AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT
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AMENDMENT
NO. 2 TO
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THIS
AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT
(this
"Amendment"),
dated
as of the 21st day of March, 2007, made by and among
BANK
OF AMERICA, N.A.,
a
national banking association (the "Lender");
CHAUTAUQUA
AIRLINES, INC.,
an
Indiana corporation, REPUBLIC
AIRWAYS HOLDINGS INC.,
a
Delaware corporation, REPUBLIC
AIRLINE INC., an
Indiana corporation, and SHUTTLE
AMERICA CORPORATION,
an
Indiana corporation (the "Borrowers"),
to
the
Loan and Security Agreement, dated December 9, 1998, as previously amended
by
the Joinder and Consolidated Amendment thereto, dated May 15, 2006 (such Loan
and Security Agreement, as amended, modified, restated or supplemented from
time
to time, the "Loan
Agreement"),
between the Borrowers and the Lender. All capitalized terms used herein without
definition shall have the meanings ascribed to such terms in the Loan
Agreement.
RECITALS
A. Pursuant
to the Loan Agreement, the Lender has agreed to make loans and extend credit
to
the Borrowers secured by all of the Collateral. As of the date of this
Amendment, there are no Revolving Loans or Equipment Loans outstanding under
the
Loan Agreement and the Term Loan has been paid in full.
B. The
Borrowers have requested that the Lender extend the term of the Loan Agreement
to March 31, 2009. The Lender has agreed to such request provided, among other
things, (i) the Revolving Facility Amount be reduced to the sum of $15 million,
(ii) the Borrowers agree that they may no longer request, and the Lender shall
no longer be obligated to make, any Revolving Loans except solely for the
purposes of paying any Obligations owing to the Lender when due, (ii) the
obligation of the Lender to make any further Equipment Loans to the Borrowers
be
terminated, (iii) the Spare Parts Borrowing Base be reduced, (iv) an additional
financial covenant be included in the Loan Agreement measuring the liquidity
of
the Borrowers, (v) the Borrowers pay to the Lender a quarterly facility fee
during the term of the extended Loan Agreement, and (vi) the Loan Agreement
is
otherwise amended as herein set forth.
C. To
accomplish the foregoing, the Borrowers and the Lender have agreed to enter
into
this Amendment.
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STATEMENT
OF AGREEMENT
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NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby expressly
acknowledged, the Borrowers and the Lender hereby agree as follows:
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ARTICLE
I
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AMENDMENTS
TO LOAN AGREEMENT
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The
Loan
Agreement is hereby amended as follows:
1.1. Definitions.
Appendix
A to the Loan Agreement is amended as follows:
(a) The
definition of "Spare Parts Advance Rate" is deleted in its entirety.
(b) The
definition of "Spare Parts Borrowing Base" is amended in its entirety to read
as
follows:
"Spare
Parts Borrowing Base
- at any
date of determination thereof, the sum of the following:
(i) the
aggregate value at such date of those Eligible Spare Parts consisting of ERJ
Spare Parts which are Rotables times thirty percent (30%); plus
(ii) the
aggregate value at such date of those Eligible Spare Parts consisting of ERJ
Spare Parts which are not Rotables times fifteen percent (15%),
in
each
case with value calculated on the basis of the lower of (1) net book value,
as
calculated in accordance with GAAP, or (2) appraised orderly liquidation value
based upon the Lender's most recent Spare Parts Collateral
Appraisal."
(c) The
definition of "Revolver Facility Amount" is amended in its entirety to read
as
follows:
"Revolver
Facility Amount
- At any
date of determination thereof, the sum of $15,000,000, as such amount may be
reduced by Borrower pursuant to Section 1.4 of the Agreement."
1.2. Credit
Facility.
Section
1, Credit
Facility,
is
amended as follows:
(a) The
first
un-numbered paragraph is amended by deleting the figure "25,400,000" and by
substituting in lieu thereof the figure "15,000,000".
(b) Section
1.1.1, Revolver
Loans,
is
amended by adding the following sentence at the end thereof:
"Notwithstanding
any term or provision of this Agreement to the contrary, Borrower shall not
request, and Lender shall not be obligated to make, any Revolver Loan to
Borrower under this Agreement except a Revolver Loan that is deemed requested
pursuant to Section 3.1.1(ii) of this Agreement that is used solely and
exclusively for the purposes of paying an Obligation owing to Lender when
due."
(c) Sections
1.1.2, Term
Loan,
and
1.1.3, Equipment
Loans,
are
each deleted in their entirety.
1.3. Letters
of Credit.
Section
1.2.1 is amended in its entirety to read as follows:
"1.2.1 Issuance
of Letters of Credit and Letter of Credit Guaranties.
Lender
agrees, for so long as no Default or Event of Default exists and subject to
the
provisions of Section 10 below, to issue Letters of Credit and Letter of Credit
Guaranties, as requested by Borrower, provided that (a) the Letter of Credit
Amount at any time shall not exceed the Revolver Facility Amount and (b) without
Lender's consent in each instance, no Letter of Credit or Letter of Credit
Guaranty may have an expiration date that is after the last day of the Original
Term. Any amounts paid by Lender under any Letter of Credit Guaranty or in
connection with any Letter of Credit shall be treated as Revolver Loans, shall
be secured by all of the Collateral and shall bear interest and be payable
at
the same rate and in the same manner as the Revolver Loans."
1.4. Use
of
Proceeds of Revolver Loans.
Section
1.3 is amended in its entirety to read as follows:
"1.3 Use
of
Proceeds of Revolver Loans.
Borrower shall use the proceeds of each Revolver Loan solely and exclusively
for
the purposes of paying an Obligation owing to Lender when due."
1.5. Facility
Fee.
A new
Section 2.2.6 is added as follows:
"2.2.6 Facility
Fee.
On the
first day of each calendar quarter, commencing on April 1, 2007 and continuing
on the first day of each calendar quarter thereafter for so long as this
Agreement is in effect, Borrower shall pay to Lender a quarterly facility fee
of
$15,000. Each installment of the facility fee shall be deemed fully earned
when
due and non-refundable once paid."
1.6 Payment
of Principal of Revolver Loans.
Section
4.2 is amended in its entirety to read as follows:
"4.2 Payment
of Principal of Revolver Loans.
Any
Revolver Loans made by Lender pursuant to this Agreement shall be paid by
Borrower to Lender immediately upon the earlier of (a) one (1) Business Day
after Lender's making thereof or (b) the termination of this Agreement by
Borrower or Lender pursuant to Section 5 hereof."
1.7. Mandatory
Prepayments and Optional Prepayments.
Sections 4.5 and 4.6 are each deleted in their entirety and in lieu thereof
is
substituted the phrase "RESERVED".
1.8. Term
of Loan Agreement.
Section
5.2 is amended in its entirety to read as follows:
"5.1 Term
of Agreement.
Subject
to Lender's right to cease making Loans to Borrower during the existence of
any
Default or Event of Default, this Agreement shall be in effect for a period
from
the date of this Agreement until March 31, 2009 (the "Original Term"), unless
terminated as provided in Section 5.2 hereof."
1.9. Financial
Covenants.
Section
9.3 is amended by adding an additional Section 9.3.3, Liquidity,
as
follows:
"9.3.3 Liquidity.
Borrower and its Subsidiaries shall maintain at all times unrestricted cash
and
Cash Equivalents of not less than $100,000,000."
1.10. Conditions
to Equipment Loans. Section 10.2 of the Loan Agreement is deleted in its
entirety and in lieu thereof is substituted the phrase "RESERVED".
1.11. Compliance
Certificate.
Exhibit
D attached to the Loan Agreement is deleted and in lieu thereof is substituted
Exhibit D attached to this Amendment.
1.12. Term
Loan and Equipment Loans.
All
references in the Loan Agreement to the Term Loan and the Equipment Loans are
deleted.
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ARTICLE
II
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REPRESENTATIONS
AND WARRANTIES OF
BORROWERS
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The
Borrowers hereby jointly and severally represent and warrant to the Lender
that
as of the date hereof:
2.1. Corporate
Power and Authority.
The
execution and delivery by the Borrowers and the performance by them of the
transactions herein contemplated: (i) are and will be within their respective
powers; (ii) have been authorized by all necessary corporate action; and (iii)
do not and will not (i) require any consent or approval of the shareholders
of
the Borrowers which has not been obtained; (ii) contravene any Borrower's or
any
of its respective Subsidiaries' charter, articles or certificate of
incorporation or by-laws; (iii) violate, or cause any Borrower or any of its
respective Subsidiaries to be in default under, any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
in
effect having applicability to such Borrower or any of its respective
Subsidiaries; (iv) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which any Borrower or any of its respective Subsidiaries is a
party or by which it or its respective Properties may be bound or affected
that
may reasonably be expected to have a Material Adverse Effect; or (v) result
in,
or require, the creation or imposition of any Lien (other than Permitted Liens)
upon or with respect to any of the Properties now owned or hereafter acquired
by
any Borrower or any of its respective Subsidi-aries.
2.2. Compliance
with the Loan Agreement and Other Loan Documents.
Each
Borrower is in compliance with all of the terms and provisions set forth in
the
Loan Agreement as amended hereby and in the other Loan Documents to be observed
or performed by such Borrower, except where the failure of such Borrower to
comply has been waived in writing by the Lender.
2.3. Representations
in Loan Agreement and other Loan Documents.
The
representations and warranties of the Borrowers set forth in the Loan Agreement
as amended hereby and the other Loan Documents are true and correct in all
material respects as of the date hereof except to the extent that such
representations and warranties relate solely to or are specifically expressed
as
of a particular date or period which is past or expired as of the date
hereof.
2.4. No
Event of Default.
No
Default or Event of Default exists.
ARTICLE
III
MODIFICATION
OF LOAN DOCUMENTS;
RELEASE
OF CLAIMS BY BORROWERS
3.1. Loan
Documents.
The
Loan Agreement and each of the other Loan Documents are amended to provide
that
any reference to the Loan Agreement in the Loan Agreement or any of the other
Loan Documents shall mean the Loan Agreement as amended by this Amendment,
and
as it is further amended, restated, supplemented or modified from time to
time.
3.2. Release
of Claims.
To
induce the Lender to enter into this Amendment, and in consideration thereof,
each Borrower hereby releases, acquits and forever discharges the Lender and
the
Lender's officers, directors, agents, employees, successors and assigns, from
all liabilities, claims, demands, actions or causes of action of any kind (if
any there be), whether absolute or contingent, due or to become due, disputed
or
undisputed, at law or in equity, that the Borrowers or any of them now has
or
ever had against the Lender arising under or in connection with the Loan
Agreement, any of the other Loan Documents or otherwise.
ARTICLE
IV
GENERAL
4.1. Full
Force and Effect.
As
expressly amended hereby, the Loan Agreement shall continue in full force and
effect in accordance with the provisions thereof. As used in the Loan Agreement,
"hereinafter", "hereto", "hereof" or words of similar import, shall, unless
the
context otherwise requires, mean the Loan Agreement as amended by this
Amendment.
4.2 Applicable
Law.
This
Amendment shall be governed by and construed in accordance with the internal
laws and judicial decisions of the State of North Carolina.
4.3 Counterparts.
This
Amendment may be executed in one or more counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute
but one and the same instrument.
4.4 Expenses.
The
Borrower shall reimburse the Lender for all reasonable legal fees and expenses
incurred by the Lender in connection with the preparation, negotiation,
execution and delivery of this Amendment and all other agreements and documents
or contemplated hereby.
4.5. Headings.
The
headings in this Amendment are for the purpose of reference only and shall
not
affect the construction of this Amendment.
4.6 Waiver
of Jury Trial.
TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE EXISTING BORROWER, THE JOINING
BORROWERS AND THE LENDER EACH WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS
AMENDMENT, THE LOAN AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO.
[Signatures
Begin on the Next Page]
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
and delivered on the date first above written.
| Borrowers: |
| CHAUTAUQUA AIRLINES, INC. | ||
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| By: | /s/ Xxxxxx X. Xxxxxx | |
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| Title: EVP & CFO | ||
| REPUBLIC AIRWAYS HOLDINGS INC. | ||
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| By: | /s/ Xxxxxx X. Xxxxxx | |
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| Title: EVP & CFO | ||
| REPUBLIC AIRLINE INC. | ||
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| By: | /s/ Xxxxxx X. Xxxxxx | |
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| Title: EVP & CFO | ||
| SHUTTLE AMERICA CORPORATION | ||
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| By: | /s/ Xxxxxx X. Xxxxxx | |
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| Title: EVP & CFO | ||
| Lender: |
| BANK OF AMERICA, N.A. | ||
| (successor by assignment to Fleet Capital Corporation) | ||
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| By: | /s/ Xxx Xxxxxx | |
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| Title: SVP | ||
EXHIBIT
D
COMPLIANCE
CERTIFICATE
[Letterhead
of Borrower]
__________________,
20__
Bank
of
America, N.A.
000
Xxxxxxxx Xxxxxxx, X.X., Xxxxx 000
Xxxxxxx,
Xxxxxxx 00000
Attention:
Southeast Loan Administration
Ladies
and Gentlemen:
The
undersigned, the chief financial officer of Republic Airlines Holdings Inc.,
a
Delaware corporation and its Subsidiaries (individually and collectively,
"Borrower"), gives this certificate to Bank of America, N.A. ("Lender") in
accordance with the require-ments of Section 9.1.3 of that certain Loan and
Security Agreement dated December 9, 1998, between Borrower and Lender (as
amended from time to time, the "Loan Agreement"). Capitalized terms used in
this
Certificate, unless otherwise defined herein, shall have the meanings ascribed
to them in the Loan Agreement.
1. Based
upon my review of the Consolidated balance sheets and statements of income
of
Borrower and its Subsidiaries for the Testing
Period ending __________________, 19__, copies of which are attached hereto,
I
hereby certify that:
(a) The
Consolidated Fixed Charges Coverage Ratio for such Testing Period is ____ to
1.0;
(b) The
Consolidated Leverage Ratio as of the end of such Testing Period is _____ to
1;
and
(c) The
amount of unrestricted cash and Cash Equivalents as of the end of such Testing
Period is $__________________.
2. No
Default exists on the date hereof, other than: ________________
__________________________________________________ [if
none,
so state];
and
3. No
Event
of Default exists on the date hereof, other than
____________________________________________________________ [if
none,
so state].
CHAUTAUQUA
AIRLINES, INC.
REPUBLIC
AIRLINE INC.
SHUTTLE
AMERICA CORPORATION
("Borrower")
By:
____________________________________
Chief
Financial Officer
