Exhibit 10.161
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FORM OF
AMENDED AND RESTATED LOAN AGREEMENT
DATED AS OF SEPTEMBER 27, 2005
AMONG
US AIRWAYS, INC.,
AS BORROWER,
US AIRWAYS GROUP, INC.
AND ITS SUBSIDIARIES FROM
TIME TO TIME PARTY HERETO,
THE SEVERAL LENDERS FROM
TIME TO TIME PARTY HERETO,
CITIBANK, N.A.,
AS AGENT,
CITICORP NORTH AMERICA, INC.,
AS GOVCO ADMINISTRATIVE AGENT,
WILMINGTON TRUST COMPANY,
AS COLLATERAL AGENT
AND
AIR TRANSPORTATION STABILIZATION BOARD
[Subject to Completion]
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS........................... 2
Section 1.1. Defined Terms.................................................... 2
Section 1.2. Computation of Time Periods...................................... 31
Section 1.3. Accounting Terms and Principles.................................. 31
Section 1.4. Certain Terms.................................................... 31
ARTICLE II THE LOAN.................................................................. 32
Section 2.1. The Loan......................................................... 32
Section 2.2. Scheduled Repayment of the Loan.................................. 32
Section 2.3. Evidence of Debt................................................. 33
Section 2.4. Optional Prepayments............................................. 35
Section 2.5. Mandatory Prepayments............................................ 35
Section 2.6. Interest......................................................... 38
Section 2.7. Fees............................................................. 39
Section 2.8. Payments and Computations........................................ 40
Section 2.9. Certain Provisions Governing the Loan............................ 42
Section 2.10. Capital Adequacy................................................. 44
Section 2.11. Taxes............................................................ 45
Section 2.12. Limitations with respect to RSA.................................. 47
ARTICLE III CONDITIONS PRECEDENT TO EFFECTIVENESS.................................... 47
ARTICLE IV REPRESENTATIONS AND WARRANTIES............................................ 51
Section 4.1. Organization, Powers, Qualification, Good Standing, Business,
Subsidiaries, the Act and the Regulations........................ 51
Section 4.2. Authorization of Loan Documents, etc............................. 52
Section 4.3. Financial Condition.............................................. 53
Section 4.4. No Material Adverse Change; No Restricted Payments............... 53
Section 4.5. Title to Properties; Liens....................................... 54
Section 4.6. Litigation; Adverse Facts........................................ 54
Section 4.7. Payment of Taxes................................................. 54
Section 4.8. Performance of Agreements; Materially Adverse Agreements......... 55
Section 4.9. Governmental Regulation.......................................... 55
Section 4.10. Securities Activities............................................ 55
Section 4.11. Employee Benefit Plans........................................... 55
Section 4.12. Environmental Protection......................................... 56
Section 4.13. Disclosure....................................................... 57
Section 4.14. Compliance with Laws............................................. 57
Section 4.15. Indebtedness..................................................... 57
Section 4.16. Insurance........................................................ 57
Section 4.17. Perfected Security Interests..................................... 57
Section 4.18. Compliance with the Plan of Reorganization....................... 57
Section 4.19. Absence of Labor Disputes........................................ 58
Section 4.20. Compliance with certain Gate Leases.............................. 58
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Section 4.21. Slot Utilization................................................. 58
Section 4.22. Deposit Accounts and Securities Accounts......................... 58
Section 4.23. Unrestricted Cash and Cash Equivalents........................... 58
ARTICLE V AFFIRMATIVE COVENANTS...................................................... 58
Section 5.1. Accounting Controls; Financial Statements and Other Reports...... 59
Section 5.2. Corporate Existence.............................................. 64
Section 5.3. Payment of Taxes and Claims...................................... 64
Section 5.4. Maintenance of Properties; Insurance............................. 64
Section 5.5. Inspection....................................................... 65
Section 5.6. Compliance with Laws, Etc........................................ 65
Section 5.7. Remedial Action Regarding Hazardous Materials.................... 65
Section 5.8. Additional Obligors; Collateral.................................. 66
Section 5.9. Employee Benefit Plans........................................... 68
Section 5.10. FAA Matters; Citizenship......................................... 68
Section 5.11. Board Guaranty................................................... 68
Section 5.12. Audits and Reviews............................................... 68
Section 5.13. Control of Deposit Accounts and Securities Accounts.............. 68
Section 5.14. Lower-Tier Covered Transaction................................... 69
Section 5.15. Contractual Obligations.......................................... 69
Section 5.16. Slot Utilization................................................. 69
Section 5.17. Stock Exchange Listing........................................... 69
Section 5.18. Further Assurances............................................... 70
Section 5.19. Credit Rating of Loan............................................ 70
ARTICLE VI NEGATIVE COVENANTS........................................................ 70
Section 6.1. Liens and Related Matters........................................ 70
Section 6.2. Investments...................................................... 72
Section 6.3. Restricted Payments.............................................. 72
Section 6.4. Financial Covenants.............................................. 73
Section 6.5. Restriction on Acquisitions; Change in Fiscal Year............... 75
Section 6.6. Sales-Leasebacks................................................. 75
Section 6.7. Transactions with Affiliates..................................... 75
Section 6.8. Conduct of Business.............................................. 76
Section 6.9. Merger or Consolidation.......................................... 76
Section 6.10. Limitations on Amendments........................................ 77
Section 6.11. No Further Negative Pledges...................................... 78
Section 6.12. Speculative Transactions......................................... 78
Section 6.13. Asset Sales...................................................... 78
Section 6.14. Spare Parts...................................................... 78
ARTICLE VII EVENTS OF DEFAULT........................................................ 79
Section 7.1. Events of Default................................................ 79
Section 7.2. Remedies......................................................... 82
ARTICLE VIII THE AGENT AND THE COLLATERAL AGENT...................................... 82
Section 8.1. Authorization and Action......................................... 82
Section 8.2. Reliance, Etc.................................................... 83
Section 8.3. Affiliates....................................................... 85
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Section 8.4. Representations of the Lenders and the Board..................... 85
Section 8.5. Events of Default; Termination of Board Guaranty................. 85
Section 8.6. Agent's and Collateral Agent's Right to Indemnity................ 86
Section 8.7. Indemnification of Agent and Collateral Agent.................... 86
Section 8.8. Successor Agent and Collateral Agent............................. 86
Section 8.9. Release of Liens on Collateral and Subsidiary Guarantors......... 87
ARTICLE IX MISCELLANEOUS............................................................. 89
Section 9.1. Amendments, Waivers, Etc......................................... 89
Section 9.2. Assignments and Participations; Successors and Assigns........... 90
Section 9.3. Costs and Expenses............................................... 93
Section 9.4. Indemnities...................................................... 93
Section 9.5. Right of Set-Off................................................. 94
Section 9.6. Sharing of Payments, Etc......................................... 94
Section 9.7. Notices, Etc..................................................... 95
Section 9.8. No Waiver; Remedies.............................................. 95
Section 9.9. Governing Law.................................................... 95
Section 9.10. Submission to Jurisdiction; Service of Process................... 95
Section 9.11. Waiver of Jury Trial............................................. 96
Section 9.12. Marshaling; Payments Set Aside................................... 96
Section 9.13. Section Titles................................................... 96
Section 9.14. Execution in Counterparts........................................ 96
Section 9.15. Severability..................................................... 96
Section 9.16. Confidentiality.................................................. 97
Section 9.17. No Proceedings................................................... 97
Section 9.18. Govco Administrative Agent....................................... 97
Section 9.19. Acknowledgment Regarding Federal Authority....................... 98
Section 9.20. Independence of Representations, Warranties and Covenants........ 99
Section 9.21. Board Acknowledgment............................................. 99
Section 9.22. GE Acknowledgement............................................... 99
Annexes
Annex A Notice Addresses
Annex B Lending Office
Schedules
Schedule 1.1(a) Slots
Schedule 2.5(b) Collateral Release Values
Schedule 2.5(d) Designated Asset Sales
Schedule 3.1(b) Other Agreements
Schedule 4.1(b) Operating Authority
Schedule 4.1(c) Subsidiaries
Schedule 4.2(c) Consents, Approvals, etc.
Schedule 4.3(d) Financial Condition
Schedule 4.6 Material Litigation
Schedule 4.7(a) Payment of Taxes
Schedule 4.7(b) Government Tax Claims
Schedule 4.8(c) Other Agreements
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Schedule 4.11(a) Plans and Multiemployer Plans
Schedule 4.12(b) Hazardous Material Activity
Schedule 4.12(c) Environmental Claims
Schedule 4.15 Indebtedness
Schedule 4.20 Gate Leases
Schedule 4.22 Deposit Accounts and Securities Accounts
Schedule 5.13 Account Control Agreements
Schedule 6.1(a) Permitted Liens
Schedule 6.1(b) Permitted Payment Restrictions
Schedule 6.6 Sale-Leasebacks
Schedule 6.7(b) Transactions with Affiliates
Exhibits
Exhibit A Form of Assignment and Acceptance
Exhibit B-1 Form of Tranche A Note
Exhibit B-2 Form of Tranche B Note
Exhibit C Form of Amended and Restated First Lien Aircraft Mortgage and Security Agreement for Borrower
Exhibit D Form of Amended and Restated First Lien Aircraft Mortgage and Security Agreement for Piedmont
Exhibit E Form of Amended and Restated First Lien Slot Security Agreement
Exhibit F Form of Amended and Restated First Lien Security Agreement
Exhibit G Form of Amended and Restated First Lien Intellectual Property Security Agreement
Exhibit H Amended and Restated First Lien Leasehold Mortgage, Security Agreement, Assignment of Rents and Leases and
Fixture Filing (Pennsylvania)
Exhibit I Form of Collateral Value Certificate
Exhibit J Form of First Lien Guaranty
Exhibit K [Reserved]
Exhibit L Form of Summary Report of Slot Utilization
Exhibit M Form of Subsidiary Joinder
Exhibit N Investment Guidelines
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AMENDED AND RESTATED LOAN AGREEMENT, dated as of September 27, 2005,
among US AIRWAYS, INC., a Delaware corporation (the "Borrower"), US AIRWAYS
GROUP, INC., a Delaware corporation ("Group"), the direct and indirect
Subsidiaries of Group parties hereto from time to time, the several banks and
other financial institutions or entities from time to time parties to this
Agreement as Lenders, CITIBANK, N.A., as agent for the Lenders (in such
capacity, together with its successors and permitted assigns, the "Agent"),
CITICORP NORTH AMERICA, INC., as Govco Administrative Agent (in such capacity,
together with its successors and permitted assigns, the "Govco Administrative
Agent"), WILMINGTON TRUST COMPANY, a Delaware banking corporation, as Collateral
Agent (in such capacity, together with its successors and permitted assigns, the
"Collateral Agent") and AIR TRANSPORTATION STABILIZATION BOARD, created pursuant
to Section 102 of the Act referred to below (the "Board").
W I T N E S S E T H:
WHEREAS, the Borrower, Group, the Subsidiaries of Group referred to
therein, the Board, the lenders and agents referred to therein and Phoenix
American Financial Services Inc., as Loan Administrator, are parties to that
certain Loan Agreement dated as of March 31, 2003 (as amended, supplemented or
otherwise modified through the date hereof, the "Original Loan Agreement")
pursuant to which the lenders thereunder made a single term loan to the Borrower
in the amount of $1,000,000,000;
WHEREAS, on September 12, 2004, the Borrower, Group and certain of
their affiliates (the "Debtors") filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the
Eastern District of Virginia, Alexandria Division (the "Bankruptcy Court"),
jointly administered Case No. 04-13819 (the "Bankruptcy Case");
WHEREAS, the Plan of Reorganization (as defined below) in the
Bankruptcy Case contemplates, among other things, (i) the merger (the "Merger")
of Barbell Acquisition Corp., a Delaware corporation and wholly owned Subsidiary
of Group ("Merger Sub"), with and into America West Holdings Corporation, a
Delaware corporation ("AWA Holdings"), pursuant to that certain Agreement and
Plan of Merger dated as of May 19, 2005 (the "Merger Agreement") among Group,
AWA Holdings and Merger Sub, and (ii) the reinstatement of the Loan upon the
terms and conditions set forth herein;
WHEREAS, the Borrower has requested that the Board and the Lenders
consent to the Merger and the transactions contemplated by the Plan of
Reorganization, and, in connection therewith, amend and restate the Original
Loan Agreement as provided herein; and
WHEREAS, the Board and the Lenders are willing to consent to the
Merger and the transactions contemplated by the Plan of Reorganization and amend
and restate the Original Loan Agreement upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants
and agreements contained herein, the parties hereto hereby agree to amend and
restate the Original Loan Agreement as follows:
ARTICLE I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
SECTION 1.1. DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Act" means the Air Transportation Safety and System Stabilization
Act, P.L. 107-42, as the same may be amended from time to time.
"Adjusted Cash Amount" has the meaning specified in Section 6.4(a).
"Adjusted Excess Cash Flow" means, for any period, (i) Excess Cash
Flow of Group for such period, minus (ii) the sum of (A) 25% of such Excess Cash
Flow, and (B) 100% of the aggregate amount of prepayments of the Loan previously
made pursuant to Section 5.8(d) during such period.
"Affiliate" means, with respect to any Person, any other Person
which, directly or indirectly, controls, is controlled by or is under common
control with such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Affiliate Transaction" has the meaning specified in Section 6.7(a).
"After-Acquired Section 1110 Equipment" means Section 1110 Equipment
acquired by an Obligor after the Effective Date.
"Agent" has the meaning specified in the preamble to this Agreement.
"Aggregate Amounts Due" has the meaning specified in Section 9.6.
"Agreement" means this Amended and Restated Loan Agreement.
"Airbus Financing Letter Agreement" means the A350/A330 Financing
Letter Agreement, dated as of September 27, 2005, among Borrower, AWA, Group,
and AVSA, S.A.R.L., or any financing pursuant thereto, as amended, restated,
supplemented or modified.
"Airbus Financings" means the Airbus Loan Agreements and the Airbus
Financing Letter Agreement.
"Airbus Loan Agreements" means the $161,000,000 Loan Agreement and
the $89,000,000 Loan Agreement, each dated as of September 27, 2005, among the
Borrower, AWA, Group, Airbus Financial Services, individually and as loan agent,
and Xxxxx Fargo Bank Northwest, National Association, as collateral agent, each
as amended, restated, supplemented or modified.
"Aircraft Related Equipment" means each Obligor's aircraft fleet
(including engines, airframes, propellers and appliances), spare aircraft
engines and propellers, spare parts, aircraft parts, simulators and other
training devices, passenger loading bridges or other flight or ground equipment
and Aircraft Related Facilities.
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"Aircraft Related Facilities" means (i) airport terminal facilities,
including without limitation, baggage systems, loading bridges and related
equipment, building, infrastructure and maintenance, club rooms, apron, fueling
systems or facilities, signage/image systems, administrative offices,
information technology systems and security systems, (ii) airline support
facilities, including without limitation, cargo, catering, mail, ground service
equipment, ramp control, deicing, hangars, aircraft parts/storage, training and
reservations facilities and (iii) all equipment used in connection with the
foregoing.
"Alternate Tranche A Lender" means Citibank, N.A, and each permitted
assignee thereof in accordance with Section 9.2.
"Appraisal Report" means, with respect to each category of Appraised
Collateral, a desktop appraisal (or, if applicable, pursuant to Section 5.8(c),
a physical inspection report) in form and substance reasonably satisfactory to
the Controlling Creditor and prepared by an Appraiser, which certifies, at the
time of determination, the current market value and the liquidation value of the
assets subject to such appraisal; provided that with respect to aircraft,
engines, spare engines, spare parts and flight simulators, the terms "current
market value" and "liquidation value" shall be as defined by the International
Society of Transport Aircraft Trading if applicable to the particular
Collateral; provided, further, that except as otherwise agreed to by the
Controlling Creditor, each Appraisal Report obtained subsequent to the
preparation of the Baseline Appraisal with respect to each category of Appraised
Collateral shall be (A) prepared by the same Appraiser used in the Baseline
Appraisal for such category of Appraised Collateral, unless such Appraiser is no
longer providing appraisals for such type of property or the Borrower, the Agent
and the Board (so long as the Board is either a guarantor of Tranche A or a
Lender hereunder) agree that good cause exists to change Appraisers and (B) in
any event, based on the same methodologies and assumptions (including, without
limitation, the time period for the disposition of such Appraised Collateral and
the market conditions perceived to exist at the time) used in the Baseline
Appraisal for such category of Appraised Collateral.
"Appraised Collateral" means (i) all aircraft, spare engines, flight
simulators, ground service equipment, passenger loading bridges and spare parts
that are part of the Collateral, (ii) Slots and Gate Leases that are part of the
Collateral, (iii) each item of Pledged Real Property that is the subject of a
Mortgage, and (iv) such other Aircraft Related Equipment that is part of the
Collateral and for which the Obligors elect to obtain Appraisal Reports.
"Appraised Value" means, with respect to any item of Collateral, the
liquidation value of such Collateral as reflected in the most recent Appraisal
Report obtained in respect of such Collateral in accordance with this Agreement.
"Appraiser" means BACK Aviation Solutions, AVITAS, Inc. or Simat
Helliesen & Xxxxxxx, Inc. or any other firm of nationally recognized,
independent appraisers as may be agreed by the Borrower and the Controlling
Creditor.
"Asset Sale" means any sale, transfer or other disposition
(including by way of merger, consolidation, exchange of assets or sale-leaseback
transactions) by an Obligor to any Person other than another Obligor of (i) all
or any of the Capital Stock of any Obligor other than Group or (ii) any other
property or assets of an Obligor (including spare parts); provided that the term
"Asset Sale" shall not include (a) any sale or disposition of spare parts,
inventory (including available seat miles and frequent flier miles (including
dividend and flightfund miles)), receivables and other current assets in each
case in the ordinary course of business; provided that with respect to a sale or
disposition of spare parts, the aggregate Appraised Value of the remaining spare
parts which would be counted in the computation of Collateral Value as of such
date is not less than 75% of the Appraised Value of the spare parts set forth in
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the Baseline Appraisal; (b) any licensing or sublicensing of intellectual
property in the ordinary course of business of the Obligors; (c) any leasing or
subleasing of property in the ordinary course of business; (d) a sale, transfer
or other disposition resulting from a casualty or a condemnation by a
Governmental Authority; (e) any sale or disposition (in a single transaction or
related series of transactions) of obsolete or worn out property (other than
spare parts) in the ordinary course of business that generate(s) consideration
to the Obligors of $100,000 or less; (f) the contemporaneous exchange, in the
ordinary course of business, of property for property of a like kind; (g) any
disposition of property which is not Collateral in connection with the making of
an Investment permitted under Section 6.2; or (h) a sale or disposition of cash
or Cash Equivalents.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Lender, consented to by the Board and
the Borrower (if applicable) and accepted by the Agent (unless consummated
pursuant to Section 9.2(d)), in substantially the form of Exhibit A.
"AWA" means America West Airlines, Inc., a Delaware corporation.
"AWA Holdings" has the meaning specified in the recitals to this
Agreement.
"AWA Loan" means the "Loan" under and as defined in the AWA Loan
Agreement.
"AWA Loan Agreement" means that certain Amended and Restated Loan
Agreement dated as of the date hereof among AWA, as borrower thereunder, Group,
the other direct and indirect Subsidiaries of Group parties thereto, Citibank,
N.A., in its capacity as lender thereunder, Citibank, N.A., in its capacity as
agent thereunder, Wilmington Trust Company, in its capacity as collateral agent
thereunder, and the Board.
"Bankruptcy Case" has the meaning specified in the recitals to this
Agreement.
"Bankruptcy Code" means Title 11 of the United States Code as now
and hereafter in effect, or any successor statute.
"Bankruptcy Court" has the meaning specified in the recitals to this
Agreement.
"Baseline Appraisal" means, as to each category of Appraised
Collateral, the first Appraisal Report with respect to such category of
Appraised Collateral obtained by the Obligors after the Effective Date pursuant
to Section 5.8(c).
"Base Rate Loan" means a Loan that bears interest based on a
fluctuating rate per annum for any day equal to the sum of (a) the higher of (i)
the Federal Funds Rate plus -1/2 of 1% and (ii) the rate of interest in effect
for such day as publicly announced from time to time by Citibank, N.A. (or any
successor thereto) as its "prime rate" plus (b) 3.00%. For purposes of this
definition, "Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Citibank, N.A. on
such day on such transactions as determined by the Agent. Furthermore, the
"prime rate" is a rate set by Citibank, N.A. based upon various factors
including its costs and desired return, general economic conditions and other
factors, and is used as a reference point for
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pricing some loans, which may be priced at, above, or below such announced rate.
Any change in such prime rate announced by Citibank, N.A. shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Board" has the meaning specified in the preamble to this Agreement,
and any successor approved by or established in accordance with the Act.
"Board Guaranty" means the Second Amended and Restated Guarantee
Agreement dated as of the date hereof and executed by the Board, the Lenders
referred to therein and the Agent.
"Borrower" has the meaning specified in the preamble to this
Agreement.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York, New York, Charlotte, North Carolina
or Phoenix, Arizona and, if the applicable Business Day relates to notices,
determinations, fundings and payments in connection with LIBOR, a day on which
dealings in Dollar deposits are also carried on in the London interbank market.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is required to be accounted for as a capital lease on the
balance sheet of that Person, and the amount of Indebtedness represented by such
lease shall be the capitalized amount of the obligations evidenced thereby
determined in accordance with GAAP.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's capital stock, or corresponding
equity rights in any partnership, limited liability company or other entity,
whether now outstanding or issued after the date of this Agreement, including,
without limitation, all Common Stock.
"Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States government or (b) issued by any
agency or instrumentality of the United States the obligations of which are
backed by the full faith and credit of the United States, in each case maturing
within one year after such date; (ii) marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any instrumentality thereof, in each case maturing within one year
after such date and having, at the time of the acquisition thereof, the highest
rating obtainable from either S&P or Xxxxx'x; (iii) commercial paper not issued
by the Borrower maturing no more than one year after such date and having, at
the time of the acquisition thereof, a rating of at least A-2 from S&P or at
least P-2 from Xxxxx'x; (iv) certificates of deposit or bankers' acceptances
maturing within one year after such date and issued or accepted by any Lender or
by any commercial bank organized under the laws of the United States of America
or any state thereof or the District of Columbia that (a) is at least
"adequately capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $500,000,000; (v) shares of any money market mutual fund that
(a) has at least 95% of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $500,000,000, and (c) has the highest rating obtainable from either
S&P or Xxxxx'x; and (vi) investments made pursuant to the Investment Guidelines,
so long as an amount equal to 100% of the Minimum Adjusted Cash Amount required
to be maintained at such time pursuant to Section 6.4(a) is maintained in cash
and/or investments covered in clauses (i) through (v) above.
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"Cash Proceeds" means, (a) with respect to any Asset Sale, the cash
or Cash Equivalents proceeds of such Asset Sale, including payments of deferred
payment obligations (to the extent corresponding to the principal, but not the
interest component thereof) when received in the form of cash or Cash
Equivalents and proceeds from the conversion of other property received when
converted to cash or Cash Equivalents, and (b) with respect to any Future
Issuance, the cash proceeds of such Future Issuance.
"CFC" means a "controlled foreign corporation" under Section 957 of
the Internal Revenue Code.
"Change of Control" means (i) the acquisition at any time by any
Person of "beneficial ownership" (within the meaning of Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder ("Section
13(d)")) in excess of 35% of the total voting power of the Voting Stock of
Borrower, AWA, AWA Holdings or Group; (ii) the sale, lease, transfer or other
disposition, of all or substantially all of the assets of the Borrower, AWA, AWA
Holdings or Group to any Person as an entirety or substantially as an entirety
in one transaction or a series of related transactions; (iii) the merger or
consolidation of the Borrower, AWA, AWA Holdings or Group, with or into another
corporation, or the merger of another corporation into the Borrower, AWA, AWA
Holdings or Group, or any other transaction, with the effect that a Person
acquires as a result of such transaction "beneficial ownership" in excess of 35%
of the total voting power of the Voting Stock of the Borrower, AWA, AWA Holdings
or Group, or (if the Borrower, AWA, AWA Holdings or Group is not the surviving
corporation in such transaction) such other corporation (including, in any such
case, indirect ownership through another Person); (iv) the liquidation or
dissolution of the Borrower, AWA or Group, other than a liquidation or
dissolution in which another Obligor acquires all of the assets of the
liquidating entity; or (v) if a majority of the board of directors of Group
shall no longer be composed of individuals (a) who were members of said board on
the Effective Date (after giving effect to the Consummation of the Plan), (b)
whose election or nomination to said board was approved by individuals referred
to in clause (a) above constituting at the time of such election or nomination
at least a majority of said board, (c) whose election or nomination to said
board was approved by individuals referred to in clauses (a) and (b) above
constituting at the time of such election or nomination at least a majority of
said board or (d) in the case of individuals nominated by the investors under
the Equity Investment Agreements, who were nominated or proposed by such
investors; provided, however, that notwithstanding the provisions of clauses (i)
through (v) above, none of (A) the Merger, (B) the Consummation of the Plan and
the implementation of the transactions contemplated thereby, or (C) entry by the
Obligors into any contract or arrangement that provides for or is conditioned
upon payment in full in cash of all Obligations shall constitute a "Change of
Control" hereunder. For purposes of this definition, the term Person includes a
"person" or "group" within the meaning of Rule 13d-3 under the Exchange Act but
does not include any other Obligor.
"Collateral" means all of the properties and assets that are (or are
purported to be) from time to time subject to the Liens granted to the
Collateral Agent pursuant to the Collateral Documents as security for the
Obligations but not including Excluded Property.
"Collateral Agent" has the meaning set forth in the preamble to this
Agreement.
"Collateral Documents" means, collectively, (i) that certain Amended
and Restated First Lien Aircraft Mortgage and Security Agreement, dated as of
the date hereof, between the Borrower and the Collateral Agent, in substantially
the form of Exhibit C (the "Borrower Aircraft Mortgage"); (ii) that certain
Amended and Restated First Lien Aircraft Mortgage and Security Agreement, dated
as of the date hereof, between Piedmont and the Collateral Agent, in
substantially the form of Exhibit D (the "Piedmont Aircraft Mortgage," and
together with the Borrower Aircraft Mortgage, the "Aircraft Mortgages"); (iii)
that certain Amended and Restated First Lien Slot Security Agreement, dated as
of the date hereof,
6
among the Borrower, AWA, Piedmont, PSA Airlines, Inc. and the Collateral Agent,
in substantially the form of Exhibit E (the "Slot Security Agreement"); (iv)
that certain Amended and Restated First Lien Security Agreement, dated as of the
date hereof, among the Obligors party thereto and the Collateral Agent, in
substantially the form of Exhibit F (the "Security Agreement"); (v) that certain
Amended and Restated First Lien Intellectual Property Security Agreement, dated
as of the date hereof, among the Obligors and the Collateral Agent, in
substantially the form of Exhibit G (the "Intellectual Property Security
Agreement"); (vi) the Amended and Restated First Lien Leasehold Mortgage,
Security Agreement, Assignment of Rents and Leases and Fixture Filing
(Pennsylvania) dated as of the date hereof, by the Borrower for the benefit of
the Collateral Agent, in substantially the form of Exhibit H (the "Mortgage");
(vii) the Intercreditor Agreement; (viii) each other certificate, agreement or
document executed and delivered by any Obligor pursuant to any of the foregoing
agreements, including any Control Agreement, certificate, agreement or document
delivered pursuant hereto or to the terms of Section 5.8; and (ix) any consents
of lessors of any of the Collateral to the pledge of such Collateral pursuant to
the agreements or documents listed in (i) through (vi) above.
"Collateral Document Supplement" means a supplement to a Collateral
Document that subjects additional Collateral to the Lien granted by such
Collateral Document.
"Collateral Release Value" means, for each item of Collateral with
respect to which the Lien of the Collateral Agent is being released (or
subordinated) in connection with a Replacement Secured Financing, an amount
equal to (a) with respect to (i) Slots or (ii) rotable, repairable and
expendable spare parts, 100% of the dollar amount therefor set forth on Schedule
2.5(b) (which amount, for the avoidance of doubt, shall not be pro rated for a
Replacement Secured Financing with respect to less than all of the Obligors'
Slots or spare parts), and (b) with respect to aircraft and spare engines, the
product of (i) the Appraised Value of such Collateral (based on an Appraisal
Report obtained within sixty (60) days of the date of such transaction and
otherwise satisfactory to the Controlling Creditor) and (ii) the prepayment
percentage for such item or type of Collateral which is set forth on Schedule
2.5(b).
"Collateral Value" means, as of any date of determination, the sum
of: (a) the Appraised Value of all Appraised Collateral, as stated in the then
most current Appraisal Report(s) therefor and (b) 85% of the Eligible Accounts
as of such date; provided that none of the following assets shall be included in
the computation of Collateral Value (collectively, the "Ineligible Assets"): (A)
property or assets not subject to a first-priority perfected Lien in favor of
the Collateral Agent (subject to Permitted Encumbrances), including, without
limitation, any property or assets that may no longer be owned by an Obligor as
a result of an Asset Sale or otherwise; (B) After-Acquired Section 1110
Equipment; and (C) property or assets subject to any event of loss, damage or
other casualty that has materially and adversely affected the value of such
Collateral, whether insured or not, and in the event that any Ineligible Assets
are excluded from the computation of the Collateral Value based on this proviso,
the Collateral Value computed in accordance with the foregoing method shall be
adjusted to exclude such Ineligible Assets.
"Collateral Value Certificate" means a certificate executed by a
Responsible Officer of the Borrower in substantially the form of Exhibit I
annexed hereto (provided that such certificate may be incorporated into a
certificate contemporaneously delivered pursuant to clause (iv) of Section
5.1(b)).
"Collateral Value Deficiency" means, as of any date of
determination, the positive amount, if any, equal to the difference of (i) 135%
of (x) the sum of the aggregate outstanding amount of principal of and accrued
interest on the Loan on such date plus the aggregate outstanding amount of
principal of and accrued interest on the AWA Loan on such date less (y) the
Minimum Adjusted Cash Amount required to be maintained by the Obligors on such
date minus (ii) the Collateral Value as of such date.
7
"Collateral Value Test Date" has the meaning specified in Section
5.8(d).
"Commercial Paper" has the meaning set forth in the definition of
"Tranche A Applicable Interest Rate."
"Commodity Agreement" means any agreement or arrangement the value
of which fluctuates based on the value of a commodity.
"Common Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's common stock, whether now
outstanding or issued after the date of this Agreement, including, without
limitation, all series and classes of such common stock.
"Confirmation Order" means the order of the Bankruptcy Court, dated
September 16, 2005, confirming the Plan of Reorganization pursuant to Section
1129 of the Bankruptcy Code.
"Consolidated EBITDAR" means, with respect to any Person, for any
period, the sum of (i) the operating income of such Person for such period, (ii)
rental expenses of such Person for such period under aircraft Operating Leases
and (iii) depreciation and amortization and stock compensation expenses and
extraordinary charges and non-cash unusual items of such Person that were
recognized in arriving at the amount of such operating income for such period,
all as determined on a consolidated basis in accordance with GAAP.
"Consolidated Fixed Charges" means, with respect to any Person, for
any period, the sum of (a) the aggregate gross interest expense relating to
Indebtedness of such Person for such period (calculated without regard to any
limitations on the payment thereof), including the corresponding amounts for
such period under Capital Lease obligations and Synthetic Lease obligations of
such Person (and including, for the avoidance of doubt, the Guarantee Fee
hereunder and the "Guarantee Fee" under and as defined in the AWA Loan Agreement
payable for such period), (b) the aggregate rental expenses of such Person for
such period under aircraft Operating Leases, and (c) dividends or any other
payments or distributions in respect of any class of Capital Stock of such
Person, including in connection with any redemption, purchase, retirement or
other acquisition, directly or indirectly of any such class of Capital Stock,
paid or payable during such period (but only to the extent payment thereof is
permitted under this Agreement), all determined on a consolidated basis.
"Consummation of the Plan" means substantial consummation of the
Plan of Reorganization within the meaning of Section 1101(2) of the Bankruptcy
Code.
"Contractual Obligation" means, as applied to any Person, any
provision of any equity security issued by that Person or of any indenture,
mortgage, deed of trust, contract, lease, license, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
"Control Agreement" has the meaning specified in Section 5.13
hereof.
"Controlling Creditor" means, as of any date, (a) the Board, so long
as (i) the Board Guaranty is in full force and effect as of such date and has
not been terminated without payment having been made thereunder and (ii) the
outstanding amount of Tranche A guaranteed under the Board Guaranty as of such
date represents a majority of the principal amount of the Loan then outstanding,
and (b) at all other times, the Requisite Lenders.
8
"Convertible Note Offering" means the offering of $125,000,000 of US
Airways Group, Inc. Senior Convertible Notes as described in the Confidential
Offering Memorandum dated September 20, 2005, together with the offering of such
principal amount of such notes pursuant to any overallotment option granted to
the initial purchasers thereof in connection therewith.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement.
"DCA" means Xxxxxx Xxxxxx Washington National Airport.
"Debtors" has the meaning specified in the recitals to this
Agreement.
"Default" means any condition or event which with the required
passing of time or the giving of any required notice or both would, unless cured
or waived, become an Event of Default.
"Designated Asset Sale" means an Asset Sale with respect to an asset
identified on Schedule 2.5(d), whether consummated prior to, on or after the
Effective Date. Schedule 2.5(d) sets forth the amount of Net Cash Proceeds
received by the Obligors with respect to any Designated Asset Sales consummated
prior to the Effective Date.
"Disclosure Statement" means the Disclosure Statement with respect
to the Plan of Reorganization of US Airways Group, Inc. and its Affiliated
Debtors and Debtors-in-Possession pursuant to Section 1125 of the Bankruptcy
Code which was approved by the Bankruptcy Court on August 9, 2005, together with
any amendments, supplements or modifications thereto that have been approved by
the Bankruptcy Court prior to the Effective Date.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Effective Date" has the meaning specified in Article III hereof.
"Eligible Accounts" means, as of any date of determination, accounts
receivable shown on the consolidated balance sheet of Group as of the end of the
then most recently ended fiscal quarter, net of, without duplication, all
reserves against such accounts receivables and all accounts receivables owed by
another Obligor, provided that:
(a) such accounts receivable arise out of sales of goods or
rendering of services in the ordinary course of the relevant Obligor's
business;
(b) such accounts receivable are payable in Dollars and are
otherwise on terms normal and customary in the relevant Obligor's
business;
(c) such accounts receivable are not more than 90 days past original
invoice date or more than 60 days past the date due;
(d) such accounts receivable are not owing from any Person from
which an aggregate amount of more than 20% of the accounts receivable
owing therefrom is more than 60 days past the date due;
(e) such accounts receivable are not owing from any Person that (i)
has disputed liability for any account receivable owing from such Person
(but only to the extent of such dispute) or (ii) has otherwise asserted
any claim, demand or liability against any Obligor, whether
9
by action, suit, counterclaim or otherwise (but only to the extent of such
claim, demand or liability);
(f) such accounts receivable are not owing from any Person that has
taken or is the subject of any action or proceeding under any bankruptcy,
insolvency or similar law;
(g) such accounts receivable (i) are not owing from any Person that
is also a supplier to, or creditor of, any Obligor, is a credit card
processor, travel agent or marketing partner of any Obligor, or to whom
any Obligor is otherwise indebted, and (ii) do not represent any
manufacturer's or supplier's credits, discounts, incentive plans or
similar arrangements entitling any Obligor to discounts on future purchase
therefrom;
(h) such accounts receivable do not arise out of sales to account
debtors outside the United States or Canada;
(i) such accounts receivable do not arise out of sales on a
xxxx-and-hold, guaranteed sale, sale-or-return, sale on approval or
consignment basis or subject to any right of return, setoff or chargeback
(including, without limitation, accounts receivables for unutilized
tickets);
(j) such accounts receivable are not owing from an account debtor
that is an agency, department or instrumentality of the United States or
any state thereof; and
(k) such accounts receivables arise out of sales for which the
account debtors' obligations to pay are not conditioned upon any Obligor's
completion of any further performance or as to which the goods or services
giving rise thereto have been delivered or performed by the Obligors, and
if applicable, have been accepted by the account debtors, and the account
debtors have not revoked their acceptance.
"Eligible Collateral" means property and assets of the Obligors
other than Excluded Property.
"Eligible Lender" means a "lender" as defined in the Act.
"Environmental Claim" means any investigation, notice, claim, suit,
proceeding, demand or order, by any Governmental Authority or any Person arising
in connection with any alleged or actual violation of Environmental Laws or with
any Hazardous Materials Activity, or any actual or alleged damage, or harm to
health, safety, property or the environment.
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
governmental authorizations, or any other requirement of Governmental
Authorities relating to (a) the prevention or control of pollution or protection
of the environment, (b) solid, gaseous or liquid waste generation, handling,
treatment, storage, disposal, discharge, Release, emission or transportation, or
(c) exposure to Hazardous Materials. "Environmental Laws" shall include, but not
be limited to, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. 9601 et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. 6901 et seq.), the National Environmental Policy Act (42 U.S.C.
4321 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. 1801 et
seq.), the Toxic Substances Control Act (49 U.S.C. 2601 et seq.), the Clean Air
Act (42 U.S.C. 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.), the Safe Drinking Water Act (42 U.S.C. 3007 et seq.), the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. 11001 et seq.),
the Occupational Safety and Health Act (29 U.S.C. 641 et seq.), and the State of
Arizona Environmental Quality Act (A.R.S. 49-101 et seq.).
10
"Equity Investment Agreements" means (i) the Investment Agreement,
dated as of May 19, 2005, by and among Peninsula Investment Partners, L.P.,
Group and AWA Holdings, (ii) the Investment Agreement, dated as of May 19, 2005,
by and among ACE Aviation Holdings, Inc., Group and AWA Holdings, (iii) the
Investment Agreement, dated as of May 19, 2005, by and among Par Investment
Partners, L.P., Group and AWA Holdings, (iv) the Investment Agreement, dated as
of May 19, 2005, by and among Eastshore Aviation, LLC, Group and AWA Holdings,
(v) the Investment Agreement, dated May 27, 2005, by and among Wellington
Investment Management Company, LLP, Group and AWA Holdings, and (vi) the
Investment Agreement, dated as of July 7, 2005, by and among Tudor Proprietary
Trading, L.L.C., certain investors listed on Schedule 1 thereto, Group and AWA
Holdings, in each case as amended, restated, supplemented or otherwise modified
through the date hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA Affiliate" means, as applied to Group, (i) any corporation
which is, or was at any time in the preceding six (6) years, a member of a
controlled group of corporations within the meaning of Section 414(b) of the
Internal Revenue Code of which Group is a member; (ii) any trade or business
(whether or not incorporated) which is a member of a group of trades or
businesses under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which Group is a member; and (iii) any member of an
affiliated service group within the meaning of Section 414(m) or (o) of the
Internal Revenue Code of which Group, any corporation described in clause (i)
above or any trade or business described in clause (ii) above is a member.
"ERISA Event" means (a) any "reportable event," as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which reporting is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Internal Revenue Code or Section 302 of ERISA); (c) the
filing pursuant to Section 412(d) of the Internal Revenue Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by Group or any of its ERISA Affiliates
of any liability under Title IV of ERISA with respect to the termination of any
Plan; (e)(i) the receipt by Group or any ERISA Affiliate from the PBGC of a
notice of determination that PBGC intends to seek termination of any Plan or to
have a trustee appointed for any Plan, or (ii) the filing by Group or any ERISA
Affiliate of a notice of intent to terminate any Plan; (f) the incurrence by
Group or any of its ERISA Affiliates of any liability (i) with respect to the
withdrawal from a Multiemployer Plan pursuant to Sections 4063 and 4064 of
ERISA, (ii) with respect to a facility closing pursuant to Section 4062(e) of
ERISA, or (iii) with respect to the withdrawal or partial withdrawal from any
Multiemployer Plan; or (g) the receipt by Group or any ERISA Affiliate of any
notice concerning the imposition of Withdrawal Liability or a determination that
a Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Event of Default" has the meaning specified in Section 7.1.
"Excess Cash Flow" means, for any period, (i) Consolidated EBITDAR
of Group for such period, minus (plus) (ii) any increase (decrease) in Working
Capital of Group from the first day of such period to the last day of such
period (as adjusted for fresh start accounting as of the first day of such
period), minus (iii) the sum of (A) payments by the Obligors of principal and
interest with respect to the consolidated Indebtedness of Group (but excluding
Indebtedness that is solely the obligation of any Subsidiary that is not an
Obligor) during such period, to the extent such payments are not prohibited
under this Agreement, (B) income taxes paid during such period, (C) aircraft
rentals paid during such period under Operating Leases, (D) cash used during
such period for capital expenditures, (E) deposit and pre-delivery payments made
in respect of Aircraft Related Equipment, and (F) an amount equal to
11
pension or FASB 106 payments made in excess, if any, of pension or FASB 106
expenses, plus (iii) an amount equal to the excess of pension or FASB 106
expense in excess, if any, of pension or FASB 106 payments.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Excluded Cash" means cash and Cash Equivalents maintained in
accounts that are not subject to Control Agreements to the extent that such
accounts are:
(i) subject to Liens arising or granted in the ordinary course of
business in favor of Persons performing credit card processing services,
travel charge processing services or clearinghouse services for any
Obligor, including IATA, Diners Club, Discover Card, NPC, ARC and American
Express, so long as such Liens are on cash and Cash Equivalents that are
subject to holdbacks by, or are pledged (in lieu of such holdbacks) to,
such Persons to secure amounts that may be owed to such Persons under the
Obligors' agreements with them in connection with their provision of
credit card processing, travel charge processing or clearinghouse services
to the Obligors; being Liens of the type described in clause (iii)(B) of
the definition of "Permitted Encumbrances";
(ii) subject to Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods in the ordinary course of
business; being Liens of the type described in clause (v) of the
definition of "Permitted Encumbrances";
(iii) subject to Liens incurred or deposits made in each case
required under or in connection with the Trust Agreements (not including
the Obligors' residuary interest in, claims to or refunds of any such
trust funds); being Liens of the type described in clause (ix) of the
definition of "Permitted Encumbrances";
(iv) subject to Liens securing reimbursement obligations in respect
of letters of credit issued for the account of any Obligor in the ordinary
course of business and consistent with past practice, so long as the
aggregate amount of such cash and Cash Equivalents does not exceed 115% of
the maximum available amount under the secured letters of credit; being
Liens of the type described in Section 6.1(a)(viii)(A);
(v) subject to Liens securing reimbursement or other margin
requirements in connection with, in the case of Liens contemplated in this
clause (v), (x) transactions designed to hedge against fluctuations in
fuel costs, entered into in the ordinary course of business, consistent
with past business practice or then current industry practice, and not
entered into for speculative purposes, (y) transactions designed to hedge
interest rates entered into with respect to notional amounts not to exceed
actual or anticipated Indebtedness, not entered into for speculative
purposes and (z) transactions designed to hedge against risks associated
with fluctuations in currencies entered into in the ordinary course of
business; being Liens of the type described in Section 6.1(a)(viii)(B);
(vi) subject to Liens securing prepaid fuel and healthcare expenses
in the ordinary course of business; being Liens of the type described in
Section 6.1(a)(viii)(C);
(vii) subject to Liens incurred or deposits (other than with respect
to the Plans described in Section 4.11) made in the ordinary course of
business in connection with workers'
12
compensation, unemployment insurance and other types of social security,
or to secure the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds, reimbursement obligations and
chargeback rights of Persons performing services for an Obligor (including
Liens securing Trade Payables arising from the Obligors' use in the
ordinary course of business, consistent with past practice, of credit
advance facilities to purchase goods and services) and other similar
obligations (exclusive of obligations for the payment of borrowed money);
being Liens of the type described in clause (iii)(A) of the definition of
"Permitted Encumbrances"; or
(viii) referred to in any of clauses (i) through (iii) of Section
5.13.
For the avoidance of doubt, all amounts on deposit in deposit accounts and
securities accounts not subject to Control Agreements or otherwise pledged to
the Collateral Agent in reliance on Section 5.13 hereof shall constitute
Excluded Cash.
"Excluded Property" means (i)(A) any lease or other written
agreement under which an Obligor leases real property (other than Gate Leases)
and (1) that requires such Obligor to pay annual rentals of $10,000,000 or more
but where the grant of a Lien in favor of the Collateral Agent would violate
such lease or other written agreement, provided, that if requested by the
Controlling Creditor such Obligor has used commercially reasonable efforts to
obtain the consent of the lessor to the grant of a Lien on such lease or other
agreement in favor of the Collateral Agent, (2) that requires such Obligor to
pay annual rentals of less than $10,000,000, or (3) that the Controlling
Creditor has agreed in writing in its or their sole discretion is not material
or (B) Gate Leases, other than (upon receipt of consent of the respective
lessors thereof) the Gate Leases at LGA and DCA; (ii) any property which is
subject to a Lien of the type described in Section 6.1(a)(ii), (iii), (iv),
(vi), (x) or (xii) but only while subject to such Lien; (iii) any After-Acquired
Section 1110 Equipment which the Obligors have owned for a period of less than
fifteen (15) days; (iv) any right in any agreement (A) the grant of a security
interest in which would violate the agreement under which such right arises
except to the extent provided under Sections 9-406 and 9-407 of the UCC of the
State of New York, if such Obligor has failed to obtain a waiver or other relief
from such provision, but provided that such Obligor has used commercially
reasonable efforts (without obligation to incur more than immaterial costs or
expenses in connection with such commercially reasonable efforts) to obtain such
waiver or other relief or (B) to the extent that the pledge or assignment of
such agreement requires the consent of any third party, unless such third party
has consented thereto, except to the extent provided under Sections 9-406 and
9-407 of the UCC of the State of New York, so long as such Obligor has used
commercially reasonable efforts (without obligation to incur more than
immaterial costs or expenses in connection with such commercially reasonable
efforts) to obtain such consent; (v) Excluded Cash; (vi) 100% of the Capital
Stock of Excluded Subsidiaries, 35% of the voting Capital Stock of Subsidiaries
of the Obligors that are CFCs, and all beneficiary interests of third parties in
the trusts created by or pursuant to the Trust Agreements (which does not
include the Obligors' residuary interest in, claims to or refunds of any trust
funds in respect of such trusts); (vii) assets pledged to secure a Permitted
Acquisition Financing; and (viii) aircraft purchase agreements which by their
terms are not assignable; provided that if an Obligor nonetheless pledges to the
Collateral Agent pursuant to Section 5.8 or otherwise assets that otherwise
would constitute Excluded Property absent this proviso, unless or until the Lien
with respect to such assets is released in accordance with this Agreement and
the applicable Collateral Document, such assets shall constitute Collateral for
all purposes under this Agreement and under the other Loan Documents and shall
not be treated as Excluded Property.
"Excluded Subsidiaries" means (i) FTCHP LLC, a Delaware limited
liability company, if and for so long as (A) the assets of and ownership
interests in FTCHP LLC are pledged to secure its obligations under that certain
Senior Secured Term Loan Agreement dated as of December 23, 2004 among FTCHP
LLC, AWA, Heritage Bank, SSB, Citibank, N.A. and the other lenders named therein
13
(and any amendments, restatements, supplements, modifications, refinancings or
replacements thereof) or (B) restrictions contained in its constituent documents
prevent it from becoming an Obligor under the Loan Documents, (ii) Airways
Assurance Limited LLC, (iii) AWHQ LLC and (iv) America West Company Store LLC.
"Exercising Lender" has the meaning specified in Section 2.2(c).
"FAA" means the Federal Aviation Administration.
"Facilities" means any and all real property now, hereafter or
heretofore owned, leased, operated or used by an Obligor.
"Fair Market Value" means, with respect to any asset subject to an
Asset Sale, the price that could be obtained for such asset by a seller in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer.
"FASB" means the Financial Accounting Standards Board.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"First Lien Guaranty" means the First Lien Guaranty dated as of the
date hereof made by Group and the Subsidiary Guarantors, in substantially the
form of Exhibit J.
"Fiscal Year" means Group's fiscal year referenced in the financial
statements to be delivered by Group pursuant to Section 5.1.
"Fitch" means Fitch, Inc., and any successor thereto that is a
nationally recognized rating agency.
"Fixed Cash Amount" has the meaning specified in Section 6.4(a)(i).
"Future Issuance" means, without duplication, each (i) borrowing
after the Effective Date by an Obligor from any source (including in the debt
capital markets or from commercial bank lenders) (other than any other Obligor)
of any Indebtedness of the type described in clauses (i), (ii), (x) or (xii) of
the definition of "Indebtedness" and (ii) issuance after the Effective Date of
any Capital Stock or any warrants, options or other rights to acquire Capital
Stock by any Obligor (other than to another Obligor) or the exercise after the
Effective Date of any warrants, options or other rights to acquire Capital Stock
of any Obligor (other than exercise by another Obligor) other than, in each
case, the exercise or issuance of options or similar rights as compensation by
or to existing or former officers, directors or employees of an Obligor or
cashless exercise of warrants issued by any Obligor; provided, however, that
notwithstanding the provisions of clauses (i) and (ii) above, no borrowing,
issuance of Capital Stock or exercise or issuance of any warrants, options or
other rights to acquire Capital Stock (including any Capital Stock issued
pursuant to the terms of such Capital Stock, warrants, options or other rights
to acquire Capital Stock) in each case, effected on or around the Effective Date
or otherwise in connection with the Consummation of the Plan shall constitute a
"Future Issuance" hereunder (including, without limitation, the issuance of
shares of Common Stock of Group pursuant to the Convertible Note Offering, the
Stock Offering and the Equity Investment Agreements).
"GAAP" means, subject to the limitations on the application thereof
set forth in Section 1.3, accounting principles generally accepted in the United
States, as in effect from time to time as set
14
forth in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of FASB approved by a significant segment of the accounting
profession in the United States, subject to requirements of applicable law.
"Gate Leases" means all right, title and interest of each Obligor,
now existing or hereafter acquired, in and to any airport facility use,
operation or occupancy lease, license or other agreement with respect to arrival
and departure gates, aircraft parking spaces, passenger lounges, ticket
counters, terminal common areas, baggage handling areas, carousels and other
facilities, crew briefing areas, club lounges, kiosks, flight simulator
buildings and other related properties and rights with respect to airports at
which any Obligor lands, takes off or otherwise conducts operations or maintains
property (not including Slots).
"GE 2001 Credit Agreement" means the Credit Agreement, dated as of
November 16, 2001, among Borrower, Group, and General Electric Capital
Corporation, as amended, restated, supplemented or modified, including pursuant
to that certain Credit Agreement Amendment No. 1, dated as of January 30, 2003,
and that certain Credit Agreement Amendment No. 2, dated as of March 31, 2003,
among the parties thereto.
"GE Engine Financing" means the Loan Agreement [Engines], dated as
of September 3, 2004, among AWA, General Electric Capital Corporation,
individually and as administrative agent, Xxxxx Fargo Bank Northwest, National
Association, as security trustee, and the lenders party thereto, as amended,
restated, supplemented or modified.
"GE Expendables Mortgage" means the Expendables Mortgage and
Security Agreement dated as of September 27, 2005 between AWA and Xxxxx Fargo
Bank Northwest, National Association, as security trustee, as amended, restated,
supplemented or modified.
"GE Financings" means the GE Engine Financing and the GE Spare Parts
Financing.
"GE Spare Parts Financing" means the Loan Agreement [Spare Parts],
dated as of September 3, 2004, among AWA, General Electric Capital Corporation,
individually and as administrative agent, Xxxxx Fargo Bank Northwest, National
Association, as security trustee, and the lenders party thereto, as amended,
restated, supplemented or modified.
"GECC RJ Agreement" means the RJ Lease Transaction and Debt
Financing Agreement, dated as of December 18, 2003, by and between Borrower,
Group and General Electric Capital Corporation, as amended, restated,
supplemented or modified.
"Govco Administrative Agent" has the meaning set forth in the
preamble to this Agreement.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Governmental Authorization" means any permit, license, certificate,
authorization, plan, directive, consent order or consent decree or agreement of,
from or with any Governmental Authority.
"Group" has the meaning specified in the preamble to this Agreement.
15
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such first Person (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise), (ii)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), including any pledge of any assets to
secure indebtedness of another or (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of such other Person so as to enable such Person to pay such
Indebtedness. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantee Fee" has the meaning specified in Section 2.06 of the
Board Guaranty.
"Hazardous Materials" means all substances defined as Hazardous
Substances, Oil, Pollutants or Contaminants in the National Oil and Hazardous
Substances Pollution Contingency Plan, 40 C.F.R. Section 300.5, or defined as
such by or regulated as such under, any Environmental Law.
"Hazardous Materials Activity" means any past, current, proposed, or
threatened use, storage, Release, generation, treatment, remediation or
transportation of any Hazardous Material (i) from, under, in, into or on the
Facilities or surrounding property; and (ii) caused by, or undertaken by or on
behalf of, an Obligor or any of their respective predecessors or Affiliates.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money; (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto); (iv) all obligations of such
Person to pay the deferred and unpaid purchase price of property or services,
which purchase price is due more than six (6) months after the date of placing
such property in service or taking delivery and title thereto or the completion
of such services, except Trade Payables; (v) all Capital Lease obligations of
such Person (the amount of the Indebtedness in respect of Capital Lease
obligations to be determined as provided in the definition of Capital Lease in
this Section 1.1); (vi) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person, provided that the amount of such Indebtedness shall be the lesser of (A)
the fair market value of such asset at such date of determination and (B) the
stated principal amount of such Indebtedness, provided, however, that if such
Indebtedness is assumed by such Person or provides for recourse against such
Person, the amount of such Indebtedness shall be the greater of (A) and (B)
above; (vii) all Indebtedness of other Persons Guaranteed by such Person to the
extent such Indebtedness is Guaranteed by such Person; (viii) to the extent not
otherwise included in this definition and to the extent treated as a liability
under GAAP, obligations under Currency Agreements, Interest Rate Agreements and
Commodity Agreements; (ix) the capitalized amount of remaining lease payments
owing by such Person under Synthetic Leases that would appear on the balance
sheet of such Person if such lease were treated as a Capital Lease; (x) the
aggregate amount of uncollected accounts receivable of such Person subject at
such time to a sale of receivables (or similar transaction) to the extent such
transaction is effected with recourse to such Person (whether or not such
transaction would be reflected on the balance sheet of such Person in accordance
with GAAP); (xi) the Indebtedness of any partnership or unincorporated joint
venture in which such Person is a general partner or a joint venturer to the
extent such Indebtedness is recourse to such Person; and (xii) all prepaid
forward sales in bulk of dividend miles or available seat miles or like
transactions other than in the ordinary course of business. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional
16
obligations as described above and the maximum liability, upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations at
such date; provided that the amount outstanding at any time of any Indebtedness
issued with original issue discount is the face amount of such Indebtedness less
the remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with GAAP.
"Indemnified Liabilities" has the meaning specified in Section 9.4.
"Indemnified Taxes" has the meaning specified in Section 2.11(a).
"Indemnitees" has the meaning specified in Section 9.4.
"Initial Indebtedness" has the meaning specified in Section 6.10(a).
"Intercreditor Agreement" means that certain Intercreditor
Agreement, dated as of the date hereof, by and among the Borrower, AWA, the
other Subsidiary Guarantors, Group, the Collateral Agent and Wilmington Trust
Company, as Collateral Agent under the AWA Loan Agreement.
"Interest Payment Date" means the last Business Day of each
December, March, June, and September, commencing September 2005; provided,
however, that
(i) the Loan Maturity Date shall be an Interest Payment Date; and
(ii) following a Default or an Event of Default, each "Interest
Payment Date" shall be the last day of each Interest Period occurring
during such period in which such Default or Event of Default exists.
"Interest Period" means (a) initially, the period commencing on
[July 1, 2005] and ending on but excluding the next succeeding Interest Payment
Date and (b) thereafter, each successive period commencing on and including the
immediately preceding Interest Payment Date and ending on but excluding the next
succeeding Interest Payment Date; provided, however, that during the continuance
of an Event of Default, each "Interest Period" shall be for such duration of one
(1) month or less as shall be selected by the Agent by notice to the Borrower,
each Lender, the Board and the Loan Administrator on or prior to the start of
such Interest Period (and in the absence of any such notice or selection, the
applicable Interest Period shall be determined as provided above without regard
to this proviso).
"Interest Rate Agreement" means any interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"Investment" means with respect to any Person, any direct or
indirect advance, loan (other than loans or advances to customers in the
ordinary course of business that are recorded as accounts receivable on the
balance sheet of such Person or its Subsidiaries) or other extensions of credit
or capital contribution or other equity investment by such Person to any other
Person, including by means of any transfer of cash or other property to others
or any payment for property or services for the account or use of others, any
Guarantee (including any support for a letter of credit issued on behalf of such
Person) incurred for the benefit of such Person or any purchase or acquisition
by such Person of Capital Stock (or warrants, options or rights convertible into
or exercisable for Capital Stock), bonds, notes,
17
debentures or other similar instruments issued by any other Person; provided
that advances or loans by any Obligor to any other Obligor, Guarantees
(including any support for a letter of credit issued on behalf of another
Obligor) incurred by any Obligor for the benefit of any other Obligor, capital
contributions or other equity investments by an Obligor in any other Obligor and
deposits made by any Obligor in connection with the purchase by an Obligor of
Aircraft Related Equipment or other property shall not constitute an
"Investment."
"Investment Guidelines" means investment guidelines in the form
attached hereto as Exhibit N, together with any amendments, restatements,
supplements or other modifications thereof permitted in accordance with Section
6.10(c).
"IRS" means the Internal Revenue Service of the United States or any
successor thereto.
"Juniper Financing" means the America West Co-Branded Card
Agreement, dated January 25, 2005, between AWA and Juniper Bank, as amended,
restated, supplemented or modified, including pursuant to the Assignment and
First Amendment to the America West Co-Branded Card Agreement, dated as of
August 8, 2005, among AWA, Group and Juniper Bank.
"Lender" means each of the Primary Tranche A Lender, the Alternate
Tranche A Lender and/or the Tranche B Lenders (including its respective
successors and permitted assigns), as the context may require, and the term
"Lenders" means the Primary Tranche A Lender, the Alternate Tranche A Lender
and/or the Tranche B Lenders (including their respective successors and
permitted assigns) collectively, as the context may require; provided that the
terms "Lender" and "Lenders" shall include the Board to the extent it acquires
any interest in Tranche A as contemplated by Section 2.8(f) hereof and by the
Board Guaranty.
"Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "Lending Office" opposite its name on Annex B or on
the Assignment and Acceptance by which it became a Lender or such other office
of such Lender as such Lender may from time to time specify to the Borrower and
the Agent.
"LGA" means LaGuardia Airport.
"LIBOR" means, with respect to any Interest Period, the offered rate
in the London interbank market for deposits in Dollars of amounts equal or
comparable to the then unpaid amount of the Loan not being funded by the Primary
Tranche A Lender with Commercial Paper offered for a term comparable to such
Interest Period, as currently shown on the page of the Telerate screen (or any
successor thereto) that displays an average British Bankers Association Interest
Settlement Rate as of 11:00 a.m., London time, two (2) Business Days prior to
the first day of such Interest Period; provided, however, that (A) LIBOR for the
initial Interest Period shall be 3.51% per annum, (B) if more than one offered
rate as described above appears on such Telerate screen, the rate used to
determine LIBOR will be the arithmetic average (rounded upward, if necessary, to
the next higher 1/100 of 1%) of such offered rates, (C) if no such offered rates
appear, the rate used for such Interest Period will be the arithmetic average
(rounded upward, if necessary, to the next higher 1/100 of 1%) of rates quoted
by Citibank, N.A. - London Branch (and its successor) at approximately 4:00
p.m., London time, two (2) Business Days prior to the first day of such Interest
Period for deposits in Dollars offered to leading European banks for a period
comparable to such Interest Period in an amount comparable to such unpaid
principal amount of the Loan, and (D) in the case of an Interest Period
commencing after an assignment of all or any portion of Tranche A from the
Primary Tranche A Lender to the Alternate Tranche A Lender or the Primary
Tranche A Lender ceases to fund all of its Tranche A through the issuance of
Commercial Paper, all determinations of LIBOR with respect to the applicable
portion of the Loan so assigned shall be made on
18
the first day of such Interest Period (rather than two (2) Business Days prior
to the first day of such Interest Period). If the Agent ceases generally to use
such Telerate screen for determining interest rates based on eurodollar deposit
rates, a comparable internationally recognized interest rate reporting service
shall be used to determine such offered rates.(1)
"LIBOR Lenders" means Lenders holding Notes that bear interest at a
rate determined by reference to LIBOR.
"Lien" means any lien, mortgage, pledge, assignment for security,
security interest, charge, hypothecation, lease or encumbrance of any kind
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any easement, right of way or other encumbrance on title to
real property and any agreement to give any security interest).
"Liquidation Period" has the meaning specified in Section 2.9(f).
"Loan" means the loan outstanding under this Agreement and
consisting of Tranche A and Tranche B.
"Loan Administration Agreement" means that certain Loan
Administration Agreement dated as of the date hereof among the Loan
Administrator, the Borrower, AWA, Group, the Board, the Lenders and the lenders
under the AWA Loan Agreement.
"Loan Administrator" means Capstone Advisory Group, LLC, a New
Jersey limited liability company.
"Loan Discharge Exercise" has the meaning specified in Section
2.2(c).
"Loan Documents" means, collectively, this Agreement, the Notes, the
Collateral Documents, the First Lien Guaranty, the Loan Administration Agreement
and each certificate, agreement or document executed by an Obligor and delivered
to the Agent, the Lenders or the Board in connection with or pursuant to this
Agreement.
"Loan Prepayment Percentage" means, with respect to any mandatory
prepayment required to be made by the Borrower pursuant to Section 2.5, the
fraction, expressed as a percentage, whose numerator is the outstanding
principal amount of the Loan as of the date of such prepayment and whose
denominator is the sum of (a) the outstanding principal amount of the Loan and
(b) the outstanding principal amount of the AWA Loan, in each case as of such
date.
"Marketing and Service Agreements" means those certain business,
marketing and service agreements among an Obligor and any of Mesa Airlines,
Inc., Chautauqua Airlines, Inc., Trans States Airlines, Inc., United Air Lines,
Inc., Republic Airline, Inc., and Air Wisconsin Airlines Corporation and such
other parties or agreements from time to time that include, but are not limited
to, code-sharing, pro-rate, capacity purchase, service, frequent flyer, ground
handling and marketing agreements that are entered into in the ordinary course
of business.
"Material Adverse Effect" means (a) a material adverse effect on (i)
the business, condition (financial or otherwise), operations, performance,
prospects, assets or properties of the Obligors, taken as a whole or (ii) the
legality, validity, binding effect or enforceability against any Obligor of any
Loan Document, or the rights and remedies of the Agent, the Collateral Agent,
the Board
----------------
(1) East and West LIBOR definitions to be conformed.
19
or any Lender under any Loan Document, or (b) any material adverse effect on or
material impairment of (i) the ability of the Obligors, taken as a whole, to
perform their payment or other material obligations under the Loan Documents or
(ii) the value of the Collateral or the validity and priority of the Liens on
the Collateral in each case taken as a whole.
"Maturity Date" means September 30, 2010, except that if such date
is not a Business Day, then the Maturity Date shall be the immediately preceding
Business Day.
"Merger" has the meaning specified in the recitals to this
Agreement.
"Merger Agreement" has the meaning specified in the recitals to this
Agreement.
"Merger Sub" has the meaning specified in the recitals to this
Agreement.
"Minimum Adjusted Cash Amount" has the meaning specified in Section
6.4(a).
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor
thereto that is a nationally recognized rating agency.
"Mortgage" has the meaning specified in the definition of
"Collateral Documents."
"Multiemployer Plan" means a multiemployer plan as defined Section
4001(a)(3) of ERISA, and in respect of which Group or any ERISA Affiliate is (or
with the application of Section 4212(c) of ERISA would be) (a) an "employer" as
defined in Section 3(5) of ERISA or (b) a "seller" as defined in Section 4204 of
ERISA.
"Net Cash Proceeds" means, with respect to any Asset Sale, the Cash
Proceeds of such Asset Sale, net of (i) reasonable and customary brokerage
commissions and other reasonable and customary fees and expenses (including
reasonable fees and expenses of counsel, investment bankers, accountants and
other professionals, consultants and advisors) related to such Asset Sale, (ii)
provisions for all taxes payable as a result of such Asset Sale without regard
to the consolidated results of operations of Group, the Borrower and their
respective Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
(or any related expenses required to be paid to third parties pursuant to
documentation related to the financing of the assets subject to such Asset Sale)
that (A) is secured by a Lien on the property or assets sold and (B) is required
by its terms to be paid as a result of such Asset Sale and (iv) appropriate
amounts to be provided by any Obligor as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP, but limited to the
period of the required reserve.
"Net Condemnation Proceeds" means an amount equal to: (i) any cash
payments or proceeds received by an Obligor as a result of any condemnation or
other taking or temporary or permanent requisition of any property, any interest
therein or right appurtenant thereto, or any change of grade affecting any
property, as the result of the exercise of any right of condemnation or eminent
domain by a Governmental Authority (including a transfer to a Governmental
Authority in lieu or anticipation of a condemnation), minus (ii) (a) any actual
and reasonable costs incurred by an Obligor in connection with any such
condemnation or taking (including reasonable fees and expenses of counsel), (b)
provisions for all taxes payable as a result of such condemnation, without
regard to the consolidated results of operations of Group, the Borrower, and
their respective Subsidiaries, taken as a whole, (c) the amount of any
Indebtedness secured by a Lien on any property subject to such condemnation or
taking and any related
20
expenses of third parties, in each case, required by the documentation related
to such Indebtedness to be discharged or paid from the proceeds thereof and (d)
any amounts required to be paid to any Person (other than an Obligor) owning a
beneficial interest in the property subject to such condemnation or taking.
"Net Insurance Proceeds" means an amount equal to: (i) any cash
payments or proceeds received by an Obligor under any casualty insurance policy
in respect of a covered loss thereunder with respect to tangible, real or
personal property, minus (ii) (a) any actual and reasonable costs incurred by an
Obligor in connection with the adjustment or settlement of any claims of an
Obligor in respect thereof (including reasonable fees and expenses of counsel),
(b) provisions for all taxes payable as a result of such event without regard to
the consolidated results of operations of Group, the Borrower and their
respective Subsidiaries, taken as a whole, (c) the amount of any Indebtedness
secured by a Lien on any property subject to such covered loss and any related
expenses of third parties, in each case, required by the documentation related
to such Indebtedness to be discharged or paid from the proceeds thereof and (d)
any amounts required to be paid to any Person (other than an Obligor) owning a
beneficial interest in the property subject to such loss.
"Net Issue Proceeds" means, with respect to any Future Issuance, the
Cash Proceeds of such Future Issuance net of (i) any reasonable and customary
brokers' and advisors' fees, any underwriting discounts and commissions and
other costs incurred in connection with such transaction (provided that evidence
of such fees, discounts, commissions and costs is provided to the Board and the
Agent), (ii) provisions for all taxes payable as a result of such transaction
without regard to the consolidated results of operations of Group, the Borrower
and their respective Subsidiaries, taken as a whole, and (iii) payments made to
repay Indebtedness or any other obligation outstanding at the time of such
Future Issuance that is secured by a Lien on the property or assets pledged to
secure such Future Issuance.
"Non-Consenting Lender" has the meaning specified in Section 9.1(c).
"Non-U.S. Person" means a Person that is not a United States person
as defined in Section 7701(a)(30) of the Internal Revenue Code.
"Note" and "Notes" have the meanings specified in Section 2.3(d).
"Obligations" means all payment and performance obligations of every
nature of any Obligor from time to time owed to the Agent, the Collateral Agent,
the Govco Administrative Agent, the Lenders, the Loan Administrator or the Board
(together with their respective permitted successors and assigns), or any of
their respective Affiliates, officers, directors, employees, agents or advisors
under or in respect of any Loan Document, whether for principal, interest, fees,
expenses, indemnification or otherwise.
"Obligors" means Group, the Borrower and each Subsidiary Guarantor,
and their respective successors and assigns.
"Officer" means, as applied to any corporation, each Responsible
Officer, the Chairman of the Board (if an officer), Assistant Treasurer,
Secretary or Assistant Secretary.
"Officer's Certificate" means, as applied to Group or the Borrower,
a certificate executed by a Responsible Officer of such Person in his/her
capacity as such; provided that every Officer's Certificate shall include a
statement that, in the opinion of the signer, such Responsible Officer has made
or has caused to be made such examination or investigation as is necessary to
enable such Responsible
21
Officer to express an informed opinion as to the substance of such Officer's
Certificate in light of the provisions hereof pursuant to which it is being
delivered.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) under which such
Person is lessee, that is not a Capital Lease.
"Original Loan Agreement" has the meaning specified in the recitals
to this Agreement.
"Other Taxes" has the meaning specified in Section 2.11(b).
"Participant" has the meaning specified in Section 9.2(e).
"Payee" has the meaning specified in Section 9.12.
"Payment Restriction" means, with respect to a Subsidiary of any
Person, any encumbrance, restriction or limitation, whether by operation of the
terms of its charter or by reason of any agreement or instrument, on the ability
of (i) such Subsidiary to (a) pay dividends or make other distributions on its
Capital Stock or make payments on any obligation, liability or Indebtedness owed
to such Person or any other Subsidiary of such Person, (b) make loans or
advances to such Person or any other Subsidiary of such Person or (c) transfer
any of its property or assets to such Person or any other Subsidiary of such
Person or (ii) such Person or any other Subsidiary of such Person to receive or
retain any such (a) dividend, distributions or payments, (b) loans or advances
or (c) property or assets.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Acquisition Financing" means Indebtedness incurred by an
Obligor in connection with an acquisition, merger or consolidation which is
permitted by Section 6.5 and/or Section 6.9 (as applicable) if and to the extent
used (i) to refinance existing Indebtedness of the Person acquired or
Indebtedness secured by the assets acquired or (ii) to pay consideration or
related expenses in connection with such transaction.
"Permitted Encumbrances" means the following types of Liens (other
than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA) as applied to property:
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is either (a) not delinquent for a period of more
than 30 days or (b) being contested in good faith by appropriate
proceedings, if such reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor, as set forth in
Section 5.3;
(ii) statutory Liens of landlords and Liens of carriers, vendors,
warehousemen, repairmen, mechanics and materialmen and other Liens imposed
by law incurred in the ordinary course of business for sums either (a) not
delinquent for a period of more than thirty (30) days or (b) being
contested in good faith by appropriate proceedings, if such reserve or
other appropriate provision, if any, as shall be required by GAAP shall
have been made therefor;
(iii) (A) Liens incurred or deposits (other than with respect to the
Plans described in Section 4.11) made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, trade
22
contracts, performance and return-of-money bonds, reimbursement
obligations and chargeback rights of Persons performing services for an
Obligor (including Liens securing Trade Payables arising from the
Obligors' use in the ordinary course of business, consistent with past
practice, of credit advance facilities to purchase goods and services) and
other similar obligations (exclusive of obligations for the payment of
borrowed money) and (B) Liens arising or granted in the ordinary course of
business in favor of Persons performing credit card processing services,
travel charge processing services or clearinghouse services for any
Obligor, including IATA, Diners Club, Discover Card, NPC, ARC and American
Express, so long as such Liens are on cash and Cash Equivalents that are
subject to holdbacks by, or are pledged (in lieu of such holdbacks) to,
such Persons to secure amounts that may be owed to such Persons under the
Obligors' agreements with them in connection with their provision of
credit card processing, travel charge processing or clearinghouse services
to the Obligors;
(iv) with respect to real property, easements, rights-of-way,
restrictions, minor defects, encroachments or irregularities in title and
other similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of an Obligor; provided
that such charges or encumbrances, if affecting any of the Collateral
constituting real property, comply with the terms of the Mortgage;
(v) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods in the ordinary course of business;
(vi) any interest or title of a lessor in property leased by an
Obligor under any Capital Lease obligation or Operating Lease which, in
each case, is not prohibited under this Agreement;
(vii) Liens in favor of collecting or payor banks and other banks
providing cash management services, in each case, having a right of
setoff, revocation, refund or chargeback against money or instruments of
any Obligor on deposit with or in possession of such bank arising for the
payments of bank fees and other similar amounts owed in the ordinary
course of business;
(viii) Liens of creditors of any Person to whom any Obligor's assets
are consigned for sale in the ordinary course of business;
(ix) Liens incurred or deposits made in connection with the Trust
Agreements;
(x) any renewal of or substitution for any Lien permitted by any of
the preceding clauses; provided that the Indebtedness secured is not
increased nor the Lien extended to any additional assets;
(xi) any licensing or sublicensing of intellectual property in the
ordinary course of business of the Obligors;
(xii) Liens arising from precautionary UCC and similar financing
statements relating to Operating Leases not otherwise prohibited under any
Loan Document; and
(xiii) Liens created under the Collateral Documents.
"Permitted Refinancing Indebtedness" means Indebtedness of any
Obligor the cash proceeds of which are used to refinance (for purposes of this
definition, "Refinancing Indebtedness") then
23
outstanding Indebtedness (for purposes of this definition, "Old Indebtedness")
(including by way of an extension, renewal or replacement of, or substitution
for, such Old Indebtedness) in an amount not to exceed the then outstanding
principal amount of the Old Indebtedness, plus accrued and unpaid interest,
premiums, fees and expenses; provided that: (a) if the Old Indebtedness is
subordinated in right of payment to the Loan, the Refinancing Indebtedness, by
its terms or by the terms of any agreement or instrument pursuant to which it is
outstanding, is expressly made subordinate in right of payment to the Loan, (b)
the Refinancing Indebtedness does not have a final scheduled maturity prior to
the final scheduled maturity of the Old Indebtedness and (c) the average life of
the Refinancing Indebtedness calculated as of the consummation of the
refinancing is not less than the remaining average life of the Old Indebtedness.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity, or a Governmental
Authority.
"Piedmont" means Piedmont Airlines, Inc.
"Plan" means any "employee benefit plan" as defined in Section 3(3)
of ERISA which is, or was at any time during the preceding six (6) years,
maintained or contributed to, or required to be contributed to, by Group or any
of its ERISA Affiliates, other than a multiemployer plan, within the meaning of
Section 4001(a)(3) of ERISA.
"Plan of Reorganization" means the Plan of Reorganization of US
Airways Group, Inc. and its Affiliated Debtors and Debtors-in-Possession dated
June 30, 2005 together with amendments, supplements or modifications thereto, as
confirmed by the Confirmation Order, together with any amendments, supplements
or modifications thereto that have been approved or authorized by the Bankruptcy
Court prior to the Effective Date.
"Pledged Cash" means, as of any time of determination, the aggregate
Dollar amount of unrestricted cash and Cash Equivalents of the Obligors held in
deposit and securities accounts over which the Collateral Agent maintains
perfected first priority security interests in accordance with (and subject to)
Section 5.13 (it being acknowledged and agreed for the avoidance of doubt that
Pledged Cash shall not include Excluded Cash and cash held in the Prepayment
Account (as defined in the definition of "Prepayment Breakage Avoidance
Procedure") or in an analogous account created pursuant to corresponding
provision of the AWA Loan Agreement).
"Pre-Funded Amount" means, as of any date of determination, an
amount equal to the sum of (i) the aggregate amount of (A) Excluded Cash held by
the Obligors as of such date for the purpose of satisfying their obligations
under or in respect of the Trust Agreements plus (B) cash and Cash Equivalents
held as of such date by a Person performing credit card processing services or
travel charge processing services for an Obligor which such Person has
unconditionally agreed in writing to transfer to or at the direction of such
Obligor as and when needed to satisfy the obligations of such Obligor under or
in respect of the Trust Agreements; and (ii) the aggregate amount of cash and
Cash Equivalents held by a Person performing clearinghouse services for an
Obligor (including, without limitation IATA, ARC and ACH) to secure amounts that
may be owed to such Person in connection with such Person's performance of
clearinghouse services for such Obligor; provided that for purposes of
calculating the Adjusted Cash Amount under Section 6.4(a) hereof, the aggregate
amount under clause (i) above shall not exceed $250,000,000 and the aggregate
amount under clause (ii) above shall not exceed $35,000,000.
"Prepayment Breakage Avoidance Procedure" means, with respect to any
prepayment of the Loan required or permitted by Section 2.5 or Section 2.9, that
the Borrower shall at its option have the
24
right to apply any amounts required or permitted to be prepaid by Section 2.5 or
Section 2.9 with respect to the Loan as follows: (i) the Borrower may
immediately prepay the Loan (in whole or in part) as required or permitted by
Section 2.5 or Section 2.9, as applicable, and/or (ii) the Borrower may deposit
all or a portion of such amount in an account established by the Borrower with
the Agent and over which the Agent shall have a perfected first priority
security interest (the "Prepayment Account"). To the extent the Borrower elects
to deposit cash in the Prepayment Account as provided in the preceding sentence,
the Agent shall apply any cash so deposited in the Prepayment Account to prepay
the Loan on the last day of the relevant Interest Period for the applicable
tranche. The Borrower shall be deemed to have satisfied the prepayment
requirements of Section 2.5 or Section 2.9, as applicable, upon deposit of cash
in the Prepayment Account in an amount equal to the amount of the prepayment
otherwise remaining due pursuant to Section 2.5 or Section 2.9, as applicable.
The Agent shall, at the request of the Borrower, invest amounts on deposit in
the Prepayment Account in Cash Equivalents maturing on or prior to the last day
of the next Interest Period with any interest thereon for the benefit of the
Borrower.
"Primary Tranche A Lender" means Govco Incorporated, a Delaware
corporation.
"Principal Obligors" means Borrower, Group and AWA.
"Pro Forma Basis" means, with respect to compliance with any
covenant hereunder, compliance with such covenant after giving effect to the
acquisition (whether by purchase, merger or otherwise) or disposition (whether
by sale, merger or otherwise) of any company, entity or business or any asset by
any Obligor or any other action which requires compliance on a Pro Forma Basis.
In making any determination of compliance on a Pro Forma Basis, such
determination shall be performed using the consolidated financial statements of
such Obligor which shall be reformulated as if any such acquisition, disposition
or other action had been consummated at the beginning of the period specified in
the covenant with respect to which Pro Forma Basis compliance is required.
"Proceedings" has the meaning specified in Section 5.1(b)(vii).
"Program Support Provider" means and includes any Person now or
hereafter extending credit or having a commitment to extend credit to or for
account of, or to make purchases from, the Primary Tranche A Lender or issuing a
letter of credit, surety bond or other instrument to support any obligations
arising under or in connection with the Primary Tranche A Lender's commercial
paper program.
"Prohibited Transferee" has the meaning specified in Section 9.2(a).
"Redeemable Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise (i) is required to be redeemed prior to
the Maturity Date, (ii) may be required to be redeemed at the option of the
holder of such class or series of Capital Stock at any time prior to the
Maturity Date or (iii) is convertible into or exchangeable for (a) Capital Stock
referred to in clause (i) or (ii) above or (b) Indebtedness having a scheduled
maturity prior to the Maturity Date; provided that any Capital Stock that would
constitute Redeemable Stock solely because of the provisions thereof offering
holders thereof the right to require the issuer thereof to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" occurring prior to the
Maturity Date shall not constitute Redeemable Stock if the asset sale provisions
contained in such Capital Stock specifically provide that, in respect of any
particular asset sale proceeds, the issuer thereof will not be required to
repurchase or redeem any such Capital Stock pursuant to such provisions so long
as the Borrower applies the full amount of such proceeds (net of associated
taxes and transaction costs) to the permanent reduction of the aggregate
outstanding principal amount of the Loan.
25
"Register" has the meaning specified in Section 2.3(e).
"Regulations" means the regulations for Air Carrier Guarantee Loan
Program issued pursuant to the Act, 14 C.F.R. Part 1300, as the same may be
amended from time to time.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facilities, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"Replacement Secured Financing" means any financing transaction,
whether structured as Indebtedness, sale-leaseback or otherwise, (a) which is
secured by any of the Obligors' (i) Slots, (ii) rotable, repairable and
expendable spare parts, (iii) aircraft, or (iv) spare engines, in each case
which immediately prior to such transaction constituted Collateral, and (b) the
Net Issue Proceeds of which are at least equal to the Collateral Release Value
of the Collateral released in connection with such transaction, other than a
financing transaction referred to in the proviso to Section 5.8(b) with respect
to After-Acquired Section 1110 Equipment.
"Reporting Obligor" means any Obligor which files or is required to
file reports with the SEC under Section 13(a) or 15(d) of the Exchange Act.
"Requisite Lenders" means, collectively, Lenders holding not less
than a majority of the principal amount of the Loan then outstanding; provided
that if (i) the Board Guaranty is in full force and effect as of such date and
has not been terminated without payment having been made thereunder and (ii) the
outstanding amount of Tranche A guaranteed under the Board Guaranty as of such
date represents less than a majority of the principal amount of the Loan then
outstanding (such that the Board is not the Controlling Creditor at such time),
then for purposes of this definition, the Board shall be deemed to be the Lender
with respect to the outstanding amount of Tranche A then guaranteed under the
Board Guaranty.
"Requisite LIBOR Lenders" means, collectively, Lenders holding not
less than a majority of the principal amount of the portion of the Loan bearing
interest at a rate determined by reference to LIBOR.
"Responsible Officer" means with respect to an Obligor, any of its
Chief Executive Officer, President, Chief Financial Officer, General Counsel,
Treasurer or Controller, but in any event, with respect to financial matters,
its Chief Financial Officer, Treasurer or Controller.
"Restricted Payment" means, with respect to any Person (i) any
declaration or payment of dividends on or making of any distributions in respect
of the Capital Stock of such Person (other than dividends or distributions
payable solely in shares of Capital Stock (other than Redeemable Stock) or in
options, warrants, or other rights to purchase Capital Stock (other than
Redeemable Stock)) to holders of Capital Stock of such Person, (ii) any
purchase, redemption or other acquisition or retirement for value (other than
through the issuance solely of Capital Stock (other than Redeemable Stock) or
options, warrants or other rights to purchase Capital Stock (other than
Redeemable Stock)) of any Capital Stock or warrants, rights (other than
exchangeable or convertible Indebtedness of such Person not prohibited under
clause (iii) below) or options to acquire Capital Stock of such Person, and
(iii) any prepayment, redemption, repurchase, defeasance (including, but not
limited to, in substance or legal defeasance) or other acquisition or retirement
for value (other than through the issuance solely of Capital Stock (other
26
than Redeemable Stock) or warrants, rights or options to acquire Capital Stock
(other than Redeemable Stock)) of Indebtedness of such Person or any Subsidiary
of such Person, directly or indirectly (including by way of setoff or amendment
of the terms of any Indebtedness in connection with any retirement or
acquisition of such Indebtedness), which is made other than at any scheduled
maturity thereof or by any scheduled repayment or scheduled sinking fund payment
(collectively, a "prepayment"); provided that the following shall not constitute
Restricted Payments: (a) any declaration, payment, distribution, purchase,
redemption, acquisition or retirement for value, repurchase or defeasance
referred to in clauses (i) through (iii) above in each case solely among
Obligors, (b) repayment of the Loan, (c) subject to the terms of the
Intercreditor Agreement and the other the Loan Documents, repayment of the AWA
Loan, (d) repayment of the loan outstanding under the GE Financings (and any
replacements or refinancings thereof) to cure a collateral value deficiency
thereunder and repayment of obligations secured by the GE Expendables Mortgage,
and (e) payments made pursuant to the Plan of Reorganization.
"RSA" means Retirement Systems of Alabama Holdings LLC, a Delaware
limited liability company, and its successors and assigns.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and any successor thereto that is a nationally
recognized rating agency.
"SEC" means the Securities and Exchange Commission of the United
States or any successor thereto.
"Secondary Slots" means (a) Air-21 slot exemptions, (b) the
Essential Air Services Slots identified on Schedule 1.1(a) hereto, (c) any other
Slots which, under the Slot Regulations, are not transferable among private
parties, (d) for so long as their aggregate Appraised Value does not exceed
$5,000,000, Slots at Xxxx X. Xxxxxxx International Airport, (e) the Slots
identified on Schedule 1.1(a) hereto as "pool" Slots (within the meaning of 14
C.F.R. Section 93.226(e)), (f) all 6:00 a.m. arrival and departure Slots at
LaGuardia Airport, (g) all arrival and departure Slots at LaGuardia Airport
commencing at or after 9:30 p.m. (2130), (h) all 6:00 a.m. Slots at Xxxxxx
Xxxxxx Washington National Airport, and (i) all Slots at Xxxxxx Xxxxxx
Washington National Airport commencing at or after 9:00 p.m. (2100).
"Section 1110 Equipment" means airframes, aircraft, aircraft
engines, propellers and appliances which are not spare parts (as such terms are
used in Section 1110 of the Bankruptcy Code).
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Security Agreement" has the meaning specified in clause (iv) of the
definition of Collateral Documents.
"Slot Regulations" means 49 U.S.C. Section 40103 and 14 C.F.R.
Sections 93.211 - 93.227, and any amendment, supplement or other modification
thereto, or successor, replacement or substitute federal law or regulation
concerning the right or operational authority to conduct landing or takeoff
operations at any airports.
"Slots" means all of the rights and operational authority granted
under the Slot Regulations and now or hereafter acquired or held by each Obligor
to conduct one instrument flight rule landing or takeoff operation in a
specified time period at DCA, Xxxx X. Xxxxxxx International Airport, LGA, or any
other airport.
27
"Solvent" means, with respect to any Person, that as of the date of
determination (a) the then fair saleable value of the business of such Person is
not less than the amount that will be required to pay the probable liabilities
on such Person's then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to such Person; (b) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction; and (c)
such Person does not intend to incur, or believes that it will not incur, debts
beyond its ability to pay such debts as they become due. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"Stock Offering" means the offering of common stock pursuant to the
registration statement of Group filed with the SEC on September 20, 2005, as
amended, including any overallotment option.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association, limited liability company, trust or estate, joint
venture or other business entity of which more than 50% of the issued and
outstanding shares of Voting Stock at the time of determination are owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"Subsidiary Guarantor" means each Person that is a direct or
indirect Subsidiary of Group as of the Effective Date and after giving effect to
the Merger (other than the Borrower and the Excluded Subsidiaries) and each
other Subsidiary of Group that becomes a party to the First Lien Guaranty
pursuant to Section 5.8(a), but with respect to any such Subsidiary, subject to
the last sentence of Section 8 of the First Lien Guaranty and excluding in each
case any Subsidiary that is a CFC. As of the Effective Date the Subsidiary
Guarantors are AWA Holdings, AWA, Piedmont, Material Services Company, Inc. and
PSA Airlines, Inc.
"Substitute Basis" has the meaning specified in Section 2.9(b).
"Synthetic Lease" means (a) a so-called synthetic, off-balance sheet
lease or lease in which the lessee is contractually entitled to the tax benefits
of ownership of the leased assets, or (b) an agreement for the use or possession
of property creating obligations that do not appear on the balance sheet of such
Person but which, upon the insolvency or bankruptcy of such Person, would be
characterized as the indebtedness of such Person (without regard to accounting
treatment).
"Taxes" means any and all present or future taxes, levies, fees,
duties, imposts, deductions, charges or withholdings of any nature, and all
interest, penalties and other liabilities thereon or computed by reference
thereto imposed by any Governmental Authority.
"Title 49" means Title 49 of the United States Code, as amended and
in effect from time to time, and the regulations promulgated pursuant thereto.
"Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries and
arising in the ordinary course of business in connection with the acquisition of
goods or services but limited to current liabilities in accordance with GAAP.
"Tranche A" has the meaning specified in Section 2.1.
28
"Tranche A Applicable Interest Rate" means, for any Interest Period
(or part thereof), (a) with respect to such portion of Tranche A which is held
by the Primary Tranche A Lender, a rate per annum equal to the sum of (i) the
Primary Tranche A Lender's weighted average cost (as defined below) related to
the issuance of commercial paper notes and other short-term borrowings or the
sale of participation interests (collectively, "Commercial Paper"), which in
each case have been allocated by the Primary Tranche A Lender to Tranche A
during such Interest Period, which rate includes related issuance costs incurred
by the Primary Tranche A Lender (the "Govco COF Rate") and (ii) 0.30% (such
Tranche A Applicable Interest Rate to be calculated by the Govco Administrative
Agent and specified in a notice sent to the Borrower, with a copy to the Agent
and the Loan Administrator, at least five Business Days prior to each Interest
Payment Date on which the interest so calculated is payable); (b) with respect
to such portion of Tranche A which is held by (i) an assignee (permitted under
Section 9.2) of the Primary Tranche A Lender or the Alternate Tranche A Lender
and is guaranteed under and entitled to the benefits of the Board Guaranty, (ii)
the Alternate Tranche A Lender, or (iii) the Board, a rate per annum equal to
LIBOR for such Interest Period plus 0.40% per annum; and (c) with respect to
such portion of Tranche A which is held by an assignee (permitted under Section
9.2) of the Primary Tranche A Lender or the Alternate Tranche A Lender (or a
permitted assignee of such Person) and is not guaranteed under or entitled to
the benefits of the Board Guaranty, a rate per annum equal to LIBOR for such
Interest Period plus 6.00% per annum. As used in this definition, "weighted
average cost" of Commercial Paper means (A) the actual interest rate paid to
purchasers of Commercial Paper, (B) the costs associated with the issuance of
the Commercial Paper, and (C) other borrowings the Primary Tranche A Lender may
incur, including the amount to fund small or odd dollar amounts that are not
easily accommodated in the commercial paper market.
"Tranche A Lender" means the Primary Tranche A Lender and each other
Person who becomes the holder of Tranche A pursuant to the provisions of this
Agreement, including the Board, if it acquires any interest in Tranche A as
contemplated by Section 2.8(f) hereof and the Board Guaranty, and the Alternate
Tranche Lender.
"Tranche A Note" has the meaning specified in Section 2.3(d).
"Tranche B" has the meaning specified in Section 2.1.
"Tranche B Applicable Interest Rate" means a rate per annum
(determined for each Interest Payment Date) equal to: (i) with respect to an
undivided pro rata portion of Tranche B equal to the pro rata portion of Tranche
A for which the Tranche A Applicable Interest Rate is determined by clause (a)
thereof, the Govco COF Rate (as defined in the definition of "Tranche A
Applicable Interest Rate") plus 6.30% per annum; (ii) with respect to an
undivided pro rata portion of Tranche B equal to the pro rata portion of Tranche
A for which the Tranche A Applicable Interest Rate is determined by clause (b)
thereof, LIBOR plus 6.40% per annum; and (iii) with respect an undivided pro
rata portion of Tranche B equal to the pro rata portion of Tranche A for which
the Tranche A Applicable Interest Rate is determined by clause (c) thereof,
LIBOR plus 6.00% per annum; provided, that in no event shall the Tranche B
Applicable Interest Rate be less than LIBOR plus 6.00% per annum.
"Tranche B Lender" means each Lender that is the holder of Tranche
B. As of the Effective Date, the Tranche B Lenders are RSA and Bank of America,
N.A.
"Tranche B Note" has the meaning specified in Section 2.3(d).
"Trust Agreements" means all special purpose trust funds established
by any Obligor to manage the collection and payment of amounts collected by the
Obligors for the express benefit of third-party beneficiaries relating to (a)
federal income tax withholding and backup withholding tax,
29
employment taxes, transportation excise taxes and security related charges,
including (i) federal payroll withholding taxes, as described in Sections 3101,
3111 and 3402 of the Internal Revenue Code; (ii) federal Unemployment Tax Act
taxes, as described in Chapter 23 of Subtitle C of the Internal Revenue Code;
(iii) federal air transportation excise taxes, as described in Sections 4261 and
4271 of the Internal Revenue Code; (iv) federal security charges, as described
in Title 49 of the Code of Federal Regulations of 2002 (referred to in this
definition as the "CFR"), Chapter XII, Part 1510; (v) federal Animal and Plant
Health Inspection Service of the United States Department of Agriculture (APHIS)
user fees, as described in Title 00 Xxxxxx Xxxxxx Code (2002) (referred to in
this definition as "U.S.C.") Section 136a and 7 CFR Section 354.3; (vi) federal
Immigration and Naturalization Service (INS) fees, as described in 8 U.S.C.
Section 1356 and 8 CFR Part 286; (vii) federal customs fees as described in 19
U.S.C. Section 58c and 19 CFR Section 24.22; and (viii) federal jet fuel taxes
as described in Sections 4091 and 4092 of the Internal Revenue Code collected on
behalf of and owed to the federal government, (b) any and all state and local
income tax withholding, employment taxes and related charges and fees and
similar taxes, charges and fees, including, but not limited to, state and local
payroll withholding taxes, unemployment and supplemental unemployment taxes,
disability taxes, xxxxxxx'x or workers' compensation charges and related charges
and fees that are analogous to those described in Subtitle C of the Internal
Revenue Code and that are described in or are analogous to Chapter 23 of Title
19 Delaware Code Annotated (2002) (referred to in this definition as "D.C.A.")
collected on behalf of and owed to state and local authorities, agencies and
entities, (c) Passenger Facility Charges as described in Title 00 Xxxxxx Xxxxxx
Code Section 40117 (2004) and Title 14 of the Code of Federal Regulations,
Subchapter 1, Part 158 collected on behalf of and owed to various
administrators, institutions, authorities, agencies and entities and (d)
voluntary and/or other non-statutorily required employee payroll deductions,
whether authorized by the employee, imposed by court order, agreed to pursuant
to collective bargaining arrangement or otherwise, including (i) employee
contributions made for the purpose of participating in any employer-sponsored
retirement plan as described and defined in Section 401(k) of the Internal
Revenue Code (including repayment of any 401(k) related loans made to the
employee but excluding any funds matched and/or contributed by the employer on
behalf of any employee), (ii) employee payments made for the purpose of
participating in any employer-sponsored medical, dental or related health plan,
(iii) employee payments made for the purpose of satisfying periodic union dues,
(iv) employee payments made for the purpose of purchasing United States Savings
Bonds, (v) employee payments made for the purpose of making deposits to an
account at or making repayment of an extension of credit from an
employer-associated credit union, (vi) employee payments made for the purpose of
purchasing life, accident, disability or other insurance, (vii) employee
payments made for the purpose of participating in any employer-sponsored
cafeteria plan as described and defined in Section 125 of the Internal Revenue
Code, (viii) employee-directed donations to charitable organizations and (ix)
levys, garnishments and other attachments on employee compensation (as described
in Sections 6305 and 6331 of the Internal Revenue Code, in Section 4913 of Title
10 of D.C.A. or in any analogous provision of other applicable federal, state or
local law) collected on behalf of any Governmental Authority or any other Person
authorized to receive funds of the type described in this clause (d).
"UCC" means the Uniform Commercial Code.
"United States Citizen" has the meaning specified in Section 4.1(b).
"Variable Cash Amount" has the meaning specified in Section
6.4(a)(ii).
"Voting Stock" means any class or classes of Capital Stock pursuant
to which the holders thereof have the general voting power under ordinary
circumstances to vote for the election of directors, managers or trustees of any
Person (or Persons performing similar functions) irrespective of whether or not
at the time stock of any such class or classes will have or might have such
voting power by the reason of the happening of any contingency.
30
"Warrants" means (i) the Warrant to purchase up to 7,735,770 shares
of Groups' Common Stock issued by Group to the Board in substantially the form
of Exhibit O to the AWA Loan Agreement, which Warrant is being issued in
replacement for the Warrant to purchase up to 18,754,000 shares of AWA Holdings'
class B common stock issued by AWA Holdings to the Board on January 18, 2002 and
(ii) the Warrant to purchase up to 386,925 shares of Groups' Common Stock issued
by Group to [the Airbus Counter-Guarantor][AFS Cayman Limited], which Warrant is
being issued in replacement for the Warrant to purchase up to 938,000 shares of
AWA Holdings' class B common stock issued by AWA Holdings to [the Airbus
Counter-Guarantor][AFS Cayman Limited] on January 18, 2002.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Working Capital" means, as of any date, (i) the current assets
(excluding cash and Cash Equivalents) of Group minus (ii) the current
liabilities of Group (other than the current portion of long term debt), in each
case, determined on a consolidated basis and otherwise, in accordance with GAAP
as of such date.
SECTION 1.2. COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including".
SECTION 1.3. ACCOUNTING TERMS AND PRINCIPLES.
(a) Accounting Terms. All accounting terms not specifically defined
herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.
(b) Change in GAAP. If any change in accounting principles used in
the preparation of the most recent financial statements referred to in Section
5.1 is hereafter required or permitted by the rules, regulations, pronouncements
and opinions of FASB or the American Institute of Certified Public Accountants
(or any successor thereto) and such change is adopted by an Obligor with the
agreement of its independent public accountants and results in a change in any
of the calculations required by Article VI had such accounting change not
occurred, the parties hereto agree to promptly enter into good faith
negotiations in order to amend such provisions so as to equitably reflect such
change with the desired result that the criteria for evaluating compliance with
such covenants by the Obligors shall be the same after such change as if such
change had not been made; provided, however, that no change in GAAP that would
affect a calculation that measures compliance with any covenant contained in
Article VI shall be given effect until such provisions are amended to reflect
such changes in GAAP.
SECTION 1.4. CERTAIN TERMS.
(a) Certain References. The words "herein," "hereof" and "hereunder"
and similar words refer to this Agreement as a whole, and not to any particular
Article, Section, subsection or clause in, this Agreement.
(b) References to Exhibits, Schedules, etc. References in this
Agreement to an Exhibit, Schedule, Article, Section, subsection or clause refer
to the appropriate Exhibit or Schedule to, or Article, Section, subsection or
clause in this Agreement unless otherwise indicated.
31
(c) References to Agreements. Each agreement defined in this Article
I shall include all appendices, exhibits and schedules thereto. If the prior
written consent of any Person is required hereunder for an amendment,
restatement, supplement or other modification to any such agreement and the
consent of each such Person is obtained, references in this Agreement to such
agreement shall be to such agreement as so amended, restated, supplemented or
modified. If no such consent is required, references in this Agreement to such
agreement shall be to such agreement as so amended, restated, supplemented or
modified.
(d) References to Statutes. References in this Agreement to any
statute shall be to such statute as amended or modified and in effect at the
time any such reference is operative.
(e) Miscellaneous. The term "including" when used in any Loan
Document means "including without limitation" except when used in the
computation of time periods.
ARTICLE II
THE LOAN
SECTION 2.1. THE LOAN. The aggregate principal amount of the Loan on
the date hereof is $[-] comprised of (i) a Tranche A portion of the Loan
("Tranche A") in the principal amount of $[-] and (ii) a Tranche B portion of
the Loan ("Tranche B") in the principal amount of $[-]. Any amount of Tranche A
or Tranche B repaid or prepaid may not be reborrowed.
SECTION 2.2. SCHEDULED REPAYMENT OF THE LOAN.
(a) Repayment of Tranche A. The Borrower shall repay principal
amounts with respect to Tranche A on the dates and in the amounts set forth
below:
INTEREST PAYMENT DATE FALLING ON OR ABOUT REPAYMENT AMOUNT(2)
----------------------------------------- ----------------
[March 31, 2007] $ [-](3)
September 30, 2007 $ 80,100,000.00
March 31, 2008 $ 57,600,000.00
September 30, 2008 $ 57,600,000.00
March 31, 2009 $ 76,500,000.00
September 30, 2009 $ 76,500,000.00
March 31, 2010 $ 76,500,000.00
September 30, 2010 $ 76,500,000.00
Notwithstanding anything herein to the contrary, the Borrower shall
repay the entire unpaid principal amount of Tranche A together with accrued and
unpaid interest thereon and all other amounts owing hereunder in respect thereof
on the Maturity Date (or, if earlier, the date the Loan is accelerated pursuant
to Section 7.2).
(b) Repayment of Tranche B. The Borrower shall repay principal
amounts with respect to Tranche B on the dates and in the amounts set forth
below:
------------
(2) The amortization schedule assumes $250,000,000 in Designated Asset Sales
prior to the Effective Date, yielding a principal payment of $150,000,000. Other
miscellaneous asset sales will further reduce the principal amount.
(3) The amount of this payment will be Tranche A's pro rata amount of the
excess, if any, of $150,000,000 over the aggregate prepayments made prior to the
Effective Date from proceeds of Designated Asset Sales.
32
INTEREST PAYMENT DATE FALLING ON OR ABOUT REPAYMENT AMOUNT(4)
----------------------------------------- ----------------
[March 31, 2007] $ [-](5)
September 30, 2007 $ 8,900,000.00
March 31, 2008 $ 6,400,000.00
September 30, 2008 $ 6,400,000.00
March 31, 2009 $ 8,500,000.00
September 30, 2009 $ 8,500,000.00
March 31, 2010 $ 8,500,000.00
September 30, 2010 $ 8,500,000.00
Notwithstanding anything herein to the contrary, the Borrower shall
repay the entire unpaid principal amount of Tranche B together with accrued and
unpaid interest thereon and all other amounts owing hereunder in respect thereof
on the Maturity Date (or, if earlier, the date the Loan is accelerated pursuant
to Section 7.2).
(c) Reduction of Principal Amount upon Exercise of Warrants. Any
Lender holding Warrants shall be entitled to pay some or all of the Exercise
Price (as defined in the Warrants) for any of its Warrants by offsetting amounts
owed to such Lender (such Lender, an "Exercising Lender") in respect of its
interest in the Loan as provided in Section 2.1(b)(ii) of the Warrants (such
exercise, a "Loan Discharge Exercise"). In such event, the principal amount of
the Loan outstanding and owing to the Exercising Lender on the effective date of
such exercise shall be discharged on a dollar-for-dollar basis by the amount of
the Exercising Lender's interest in the Loan which was applied to pay such
Exercise Price. Any such reduction in the principal amount of the Loan shall be
applied to the then remaining installments of the outstanding principal amount
of the Loan owed to such Exercising Lender in the inverse order of maturity
thereof. For the avoidance of doubt, no discharge of the principal amount of the
Loan as provided herein shall discharge the principal amount of the Loan owed to
any other Lender or otherwise impair the Borrower's obligations with respect
thereto. An Exercising Lender shall give prompt written notice to the Agent
(with a copy to the Borrower) of any exercise of its Warrants in the manner
described in this subsection in order to enable the Agent to record such
transaction.
(d) Principal Payments. Each payment of the principal amount of the
Loan due and owing on each date specified in Section 2.2(a) and (b) shall be
made after giving effect to all repayments and prepayments of the Loan and each
Loan Discharge Exercise effected on or prior to such date.
SECTION 2.3. EVIDENCE OF DEBT.
(a) Lenders' Accounts. Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing such Lender's portion of
the Loan outstanding from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time under this Agreement.
(b) Agent's Records of Loan. The Agent shall establish and maintain
a register for recording with respect to the Loan (i) the date and amount of
each payment on the Loan made by or on behalf of, or collected from, the
Borrower, (ii) the amount of each such payment applied in accordance with
Section 2.8(d) and (e) or other applicable terms hereof to scheduled principal
of or interest on the Loan and to each of the fees identified in Section 2.7(a)
through Section 2.7(d), (iii) the amount by which
------------------
(4) The amortization schedule assumes $250,000,000 in Designated Asset Sales
prior to the Effective Date, yielding a principal payment of $150,000,000. Other
miscellaneous asset sales will further reduce the principal amount.
(5)The amount of this payment will be Tranche B's pro rata amount of the excess,
if any, of $150,000,000 over the aggregate prepayments made prior to the
Effective Date from proceeds of Designated Asset Sales.
33
the principal amount of the Loan owing to an Exercising Lender is reduced in
connection with the exercise by such Exercising Lender of its Warrant as
described in Section 2.2(c), (iv) the then outstanding principal balance of the
Loan (without reliance on the Lender's accounts), and (v) the date and amount of
each payment made by the Board under the Board Guaranty.
(c) Entries Prima Facie Evidence. The entries made in the accounts
maintained pursuant to this Section 2.3 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of any Lender
or the Agent to maintain such accounts or any error therein shall not in any
manner affect the obligations of the Borrower to repay the Loan in accordance
with its terms.
(d) Notes. The Borrower shall execute and deliver to the Agent on
the Effective Date (i) a promissory note substantially in the form of Exhibit
B-1 in the principal amount of Tranche A of the Loan outstanding on the date
hereof, dated the Effective Date and otherwise appropriately completed (such
note, including any replacement note therefor issued in accordance with the
provisions of this Section 2.3(d), the "Tranche A Note"), and (ii) promissory
notes substantially in the form of Exhibit B-2 in the principal amount of
Tranche B of the Loan outstanding on the date hereof owing to each Tranche B
Lender, dated the Effective Date and otherwise appropriately completed, (each
such note, including any replacement note therefor issued in accordance with the
provisions of this Section 2.3(d), a "Tranche B Note" and the Tranche B Notes
collectively, together with the Tranche A Note, the "Notes"). Each Note shall be
made payable to the Agent at the office of the Agent; provided that at the
request of any Lender, the Borrower shall execute and deliver a Note (or
replacement thereof) payable directly to such Lender in the amount of its
interest in the Loan. If a Note is mutilated, lost, stolen or destroyed, the
Borrower shall issue a new Note of the same tranche, in the same principal
amount and having the same interest rate, date and maturity as the Note so
mutilated, lost, stolen or destroyed endorsed to indicate all payments thereon.
In the case of any lost, stolen or destroyed Note, there shall first be
furnished to the Borrower and the Board an instrument of indemnity from the
Agent (or Lender, as applicable) and evidence of such loss, theft or destruction
reasonably satisfactory to each of them. Upon the execution and delivery by the
Borrower of the Notes, the promissory notes executed and delivered by the
Borrower under the Original Loan Agreement shall be null and void and of no
further force and effect, and shall be contemporaneously returned to the
Borrower for cancellation.
(e) Register. A manually signed copy of this Agreement and the
original of a Note shall be evidence of (i) the rights of each Lender under this
Agreement and such Note and (ii) the rights of the Agent under this Agreement.
Neither this Agreement nor any of the Notes is a bearer instrument. The Agent
will establish and maintain a record of ownership (the "Register") in which the
Agent agrees to register by book entry the Agent's and each Lender's interest in
the Loan, the Notes and this Agreement, and in the right to receive any payments
hereunder or thereunder (including any adjustment pursuant to Section 2.2(c))
and any assignment of any such interest or rights. In connection with any
assignment pursuant to Section 9.2, the Agent shall maintain a copy of each
Assignment and Acceptance delivered to and accepted by it and shall record the
names and addresses of the Lenders and principal amount of the Loan owing to
each Lender from time to time. Solely for purposes of this Section 2.3(e), the
Agent shall be the Borrower's agent for purposes of maintaining the Register.
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Board, the Agent and the Lenders
shall treat each Person whose name is recorded in the Register as a Lender for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower, the Agent, the Board (so long as the Board is either a
guarantor of Tranche A or a Lender hereunder), the Loan Administrator or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
34
SECTION 2.4. OPTIONAL PREPAYMENTS.
(a) Notice. The Borrower may, upon at least fifteen (15) days' prior
revocable notice to the Board, the Loan Administrator, the Govco Administrative
Agent and the Agent stating the proposed date and aggregate principal amount of
the prepayment, elect to prepay the outstanding principal amount of the Loan
ratably as to Tranche A and Tranche B, in whole or in part (but not less than a
minimum amount of $5,000,000), together with accrued interest to the date of
such prepayment on the principal amount prepaid; provided, however, that upon
any prepayment of all or a portion of the Loan by the Borrower, or if the
Borrower revokes such notice at any time within such fifteen (15) days, the
Borrower shall also pay any amounts owing pursuant to Section 2.9(e) or (f).
(b) Amounts Due upon Notice. Upon the giving of any notice of
prepayment under Section 2.4(a), the principal amount of the Loan specified to
be prepaid together with accrued and unpaid interest thereon shall (subject to
the proviso below) become due and payable on the date specified for such
prepayment; provided, however, that any failure to make any such prepayment in
full on such date shall be deemed to be an automatic revocation of the notice of
prepayment given under Section 2.4(a) and such failure shall not constitute a
Default or an Event of Default hereunder; provided, further, however, that the
Borrower shall be obligated to pay on such date any amounts owing under Section
2.9(e) or (f) due to such failure to prepay.
(c) Application of Optional Prepayments. Any partial prepayment of
the Loan under this Section 2.4 shall be applied to the then remaining
installments of the outstanding principal amount of the Loan ratably as to each
Lender and, with respect to each Lender, pro rata across the remaining scheduled
principal payments on the Loan owing to each such Lender (and not in the inverse
order of maturity). Any such prepayment shall be paid to the Agent for
application as provided in Section 2.8. The Borrower shall have no right to
optionally prepay the principal amount of the Loan other than as provided in
this Section 2.4, Section 2.9(b) or Section 2.9(d).
SECTION 2.5. MANDATORY PREPAYMENTS.
(a) Certain Future Issuances within Six Months of Effective Date.
Upon receipt by an Obligor of any Cash Proceeds from any Future Issuance of
Indebtedness convertible into Capital Stock (or convertible into warrants,
options or other rights to acquire Capital Stock) which is consummated no later
than six (6) months after the Effective Date, the Borrower shall prepay the Loan
in the manner provided below in an amount equal to the product of (x) the Loan
Prepayment Percentage and (y) an amount equal to fifty percent (50%) of the Net
Issue Proceeds of such Future Issuance; provided that the Borrower shall not be
obligated to so prepay the Loan if and to the extent that the Future Issuance is
of Permitted Refinancing Indebtedness. Any prepayment of the Loan under this
subsection shall be made on the Business Day following the receipt by such
Obligor of the proceeds of the applicable Future Issuance.
(b) Replacement Secured Financing. Upon receipt by an Obligor of any
Cash Proceeds from any Future Issuance constituting a Replacement Secured
Financing, the Borrower shall prepay the Loan from the proceeds thereof in the
manner provided below in an aggregate amount equal to the Collateral Release
Value for each item or category (as applicable) of Collateral subject to such
Replacement Secured Financing. Any prepayment of the Loan under this subsection
shall be made on the Business Day following the receipt by such Obligor of the
proceeds of the applicable Future Issuance.
(c) Other Future Issuances. Upon receipt by an Obligor of any Cash
Proceeds from any Future Issuances other than a Future Issuance described in (or
excluded from prepayment pursuant to) subsections (a) and (b) above, the
Borrower shall prepay the Loan in the manner provided below in an
35
amount equal to the product of (x) the Loan Prepayment Percentage and (y) 100%
of the Net Issue Proceeds of such transaction; provided that:
(i) with respect to Future Issuances of Capital Stock or warrants,
options or other rights to acquire Capital Stock consummated after the
Effective Date (excluding Indebtedness which is convertible into Capital
Stock), the Borrower (A) shall not be obligated to prepay the Loan from
the first $75,000,000 of Net Issue Proceeds therefrom, and (B) thereafter,
shall be obligated to prepay the Loan in an amount equal to the product of
(x) the Loan Prepayment Percentage and (y)(1) 25% on a dollar-for-dollar
basis of Net Issue Proceeds from the next $75,000,000 of Net Issue
Proceeds and (2) 50% on a dollar-for-dollar basis of Net Issue Proceeds in
excess of $150,000,000, with all calculations of Net Issue Proceeds for
the purpose of this clause (i) being made on a cumulative basis from the
Effective Date through the life of the Loan;
(ii) with respect to Net Issue Proceeds from a Future Issuance of
Indebtedness incurred to refinance any Aircraft Related Equipment that is
not (and is not required to be pursuant to the terms of the Loan
Documents) Collateral, the Borrower shall only be required to pay an
amount equal to the product of (x) the Loan Prepayment Percentage and (y)
an amount equal to fifty percent (50%) of the Net Issue Proceeds from such
Future Issuance; provided that the Obligors shall not be required to
prepay the Loan as provided in this clause (ii) if such Future Issuance is
a refinancing of Aircraft Related Equipment acquired by the Obligors
within the twenty-four (24) months preceding the date of such Future
Issuance; and
(iii) the Borrower shall not be obligated to so prepay the Loan (A)
if and to the extent that the Future Issuance is (x) Permitted Refinancing
Indebtedness or (y) Permitted Acquisition Financing, (B) if and to the
extent that an Obligor applies the proceeds of a Future Issuance of
Indebtedness to make pre-delivery payments, deposits or progress payments
(or other similar payments) with respect to the acquisition of Aircraft
Related Equipment (or reimburses itself or any other Obligor for any such
payment or deposit) (including After-Acquired Section 1110 Equipment), an
Obligor applies such proceeds to purchase (or reimburse itself or any
other Obligor for the purchase of) Aircraft Related Equipment (including
After-Acquired Section 1110 Equipment), or an Obligor otherwise sets aside
such proceeds (through an escrow account or otherwise) for a period not to
exceed twelve (12) months for the express purpose of making any of the
payments described above in this subclause (iii)(B) and the Obligor makes
such payment within such period, or (C) with the Net Issue Proceeds of (x)
the Juniper Financing or (y) the Airbus Financing, it being understood
that, subject to subsection (c)(ii) above, the Loan Prepayment Percentage
of all Net Issue Proceeds in excess of amounts otherwise applied in
accordance with clause (iii)(A) or (iii) (B) above, as applicable, shall
be applied to prepay the Loan.
Any prepayment of the Loan under this subsection (c) shall be made on the
Business Day following the receipt by such Obligor of the proceeds of the
applicable Future Issuance.
(d) Asset Sales. Upon receipt by an Obligor of any Cash Proceeds
from an Asset Sale permitted under Section 6.13, the Borrower shall prepay the
Loan as follows:
(i) with respect to Net Cash Proceeds from an Asset Sale in a
sale-leaseback transaction of (A) Aircraft Related Equipment that is not
(and is not required to be pursuant to the terms of the Loan Documents)
Collateral or (B) After-Acquired Section 1110 Equipment which has been
pledged as Collateral but is subject to release pursuant to Section
5.8(b), the Borrower shall prepay the Loan in an amount equal to the
product of (x) the Loan Prepayment Percentage and (y) an amount equal to
fifty percent (50%) of the Net Cash Proceeds of such sale-leaseback;
36
provided that the Obligors shall not be required to prepay the Loan with
the Net Cash Proceeds from any such sale-leaseback transaction entered
into within twenty-four (24) months of the acquisition of such Aircraft
Related Equipment or After-Acquired Section 1110 Equipment (as
applicable);
(ii) with respect to Net Cash Proceeds from Designated Asset Sales,
the Borrower shall prepay the Loan in such amount (if any) so that after
giving effect to such prepayment the aggregate amount prepaid in
connection with Designated Asset Sales is equal to the greater of (A)
$125,000,000 and (B) 60% of the aggregate Net Cash Proceeds received in
respect of all Designated Asset Sales, taking into account Net Cash
Proceeds in respect of Designated Asset Sales consummated on or prior to
the Effective Date and applied to reduce the principal amount of the Loan
on or prior to the Effective Date as set forth on Schedule 2.5(d) hereto;
(iii) with respect to all other Asset Sales, the Borrower shall
prepay the Loan in an aggregate amount equal to one hundred percent (100%)
of the Net Cash Proceeds from such Asset Sales; provided, however, that
the Borrower shall not be obligated to so prepay the Loan (A) if and to
the extent that the Borrower furnishes to the Agent and the Board on or
prior to the date such prepayment is otherwise required to be made an
Officer's Certificate certifying that it or another Obligor intends to
replace the assets from which such Net Cash Proceeds derived, and does so
(or enters into a definitive agreement committing to do so) within one (1)
year of receipt thereof (it being understood that any Net Cash Proceeds
retained by the Borrower but not actually expended within such year or
pursuant to such agreement to replace the assets from which such Net Cash
Proceeds derived shall be used to prepay the Loan on the expiration of
such year), (B) with Net Cash Proceeds from Asset Sales to the extent such
Net Cash Proceeds do not exceed $1,000,000 in the aggregate per Fiscal
Year, or (C) from the sale or disposition of Investments permitted to be
made pursuant to Section 6.2 hereof, other than the Investments permitted
under clauses (viii), (x) and (xii) of Section 6.2.
Any prepayment of the Loan under this subsection (d) shall be made no later than
three (3) Business Days following the receipt by such Obligor of the proceeds of
such Asset Sale.
(e) Insurance/Condemnation Proceeds. No later than three (3)
Business Days following (x) the date of receipt by an Obligor of any Net
Insurance Proceeds or Net Condemnation Proceeds, or (y) if applicable, the end
of the one (1) year period described in the proviso below or in the case of the
Collateral, such other time as provided in the applicable Collateral Document
(as contemplated in the proviso below), the Borrower shall prepay the Loan in an
amount equal to the amount by which the aggregate amount of the sum of such Net
Insurance Proceeds and Net Condemnation Proceeds in any Fiscal Year (excluding
any amounts used to repair, restore or replace assets in accordance with the
immediately following proviso or any Collateral Document) exceeds $5,000,000;
provided the Borrower shall not be obligated to so prepay the Loan if and to the
extent that (i) the Borrower furnishes to the Board and the Agent on or prior to
the date such prepayment is otherwise required to be made an Officer's
Certificate certifying that it or another Obligor intends to repair, restore or
replace the assets from which such Net Insurance Proceeds or Net Condemnation
Proceeds derived, and does so (or enters into a definitive agreement committing
to do so) within one (1) year of receipt thereof, or (ii) in the case of
proceeds derived from Collateral, the Obligor uses such proceeds to repair,
replace or restore such Collateral in accordance with the applicable provisions
of the applicable Collateral Document, including any timeframes contemplated
thereby (it being understood that any Net Insurance Proceeds or Net Condemnation
Proceeds retained by an Obligor but not actually expended within such year or
such other time as provided in an applicable Collateral Document or pursuant to
such agreement to repair, restore or replace the assets from which such Net
Insurance Proceeds or Net Condemnation Proceeds derived shall
37
be used to prepay the Loan on the expiration of such year or such other time as
provided in an applicable Collateral Document).
(f) Change of Control. Upon the occurrence of a Change of Control,
the Borrower shall promptly give the Agent, the Lenders, the Board and the Loan
Administrator written notice thereof, and the Controlling Creditor shall have
the right, by written notice to the Borrower (with a copy to the Agent and each
Lender) given not more than thirty (30) days following its or their receipt of
the notice of the Change of Control, to require the Borrower to prepay the Loan
in full, together with accrued interest thereon to the date of such prepayment,
on the date specified in such notice (which date shall be a Business Day not
less than ten (10) nor more than twenty (20) Business Days after the date of
such notice), and upon the specified payment date, the Borrower shall so prepay
the then outstanding principal amount of the Loan together with such accrued
interest thereon.
(g) Gate Leases. In the event that the Obligors' shall not have
pledged to the Collateral Agent the Gate Leases at both LGA and DCA (with the
consent of the lessors thereof) by January 1 of any year, the Borrower shall
prepay the Loan on such date in the amount of $10,000,000.
(h) Collateral Value Deficiency. Upon the occurrence and during the
continuance of a Collateral Value Deficiency under Section 5.8(d), the Borrower
shall prepay the Loan if and to the extent required thereunder.
(i) Application of Prepayments. Any partial prepayments of the Loan
made by the Borrower in accordance with this Section 2.5 shall be applied to the
then remaining installments of the outstanding principal balance of the Loan
ratably as to each Lender and, with respect to each Lender, pro rata across the
remaining scheduled principal payments on the Loan owing to each such Lender
(and not in the inverse order of maturity); provided that the first $275,000,000
in prepayments made under subsection (d)(ii) of this Section 2.5 shall be
applied (ratably as to each Lender) first, to the principal payment scheduled
for March 31, 2007 until such amount is fully reduced, and, thereafter, to the
principal payment scheduled for September 30, 2007 (with any excess above
$275,000,000 to be applied pro rata across the remaining scheduled principal
payments on the Loan). Subject to the Borrower's right to elect the Prepayment
Breakage Avoidance Procedure, the Borrower shall also pay any amounts owing
pursuant to Section 2.9(e) or (f) in connection with any prepayment under this
Section 2.5. All prepayments under this Section 2.5 shall be paid to the Agent
for application as provided in Section 2.8.
SECTION 2.6. INTEREST.
(a) Rate of Interest. Except as otherwise provided in Section 2.6(c)
and Section 2.9, (i) Tranche A shall bear interest on the unpaid principal
amount thereof from the first day of the initial Interest Period hereunder until
paid in full at the Tranche A Applicable Interest Rate and (ii) Tranche B shall
bear interest on the unpaid principal amount thereof from the first day of the
initial Interest Period hereunder until paid in full at the Tranche B Applicable
Interest Rate; provided, that interest on Tranche A and Tranche B of the Loan
from the first day of the initial Interest Period hereunder until the Effective
Date shall accrue at the Tranche A Applicable Interest Rate and Tranche B
Applicable Interest Rate, respectively (including the default rates), provided
for in the Original Loan Agreement.
(b) Interest Payments. Interest accrued on the Loan shall be payable
in arrears on each Interest Payment Date, upon the payment or prepayment thereof
in whole or in part, and, if not previously paid in full, at maturity (whether
by acceleration or otherwise). Interest on the Loan shall be calculated on the
basis of a year of 360 days and actual number of days elapsed.
38
(c) Default Interest. Notwithstanding the rate of interest specified
in Section 2.6(a), if any principal of or interest on the Loan is not paid when
due, whether at stated maturity, upon acceleration, by mandatory prepayment or
otherwise (but other than any voluntary prepayment), such overdue amount shall
bear interest at a rate which is two percent (2.0%) per annum in excess of the
then applicable interest rates on the Loan.
(d) Assignment of Tranche A During an Interest Period. If some or
all of Tranche A is assigned in compliance with Section 9.2 on a date which is
not the first day of an Interest Period and the Tranche A Applicable Interest
Rate on the portion so assigned will be adjusted as a result thereof (as
provided in the definition of "Tranche A Applicable Interest Rate"), then
interest on the portion of Tranche A so assigned shall accrue at the adjusted
Tranche A Applicable Interest Rate from and including the effective date of such
assignment until paid in full.
SECTION 2.7. FEES.
(a) Agency Fees. The Borrower agrees to pay to the Agent on the
Effective Date and annually thereafter on each Interest Payment Date occurring
on or about September 30th of each year (beginning September 30, 2006), an
agency fee in an amount equal to $70,000 per annum for so long as the Loan shall
remain outstanding. In addition, the Borrower agrees to pay to the Govco
Administrative Agent on each Interest Payment Date falling on or about March
31st an agency fee in an amount equal to $25,000 per annum for so long as
Tranche A is funded by the Primary Tranche A Lender.
(b) Loan Administrator Fee. The Borrower agrees to pay the Loan
Administrator the fees provided for in the Loan Administration Agreement.
(c) Guarantee Fees. The Borrower agrees to pay to the Agent for the
account of the Board quarterly in advance on each Interest Payment Date for so
long as the Board Guaranty shall remain in effect the Guarantee Fee set forth in
Section 2.06 of the Board Guaranty; provided that if the Effective Date occurs
on a date which is not an Interest Payment Date, the Borrower agrees to pay to
the Agent on the Effective Date for the account of the Board an additional
Guarantee Fee amount equal to the product of (x) the amount of Tranche A
outstanding on the Effective Date (after giving effect to any prepayments of the
Loan on such date), (y) a rate equal to the difference between the Guarantee Fee
rate in effect on the Effective Date and the Guarantee Fee rate in effect
immediately prior thereto, and (z) a fraction, the numerator of which is the
number of days remaining in such Interest Period and the denominator of which is
360.
(d) Collateral Agent Fee. The Borrower agrees to pay to the Agent,
for the account of the Collateral Agent, (i) a setup fee on the Effective Date
in the amount of $7,500, and (ii) on the Effective Date and annually thereafter
on each Interest Payment Date occurring on or about September 30th of each year
(beginning September 30, 2006), a collateral agency fee in an amount equal to
$42,500 per annum for so long as the Loan shall remain outstanding.
(e) Board Fee. The Borrower agrees to pay to the Board on the
Effective Date a fee in the amount of $250,000.
(f) Lazard Fee. The Borrower agrees to pay to Lazard Freres & Co. on
the Effective Date a fee in the amount of $1,000,000, which fee is the fee
referenced in paragraph II.B of that certain engagement letter dated as of
September 9, 2004, which was approved by the Bankruptcy Court in the Final Order
(I) Authorizing Debtors' Use of Cash Collateral and (II) Providing Adequate
Protection Pursuant to Bankruptcy Rules 4001(b) and 4001(d) dated October 14,
2004.
39
(g) Distribution of Fees. On the Effective Date and upon the Agent's
receipt thereof, the Agent shall distribute to the Person entitled thereto each
of the fees referred to in this Section 2.7 payable on such date. Thereafter,
the Agent will distribute any and all fees payable under this Section 2.7 in
accordance with Section 2.8(d) or (e) hereof, as applicable.
(h) Fees Non-refundable. All fees paid under this Section 2.7 shall
be non-refundable.
(i) Interest on Fees. If any fee or other amount payable by the
Borrower hereunder is not paid when due, such overdue amount shall bear interest
at a rate which is two percent (2.0%) per annum in excess of the Tranche B
Applicable Interest Rate as in effect from time to time.
SECTION 2.8. PAYMENTS AND COMPUTATIONS.
(a) Payments. The Borrower shall make each payment hereunder
(including fees and expenses) not later than 12:00 noon (New York City time) on
the day when due, in Dollars, to the Agent at Citibank, N.A., ABA #000000000,
Account No. 3041-9849, Account Name: Project Finance, Reference: US Airways, in
immediately available funds without set-off, defense, recoupment or
counterclaim. All payments in respect of any Obligations shall at all times be
made to the Agent, whether or not a demand shall have been made or paid under
the Board Guaranty. The Agent will promptly cause all such payments received by
it to be distributed to the Person entitled thereto in accordance with the
priorities of payment set forth below in Section 2.8(d) or (e), or both, as
applicable. Payments received by the Agent after 12:00 noon (New York City time)
shall be deemed to be received on the next Business Day.
(b) Computation. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) Payments on Business Days. Whenever any payment hereunder shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or fees, as the
case may be.
(d) Application of Payments - No Event of Default. So long as no
Event of Default under any of clauses (a) (including any failure to pay all
amounts hereunder upon acceleration as a result of any other Event of Default),
(f) or (g) of Section 7.1 has occurred and is continuing or would result
therefrom, the Agent shall apply all payments in respect of any Obligations in
the following order:
(i) first, to pay any fees then due and payable under Section
2.7(a), (b) and (d) to the Agent, the Govco Administrative Agent, the
Collateral Agent and the Loan Administrator, as the case may be, on a pro
rata basis;
(ii) second, to pay interest then due and payable in respect of the
Loan to the Lenders on a pro rata basis, provided that, so long as the
Board Guaranty is in effect, to the extent that any amounts received by
the Agent constitute interest accrued on any overdue principal of or
interest on Tranche A in accordance with Section 2.6(c), such amounts
shall be distributed to the Board under this clause (ii) as if it were a
Lender (it being understood that following the Board's honoring of a
demand for payment in accordance with the Board Guaranty and until the
Board is reimbursed for the amount of all payments thereunder, all amounts
paid in respect of Tranche A shall be distributed to the Board and amounts
paid in respect of Tranche B shall be distributed to the Tranche B
Lenders, all on a pro rata basis);
40
(iii) third, to pay principal then due and payable on the Loan to
the Lenders, on a pro rata basis (it being understood that following the
Board's honoring of a demand for payment in accordance with the Board
Guaranty and until the Board is reimbursed for the amount of all payments
thereunder, the amounts paid in respect of Tranche A shall be distributed
to the Board and amounts paid in respect of Tranche B shall be distributed
to the Tranche B Lenders, in each case on a pro rata basis);
(iv) fourth, to pay any fees then due and payable under Section
2.7(c) to the Board; and
(v) fifth, to pay any other Obligations then due and payable to the
Agent, the Govco Administrative Agent, the Collateral Agent, the Loan
Administrator, the Board and the Lenders, on a pro rata basis.
(e) Application of Payments After Event of Default. After the
occurrence and during the continuance of an Event of Default under any of
clauses (a) (including any failure to pay all amounts hereunder upon
acceleration as a result of any other Event of Default), (f) or (g) of Section
7.1, the Agent shall apply all payments in respect of any Obligations (including
amounts received by the Collateral Agent upon the exercise of remedies under the
Collateral Documents) in the following order:
(i) first, to pay Obligations in respect of any expenses, fees,
indemnities or other sums owing hereunder then due to the Agent, the
Collateral Agent and the Loan Administrator, on a pro rata basis;
(ii) second, to pay Obligations in respect of any expenses, fees,
indemnities or other sums owing hereunder not referred to in clauses (iii)
through (v) below then due to the Board, the Govco Administrative Agent
and the Lenders, on a pro rata basis;
(iii) third, to pay on a pro rata basis (A) interest then due and
payable in respect of the Loan to the Lenders, provided that so long as
the Board Guaranty is in effect, to the extent that any amounts received
by the Agent constitute interest accrued on any overdue principal or
interest on Tranche A in accordance with Section 2.6(c), such amounts
shall be distributed to the Board under this clause (iii) as if it were a
Lender and (B) in the event that any fees payable to the Board under
Section 2.7(c) were not paid when due under Section 2.7(c), the portion of
such unpaid fees which is equal to the amount which the Board would have
been then entitled to receive if the fee payable under Section 2.7(c) were
payable daily in arrears (instead of quarterly in advance) (including
interest accrued thereon through the date of payment in accordance with
Section 2.7(i)), on a pro rata basis (it being understood that following
the Board's honoring of a demand for payment in accordance with the Board
Guaranty and until the Board is reimbursed for the amount of all payments
thereunder, all amounts paid in respect of Tranche A shall be distributed
to the Board and amounts paid in respect of Tranche B shall be distributed
to the Tranche B Lenders, all on a pro rata basis);
(iv) fourth, to pay or prepay principal payments on the Loan to the
Lenders, on a pro rata basis (it being understood that following the
Board's honoring of a demand for payment in accordance with the Board
Guaranty and until the Board is reimbursed for the amount of all payments
thereunder, amounts paid in respect of Tranche A shall be distributed to
the Board and amounts paid in respect of Tranche B shall be distributed to
the Tranche B Lenders, in each case on a pro rata basis); and
41
(v) fifth, to pay any fees due and payable under Section 2.7(c) to
the Board under and in accordance with Section 2.7(c) (including interest
accrued thereon through the date of payment in accordance with Section
2.7(i)) and not otherwise paid pursuant to clause (iii) above.
(f) Assignment to Board of Lender's Interest in Loan. Upon the
assignment to the Board of any Tranche A Lender's right, title and interest in
and to its pro rata portion of the principal of and interest on Tranche A in
accordance with the Board Guaranty, the Board shall have the rights and
privileges of a Tranche A Lender with respect to such payment (to the extent of
the interests in Tranche A so assigned to the Board). No payment by the Board to
the Agent or any Tranche A Lender under the Board Guaranty shall reduce,
discharge, satisfy, modify or terminate the corresponding payment or any other
obligation of the Borrower under this Agreement or any Tranche A Note, which
obligations shall remain in full force and effect.
(g) Funding Defaults. Unless the Borrower has notified the Agent,
prior to the date any payment is required to be made by it to the Agent
hereunder, that the Borrower will not make such payment, the Agent may assume
that the Borrower has timely made such payment and may (but shall not be so
required to), in reliance thereon, make available a corresponding amount to the
Person entitled thereto. If and to the extent that such payment was not in fact
made to the Agent in immediately available funds, then each Lender (or the
Board, if applicable) shall forthwith on demand repay to the Agent the portion
of such assumed payment that was made available to such Lender (or the Board, if
applicable) in immediately available funds, together with interest thereon in
respect of each day from and including the date such amount was made available
by the Agent to such Lender (or the Board, if applicable) to the date such
amount is repaid to the Agent in immediately available funds, at the applicable
Federal Funds Rate (as defined in the definition of "Base Rate Loan") from time
to time in effect. A notice of the Agent to the Borrower with respect to any
amount owing under this subsection (g) shall be conclusive, absent manifest
error.
SECTION 2.9. CERTAIN PROVISIONS GOVERNING THE LOAN.
(a) Determination of Interest Rate. The Tranche A Applicable
Interest Rate and the Tranche B Applicable Interest Rate shall be determined by
the Govco Administrative Agent (as applicable) and Agent, respectively, pursuant
to the procedures set forth in the definition of "Tranche A Applicable Interest
Rate" and "LIBOR", and shall promptly thereafter be notified to the Borrower,
the Board, the Primary Tranche A Lender or the Alternate Tranche A Lender, as
applicable, and each Tranche B Lender.
(b) Interest Rate Unascertainable, Inadequate or Unfair. In the
event that: (i) the Agent determines that adequate and fair means do not exist
for ascertaining the applicable interest rates by reference to which the LIBOR
then being determined is to be fixed or (ii) the Requisite LIBOR Lenders notify
the Agent that the LIBOR for any Interest Period will not adequately reflect the
cost to the LIBOR Lenders of making or maintaining the portion of the loan for
which the interest rate is determined by reference to LIBOR for such Interest
Period, the Agent shall forthwith so notify the Borrower, the Board, the Loan
Administrator and the Lenders, whereupon during the thirty (30) days following
the date of any such notice the Borrower, the Agent and the LIBOR Lenders shall
negotiate in good faith (subject to the consent of the Board) in order to arrive
at a mutually acceptable alternative basis for determining the interest rate
from time to time applicable to Tranche A or Tranche B, as applicable, (the
"Substitute Basis"). If within the twenty (20) days following the date of any
such notice the Borrower, the Agent and the LIBOR Lenders shall agree upon, and
the Board shall consent to, a Substitute Basis, such Substitute Basis shall be
retroactive to and effective from the first day of the then current Interest
Period until and including the last day of such Interest Period. If after twenty
(20) days from the date of such notice, the Borrower, the Agent and the LIBOR
Lenders shall have failed to agree upon, or the Board shall have
42
failed to consent to, a Substitute Basis, then the Agent (upon instructions from
the Requisite LIBOR Lenders) shall certify in writing to the Borrower (such
certification to be conclusive and binding on all LIBOR Lenders and all other
parties hereto absent manifest error) the interest rate at which the LIBOR
Lenders are prepared to maintain their portion of the Loan for such Interest
Period, it being understood that such Lenders' interest rate shall be at a rate
per annum equal to a rate which adequately and fairly reflects the cost to such
Lenders of obtaining the funds necessary to maintain their portion of the Loan
for such Interest Period. If no Substitute Basis is established, upon receipt of
notice of the interest rates at which the Requisite LIBOR Lenders are prepared
to maintain their respective portion of the Loan, the Borrower shall have the
right exercisable upon ten (10) Business Days' prior notice to the Lenders, the
Board and the Loan Administrator through the Agent (i) to continue to borrow the
Loan at the interest rate so advised by the Agent (as such rate may be modified,
from time to time, at the outset of each subsequent Interest Period), (ii) to
convert the Loan to a Base Rate Loan, or (iii) to prepay in full the Loan
together with accrued but unpaid interest thereon at the interest rate certified
in writing by the Requisite LIBOR Lenders as provided above and all other
amounts due under the Loan Documents, whereupon the Loan shall become due and
payable on the date specified by the Borrower in such notice.
(c) Increased Costs. If at any time any Lender or Program Support
Provider shall determine that as a result of the introduction of or any change
after the date hereof in or in the interpretation of any law, treaty or
governmental rule, regulation or order or the compliance by such Lender or
Program Support Provider with any guideline, request or directive after the date
hereof from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to such Lender
or Program Support Provider of agreeing to make or making, funding, guaranteeing
or maintaining any portion of the Loan (except in respect of Taxes), then the
Borrower shall from time to time, within five (5) Business Days of a demand
(which demand shall be accompanied by a statement setting forth the basis for
such demand and a calculation of the amount thereof in reasonable detail) by
such Lender or Program Support Provider (with a copy of such demand to the
Agent, the Board and the Loan Administrator), pay to the Agent for the account
of such Lender or Program Support Provider additional amounts sufficient to
compensate such Lender or Program Support Provider for such increased cost;
provided that no Lender or Program Support Provider shall be entitled to claim
any such additional amount for amounts incurred more than six (6) months prior
to the making of such demand. A certificate as to the amount of such increased
cost, submitted to the Borrower (and the Agent and the Board) by such Lender or
Program Support Provider shall be conclusive and binding for all purposes,
absent manifest error. Each Lender or Program Support Provider shall promptly
notify in writing the Borrower, the Agent and the Board of any event of which
such Lender or Program Support Provider has knowledge, occurring after the date
hereof, which would entitle such Lender or Program Support Provider to
compensation pursuant to this Section 2.9(c) and will designate a different
lending office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such Lender or Program
Support Provider be otherwise materially disadvantageous to it.
(d) Illegality. Notwithstanding any other provision of this
Agreement, if any Lender determines that the introduction of or any change in or
in the interpretation of any law, treaty or governmental rule, regulation or
order after the date of this Agreement shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for such
Lender to maintain its portion of the Loan, then, on notice thereof by such
Lender to the Borrower through the Agent (with a copy to the Board and the Loan
Administrator), the obligation of such Lender to continue to fund or maintain
its portion of the Loan shall be terminated and the Borrower shall either (i)
convert the affected portion of the Loan of such Lender to a Base Rate Loan,
either on the last day of the Interest Period therefor, if such Lender may
lawfully continue to maintain its portion of the Loan based on LIBOR to such
day, or immediately, if such Lender may not lawfully continue to maintain such
portion of the Loan based on LIBOR or (ii) prepay such affected portion of the
Loan to such Lender together with accrued but
43
unpaid interest thereon and all other sums payable hereunder with respect
thereto on the last day of the then current Interest Period or earlier if
necessary to avoid such illegality. Any such partial prepayment of the Loan
shall be applied ratably to the then unpaid installments thereof in accordance
with the amount of each such unpaid installment.
(e) Breakage Costs. In addition to all amounts required to be paid
by the Borrower pursuant to Section 2.5 but without duplication of any amounts
payable under Section 2.9(f), the Borrower shall compensate each Lender upon
demand, for all losses, expenses and liabilities (including any loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender or the termination of any other financial arrangement it
may have entered into to fund or maintain or support such Lender's portion of
the Loan, but excluding Taxes) which that Lender may sustain (i) subject to the
Borrower's right to utilize the Prepayment Breakage Avoidance Procedure, if for
any reason any portion of the Loan is prepaid (including mandatorily pursuant to
Section 2.5 or this Section 2.9) on a date which is not the last day of the
applicable Interest Period or (ii) as a consequence of any failure by a Borrower
to repay any portion of the Loan when required by the terms hereof. The Lender
making demand for such compensation shall deliver to the Borrower (with a copy
to the Agent, the Board and the Loan Administrator) concurrently with such
demand a written statement as to such losses, expenses and liabilities, and this
statement shall be conclusive as to the amount of compensation due to that
Lender absent manifest error, and such compensation shall be paid to the Agent
for the account of such Lender. Such compensation shall not exceed an amount
equal to the excess, if any, of (A) the amount of interest that would have
accrued on the amount so prepaid or repaid for the period from the date of such
prepayment or repayment to the last day of the then applicable Interest Period
in each case at the applicable rate of interest for such Loan provided for in
this Agreement over (B) the amount of interest (as reasonably determined by such
Lender) that would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the LIBOR market
(it being understood that the Borrower shall not be required to indemnify any
Lender for lost profits other than to the extent included in clause (A) above).
(f) Primary Tranche A Lender Prepayment Compensation. In connection
with all prepayments under Section 2.4, Section 2.5 and Section 2.9(d), if the
Primary Tranche A Lender is the Tranche A Lender, the Borrower shall pay to the
Primary Tranche A Lender within 10 Business Days of demand an amount equal to
(i) the amount of yield that the Primary Tranche A Lender is required to pay to
holders of its Commercial Paper during the Liquidation Period (as defined below)
on an amount of Commercial Paper having an aggregate issue price equal to the
amount of the Borrower's prepayment less (ii) the amount of the investment
earnings, if any, received as reasonably determined by the Govco Administrative
Agent, on the prepayment amount during the Liquidation Period. As used herein,
"Liquidation Period" means the period from the date on which a prepayment is
made to the date on which the Primary Tranche A Lender's total amount of
Commercial Paper related to the funding of Tranche A is reduced (without
prepayment thereof) by an amount equal to the amount of the Borrower's
prepayment.
SECTION 2.10. CAPITAL ADEQUACY. If at any time any Lender or Program
Support Provider determines that (a) the adoption of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement regarding capital adequacy, (b) compliance with
any such law, treaty, rule, regulation, or order or (c) compliance with any
guideline or request or directive from any central bank or other Governmental
Authority or any accounting board or authority (whether or not a Governmental
Authority) which is responsible for the establishment or interpretation of
national or international accounting principles (in each case, whether or not
having the force of law) shall have the effect of reducing the rate of return on
such Lender's or Program Support Provider's (or any corporation controlling such
Lender's or Program Support Provider's) capital as a consequence of its
obligations hereunder (other than with respect to Taxes) to a level below that
which such Lender, Program Support Provider or corporation could have achieved
but for such adoption,
44
change, compliance or interpretation, then, upon demand from time to time by
such Lender or Program Support Provider (with a copy of such demand to the Agent
and the Board), the Borrower shall within five (5) Business Days of such demand
pay to the Agent for the account of such Lender or Program Support Provider from
time to time as specified by such Lender or Program Support Provider additional
amounts sufficient to compensate such Lender or Program Support Provider for
such reduction; provided that the Borrower shall not be required to compensate a
Lender or Program Support Provider pursuant to this Section 2.10 for any amounts
incurred more than six (6) months prior to the date of such demand. A
certificate as to such amounts submitted to the Borrower (and the Agent and the
Board) by such Lender or Program Support Provider shall be conclusive and
binding for all purposes absent manifest error. Each Lender or Program Support
Provider shall promptly notify the Borrower, the Agent and the Board of any
event of which such Lender or Program Support Provider has knowledge, occurring
after the date hereof, which would entitle such Lender or Program Support
Provider to compensation pursuant to this Section 2.10 and will designate a
different lending office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Lender or
Program Support Provider, be otherwise disadvantageous to it. For the avoidance
of doubt, any interpretation of Accounting Research Bulletin No. 51 by FASB
(including Interpretation No. 46 - Consolidation of Variable Interest Entities)
shall constitute an adoption, change, request or directive, and any
implementation thereof shall be, subject to this Section 2.10.
SECTION 2.11. TAXES.
(a) No Withholding, etc. Except as otherwise provided in the next
sentence and Section 9.2, any and all payments by the Obligors under each Loan
Document shall be made free and clear of and without deduction for any and all
Taxes, excluding (i) in the case of each Lender, the Loan Administrator, each
Participant and the Agent, Taxes measured by its net income and franchise Taxes
imposed on it by the jurisdiction under the laws of which it is organized or is
otherwise doing business (other than a jurisdiction in which such Person is
deemed to be doing business solely as a result of entering into, or performing
its obligations under, any Loan Document), (ii) in the case of each Lender and
each Participant, Taxes measured by its net income and franchise Taxes imposed
on it by the jurisdiction in which its Lending Office is located or in which it
booked its participation for tax accounting purposes, (iii) in the case of each
Lender, the Loan Administrator, each Participant and the Agent, Taxes imposed on
it as a result of its failure to comply with its obligations under Section
2.11(f), Section 2.11(g) or Section 9.2, (iv) in the case of each Lender, the
Loan Administrator, each Participant and the Agent (A) that is a party hereto or
Participant, as the case may be, on the Effective Date, United States federal
withholding Taxes except to the extent imposed as a result of a change in
applicable law, including income tax conventions, after the Effective Date and
(B) that becomes a party hereto or Participant, as the case may be, after the
Effective Date, United States federal withholding Taxes except to the extent
imposed as a result of a change in applicable law, including income tax
conventions, after the date of the Assignment and Acceptance pursuant to which
it becomes a Lender or after the date such Person becomes a Participant, the
Loan Administrator or the Agent, as applicable, and (v) Taxes imposed as a
result of the gross negligence or willful misconduct of any Lender, the Loan
Administrator, any Participant or the Agent, as the case may be (all such
non-excluded Taxes being hereinafter referred to as "Indemnified Taxes"). If any
Indemnified Taxes shall be required by law to be deducted from or in respect of
any sum payable under any Loan Document to any Lender, the Loan Administrator or
the Agent (1) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.11) such Lender, the Loan
Administrator or the Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (2) the Obligors
shall make such deductions, and (3) the Obligors shall pay the full amount
deducted to the relevant taxing authority or other authority in accordance with
applicable law.
45
(b) Other Taxes. In addition, the Obligors agree to pay any present
or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies of the United States or any political subdivision
thereof or any applicable foreign jurisdiction which arise from any payment made
under any Loan Document or from the execution, delivery or registration of, or
otherwise with respect to, any Loan Document (collectively, "Other Taxes") to
the Agent for the account of the affected party.
(c) Tax Indemnity. The Obligors will indemnify each Lender, the
Agent and the Loan Administrator for the full amount of Indemnified Taxes or
Other Taxes (including any Taxes imposed by any jurisdiction on amounts payable
under this Section 2.11) paid by such Lender, the Loan Administrator or the
Agent (as the case may be) and any liability (including for penalties, interest
and expenses) arising therefrom or with respect thereto, other than any
liability, including for penalties, interest and expenses, arising from the
gross negligence or willful misconduct of the Lender, the Loan Administrator or
the Agent, as the case may be. This indemnification shall be made to the Agent
for account of the relevant Lender, the Loan Administrator or the Agent, as the
case may be, within 30 days from the date such Lender, the Loan Administrator,
or the Agent (as the case may be) makes written demand therefor (with a copy to
the Agent if made by a Lender or the Loan Administrator and accompanied by a
statement setting forth the basis for such taxation and the calculation of the
amount thereof in reasonable detail).
(d) Evidence of Payment. Within 30 days after the date of any
payment of Indemnified Taxes or Other Taxes, the Obligors will furnish to the
Agent the original or a certified copy of a receipt evidencing payment thereof
or other documentation reasonably satisfactory to the Agent.
(e) Survival. Without prejudice to the survival of any other
agreement of the Obligors hereunder, the agreements and obligations of the
parties contained in this Section 2.11 shall survive the payment in full of the
Obligations.
(f) Certain Withholding Tax Matters. Each Lender, each Participant,
the Loan Administrator and the Agent that is a Non-U.S. Person and that is
entitled at such time to an exemption from United States withholding tax, or
that is subject to such tax at a reduced rate under an applicable tax treaty,
shall, on or prior to the Effective Date or on or prior to the date of the
Assignment and Acceptance pursuant to which it becomes a Lender or on or prior
to the date such Person becomes a Participant, the Loan Administrator or the
Agent, as applicable, and from time to time thereafter if requested by the Agent
or the Obligors, provide the Agent and the Obligors with two completed copies of
either IRS Form W-8BEN or W-8ECI or other applicable form, certificate or
document prescribed by the IRS certifying as to such Non-U.S. Person's
entitlement to such exemption from United States withholding tax or reduced rate
with respect to all payments to be made to such Non-U.S. Person under the Loan
Documents. In addition, each Lender, each Participant, the Loan Administrator
and the Agent that is a Non-U.S. Person, as the case may be, shall deliver to
the Obligors and the Agent, notice of any event (other than a change in
applicable law, including income tax conventions) requiring a change in the most
recent form previously delivered by such Person to the Obligors and the Agent.
Each Lender, each Participant, the Loan Administrator and Agent (other than an
entity treated as a corporation for U.S. federal income tax purposes) that is a
"United States person" within the meaning of Section 7701(a)(30) of the Internal
Revenue Code shall deliver two duly signed and completed copies of IRS Form W-9
to the Agent and the Obligors, at the times and in the manner described above
with respect to IRS Forms W-8. Unless the Agent and the Obligors have received
forms or other documents satisfactory to them indicating that payments under the
Loan Documents are not subject to United States withholding tax or are subject
to such tax at a rate reduced by an applicable tax treaty, the Agent or the
Obligors shall, notwithstanding the provisions of Section 2.11(a) and (c) and
without impairing any obligation of the Obligors under this Section 2.11 with
respect to such tax, withhold such United States withholding taxes from such
payments
46
at the appropriate rate, and the Obligors shall not be obligated to pay
additional amounts to any Person under this Section 2.11; provided that if such
Person is a Lender, Participant, Agent or Loan Administrator and shall have
satisfied the requirement of this Section 2.11(f) on the date it became a
Lender, Participant, Agent or Loan Administrator, nothing in this Section
2.11(f) shall relieve the Obligors of its obligation to pay any amounts pursuant
to this Section 2.11 in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or any change
in governmental interpretation, administration or application thereof, such
Lender, Participant, Agent or Loan Administrator is no longer properly entitled
to deliver forms, certificates or other evidence at a subsequent date
establishing that it is not subject to withholding or is subject to withholding
at a reduced rate. The obligation of the Lenders and Participants under this
Section 2.11 shall survive the repayment of all other Obligations hereunder and
the resignation of the Agent.
(g) Mitigation. Any Lender claiming any additional amounts payable
pursuant to this Section 2.11 shall use its reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which would
be payable or may thereafter accrue and would not, in the reasonable judgment of
such Lender, be otherwise materially disadvantageous to such Lender.
SECTION 2.12. LIMITATIONS WITH RESPECT TO RSA. Notwithstanding
anything to the contrary contained herein, RSA, as a Tranche B Lender, shall not
be entitled to the benefits of Section 2.9(b) or Section 2.10; provided,
however, that any permitted assignee or participant of RSA which is a bank
organized under the laws of the United States or any state thereof shall be
entitled to the benefits of Section 2.9(b) and Section 2.10 (subject, in the
case of any permitted participant, to the limitation set forth in Section
9.2(e)).
ARTICLE III
CONDITIONS PRECEDENT TO EFFECTIVENESS
This Agreement shall become effective on the date hereof (the
"Effective Date") subject to the satisfaction (in the judgment of the Agent, the
Board and the Lenders (except as otherwise provided below in this Article III))
of all of the following conditions precedent:
(a) Certain Agreements and Documents. The Agent, the Collateral
Agent, the Primary Tranche A Lender, the Alternate Tranche A Lender, the Tranche
B Lenders and the Board shall have received on or prior to the Effective Date
each of the following (with only the Agent or the requesting Lender receiving
originals of the Notes), each dated as of the Effective Date, in form and
substance satisfactory to the Agent, the Collateral Agent, the Board, the
Primary Tranche A Lender, the Alternate Tranche A Lender and the Tranche B
Lenders:
(i) this Agreement, duly executed and delivered by the parties
hereto;
(ii) the Notes, duly executed by the Borrower and conforming to the
requirements set forth in Section 2.3(d);
(iii) the First Lien Guaranty, duly executed and delivered by the
parties thereto;
(iv) the Board Guaranty, duly executed and delivered by the parties
thereto;
47
(v) the Collateral Documents specified in clauses (i) through (vii)
of the definition thereof, duly executed and delivered by the parties
thereto, together with (A) financing statements in form and substance
reasonably acceptable to the Board, as may be required or advisable to
grant, continue and maintain an enforceable security interest in the
Collateral (subject to the terms hereof and of the other Loan Documents)
in accordance with the UCC as enacted in all relevant jurisdictions; (B)
such Collateral Documents (together with any other necessary documents,
instruments, affidavits or certificates) as may be required in order to
perfect and maintain the security interest in the Collateral, perfection
of a security interest in which requires a filing for recordation with the
FAA, in proper form for recordation with the FAA; (C) insurance
certificates and brokers' reports evidencing the insurance coverages
required under the Loan Documents, including with respect to the
Collateral (in accordance with the requirements of the Collateral
Documents) naming the Collateral Agent as loss payee and otherwise in form
and substance reasonably acceptable to the Collateral Agent; (D) a
Collateral Value Certificate, together with Appraisal Reports in respect
of the Appraised Collateral in form and substance reasonably acceptable to
the Board; (E) any other necessary documents, certificates, forms and
filing fees as may be required in order to perfect and maintain the
security interest in the Collateral in the records of the appropriate
Governmental Authorities' offices of the various land records offices
located in Pennsylvania; (F) Control Agreements with respect to the
deposit accounts and securities accounts of the Obligors (expect to the
extent not required pursuant to Section 5.13 hereof); and (G) original
stock certificates representing the Obligors' interests in each of the
entities listed on Schedule 3(a)(v) (being all entities listed on Schedule
4.1(c) whose securities are certificated), together with undated stock
powers executed in blank (delivered only to the Collateral Agent);
(vi) the Loan Administration Agreement, duly executed and delivered
by the parties thereto;
(vii) the favorable opinions of (A) Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP and/or its affiliates, special counsel to the Obligors, (B)
Xxxxxx & Xxxxxx LLP, special counsel to the Obligors; (C) Xxxxx X. Xxxxx
III, General Counsel of the Borrower, (D) Xxxxxxx Xxxxxx, special
Pennsylvania real estate counsel to the Obligors, (E) Daugherty, Fowler,
Peregrin & Xxxxxx, special FAA counsel; (E) O'Melveny & Xxxxx LLP, special
counsel to the Obligors; (F) Xxxxxxxxxx Xxxx, legal counsel to the Board
(which need be addressed and delivered only to the Agent and Tranche A
Lenders), and (G) Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle LLP, special New
York counsel to the Board (which need be addressed and delivered only to
the Agent and the Tranche A Lenders);
(viii) a copy of the certificate of incorporation of each Obligor,
certified as of a recent date by the Secretary of State of the state of
its incorporation or organization, together with a "long-form" certificate
of such official attesting to the good standing of such Person;
(ix) a certificate of each Obligor signed on behalf of such Person
by its Secretary or an Assistant Secretary certifying (A) the names and
true signatures of each officer of such Person who has been authorized to
execute and deliver each Loan Document required to be executed and
delivered on or prior to the Effective Date by or on behalf of such Person
hereunder or thereunder, (B) the by-laws of such Person as in effect on
the date of such certification, (C) the resolutions of such Person's board
of directors approving and authorizing the execution, delivery and
performance of each Loan Document to which it is a party and (D) that
there have been no changes in the certificate of incorporation of such
Person from the certificate of incorporation delivered pursuant to the
immediately preceding clause;
48
(x) an Officer's Certificate of the Borrower certifying (A) that all
representations and warranties in Article IV hereof (other than the
representation set forth in Section 4.3(b)(i)) are true and correct in all
material respects on and as of the Effective Date after giving effect to
the Consummation of the Plan, as though made on and as of such date, (B)
that no Default or Event of Default has occurred and is continuing and (C)
as to the matters specified in subsection (p) of this Article III;
(xi) an Officer's Certificate of the Borrower certifying that as of
the Effective Date, the written information furnished to the Board by or
on behalf of the Obligors for use in connection with negotiation and
closing of the transaction contemplated by this Agreement is true and
complete in all material respects; provided that with respect to pro forma
and projected financial information and other forward-looking statements,
the Borrower represents only that such information was prepared in good
faith based upon assumptions believed to be reasonable at the time; and
(xii) an Officer's Certificate of the Borrower certifying that
attached thereto is a true, correct and complete copy of the Disclosure
Statement, Plan of Reorganization and the Confirmation Order.
(b) Other Agreements. The Agent, the Board, the Primary Tranche A
Lender, the Alternate Tranche A Lender and the Tranche B Lenders shall have
received on or before the Effective Date evidence that the Obligors have
consummated the transactions contemplated by the following agreements (which
agreements shall be in form and substance reasonably satisfactory to the Board,
the Lenders and the Agent): (i) the AWA Loan Agreement and the other "Loan
Documents" (under and as defined therein) which are required to be executed and
delivered by the parties thereto on the effective date thereof, and (ii) the
other agreements listed on Schedule 3.1(b).
(c) Fees and Expenses Paid. The Borrower shall have paid all fees
due and payable on the Effective Date (including, without limitation, the fees
referenced in Section 2.7), and all expenses of the Agent and its Affiliates,
the Primary Tranche A Lender, the Alternate Tranche A Lender, the Tranche B
Lenders, the Board, the Collateral Agent and the Loan Administrator due and
payable on or before the Effective Date.
(d) Consents, Etc. The Obligors shall have received all consents and
authorizations required pursuant to any material Contractual Obligation with any
other Person in form and substance reasonably satisfactory to the Board and the
Lenders and shall have obtained all consents, waivers and authorizations of, and
effected all notices to and filings with, the New York Stock Exchange, the SEC
and any other Governmental Authority as may be necessary (i) in connection with
the effectiveness of the Plan of Reorganization and (ii) to allow the Obligors
lawfully to execute, deliver and perform, in all material respects, their
obligations under the Loan Documents to which they are, or shall be, a party and
each other agreement or instrument to be executed and delivered by them,
pursuant thereto or in connection therewith.
(e) No Illegality. No law or regulation shall be applicable in the
judgment of the Agent or the Board that restrains, prevents or imposes
materially adverse conditions upon the transactions contemplated hereby.
(f) Representations and Warranties of the Obligors. All
representations and warranties set forth in Article IV hereof shall be true and
correct in all material respects on and as of the Effective Date after giving
effect to the Consummation of the Plan as though made on and as of such date
(except to the extent any such representation or warranty by its terms is made
as of a different specified
49
date in which event such representation or warranty shall be true and correct in
all material respects as of such specified date).
(g) No Event of Default. After giving effect to the Consummation of
the Plan, no Default or Event of Default shall have occurred and be continuing.
(h) Corporate and Other Proceedings. All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to the Agent, the Board, the Primary Tranche
A Lender, the Alternate Tranche A Lender and the Tranche B Lenders.
(i) No Material Adverse Change. Since the August 9, 2005, no
material adverse change shall have occurred in the financial condition, assets,
liabilities, business or results of operations of the Obligors taken as a whole
(excluding any such changes resulting from (i) changes or conditions generally
affecting the U.S. economy or financial markets, (ii) changes or conditions
generally affecting any of the segments of the airline industry in which any of
the Obligors operate, to the extent such conditions or changes do not
disproportionately impact the Obligors, or (iii) the announcement or
consummation of the Merger) or in the Borrower's ability to repay the Loan or
perform its obligations under the Loan Documents.
(j) Plan of Reorganization. (i) The Plan of Reorganization shall be
reasonably satisfactory to the Lenders and the Board, (ii) all conditions
precedent to the occurrence of the effective date of the Plan of Reorganization
shall have been satisfied and the Plan of Reorganization shall have become
effective, subject only to consummation of the transactions contemplated under
the Loan Documents, and (iii) no Obligor shall be in default with respect to any
material obligation under the Plan of Reorganization and the Consummation of the
Plan shall have occurred, subject only to consummation of the transactions under
the Loan Documents.
(k) Confirmation Order. (i) The Confirmation Order shall be in form
and substance reasonably satisfactory to the Lenders and the Board and shall not
have been stayed by the Bankruptcy Court (or by any court having jurisdiction to
issue any such stay) or reversed, vacated, amended, supplemented or modified,
(ii) the time to appeal the Confirmation Order shall have expired, (iii) no
appeal or petition for review, rehearing, or certiorari with respect to the
Confirmation Order shall be pending, and (iv) the Confirmation Order shall
otherwise be in full force and effect.
(l) Projections. The Lenders and the Board shall have received
satisfactory projections and pro forma financial information for Group (on a
consolidated basis) for the fiscal years 2005 through and including 2010, which
projections shall be certified by the Chief Executive Officer or the Chief
Financial Officer of Group as being reasonable estimates as of the Effective
Date of future financial performance and based upon assumptions that are
reasonable in light of conditions and facts known to Group as of the Effective
Date.
(m) Jurisdiction of Bankruptcy Court. The Lenders and the Board
shall be satisfied that the Bankruptcy Court's retention of jurisdiction under
the Confirmation Order will not govern the enforcement of the Loan Documents or
any rights or remedies relating thereto, except as may be otherwise consented to
by them.
(n) Certificates of Incorporation. The certificates of incorporation
or other applicable governing documents of the Obligors, as provided for in the
Plan or the Merger Agreement, shall be reasonably satisfactory to the Lenders
and the Board, and shall have been filed with and accepted
50
by the Secretary of State or other appropriate Governmental Authority in the
applicable jurisdictions and shall have become effective.
(o) Merger. The Effective Time (as defined in the Merger Agreement)
shall have occurred.
(p) Unrestricted Cash and Cash Equivalents. After the Consummation
of the Plan, the Obligors shall have on a pro forma basis as of the Effective
Date, taking into account net cash proceeds of the Stock Offering, the
Convertible Note Offering and the Juniper Financing expected to be received
within seven (7) days of the Effective Date, unrestricted cash and Cash
Equivalents (as determined in accordance with GAAP) of not less than
$1,250,000,000.
(q) Equity Investment Agreements. The Obligors shall have
consummated the transactions contemplated by the Equity Investment Agreements
and in connection therewith shall have received Cash Proceeds of no less than
$565,000,000.
(r) Designated Asset Sales. The Obligors shall have on or prior to
the Effective Date consummated Designated Asset Sales which resulted in Net Cash
Proceeds to the Obligors of not less than $125,000,000. (s) Other Documents and
Information. The Agent, the Lenders and the Board shall have received such other
certificates, documents, agreements and information respecting the Obligors as
each of them may have reasonably requested.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the other parties (excluding any other Obligors) to enter
into this Agreement, each of the Obligors represents and warrants to each other
party hereto (excluding any other Obligors) that, on and as of the Effective
Date, after giving effect to the Consummation of the Plan (references to
"Obligors" contained in this Article IV shall be limited to Obligors as of the
Effective Date):
SECTION 4.1. ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING,
BUSINESS, SUBSIDIARIES, THE ACT AND THE REGULATIONS.
(a) Organization, Power and Authority. Each Obligor is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Each Obligor has all requisite corporate power and
authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Loan Documents to
which it is a party and to carry out the transactions contemplated hereby and
thereby.
(b) Foreign Qualification; "Air Carrier Status". Each Obligor is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing could not reasonably be expected to have a Material Adverse
Effect. The Borrower is an "air carrier" within the meaning of the Act and holds
a certificate under Section 41102 of Title 49. Each of the Borrower and any
other Obligor engaged in operations as an "air carrier" is a "citizen of the
United States" within the meaning of Section 40102(a)(15) of Title 49, as
interpreted by the United States Department of Transportation (a "United States
Citizen") and holds an air carrier operating certificate issued pursuant to
Chapter 447 of Title 49 for aircraft capable of carrying 10 or more individuals
or 6,000
51
pounds or more of cargo. Each Obligor possesses all necessary certificates,
franchises, licenses, permits, rights and concessions and consents which are
material to the conduct of its business and operations as currently conducted
(including in the case of each Obligor engaged in operations as an "air
carrier", the operation of the routes flown by it), a true and complete list of
which are set forth on Schedule 4.1(b).
(c) Subsidiaries. All of the Subsidiaries of each Obligor and all
other Persons in which any Obligor owns any Capital Stock, in each case, as of
the Effective Date, are identified in Schedule 4.1(c). Schedule 4.1(c) correctly
sets forth as of the Effective Date the equity and voting interest of Group in
each of the Subsidiaries identified therein. There are no limitations on the
rights of Group to vote the Capital Stock it owns of any Person listed on
Schedule 4.1(c). Airways Assurance Limited, a Bermuda corporation, is a
wholly-owned Subsidiary of Group whose business is limited to securing insurance
for the Obligors. AWHQ LLC, an Arizona limited liability company, is a
wholly-owned Subsidiary of the Obligors, owned 99% by Holdings and 1% by AWA,
whose business is limited to acting as a real estate holding company. America
West Company Store LLC, an Arizona limited liability company, is a wholly-owned
Subsidiary of AWA whose business is limited to operation of the America West
company store.
SECTION 4.2. AUTHORIZATION OF LOAN DOCUMENTS, ETC.
(a) Authorization. Each Obligor has duly authorized by all necessary
corporate action the execution, delivery and performance of the Loan Documents
to which it is a party.
(b) No Conflicts. After giving effect to the Consummation of the
Plan, the execution, delivery and performance by each Obligor of the Loan
Documents and the consummation of the transactions contemplated by the Loan
Documents to which it is a party do not and will not (i) violate any provision
of any law or any governmental rule or regulation applicable to any Obligor, the
certificate or articles of incorporation or bylaws of any Obligor or any order,
judgment or decree of any court or other agency of government binding on any
Obligor, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default or require any payment under (A) any
Loan Document or (B) any other Contractual Obligation of any Obligor, except
that with respect to clause (B), for any such conflict, breach, default or
requirement of payment which could not reasonably be expected to have a Material
Adverse Effect, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of any Obligor (other than the Liens
created under the Collateral Documents) or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of any Obligor, except for such approvals or consents (A) which will
have been obtained on or before the Effective Date and have been disclosed in
writing to the Agent and the Board or (B) with respect to any Contractual
Obligation, which if not obtained, could not reasonably be expected to have a
Material Adverse Effect.
(c) No Consents, Approvals, etc. The execution, delivery and
performance by each Obligor of the Loan Documents to which it is a party and the
consummation of the transactions contemplated by the Loan Documents to which
such Obligor is a party do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by, any
federal, state or other Governmental Authority or regulatory body or any other
Person which is required to be obtained or made on or prior to the Effective
Date and which has not been obtained or made, except as is disclosed on Schedule
4.2(c).
(d) Execution, Delivery, Enforceability. Each Obligor has duly
executed and delivered each of the Loan Documents to which it is party and after
giving effect to the Consummation of the Plan, each such Loan Document is the
valid and binding obligation of such Obligor, enforceable against such Obligor
in accordance with its respective terms, except as may be limited by bankruptcy,
52
insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws relating to or affecting the enforcement of creditors' rights generally,
including materiality, reasonableness, good faith and fair dealing, and by
general principles of equity (regardless of whether considered in a proceeding
in equity or at law).
SECTION 4.3. FINANCIAL CONDITION.
(a) The Borrower has heretofore delivered to the Agent, the Board
and the Loan Administrator (i) the audited consolidated balance sheets of the
Borrower and Group as at December 31, 2004, and the related consolidated
statements of income, stockholders' equity and cash flows of the Borrower and
Group for the Fiscal Year then ended, (ii) the unaudited consolidated balance
sheets of the Borrower and Group as at June 30, 2005 and the related unaudited
consolidated statements of income, stockholders' equity and cash flows of the
Borrower and Group for the six months then ended, and (iii) audited consolidated
balance sheets of AWA Holdings and AWA as at December 31, 2004, and the related
consolidated statements of income, stockholders' equity and cash flows of AWA
Holdings and AWA for the Fiscal Year then ended, and (iv) the unaudited
consolidated balance sheets of AWA Holdings and AWA as at June 30, 2005 and the
related unaudited consolidated statements of income, stockholders' equity and
cash flows of AWA Holdings and AWA for the six months then ended. All such
financial statements were prepared in accordance with GAAP (except that any
unaudited financial statements are subject to normal year-end adjustments and
may not be accompanied by footnotes) and fairly present, in all material
respects, the consolidated financial position of such Persons as at the date
thereof and the consolidated results of operations and cash flows of such Person
for the period then ended.
(b) After giving effect to the Consummation of the Plan, (i) the
Obligors taken as a whole are Solvent and (ii) no Obligor has any material
liability, including reasonably likely contingent liability or liability for
taxes, long-term lease or any unusual forward or long-term commitment of a type
required to be reflected in financial statements prepared in conformity with
GAAP, that is not reflected in the projections and pro forma financial
information delivered pursuant to clause (l) of Article III or, in the case of a
Reporting Obligor, taken into account in the preparation of the annual report on
Form 10-K for the fiscal year ended December 31, 2004 of such Reporting Obligor.
(c) Each Reporting Obligor maintains disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the Obligors and has (i) caused such disclosure
controls and procedures to be designed to ensure that material information
relating to the Obligors is reported internally, (ii) caused such internal
controls over financial reporting to be designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP, (iii)
evaluated the effectiveness of such disclosure controls and procedures and
presented as required in the Reporting Obligors' Annual Report on Form 10-K for
the Fiscal Year ended December 31, 2004, conclusions about the effectiveness of
the disclosure controls and procedures, and (iv) disclosed as required in such
Annual Report any change in such internal control over financial reporting that
occurred during the relevant reporting period that has materially affected, or
is reasonably likely to materially affect, their internal control over financial
reporting.
(d) Other than as disclosed on Schedule 4.3(d) or as disclosed in
the Annual Report on Form 10-K for the Fiscal Year ended December 31, 2004 of
any Obligor, no Obligor is a party to any "off-balance sheet arrangement"
(within the meaning of Item 303(a)(4) of Regulation S-K under the Securities Act
and the Exchange Act, as amended by SEC Release No. 33-8182 (January 28, 2003)).
53
SECTION 4.4. NO MATERIAL ADVERSE CHANGE; NO RESTRICTED PAYMENTS.
Since August 9, 2005, no material adverse change has occurred in the financial
condition, assets, liabilities, business or results of operations of the
Obligors, taken as a whole (excluding any such changes resulting from (i)
changes or conditions generally affecting the U.S. economy or financial markets,
(ii) changes or conditions generally affecting any of the segments of the
airline industry in which any of the Obligors operate, to the extent such
conditions or changes do not disproportionately impact the Obligors, or (iii)
the announcement or consummation of the Merger), or in the Borrower's ability to
repay the Loan or perform its obligations under the Loan Documents or with
respect to the matters included in the financial projections delivered to the
Board and the Agent on July 28, 2005. Since August 9, 2005, no Obligor has
directly or indirectly declared, ordered, paid or made, or set apart any sum or
property for, any Restricted Payment or agreed to do so except as would have
been permitted by Section 6.3, as if such section were in effect at all times
after such date. After giving effect to the Consummation of the Plan, no event
or occurrence which would constitute a Default or Event of Default has occurred
and is continuing.
SECTION 4.5. TITLE TO PROPERTIES; LIENS. Each Obligor has (i) good
and insurable fee title to (in the case of fee interests in real property), (ii)
valid, and in the case of leasehold interests in real property, insurable,
leasehold interests in (in the case of leasehold interests in real or personal
property) or (iii) good title to (in the case of all other personal property)
all of the properties and assets necessary to the conduct of its business
including property and assets reflected in the financial statements referred to
in Section 4.3, except for assets disposed of since the date of such financial
statements in the ordinary course of business or pursuant to the restructuring
contemplated by the Plan of Reorganization. Except as otherwise permitted by
this Agreement and the Collateral Documents, all such properties and assets are
free and clear of Liens.
SECTION 4.6. LITIGATION; ADVERSE FACTS. There are no actions, suits,
proceedings, arbitrations or investigations (whether or not purportedly on
behalf of Group, the Borrower or any other Obligor) at law or in equity or
before or by any Governmental Authority pending or, to the knowledge of any
Responsible Officer of any Principal Obligor, threatened against or affecting
(in either case, whether asserted or unasserted) any of the Obligors or any
property of the Obligors that, individually or in the aggregate, (a) except for
matters disclosed on Schedule 4.6, in the reasonable judgment of the Obligors
could be expected to have a Material Adverse Effect, or (ii) challenge the
legality, validity or binding effect of, or seeks to restrain or enjoin any
Obligor from entering into or performing under, any Loan Document including,
without limitation, this Agreement or any Collateral Document. No Obligor is
subject to any final judgments, writs, injunctions or decrees of any court or
any Governmental Authority, compliance with which could reasonably be expected
to have a Material Adverse Effect, or is in default with respect to any such
judgments, writs, injunctions or decrees, which default could reasonably be
expected to have a Material Adverse Effect.
SECTION 4.7. PAYMENT OF TAXES.
(a) Except as otherwise set forth on Schedule 4.7(a): (i) the
Obligors have timely filed all material Tax returns and reports required to have
been filed, and have paid or made adequate provision for payment of all material
Taxes levied or imposed upon them or their properties (including the
Collateral), income or assets that have become due and payable, except (A) in
those instances in which such Taxes are being contested in good faith by
appropriate proceedings diligently conducted and for which adequate reserves
have been made in accordance with GAAP and (B) that the Debtors' obligations to
pay Taxes that relate to a Tax period (or portion thereof) ending on or before
the commencement of the Bankruptcy Cases and which first became due and payable
after the time of the commencement of the Bankruptcy Cases, have been stayed or
enjoined pursuant to the Plan of Reorganization, the Confirmation Order or the
Bankruptcy Code, it being understood that the exception in this clause (B) does
not affect the Obligors' representation that they have made adequate provision
for such Taxes; (ii) there is no proposed
54
Tax assessment against any Obligor that relates to a material amount of Taxes,
and neither Group nor the Borrower knows of any basis for any such assessment;
and (iii) no Obligor is party to any Tax sharing agreement with any Person other
than another Obligor, other than tax indemnity agreements in leasing
transactions entered into in the ordinary course of business.
(b) Schedule 4.7(b) is a true and complete list of each claim of a
governmental unit of the kind entitled to priority in payment, as specified in
section 502(i) and 507(a)(8) of the Bankruptcy Code, that the Debtors will or
expect to pay or to be required to pay during the six (6) years immediately
following the Effective Date.
SECTION 4.8. PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE
AGREEMENTS.
(a) No Default. After giving effect to the Consummation of the Plan,
no Obligor is in default in the performance, observance or fulfillment of any
Contractual Obligations other than defaults which are not reasonably expected to
have a Material Adverse Effect, and no condition exists that, with the giving of
notice or the lapse of time or both, would constitute such a default; it being
understood that the existence on the Effective Date of any default under (i)
certain executory contracts and unexpired leases that the Obligors are entitled
to reject in accordance with the Plan of Reorganization or prior order of the
Bankruptcy Court and (ii) certain other contracts relating to property that any
Obligor has abandoned pursuant to an order of the Bankruptcy Court shall be
deemed not to be a breach of this Section 4.8(a).
(b) No Adverse Agreements. No Obligor is a party to or is otherwise
subject to any agreements or instruments or any charter or other internal
restrictions which, individually or in the aggregate, could reasonably be
expected to impair the ability of the Obligors, taken as a whole, to perform
their payment or other material obligations under the Loan Documents.
(c) Other Agreements. Except as disclosed on Schedule 4.8(c), no
Obligor is a party to or is otherwise subject to any agreement or arrangement,
including, but not limited to, agreements relating to Indebtedness, lease
agreements or Guarantees, that provide for early payment, additional collateral
support, changes in terms or acceleration of maturity, or the creation of an
additional financial obligation, as a result of any of (i) an adverse change in
the credit rating of an Obligor, (ii) an adverse change in the financial ratios,
earnings, cash flow or stock price of an Obligor or (iii) changes in the value
of underlying, linked or indexed assets, except to the extent that such
agreements or arrangements could not reasonably be expected to have a Material
Adverse Effect.
SECTION 4.9. GOVERNMENTAL REGULATION. No Obligor is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act of 1940 or under any other federal or
state statute or regulation (other than the Bankruptcy Code) which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of its Obligations unenforceable.
SECTION 4.10. SECURITIES ACTIVITIES. No Obligor owns or is engaged
principally in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock (as defined below), and no proceeds of the Loan were
used to purchase or carry Margin Stock or to extend credit to any Person for the
purpose of purchasing or carrying any Margin Stock in a manner that violated or
caused a violation of Regulations T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors. For
purposes of this Section 4.10, the term "Margin Stock" has the meaning assigned
to that term in Regulation T, U or X of the Board of Governors of the Federal
Reserve System as in effect from time to time.
55
SECTION 4.11. EMPLOYEE BENEFIT PLANS.
(a) Schedule 4.11(a) lists each Plan and each Multiemployer Plan
maintained or contributed to, or required to be contributed to, by Group or any
of its ERISA Affiliates as of the Effective Date. Each Plan has been operated
and administered in compliance with all applicable requirements of ERISA, and,
if intended to qualify under Section 401(a) or 403(a) of the Internal Revenue
Code, in compliance with all applicable requirements of such provisions except
where the failure to do so could not reasonably be expected to have, taking all
instances in the aggregate, a Material Adverse Effect.
(b) Full payment has been made by Group or any of its ERISA
Affiliates of all minimum amounts which such entities are required to pay under
the terms of each Plan and Multiemployer Plan except where the failure to so
comply, taking all instances in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.
(c) No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to have a Material
Adverse Effect.
(d) Neither Group nor any of its ERISA Affiliates maintains or
contributes to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) which provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any employee pension benefit
plan (as defined in Section 3(2) of ERISA), other than a Plan the obligations
with respect to which, when taken together with the projected contributions
thereto reflected in the projections and pro forma financial information
delivered pursuant to clause (l) of Article III, could not reasonably be
expected to have a Material Adverse Effect.
(e) After giving effect to the Consummation of the Plan, no Plan
maintained by Group or any ERISA Affiliate is underfunded (based on the present
value of all accumulated benefit obligations thereunder) except to the extent
that the aggregate amount of underfunding with respect to all such plans, when
taken together with the projected contributions thereto reflected in the
projections and pro forma financial information delivered pursuant to clause (l)
of Article III, could not reasonably be expected to have a Material Adverse
Effect.
SECTION 4.12. ENVIRONMENTAL PROTECTION.
(a) Compliance with Environmental Laws. All Facilities and
operations of each Obligor are, and have been to the knowledge of each Principal
Obligor, in compliance with all Environmental Laws except for any noncompliance
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(b) Hazardous Materials Activity. Except as disclosed on Schedule
4.12(b), there are no, and have been no, conditions, occurrences, or Hazardous
Materials Activity (i) arising at any Facilities or (ii) arising in connection
with the operations of the Obligors or of past or current Affiliates of any
Obligor (while under the control of a Principal Obligor or otherwise to the
knowledge of a Principal Obligor) (including the transportation of Hazardous
Materials in accordance with applicable regulations), which conditions,
occurrences or Hazardous Materials Activity could reasonably be expected to form
the basis of an Environmental Claim against any Obligor and which, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(c) Environmental Claims. Except as disclosed on Schedule 4.12(c),
there are no pending or, to the knowledge of any Principal Obligor, threatened
Environmental Claims against any
56
Obligor, and no Principal Obligor has received any notices, inquiries, or
requests for information with respect to any Environmental Claims which could
reasonably be expected to have a Material Adverse Effect.
(d) Orders, Decrees, etc. No Obligor is currently operating or
required to be operating under any compliance order, schedule, decree or
agreement, any consent decree, order or agreement, and/or any corrective action
decree, order or agreement issued or entered into under any Environmental Law
the failure to comply with which could reasonably be expected to have a Material
Adverse Effect.
SECTION 4.13. DISCLOSURE.
(a) No representation or warranty or certification of any Obligor or
of any Responsible Officer of the Borrower or Group or any other Officer of any
Obligor contained in this Agreement, any other Loan Document or in any other
document, certificate or written statement furnished to the Board, the Agent or
the Lenders by or on behalf of any Obligor (as modified or supplemented by other
written information so furnished) for use in connection with the negotiation and
closing of the transactions contemplated by this Agreement contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements therein at the time, and in light of the circumstances under
which they were made, not misleading; provided that with respect to projected
financial information contained in any such document or furnished to any party
hereto by or on behalf of the Obligors, the Obligors represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time, it being recognized that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered thereby may differ from the projected results.
(b) None of the Reporting Obligors' filings under the Exchange Act
(as amended or supplemented through the date hereof) nor the Disclosure
Statement (as amended or supplemented through the date hereof) contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
SECTION 4.14. COMPLIANCE WITH LAWS. Each Obligor is in compliance
with all laws, statutes, rules, regulations and orders binding on or applicable
to such Obligor, and all of its properties, except to the extent failure to so
comply (either individually or in the aggregate) could not reasonably be
expected to have a Material Adverse Effect.
SECTION 4.15. INDEBTEDNESS. Schedule 4.15 correctly sets forth the
consolidated Indebtedness of Group and its Subsidiaries as of the Effective Date
and identifies each primary obligor and each guarantor or other secondary
obligor thereof, if any.
SECTION 4.16. INSURANCE. The properties, business and operations of
the Obligors are insured or reinsured with financially sound and reputable
insurance companies or by the United States of America, in such amounts, with
such deductibles and covering such risks as are insured against (including, but
not limited to, war risk and third party liability) and carried in accordance
with applicable law and prudent industry practice by major U.S. commercial air
carriers similarly situated with the Obligors and owning or operating similar
properties, aircraft and engines.
SECTION 4.17. PERFECTED SECURITY INTERESTS. The Collateral Agent, on
behalf of the Lenders and the Board, has valid security interests in the
Collateral, with such priority and perfected to such extent as is provided in
the Collateral Documents.
57
SECTION 4.18. COMPLIANCE WITH THE PLAN OF REORGANIZATION. No Obligor
is in default with respect to any material obligation under the Plan of the
Reorganization.
SECTION 4.19. ABSENCE OF LABOR DISPUTES. No strikes, boycotts, work
stoppages or lockouts with respect to any of the Obligors exist, and no Obligor
has received written notice, sanctioned by any collective bargaining unit
representing employees of such Obligor, threatening a strike, boycott or work
stoppage.
SECTION 4.20. COMPLIANCE WITH CERTAIN GATE LEASES. After giving
effect to the Consummation of the Plan, each Obligor is in compliance in all
material respects with all Gate Leases with respect to the airports listed on
Schedule 4.20.
SECTION 4.21. SLOT UTILIZATION. Each Obligor which holds or operates
Slots is utilizing its Slots in a manner consistent with the Slot Regulations in
order to avoid the withdrawal of any Slot (other than Slots of the type
referenced in clauses (f) through (i) of the definition of "Secondary Slots") by
the FAA, taking into account any waivers or other relief granted by the FAA in
connection with the failure to utilize Slots. None of the Obligors has received
any notice of withdrawal from the FAA, nor (other than with respect to Slots of
the type referenced in clauses (d) and (f) through (i) of the definition of
"Secondary Slots") is any Obligor aware of any other event or circumstance
(other than any proposed change of law, regulation or rule), that could
reasonably be expected to result in the withdrawal of any Slot or otherwise
impair any of the Slots or the value thereof (it being understood, however, that
the Slot Regulations provide for withdrawal in certain circumstances other than
for failure to utilize Slots, and the FAA has asserted the right to withdraw and
reallocate "pool" Slots (within the meaning of 14 C.F.R. Section 93.226(e)),
including those identified on Schedule 1.1(a) hereto, at its discretion). The
Obligors maintain personnel, policies, procedures and a computer database for
the monitoring, utilization and management of the Slots in compliance with the
Slot Regulations so as to ensure, to the greatest extent operationally feasible,
that the Slot Regulations are complied with and no Slot becomes subject to
withdrawal by the FAA.
SECTION 4.22. DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS. Schedule
4.22 contains a true, complete and correct list of all deposits accounts and
securities accounts of the Obligors, including, with respect to each account,
the name of such account, the account number, the bank or financial institution
with which such account is maintained, and the balance therein as of a specified
date (which shall be no earlier than August 31, 2005), indicating thereon
whether each such account is subject to a Control Agreement in favor of the
Collateral Agent.
SECTION 4.23. UNRESTRICTED CASH AND CASH EQUIVALENTS. After the
Consummation of the Plan, the Obligors have on a pro forma basis as of the
Effective Date, taking into account net cash proceeds of the Stock Offering, the
Convertible Note Offering and the Juniper Financing expected to be received
within seven (7) days of the Effective Date, unrestricted cash and Cash
Equivalents (as determined in accordance with GAAP) of not less than
$1,250,000,000.
ARTICLE V
AFFIRMATIVE COVENANTS
To induce the other parties to enter into this Agreement (excluding
any other Obligor), the Obligors agree with each other party hereto (excluding
any other Obligor) that, so long as any of the Obligations (other than
contingent indemnification obligations) remain outstanding:
58
SECTION 5.1. ACCOUNTING CONTROLS; FINANCIAL STATEMENTS AND OTHER
REPORTS.
(a) Accounting Controls. Each Obligor will maintain a system of
accounting established and administered in accordance with sound business
practices and applicable law, rules and regulations issued by any Governmental
Authority to permit preparation of financial statements in conformity with GAAP,
including, without limitation, as set forth in Section 4.3(c).
(b) Financial Certificates; Information. Group will deliver to the
Agent, [the Lenders6], the Loan Administrator and the Board:
(i) Quarterly Financials: within two (2) Business Days after the
date on which a Reporting Obligor files or is required to file its Form
10-Q under the Exchange Act (after giving effect to any extension pursuant
to Rule 12b-25 under the Exchange Act (or any successor rule)), (A) the
consolidated balance sheets of such Person as at the end of such fiscal
quarter and the related consolidated statements of income of such Person
for such fiscal quarter for the period from the beginning of the then
current Fiscal Year to the end of such fiscal quarter and cash flows of
such Person for the period from the beginning of the then current Fiscal
Year to the end of such fiscal quarter, setting forth in each case in
comparative form the corresponding figures from the corresponding dates
and periods of the previous Fiscal Year, all prepared in accordance with
GAAP (except that any unaudited financial statements are subject to normal
year-end adjustments and may not be accompanied by footnotes) and in
reasonable detail and certified by the Chief Financial Officer,
Controller, Chief Executive Officer or Treasurer of such Person that they
fairly present in all material respects the consolidated financial
condition of such Person as at the dates indicated and the results of its
operations and its cash flows for the periods indicated, and (B) a
narrative report describing the operations of such Person in the form
prepared for presentation to senior management for such fiscal quarter and
for the period from the beginning of the then current Fiscal Year to the
end of such fiscal quarter; provided that delivery of such Person's Form
10-Q for such fiscal quarter shall be deemed to satisfy all of the
requirements of this clause (i); provided, further, that in lieu of
delivering a hard copy of Form 10-Q hereunder, Group may transmit by
e-mail an electronic copy of such document or a link to an electronic copy
of such document on the XXXXX database (or a comparable service) or an
Obligor's website;
(ii) Monthly Reporting: within 45 days after the end of each of the
first twenty-four (24) calendar months following the Effective Date, the
consolidated balance sheets of each Reporting Obligor as at the end of
such month and the related consolidated statements of income of such
Person for such calendar month and for the period from the beginning of
the then current Fiscal Year to the end of such month and cash flows of
each such Person for the period from the beginning of the then current
Fiscal Year to the end of such calendar month, and together therewith, a
statement of the Adjusted Cash Amount as of the last Business Day of such
calendar month, all prepared in accordance with GAAP (except that any
unaudited financial statements are subject to normal year-end adjustments
and may not be accompanied by footnotes) and in reasonable detail and
certified by the Chief Financial Officer, Chief Executive Officer,
Controller or Treasurer of such Person that they fairly present in all
material respects the consolidated financial condition of such Person as
at the dates indicated and the results of its operations and its cash
flows for the periods indicated;
(iii) Year-End Financials: within two (2) Business Days after the
date on which a Reporting Obligor files or is required to file its Form
10-K under the Exchange Act (after giving
--------------
(6) Discuss delivery of reports to Agent, Loan Administrator and the Board for
further distribution by Agent to Lenders (other than Lenders who opt out).
59
effect to any extension pursuant to Rule 12b-25 under the Exchange Act (or
any successor rule)), (A) the consolidated balance sheets of such Person
at the end of such Fiscal Year and the related consolidated statements of
income, stockholders' equity and cash flows of such Person for such Fiscal
Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year and the corresponding figures from
the annual financial plan delivered pursuant to clause (ix) of this
Section 5.1(b) for the Fiscal Year covered by such financial statements of
such Person, all in reasonable detail, and certified by the Chief
Financial Officer or the Chief Executive Officer of such Person that they
fairly present in all material respects the consolidated financial
condition of such Person as at the date indicated and the results of its
operations and its cash flows for the periods indicated, (B) a narrative
report describing the operations of such Person in the form prepared for
presentation to senior management for such Fiscal Year, and (C) an
accountant's report thereon of KPMG LLP or other independent certified
public accountants of recognized national standing selected by the
Borrower or Group, as the case may be, which report (1) shall be
unqualified as to scope, (2) shall not, for each Fiscal Year commencing
with the Fiscal Year ending December 31, 2006, contain a going concern
qualification, and (3) shall state that such consolidated financial
statements fairly present the consolidated financial position of such
Person as at the dates indicated and the results of their operations and
their cash flows for the periods indicated in conformity with GAAP applied
on a basis consistent with prior years, and that the examination by such
accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards;
provided that (x) references in such report to changes in GAAP, changes in
accounting standards, highlighting contents of footnotes, limitations in
the scope of the audit or exclusions from the audit information not
required by GAAP that are, in each case, customary in industry practice
and not prejudicial to the opinion stated therein shall not be deemed to
be "qualifications" for the purpose of clause (C) of this Section
5.1(b)(iii) and (y) delivery of such Person's Form 10-K for such Fiscal
Year, and which satisfy the requirements of clause (C) above, shall be
deemed to satisfy the requirements of this Section 5.1(b)(iii); provided,
further, that in lieu of delivering a hard copy of Form 10-K hereunder,
Group may transmit by e-mail an electronic copy of such document or a link
to an electronic copy of such document on the XXXXX database (or a
comparable service) or an Obligor's website;
(iv) Officers' Certificates: together with each delivery of
financial statements pursuant to clauses (i) and (iii) above, an Officer's
Certificate of the Borrower (which certificate may incorporate the
Collateral Value Certificate and schedule of deposit accounts and
securities accounts of the Obligors deliverable on such date pursuant to
clauses (xix) and (xxii) of this Section 5.1(b), respectively) (I) stating
that the signer has made, or caused to be made under his or her
supervision, a review of the terms of this Agreement and of the
transactions and condition of the Obligors during the accounting period
covered by such financial statements and that such review has not
disclosed the existence, and that the signer does not have knowledge of
the existence as at the date of such Officer's Certificate, of any
condition or event that constitutes a Default or an Event of Default, or,
if any such condition or event existed at the date of the certificate,
specifying the nature and period of existence thereof and what action the
Obligors have taken, are taking and propose to take with respect thereto,
(II) demonstrating in reasonable detail compliance (or noncompliance)
during and at the end of the applicable accounting periods with the
restrictions contained in Section 6.3 and Section 6.4, and (III) with
respect to the delivery of financial statements pursuant to clause (iii)
above, stating whether any change in GAAP or in the application thereof
has occurred since the date of delivery of the preceding year-end
financial statements, and if any such change has occurred, describing the
effect of such change on the financial statements of Group and the
Borrower;
60
(v) SEC Filings and Press Releases: promptly upon their filing,
copies of (A) all financial statements, reports, notices and proxy
statements sent or made available generally by a Reporting Obligor to its
security holders and (B) all regular, periodic and current reports
(including all Form 8-K reports) and all registration statements and
prospectuses, if any, filed by any Reporting Obligor with any securities
exchange or with the SEC or any Governmental Authority or private
regulatory authority; provided that in lieu of delivering a hard copy of
any such document, Group may transmit by e-mail an electronic copy of such
document or a link to an electronic copy of such document on the XXXXX
database (or a comparable service) or an Obligor's website;
(vi) Notice of Events of Default, etc.: promptly upon any
Responsible Officer of a Principal Obligor obtaining knowledge of (A) any
condition or event that constitutes a Default or an Event of Default or
(B) the occurrence of any event or change that has had, or is reasonably
expected to have, a Material Adverse Effect (disregarding for purposes of
this clause (vi) publicly known facts, circumstances, events or conditions
applicable to the airline and travel industries generally), an Officer's
Certificate of Group specifying the nature and period of existence of such
Default or Event of Default or condition, event or change and what action
the Obligors have taken, are taking and propose to take with respect
thereto;
(vii) Litigation or Other Proceedings: to the extent not otherwise
disclosed pursuant to this Section 5.1, promptly upon any Responsible
Officer of a Principal Obligor obtaining knowledge of (A) the institution
of, or threat of, any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration against
or affecting any Obligor or any property of any Obligor, unless Group's
general counsel or outside legal counsel has determined that a favorable
outcome to such Obligor is reasonably likely (collectively, "Proceedings")
or (B) any material development in any Proceeding that, in either case:
(1) if adversely determined, would be reasonably likely to
have a Material Adverse Effect;
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby; or
(3) challenges or calls into question in any material respect
the reliability or accuracy of a Reporting Obligor's SEC filings;
written notice thereof together with such other information as may be
reasonably available to the Obligors to enable the Agent and the Board,
and their respective counsel to evaluate such matters;
(viii) ERISA Reports: promptly after the receipt by the Borrower of
a request therefor by the Agent, the Loan Administrator or the Board,
copies of any annual and other reports (including Schedule B thereto) with
respect to a Plan filed by an Obligor or any ERISA Affiliate with the
United States Department of Labor, the IRS or the PBGC;
(ix) Financial Plan and Projections: annually, as soon as
practicable after preparation thereof in the ordinary course of business
but in no event later than February 28 of each year, copies of the
Principal Obligors' annual financial plans and projections, together with
a reconciliation of actual results to projected results for such periods;
61
(x) Environmental Audits and Assessments: as soon as practicable
following receipt thereof by a Principal Obligor, copies of all
environmental audits and assessments, whether prepared by personnel of an
Obligor or by independent consultants (except to the extent protected by
the "attorney work product" privilege or similar privilege expressly
granted by statute with respect to the work product of environmental
consultants), with respect to material environmental matters at any
Facility or which relate to an Environmental Claim which could reasonably
be expected to have a Material Adverse Effect;
(xi) Ratings Change: promptly after any public release by S&P or
Xxxxx'x raising or lowering (i) an Obligor's general unsecured credit
rating or (ii) a credit rating on the Loan obtained pursuant to Section
5.19 hereof, notice (which may be sent by e-mail) of such change;
(xii) Insurance Reports: No later than January 30 of each year,
insurance brokers reports with respect to all insurance maintained by the
Obligors, together with schedules detailing the type and amount of
coverage provided and the insurance carrier;
(xiii) Insurance/Condemnation Proceeds: in addition to any similar
reporting obligations under the Collateral Documents but without the
duplication of any such obligation, upon (A) a Responsible Officer of a
Principal Obligor obtaining knowledge of the occurrence of an event of
loss or damage to, or any taking, condemnation or requisition by any
Governmental Authority of, any property of any Obligor having fair market
value in excess of $5,000,000 whether or not such loss or damage is
expected to result in receipt of insurance or condemnation proceeds or of
any other event of loss or damage that the Obligors reasonably expect to
result in proceeds reasonably estimated by them to exceed $5,000,000 and
(B) the receipt of insurance proceeds or condemnation proceeds from an
event of loss or material damage to, or any taking, condemnation or
requisition by any Governmental Authority of, any property of any Obligor
giving rise to a mandatory prepayment obligation under Section 2.5, notice
of such occurrence;
(xiv) Future Issuance and Asset Sales: prior to an Obligor
consummating any Future Issuance or Asset Sale greater than $1,000,000 in
an individual transaction or series of related transactions giving rise to
a mandatory prepayment obligation under Section 2.5, notice of such event;
provided that in the case of a Replacement Secured Financing, the
applicable Obligor shall give no less than fifteen (15) Business Days'
prior notice of such event and include therein (A) a specific
identification of the Collateral proposed to be pledged, (B) the
Collateral Release values therefor together with copies of the Appraisal
Reports upon which such Collateral Release Values are based, if
applicable, and (C) a detailed summary of the terms and conditions of such
Replacement Secured Financing;
(xv) Plan Audits and Liabilities: promptly after (A) an Obligor or
any ERISA Affiliate contacts the IRS or the PBGC for the purpose of
participating in a closing agreement or any voluntary resolution program
with respect to a Plan or Multiemployer Plan which could reasonably be
expected to have a Material Adverse Effect, or (B) a Responsible Officer
of a Principal Obligor knows or has reason to know that any event with
respect to any Plan or Multiemployer Plan occurred that could reasonably
be expected to have a Material Adverse Effect, notice of such contact or
the occurrence of such event;
(xvi) Funding Changes and New Plan Benefits: promptly after the
change, a notification of any material increases in the benefits, or
material change in funding method, with respect to which an Obligor may
have any liability, under any Plan or Multiemployer Plan or the
establishment of any material new Plan or Multiemployer Plan with respect
to which an Obligor may have any liability or the commencement of
contributions to any Plan or Multiemployer Plan
62
to which an Obligor or any ERISA Affiliate was not previously
contributing, except to the extent that such an event could not reasonably
be expected to have a Material Adverse Effect;
(xvii) Claims and Proceedings: promptly after receipt of written
notice of commencement thereof, notification of all (A) claims made by
participants or beneficiaries with respect to any Plan and (B) actions,
suits and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting an Obligor or any ERISA Affiliate with respect to any Plan,
except those which, in the aggregate, if adversely determined, could not
reasonably be expected to have a Material Adverse Effect;
(xviii) ERISA Event: promptly after the occurrence of any ERISA
Event (A) that could reasonably be expected to have a Material Adverse
Effect or (B) that relates to the occurrence or existence of an event or
condition that could reasonably be expected to have a Material Adverse
Effect, notice of such ERISA Event;
(xix) Collateral Value Certificates: no later than the date upon
which an Officer's Certificate is required to be delivered under clause
(iv) of this Section 5.1(b) with respect to each of the four fiscal
quarters of each Fiscal Year (and, in the case of the last fiscal quarter
of each Fiscal Year, no later than the first Interest Payment Date
occurring after the end of such Fiscal Year), a Collateral Value
Certificate certifying the Collateral Value (based on the most recently
completed Appraisal Report), in each case as of a date no earlier than the
end of the fiscal quarter or the Fiscal Year to which such Officer's
Certificate relates, together with the Appraisal Report upon which such
Collateral Value Certificate is based;
(xx) Slot Utilization Reports: as soon as available, but in any
event no later than the date on which each report referred to in clause
(A) below is submitted to the FAA, each of the following: (A) a true and
complete copy of each Slot utilization report required to be delivered to
the FAA under the Slot Regulations, (B) any related requests for waivers
or other documentation provided to the FAA in connection therewith, and
(C) a summary report, in the form of Exhibit L, of Slot utilization during
the period covered by the report to the FAA referred to in (A) above;
(xxi) Adjusted Cash Amount: within one Business Day, by e-mail, the
Adjusted Cash Amount as of the last Business Day of each calendar week and
for each Business Day in such calendar week; provided that if the Obligors
do not have current information regarding the Obligors' aggregate
outstanding air traffic liability for purposes of calculating the Adjusted
Cash Amount, such weekly reports may be based on a good-faith estimate of
the Obligors' aggregate then outstanding air traffic liability based on
all available data;
(xxii) Deposit Accounts and Securities Accounts: no later than the
date upon which an Officer's Certificate is required to be delivered under
clause (iv) of this Section 5.1(b) with respect to each Fiscal Year and
each fiscal quarter of each Fiscal Year, a schedule of all deposits
accounts and securities accounts of the Obligors, including, with respect
to each account, the name of such account, the account number, the bank or
financial institution with which such account is maintained and the
balance therein as of the end of the accounting period covered by the
financial statements deliverable with such Officer's Certificate,
indicating thereon whether each such account is subject to a Control
Agreement in favor of the Collateral Agent;
(xxiii) Cash Forecast: if for a period of five (5) consecutive
Business Days the Adjusted Cash Amount is less than 125% of the Minimum
Adjusted Cash Amount required to be maintained at such time pursuant to
Section 6.4(a), no later than Wednesday of each week thereafter, a rolling
13-week cash forecast including reports, in form, detail and substance
63
reasonably satisfactory to the Board (so long as the Board is either a
guarantor of Tranche A or a Lender hereunder), or thereafter, the Agent,
which show the Obligors' sources and uses of cash from the prior week, and
material variances associated therewith; and
(xxiv) Other Information: with reasonable promptness, such other
information and data with respect to an Obligor as from time to time may
be reasonably requested by the Agent, the Loan Administrator or the Board.
SECTION 5.2. CORPORATE EXISTENCE. Except as permitted by Section
6.9, each Obligor will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and the corporate,
partnership or other existence of each Obligor and the material rights, permits,
licenses (charter and statutory) and franchises of each Obligor; provided that
subject to Section 5.10, no Obligor shall be required to preserve any such
right, permit, license or franchise, and, subject to compliance with Section
6.9, as applicable, no Obligor shall be required to preserve any such corporate,
partnership or other existence, if in each case, the Chief Executive Officer of
Group or the Borrower shall determine in the exercise of his or her business
judgment that the preservation thereof is no longer desirable in the conduct of
the business of the Obligors taken as a whole and that abandonment of any such
right, permit, license or franchise or failure to preserve such existence could
not reasonably be expected to have a Material Adverse Effect.
SECTION 5.3. PAYMENT OF TAXES AND CLAIMS. Each Obligor will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material Taxes levied or imposed upon an Obligor or upon the
income, profits or property of an Obligor except (a) that this Section 5.3 shall
not require the Obligors who were debtors in the Bankruptcy Cases to pay Taxes
that relate to a Tax period (or portion thereof) ending on or before the
commencement of the Bankruptcy Cases and which first became due and payable
after the time of the commencement of the Bankruptcy Cases, to the extent that,
and for so long as, such Taxes are stayed or enjoined pursuant to the Plan of
Reorganization, the Confirmation Order or the Bankruptcy Code, it being
understood that notwithstanding the exception in this clause (a), such Obligors
shall make adequate reserves in accordance with GAAP for Taxes stayed or
enjoined pursuant to the Plan of Reorganization, the Confirmation Order or the
Bankruptcy Code, or (b) where the amount, applicability or validity of such
Taxes are being contested in good faith by appropriate proceedings and for which
adequate reserves have been made in accordance with GAAP and (ii) all lawful
claims for labor, materials and supplies that, if unpaid, might by law become a
Lien on the property of an Obligor. No Obligor will file or consent to the
filing of, any consolidated income tax return with any Person (other than any
other Obligor or any Subsidiary of any Obligor).
SECTION 5.4. MAINTENANCE OF PROPERTIES; INSURANCE.
(a) Maintenance of Properties. Each Obligor will maintain all
properties used or useful in the conduct of the business of the Obligors in good
condition, repair and working order (ordinary wear and tear excepted) and supply
such properties with all necessary equipment and make all necessary repairs,
renewals, replacements, betterments and improvements thereto, all as in the
reasonable judgment of an Obligor may be necessary so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times; provided, however, that no Obligor shall be restricted from discontinuing
the operation and maintenance of any such properties if such discontinuance is,
in the good faith judgment of Group, desirable in the conduct of the business of
such Obligor and could not reasonably be expected to have a Material Adverse
Effect, but subject in each case to all applicable provisions of the Collateral
Documents.
64
(b) Insurance. Each Obligor will insure and keep insured or
reinsured with financially sound and reputable insurance companies that are not
Affiliates of the Obligors or by the United States of America, their businesses
and operations and such of their respective properties, in such amounts, with
such deductibles and covering such risks as are insured against (including, but
not limited to, war risk and third party liability) and carried in accordance
with applicable law and prudent industry practice by U.S. commercial air
carriers similarly situated with the Obligors and owning or operating similar
properties, aircraft and engines, including such insurance coverage as is
required to be maintained under the Collateral Documents, and providing for not
less than thirty (30) days' (or in the case of war risk coverage, the maximum
time as is available) prior notice to the Agent, the Board, the Loan
Administrator and the Collateral Agent of termination, lapse or cancellation of
such insurance or reinsurance; provided that this Section 5.4(b) shall not
prohibit any Obligor from procuring and maintaining all or any portion of its
insurance through Airways Assurance Limited LLC so long as Airways Assurance
Limited LLC reinsures 100% of such risk as provided above in this Section 5.4(b)
and such reinsurance policies contain a cut-through endorsement.
SECTION 5.5. INSPECTION. Each Obligor will permit any authorized
representatives designated by the Agent, any Lender, the Loan Administrator or
the Board to visit and inspect any of the properties of the Obligors, including
their financial and accounting records, and to make copies and take extracts
therefrom, and to discuss their affairs, finances and accounts with its and
their officers and independent public accountants (it being understood that a
representative of an Obligor will be present), at the Borrower's expense, all
upon reasonable notice and at such reasonable times during normal business hours
and as often as may be reasonably requested; provided that so long as the
Controlling Creditor is not exercising material remedies under the Loan
Documents, such inspection shall not be disruptive to the business of the
Obligors. Without limiting the generality of the foregoing, the Obligors will
meet with the Loan Administrator on a quarterly basis (in person or, if deemed
appropriate by the Loan Administrator, telephonically) to review the Obligors'
financial and accounting records and will make their officers and independent
public accountants available to discuss with the Loan Administrator the
Obligors' affairs, financial condition, results of operations, business plan,
prospects, projections, accounts and other related matters (including, without
limitation, the integration of AWA and the Borrower), and otherwise will
cooperate with the Loan Administrator and provide such information as it may
reasonably request to enable it to perform the services described in the Loan
Administration Agreement.
SECTION 5.6. COMPLIANCE WITH LAWS, ETC. Each Obligor will comply
with all applicable statutes, rules, regulations, orders, restrictions and
Governmental Authorizations of any applicable Governmental Authority, in respect
of the conduct of the businesses of the Obligors and the ownership of their
respective properties (including, without limitation, Gate Leases and Slots),
except such as are being contested in good faith by appropriate proceedings and
except for such noncompliance as could not in any case or in the aggregate
reasonably be expected to have a Material Adverse Effect. None of the Obligors
shall conduct any Hazardous Materials Activity at any Facility or at any other
location in a manner that does not comply in all material respects with
Environmental Laws. Each Obligor will use commercially reasonable efforts to
cause all other Persons operating or occupying any of their properties to comply
in all material respects with Environmental Laws.
SECTION 5.7. REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
(a) To the extent required by Environmental Laws, each Obligor will
take any and all necessary remedial action (except to the extent that such
remedial action is taken by other Persons responsible for such remedial action
through contractual arrangements with an Obligor) in connection with the
presence, storage, use, disposal, transportation, Release or threatened Release
of any Hazardous Materials on, under or about any Facility in order to comply
timely with all applicable Environmental Laws and Governmental Authorizations
except for such non-compliance as could not in any case or in the
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aggregate reasonably be expected to have a Material Adverse Effect. In the event
any Obligor undertakes any remedial action with respect to any Hazardous
Materials on, under or about any Facility, Group, Borrower or such Obligor will
conduct and complete such remedial action (or will cause such action to be taken
pursuant to contractual rights of such Obligor against third parties) in
compliance with all applicable Environmental Laws, and in accordance with the
policies, orders and directives of all federal, state and local Governmental
Authorities except when, and only to the extent that, such Obligor's liability
for such presence, storage, use, disposal, transportation or discharge of any
Hazardous Materials is being contested in good faith and by appropriate
proceedings diligently conducted by such Obligor or except for such
non-compliance as could not in any case or in the aggregate reasonably be
expected to have a Material Adverse Effect.
(b) The Requisite Lenders or the Board may request (i) from time to
time, if and when such Person(s) have reason to believe that an Environmental
Claim or Release of Hazardous Materials which could reasonably be expected to
have a Material Adverse Effect may exist at or with respect to any Facility, and
(ii) not more than once during any twelve month period for the purpose of
determining whether there is belief that an Environmental Claim or Release of
Hazardous Materials which could reasonably be expected to have a Material
Adverse Effect exists at or with respect to any Facility, and in the case of any
such request, the Borrower will provide to the Lenders and the Board, within
sixty (60) days after such request, at the expense of the Borrower, an
environmental site assessment report for any of its, or any other Obligor's
properties described in such request, prepared by an environmental consulting
firm reasonably acceptable to the Board evaluating the Environmental Claim or
Release of Hazardous Materials and estimating the cost of any required
compliance, removal or remedial action in connection with the Environmental
Claim or Release of Hazardous Materials. Without limiting the generality of the
foregoing clause (b), if the Agent determines at any time that a material risk
exists that any such report will not be provided in the time referred to above,
the Agent may retain an environmental consulting firm to prepare such report at
the expense of the Borrower, and each Obligor hereby agrees to grant at the time
of such request, to the Agent, the Lenders, the Board, such firm and any agents
or representatives thereof an irrevocable non-exclusive license, subject to the
rights of tenants, to enter into their respective properties to undertake such
an assessment.
SECTION 5.8. ADDITIONAL OBLIGORS; COLLATERAL.
(a) With reasonable promptness (and in any event within 30 days)
following the formation or acquisition by any Obligor of a Subsidiary or of any
Capital Stock of any other Person, the Borrower (i) shall provide the Agent, the
Loan Administrator and the Board the name, corporate structure and allocation of
Voting Stock and equity interests of such Subsidiary or other Person, (ii) in
the case of any such Subsidiary that is not a CFC, shall cause such Subsidiary
to execute and deliver to the Agent and the Board a Subsidiary Joinder in the
form of Exhibit M hereto, pursuant to which such Subsidiary shall become a party
to this Agreement, and a joinder to the First Lien Guaranty pursuant to which
such Subsidiary shall become a guarantor thereunder, and (iii) shall deliver to
the Agent and the Board documents of the types referred to in clauses (a)(viii)
and (a)(ix) of Article III, all in form, content and scope reasonably
satisfactory to the Agent and the Board.
(b) Each Obligor (including, without limitation, each Subsidiary
created or acquired after the Effective Date that is required to be a Subsidiary
Guarantor) will cause all of its properties and assets as of the Effective Date
(or the date such Person was created or acquired) and all properties and assets
acquired thereafter (including, without limitation, the Capital Stock of each
Subsidiary created or acquired and the Capital Stock of each other Person
acquired after the Effective Date) other than Excluded Property to be pledged to
the Collateral Agent on a perfected first priority basis (subject to the Liens
permitted by Section 6.1) to secure the Obligations; provided that if the
Borrower or another Obligor enters into an agreement to finance any pledged
After-Acquired Section 1110 Equipment, the
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Collateral Agent shall, and is hereby directed to, release its Lien on such
After-Acquired Section 1110 Equipment upon its receipt from the Borrower (with a
copy to the Agent and the Board) of an Officer's Certificate describing in
reasonable detail the Section 1110 Equipment proposed to be financed and
certifying that such transaction complies with this Section.
(c) The Borrower shall obtain one or more Appraisal Reports
establishing the value of the Appraised Collateral as of (i) the last day of
each Fiscal Year beginning December 31, 2005, (ii) the date upon which any
additional property or assets that constitutes Appraised Collateral is pledged
as Collateral to the Collateral Agent pursuant to Section 5.8(d) to secure the
Obligations, but only with respect to such additional Collateral, (iii) in
connection with a Replacement Secured Financing of aircraft and spare engines,
and (iv) no more than once during any twelve (12) month period, a date which is
no later than 60 days after the Controlling Creditor has requested that the
Borrower obtain an Appraisal Report (it being understood that the obligation
herein of the Borrower to periodically obtain Appraisal Reports shall be in
addition to any rights or obligations under the Collateral Documents); provided
that no more than one Appraisal Report shall be required with respect to any
item of Appraised Collateral within any 60 day period. Such Appraisal Reports
may be based on desktop appraisals unless the Controlling Creditor shall have
requested that an Appraisal Report be based on physical inspection.
(d) If as of the end of any fiscal quarter (each such date a
"Collateral Value Test Date") there exists a Collateral Value Deficiency, the
Borrower shall do one of the following to the extent (but only to the extent)
necessary to eliminate such Collateral Value Deficiency: (i) prepay the Loan in
an amount equal to Group's Adjusted Excess Cash Flow for the period commencing
on the Effective Date and ending on such Collateral Value Test Date (which
payment shall be made on the Interest Payment Date first occurring on or after
delivery of the Collateral Value Certificate that evidences such Collateral
Value Deficiency); (ii) pledge additional Eligible Collateral to the Collateral
Agent pursuant to a Collateral Document Supplement or other Collateral Document,
in each case on terms and conditions as are reasonably satisfactory to the
Agent, the Board and the Collateral Agent, or (iii) prepay the Loan as provided
in clause (i) above and pledge additional Eligible Collateral as provided in
clause (ii) above; provided that if Group's Adjusted Excess Cash Flow for such
period, together with all Eligible Collateral that is available to be pledged is
not sufficient to eliminate such Collateral Value Deficiency, the Borrower shall
continue to prepay the Loan in an amount equal to Group's Adjusted Excess Cash
Flow for the period commencing on the Effective Date and ending on the last day
of each fiscal quarter following the Collateral Value Test Date as of which the
Collateral Value Deficiency was established (which payments shall be made on the
Interest Payment Dates respectively relating to the Interest Periods first
occurring after each such fiscal quarter) and pledge all additional Eligible
Collateral to the Collateral Agent as it becomes available until the Collateral
Value Deficiency no longer exists (whether as a result of prepayments of the
Loan, pledge of additional collateral, or increase in Collateral Value or any
combination of the foregoing).
(e) If additional Collateral is being pledged in accordance with
Section 5.8(d), such additional Collateral shall be free and clear of any Liens
(other than as permitted under the applicable Collateral Document) and the
pledgor(s) shall execute and deliver to the Collateral Agent such applicable
Collateral Document Supplements or Collateral Documents (in form and substance
reasonably satisfactory to the Agent and the Board) necessary to grant a
security interest to the Collateral Agent and shall take all other actions (as
are in the reasonable judgment of the Agent and the Controlling Creditor)
necessary or desirable to cause the Liens created thereby to be perfected first
priority Liens under applicable law (except as otherwise provided under the
applicable Collateral Document), and, if requested by the Controlling Creditor,
furnish favorable legal opinions to the Collateral Agent with respect to such
additional Collateral, including the perfection and priority of the Collateral
Agent's Lien thereon and evidence of applicable filings to the Loan
Administrator, and shall otherwise comply with the provisions of the applicable
Collateral Documents that apply to a pledge of such Collateral.
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(f) In connection with each prepayment or pledge of additional
Eligible Collateral pursuant to subsection (d) of this Section 5.8, the Borrower
shall deliver to the Collateral Agent, the Loan Administrator and the Board
either (i) a Collateral Value Certificate which establishes that the applicable
Collateral Value Deficiency no longer exists, or (ii) an Officer's Certificate
of Group that certifies (A) the amount of Group's Excess Cash Flow since the
Effective Date, and (B) that Group has identified to the Collateral Agent and
the Board all of its material property (other than Excluded Property) that is
not subject to a Lien in favor of the Collateral Agent under a Collateral
Document.
(g) Any partial prepayment of the Loan under subsection (d) of this
Section 5.8 shall be applied as provided in Section 2.5(i). Any such prepayment
shall be paid to the Agent for application as provided in Section 2.8.
SECTION 5.9. EMPLOYEE BENEFIT PLANS. Each Obligor will ensure that
the Plans and Multiemployer Plans with respect to which the Obligors may have
any liability are operated in compliance with all applicable laws, except to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
SECTION 5.10. FAA MATTERS; CITIZENSHIP. The Borrower shall at all
times hereunder be an "air carrier" within the meaning of the Act and hold a
certificate under 49 U.S.C. Section 41102(a)(1) as currently in effect or as may
be amended or recodified from time to time. The Borrower and each other Obligor
engaged in operations as an "air carrier" will at all times hereunder be a
United States Citizen holding an air carrier operating certificate issued
pursuant to Chapter 447 of Title 49 for aircraft capable of carrying 10 or more
individuals or 6,000 pounds or more of cargo.
SECTION 5.11. BOARD GUARANTY. Each Obligor will comply with all of
the terms, requirements and conditions applicable to it under the Act and the
Regulations, or as may otherwise be imposed by, or agreed with, the Board in
connection with the issuance of the Board Guaranty, and shall promptly furnish
the Board, the Loan Administrator and the Agent all such information as may be
reasonably requested by the Board, the Loan Administrator or the Agent in
connection with the Board Guaranty. Each Obligor will execute such documents and
take such actions in furtherance of its obligations under the Act and the
Regulations as the Board, the Loan Administrator or the Agent may request.
SECTION 5.12. AUDITS AND REVIEWS. Each Obligor will permit and
cooperate in the conduct of such audits and reviews during the period that both
(i) the Loan is outstanding and (ii) the Board is a guarantor of Tranche A or a
Lender hereunder, and for three (3) years thereafter, as the Board may deem
appropriate, by an independent auditor acceptable to the Board or the United
States Comptroller General. To the extent requested by the Board or the Loan
Administrator, each Obligor will provide reasonable access to the officers and
employees, books, records, accounts, documents, correspondence, and other
information of the Obligors, financial advisors, consultants and independent
certified accountants that the Board or the United States Comptroller General
considers necessary.
SECTION 5.13. CONTROL OF DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS.
Except as otherwise provided in this Section 5.13, the Obligors shall maintain
deposit accounts and securities accounts (other than with respect to Excluded
Cash) only with banks or financial institutions with which they and the
Collateral Agent have entered into control agreements in form and substance
reasonably satisfactory to the Collateral Agent and the Controlling Creditor
(each, a "Control Agreement"), unless the Collateral Agent's security interest
in any such account is otherwise perfected. In furtherance thereof, with respect
to any deposit account or securities account listed on Schedule 5.13 in
existence on the Effective Date, and thereafter prior to establishing any other
deposit account or securities account at any financial institution (other than
with respect to Excluded Cash), each Obligor shall enter into a Control
68
Agreement with such financial institution and the Collateral Agent, except that
the Obligors shall not be obligated to enter into Control Agreements (or
otherwise provide for the perfection the Collateral Agent's security interest)
with respect to (i) payroll, trust, or fiduciary accounts, including the Trust
Accounts, (ii) zero balance cash management accounts through which disbursements
are made and settled on a daily basis with no balance remaining overnight, and
(iii) deposit accounts and securities accounts that have an average weekly
aggregate balance of less than $2,000,000; provided that the aggregate amount of
all deposit accounts and securities accounts not subject to Control Agreements
(or otherwise perfected) in reliance on clause (iii) above shall not, in the
case of such accounts located outside the United Sates, exceed $25,000,000 at
any time in the aggregate, and in the case of all such accounts (including
accounts located outside the United Sates), exceed $35,000,000 in the aggregate
at any time.
SECTION 5.14. LOWER-TIER COVERED TRANSACTION. If and for so long as
the Board is a guarantor of Tranche A or a Lender hereunder, in the event that
any Obligor enters into any "lower-tier covered transaction" (as such term is
defined in 31 C.F.R. Section 19.110, as amended or modified from time to time
and not excepted therefrom by 31 C.F.R. Section 19.200(c)) in respect of the
transactions contemplated hereunder, each Obligor will include the clause
entitled "Certificate Regarding Debarment, Suspension, Ineligibility and
Voluntary Exclusion - Lower Tier Covered Transactions" as set forth in Appendix
B to Part 19 of title 31 of the C.F.R. in such lower-tier covered transaction
and each Obligor will obtain a certification from the other Person or Persons
party to such lower-tier covered transaction to the effect that each such other
Person (and each "principal" thereof, as such term is defined in 31 C.F.R.
Section 19.105, as amended or modified from time to time) is not presently
debarred, suspended, proposed for debarment, declared ineligible, or voluntarily
excluded from participation in such transaction by any Federal department or
agency, or an explanation why such Person is unable to so certify. Further, no
Obligor will enter into a lower-tier covered transaction with a Person who has
been proposed for debarment under 48 C.F.R. Section 9.4, debarred or suspended
unless granted an exception for such lower-tier covered transaction pursuant to
31 C.F.R. Section 19.215.
SECTION 5.15. CONTRACTUAL OBLIGATIONS. Each Obligor will perform,
observe or fulfill the obligations, covenants and conditions contained in each
of its Contractual Obligations, provided that a failure to so perform, observe
or fulfill such obligations, covenants and conditions that (i) could not (either
individually or in the aggregate) reasonably be expected to have a Material
Adverse Effect or (ii) does not preclude continued operations by the Obligors at
any of the airport terminals listed on Schedule 4.20 shall not constitute a
breach of this Section 5.15.
SECTION 5.16. SLOT UTILIZATION. Each Obligor holding or operating
Slots shall utilize its Slots in a manner consistent with the Slot Regulations
so as to avoid the withdrawal of any Slot by the FAA or other revocation or
termination for failure to comply with the Slot Regulations, taking into account
any waivers or other relief granted by the FAA or otherwise under the Slot
Regulations; provided, however, that the Obligors shall not be required to so
utilize Secondary Slots to the extent the Obligors determine that such Secondary
Slots are no longer commercially required. The Obligors shall maintain
personnel, policies, procedures and a computer database for the monitoring,
utilization and management of the Slots in compliance with the Slot Regulations
so as to ensure, to the greatest extent operationally feasible, that no Slot
becomes subject to withdrawal by the FAA or is otherwise revoked or terminated
based upon the failure to comply with the Slot Regulations.
SECTION 5.17. STOCK EXCHANGE LISTING. Group (a) will use reasonable
efforts to list its common stock on the New York Stock Exchange or another
national securities exchange or for quotation on a national automated
interdealer quotation system, and (b) after the effectiveness of such listing,
will comply in all material respects with all applicable corporate governance
listing standards of such national securities exchange or national automated
interdealer quotation system, including standards relating to the composition,
duties and responsibilities, and functioning of boards of directors and board
committees.
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SECTION 5.18. FURTHER ASSURANCES. Promptly upon the request of the
Board or the Agent, each Obligor will, at its expense, promptly execute,
acknowledge and deliver such further documents and do such other acts and things
as the Board, the Loan Administrator or the Agent may reasonably request in
order to effect fully the purposes of the Loan Documents and to maintain and
ensure the validity, effectiveness, priority and perfection of the Collateral
Agent's Liens pursuant to the Collateral Documents.
SECTION 5.19. CREDIT RATING OF LOAN. The Borrower agrees to obtain
by December 31, 2005, and maintain for the term of the Loan, if available, and
at the expense of the Borrower, credit and recovery ratings on the Loan from S&P
or Xxxxx'x, which ratings shall assess both (x) the risk of default and ultimate
recovery on the Loan and (y) the likely recovery or loss given a default on the
Loan. The credit and recovery ratings shall be available to the Agent, the
Collateral Agent, the Loan Administrator, the Lenders and the Board.
ARTICLE VI
NEGATIVE COVENANTS
To induce the other parties to enter into this Agreement (excluding
any other Obligor), the Obligors agree with each other party hereto (excluding
any other Obligor) that, so long as any of the Obligations (other than
contingent indemnification obligations) remain outstanding:
SECTION 6.1. LIENS AND RELATED MATTERS.
(a) Prohibition on Liens. No Obligor will, nor will it permit any
other Obligor to, directly or indirectly create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of any Obligor, whether now owned or hereafter acquired, or any
income or profits therefrom, or file or consent to the filing of any financing
statement or other similar notice of any Lien with respect to any such property,
asset, income or profits under the UCC of any state or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) (A) Liens existing on the Effective Date on Aircraft Related
Equipment securing Indebtedness used to acquire such Aircraft Related
Equipment, (B) Liens on Aircraft Related Equipment acquired after the
Effective Date created or incurred in connection with the financing of
such Aircraft Related Equipment (including a financing transaction
referred to in the proviso to Section 5.8(b) with respect to
After-Acquired Section 1110 Equipment), (C) Liens on Aircraft Related
Equipment and related property as contemplated under the Airbus
Financings, the GE Financings, the GE 2001 Credit Agreement, the GE
Expendables Mortgage and the GECC RJ Agreement, (D) leases and/or
subleases of Aircraft Related Equipment to any Obligor or any US Airways
Express affiliate that is not an Obligor and operates such Aircraft
Related Equipment for the Borrower or another Obligor pursuant to a
services agreement with the Borrower or such Obligor, which lease or
sublease is entered into in connection with the debt financing or leasing
of such Aircraft Related Equipment, as applicable, and the assignment of
any such lease or sublease and the proceeds thereof, in the case of a
lease, to any Person owed Indebtedness used to acquire such Aircraft
Related Equipment or, in the case of a sublease, to any Person leasing
such Aircraft Related Equipment to the Borrower or such Obligor, (E) Liens
on Aircraft Related Equipment securing Permitted Refinancing Indebtedness
in respect of Indebtedness previously secured by such Aircraft Related
Equipment in accordance with subclause (A) or (B) above,
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including in each case, Liens securing special facility revenue bonds that
finance Aircraft Related Facilities, (F) Liens on Aircraft Related
Equipment securing refinancing Indebtedness of the type described in
Section 2.5(c)(ii) so long as the Borrower shall have complied with its
prepayment obligations thereunder, (G) Liens incurred or deposits made in
the ordinary course of business to secure the performance of contracts for
the purchase of aircraft, (H) Liens in existence on the Effective Date (1)
on aircraft and engines (other than Collateral covered by Aircraft
Mortgages) and (2) securing special facility revenue bonds, and (I) Liens
on an Obligor's interest as lessee or sublessor in respect of any Aircraft
Related Equipment or interests related thereto (including without
limitation subleases, refunds or rebates, security deposits, supplemental
rent, reserves, or return condition adjustment payments);
(iii) other Liens on assets acquired after the Effective Date
securing or relating to Indebtedness and other liabilities and obligations
in each case not otherwise prohibited under this Agreement in an aggregate
amount not to exceed $5,000,000 at any time outstanding;
(iv) Liens described in Schedule 6.1(a);
(v) judgment and attachment Liens not (A) giving rise to an Event of
Default or (B) relating to an action or judgment giving rise to an Event
of Default under Section 7.1(h);
(vi) Liens on the assets of any entity or on any asset existing at
the time such entity or asset is acquired by an Obligor, whether by
merger, consolidation, purchase of assets or otherwise; provided that (A)
such Liens are not created, incurred or assumed by such entity in
contemplation of or in connection with the financing of such entity's
being acquired by an Obligor, (B) such Liens were created to secure the
financing of Aircraft Related Equipment or other specific assets, (C) such
Liens do not extend to any other assets of any Obligor other than the
assets acquired with such financing and (D) the Indebtedness secured by
such Liens is permitted pursuant to this Agreement;
(vii) leases or subleases of real or personal property granted by
any Obligor to other Persons not interfering in any material respect with
the ordinary conduct of the business of the Obligors, taken as a whole;
(viii) Liens on cash and Cash Equivalents securing (A) reimbursement
obligations in respect of letters of credit issued for the account of any
Obligor in the ordinary course of business and consistent with past
practice, so long as the aggregate amount of such cash and Cash
Equivalents does not exceed 115% of the maximum available amount under the
secured letters of credit, (B) reimbursement or other margin requirements
in connection with, in the case of Liens contemplated in this clause (B),
transactions contemplated by the proviso in Section 6.12, and (C) prepaid
fuel and healthcare expenses in the ordinary course of business;
(ix) Liens on the Collateral to the extent permitted by the
Intercreditor Agreement securing the obligations of the Obligors with
respect to the Indebtedness under the AWA Loan;
(x) Liens on assets pledged in connection with a Replacement Secured
Financing; provided that the Borrower prepays the Loan with the Net Issue
Proceeds of such Replacement Secured Financing as provided in Section
2.5(b);
(xi) Liens on assets pledged to secure a Permitted Acquisition
Financing; provided that the Liens attach only to assets acquired in
connection with the acquisition financed by such Permitted Acquisition
Financing; and
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(xii) any renewal or substitution of any Lien for any of the
preceding clauses (ii), (iv) or (vi); provided that any such Liens are not
extended to additional assets;
provided that the Obligors will not create, incur, assume or permit to exist any
Lien permitted under any of clauses (ii) or (iii) above on any property of an
Obligor already constituting Collateral (which, for the avoidance of doubt, does
not apply to Liens permitted under clause (x) above).
(b) No Restrictions on Subsidiary Distributions. Except (i) as
provided herein or in the other Loan Documents, (ii) as described on Schedule
6.1(b), (iii) for restrictions on the use of proceeds from a permitted financing
of Aircraft Related Equipment, or (iv) Payment Restrictions contained in
refinancings or replacements of the financings listed in clause (a)(ii) above(7)
that are not more restrictive in a material respect than the corresponding
Payment Restrictions in the original financing, no Obligor will, nor will it
permit any other Obligor to, create or otherwise cause to exist any Payment
Restriction with respect to any Subsidiary of any Obligor.
SECTION 6.2. INVESTMENTS. No Obligor will, nor will it permit any
other Obligor to, make any Investment other than (i) Investments consisting of
Cash Equivalents; (ii) accounts receivable if credited or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; (iii) payroll advances and advances for business and
travel expenses in the ordinary course of business; (iv) Investments made by way
of any endorsement of negotiable instruments received by any Obligor in the
ordinary course of its business and presented by it to any bank for collection
or deposit; (v) stock, obligations or securities received in settlement of
amounts owing to any Obligor in the ordinary course of business or in a
distribution received in respect of an Investment permitted hereunder; (vi)
Investments made in connection with the Trust Agreements; (vii) in addition to
any other permitted investments, any other Investments by the Obligors in an
aggregate outstanding amount not exceeding $25,000,000 at any time; (viii)
Investments pursuant to and in compliance with Section 6.5 or Section 6.9; (ix)
Investments made in Excluded Subsidiaries consistent with past practice; (x) the
Merger; (xi) Investments in travel or airline related businesses made in
connection with Marketing and Service Agreements, alliance agreements,
distribution agreements, agreements with respect to fuel consortium, agreements
relating to flight training, agreements relating to insurance arrangements,
agreements relating to spare parts management systems and other similar
agreements which Investments under this clause (xi) (excluding Investments
existing on the date hereof) shall not exceed $50,000,000 in the aggregate at
any time outstanding; and (xii) Investments constituting non-cash consideration
received in respect of a transaction pursuant to and in compliance with Section
6.13.
SECTION 6.3. RESTRICTED PAYMENTS. No Obligor will, nor will it
permit any other Obligor to, directly or indirectly, declare, order, pay, make
or set apart, or be obligated to declare, order, pay, make or set apart, any sum
for any Restricted Payment; except that:
(a) the Obligors may prepay (i) Indebtedness which is secured by a
Lien on property or assets sold in an Asset Sale which is permitted hereunder or
subject to a condemnation, taking, temporary or permanent requisition, or change
of grade, or a covered loss under a casualty insurance policy, in each case in
this clause (a)(i), to the extent that such Indebtedness is required by its
terms to be paid as a result of such Asset Sale, condemnation, taking, temporary
or permanent requisition, change of grade, or covered loss, as applicable, (ii)
Indebtedness with the proceeds of Permitted Refinancing Indebtedness, or (iii) a
Capital Lease of property which is obsolete, worn out or no longer required in
the businesses of the Obligors;
--------------
(7) Please identify the Payment Restrictions contained in these financings.
72
(b) the Obligors may purchase or redeem (i) the Warrants held by the
Board and (ii) Capital Stock (including options on any such Capital Stock or
related stock appreciation rights or similar securities) that was issued as
compensation from their officers, directors and employees (or their estates or
beneficiaries under their estates) upon death, disability, retirement,
termination of employment or pursuant to the terms of any plan or any other
agreement under which such Capital Stock or related rights were issued, in an
amount not to exceed $1,000,000 per Fiscal Year; and
(c) [the Obligors may pay $125,000,000 to General Electric Capital
Corporation or its Affiliates.(8)]
SECTION 6.4. FINANCIAL COVENANTS.
(a) Group shall not, at the close of any Business Day during the
periods set forth in the tables below, permit (i) the aggregate amount of
Pledged Cash less (ii) the sum of (A) the amount by which all outstanding
advances to the Obligors by credit card processors exceeds twenty percent (20%)
of the Obligors' aggregate outstanding air traffic liability (as determined in
accordance with GAAP, but excluding air traffic liability associated with the
Obligors' frequent flyer, affinity card and like programs) and (B) $285,000,000
less the Pre-Funded Amount (the amount, if any, by which (i) exceeds (ii) being
the "Adjusted Cash Amount") to be less than the lesser of (x) the Fixed Cash
Amount (as defined in clause (i) below) for such period and (y) the Variable
Cash Amount (as defined in clause (ii) below) at such time (such lesser amount,
the "Minimum Adjusted Cash Amount").
(i) The term "Fixed Cash Amount" means, for each period, the amount
set forth in the table below across from such period:
PERIOD FIXED CASH AMOUNT
------------------------------------------ ------------------
Effective Date through March 31, 2006 $525,000,000
April 1, 2006 through September 30, 2006 $500,000,000
October 1, 2006 through March 31, 2007 $475,000,000
April 1, 2007 through September 30, 2007 $450,000,000
October 1, 2007 through March 31, 2008 $400,000,000
April 1, 2008 through September 30, 2008 $350,000,000
October 1, 2008 through September 30, 2010 $300,000,000
(ii) The term "Variable Cash Amount" means:
(x) with respect to the remainder of any period following a
prepayment of the Loan and the AWA Loan pursuant to Section 2.5(a) and (c)
of this Agreement and of the AWA Loan Agreement with the proceeds of any
Future Issuance, an amount equal to the product of (A) the cash coverage
percentage for such period set forth in the table below and (B) the
difference of (I) the sum of the aggregate principal amounts of the Loan
and the AWA Loan scheduled to be outstanding at the start of such period
as set forth in the table below less (II) the aggregate amount of
mandatory prepayments of the Loan and the AWA Loan made in all periods
prior to such period pursuant to Section 2.5(a) and (c) of this Agreement
and of the AWA Loan Agreement with the proceeds of Future Issuances:
----------
(8) Please describe payment.
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SCHEDULED PRINCIPAL CASH COVERAGE
PERIOD AMOUNT PERCENTAGE (9)
------------------------------------------ ------------------- --------------
Effective Date through March 31, 2006 $[-] [-]%
April 1, 2006 through September 30, 2006 $[-] [-]%
October 1, 2006 through March 31, 2007 $[-] [-]%
April 1, 2007 through September 30, 2007 $[-] [-]%
October 1, 2007 through March 31, 2008 $[-] [-]%
April 1, 2008 through September 30, 2008 $[-] [-]%
October 1, 2008 through September 30, 2010 $[-] [-]%
and (y) for each period subsequent to the period
referred to in clause (x) above, the amount determined in accordance
with paragraph (x) less the amount set forth in the table below across
from such subsequent period:
PERIOD REDUCTION AMOUNT
------------------------------------------- ----------------
April 1, 2006 through September 30, 2006 $ 25,000,000
October 1, 2006 through March 31, 2007 $ 50,000,000
April 1, 2007 through September 30, 2007 $ 75,000,000
October 1, 2007 through March 31, 2008 $125,000,000
April 1, 2008 through September 30, 2008 $175,000,000
October 1, 2008 through September 30, 2010 $225,000,000
(b) Group shall not permit its ratio of Consolidated EBITDAR to
Consolidated Fixed Charges for the four consecutive fiscal quarters ending on
the dates specified below, to be less than the applicable ratio specified below:
PERIOD APPLICABLE RATIO
------------------ ----------------
December 31, 2006 0.900:1.00
March 31, 2007 0.929:1.00
June 30, 2007 0.958:1.00
September 30, 2007 0.986:1.00
December 31, 2007 1.015:1.00
March 31, 2008 1.061:1.00
June 30, 2008 1.108:1.00
September 30, 2008 1.154:1.00
December 31, 2008 1.200:1.00
March 31, 2009 1.225:1.00
June 30, 2009 1.250:1.00
September 30, 2009 1.275:1.00
December 31, 2009 1.300:1.00
March 31, 2010 1.325:1.00
June 30, 2010 1.350:1.00
-------------
(9) The cash coverage percentage for each period will be equal to 110% of the
ratio of minimum cash to aggregate principal amount implied by the current
minimum cash test.
74
SECTION 6.5. RESTRICTION ON ACQUISITIONS; CHANGE IN FISCAL YEAR.
(a) No Obligor will, nor will it permit any other Obligor to,
acquire by purchase or otherwise all or substantially all of the business,
property or assets of any Person or any division or line of business of any
Person (excluding purchases and acquisitions in the ordinary course of business
by an Obligor of property from any Person not constituting all or substantially
all of the property of such Person), or all or substantially all of the Capital
Stock or other evidence of beneficial ownership of any Person, or acquire any
Person as a new Subsidiary, other than the Merger, except that the Obligors may
make acquisitions of Capital Stock, the assets and/or the business of another
Person (including any division or line of business of such Person) or acquire
any Person as a new Subsidiary so long as (i) the acquisition primarily involves
the acquisition of assets to be used in the business of an Obligor as engaged in
by such Obligor on the date hereof, (ii) immediately before and after giving
effect thereto, no Default or Event of Default shall have occurred and be
continuing, (iii) immediately after giving effect to the acquisition, the
Obligors shall be in compliance on a Pro Forma Basis with Section 6.4 (in the
case of Section 6.4(b), based on Consolidated EBITDAR for the four quarters
ended as of the end of the most recently ended fiscal quarter) and such
compliance shall be evidenced by an Officer's Certificate of the Borrower
demonstrating such compliance, (iv) prior to the consummation of such
acquisition, neither S&P nor Xxxxx'x shall have lowered the corporate credit
rating of the Obligors by more than one notch as a result of such acquisition
(whether or not in combination with other factors), (v) the aggregate purchase
price in connection with all such acquisitions (including therein any
Indebtedness assumed in connection with such acquisitions) consummated after the
date hereof, together with all Investments pursuant to clause (xi) of Section
6.2, does not exceed $50,000,000 during any twelve (12) month period and
$150,000,000 in the aggregate during the term of the Loan, (vi) if the
acquisition is structured as a consolidation or merger, it complies with Section
6.9, and (vii) the Obligors comply with their obligations under Section 5.8(a)
and/or (b) with respect to the properties, assets or Person so acquired (as
applicable).
(b) No Principal Obligor shall change its Fiscal Year.
SECTION 6.6. SALES-LEASEBACKS. Except with respect to Aircraft
Related Equipment, no Obligor will, nor will it permit any other Obligor to,
directly or indirectly, become liable after the Effective Date as lessee or as a
guarantor or other surety with respect to any lease, whether an Operating Lease
or a Capital Lease, of any property (whether real, personal or mixed), whether
now owned or hereafter acquired, in each case which (i) an Obligor has sold or
transferred or is to sell or transfer to any other Person (other than another
Obligor) or (ii) an Obligor intends to use for substantially the same purpose as
any other property which has been or is to be sold or transferred by such
Obligor to any Person (other than another Obligor) in connection with such
lease; provided that after the Effective Date the Obligors may become and remain
liable as lessee, guarantor or other surety with respect to any such lease if
and to the extent that (A) the annual aggregate rentals under all such leases
(other than leases with respect to Aircraft Related Equipment) shall not exceed
$20,000,000 and (B) the Obligors comply with any prepayment obligations under
Section 2.5(d); and provided, further, that the restrictions contained in this
Section 6.6 shall not apply to the transactions described on Schedule 6.6.
SECTION 6.7. TRANSACTIONS WITH AFFILIATES.
(a) No Obligor shall, directly or indirectly, (i) sell, lease,
transfer or otherwise dispose of any of its properties or assets, or issue
securities to, (ii) purchase any property, assets or securities from, (iii) make
any Investment in or (iv) enter into any contract or agreement with or for the
benefit of, any Affiliate or holder of 5% or more of any class of Capital Stock
(and any Affiliate of such holder) of any Obligor (an "Affiliate Transaction"),
other than (x) Affiliate Transactions permitted under Section 6.7(b) and (y)
Affiliate Transactions (including lease transactions) which are on fair and
reasonable terms no less favorable to such Obligor than those as might
reasonably have been obtainable at
75
such time from an unaffiliated party; provided that if an Affiliate Transaction
or series of related Affiliate Transactions involves or has a value in excess of
$10,000,000, such Obligor shall not enter into such Affiliate Transaction or
series of Affiliate Transactions unless a majority of the disinterested members
of the board of directors of Group shall reasonably and in good faith determine
that such Affiliate Transaction is fair and reasonable to such Obligor or is on
terms no less favorable to such Obligor than those that might reasonably have
been obtained at such time from an unaffiliated party. For purposes of this
Section 6.7, Section 9.9 notwithstanding, the determination of whether a
transaction is "fair" shall be governed by the Delaware General Corporation Law,
including decisional law thereunder.
(b) The provisions of Section 6.7(a) shall not apply to (i) the
agreements listed on Schedule 6.7(b) as in effect on the Effective Date or any
transaction contemplated thereby; (ii) any payments or other transactions
pursuant to any tax sharing agreement between any Obligor and any other Obligor
or Excluded Subsidiary and any other transaction solely between or among
Obligors (subject to Section 6.14(a), if applicable) and between or among any
Obligors and an Excluded Subsidiary (including the guaranty of obligations of
other Obligors, but not including the guaranty of obligations of Excluded
Subsidiaries) provided that such transactions are not otherwise prohibited by
this Agreement; (iii) reasonable and customary fees and compensation paid to,
and indemnity provided on behalf of, officers, directors and employees of any
Obligor or Excluded Subsidiary, as determined by the board of directors of such
Obligor or the senior management of the Borrower or Group in good faith; (iv)
any Restricted Payments permitted by Section 6.3; (v) transactions contemplated
by the Marketing and Service Agreements; (vi) transactions between any Obligor
with any employee labor unions or other employee groups of such Obligor provided
such transactions are not otherwise prohibited by this Agreement; (vii) the Loan
Documents and the transactions contemplated thereby; and (viii) transactions
expressly contemplated by the Plan of Reorganization, without giving affect to
any subsequent amendments to the terms governing such transactions. The Obligors
rights under clause (ii) of this subsection (b) notwithstanding, the Obligors
expressly acknowledge and agree that, in the case of any sale, transfer or other
disposition of assets or property which are Collateral from one Obligor to
another Obligor (or to an Excluded Subsidiary), whether pursuant to this Section
6.7, Section 6.9 or otherwise, the Lien of the Collateral Agent in such assets
or property immediately prior to such sale, transfer or other disposition shall
continue and survive such transaction and remain attached to (and perfected in)
such assets or property following such transaction, and each Obligor which takes
title to such assets or property acknowledges and agrees that such title is
subject to the Lien of the Collateral Agent.
SECTION 6.8. CONDUCT OF BUSINESS. From and after the date hereof,
(a) no Obligor shall engage in any principal line of business other than (i) the
businesses engaged in by the Obligors on the date hereof and related businesses
and (ii) such other lines of business as may be consented to by the Board and
the Requisite Lenders, and (b) each of the Excluded Subsidiaries shall not
engage in any business other than the business engaged in by it on the Effective
Date.
SECTION 6.9. MERGER OR CONSOLIDATION. No Obligor will consolidate
with or merge with any other Person or convey, lease or transfer its properties
and assets substantially as an entirety to any Person, other than the Merger,
unless: (i) (a) in the case of a consolidation or merger involving the Borrower
or AWA, the Borrower or AWA (as applicable) is the surviving entity or if the
Borrower or AWA (as applicable) is not the surviving entity, such surviving
entity or the Person that acquires by conveyance, lease or transfer the
properties and assets of the Borrower or AWA (as applicable) substantially as an
entirety, shall be a corporation organized and existing under the laws of the
United States of America or any State thereof or the District of Columbia and
can make the representations contained in Section 4.1(b), and shall expressly
assume, by an agreement executed and delivered to the Agent and the Board in
form and substance reasonably satisfactory to the Agent and the Board, the
Borrower's obligations to repay the Loan (in the case of the Borrower) and all
(other) obligations of the Borrower or AWA (as applicable) under the Loan
Documents, or (b) in the case of a consolidation or
76
merger involving Group, Group is the surviving entity or if Group is not the
surviving entity, such surviving entity or the Person that acquires by
conveyance, lease or transfer the properties and assets of Group substantially
as an entirety, shall be a corporation organized and existing under the laws of
the United States of America or any State thereof or the District of Columbia,
and shall expressly assume, by an agreement executed and delivered to the Agent
and the Board, in form and substance reasonably satisfactory to the Agent and
the Board, all of Group's obligations under each Loan Document to which it is a
party; (ii) immediately before and after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing and
immediately after giving effect to such transaction, Group or if applicable, its
successor, shall be in compliance, on a Pro Forma Basis, with Section 6.4 (in
the case of Section 6.4(b), based on Consolidated EBITDAR for the four quarters
ended as of the end of the most recently ended fiscal quarter); (iii) if Section
6.14(b) is applicable to such transaction, the Obligors shall comply therewith;
and (iv) the Borrower has delivered to the Agent an Officer's Certificate and an
opinion of counsel from counsel reasonably satisfactory to the Agent, in form
and substance reasonably satisfactory to the Agent, stating that such
consolidation, merger, conveyance, lease or transfer and such agreement comply
with this Section 6.9 and that all conditions precedent herein provided for
relating to such transaction have been complied with and addressing such other
matters as may be reasonably requested by the Board and the Agent.
Notwithstanding anything to the contrary contained in this Section 6.9 but
subject to Section 6.14(a)(i) and (b) (in each case, if applicable), (A) any
Obligor may merge or consolidate with any other Obligor; provided that in the
case of each such merger or consolidation involving a Principal Obligor, if such
Principal Obligor shall not be the continuing or surviving Person, the surviving
Obligor shall comply with clauses (i)(a) or (i)(b) (as applicable) and (iii)
above, and (B) any Obligor (other than a Principal Obligor, except in compliance
with the preceding clause (i)) may convey, lease or transfer its properties and
assets substantially as an entirety to any other Obligor.
SECTION 6.10. LIMITATIONS ON AMENDMENTS.
(a) No Obligor shall amend, waive or modify, nor shall it consent to
or request any amendment, waiver or modification, of any of the material terms,
conditions, representations and covenants contained in any Indebtedness for
borrowed money that (i) shortens the final maturity date of such Indebtedness
(without giving effect to any amendment, waiver or modification, the "Initial
Indebtedness") or (ii) requires the acceleration of the final scheduled maturity
date and/or any principal payments, including but not limited to scheduled
payments and mandatory prepayments, and/or increases the principal amount
payable on any date (including, without limitation, pursuant to mandatory
prepayments) prior to the dates of analogous payments of such Initial
Indebtedness; provided, however, that this Section 6.10(a) shall not prohibit
the incurrence of Permitted Refinancing Indebtedness, the repayment of the
Indebtedness being refinanced, or any amendment, waiver or modification of the
terms of the Indebtedness being refinanced necessary to effect such repayment.
No Obligor shall amend, waive or modify, nor shall it consent to or request any
amendment, waiver or modification, of the AWA Loan Agreement unless such
amendment, waiver or modification is permitted by and in compliance with the
Intercreditor Agreement.
(b) No Obligor will, nor will it permit any other Obligor to, amend,
adopt or terminate any Plan (i) unless such action could not reasonably be
expected to have a Material Adverse Effect, or (ii) in any manner that could
reasonably be expected to give the PBGC a sound and just basis to commence
Proceedings against the Obligors on the basis that such action constitutes a
subsequent change in connection with the Obligor's termination or replacement of
the defined benefit Retirement Income Plan for Pilots of US Airways, Inc. with
the 2003 Pilots Defined Contribution Plan.
(c) No Obligor shall not amend, restate, supplement or modify (or
consent to or permit any amendment, restatement, supplement or modification of)
its Investment Guidelines without the
77
prior written consent of the Controlling Creditor; provided that, for the
avoidance of doubt, this Section 6.10(c) shall not be deemed to prohibit the
adoption of the Investment Guidelines by any Obligor.
SECTION 6.11. NO FURTHER NEGATIVE PLEDGES. Except with respect to
(a) specific property encumbered to secure payment of particular Indebtedness or
to be sold pursuant to an executed agreement with respect to a permitted Asset
Sale (including sale-leaseback transactions not prohibited by this Agreement),
(b) restrictions by reason of customary provisions restricting pledges, Liens,
assignments, subletting or other transfers contained in leases, licenses and
similar agreements entered into in the ordinary course of business (provided
that such restrictions are limited to the property or assets secured by such
Liens or the property or assets subject to such leases, licenses or similar
agreements, as the case may be), (c) negative pledges contained in the Airbus
Financings and the GE Financings (and any replacements or refinancings of any
thereof), and (d) permitted refinancings or replacements of Indebtedness
outstanding on the Effective Date, after the date hereof, no Obligor will, nor
will it permit any other Obligor to, enter into any agreement prohibiting the
creation or assumption of any Lien to secure the Obligations upon any of its
properties or assets, whether now owned or hereafter acquired to the extent that
such properties or assets are required to be pledged to secure the Obligations.
SECTION 6.12. SPECULATIVE TRANSACTIONS. No Obligor will, nor will it
permit any other Obligor to, become a general partner in any general or limited
partnership or joint venture engaged or involved in, nor will any Obligor engage
in any transaction involving, commodity options or future contracts or any
similar speculative transactions; provided, however, that the following
transactions shall not be prohibited by this Section 6.12: (i) transactions
designed to hedge against fluctuations in fuel costs, entered into in the
ordinary course of business, consistent with past business practice or then
current industry practice, and not entered into for speculative purposes, (ii)
transactions designed to hedge interest rates entered into with respect to
notional amounts not to exceed actual or anticipated Indebtedness and not
entered into for speculative purposes and (iii) transactions designed to hedge
against risks associated with fluctuations in currencies entered into in the
ordinary course of business.
SECTION 6.13. ASSET SALES. No Obligor will, nor will it permit any
other Obligor to, directly or indirectly, consummate any Asset Sale unless (i)
the consideration received in respect of such Asset Sale is at least equal to
the Fair Market Value of the assets subject to such Asset Sale and (ii) at least
85% of the value of the consideration received by such Obligor in respect of
such Asset Sale (net of the amount of any Indebtedness secured by the assets
sold in such Asset Sale which is assumed by the purchaser thereof) is in the
form of cash or Cash Equivalents; provided that without the prior written
consent of the Controlling Creditor, the Obligors shall not consummate any Asset
Sales if and to the extent that the aggregate Net Cash Proceeds from all such
Asset Sales would exceed $10,000,000 per Fiscal Year, other than (x) Designated
Asset Sales and (y) sale-leasebacks not prohibited by Section 6.6 (subject to
compliance with Section 2.5(d), if applicable).
SECTION 6.14. SPARE PARTS.
(a) No Obligor shall (i) sell, lease, transfer or otherwise dispose
of its spare parts which are Collateral to another Obligor if such other Obligor
has pledged spare parts which are not Collateral to secure any other
Indebtedness or obligation, other than in the ordinary course of business as
though between unaffiliated air carriers (including pursuant to interchange,
pooling, exchange and other similar arrangements customary in the airline
industry and consistent with [Section 3.4(f)] of the Aircraft Mortgages (as
defined in clause (ii) of the definition of Collateral Documents) or (ii)
commingle at any location its spare parts which are Collateral with the spare
parts of another Obligor if such other Obligor has pledged spare parts which are
not Collateral to secure any other Indebtedness or obligation, unless the
ownership of each such commingled spare part can be definitively determined at
all times by reference to the Obligors' spare parts tracking numbers and system;
provided that spare parts that are segregated on a
78
separate shelf or in a separate storage bin or other storage unit shall not be
considered as having been commingled even though such spare parts are present at
the same location so long the Obligors install signs on each such shelf, bin or
other storage unit containing Collateral bearing the inscription: "Property of
US Airways, Inc. (or other applicable Obligor), Mortgaged to Wilmington Trust
Company, as Collateral Agent" (such sign to be replaced if there is a successor
Collateral Agent).
(b) No Obligor who has pledged spare parts as Collateral will
consolidate or merge with, or convey, lease or transfer its properties and
assets substantially as an entirety to, or liquidate into, or otherwise combine
with, any other Obligor if such other Obligor has pledged spare parts which are
not Collateral to secure any other Indebtedness or obligation, unless the
Obligors have demonstrated to the reasonable satisfaction of the Controlling
Creditor that (i) following such transaction the Lien of the Collateral Agent in
such spare parts Collateral will remain perfected with the same priority as
existed immediately prior to such transaction, (ii) the surviving Obligor has
established adequate tracking and other systems to ensure that the spare parts
which are Collateral are not commingled with the surviving Obligor's other spare
parts which are not Collateral, and (iii) at all times following such
transaction the surviving Obligor will be required to maintain spare parts
subject to the Lien of the Collateral Agent having an aggregate Appraised Value
of at least 75% of the Appraised Value of the spare parts Collateral set forth
in the Baseline Appraisal.
(c) Notwithstanding the foregoing clauses (a) and (b), the Borrower
may, on behalf of the other Obligors, from time to time propose amendments to
this Section 6.14 designed to both adequately protect the Collateral Agent's
interest in the spare parts Collateral and, to the extent consistent therewith,
maximize the Obligors' operational flexibility, and the Obligors, the Agent, and
the Board (so long as the Board is either a guarantor of Tranche A or a Lender
hereunder) shall have the ability by written consent to adopt any such proposal
and amend this Agreement to reflect the same without the consent of any other
Person, without regard to the provisions of Section 9.1(a).
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1. EVENTS OF DEFAULT. Each of the following events shall
constitute an "Event of Default":
(a) (i) failure by the Borrower to pay any installment of principal
of the Loan when due, whether at stated maturity, by acceleration, by mandatory
prepayment or otherwise or (ii) failure by the Borrower to pay any interest on
the Loan or any fee or any other amount due under this Agreement or any other
Loan Document within five (5) Business Days after the date due; or
(b) any Obligor (i) fails to make when due (after giving effect to
applicable cure or grace periods, and whether as primary obligor or as guarantor
or other surety) payments in respect of rents, principal, interest or premium or
other payments, if any, under or in respect of one or more Capital Leases or
other Indebtedness or Operating Leases (other than Indebtedness referred to in
clause (a) of this Section 7.1) and the aggregate amount of all payment defaults
(after giving effect to applicable cure or grace periods) then existing in
respect of Indebtedness and aggregate amounts under Operating Leases shall equal
or exceed $25,000,000 or (ii) fails to duly observe, perform or comply with any
agreement with any Person or any term or condition of any instrument, if such
failure, either individually or in the aggregate, shall have (A) resulted in the
acceleration of, or entitles any Person to accelerate, the payment of
Indebtedness owed by such Obligor which, together with all other accelerated
Indebtedness and Indebtedness that is entitled to be accelerated, has a
principal amount that equals or exceeds $25,000,000, (B) given rise under one or
more Operating Leases to obligations by, or rights of any other Person(s) to
79
require, an Obligor to make payments that equal or exceed, or to return assets
leased by an Obligor and having a fair market value that equals or exceeds,
$25,000,000 or (C) resulted in the termination of or given rise to rights of any
other Person(s) to terminate one or more Operating Leases under which the
aggregate net present value of the remaining basic rent payments (as determined
in accordance with the formulas for calculating "net present value" under the
applicable leases or for leases without such formulas, in accordance with
formulas under leases for comparable terms and comparable amounts) equals or
exceeds $25,000,000; provided that the failure by an Obligor to make one or more
payments that are attributable to and relate solely to return conditions under
aircraft leases shall not constitute an Event of Default under this Section
7.1(b) so long as the Obligor is, in good faith, disputing the amount of such
payments; or
(c) failure by an Obligor to perform or comply with any term or
condition contained in Section 5.2, Section 5.10 or Article VI of this Agreement
(other than Section 6.4);
(d) any representation, warranty, certification or other statement
made by any Obligor in any Loan Document or in any statement or certificate at
any time given by any Obligor in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect on the
date as of which made; or
(e) any default by any Obligor in the performance of or compliance
with any provision contained in this Agreement or any of the other Loan
Documents required to be performed or complied with by it (other than any such
provision referred to in any other clause of this Section 7.1), and (i) with
respect to a default under Section 6.4(a), such default shall not have been
waived within two (2) Business Days after the date of such default and (ii) with
respect to any other default, such default shall not have been remedied or
waived within thirty (30) days after the earliest of (A) a Responsible Officer
of a Principal Obligor obtaining knowledge of such default (which, in the case
of Section 6.4(b), will be presumed to have occurred no later than the date of
the delivery of financial statements pursuant to Section 5.1 for the end of the
accounting period as of which such default exists) or (B) receipt by the
Borrower of notice from the Agent or the Board of such default; or
(f) (i) a court shall enter a decree or order for relief in respect
of any Obligor in an involuntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or any other relief described in clause (ii) below or other similar
relief shall be granted under any applicable federal or state law; or (ii) an
involuntary case shall be commenced against any Obligor seeking (A) relief under
the Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, (B) the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over such Obligor, or over all or a substantial part of its property, or
(C) the appointment of an interim receiver, trustee or other custodian of any
Obligor for all or a substantial part of its property, and any such event
described in this clause (ii) against such Obligor shall continue for 60 days
without being dismissed or discharged; or (iii) a warrant of attachment,
execution or similar process shall have been issued against all or any
substantial part of the property of any Obligor; or
(g) (i) any Obligor shall have an order for relief entered with
respect to it or commence a voluntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian of all or a substantial part of its
property; or (ii) any Obligor shall make any assignment for the benefit of
creditors; or (iii) the board of directors of any Obligor (or any committee
thereof) shall adopt any resolution to approve any of the actions referred to in
clauses (i) or (ii) above; or
80
(h) (i) one or more final judgments or orders for the payment of
money in an aggregate amount in excess of $25,000,000 and which are not covered
by insurance (treating any deductibles, self-insurance (except to the extent
reinsured) or retention as not so covered) or (ii) one or more non-monetary
judgments or orders that could reasonably be expected to have a Material Adverse
Effect shall have been entered against one or more Obligors and shall remain
undischarged or unstayed, by reason of a pending appeal or otherwise, for a
period in excess of sixty (60) days; or
(i) the Board Guaranty shall for any reason (other than by reason of
Sections 2.03, 2.04, 2.05 or 2.06 of the Board Guaranty) cease to be in full
force and effect or the Board shall assert that any of its obligations
thereunder are invalid or unenforceable; or
(j) any order, judgment or decree shall be entered against any
Obligor decreeing the dissolution of such Obligor and such order shall remain
undischarged or unstayed for a period in excess of thirty (30) days; or
(k) (i)(A) any of the Loan Documents shall cease to be in full force
and effect or (B) any Obligor shall so assert or (ii) any Lien under the
Collateral Documents on any material portion of the Collateral shall cease to be
enforceable and of the same effect and priority purported to be created thereby,
and except in the case of clause (i)(A) of this subsection (k), such default
shall continue unremedied for a period of ten (10) days; or
(l) any of the insurance coverages required to be maintained by the
Obligors pursuant hereto or under the Collateral Documents shall lapse,
terminate or otherwise cease to be in full force and effect, other than coverage
of losses and liabilities that in the aggregate are reasonably expected to be
immaterial to the operations or financial condition of the Obligors taken as a
whole; or
(m) the "Net Investment" (as defined below) shall exceed the "Net
Receivables Balance" (as defined below) at any time (for purposes hereof, "Net
Investment" means the outstanding principal amount of Tranche A of the Loan and
accrued and unpaid interest thereon, and "Net Receivables Balance" means the
maximum amount payable under the Board Guaranty), other than pursuant to the
terms of Section 9.2(f) or any other provision of any Loan Document; or
(n) any Obligor shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or
(o) (i) Slots, other than Secondary Slots which the Obligors have
determined are no longer commercially required, (x) shall have been withdrawn by
the FAA or otherwise revoked or terminated during the term of the Loan as the
result of failure to comply with the Slot Regulations and (y) the aggregate
Appraised Value of such Slots (in each case, as of the date of such withdrawal,
revocation or termination) shall have exceeded $10,000,000; or (ii) any Obligor
implements a cessation, cancellation or curtailment of flight operations or a
change in flight schedules which, assuming no subsequent further action (such as
the sale, lease or trade of the affected Slots or their allocation to new or
additional flights) is taken, could reasonably be expected to result in the
withdrawal by the FAA or other revocation or termination based upon failure to
comply with the Slot Regulations of Slots, other than Secondary Slots, the
aggregate Appraised Value of which (as of the date of such cessation,
cancellation or curtailment) exceeds $10,000,000; it being understood, however,
that an Event of Default shall not have occurred under this clause (ii) if the
Slots otherwise affected are sold, leased or traded in arm's length transactions
or allocated to new or additional flights prior to the implementation of such
cessation, cancellation or curtailment of flight operations or change in flight
schedules; or
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(p) any default by any Obligor in the performance of or compliance
with Section 5.14 of this Agreement and such default shall not have been
remedied or waived within 180 days after the earlier of (i) a Responsible
Officer of Group or the Borrower obtaining knowledge of such default or (ii)
receipt by the Borrower of notice from the Agent or the Board of such default.
SECTION 7.2. REMEDIES. During the continuance of any Event of
Default, the Agent shall, solely at the request of the Controlling Creditor or,
if while the Board is the Controlling Creditor (i) an Event of Default under
Section 7.1(a) has occurred and within 60 days following such occurrence such
Event of Default has not been cured or (ii) an Event of Default under Section
7.1(e) has occurred as a result of Group's failure to comply with the covenant
contained in Section 6.4(a) and within 60 days following such occurrence such
Event of Default has not been waived, then at the request of the Board or the
Tranche B Lenders holding at least twenty-five percent (25%) of principal amount
of then outstanding Tranche B, in each case by notice to the Borrower (with a
copy to the Board and the Loan Administrator), declare that the Loan, all
interest thereon and all other amounts and Obligations payable under this
Agreement to be immediately due and payable, whereupon the Loan, all such
interest and all such amounts and Obligations shall become and be immediately
due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower; provided,
however, that upon the occurrence of an Event of Default specified in clause (f)
or (g) of Section 7.1, the Loan, all such interest and all such amounts and
Obligations shall automatically become and be immediately due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower. Except with respect to the Agent as
provided in the immediately preceding sentence, remedies exercisable by the
Agent or the Collateral Agent hereunder or under any Collateral Document shall
be exercised solely upon instructions received by the Agent or the Collateral
Agent from the Controlling Creditor in writing; provided, however, that in
connection with its exercise of remedies or forbearance from such exercise in
connection with any Event of Default under clause (a), (b), (c), or (d) of
Section 7.1, the Board, if it is the Controlling Creditor at the time, will make
itself reasonably available to consult in good faith with the Tranche B Lenders
for the purpose of obtaining their view on the actions that may be taken in
connection with such Event of Default and the exercise of remedies or
forbearance, it being understood that exercise of such remedies or forbearance
nonetheless shall remain within the sole discretion of the Board.
ARTICLE VIII
THE AGENT AND THE COLLATERAL AGENT
The parties hereto agree as follows:
SECTION 8.1. AUTHORIZATION AND ACTION. Each Lender and the Board
hereby appoints and authorizes each of the Agent and the Collateral Agent to
take such action as administrative agent and collateral agent, respectively, on
its behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated by such Lender to it as Agent or Collateral Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto, and each of the Agent and the Collateral Agent hereby
accepts such authorization and appointment. The Agent and the Collateral Agent
shall be obligated to perform such duties and only such duties as are
specifically set forth in this Agreement and the other Loan Documents and no
implied covenants or obligations shall be read into this Agreement or any other
Loan Document against the Agent or the Collateral Agent. Except with respect to
any matter as to which the Agent or the Collateral Agent is expressly directed
to take any specific action (or refrain from taking any specific action) by the
terms of this Agreement or any other Loan Documents, neither the Agent nor the
Collateral Agent shall be required to take any action (including making any
determination) or refrain from taking any action except upon the written
instructions of the Controlling Creditor, and neither the Agent nor the
Collateral Agent shall be required
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to exercise any discretion vested in the Agent or the Collateral Agent under
this Agreement or any other Loan Document, but each of the Agent and the
Collateral Agent shall be required to act or to refrain from acting with regard
to any such action and exercise or refrain from exercising such discretion (and
shall be fully protected in, and shall have no liability for, so acting or
refraining from action upon such written instructions of the Controlling
Creditor (including, without limitation, with respect to matters arising under
the Collateral Documents and the other Loan Documents), and such instructions
shall be binding upon all Lenders and the Board; provided, however, that neither
the Agent nor the Collateral Agent shall be required to take any action which
could expose either the Agent or the Collateral Agent to liability or which is
contrary to this Agreement, the Board Guaranty, any other Loan Document or
applicable law. As to any provisions of this Agreement or any other Loan
Document under which action may be taken or approval given by less than all of
the Lenders or the Board or both, as the case may be, the action taken or
approval given by the required Lenders or the Board or both, as the case may be,
shall be binding upon all Lenders and the Board to the same extent and with the
same effect as if each Lender and the Board had joined therein. Each of the
Agent and the Collateral Agent shall be entitled to rely upon any note, notice,
consent, certificate, affidavit, letter, telegram, teletype message, facsimile
transmission, statement, order or other document, instrument or writing believed
by it to be genuine and correct and to have been signed or sent by the proper
person or persons and, in respect of legal matters, upon the opinion of counsel
selected by the Agent or the Collateral Agent. Each of the Agent and the
Collateral Agent may deem and treat the payee of the Notes as the owner thereof
for all purposes hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Agent and the Collateral Agent.
Any request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of the Loan shall be
conclusive and binding on any subsequent holder, transferee or assignee of the
Loan. Upon any delivery of any instructions to the Collateral Agent by the
Requisite Lenders pursuant to this Agreement, the Agent shall certify to the
Collateral Agent that the Lenders delivering such instructions constitute the
Requisite Lenders under the Agreement and (i) the Collateral Agent may but shall
be under no obligation to follow such instructions until the Agent shall certify
to the Collateral Agent that the Lenders delivering such instructions constitute
the Requisite Lenders under the Agreement and (ii) the Collateral Agent shall be
fully protected in, and shall have no liability for, following such instructions
whether or not the Agent shall have made the certification referred to in clause
(i) above or declining to follow such instructions until the Agent shall have
made the certification referred to in clause (i) above. Each Lender and the
Board hereby authorizes and directs the Collateral Agent to enter into the
Collateral Documents on its behalf, and acknowledges and agrees to all of the
terms and conditions thereof and agrees to be bound thereby. No provision of
this Agreement or any other Loan Document shall be deemed to impose any duty or
obligation on the Collateral Agent to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal or in which the Collateral Agent shall be
unqualified or incompetent to perform any such act or acts or to exercise any
such right, power, duty or obligation or if such performance or exercise would
constitute doing business by the Collateral Agent in such jurisdiction or impose
a tax on the Collateral Agent by reason thereof or to risk its own funds or
otherwise incur any financial liability in the performance of its duties
hereunder.
SECTION 8.2. RELIANCE, ETC. Neither the Agent nor the Collateral
Agent nor any of their respective Affiliates, directors, officers, agents or
employees shall be liable to any Lender, the Loan Administrator or the Board for
any action taken or omitted to be taken by it or by such directors, officers,
agents or employees under or in connection with this Agreement, the Notes or any
other Loan Document, except for its or their own gross negligence or willful
misconduct as actually and finally determined by a final, non-appealable
judgment of a court of competent jurisdiction and only to the extent of direct
(as opposed to special, indirect, consequential or punitive) damages. Without
limitation of the generality of the foregoing, each of the Agent and the
Collateral Agent: (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to any
Lender, the Loan Administrator or the Board for any action taken or omitted to
be taken in good faith by it in
83
accordance with the advice of such experts; (ii) makes no warranty or
representation to any Lender, the Loan Administrator or, except, with respect to
the Agent as expressly provided in the Board Guaranty, the Board, and shall not
be responsible to any Lender, the Loan Administrator or, except, with respect to
the Agent as expressly provided in the Board Guaranty, the Board, for any
statements, warranties or representations (whether oral or written) made in or
in connection with this Agreement, the Notes or any other Loan Document; (iii)
shall not have any duty, and shall incur no liability for its failure, to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement, the Notes or any other Loan Document
on the part of any Obligor or to inspect the property (including the books and
records) of any Obligor; (iv) shall not be responsible to any Lender, the Loan
Administrator or the Board for any recitals, statements, representations or
warranties in this Agreement, the Notes or any other Loan Document, or any other
instrument or document furnished pursuant thereto, or for the validity,
perfection, priority or enforceability of the liens or security interests in any
of the Collateral created or intended to be created by any Loan Document, or for
the validity or sufficiency of the Collateral or any Loan Document, or for
insuring the Collateral or for any payment of taxes, charges, assessments, or
liens upon the Collateral or otherwise as to the maintenance of the Collateral,
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, the Notes or any other Loan Document, or
any other instrument or document furnished pursuant thereto; (v) shall incur no
liability under or in respect to this Agreement, the Notes or any other Loan
Document by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telegram, facsimile transmission, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties;
and (vi) may deem and treat each Lender which makes a loan hereunder as the
holder of the indebtedness resulting therefrom for all purposes hereof until the
Agent receives and accepts an Assignment and Acceptance entered into by such
Lender, as assignor, and an eligible assignee as provided in Section 9.2. The
Collateral Agent shall be under no obligation or duty to take any action under
this Agreement or any other Loan Document or otherwise if taking such action (i)
would subject the Collateral Agent to a tax in any jurisdiction where it is not
then subject to a tax or (ii) would require the Collateral Agent to qualify to
do business in any jurisdiction where it is not then so qualified, unless in
each such case the Collateral Agent shall receive security, or indemnity
satisfactory to it against such tax and any liability resulting from such
qualification, in each case as results from the taking of such action under this
Agreement or any other Loan Document. The Collateral Agent may execute any of
the trusts or powers hereof and perform any duty hereunder, or under any other
Loan Document, either directly or by or through agents or attorneys-in-fact. The
Collateral Agent shall be entitled to the advice of counsel concerning all
matters pertaining to such trusts, powers and duties and shall not be liable to
any Lender, the Loan Administrator or the Board for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel.
The Collateral Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it without gross negligence or
willful misconduct. The Collateral Agent shall not be liable for interest on any
money or assets received by it except as the Collateral Agent may agree in
writing. Assets held by the Collateral Agent pursuant to this Agreement or any
Collateral Document need not be segregated from other assets except to the
extent expressly required hereunder or thereunder or required by law.
Notwithstanding anything to the contrary in this Agreement or any other Loan
Document, (i) if any provision of this Agreement or any other Loan Document
provides that the Collateral Agent shall act at the direction of the Agent, the
Collateral Agent shall be fully protected in, and shall have no liability for,
taking any action pursuant to such direction, and (ii) if the Collateral Agent
shall request instructions from the Controlling Creditor with respect any act or
action (including the failure to act) in connection with this Agreement or any
other Loan Document, the Collateral Agent shall be entitled to refrain from such
act or taking such action unless and until the Collateral Agent shall have
received written instructions from the Controlling Creditor and the Collateral
Agent shall not incur any liability to any Person by reason of so refraining and
shall be fully protected in following any such written instructions. Whenever in
the administration of this Agreement or any other Collateral Document, the
Collateral Agent shall deem it necessary or desirable that a factual matter be
proved or established in connection with the Collateral Agent taking, suffering
or omitting any action
84
hereunder or thereunder, such matter (unless other evidence in respect thereof
is specifically prescribed) may be deemed to be conclusively proved and
established by a certificate of a Responsible Officer of the Controlling
Creditor delivered to the Collateral Agent, and such certificate shall be full
warrant to the Collateral Agent for any action taken, suffered or omitted in
reliance thereon and the Collateral Agent shall be fully protected in connection
therewith and shall have no liability therefor.
SECTION 8.3. AFFILIATES. If and so long as the Agent or the
Collateral Agent shall remain a Lender, the Agent or the Collateral Agent, as
applicable, shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same rights and powers under this Agreement as
any other Lender and may exercise the same as though it were not the Agent or
the Collateral Agent, and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include the Agent and the Collateral Agent, each in its
individual capacity. Unrelated to its role as Agent or Collateral Agent as set
forth herein, the Agent and the Collateral Agent and their respective Affiliates
may accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, any Obligor and any Person who
may do business with or own securities of any Obligor, all as if it were not the
Agent or the Collateral Agent, as applicable, hereunder and without any duty to
account therefor to the Lenders.
SECTION 8.4. REPRESENTATIONS OF THE LENDERS AND THE BOARD. Each
Lender, the Loan Administrator and the Board's representatives have actively
engaged in the negotiation of all of the terms of this Agreement. The Board's
representatives have met with the Obligors to discuss the business, affairs,
financial condition and prospects of the Obligors. Except as otherwise expressly
provided in this Agreement or any of the other Loan Documents, neither the Agent
nor the Collateral Agent shall have any duty or responsibility, either initially
or on a continuing basis, under this Agreement or any other Loan Document, to
provide any Lender, the Loan Administrator or the Board with any credit or other
information with respect to the Borrower whether coming into its possession as
of the date of this Agreement or at any time thereafter, or to notify any
Lender, the Loan Administrator or the Board of any Default or Event of Default
except as provided in Section 8.5. This Agreement and all instruments or
documents delivered in connection with this Agreement have been reviewed and
approved by each Lender, the Loan Administrator and the Board and none of the
Lenders, the Loan Administrator or the Board has relied on the Agent or the
Collateral Agent as to any legal or factual matter in connection therewith or in
connection with the transactions contemplated thereunder.
SECTION 8.5. EVENTS OF DEFAULT; TERMINATION OF BOARD GUARANTY.
(a) In the event of the occurrence of any Default or Event of
Default, any Lender or the Board knowing of such event may (but shall have no
duty to), or any Principal Obligor pursuant to Section 5.1(b)(vi) hereof shall,
give the Agent and the Collateral Agent written notice specifying such Default
or Event of Default and expressly stating that such notice is a "notice of
default". Neither the Agent nor the Collateral Agent shall be deemed to have
knowledge of such events unless the Agent or the Collateral Agent, as
applicable, has received such notice or, with respect to the Agent only, unless
the Default or Event of Default consists of a failure of payment of principal or
interest on the Loan. In the event that the Agent or the Collateral Agent
receives such a notice of the occurrence of a Default or Event of Default, the
Agent or the Collateral Agent, as applicable, shall give written notice thereof
to the Lenders, the Board and the Loan Administrator. In the event that such
notice is a notice of an Event of Default or such Default matures into an Event
of Default, the Agent and the Collateral Agent shall take such action with
respect to such Default or Event of Default as shall be directed in writing by
the Board, the Tranche B Lenders or the Lenders, as provided in Section 7.2;
provided, however, that, unless and until the Agent or the Collateral Agent
shall have received such directions, the Agent and the Collateral Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect
85
to such Default or Event of Default as it shall deem advisable and in the best
interest of the Lenders and the Board.
(b) In the event the Agent or the Collateral Agent shall receive
written notice from the Board to the effect that (i) the Board has the right to
terminate the Board Guaranty under Sections 2.04 and 2.05 thereof, (ii) any
portion of the Board Guaranty has terminated under Section 2.03 thereof or
otherwise or (iii) the Board Guaranty shall for any reason have ceased to be in
full force and effect or the Board shall have asserted that any of its
obligations thereunder is invalid or unenforceable, the Agent or the Collateral
Agent, as applicable shall promptly give written notice thereof to the Lenders.
Neither the Agent nor the Collateral Agent shall be deemed to have knowledge of
any such event unless the Agent or the Collateral Agent, as applicable, has
received such notice (except with respect to the Agent if any such event results
from the failure of the Agent to perform any of its obligations under the Board
Guaranty).
SECTION 8.6. AGENT'S AND COLLATERAL AGENT'S RIGHT TO INDEMNITY. The
Agent and the Collateral Agent shall be fully justified in failing or refusing
to take any action hereunder on behalf of any Lender or the Board unless it
shall first be indemnified to its satisfaction by such Lender (or, in the case
of the Primary Tranche A Lender, Citibank, N.A.) or the Board, as the case may
be, against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action.
SECTION 8.7. INDEMNIFICATION OF AGENT AND COLLATERAL AGENT. The
Lenders hereby agree to indemnify the Agent and the Collateral Agent and all of
their respective affiliates, directors, officers, employees, advisors and
representatives thereof (to the extent not reimbursed by the Borrower), ratably
as most recently in effect prior to the date indemnification is sought, from and
against any and all costs, losses, liabilities, claims, damages or expenses
which may be incurred by or asserted or awarded against the Agent or the
Collateral Agent in any way relating to or arising out of this Agreement and/or
the other Loan Documents or any action taken or omitted by the Agent or the
Collateral Agent under this Agreement and/or the other Loan Documents; provided,
however, that any such indemnification obligation in respect of any claim
against the Primary Tranche A Lender shall constitute an indemnification
obligation solely of Citibank, N.A. rather than the Primary Tranche A Lender and
the Primary Tranche A Lender shall have no indemnification obligation in respect
thereof; provided, further, that no Lender (or in the case of the Primary
Tranche A Lender, Citibank, N.A.) shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's or the Collateral
Agent's gross negligence or willful misconduct as actually and finally
determined by a final, non-appealable judgment of a court of competent
jurisdiction and only to the extent of direct (as opposed to special, indirect,
consequential or punitive) damages. Without limiting the foregoing, each Lender
(or in the case of the Primary Tranche A Lender, Citibank, N.A.) agrees to
reimburse the Agent and the Collateral Agent promptly upon demand for its
ratable share of any reasonable out-of-pocket expenses (including reasonable
counsel fees) incurred by the Agent or the Collateral Agent in connection with
the administration or enforcement of, or the preservation of any rights under,
this Agreement and/or the other Loan Documents, to the extent that the Agent or
the Collateral Agent is not reimbursed for such expenses by the Borrower.
SECTION 8.8. SUCCESSOR AGENT AND COLLATERAL AGENT. Each of the Agent
and the Collateral Agent may resign at any time by giving written notice thereof
to the Lenders, the Board, the Loan Administrator and the Borrower and may be
removed at any time with cause by the Controlling Creditor and, so long as the
Board is a guarantor of Tranche A or a Lender hereunder, with or without cause
by the Board. Any such resignation or removal shall be effective upon
appointment and acceptance of a successor Agent or Collateral Agent, as
applicable, in accordance with this Section 8.8. Upon any such resignation or
removal, the Borrower shall have the right to appoint a successor agent, subject
to confirmation by the Controlling Creditor. If no successor agent shall have
been appointed and accepted
86
such appointment within sixty (60) days after the retiring Agent's or Collateral
Agent's, as applicable, giving of notice of resignation or the Controlling
Creditor's removal of the Agent or the Collateral Agent, the Agent or the
Collateral Agent, as applicable, may, with the consent (not to be unreasonably
withheld) of the Controlling Creditor and, so long as no Event of Default shall
have occurred and be continuing, the Borrower, appoint a successor Agent or
Collateral Agent, as applicable, who shall be willing to accept such
appointment. Each successor agent appointed hereunder shall be a commercial bank
organized under the laws of the United States of America or of any State thereof
and shall have a combined capital and surplus of at least $1,000,000,000. Upon
the acceptance of any appointment as Agent or Collateral Agent hereunder by a
successor Agent or Collateral Agent, such successor Agent or the Collateral
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Agent or Collateral Agent, and
the retiring or removed Agent or Collateral Agent shall be discharged from its
duties and obligations as agent under this Agreement. After any Agent's or
Collateral Agent's resignation or removal hereunder as Agent or Collateral
Agent, as applicable, the provisions of this Article VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
or Collateral Agent under this Agreement.
SECTION 8.9. RELEASE OF LIENS ON COLLATERAL AND SUBSIDIARY
GUARANTORS. The Lenders and the Board irrevocably authorize the Collateral Agent
to release any Lien on any property granted to or held by the Collateral Agent
under any Collateral Document and to release any Subsidiary Guarantor from its
obligations under the First Lien Guaranty and the other Loan Documents to which
such Subsidiary may be a party (i) upon payment in full of all Obligations
(other than contingent indemnification obligations), (ii) upon the transfer of
property as part of or in connection with any Asset Sale that complies with
Section 6.13 and with respect to which the relevant Obligor complies with
Section 2.5(d), as applicable, (iii) upon the pledge, sale transfer or other
disposition of property as part of or in connection with any Replacement Secured
Financing with respect to which the relevant Obligor complies with Section
2.5(b), (iv) to the extent release of any Lien is otherwise permitted under this
Agreement or any Collateral Document (including, without limitation, in the
proviso to Section 5.8(b) hereof), or (v) subject to Section 9.1, if approved,
authorized or ratified in writing by the Controlling Creditor; provided, that
the Collateral Agent shall not be obligated to release any Lien pursuant to this
Section 8.9 until its receipt from the Borrower (with a copy to the Agent, the
Board and the Loan Administrator) of an Officer's Certificate certifying that
such release complies with this Section 8.9.
SECTION 8.10. CO-COLLATERAL AGENT; SEPARATE COLLATERAL AGENT. (a) If
at any time or times it shall be necessary or prudent in order to conform to any
law of any jurisdiction in which any of the Collateral shall be located, or to
avoid any violation of law or imposition on the Collateral Agent of taxes by
such jurisdiction not otherwise imposed on the Collateral Agent, or the
Collateral Agent shall be advised by legal counsel that it is necessary or
prudent in the interest of the Lenders, or the Collateral Agent shall deem it
desirable for its own protection in the performance of its duties hereunder, the
Collateral Agent and the Borrower shall execute and deliver all instruments and
agreements necessary or proper to constitute another bank or trust company, or
one or more persons approved by the Collateral Agent and the Borrower (with the
consent, not to be unreasonably withheld, of the Controlling Creditor), either
to act as Collateral Agent or co-Collateral Agents of all or any of the
Collateral under this Agreement, jointly with the Collateral Agent originally
named herein or therein or any successor Collateral Agent, or to act as separate
Collateral Agent or Collateral Agents of any of the Collateral. If the Borrower
shall not have joined in the execution of such instruments and agreements within
10 days after it receives a written request from the Collateral Agent to do so,
or if an Event of Default shall have occurred and be continuing, the Collateral
Agent may act under the foregoing provisions of this Section 8.10(a) without the
concurrence of the Borrower (and without the consent of the Controlling
Creditor) and execute and deliver such instruments and agreements on behalf of
the Borrower. The Borrower hereby appoints the Collateral Agent as its agent and
attorney to act for it under the foregoing provisions of this Section 8.10(a) in
either of such contingencies.
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(b) Every separate Collateral Agent and every co-Collateral Agent,
other than any successor Collateral Agent appointed pursuant to Section 8.8,
shall, to the extent permitted by law, be appointed and act and be such, subject
to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred upon such
Collateral Agent in respect of the custody, control and management of
moneys, papers or securities shall be exercised by such Collateral Agent
or any agent appointed by such Collateral Agent;
(ii) all rights, powers, duties and obligations conferred or imposed
upon the Collateral Agent hereunder shall be conferred or imposed and
exercised or performed by the Collateral Agent and such separate
Collateral Agent or separate Collateral Agents or co-Collateral Agent or
co-Collateral Agents, jointly, as shall be provided in the instrument
appointing such separate Collateral Agent or separate Collateral Agents or
co-Collateral Agent or co-Collateral Agents, except to the extent that
under any law of any jurisdiction in which any particular act or acts are
to be performed the Collateral Agent shall be incompetent or unqualified
to perform such act or acts, or unless the performance of such act or acts
would result in the imposition of any tax on the Collateral Agent which
would not be imposed absent such joint act or acts, in which event such
rights, powers, duties and obligations shall be exercised and performed by
such separate Collateral Agent or separate Collateral Agents or
co-Collateral Agent or co-Collateral Agents;
(iii) except as provided in clause (ii) above, no power given hereby
to, or which it is provided herein or therein may be exercised by, any
such co-Collateral Agent or co-Collateral Agents or separate Collateral
Agent or separate Collateral Agents shall be exercised hereunder or
thereunder by such co-Collateral Agent or co-Collateral Agents or separate
Collateral Agent or separate Collateral Agents except jointly with, or
with the consent in writing of, the Collateral Agent, anything contained
herein to the contrary notwithstanding;
(iv) no Collateral Agent hereunder shall be personally liable by
reason of any act or omission of any other Collateral Agent hereunder; and
(v) the Borrower and the Collateral Agent, at any time by an
instrument in writing executed by them jointly (with the consent, not to
be unreasonably withheld, of the Controlling Creditor), may accept the
resignation of or remove (for any reason or no reason at all) any such
separate Collateral Agent or co-Collateral Agent and, in that case by an
instrument in writing executed by them jointly, may appoint a successor to
such separate Collateral Agent or co-Collateral Agent, as the case may be,
anything contained herein to the contrary notwithstanding. If the Borrower
shall not have joined in the execution of any such instrument within 10
days after it receives a written request from the Collateral Agent to do
so, or if an Event of Default shall have occurred and be continuing, the
Collateral Agent shall have the power to accept the resignation of or
remove any such separate Collateral Agent or co-Collateral Agent and to
appoint a successor without the concurrence of the Borrower (and without
the consent of the Controlling Creditor), the Borrower hereby appointing
the Collateral Agent its agent and attorney to act for it in such
connection in such contingency. If the Collateral Agent shall have
appointed a separate Collateral Agent or separate Collateral Agents or
co-Collateral Agent or co-Collateral Agents as above provided, the
Collateral Agent may at any time, by an instrument in writing, accept the
resignation of or remove any such separate Collateral Agent or
co-Collateral Agent and the successor to any such separate Collateral
Agent or co-Collateral Agent shall be appointed by the Borrower and the
Collateral Agent, or by the Collateral Agent alone pursuant to this
Section 8.10(b).
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SECTION 8.11. COLLATERAL AGENTS' LIEN. Notwithstanding anything to
the contrary in this Agreement or in any other Loan Document, as security for
the payment of its fee under Section 2.7(d) and all other amounts payable to the
Collateral Agent hereunder including, without limitation, any and all expenses
and any amounts for which the Collateral Agent is entitled to reimbursement or
indemnification, (i) the Collateral Agent is hereby granted a lien on all
Collateral and (ii) the Collateral Agent shall have the right to use and apply
any of the funds held by the Collateral Agent to cover all such fees and other
amounts.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. AMENDMENTS, WAIVERS, ETC.
(a) Amendments and Waivers. No amendment, modification or waiver of
any provision of this Agreement or any other Loan Document nor consent to any
departure by any Obligor therefrom shall in any event be effective unless the
same shall be in writing and (x) signed by the Controlling Creditor and (y)
permitted by Section 5.3 of the Intercreditor Agreement (if applicable), and
then any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that:
(i) no amendment, modification, waiver or consent shall, unless in
writing and signed by each Lender affected thereby and the Board (so long
as the Board is either a guarantor of Tranche A or a Lender hereunder), do
any of the following:
(1) subject the Lenders or the Board to any additional
obligations;
(2) extend the scheduled final maturity of the Loan or change
the amount of or extend the scheduled date for payment of any
principal of the Loan;
(3) decrease the rate of interest on the Loan or any fee,
indemnity or other amount payable to such Lender or the Board or
extend any date fixed for payment of such interest, indemnity or
other amount or fees;
(4) amend the definition of "Requisite Lenders," "Controlling
Creditor" or this Section 9.1;
(5) waive, amend, modify or release the First Lien Guaranty
except as provided herein;
(6) modify the application of payments to the Loan under
Section 2.8; and
(7) waive, amend or modify Section 6.4(a) in a manner which
would have the effect of reducing the Minimum Adjusted Cash Amount
for any period thereunder (A) by more than 25% of the originally
scheduled amount for such period or (B) to an amount which would
result in the Collateral Value (as of the last Collateral Value Test
Date) being less than the product of (x) the then outstanding
principal amount of the Loan minus the Minimum Adjusted Cash Amount
(as amended or modified) and (y) 1.35.
(ii) no (A) amendment or modification of any material provision of
Article II, Article III, Article IV, Article VIII or Section 5.1 (other
than monthly reporting), Section 5.2, Section
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5.5, Section 7.1 (other than to add Events of Default), Section 7.2,
Section 9.2, Section 9.3, Section 9.4, Section 9.5, Section 9.6, Section
9.7, Section 9.9, Section 9.10, Section 9.11, Section 9.12, Section 9.16,
Section 9.17 or Section 9.19 or any of the definitions as relevant
thereto, (B) release of all or substantially all of the Collateral, or any
dilution or subordination of the Liens on any Collateral having a material
value, or (C) waiver, amendment or modification of the Intercreditor
Agreement in a manner adverse to the First Lien Claimholders (under and as
defined therein), in each case shall be effective unless in writing and
signed by (I) RSA so long as it continues to hold more than 37.5% of the
principal amount of Tranche B Notes outstanding, (II) Bank of America,
N.A., as a Tranche B Lender, so long as it continues to hold more than
12.5% of the principal amount of Tranche B Notes outstanding, (III)
Citicorp North America, Inc., as Govco Administrative Agent, and Citibank,
N.A., so long as the Primary Tranche A Lender or the Alternate Tranche A
Lender, respectively, continues to hold more than 50% of the principal
amount of Tranche A Notes, and (IV) the Board, so long as the Board is
either a guarantor of Tranche A or a Lender hereunder; and
(iii) no amendment, modification, waiver or consent shall, unless in
writing and signed by the Agent, the Collateral Agent or the Loan
Administrator, as applicable, in addition to the Persons required above to
take such action, affect the rights or duties of the Agent, the Collateral
Agent or the Loan Administrator, as the case may be, under this Agreement,
the other Loan Documents or the Board Guaranty.
(b) Execution of Amendments and Waivers by the Agent. The Agent may,
but shall have no obligation to, with the written concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of that Lender.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances.
(c) Non-Consenting Lenders. In connection with any proposed
amendment, modification, waiver or termination requiring the consent of all
affected Lenders, if the consent of Requisite Lenders is obtained, but the
consent of other Lenders whose consent is required is not obtained (any such
Lender whose consent is not obtained as described in this Section 9.1 being
referred to as a "Non-Consenting Lender"), then, so long as the Lender that is
acting as the Agent is not a Non-Consenting Lender, at the Borrower's request,
the Agent or an Eligible Lender that is acceptable to the Agent, the Board and,
so long as no Event of Default shall have occurred and be continuing, the
Borrower, shall have the right with the Agent's consent and in the Agent's sole
discretion (but shall have no obligation) to purchase from such Non-Consenting
Lender, and such Non-Consenting Lender agrees that it shall, upon the Agent's
request, sell and assign to the Lender that is acting as the Agent or such
Eligible Lender, all of the portion of the Loan of such Non-Consenting Lender
for an amount equal to the principal balance of such portion of the Loan held by
the Non-Consenting Lender and all accrued interest and fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment and Acceptance.
SECTION 9.2. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS AND ASSIGNS.
(a) Assignment. Each Lender may sell, transfer, negotiate or assign
either in whole or in part to one or more Eligible Lenders its rights and
obligations hereunder and under the Notes and the other Loan Documents; provided
that (i) the assigning Lender shall give prompt written notice to the Agent, the
Borrower, the Board and the Loan Administrator of the terms of and the parties
to any such assignment, (ii) the proposed assignee shall provide to the Agent,
the Borrower and the Board all documentation and certificates as required by the
Agent, the Borrower and the Board to confirm to the
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Agent's and the Board's satisfaction that such proposed assignee is an Eligible
Lender, (iii) the Borrower will not be obligated to pay any greater amount under
Section 2.9(c) or Section 2.11 (in respect of increased costs or Indemnified
Taxes or Other Taxes imposed pursuant to applicable law in effect on the date of
such assignment) to the assignee than the Borrower is then obligated to pay to
the assigning Lender under such Sections, (iv) any sale, transfer or assignment
of a Tranche A Lender's rights, interests or obligations under the Board
Guaranty shall be subject to Sections 2.04 and 5.04 of the Board Guaranty, and
(v) without the consent of the Borrower (in its sole discretion), no right,
obligation or interest hereunder or under any Note or other Loan Document may be
sold, transferred, negotiated or assigned to (A) an airline, a commercial
aircraft operator, an air freight forwarder or an entity principally engaged in
the business of parcel transport by air (any such Person, a "Prohibited
Transferee"), (B) an Affiliate of a Prohibited Transferee or (C) a manufacturer
of, or a maintenance provider for, aircraft airframes, engines or related parts.
Notwithstanding the foregoing, no prior consent or approval of any Person shall
be required for an assignment of Tranche A from the Primary Tranche A Lender to
the Alternate Tranche A Lender.
(b) Deliveries in Connection with Assignment. The parties to each
assignment under this Section 9.2 shall execute and deliver to the Agent, for
its acceptance and recording, an Assignment and Acceptance, and the assignee, if
a Non-U.S. Person, shall deliver to the Borrower and the Agent, on or prior to
the date of the assignment, two completed copies of IRS Form X-0, X-0XXX or
W-8ECI or other applicable form, certificate or document required to satisfy the
requirements of Section 2.11. Upon such execution, delivery and acceptance and
the receipt by the Agent of an assignment fee in the amount of $3,500 (which fee
shall be payable by the assignor, or if the assignor is the Board, the
Borrower), the Agent shall record such Assignment and Acceptance and from and
after the effective date specified in such Assignment and Acceptance (i) the
assignee thereunder of all or any portion of the Loan shall become a party
hereto and, to the extent that rights and obligations under the Loan Documents
have been assigned to such assignee pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender and (ii) the assignor thereunder
shall, to the extent that rights and obligations under this Agreement have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except those rights with respect to indemnification which survive the payment
in full of the Obligations) and be released from its obligations under the Loan
Documents, other than those relating to events or circumstances occurring prior
to such assignment (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under the Loan Documents, such Lender shall cease to be a party hereto).
(c) Agent's Duties Upon Assignment. Upon its receipt of an
Assignment and Acceptance executed by an assigning Lender and an assignee, the
Agent shall, if such Assignment and Acceptance has been completed, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register, (iii) give prompt notice thereof to the Borrower and (iv) shall
give prompt written notice of the terms of and parties to any such assignment to
the Borrower, the Board and the Loan Administrator.
(d) Assignments to Federal Reserve Bank. In addition to the other
assignment rights provided in this Section 9.2, each Lender may assign, without
the prior consent of the Borrower, the Agent or the Board as collateral or
otherwise, any of its rights under this Agreement to any Federal Reserve Bank
pursuant to Regulation A of the Federal Reserve Board, provided, however, that
no such assignment shall release the assigning Lender from any of its
obligations hereunder.
(e) Participations. Each Lender may, without the prior consent of
the Borrower or any other Person, sell participations, to the extent permitted
by the Regulations and except as provided in Section 5.04(b) of the Board
Guaranty, in or to all or a portion of its rights and obligations hereunder and
under the Notes and the other Loan Documents (any such purchaser of a
participation being referred to as
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a "Participant"); provided that (i) neither the Notes nor the Board Guaranty is
assigned, conveyed, sold or transferred in whole or in part, (ii) the Board's
ability to assert any and all defenses available to it under the Board Guaranty
and the law is not adversely affected, (iii) the Borrower will not be obligated
to pay any greater amount under Section 2.9(b) or Section 2.11 (in respect of
increased costs, Indemnified Taxes or Other Taxes) to the Participant than the
Borrower is then obligated to pay to the selling Lender under such Sections,
(iv) no Participant shall, without the consent of the Borrower (such consent to
be in the Borrower's sole discretion), be a (x) Prohibited Transferee, (y) an
Affiliate of a Prohibited Transferee or (z) a manufacturer of, or a maintenance
provider for, aircraft airframes, engines or related parts, without in each case
the consent of the Borrower. In the event of the sale of any participation by
any Lender, (A) such Lender's obligations under the Loan Documents shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
for the performance of such obligations, (C) such Lender shall remain the holder
of such Obligations for all purposes of this Agreement, (D) the Borrower, the
Agent, the Board and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and (E) each Participant, shall deliver to the
Borrower and the Agent, on or prior to the date of the sale of the
participation, two completed copies of IRS Form X-0, X-0XXX or W-8ECI or other
applicable form, certificate or document required to satisfy the requirements of
Section 2.11. Any Participant will be entitled to the benefits of Section
2.9(c), Section 2.9(e), Section 2.10 and Section 2.11 to the same extent as if
such Person were a Lender.
(f) Assignment of Tranche A at the Direction of the Board. The
Tranche A Lender agrees that if and to the extent that the Board Guaranty
remains in effect, the Board shall have the right, upon five (5) Business Days'
prior notice to the Tranche A Lender (with a copy to the Agent and the
Borrower), to require the Tranche A Lender to sell, transfer and assign Tranche
A, in whole or in part (but in no event in excess of the amount then guaranteed
under the Board Guaranty), and with or without the benefit of the Board Guaranty
(which, if without, shall be fully and irrevocably released upon the closing and
to the extent of such purchase), to a Person designated by the Board, for a
purchase price equal to 100% of the principal amount of such portion of Tranche
A to be sold, transferred and assigned, together with all accrued and unpaid
interest thereon through the date of purchase (which purchase price may include
a payment under the Board Guaranty) and payment of any losses, expenses and
liabilities under Section 2.9(e) hereof attributable to such sale, transfer and
assignment (it being acknowledged and agreed that any premium paid by such
purchaser for such portion of the Loan shall be for the benefit of the Board);
provided, that the Tranche A Lender and the Borrower shall cooperate with the
Board to avoid any such losses, expenses and liabilities; and provided, further
that the Tranche A Lender shall also be entitled to payment of all other unpaid
Obligations owing to it through the date of purchase from the Obligors,
including, without limitation, fees, expenses, indemnities and other amounts
which are then due and payable pursuant to the terms of the Loan Documents,
which amounts the Obligors agree to pay to the Tranche A Lender on the date of
purchase. The closing of the Tranche A assignment shall be consummated pursuant
to an Assignment and Acceptance and such other documentation as the Tranche A
Lender, the Board and such assignee shall mutually agree is reasonably
necessary. Any such sale, transfer or assignment under this subsection (f) shall
be subject to the conditions specified in clauses (i), (ii), (iii) and (v) of
the proviso in subsection (a) of this Section 9.2.
(g) Reimbursement of Guarantee Fee upon Certain Assignments. If
during any Interest Period some or all of Tranche A is assigned in compliance
with this Section 9.2 and as a result of such assignment the Tranche A
Applicable Interest Rate on the portion of Tranche A so assigned will accrue at
the rate specified in clause (c) of the definition of "Tranche A Applicable
Interest Rate," then the Board shall reimburse the Borrower on or prior to the
first day of the next Interest Period for a pro rata amount of the Guarantee Fee
paid by the Borrower to the Board for such Interest Period, which amount shall
be equal to the product of (x) the amount of the Guarantee Fee attributable to
the portion of Tranche A so assigned and (y) a fraction, the numerator of which
is the number of days in such Interest Period
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during which the assignee held such assigned portion of Tranche A and the
denominator of which is the total number of days in such Interest Period.
(h) Assignment Pursuant to of the Intercreditor Agreement. Each of
the Lenders and the Board hereby acknowledges and agrees to the purchase right
set forth in the Section 5.6 of the Intercreditor Agreement and agrees to sell,
assign and transfer its interest in the Loan upon the terms and conditions
specified therein. For the avoidance of doubt, any such sale, assignment or
transfer shall be made without the benefit of the Board Guaranty (which shall be
fully and irrevocably released upon the closing of such sale).
(i) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, provided that except as otherwise expressly provided herein,
no Obligor may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Board, the Lenders and the
Agent (and any attempted assignment or transfer by an Obligor without such
consent shall be null and void).
SECTION 9.3. COSTS AND EXPENSES. Whether or not the transactions
contemplated hereby shall be consummated, the Obligors agree to pay promptly (i)
all reasonable costs and expenses incurred by the Loan Administrator, the Board,
RSA, the Lenders, the Agent and the Collateral Agent in connection with the
negotiation, preparation, execution and delivery of the Loan Documents, the
Board Guaranty and all documents relating thereto (including reasonable legal
fees and expenses), (ii) all reasonable costs and expenses incurred by the Loan
Administrator, the Board, RSA, Bank of America, the Agent and the Collateral
Agent in connection with any consents, amendments, waivers or other
modifications hereto (including reasonable legal fees and expenses) and (iii)
all reasonable costs and expenses, including reasonable legal fees and expenses
incurred by the Agent, the Collateral Agent, the Lenders, the Loan Administrator
and the Board in enforcing any Obligations of, or in collecting any payments due
from, the Obligors hereunder or under the other Loan Documents, including any
such costs and expenses incurred after the filing of a bankruptcy or insolvency
proceeding with respect to any Obligor.
SECTION 9.4. INDEMNITIES. Whether or not the transactions
contemplated hereby shall be consummated, the Obligors agree to defend,
indemnify, pay and hold harmless the Board, the Agent, the Collateral Agent, the
Govco Administrative Agent, the Lenders, the Loan Administrator and their
respective Affiliates, officers, directors, employees, agents and advisors
(collectively called the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including without limitation the reasonable fees and disbursements of counsel
for such Indemnitees, but excluding Taxes), whether direct, indirect or
consequential and whether based on any federal, state or foreign laws, statutes,
rules or regulations (including without limitation securities and commercial
laws, statutes and rules or regulations), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner arising out of this Agreement, the other Loan
Documents or the transactions contemplated hereby or thereby (including, without
limitation, the use or intended use of the proceeds of the Loan) or any breach
or default by the Obligors of any provision of the Loan Documents (collectively
called the "Indemnified Liabilities"); provided that the Obligors shall not have
any obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise (i) from the gross
negligence or willful misconduct of that Indemnitee (as actually and finally
determined by a final and non-appealable judgment of a court of competent
jurisdiction) and only to the extent that such Indemnified Liabilities
constitute direct (as opposed to special, indirect, punitive or consequential)
damages or (ii) constitute ordinary and usual operating or overhead expenses of
an Indemnitee (excluding, without limitation, costs and expenses of any outside
counsel, consultant or agent). To the extent that the undertaking to defend,
indemnify, pay
93
and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, each of the Obligors shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by the Indemnitees or any of them. No Indemnitee shall have any
liability (whether direct or indirect, in contract, tort or otherwise) to any
Obligor or any of its security holders or creditors for or in connection with
the transactions contemplated hereby, except to the extent such liability is
determined in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted primarily from such Indemnitee's gross negligence
or willful misconduct. In no event, however, shall any Indemnitee be liable on
any theory of liability for any special, indirect, consequential or punitive
damages (including, without limitation, any loss of profits, business or
anticipated savings). Without limitation of the generality of the foregoing,
each Indemnitee (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to any
Obligor or any of its security holders or creditors for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
experts and (ii) shall incur no liability under or in respect to this Agreement,
the Notes or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telegram, facsimile
transmission, cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties. The agreements in this Section 9.4 shall survive
the termination of the other provisions of this Agreement and the other Loan
Documents and, in the case of the Collateral Agent, shall survive the
resignation or removal of the Collateral Agent hereunder.
SECTION 9.5. RIGHT OF SET-OFF. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
to the fullest extent permitted by law, each Lender is hereby authorized by the
Obligors at any time or from time to time, with notice to the Obligors and to
each other Lender, the Board, the Agent, the Collateral Agent and the Loan
Administrator, to set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, Indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
Indebtedness at any time held or owing by that Lender to or for the credit or
the account of any Obligor against and on account of the obligations and
liabilities of such Obligor to that Lender under this Agreement, the First Lien
Guaranty, the Notes and the other Loan Documents, including, but not limited to,
all claims of any nature or description arising out of or connected with this
Agreement, the First Lien Guaranty, the Notes, or any other Loan Document,
irrespective of whether or not (i) that Lender shall have made any demand
hereunder or (ii) the principal of or the interest on the Loan or any other
amounts due hereunder shall have become due and payable pursuant to Section 7.2
and although said obligations and liabilities, or any of them, may be contingent
or unmatured.
SECTION 9.6. SHARING OF PAYMENTS, ETC. The Lenders and the Board
hereby agree among themselves that if any of them shall, whether by voluntary
payment, by realization upon security, through the exercise of any right of
set-off or banker's lien, by counterclaim or cross action or by the enforcement
of any right under the Loan Documents or otherwise, or as adequate protection of
a deposit treated as cash collateral under the Bankruptcy Code, receive payment
or reduction of a proportion of the aggregate amount of principal, interest,
fees and other amounts then due and owing to the Lenders and the Board hereunder
or under the other Loan Documents (collectively, the "Aggregate Amounts Due")
which is greater than the proportion received by any other Lender or the Board
in respect of the Aggregate Amounts Due to such other Lender or the Board, then
the Lender or the Board receiving such proportionately greater payment shall (i)
notify the Agent and each other Lender and the Board of the receipt of such
payment and (ii) (A) in the case of a Lender, (1) apply a portion of such
payment to purchase participations equal to the portion of the Aggregate Amounts
Due to the other Lenders and (2) pay to the Board the portion of the Aggregate
Amounts Due to it or (B) in the case of the Board, pay to each Lender the
portion of the Aggregate Amounts Due to it (which participations shall be deemed
to have been purchased and payments made simultaneously upon the receipt by the
seller or the Board of its
94
portion of such payment, and which participations will be permitted
notwithstanding any prohibition) to the contrary in Section 9.2(e)) so that all
such recoveries of Aggregate Amounts Due shall be shared by all Lenders and the
Board in proportion to the Aggregate Amounts Due to them, provided that if all
or part of such proportionately greater payment received by such purchasing
Lender or the Board is thereafter recovered from such Lender or the Board upon
the bankruptcy or reorganization of the Borrower or otherwise, those purchases
or other payments shall be rescinded and the purchase prices paid for such
participations or other payments shall be returned to such purchasing Lender or
the Board ratably to the extent of such recovery, but without interest. The
Borrower expressly consents to the foregoing arrangement and agrees that any
holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by the Borrower to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder.
SECTION 9.7. NOTICES, ETC. Unless otherwise specifically provided
herein, any notice, request or other communication herein required or permitted
to be given shall be in writing and may be personally served or sent by
telefacsimile or courier service and shall be deemed to have been given when
delivered in person or by courier service, or upon receipt of telefacsimile
(promptly confirmed in writing). For the purposes hereof, the address of each
party hereto shall be as set forth under such party's name on Annex A or such
other address as shall be designated by such party in a written notice delivered
to the Agent. A copy of any and all notices, requests, communications, demands,
reports, documents or other materials (including, without limitation, any of the
materials delivered by the Obligors under Section 5.1(b)) delivered or sent by
any party pursuant to the terms of this Agreement shall also be given to the
Loan Administrator. Anything to the contrary contained herein notwithstanding,
the Obligors shall not be required to provide the Board with any notices or
certificates required to be delivered to the Board hereunder and under the other
Loan Documents if, at the time such notice is required to be delivered, the
Board is neither a guarantor of Tranche A nor a Lender hereunder.
SECTION 9.8. NO WAIVER; REMEDIES. No failure on the part of the
Board, any Lender or the Agent to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 9.9. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (AND, TO THE EXTENT
APPLICABLE, THE BANKRUPTCY CODE); PROVIDED THAT THE RIGHTS AND OBLIGATIONS OF
THE BOARD HEREUNDER (WHETHER AS GUARANTOR OR LENDER) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE FEDERAL LAW OF THE UNITED STATES OF AMERICA,
IF AND TO THE EXTENT SUCH FEDERAL LAW IS APPLICABLE, AND OTHERWISE IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK.
SECTION 9.10. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.
(a) Submission to Jurisdiction. BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OBLIGOR HEREBY AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT AGAINST IT
IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND
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UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH ANY OF THEM MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS.
(b) Service of Process. EACH OF THE OBLIGORS HEREBY IRREVOCABLY
CONSENTS TO THE SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND
DOCUMENTS IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE UNITED STATES OF
AMERICA ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS BY THE MAILING (BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID)
OR DELIVERING OF A COPY OF SUCH PROCESS TO IT IN ACCORDANCE WITH THE PROVISIONS
OF Section 9.7.
(c) No Limitation. Nothing contained in this Section 9.10 shall
affect the right of the Agent or any Lender or other party hereto to serve
process in any other manner permitted by law or commence legal proceedings or
otherwise proceed against any Obligor in any other jurisdiction.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH OBLIGOR IRREVOCABLY WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT.
SECTION 9.12. MARSHALING; PAYMENTS SET ASIDE. Neither the Agent nor
any Lender shall be under any obligation to marshal any assets in favor of any
Obligor or any other party or against or in payment of any or all of the
Obligations. To the extent that any Obligor makes a payment or payments to the
Agent for the account of the Board, the Loan Administrator or any Lender (each,
a "Payee") or any Payee receives payment from exercise of their rights of
setoff, and such payment or payments or the proceeds of such setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party,
then (i) to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all rights and remedies therefor, shall
be revived and continued in full force and effect as if such payment had not
been made or such enforcement or setoff had not occurred and (ii) each Payee
shall pay and return such amount to the Agent as the Agent may be required to
disgorge or otherwise pay to a trustee, receiver or any other party in respect
of the portion of the payment from such Obligor distributed by the Agent to such
Payee hereunder.
SECTION 9.13. SECTION TITLES. The Section titles and subtitles
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
SECTION 9.14. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are attached to the same
document. Delivery of an executed signature page of this Agreement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all parties
shall be lodged with the Borrower and the Agent.
SECTION 9.15. SEVERABILITY. In case any provision in or obligation
under this Agreement, the Notes or the other Loan Documents shall be invalid,
illegal or unenforceable in any
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jurisdiction the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 9.16. CONFIDENTIALITY.
(a) Each party hereto (other than the Board) shall, and shall
procure that its respective officers, employees and agents shall, keep
confidential and shall not, without the prior written consent of the other
parties, disclose to any third party this Agreement, any other Loan Document or
any of the information, reports or documents supplied by or on behalf of such
other party not otherwise publicly available, except that a party shall be
entitled to disclose this Agreement, any other Loan Document, and any such
information, reports or documents:
(i) in connection with any proceeding arising out of or in
connection with this Agreement, any of the other Loan Documents or the
Board Guaranty to the extent that such party may reasonably consider
necessary to protect its interest;
(ii) to any potential assignee or transferee of any party's rights
under this Agreement or any of the Loan Documents or any other person
proposing to enter into contractual arrangements with any party in
relation to this Agreement, any of the other Loan Documents, the Board
Guaranty subject to the relevant party obtaining an undertaking from such
potential assignee or transferee or other person in corresponding terms to
this Section 9.16;
(iii) pursuant to any applicable laws, ordinances, judgments,
decrees, injunctions, writs, rules, regulations, orders, interpretations,
licenses, permits and orders of any competent court, arbitrator or
governmental agency or authority in any relevant jurisdiction;
(iv) to bank examiners or any other regulatory authority or rating
agencies or similar entities, if requested to do so;
(v) to its auditors, legal, tax or to other professional advisers;
or
(vi) to its Affiliates and their respective directors, officers,
employees and agents.
(b) The provisions of this Section 9.16 shall survive any
termination of this Agreement or any other Loan Document or any assignment,
transfer or participation under this Agreement or any other Loan Document.
SECTION 9.17. NO PROCEEDINGS. Each of the Borrower, Group, the
Board, the Loan Administrator, the Agent, the Collateral Agent and each Lender
(other than the Primary Tranche A Lender) hereby agrees that it will not
institute against, or join any other Person in instituting against, the Primary
Tranche A Lender any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding under any federal or state bankruptcy or similar law, so
long as any Commercial Paper issued by the Primary Tranche A Lender shall be
outstanding or there shall have elapsed one (1) year plus one (1) day since the
last day on which any such Commercial Paper shall have been outstanding.
SECTION 9.18. GOVCO ADMINISTRATIVE AGENT. Each of the Borrower, the
Board, the Loan Administrator, the Agent, the Collateral Agent and each Lender
acknowledges that the Govco Administrative Agent is a party hereto and certain
of the other Loan Documents only in its capacity as administrative agent of the
Primary Tranche A Lender and the Primary Tranche A Lender's Commercial Paper
holders. The parties hereto agree that none of the provisions hereof shall at
any time apply to, or
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restrict, the ability of the Govco Administrative Agent to resign its position
of Govco Administrative Agent.
SECTION 9.19. ACKNOWLEDGMENT REGARDING FEDERAL AUTHORITY.
(a) Each of the parties hereto acknowledges and agrees that:
(i) the operations and assets of the Obligors (including, without
limitation, Aircraft Related Equipment and other assets that constitute
Collateral) are subject, directly and indirectly, to the actions, inaction
and policies of various Governmental Authorities, including, in particular
but without limitation, the United States Department of Transportation (of
which the FAA is a component) and the United States Department of Justice;
(ii) Governmental Authorities, in discharging their current and
future statutory or regulatory responsibilities, may act, decline to act,
or adopt policies resulting in material adverse effects on (A) the
business, condition (financial or otherwise), operations, performance,
prospects, assets or properties of the Obligors, (B) the ability of the
Obligors to perform their payment or other material obligations under the
Loan Documents, and (C) the value of the Collateral or the practical
ability of the Collateral Agent to realize such value in the event of a
Default or an Event of Default;
(iii) no Governmental Authority, in discharging its statutory or
regulatory responsibilities, has or shall have any obligation whatsoever
to the Obligors, or to any secured party by reason of such Governmental
Authority's representation on the Board, the Board's issuance of the Board
Guaranty, or the Board's participation as a party to the other Loan
Documents, to consider the potential that any of the material adverse
effects referred to in clause (ii) above may result from such Governmental
Authority's discharge of its statutory or regulatory responsibilities; and
(iv) neither the Board, in discharging its rights and
responsibilities, or in exercising its discretion, under the Act, the
Regulations, the Board Guaranty or the other Loan Documents, nor any of
the Board's members, acting in their capacities as such, has or shall have
any obligation whatsoever to the Obligors or to any of the secured parties
to take any action in connection with a Governmental Authority's discharge
of its statutory or regulatory responsibilities which may have any of the
material adverse effects referred to in clause (ii) above, and the Board
may not take any action depriving a Governmental Authority of its rights
and powers to discharge its statutory and regulatory responsibilities in
any manner that may have any of the material adverse effects referred to
in clause (ii) above.
(b) Without limiting the generality of the foregoing, the parties
acknowledge and agree that (i) the Department of Transportation, through the
FAA, has broad authority under Title 49 of the United States Code to regulate
the use of the navigable airspace of the United States so as to ensure its safe
and efficient utilization, (ii) the exercise of such authority may substantially
impair or eliminate altogether the utility to the Obligors and value to the
secured parties of Aircraft Related Equipment pledged as Collateral and other
assets of the Obligors such as Gate Leases and Slots utilized at airports, (iii)
nothing in this Agreement or in the Slot Security Agreement (as defined in
clause (iii) of the definition of "Collateral Documents") shall be construed or
asserted by any of the parties to impede or interfere with the FAA's exercise of
its authority under the Slot Regulations, and (iv) no assurance, express or
implied, has been given by any Governmental Authority, including the Board, to
the Obligors or to any secured party, nor has any of the Obligors or any secured
party relied upon any such assurance,
98
with respect to any future action, inaction or policy of the FAA or any other
Governmental Authority relating to any such Collateral or other assets.
SECTION 9.20. INDEPENDENCE OF REPRESENTATIONS, WARRANTIES AND
COVENANTS. All representations and warranties made in and covenants under this
Agreement shall be given independent effect so that (a) if a particular
representation and warranty is unqualified, the fact that another representation
and warranty is qualified shall not affect the operation of the former
provision; and (b) if a particular action or condition is not permitted by any
of such covenants, the fact that it would be permitted by an exception to, or
would otherwise be within the limitations of, another covenant shall not avoid
the occurrence of an Event of Default or Default if such action is taken or
condition exists.
SECTION 9.21. BOARD ACKNOWLEDGMENT. The Board acknowledges and
agrees for the benefit of the Tranche A Lender that as of the date hereof the
Board Guaranty remains in full force and effect and is hereby ratified and
confirmed.
SECTION 9.22. GE ACKNOWLEDGEMENT. Nothing in this Agreement or in
any other Loan Document shall be construed as preventing any party from
performing any of the transactions contemplated by that certain Master Merger
Memorandum of Understanding dated as of June 13, 2005 among Group, AWA, the
Borrower, America West Holdings Corporation, General Electric Capital
Corporation and General Electric Company, including the transactions
contemplated by the "Original MOU" as defined therein, as such Master Merger
Memorandum of Understanding has been amended, supplemented or otherwise modified
to the date hereof, regardless of whether such transactions occur on, before or
after the Effective Date; provided, however, that this Section 9.22 shall not
constitute a waiver of or consent to any Default or Event of Default under this
Agreement or a default under any other Loan Document which may result from any
such performance.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
US AIRWAYS, INC.
By: _________________________________
Name:
Title:
US AIRWAYS GROUP, INC.
By: _________________________________
Name:
Title:
AMERICA WEST HOLDINGS CORPORATION
By: _________________________________
Name:
Title:
AMERICA WEST AIRLINES, INC.
By: _________________________________
Name:
Title:
MATERIAL SERVICES COMPANY, INC.
By: _________________________________
Name:
Title:
PSA AIRLINES, INC.
By: _________________________________
Name:
Title:
[Signature page to Loan Agreement]
PIEDMONT AIRLINES, INC.
By: _________________________________
Name:
Title:
[Signature page to Loan Agreement]
GOVCO INCORPORATED,
as Primary Tranche A Lender
By: Citicorp North America, Inc., as
its attorney-in-fact and
administrative agent
By: _________________________________
Name:
Title:
CITICORP NORTH AMERICA, INC.,
as Govco Administrative Agent
By: _________________________________
Name:
Title:
CITIBANK, N.A.,
as Alternate Tranche A Lender and for
purposes of Section 8.7
By: _________________________________
Name:
Title:
BANK OF AMERICA, N.A.,
as a Tranche B Lender
By: _________________________________
Name:
Title:
RETIREMENT SYSTEMS OF ALABAMA
HOLDINGS LLC,
as a Tranche B Lender
By: _________________________________
Name:
Title:
CITIBANK, N.A.,
as Agent
By: _________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Collateral Agent
By: _________________________________
Name:
Title:
AIR TRANSPORTATION STABILIZATION
BOARD
By: _________________________________
Name: Xxxx X. Xxxxxx
Title: Executive Director
[Signature page to Loan Agreement]
