[CONFORMED COPY]
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CREDIT AGREEMENT
among
ATLAS FREIGHTER LEASING III, INC.,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders
and
BANKERS TRUST COMPANY,
as Administrative Agent.
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Dated as of April 25, 2000
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$300,000,000
DEUTSCHE BANK SECURITIES, INC.
Lead Arranger
and
Book Manager
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TABLE OF CONTENTS
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SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms..............................................................................1
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement................21
1.3 Other Definitional Provisions.....................................................................21
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; Notes; Register.....................................................21
A. COMMITMENTS................................................................................21
B. BORROWING MECHANICS........................................................................22
C. DISBURSEMENT OF FUNDS......................................................................23
D. NOTES......................................................................................23
E. THE REGISTER...............................................................................24
2.2 Interest on the Loans.............................................................................25
A. RATE OF INTEREST...........................................................................25
B. INTEREST PERIODS...........................................................................25
C. INTEREST PAYMENTS..........................................................................26
D. DEFAULT RATE...............................................................................26
E. COMPUTATION OF INTEREST....................................................................26
2.3 Fees..............................................................................................27
2.4 Repayments and Prepayments; General Provisions Regarding Payments.................................27
A. MANDATORY REDUCTION OF COMMITMENTS.........................................................27
B. SCHEDULED REPAYMENTS OF LOANS..............................................................27
C. PREPAYMENTS................................................................................28
D. GENERAL PROVISIONS REGARDING PAYMENTS......................................................32
2.5 Use of Proceeds...................................................................................33
A. APPLICATION OF PROCEEDS....................................................................33
B. MARGIN REGULATIONS.........................................................................33
2.6 Special Provisions Governing Loans................................................................33
A. DETERMINATION OF APPLICABLE INTEREST RATE..................................................33
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE............................................33
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C. ILLEGALITY OR IMPRACTICABILITY OF LOANS....................................................34
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS..........................34
E. BOOKING OF LOANS...........................................................................35
F. ASSUMPTIONS CONCERNING FUNDING OF LOANS....................................................35
G. SUBSTITUTE BASIS...........................................................................35
2.7 Increased Costs, Taxes; Capital Adequacy..........................................................36
A. COMPENSATION FOR INCREASED COSTS AND TAXES.................................................36
B. WITHHOLDING OF TAXES.......................................................................37
C. CAPITAL ADEQUACY ADJUSTMENT................................................................40
D. SUBSTITUTE LENDERS.........................................................................40
2.8 Obligation of Lenders to Mitigate.................................................................41
SECTION 3.
CONDITIONS TO LOANS
3.1 Conditions to Loans...............................................................................41
A. BORROWER AND ATLAS DOCUMENTS...............................................................41
B. AIRCRAFT DOCUMENTS.........................................................................42
C. NOTICES OF BORROWING.......................................................................42
D. NECESSARY CONSENTS.........................................................................43
E. AIRCRAFT CHATTEL MORTGAGES.................................................................43
F. FAIRNESS OPINION...........................................................................43
G. FINANCIAL CONDITION CERTIFICATES...........................................................43
H. OPINIONS OF BORROWER'S COUNSEL.............................................................43
I. ATLAS CREDIT AGREEMENT; LEASES.............................................................44
J. OPINIONS OF FAA COUNSEL....................................................................44
K. FEES.......................................................................................44
L. FINANCIAL STATEMENTS.......................................................................44
M. EVIDENCE OF INSURANCE......................................................................44
N. NO MATERIAL ADVERSE EFFECT.................................................................45
O. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS..................................45
P. COMPLIANCE CERTIFICATE.....................................................................45
Q. TRANSACTION; REFINANCING...................................................................45
R. COMPLETION OF PROCEEDINGS..................................................................46
S. APPRAISALS.................................................................................46
T. FAA CERTIFICATION AND TITLE................................................................46
U. BANKRUPTCY-REMOTE SUBSIDIARY...............................................................46
SECTION 4.
BORROWER'S REPRESENTATIONS AND WARRANTIES
4.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries.....................47
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A. ORGANIZATION AND POWERS....................................................................47
B. QUALIFICATION AND GOOD STANDING............................................................47
C. SUBSIDIARIES...............................................................................47
D. COLLATERAL DOCUMENTS.......................................................................47
4.2 Authorization of Borrowing, etc...................................................................48
A. AUTHORIZATION OF BORROWING.................................................................48
B. NO CONFLICT................................................................................48
C. GOVERNMENTAL CONSENTS......................................................................48
D. BINDING OBLIGATION.........................................................................48
4.3 Financial Condition...............................................................................48
4.4 No Material Adverse Change; No Restricted Junior Payments.........................................49
4.5 Title to Properties, Liens........................................................................49
4.6 Litigation, Adverse Facts.........................................................................50
4.7 Payment of Taxes..................................................................................50
4.8 Performance of Agreements.........................................................................50
4.9 Governmental Regulation...........................................................................51
4.10 Securities Activities.............................................................................51
4.11 Compliance with ERISA.............................................................................51
4.12 Certain Fees......................................................................................51
4.13 Environmental Protection..........................................................................51
4.14 Employee Matters..................................................................................52
4.15 Solvency..........................................................................................52
4.16 Disclosure........................................................................................52
4.17 Section 1110......................................................................................53
4.18 Special Purpose Corporation.......................................................................53
4.19 Transaction.......................................................................................53
4.20 Representations and Warranties in Documents.......................................................53
4.21 Leases............................................................................................53
SECTION 5.
BORROWER'S AFFIRMATIVE COVENANTS
5.1 Financial Statements and Other Reports............................................................54
5.2 Corporate Existence...............................................................................57
5.3 Payment of Taxes and Claims; Tax Consolidation....................................................57
5.4 Maintenance of Properties; Insurance..............................................................57
5.5 Inspection; Lender Meeting........................................................................58
5.6 Compliance with Laws, etc.........................................................................58
5.7 Environmental Indemnity...........................................................................58
5.8 Borrower's Remedial Action Regarding Hazardous Materials..........................................59
5.9 Maintenance Contracts.............................................................................59
5.10 Employee Benefit Plans............................................................................59
5.11 Further Assurances................................................................................59
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5.12 Performance of Obligations........................................................................59
5.13 Corporate Separateness............................................................................60
SECTION 6.
BORROWER'S NEGATIVE COVENANTS
6.1 Indebtedness......................................................................................61
6.2 Liens and Related Matters.........................................................................61
A. PROHIBITION ON LIENS.......................................................................61
B. NO NEGATIVE PLEDGES........................................................................61
6.3 Investments; Joint Ventures.......................................................................61
6.4 Contingent Obligations............................................................................61
6.5 Restricted Junior Payments........................................................................62
6.6 Restriction on Fundamental Changes, Asset Sales, Acquisitions, New Subsidiaries...................62
6.7 Amendments of Material Agreements.................................................................62
6.8 Restriction on Leases.............................................................................63
6.9 Transaction with Shareholders and Affiliates......................................................63
6.10 Conduct of Business...............................................................................63
SECTION 7.
EVENTS OF DEFAULT
7.1 Failure to Make Payments When Due.................................................................64
7.2 Default Under Lease...............................................................................64
7.3 Breach of Certain Covenants.......................................................................64
7.4 Breach of Warranty................................................................................64
7.5 Other Defaults Under Loan Documents...............................................................64
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc..............................................64
7.7 Voluntary Bankruptcy, Appointment of Receiver, etc................................................65
7.8 Judgments and Attachments.........................................................................65
7.9 Dissolution.......................................................................................65
7.10 Change in Control.................................................................................65
7.11 Failure of Security...............................................................................66
7.12 Loss of United States Citizen Status..............................................................66
SECTION 8.
THE ADMINISTRATIVE AGENT
8.1 Appointment.......................................................................................67
8.2 Powers and Duties; General Immunity...............................................................67
X. XXXXXX; DUTIES SPECIFIED...................................................................67
B. NO RESPONSIBILITY FOR CERTAIN MATTERS......................................................67
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C. EXCULPATORY PROVISIONS.....................................................................68
D. ADMINISTRATIVE AGENT ENTITLED TO ACT AS LENDER.............................................68
8.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness...............69
8.4 Right to Indemnity................................................................................69
8.5 Collateral Documents..............................................................................69
8.6 Successor Administrative Agent....................................................................70
SECTION 9.
MISCELLANEOUS
9.1 Assignments and Participations in Loans...........................................................70
A. GENERAL....................................................................................70
B. ASSIGNMENTS................................................................................71
C. PARTICIPATIONS.............................................................................72
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS AND OTHERS............................................72
E. INFORMATION................................................................................73
9.2 Expenses..........................................................................................73
9.3 Indemnity.........................................................................................74
9.4 Set-Off...........................................................................................74
9.5 Ratable Sharing...................................................................................75
9.6 Amendments and Waivers............................................................................75
9.7 Independence of Covenants.........................................................................77
9.8 Notices...........................................................................................77
9.9 Survival of Representations, Warranties and Agreements............................................77
9.10 Failure or Indulgence Not Waiver; Remedies Cumulative.............................................78
9.11 Marshalling; Payments Set Aside...................................................................78
9.12 Severability......................................................................................78
9.13 Obligations Several; Independent Nature of Lenders' Rights........................................78
9.14 Headings..........................................................................................79
9.15 Applicable Law....................................................................................79
9.16 Successors and Assigns............................................................................79
9.17 Consent to Jurisdiction and Service of Process....................................................79
9.18 Waiver of Jury Trial..............................................................................80
9.19 Confidentiality...................................................................................80
9.20 Counterparts; Effectiveness.......................................................................81
9.21 Replacement Engines and Airframes.................................................................81
A. ENGINES....................................................................................81
B. AIRFRAMES..................................................................................82
C. FURTHER ASSURANCES.........................................................................82
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SCHEDULES
2.1 LENDER'S COMMITMENTS
2.2 MAXIMUM LOAN AMOUNTS FOR AIRCRAFT AND SPARE ENGINE POOLS
EXHIBITS
I FORM OF NOTICE OF BORROWING
IIA FORM OF TRANCHE A NOTE
IIB FORM OF TRANCHE B NOTE
III FORM OF COMPLIANCE CERTIFICATE
IVA FORM OF OPINION OF XXXXXX XXXXXX & XXXXXXX
IVB FORM OF SECTION 1110 OPINION
IVC FORM OF OPINION COVERING CERTAIN BANKRUPTCY MATTERS
IVD FORM OF OPINION COVERING CERTAIN TAX MATTERS
IVE FORM OF OPINION OF FAA COUNSEL
V FORM OF ASSIGNMENT AGREEMENT
VI FORM OF CERTIFICATE RE NON-BANK STATUS
VII FORM OF FINANCIAL CONDITION CERTIFICATE - BORROWER
VIIA FORM OF FINANCIAL CONDITION CERTIFICATE - ATLAS
VIIIA FORM OF AIRCRAFT LEASE
VIIIB FORM OF SPARE ENGINE LEASE
IXA FORM OF AIRCRAFT CHATTEL MORTGAGE
IXB FORM OF SPARE ENGINE CHATTEL MORTGAGE
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CREDIT AGREEMENT, dated as of April 25, 2000, among ATLAS FREIGHTER
LEASING III, INC., a Delaware corporation ("AFL III" or the "BORROWER"), the
lenders party hereto from time to time (each a "LENDER," and collectively, the
"LENDERS") and BANKERS TRUST COMPANY, as Administrative Agent for the Lenders
(in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, the Borrower has been established for the sole purpose of
owning and leasing to Atlas the Aircraft and the Spare Engines;
WHEREAS, the Aircraft and the Spare Engines are currently owned by
Atlas, AFL or AFL II;
WHEREAS, the Aircraft and the Spare Engines are currently encumbered
by certain indebtedness which is to be refinanced;
WHEREAS, in connection with the refinancing of such indebtedness,
Atlas, AFL and AFL II, will contribute or transfer the Aircraft and the Spare
Engines subject to certain indebtedness to AFL III; and
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Lenders are willing to make available to the Borrower the credit
facility provided for herein to refinance the indebtedness relating to the
Aircraft and the Spare Engines;
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, do hereby agree as follows:
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ACCEPTABLE ALTERNATE AIRFRAME" means, with respect to any Airframe,
an Acceptable Alternate Airframe as defined in the applicable Aircraft Lease.
"ACCEPTABLE ALTERNATE ENGINE" means, with respect to any Engine, an
Acceptable Alternate Engine as defined in the applicable Lease.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date, the rate per annum obtained by dividing (rounded upward to the nearest
1/100 of one percent) (x) the offered quotation, if any, to first class banks
in the interbank Eurodollar market by the Administrative Agent for U.S. dollar
deposits of amounts in same day funds comparable to the principal amount of the
Loans of the Administrative Agent for which the Adjusted Eurodollar Rate is
then being determined with maturities comparable to such Interest Period as of
approximately 10:00 A.M. (New York time) on such Interest Rate Determination
Date by (y) a percentage equal to 100% minus the stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest Rate
Determination Date to any member bank of the Federal Reserve System in respect
of "Eurocurrency liabilities" as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
preamble to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 8.6.
"AFFECTED LENDER" has the meaning assigned to that term in subsection
2.6C.
"AFFECTED LOANS" has the meaning assigned to that term in subsection
2.6C.
"AFFILIATE" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting securities
or by contract or otherwise.
"AFL" means Atlas Freighter Leasing, Inc., a Delaware corporation.
"AFL AIRCRAFT" means six Boeing 747-200 aircraft in full freighter
configuration with FAA Registration Nos. N505MC, N507MC, N508MC, N509MC, N516MC
and N517MC, including the 24 General Electric CFC-50E2 engines with
manufacturer's serial numbers 517476, 528318, 530197, 517753, 517284, 530320,
517767, 530288, 517324, 517287, 517269, 530284, 530283, 517207, 530304, 530318,
517551, 517214, 530202, 530247, 517943, 517886, 517675 and 517941, which
aircraft (i) are in cargo configuration capable of immediate operation in the
business of Atlas, when leased to Atlas by the Borrower, (ii) have a maximum
gross take-off weight ("MTOW") of at least 800,000 pounds and (iii) are owned
by AFL (prior to giving effect to the AFL Contribution).
"AFL CONTRIBUTION" has the meaning assigned to that term in subsection
3.1Q.
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"AFL CREDIT FACILITY" means that certain Credit Agreement, dated as of
May 29, 1997, among Atlas Freighter Leasing, Inc., as borrower, the lenders
party thereto from time to time, and Bankers Trust Company, as agent for the
lenders, as amended, restated, supplemented, or otherwise modified prior to the
date hereof.
"AFL EQUIPMENT OBLIGATIONS" means all amounts owing by AFL or any of
its Affiliates pursuant to the AFL Credit Facility and relating to the AFL
Aircraft.
"AFL II" means Atlas Freighter Leasing II, Inc., a Delaware
corporation.
"AFL II AIRCRAFT" means four Boeing 747-200 aircraft in full freighter
configuration with FAA Registration Nos. N523MC, N524MC, N526MC, and N527MC,
including the 16 General Electric CFC-50E2 engines with manufacturer's serial
numbers 528105, 530166, 517353, 517265, 528419, 517343, 517545, 517791, 530169,
517718, 517506, 517569, 528420, 517532, 455793 and 455430, which aircraft (i)
are in cargo configuration capable of immediate operation in the business of
Atlas, when leased to Atlas by the Borrower, (ii) have a maximum gross take-off
weight ("MTOW") of at least 800,000 pounds and (iii) are owned by AFL II (prior
to giving effect to the AFL II Contribution).
"AFL II CONTRIBUTION" has the meaning assigned to that term in
subsection 3.1Q.
"AFL II CREDIT FACILITY" means that certain Credit Agreement, dated as
of September 5, 1997, among AFL II, as a borrower, the lenders party thereto
from time to time, Bankers Trust Company, as administrative agent, and Xxxxxxx
Xxxxx Credit Partners L.P., as syndication agent, as amended, restated,
supplemented, or otherwise modified prior to the date hereof.
"AFL II EQUIPMENT OBLIGATIONS" means all amounts owing by AFL II or
any of its Affiliates pursuant to the AFL II Credit Facility and relating to
the AFL II Aircraft or the AFL II Spare Engines.
"AFL II SPARE ENGINES" means the nine General Electric CF6-50E2
engines with manufacturer's serial numbers 530168, 517790, 517530, 517547,
455167, 517602, 517538, 517539, and 530255, which Spare Engines are owned by
AFL II (prior to giving effect to the AFL II Contribution).
"AFL III" has the meaning assigned to that term in the preamble to
this Agreement.
"AGGREGATE AMOUNTS DUE" has the meaning assigned to that term in
subsection 9.5.
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"AGREEMENT" means this Credit Agreement, dated as of April 25, 2000,
as it may be amended, supplemented or otherwise modified from time to time.
"AIRCRAFT" means, collectively, the Atlas Aircraft, the AFL Aircraft
and the AFL II Aircraft, or any of them, as appropriate.
"AIRCRAFT CHATTEL MORTGAGE" means, with respect to each Aircraft or
Spare Engine Pool, a Security Agreement and Chattel Mortgage substantially in
the form of Exhibit IXA or Exhibit IXB annexed hereto, as appropriate, granting
to the Administrative Agent for the benefit of the Lenders a first priority
security interest in such Aircraft or Spare Engine Pool, as the case may be, as
such Aircraft Chattel Mortgage may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof and
thereof.
"AIRCRAFT LEASE" or "AIRCRAFT LEASES" means each of the lease
agreements, in the form of Exhibit VIIIA, dated as of April 25, 2000, between
Atlas Freighter Leasing III, Inc., as Lessor and Atlas Air, Inc., as Lessee, as
the same may be amended, modified, or supplemented from time to time in
accordance with the terms hereof, and including any lease supplement entered
into in accordance with the terms of any Aircraft Lease.
"AIRFRAME" means, as the context requires, an Airframe as defined in a
particular Aircraft Chattel Mortgage, all Airframes as defined in all Aircraft
Chattel Mortgages, a Replacement Airframe, all Replacement Airframes or all or
any of the foregoing.
"AMENDED AIRCRAFT CREDIT FACILITY" means the Fourth Amended and
Restated Credit Agreement, dated as of April 25, 2000, among Atlas Air, Inc.,
as borrower, the lenders listed therein and Bankers Trust Company, as
administrative agent, but without giving effect to any amendments,
modifications, supplements or waivers thereof.
"APPLICABLE MARGIN" means, with respect to Tranche A Loans, the
Tranche A Applicable Margin, and with respect to Tranche B Loans, the Tranche B
Applicable Margin.
"APPRAISED VALUE" means, with respect to any Aircraft or Spare Engine,
the average of the appraised value of such Aircraft or Spare Engine by two
Approved Appraisers as determined pursuant to subsection 3.1S.
"APPROVED APPRAISER" means any of AvSolutions, Inc., BK Associates,
Inc., Xxxx X. Xxxx Associates, Xxxxxx Xxxxx & Xxxxx, Inc., Simat, Helliesen &
Xxxxxxx, Inc., or AVITAS, Inc., Airclaims, Ltd., Aircraft Information Services,
Inc., or any other nationally recognized firm of aircraft appraisers reasonably
satisfactory to the Administrative Agent.
"ASSET SALE" means the sale (including any sale-leaseback transaction)
or other disposition by the Borrower to any other Person of any assets of the
Borrower (whether tangi-
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ble or intangible) excluding (i) transactions related to aircraft engines,
components, parts or spare parts or other equipment, appliances, instruments,
appurtenances, accessories or furnishings of whatever nature that may from time
to time be removed from any Airframe or Engine in connection with transactions
permitted pursuant to and in accordance with Section 4(d) or Section 4(e) of
the Aircraft Chattel Mortgages and (ii) transactions effected in accordance
with Section 9.21 of this Agreement.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in substantially
the form of Exhibit V annexed hereto.
"ATLAS" means Atlas Air, Inc., a Delaware corporation.
"ATLAS AIRCRAFT" means one Boeing 747-200 aircraft in full freighter
configuration with FAA Registration No. N528MC, including the four General
Electric CF6-50C2 engines with manufacturer's serial number 517600, 530167,
517719 and 517825, which aircraft (i) is in cargo configuration capable of
immediate operation in the business of Atlas, when leased to Atlas by the
Borrower, (ii) has a maximum gross take-off weight ("MTOW") of at least 800,000
pounds and (iii) is owned by Atlas (prior to giving effect to the Atlas
Contribution).
"ATLAS ASSET SALES" means the sale (including any sale-leaseback
transaction) by Atlas or any of its Subsidiaries to any other Person of (i) any
of the stock of any of Atlas's Subsidiaries, (ii) substantially all of the
assets of any division or line of business of Atlas or any of its Subsidiaries,
or (iii) any other assets (whether tangible or intangible) of Atlas or any of
its Subsidiaries outside of the ordinary course of business.
"ATLAS CONTRIBUTION" has the meaning assigned to that term in
subsection 3.1Q.
"ATLAS EQUIPMENT OBLIGATIONS" means all amounts owing by Atlas or any
of its Subsidiaries pursuant to the Amended Aircraft Credit Facility
immediately prior to giving effect to the fourth amendment and restatement
thereof on the date hereof and relating to the Atlas Aircraft or the Atlas
Spare Engines.
"ATLAS SPARE ENGINES" means the three General Electric CF6-80C2
engines with manufacturer's serial numbers 704699, 704860, and 704918, which
Spare Engines are owned by Atlas (prior to giving effect to the Atlas
Contribution).
"BANKRUPTCY CODE" means Title 11 of the United States Code, entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the higher of (x) the Prime Rate or
(y) the rate that is 1/2 of 1% in excess of the Federal Funds Effective Rate.
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"BORROWER" has the meaning assigned to that term in the preamble to
this Agreement.
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day
that is a legal holiday under the laws of the States of New York or Colorado or
is a day on which banking institutions located in either such state are
authorized or required by law or other governmental action to close.
"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 accounted for as a capital lease on the balance sheet
of that Person.
"CASH" means money, currency or a credit balance in a Deposit Account.
"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 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
public 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 Moody's, (iii) commercial paper maturing
no more than one year from the date of creation thereof and having, at the time
of the acquisition thereof, a rating of at least A-1 from S&P or at least P-I
from Moody's, (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 I capital (as defined in such regulations) of not
less than $100,000,000, and (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 Moody's.
"CASH PROCEEDS" means, with respect to any Asset Sale, Cash payments
(including any Cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially in
the form of Exhibit VI annexed hereto delivered by a Lender to the
Administrative Agent pursuant to subsection 2.7B(iii).
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"CF6-50E2 SPARE ENGINE LEASE" means the lease agreement, in the form
of Exhibit VIIIB, dated as of April 25, 2000, between Atlas Freighter Leasing
III, Inc., as Lessor and Atlas Air, Inc., as Lessee, as the same may be
amended, modified or supplemented from time to time in accordance with the
terms hereof, and including any lease supplement entered into in accordance
with the terms of the CF6-50E2 Spare Engine Lease.
"CF6-50E2 SPARE ENGINE POOL" means the set of Spare Engines leased
pursuant to the CF6-50E2 Spare Engine Lease.
"CF6-80C2 SPARE ENGINE LEASE" means the lease agreement, in the form
of Exhibit VIIIB, dated as of April 25, 2000, between Atlas Freighter Leasing
III, Inc., as Lessor and Atlas Air, Inc., as Lessee, as the same may be
amended, modified or supplemented from time to time in accordance with the
terms hereof, and including any lease supplement entered into in accordance
with the terms of the CF6-80C2 Spare Engine Lease.
"CF6-80C2 SPARE ENGINE POOL" means the set of Spare Engines leased
pursuant to the CF6-80C2 Spare Engine Lease.
"COLLATERAL" means all of the properties and assets in which Liens are
purported to be granted by the Collateral Documents.
"COLLATERAL DOCUMENTS" means each Aircraft Chattel Mortgage and any
security agreement executed pursuant to subsection 5.11.
"COMMITMENT" means the sum of the Tranche A Commitment and the Tranche
B Commitment of each Lender as set forth on Schedule 2.1, as the same may be
reduced or terminated pursuant to Section 2.4 and/or Section 7.
"COMPLIANCE CERTIFICATE" means a certificate delivered to the
Administrative Agent and the Lenders by the Borrower pursuant to subsection
3.1P or 5.1(iii).
"CONDEMNATION PROCEEDS" has the meaning assigned to that term in
subsection 2.4C(ii)(b).
"CONTINGENT OBLIGATION" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or
as to which that Person is otherwise liable for reimbursement of drawings, or
(iii) under Interest Rate Agreements and Currency Agree-
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ments. Contingent Obligations shall include, without limitation, (a) the direct
or indirect guaranty, endorsement (otherwise than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or sale
with recourse by such Person of the obligation of another, (b) the obligation
to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (X) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the solvency
or any balance sheet item, level of income or financial condition of another
if, in the case of any agreement described under subclauses (X) or (Y) of this
sentence, the primary purpose or intent thereof is as described in the
preceding sentence. The amount of any Contingent Obligation shall be equal to
the amount of the obligation so guaranteed or otherwise supported or, if less,
the amount to which such Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, deed to secure debt, contract, 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.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement designated to protect Borrower against
fluctuations in currency values.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
"EFFECTIVE DATE" has the meaning assigned to that term in Section
9.20.
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized under
the laws of the United States or any state thereof, (ii) a savings and loan
association or savings bank organized under the laws of the United States or
any state thereof, (iii) a commercial bank organized under the laws of any
other country or a political subdivision thereof, provided that (x) such bank
is acting through a branch or agency located in the United States or (y) such
bank is organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of such country, and (iv) any other entity that is an "accredited
investor" (as defined in Regulation D under the Securities Act) that extends
credit or buys loans as one of its businesses (including, but not limited to,
-8-
insurance companies, mutual funds and lease financing companies), (B) any
Lender, and (C) any Related Fund or any Affiliate of any Lender; provided, that
no Affiliate of the Borrower shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA that is, or was at any time, maintained or contributed
to by the Borrower or by any of its ERISA Affiliates.
"ENGINE" means, as the context requires, an Engine as defined in a
particular Aircraft Chattel Mortgage, all Engines as defined in all Aircraft
Chattel Mortgages, a Replacement Engine, all Replacement Engines or all or any
of the foregoing.
"ENVIRONMENTAL CLAIM" means any investigation, notice, claim, suit 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
Material, or with any actual or alleged damage or harm to health, safety 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 environmental matters, including, without limitation,
those relating to any Hazardous Materials Activity.
"EQUIPMENT OBLIGATIONS" means, collectively, the Atlas Equipment
Obligations, the AFL Equipment Obligations and the AFL II Equipment
Obligations.
"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 any Person, (i) any corporation
that is, or was at any time, a member of a controlled group of corporations
within the meaning of Section 414(b) of the Internal Revenue Code of which that
Person is, or was at any time, a member, (ii) any trade or business, (whether
or not incorporated) that is, or was at any time, 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 that Person is, or was at any time, 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 that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is, or was at any time, a member.
"EVENT OF DEFAULT" means each of the events set forth in Section 7.
"EVENT OF LOSS" means any of the following events with respect to any
Aircraft (whether the Airframe or an Engine of such Aircraft or both) or any
Spare Engine: (A) loss of
-9-
such Aircraft or Spare Engine or the use thereof due to theft or disappearance
of such Aircraft or Spare Engine that results in the loss of possession thereof
for a period of 120 days (or for a shorter period ending on the date on which
there is an insurance settlement for a total loss on the basis of the theft or
disappearance of such Aircraft or Spare Engine), (B) the destruction, damage
beyond repair or rendition of such Aircraft or Spare Engine permanently unfit
for normal use for any reason whatsoever, (C) the condemnation, confiscation or
seizure of, or requisition of title to, or adverse use or possession (other
than use by the United States Government if the Borrower obtains adequate
compensation from the United States Government) of such Aircraft or Spare
Engine, (D) as a result of any rule, regulation, order or any other action by
the FAA or any other governmental body having jurisdiction, the use of such
Aircraft or Spare Engine in the normal course of interstate air transportation
of persons or cargo shall have been prohibited for a period of more than nine
consecutive months unless the Borrower, prior to the expiration of such nine
month period, shall have undertaken and shall be diligently carrying forward
all steps that are necessary or desirable to permit the normal use of such
property by the Borrower or, in any event, if such use shall have been
prohibited for a period of twelve consecutive months, (E) the operation or
location of such Aircraft or Spare Engine, while under requisition for use by
the United States or any instrumentality or agency thereof, in any area
excluded from coverage by any insurance policy in effect with respect to such
Aircraft or Spare Engine, if the Borrower shall be unable to obtain indemnity
or "war risk" insurance in lieu thereof from the United States, (F) any damage
that results in an insurance settlement with respect to such Aircraft or Spare
Engine on the basis of an actual or constructive total loss or (G) a
divestiture of such Airframe or Spare Engine as described in Section 4(d)(iii)
or Section 4(d)(vi) of any Aircraft Chattel Mortgage. An Event of Loss with
respect to any Aircraft shall be deemed to have occurred if an Event of Loss
occurs with respect to the Airframe of such Aircraft.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"FEDERAL AVIATION ACT" means the Federal Aviation Act of 1958, as
amended and as recodified in Xxxxx 00, Xxxxxx Xxxxxx Code, or any similar
legislation of the United States enacted to supersede, amend or supplement such
Act and the rules and regulations promulgated thereunder.
"FEDERAL AVIATION ADMINISTRATION" or "FAA" means the United States
Federal Aviation Administration or any successor thereto administering the
functions of the Federal Aviation Administration under the Federal Aviation Act.
"FEDERAL FUNDS EFFECTIVE RATE" means for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so
-10-
published for any day that is a Business Day, the average of the quotations for
such day on such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by the Administrative
Agent.
"FINAL MATURITY DATE" means, in the case of Tranche A Loans, April 25,
2005, and, in the case of Tranche B Loans, April 25, 2006.
"FISCAL YEAR" means the fiscal year of the Borrower.
"FUNDING AND PAYMENT OFFICE" means the office of the Administrative
Agent located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxxxxx Xxxxxx.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession. Financial statements and other information required
to be delivered by the Borrower to the Lenders pursuant to clauses (i) and (ii)
of subsection 5.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation. Calculations in connection with the definitions,
covenants and other provisions of this Agreement shall utilize accounting
principles and policies in conformity with GAAP as in effect on the date of
this Agreement.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"HAZARDOUS MATERIALS" means any chemical or other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated under any 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 of the Borrower and (ii) caused by, or
undertaken by or on behalf of, the Borrower.
"INDEBTEDNESS" means, as applied to any Person, (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money, (iv) any obligation owed for all or any part of the deferred purchase
price of property or services (excluding any such obligations incurred under
ERISA), which purchase price is (a) due more than six months from the date of
incurrence of the obligation in respect
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thereof or (b) evidenced by a note or similar written instrument, and (v) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person.
Obligations under Interest Rate Agreements and Currency Agreements constitute
Contingent Obligations and are not Indebtedness.
"INDEMNIFIED LIABILITIES" has the meaning assigned to that term in
subsection 3.
"INDEMNITEE" has the meaning assigned to that term in subsection 9.3.
"INDEPENDENT DIRECTOR" means a director of the Borrower that satisfies
the criteria for "Independent Director" set forth in the certificate of
incorporation of the Borrower.
"INITIAL BORROWING DATE" shall mean the date occurring on or after the
Effective Date on which the borrowing of the Loans occurs.
"INSURANCE PROCEEDS" has the meaning assigned to that term in
subsection 2.4C(ii)(b).
"INTEREST PAYMENT DATE" means, with respect to any Loan, the last day
of each Interest Period applicable to such Loan.
"INTEREST PERIOD" has the meaning assigned to that term in subsection
2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect the Borrower against fluctuations
in interest rates.
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by the Borrower of, or of a beneficial interest in, any Securities
of any other Person or (ii) any direct or indirect loan, advance (other than
advances to employees for moving, entertainment and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business) or
capital contribution by the Borrower to any other Person, including all
indebtedness and accounts receivable from that other Person that are not
current assets or did not arise from sales to that other Person in the ordinary
course of business. The amount of any Investment shall be the original cost of
such Investment plus the cost of all additions thereto, with-
-12-
out any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided,
that in no event shall any corporate Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.
"LEASE" or "LEASES" means the eleven Aircraft Leases, the CF6-50E2
Spare Engine Lease and the CF6-80C2 Spare Engine Lease, or any of them, as the
context implies.
"LENDER" and "LENDERS" means the Tranche A Lenders and the Tranche B
Lenders, or any of them, as the context implies.
"LIEN" means any lien, mortgage, deed of trust, deed to secure debt,
pledge, assignment, security interest, charge, hypothecation, preference,
priority, privilege, lease or encumbrance of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any option, trust
or other preferential arrangement having the practical effect of any of the
foregoing.
"LOAN" or "LOANS" means all the term loans made under this Agreement
on the same day by the Lenders to the Borrower and relating to one Aircraft or
to one Spare Engine Pool, but secured by all Collateral.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Leases and the
Collateral Documents.
"LOAN EXPOSURE" means, with respect to any Lender, as of any date of
determination, the outstanding principal amount of the Loans of that Lender.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of the Borrower or (ii) the impairment of the ability of the Borrower
to perform the Obligations, or the impairment, as a result of actions or
inaction by the Borrower, of the ability of the Administrative Agent or the
Lenders to enforce the Obligations.
"MAXIMUM LOAN AMOUNT" means, with respect to each Aircraft or Spare
Engine Pool, if any, the amount set forth on Schedule 2.2 opposite the
respective Aircraft or Spare Engine Pool.
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"MAXIMUM TRANCHE A LOAN AMOUNT" means, with respect to each Aircraft
or Spare Engine Pool, the product obtained by multiplying (i) the Maximum Loan
Amount for such Aircraft or Spare Engine Pool by (ii) a fraction, the numerator
of which is one hundred sixty-five (165), and the denominator of which is three
hundred (300).
"MAXIMUM TRANCHE B LOAN AMOUNT" means, with respect to each Aircraft
or Spare Engine Pool, the product obtained by multiplying (i) the Maximum Loan
Amount for such Aircraft or Spare Engine Pool by (ii) a fraction, the numerator
of which is one hundred thirty-five (135), and the denominator of which is
three hundred (300).
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"NET CASH PROCEEDS" means, with respect to any Asset Sale, Cash
Proceeds of such Asset Sale net of bona fide direct costs of sale including
income taxes reasonably estimated to be actually payable as a result of such
Asset Sale within two years of the date of such Asset Sale.
"NON-U.S. LENDER" has the meaning assigned to that term in subsection
2.7B(iii)(a).
"NOTES" has the meaning assigned to that term in subsection 2.1D.
"NOTICE OF BORROWING" means a notice delivered by the Borrower to the
Administrative Agent pursuant to subsection 2.1B.
"OBLIGATIONS" means all obligations of every nature of the Borrower
from time to time owed to the Administrative Agent, the Lenders or any of them
under the Loan Documents, whether for principal, interest, fees, expenses,
indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents or its secretary
or by its chief financial officer or its treasurer; provided, that every
Officers' Certificate with respect to the fulfillment of a condition precedent
to the making of any Loans hereunder shall include (i) a statement that the
officer or officers making or giving such Officers' Certificate have read such
condition and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the signers, they
have made or have caused to be made such examination or investigation as is
necessary to enable them to express an informed opinion as to whether or not
such condition has been fulfilled, and (iii) a statement as to whether, in the
opinion of the signers, such condition has been fulfilled.
"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
-14-
(whether real, personal or mixed) that is not a Capital Lease other than any
such lease under which that Person is the lessor.
"PASS THROUGH TRUST DOCUMENTS" means, collectively, (i) those six
certain Pass Through Trust Agreements, dated as of February 9, 1998, between
Atlas Air, Inc., and Wilmington Trust Company, as trustee (the "1998 Pass
Through Trust Agreements") and any related agreements, notes, guaranties,
indentures, security documents or other documents, including, without
limitation, documents relating to the equipment notes to be held in trust
pursuant to the 1998 Pass Through Trust Agreements and all related documents,
as the same may be amended, restated, supplemented or otherwise modified from
time to time in accordance with this Agreement, (ii) that certain Pass Through
Trust Agreement, dated as of April 1, 1999, between Atlas Air, Inc., and
Wilmington Trust Company, as trustee (the "1999 Pass Through Trust Agreement")
and any related agreements, trust supplements, notes, guaranties, indentures,
security documents or other documents, including, without limitation, documents
relating to the equipment notes to be held in trust pursuant to the 1999 Pass
Through Agreement and all related documents, as the same may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with this Agreement and (iii) that certain Pass Through Trust Agreement, dated
as of January 28, 2000, between Atlas Air, Inc., and Wilmington Trust Company,
as trustee (the "2000 Pass Through Trust Agreement") and any related
agreements, trust supplements, notes, guaranties, indentures, security
documents or other documents, including, without limitation, documents relating
to the equipment notes to be held in trust pursuant to the 2000 Pass Through
Trust Agreement and all related documents, as the same may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with this Agreement.
"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):
(i) Liens for taxes, assessments or governmental charges or
claims, the payment of which is not, at the time, required by subsection
5.3;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent or
being contested in good faith by appropriate proceedings that do not
involve any danger of the sale, forfeiture or loss of any Collateral, if
such reserve or other appropriate provision, if any, as shall be required
by GAAP shall have been made therefor;
(iii) the rights of others under agreements or arrangements to the
extent expressly permitted by the terms of Sections 4(d) and 4(e) of the
Aircraft Chattel Mortgages; and
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(iv) Liens granted pursuant to the Collateral Documents.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability partnerships, limited
liability companies, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or
other organizations, whether or not legal entities, and governments and
agencies and political subdivisions thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or the expiration of any grace period or both, would constitute an Event
of Default.
"PRICING CERTIFICATE" has the meaning assigned to that term in
subsection 5.1(xi).
"PRICING REDUCTION" means, for any Interest Period, a pricing
reduction in the Tranche A Applicable Margin equal to:
(i) 0.250% if, as of 10:00 A.M. (New York time) on the Interest
Rate Determination Date with respect to such Interest Period, Atlas has a
senior secured rating of Ba1 or higher from Moody's and a senior secured
rating of BB or higher from S&P; or
(ii) 0.125% if, as of 10:00 A.M. (New York time) on the Interest
Rate Determination Date with respect to such Interest Period, Atlas has a
senior secured rating of Ba1 or higher from Moody's and a senior secured
rating of BB- from S&P.
Notwithstanding anything to the contrary herein, at any time when an
Event of Default shall have occurred and be continuing, the Pricing Reduction
shall be zero.
"PRIME RATE" means the rate that the Administrative Agent announces
from time to time as its prime lending rate, as in effect from time to time.
The Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. The Administrative Agent
or any other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.
"PRO RATA SHARE" means, with respect to each Lender, the percentage
obtained by dividing the Loan Exposure of that Lender by the aggregate Loan
Exposure of all Lenders, in each case as such percentage may be adjusted by
assignments permitted pursuant to subsection 9.1. The initial Pro Rata Share of
each Lender is set forth opposite the name of that Lender in Schedule 2.1
annexed hereto.
"PROCEEDINGS" has the meaning assigned to that term in subsection
5.1(viii).
"PROCEEDS" has the meaning assigned to that term in subsection
2.4C(ii)(b).
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"PROJECTIONS" means the financial projections of Atlas and its
Subsidiaries delivered on or prior to the Initial Borrowing Date covering the
period commencing on or prior to the Initial Borrowing Date and ending on
December 31, 2006.
"REFINANCING" has the meaning assigned to that term in subsection
3.1Q.
"REGISTER" has the meaning assigned to that term in subsection 2.1E.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"RELATED FUND" means, with respect to any Lender that is a fund that
invests in loans, any other fund that invests in loans and is managed by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
"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 facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"REQUISITE LENDERS" means Lenders having or holding 50.1% or more of
the aggregate Loan Exposure of all Lenders.
"REPLACEMENT AIRFRAME" has the meaning assigned to that term in
subsection 9.21B.
"REPLACEMENT ENGINE" has the meaning assigned to that term in
subsection 9.21A.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of the Borrower now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of the Borrower now or hereafter outstanding and (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of stock of the Borrower now or
hereafter outstanding.
"S&P" means Standard & Poor's Ratings Services.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement,
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options, warrants, bonds, debentures, notes, or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
in general any instruments commonly known as "securities" or any certificates
of interest, shares or participations in temporary or interim certificates for
the purchase or acquisition of, or any right to subscribe to, purchase or
acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SENIOR NOTE DOCUMENTS" means (i) the Indenture, dated as of August
13, 1997, between Atlas Air, Inc., and State Street Bank and Trust Company,
relating to the 10 3/4% $150 million Senior Notes due 2005 of the Borrower (the
"10 3/4% Senior Notes"), and any and all related agreements, as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with this Agreement, (ii) the Indenture, date as of April 9, 1998,
between Atlas Air, Inc., and State Street Bank and Trust Company, relating to
the 9 1/4% $175 million Senior Notes due 2008 of the Borrower (the "9 1/4%
Senior Notes") and any and all related agreements, as the same may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with this Agreement and (iii) the Indenture, dated as of November 18, 1998,
between Atlas Air, Inc., and State Street Bank and Trust Company relating to
the 9 3/8% $150 million Senior Notes due 2006 of the Borrower (the "9 3/8%
Senior Notes," and together with the 10 3/4% Senior Notes and the 9 1/4% Senior
Notes, the "Senior Notes"), and any and all related agreements, as the same may
be amended, restated, supplemented or otherwise modified from time to time in
accordance with this Agreement.
"SERVICE AGREEMENT" means the Service Agreement, dated as of April 25,
2000, between Atlas and the Borrower.
"SOLVENT" means, with respect to any Person, that, as of the date of
determination, both (A) (i) the then fair saleable value of the property of
such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) 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,
(ii) such Person's capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction, and (iii) such Person
does not intend to incur, or believe (nor should it reasonably believe) that it
will incur, debts beyond its ability to pay such debts as they become due, and
(B) such Person is "solvent" within the meaning given that term and similar
terms under applicable laws relating to fraudulent transfers and conveyances.
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.
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"SPARE ENGINE POOL" means, collectively, the CF6-50E2 Spare Engine
Pool and the CF6-80C2 Spare Engine Pool, or either of them, as appropriate.
"SPARE ENGINES" means the nine General Electric CF6-50E2 engines with
manufacturer's serial numbers 530168, 517790, 517530, 517547, 455167, 517602,
517538, 517539, and 517544, and the three General Electric CF6-80C2 engines
with manufacturer's serial numbers 704699, 704860, and 704918.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which more
than 50% of the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any contingency) to
vote in the election of the Person or Persons (whether directors, managers,
trustees or other Persons performing similar functions) having the power to
direct or cause the direction of the management and policies thereof is at the
time owned or controlled, directly or indirectly, by that Person or one or more
of the other Subsidiaries of that Person or a combination thereof.
"SUBSTITUTE BASIS" has the meaning assigned to that term in subsection
2.6G.
"SYNDICATION DATE" means the date on which the Administrative Agent
has completed, in its determination, the primary syndication of Loans.
"TAX" or "TAXES" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided, that "TAX ON THE OVERALL NET INCOME" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person's principal office (and/or, in the case of a Lender, its lending office)
is located on all or part of the net income, profits or gains of that Person
(whether worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or
otherwise).
"TOTAL COMMITMENT" means the sum of the Commitments of the Lenders.
"TRANCHE A APPLICABLE MARGIN" has the meaning assigned to that term in
subsection 2.2A.
"TRANCHE A COMMITMENT" means the Tranche A commitment of each Tranche
A Lender as set forth on Schedule 2.1, as the same may be reduced or terminated
pursuant to Section 2.4 and/or Section 7.
"TRANCHE A LENDER" or "TRANCHE A LENDERS" means the persons identified
as "Tranche A Lenders" and listed on the signature pages of this Agreement,
together with their successors and permitted assigns pursuant to subsection
9.1.
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"TRANCHE A LOAN" has the meaning assigned to that term in subsection
2.1A(i).
"TRANCHE A LOAN EXPOSURE" means, with respect to any Tranche A Lender,
as of any date of determination, the outstanding principal amount of the
Tranche A Loans of that Lender.
"TRANCHE A NOTES" has the meaning assigned to that term in subsection
2.1D.
"TRANCHE A PRO RATA SHARE" means, with respect to each Tranche A
Lender, the percentage obtained by dividing the Tranche A Loan Exposure of that
Tranche A Lender by the aggregate Tranche A Loan Exposure of all Tranche A
Lenders, in each case as such percentage may be adjusted by assignments
permitted pursuant to subsection 9.1. The initial Tranche A Pro Rata Share of
each Tranche A Lender is set forth opposite the name of that Tranche A Lender
in Schedule 2.1 annexed hereto.
"TRANCHE B APPLICABLE MARGIN" has the meaning assigned to that term in
subsection 2.2B.
"TRANCHE B COMMITMENT" means the Tranche B commitment of each Tranche
B Lender as set forth on Schedule 2.1, as the same may be reduced or terminated
pursuant to Section 2.4 and/or Section 7.
"TRANCHE B LENDER" or "TRANCHE B LENDERS" means the persons identified
as "Tranche B Lenders" and listed on the signature pages of this Agreement,
together with their successors and permitted assigns pursuant to subsection
9.1.
"TRANCHE B LOAN" has the meaning assigned to that term in subsection
2.1A(ii).
"TRANCHE B LOAN EXPOSURE" means, with respect to any Tranche B Lender,
as of any date of determination, the outstanding principal amount of the
Tranche B Loans of that Lender.
"TRANCHE B NOTES" has the meaning assigned to that term in subsection
2.1D.
"TRANCHE B PRO RATA SHARE" means, with respect to each Tranche B
Lender, the percentage obtained by dividing the Tranche B Loan Exposure of that
Tranche B Lender by the aggregate Tranche B Loan Exposure of all Tranche B
Lenders, in each case as such percentage may be adjusted by assignments
permitted pursuant to subsection 9.1. The initial Tranche B Pro Rata Share of
each Tranche B Lender is set forth opposite the name of that Tranche B Lender
in Schedule 2.1 annexed hereto.
"TRANSACTION" has the meaning assigned that term in subsection 3.1Q.
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"TRANSACTION DOCUMENTS" means this Agreement, the Amended Aircraft
Credit Facility, any bills of sale or certificates of transfer for each
Aircraft and each Spare Engine (including bills of sale on AC Form 8050-2)
delivered in connection with the Transaction, the Leases, all documents
relating to the Refinancing, and all other agreements and documentation
executed and delivered in connection with the Transaction, including, without
limitation, in connection with the Atlas Contribution and the Transfers.
"TRANSFERS" has the meaning assigned to that term in subsection 3.1Q.
"UNIFORM COMMERCIAL CODE" or "UCC" means the Uniform Commercial Code
(or any similar or equivalent legislation) as in effect from time to time in
the applicable jurisdiction.
"UNITED STATES CITIZEN" means a "citizen of the United States" within
the meaning of the Federal Aviation Act.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS UNDER
AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP.
1.3 OTHER DEFINITIONAL PROVISIONS.
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; NOTES; REGISTER.
A. COMMITMENTS. (i) Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of the
Borrower herein set forth, each Tranche A Lender hereby severally agrees to
make, on the Initial Borrowing Date, thirteen term loans (each, a "TRANCHE A
LOAN" and, collectively, the "TRANCHE A LOANS") to the Borrower in an aggregate
amount not to exceed the Tranche A Commitment of such Tranche A Lender. Each
Tranche A Loan of a Tranche A Lender shall relate to one of the
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Aircraft or to one of the Spare Engine Pools and shall be in an amount equal to
such Tranche A Lender's Tranche A Pro Rata Share on the Initial Borrowing Date
of the Maximum Tranche A Loan Amount with respect to such Aircraft or Spare
Engine Pool. The Tranche A Loans of all of the Tranche A Lenders relating to
one Aircraft or Spare Engine Pool shall not exceed the Maximum Tranche A Loan
Amount for such Aircraft or Spare Engine Pool and shall be made on the same day
by the Tranche A Lenders ratably according to their respective Tranche A
Commitments. Once repaid, Tranche A Loans borrowed hereunder may not be
reborrowed.
(ii) Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of the Borrower herein set
forth, each Tranche B Lender hereby severally agrees to make, on the Initial
Borrowing Date, thirteen term loans (each, a "TRANCHE B LOAN" and,
collectively, the "TRANCHE B LOANS") to the Borrower in an aggregate amount not
to exceed the Tranche B Commitment of such Tranche B Lender. Each Tranche B
Loan of a Tranche B Lender shall relate to one of the Aircraft or to one of the
Spare Engine Pools and shall be in an amount equal to such Tranche B Lender's
Tranche B Pro Rata Share on the Initial Borrowing Date of the Maximum Tranche B
Loan Amount with respect to such Aircraft or Spare Engine Pool. The Tranche B
Loans of all of the Tranche B Lenders relating to one Aircraft or Spare Engine
Pool shall not exceed the Maximum Tranche B Loan Amount for such Aircraft or
Spare Engine Pool and shall be made on the same day by the Tranche B Lenders
ratably according to their respective Tranche B Commitments. Once repaid,
Tranche B Loans borrowed hereunder may not be reborrowed.
B. BORROWING MECHANICS. (i) Each borrowing of Loans relating to
a particular Aircraft or Spare Engine Pool shall be made by the delivery of a
Notice of Borrowing by the Borrower to the Administrative Agent not later than
12:00 Noon (New York City time) on the third Business Day prior to the date of
the proposed borrowing. The Administrative Agent shall give to each Lender
prompt notice thereof. Each such Notice of Borrowing shall be irrevocable and
binding on the Borrower. Each such Notice of Borrowing shall be in the form of
Exhibit I. The Notice of Borrowing shall specify (i) the proposed borrowing
date (which shall be a Business Day), (ii) the amount of Loans requested and
(iii) the Aircraft or Spare Engine Pool to which the Loans relate. In lieu of
delivering the above described Notice of Borrowing, the Borrower may give the
Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B, provided that such notice is promptly
confirmed in writing.
(ii) Neither the Administrative Agent nor any Lender shall incur
any liability to the Borrower in acting upon any telephonic notice referred to
above that the Administrative Agent believes in good faith to have been given
by a duly authorized officer or other person authorized to borrow on behalf of
the Borrower or for otherwise acting in good faith under this subsection 2.1B,
and upon funding of the Loans by the Lenders in accordance with this Agreement
pursuant to any such telephonic notice the Borrower shall have effected the
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Loans hereunder. The Borrower shall notify the Administrative Agent prior to
the funding of the Loans in the event that any of the matters to which the
Borrower is required to certify in the Notice of Borrowing is no longer true
and correct as of the Initial Borrowing Date and the acceptance by the Borrower
of the proceeds of any Loans shall constitute a recertification by the Borrower
as of the Initial Borrowing Date, as to the matters to which the Borrower is
required to certify in the applicable Notice of Borrowing.
C. DISBURSEMENT OF FUNDS. All Loans under this Agreement shall
be made by the Lenders simultaneously and proportionately to their respective
Pro Rata Shares, it being understood that no Lender shall be responsible for
any default by any other Lender in that other Lender's obligation to make a
Loan requested hereunder nor shall the Commitment of any Lender to make a Loan
requested be increased or decreased as a result of a default by any other
Lender in that other Lender's obligation to make a Loan requested hereunder.
Promptly after receipt by the Administrative Agent of a Notice of Borrowing
pursuant to subsection 2.1B (or telephonic notice in lieu thereof), the
Administrative Agent shall notify each Lender of the proposed borrowing. Each
Lender shall make the amount of its Loans available to the Administrative Agent
not later than 12:00 Noon (New York time) on the Initial Borrowing Date, in
each case in same day funds in Dollars, at the Funding and Payment Office.
Unless the Administrative Agent shall have been notified by any Lender
prior to the Initial Borrowing Date that such Lender does not intend to make
available to the Administrative Agent the amount of such Lender's Loans so
requested on the Initial Borrowing Date, the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent on
the Initial Borrowing Date and the Administrative Agent may, in its sole
discretion, but shall not be obligated to, make available to the Borrower a
corresponding amount on the Initial Borrowing Date. If such corresponding
amount is not in fact made available to the Administrative Agent by such
Lender, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from the Initial Borrowing Date until the date such amount is paid
to the Administrative Agent, at the customary rate set by the Administrative
Agent for the correction of errors among banks for three Business Days. If such
Lender does not pay such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent shall promptly notify the
Borrower and the Borrower shall immediately pay such corresponding amount to
the Administrative Agent together with interest thereon, for each day from the
Initial Borrowing Date until the date such amount is paid to the Administrative
Agent, at the rate payable under this Agreement. Nothing in this subsection
2.1C shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment hereunder or to prejudice any rights that the Borrower may have
against any Lender as a result of any default by such Lender hereunder.
D. NOTES. (i) The Borrower shall duly execute and deliver on the
Initial Borrowing Date to each Tranche A Lender (or to the Administrative Agent
for that Tranche A
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Xxxxxx) the Tranche A Notes, each substantially in the form of Exhibit IIA
annexed hereto, to evidence that Tranche A Lender's Tranche A Loans in respect
of each Aircraft or Spare Engine Pool, in the principal amount of such Tranche
A Lender's Tranche A Pro Rata Share of the Maximum Tranche A Loan Amount
relating to such Aircraft or Spare Engine Pool and with other appropriate
insertions (each a "TRANCHE A NOTE" and collectively, the "TRANCHE A NOTES").
(ii) The Borrower shall duly execute and deliver on the Initial
Borrowing Date to each Tranche B Lender (or to the Administrative Agent for
that Tranche B Lender) the Tranche B Notes, each substantially in the form of
Exhibit IIB annexed hereto, to evidence that Tranche B Lender's Tranche B Loans
in respect of each Aircraft or Spare Engine Pool, in the principal amount of
such Tranche B Lender's Tranche B Pro Rata Share of the Maximum Tranche B Loan
Amount relating to such Aircraft or Spare Engine Pool and with other
appropriate insertions (each a "TRANCHE B NOTE" and collectively, the "TRANCHE
B NOTES" and, together with the Tranche A Notes, the "NOTES").
E. THE REGISTER. (i) The Administrative Agent shall maintain, at
its address referred to in subsection 9.8, a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders and the Commitments and
Loans of each Lender from time to time and the Administrative Agent shall
record in the Register the Commitments and the Loans from time to time of each
Lender and each repayment or prepayment in respect of the principal amount of
the Loans of each Lender. Such recordation shall be conclusive and binding on
the Borrower and each Lender, absent manifest error; provided, that failure to
make any such recordation, or any error in such recordation, shall not affect
the Borrower's Obligations in respect of the applicable Loans. The Register
shall be available for inspection by the Borrower or by any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(ii) Each Lender shall record on its internal records (including,
without limitation, the Notes held by such Lender) the amount of each Loan made
by it and each payment in respect thereof. Any such recordation shall be
conclusive and binding on the Borrower, absent manifest error; provided, that
failure to make any such recordation, or any error in such recordation, shall
not affect the Borrower's Obligations in respect of the applicable Loans; and
provided further, that, in the event of any inconsistency between the Register
and any Lender's records, the recordations in the Register shall govern.
(iii) The Borrower, the Administrative Agent and the Lenders shall
deem and treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Loan or Commitment
shall be effective in any case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by the
Administrative Agent and recorded in the Register as provided in subsection
9.1B(ii). Prior to such recordation, all amounts owed with respect to the
applicable Loan shall be owed
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to the Lender listed in the Register as the owner thereof, and any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is listed in the Register as a Lender shall
be conclusive and binding on any subsequent holder, assignee or transferee of
the corresponding Commitments or Loans.
(iv) The Borrower hereby designates the Administrative Agent to
serve as the Borrower's agent solely for purposes of maintaining the Register
as provided in this subsection 2.1E, and the Borrower hereby agrees that, to
the extent that the Administrative Agent serves in such capacity, the
Administrative Agent and its officers, directors, employees, agents and
affiliates shall constitute Indemnitees for all purposes under subsection 9.3.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. (i) Subject to the provisions of Sections
2.6 and 2.7, each Loan shall bear interest on the unpaid principal amount
thereof from the Initial Borrowing Date through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Adjusted
Eurodollar Rate. The applicable Interest Period for determining the rate of
interest with respect to the Loans shall be determined in accordance with
subsection 2.2B.
(ii) Subject to the provisions of subsections 2.2D and 2.7, the
Loans shall bear interest through maturity at a per annum rate equal to the sum
of the Adjusted Eurodollar Rate plus the Applicable Margin.
(iii) The "TRANCHE A APPLICABLE MARGIN" for each Tranche A Loan
shall be 1.75% less the Pricing Reduction, if any, in effect from time to time.
The "TRANCHE B APPLICABLE MARGIN" for each Tranche B Loan shall be 2.00%.
B. INTEREST PERIODS. In connection with each Loan, the interest
period ("Interest Period") to be applicable to such Loan shall be three months;
provided, that:
(i) prior to the earlier of July 25, 2000, and the Syndication
Date, the Interest Period for each Loan shall be one month, and the first
such Interest Period shall commence on the Initial Borrowing Date;
(ii) each successive Interest Period shall be three months and
shall commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
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(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on the
last Business Day of a calendar month;
(v) no Interest Period shall extend beyond the Final Maturity
Date for the applicable tranche of Loans;
(vi) no Interest Period shall extend beyond a date on which the
Borrower is required to make a scheduled payment of principal of the Loans
of the same tranche as such Loan; and
(vii) there shall be no more than one Interest Period at any time.
C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2D, interest on each Loan shall be payable in arrears on the last day of each
Interest Period applicable to that Loan, upon any prepayment of Loans (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
D. DEFAULT RATE. Upon the occurrence and during the continuation
of any Event of Default, the outstanding principal amount of all Loans and, to
the extent permitted by applicable law, any interest payments thereon not paid
when due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate that is 1% per annum in
excess of the sum of the Base Rate as in effect from time to time and the
Applicable Margin); provided, that, upon the expiration of the Interest Period
in effect at the time any such increase in interest rate is effective, such
Loans shall thereupon bear interest payable upon demand at a rate that is 1%
per annum in excess of the sum of the Base Rate as in effect from time to time
and the Applicable Margin. Payment or acceptance of the increased rates of
interest provided for in this subsection 2.2D is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of the Administrative Agent
or any Lender.
E. COMPUTATION OF INTEREST. Interest on each Loan shall be
computed on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on
any Loan, the date of the making of such Loan or the first day of an Interest
Period applicable to such Loan shall be included, and the date of payment of
such Loan or the expiration date of an Interest Period applicable to such Loan
shall be excluded; provided, that if a Loan is repaid on the same day on which
it is made, one day's interest shall be paid on that Loan.
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2.3 FEES.
The Borrower agrees to pay to the Lenders and the Administrative Agent
such fees and in such amounts and at such times as have been separately agreed
upon in writing among the Borrower and the Administrative Agent.
2.4 REPAYMENTS AND PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.
A. MANDATORY REDUCTION OF COMMITMENTS. The Total Commitment (and
the Commitment of each Lender) shall terminate on the earlier of (x) the
Initial Borrowing Date, after giving effect to the incurrence of the Loans on
such date and (y) April 30, 2000.
B. SCHEDULED REPAYMENTS OF LOANS. (a) The Borrower shall make
the following scheduled payments on the Tranche A Loans on each three month
anniversary of April 25, 2000, commencing with the three month anniversary
thereof: (i) the first four scheduled principal payments shall be in the amount
of $4,950,000; (ii) the next succeeding four scheduled principal payments shall
be in the amount of $6,600,000 and (iii) the final twelve scheduled principal
payments shall be in the amount $9,900,000; provided, that such scheduled
installments of principal of the Tranche A Loans shall be reduced in connection
with any voluntary or mandatory prepayments of the Tranche A Loans in
accordance with subsection 2.4C; and provided further, that the Tranche A Loans
and all other amounts owed hereunder with respect to the Tranche A Loans shall
be paid in full no later than the Final Maturity Date applicable to Tranche A
Loans, and the final installment payable by the Borrower in respect of the
Tranche A Loans on such date shall be in an amount sufficient to repay all
amounts owing by the Borrower under this Agreement with respect to the Tranche
A Loans. Any payment pursuant to this subsection 2.4B(a) will be applied
ratably among the Tranche A Loans relating to all Aircraft and both Spare
Engine Pools based on the outstanding principal amount of each such Tranche A
Loan as compared to the total outstanding principal amount of all Tranche A
Loans. If the date on which any scheduled payment is due falls on a day that is
not a Business Day, then such scheduled repayment shall be made on the next
succeeding Business Day; provided, that, if any such scheduled repayment would
otherwise become due on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such scheduled
repayment shall be made on the next preceding Business Day.
(b) The Borrower shall make the following scheduled payments on
the Tranche B Loans on each three month anniversary of April 25, 2000,
commencing with the three month anniversary thereof: (i) the first eight
scheduled principal payments shall be in the amount of $1,687,500; (ii) the
next succeeding four scheduled principal payments shall be in the amount of
$3,375,000; (iii) the next succeeding four scheduled principal payments shall
be in the amount of $5,062,500; (iv) the next succeeding seven scheduled
principal payments shall be in the amount of $6,750,000 and (v) the final
scheduled principal payment shall be in
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the amount of $40,500,000; provided, that such scheduled installments of
principal of the Tranche B Loans shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche B Loans in accordance with
subsection 2.4C; and provided further, that the Tranche B Loans and all other
amounts owed hereunder with respect to the Tranche B Loans shall be paid in
full no later than the Final Maturity Date applicable to Tranche B Loans, and
the final installment payable by the Borrower in respect of the Tranche B Loans
on such date shall be in an amount sufficient to repay all amounts owing by the
Borrower under this Agreement with respect to the Tranche B Loans. Any payment
pursuant to this subsection 2.4B(b) will be applied ratably among the Tranche B
Loans relating to all Aircraft and both Spare Engine Pools based on the
outstanding principal amount of each such Tranche B Loan as compared to the
total outstanding principal amount of all Tranche B Loans. If the date on which
any scheduled payment is due falls on a day that is not a Business Day, then
such scheduled repayment shall be made on the next succeeding Business Day;
provided, that, if any such scheduled repayment would otherwise become due on a
day that is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such scheduled repayment shall be made on
the next preceding Business Day.
C. PREPAYMENTS.
(i) Voluntary Prepayments. The Borrower may, upon not less than
three Business Days' prior written or telephonic notice given to the
Administrative Agent by 12:00 Noon (New York time) on the date required, and,
if given by telephone, promptly confirmed in writing to the Administrative
Agent (which original written or telephonic notice the Administrative Agent
will promptly transmit by telefacsimile or telephone to each Lender), at any
time and from time to time prepay, without premium or penalty, the Loans on any
Business Day in whole or in part in an aggregate minimum amount of $5,000,000
and integral multiples of $500,000 in excess of that amount; provided, however,
that Loans may only be prepaid on the expiration of the Interest Period
applicable thereto. Notice of prepayment having been given as aforesaid, the
principal amount of the Loans specified in such notice shall become due and
payable on the prepayment date specified therein. Any such voluntary prepayment
shall be applied as specified in subsection 2.4C(iii).
(ii) Mandatory Prepayments.
(a) Prepayments and Reductions from Asset Sales. No later than
the second Business Day following the date of receipt by the Borrower of Cash
Proceeds of any Asset Sale, the Borrower shall prepay, without premium or
penalty (other than pursuant to subsection 2.6D), Loans in an amount equal to
the Net Cash Proceeds of such Asset Sale. Concurrently with any prepayment of
the Loans pursuant to this subsection 2.4C(ii)(a), the Borrower shall deliver
to the Administrative Agent an Officers' Certificate demonstrating the
derivation of the Net Cash Proceeds of the correlative Asset Sale from the
gross sales price thereof. In the event that the Borrower shall, at any time
after receipt of Cash Proceeds of any Asset Sale requiring a prepayment
pursuant to this subsection 2.4C(ii)(a), determine that the
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prepayments previously made in respect of such Asset Sale were in an aggregate
amount less than that required by the terms of this subsection 2.4C(ii)(a), the
Borrower shall promptly make an additional prepayment of the Loans, as the case
may be, in the manner described above in an amount equal to the amount of any
such deficit, and the Borrower shall concurrently therewith deliver to the
Administrative Agent an Officers' Certificate demonstrating the derivation of
the additional Net Cash Proceeds resulting in such deficit. Any mandatory
prepayments pursuant to this subsection 2.4C(ii)(a) shall be applied as
specified in subsection 2.4C(iii).
(b) Prepayments and Reductions Due to Insurance and Condemnation
Proceeds. Within 270 days of receipt by the Borrower of any cash payments under
any of the casualty insurance policies covering damage to or loss of property
maintained pursuant to subsection 5.4 or otherwise resulting from damage to or
loss of all or any portion of the Collateral or any other tangible asset (net of
actual and documented reasonable costs incurred by the Borrower in connection
with adjustment and settlement thereof and in connection with the reinvestment
of proceeds permitted hereby, "INSURANCE PROCEEDS") or any proceeds resulting
from the taking of assets by the power of eminent domain, condemnation or
otherwise (net of actual and documented reasonable costs incurred by Borrower in
connection with adjustment and settlement thereof and in connection with the
reinvestment of proceeds permitted hereby, "CONDEMNATION PROCEEDS," and
collectively with Insurance Proceeds, "PROCEEDS") (other than proceeds applied
pursuant to subsection 2.4C(ii)(c)) and so long as at the time of receipt of
such proceeds there shall exist no Potential Event of Default or Event of
Default, the Borrower may reinvest such Proceeds in property substantially
similar to the property so damaged or lost so long as the Administrative Agent
receives a first priority perfected security interest in such property pursuant
to documentation acceptable to the Administrative Agent, the property is duly
leased to Atlas pursuant to the applicable Lease and the Administrative Agent
receives all documents and opinions in connection therewith that it may
reasonably request, including, without limitation, an opinion from counsel that
the Borrower as lessor and the Administrative Agent as the assignee under the
Lease are entitled to the benefits of Section 1110 of the Bankruptcy Code with
respect to such property. If, 270 days after receipt of any such Proceeds, the
Borrower has not reinvested such Proceeds as described above or if at the time
of receipt of such proceeds or at the time of reinvestment there shall exist a
Potential Event of Default or an Event of Default then the Borrower shall
immediately prepay, without premium or penalty (other than pursuant to
subsection 2.6D), those Loans relating to the Aircraft or Spare Engine Pool in
respect of which such Proceeds were received based on the outstanding principal
amount of each Loan as compared to the total outstanding principal amount of all
Loans relating to such Aircraft or Spare Engine Pool. Any amount of the Proceeds
remaining (a) after prepayment of the Loans described in the immediately
preceding sentence and/or (b) after being reinvested in the manner described in
the second preceding sentence shall be applied ratably to the prepayment of
Loans relating to all of the remaining Aircraft and Spare Engine Pools based on
the outstanding principal amount of each such Loan as compared to the total
outstanding principal amount of all Loans relating to all of the remaining
Aircraft and
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Spare Engine Pools. Any such mandatory prepayments shall be applied as
specified in subsection 2.4C(iii). Until such time as such proceeds are
reinvested or applied to repay Loans, all such proceeds shall be held by the
Administrative Agent in a cash collateral account with the Administrative Agent
as security for the Obligations pursuant to a cash collateral agreement in form
and substance satisfactory to the Administrative Agent and providing that such
proceeds may be invested in Cash or Cash Equivalents at the direction of the
Borrower with any earnings thereon being for the account of the Borrower.
(c) Prepayments and Reductions Due to an Event of Loss. Following
an Event of Loss with respect to an Aircraft or a Spare Engine, the Borrower
shall prepay, without premium or penalty (other than pursuant to subsection
2.6(D)), the outstanding principal amount of Loans relating to the Aircraft or
Spare Engine Pool that were the subject of the Event of Loss; provided, that
the Borrower shall not be required to make a prepayment pursuant to this
subsection 2.4C(ii)(c) in the event that the Borrower receives Insurance
Proceeds or Condemnation Proceeds in connection with such Event of Loss so long
as at the time of reinvestment there exists no Potential Event of Default or
Event of Default, in which case such proceeds may, within 270 days of receipt
of any such Proceeds, be reinvested in aircraft or spare engines substantially
similar to the Aircraft or Spare Engines that were the subject of the Event of
Loss so long as such replacement aircraft or spare engines are duly leased to
Atlas pursuant to the applicable Lease or Leases and the Administrative Agent
receives all documents and opinions in connection therewith that it may
reasonably request, including, without limitation, an opinion from counsel of
the Borrower to the extent that the Borrower as lessor and the Administrative
Agent as the assignee under the Lease are entitled to the benefits of Section
1110 of the Bankruptcy Code with respect to such property. To the extent that
Insurance Proceeds or Condemnation Proceeds received upon the occurrence of an
Event of Loss with respect to an Aircraft or Spare Engine are not reinvested in
accordance with the preceding sentence, then the Borrower shall prepay, without
premium or penalty (other than pursuant to subsection 2.6D), those Loans
relating to the Aircraft or Spare Engine Pool in respect of which such
Insurance Proceeds or Condemnation Proceeds were received based on the
outstanding principal amount of each Loan as compared to the total outstanding
principal amount of all Loans relating to such Aircraft or Spare Engine Pool.
Any amount of the Proceeds remaining (a) after prepayment of the Loans
described in the immediately preceding sentence and/or (b) after being
reinvested in the manner described in the second preceding sentence, shall be
applied ratably to the prepayment of Loans relating to all of the remaining
Aircraft and Spare Engine Pools based on the outstanding principal amount of
each such Loan as compared to the total outstanding principal amount of all
Loans relating to all of the remaining Aircraft and Spare Engine Pools. Any
such mandatory prepayments shall be applied as specified in subsection
2.4C(iii). Until such time as such Proceeds are reinvested in replacement
aircraft or spare engines or applied to repay Loans, such proceeds shall be
held by the Administrative Agent in a cash collateral account with the
Administrative Agent as security for the Obligations pursuant to a cash
collateral agreement in form and substance satisfactory to the Administrative
Agent and providing that such proceeds may be invested in Cash or
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Cash Equivalents at the direction of the Borrower with any earnings thereon
being for the account of the Borrower.
(d) Prepayments under Leases. On any date on which the Borrower
receives any prepayments of rent or other amounts pursuant to the terms of any
Lease, the Borrower shall prepay, without premium or penalty (other than
pursuant to subsection 2.6), the outstanding principal amount of Loans relating
to the Aircraft or Spare Engine Pool that is the subject of the Lease pursuant
to which such prepayments were made and, to the extent that such payments are
in excess of the principal amount of Loans relating to such Aircraft or Spare
Engine Pool, such excess proceeds shall be applied to make an additional
prepayment of Loans relating to all of the remaining Aircraft and Spare Engine
Pools based on the outstanding principal amount of each such Loan as compared
to the total outstanding principal amount of all Loans relating to all of the
remaining Aircraft and Spare Engine Pools.
(iii) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of Loans and
Order of Maturity. Any voluntary prepayments pursuant to subsection 2.4C(i)
shall be applied ratably among the Loans relating to all of the Aircraft and
both Spare Engine Pools based on the outstanding principal amount of each such
Loan as compared to the total outstanding principal amount of all Loans. All
voluntary prepayments of the Loans pursuant to subsection 2.4C(i) shall be
applied pro rata to all scheduled amortization payments.
(b) Application of Mandatory Prepayments of Loans. Any mandatory
prepayments of the Loans pursuant to subsection 2.4C(ii) shall be applied
ratably among the Loans relating to all of the Aircraft and both Spare Engine
Pools based on the outstanding principal amount of each such Loan as compared
to the total outstanding principal amount of all Loans; provided, that in the
event of a prepayment pursuant to subsection 2.4C(ii)(a) such prepayment shall
be applied first to the Loans relating to such Aircraft or Spare Engine Pool
that were the subject of the Asset Sale on a pro rata basis based on the
outstanding principal amount of each Loan as compared to the total outstanding
principal amount of all Loans relating to such Aircraft or Spare Engine Pool
and second, ratably among the Loans relating to all other Aircraft and Spare
Engine Pools on a pro rata basis based on the outstanding principal amount of
the Loan being prepaid as compared to the total outstanding principal amount of
all Loans relating to all other Aircraft and Spare Engine Pools. Any mandatory
prepayments of the Loans pursuant to subsection 2.4C(ii)(b) or (c) shall be
applied to the Loans relating to the particular Aircraft or Spare Engine Pool,
retained by the Borrower and/or applied ratably among the Loans relating to all
other Aircraft and Spare Engine Pools in accordance with such sections. All
mandatory prepayments of the Loans pursuant to subsection 2.4C(ii) shall be
applied to scheduled amortization payments in inverse order of maturity.
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D. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by the Borrower of
principal, interest, fees and other Obligations hereunder and under the Notes
shall be made in Dollars in same day funds, without defense, set-off or
counterclaim, free of any restriction or condition, and delivered to the
Administrative Agent not later than 12:00 Noon (New York time) on the date due
at the Funding and Payment Office for the account of the Lenders. Funds
received by the Administrative Agent after that time on such due date shall be
deemed to have been paid by the Borrower on the next succeeding Business Day.
The Borrower hereby authorizes the Administrative Agent to charge its accounts
with the Administrative Agent in order to cause timely payment to be made to
the Administrative Agent of all principal, interest, fees and expenses due
hereunder (subject to sufficient funds being available in its accounts for that
purpose).
(ii) Application of Payments to Principal and Interest. All
payments in respect of the principal amount of any Loan shall include payment
of accrued interest on the principal amount being repaid or prepaid, and all
such payments shall be applied to the payment of interest before application to
principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments in respect of Tranche A Loans shall be apportioned among all
outstanding Tranche A Loans to which such payments relate, in each case
proportionately to each Tranche A Lender's respective Tranche A Pro Rate Share.
Aggregate principal and interest payments in respect of Tranche B Loans shall
be apportioned among all outstanding Tranche B Loans to which such payments
relate, in each case proportionately to each Tranche B Lender's respective
Tranche B Pro Rata Share. The Administrative Agent shall promptly distribute to
each Lender, at its address set forth below its name on the signature page
hereof or at such other address as such Lender may request, its Tranche A Pro
Rata Share of all such payments received by the Administrative Agent in respect
of Tranche A Loans, and its Tranche B Pro Rate Share of all such payments
received by the Administrative Agent in respect of Tranche B Loans.
(iv) Payments on Business Days. Except as otherwise provided
herein, whenever any payment to be made hereunder shall be stated to be due on
a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder.
(v) Notation of Payment. Each Lender agrees that before disposing
of any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all Loans
evidenced by that Note and all principal payments previously made thereon and
of the date to which interest thereon has been paid; provided, that the failure
to make (or any error in the making of) a notation of any Loan made under
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such Note shall not limit or otherwise affect the obligations of the Borrower
hereunder or under such Note with respect to any Loan or any payments of
principal or interest on such Note.
2.5 USE OF PROCEEDS.
A. APPLICATION OF PROCEEDS. The proceeds of the Loans shall be
applied solely (I)(x) to consummate the Refinancing and (y) to pay fees and
expenses related to the Refinancing and the other transactions contemplated
hereby, (II) (x) to finance the Transfers and (y) to pay fees and expenses
related to the Transfers and the other transactions contemplated hereby, (III)
to pay fees and expenses related to the Atlas Contribution and the other
transactions contemplated hereby and (IV) to the extent that there are proceeds
remaining after application pursuant to preceding clauses (I), (II) and (III),
for general corporate purposes, including the payment of dividends to Atlas
permitted hereunder.
B. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by the Borrower in any manner that
might cause the borrowing or the application of such proceeds to violate
Regulation U, Regulation T or Regulation X of the Board of Governors of the
Federal Reserve System, or any other regulation of such Board, or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING LOANS.
Notwithstanding any other provisions of this Agreement to the
contrary, the following provisions shall govern with respect to Loans as to the
matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 10:00 A.M. (New York time) on each Interest Rate
Determination Date, the Administrative Agent shall determine (which
determination shall, absent manifest error, be final, conclusive and binding
upon all parties) the interest rate that shall apply to the Loans for which an
interest rate is then being determined for the applicable Interest Period and
shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to the Borrower and to each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that the Administrative Agent shall have determined (which determination shall
be final and conclusive and binding upon all parties hereto), on any Interest
Rate Determination Date with respect to any Loans, that, by reason of
circumstances affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the interest rate applicable to such Loans
on the basis provided for in the definition of Adjusted Eurodollar Rate, the
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to the Borrower and to each Lender of such
determination, whereupon (i) no Loans may be incurred until such time as the
Administrative Agent notifies the Borrower and the
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Lenders that the circumstances giving rise to such notice no longer exist, or
until the Borrower, the Administrative Agent and the Lenders agree upon a
Substitute Basis in accordance with Section 2.6G and (ii) the rate of interest
applicable to any Affected Loans then outstanding shall be determined in
accordance with Section 2.6G.
C. ILLEGALITY OR IMPRACTICABILITY OF LOANS. In the event that on
any date any Lender shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto but shall be made only after
consultation with the Borrower and the Administrative Agent) that the making,
maintaining or continuation of its Loans (i) has become unlawful as a result of
compliance by such Lender in good faith with any law, treaty, governmental
rule, regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful) or (ii) has
become impracticable, or would cause such Lender material hardship, as a result
of contingencies occurring after the date of this Agreement that materially and
adversely affect the interbank Eurodollar market or the position of such Lender
in that market, then, and in any such event, such Lender shall be an "AFFECTED
LENDER" and it shall on that day give notice (by telefacsimile or by telephone
confirmed in writing) to the Borrower and the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each other Lender). Thereafter, (a) the obligation of the Affected Lender to
make Loans shall be suspended until such notice shall be withdrawn by the
Affected Lender, (b) the Affected Lender's obligation to maintain its
outstanding Loans (the "AFFECTED LOANS") shall be suspended until such notice
shall be withdrawn by the Affected Lender, and (c) the parties shall follow the
procedures set forth in Section 2.6G with respect to the Affected Loans so long
as, if following such procedures, the maintaining of such Loans is lawful.
Notwithstanding the foregoing, to the extent that a determination by an
Affected Lender as described above relates to a borrowing then being requested
by the Borrower subject to the provisions of subsection 2.6D, the Borrower
shall have the option, subject to the provisions of subsection 2.6D, to rescind
such borrowing as to all Lenders by giving notice (by telefacsimile or by
telephone confirmed in writing) to the Administrative Agent of such rescission
on the date on which the Affected Lender gives notice of its determination as
described above (which notice of rescission the Administrative Agent shall
promptly transmit to each other Lender). Except as provided in the immediately
preceding sentence, nothing in this subsection 2.6C shall affect the obligation
of any Lender other than an Affected Lender to make or maintain Loans in
accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. The Borrower shall compensate each Lender, upon written request by
such Lender (which request shall set forth the basis for requesting such
amounts), for all reasonable losses, expenses and liabilities (including,
without limitation, any interest paid by such Lender to lenders of funds
borrowed by it to make or carry its Loans and any loss, expense or liability
sustained by such Lender in connection with the liquidation or reemployment of
such funds)
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that such Lender may sustain: (i) if for any reason (other than a default by
such Lender) a borrowing of any Loan does not occur on a date specified
therefor in a Notice of Borrowing or a telephonic request for borrowing, (ii)
if any prepayment or other principal payment occurs on a date prior to the last
day of an Interest Period applicable to such Loan, (iii) if any prepayment of
any of its Loans is not made on any date specified in a notice of prepayment
given by the Borrower, or (iv) as a consequence of any other default by the
Borrower in the repayment of its Loans when required by the terms of this
Agreement.
E. BOOKING OF LOANS. Any Lender may make, carry or transfer
Loans at, to, or for the account of any of its branch offices or the office of
an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF LOANS. Calculation of all
amounts payable to a Lender under this subsection 2.6 and under subsection 2.7A
shall be made as though that Lender had actually funded each of its relevant
Loans through the purchase of a Eurodollar deposit bearing interest at the rate
obtained pursuant to the definition of Adjusted Eurodollar Rate in an amount
equal to the amount of such Loan and having a maturity comparable to the
relevant Interest Period and through the transfer of such Eurodollar deposit
from an offshore office of that Lender to a domestic office of that Lender in
the United States of America; provided, however, that each Lender may fund each
of its Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
G. SUBSTITUTE BASIS. During the 30 days following the date of
any notice given to the Borrower pursuant to subsections 2.6B and 2.6C, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good
faith in order to arrive at a mutually acceptable alternative basis for
determining the interest rate from time to time applicable to the affected
Loans (the "SUBSTITUTE BASIS"). If, within the 30 days following the date of
any such notice to the Borrower, the Administrative Agent, the Lenders and the
Borrower shall agree upon 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 30
days from the date of such notice, the Lenders and the Borrower shall have
failed to agree upon a Substitute Basis, then each Lender shall certify in
writing to the Borrower through the Administrative Agent (such certification to
be conclusive and binding on all of the parties hereto absent manifest error)
the interest rate at which such Lender is prepared to make or maintain its
affected Loan for such Interest Period, it being understood that such Lender's
interest rate shall be at a rate per annum equal to the sum of the Applicable
Margin plus, a rate which adequately and fairly reflects the cost to such
Lender of obtaining the funds necessary to maintain its affected Loan for such
Interest Period, such interest rate to be retroactive to and effective from the
first day of such Interest Period. If no Substitute Basis is established, upon
receipt of notice of the interest rates at which the Lenders are prepared to
make or maintain their respective affected Loans, the Borrower shall have the
right, exercisable upon ten Business Days' prior notice to any Lender through
the Administrative Agent,
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(A) to continue to borrow Loans at the interest rates so advised by the
respective Lenders (as such rates may be modified, from time to time, at the
outset of each subsequent Interest Period) or (B) to prepay in full the
Affected Loans of any Lender, together with accrued interest thereon at the
interest rate certified in writing by such Lender as provided above, whereupon
such Affected Loans shall become due and payable on the date specified by the
Borrower in such notice. In determining the actual interest rate per annum to
be charged on any Loan, the Substitute Basis or the interest rate advised by
the respective Lenders to apply to a Loan in accordance with the provisions of
this subsection 2.6G shall be increased to the rate per annum obtained by
dividing the Substitute Basis or such advised interest rate by a percentage
equal to 100% minus the then stated maximum rate of all required reserve
requirements under applicable law (including any marginal, emergency,
supplemental, special or other reserves) and applicable on the date of
determination of such interest rate to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time (or any successor category of liabilities under Regulation D).
2.7 INCREASED COSTS, TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B, in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after the
date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force of
law):
(i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any change in the rate of Tax on the overall net
income of such Lender) with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including,
without limitation, any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in or for
the account of, or advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Loans that are reflected in the
definition of Adjusted Eurodollar Rate); or
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(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or its
obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender
of agreeing to make, making or maintaining Loans hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending office)
with respect thereto; then, in any such case, the Borrower shall promptly pay
to such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to the Borrower (with a copy to the
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to such Lender under this
subsection 2.7A, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by the
Borrower under this Agreement and the other Loan Documents shall be paid free
and clear of and (except to the extent required by law) without any deduction
or withholding on account of any Tax (excluding, except as provided in
subsection 27B(ii)(e), any Tax on the overall net income of any Lender)
imposed, levied, collected, withheld or assessed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
such payments.
(ii) Grossing-up of Payments. If the Borrower or any other Person
is required by law to make any deduction or withholding on account of any such
Tax from any sum paid or payable by the Borrower to the Administrative Agent or
any Lender under any of the Loan Documents:
(a) the Borrower shall notify the Administrative Agent of any
such requirement or any change in any such requirement as soon as the Borrower
becomes aware of it;
(b) the Borrower shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to pay is
imposed on the Borrower) for its own account or (if that liability is imposed
on the Administrative Agent or such Lender, as the case may be) on behalf of
and in the name of the Administrative Agent or such Lender;
(c) the sum payable by the Borrower in respect of which the
relevant deduction, withholding or payment is required shall be increased to
the extent necessary to ensure that, after the making of that deduction,
withholding or payment, the Administrative
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Agent or such Lender, as the case may be, receives on the due date a net sum
equal to what it would have received had no such deduction, withholding or
payment been required or made;
(d) within 30 days after paying any sum from which it is required
by law to make any deduction or withholding, and within 30 days after the due
date of payment of any Tax which it is required by clause (b) above to pay, the
Borrower shall deliver to the Administrative Agent evidence satisfactory to the
other affected parties of such deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other authority; and
(e) if any amounts are payable in respect of Taxes pursuant to
subsection 2.7B(ii)(c), the Borrower agrees to reimburse each Lender, upon the
written request of such Lender, for taxes imposed on or measured by the overall
net income of such Lender and for any withholding of taxes as such Lender shall
determine are payable by, or withheld from, such Lender, in respect of such
amounts so paid to or on behalf of such Lender pursuant to subsection
2.7B(ii)(c), and in respect of any amounts paid to or on behalf of such Lender
pursuant to this subsection 2.7B(ii)(e).
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other political
subdivision thereof (for purposes of this subsection 2.7B(iii), a "NON-U.S.
LENDER") shall deliver to the Administrative Agent for transmission to the
Borrower, on or prior to the Effective Date (in the case of each Lender listed
on the signature pages hereof) or on the date of the Assignment Agreement
pursuant to which it becomes a Lender (in the case of each other Lender that
was not a Lender hereunder immediately prior to such assignment or transfer),
and at such other times as may be necessary in the determination of the
Borrower or the Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service Form W-8ECI or
Form W-8BEN (with respect to a complete exemption under an income tax treaty)
(or any successor forms), properly completed and duly executed by such Lender,
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to any payments to such Lender under any of
the Loan Documents or (2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code and cannot deliver
either Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a
complete exemption under an income tax treaty) pursuant to clause (1) above, a
Certificate re Non-Bank Status together with two original copies of Internal
Revenue Service Form W-8BEN (with respect to the portfolio interest exemption)
(or any successor form), properly completed and duly executed by such Lender,
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to any payments to such Lender of interest
payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax withholding
matters pursuant to sub-
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section 2.7B(iii)(a) hereby agrees, from time to time after the initial
delivery by such Lender of such forms, certificates or other evidence, whenever
a lapse in time or change in circumstances renders such forms, certificates or
other evidence obsolete or inaccurate in any material respect, such Lender
shall (1) deliver to the Administrative Agent for transmission to the Borrower
two new original copies of Internal Revenue Service Form W-8ECI or Form W-8BEN
(with respect to the benefits of any income tax treaty), or a Certificate re
Non-Bank Status and two original copies of Internal Revenue Service Form W-8BEN
(with respect to the portfolio interest exemption), as the case may be,
properly completed and duly executed by such Lender, together with any other
certificate or statement of exemption required in order to confirm or establish
the entitlement of such Lender to a continued exemption from or reduction in
United States withholding tax with respect to payments to such Lender under the
Loan Documents or (2) immediately notify the Administrative Agent and the
Borrower of its inability to deliver any such forms, certificates or other
evidence, in which case such Lender shall not be required to deliver any such
forms, certificates or other evidence pursuant to this subsection 2.7B(iii)(b).
(c) The Borrower shall not be required to pay any additional
amount to any Non-U.S. Lender under clause (c) or (e) of subsection 2.7B(ii) if
such Lender shall have failed to satisfy the requirements of subsection
2.7B(iii)(a); provided, that if such Lender shall have satisfied such
requirements on the Initial Borrowing Date (in the case of each Lender listed
on the signature pages hereof) or on the date of the Assignment Agreement
pursuant to which it became a Lender (in the case of each other Lender),
nothing in this subsection 2.7B(iii)(c) shall relieve the Borrower of its
obligation to pay any additional amounts pursuant to clause (c) or (e) of
subsection 2.7B(ii) 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 the interpretation, administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender is not subject to
withholding as described in subsection 2.7B(iii)(a).
(iv) If the Borrower pays any additional amount under this
subsection 2.7B to a Lender and such Lender determines in its sole discretion
that it has actually received or realized in connection therewith any refund or
any reduction of, or credit against, its Tax liabilities in or with respect to
the taxable year in which the additional amount is paid, such Lender shall pay
to the Borrower an amount that such Lender shall, in its sole discretion,
determine is equal to the net benefit, after tax, that was obtained by the
Lender in such year as a consequence of such refund, reduction or credit;
provided, however, that (i) any Lender may determine, in its sole discretion
consistent with the policies of such Lender, whether to seek a Tax Benefit;
(ii) any Taxes that are imposed on a Lender as a result of a disallowance or
reduction (including through the expiration of any tax credit carryover or
carryback of such Lender that otherwise would not have expired) of any Tax
Benefit with respect to which such Lender has made a payment to the Borrower
pursuant to this Section 2.7B(iv) shall be treated as a Tax for which the
Borrower is obligated to indemnify such Lender pursuant to this Sec-
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tion 2.7B(iv) without any exclusions or defenses; and (iii) nothing in this
Section 2.7B(iv) shall require the Lender to disclose any confidential
information to the Borrower (including , without limitation, its tax returns).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after
the date hereof of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its applicable lending office) with any guideline,
request or directive regarding capital adequacy (whether or not having the
force of law) of any such governmental authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's Loans or Commitments or
other obligations hereunder to a level below that which such Lender or such
controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within ten Business Days
after receipt by the Borrower from such Lender of the statement referred to in
the next sentence, the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to the Borrower
(with a copy to the Administrative Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such additional amounts,
which statement shall be conclusive and binding upon all parties hereto absent
manifest error.
D. SUBSTITUTE LENDERS. In the event that the Borrower is
required under the provisions of subsection 2.6C or this subsection 2.7 to make
payments in a material amount to any Lender or in the event that any Lender
fails to lend to the Borrower in accordance with this Agreement, the Borrower
may, so long as, no Event of Default or Potential Event of Default shall have
occurred and be continuing, elect to terminate such Lender as a party to this
Agreement, so long as, concurrently with such termination, (i) the Borrower
pays to that Lender all principal, interest and fees and other amounts
(including, without limitation, amounts, if any, owed under subsection 2.6C or
this subsection 2.7) owed to such Lender through such date of termination, (ii)
another financial institution satisfactory to the Borrower and the
Administrative Agent (or if the Administrative Agent is also the Lender to be
terminated, the successor Administrative Agent) agrees, as of such date, to
become a Lender for all purposes under this Agreement (whether by assignment or
amendment) and to assume all obligations of the Lender to be terminated as of
such date, and (iii) all documents and supporting materials necessary, in the
judgment of the Administrative Agent (or if the Administrative Agent is also
the Lender to be terminated, the successor Administrative Agent) to evidence
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the substitution of such Lender have been received and approved by the
Administrative Agent as of such date.
2.8 OBLIGATION OF LENDERS TO MITIGATE.
Each Lender agrees that, as promptly as practicable after the officer
of such Lender responsible for administering the Loans of such Lender becomes
aware of the occurrence of an event or the existence of a condition that would
cause such Lender to become an Affected Lender or that would entitle such
Lender to receive payments under subsection 2.7, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable legal
or regulatory restrictions, use reasonable efforts (i) to make, issue, fund or
maintain the Commitment of such Lender or the Affected Loan of such Lender
through another lending office of such Lender, or (ii) take such other measures
as such Lender may deem reasonable, if as a result thereof the circumstances
that would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts that would otherwise be required to be paid to such
Lender pursuant to subsection 2.7 would be materially reduced and if, as
determined by such Lender in its sole discretion, the making, issuing, funding
or maintaining of such Commitments or Loans through such other lending office
or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or the
interests of such Lender; provided, that such Lender will not be obligated to
utilize such other lending office pursuant to this subsection 2.8 unless the
Borrower agrees to pay all incremental expenses incurred by such Lender as a
result of utilizing such other lending office as described in clause (i) above.
A certificate as to the amount of any such expenses payable by the Borrower
pursuant to this subsection 2.8 (setting forth in reasonable detail the basis
for requesting such amount) submitted by such Lender to the Borrower (with a
copy to the Administrative Agent) shall be conclusive absent manifest error.
SECTION 3.
CONDITIONS TO LOANS
3.1 CONDITIONS TO LOANS.
The obligations of the Lenders to make the Loans on the Initial
Borrowing Date are subject to prior or concurrent satisfaction of the following
conditions:
A. BORROWER AND ATLAS DOCUMENTS. On or before the Initial Borrowing
Date, the Borrower shall deliver or cause to be delivered to the Lenders (or to
the Administrative Agent for the Lenders with sufficient originally executed
copies, where appropriate, for each Lender and its counsel) the following,
each, unless otherwise noted, dated the Effective Date:
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(i) certified copies of the certificate or articles of
incorporation of the Borrower and Atlas, together with a good standing
certificate from the Secretary of State of the State of Delaware and each other
state in which such corporation is qualified as a foreign corporation to do
business and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or similar
taxes from the appropriate taxing authority of each of such states, each dated
a recent date prior to the Effective Date;
(ii) copies of the bylaws of the Borrower and of Atlas, certified
in each case as of the Effective Date by its corporate secretary or an
assistant secretary;
(iii) resolutions of the Board of Directors of the Borrower and
Atlas approving and authorizing the execution, delivery and performance of this
Agreement, the other Loan Documents and the Transaction Documents (to the
extent that such Person is a party thereto), certified as of the Effective Date
by such Person's corporate secretary or an assistant secretary as being in full
force and effect without modification or amendment;
(iv) signature and incumbency certificates of the officers of the
Borrower and of Atlas executing this Agreement and the other Loan Documents;
(v) executed originals of this Agreement, the Notes (duly
executed in accordance with this Agreement) and the other Loan Documents,
including Aircraft Chattel Mortgages with respect to all of the Aircraft and
both of the Spare Engine Pools; and
(vi) such other documents as the Administrative Agent may
reasonably request.
B. AIRCRAFT DOCUMENTS. With respect to each Aircraft or Spare
Engine, the following documents shall have been duly authorized, executed and
delivered by the respective parties thereto, shall each be reasonably
satisfactory in form and substance to the Lenders and the Administrative Agent
and shall be in full force and effect, and copies shall have been delivered to
the Administrative Agent: all documents, including without limitation, any
bills of sale, certificates of transfer and bills of sale on AC Form 8050-2
evidencing the conveyance of title of the Aircraft and Spare Engines from
Atlas, AFL, or AFL II, as the case may be, to the Borrower and such other
evidence as the Administrative Agent shall request confirming that the Borrower
has good and valid title to each Aircraft and Spare Engine and that all
registrations and recordings necessary to evidence such title have been made,
including, without limitation, all recordings with the FAA to register the
Aircraft in the name of the Borrower.
C. NOTICES OF BORROWING. Prior to the making of the Loans, the
Administrative Agent shall have received such Notices of Borrowing as are
required by sub-section 2.1B.
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D. NECESSARY CONSENTS. The Borrower shall have obtained all
consents necessary or advisable in connection with the transactions
contemplated by the Loan Documents and the continued operation of the business
of the Borrower, and each of the foregoing shall be in full force and effect
and in form and substance satisfactory to the Administrative Agent.
E. AIRCRAFT CHATTEL MORTGAGES. The Administrative Agent shall
have received a copy of a first priority Aircraft Chattel Mortgage relating to
each Aircraft and each Spare Engine, duly executed by the Borrower, which
Aircraft Chattel Mortgages shall provide a first priority security interest in
the Collateral for the benefit of the Lenders, securing all the Obligations,
together with:
(i) executed copies of proper financing statements to be filed
under the UCC in all jurisdictions where the Administrative Agent may deem such
filing necessary or desirable in order to perfect the security interests
created by the Aircraft Chattel Mortgages;
(ii) evidence of the completion of all recordings and filings with
respect to the Collateral that the Administrative Agent may deem necessary or
desirable in order to perfect the security interest created by the Aircraft
Chattel Mortgages including, without limitation, all filings with the FAA; and
(iii) evidence that all other actions necessary or, in the
reasonable opinion of the Administrative Agent, desirable to establish,
preserve and perfect the first priority security interests created by the
Aircraft Chattel Mortgages in all Aircraft and Spare Engines have been taken
(including all FAA filings).
F. FAIRNESS OPINION. On or prior to the Initial Borrowing Date,
the Borrower shall have delivered or shall have caused to be delivered to the
Administrative Agent a fairness opinion from Xxxxx & Xxxxxxxxxxxx, Inc.,
stating that the Transaction is on terms no less favorable to Atlas or the
Borrower than those that could have been obtained in an arm's length
transaction with unrelated third parties.
G. FINANCIAL CONDITION CERTIFICATES. Each of the Borrower and
Atlas shall have delivered to the Administrative Agent a Financial Condition
Certificate dated the Initial Borrowing Date, substantially in the form annexed
hereto as Exhibit VIIA and Exhibit VIIB annexed hereto, respectively, with
appropriate attachments demonstrating that, after giving effect to the
consummation of the financing transactions contemplated hereby, each of the
Borrower and Atlas and its Subsidiaries is Solvent.
H. OPINIONS OF BORROWER'S COUNSEL. Lenders and their respective
counsel shall have received (i) one or more favorable written opinions of
Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Borrower, in form and substance
reasonably satisfactory to the Administrative Agent and its counsel, dated as
of the Initial Borrowing Date and setting forth substantially
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the matters in the opinions designated in Exhibit IVA annexed hereto and as to
such other matters as the Administrative Agent acting on behalf of the Lenders
may reasonably request, (ii) an opinion of Xxxxxx Xxxxxx & Xxxxxxx regarding
Section 1110 of the Bankruptcy Code, dated the Initial Borrowing Date and
setting forth substantially the matters in the opinions designated in Exhibit
IVB annexed hereto, (iii) an opinion of Xxxxxx Xxxxxx & Xxxxxxx regarding
certain bankruptcy matters other than those covered in the opinion referred to
in clause (ii) above, dated the Initial Borrowing Date and setting forth
substantially the matters in the opinions designated in Exhibit IVC annexed
hereto and (iv) an opinion of Xxxxxx Xxxxxx & Xxxxxxx regarding certain tax
matters, dated the Initial Borrowing Date and setting forth substantially the
matters in the opinions designated in Exhibit IVD annexed hereto.
I. ATLAS CREDIT AGREEMENT; LEASES. The Amended Aircraft Credit
Facility and the Leases shall be effective and shall be in form and substance
satisfactory to the Administrative Agent and the Lenders so as to allow,
according to its terms, the Transaction to be consummated.
J. OPINIONS OF FAA COUNSEL. The Lenders and their respective
counsel shall have received originally executed copies of one or more favorable
written opinions of FAA counsel in form and substance satisfactory to the
Administrative Agent and its counsel, dated the Initial Borrowing Date, and
setting forth substantially the matters in the opinions designated in Exhibit
IVE annexed hereto.
K. FEES. The Borrower shall have paid to the Administrative
Agent, for distribution (as appropriate) to the Administrative Agent and the
Lenders, the fees payable on the Initial Borrowing Date referred to in
subsection 2.3.
L. FINANCIAL STATEMENTS. On or before the Initial Borrowing
Date, the Administrative Agent shall have received from the Borrower (i) an
audited consolidated and consolidating balance sheet of Atlas and its
Subsidiaries as at December 31, 1999, and the related consolidated and
consolidating statements of income, stockholders' equity and cash flows of
Atlas and its Subsidiaries for such fiscal year, accompanied by an opinion of a
nationally recognized firm of independent public accountants and (ii) the
Projections, which financial statements and Projections shall be in form and
substance reasonably satisfactory to the Administrative Agent.
M. EVIDENCE OF INSURANCE. The Borrower shall have delivered to
the Administrative Agent certificates of insurance naming the Administrative
Agent on behalf of the Administrative Agent and the Lenders as loss payee under
the casualty insurance policies and the Administrative Agent and the Lenders as
additional insured under the liability policies of the Borrower and a broker's
report from the Borrower's insurance broker evidencing compliance with the
requirements of each Aircraft Chattel Mortgage, all as required pursuant to
subsection 5.4 hereof or pursuant to the Collateral Documents. All such
certificates of insurance shall contain such endorsements as are reasonably
required by the Administrative Agent.
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N. NO MATERIAL ADVERSE EFFECT. Since December 31, 1999, no
Material Adverse Effect (in the reasonable opinion of the Administrative Agent)
shall have occurred.
O. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. On
the Initial Borrowing Date, (i) there shall exist no Potential Event of Default
or Event of Default and (ii) all representations and warranties in Section 4
hereof are true, correct and complete in all material respects on and as of the
Initial Borrowing Date to the same extent as though made on and as of that date
and the Borrower shall have performed in all material respects all agreements
and satisfied all conditions that this Agreement provides shall be performed or
satisfied by it on or before the Initial Borrowing Date except as otherwise
disclosed to and agreed to in writing by the Administrative Agent and Requisite
Lenders, and the Borrower shall have delivered to the Administrative Agent an
Officer's Certificate, in form and substance satisfactory to the Administrative
Agent, to that effect.
P. COMPLIANCE CERTIFICATE. The Borrower shall have delivered to
the Administrative Agent a Compliance Certificate dated the Initial Borrowing
Date, substantially in the form annexed hereto as Exhibit III.
Q. TRANSACTION; REFINANCING. On or prior to the Initial
Borrowing Date, the following shall have occurred: (i) Atlas shall have
contributed to the Borrower, in exchange for equity interests in the Borrower,
the sum of $12,783,142, together with the Atlas Aircraft and each of the Atlas
Spare Engines, and the Borrower shall, concurrently with such contribution, pay
the sum of $29,705,684 to the holders of the Atlas Equipment Obligations
(collectively, the "ATLAS CONTRIBUTION"); (ii) AFL shall have contributed to
the Borrower, in exchange for equity interests in the Borrower, each of the AFL
Aircraft, subject to the AFL Equipment Obligations (the "AFL CONTRIBUTION");
(iii) AFL II shall have contributed to the Borrower, in exchange for equity
interests in the Borrower, each of the AFL II Aircraft and each of the AFL II
Spare Engines, in each case subject to the AFL II Equipment Obligations (the
"AFL II CONTRIBUTION" and, together with the AFL Contribution, the
"TRANSFERS"); (iv) the Borrower shall have leased each of the Aircraft to Atlas
via the Aircraft Leases; (v) the Borrower shall have leased all of the AFL II
Spare Engines to Atlas via the CF6-50E2 Spare Engine Lease; (vi) the Borrower
shall have leased all of the Atlas Spare Engines to the Borrower via the
CF6-80C2 Spare Engine Lease; (vii) all Equipment Obligations shall have been
indefeasibly repaid in full from, among other sources, the proceeds of the
borrowing hereunder and (viii) all security interests and Liens encumbering the
Aircraft or any part thereof or the Spare Engines or any other assets of the
Borrower shall have been terminated and released (the actions taken in clauses
(vii) and (viii) collectively, the "REFINANCING," and the actions taken in
clauses (i) through (viii) together with the incurrence of Loans hereunder
collectively, the "TRANSACTION"). The Lenders shall have received true and
correct copies of all of the Transaction Documents, including, without
limitation, all documentation entered into in connection with the Atlas
Contribution, the Transfers and the Leases, which Leases shall be substantially
in the form of Exhibit VIIIA or Exhibit VIIIB annexed hereto, as appropriate,
and
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all terms and conditions thereof shall be satisfactory to the Administrative
Agent (including, with respect to the Leases, their terms, rental schedules,
covenants, events of default and remedies). All of the Transaction Documents
shall have been duly executed and delivered by all parties thereto, and shall
be in full force and effect. Each of the conditions precedent to the
consummation of the Transaction set forth in the Transaction Documents shall
have been satisfied or waived, all to the satisfaction of the Administrative
Agent, and on or prior to the Initial Borrowing Date, the Transaction shall
have been consummated in accordance with the Transaction Documents and all
applicable laws, rules and regulations.
R. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by the Administrative Agent, acting on behalf of the Lenders, and
its counsel shall be satisfactory in form and substance to the Administrative
Agent and such counsel, and the Administrative Agent and such counsel shall
have received all such counterpart originals or certified copies of such
documents as the Administrative Agent may reasonably request.
S. APPRAISALS. The Borrower shall have delivered to the
Administrative Agent appraisals from two Approved Appraisers, in form and
substance satisfactory to the Lenders, which appraisals shall demonstrate to
the Lenders' satisfaction that the ratio of the Total Commitment to the
aggregate Appraised Value of the Aircraft and the Spare Engines does not exceed
65% and that the terms of each of the Leases, including, without limitation,
rental rates, economic life and residual value, are at fair market value.
T. FAA CERTIFICATION AND TITLE. The Administrative Agent shall
have received evidence satisfactory to it to the effect that Atlas is an air
carrier certificated under Sections 401 and 604(b) of the Federal Aviation Act
and with respect to each Aircraft, the Administrative Agent shall have received
evidence that (i) each of the Aircraft has been registered with and duly
certified by the FAA as to type and airworthiness in the name of the Borrower
and the Administrative Agent has received a copy of such certification and
evidence satisfactory to the Lenders that each Engine and each Spare Engine is
being maintained in accordance with an FAA-approved or substantially similar
program and (ii) the Borrower shall have good and marketable title to and a
valid ownership interest in the Collateral, including the Aircraft and each
Spare Engine, free and clear of all Liens other than Liens permitted by
subsection 6.2.
U. BANKRUPTCY-REMOTE SUBSIDIARY. The Administrative Agent and
the Lenders shall be satisfied that the Borrower is a bankruptcy-remote
Subsidiary of Atlas and that the certificate of incorporation contains
provisions under which the Borrower may not commence a voluntary bankruptcy
proceeding without the affirmative vote of all directors.
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SECTION 4.
BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Loans, the Borrower represents and warrants to each Lender, after
giving effect to the Transaction consummated on the Initial Borrowing Date,
that the following statements are true, correct and complete:
4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. The Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Borrower 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 and to carry out the
transactions contemplated thereby and by the Transaction Documents.
B. QUALIFICATION AND GOOD STANDING. The Borrower 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 has
not had and will not have a Material Adverse Effect.
C. SUBSIDIARIES. The Borrower has no Subsidiaries.
D. COLLATERAL DOCUMENTS. The security interests created in favor
of the Administrative Agent under the Collateral Documents will at all times
from and after the Initial Borrowing Date constitute, as security for the
obligations purported to be secured thereby, a legal, valid and enforceable
first priority perfected security interest in and a Lien on all of the
Collateral referred to therein in favor of the Administrative Agent for the
benefit of the Lenders, perfected and prior to the rights of all third persons
in accordance with the requirements of all applicable Collateral Documents. The
Borrower has good and marketable title to its Collateral, and all such
Collateral is free and clear of all Liens except for Liens permitted by
subsection 6.2. No consents, filings or recordings are required in order to
perfect (or maintain the perfection or priority of) the security interests
purported to be created by any of the Collateral Documents, other than such as
have been obtained and which remain in full force and effect and Uniform
Commercial Code financing statements to be filed, or delivered to the
Administrative Agent for filing, on the Initial Borrowing Date and periodic
Uniform Commercial Code continuation filings or as is specifically otherwise
permitted by the terms of any applicable Collateral Document.
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4.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents and the Transaction Documents have been duly
authorized by all necessary corporate action on the part of the Borrower.
B. NO CONFLICT. The execution, delivery and performance by the
Borrower of the Loan Documents and the Transaction Documents and the
consummation of the Transaction and the transactions contemplated by the Loan
Documents do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to the Borrower, the certificate or
articles of incorporation or bylaws of the Borrower or any order, judgment or
decree of any court or other agency of government binding on the Borrower, (ii)
conflict with in any material respect, result in a material breach of or
constitute (with due notice or lapse of time or both) a material default under
any material Contractual Obligation of the Borrower, including, without
limitation, the Pass Through Trust Documents, the Senior Note Documents and the
Amended Aircraft Credit Facility, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of the Borrower
(other than any Liens created under any of the Loan Documents in favor of the
Administrative Agent on behalf of the Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of the Borrower, except for such approvals or consents as will be
obtained on or before the Initial Borrowing Date, are disclosed in writing to
the Lenders and have terms and conditions that are acceptable to the
Administrative Agent and the Lenders.
C. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by the Borrower of the Loan Documents and the Transaction Documents
and the consummation of the Transaction and the transactions contemplated by
the Transaction Documents 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 that has not
been obtained or made on or prior to the date required to be obtained or made.
D. BINDING OBLIGATION. Each of the Loan Documents and the
Transaction Documents has been duly executed and delivered by the Borrower and
is the legally valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
4.3 FINANCIAL CONDITION.
A. The Borrower has heretofore delivered to the Lenders the
following financial statements and information: (i) the audited consolidated
and consolidating balance sheets of Atlas and its Subsidiaries as at December
31, 1999, and the related consolidated and
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consolidating statements of income, stockholders' equity and cash flows of
Atlas and its Subsidiaries for such fiscal year and (ii) the Projections. All
such statements were prepared in conformity with GAAP and fairly present the
financial position (on a consolidated, and, where applicable, consolidating
basis) of the entities described in such financial statements as at the
respective dates thereof and the results of operations and cash flows (on a
consolidated and, where applicable, consolidating basis) of the entities
described therein for each of the periods then ended. Atlas does not have any
Contingent Obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
foregoing financial statements or the notes thereto and which in any such case
is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Atlas or any of its
Subsidiaries.
B. Except as fully disclosed in the financial statements delivered
pursuant to Section 4.3A, there were, as of the Effective Date, no liabilities
or obligations with respect to Atlas and its Subsidiaries or to the Borrower of
any nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) that, either individually or in aggregate, could reasonably
be expected to be material to Atlas and its Subsidiaries taken as a whole but
excluding the Borrower, or to the Borrower on a stand-alone basis. As of the
Effective Date, neither Atlas nor the Borrower knows of any basis for the
assertion against it or, in the case of Atlas, against it or its Subsidiaries,
of any liability or obligation of any nature whatsoever that is not fully
disclosed in the financial statements delivered pursuant to Section 4.3A that,
either individually or in the aggregate, could reasonably be expected to be
material to Atlas and its Subsidiaries taken as a whole but excluding the
Borrower, or to the Borrower on a stand-alone basis.
4.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
(i) Since December 31, 1999, no event or change has
occurred that has caused or evidences, either in any case or in the aggregate,
a Material Adverse Effect.
(ii) Since December 31, 1999, the Borrower has not directly or
indirectly declared, ordered, paid or made, or set apart any sum or property
for, any Restricted Junior Payment or agreed to do so, except as permitted by
subsection 6.5.
4.5 TITLE TO PROPERTIES, LIENS.
A. The Borrower has good, sufficient and legal title to all of its
properties and assets, including without limitation, all Aircraft and Spare
Engines. Except as permitted by this Agreement, all such properties and assets
are free and clear of Liens.
B. Each Aircraft has a current and valid airworthiness certificate
issued by the FAA pursuant to the Federal Aviation Act in effect and is in such
condition as may be necessary to enable the airworthiness certificate to be
maintained in good standing. Each En-
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gine and Spare Engine has a rated takeoff horsepower greater than 750
horsepower or the equivalent of such horsepower. Each Aircraft is registered
with the FAA in the name of the Borrower and Atlas has authority to operate
such Aircraft.
4.6 LITIGATION, ADVERSE FACTS.
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of the Borrower) at law or
in equity or in admiralty or before or by any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any property of the
Borrower or with respect to the Transaction that could reasonably be expected
to result in a Material Adverse Effect. The Borrower is not (i) in violation of
any applicable laws that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect or (ii) subject to or in
default with respect to any final judgments, writs, injunctions, decrees, rules
or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
4.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 5.3, all tax returns and
reports of the Borrower required to be filed by it have been timely filed, and
all taxes, assessments, fees and other governmental charges upon the Borrower
and upon its respective properties, assets, income, businesses and franchises
that are due and payable have been paid when due and payable. The Borrower does
not know of any proposed tax assessment against it that is not being actively
contested by it in good faith and by appropriate proceedings; provided, that
such reserves or other appropriate provisions, if any, for liabilities for
taxes as shall be required in conformity with GAAP shall have been made or
provided for in the financial statements of the Borrower. There are no
agreements with respect to taxes or waiver extending any statute of limitations
relating to the payment or correction of taxes between the Borrower and any tax
agency or authority.
4.8 PERFORMANCE OF AGREEMENTS.
The Borrower is not in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
of its Contractual Obligations, and no condition exists that, with the giving
of notice or the lapse of time or both, would constitute such a default, except
where the consequences, direct or indirect, of such default or defaults, if
any, would not have a Material Adverse Effect.
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4.9 GOVERNMENTAL REGULATION.
The Borrower is not subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act
or the Investment Company Act of 1940 or under any other federal or state
statute or regulation that may limit its ability to incur Indebtedness or that
may otherwise render all or any portion of the Obligations unenforceable.
4.10 SECURITIES ACTIVITIES.
A. The Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.
B. No part of the proceeds of any Loan will be used (or has been
used) to purchase or carry any Margin Stock or to extend credit for the purpose
of purchasing or carrying any margin Stock. Neither the making of any Loan nor
the use of the proceeds thereof will violate or be inconsistent with the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
4.11 COMPLIANCE WITH ERISA.
The Borrower has no qualified retirement plans under Section 401(k) of
the Internal Revenue Code nor medical benefit plans. The Borrower has never
sponsored, maintained, contributed to (or had an obligation to contribute to)
any Employee Benefit Plans.
4.12 CERTAIN FEES.
No broker's or finder's fee or commission will be payable with respect
to this Agreement or any of the transactions contemplated hereby, and the
Borrower hereby indemnifies the Lenders against, and agrees that it will hold
the Lenders harmless from, any claim, demand or liability for any such broker's
or finder's fees alleged to have been incurred in connection herewith or
therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.
4.13 ENVIRONMENTAL PROTECTION.
A. All facilities and operations of the Borrower are, and have
been to the best of the Borrower's knowledge, in compliance in all material
respects with all applicable Environmental Laws.
B. There are no, and have been no, conditions, occurrences, or
Hazardous Materials Activity, (a) arising at any facilities owned or operated
by the Borrower or (b) arising in connection with the operations of the
Borrower (including the transportation of Hazard-
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ous Materials), which conditions, occurrences or Hazardous Materials Activity
could reasonably be expected to form the basis of an Environmental Claim
against the Borrower and that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
C. To the best of the Borrower's knowledge, there are no pending
or threatened Environmental Claims against the Borrower, and the Borrower has
received no written notices, inquiries, or requests for information with
respect to any Environmental Claims.
4.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or, to the Borrower's
knowledge threatened, involving the Borrower that could reasonably be expected
to have a Material Adverse Effect.
4.15 SOLVENCY.
The Borrower is and, upon the incurrence of any Obligations by the
Borrower on any date on which this representation is made, will be, Solvent.
4.16 DISCLOSURE.
No representation or warranty of the Borrower contained in any Loan
Document, any Transaction Document or in any other document, certificate or
written statement furnished to the Lenders by or on behalf of the Borrower for
use in connection with the transactions contemplated by this Agreement contains
any untrue statement of a material fact or omits to state a material fact
(known to the Borrower, in the case of any document not furnished by it)
necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. The
Projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by the Borrower to be
reasonable at the time made, it being recognized by the Lenders that the
Projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by the Projections may differ from
the projected results. There are no facts known (or which should, upon the
reasonable exercise of diligence, be known) to the Borrower (other than matters
of a general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to the Lenders for use in connection with the transactions
contemplated hereby.
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4.17 SECTION 1110.
(i) The Borrower, as Lessor under the Leases, is entitled to the
protection of Section 1110 of the Bankruptcy Code with respect to each Aircraft
and Spare Engine in the event of a case under Chapter 11 of the Bankruptcy Code
in which the Lessee is a debtor.
(ii) The Administrative Agent will be entitled to the protection
of Section 1110 of the Bankruptcy Code with respect to each Aircraft and Spare
Engine in the event of a case under Chapter 11 of the Bankruptcy Code in which
the Lessee is a debtor upon the exercise of the Administrative Agent's remedies
under each Aircraft Chattel Mortgage.
(iii) All assumptions made by the appraisers with respect to the
Aircraft and Spare Engines in the appraisals delivered to the Administrative
Agent that would affect any Approved Appraiser's determinations as set forth in
such appraisal shall be true and correct as of the Initial Borrowing Date with
respect to each Aircraft and Spare Engine.
4.18 SPECIAL PURPOSE CORPORATION.
The Borrower was formed solely for the purpose of effecting the
Transaction, and except in connection therewith (and as contemplated by this
Agreement) has no assets or liabilities.
4.19 TRANSACTION.
The Transaction has been consummated in accordance with applicable law
and the Transaction Documents.
4.20 REPRESENTATIONS AND WARRANTIES IN DOCUMENTS.
All representations and warranties of the Borrower set forth in the
Loan Documents and the Transaction Documents were true and correct in all
material respects as of the time such representations and warranties were made
and shall be true and correct in all material respects as of the Initial
Borrowing Date as if such representations and warranties were made on and as of
such date, unless stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date.
4.21 LEASES.
The Leases are in full force and effect and are leases for U.S.
federal income tax purposes of the Lessor and the Lessee thereunder.
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SECTION 5.
BORROWER'S AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all
of the Loans and other Obligations, unless Requisite Lenders shall otherwise
give prior written consent, the Borrower shall perform all covenants in this
Section 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
The Borrower will maintain a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP. The Borrower will deliver to
the Administrative Agent and the Lenders:
(i) Quarterly Financials: as soon as available, and in any event
within 45 days after the end of each fiscal quarter of each Fiscal Year, the
balance sheet of the Borrower as at the end of such fiscal quarter and the
related statements of income, stockholders' equity and cash flows of the
Borrower for such fiscal quarter and 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 for the corresponding
periods of the previous Fiscal Year, if applicable, in reasonable detail and
certified by the chief financial officer of the Borrower that they fairly
present the financial condition of the Borrower as at the dates indicated and
the results of its operations and its cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments;
(ii) Year-End Financials: as soon as available, and in any event
within 90 days after the end of each Fiscal Year, (a) the balance sheet of the
Borrower as at the end of such Fiscal Year and the related statements of
income, stockholders' equity and cash flows of the Borrower for such Fiscal
Year, setting forth in each case in comparative form the corresponding figures
for the previous Fiscal Year, if applicable, in reasonable detail and certified
by the chief financial officer of the Borrower that they fairly present the
financial condition of the Borrower as at the dates indicated and the results
of its operations and its cash flows for the periods indicated, and (b) in the
case of such financial statements, a report thereon of independent certified
public accountants of recognized national standing selected by the Borrower and
satisfactory to the Administrative Agent, which report shall be unqualified,
shall express no doubts about the ability of the Borrower to continue as a
going concern, and shall state that such financial statements fairly present
the financial position of the Borrower as at the dates indicated and the
results of its operations and its cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years (except as
otherwise disclosed in such financial statements) and that the examination by
such accountants in con-
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nection with such financial statements has been made in accordance with
generally accepted auditing standards;
(iii) Officers' and Compliance Certificates: together with each
delivery of financial statements of the Borrower pursuant to subdivisions (i)
and (ii) above after the Effective Date, (a) an Officers' Certificate of the
Borrower stating that the signers have reviewed the terms of this Agreement and
have made, or caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of the Borrower during the accounting
period covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period, and
that the signers do not have knowledge of the existence as at the date of such
Officers' Certificate, of any condition or event that constitutes an Event of
Default or Potential Event of Default, or, if any such condition or event
existed or exists, specifying the nature and period of existence thereof and
what action the Borrower has taken, is taking and proposes to take with respect
thereto; and (b) a Compliance Certificate demonstrating, in reasonable detail,
compliance during and at the end of the applicable quarterly and annual
accounting periods with the restrictions contained in Section 6;
(iv) Notices under Leases: within 3 Business Days, all notices and
other information or documents delivered or received under any of the Leases by
the Lessor pursuant to Section 19 of the Leases, including, without limitation,
all additional financial statements and reports delivered pursuant to Section
6(a) of the Leases;
(v) Accountants' Certification: together with each delivery of
financial statements of the Borrower pursuant to subdivision (ii) above, a
written statement by the independent certified public accountants giving the
report thereon (a) stating that their audit examination has included a review
of the terms of this Agreement and the other Loan Documents as they relate to
accounting matters, (b) stating whether, in connection with their audit
examination, any condition or event that constitutes an Event of Default or
Potential Event of Default has come to their attention and, if such a condition
or event has come to their attention, specifying the nature and period of
existence thereof; provided, that such accountants shall not be liable by
reason of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course of their
audit examination, and (c) stating that based on their audit examination
nothing has come to their attention that causes them to believe either or both
that the information contained in the certificates delivered therewith pursuant
to subdivision (iii) above is not correct or that the matters set forth in the
Compliance Certificates delivered therewith pursuant to clause (b) of
subdivision (iii) above for the applicable Fiscal Year are not stated in
accordance with the terms of this Agreement;
(vi) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to the Borrower by independent certified public accountants in
connection with each annual, interim or special audit
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of the financial statements of the Borrower made by such accountants,
including, without limitation, any comment letter submitted by such accountants
to management in connection with their annual audit;
(vii) Events of Default, etc.: promptly upon any officer of the
Borrower obtaining knowledge (a) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that any
Lender has given any notice (other than to the Administrative Agent) or taken
any other action with respect to a claimed Event of Default or Potential Event
of Default, (b) that any Person has given any notice to the Borrower or taken
any other action with respect to a claimed default or event or condition of the
type referred to in subsection 7.2, or (c) of the occurrence of any event or
change that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, an Officers' Certificate specifying the nature and
period of existence of such condition, event or change, or specifying the
notice given or action taken by any such Person and the nature of such claimed
Event of Default, Potential Event of Default, default, event or condition, and
what action the Borrower has taken, is taking and proposes to take with respect
thereto;
(viii) Litigation or Other Proceedings: (a) promptly upon any
officer of the Borrower obtaining knowledge of (X) the institution of, or
non-frivolous threat of, any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration against or
affecting the Borrower or any property of the Borrower (collectively,
"PROCEEDINGS") not previously disclosed in writing by the Borrower to the
Lenders or (Y) any material development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(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;
written notice thereof, together with such other information as may be
reasonably available to the Borrower to enable the Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of each fiscal
quarter of the Borrower, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, the Borrower equal to or greater
than $1,000,000 and, promptly after request by the Administrative Agent, such
other information as may be reasonably requested by the Administrative Agent to
enable the Administrative Agent and its counsel to evaluate any of such
Proceedings;
(ix) Insurance: as soon as practicable, and in any event by the
last day of each Fiscal Year, a report in form and substance satisfactory to
the Administrative Agent outlining all material insurance coverage maintained
as of the date of such report by the Borrower and all material insurance
coverage planned to be maintained by the Borrower in the immediately succeeding
Fiscal Year;
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(x) Environmental Audits and Reports: as soon as practicable
following receipt thereof, copies of all environmental audits and reports,
whether prepared by personnel of the Borrower or by independent consultants,
with respect to significant environmental matters or that relate to an
Environmental Claim that could result in a Material Adverse Effect;
(xi) Pricing Certificate: in the event that the Borrower believes
that it is entitled to a Pricing Reduction, copies of the most recent rating
reports pertaining to the Borrower from each of Xxxxx'x and S&P, together with
a certificate setting forth the calculations necessary to demonstrate the
Borrower's entitlement to a Pricing Reduction;
(xii) Other Information: with reasonable promptness, such other
information and data with respect to the Borrower or Atlas, as the case may be,
as from time to time may be reasonably requested by any Lender.
5.2 CORPORATE EXISTENCE.
The Borrower will at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to its
business. The Borrower will at all times maintain its corporate existence as a
United States Citizen.
5.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. The Borrower will pay all taxes, assessments and other
governmental charges imposed upon it or any of its properties or assets or in
respect of any of its income, businesses or franchises before any penalty, fine
or interest accrues thereon, and all claims (including, without limitation,
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty, fine or interest
shall be incurred or any Lien created with respect thereto; provided, that no
such charge or claim need be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and if
such reserve or other appropriate provision, if any, with respect to any
liability for taxes, as shall be required in conformity with GAAP shall have
been made therefor in the financial statements of the Borrower.
B. The Borrower will not file or consent to the filing of any
consolidated federal income tax return with any Person other than the
affiliated group of which Atlas is the parent corporation.
5.4 MAINTENANCE OF PROPERTIES; INSURANCE.
The Borrower will maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in
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the business of the Borrower and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof. The Borrower
will maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and business against loss or
damage (including, without limitation, flood insurance, if necessary or
advisable) of the kinds customarily carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses, and the Borrower will, with respect to each Aircraft and Spare
Engine, maintain the insurance specified in the Aircraft Chattel Mortgage with
respect to such Aircraft or Spare Engine.
5.5 INSPECTION; LENDER MEETING.
The Borrower will permit any authorized representatives designated by
any Lender to visit and inspect any of the properties of the Borrower,
including its and their financial and accounting records, and to make copies
and take extracts therefrom, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided, that the Borrower may, if it so chooses, be present at or
participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and as often as may be reasonably
requested, provided, so long as no Event of Default has occurred and is
continuing, that such inspection is not disruptive to the Borrower's business,
as reasonably determined by the Borrower. Without in any way limiting the
foregoing, the Borrower will, upon the request of the Administrative Agent or
Requisite Lenders, participate in a meeting of the Administrative Agent and
Lenders once during each Fiscal Year to be held at the Borrower's corporate
offices (or such other location as may be agreed to by the Borrower and the
Administrative Agent) at such time as may be agreed to by the Borrower and the
Administrative Agent.
5.6 COMPLIANCE WITH LAWS, ETC.
The Borrower will comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority (including, without
limitation, Environmental Laws), noncompliance with which could reasonably be
expected to cause a Material Adverse Effect. The Borrower shall not conduct,
and shall not permit the conduct of, any Hazardous Materials Activity at any
location that could reasonably be expected to form the basis of an
Environmental Claim against the Borrower and that could reasonably be expected
to have a Material Adverse Effect.
5.7 ENVIRONMENTAL INDEMNITY.
The Borrower agrees to indemnify, defend, and hold harmless the
Administrative Agent and the Lenders, and the officers, directors, employees,
agents and affiliates of the Administrative Agent and the Lenders from and
against any and all losses, claims, liabilities or expenses arising in
connection with Environmental Claims against the Borrower or with any Hazardous
Materials Activity.
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5.8 BORROWER'S REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
The Borrower will promptly take any and all necessary remedial action
in connection with the presence, storage, use, disposal, transportation or
Release of any Hazardous Materials on, under or about any facility in order to
comply with all applicable Environmental Laws and Governmental Authorizations.
In the event that the Borrower undertakes any remedial action with respect to
any Hazardous Materials on, under or about any such facility, the Borrower will
conduct and complete such remedial action 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, the Borrower's liability for such presence, storage, use,
disposal, transportation or Release of any such Hazardous Materials is being
contested in good faith by the Borrower. Notwithstanding anything to the
contrary contained in the Transaction Documents, the Borrower or Lessee may
engage in the transportation of Hazardous Materials in the ordinary course of
business so long as such is conducted in compliance with all applicable
Environmental Laws and all other applicable laws, policies, orders, regulations
and directives.
5.9 MAINTENANCE CONTRACTS.
The Borrower shall maintain or shall cause to be maintained a
maintenance program with respect to the Aircraft and Spare Engines approved by
the FAA.
5.10 EMPLOYEE BENEFIT PLANS.
The Borrower will not establish, contribute to (or have an obligation
to contribute to) or permit to be established any Employee Benefit Plans for
the Borrower or any of its employees.
5.11 FURTHER ASSURANCES.
At any time or from time to time upon the request of the
Administrative Agent, the Borrower will, at its expense, promptly execute,
acknowledge and deliver such further documents and do such other acts and
things as the Administrative Agent may reasonably request in order to effect
fully the purposes of the Loan Documents and to provide for payment of the
Obligations in accordance with the terms of this Agreement, the Notes and the
other Loan Documents.
5.12 PERFORMANCE OF OBLIGATIONS.
The Borrower will perform all of its obligations under the terms of
each Lease, Collateral Document and Loan Document, contract or instrument by
which it is bound.
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5.13 CORPORATE SEPARATENESS.
The Borrower will take all such action as is necessary to keep its
operations separate and apart from those of Atlas or any of its Affiliates,
including, without limitation, ensuring that all customary corporate
formalities, including the maintenance of separate corporate records and
documents and holding regular meetings, are followed. Any financial statements
distributed to any creditors of the Borrower shall clearly establish the
corporate separateness of the Borrower from Atlas and each of Atlas's other
Subsidiaries. The Borrower shall not take any action or conduct its affairs in
a manner that is likely to result in the corporate existence of the Borrower on
the one hand and of Atlas or any Subsidiary of Atlas on the other hand being
disregarded, or in the assets and liabilities of Atlas or any Subsidiary of
Atlas being substantively consolidated with those of the Borrower in a
bankruptcy, reorganization or other insolvency proceeding. The Borrower shall
have at all times at least one Independent Director who shall be satisfactory
to the Administrative Agent. The Borrower shall maintain its principal
executive office separate from Atlas or any of its Affiliates, which may be
subleased from Atlas on an arm's-length basis or maintained as provided in the
Service Agreement.
The Borrower shall pay out of its own funds fees for its directors and
salaries of its officers and employees, and shall promptly reimburse any
Affiliate for any services provided to the Borrower by such Affiliate;
provided, however, that Atlas may advance funds on behalf of the Borrower to
pay for the expenses of its organization and funding. All such advances shall
be duly and properly recorded and promptly repaid as intercompany advances. The
Borrower shall not commingle any of its funds or other assets with the funds or
assets of any other entity or person. The Borrower will maintain separate bank
accounts in its own name.
The assets of the Borrower shall be separately identified and
segregated. All of the Borrower's assets shall at all times be held by or on
behalf of the Borrower, and, if held on behalf of the Borrower by another
entity, shall at all times be kept identifiable (in accordance with customary
usages) as assets owned by the Borrower. In no event shall any of the
Borrower's assets be held by Atlas or by any other Affiliate. The Borrower
shall pay from its assets all obligations and indebtedness of any kind incurred
by the Borrower, and shall not pay from its assets any obligations or
indebtedness of any other entity or person. The liabilities of the Borrower
will be separately managed from those of any Affiliate, and all liabilities,
including all administrative expenses, shall be paid from its own separate
assets; provided, however, that the Borrower will be included, to the extent
permitted by law, in the affiliated group of corporations of which Atlas is the
"common parent" for federal income tax returns filed for such affiliated group
by Atlas.
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SECTION 6.
BORROWER'S NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations, unless Requisite Lenders shall otherwise give
prior written consent, the Borrower shall perform all covenants in this Section
6.
6.1 INDEBTEDNESS.
The Borrower shall not, directly or indirectly, create, incur,
assume or guaranty, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness, except that the Borrower may become and
remain liable with respect to the Obligations.
6.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. The Borrower shall not, 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 the Borrower, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any state or under any similar
recording or notice statute, except for Permitted Encumbrances.
B. NO NEGATIVE PLEDGES. The Borrower shall not enter into
any agreement prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired.
6.3 INVESTMENTS; JOINT VENTURES.
The Borrower shall not, directly or indirectly, make or own
any Investment in any Person, including any Joint Venture, except that the
Borrower may make and own Investments in Cash Equivalents.
6.4 CONTINGENT OBLIGATIONS.
The Borrower shall not, directly or indirectly, create or
become or remain liable with respect to any Contingent Obligation.
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6.5 RESTRICTED JUNIOR PAYMENTS.
The Borrower shall not, directly or indirectly, declare,
order, pay, make or set apart any sum for any Restricted Junior Payment;
provided, that the Borrower may make payments pursuant to the Service Agreement
in an aggregate annual amount not to exceed $200,000 per annum; and provided
further, that, so long as no Event of Default or Potential Event of Default has
occurred and is continuing, or would result therefrom, within five Business Days
of any payment made under any of the Leases by Atlas to the Borrower, to the
extent that such payment is in excess of amounts owing to the Lenders under the
Loan Documents, the Borrower may distribute such excess amounts to Atlas as a
dividend, to the extent that the Borrower, after giving effect to such dividend,
has no other liabilities and maintains a reserve of Cash or Cash Equivalents
adequate to fund all expenses of the Borrower (exclusive of payments under the
Loan Documents) to be incurred during the next four quarters following such
dividend.
6.6 RESTRICTION ON FUNDAMENTAL CHANGES, ASSET SALES, ACQUISITIONS, NEW
SUBSIDIARIES.
The Borrower shall not enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, sub-lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or any
part of its business, property or assets, whether now owned or hereafter
acquired, or acquire by purchase or otherwise all or any portion of the
business, property or assets of, or stock or other evidence of beneficial
ownership of, any Person or any division or line of business of any Person or
establish any Subsidiary, except that the Borrower may (i) effect the
Transaction on or prior to the Initial Borrowing Date, (ii) sell no more than
one Aircraft, provided that (x) the net proceeds of any such sale shall be in an
amount at least equal to the outstanding principal amount of all Loans and other
Obligations relating to such Aircraft and (y) the entire amount of the proceeds
of such asset sale are promptly applied in accordance with Section 2.4C(ii)(a)
of this Agreement and (iii) sell, lease or dispose of assets so long as such
transaction is effected in accordance with Section 4(d) or 4(e) of the Aircraft
Chattel Mortgages or Section 9.21 of this Agreement.
6.7 AMENDMENTS OF MATERIAL AGREEMENTS.
The Borrower shall not permit (i) its certificate of
incorporation or bylaws to be amended or otherwise modified in any manner or
(ii) any Lease to be amended or otherwise modified in any manner (other than any
amendment or modification which may be required to give effect to any
transaction permitted by Section 6.6(ii) or Section 9.21 of this Agreement).
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6.8 RESTRICTION ON LEASES.
The Borrower shall not become liable in any way, whether
directly or by assignment or as a guarantor or other surety, for the obligations
of the lessee under any lease, whether such lease be an Operating Lease or a
Capital Lease.
6.9 TRANSACTION WITH SHAREHOLDERS AND AFFILIATES.
The Borrower shall not, directly or indirectly, enter into or
permit to exist any transaction (including, without limitation, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
Atlas or with any other Affiliate of the Borrower; provided, that the foregoing
restriction shall not apply to (i) reasonable and customary fees paid to and
indemnification of members of the Board of Directors of the Borrower, (ii)
reasonable and customary salaries, bonuses and other compensation paid to and
indemnification of employees of the Borrower, (iii) the Transaction and (iv) the
Service Agreement providing for the rendering of accounting, administration and
office services by Atlas to the Borrower on terms consistent with the terms of
similar agreements between unrelated parties, in an aggregate amount not to
exceed $200,000 per annum.
6.10 CONDUCT OF BUSINESS.
(a) From and after the Initial Borrowing Date, the Borrower
shall not engage in any business other than in connection with owning the
Aircraft and Spare Engines or any replacement aircraft and spare engines and
leasing of the Aircraft and Spare Engines or any replacement aircraft and spare
engines to Atlas, and will have no material assets (other than Cash, Cash
Equivalents, the Aircraft and Spare Engines or any replacement aircraft and
spare engines, and the Leases) or liabilities (other than the Loans and other
liabilities that are expressly permitted hereunder); provided, however, that
replacement aircraft and spare engines may be substituted for Aircraft and Spare
Engines only in accordance with the applicable Aircraft Chattel Mortgage.
(b) The Borrower shall not take any action or enter into any
transaction that requires the approval of the Independent Director without the
consent of the Independent Director.
SECTION 7.
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF
DEFAULT") shall occur:
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7.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by the Borrower to pay any installment of principal of
any Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; or failure by the
Borrower to pay any interest on any Loan or any fee or any other amount due
under this Agreement within five days after the date due; or
7.2 DEFAULT UNDER LEASE.
Any Lease shall at any time be terminated (other than by its
terms) or cease to be in full force and effect (other than by its terms), or
there shall exist a Default or a Lease Event of Default under, and as defined
in, any of the Leases; or
7.3 BREACH OF CERTAIN COVENANTS.
Failure of the Borrower to perform or comply in any material
respect with any term or condition contained in subsections 2.5, 5.1(vii), 5.2,
5.13, 6.1, 6.2, 6.5, 6.6, 6.7 or 6.10 of this Agreement or in clauses (i) and
(ii) of Section 4(c), Section 4(d) or Section 4(g) of any Aircraft Chattel
Mortgage; or
7.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement
made by Atlas or the Borrower in any Loan Document or in any Transaction
Document or in any statement or certificate at any time given by Atlas or the
Borrower 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
7.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
The Borrower shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 7,
and such default shall not have been remedied or waived within 15 days after the
earlier of (a) an officer of the Borrower becoming aware of such default or (b)
receipt by the Borrower of notice from the Administrative Agent or any Lender of
such default; or
7.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Borrower in an involuntary case
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, which decree or order is not stayed;
or any other similar relief shall be granted under any applicable federal or
state law; or (ii) an involuntary case shall be commenced against the Bor-
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rower under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over the Borrower, or over all or a substantial part of its property,
shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of the Borrower
for all or a substantial part of its property; or a warrant of attachment,
execution or similar process shall have been issued against any substantial part
of the property of the Borrower, and any such event described in this clause
(ii) shall continue for 60 days unless dismissed, bonded or discharged; or
7.7 VOLUNTARY BANKRUPTCY, APPOINTMENT OF RECEIVER, ETC.
(i) The Borrower 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 for all or a substantial part of its
property; or the Borrower shall make any assignment for the benefit of
creditors; or (ii) the Borrower shall be unable, or shall fail generally, or
shall admit in writing its inability, to pay its debts as such debts become due;
or the Board of Directors of the Borrower (or any committee thereof) shall adopt
any resolution or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or
7.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar
process (not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against the Borrower or any of its assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days (or in any event later
than five days prior to the date of any proposed sale thereunder); or
7.9 DISSOLUTION.
Any order, judgment or decree shall be entered against the
Borrower decreeing the dissolution or split up of the Borrower and such order
shall remain undischarged or unstayed for a period in excess of 30 days; or
7.10 CHANGE IN CONTROL.
Atlas shall cease to own beneficially and to control all of
the issued and outstanding shares of capital stock of the Borrower; or
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7.11 FAILURE OF SECURITY.
Any Collateral Document shall, at any time, cease to be in
full force and effect (other than by reason of a release of Collateral
thereunder in accordance with the terms hereof or thereof, the satisfaction in
full of the Obligations or any other termination of such Collateral Document in
accordance with the terms hereof or thereof) or shall be declared null and void,
or the validity or enforceability thereof shall be contested in writing by the
Borrower, or the Administrative Agent shall not have or shall cease to have a
valid security interest in any Collateral purported to be covered thereby,
perfected and with the priority required by the relevant Collateral Document,
for any reason, subject only to Liens permitted under the applicable Collateral
Documents or the Borrower, as lessor under a Lease or the Administrative Agent,
as assignee of the Borrower's rights under such Lease, shall cease to be
entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to
the rights and remedies under such Lease; or
7.12 LOSS OF UNITED STATES CITIZEN STATUS.
The Borrower for any reason ceases to be a United States
Citizen;
THEN (I) (i) upon the occurrence of any Event of Default described in
subsection 7.6 or 7.7, each of (a) the unpaid principal amount of and accrued
interest on the Loans and (b) all other Obligations shall automatically become
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by the
Borrower, and the obligation of each Lender to make any Loan shall thereupon
terminate and (ii) upon the occurrence and during the continuation of any other
Event of Default, the Administrative Agent shall, upon the written request or
with the written consent of Requisite Lenders, by written notice to the
Borrower, declare all or any portion of the amounts described in clauses (a) and
(b) above to be, and the same shall forthwith become, immediately due and
payable, and the obligation of each Lender to make any Loan shall thereupon
terminate and (II) upon the occurrence of any Event of Default, the
Administrative Agent, upon the written request of the Requisite Lenders, shall,
by written notice to the Borrower, enforce all of the Liens and security
interests created pursuant to the Collateral Documents and exercise all other
remedies at law or in equity or in admiralty available under the Loan Documents.
If, at any time within 60 days after an acceleration of the
Loans pursuant to the preceding paragraph, the Borrower shall pay all arrears of
interest and all payments on account of principal which shall have become due
otherwise than as a result of such acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the rates specified in
this Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case that is due and payable solely by virtue of acceleration) shall be remedied
or waived pursuant to subsection 9.6, then Requisite Lenders, by written notice
to the Borrower, may at their option rescind and annul such acceleration and its
consequences, but such action shall not affect any
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subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind
the Lenders to a decision that may be made at the election of Requisite Lenders
and are not intended to benefit the Borrower and do not grant to the Borrower
the right to require the Lenders to rescind or annul any acceleration hereunder,
even if the conditions set forth herein are met.
SECTION 8.
THE ADMINISTRATIVE AGENT
8.1 APPOINTMENT.
Each Lender hereby appoints Bankers Trust Company as
Administrative Agent hereunder and under the other Loan Documents, and each
Lender hereby authorizes the Administrative Agent to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents. The
Administrative Agent agrees to act upon the express conditions contained in this
Agreement and the other Loan Documents, as applicable. The provisions of this
Section 8 are solely for the benefit of the Administrative Agent and the
Lenders, and the Borrower shall have no rights as a third-party beneficiary of
any of the provisions thereof. In performing its functions and duties under this
Agreement, the Administrative Agent shall act solely as an agent of the Lenders
and does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the Borrower.
8.2 POWERS AND DUTIES; GENERAL IMMUNITY.
X. XXXXXX; DUTIES SPECIFIED. Each Lender irrevocably
authorizes the Administrative Agent to take such action on such Lender's behalf
and to exercise such powers, rights and remedies hereunder and under the other
Loan Documents as are specifically delegated or granted to such Administrative
Agent by the terms hereof and thereof, together with such powers, rights and
remedies as are reasonably incidental thereto. The Administrative Agent shall
have only those duties and responsibilities that are expressly specified in this
Agreement and the other Loan Documents. The Administrative Agent may exercise
such powers, rights and remedies and perform such duties by or through its
agents or employees. The Administrative Agent shall not have, by reason of this
Agreement or any of the other Loan Documents, a fiduciary relationship in
respect of any Lender, and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon the Administrative Agent any obligations in respect of this
Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. The Administrative
Agent shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity,
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enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by the Administrative Agent to any Lender or by or
on behalf of the Borrower to the Administrative Agent or any Lender in
connection with the Loan Documents and the transactions contemplated thereby or
for the financial condition or business affairs of the Borrower or any other
Person liable for the payment of any Obligations, nor shall the Administrative
Agent be required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements contained in
any of the Loan Documents or as to the use of the proceeds of the Loans or as to
the existence or possible existence of any Event of Default or Potential Event
of Default. Anything contained in this Agreement to the contrary
notwithstanding, the Administrative Agent shall not have any liability arising
from confirmations of the amount of outstanding Loans or the component amounts
thereof.
C. EXCULPATORY PROVISIONS. Neither the Administrative Agent
nor any of its officers, directors, partners, employees or agents shall be
liable to the Lenders for any action taken or omitted by the Administrative
Agent under or in connection with any of the Loan Documents except to the extent
caused by their respective gross negligence or willful misconduct. If the
Administrative Agent shall request instructions from the Lenders with respect to
any act or action (including the failure to take an action) in connection with
this Agreement or any of the other Loan Documents, such Administrative Agent
shall be entitled to refrain from such act or taking such action unless and
until such Administrative Agent shall have received instructions from Requisite
Lenders. Without prejudice to the generality of the foregoing, (i) the
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any communication, instrument or document believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons, and shall be entitled to rely and shall be protected in relying on
opinions and judgments of attorneys (who may be attorneys for the Borrower),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against the Administrative
Agent as a result of the Administrative Agent acting or (where so instructed)
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of Requisite Lenders. The Administrative
Agent shall be entitled to refrain from exercising any power, discretion or
authority vested in it under this Agreement or any of the other Loan Documents
unless and until it has obtained the instructions of Requisite Lenders.
D. ADMINISTRATIVE AGENT ENTITLED TO ACT AS LENDER. The
agency hereby created shall in no way impair or affect any of the rights and
powers of, or impose any duties or obligations upon, the Administrative Agent in
its individual capacity as a Lender hereunder. With respect to its
participations in the Loans, the Administrative Agent shall have the same rights
and powers hereunder as any other Lender and may exercise the same as though it
were not performing the duties and functions delegated to it hereunder, and the
term "Lender"
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or "Lenders" or any similar term shall, unless the context clearly otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with the Borrower or any of its Affiliates as if it were not performing
the duties specified herein, and may accept fees and other consideration from
the Borrower for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.
8.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Atlas and
its Subsidiaries (including the Borrower) and the Aircraft and Spare Engines in
connection with the making of the Loans hereunder and that it has made and shall
continue to make its own appraisal of the creditworthiness of Atlas and its
Subsidiaries (including the Borrower). The Administrative Agent shall not have
any duty or responsibility, either initially or on a continuing basis, to make
any such investigation or any such appraisal on behalf of the Lenders or to
provide any Lender with any credit or other information with respect thereto,
whether coming into their possession before the making of the Loans or at any
time or times thereafter, and the Administrative Agent shall not have any
responsibility with respect to the accuracy of or the completeness of any
information provided to the Lenders.
8.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify the Administrative Agent (and its affiliates and partners),
to the extent that the Administrative Agent shall not have been reimbursed by
the Borrower, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including,
without limitation, counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
the Administrative Agent in exercising its powers, rights and remedies or
performing its duties hereunder or under the other Loan Documents or otherwise
in its capacity as Administrative Agent, in any way relating to or arising out
of this Agreement or the other Loan Documents; provided, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Administrative Agent's gross negligence or willful misconduct.
8.5 COLLATERAL DOCUMENTS.
Without limiting the generality of subsection 8.1, each Lender
hereby further authorizes the Administrative Agent to enter into the Collateral
Documents as secured party on behalf of and for the benefit of such Lender and
agrees to be bound by the terms of each of
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the Collateral Documents; provided, that, except as otherwise provided below,
the Administrative Agent shall not enter into or consent to any amendment,
modification, termination or waiver of any provision contained in any Collateral
Document without prior written consent of Requisite Lenders. Anything contained
in any of the Loan Documents to the contrary notwithstanding, each Lender agrees
that no Lender shall have any right individually to realize upon any of the
collateral under any Collateral Document, it being understood and agreed that
all powers, rights and remedies under the Collateral Documents may be exercised
solely by the Administrative Agent for the benefit of the Lenders in accordance
with the terms thereof. Each Lender hereby authorizes the Administrative Agent
(i) to release or subordinate Collateral as permitted or required under this
Agreement or the Collateral Documents, and agrees that a certificate executed by
the Administrative Agent evidencing such release of Collateral shall be
conclusive evidence of such release as to any third party and (ii) to enter into
any amendments of the Collateral Documents to cure any ambiguity, defect or
inconsistency or to amend provisions relating to ministerial or administrative
matters that do not materially adversely affect the rights of the Lenders
thereunder.
8.6 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign at any time by giving 30
days' prior written notice thereof to the Lenders and the Borrower. Upon any
such notice of resignation, Requisite Lenders shall have the right, upon
consultation with the Borrower, to appoint a successor Administrative Agent.
Upon the acceptance of any appointment hereunder by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent and the retiring or removed Administrative Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Section 8 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
SECTION 9.
MISCELLANEOUS
9.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS.
A. GENERAL. Each Lender shall have the right at any time (i)
to sell, assign or transfer to any Eligible Assignee, or (ii) to sell
participations to any Person in, all or any part of its Commitment or any Loan
or Loans made by it or any other interest herein or in any other Obligations
owed to it, so long as no such sale, assignment, transfer or participation
shall, without the consent of the Borrower, require the Borrower to file a
registration state-
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ment with the Securities and Exchange Commission or apply to qualify such sale,
assignment, transfer or participation under the securities laws of any state;
provided, that no such sale, assignment or transfer described in clause (i)
above shall be effective unless and until an Assignment Agreement effecting such
sale, assignment or transfer shall have been accepted by the Administrative
Agent and recorded in the Register as provided in subsection 9.1B(ii). Except as
otherwise provided in this subsection 9.1, no Lender shall, as between the
Borrower and such Lender, be relieved of any of its obligations hereunder as a
result of any sale, assignment or transfer of, or any granting of participations
in, all or any part of its Commitment or the Loans, or the other Obligations
owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment, Loan
or other Obligation may (a) be assigned in any amount to another Lender, or to
an Affiliate or Related Fund of the assigning Lender or another Lender, with the
giving of notice to the Borrower and the Administrative Agent or (b) be assigned
in an aggregate amount of not less than $5,000,000 (or such lesser amount as
shall constitute the aggregate amount of the Commitments, Loans, and other
Obligations of the assigning Lender) to any other Eligible Assignee with the
giving of notice to the Borrower and with the consent of the Administrative
Agent and the Borrower (which consent shall not be unreasonably withheld or
delayed) unless (I) an Event of Default shall have occurred and be occurring or
(II) such assignment is consented to by the Administrative Agent within 15 days
after the Initial Borrowing Date, in each of which cases the consent of the
Borrower to such assignment shall not be required. Any assignment of Loans
hereunder shall effect a pro rata assignment of the Notes with respect to each
Aircraft or Spare Engine Pool. To the extent of any such assignment in
accordance with either clause (a) or (b) above, the assigning Lender shall be
relieved of its obligations with respect to its Commitment, Loans, or other
Obligations or the portion thereof so assigned. The parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment Agreement, together with
a processing and recordation fee of $3,000 and such forms, certificates or other
evidence, if any, with respect to United States federal income tax withholding
matters as the assignee under such Assignment Agreement may be required to
deliver to the Administrative Agent pursuant to subsection 2.7B(iii)(a);
provided, however, that such processing fee shall not be required where the
assignee is an existing Lender. Upon such execution, delivery, acceptance and
recording from and after the effective date specified in such Assignment
Agreement, (y) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and (z) the assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment Agreement, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment Agreement covering all
or the remaining portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto);
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provided further, however, that the assigning Lender shall retain any right to
payment accrued under subsections 2.6C, 2.6D, 2.7, 9.2 or 9.3 unless such rights
are explicitly assigned to the assignee in the Assignment Agreement. The
Commitments hereunder shall be modified to reflect the Commitment of such
assignee and any remaining Commitment of such assigning Lender and, if any such
assignment occurs after the issuance of the Notes hereunder, the assigning
Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its applicable Notes to the Administrative
Agent for cancellation, and thereupon new Notes shall be issued to the assignee
substantially in the form of Exhibit IIA annexed hereto or Exhibit IIB annexed
hereto, as appropriate, with appropriate insertions, to reflect the new
Commitment or outstanding Loans, as the case may be, of the assignee and/or the
assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee, together
with the processing and recordation fee referred to in subsection 9.1B(i) and
any forms, certificates or other evidence with respect to United States federal
income tax withholding matters that such assignee may be required to deliver to
the Administrative Agent pursuant to subsection 2.7B(iii)(a), the Administrative
Agent shall, if such Assignment Agreement has been completed and is in
substantially the form of Exhibit V hereto, and if the Administrative Agent and
the Borrower have consented to the assignment evidenced thereby to the extent
that such consent is required pursuant to subsection 9.1B(i), (a) accept such
Assignment Agreement by executing a counterpart thereof as provided therein
(which acceptance shall evidence any required consent of the Administrative
Agent and the Borrower to such assignment), (b) record the information contained
therein in the Register and (c) give prompt notice thereof to the Borrower. The
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection 9.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other
than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder
except action directly affecting (i) the extension of the Final Maturity Date
of any Loan allocated to such participation, (ii) a reduction of the principal
amount of or the rate of interest payable on any Loan allocated to such
participation or (iii) a release of Collateral, and all amounts payable by the
Borrower hereunder (including, without limitation, amounts payable to such
Lender pursuant to subsections 2.6D and 2.7) shall be determined as if such
Lender had not sold such participation. The Borrower and each Lender hereby
acknowledge and agree that, solely for purposes of subsection 9.5, (a) any
participation will give rise to a direct obligation of the Borrower to the
participant and (b) the participant shall be considered to be a "Lender."
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS AND OTHERS. In
addition to the assignments and participations permitted under the foregoing
provisions of this subsection
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9.1, any Lender may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender, and its Notes to (i) any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any operating circular issued by such Federal
Reserve Bank or (ii) if such Lender is a "fund", to any holders of obligations
owed or securities issued by such fund as security for such obligations or
securities, or to any trustee for, or any representative of, such holders;
provided, that (i) no Lender shall, as between the Borrower and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank or lender be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information
concerning the Borrower in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to subsection 9.19.
9.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, the Borrower agrees to pay promptly (i) all the actual and
reasonable costs and expenses of preparation of the Loan Documents; (ii) all the
costs of furnishing all opinions by counsel for the Borrower (including, without
limitation, any opinions requested by the Lenders as to any legal matters
arising hereunder) and of the Borrower's performance of and compliance with all
agreements and conditions on its part to be performed or complied with under
this Agreement and the other Loan Documents, including, without limitation, with
respect to confirming compliance with environmental and insurance requirements;
(iii) the reasonable fees, expenses and disbursements of counsel to the
Administrative Agent in connection with the negotiation, preparation, execution
and administration of the Loan Documents and the Loans and any consents,
amendments, waivers or other modifications hereto or thereto and any other
documents or matters requested by the Borrower; (iv) all the costs and expenses
of creating and perfecting the Liens in favor of the Administrative Agent for
the benefit of the Lenders pursuant to the Loan Documents, including filing and
recording fees and expenses, title insurance, fees and expenses of counsel for
providing such opinions as the Lenders may reasonably request and fees and
expenses of legal counsel to the Administrative Agent (including local
counsel); (v) all other actual and reasonable costs and expenses incurred by the
Administrative Agent in connection with the syndication of the Commitments and
the Loans and the negotiation, preparation and execution of the Loan Documents
and the transactions contemplated hereby and thereby, provided that such costs
and expenses of syndication shall not exceed $25,000; and (vi) after the
occurrence of an Event of Default, all costs and expenses, including reasonable
attorneys' fees (including allocated costs of internal counsel) and costs of
settlement, incurred by the Administrative Agent and the Lenders in enforcing
any Obligations of or in collecting any payments due from the Borrower hereunder
or under the other Loan Documents by reason of such Event of Default or in
connection with any refinancing or re-
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structuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings.
9.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection
9.2, whether or not the transactions contemplated hereby shall be consummated,
the Borrower agrees to defend, indemnify, pay and hold harmless the
Administrative Agent and the Lenders, and the officers, directors, partners,
employees, agents and affiliates of the Administrative Agent and the Lenders
(collectively called the "INDEMNITEES") from and against any and all other
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 in connection with any investigative, administrative or
judicial proceeding, commenced or threatened by any Person, whether or not any
such Indemnitee shall be designated as a party or a potential party thereto),
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, rules or regulations and
Environmental Laws), 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 relating to or arising out of this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby
(including, without limitation, the Lenders' agreement to make the Loans
hereunder, or the use or intended use of the proceeds of any of the Loans) or
the statements contained in the commitment letter delivered by any Lender to the
Borrower with respect thereto (collectively called the "INDEMNIFIED
LIABILITIES"); provided, that the Borrower shall not have any obligation to any
Indemnitee hereunder with respect to any Indemnified Liabilities to the extent
such Indemnified Liabilities arise solely from the gross negligence or willful
misconduct of that Indemnitee as determined by a final judgment of a court of
competent jurisdiction. To the extent that the undertaking to defend, indemnify,
pay and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, the Borrower 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.
9.4 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 of any Event of Default each Lender is hereby authorized by the
Borrower at any time or from time to time, without notice to the Borrower or to
any other Person, any such notice being hereby expressly waived, 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, but not including trust accounts) and any other
Indebtedness at any time held or owing by that
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Lender to or for the credit or the account of the Borrower against and on
account of the obligations and liabilities of the Borrower to that Lender under
this Agreement, its 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 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 Loans or any other amounts due hereunder
shall have become due and payable pursuant to Section 7 and although said
obligations and liabilities, or any of them, may be contingent or unmatured.
9.5 RATABLE SHARING.
The Lenders 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 that
Lender hereunder or under the other Loan Documents (collectively, the "AGGREGATE
AMOUNTS DUE" to such Lender) that is greater than the proportion received by any
other Lender in respect of the Aggregate Amounts Due to such other Lender, then
the Lender receiving such proportionately greater payment shall (i) notify the
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders 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 is thereafter recovered from
such Lender upon the bankruptcy or reorganization of the Borrower or otherwise,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender 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.
9.6 AMENDMENTS AND WAIVERS.
A. No amendment, modification, termination or waiver of any
provision of this Agreement or any of the other Loan Documents (other than any
amendment, modification, termination or waiver which may be required to effect
the replacement of any Engine or any Airframe in accordance with Section 9.21 of
this Agreement or the sale of a single Aircraft in accordance with Section
6.6(ii) of this Agreement), or consent to and departure by the
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Borrower therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided, that any such amendment,
modification, termination, waiver or consent that: increases the amount of any
of the Commitments or reduces the principal amount of any of the Loans; changes
any Lender's Tranche A Pro Rata Share or Tranche B Pro Rata Share; changes in
any manner the definition of "Requisite Lenders;" changes in any manner any
provision of this Agreement that, by its terms, expressly requires the approval
or concurrence of all Lenders; postpones the Final Maturity Date (but not the
date of any scheduled installment of principal) of any of the Loans; postpones
the date on which any interest or any fees are payable; decreases the interest
rate borne by any of the Loans (other than any waiver of any increase in the
interest rate applicable to any of the Loans pursuant to subsection 2.2D) or the
amount of any fees payable hereunder; releases all or substantially all of the
Collateral; or changes in any manner the provisions contained in this subsection
9.6 shall be effective only if evidenced by a writing signed by or on behalf of
all Lenders to whom are owed Obligations being directly affected by such
amendment, modification, termination, waiver or consent. In addition, (i) no
amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the Lender that is the
holder of that Note, (ii) no increase in the Commitment of any Lender over the
amount thereof then in effect shall be effective without the written concurrence
of that Lender, it being understood and agreed that in no event shall waivers or
modifications of conditions precedent, covenants, Events of Default, Potential
Events of Default or of a mandatory prepayment or a reduction of any or all of
the Commitments be deemed to constitute an increase of the Commitment of any
Lender, and that an increase in the available portion of any Commitment of any
Lender shall not be deemed to constitute an increase in the Commitment of such
Lender and (iii) no amendment, modification, termination or waiver of any
provision of Section 8 or of any other provision of this Agreement that, by its
terms, expressly requires the approval or concurrence of the Administrative
Agent shall be effective without the written concurrence of such Administrative
Agent. No change shall be made (x) to Section 2.4B(a) or (b) without the consent
of the holders of a majority of principal of the Tranche A Loans or Tranche B
Loans, respectively, and (y) to Section 2.4C(iii) without the consent of the
holders of a majority of principal of each of the Tranche A Loans and Tranche B
Loans. The Administrative Agent may, but shall have no obligation to, with the
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. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 9.6 shall be binding upon each Person who was a Lender at
the time of such amendment, modification, termination, waiver or consent, upon
each Person who subsequently becomes a Lender and, if signed by the Borrower,
upon the Borrower.
B. If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by the proviso in the first
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sentence of this subsection 9.6, the consent of Requisite Lenders is obtained
but consent of one or more of such other Lenders whose consent is required is
not obtained, then the Borrower may, so long as all non-consenting Lenders are
so treated, elect to terminate such Lender as a party to this Agreement, so long
as, concurrently with such termination, (i) the Borrower pays to that Lender all
principal, interest and fees and other amounts owed to such Lender through such
date of termination, (ii) another financial institution satisfactory to the
Borrower and the Administrative Agent (or if the Administrative Agent is also
the Lender to be terminated, the successor Administrative Agent) agrees, as of
such date, to become a Lender for all purposes under this Agreement (whether by
assignment or amendment) and to assume all obligations of the Lender to be
terminated as of such date, and (iii) all documents and supporting materials
necessary, in the judgment of the Administrative Agent (or if the Administrative
Agent is also the Lender to be terminated, the successor Administrative Agent)
to evidence the substitution of such Lender have been received and approved by
the Administrative Agent as of such date.
9.7 INDEPENDENCE OF COVENANTS.
All covenants under this Agreement shall be given independent
effect so that 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 Potential Event of Default if such action
is taken or condition exists.
9.8 NOTICES.
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, telexed or sent by telefacsimile or United States
mail or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided, that notices to the Administrative Agent shall
not be effective until received. For the purposes hereof, the address of each
party hereto shall be as set forth under such party's name on the signature
pages hereof or (i) as to the Borrower and the Administrative Agent, such other
address as shall be designated by such Person in a written notice delivered to
the other parties hereto and (ii) as to each other party, such other address as
shall be designated by such party in a written notice delivered to the
Administrative Agent.
9.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made
herein shall survive the execution and delivery of this Agreement and the making
of the Loans hereunder.
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B. Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of the Borrower set forth in subsections
2.6D, 2.7, 9.2, 9.3 and 9.4 and the agreements of the Lenders set forth in
subsections 8.2C, 8.4 and 9.5 shall survive the payment of the Loans, and the
termination of this Agreement.
9.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Administrative Agent or
any Lender in the exercise of any power, right or privilege hereunder or under
any other Loan Document shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement and the other Loan Documents
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
9.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither the Administrative Agent nor any Lender shall be under
any obligation to marshal any assets in favor of the Borrower or any other party
or against or in payment of any or all of the Obligations. To the extent that
the Borrower makes a payment or payments to the Administrative Agent or Lenders
(or to the Administrative Agent for the benefit of the Lenders), or the
Administrative Agent or Lenders enforce any security interests or exercise their
rights of set-off, and such payment or payments or the proceeds of such
enforcement or set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law, the law of admiralty or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or set-off had
not occurred.
9.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or
the Notes 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.
9.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of the Lenders hereunder are several and no
Lender shall be responsible for the obligations or Commitments of any other
Lender hereunder. Nothing contained herein or in any other Loan Document, and no
action taken by any Lenders pursuant
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hereto or thereto, shall be deemed to constitute the Lenders as a partnership,
an association, a joint venture or any other kind of entity. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights arising out
of this Agreement, and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.
9.14 HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
9.15 APPLICABLE LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
9.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of the Lenders (it being
understood that the Lenders' rights of assignment are subject to subsection
9.1). Neither the Borrower's rights or obligations hereunder nor any interest
therein may be assigned or delegated by the Borrower without the prior written
consent of all Lenders.
9.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE BORROWER ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY
OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH OBLIGATION (SUBJECT TO ANY RIGHT TO
APPEAL TO A COURT IN THE STATE OF NEW YORK). The Borrower hereby agrees that
service of all process in any such proceeding in any such court may be made by
registered or certified
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mail, return receipt requested, to the Borrower at its address provided in
subsection 9.8, such service being hereby acknowledged by the Borrower to be
sufficient for personal jurisdiction in any action against the Borrower in any
such court and to be otherwise effective and binding service in every respect.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Lender to bring proceedings
against the Borrower in the courts of any other jurisdiction.
9.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including, without limitation, contract claims, tort claims, breach of duty
claims and all other common law and statutory claims. Each party hereto
acknowledges that this waiver is a material inducement to enter into a business
relationship, that each has already relied on this waiver in entering into this
Agreement, and that each will continue to rely on this waiver in their related
future dealings. Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
9.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained
pursuant to the requirements of the Transaction Documents that has been
identified as confidential by the Borrower in accordance with such Lender's
customary procedures for handling confidential information of this nature, it
being understood and agreed by the Borrower that in any event a Lender may make
disclosures to any Person who evaluates, approves, structures or administers the
Loans on behalf of a Lender and who is subject to this confidentiality
provision, or, subject to this Section 9.19, reasonably required by any bona
fide assignee, transferee or participant in connection with the contemplated
assignment or transfer by such Lender of any Loans or any participation therein
(at which time, any such assignee, transferee or participant shall be bound by
this Section 9.19) or as required or requested by any governmental or regu-
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latory agency (including, without limitation, the National Association of
Insurance Commissions) or representative thereof or pursuant to legal process or
in accordance with any applicable law or regulation; provided, that, unless
specifically prohibited by applicable law or court order, each Lender shall
notify the Borrower of any request by any governmental or regulatory agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental or
regulatory agency) for disclosure of any such non-public information prior to
disclosure of such information; and provided further, that in no event shall any
Lender be obligated or required to return any materials furnished by the
Borrower.
9.20 COUNTERPARTS; EFFECTIVENESS.
A. This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
B. This Agreement shall become effective upon the execution
of a counterpart hereof by each of the parties hereto and receipt by the
Borrower and the Administrative Agent of written or telephonic notification of
such execution and authorization of delivery thereof (the "EFFECTIVE DATE").
9.21 REPLACEMENT ENGINES AND AIRFRAMES.
A. ENGINES. So long as no Event of Default or Potential
Event of Default has occurred and is continuing, the Borrower may, upon not less
than 5 Business Days' prior written notice to the Administrative Agent, replace
any Engine that is the subject of an Aircraft Chattel Mortgage with another
engine (the "Replacement Engine") meeting the requirements of the applicable
Aircraft Chattel Mortgage and the requirements of an Acceptable Alternate
Engine. In addition to the requirements of the preceding sentence, any
Replacement Engine shall be an engine that is the same or improved make and
model as the Engine to be replaced, and that is suitable for installation and
use on any Airframe (or any Boeing 747-400 aircraft operated by Atlas) and that
has a value, utility and remaining useful life (including with respect to hours
and cycles remaining until overhaul) at least equal to the Engine to be replaced
thereby.
The Lenders agree to release the Lien created by the
applicable Aircraft Chattel Mortgage for any Engine to be replaced by a
Replacement Engine promptly upon (i) presentation by the Borrower of
documentation necessary to create a legal, valid and enforceable first priority
security interest in and to the Replacement Engine, (ii) delivery to the
Adminis-
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trative Agent of an opinion of Xxxxxx Xxxxxx & Xxxxxxx, or such other counsel as
may be acceptable to the Administrative Agent, confirming that the Borrower (and
the Administrative Agent upon succeeding to the Borrower's interest in the
applicable Lease) will continue to be entitled to the benefits of Section 1110
of the Bankruptcy Code with respect to such Replacement Engine free of all Liens
(other than Permitted Encumbrances and the applicable Lease) and (iii) receipt
of all other deliveries required by Section 4(f)(ii) of the applicable Aircraft
Chattel Mortgage.
B. AIRFRAMES. So long as no Event of Default or Potential
Event of Default has occurred and is continuing, the Borrower may, upon not less
than 5 Business Days' prior notice to the Administrative Agent, replace any
Airframe that is the subject of an Aircraft Chattel Mortgage with another
airframe (the "Replacement Airframe") meeting the requirements of the applicable
Aircraft Chattel Mortgage and the requirements of an Acceptable Alternate
Airframe; provided that, no more than two Airframes may be replaced by the
Borrower pursuant to this subsection 9.21B. In addition to the requirements of
the preceding sentence, any Replacement Airframe shall be an airframe that is
the same or improved make and model as the Airframe to be replaced and that has
a value, utility and remaining useful life (including with respect to hours and
cycles remaining until overhaul) at least equal to the Airframe to be replaced
thereby.
The Lenders agree to release the Lien created by the
applicable Aircraft Chattel Mortgage for any Airframe to be replaced by a
Replacement Airframe promptly upon (i) presentation by the Borrower of
documentation necessary to create a legal, valid and enforceable first priority
security interest in and to the Replacement Airframe, (ii) delivery to the
Administrative Agent of an opinion of Xxxxxx Xxxxxx & Xxxxxxx, or such other
counsel as may be acceptable to the Administrative Agent, confirming that the
Borrower (and the Administrative Agent upon succeeding to the Borrower's
interest in the applicable Lease) will continue to be entitled to the benefits
of Section 1110 of the Bankruptcy Code with respect to such Replacement Airframe
free of all Liens (other than Permitted Encumbrances and the applicable Lease)
and (iii) receipt of all other deliveries required by Section 4(f)(ii) of the
applicable Aircraft Chattel Mortgage.
C. FURTHER ASSURANCES. The Borrower shall, in addition to
the actions required by the preceding subsections 9.21A and 9.21B, take all
necessary actions to provide that the Borrower (and the Administrative Agent
upon succeeding to the Borrower's interest in the applicable Lease) will
continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code
with respect to each Replacement Engine and each Replacement Airframe, in each
case free of all Liens (other than Permitted Encumbrances and the applicable
Lease).
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
ATLAS FREIGHTER LEASING III, INC.
By: /s/ Xxxx X. xxXxxxx
---------------------------------
Title: Vice President
Notice Address:
000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Executive Vice President - Strategic Planning and
Treasurer
BANKERS TRUST COMPANY, as Administrative
Agent and Lender
By: /s/ Xxxxxxxxxx Xxxxxx
----------------------------
Title: Vice President
Notice Address:
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxx Xxxxxx
LENDERS:
DEUTSCHE VERKEHRSBANK AG
By: /s/ Xxxxxxxxx Xxxxxxxxxxxxxx
--------------------------------------
Title: Senior Vice President
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Title: Assistant Vice President
FIRST SECURITY BANK, N.A.
By: /s/ Xxxx Xxxxxxxxx
--------------------------------------
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Title: Vice President
GMAC COMMERCIAL CREDIT LLC
By: /s/ Xxx Xxxxxxx
--------------------------------------
Title: Executive Vice President
IMPERIAL BANK
By: /s/ Xxx Xxxxxxx
--------------------------------------
Title: Senior Managing Director
NORWEST BANK COLORADO NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Title: Vice President
SUMMIT BANK
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Title: Vice President
UNION PLANTERS BANK
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------------
Title: Senior Vice President
U.S. BANK N.A.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Vice President
KZH CNC LLC
By: /s/ Xxxxx Xxx
--------------------------------------
Title: Authorized Agent
KZH CYPRESSTREE-1 LLC
By: /s/ Xxxxx Xxx
--------------------------------------
Title: Authorized Agent
NORTH AMERICAN SENIOR FLOATING RATE FUND
By: CYPRESSTREE INVESTMENT
MANAGEMENT COMPANY, INC.
as Portfolio Manager
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Title: Principal
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CYPRESSTREE INVESTMENT FUND, LLC
By: CYPRESSTREE INVESTMENT
MANAGEMENT COMPANY, INC.
its Managing Member
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Title: Principal
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
By: CYPRESSTREE INVESTMENT
MANAGEMENT COMPANY, INC.
as Attorney-in-Fact and on behalf of First
Allmerica Financial Life Insurance Company as
Portfolio Manager
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Title: Principal
KZH ING-1 LLC
By: /s/ Xxxxx Xxx
--------------------------------------
Title: Authorized Agent
KZH ING-2 LLC
By: /s/ Xxxxx Xxx
--------------------------------------
Title: Authorized Agent
KZH ING-3 LLC
By: /s/ Xxxxx Xxx
--------------------------------------
Title: Authorized Agent
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