is not received by Agent
within 2 Business Days after the date that such notice is provided (it being
understood that nothing in the foregoing proviso shall affect the date that such
payment is due and payable). Any interest not paid when due shall be compounded
by being charged to the Loan Account and shall thereafter constitute Advances
hereunder and shall accrue interest at the rate then applicable to Advances that
are Base Rate Loans.
(e) COMPUTATION. All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of days elapsed. In the event the Base Rate is changed from time to time
hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.
(f) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no event shall
the interest rate or rates payable under this Agreement, plus any other amounts
paid in connection herewith, exceed the highest rate permissible under any law
that a court of competent jurisdiction shall, in a final determination, deem
applicable. Borrower and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that, anything contained herein
to the contrary notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto, as
of the date of this Agreement, Borrower is and shall be liable only for the
payment of such maximum as allowed by law, and payment received from Borrower in
excess of such legal maximum, whenever received, shall be applied to reduce the
principal balance of the Obligations to the extent of such excess.
2.7 CASH MANAGEMENT.
(a) Parent and Borrower shall and Borrower shall cause each of its
Subsidiaries to (i) establish on the Closing Date cash management services of a
type and on terms satisfactory to the Required Lenders and maintain from and
after the Closing Date cash management services of a type and on terms similar
to those cash management services established on the Closing Date (it being
understood that the cash management services established on the Closing Date are
satisfactory to the Required Lenders), at one or more of the banks set forth on
Schedule 2.7(a) (each a "Cash Management Bank"), (ii) request in writing and
otherwise take such reasonable steps to ensure that all of its and its
Subsidiaries' Account Debtors and Credit Card Processors forward payment of the
amounts owed by them directly to such Cash Management Bank, and (iii) deposit or
cause to be deposited promptly, and in any event no later than the first
Business Day after the date of receipt thereof, all of their Collections
(including those sent directly by their Account Debtors and Credit Card
Processors to Parent, Borrower, or one of Borrower's Subsidiaries) into a bank
account in Parent's, Borrower's, or such Subsidiary's name (a "Cash Management
Account") at one of the Cash Management Banks.
(b) Each Cash Management Bank shall establish and maintain Cash
Management Agreements with Agent, Parent, Borrower, and Borrower's Subsidiaries.
Each such Cash Management Agreement shall provide, among other things, that (i)
the Cash Management Bank will comply with any instructions originated by Agent
directing the disposition of the funds in such Cash Management Account without
further consent by Parent, Borrower, or Borrower's Subsidiaries, as applicable,
(ii) the Cash Management Bank has no rights of setoff or recoupment or any other
claim against the applicable Cash Management Account other than for payment of
its service fees and other charges directly related to the administration of
such Cash Management Account and for returned checks or other items of payment,
and (iii) from and after the date that the Cash Management Bank receives written
notification from Agent, the Cash
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Management Bank will forward, by daily sweep, all amounts in the applicable Cash
Management Account to the Agent's Account. Agent agrees that it shall not
provide such written notification to the Cash Management Bank unless and until
either of the following events (each, a "Triggering Event") has occurred: (A) an
Event of Default has occurred and is continuing, or (B) Excess Availability plus
Qualified Cash is less than (i) $50,000,000 at any time during the period from
and after the date of the execution and delivery of this Agreement up to (but
not including) the date that is the first anniversary of the Closing Date, and
(ii) $40,000,000 at any time thereafter. Once a Triggering Event has occurred,
Agent shall be free to exercise its right to issue such notice and the
subsequent elimination, cure, or waiver of such Triggering Event shall not
eliminate the effectiveness of such notice.
(c) Schedule 2.7(c) sets forth all of Parent's, Borrower's and each of
Borrower's Subsidiaries' Credit Card Processors. Parent and Borrower shall
establish and maintain (and Borrower shall cause its Subsidiaries that receive
Collections through credit card charges to establish and maintain) Credit Card
Agreements with Agent and each Credit Card Processor. Each such Credit Card
Agreement shall provide, among other things, that each such Credit Card
Processor shall transfer all proceeds of credit card charges for sales by
Parent, Borrower, or such Subsidiary, as applicable, received by it (or other
amounts payable by such Credit Card Processor) into a Cash Management Account on
a daily basis. Neither Parent, Borrower, nor any Subsidiary of Borrower may
change the designation of a Cash Management Account in any Credit Card Agreement
as the Deposit Account to which all such proceeds must be transferred without
the prior written consent of Agent, and neither Parent, Borrower, nor any
Subsidiary of Borrower shall cause the proceeds of credit card charges to be
transferred to any Deposit Account other than a Cash Management Account.
(d) So long as no Event of Default has occurred and is continuing,
Borrower may amend Schedule 2.7(a) or Schedule 2.7(c) to add or replace a Cash
Management Bank, Cash Management Account, or Credit Card Processor; provided,
however, that (i) prior to the time of the opening of such Cash Management
Account, Parent, Borrower (or Borrower's Subsidiary, as applicable) and such
prospective Cash Management Bank shall have executed and delivered to Agent a
Cash Management Agreement, and (ii) prior to adding or replacing such Credit
Card Processor, Parent, Borrower (or Borrower's Subsidiary, as applicable) and
such prospective Credit Card Processor shall have executed and delivered to
Agent a Credit Card Agreement.
(e) Each Cash Management Account shall be subject to a Control
Agreement.
2.8 CREDITING PAYMENTS. The receipt of any payment item by Agent (whether
from transfers to Agent by the Cash Management Banks pursuant to the Cash
Management Agreements or otherwise) shall not be considered a payment on account
unless such payment item is a wire transfer of immediately available federal
funds made to the Agent's Account or unless and until such payment item is
honored when presented for payment. Should any payment item not be honored when
presented for payment, then Borrower shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into the Agent's Account on a Business Day on or
before 11:00 a.m. (California time). If any payment item is received into the
Agent's Account on a non-Business Day or after 11:00 a.m. (California time) on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day.
2.9 DESIGNATED ACCOUNT. Agent is authorized to make the Advances and the
Term Loan, and Issuing Lender is authorized to issue the Letters of Credit,
under this Agreement based upon telephonic or other instructions received from
anyone purporting to be an Authorized Person or, without instructions, if
pursuant to Section 2.6(d). Borrower agrees to establish and maintain the
Designated Account with the Designated Account Bank for the purpose of receiving
the proceeds of the Advances requested by Borrower and made by Agent or the
Lenders hereunder. Unless otherwise specified in writing by Borrower, any
Advance, Protective Advance, or Swing Loan requested by Borrower and made by
Agent or the Lenders hereunder shall be made to the Designated Account.
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2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Agent shall
maintain an account on its books in the name of Borrower (the "Loan Account") on
which Borrower will be charged with the Term Loan, all Advances (including
Protective Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders
to Borrower or for Borrower's account, the Letters of Credit issued by Issuing
Lender for Borrower's account, and with all other payment Obligations hereunder
or under the other Loan Documents, including, accrued interest, fees and
expenses, and Lender Group Expenses. In accordance with Section 2.8, the Loan
Account will be credited with all payments received by Agent from Borrower or
for Borrower's account, including all amounts received in the Agent's Account
from any Cash Management Bank. Agent shall render statements regarding the Loan
Account to Borrower, including principal, interest, fees, and including an
itemization of all charges and expenses constituting Lender Group Expenses
owing, and such statements, absent manifest error, shall be conclusively
presumed to be correct and accurate and constitute an account stated between
Borrower and the Lender Group unless, within 30 days after receipt thereof by
Borrower, Borrower shall deliver to Agent written objection thereto describing
the error or errors contained in any such statements.
2.11 FEES. Borrower shall pay to Agent, as and when due and payable under
the terms of the Fee Letter, the fees set forth in the Fee Letter.
2.12 LETTERS OF CREDIT.
(a) Subject to the terms and conditions of this Agreement, the Issuing
Lender agrees to issue letters of credit for the account of Borrower (each, an
"L/C") or to purchase participations or execute indemnities or reimbursement
obligations (each such undertaking, an "L/C Undertaking") with respect to
letters of credit issued by an Underlying Issuer (as of the Closing Date, the
prospective Underlying Issuer is to be Xxxxx Fargo) for the account of Borrower.
Each request for the issuance of a Letter of Credit, or the amendment, renewal,
or extension of any outstanding Letter of Credit, shall be made in writing by an
Authorized Person and delivered to the Issuing Lender and Agent via hand
delivery, telefacsimile, or other electronic method of transmission reasonably
in advance of the requested date of issuance, amendment, renewal, or extension.
Each such request shall be in form satisfactory to the Issuing Lender in its
Permitted Discretion and shall specify (i) the amount of such Letter of Credit,
(ii) the date of issuance, amendment, renewal, or extension of such Letter of
Credit, (iii) the expiration date of such Letter of Credit, (iv) the name and
address of the beneficiary thereof (or the beneficiary of the Underlying Letter
of Credit, as applicable), and (v) such other information (including, in the
case of an amendment, renewal, or extension, identification of the outstanding
Letter of Credit to be so amended, renewed, or extended) as shall be necessary
to prepare, amend, renew, or extend such Letter of Credit. If requested by the
Issuing Lender, Borrower also shall be an applicant under the application with
respect to any Underlying Letter of Credit that is to be the subject of an L/C
Undertaking. The Issuing Lender shall have no obligation to issue a Letter of
Credit if any of the following would result after giving effect to the issuance
of such requested Letter of Credit:
(i) the Letter of Credit Usage would exceed the Borrowing Base
less the outstanding amount of Advances, or
(ii) the Letter of Credit Usage would exceed $15,000,000, or
(iii) the Letter of Credit Usage would exceed the Maximum
Revolver Amount less the outstanding amount of Advances.
Borrower and the Lender Group acknowledge and agree that certain
Underlying Letters of Credit may be issued to support letters of credit that
already are outstanding as of the Closing Date. Each Letter of Credit (and
corresponding Underlying Letter of Credit) shall be in form and substance
acceptable to the Issuing Lender (in the exercise of its Permitted Discretion),
including the requirement that the amounts payable thereunder must be payable in
Dollars. If Issuing Lender is obligated to advance funds under a Letter of
Credit, Borrower immediately shall reimburse such L/C Disbursement to Issuing
Lender by paying to Agent
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an amount equal to such L/C Disbursement not later than 11:00 a.m., California
time, on the date that such L/C Disbursement is made, if Borrower shall have
received written or telephonic notice of such L/C Disbursement prior to 10:00
a.m., California time, on such date, or, if such notice has not been received by
Borrower prior to such time on such date, then not later than 11:00 a.m.,
California time, on the Business Day that Borrower receives such notice, if such
notice is received prior to 10:00 a.m., California time, on the date of receipt,
and, in the absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance hereunder and, thereafter, shall
bear interest at the rate then applicable to Advances that are Base Rate Loans
unless and until converted to a LIBOR Rate Loan. To the extent an L/C
Disbursement is deemed to be an Advance hereunder, Borrower's obligation to
reimburse such L/C Disbursement shall be discharged and replaced by the
resulting Advance. Promptly following receipt by Agent of any payment from
Borrower pursuant to this paragraph, Agent shall distribute such payment to the
Issuing Lender or, to the extent that Lenders have made payments pursuant to
Section 2.12(b) to reimburse the Issuing Lender, then to such Lenders and the
Issuing Lender as their interests may appear.
(b) Promptly following receipt of a notice of L/C Disbursement
pursuant to Section 2.12(a), each Lender with a Revolver Commitment agrees to
fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing
subsection on the same terms and conditions as if Borrower had requested such
Advance and Agent shall promptly pay to Issuing Lender the amounts so received
by it from the Lenders. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Issuing Lender or the Lenders with Revolver
Commitments, the Issuing Lender shall be deemed to have granted to each Lender
with a Revolver Commitment, and each Lender with a Revolver Commitment shall be
deemed to have purchased, a participation in each Letter of Credit, in an amount
equal to its Pro Rata Share of the Risk Participation Liability of such Letter
of Credit, and each such Lender agrees to pay to Agent, for the account of the
Issuing Lender, such Lender's Pro Rata Share of any payments made by the Issuing
Lender under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender with a Revolver Commitment hereby absolutely and
unconditionally agrees to pay to Agent, for the account of the Issuing Lender,
such Lender's Pro Rata Share of each L/C Disbursement made by the Issuing Lender
and not reimbursed by Borrower on the date due as provided in Section 2.12(a),
or of any reimbursement payment required to be refunded to Borrower for any
reason. Each Lender with a Revolver Commitment acknowledges and agrees that its
obligation to deliver to Agent, for the account of the Issuing Lender, an amount
equal to its respective Pro Rata Share of each L/C Disbursement made by the
Issuing Lender pursuant to this Section 2.12(b) shall be absolute and
unconditional and such remittance shall be made notwithstanding the occurrence
or continuation of an Event of Default or Default or the failure to satisfy any
condition set forth in Section 3. If any such Lender fails to make available to
Agent the amount of such Lender's Pro Rata Share of each L/C Disbursement made
by the Issuing Lender in respect of such Letter of Credit as provided in this
Section, such Lender shall be deemed to be a Defaulting Lender and Agent (for
the account of the Issuing Lender) shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the Defaulting Lender
Rate until paid in full.
(c) Borrower hereby agrees to indemnify, save, defend, and hold the
Lender Group harmless from any loss, cost, expense, or liability, and reasonable
attorneys fees incurred by the Lender Group arising out of or in connection with
any Letter of Credit; provided, however, that Borrower shall not be obligated
hereunder to indemnify for any loss, cost, expense, or liability to the extent
that it is caused by the gross negligence or willful misconduct of the Issuing
Lender or any other member of the Lender Group. Borrower agrees to be bound by
the Underlying Issuer's regulations and interpretations of any Underlying Letter
of Credit or by Issuing Lender's interpretations of any L/C issued by Issuing
Lender to or for Borrower's account, even though this interpretation may be
different from Borrower's own, and Borrower understands and agrees that the
Lender Group shall not be liable for any error, negligence, or mistake, whether
of omission or commission, in following Borrower's instructions or those
contained in the Letter of Credit or any modifications, amendments, or
supplements thereto. Borrower understands that the L/C Undertakings may require
Issuing Lender to indemnify the Underlying Issuer for certain costs or
liabilities arising out of claims by Borrower against such Underlying Issuer.
Borrower hereby agrees to indemnify, save, defend, and
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hold the Lender Group harmless with respect to any loss, cost, expense
(including reasonable attorneys fees), or liability incurred by the Lender Group
under any L/C Undertaking; provided, however, that Borrower shall not be
obligated hereunder to indemnify for any loss, cost, expense, or liability to
the extent that it is caused by the gross negligence or willful misconduct of
the Issuing Lender or any other member of the Lender Group. Borrower hereby
acknowledges and agrees that neither the Lender Group nor the Issuing Lender
shall be responsible for delays, errors, or omissions resulting from the
malfunction of equipment in connection with any Letter of Credit.
(d) Borrower hereby authorizes and directs any Underlying Issuer to
deliver to the Issuing Lender all instruments, documents, and other writings and
property received by such Underlying Issuer pursuant to such Underlying Letter
of Credit and to accept and rely upon the Issuing Lender's instructions with
respect to all matters arising in connection with such Underlying Letter of
Credit and the related application.
(e) Any and all issuance charges, commissions, fees, and costs
incurred by the Issuing Lender relating to Underlying Letters of Credit shall be
Lender Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by Borrower to Agent for the account of the Issuing Lender; it
being acknowledged and agreed by Borrower that, as of the Closing Date, the
issuance charge imposed by the prospective Underlying Issuer is .525% per annum
times the undrawn amount of each Underlying Letter of Credit, that such issuance
charge may be changed from time to time (if and to the extent that the
Underlying Issuer changes such issuance charge generally with respect to its
customers), and that the Underlying Issuer also imposes a schedule of charges
for amendments, extensions, drawings, and renewals.
(f) If by reason of (i) any change after the Closing Date in any
applicable law, treaty, rule, or regulation or any change in the interpretation
or application thereof by any Governmental Authority, or (ii) compliance by the
Underlying Issuer or the Lender Group with any direction, request, or
requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Federal Reserve Board as from time to time in effect (and any successor
thereto):
(i) any reserve, deposit, or similar requirement is or shall be
imposed or modified in respect of any Letter of Credit issued hereunder, or
(ii) there shall be imposed on the Underlying Issuer or the
Lender Group any other condition regarding any Underlying Letter of Credit or
any Letter of Credit issued pursuant hereto,
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Borrower, and Borrower shall pay on demand such amounts as Agent may
specify to be necessary to compensate the Lender Group for such additional cost
or reduced receipt, together with interest on such amount from the date of such
demand until payment in full thereof at the rate then applicable to Base Rate
Loans hereunder. The determination by Agent of any amount due pursuant to this
Section, as set forth in a certificate setting forth the calculation thereof in
reasonable detail, shall, in the absence of manifest or demonstrable error, be
final and conclusive and binding on all of the parties hereto.
2.13 LIBOR OPTION.
(a) INTEREST AND INTEREST PAYMENT DATES. In lieu of having interest
charged at the rate based upon the Base Rate, Borrower shall have the option
(the "LIBOR Option") to have interest on all or a portion of the Advances or the
Term Loan be charged at a rate of interest based upon the LIBOR Rate. Interest
on LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the
Interest Period applicable thereto (provided, however, that, subject to the
following clauses (ii) and (iii), in the case of any Interest Period greater
than 3 months in duration, interest shall be payable at 3 month intervals after
the commencement of the
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applicable Interest Period and on the last day of such Interest Period), (ii)
the date on which an Event of Default occurs, or (iii) the date on which this
Agreement is terminated pursuant to the terms hereof. On the last day of each
applicable Interest Period, unless Borrower properly has exercised the LIBOR
Option with respect thereto, the interest rate applicable to such LIBOR Rate
Loan automatically shall convert to the rate of interest then applicable to Base
Rate Loans of the same type hereunder. At any time that an Event of Default has
occurred and is continuing, (x) Borrower no longer shall have the option to
request that Advances or the Term Loan bear interest at a rate based upon the
LIBOR Rate, and (y) Agent shall have the right to convert the interest rate on
all outstanding LIBOR Rate Loans to the rate then applicable to Base Rate Loans
hereunder, provided that Borrower shall not be obligated for any loss, cost, or
expense incurred by Agent or any Lender as a result of any such conversion by
Agent.
(b) LIBOR ELECTION.
(i) Borrower may, at any time and from time to time, so long as
no Event of Default has occurred and is continuing, elect to exercise the LIBOR
Option by notifying Agent prior to 11:00 a.m. (California time) at least 3
Business Days prior to the commencement of the proposed Interest Period (the
"LIBOR Deadline"). Notice of Borrower's election of the LIBOR Option for a
permitted portion of the Advances or the Term Loan and an Interest Period
pursuant to this Section shall be made by delivery to Agent of a LIBOR Notice
received by Agent before the LIBOR Deadline, or by telephonic notice received by
Agent before the LIBOR Deadline (to be confirmed by delivery to Agent of a LIBOR
Notice received by Agent prior to 5:00 p.m. (California time) on the same day).
Promptly upon its receipt of each such LIBOR Notice, Agent shall provide a copy
thereof to each of the Lenders having a Revolver Commitment.
(ii) Each LIBOR Notice shall be irrevocable and binding on
Borrower. In connection with each LIBOR Rate Loan, Borrower shall indemnify,
defend, and hold Agent and the Lenders harmless against any loss, cost, or
expense incurred by Agent or any Lender as a result of (a) the payment of any
principal of any LIBOR Rate Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default but
excluding as a result of any mandatory prepayment required to be made pursuant
to Section 2.4(c)), (b) the conversion of any LIBOR Rate Loan other than on the
last day of the Interest Period applicable thereto (except as provided in
Section 2.13(a)(y)), or (c) the failure to borrow, convert, continue or prepay
any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered pursuant
hereto (such losses, costs, or expenses, "Funding Losses"). Funding Losses
shall, with respect to Agent or any Lender, be deemed to equal the amount
determined by Agent or such Lender to be the excess, if any, of (i) the amount
of interest that would have accrued on the principal amount of such LIBOR Rate
Loan had such event not occurred, at the LIBOR Rate that would have been
applicable thereto, for the period from the date of such event to the last day
of the then current Interest Period therefor (or, in the case of a failure to
borrow, convert, or continue, for the period that would have been the Interest
Period therefor), minus (ii) the amount of interest that would accrue on such
principal amount for such period at the interest rate which Agent or such Lender
would be offered were it to be offered, at the commencement of such period,
Dollar deposits of a comparable amount and period in the London interbank
market. A certificate of Agent or a Lender delivered to Borrower setting forth
any amount or amounts that Agent or such Lender is entitled to receive pursuant
to this Section 2.13 shall be conclusive absent manifest error.
(iii) Borrower shall have not more than 10 LIBOR Rate Loans in
effect at any given time. Borrower only may exercise the LIBOR Option for LIBOR
Rate Loans of at least $1,000,000 and integral multiples of $500,000 in excess
thereof.
(c) PREPAYMENTS. Borrower may prepay LIBOR Rate Loans at any time;
provided, however, that in the event that LIBOR Rate Loans are prepaid on any
date that is not the last day of the Interest Period applicable thereto,
including as a result of any automatic prepayment (except as provided in Section
2.13(b)(ii)(a)) through the required application by Agent of proceeds of
Borrower's and its Subsidiaries' Collections in accordance with Section 2.4(b)
or for any other reason, including early termination of the term of this
Agreement or acceleration of all or any portion of the Obligations pursuant to
the terms hereof,
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Borrower shall indemnify, defend, and hold Agent and the Lenders and their
Participants harmless against any and all Funding Losses in accordance with
clause (b)(ii) above.
(d) SPECIAL PROVISIONS APPLICABLE TO LIBOR RATE.
(i) The LIBOR Rate may be adjusted by Agent with respect to any
Lender on a prospective basis to take into account any additional or increased
costs to such Lender of maintaining or obtaining any eurodollar deposits or
increased costs, in each case, due to changes in applicable law occurring
subsequent to the commencement of the then applicable Interest Period and that
(A) are applied generally to borrowers of such Lender, and (B) have not been
reimbursed by Borrower pursuant to Section 2.14, including changes in tax laws
(except changes of general applicability in corporate income tax laws) and
changes in the reserve requirements imposed by the Board of Governors of the
Federal Reserve System (or any successor), excluding the Reserve Percentage,
which additional or increased costs would increase the cost of funding loans
bearing interest at the LIBOR Rate. In any such event, the affected Lender shall
give Borrower and Agent notice of such a determination and adjustment and Agent
promptly shall transmit the notice to each other Lender and, upon its receipt of
the notice from the affected Lender, Borrower may, by notice to such affected
Lender (y) require such Lender to furnish to Borrower a statement setting forth
the basis for adjusting such LIBOR Rate and the method for determining the
amount of such adjustment, or (z) repay the LIBOR Rate Loans with respect to
which such adjustment is made (together with any amounts due under Section
2.13(b)(ii)).
(ii) In the event that any change in market conditions or any
law, regulation, treaty, or directive, or any change therein or in the
interpretation of application thereof, shall at any time after the date hereof,
in the reasonable opinion of any Lender, make it unlawful or impractical for
such Lender to fund or maintain LIBOR Advances or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, such
Lender shall give notice of such changed circumstances to Agent and Borrower and
Agent promptly shall transmit the notice to each other Lender and (y) in the
case of any LIBOR Rate Loans of such Lender that are outstanding, the date
specified in such Lender's notice shall be deemed to be the last day of the
Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans
of such Lender thereafter shall accrue interest at the rate then applicable to
Base Rate Loans, and (z) Borrower shall not be entitled to elect the LIBOR
Option until such Lender determines that it would no longer be unlawful or
impractical to do so.
(e) NO REQUIREMENT OF MATCHED FUNDING. Anything to the contrary
contained herein notwithstanding, neither Agent, nor any Lender, is required
actually to acquire eurodollar deposits to fund or otherwise match fund any
Obligation as to which interest accrues at the LIBOR Rate. The provisions of
this Section shall apply as if each Lender had match funded any Obligation as to
which interest is accruing at the LIBOR Rate by acquiring eurodollar deposits
for each Interest Period in the amount of the LIBOR Rate Loans.
2.14 CAPITAL REQUIREMENTS. If, after the date hereof, any Lender determines
that (i) the adoption of or change in any law, rule, regulation or guideline
regarding capital requirements for banks or bank holding companies, or any
change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request, or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on such Lender's or
such holding company's capital as a consequence of such Lender's Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such adoption, change, or compliance (taking into
consideration such Lender's or such holding company's then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity's capital) by any amount deemed by such Lender to be material, then such
Lender may notify Borrower and Agent thereof. Following receipt of such notice,
Borrower agrees to pay such Lender on demand the amount of such reduction of
return of capital as and when such reduction is determined, payable within 90
days after presentation by such Lender of a statement in the amount and setting
forth in reasonable detail such Lender's calculation thereof and the assumptions
upon which such calculation
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was based (which statement shall be deemed true and correct absent manifest
error); provided, however, that Borrower shall not be required to compensate
such Lender pursuant to this Section 2.14 for such reduction of rate of return
of capital incurred more than 180 days prior to the date that such Lender
delivers such statement. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
2.15 REGISTERED NOTES. Agent agrees to record each Advance, Letter of
Credit, and Term Loan on the Register referenced in Section 13.1(h). Each
Advance, Letter of Credit, and Term Loan recorded on the Register (each a
"Registered Loan") may not be evidenced by promissory notes other than
Registered Notes (as defined below). Upon the registration of any Advance,
Letter of Credit, and Term Loan, Borrower agrees, at the request of any Lender,
to execute and deliver to such Lender a promissory note, in conformity with the
terms of this Agreement, in registered form to evidence such Registered Loan, in
form and substance reasonably satisfactory to such Lender, and registered as
provided in Section 13.1(h) (a "Registered Note"), payable to the order of such
Lender and otherwise duly completed, provided that any Registered Note issued to
evidence Advances shall be issued in the principal amount of the applicable
Lender's Commitment. Once recorded on the Register, each Advance may not be
removed from the Register so long as it remains outstanding, and a Registered
Note may not be exchanged for a promissory note that it is not a Registered
Note.
2.16 SECURITIZATION. Each of Borrower and each Guarantor hereby
acknowledges that the Lenders and each of their Affiliates and Related Funds may
sell or securitize the Borrowings (a "Securitization") through the pledge of the
Borrowings as collateral security for loans to such Lenders or their Affiliates
or Related Funds or through the sale of the Borrowings or the issuance of direct
or indirect interests in the Borrowings, which loans to such Lenders or their
Affiliates or Related Funds or direct or indirect interests will be rated by
Xxxxx'x, Standard & Poor's or one or more other rating agencies (the "Rating
Agencies"). Each of Borrower and each Guarantor shall use commercially
reasonable efforts to cooperate with such Lenders and their Affiliates and
Related Funds to effect the Securitization, including by (a) amending this
Agreement and the other Loan Documents, (b) executing such additional documents,
as reasonably requested by such Lenders in order to effect the Securitization,
provided that (i) any such cooperation, amendment, or additional documentation
does not impose any additional costs (other than de minimis costs) on Borrower
or any Guarantor, (ii) any such amendment or additional documentation does not
materially adversely affect the rights, or increase the obligations, of Borrower
or any Guarantor under the Loan Documents or change or affect in a manner
adverse to Borrower or any Guarantor the financial terms of the Borrowings or
add more restrictive covenants or defaults, and (iii) such amendment or
additional documentation does not require Borrower or any Guarantor to (x) take
any action which would be illegal or would breach any contractual obligation of
Borrower or any Guarantor existing prior to the Closing Date or (y) indemnify
any Person other than the Agent and the Lenders, (c) providing such information
as may be reasonably requested by such Lenders in connection with the rating of
the Borrowings or the Securitization, and (d) providing in connection with any
rating of the Borrowings a certificate (i) agreeing to indemnify such Lenders
and any of their Affiliates and Related Funds, any of the Rating Agencies, or
any party providing credit support or otherwise participating in the
Securitization (collectively, the "Securitization Parties") for any losses,
claims, damages or liabilities (the "Securitization Liabilities") to which such
Lenders or any of their Affiliates or Related Funds, or such Securitization
Parties, may become subject insofar as the Securitization Liabilities arise out
of or are based upon a breach of the representation and warranty contained in
Section 4.18 (as if such representation or warranty were made to the best of
Borrower's and each Guarantor's knowledge), and (ii) agreeing to reimburse such
Lenders and their Affiliates and Related Funds, and such Securitization Parties,
for any legal or other expenses reasonably incurred by such Persons in
connection with defending the Securitization Liabilities.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The obligation
of each Lender to make its initial extension of credit provided for hereunder,
is subject to the fulfillment, to the satisfaction of Agent and each Lender of
each of the conditions precedent set forth on Schedule 3.1 (the making of such
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initial extension of credit by a Lender being conclusively deemed to be its
satisfaction or waiver of the conditions precedent ).
3.2 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The obligation of the
Lender Group (or any member thereof) to make any Advances hereunder (or to
extend any other credit hereunder) at any time shall be subject to the following
conditions precedent:
(a) the representations and warranties of Borrower and each Guarantor
contained in this Agreement or in the other Loan Documents shall be true and
correct in all material respects (except that such materiality qualifier shall
not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) on and as of the date
of such extension of credit, as though made on and as of such date (except to
the extent that such representations and warranties relate solely to an earlier
date);
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result from
the making thereof;
(c) no injunction, writ, restraining order, or other order of any
nature restricting or prohibiting, directly or indirectly, the extending of such
credit shall have been issued and remain in force by any Governmental Authority
against Borrower, any Guarantor, Agent, or any Lender; and
(d) the results of operations or the financial condition of Borrower
and Borrower's Subsidiaries, taken as a whole, shall not materially and
adversely differ from the projected results of operations or the financial
condition of Borrower set forth in the Projections of Borrower delivered to
Agent on or about the Closing Date.
3.3 TERM. This Agreement shall continue in full force and effect for a term
ending on June 2, 2008 (the "Maturity Date"). The foregoing notwithstanding, the
Lender Group, upon the election of the Required Lenders, shall have the right to
terminate its obligations under this Agreement immediately and without notice
upon the occurrence and during the continuation of an Event of Default.
3.4 EFFECT OF TERMINATION. On the date of termination of this Agreement,
all Obligations (including contingent reimbursement obligations of Borrower with
respect to outstanding Letters of Credit) immediately shall become due and
payable without notice or demand (including either (i) providing cash collateral
to be held by Agent for the benefit of those Lenders with a Revolver Commitment
in an amount equal to 105% of the Letter of Credit Usage, or (ii) causing the
original Letters of Credit to be returned to the Issuing Lender). No termination
of this Agreement, however, shall relieve or discharge Parent, Borrower, or
Borrower's Subsidiaries of their duties, Obligations, or covenants hereunder or
under any other Loan Document and the Agent's Liens in the Collateral shall
remain in effect until all Obligations have been paid in full and the Lender
Group's obligations to provide additional credit hereunder have been terminated.
When this Agreement has been terminated and all of the Obligations have been
paid in full and the Lender Group's obligations to provide additional credit
under the Loan Documents have been terminated irrevocably, Agent will, at
Borrower's sole expense, execute and deliver any termination statements, Lien
releases, mortgage releases, re-assignments of trademarks, discharges of
security interests, and other similar discharge or release documents (and, if
applicable, in recordable form) as are reasonably necessary to release, as of
record, the Agent's Liens and all notices of security interests and Liens
previously filed by Agent with respect to the Obligations.
3.5 EARLY TERMINATION BY BORROWER. Borrower has the option, at any time
upon 45 days prior written notice to Agent, to terminate this Agreement and
terminate the Commitments hereunder by paying to Agent, in cash, the Obligations
(including either (i) providing cash collateral to be held by Agent for the
benefit of those Lenders with a Revolver Commitment in an amount equal to 105%
of the Letter of Credit Usage, or (ii) causing the original Letters of Credit to
be returned to the Issuing Lender) in full. If Borrower has sent a notice of
termination pursuant to the provisions of this Section, then the Commitments
shall
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terminate and Borrower shall be obligated to repay the Obligations (including
either (i) providing cash collateral to be held by Agent for the benefit of
those Lenders with a Revolver Commitment in an amount equal to 105% of the
Letter of Credit Usage, or (ii) causing the original Letters of Credit to be
returned to the Issuing Lender), in full, on the date set forth as the date of
termination of this Agreement in such notice.
4. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement, each
of Borrower and each Guarantor makes the following representations and
warranties to the Lender Group which shall be true, correct, and complete (in
all material respects, to the extent not already so qualified), as of the date
hereof, and shall be true, correct, and complete, in all material respects, as
of the Closing Date and at and as of the date of the making of each Advance (or
other extension of credit) made thereafter, as though made on and as of the date
of such Advance (or other extension of credit) (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:
4.1 NO ENCUMBRANCES. Parent, Borrower, and Borrower's Subsidiaries have
good and indefeasible title to, or a valid leasehold interest in, their personal
property assets and good and marketable title to, or a valid leasehold interest
in, their Real Property, if any, in each case, free and clear of Liens except
for Permitted Liens.
4.2 ELIGIBLE ACCOUNTS. As to each Account that is identified by Borrower as
an Eligible Account in a borrowing base report submitted to Agent, such Account
is, as of the date so identified (a) a bona fide existing payment obligation of
the applicable Account Debtor created by the sale and delivery of Inventory or
the rendition of services to such Account Debtor in the ordinary course of
Borrower's business, (b) owed to Borrower without any known defenses, disputes,
offsets, counterclaims, or rights of return or cancellation, and (c) not
excluded as ineligible by virtue of one or more of the excluding criteria set
forth in the definition of Eligible Accounts.
4.3 SPARE PARTS.
(a) Borrower keeps correct and accurate records itemizing and
describing the type, quality, and quantity of its Spare Parts. Full legal and
beneficial ownership to all Spare Parts are held by Borrower, free and clear of
all Liens in the case of Spare Parts identified by Borrower as an Eligible Spare
Part in the most recent Borrowing Base Certificate submitted to Agent and free
and clear of all Liens other than Permitted Liens in the case of all other Spare
Parts. Neither Parent nor any Subsidiaries of Borrower has or will have any
ownership, title, Lien or other interest in any Spare Part.
(b) Each Rotable and Expendable that is identified by Borrower as an
Eligible Spare Part in the most recent Borrowing Base Certificate submitted to
Agent is, as of the date of such Borrowing Base Certificate (i) of good and
merchantable quality, free from defects, serviceable in accordance with
Borrower's Maintenance Program and its manufacturer's recommendations and
limits, in good operating condition and ready for immediate use or operation in
accordance with Borrower's Maintenance Program and has all serviceability tags
applicable thereto and all related applicable back to birth records and all
other documents required by Borrower's Maintenance Program, (ii) not excluded as
ineligible by virtue of one or more of the excluding criteria set forth in the
definition of Eligible Spare Parts, and (iii) accurately described in such
Borrowing Base Certificate (including by manufacturer's serial number or
manufacturer's part number, as applicable, if a serialized Spare Part and
location).
(c) Except to the extent expressly permitted by Section 5.17(b), the
Spare Parts of Borrower are in the possession and control of Borrower, held for
use in Borrower's business, and only located at the locations identified on
Schedule 4.3 (as such Schedule may be updated pursuant to Section 5.17(b)).
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(d) Schedule 1.1(S) of the Engine and Spare Parts Security Agreement
contains a true and complete summary description by type and location of all of
the Spare Parts owned by Borrower that are located in the United States (other
than Spare Parts that are specifically excluded from Schedule 1.1(S) pursuant to
the terms of the Engine and Spare Parts Security Agreement) as of each date that
this representation and warranty is given. The Spare Parts on such Schedule
1.1(S) are covered by Warranties applicable thereto that are at least as
extensive as the warranties that are maintained by similarly situated businesses
in accordance with industry practice, and such Warranties are transferable at
least to the extent that similar warranties are transferable (without the
consent of any other Person) in accordance with industry practice. The Spare
Parts located in the United States are primarily maintained for the purposes of
installing such Spare Parts on Aircraft, Engines, Propellers, or Appliances
operated by Borrower.
(e) Borrower possesses all necessary certificates, permits, rights,
authorizations and concessions and consents which are material to the repair,
refurbishment or overhaul of any of the Spare Parts (to the extent Borrower
performs any of such actions) or to the maintenance, use, operation, or sale of
any of the Spare Parts.
(f) Borrower uses, stores, maintains, overhauls, repairs and
refurbishes (or causes a duly authorized FAA repair station to maintain,
overhaul, repair and refurbish) all Spare Parts and maintains books and records
with respect thereto in compliance with the material requirements of applicable
law (including the provision of FAA serviceability tags where applicable) and
with the Borrower's Maintenance Program, except for such requirements of
applicable law the validity or applicability of which are being protested by
Borrower so long as (i) such protest is instituted promptly and prosecuted
diligently by Borrower in good faith, (ii) there is no material risk of any
sale, forfeiture, or loss of any Spare Part or diminution in value of any Spare
Part as a result of such contest, (iii) there is no risk of any criminal
liability, or any material civil liability, for Borrower, Agent, or any of the
Lenders as a result of such contest, (iv) Agent is satisfied that while such
contest is pending, there is no impairment of the enforceability, validity, or
priority of any of the Agent's Liens on the Spare Parts, and (v) there is no
material risk of any adverse affect on the ownership interest of Borrower in
such Spare Part.
4.4 EQUIPMENT OTHER THAN SPARE PARTS. Except to the extent expressly
permitted by Section 5.9, the Ground Equipment and each other material item of
Borrower's Equipment (other than Spare Parts, which are addressed in Section
4.3) are (a) in the possession and control of Borrower, (b) used or held for use
in Borrower's business, (c) are in good working order, and (d) are only located
at the locations identified on Schedule 4.4 (as such Schedule may be updated
pursuant to Section 5.9(a)).
4.5 [INTENTIONALLY OMITTED].
4.6 [INTENTIONALLY OMITTED].
4.7 STATE OF INCORPORATION; LOCATION OF CHIEF EXECUTIVE OFFICE;
ORGANIZATIONAL IDENTIFICATION NUMBER; COMMERCIAL TORT CLAIMS.
(a) The name of (within the meaning of Section 9-503 of the Code) and
jurisdiction of organization of Parent, Borrower, and each of Borrower's
Subsidiaries is set forth on Schedule 4.7(a) (as such Schedule may be updated
from time to time to reflect changes permitted to be made under Section 6.5).
(b) The chief executive office of Parent, Borrower, and each of
Borrower's Subsidiaries is located at the address indicated on Schedule 4.7(b)
(as such Schedule may be updated from time to time to reflect changes permitted
to be made under Section 5.9).
(c) Parent's, Borrower's, and each of Borrower's Subsidiaries'
organizational identification numbers, if any, are identified on Schedule 4.7(c)
(as such Schedule may be updated from time to time to reflect changes permitted
to be made under Section 6.5).
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(d) As of the Closing Date, Parent, Borrower's, and Borrower's
Subsidiaries do not hold any commercial tort claims, except as set forth on
Schedule 4.7(d).
4.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Each of Borrower and each Guarantor is duly organized and existing
and in good standing under the laws of the jurisdiction of its organization and
qualified to do business in any state where the failure to be so qualified
reasonably could be expected to result in a Material Adverse Change.
(b) [Intentionally Omitted].
(c) Set forth on Schedule 4.8(c) (as such Schedule may be updated from
time to time to reflect changes permitted to be made under Section 5.16), is a
complete and accurate list of Borrower and each of Borrower's direct and
indirect Subsidiaries, showing: (i) the jurisdiction of their organization, (ii)
the number of shares of each class of common and preferred Stock authorized for
Borrower and each of such Subsidiaries, and (iii) the number and the percentage
of the outstanding shares of each such class owned directly or indirectly by
Parent (in the case of Borrower) or Borrower (in the case of such Subsidiaries),
as applicable. All of the outstanding capital Stock of Borrower and each such
Subsidiary has been validly issued and is fully paid and non-assessable.
(d) Except as set forth on Schedule 4.8(c), there are no
subscriptions, options, warrants, or calls relating to any shares of Borrower's
or Borrower's Subsidiaries' capital Stock, including any right of conversion or
exchange under any outstanding security or other instrument. None of Parent,
Borrower, or any of Borrower's Subsidiaries is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of Borrower's or Borrower's Subsidiaries' capital Stock or any security
convertible into or exchangeable for any such capital Stock.
4.9 DUE AUTHORIZATION; NO CONFLICT.
(a) The execution, delivery, and performance by Borrower of this
Agreement and the Loan Documents to which it is a party have been duly
authorized by all necessary action on the part of Borrower.
(b) The execution, delivery, and performance by Borrower of this
Agreement and the other Loan Documents to which it is a party do not and will
not (i) violate any material provision of federal, state, or local law or
regulation applicable to Borrower, the Governing Documents of Borrower, or any
material order, judgment, or decree of any court or other Governmental Authority
binding on Borrower, (ii) conflict with, result in a breach of, or constitute
(with due notice or lapse of time or both) a default under any material
contractual obligation of Borrower, (iii) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any properties or assets of
Borrower, other than Permitted Liens, or (iv) require any approval of Borrower's
interestholders or any approval or consent of any Person under any material
contractual obligation of Borrower, other than consents or approvals that have
been obtained and that are still in force and effect.
(c) Other than the filing of financing statements, the recordation of
the mortgages (if any), the recordation of the Engine and Spare Parts Security
Agreement, and other filings or actions necessary to perfect Liens granted to
Agent in the Collateral, the execution, delivery, and performance by Borrower of
this Agreement and the other Loan Documents to which Borrower is a party do not
and will not require any registration with, consent, or approval of, or notice
to, or other action with or by, any Governmental Authority, other than consents
or approvals that have been obtained and that are still in force and effect.
(d) This Agreement and the other Loan Documents to which Borrower is a
party, and all other documents contemplated hereby and thereby, when executed
and delivered by Borrower will be the legally valid and binding obligations of
Borrower, enforceable against Borrower in accordance with their
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respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors' rights generally.
(e) The Agent's Liens are validly created, perfected, and first
priority Liens, subject only to Permitted Liens.
(f) The execution, delivery, and performance by each Guarantor of the
Loan Documents to which it is a party have been duly authorized by all necessary
action on the part of such Guarantor.
(g) The execution, delivery, and performance by each Guarantor of the
Loan Documents to which it is a party do not and will not (i) violate any
provision of material federal, state, or local law or regulation applicable to
such Guarantor, the Governing Documents of such Guarantor, or any material
order, judgment, or decree of any court or other Governmental Authority binding
on such Guarantor, (ii) conflict with, result in a breach of, or constitute
(with due notice or lapse of time or both) a default under any material
contractual obligation of such Guarantor, (iii) result in or require the
creation or imposition of any Lien of any nature whatsoever upon any properties
or assets of such Guarantor, other than Permitted Liens, or (iv) require any
approval of such Guarantor's interestholders or any approval or consent of any
Person under any material contractual obligation of such Guarantor, other than
consents or approvals that have been obtained and that are still in force and
effect.
(h) Other than the filing of financing statements, the recordation of
the mortgages (if any), the recordation of the Engine and Spare Parts Security
Agreement, and other filings or actions necessary to perfect Liens granted to
Agent in the Collateral, the execution, delivery, and performance by each
Guarantor of the Loan Documents to which such Guarantor is a party do not and
will not require any registration with, consent, or approval of, or notice to,
or other action with or by, any Governmental Authority, other than consents or
approvals that have been obtained and that are still in force and effect.
(i) The Loan Documents to which each Guarantor is a party, and all
other documents contemplated hereby and thereby, when executed and delivered by
such Guarantor will be the legally valid and binding obligations of such
Guarantor, enforceable against such Guarantor in accordance with their
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors' rights generally.
4.10 LITIGATION. Other than those matters disclosed on Schedule 4.10 and
other than matters arising after the Closing Date that reasonably could not be
expected to result in a Material Adverse Change, there are no actions, suits, or
proceedings pending or, to the best knowledge of Parent, threatened against
Parent, Borrower, or any of Borrower's Subsidiaries.
4.11 NO MATERIAL ADVERSE CHANGE.
(a) All financial statements relating to Parent, Borrower, and
Borrower's Subsidiaries that have been delivered by Borrower to the Lender Group
have been prepared in accordance with GAAP (except, in the case of unaudited
financial statements, for the lack of footnotes and being subject to year-end
audit adjustments) and present fairly in all material respects, Parent's,
Borrower's, and Borrower's Subsidiaries' financial condition as of the date
thereof and results of operations for the period then ended.
(b) Neither the results of operations nor the financial condition of
Borrower and Borrower's Subsidiaries, taken as a whole, materially and adversely
differ from the projected results of operations and the financial condition of
Borrower set forth in the Projections of Borrower delivered to Agent on or about
the Closing Date. There is no material impairment of Parent's, Borrower's, or
Borrower's Subsidiaries ability to perform their obligations under the Loan
Documents to which they are parties or of the Lender Group's ability to enforce
the Obligations or realize upon the Collateral. There is no material impairment
of the enforceability or priority of the Agent's Liens with respect to the
Collateral as a result of an action or failure to act on the part of Parent,
Borrower, or Borrower's Subsidiaries.
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4.12 FRAUDULENT TRANSFER.
(a) Each of Parent, Borrower, and each of Borrower's Subsidiaries is
Solvent.
(b) No transfer of property is being made by Parent, Borrower, or
Borrower's Subsidiaries and no obligation is being incurred by Parent, Borrower,
or Borrower's Subsidiaries in connection with the transactions contemplated by
this Agreement or the other Loan Documents with the intent to hinder, delay, or
defraud either present or future creditors of Parent, Borrower, or Borrower's
Subsidiaries.
4.13 EMPLOYEE BENEFITS. Schedule 4.13 sets forth each Benefit Plan. Except
as otherwise set forth in Schedule 4.13, which may be updated pursuant to the
requirements of Section 14.1: (i) each Benefit Plan (and each related trust,
insurance contract, or fund) is and has at all times been operated in material
compliance with its terms and with all applicable laws, including with out
limitation ERISA and the IRC, (ii) each Benefit Plan (and each related trust, if
any) has received a determination letter from the Internal Revenue Service to
the effect that it meets the requirements of Sections 401(a) and 501(a) of the
IRC, (iii) no Reportable Event has occurred, and to the knowledge of Borrower,
Parent, Borrower's Subsidiaries and all ERISA Affiliates, no Multiemployer Plan
is insolvent or in reorganization other than an insolvency or reorganization
that could not reasonably be expected to result in liability in excess of
$1,000,000 or, if less, an amount that could result in a Material Adverse
Change, (iv) there is no Multiemployer Plan, and neither Borrower, Parent, any
of Borrower's Subsidiaries nor any ERISA Affiliate maintains, contributes to or
has any liability with respect to a Foreign Pension Plan, (v) no Benefit Plan
has an Unfunded Benefit Liability in excess of $300,000,000 or, if less, an
amount that could result in a Material Adverse Change, (vi) no Benefit Plan has
a material "accumulated funding deficiency", within the meaning of Section 412
of the IRC or Section 302 of ERISA, or has applied for or received a waiver of
an accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the IRC or Section 303 or 304 of ERISA,
(vii) all contributions (other than de minimis contributions) required to be
made with respect to a Benefit Plan have been timely made (including the
quarterly contributions required by Section 412 of the IRC at the times
specified in such Section), (viii) neither the Borrower, Parent, any of
Borrower's Subsidiaries or any ERISA Affiliate has incurred any material
liability (including any indirect, contingent or secondary liability) to or on
account of a Benefit Plan or a Multiemployer Plan pursuant to Section 409,
502(i), 502(l), 515, 4062, 4064, 4069, 4201, 4204, or 4212 of ERISA or expects
to incur any such material liability under any of the foregoing sections and no
condition exists that presents a risk of incurring such material liability; (ix)
no proceedings have been instituted to terminate or appoint a trustee to
administer any Benefit Plan (under ERISA), (x) no action, suit, proceeding,
hearing, audit, or investigation with respect to the administration, operation,
or the investment of assets of any Benefit Plan (other than routine claims for
benefits), which could result in the imposition of liability on Borrower,
Parent, any of Borrower's Subsidiaries or any ERISA Affiliate in an amount in
excess of $1,000,000, or, if less, an amount that could result in a Material
Adverse Change, is pending, expected or to the knowledge of Borrower, Parent,
any of Borrower's Subsidiaries or any ERISA Affiliate threatened, (xi) the
aggregate liabilities of the Borrower, Parent, Borrower's Subsidiaries and all
ERISA Affiliates to all Multiemployer Plans in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Multiemployer Plan ended prior to the date hereof, based on a computation
of withdrawal liability requested and received from each such Multiemployer
Plan, would not exceed $1,000,000 or, if less, an amount that could result in a
Material Adverse Change, (xii) no Lien has been imposed under the IRC or ERISA
on the assets of Borrower, Parent, any of Borrower's Subsidiaries or any ERISA
Affiliate, or is likely to arise, on account of any Benefit Plan, (xiii) except
as otherwise required by the termination and funding requirements of ERISA and
the IRC and any applicable collective bargaining agreements, Borrower, Parent,
any of Borrower's Subsidiaries and any ERISA Affiliate may, at any time and
without material liability, terminate or cease making contributions to any
"employee benefit plan", within the meaning of Section 3(3) of ERISA, to which
such Person maintains or makes (or has any liability to make) contributions, and
(xiv) each group health plan (as defined in Section 607(l) of ERISA or Section
4980B(g)(2) of the IRC) which covers or has covered employees or former
employees of Borrower, Parent, any of Borrower's Subsidiaries or any ERISA
Affiliate has at all times been operated in material compliance with the
provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the
IRC.
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4.14 ENVIRONMENTAL CONDITION. Except as set forth on Schedule 4.14 and for
other matters that could not reasonably be expected to result in a Material
Adverse Change, (a) to Parent's knowledge, none of Parent's, Borrower's or
Borrower's Subsidiaries' properties or assets has ever been used by Parent, its
Subsidiaries, or by previous owners or operators in the disposal of, or to
produce, store, handle, treat, release, or transport, any Hazardous Materials,
where such use, production, storage, handling, treatment, release or transport
was in violation of any applicable Environmental Law, (b) to Parent's knowledge,
none of Parent's, Borrower's or Borrower's Subsidiaries' properties or assets
has ever been designated or identified in any manner pursuant to any
environmental protection statute as a Hazardous Materials disposal site, (c)
none of Parent, Borrower, or any of Borrower's Subsidiaries has received notice
that a Lien arising under any Environmental Law has attached to any revenues or
to any Real Property operated by Parent, Borrower, or Borrower's Subsidiaries,
and (d) none of Parent, Borrower, or Borrower's Subsidiaries has received a
summons, citation, notice, or directive from the United States Environmental
Protection Agency or any other federal or state governmental agency concerning
any action or omission by Parent, Borrower, or Borrower's Subsidiaries resulting
in the releasing or disposing of Hazardous Materials into the environment.
4.15 INTELLECTUAL PROPERTY. Parent, Borrower, and Borrower's Subsidiaries
own, or hold licenses in, all trademarks, trade names, copyrights, patents,
patent rights, and licenses that are necessary to the conduct of its business as
currently conducted, and attached hereto as Schedule 4.15 (as updated from time
to time) is a true, correct, and complete listing of all material patents,
patent applications, trademarks, trademark applications, copyrights, and
copyright registrations as to which Parent, Borrower, or one of Borrower's
Subsidiaries is the owner or is an exclusive licensee; provided, however, that
Borrower may amend Schedule 4.15 so long as such amendment occurs by written
notice to Agent not less than 10 days before the date on which Parent, Borrower,
or any Subsidiary of Borrower acquires any such property after the Closing Date.
4.16 LEASES. Parent, Borrower, and Borrower's Subsidiaries enjoy peaceful
and undisturbed possession under all Material Leases, and all Material Leases
are valid and subsisting. No default by Parent, Borrower, or Borrower's
Subsidiaries exists and is continuing beyond the applicable grace period under
any Material Lease, unless such default is the subject of a Permitted Protest.
4.17 DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS. Set forth on Schedule 4.17
is a listing of all of Parent's, Borrower, and Borrower's Subsidiaries' Deposit
Accounts and Securities Accounts, including, with respect to each bank or
securities intermediary (a) the name and address of such Person, and (b) the
account numbers of the Deposit Accounts or Securities Accounts maintained with
such Person.
4.18 COMPLETE DISCLOSURE. All factual information (taken as a whole)
furnished by or on behalf of Parent or its Subsidiaries in writing to Agent or
any Lender (including all information contained in the Schedules hereto or in
the other Loan Documents but excluding any information based on or constituting
a forecast or projection) for purposes of or in connection with this Agreement,
the other Loan Documents, or any transaction contemplated herein or therein is,
and all other such factual information (taken as a whole) hereafter furnished by
or on behalf of Parent or its Subsidiaries in writing to Agent or any Lender
will be, true and accurate, in all material respects, on the date as of which
such information is dated or certified and not incomplete by omitting to state
any fact necessary to make such information (taken as a whole) not misleading in
any material respect at such time in light of the circumstances under which such
information was provided. On the Closing Date, the Closing Date Projections
represent, and as of the date (after the Closing Date) on which any other
Projections are delivered to Agent, such additional Projections represent
Parent's good faith estimate of its and its Subsidiaries future performance for
the periods covered thereby based upon assumptions believed by Parent to be
reasonable at the time of the delivery thereof.
4.19 INDEBTEDNESS. Set forth on Schedule 4.19 is a true and complete list
of all Indebtedness of Parent, Borrower, and Borrower's Subsidiaries outstanding
immediately prior to the Closing Date that is to remain outstanding after the
Closing Date and such Schedule accurately sets forth the aggregate principal
amount of such Indebtedness.
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4.20 AIR CARRIER. Borrower is a Certificated Air Carrier. Borrower
possesses all other necessary certificates, franchises, air carrier and other
licenses, permits, rights, authorizations and concessions and consents which are
material to the operation of Aircraft operated by it and routes flown by it and
the conduct of its business and operations as currently conducted.
4.21 AIRCRAFT, ENGINES, AND PROPELLERS. As of the Closing Date, neither
Parent nor any of its Subsidiaries owns or has title to any Aircraft, Engines,
or Propellers.
4.22 SLOTS, GATES AND ROUTES.
(a) Set forth on Schedule 4.22 is a complete and accurate list of all
Slots, Gates, and Routes used, held by, contracted or licensed to, Parent and
its Subsidiaries as of the Closing Date.
(b) Parent, Borrower, and Borrower's Subsidiaries are utilizing the
Slots, Gates and Routes in a manner consistent with applicable contracts
governing such Slots, Gates and Routes and applicable laws (including the rules
and regulations of the FAA, the DOT or any other Governmental Authority or
airport authority) in order to maintain its right to use such Slots, Gates and
Routes and where the failure to so maintain its right to use such Slots, Gates,
and Routes would materially impair the Collateral. None of Parent, Borrower, or
any of Borrower's Subsidiaries has received any notice from any Governmental
Authority, or is aware of any other event or circumstance, that would be
reasonably likely to materially impair, or have a potential adverse effect upon,
the utilization of the Slots, Gates and Routes.
4.23 IRS CLAIM. Set forth on Schedule 4.23 is Borrower's repayment plan as
of the Closing Date with respect to the IRS Tax Claim Indebtedness.
5. AFFIRMATIVE COVENANTS.
Each of Borrower and each Guarantor covenants and agrees that, until
termination of all of the Commitments and payment in full of the Obligations,
each of Borrower and each Guarantor shall, and shall cause each of Parent's
Subsidiaries to do all of the following:
5.1 ACCOUNTING SYSTEM. Maintain a system of accounting that enables Parent
to produce financial statements in accordance with GAAP and maintain records
pertaining to the Collateral that contain information as from time to time
reasonably may be requested by Agent.
5.2 COLLATERAL REPORTING. Provide Agent with each of the reports set forth
on Schedule 5.2 at the times specified therein. In addition, Borrower agrees to
cooperate fully with Agent to facilitate and implement a system of electronic
collateral reporting in order to provide electronic reporting of each of the
items set forth on Schedule 5.2.
5.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Agent, with
copies to each Lender, each of the financial statements, reports, or other items
set forth on Schedule 5.3 at the times specified therein. In addition, Parent
agrees that Borrower will not have a fiscal year different from that of Parent.
5.4 GUARANTOR REPORTS. Cause each Guarantor to deliver its annual financial
statements at the time when Parent provides its audited financial statements to
Agent, but only to the extent such Guarantor's financial statements are not
consolidated with Parent's financial statements.
5.5 INSPECTION. Subject to the reimbursement limitations set forth in the
Fee Letter, permit Agent, each Lender, and each of their duly authorized
representatives or agents to visit any of its properties and inspect any of its
assets or books and records, to examine and make copies of its books and
records, and to discuss its affairs, finances, and accounts with, and to be
advised as to the same by, its officers and employees at such reasonable times
and intervals as Agent or any such Lender may designate and, so long as no
Default
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or Event of Default exists, such inspection (a) shall be with reasonable prior
notice to Borrower, and (b) shall not interfere (other than indirectly) with the
operation or maintenance of Borrower's Aircraft.
5.6 MAINTENANCE OF PROPERTIES. Maintain and preserve all of its properties
which are necessary or useful in the proper conduct of its business in good
working order and condition, ordinary wear, tear, and casualty excepted (and
except where the failure to do so could not reasonably be expected to result in
a Material Adverse Change), and comply at all times with the provisions of all
material leases to which it is a party as lessee, where failure to so comply
could reasonably be expected to result in a Material Adverse Change.
5.7 TAXES. Cause all assessments and taxes (other than assessments or taxes
in de minimis amounts), whether real, personal, or otherwise, due or payable by,
or imposed, levied, or assessed against Parent, Borrower, Borrower's
Subsidiaries, or any of their respective assets to be paid in full, before
delinquency or before the expiration of any extension period, except to the
extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest. Parent and Borrower will and Borrower will cause its
Subsidiaries to make timely payment or deposit of all tax payments and
withholding taxes required of it and them by applicable laws, including those
laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and
federal income taxes, and will, upon request, furnish Agent with proof
satisfactory to the Required Lenders indicating that Parent, Borrower, and
Borrower's Subsidiaries have made such payments or deposits.
5.8 INSURANCE.
(a) At Borrower's expense, maintain insurance respecting its and its
Subsidiaries' assets wherever located, covering loss or damage by fire, theft,
explosion, and all other hazards and risks as ordinarily are insured against by
other Persons engaged in the same or similar businesses (including all-risk
ground coverage of Spare Parts). Borrower also shall maintain business
interruption, public liability, aircraft public liability insurance (including
(i) passenger legal liability, and (ii) if such insurance is then generally
carried by major United States air carriers, aircraft war risk and allied perils
insurance in accordance with London form AVN52C (as in effect on September 1,
2001 or in accordance with the FAA's Chapter 443 Aviation Insurance Policy as in
effect on the date hereof) or its equivalent form reasonably acceptable to the
Required Lenders)), cargo liability insurance, and war risk and allied perils
hull (including confiscation, expropriation, nationalization and seizure by a
government other than the United States), terrorist and hijacking insurance, and
product liability insurance, as well as insurance against larceny, embezzlement,
and criminal misappropriation. All such policies of insurance shall be in such
amounts, against such risks, in such form, and with such insurance companies as
are reasonably satisfactory to Required Lenders (it being understood that (x)
the insurance coverage reflected on the certificates of insurance delivered to
Agent on the Closing Date is acceptable to Agent and (y) an insurance company
with the same financial strength, credit rating, and debt rating as the
financial strength, credit rating, and debt rating, as of the Closing Date, of
the insurance company that issues the certificates of insurance on the Closing
Date is acceptable to Agent). All hull and spares ground insurance shall be on
an "agreed" value basis without right of replacement. All deductibles shall be
in an amount reasonably satisfactory to the Required Lenders (it being
understood that the deductibles reflected on the certificates of insurance
delivered to Agent on the Closing Date are acceptable to Agent). As soon as
practicable after receipt by Borrower thereof, Borrower shall deliver copies of
all such policies to Agent with an endorsement naming Agent as the sole loss
payee (under a satisfactory lender's loss payable endorsement) or additional
insured, as appropriate. Each policy of insurance (except any policy of
insurance placed with the FAA) or endorsement shall contain a clause requiring
the insurer to give not less than 30 days prior written notice (7 in the case of
war risk and allied perils coverage) to Agent in the event of cancellation of
the policy for any reason whatsoever.
(b) Borrower shall give Agent prompt notice of (i) any loss exceeding
$1,000,000 covered by such insurance, and (ii) any cancellation of any policy of
insurance placed with the FAA. So long as no Event of Default has occurred and
is continuing, Borrower shall have the exclusive right to adjust any losses
payable under any such insurance policies which are less than $500,000.
Following the occurrence and during the continuation of an Event of Default, or
in the case of any losses payable under such insurance
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exceeding $500,000, Agent shall have the exclusive right to adjust any losses
payable under any such insurance policies, without any liability to Borrower
whatsoever in respect of such adjustments, other than liability that results
from Agent's own willful misconduct or gross negligence (as finally determined
by a court of competent jurisdiction).
5.9 EQUIPMENT (OTHER THAN SPARE PARTS)/CHIEF EXECUTIVE OFFICE.
Keep Borrower's and its Subsidiaries' Equipment (other than Spare Parts,
which are addressed in Section 5.17) only at the locations identified on
Schedule 4.4 (and not permit such Equipment to be located at the premises of or
otherwise put into the possession or control of any bailee, warehouseman, FAA
repair station, servicer, mechanic, vendor, supplier, or other Person) and their
chief executive offices only at the locations identified on Schedule 4.7(b);
provided, however, that:
(a) Borrower may amend Schedule 4.4 or Schedule 4.7(b) to add
additional locations so long as (i) such amendment occurs by written notice to
Agent not less than 10 days prior to the date on which such Equipment (other
than Spare Parts) is moved to such new location or such chief executive office
is relocated, (ii) such new location is within the United States, and (iii) with
respect to any Equipment (other than Spare Parts) identified by Borrower as
Eligible Ground Equipment in the most recent Borrowing Base Certificate
delivered to Agent, within 90 days after the time of such written notification,
Borrower provides Agent with evidence satisfactory to Agent that Borrower has
used its best efforts to obtain a Collateral Access Agreement with respect to
such new location (provided, however, that so long as Borrower provides Agent
with evidence satisfactory to Agent that Borrower has used its best efforts to
obtain a Collateral Access Agreement with respect to such new location, if
Borrower fails to deliver to Agent such Collateral Access Agreement within 90
days of the time of such written notification, no Event of Default shall have
occurred and Agent shall have the right to establish a reserve against the
Borrowing Base in an aggregate amount equal to 3 months rent under the lease for
each location for which a Collateral Access Agreement has not been delivered);
(b) so long as such transit is in the ordinary course of Borrower's
business, Aircraft, Engines, and Propellers may be in transit between such
locations;
(c) any Equipment that is not Eligible Ground Equipment may be in the
possession of or under the control of a bailee, warehouseman, FAA repair
station, overhaul or maintenance servicer, mechanic, or similar Person for
purposes of repair in the ordinary course of Borrower's business so long as
either (i) no Event of Default has occurred and is continuing or would result
therefrom, or (ii) no Overadvance is outstanding or would result therefrom and
the aggregate value of all such Equipment in the possession of or under the
control of all such Persons, in the aggregate, does not exceed $250,000;
(d) so long as such transit is in the ordinary course of Borrower's
business, Borrower may move Equipment (other than Spare Parts) that is not
Eligible Ground Equipment from any location in the United States to any other
location in the United States;
(e) so long as (i) no Event of Default has occurred and is continuing
or would result therefrom, (ii) such transit is in the ordinary course of
Borrower's business, and (iii) the aggregate value of all Equipment (other than
Spare Parts) moved to all such foreign locations, in the aggregate, does not
exceed $100,000, Borrower may move Equipment (other than Spare Parts) that is
not Eligible Ground Equipment from any location in the United States to any
location outside the United States (including locations outside the United
States where such Equipment is in the possession of or under the control of a
bailee, warehouseman, FAA repair station, overhaul or maintenance servicer,
mechanic, or similar Person); and
(f) so long as such transit is in the ordinary course of Borrower's
business, Borrower may move Equipment (other than Spare Parts) that is Eligible
Ground Equipment from any location outside the United States to any other
location outside the United States.
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5.10 COMPLIANCE WITH LAWS. Comply with the requirements of all applicable
laws, rules, regulations, and orders of any Governmental Authority (including,
without limitation, the rules, regulations standards and policies of the FAA,
the DOT and any applicable similar body or Governmental Authority responsible
for the regulation of commercial aviation in any applicable jurisdiction or
having jurisdiction over the Parent, Borrower, or any of Borrower's
Subsidiaries), other than laws, rules, regulations, and orders the
non-compliance with which, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Change.
5.11 LEASES. Pay when due all rents and other amounts payable under any
Material Leases, unless such payments are the subject of a Permitted Protest.
5.12 EXISTENCE. At all times preserve and keep in full force and effect
Parent's, Borrower's, and Borrower's Subsidiaries valid existence and good
standing and any rights and franchises material to their businesses; provided,
however, solely as a result of the consummation of a Permitted Merger, the
Person that is not the surviving entity may cease to keep in full force and
effect its valid existence and good standing.
5.13 ENVIRONMENTAL.
(a) Keep any property either owned or operated by Parent, Borrower, or
Borrower's Subsidiaries free of any Environmental Liens or post bonds or other
financial assurances sufficient to satisfy the obligations or liability
evidenced by such Environmental Liens, (b) comply, in all material respects,
with Environmental Laws and provide to Agent documentation of such compliance
which Agent reasonably requests, (c) promptly notify Agent of any release of a
Hazardous Material in any reportable quantity, which could reasonably be
expected to result in a Material Adverse Change, from or onto property owned or
operated by Parent or its Subsidiaries and take any Remedial Actions required of
Parent, Borrower, or Borrower's Subsidiaries to xxxxx said release in compliance
with applicable Environmental Law, and (d) promptly, but in any event within 5
days of its receipt thereof, provide Agent with written notice of any of the
following: (i) notice that an Environmental Lien has been filed against any of
the real or personal property of Parent, Borrower, or Borrower's Subsidiaries,
(ii) commencement of any Environmental Action against or notice that an
Environmental Action will be filed against Parent, Borrower, or Borrower's
Subsidiaries, and (iii) notice of a violation of, citation with respect to, or
other administrative order with respect to any Environmental Law which
reasonably could be expected to result in a Material Adverse Change.
5.14 DISCLOSURE UPDATES. Promptly and in no event later than 5 Business
Days after obtaining knowledge thereof, notify Agent if any written information,
exhibit, or report furnished to the Lender Group contained, at the time it was
furnished, any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein not misleading
in light of the circumstances in which made. The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not
cure or remedy the effect of the prior untrue statement of a material fact or
omission of any material fact nor shall any such notification have the effect of
amending or modifying this Agreement or any of the Schedules hereto.
5.15 CONTROL AGREEMENTS. Subject to the limitations set forth in Section
6.12, take all reasonable steps in order for Agent to obtain control in
accordance with Sections 8-106, 9-104, 9-105, 9-106, and 9-107 of the Code with
respect to all of its Securities Accounts, Deposit Accounts, electronic chattel
paper, investment property, and letter-of-credit rights.
5.16 FORMATION OF SUBSIDIARIES. Within 10 days after the time that Borrower
or any of its Subsidiaries forms any direct or indirect Subsidiary or acquires
any direct or indirect Subsidiary after the Closing Date, Borrower or such
Subsidiary, as applicable, shall (a) cause such new Subsidiary to provide to
Agent a joinder to the Guaranty, and the Security Agreement, together with such
other security documents (including (i) mortgages with respect to any Real
Property of such new Subsidiary with a value in excess of $250,000, and (ii) if
required by the Security Agreement, an Engine and Spare Parts Security Agreement
and an Aircraft Security Agreement), as well as appropriate financing statements
(and with respect to all property
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subject to a mortgage, fixture filings), all in form and substance satisfactory
to the Required Lenders (including being sufficient to grant Agent a first
priority Lien (subject to Permitted Liens) in and to the assets of such newly
formed or acquired Subsidiary), (b) provide to Agent a pledge agreement and
appropriate certificates and powers or financing statements, hypothecating all
of the direct or beneficial ownership interest in such new Subsidiary, in form
and substance satisfactory to the Required Lenders, and (c) provide to Agent all
other documentation, including one or more opinions of counsel satisfactory to
the Required Lenders, which in its opinion is appropriate with respect to the
execution and delivery of the applicable documentation referred to above
(including policies of title insurance or other documentation with respect to
all property with a value in excess of $250,000 subject to a mortgage). Any
document, agreement, or instrument executed or issued pursuant to this Section
5.16 shall be a Loan Document.
5.17 SPARE PARTS.
(a) Keep all Eligible Spare Parts only at Borrower's primary
maintenance and operations facility at Honolulu International Airport in fenced
areas with readily visible signage indicating that the Spare Parts located at
such location are subject to a Lien in favor of Agent.
(b) Keep all Spare Parts of Borrower not designated as Eligible Spare
Parts only at the locations identified on Schedule 4.3 (and not permit any Spare
Parts to be located at the premises of or otherwise put into the possession or
control of any bailee, warehouseman, FAA repair station, servicer, mechanic,
vendor, supplier, or other Person), provided that: (i) so long as (A) such
amendment occurs by written notice to Agent not less than 20 days prior to the
date on which such Spare Part is moved to such new location, and (B) such new
location is within the United States, Borrower may amend Schedule 4.3 to add
additional locations; (ii) any Spare Part that is not an Eligible Spare Part may
be in the possession of or under the control of a bailee, warehouseman, FAA
repair station, overhaul or maintenance servicer, mechanic, or similar Person
for purposes of repair in the ordinary course of Borrower's business so long as
either (x) no Event of Default has occurred and is continuing or would result
therefrom, or (y) the aggregate value of all such Spare Parts in the possession
of or under the control of all such Persons, in the aggregate, does not exceed
$1,500,000; (iii) so long as such transit is in the ordinary course of
Borrower's business, Borrower may move Spare Parts that are not Eligible Spare
Parts from any location in the United States identified on Schedule 4.3 to any
other location in the United States identified on Schedule 4.3; (iv) so long as
(A) no Event of Default has occurred and is continuing or would result
therefrom, (B) such transit is in the ordinary course of Borrower's business,
and (C) the aggregate value of all Spare Parts moved to all such foreign
locations, in the aggregate, does not exceed $2,500,000, Borrower may move Spare
Parts that are not Eligible Spare Parts from any location in the United States
identified on Schedule 4.3 to any location outside the United States (including
locations outside the United States where such Spare Parts are in the possession
of or under the control of a bailee, warehouseman, FAA repair station, overhaul
or maintenance servicer, mechanic, or similar Person); and (v) so long as such
transit is in the ordinary course of Borrower's business, Borrower may move
Spare Parts that are not Eligible Spare Parts from any location outside the
United States to any other location outside the United States.
(c) Maintain in effect a Spare Parts Tracking System.
(d) Maintain all records, logs, serviceability tags and other
documents and materials required by applicable law, including the FARs, or by
Borrower's Maintenance Program.
(e) Not permit any Spare Parts to be leased, sold, exchanged, attached
or installed on any Aircraft, Engine, flight simulator, or other Equipment, or
otherwise disposed of; provided, however, that (i) so long as no Overadvance is
outstanding or would result therefrom, Borrower may sell Spare Parts to other
airlines in the ordinary course of Borrower's business, (ii) so long as no
Overadvance is outstanding or would result therefrom, Borrower may attach or
install Spare Parts to its Aircraft, Engines, flight simulators, or other
Equipment in the ordinary course of business, and (iii) with respect to Spare
Parts that are not Eligible Spare Parts, pool, exchange, or lease such Spare
Parts pursuant to a parts pooling, parts exchange, or short-term parts leasing
agreement which is acceptable to the Required Lenders in their Permitted
Discretion so long as (x) no
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Event of Default has occurred and is continuing or would result therefrom, or
(y) the aggregate value of all such Spare Parts subject to all such agreements,
in the aggregate, does not exceed $100,000.
(f) Each of Parent, Borrower, and Borrower, on behalf of each of its
Subsidiaries, hereby waives any and all rights that it has or may have in the
future to assert or claim against Agent or any of the Lenders or any transferee
pursuant to the exercise of remedies under any of the Loan Documents, any
mechanic's, repairer's, servicer's, xxxxxx'x or other Lien against any
Collateral, including any Spare Parts. None of Parent, Borrower, or any of
Borrower's Subsidiaries shall permit any Spare Parts to be located at the
premises of or otherwise put into the possession or control of any bailee,
warehouseman, FAA repair station, servicer, mechanic, vendor, supplier, or
similar Person; provided, however, that any Spare Part that is not an Eligible
Spare Part may be in the possession of or under the control of a bailee,
warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or
similar Person to the extent expressly permitted by (but without duplication of)
the proviso to Section 5.17(b)(ii).
5.18 SLOTS, GATES, AND ROUTES.
(a) Utilize each of its Slots, Gates, and Routes (or cause to be
utilized in case of any sublicence or sublease thereof permitted by this
Agreement) in accordance with applicable contracts governing such Slot, Gate, or
Route and applicable law (including any minimum utilization requirements under
the rules and regulations of the FAA, the DOT or of any other Governmental
Authority or airport authority) in order to maintain its right to use such Slot,
Gate, or Route, as applicable, and where the failure to so maintain its right to
use such Slot, Gate, or Route, as applicable, would materially impair the value
of the Collateral.
(b) Promptly upon receipt thereof, deliver to Agent copies of (i) each
certificate or order relating to each of its Slots, Gates, and Routes or any
other material certificates or orders that are issued by the DOT or any
applicable Governmental Authority or airport authority, (ii) all filings made by
or on behalf of Parent, Borrower, or any of Borrower's Subsidiaries with any
Governmental Authority related to preserving and maintaining the value of any of
its Slots, Gates and Routes and (iii) any notices received from any Person
notifying Parent, Borrower, or any of Borrower's Subsidiaries of an event or
other circumstances that would be reasonably likely to materially impair, or
have a potential material adverse effect upon, any of the Slots, Gates or
Routes.
(c) Parent shall notify Agent not less than 30 days prior to the
termination or cessation of operation by Parent, Borrower, or any of Borrower's
Subsidiaries in any Slot or on any Route, if such termination or cessation of
operating a Slot or Route is reasonably likely to have a Material Adverse Change
on Parent, Borrower, or any of Borrower's Subsidiaries.
5.19 BENEFIT PLANS. Parent shall provide (or cause to be provided) to Agent
(i) promptly and in any event within 5 Business Days after Borrower, Parent, any
of Borrower's Subsidiaries or any ERISA Affiliate knows or has reason to know
that, with respect to any Benefit Plan, any ERISA Event or "accumulated funding
deficiency" (within the meaning of Section 412 or the IRC or Section 302 of
ERISA) has occurred or that an application has been made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard (including
installment payments) or an extension of any amortization period under Section
412 of the IRC, a statement of an Authorized Person setting forth the details of
such occurrence and the action, if any, which Borrower, Parent or such
Subsidiary or ERISA Affiliate proposes to take with respect thereto, (ii)
promptly and in any event within 5 Business Days after receipt thereof by
Borrower, Parent, any of Borrower's Subsidiaries or any ERISA Affiliate from the
PBGC, copies of each notice received by any of them of the PBGC's intention to
terminate any Benefit Plan or to have a trustee appointed to administer any
Benefit Plan, (iii) promptly and in any event within 5 Business Days after the
filing thereof with the Internal Revenue Service, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with respect to
each Benefit Plan, (iv) promptly and in any event within 5 Business Days after
Borrower, Parent, any of Borrower's Subsidiaries or any ERISA Affiliate knows or
has reason to know that a required installment within the meaning of Section 412
of the IRC has not been made when due with respect to a Benefit Plan, a
statement of an Authorized Person describing the failure to make such
installment
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and (vi) promptly and in any event within 5 Business Days after receipt thereof
by Borrower, Parent, any of Borrower's Subsidiaries or any ERISA Affiliate from
a sponsor of a Multiemployer Plan or from the PBGC, a copy of each notice
received by any such Person concerning the imposition of withdrawal liability
under Section 4202 of ERISA or indicating that a Multiemployer Plan may enter
reorganization status under Section 4241 of ERISA. Parent shall timely make (or
cause to be timely made) each required contribution (other than a de minimis
contribution) with respect to each Benefit Plan (including each quarterly
contribution required by Section 412 of the IRC at the time specified in such
section) and shall provide (or cause to be provided) to Agent promptly and in
any event within 5 Business Days of each such contribution, proof that such
contribution was made along with a statement from the Benefit Plan's actuary
indicating that such contribution constitutes full and timely payment of all
required contributions then due with respect to such Benefit Plan and that there
are no past-due contributions outstanding for any Benefit Plan. For purposes of
the foregoing sentence only, a contribution that actually is made within 15
Business Days of when it actually was due shall be considered timely made if (i)
the contribution is less than $1,000,000; (ii) the total outstanding past-due
contributions with respect to all Benefit Plans (determined without regard to
this sentence) do not exceed $1,000,000; and (iii) the PBGC has not perfected a
Lien with respect to any Benefit Plan.
6. NEGATIVE COVENANTS.
Each of Borrower and each Guarantor covenants and agrees that, until
termination of all of the Commitments and payment in full of the Obligations,
each of Borrower and each Guarantor will not and will not permit any of Parent's
Subsidiaries to do any of the following:
6.1 INDEBTEDNESS. Create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other Loan
Documents, together with Indebtedness owed to Underlying Issuers with respect to
Underlying Letters of Credit,
(b) Indebtedness set forth on Schedule 4.19 and any Refinancing
Indebtedness in respect of such Indebtedness,
(c) Permitted Purchase Money Indebtedness and any Refinancing
Indebtedness in respect of such Indebtedness,
(d) endorsement of instruments or other payment items for deposit,
(e) Indebtedness composing Permitted Investments,
(f) the incurrence by Parent, Borrower, or Borrower's Subsidiaries of
Indebtedness under any Hedge Agreement that are incurred for the bona fide
purpose of hedging (i) interest rate risk with respect to Indebtedness of
Parent, Borrower, or Borrower's Subsidiaries permitted to be incurred under this
Agreement and which will have a notional amount no greater than the payments due
with respect to the Indebtedness being hedged thereby, (ii) currency exchange
rate risk in connection with the then existing financial obligations or the
acquisition of goods or services and not for purposes of speculation, or (iii)
the cost of fuel to be used in connection with the operations of the Borrower
and not for purposes of speculation,
(g) the Second Lien Indebtedness,
(h) the IRS Tax Claim Indebtedness so long as the repayment terms of
such IRS Tax Claim Indebtedness set forth in the Plan of Reorganization and
Schedule 4.23, are acceptable to the Required Lenders,
(i) unsecured Indebtedness of Parent evidenced by the Subordinated
Notes,
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(j) other unsecured Indebtedness of Borrower and Borrower's
Subsidiaries so long as such Indebtedness (i) is permitted by the Second Lien
Credit Agreement, (ii) matures on a date that is at least one year after the
Maturity Date, (iii) no scheduled principal payments, mandatory prepayments of
principal, optional prepayments of principal, or any other principal payments in
respect of such Indebtedness can be made until the Maturity Date of such
Indebtedness, and (iv) the interest rate is consistent with market terms then
existing, or
(k) Permitted Parent Indebtedness.
6.2 LIENS. Create, incur, assume, or suffer to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens.
6.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.
(a) Other than a Permitted Merger, enter into any merger,
consolidation, reorganization, or recapitalization, or reclassify its Stock,
(b) Other than as a result of a Permitted Merger, liquidate, wind up,
or dissolve itself (or suffer any liquidation or dissolution),
(c) Other than as a result of a Permitted Merger, convey, sell, lease,
license, assign, transfer, or otherwise dispose of, in one transaction or a
series of transactions, all or any substantial part of its assets, or
(d) Other than as a result of a Permitted Merger, suspend or go out of
a substantial portion of its or their business.
6.4 DISPOSAL OF ASSETS. Other than Permitted Dispositions, the Permitted
Mergers, and Permitted Liens, convey, sell, lease, license, assign, transfer, or
otherwise dispose of any of Parent's, Borrower's or Borrower's Subsidiaries
assets.
6.5 CHANGE NAME. Change Parent's, Borrower's, or any of Borrower's
Subsidiaries' name, organizational identification number, state of organization
or organizational identity; provided, however, that Parent, Borrower, or any of
Borrower's Subsidiaries may change their names upon at least 10 days prior
written notice to Agent of such change and so long as, at the time of such
written notification, Parent, Borrower, or Borrower's Subsidiary provides any
financing statements necessary to perfect and continue perfected the Agent's
Liens.
6.6 NATURE OF BUSINESS. Make any change in the principal nature of its or
their business.
6.7 PREPAYMENTS AND AMENDMENTS. Except in connection with Refinancing
Indebtedness permitted by Section 6.1,
(a) optionally prepay, redeem, defease, purchase, or otherwise acquire
any Indebtedness of Parent, Borrower, or Borrower's Subsidiaries, other than the
Obligations in accordance with this Agreement; provided, however, that so long
as no Default or Event of Default has occurred and is continuing or would result
therefrom, (i) Parent may prepay the Indebtedness described in Section 6.1(i)
with the Net Cash Proceeds of the Permitted Parent Indebtedness that is incurred
on or before December 31, 2005, or a Parent Rights Offering, and (ii) Parent may
prepay the Second Lien Indebtedness with the Net Cash Proceeds of the Permitted
Parent Indebtedness that is incurred on or before December 31, 2005,
(b) make any mandatory payment (if any) on account of (i) the Second
Lien Indebtedness to the extent prohibited under the Intercreditor Agreement,
(ii) the Indebtedness evidenced by the
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Subordinated Notes to the extent prohibited under the terms of the Subordinated
Notes, or (iii) any other Indebtedness that has been contractually subordinated
in right of payment if such payment is not permitted at such time under the
applicable subordination terms and conditions, or
(c) directly or indirectly, amend, modify, alter, increase, or change
any of the terms or conditions (i) the Second Lien Loan Documents (to the extent
that such amendment, modification, alteration, increase or change is prohibited
under the Intercreditor Agreement), or (ii) any other agreement, instrument,
document, indenture, or other writing evidencing or concerning Indebtedness
permitted under Sections 6.1(b), (c), (g), or (h); provided, however, that
Parent, Borrower, or any of Borrower's Subsidiaries may directly or indirectly
amend, modify, alter, increase, or change any of the terms of conditions of any
agreement, instrument, document, indenture, or other writing evidencing or
concerning Indebtedness permitted under Sections 6.1(b), (c), or (h) so long as
(A) such amendment, modification, alteration, increase or change does not result
in an increase in the principal amount of such Indebtedness, (B) after giving
effect to such proposed amendment, modification, alteration, increase or change,
the interest rate with respect to such Indebtedness is consistent with market
terms then existing, (C) such amendment, modification, alteration, increase or
change does not result in a shortening of the average weighted maturity of such
Indebtedness (provided, however, that such amendment, modification, alteration,
increase or change may result in a shortening of the average weighted maturity
of the Indebtedness so refinanced, renewed, or extended so long as the maturity
for all of the principal that is due in respect of such Indebtedness is a date
that is at least 1 year after the Maturity Date), (D) if the Indebtedness that
is the subject of such amendment, modification, alteration, increase or change
was subordinated in right of payment to the Obligations, then after giving
effect to such amendment, modification, alteration, increase or change, the
subordination terms and conditions of such Indebtedness must be at least as
favorable to the Lender Group as those that were applicable to the Indebtedness
prior to such amendment, modification, alteration, increase or change, and (E)
the Indebtedness that is the subject of such amendment, modification,
alteration, increase or change is not recourse to any Person that is liable on
account of the Obligations other than those Persons which were obligated with
respect to the Indebtedness that is subject of such amendment, modification,
alteration, increase or change.
6.8 CHANGE OF CONTROL. Cause, permit, or suffer, directly or indirectly,
any Change of Control.
6.9 CONSIGNMENTS. Consign any of its or their Inventory or sell any of its
or their Inventory on xxxx and hold, sale or return, sale on approval, or other
conditional terms of sale.
6.10 DISTRIBUTIONS. Other than Permitted Distributions, make any
distribution or declare or pay any dividends (in cash or other property, other
than Stock) on, or purchase, acquire, redeem, or retire any of Borrower's Stock,
of any class, whether now or hereafter outstanding.
6.11 ACCOUNTING METHODS. Modify or change its fiscal year (other than as
may be required to comply with GAAP and any other change so long as Parent and
Borrower maintain the same fiscal year) or its method of accounting (other than
as may be required to conform to GAAP) or enter into, modify, or terminate any
agreement currently existing, or at any time hereafter entered into with any
third party accounting firm or service bureau for the preparation or storage of
Parent's, Borrower's, or Borrower's Subsidiaries' accounting records without
said accounting firm or service bureau agreeing to provide Agent information
regarding Parent's, Borrower's, and Borrower's Subsidiaries' financial
condition.
6.12 INVESTMENTS. Except for Permitted Investments, directly or indirectly,
make or acquire any Investment or incur any liabilities (including contingent
obligations) for or in connection with any Investment; provided, however, that
none of Parent, Borrower, or any of Borrower's Subsidiaries shall have Permitted
Investments (other than in the Cash Management Accounts) in Deposit Accounts or
Securities Accounts at any securities intermediary or bank in an aggregate
amount at any one time in excess of an amount equal to (i) $2,000,000 plus (ii)
solely for any 3 consecutive Business Days, deposits in Borrower's payroll
Deposit Account, unless Parent, Borrower, or Borrower's Subsidiary, as
applicable, and the applicable securities intermediary or bank have entered into
Control Agreements governing such Permitted Investments in order to perfect (and
further establish) the Agent's Liens in such Permitted Investments; provided,
further, that none of
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Parent, Borrower, or any of Borrower's Subsidiaries shall have Permitted
Investments in Deposit Accounts or Securities Accounts at Xxxxxx Xxxxxxx DWC
Inc. or any of its Affiliates in an aggregate amount at any one time in excess
of the Permitted Xxxxxx Xxxxxxx Amount unless Parent, Borrower, or Borrower's
Subsidiary, as applicable, and the applicable securities intermediary or bank
have entered into Control Agreements governing such Permitted Investments in
order to perfect (and further establish) the Agent's Liens in such Permitted
Investments. Subject to the foregoing proviso, neither Parent nor Borrower shall
and Borrower shall not permit its Subsidiaries to establish or maintain any
Deposit Account or Securities Account unless Agent shall have received a Control
Agreement in respect of such Deposit Account or Securities Account.
6.13 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any transaction (including the payment of any management fees)
with any Affiliate of Borrower except for:
(a) transactions that (i) are in the ordinary course of Borrower's
business, (ii) are upon fair and reasonable terms, (iii) if they involve one or
more payments by Parent, Borrower, or Borrower's Subsidiaries in excess of
$250,000, are fully disclosed to Agent, and (iv) are no less favorable to
Parent, Borrower, or Borrower's Subsidiaries, as applicable, than would be
obtained in an arm's length transaction with a non-Affiliate,
(b) without duplication, any Permitted Intercompany Advance, any
Permitted Distribution, any Permitted Merger, the transactions contemplated by
the Subordinated Documents, and any guarantee of Indebtedness permitted by
Sections 6.1(a), (b), (c), (d), (e), (f) or (g), so long as such guarantee
benefits Borrower or any of Borrower's Subsidiaries, and
(c) so long as no Event of Default shall have occurred and be
continuing or would result therefrom, Borrower may make distributions to Parent
for the sole purpose of allowing Parent to, and Parent shall use the proceeds
thereof solely to (i) pay Xx. Xxxxxxxx Xxxxxxxxxx fair and reasonable
compensation in connection with serving as a director on the Board of Directors
or an officer of Parent or Borrower as determined by independent members (other
than Xx. Xxxxxxxx Xxxxxxxxxx) of the Board of Directors, and (ii) pay Xx.
Xxxxxxx X. Xxxxxx fair and reasonable compensation in connection with serving as
a director on the Board of Directors or an officer of Parent or Borrower as
determined by independent members (other than Xx. Xxxxxxx X. Xxxxxx) of the
Board of Directors.
6.14 USE OF PROCEEDS. Use the proceeds of the Advances and the Term Loan
for any purpose other than (a) on the Closing Date, (i) to fund distributions
under the Plan of Reorganization, and (ii) to pay transactional fees, costs, and
expenses incurred in connection with the Plan of Reorganization, this Agreement,
the other Loan Documents, and the transactions contemplated hereby and thereby,
and (b) thereafter, consistent with the terms and conditions hereof, for its
working capital and other lawful and permitted purposes.
6.15 IRS TAX CLAIM INDEBTEDNESS. Modify or change the repayment plan with
respect to the IRS Tax Claim Indebtedness set forth on Schedule 4.23 without the
prior written consent of the Required Lenders.
6.16 FINANCIAL COVENANTS.
(a) Fail to maintain or achieve:
(i) MINIMUM EBITDA. EBITDA, measured on a quarter-end basis, of
at least the required amount set forth in the following table for the applicable
period set forth opposite thereto:
--------------------------------------------------------------------------------
Applicable Amount Applicable Period
--------------------------------------------------------------------------------
$7,294,000 For the 6 month period
ending June 30, 2005
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
$25,175,000 For the 9 month period
ending September 30, 2005
--------------------------------------------------------------------------------
$25,073,000 For the 12 month period
ending December 31, 2005
--------------------------------------------------------------------------------
$25,000,000 For the 12 month period
ending March 31, 2006
--------------------------------------------------------------------------------
$25,000,000 For the 12 month period ending
each quarter thereafter
--------------------------------------------------------------------------------
provided, however, that (A) if Excess Availability plus Qualified Cash exceeds
$70,000,000 at all times during the period from June 1, 2005 through June 30,
2005, EBITDA for the 6 month period ending June 30, 2005 solely for purposes of
this Section 6.16(a)(i) will not be tested, (B) if Excess Availability plus
Qualified Cash exceeds $70,000,000 at all times during the period from September
1, 2005 through September 30, 2005, EBITDA for the 9 month period ending
September 30, 2005 solely for purposes of this Section 6.16(a)(i) will not be
tested, (C) if Excess Availability plus Qualified Cash exceeds $70,000,000 at
all times during the period from December 1, 2005 through December 31, 2005,
EBITDA for the 12 month period ending December 31, 2005 solely for purposes of
this Section 6.16(a)(i) will not be tested, (D) if Excess Availability plus
Qualified Cash exceeds $70,000,000 at all times during the period from March 1,
2006 through March 31, 2006, EBITDA for the 12 month period ending March 31,
2006 solely for purposes of this Section 6.16(a)(i) will not be tested, and (E)
if Excess Availability plus Qualified Cash exceeds $70,000,000 at all times
during the 30-day period immediately prior to the end of each quarter
thereafter, EBITDA for the 12 month period ending on such quarter solely for
purposes of this Section 6.16(a)(i) will not be tested; provided, further,
however, that if Excess Availability plus Qualified Cash does not exceed
$70,000,000 at any time during any of the applicable periods specified above
(the "EBITDA Event"), EBITDA for all future periods will be tested whether or
not Excess Availability plus Qualified Cash exceeds $70,000,000 at any time
after the EBITDA Event.
(ii) EXCESS AVAILABILITY PLUS QUALIFIED CASH. Solely with respect
to Borrower and its Subsidiaries, Excess Availability plus Qualified Cash at all
times of at least an amount equal to: (A) during the period from and after the
execution and delivery of this Agreement up to (but not including) the date that
is the first anniversary of the Closing Date, $50,000,000; and (B) from and
including the date that is the first anniversary of the Closing Date up to (but
not including) the Maturity Date, an amount equal to (x) $50,000,000, minus (y)
the aggregate amount of amortized payments and optional prepayments in respect
of the Term Loan that have been made since the Closing Date.
(b) Fail to maintain or achieve:
(i) FIRST LIEN LEVERAGE RATIO. Solely with respect to Borrower
and its Subsidiaries, a First Lien Leverage Ratio, measured on a quarter-end
basis, of (i) not more than 1.75:1.00 during the period from the Closing Date up
to (but excluding) the one year anniversary of the Closing Date, (ii) not more
than 1.60:1.00 during the period from the one year anniversary of the Closing
Date up to (but excluding) the second year anniversary of the Closing Date, and
(iii) not more than 1.25:1.00 thereafter.
(ii) TOTAL LEVERAGE RATIO. Solely with respect to Borrower and
its Subsidiaries, a Total Leverage Ratio, measured on a quarter-end basis, of
(i) not more than 2.75:1.00 during the period from the Closing Date up to (but
excluding) the one year anniversary of the Closing Date, (ii) not more than
2.60:1.00 during the period from the one year anniversary of the Closing Date up
to (but excluding) the second year anniversary of the Closing Date, and (iii)
not more than 2.25:1.00 thereafter.
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7. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "Event of Default") under this Agreement:
7.1 If Borrower fails to pay when due and payable, or when declared due and
payable, (a) all or any portion of the Obligations consisting of interest, fees,
or charges due the Lender Group, reimbursement of Lender Group Expenses, or
other amounts (other than any portion thereof constituting principal)
constituting Obligations (including any portion thereof that accrues after the
commencement of an Insolvency Proceeding, regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding), and
such failure continues for a period of 3 Business Days, or (b) all or any
portion of the principal of the Obligations;
7.2 If Parent, Borrower, or any of Borrower's Subsidiaries:
(a) fails to perform or observe any covenant or other agreement
contained in any of Sections 2.7, 5.2, 5.3, 5.5, 5.8, 5.12, 5.14, 5.16 through
5.19, and 6.1 through 6.8, 6.10, and 6.12 through 6.16 of this Agreement;
(b) fails to perform or observe any covenant or other agreement
contained in any of Sections 5.6, 5.7, 5.9, 5.10, 5.11, 5.15, 6.9, and 6.11 of
this Agreement and such failure continues for a period of 10 Business Days after
the earlier of (i) the date on which such failure shall first become known to
any officer of Borrower or (ii) written notice thereof is given to Borrower by
Agent; or
(c) fails to perform or observe any covenant or other agreement
contained in this Agreement, or in any of the other Loan Documents; in each
case, other than any such covenant or agreement that is the subject of another
provision of this Section 7 (in which event such other provision of this Section
7 shall govern), and such failure continues for a period of 30 days after the
earlier of (i) the date on which such failure shall first become known to any
officer of Borrower or (ii) written notice thereof is given to Borrower by
Agent;
7.3 If any material portion of Parent's or any of its Subsidiaries' assets
is attached, seized, subjected to a writ or distress warrant, or is levied upon,
and the same is not discharged before the earlier of 30 days after the date it
first arises or 5 days prior to the date on which such property or asset is
subject to forfeiture by Parent or the applicable Subsidiary;
7.4 If an Insolvency Proceeding is commenced by Parent or any of its
Subsidiaries;
7.5 If an Insolvency Proceeding is commenced against Parent or any of its
Subsidiaries and any of the following events occur: (a) Parent or such
Subsidiary consents to the institution of such Insolvency Proceeding against it,
(b) the petition commencing the Insolvency Proceeding is not timely
controverted, (c) the petition commencing the Insolvency Proceeding is not
dismissed within 60 calendar days of the date of the filing thereof, (d) an
interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, Parent or any of its Subsidiaries, or (e) an order
for relief shall have been issued or entered therein;
7.6 If Parent or any of its Subsidiaries is enjoined, restrained, or in any
way prevented by court order from continuing to conduct all or any material part
of its business affairs;
7.7 If one or more judgments, orders, or awards involving an aggregate
amount of $1,000,000, or more (except to the extent fully covered by insurance
pursuant to which the insurer has accepted liability therefor in writing) shall
be entered or filed against Parent, Borrower, or any of Borrower's Subsidiaries
or with respect to any of their respective assets, and the same is not released,
discharged, bonded against, or
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stayed pending appeal before the earlier of 30 days after the date it first
arises or 5 days prior to the date on which such asset is subject to being
forfeited by Parent, Borrower, or the applicable Subsidiary;
7.8 If there is a default (after giving effect to any applicable grace
period) in (a) any of the Second Lien Loan Documents, (b) any of the
Subordinated Documents, (c) the repayment of the obligations owed to the
Internal Revenue Service as set forth in the Plan of Reorganization and the
related orders, (d) one or more agreements to which Parent or any of its
Subsidiaries is a party with one or more third Persons relative to Parent's,
Borrower's, or any of Borrower's Subsidiaries' Indebtedness involving an
aggregate amount of $1,000,000 or more, and such default (i) occurs at the final
maturity of the obligations thereunder, or (ii) results in a right by such third
Person(s), irrespective of whether exercised, to accelerate the maturity of
Parent's, Borrower's, or the applicable Subsidiary's obligations thereunder, or
(e) one or more executory contracts or unexpired leases which are proposed to be
assumed pursuant Article VI of the Plan of Reorganization (including any of
those identified on Plan Exhibit A thereto) and which relate to any lease of
real or personal property of any kind with a fair market value (individually or
in the aggregate) of $1,000,000 or more, and any party thereto (other than the
Borrower) asserts in writing that a default has occurred with respect to any
such agreement;
7.9 If any warranty, representation, statement, or Record made herein or in
any other Loan Document or delivered by Parent, Borrower, or any of Borrower's
Subsidiaries to Agent or any Lender in connection with this Agreement or any
other Loan Document proves to be untrue in any material respect (except that
such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) as of the date of issuance or making or deemed making thereof;
7.10 If the obligation of any Guarantor under the Guaranty is limited or
terminated by operation of law or by such Guarantor, or any such Guarantor
becomes the subject of an Insolvency Proceeding; provided, however, that if the
obligation of a Subsidiary of the Borrower that has issued a Guaranty in favor
of Agent is terminated in connection with the merger of such Subsidiary with and
into Borrower pursuant to a Permitted Merger, the termination of such obligation
will not constitute an Event of Default;
7.11 If the Security Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby, except as a result of a disposition of the applicable Collateral in a
transaction permitted under this Agreement;
7.12 Borrower shall at any time cease to be a Certificated Air Carrier;
7.13 Any provision of any Loan Document shall at any time for any reason be
declared to be null and void, or the validity or enforceability thereof shall be
contested by Parent, Borrower, or Borrower's Subsidiaries, or a proceeding shall
be commenced by Parent, Borrower, or Borrower's Subsidiaries, or by any
Governmental Authority having jurisdiction over Parent, Borrower, or Borrower's
Subsidiaries, seeking to establish the invalidity or unenforceability thereof,
or Parent, Borrower, or Borrower's Subsidiaries shall deny that Parent,
Borrower, or Borrower's Subsidiaries has any liability or obligation purported
to be created under any Loan Document; or
7.14 (a) If Borrower, Parent, any of Borrower's Subsidiaries or any ERISA
Affiliate shall have made a complete or partial withdrawal from a Multiemployer
Plan, and, as a result of such complete or partial withdrawal, any of them
incurs a withdrawal liability in a total amount exceeding $2,000,000 or, if
less, an amount that could result in a Material Adverse Change; or if a
Multiemployer Plan enters reorganization status under Section 4241 of ERISA,
and, as a result thereof, Borrower's, Parent's, any of Borrower's Subsidiary's
or any ERISA Affiliate's total contribution requirement with respect to such
Multiemployer Plan exceeds $2,000,000 or, if less, an amount that could result
in a Material Adverse Change;
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(b) An ERISA Event has occurred with respect to a Benefit Plan and (i)
30 days thereafter, such ERISA Event (if correctable) shall not have been
corrected, and (ii) the then current Unfunded Benefit Liability of such Benefit
Plan exceeds $300,000,000 or, if less, an amount that could result in a Material
Adverse Change (or, in the case of an ERISA Event involving liability under
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 4971 or 4975 of the IRC, the liability is in excess of
$2,000,000 or, if less, an amount that could result in a Material Adverse
Change); or
(c) The total projected benefit obligation of Borrower, Parent,
Borrower's Subsidiaries and all ERISA Affiliates, determined as of the close of
any fiscal year of the Parent and in accordance with Financial Accounting
Standards Board Statement No.106 (without regard to continuation coverage
required under Part 6 of subtitle B of Title I of ERISA or Section 4980B of the
IRC), for any post-employment or retiree health benefits, life insurance
coverage, or any other welfare benefits exceeds $70,000,000 or, if less, an
amount that could result in a Material Adverse Change.
8. THE LENDER GROUP'S RIGHTS AND REMEDIES.
8.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the continuation,
of an Event of Default, the Required Lenders (at their election but without
notice of their election and without demand, except as required by law) may
authorize and instruct Agent to do any one or more of the following on behalf of
the Lender Group (and Agent, acting upon the instructions of the Required
Lenders, shall do the same on behalf of the Lender Group), all of which are
authorized by Borrower:
(a) Declare all or any portion of the Obligations, whether evidenced
by this Agreement, by any of the other Loan Documents, or otherwise, immediately
due and payable;
(b) Cease advancing money or extending credit to or for the benefit of
Borrower under this Agreement, under any of the Loan Documents, or under any
other agreement between Borrower and the Lender Group;
(c) Terminate this Agreement and any of the other Loan Documents as to
any future liability or obligation of the Lender Group, but without affecting
any of the Agent's Liens in the Collateral and without affecting the
Obligations;
(d) The Lender Group shall have all other rights and remedies
available at law or in equity or pursuant to any other Loan Document.
The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 7.4 or Section 7.5, in addition to the remedies
set forth above, without any notice to Borrower or any other Person or any act
by the Lender Group, the Commitments shall automatically terminate and the
Obligations then outstanding, together with all accrued and unpaid interest
thereon and all fees and all other amounts due under this Agreement and the
other Loan Documents, shall automatically and immediately become due and
payable, without presentment, demand, protest, or notice of any kind, all of
which are expressly waived by Borrower.
8.2 REMEDIES CUMULATIVE. The rights and remedies of the Lender Group under
this Agreement, the other Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
9. TAXES AND EXPENSES.
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If Borrower fails to pay any monies (whether taxes, assessments,
insurance premiums, or, in the case of leased properties or assets, rents or
other amounts payable under such leases) due to third Persons, or fails to make
any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, Agent, in its sole discretion
and without prior notice to Borrower, may do any or all of the following: (a)
make payment of the same or any part thereof, (b) set up such reserves against
the Borrowing Base or the Maximum Revolver Amount as Agent deems necessary to
protect the Lender Group from the exposure created by such failure, or (c) in
the case of the failure to comply with Section 5.8 hereof, obtain and maintain
insurance policies of the type described in Section 5.8 and take any action with
respect to such policies as Agent deems prudent. Any such amounts paid by Agent
shall constitute Lender Group Expenses and any such payments shall not
constitute an agreement by the Lender Group to make similar payments in the
future or a waiver by the Lender Group of any Event of Default under this
Agreement. Agent need not inquire as to, or contest the validity of, any such
expense, tax, or Lien and the receipt of the usual official notice for the
payment thereof shall be conclusive evidence that the same was validly due and
owing.
10. WAIVERS; INDEMNIFICATION.
10.1 DEMAND; PROTEST; ETC. Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which Borrower may in any way be liable, except for such of the
foregoing which Agent has expressly agreed to provide under this Agreement or
any of the other Loan Documents.
10.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. Borrower hereby agrees
that: (a) so long as Agent complies with its obligations, if any, under the
Code, the Lender Group shall not in any way or manner be liable or responsible
for: (i) the safekeeping of the Collateral, (ii) any loss or damage thereto
occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrower.
10.3 INDEMNIFICATION. Borrower shall pay, indemnify, defend, and hold the
Agent-Related Persons, and the Lender-Related Persons (each, an "Indemnified
Person") harmless (to the fullest extent permitted by law) from and against any
and all claims, demands, suits, actions, investigations, proceedings, and
damages, and all reasonable attorneys fees and disbursements and other
reasonable costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a
result of or related to the execution, delivery, enforcement, performance, or
administration (including any restructuring or workout with respect hereto) of
this Agreement, any of the other Loan Documents, or the transactions
contemplated hereby or thereby or the monitoring of Parent's, Borrower's, and
Borrower's Subsidiaries' compliance with the terms of the Loan Documents, and
(b) with respect to any investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, or the use of the proceeds of the credit
provided hereunder (irrespective of whether any Indemnified Person is a party
thereto), or any act, omission, event, or circumstance in any manner related
thereto (each and all of the foregoing, the "Indemnified Liabilities"). The
foregoing to the contrary notwithstanding, Borrower shall have no obligation to
any Indemnified Person under this Section 10.3 with respect to any Indemnified
Liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of such Indemnified
Person or relate to disputes between or among the Agent and the Lenders. This
provision shall survive the termination of this Agreement and the repayment of
the Obligations. If any Indemnified Person makes any payment to any other
Indemnified Person with respect to an Indemnified Liability as to which Borrower
was required to indemnify the Indemnified Person receiving such payment, the
Indemnified Person making such payment is entitled to be indemnified and
reimbursed by Borrower with respect thereto. WITHOUT LIMITATION, THE FOREGOING
INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED
LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE
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OUT OF ANY NEGLIGENT (BUT NOT GROSSLY NEGLIGENT) ACT OR OMISSION OF SUCH
INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
11. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands by
Parent, Borrower, or Agent to the other relating to this Agreement or any other
Loan Document shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by registered or certified mail (postage
prepaid, return receipt requested), overnight courier, electronic mail (at such
email addresses as Borrower or Agent, as applicable, may designate to each other
in accordance herewith), or telefacsimile to Borrower or Agent, as the case may
be, at its address set forth below:
If to Parent or HAWAIIAN AIRLINES, INC.
Borrower: 0000 Xxxxxxx Xx., Xxx. X-000
Xxxxxxxx, Xxxxxx 00000
Attn: Xxxx Xxxxxxxx, Xxxxx Xxxxxxx, and the
General Counsel
Fax No. 000-000-0000
with copies to: HAWAIIAN HOLDINGS, INC.
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxxxxxx
Fax No. 000-000-0000
and: DECHERT LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx, Esq.
Fax No. 000-000-0000
If to Agent: XXXXX FARGO FOOTHILL, INC.
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Business Finance Division Manager
Fax No.: 000-000-0000
with copies to: PAUL, HASTINGS, XXXXXXXX & XXXXXX LLP
000 X. Xxxxxx Xxxxxx
Xxxxxx-xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx Hilson, Esq.
Fax No.: 000-000-0000
Agent and Borrower may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other party. All notices or demands sent in accordance with this Section 11,
other than notices by Agent in connection with enforcement rights against the
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt
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or 3 Business Days after the deposit thereof in the mail. Borrower acknowledges
and agrees that notices sent by the Lender Group in connection with the exercise
of enforcement rights against Collateral under the provisions of the Code shall
be deemed sent when deposited in the mail or personally delivered, or, where
permitted by law, transmitted by telefacsimile or any other method set forth
above.
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO
THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(B).
(c) BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWER AND EACH MEMBER OF THE LENDER
GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
13.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may assign and delegate to one or more assignees (each
an "Assignee") that are Eligible Transferees all, or any ratable portion of all,
of the Obligations, the Commitments and the other rights and obligations of such
Lender hereunder and under the other Loan Documents, in a minimum amount of
$5,000,000 (except that such minimum amount shall not apply to an Affiliate of a
Lender or to a Related Fund); provided, however, that Borrower and Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses, and related information with
respect to the Assignee, have been given to Borrower and Agent by such Lender
and the Assignee, (ii) such Lender and its Assignee have delivered to Borrower
and Agent an Assignment and Acceptance and Agent has notified the assigning
Lender
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of its receipt thereof in accordance with Section 13.1(b), and (iii) unless
waived by Agent, the assigning Lender or Assignee has paid to Agent for Agent's
separate account a processing fee in the amount of $3,500. Anything contained
herein to the contrary notwithstanding, the payment of any fees shall not be
required and the Assignee need not be an Eligible Transferee if (x) such
assignment is in connection with any merger, consolidation, sale, transfer, or
other disposition of all or any substantial portion of the business or loan
portfolio of the assigning Lender, or (y) the assignee is an Affiliate (other
than individual(s)) of a Lender or a Related Fund.
(b) From and after the date that Agent notifies the assigning Lender
(with a copy to Borrower) that it has received an executed Assignment and
Acceptance, if applicable, and payment of the required processing fee, (i) 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, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assigning Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights (except
with respect to Section 10.3 hereof) and be released from any future obligations
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 and the other Loan Documents, such Lender shall cease to be
a party hereto and thereto), and such assignment shall effect a novation among
Borrower, the assigning Lender, and the Assignee; provided, however, that
nothing contained herein shall release any assigning Lender from obligations
that survive the termination of this Agreement, including such assigning
Lender's obligations under Article 15 and Section 16.7 of this Agreement.
(c) 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: (1) 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 this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrower or the performance or observance by Borrower of any of its obligations
under this Agreement or any other Loan Document furnished pursuant hereto, (3)
such Assignee confirms that it has received a copy of this Agreement, together
with 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, (4) such Assignee will, independently and without reliance upon
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, (5)
such Assignee appoints and authorizes Agent to take such actions and to exercise
such powers under this Agreement as are delegated to Agent, by the terms hereof,
together with such powers as are reasonably incidental thereto, and (6) such
Assignee agrees that it will perform all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(d) Immediately upon Agent's receipt of the required processing fee,
if applicable, and delivery of notice to the assigning Lender pursuant to
Section 13.1(b), this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender
pro tanto.
(e) Any Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons (a "Participant") participating
interests in its Obligations, the Commitment, and the other rights and interests
of that Lender (the "Originating Lender") hereunder and under the other Loan
Documents; provided, however, that (i) the Originating Lender shall remain a
"Lender" for all purposes of this Agreement and the other Loan Documents and the
Participant receiving the participating interest in the Obligations, the
Commitments, and the other rights and interests of the Originating Lender
hereunder shall not
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constitute a "Lender" hereunder or under the other Loan Documents and the
obligations of the Originating Lender, the Parent, and the Borrower under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrower,
Agent, and the Lenders shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender's rights and
obligations under this Agreement and the other Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
has the right to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating, (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender, or (E) change
the amount or due dates of scheduled principal repayments or prepayments or
premiums, and (v) all amounts payable by Borrower hereunder shall be determined
as if such Lender had not sold such participation, except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement. The rights of any Participant only shall be
derivative through the Originating Lender with whom such Participant
participates and no Participant shall have any rights under this Agreement or
the other Loan Documents or any direct rights as to the other Lenders, Agent,
Borrower, the Collections of Parent, Borrower, or Borrower's Subsidiaries, the
Collateral, or otherwise in respect of the Obligations. No Participant shall
have the right to participate directly in the making of decisions by the Lenders
among themselves.
(f) In connection with any such assignment or participation or
proposed assignment or participation, a Lender may, subject to the provisions of
Section 16.7, disclose all documents and information which it now or hereafter
may have relating to Parent, Borrower, and Borrower's Subsidiaries and their
respective businesses.
(g) Any other provision in this Agreement notwithstanding, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement in favor of any Federal Reserve
Bank in accordance with Regulation A of the Federal Reserve Bank or U.S.
Treasury Regulation 31 CFR ss.203.24, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
(h) Agent (on behalf of Borrower) shall maintain, or cause to be
maintained, a register (the "Register") on which it enters the name of a Lender
as the registered owner of each Term Loan held by such Lender. Other than in
connection with an assignment by a Lender of all or any portion of its Term Loan
to an Affiliate of such Lender or a Related Fund of such Lender (i) a Registered
Loan (and the Registered Note, if any, evidencing the same) may be assigned or
sold in whole or in part only by registration of such assignment or sale on the
Register (and each Registered Note shall expressly so provide) and (ii) any
assignment or sale of all or part of such Registered Loan (and the Registered
Note, if any, evidencing the same) may be effected only by registration of such
assignment or sale on the Register, together with the surrender of the
Registered Note, if any, evidencing the same duly endorsed by (or accompanied by
a written instrument of assignment or sale duly executed by) the holder of such
Registered Note, whereupon, at the request of the designated assignee(s) or
transferee(s), one or more new Registered Notes in the same aggregate principal
amount shall be issued to the designated assignee(s) or transferee(s). Prior to
the registration of assignment or sale of any Registered Loan (and the
Registered Note, if any evidencing the same), Borrower shall treat the Person in
whose name such Loan (and the Registered Note, if any, evidencing the same) is
registered as the owner thereof for the purpose of receiving all payments
thereon and for all other purposes, notwithstanding notice to the contrary. In
the case of any assignment by a Lender of all or any portion of its
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Term Loan to an Affiliate of such Lender or a Related Fund of such Lender, and
which assignment is not recorded in the Register, the assigning Lender, on
behalf of Borrower, shall maintain a register comparable to the Register.
(i) In the event that a Lender sells participations in a Registered
Loan, such Lender shall maintain a register on which it enters the name of all
participants in the Registered Loans held by it (the "Participant Register"). A
Registered Loan (and the Registered Note, if any, evidencing the same) may be
participated in whole or in part only by registration of such participation on
the Participant Register (and each Registered Note shall expressly so provide).
Any participation of such Registered Loan (and the Registered Note, if any,
evidencing the same) may be effected only by the registration of such
participation on the Participant Register.
13.2 SUCCESSORS. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however,
that Borrower may not assign this Agreement or any rights or duties hereunder
without the Lenders' prior written consent and any prohibited assignment shall
be absolutely void ab initio. No consent to assignment by the Lenders shall
release Borrower from its Obligations. A Lender may assign this Agreement and
the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to Section 13.1 hereof and, except as expressly required pursuant to
Section 13.1 hereof, no consent or approval by Borrower is required in
connection with any such assignment.
14. AMENDMENTS; WAIVERS.
14.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by Borrower therefrom, shall be effective unless the same shall be in
writing and signed by the Required Lenders (or by Agent at the written request
of the Required Lenders) and Borrower and then any such waiver or consent shall
be effective, but only in the specific instance and for the specific purpose for
which given; provided, however, that no such waiver, amendment, or consent
shall, unless in writing and signed by all of the Lenders affected thereby and
Borrower, do any of the following:
(a) increase or extend any Commitment of any Lender,
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of interest on, any loan or
other extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document,
(d) change the Pro Rata Share that is required to take any action
hereunder,
(e) amend or modify this Section or any provision of the Agreement
providing for consent or other action by all Lenders,
(f) other than as permitted by Section 15.12, release Agent's Lien in
and to any of the Collateral,
(g) change the definition of "Required Lenders" or "Pro Rata Share",
(h) contractually subordinate any of the Agent's Liens,
(i) release Borrower or any Guarantor from any obligation for the
payment of money,
(j) change the definition of Borrowing Base or the definitions of
Eligible Accounts, Eligible Spare Parts, Maximum Revolver Amount, Term Loan
Amount, or change Section 2.1(b), or
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(k) amend any of the provisions of Section 15.
and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, as
applicable, affect the rights or duties of Agent, Issuing Lender, or Swing
Lender, as applicable, under this Agreement or any other Loan Document. The
foregoing notwithstanding, any amendment, modification, waiver, consent,
termination, or release of, or with respect to, any provision of this Agreement
or any other Loan Document that relates only to the relationship of the Lender
Group among themselves, and that does not affect the rights or obligations of
Borrower, shall not require consent by or the agreement of Borrower.
14.2 REPLACEMENT OF HOLDOUT LENDER.
(a) If any action to be taken by the Lender Group or Agent hereunder
requires the unanimous consent, authorization, or agreement of all Lenders, and
a Lender ("Holdout Lender") fails to give its consent, authorization, or
agreement, then Agent, upon at least 5 Business Days prior irrevocable notice to
the Holdout Lender, may permanently replace the Holdout Lender with one or more
substitute Lenders (each, a "Replacement Lender"), and the Holdout Lender shall
have no right to refuse to be replaced hereunder. Such notice to replace the
Holdout Lender shall specify an effective date for such replacement, which date
shall not be later than 15 Business Days after the date such notice is given.
(b) Prior to the effective date of such replacement, the Holdout
Lender and each Replacement Lender shall execute and deliver an Assignment and
Acceptance, subject only to the Holdout Lender being repaid its share of the
outstanding Obligations (including an assumption of its Pro Rata Share of the
Risk Participation Liability) without any premium or penalty of any kind
whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver
any such Assignment and Acceptance prior to the effective date of such
replacement, the Holdout Lender shall be deemed to have executed and delivered
such Assignment and Acceptance. The replacement of any Holdout Lender shall be
made in accordance with the terms of Section 13.1. Until such time as the
Replacement Lenders shall have acquired all of the Obligations, the Commitments,
and the other rights and obligations of the Holdout Lender hereunder and under
the other Loan Documents, the Holdout Lender shall remain obligated to make the
Holdout Lender's Pro Rata Share of Advances and to purchase a participation in
each Letter of Credit, in an amount equal to its Pro Rata Share of the Risk
Participation Liability of such Letter of Credit.
14.3 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any Lender to
exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent's and each
Lender's rights thereafter to require strict performance by Borrower of any
provision of this Agreement. Agent's and each Lender's rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.
15. AGENT; THE LENDER GROUP.
15.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby designates
and appoints WFF as its representative under this Agreement and the other Loan
Documents and each Lender hereby irrevocably authorizes Agent to execute and
deliver each of the other Loan Documents on its behalf and to take such other
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to Agent by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Agent agrees to
act as such on the express conditions contained in this Section 15. The
provisions of this Section 15 (other than the proviso to Section 15.11(a)) are
solely for the benefit of Agent, and the Lenders, and Parent, Borrower, and
Borrower's Subsidiaries shall have no rights as a third party beneficiary of any
of the provisions contained herein. Any provision to the contrary contained
elsewhere in this Agreement or in any
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other Loan Document notwithstanding, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall Agent have
or be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against Agent; it being expressly understood and agreed that the use of the word
"Agent" is for convenience only, that WFF is merely the representative of the
Lenders, and only has the contractual duties set forth herein. Except as
expressly otherwise provided in this Agreement, Agent shall have and may use its
sole discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that Agent
expressly is entitled to take or assert under or pursuant to this Agreement and
the other Loan Documents. Without limiting the generality of the foregoing, or
of any other provision of the Loan Documents that provides rights or powers to
Agent, Lenders agree that Agent shall have the right to exercise the following
powers as long as this Agreement remains in effect: (a) maintain, in accordance
with its customary business practices, ledgers and records reflecting the status
of the Obligations, the Collateral, the Collections of Parent, Borrower, and
Borrower's Subsidiaries, and related matters, (b) execute or file any and all
financing or similar statements or notices, amendments, renewals, supplements,
documents, instruments, proofs of claim, notices and other written agreements
with respect to the Loan Documents, (c) make Advances, for itself or on behalf
of Lenders as provided in the Loan Documents, (d) exclusively receive, apply,
and distribute the Collections of Parent, Borrower, and Borrower's Subsidiaries
as provided in the Loan Documents, (e) open and maintain such bank accounts and
cash management arrangements as Agent deems necessary and appropriate in
accordance with the Loan Documents for the foregoing purposes with respect to
the Collateral and the Collections of Parent, Borrower, and Borrower's
Subsidiaries, (f) perform, exercise, and enforce any and all other rights and
remedies of the Lender Group with respect to Borrower, the Obligations, the
Collateral, the Collections of Parent, Borrower, and Borrower's Subsidiaries, or
otherwise related to any of same as provided in the Loan Documents, and (g)
incur and pay such Lender Group Expenses as Agent may deem necessary or
appropriate for the performance and fulfillment of its functions and powers
pursuant to the Loan Documents.
15.2 DELEGATION OF DUTIES. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
15.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (a) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by Parent, Borrower, or any
Subsidiary of Borrower or Affiliate of Parent or Borrower, or any officer or
director thereof, contained in this Agreement or in any other Loan Document, or
in any certificate, report, statement or other document referred to or provided
for in, or received by Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the books and records or properties of
Parent, Borrower or the books or records or properties of any of Borrower's
Subsidiaries or Affiliates of Parent or Borrower.
15.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telefacsimile or other electronic
method of transmission, telex or telephone message, statement or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent, or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Borrower or counsel to any
Lender), independent accountants and other experts selected by Agent. Agent
shall be fully justified in failing
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or refusing to take any action under this Agreement or any other Loan Document
unless Agent shall first receive such advice or concurrence of the Lenders as it
deems appropriate and until such instructions are received, Agent shall act, or
refrain from acting, as it deems advisable. If Agent so requests, it shall first
be indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement or any other Loan
Document in accordance with a request or consent of the requisite Lenders and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all of the Lenders.
15.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders and, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or Borrower referring to
this Agreement, describing such Default or Event of Default, and stating that
such notice is a "notice of default." Agent promptly will notify the Lenders of
its receipt of any such notice or of any Event of Default of which Agent has
actual knowledge. If any Lender obtains actual knowledge of any Event of
Default, such Lender promptly shall notify the other Lenders and Agent of such
Event of Default. Each Lender shall be solely responsible for giving any notices
to its Participants, if any. Subject to Section 15.4, Agent shall take such
action with respect to such Default or Event of Default as may be requested by
the Required Lenders in accordance with Section 9; provided, however, that
unless and until Agent has received any such request, Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable.
15.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Parent,
Borrower, Borrower's Subsidiaries, and Parent's and Borrower's or Affiliates,
shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Lender. Each Lender represents to Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrower and any
other Person party to a Loan Document, and all applicable bank regulatory laws
relating to the transactions contemplated hereby, and made its own decision to
enter into this Agreement and to extend credit to Borrower. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of Borrower and any other Person party
to a Loan Document. Except for notices, reports, and other documents expressly
herein required to be furnished to the Lenders by Agent, Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of Borrower and any other Person party
to a Loan Document that may come into the possession of any of the Agent-Related
Persons.
15.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay Lender
Group Expenses to the extent Agent reasonably deems necessary or appropriate for
the performance and fulfillment of its functions, powers, and obligations
pursuant to the Loan Documents, including court costs, attorneys fees and
expenses, fees and expenses of financial accountants, advisors, consultants, and
appraisers, costs of collection by outside collection agencies, auctioneer fees
and expenses, and costs of security guards or insurance premiums paid to
maintain the Collateral, whether or not Borrower is obligated to reimburse Agent
or Lenders for such expenses pursuant to this Agreement or otherwise. Agent is
authorized and directed to deduct and retain sufficient amounts from the
Collections of Parent, Borrower, and Borrower's Subsidiaries received by Agent
to reimburse Agent for such out-of-pocket costs and expenses prior to the
distribution of any amounts to
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Lenders. In the event Agent is not reimbursed for such costs and expenses by
Parent, Borrower, or Borrower's Subsidiaries, each Lender hereby agrees that it
is and shall be obligated to pay to Agent such Lender's Pro Rata Share thereof.
Whether or not the transactions contemplated hereby are consummated, the Lenders
shall indemnify upon demand the Agent-Related Persons (to the extent not
reimbursed by or on behalf of Borrower and without limiting the obligation of
Borrower to do so), according to their Pro Rata Shares, from and against any and
all Indemnified Liabilities; provided, however, that no Lender shall be liable
for the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct nor shall any Lender be liable for the obligations of any Defaulting
Lender in failing to make an Advance or other extension of credit hereunder.
Without limitation of the foregoing, each Lender shall reimburse Agent upon
demand for such Lender's Pro Rata Share of any costs or out of pocket expenses
(including attorneys, accountants, advisors, and consultants fees and expenses)
incurred by Agent in connection with the preparation, execution, delivery,
administration, modification, amendment, or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that Agent is
not reimbursed for such expenses by or on behalf of Borrower. The undertaking in
this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of Agent.
15.8 AGENT IN INDIVIDUAL CAPACITY. WFF and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Parent, Borrower, and
Borrower's Subsidiaries and Affiliates and any other Person party to any Loan
Documents as though WFF were not Agent hereunder, and, in each case, without
notice to or consent of the other members of the Lender Group. The other members
of the Lender Group acknowledge that, pursuant to such activities, WFF or its
Affiliates may receive information regarding Parent, Borrower, or Borrower's
Affiliates and any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrower or such other Person and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver Agent will use its reasonable best
efforts to obtain), Agent shall not be under any obligation to provide such
information to them. The terms "Lender" and "Lenders" include WFF in its
individual capacity.
15.9 SUCCESSOR AGENT. Agent may resign as Agent upon 45 days notice to the
Lenders. If Agent resigns under this Agreement, the Required Lenders shall
appoint a successor Agent for the Lenders. If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders, a successor Agent. If Agent has materially
breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders. So long as no Event of
Default has occurred and is continuing, any successor Agent must be satisfactory
to Borrower; provided, however, that the Borrower's right to approve a successor
Agent pursuant to this sentence shall not in any manner affect the right of
Agent to resign pursuant to the first sentence of this Section 15.9. Upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term "Agent" shall mean such successor Agent and the retiring Agent's
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 15 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 no successor Agent has accepted
appointment as Agent by the date which is 45 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
Agent hereunder until such time, if any, as the Lenders appoint a successor
Agent as provided for above.
15.10 LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting, or other business with Parent,
Borrower,
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Borrower's Subsidiaries, and Parent's and Borrower's Affiliates and any other
Person party to any Loan Documents as though such Lender were not a Lender
hereunder without notice to or consent of the other members of the Lender Group.
The other members of the Lender Group acknowledge that, pursuant to such
activities, such Lender and its respective Affiliates may receive information
regarding Parent, Borrower, or Parent's or Borrower's Affiliates and any other
Person party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrower or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use its reasonable best efforts to
obtain), such Lender shall not be under any obligation to provide such
information to them. With respect to the Swing Loans and Protective Advances,
Swing Lender shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not the sub-agent of
Agent.
15.11 WITHHOLDING TAXES.
(a) All payments made by Borrower hereunder or under any note or other
Loan Document will be made without setoff, counterclaim, or other defense. In
addition, all such payments will be made free and clear of, and without
deduction or withholding for, any present or future Taxes, and in the event any
deduction or withholding of Taxes is required, Borrower shall comply with the
penultimate sentence of this Section 15.11(a). "Taxes" shall mean, any taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but excluding
any franchise tax and tax imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein measured by or based on the
net income or net profits of any Lender) and all interest, penalties or similar
liabilities with respect thereto. If any Taxes are so levied or imposed,
Borrower agrees to pay the full amount of such Taxes and such additional amounts
as may be necessary so that every payment of all amounts due under this
Agreement, any note, or Loan Document, including any amount paid pursuant to
this Section 15.11(a) after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein; provided, however,
that Borrower shall not be required to increase any such amounts if the increase
in such amount payable (i) results from Agent's or such Lender's own willful
misconduct or gross negligence (as finally determined by a court of competent
jurisdiction), (ii) results from an obligation by Agent or such Lender to
withhold, deduct, or pay such amount that existed prior to the date that Agent
or such Lender became a party to this Agreement, or (iii) results from such
Lender's failure to comply with the provisions of Section 15.11(b). Borrower
will furnish to Agent as promptly as possible after the date the payment of any
Tax is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by Borrower.
(b) If a Lender claims an exemption from United States withholding
tax, Lender agrees with and in favor of Agent and Borrower, to deliver to Agent:
(i) if such Lender claims an exemption from United States
withholding tax pursuant to its portfolio interest exception, (A) a statement of
the Lender, signed under penalty of perjury, that it is not a (I) a "bank" as
described in Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of Borrower
(within the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled
foreign corporation related to Borrower within the meaning of Section 864(d)(4)
of the IRC, and (B) a properly completed and executed IRS Form W-8BEN, before
receiving its first payment under this Agreement and at any other time
reasonably requested by Agent or Borrower;
(ii) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed and
executed IRS Form W-8BEN before receiving its first payment under this Agreement
and at any other time reasonably requested by Agent or Borrower;
(iii) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such
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Lender, two properly completed and executed copies of IRS Form W-8ECI before
receiving its first payment under this Agreement and at any other time
reasonably requested by Agent or Borrower; or;
(iv) such other form or forms, including IRS Form W-9, as may be
required under the IRC or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding or backup withholding
tax before receiving its first payment under this Agreement and at any other
time reasonably requested by Agent or Borrower.
Lender agrees promptly to notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(c) If a Lender claims an exemption from withholding tax in a
jurisdiction other than the United States, Lender agrees with and in favor of
Agent and Borrower, to deliver to Agent any such form or forms, as may be
required under the laws of such jurisdiction as a condition to exemption from,
or reduction of, foreign withholding or backup withholding tax before receiving
its first payment under this Agreement and at any other time reasonably
requested by Agent or Borrower.
Lender agrees promptly to notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(d) If any Lender claims exemption from, or reduction of, withholding
tax and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of Borrower to such Lender, such Lender
agrees to notify Agent and Borrower of the percentage amount in which it is no
longer the beneficial owner of Obligations of Borrower to such Lender. To the
extent of such percentage amount, Agent and Borrower will treat such Lender's
documentation provided pursuant to Sections 15.11(b) or 15.11(c) as no longer
valid. With respect to such percentage amount, Lender may provide new
documentation, pursuant to Sections 15.11 (b) or 15.11(c), if applicable.
(e) If any Lender is entitled to a reduction in the applicable
withholding tax, Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (b)
or (c) of this Section 15.11 are not delivered to Agent, then Agent may withhold
from any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(f) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that Agent did not properly
withhold tax from amounts paid to or for the account of any Lender due to a
failure on the part of the Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
Agent of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason) such Lender
shall indemnify and hold Agent harmless for all amounts paid, directly or
indirectly, by Agent, as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to Agent
under this Section 15.11, together with all costs and expenses (including
attorneys fees and expenses). The obligation of the Lenders under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of Agent.
15.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent, at its option and
in its sole discretion, to release any Lien on any Collateral (i) upon the
termination of the Commitments and payment and satisfaction in full by Borrower
of all Obligations, (ii) constituting property being sold or disposed of if a
release is required or desirable in connection therewith and if Borrower
certifies to Agent that the sale or disposition is permitted under Section 6.4
of this Agreement or the other Loan Documents (and Agent may rely conclusively
on any such certificate, without further inquiry), (iii) constituting property
in which Parent,
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Borrower, or Borrower's Subsidiaries owned no interest at the time the Agent's
Lien was granted nor at any time thereafter, or (iv) constituting property
leased to Parent, Borrower, or Borrower's Subsidiaries under a lease that has
expired or is terminated in a transaction permitted under this Agreement. Except
as provided above, Agent will not execute and deliver a release of any Lien on
any Collateral without the prior written authorization of (y) if the release is
of all or substantially all of the Collateral, all of the Lenders, or (z)
otherwise, the Required Lenders. Upon request by Agent or Borrower at any time,
the Lenders will confirm in writing Agent's authority to release any such Liens
on particular types or items of Collateral pursuant to this Section 15.12;
provided, however, that (1) Agent shall not be required to execute any document
necessary to evidence such release on terms that, in Agent's opinion, would
expose Agent to liability or create any obligation or entail any consequence
other than the release of such Lien without recourse, representation, or
warranty, and (2) such release shall not in any manner discharge, affect, or
impair the Obligations or any Liens (other than those expressly being released)
upon (or obligations of Borrower in respect of) all interests retained by
Borrower, including, the proceeds of any sale, all of which shall continue to
constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the Lenders to
assure that the Collateral exists or is owned by Borrower or is cared for,
protected, or insured or has been encumbered, or that the Agent's Liens have
been properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent pursuant to any of the Loan Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission, or event
related thereto, subject to the terms and conditions contained herein, Agent may
act in any manner it may deem appropriate, in its sole discretion given Agent's
own interest in the Collateral in its capacity as one of the Lenders and that
Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing, except as otherwise provided herein.
15.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the express
written consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the written request of Agent, set off against the
Obligations, any amounts owing by such Lender to Borrower or any deposit
accounts of Borrower now or hereafter maintained with such Lender. Each of the
Lenders further agrees that it shall not, unless specifically requested to do so
in writing by Agent, take or cause to be taken any action, including, the
commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral.
(b) If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender's ratable portion of all such
distributions by Agent, such Lender promptly shall (1) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (2) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that to the extent that such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
15.14 AGENCY FOR PERFECTION. Agent hereby appoints each other Lender as its
agent (and each Lender hereby accepts such appointment) for the purpose of
perfecting the Agent's Liens in assets which, in accordance with Article 8 or
Article 9, as applicable, of the Code can be perfected only by possession or
control. Should any Lender obtain possession or control of any such Collateral,
such Lender shall notify
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Agent thereof, and, promptly upon Agent's request therefor shall deliver
possession or control of such Collateral to Agent or in accordance with Agent's
instructions.
15.15 PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by Agent to
the Lenders shall be made by bank wire transfer of immediately available funds
pursuant to such wire transfer instructions as each party may designate for
itself by written notice to Agent. Concurrently with each such payment, Agent
shall identify whether such payment (or any portion thereof) represents
principal, premium, fees, or interest of the Obligations.
15.16 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each member of
the Lender Group authorizes and directs Agent to enter into this Agreement and
the other Loan Documents. Each member of the Lender Group agrees that any action
taken by Agent in accordance with the terms of this Agreement or the other Loan
Documents relating to the Collateral and the exercise by Agent of its powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.
15.17 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY; DISCLAIMERS BY
LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to this Agreement,
each Lender:
(a) is deemed to have requested that Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination
report (each a "Report" and collectively, "Reports") prepared by or at the
request of Agent, and Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Borrower
and will rely significantly upon Parent's, Borrower, and Borrower's
Subsidiaries' books and records, as well as on representations of Parent's
personnel,
(d) agrees to keep all Reports and other material, non-public
information regarding Parent, Borrower, and Borrower's Subsidiaries and their
operations, assets, and existing and contemplated business plans in a
confidential manner in accordance with Section 16.7, and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold Agent and any other
Lender preparing a Report harmless from any action the indemnifying Lender may
take or fail to take or any conclusion the indemnifying Lender may reach or draw
from any Report in connection with any loans or other credit accommodations that
the indemnifying Lender has made or may make to Borrower, or the indemnifying
Lender's participation in, or the indemnifying Lender's purchase of, a loan or
loans of Borrower, and (ii) to pay and protect, and indemnify, defend and hold
Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including, attorneys fees and costs) incurred by Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrower to Agent that has not been contemporaneously
provided by Borrower to such Lender, and, upon receipt of such request, Agent
promptly shall provide a copy of same to such Lender, (y) to the extent that
Agent is entitled, under any provision of the Loan Documents, to request
additional reports or information from Borrower, any Lender may, from time to
time, reasonably request Agent to exercise such right as specified in such
Lender's notice to Agent, whereupon Agent promptly shall request of Borrower the
additional reports or information reasonably specified by such
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Lender, and, upon receipt thereof from Borrower, Agent promptly shall provide a
copy of same to such Lender, and (z) any time that Agent renders to Borrower a
statement regarding the Loan Account, Agent shall send a copy of such statement
to each Lender.
15.18 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that certain of
the Loan Documents now or hereafter may have been or will be executed only by or
in favor of Agent in its capacity as such, and not by or in favor of the
Lenders, any and all obligations on the part of Agent (if any) to make any
credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 15.7, no member of the Lender Group shall
have any liability for the acts of any other member of the Lender Group. No
Lender shall be responsible to Borrower or any other Person for any failure by
any other Lender to fulfill its obligations to make credit available hereunder,
nor to advance for it or on its behalf in connection with its Commitment, nor to
take any other action on its behalf hereunder or in connection with the
financing contemplated herein.
15.19 INTERCREDITOR AGREEMENT. Each Lender hereunder (i) acknowledges that
it has received a copy of the Intercreditor Agreement, (ii) agrees that it will
be bound by and will take no actions contrary to the provisions of the
Intercreditor Agreement and (iii) authorizes and instructs Agent to enter into
the Intercreditor Agreement as agent and on behalf of such Lender. Nothing
contained in the Intercreditor Agreement, this Agreement or elsewhere in any of
the other Loan Documents is intended to or shall impair, as between the Borrower
and the Guarantors, on the one hand, and any member of the Lender Group, on the
other hand, the obligation of the Borrower and each Guarantor, which is absolute
and unconditional, to pay to the such member prompt payment in full, when due or
declared due, whether at maturity, acceleration, call for redemption or
otherwise, and at all such times, of any and all amounts owed by the Borrower
with respect to the Obligations, or is intended to or shall affect the relative
rights of the Lenders and creditors of the Borrower or any Guarantor (other than
the Second Lien Agent and the Second Lien Lenders), nor shall anything herein or
therein afford the Borrower or any Guarantor any right or power to contest the
Agent's or any Lender's exercise of any and all remedies otherwise permitted by
applicable law upon default under this Agreement or the other Loan Documents.
16. GENERAL PROVISIONS.
16.1 EFFECTIVENESS. This Agreement shall be binding and deemed effective
when executed by Borrower, Agent, and each Lender whose signature is provided
for on the signature pages hereof.
16.2 SECTION HEADINGS. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.
16.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against the Lender Group or Borrower,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
16.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
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16.5 COUNTERPARTS; ELECTRONIC EXECUTION. This Agreement may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
16.6 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or payment
of the Obligations by Borrower or any Guarantor or the transfer to the Lender
Group of any property should for any reason subsequently be declared to be void
or voidable under any state or federal law relating to creditors' rights,
including provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (each, a "Voidable Transfer"), and if the Lender Group is required to
repay or restore, in whole or in part, any such Voidable Transfer, or elects to
do so upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that the Lender Group is required or elects to
repay or restore, and as to all reasonable costs, expenses, and attorneys fees
of the Lender Group related thereto, the liability of Borrower or any Guarantor
automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made.
16.7 CONFIDENTIALITY. Agent and Lenders each individually (and not jointly
or jointly and severally) agree that material, non-public information regarding
Parent, Borrower, and Borrower's Subsidiaries, their operations, assets, and
existing and contemplated business plans shall be treated by Agent and the
Lenders in a confidential manner, and shall not be disclosed by Agent and the
Lenders to Persons who are not parties to this Agreement, except: (a) to
attorneys for and other advisors, accountants, auditors, and consultants to any
member of the Lender Group who need such information in connection with their
work, (b) to Subsidiaries and Affiliates of any member of the Lender Group,
provided that any such Subsidiary or Affiliate shall have agreed to receive such
information hereunder subject to the terms of this Section 16.7, (c) as may be
required by statute, decision, or judicial or administrative order, rule, or
regulation, (d) as may be agreed to in advance by Parent, Borrower, or
Borrower's Subsidiaries or as requested or required by any Governmental
Authority pursuant to any subpoena or other legal process, (e) as to any such
information that is or becomes generally available to the public (other than as
a result of prohibited disclosure by Agent or the Lenders), (f) in connection
with any assignment, prospective assignment, sale, prospective sale,
participation or prospective participations, or pledge or prospective pledge of
any Lender's interest under this Agreement, provided that any such assignee,
prospective assignee, purchaser, prospective purchaser, participant, prospective
participant, pledgee, or prospective pledgee shall have agreed in writing to
receive such information hereunder subject to the terms of this Section, and (g)
in connection with any litigation or other adversary proceeding involving
parties hereto which such litigation or adversary proceeding involves claims
related to the rights or duties of such parties under this Agreement or the
other Loan Documents. The provisions of this Section 16.7 shall survive for 2
years after the payment in full of the Obligations.
16.8 INTEGRATION. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
16.9 PUBLIC DISCLOSURE. Parent and Borrower agree that neither they nor any
of their respective Affiliates will issue any press release or other public
disclosure using the name of Agent, any Lender or any of their respective
Affiliates or Related Funds or referring to this Agreement or any other Loan
Document without the prior written consent of Agent or such Lender, except to
the extent that Parent, Borrower or such Affiliate is required to do so under
applicable law (in which event, Parent, Borrower or such Affiliate will consult
with Agent or such Lender before issuing such press release or other public
disclosure). Agent agrees that it will consult in advance with Borrower
regarding the so-called "tombstone" (and the marketing
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materials related thereto) that is created and published for the purpose of
announcing the financing transaction contemplated by this Agreement.
[Signature pages to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
HAWAIIAN HOLDINGS, INC., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
Title: Chief Financial Officer, Treasurer and
Secretary
----------------------------------------
HAWAIIAN AIRLINES, INC., a Delaware corporation
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------------
Title: Senior Vice President, Chief Financial
Officer and Treasurer
----------------------------------------
XXXXX FARGO FOOTHILL, INC.,
a California corporation, as Agent and
as a Lender
By: /s/ Xxxx X. Xxxxxx
-------------------------------------------
Title: Vice President - Underwriting
----------------------------------------
X.X. XXXXX SPECIAL OPPORTUNITIES FUND, L.P.,
a Delaware limited partnership
By: X.X. Xxxxx Partners, LLC,
its general partner
By: Xxxxx Holdings, LLC,
its managing member
By: /s/ Xxxxx X. Xxxxx
-------------------------------------------
Title:
XXXXXXX NATIONAL LOAN INVESTORS, LTD.,
a Cayman Islands company
By: Xxxxxxx Capital Funding, LLC
its Investment Advisor
By: /s/ Xxxxx X. Xxxxx
-------------------------------------------
Title:
TABLE OF CONTENTS
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1. DEFINITIONS AND CONSTRUCTION..............................................1
1.1 Definitions.........................................................1
1.2 Accounting Terms....................................................1
1.3 Code................................................................1
1.4 Construction........................................................1
1.5 Schedules and Exhibits..............................................1
2. LOAN AND TERMS OF PAYMENT.................................................2
2.1 Revolver Advances...................................................2
2.2 Term Loan...........................................................2
2.3 Borrowing Procedures and Settlements................................3
2.4 Payments............................................................7
2.5 Overadvances........................................................9
2.6 Interest Rates and Letter of Credit Fee:
Rates, Payments, and Calculations...................................9
2.7 Cash Management....................................................11
2.8 Crediting Payments; Clearance Charge...............................11
2.9 Designated Account.................................................12
2.10 Maintenance of Loan Account; Statements of Obligations.............12
2.11 Fees...............................................................12
2.12 Letters of Credit..................................................13
2.13 LIBOR Option.......................................................15
2.14 Capital Requirements...............................................17
3. CONDITIONS; TERM OF AGREEMENT............................................17
3.1 Conditions Precedent to the Initial Extension of Credit............17
3.2 Conditions Precedent to all Extensions of Credit...................18
3.3 Term...............................................................18
3.4 Effect of Termination..............................................18
3.5 Early Termination by Borrower......................................18
4. REPRESENTATIONS AND WARRANTIES...........................................19
4.1 No Encumbrances....................................................19
4.2 Eligible Accounts..................................................19
4.3 Eligible Spare Parts...............................................19
4.4 Equipment..........................................................19
4.5 Location of Inventory and Equipment................................19
TABLE OF CONTENTS
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(continued)
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4.6 Inventory Records..................................................20
4.7 State of Incorporation; Location of Chief Executive Office;
Organizational Identification Number; Commercial Tort Claims.......20
4.8 Due Organization and Qualification; Subsidiaries...................20
4.9 Due Authorization; No Conflict.....................................20
4.10 Litigation.........................................................21
4.11 No Material Adverse Change.........................................22
4.12 Fraudulent Transfer................................................22
4.13 Employee Benefits..................................................22
4.14 Environmental Condition............................................22
4.15 Intellectual Property..............................................22
4.16 Leases.............................................................22
4.17 Deposit Accounts and Securities Accounts...........................22
4.18 Complete Disclosure................................................23
4.19 Indebtedness.......................................................23
5. AFFIRMATIVE COVENANTS....................................................23
5.1 Accounting System..................................................23
5.2 Collateral Reporting...............................................23
5.3 Financial Statements, Reports, Certificates........................23
5.4 Guarantor Reports..................................................24
5.5 Inspection.........................................................24
5.6 Maintenance of Properties..........................................25
5.7 Taxes..............................................................25
5.8 Insurance..........................................................25
5.9 Location of Inventory and Equipment................................26
5.10 Compliance with Laws...............................................26
5.11 Leases.............................................................26
5.12 Existence..........................................................26
5.13 Environmental......................................................26
5.14 Disclosure Updates.................................................26
5.15 Control Agreements.................................................26
5.16 Formation of Subsidiaries..........................................26
6. NEGATIVE COVENANTS.......................................................27
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TABLE OF CONTENTS
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(continued)
Page
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6.1 Indebtedness.......................................................27
6.2 Liens..............................................................27
6.3 Restrictions on Fundamental Changes................................28
6.4 Disposal of Assets.................................................28
6.5 Change Name........................................................28
6.6 Nature of Business.................................................28
6.7 Prepayments and Amendments.........................................28
6.8 Change of Control..................................................28
6.9 Consignments.......................................................28
6.10 Distributions......................................................28
6.11 Accounting Methods.................................................28
6.12 Investments........................................................28
6.13 Transactions with Affiliates.......................................29
6.14 Suspension.........................................................29
6.15 Compensation.......................................................29
6.16 Use of Proceeds....................................................29
6.17 Inventory and Equipment with Bailees...............................29
6.18 Financial Covenants................................................29
7. EVENTS OF DEFAULT........................................................30
8. THE LENDER GROUP'S RIGHTS AND REMEDIES...................................32
8.1 Rights and Remedies................................................32
8.2 Remedies Cumulative................................................32
9. TAXES AND EXPENSES.......................................................32
10. WAIVERS; INDEMNIFICATION.................................................33
10.1 Demand; Protest; etc...............................................33
10.2 The Lender Group's Liability for Collateral........................33
10.3 Indemnification....................................................33
11. NOTICES..................................................................33
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER...............................34
13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS...............................35
13.1 Assignments and Participations.....................................35
13.2 Successors.........................................................37
14. AMENDMENTS; WAIVERS......................................................37
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TABLE OF CONTENTS
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(continued)
Page
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14.1 Amendments and Waivers............................................37
14.2 Replacement of Holdout Lender.....................................38
14.3 No Waivers; Cumulative Remedies...................................38
15. AGENT; THE LENDER GROUP..................................................38
15.1 Appointment and Authorization of Agent............................38
15.2 Delegation of Duties..............................................39
15.3 Liability of Agent................................................39
15.4 Reliance by Agent.................................................39
15.5 Notice of Default or Event of Default.............................40
15.6 Credit Decision...................................................40
15.7 Costs and Expenses; Indemnification...............................40
15.8 Agent in Individual Capacity......................................41
15.9 Successor Agent...................................................41
15.10 Lender in Individual Capacity.....................................41
15.11 Withholding Taxes.................................................42
15.12 Collateral Matters................................................43
15.13 Restrictions on Actions by Lenders; Sharing of Payments...........44
15.14 Agency for Perfection.............................................44
15.15 Payments by Agent to the Lenders..................................44
15.16 Concerning the Collateral and Related Loan Documents..............45
15.17 Field Audits and Examination Reports; Confidentiality;
Disclaimers by Lenders; Other Reports and Information.............45
15.18 Several Obligations; No Liability.................................45
16. GENERAL PROVISIONS.......................................................46
16.1 Effectiveness.....................................................46
16.2 Section Headings..................................................46
16.3 Interpretation....................................................46
16.4 Severability of Provisions........................................46
16.5 Counterparts; Electronic Execution................................46
16.6 Revival and Reinstatement of Obligations..........................46
16.7 Confidentiality...................................................47
16.8 Integration.......................................................47
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TABLE OF CONTENTS
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EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance
Exhibit B-1 Form of Borrowing Base Certificate
Exhibit C-1 Form of Compliance Certificate
Exhibit E-1 Form of Engine and Spare Parts Security Agreement
Exhibit G-1 Form of Guaranty
Exhibit I-1 Form of Intercompany Subordination Agreement
Exhibit L-1 Form of LIBOR Notice
Exhibit S-1 Form of Security Agreement
Schedule A-1 Agent's Account
Schedule A-2 Authorized Persons
Schedule C-1 Commitments
Schedule D-1 Designated Account
Schedule E-1 Eligible Spare Parts Located at LAX
Schedule P-1 Permitted Liens
Schedule 1.1 Definitions
Schedule 2.7(a) Cash Management Banks
Schedule 2.7(c) Credit Card Processors
Schedule 3.1 Conditions Precedent
Schedule 4.3 Locations of Spare Parts
Schedule 4.4 Locations of Equipment (other than Spare Parts)
Schedule 4.7(a) States of Organization
Schedule 4.7(b) Chief Executive Offices
Schedule 4.7(c) Organizational Identification Numbers
Schedule 4.7(d) Commercial Tort Claims
Schedule 4.8(c) Capitalization of Borrower's Subsidiaries
Schedule 4.10 Litigation
Schedule 4.13 Employee Benefit Plans
Schedule 4.14 Environmental Matters
Schedule 4.15 Intellectual Property
Schedule 4.17 Deposit Accounts and Securities Accounts
Schedule 4.19 Permitted Indebtedness
Schedule 4.22 Slots, Gates, and Routes
Schedule 4.23 IRS Tax Claim Indebtedness Repayment Plan
Schedule 5.2 Collateral Reporting
Schedule 5.3 Financial Statements, Reports, Certificates
