WAIVER TO LOAN AGREEMENT
Exhibit 10.5
THIS WAIVER TO LOAN AGREEMENT, dated as of November 11, 2005 (this “Waiver”), is made
and entered into by and among World Airways, Inc., a Delaware corporation (the “Borrower”),
North American Airlines, Inc., a Delaware corporation (“North American”) World Air
Holdings, Inc., a Delaware Corporation (the “Parent”) and the Air Transportation
Stabilization Board (the “Board”). Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Loan Agreement (as such term is
defined below).
W I T N E S S E T H:
WHEREAS, the Borrower, North American, the Parent, World Airways Parts Company, LLC, Govco
Incorporated, as Primary Tranche A Lender, Citicorp North America, Inc., as Govco Administrative
Agent, the other lenders party thereto, Citibank, N.A., as Agent, Citibank, N.A., as Collateral
Agent, International Lease Finance Corporation, as Supplemental Guarantor, Phoenix American
Financial Services, Inc., as Loan Administrator and the Board are parties to that certain Loan
Agreement dated as of December 30, 2003 (the “Original Loan Agreement”) and that certain
Amendment No. 1 and Waiver to the Loan Agreement dated as of April 27, 2005 (the “First
Amendment”, and together with the Original Loan Agreement, the “Loan Agreement”);
WHEREAS, the Parent has advised the Agent, the Loan Administrator and the Board that the
Obligors from time to time have been and currently are in Default of the covenants set forth in
Sections 6.2 and 6.4(a) of the Loan Agreement by reason of the Borrower having invested
unrestricted cash in certain Investments which do not constitute Cash Equivalents in amounts
exceeding the allowance for such Investments provided in Sections 6.2 and leaving the Obligors with
cash and Cash Equivalents insufficient to meet the minimum cash requirement set forth in Section
6.4(a), and that this has resulted in an Event of Default under Section 7.1(e) of the Loan
Agreement (such Default and Event of Default referred to hereinafter as the “Current
Default”);
WHEREAS, the Parent hereby represents to the Board that it is taking diligent steps to
reinvest its cash in Cash Equivalents so as to be in full compliance with Sections 6.2 and 6.4(a)
by not later than the close of business on November 11, 2005;
WHEREAS, the Obligors, subsequent to April 27,2005, opened new bank accounts to operate their
business which were not reflected on Schedule 2.09 of the Security Agreement as required and have
discovered that one of the bank accounts which is reflected on Schedule 2.09 is mistakenly
identified as owned by a different Obligor (the failure to so maintain Schedule 2.09 being the
“Account Default”);
WHEREAS, the Parent has now corrected Schedule 2.09 to the Security Agreement ;
WHEREAS, the Parent has requested that the Board waive the Current Default, the Account
Default and any related Default of its obligation to promptly report the Current Default and the
Account Default under Section 5.1(b)(v);
WHEREAS, pursuant to Section 10.1 of the Loan Agreement, so long as the Board Guarantee is in
full force and effect and has not been terminated without a payment having been made thereunder,
the Board may, in its sole discretion, consent to the amendment, modification or waiver of certain
provisions of the Loan Agreement, including Sections 5.1(b)(v), 5.17, 6.2 and 6.4(a); and
WHEREAS, the Board is willing to grant the waiver requested by the Parent pursuant to the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants contained
herein, and for other good and valuable consideration, the receipt, adequacy and legal sufficiency
of which are hereby acknowledged, the parties do hereby agree as follows:
Section 1. Limited Waiver. Subjection to the terms and conditions of this Waiver, the
Board hereby waives compliance by the Obligors with (i) the provisions of Section 6.2 and 6.4(a) of
the Loan Agreement to the extent violated by the Current Default and the provisions of Section 5.17
of the Loan Agreement to the extent violated by the Account Default, in each case during the period
from the date of the Original Loan Agreement through November 11, 2005 (the “Waiver
Period”) and (ii) the provisions of Section 5.1(b)(v) of the Loan Agreement to the extent that
the Obligors may have failed to timely provide an Officer’s Certificate specifying the Current
Default and the Account Default. The foregoing limited waiver shall not be construed to impair the
ability of the Board to enforce any of its rights, powers or remedies in any manner except as set
forth in the preceding sentence, including, without limitation: (i) after the Waiver Period,
regardless of whether or not such enforcement relates to an event taking place during the Waiver
Period, or (ii) during the Waiver Period for Defaults or Events of Default other than the Current
Default and the Account Default.
Section 2. Representations and Warranties. The Obligors each represent and warrant to
the Board as follows:
(a) this Waiver has been duly authorized, executed and delivered by it and constitutes its
legal, valid and binding obligation, enforceable in accordance with its terms;
(b) all of the representations and warranties in the Loan Agreement, after giving effect to
this Waiver, are true and correct in all material respects (except that any representation and
warranty that is qualified as to “materiality” shall be true and correct in all respects) on and as
of the date hereof as if made on the date hereof (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific date); and
(c) after giving effect to this Waiver, no Default or Event of Default has occurred and is
continuing.
Section 3. No Waiver; Remedies. Except as expressly set forth herein, this Waiver
shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect
the rights and remedies of the Board or the Obligors under the Loan Agreement or any other Loan
Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions,
- 2 -
obligations, covenants or agreements contained in the Loan Agreement, any other Loan Document
or the Board Guarantee, all of which are ratified and affirmed in all respects and shall continue
in full force and effect. Nothing contained herein shall be deemed to entitle the Obligors to a
consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions,
obligations, covenants or agreements contained in the Loan Agreement or any other Loan Document in
similar or different circumstances. This Waiver shall constitute a “Loan Document” for all
purposes of the Loan Agreement and the other Loan Documents.
Section 4. Headings. The headings set forth in this Waiver are and shall be without
substantive meaning or content of any kind whatsoever and are not a part of the agreement between
the parties hereto.
Section 5. Severability. In case any provision in or obligation under this Waiver
shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
Section 6. Counterparts. This Waiver may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are attached to the same document. Delivery of an executed
signature page of this Waiver by facsimile transmission shall be as effective as delivery of a
manually executed counterpart hereof.
Section 7. Governing Law. This Waiver and the rights and obligations of the parties
hereto shall be governed by, and construed in accordance with, the law of the State of New York;
provided, that the rights and obligations of the Board hereunder (whether as guarantor or
lender) shall be governed by, and construed in accordance with, the Federal law of the United
States of America, if and to the extent such Federal law is applicable, and otherwise in accordance
with the law of the State of New York.
Section 8. Fees and Expenses. The Obligors agree to promptly pay, upon request, all
costs and expenses (including the reasonable fees and expenses of counsel) reasonably incurred by
the Board in connection with this Waiver.
[REMAINDER OF INTENTIONALLY LEFT BLANK]
- 3 -
IN WITNESS WHEREOF, the parties have caused this Waiver to be duly executed as of the date
first written above.
| WORLD AIRWAYS, INC. | ||||||
| By: | /s/ Xxxxx Xxxxxxx
Title: Vice President/Controller |
|||||
| WORLD AIR HOLDINGS, INC. | ||||||
| By: | /s/ Xxxxxxxx X. Xxxxxx, Xx.
|
|||||
| Title: Chief Financial Officer | ||||||
| NORTH AMERICAN AIRLINES, INC. | ||||||
| By: | /s/ Xxxxxxxxx X. Xxxxx
|
|||||
| Title: Vice President/Controller | ||||||
| AIR TRANSPORTATION STABILIZATION BOARD | ||||||
| By: | /s/ Xxxx X. Xxxxxx
|
|||||
| Title: Executive Director | ||||||
