364-DAY COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT
among
SOUTHWEST AIRLINES CO.,
THE BANKS PARTY HERETO,
CITIBANK, N.A.,
as Syndication Agent,
BANK ONE CORPORATION
and
SUNTRUST BANK,
as Documentation Agents,
and
JPMORGAN CHASE BANK,
as Administrative Agent
As of April 23, 2002
J.P. MORGAN SECURITIES INC.
and
SALOMON SMITH BARNEY INC.,
as Joint Lead Arrangers and Joint Bookrunners
<Page>
Table of Contents
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1
Section 1.1 Certain Defined Terms 1
Section 1.2 Computation of Time Periods 12
ARTICLE II LOANS 12
Section 2.1 Commitments 12
Section 2.2 Competitive Bid Procedure 12
Section 2.3 Committed Borrowing Procedure 14
Section 2.4 Refinancings; Conversions 15
Section 2.5 Fees 16
Section 2.6 Termination and Reduction of Commitments 16
Section 2.7 Loans 16
Section 2.8 Loan Accounts 17
Section 2.9 Interest on Loans 18
Section 2.10 Interest on Overdue Amounts 19
Section 2.11 Alternate Rate of Interest 19
Section 2.12 Prepayment of Loans 19
Section 2.13 Reserve Requirements; Change in Circumstances 20
Section 2.14 Change in Legality 22
Section 2.15 Indemnity 22
Section 2.16 Pro Rata Treatment 23
Section 2.17 Sharing of Setoffs 23
Section 2.18 Payments 24
Section 2.19 Tax Forms 24
Section 2.20 Calculation of LIBO Rates 25
Section 2.21 Booking Loans 25
Section 2.22 Quotation of Rates 25
ARTICLE III CONDITIONS OF LENDING 25
Section 3.1 Conditions Precedent 25
Section 3.2 Conditions Precedent to Each Committed Borrowing 26
Section 3.3 Conditions Precedent to Each Competitive Borrowing 26
Section 3.4 Legal Details 27
ARTICLE IV REPRESENTATIONS AND WARRANTIES 27
Section 4.1 Organization, Authority and Qualifications 27
Section 4.2 Financial Statements 28
Section 4.3 Compliance with Agreement and Laws 28
Section 4.4 Authorization; No Breach; and Valid Agreements 28
Section 4.5 Litigation and Judgments 28
Section 4.6 Ownership of Properties 28
Section 4.7 Taxes 28
Section 4.8 Approvals Required 28
Section 4.9 Business; Status as Air Carrier 29
Section 4.10 ERISA Compliance 29
Section 4.11 Insurance 29
Section 4.12 Purpose of Loan 29
Section 4.13 Investment Company Act 29
Section 4.14 General 29
ARTICLE V COVENANTS 29
Section 5.1 Performance of Obligations 29
Section 5.2 Compliance with Laws 29
Section 5.3 Maintenance of Existence Licenses
and Franchises: Compliance With Agreements 30
Section 5.4 Maintenance of Properties 30
Section 5.5 Maintenance of Books and Records 30
Section 5.6 Inspection 30
Section 5.7 Insurance 31
Section 5.8 Appraisals 31
Section 5.9 Coverage Ratio 31
Section 5.10 Reporting Requirements 31
Section 5.11 Use of Proceeds 32
Section 5.12 Pool Assets 32
Section 5.13 Restrictions on Liens 33
Section 5.14 Mergers and Dissolutions 33
Section 5.15 Assignment 34
ARTICLE VI EVENTS OF DEFAULT; REMEDIES 34
Section 6.1 Events of Default 34
Section 6.2 Remedies Upon Default 35
Section 6.3 Remedies in General 36
ARTICLE VII THE AGENTS 36
Section 7.1 Authorization and Action 36
Section 7.2 Agents' Reliance, Etc. 36
Section 7.3 Rights of Agents as Banks 37
Section 7.4 Bank Credit Decision 37
Section 7.5 Agents' Indemnity 37
Section 7.6 Successor Administrative Agent 38
Section 7.7 Notice of Default 38
Section 7.8 Documentation Agents and Syndication Agent 38
ARTICLE VIII MISCELLANEOUS 38
Section 8.1 Amendments, Etc 38
Section 8.2 Notices, Etc. 39
Section 8.3 No Waiver; Remedies 40
Section 8.4 Costs, Expenses and Taxes 40
Section 8.5 Indemnity 40
Section 8.6 Right of Setoff 41
SECTION 8.7 GOVERNING LAW 41
Section 8.8 Submission To Jurisdiction; Waivers 41
Section 8.9 Survival of Representations and Warranties 41
Section 8.10 Binding Effect 41
Section 8.11 Successors and Assigns; Participations 42
Section 8.12 Independence of Covenants 44
Section 8.13 Severability 44
Section 8.14 Integration 44
Section 8.15 Descriptive Headings 44
Section 8.16 Execution in Counterparts 45
Section 8.17 WAIVERS OF JURY TRIAL 45
SCHEDULES
Location of Lending Office; Notice Information Schedule I
Pool Assets Schedule II
<Page>
EXHIBITS
Form of Competitive Bid Request Exhibit A-1
Form of Notice of Committed Borrowing Exhibit A-2
Form of Notice to Banks of Competitive Bid Request Exhibit B
Form of Competitive Bid Exhibit C
Form of Competitive Note Exhibit D-1
Form of Committed Note Exhibit D-2
Form of Company's Internal Counsel Opinion Exhibit E-1
Form of Company's Outside Counsel Opinion Exhibit E-2
Form of Agents' Counsel Opinion Exhibit E-3
Form of Financial Report Certificate Exhibit F
Form of Assignment and Acceptance Exhibit G
Form of Appraisal Exhibit H
<Page>
364-DAY COMPETITIVE ADVANCE AND
REVOLVING CREDIT FACILITY AGREEMENT
364-DAY COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY
AGREEMENT dated as of April 23, 2002, among SOUTHWEST AIRLINES CO., a Texas
corporation (the "Company"), the Banks, JPMORGAN CHASE BANK, a New York banking
corporation, as administrative agent for the Banks (in such capacity, the
"Administrative Agent"), CITIBANK, N.A., a national banking association, as
syndication agent for the Banks (in such capacity, the "Syndication
Agent"), BANK ONE CORPORATION, a Delaware corporation and SUNTRUST BANK, a
Georgia corporation, as documentation agents for the Banks (collectively, in
such capacity, the "Documentation Agents"). The Company has requested the
Banks to extend credit to the Company in order to enable it to borrow on a
revolving credit basis on and after the Effective Date and at any time and
from time to time prior to the Termination Date (each as herein defined) in
an aggregate principal amount not in excess of $287,500,000 at any time
outstanding. The maturity of such borrowings may be extended by one year
pursuant to a term-out option described herein. The Company has also
requested the Banks to provide a procedure pursuant to which the Company may
designate that all of the Banks be invited to bid on an uncommitted basis on
borrowings by the Company scheduled to mature on or prior to the Termination
Date. The Banks are willing to extend such credit to the Company on the
terms and conditions herein set forth. Accordingly, the Company, the Agents,
and the Banks agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"Adjusted Pre-Tax Income" of any Person means, with respect to any
period, net income before taxes of such Person for such period, but excluding
(i) any gain or loss arising from the sale of capital assets other than
capital assets consisting of Aircraft, (ii) any gain or loss arising from any
write-up or write-down of assets, (iii) income or loss of any other Person,
substantially all of the assets of which have been acquired by such Person in
any manner, to the extent that such income or loss was realized by such
other Person prior to the date of such acquisition, (iv) net income or loss
of any other Person (other than a Subsidiary) in which such Person has an
ownership interest, (v) the income or loss of any other Person to which
assets of such Person shall have been sold, transferred, or disposed of, or
into which such Person shall have merged, to the extent that such income or
loss arises prior to the date of such transaction, (vi) any gain or loss
arising from the acquisition of any securities of such Person, (vii) gains or
losses reported as extraordinary in accordance with GAAP not previously
excluded in clauses (i) through (vi), and (viii) the cumulative effect of
changes in accounting methods permitted by GAAP during such period.
"Administrative Agent" is defined in the introduction to this Agreement.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form satisfactory to the Administrative Agent, which each Bank shall complete
and provide to the Administrative Agent.
"Affiliate" means a Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with another Person.
"Agents" means the Administrative Agent, the Syndication Agent and the
Documentation Agent.
"Agreed Maximum Rate" means, for any date, 2% per annum above the interest
rate then applicable to Alternate Base Loans.
"Agreement" means this 364-Day Competitive Advance and Revolving Credit
Facility Agreement, as the same may be amended, supplemented, or modified from
time to time.
"Aircraft" means, collectively, airframes and aircraft engines now owned or
hereafter acquired by the Company, together with all appliances, equipment,
instruments, and accessories (including radio and radar) from time to time
belonging to, installed in, or appurtenant to such airframes and aircraft
engines; provided, however, the term "Aircraft" shall not include airframes and
engines leased by the Company.
"Aircraft Rentals" means the operating expense attributable to rental of
aircraft, calculated in accordance with the line item described as such in the
Current Financials.
"Alternate Base Loan" means any Committed Loan with respect to which the
Company shall have selected an interest rate based on the Alternate Base Rate in
accordance with the provisions of Article II.
"Alternate Base Rate" means, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall
mean the rate of interest per annum publicly announced from time to time by
JPMorgan Chase Bank as its prime rate in effect at its principal office in New
York City (the Prime Rate not being intended to be the lowest rate of interest
charged by JPMorgan Chase Bank in connection with extensions of credit to
debtors). Any change in the Alternate Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective as of the opening
of business on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"Applicable Lending Office" means, with respect to each Bank, such
Bank's Domestic Lending Office in the case of an Alternate Base Loan or a Fixed
Rate Loan and such Bank's Eurodollar Lending Office in the case of a Eurodollar
Loan.
"Applicable Margin" means, as of any date, in the case of Alternate Base
Loans or Eurodollar Loans that are Committed Loans, a percentage per annum
determined by reference to the Public Debt Rating in effect on such date as set
forth below:
<Table>
<Caption>
Eurodollar Alternate Base Eurodollar Alternate Base
Public Debt Committed Committed Term-Out Term-Out
Rating Loans Loans Loans Loans
S&P/Moody's Margin Margin Margin Margin
A/A2 or better .42% .00% 1.0% .00%
A-/A3 .525% .00% 1.125% .125%
BBB+/Baa1 .625% .00% 1.25% .25%
BBB/Baa2 .725% .00% 1.375% .375%
BBB-/Baa3 1.075% .075% 1.75% .75%
BB+/Ba1 or 1.375% .375% 2.125% 1.125%
below
</Table>
For purposes of determining the Applicable Margin on any date, the Public Debt
Rating shall be determined as set forth in the definition of the term Public
Debt Rating.
The Applicable Margin shall be increased by 0.125% (a) at any time when the sum
of the aggregate principal amount of the Loans then outstanding exceeds 50% of
the Total Commitment (provided, that such increase shall apply to Alternate Base
Loans only if pricing set forth in either of the two lowest rows in the above
pricing grid is applicable) and (b) at all times with respect to any Term-Out
Loans.
"Appraisal" means a "desk-top" appraisal report substantially in the form
of Exhibit H, which will not include physical inspection of aircraft, engines
or maintenance records and will assume the equipment is half life in its
maintenance cycle, dated the date of delivery thereof to the Banks pursuant to
the terms of this Agreement, by one or more independent appraisal firms of
recognized national standing selected by the Company (such firm to be reasonably
satisfactory, at the time of such Appraisal, to the Administrative Agent)
setting forth the fair market value, as determined in accordance with the
definition of "fair market value" promulgated by the International Society of
Transport Aircraft Trading, as of the date of such appraisal, of each Pool Asset
or a proposed Pool Asset, as the case may be.
"Appraisal Delivery Date" means (a) the Effective Date, (b) each
anniversary of the Effective Date and (c) each date of replacement, removal or
addition of any Pool Asset if such Pool Asset is an airframe or an airframe and
one or more engines installed thereon.
"Appraised Value" means, as of any date of determination, the aggregate
fair market value as of such date of each Pool Asset or proposed Pool Asset, as
the case may be, as provided in the most recently delivered Appraisal.
"Assignment and Acceptance" is defined in Section 8.11(c).
"Auditors" means independent certified public accountants of recognized
national standing selected by the Company.
"Banks" means those banks signatory hereto and other banks which from time
to time become party hereto pursuant to the provisions of this Agreement.
"Board" means the Board of Governors of the Federal Reserve System of the
United States.
"Borrowing" means a Competitive Borrowing or a Committed Borrowing.
"Borrowing Date" means the Business Day on which the proceeds of any
Borrowing are to be made available to the Company.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close, provided, that with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, such day is
also a day for trading in London, England by and between banks in dollar
deposits in the Eurodollar Interbank Market.
"Collateral Coverage Test" means, on any date, the requirement that the
Appraised Value of the Pool Assets on such date shall not be less than an
amount equal to 1.5 times the sum of (x) the Total Commitment on such date (or,
after termination of the Commitments, the sum of the aggregate outstanding
amount of Loans) plus (y) the "Total Commitment" on such date (or, after
termination of the "Commitments", the sum of the aggregate outstanding amount
of "Loans" and "L/C Obligations"); capitalized terms used in this clause (y)
shall have the meaning assigned thereto in the 3-Year Agreement.
"Commitment" means, with respect to each Bank, the obligation of such Bank
to make Loans in the aggregate principal and/or face amount set forth opposite
the name of such Bank on the signature pages hereof, and, if applicable,
amendments hereto, as such amount may be permanently terminated or reduced from
time to time pursuant to Section 2.6, Section 2.13(d) and Section 6.2, and as
such amount may be increased or reduced from time to time by assignment or
assumption pursuant to Section 2.13(d) and Section 8.11(c). The Commitments
shall automatically and permanently terminate on the Termination Date.
"Committed Borrowing" means a borrowing consisting of simultaneous
Committed Loans from each of the Banks distributed ratably among the Banks in
accordance with their respective Commitments.
"Committed Loan" means a loan by a Bank to the Company pursuant to Section
2.1, and shall be either a Eurodollar Loan or an Alternate Base Loan.
"Committed Note" means a promissory note which a Bank may require the
Company to execute in accordance with Section 2.8(b), payable to the order of
such Bank, in substantially the form of Exhibit D-2 hereto, with the blanks
appropriately completed, to evidence the aggregate indebtedness of the Company
to such Bank resulting from the Committed Loans made by such Bank to the
Company, together with all modifications, extensions, renewals, and
rearrangements thereof.
"Communications" is defined in Section 8.2.
"Company" is defined in the introduction to this Agreement.
"Competitive Bid" means an offer by a Bank to make a Competitive Loan
pursuant to Section 2.2.
"Competitive Bid Rate" means, as to any Competitive Bid made by a Bank
pursuant to Section 2.2(b), (i) in the case of a Eurodollar Loan, the Margin
(which will be added to or subtracted from the LIBO Rate), and (ii) in the case
of a Fixed Rate Loan, the fixed rate of interest, in each case, offered by
the Bank making such Competitive Bid.
"Competitive Bid Request" means a request for Competitive Bids made
pursuant to Section 2.2(a) substantially in the form of Exhibit A-l.
"Competitive Borrowing" means a borrowing consisting of a single
Competitive Loan from a Bank or simultaneous Competitive Loans from one or more
of the Banks, in each case, whose Competitive Bid as all or as a part of such
Borrowing, as the case may be, has been accepted by the Company under the
bidding procedure described in Section 2.2.
"Competitive Loan" means a loan from a Bank to the Company pursuant to the
bidding procedure described in Section 2.2, and shall be either a Eurodollar
Loan or a Fixed Rate Loan.
"Competitive Note" means a promissory note which a Bank may require the
Company to execute in accordance with Section 2.8(b), payable to the order of
such Bank, in substantially the form of Exhibit D-l hereto, with the blanks
appropriately completed, to evidence the aggregate indebtedness of the Company
to such Bank resulting from the Competitive Loans made by such Bank to the
Company, together with all modifications, extensions, renewals, and
rearrangements thereof.
"Competitive Reduction" is defined in Section 2.1.
"Consolidated Long-Term Debt" means, as of any date, all consolidated Debt
of the Company and its Subsidiaries which is classified as "long term" in
accordance with GAAP, together with the aggregate of all portions of
Consolidated Long-Term Debt classified as "current maturities" in accordance
with GAAP.
"Coverage Ratio" means, as of any date, the ratio of (i) for the four
fiscal quarter period for which the Company's annual or quarterly Financial
Statements have been most recently required to have been delivered pursuant to
Section 5.10(a) and Section 5.10(b), the Company's and its Subsidiaries'
consolidated Adjusted Pre-Tax Income, plus Aircraft Rentals, plus consolidated
Net Interest Expense, depreciation, and amortization, and minus cash dividends
paid by the Company, to (ii) current maturities of Consolidated Long-Term Debt
or any other Debt due within a year of the date of determination, consolidated
Net Interest Expense, and Aircraft Rentals paid within such four-quarter period.
"Current Financials" means the Financial Statements of the Company and its
Subsidiaries for the fiscal year ended December 31, 2001.
"Debt" means, without duplication, (a) any indebtedness for borrowed money
or incurred in connection with the acquisition or construction of any Property,
(b) any obligation under any lease of any Property entered into after the date
of this Agreement which is required under GAAP to be capitalized on the
lessee's balance sheet, and (c) any direct or indirect guarantee or assumption
of indebtedness or obligations described in clause (a) or (b), including
without limitation any agreement to provide funds to or otherwise assure the
ability of an obligor to repay indebtedness or meet its obligations.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent
transfer or conveyance, suspension of payments, or similar Laws from time to
time in effect affecting the Rights of creditors generally.
"Default" means the occurrence of any event which with the giving of notice
or the passage of time or both would become an Event of Default.
"Documentation Agents" is defined in the introduction to this Agreement.
"dollars" and the symbol "$" mean the lawful currency of the United States
of America.
"Domestic Lending Office" means, with respect to any Bank, the office of
such Bank specified as its "Domestic Lending Office" on Schedule I to this
Agreement or such other office of such Bank as such Bank may from time to time
specify to the Company and the Administrative Agent.
"Effective Date" means the date on which the conditions set forth in
Section 3.1 are first met, which date is April 23, 2002.
"Eligible Affiliate Assignee" means (i) a commercial bank organized under
the Laws of the United States, or any state thereof, and having total assets in
excess of $1,000,000,000; (ii) a commercial bank organized under the Laws of
France, Germany, the Netherlands or the United Kingdom, or under the Laws of a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000; provided that such bank is acting through a branch or agency
located in such country or the United States; and (iii) a commercial bank
organized under the Laws of any other country which is a member of the OECD, or
under the Laws of a political subdivision of any such country, and having total
assets in excess of $1,000,000,000; provided that such bank is acting through a
branch or agency located in the United States.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder.
"Eurocurrency Liabilities" is defined in Regulation D.
"Eurodollar Interbank Market" means the London eurodollar interbank market.
"Eurodollar Lending Office" means, with respect to each Bank, the branches
or affiliates of such Bank which such Bank has designated on Schedule I as its
"Eurodollar Lending Office" or may hereafter designate from time to time as its
"Eurodollar Lending Office" by notice to the Company and the Administrative
Agent.
"Eurodollar Loan" means any loan with respect to which the Company shall
have selected an interest rate based on the LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" means any of the events described in Article VI,
provided there has been satisfied any requirement in connection therewith for
the giving of notice, lapse of time, or happening of any further condition,
event, or act.
"Existing Credit Agreement" means the Competitive Advance and Revolving
Credit Facility Agreement, dated as of May 6, 1997, among the Company, Texas
Commerce Bank National Association, as administrative agent, the banks party
thereto, Bank of America National Trust and Savings Association, as
documentation agent, NationsBank of Texas, N.A., as Syndication Agent and The
Chase Manhattan Bank, as Auction Administration Agent.
"Facility Fee" is defined in Section 2.5.
"Facility Fee Percentage" means, as of any date, a percentage per annum
determined by reference to the Public Debt Rating in effect on such date as set
forth below:
<Table>
<Caption>
Public Debt Rating
S&P/Moody's Percentage
A/A2 or better .08%
A-/A3 .10%
BBB+/Baa1 .125%
BBB/Baa2 .15%
BBB-/Baa3 .175%
BB+/Ba1 or below .25%
</Table>
For purposes of determining the Facility Fee Percentage on any date, the Public
Debt Rating shall be determined as set forth in the definition of the term
Public Debt Rating.
"Federal Funds Effective Rate" means, for any day, 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 on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by JPMorgan Chase Bank from
three federal funds brokers of recognized standing selected by it.
"Financial Report Certificate" means a certificate substantially in the
form of Exhibit F.
"Financial Statements" means balance sheets, income and loss statements,
statements of stockholders' equity, and statements of cash flow prepared in
accordance with GAAP and in comparative form to the corresponding period of the
preceding fiscal year.
"Fixed Rate Loan" means any Competitive Loan made by a Bank pursuant to
Section 2.2 based upon an actual percentage rate per annum offered by such
Bank, expressed as a decimal (to no more than four decimal places), and
accepted by the Company.
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board which are applicable as of the date in
question for the purpose of the definition of "Financial Statements."
"Interest Payment Date" means (i) with respect to any Alternate Base Loan, each
Quarterly Payment Date, or, if earlier, the Termination Date (or, if applicable,
the Term-Out Maturity Date) or the date of prepayment of such Loan or
conversion of such Loan to a Eurodollar Loan, (ii) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable thereto and, in
addition in the case of a Eurodollar Loan with an Interest Period longer than
three months each day that would have been the Interest Payment Date for such
Loan had successive Interest Periods of three months been applicable to
such Loan, and (iii) in the case of a Fixed Rate Loan, the last day of the
Interest Period applicable thereto and, in the case of a Fixed Rate Loan with
an Interest Period of more than 90 days, on the numerically corresponding day
which occurs during such Interest Period every three months from the first day
of such Interest Period (or, if there is no such corresponding day in any such
month, the last day of such month).
"Interest Period" means:
(i) as to any Eurodollar Loan, the period commencing on the date
of such Loan and ending on the numerically corresponding day (or if there
is no corresponding day, the last day) in the calendar month that is one,
two, three, six or nine months thereafter, as the Company may
elect; and
(ii) as to any Fixed Rate Loan, the period commencing on the date
of such Loan and ending on the date specified in the Competitive Bid in
which the offer to make the Fixed Rate Loan was extended; provided,
however, that each such period shall have a duration of not less than
seven calendar days nor more than 360 calendar days;
provided, further, that (x) if any Interest Period would end on a day which
shall not be a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, with respect to Eurodollar Loans only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day, and (y)
no Interest Period may be selected that ends later than the Termination Date
(or, if applicable, the Term-Out Maturity Date). Interest shall accrue from
and including the first day of an Interest Period to but excluding the last day
of such Interest Period.
"Laws" means all applicable statutes, laws, treaties, ordinances, rules,
regulations, orders, writs, injunctions, decrees, judgments, or opinions of any
Tribunal.
"LIBO Rate" means, for any Eurodollar Loan for any Interest Period
therefor, the rate equal to the annual rate of interest shown on the Telerate
Screen (Page 3750) for a period equal to such Interest Period or, if the
Telerate Screen is not available, the annual rate of interest at which dollar
deposits approximately equal in principal amount to JPMorgan Chase Bank's
portion of the Committed Borrowing of which such Eurodollar Loan forms a part
(or, in the case of a Competitive Loan, a principal amount which would have been
JPMorgan Chase Bank's portion of the Committed Borrowing of which such
Eurodollar Loan would have formed a part had such Competitive Borrowing been a
Committed Borrowing) and with a maturity equal to the applicable Interest
Period are offered in immediately available funds to the principal office of
JPMorgan Chase Bank in London, England (or if JPMorgan Chase Bank does not at
the time any such determination is to be made maintain an office in London,
England, the principal office of any Affiliate of JPMorgan Chase Bank in
London, England), in the Eurodollar Interbank Market, at 11:00 a.m., London
time (or as soon thereafter as practicable), two Business Days before the first
day of such Interest Period. The LIBO Rate for the Interest Period for each
Eurodollar Loan comprising part of the same Borrowing shall be determined by
the Administrative Agent.
"Lien" means any mortgage, lien, pledge, adverse claim, charge, security
interest or other encumbrance in or on, or any interest or title of any vendor,
lessor, lender or other secured party to or of any Person under, any
conditional sale or other title retention agreement or lease with respect to,
any Property or asset of such Person.
"Litigation" means any action conducted, pending, or threatened by or
before any Tribunal.
"Loan" means a Competitive Loan, a Committed Loan, a Eurodollar Loan, a
Fixed Rate Loan, or an Alternate Base Loan.
"Loan Based Accrual" is defined in Section 2.5.
"Loan Papers" means (i) this Agreement, certificates delivered pursuant to
this Agreement and exhibits and schedules hereto, (ii) any notes, security
documents, guaranties, and other agreements in favor of the Agents and Banks,
or any or some of them, ever delivered in connection with this Agreement, and
(iii) all renewals, extensions, or restatements of, or amendments or
supplements to, any of the foregoing.
"Loan Payment Date" is defined in Section 2.5.
"Majority Banks" means, at any time, Banks having Loans and unused
Commitments representing more than 50% of the sum of the aggregate outstanding
principal amount of all Loans and unused Commitments at such time.
"Margin" means, as to any Competitive Bid made by a Bank relating to a
Eurodollar Loan, the margin (expressed as a percentage rate per annum in the
form of a decimal to no more than four decimal places) to be added to or
subtracted from the LIBO Rate for any such Loan in order to determine the
interest rate acceptable to such Bank with respect to such Eurodollar Loan.
"Margin Stock" means "margin stock" within the meaning of Regulation T, U,
or X of the Board.
"Material Adverse Change" or "Material Adverse Effect" means an act, event
or circumstance which materially and adversely affects the business, financial
condition or results of operations of the Company and its Subsidiaries on a
consolidated basis or the ability of the Company to perform its obligations
under this Agreement or any Loan Paper.
"Material Subsidiary" means, at any time, any Subsidiary of the Company
having at such time either (i) total assets, as of the last day of the
preceding fiscal quarter, having a net book value greater than or equal to 10%
of the total assets of the Company and all of its Subsidiaries on a
consolidated basis or (ii) Adjusted Pre-Tax Income, as of the last day of the
preceding fiscal quarter, greater than or equal to 10% of the total Adjusted
Pre-Tax Income of the Company and all of its Subsidiaries on a consolidated
basis.
"Moody's" means Moody's Investors Service, Inc.
"Net Interest Expense" means interest expense minus interest income,
excluding in either case capitalized interest, but including payments in the
nature of interest under capital leases if and to the extent characterized as
such in accordance with GAAP.
"Note" means a Competitive Note or a Committed Note.
"Notice of Committed Borrowing" is defined in Section 2.3.
"Obligation" means all present and future indebtedness, obligations, and
liabilities, and all renewals, extensions, and modifications thereof, owed to
the Agents and Banks, or any or some of them, by the Company, arising pursuant
to any Loan Paper, together with all interest thereon and costs, expenses, and
reasonable attorneys' fees incurred in the enforcement or collection thereof.
"OECD" means the Organization for Economic Cooperation and Development as
constituted on the date hereof (excluding Mexico, Poland and the Czech
Republic).
"Officer's Certificate" means a certificate signed in the name of the
Company by either its Chairman, its Chief Executive Officer, its Chief Financial
Officer, its President, one of its Vice Presidents, its Treasurer, or its
Assistant Treasurer, in each case without personal liability.
"Original Termination Date" means April 22, 2003.
"Permitted Liens" means: (a) Liens for taxes, assessments and governmental
charges or levies which either are not yet due and payable or are being
contested in good faith by appropriate proceedings and for which adequate
reserves are established in accordance with GAAP; (b) Liens securing judgments,
but only to the extent, for an amount and for a period not resulting in an
Event of Default under Section 6.1(d); (c) Liens arising under this Agreement;
(d) Liens constituting normal operational usage of the affected Property,
including charter, third party maintenance, leasing, pooling or interchange
thereof; and (e) Liens imposed by law such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens arising in
the ordinary course of business securing obligations that (i) are not overdue
for a period of more than 30 days, provided that no enforcement, collection,
execution, levy or foreclosure proceeding shall have been commenced with respect
thereto, or (ii) are being contested in good faith and for which adequate
reserves are established in accordance with GAAP.
"Person" means and includes an individual, partnership, joint venture,
corporation, trust, limited liability company or other entity, Tribunal,
unincorporated organization, or government, or any department, agency, or
political subdivision thereof.
"Plan" means any plan defined in Section 402 1(a) of ERISA in respect of
which the Company is an "employer" or a "substantial employer" as such terms are
defined in ERISA.
"Pool Assets" means assets of the Company listed on Schedule II, to the
extent modified pursuant to Section 5.12 and shall include only Stage 3
Equipment owned legally by the Company.
"Prime Rate" is defined in the definition of the term Alternate Base Rate.
"Principal Office" of the Administrative Agent means 270 Park Avenue, New
York, New York, 10017, or such other office as the Administrative Agent may
hereafter designate from time to time as its
"Principal Office" by notice to the Company and the Banks.
"Property" means all types of real, personal, tangible, intangible, or
mixed property.
"Public Debt Rating" means, as of any date, the rating that has been most
recently announced by S&P and Moody's for that class of non-credit enhanced,
senior unsecured debt with an original term of longer than one year issued by
the Company which has the lowest rating of all classes of non-credit enhanced,
senior unsecured debt with an original term of longer than one year issued by
the Company. For purposes of the foregoing, (a) if only one of S&P and Moody's
shall have in effect a Public Debt Rating, the Applicable Margin and the
Facility Fee Percentage shall be determined by reference to the available
rating; (b) if the ratings established by S&P and Moody's shall fall within
different levels, the Applicable Margin and the Facility Fee Percentage shall be
based upon the higher rating, except that if the difference is two or more
levels, the Applicable Margin and Facility Fee Percentage shall be based on the
rating that is one level below the higher rating; (c) if any rating established
by S&P or Moody's shall be changed, such change shall be effective as of the
date on which such change is first announced publicly by the rating agency
making such change; (d) if S&P or Moody's shall change the basis on which]
ratings are established, each reference to the Public Debt Rating announced by
S&P or Moody's, as the case may be, shall refer to the then equivalent rating
by S&P or Moody's, as the case may be; (e) if neither S&P nor Moody's shall have
in effect a Public Debt Rating but at least one of S&P and Moody's has in effect
a rating for any class of senior secured debt with an original term of longer
than one year issued by the Company, the Applicable Margin and Facility Fee]
Percentage shall be determined by reference to a rating that is two levels
lower than the rating that has been most recently announced by S&P and Moody's
for such class of debt; and (f) if neither S&P nor Moody's shall have in effect
either a Public Debt Rating or a rating for any class of senior secured debt
with an original term of longer than one year issued by the Company, the
Applicable Margin and the Facility Fee Percentage shall be set in accordance
with the lowest level rating and highest percentage rate set forth in the
respective tables in the definitions of "Applicable Margin" and "Facility Fee
Percentage", as the case may be.
"Quarterly Payment Date" means the 15th day of each March, June, September
and December of each year, the first of which shall be the first such day after
the Effective Date.
"Register" is defined in Section 8.11(e).
"Regulation D" means Regulation D of the Board, as the same is from time to
time in effect, and all official rulings and interpretations thereunder or
thereof.
"Regulatory Change" means, with respect to any Bank, (a) any adoption or
change after the Effective Date of or in United States federal, state or
foreign laws, rules, regulations (including Regulation D) or guidelines
applying to a class of banks including such Bank, (b) the adoption or making
after the Effective Date of any interpretations, directives or requests
applying to a class of banks including such Bank of or under any United States
federal, state or foreign laws, rules, regulations or guidelines (whether or
not having the force of law) by any Tribunal, monetary authority, central bank,
or comparable agency charged with the interpretation or administration thereof,
or (c) any change in the interpretation or administration of any United States
federal, state or foreign laws, rules, regulations or guidelines applying to a
class of banks including such Bank by any Tribunal, monetary authority, central
bank, or comparable agency charged with the interpretation or administration
thereof.
"Reserve Percentage" of any Bank for the Interest Period for any
Eurodollar Loan means the reserve percentage applicable during such Interest
Period under regulations issued from time to time by the Board (or if more than
one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) for determining the maximum reserve
requirement (including, without limitation, any marginal reserve requirement)
for such Bank with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period.
"Rights" means rights, remedies, powers, and privileges.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
"Stage 3 Airframes" and "Stage 3 Engines" mean airframes or engines,
respectively, owned by the Company and qualifying as Stage 3 airplanes, as set
forth in Federal Aviation Regulation 36.1(f)(6), 14 C.F.R. Section 36.1(f)(6)
or any successor regulation, as amended; and "Stage 3 Engines" also include
spare engines which are suitable for use on Stage 3 Airframes and are being
maintained according to the Company's normal and customary standards.
"Stage 3 Equipment" means Stage 3 Airframes and not less than two nor more
than four Stage 3 Engines per Stage 3 Airframe.
"Stated Rate" is defined in Section 8.8.
"Subsidiary" of a Person means any entity of which an aggregate of more
than 50% (in number of votes) of the stock (or equivalent interests) is owned of
record or beneficially, directly or indirectly, by such Person.
"Syndication Agent" is defined in the introduction to this Agreement.
"Taxes" means all taxes, assessments, fees, or other similar charges at any
time imposed by any Laws or Tribunal.
"Termination Date" means, at any time, the Original Termination Date or the
earlier date of termination in whole of the Total Commitment pursuant to Section
2.6 or Section 6.2.
"Term-Out Loans" means any Committed Loans outstanding after the
Termination Date if the Term-Out Maturity Date is selected.
"Term-Out Maturity Date" means the first anniversary of the Termination
Date.
"3-Year Agreement" means the 3-Year Credit Agreement, dated as of April
23, 2002, among the Company, the banks parties thereto, JPMorgan Chase Bank, as
administrative agent, Citibank, N.A, as syndication agent, Bank One Corporation
and SunTrust Bank, as documentation agents, as the same may from time to time
be modified, supplemented or amended.
"Total Commitment" means at any time the aggregate amount of the Banks'
Commitments, as in effect at such time.
"Tribunal" means any municipal, state, commonwealth, federal, foreign,
territorial, or other court, governmental body, subdivision, agency,
department, commission, board, bureau, or instrumentality.
"Type" refers to the distinction between Committed Loans that are
Alternate Base Loans and Committed Loans that are Eurodollar Loans.
"United States" and "U.S." each means United States of America.
Section 1.2 Computation of Time Periods. In this Agreement in
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each means "to but excluding."
ARTICLE II
LOANS
Section 2.1 Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Bank,
severally and not jointly, agrees to make revolving credit loans to the
Company, at any time and from time to time on and after the Effective Date
and until the earlier of the Termination Date and the termination of the
Commitment of such Bank in accordance with the terms hereof. Notwithstanding
the foregoing, (a) the aggregate principal amount at any time outstanding of
all Committed Loans of a Bank shall not exceed such Bank's Commitment and
(b) the Total Commitment shall be deemed used from time to time to the extent
of the aggregate principal amount of the Competitive Loans then outstanding,
and such deemed use of the Total Commitment shall be applied to the Banks
ratably according to their respective Commitments (such deemed use of the Total
Commitment being a "Competitive Reduction"), subject, however, to the
conditions that (i) at no time shall (A) the sum of (x) the outstanding
aggregate principal amount of all Committed Loans made by all Banks and (y) the
outstanding aggregate principal amount of all Competitive Loans made by all
Banks exceed (B) the Total Commitment and (ii) at all times the outstanding
aggregate principal amount of all Committed Loans made by a Bank shall equal
the product of (x) the percentage which its Commitment represents of the Total
Commitment times (y) the outstanding aggregate principal amount of all
Committed Loans obligated to have been made by all Banks.
Within the foregoing limits, the Company may borrow, repay, prepay, and
reborrow hereunder, on and after the Effective Date and prior to the
Termination Date, subject to the terms, provisions, and limitations set forth
herein.
Section 2.2 Competitive Bid Procedure
(a) In order to request Competitive Bids, the Company shall hand
deliver or telecopy to the Administrative Agent a duly completed Competitive
Bid Request, to be received by the Administrative Agent (i) in the case of
Eurodollar Loans, not later than 10:00 a.m., New York City time, four Business
Days before the Borrowing Date specified for a proposed Competitive Borrowing
and (ii) in the case of Fixed Rate Loans, not later than 10:00 a.m., New York
City time, one Business Day before the Borrowing Date specified for a proposed
Competitive Borrowing. No Alternate Base Loan shall be requested in, or,
except pursuant to Section 2.14, made pursuant to, a Competitive Bid Request.
A Competitive Bid Request that does not conform substantially to the format of
Exhibit A-1 may be rejected at the Administrative Agent's sole discretion, and
the Administrative Agent shall promptly notify the Company of such rejection by
telecopier. Each Competitive Bid Request shall in each case refer to this
Agreement and specify (x) whether the Competitive Loans then being requested are
to be Eurodollar Loans or Fixed Rate Loans, (y) the Borrowing Date of such
Competitive Loans (which shall be a Business Day) and the aggregate principal
amount thereof (which shall not be less than $10,000,000 or greater than the
unused Total Commitment on such Borrowing Date and shall be an integral
multiple of $1,000,000), and (z) the Interest Period with respect thereto
(which may not end after the Termination Date). Promptly after its receipt of
a Competitive Bid Request that is not rejected as aforesaid, the Administrative
Agent shall invite by telecopier (substantially in the form set forth in
Exhibit B hereto) the Banks to bid, on the terms and conditions of this
Agreement, to make Competitive Loans pursuant to such Competitive Bid Request.
(b) Each Bank may, in its sole discretion, make one or more
Competitive Bids to the Company responsive to each Competitive Bid Request.
Each Competitive Bid by a Bank must be received by the Administrative Agent via
telecopier, substantially in the form of Exhibit C hereto, (i) in the case of
Eurodollar Loans, not later than 10:00 a.m., New York City time, three Business
Days before the Borrowing Date specified for a proposed Competitive Borrowing
and (ii) in the case of Fixed Rate Loans, not later than 9:30 a.m., New York
City time, on the day of a proposed Competitive Borrowing. Competitive Bids
that do not conform substantially to the format of Exhibit C may be rejected by
the Administrative Agent after conferring with, and upon the instruction of,
the Company, and the Administrative Agent shall notify the non-conforming Bank
of such rejection as soon as practicable. Each Competitive Bid shall refer to
this Agreement and (x) specify the principal amount (which shall be in a
minimum principal amount of $5,000,000 and in an integral multiple of
$1,000,000 and which may equal the entire principal amount of the Competitive
Borrowing requested by the Company) of the Competitive Loan the Bank is willing
to make to the Company, (y) specify the Competitive Bid Rate(s) at which the
Bank is prepared to make the Competitive Loan and (z) confirm the Interest
Period with respect thereto specified by the Company in its Competitive Bid
Request. A Competitive Bid submitted by a Bank pursuant to this paragraph (b)
shall be irrevocable.
(c) The Administrative Agent shall promptly notify the Company by
telecopier of all the Competitive Bids made, the Competitive Bid Rate and the
principal amount of each Competitive Loan in respect of which a Competitive Bid
was made and the identity of the Bank that made each bid. The Administrative
Agent shall send a copy of all Competitive Bids to the Company for its records
as soon as practicable after completion of the bidding process set forth in
this Section 2.2.
(d) The Company may in its sole and absolute discretion, subject
only to the provisions of this Section 2.2(d), accept or reject any or all of
the Competitive Bids referred to in paragraph (c) above; provided, however,
that the aggregate amount of the Competitive Bids so accepted by the Company
may not exceed the principal amount of the Competitive Borrowing requested by
the Company. The Company shall notify the Administrative Agent by telecopier
whether and to what extent it has decided to accept or reject any or all of the
bids referred to in paragraph (c) above, (i) in the case of Eurodollar Loans,
not later than 12:00 noon, New York City time, three Business Days before the
Borrowing Date specified for a proposed Competitive Borrowing and (ii) in the
case of Fixed Rate Loans, not later than 10:30 a.m., New York City time, on the
day specified for a proposed Competitive Borrowing; provided, however, that (w)
the failure by the Company to give such notice shall be deemed to be a ]
rejection of all the bids referred to in paragraph (c) above, (x) the Company
shall not accept a bid made at a particular Competitive Bid Rate if the Company
has decided to reject a bid made at a lower Competitive Bid Rate, (y) if the
Company shall accept bids made at a particular Competitive Bid Rate but shall
be restricted by other conditions hereof from borrowing the full principal
amount of Competitive Loans in respect of which bids at such Competitive Bid
Rate have been made or shall not require the full amount offered thereby, then
the Company shall accept a pro rata portion of each bid made at such
Competitive Bid Rate based as nearly as possible on the respective principal
amounts of Competitive Loans for which such bids were made and (z) no bid shall
be accepted for a Competitive Loan unless such Competitive Loan is in a minimum
principal amount of $5,000,000 and an integral multiple of $1,000,000.
Notwithstanding the foregoing clause (z), if it is necessary for the Company to
accept a pro rata allocation of the bids made in response to a Competitive Bid
Request (whether pursuant to the events specified in clause (y) above or
otherwise) and the available principal amount of Competitive Loans to be
allocated among the Banks is not sufficient to enable Competitive Loans to be
allocated to each Bank in a minimum principal amount of $5,000,000 and in
integral multiples of $1,000,000, then the Company shall select the Banks to be
allocated such Competitive Loans and shall round allocations up or down to the
next higher or lower multiple of $500,000 as it shall deem appropriate. A
notice given by the Company pursuant to this paragraph (d) shall be
irrevocable.
(e) The Administrative Agent shall promptly notify each bidding Bank
whether or not its Competitive Bid has been accepted (and if so, in what amount
and at what Competitive Bid Rate) by telecopier, and each successful bidder
will thereupon become bound, subject to the other applicable conditions hereof,
to make the Competitive Loan in respect of which its bid has been accepted.
After completing the notifications referred to in the immediately preceding
sentence, the Administrative Agent shall notify each Bank of the aggregate
principal amount of all Competitive Bids accepted.
(f) Upon receipt from the Administrative Agent of the LIBO Rate
applicable to any Eurodollar Loan to be made by any Bank pursuant to a
Competitive Bid that has been accepted by the Company pursuant to Section
2.2(d), the Administrative Agent shall notify such Bank of (i) the applicable
LIBO Rate and (ii) the sum of the applicable LIBO Rate plus the Margin bid by
such Bank.
(g) No Competitive Bid Request shall be made within five Business
Days of the date of any other Competitive Bid Request, unless the Company and
the Administrative Agent shall mutually agree otherwise.
(h) If the Administrative Agent shall at any time have a Commitment
hereunder and shall elect to submit a Competitive Bid in its capacity as a Bank,
it shall submit such bid directly to the Company one quarter of an hour earlier
than the latest time at which the other Banks are required to submit their bids
to the Administrative Agent pursuant to paragraph (b) above.
(i) All notices required by this Section 2.2 shall be made in
accordance with Section 8.2.
Section 2.3 Committed Borrowing Procedure. In order to effect a
Committed Borrowing, the Company shall hand deliver or telecopy to the
Administrative Agent a duly completed request for Committed Borrowing,
substantially in the form of Exhibit A-2 hereto (a "Notice of Committed
Borrowing"), (i) in the case of Eurodollar Loans, not later than 11:00 a.m.,
New York City time, three Business Days before the Borrowing Date specified for
a proposed Committed Borrowing, and (ii) in the case of Alternate Base Loans,
not later than 11:00 a.m., New York City time, on the Business Day which is the
Borrowing Date specified for a proposed Committed Borrowing. No Fixed Rate
Loan shall be requested or made pursuant to a Notice of Committed Borrowing.
Such notice shall be irrevocable and shall in each case refer to this Agreement
and specify (x) whether the Loans then being requested are to be Eurodollar
Loans, or Alternate Base Loans, (y) the Borrowing Date of such Loans (which
shall be a Business Day) and the aggregate amount thereof (which shall not be
less than $10,000,000 and shall be an integral multiple of $1,000,000) and (z)
in the case of a Eurodollar Loan, the Interest Period with respect thereto
(which shall not end later than the Termination Date or, if applicable, the
Term-Out Maturity Date). If no Interest Period with respect to any Eurodollar
Loan is specified in any such Notice of Committed Borrowing, then the Company
shall be deemed to have selected an Interest Period of one month's duration.
Promptly, and in any event on the same day the Administrative Agent receives a
Notice of Committed Borrowing pursuant to this Section 2.3 if such notice is
received by 11:00 a.m., New York City time on a Business Day and otherwise on
the next succeeding Business Day, the Administrative Agent shall advise the
other Banks of such Notice of Committed Borrowing and of each Bank's portion of
the requested Committed Borrowing by telecopier. Each Committed Borrowing
shall consist of Loans of the same Type made on the same day and having the
same Interest Period.
Section 2.4 Refinancings; Conversions
(a) The Company may refinance all or any part of any Loan with a
Loan of the same or a different type made pursuant to Section 2.2 or Section
2.3, subject to the conditions and limitations set forth herein and elsewhere
in this Agreement, including, without limitation, refinancings of Competitive
Loans with Committed Loans and Committed Loans with Competitive Loans. Any
Loan or part thereof so refinanced shall be deemed to be repaid in accordance
with Section 2.18 with the proceeds of a new Borrowing hereunder and the
proceeds of the new Loan, to the extent they do not exceed the principal amount
of the Loan being refinanced, shall not be paid by the Banks to the
Administrative Agent or by the Administrative Agent to the Company pursuant to
Section 2.7(c); provided, however, that (i) if the principal amount extended by
a Bank in a refinancing is greater than the principal amount extended by such
Bank in the Borrowing being refinanced, then such Bank shall pay such
difference to the Administrative Agent for distribution to the Banks described
in (ii) below, (ii) if the principal amount extended by a Bank in the Borrowing
being refinanced is greater than the principal amount being extended by such
Bank in the refinancing, the Administrative Agent shall return the difference
to such Bank out of amounts received pursuant to (i) above, (iii) to the extent
any Bank fails to pay the Administrative Agent amounts due from it pursuant to
(i) above, any Loan or portion thereof being refinanced shall not be deemed
repaid in accordance with Section 2.18 to the extent of such failure and the
Company shall pay such amount to the Administrative Agent pursuant to Section
2.18 and (iv) to the extent the Company fails to pay to the Administrative
Agent any amounts due in accordance with Section 2.18 as a result of the
failure of a Bank to pay the Administrative Agent any amounts due as described
in (iii) above, the portion of any refinanced Loan deemed not repaid shall be
deemed to be outstanding solely to the Bank which has failed to pay the
Administrative Agent amounts due from it pursuant to (i) above to the full
extent of such Bank's portion of such refinanced Loan.
(b) Subject to the conditions and limitations set forth in this
Agreement, the Company shall have the right from time to time to convert all or
part of one Type of Committed Loan into another Type of Committed Loan or to
continue all or a part of any Committed Loan that is a Eurodollar Loan from one
Interest Period to another Interest Period by giving the Administrative Agent
written notice (by means of a Notice of Committed Borrowing) (i) in the case of
Eurodollar Loans, not later than 11:00 a.m., New York City time, three Business
Days before the date specified for such proposed conversion or continuation, and
(ii) in the case of Alternate Base Loans, not later than 11:00 a.m., New York
City time, on the Business Day which is the date specified for such proposed
conversion or continuation. Such notice shall specify (A) the proposed date
for conversion or continuation, (B) the amount of the Committed Loan to be
converted or continued, (C) in the case of conversions, the Type of Committed
Loan to be converted into, and (D) in the case of a continuation of or
conversion into a Eurodollar Loan, the duration of the Interest Period
applicable thereto; provided that (1) Eurodollar Loans may be converted only on
the last day of the applicable Interest Period, (2) except for conversions to
Alternate Base Loans, no conversion shall be made while a Default or Event of
Default has occurred and is continuing and no continuations of any Eurodollar
Loan from one Interest Period to another Interest Period shall be made while a
Default or Event of Default has occurred and is continuing, unless such
conversion or continuation has been approved by Majority Banks, and (3)
each such conversion or continuation shall be in an amount not less than
$10,000,000 and shall be an integral multiple of $1,000,000. All notices given
under this Section shall be irrevocable. If the Company shall fail to give the
Administrative Agent the notice as specified above for continuation or
conversion of a Eurodollar Loan prior to the end of the Interest Period with
respect thereto, such Eurodollar Loan shall automatically be converted into an
Alternate Base Loan on the last day of the Interest Period for such Eurodollar
Loan.
Section 2.5 Fees. The Company agrees to pay to each Bank, through
the Administrative Agent, on each Quarterly Payment Date, on the Termination
Date and, if applicable, on the relevant Loan Payment Date, in immediately
available funds, a facility fee (a "Facility Fee") calculated by multiplying
the Facility Fee Percentage by the amount of the average daily Commitment of
such Bank, whether used or unused (or, if the Commitments shall have been
terminated (except in the case of any period after the Termination Date if the
Term-Out Maturity Date is selected), by the average outstanding principal
amount of the Committed Loans of such Bank ("Loan Based Accrual")) during the
preceding three-month period (or shorter period commencing with the Effective
Date and/or ending with the Termination Date or the relevant Loan Payment Date,
as the case may be). All Facility Fees shall be computed by the Administrative
Agent on the basis of the actual number of days elapsed in a year of 360 days,
and shall be conclusive and binding for all purposes, absent manifest error.
The Facility Fee due to each Bank shall commence to accrue on the Effective
Date and shall cease to accrue on the Termination Date or, if earlier, the date
of the termination of the Commitment of such Bank as provided herein (or, if
Loan Based Accrual is applicable, on the date (the "Loan Payment Date") the
relevant Loans have been paid in full).
Section 2.6 Termination and Reduction of Commitments
(a) Subject to Section 2.12(b), the Company may permanently
terminate, or from time to time in part permanently reduce, the Total
Commitment, in each case upon at least three Business Days' prior written notice
to the Administrative Agent (who shall promptly forward a copy thereof to each
Bank). Such notice shall specify the date and the amount of the termination
or reduction of the Total Commitment. Each such partial reduction of the Total
Commitment shall be in a minimum aggregate principal amount of $10,000,000 and
in an integral multiple of $1,000,000.
(b) On the Termination Date the Total Commitment shall be zero.
(c) Each reduction in the Total Commitment pursuant to this Section
2.6 shall be made ratably among the Banks in accordance with their respective
Commitments. Simultaneously with any termination of Commitments pursuant to
this Section, the Company shall pay to the Administrative Agent for account of
the Banks the Facility Fees on the amount of the Total Commitment so terminated,
accrued through the date of such termination.
Section 2.7 Loans
(a) Each Borrowing made by the Company on any date shall be (i) in
the case of Competitive Loans, in an integral multiple of $1,000,000 and in a
minimum aggregate principal amount of $5,000,000 and (ii) in the case of
Committed Loans, in an integral multiple of $1,000,000 and in a minimum
aggregate principal amount of $10,000,000. Competitive Loans shall be made by
the Banks in accordance with Section 2.2(d), and Committed Loans shall be made
by the Banks ratably in accordance with their respective Commitments on the
Borrowing Date of the Committed Borrowing; provided, however, that the failure
of any Bank to make any Loan shall not in itself relieve any other Bank of its
obligation to lend hereunder.
(b) Each Competitive Loan shall be a Eurodollar Loan or a Fixed Rate
Loan, and each Committed Loan shall be a Eurodollar Loan or an Alternate Base
Loan, as the Company may request subject to and in accordance with Section 2.2,
Section 2.3 or Section 2.4(b), as applicable. Each Bank may at its option make
any Eurodollar Loan by causing a foreign branch or Affiliate of such Bank to
make such Loan; provided, however, that any exercise of such option shall not
affect the obligation of the Company to repay such Loan in accordance with the
terms of this Agreement or increase the Company's obligations to such Bank
hereunder. Loans of more than one interest rate option may be outstanding at
the same time; provided, however, that the Company shall not be entitled to
request any Loan which, if made, would result in an aggregate of more than ten
separate Interest Periods being outstanding hereunder at any one time. For
purposes of the foregoing, Loans having different Interest Periods, regardless
of whether they commence on the same date, shall be considered separate Loans.
(c) Subject to Section 2.4, each Bank shall make its portion of each
Competitive Borrowing and each Committed Borrowing on the proposed Borrowing
Date thereof by paying the amount required to the Administrative Agent at the
Principal Office in immediately available funds not later than 1:00 p.m., New
York City time, and the Administrative Agent shall by 2:00 p.m., New York City
time, credit the amounts so received to the general deposit account of the
Company with the Administrative Agent or, if Loans are not made on such date
because any condition precedent to a Borrowing herein specified shall not have
been met, return the amounts so received to the respective Banks as soon as
practicable; provided, however, if and to the extent the Administrative Agent
fails to return any such amounts to a Bank on the Borrowing Date for such
Borrowing, the Administrative Agent shall pay interest on such unreturned
amounts, for each day from such Borrowing Date to the date such amounts are
returned to such Bank, at the Federal Funds Effective Rate.
(d) The outstanding principal amount of each Competitive Loan shall
be due and payable on the last day of the Interest Period applicable to such
Competitive Loan, and the outstanding principal balance of each Committed Loan
shall be due and payable on the Termination Date.
(e) Notwithstanding clause (d) above, the Company may, upon written
notice to the Administrative Agent given at least three Business Days prior to
the Termination Date, extend the date upon which the principal amount of any
Committed Loans outstanding as of the Termination Date will be due and payable
to the Term-Out Maturity Date; provided that no Default or Event of Default
shall have occurred and be continuing on the Termination Date and the
representations and warranties set forth in Article IV (except Sections 4.2 and
4.5) shall be true and correct in all material respects on and as of the
Termination Date as if made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date. If the
Company gives notice to the Administrative Agent in accordance with the
preceding sentence, the outstanding principal balance of each Committed Loan
outstanding on the Termination Date shall be payable on the Term-Out Maturity
Date. It is understood that, whether or not the Term-Out Maturity Date is
selected, the Commitments shall automatically terminate on the Termination
Date.
Section 2.8 Loan Accounts
(a) The Loans made by each Bank shall be evidenced by one or more
loan accounts or records maintained by such Bank in the ordinary course of
business. Absent manifest error, the loan accounts or records maintained by
the Administrative Agent and each Bank shall be prima facie evidence of the
amount of the Loans made by the Banks to the Company and the interest and
payments thereon. Any failure so to record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Company hereunder to
pay any amount owing with respect to the Loans.
(b) Upon the request of any Bank made through the Administrative
Agent, the Loans made by such Bank may be evidenced by one or more Notes,
instead of or in addition to loan accounts, and upon any such request the
Company shall execute and deliver such Notes to such Bank. Each such Bank
shall, and is hereby authorized by the Company to, endorse on the schedule
attached to the relevant Note held by such Bank (or on a continuation of such
schedule attached to each such Note and made a part thereof) or in its records
relating to such Note an appropriate notation evidencing the date and amount of
each Competitive Loan or Committed Loan, as applicable, of such Bank, each
payment or prepayment of principal of any Competitive Loan or Committed Loan,
as applicable, and the other information provided for on such schedule. The
failure of any Bank to make such a notation or any error therein shall not in
any manner affect the obligation of the Company to repay the Competitive Loans
or Committed Loans, as applicable, made by such Bank in accordance with the
terms of the relevant Note.
Section 2.9 Interest on Loans
(a) Subject to the provisions of Section 2.10, each Eurodollar Loan
shall bear interest at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) equal to the LIBO Rate for the
Interest Period in effect for such Loan (A) plus or minus, as the case may be,
in the case of each Competitive Loan, the Margin specified by a Bank with
respect to such Loan in its Competitive Bid submitted pursuant to Section
2.2(b) or (B) plus in the case of each Committed Loan, the Applicable Margin.
Interest on each Eurodollar Loan shall be payable on each Interest Payment Date
applicable thereto. The applicable LIBO Rate for each Interest Period shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
(b) Subject to the provisions of Section 2.10, each Alternate Base
Loan shall bear interest at the rate per annum equal to the Alternate Base Rate
plus the Applicable Margin (if the Alternate Base Rate is based on the Prime
Rate, computed on the basis of the actual number of days elapsed over a year of
365 or 366 days, as the case may be; if the Alternate Base Rate is based on the
Federal Funds Effective Rate, computed on the basis of the actual number of
days elapsed over a year of 360 days). Interest on each Alternate Base Loan
shall be payable on each Interest Payment Date applicable thereto. The
applicable Alternate Base Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
(c) Subject to the provisions of Section 2.10, each Fixed Rate Loan
shall bear interest at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) equal to the fixed rate of
interest offered by the Bank making such Loan and accepted by the Company
pursuant to Section 2.2. Interest on each Fixed Rate Loan shall be payable on
each Interest Payment Date applicable thereto.
(d) The Company shall pay to the Administrative Agent for the account
of each Bank that has made a Eurodollar Loan to the Company, so long as such
Bank shall be required under regulations of the Board to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, additional interest on the unpaid principal amount of each such
Eurodollar Loan of such Bank, from the date of such Loan until such principal
amount is paid in full, at an interest rate per annum for such number of days
during the Interest Period for such Loan as shall be pertinent equal to the
remainder obtained by subtracting (i) the LIBO Rate for such Interest Period
from (ii) the rate obtained by dividing such LIBO Rate referred to in clause (i)
above by that percentage equal to 100% minus the Reserve Percentage of such Bank
for such Interest Period, payable on the next Interest Payment Date applicable
to such Loan. Such additional interest shall be determined by such Bank as, if
and to the extent incurred, and shall be payable as aforesaid upon notification
thereof by such Bank to the Company through the Administrative Agent. Each
determination by a Bank of additional interest under this Section 2.9(d) shall
be conclusive and binding for all purposes in the absence of manifest error.
Section 2.10 Interest on Overdue Amounts. If the Company shall
default in the payment of the principal of or interest on any Loan or any other
amount becoming due hereunder, the Company shall on demand from time to time
pay interest, to the extent permitted by Law, on such defaulted amount up to
(but not including) the date of actual payment (after as well as before
judgment) at a rate per annum equal to (i) in the case of the principal amount
of any Eurodollar Loan or any Competitive Loan, 2% above the rate otherwise
applicable thereto and (ii) in all other cases, the Agreed Maximum Rate (if the
Alternate Base Rate is based on the Prime Rate, computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be; if the Alternate Base Rate is based on the Federal Funds Effective Rate,
computed on the basis of the actual number of days elapsed over a year of 360
days).
Section 2.11 Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Loan that is a Committed Loan, the
Administrative Agent shall have determined that dollar deposits in the amount
of the requested principal amount of such Eurodollar Loan are not generally
available in the Eurodollar Interbank Market, or that dollar deposits are not
generally available in the Eurodollar Interbank Market for the requested
Interest Period, or that the rate at which such dollar deposits are being
offered will not adequately and fairly reflect the cost to the Majority Banks
of making or maintaining such Eurodollar Loan during such Interest Period, or
that reasonable means do not exist for ascertaining the LIBO Rate, the
Administrative Agent shall, as soon as practicable thereafter, give telecopy
notice of such determination to the Company and the Banks. In the event of any
such determination, any request by the Company for a Eurodollar Loan that is a
Committed Loan shall, until the circumstances giving rise to such notice no
longer exist, be deemed to be a request for an Alternate Base Loan. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
Section 2.12 Prepayment of Loans
(a) Prior to the Termination Date (or, if applicable, the Term-Out
Maturity Date), the Company shall have the right at any time to prepay any
Committed Borrowing, in whole or in part, subject to the requirements of
Section 2.15 or Section 2.16 but otherwise without premium or penalty, upon at
least five Business Days prior written notice to the Administrative Agent;
provided, however, that each such partial prepayment shall be in an integral
multiple of $1,000,000 and in a minimum aggregate principal amount of
$5,000,000. Each notice of prepayment shall specify the prepayment date and the
aggregate principal amount of each Borrowing to be prepaid, shall be irrevocable
and shall commit the Company to prepay such Borrowing by the amount stated
therein. The Company shall not have the right to prepay any Competitive
Borrowing.
(b) On the date of any termination or reduction of the Total Commitment
pursuant to Section 2.6(a), the Company shall pay or prepay so much of the
Loans as shall be necessary in order that the aggregate principal amount of the
Loans outstanding will not exceed the Total Commitment following such
termination or reduction. Subject to the foregoing, any such payment or
prepayment shall be applied to such Borrowing or Borrowings as the Company
shall select. All prepayments under this paragraph shall be subject to Section
2.15 and Section 2.16.
(c) All prepayments under this Section 2.12 shall be accompanied by
accrued interest on the principal amount being prepaid to the date of
prepayment.
Section 2.13 Reserve Requirements; Change in Circumstances
(a) Notwithstanding any other provision herein, if after the date of
this Agreement any Regulatory Change (i) shall change the basis of taxation of
payments to any Bank of the principal of or interest on any Eurodollar Loan or
Fixed Rate Loan made by such Bank or any other fees or amounts payable
hereunder (other than (x) Taxes imposed on or measured by the capital, receipts
or franchises of such Bank or the overall gross or net income of such Bank by
the jurisdiction in which such Bank has its principal office or by any
political subdivision or taxing authority therein (or any Tax which is enacted
or adopted by such jurisdiction, political subdivision, or taxing authority as
a direct substitute for any such Taxes) or (y) any Tax, assessment, or other
governmental charge that would not have been imposed but for the failure of any
Bank to comply with any certification, information, documentation, or other
reporting requirement), (ii) shall impose, modify, or deem applicable any
reserve, special deposit, or similar requirement with respect to any Eurodollar
Loan against assets of, deposits with or for the account of, or credit extended
by, such Bank under this Agreement (without duplication of any amounts paid
pursuant to Section 2.9(d)), or (iii) with respect to any Eurodollar Loan,
shall impose on such Bank or the Eurodollar Interbank Market any other condition
affecting this Agreement or any Eurodollar Loan made by such Bank, and the
result of any of the foregoing shall be to materially increase the actual cost
to such Bank of maintaining its Commitment or of making or maintaining any
Eurodollar Loan or Fixed Rate Loan or to materially reduce the amount of any
sum received or receivable by such Bank hereunder (whether of principal,
interest, or otherwise) in respect thereof, then the Company shall pay to the
Administrative Agent for the account of such Bank, within ten days following
delivery to the Company of the certificate specified in paragraph (c) below by
such Bank, such additional amount or amounts as will reimburse such Bank for
such increase or reduction to such Bank to the extent reasonably allocable to
this Agreement.
(b) If any Bank shall have determined in good faith that any Regulatory
Change regarding capital adequacy or compliance by any Bank (or its parent or
any lending office of such Bank) with any request or directive regarding
capital adequacy (whether or not having the force of Law) of any Tribunal,
monetary authority, central bank, or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's (or its parent's) capital
as a consequence of its obligations hereunder to a level below that which such
Bank (or its parent) could have achieved but for such Regulatory Change, or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, the Company shall pay to the Administrative Agent for the
account of such Bank, within ten days following delivery to the Company of the
certificate specified in paragraph (c) below by such Bank, such additional
amount or amounts as will reimburse such Bank (or its parent) for such
reduction.
(c) Each Bank shall notify the Company of any event occurring after the
date hereof entitling such Bank to compensation under paragraph (a) or (b) of
this Section 2.13 (together with a good faith estimate of the amounts it would
be entitled to claim in respect of such event) as promptly as practicable, but
in any event on or before the date which is 60 days after the related
Regulatory Change or other event; provided that (i) if such Bank fails to give
such notice by such date, such Bank shall, with respect to compensation payable
pursuant to paragraph (a) or (b) of this Section 2.13 in respect of any costs
resulting from such Regulatory Change or other event, only be entitled to
payment under paragraph (a) or (b) of this Section 2.13 for costs incurred from
and after the date of such notice and (ii) such Bank will take such reasonable
actions, if any (including the designation of a different Applicable Lending
Office for the Loans of such Bank affected by such event) to avoid the need
for, or reduce the amount of, such compensation so long as such actions will
not, in the reasonable opinion of such Bank, be materially disadvantageous to
such Bank. A certificate of a Bank setting forth in reasonable detail (i) the
Regulatory Change or other event giving rise to any costs, (ii) such amount or
amounts as shall be necessary to reimburse such Bank (or participating banks or
other entities pursuant to Section 8.11) as specified in paragraph (a) or (b)
of this Section 2.13, as the case may be, and (iii) the calculation of such
amount or amounts, shall be delivered to the Company (with a copy to the
Administrative Agent) promptly after such Bank determines it is entitled to
payment under this Section 2.13, and shall be conclusive and binding absent
manifest error. In preparing such certificate, such Bank may employ such
assumptions and allocations of costs and expenses as it shall in good faith
deem reasonable and may use any reasonable averaging and attribution method.
(d) In the event any Bank shall seek payment pursuant to this Section
2.13 or the events contemplated under Section 2.11 or Section 2.14 shall have
occurred with respect to any Bank, the Company may, provided no Event of
Default has occurred and is continuing, give notice to such Bank (with copies
to the Agents) that it wishes to seek one or more assignees (which may be one
or more of the Banks, but which may not be a Person who would be entitled at
such time to claim payment pursuant to this Section 2.13 or with respect to
which any of the events contemplated under Section 2.11 or Section 2.14 would
exist at such time if such Person were a Bank under this Agreement) to assume
the Commitment of such Bank and to purchase its outstanding Loans and Notes (if
any). Each Bank requesting payment pursuant to this Section 2.13, or with
respect to which any of the events contemplated under Section 2.11 or Section
2.14 have occurred, agrees to sell its Commitment, Loans, Notes (if any), and
interest in this Agreement and the other Loan Papers pursuant to Section
8.11(c) to any such assignee approved by the Company and the Administrative
Agent for an amount equal to the sum of the outstanding unpaid principal of and
accrued interest on such Loans and Notes (if any) plus all other fees and
amounts (including, without limitation, any payment claimed by such Bank under
this Section, 2.13 and as to which such Bank has delivered the certificate
required by Section 2.13(c) on or before the date such Commitment, Loans, and
Notes (if any) are purchased) due such Bank hereunder calculated, in each case,
to the date such Commitment, Loans, Notes (if any) and interest are purchased,
whereupon such Bank shall have no further Commitment or other obligation to the
Company hereunder or under any other Loan Paper.
(e) Notwithstanding anything herein to the contrary, no Bank or
participant shall be entitled to any payment under this Section 2.13 with
respect to any Competitive Loan.
(f) Without prejudice to the survival of any other obligations of the
Company hereunder, the obligations of the Company under this Section 2.13 shall
survive for one year after the termination of this Agreement and/or the payment
or assignment of any of the Loans or Notes.
Section 2.14 Change in Legality
(a) Notwithstanding anything to the contrary herein contained, if any
Regulatory Change shall make it unlawful for any Bank to make or maintain any
Eurodollar Loan or to give effect to its obligations in respect of Eurodollar
Loans as contemplated hereby, then, by prompt written notice to the Company and
to the Administrative Agent, such Bank may:
(i) declare that Eurodollar Loans will not thereafter be made by such
Bank hereunder, whereupon the Company shall be prohibited from requesting
Eurodollar Loans from such Bank hereunder unless such declaration is
subsequently withdrawn; and
(ii) if such unlawfulness shall be effective prior to the end of any
Interest Period of an outstanding Eurodollar Loan, require that all outstanding
Eurodollar Loans with such Interest Periods made by it be converted to Alternate
Base Loans, in which event (A) all such Eurodollar Loans shall be automatically
converted to Alternate Base Loans as of the effective date of such notice as
provided in paragraph (b) below and (B) all payments and prepayments of
principal which would otherwise have been applied to repay the converted
Eurodollar Loans shall instead be applied to repay the Alternate Base Loans
resulting from the conversion of such Eurodollar Loans.
(b) For purposes of this Section 2.14, a notice to the Company (with a
copy to the Administrative Agent) by any Bank pursuant to paragraph (a) above
shall be effective on the date of receipt thereof by the Company. Any Bank
having furnished such a notice agrees to withdraw the same promptly following
any Regulatory Change that makes it lawful for such Bank to make
and maintain Eurodollar Loans.
(c) If, with respect to any Bank, a condition arises or an event occurs
which would, or would upon the giving of notice, result in the payment of
amounts pursuant to Section 2.13 or permit such Bank, pursuant to this Section
2.14, to suspend its obligation to make Eurodollar Loans, such Bank, promptly
upon becoming aware of the same, shall notify the Company thereof and shall
take such steps as may reasonably be available to it (including, without
limitation, changing its Applicable Lending Office) to mitigate the effects of
such condition or event, provided that such Bank shall be under no obligation to
take any step that, in its good faith opinion, would (a) result in its incurring
any additional costs in performing its obligations hereunder and under any
outstanding Loan (unless the Company has notified such Bank of the Company's
agreement to reimburse it for the same) or (b) be otherwise adverse to such Bank
in a material respect.
Section 2.15 Indemnity. The Company shall indemnify each Bank against
any loss or reasonable expense which such Bank may sustain or incur as a
consequence of (a) any failure by the Company to fulfill on the date of any
Borrowing hereunder the applicable conditions set forth in Article III, (b) any
failure by the Company to borrow hereunder after a Notice of Committed
Borrowing pursuant to Article II has been given or after Competitive Bids have
been accepted, (c) any payment, prepayment, or conversion of a Eurodollar Loan
or Fixed Rate Loan required by any other provision of this Agreement or
otherwise made on a date other than the last day of the applicable Interest
Period for any reason, including without limitation the acceleration of
outstanding Loans as a result of any Event of Default, (d) any failure by the
Company for any reason (including without limitation the existence of a Default
or an Event of Default) to pay, prepay or convert a Eurodollar Loan on the date
for such payment, prepayment or conversion, specified in the relevant notice of
payment, prepayment or conversion under this Agreement. The indemnity of the
Company pursuant to the immediately preceding sentence shall include, but not be
limited to, any loss or reasonable expense sustained or incurred or to be
sustained or incurred in liquidating or employing deposits from third parties
acquired to effect or maintain such Loan or any part thereof as a Eurodollar
Loan or Fixed Rate Loan. Such loss or reasonable expense shall include,
without limitation, an amount equal to the excess, if any, as reasonably
determined by each Bank of (i) its cost of obtaining the funds for the Loan
being paid, prepaid, or converted or not borrowed, paid, prepaid or converted
(based on the LIBO Rate or, in the case of a Fixed Rate Loan, the fixed rate of
interest applicable thereto) for the period from the date of such payment,
prepayment, or conversion or failure to borrow, pay, prepay or convert to the
last day of the Interest Period for such Loan (or, in the case of a failure to
borrow, pay, prepay or convert, the Interest Period for the Loan which would
have commenced on the date of such failure to borrow, pay, prepay or convert)
over (ii) the amount of interest (as reasonably determined by such Bank) that
would be realized by such Bank in reemploying the funds so paid, prepaid, or
converted or not borrowed, paid, prepaid or converted for such period or
Interest Period, as the case may be. A certificate of each Bank setting forth
any amount or amounts and, in reasonable detail, the computations thereof,
which such Bank is entitled to receive pursuant to this Section 2.15 shall be
delivered to the Company (with a copy to the Administrative Agent) and shall be
conclusive, if made in good faith, absent manifest error. The Company shall
pay to the Administrative Agent for the account of each Bank the amount shown
as due on any certificate within 30 days after its receipt of the same.
Section 2.16 Pro Rata Treatment. Except as permitted under Section
2.9(d), Section 2.13(c) and Section 2.15 with respect to interest, (a) each
payment or prepayment of principal and each payment of interest with respect to
a Competitive Borrowing (at a particular Competitive Bid Rate) or a Committed
Borrowing shall be made pro rata among the Banks in accordance with the
respective principal amounts of the Loans extended by each Bank, if any, with
respect to such Competitive Borrowing or Committed Borrowing, and (b)
conversions of Committed Loans to Committed Loans of another Type, continuations
of Committed Loans that are Eurodollar Loans from one Interest Period to another
Interest Period, refinancings of Competitive Loans with Committed Loans, and
Committed Loans which are not refinancings of other Loans shall be made pro rata
among the Banks in accordance with their respective Commitments.
Section 2.17 Sharing of Setoffs. Each Bank agrees that if it shall
through the exercise of a right of banker's lien, setoff, or counterclaim
against the Company (pursuant to Section 8.6 or otherwise), including, but not
limited to, a secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Bank under any applicable Debtor Relief Law or
otherwise, obtain payment (voluntary or involuntary) in respect of the
Committed Loans held by it (other than pursuant to Section 2.9(d), Section
2.13, or Section 2.15) as a result of which the unpaid principal portion of the
Committed Loans held by it shall be proportionately less than the unpaid
principal portion of the Committed Loans held by any other Bank, it shall be
deemed to have simultaneously purchased from such other Bank a participation in
the Committed Loans held by such other Bank, so that the aggregate unpaid
principal amount of the Committed Loans and participations in Committed Loans
pursuant to this Section 2.17 held by each Bank shall be in the same proportion
to the aggregate unpaid principal amount of all Committed Loans then outstanding
as the principal amount of the Committed Loans held by it prior to such exercise
of banker's lien, setoff, or counterclaim was to the principal amount of all
Committed Loans outstanding prior to such exercise of banker's lien, setoff, or
counterclaim; provided, however, that if any such purchase or purchases or
adjustments shall be made pursuant to this Section 2.17 and the payment giving
rise thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest. The Company expressly
consents to the foregoing arrangements and agrees that any Bank holding a
participation in a Committed Loan deemed to have been so purchased may exercise
any and all rights of banker's lien, setoff, or counterclaim with respect to any
and all moneys owing by the Company to such Bank as fully as if such Bank had
made a Committed Loan directly to the Company in the amount of such
participation.
Section 2.18 Payments
(a) The Company shall make each payment hereunder and under any
instrument delivered hereunder not later than 12:00 noon (New York City time) on
the day when due in dollars to the Administrative Agent at its Principal Office
for the account of the Banks, in federal or other immediately available funds.
The Administrative Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal of or interest on Committed Loans
(other than pursuant to Section 2.9(d), Section 2.13, and Section 2.15) or
Facility Fees ratably to the Banks and like funds relating to the payment of
any other amount (including, without limitation, payments of principal or
interest on Competitive Loans which are not made ratably to the Banks) payable
to any Bank to such Bank for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement.
(b) Whenever any payment hereunder or under any Note shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in all such
cases be included in the computation of payment of interest or Facility Fee, as
the case may be; provided, however, if such extension would cause payment of
interest on or principal of a Eurodollar Loan to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.
(c) Unless the Administrative Agent shall have received notice from the
Company prior to the date on which any payment is due to the Banks hereunder
that the Company will not make such payment in full, the Administrative Agent
may assume that the Company has made or will make such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in reliance
upon such assumption, cause to be distributed to each Bank on such due date an
amount equal to the amount then due such Bank. If and to the extent the Company
shall not have so made such payment in full to the Administrative Agent, each
Bank shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day from the
date such amount is distributed to such Bank until the date such Bank repays
such amount to the Administrative Agent, at the Federal Funds Effective Rate.
(d) Except as expressly provided in Section 2.19, all payments (whether
of principal, interest, fees, reimbursements, or otherwise) by the Company
under this Agreement shall be made without setoff or counterclaim and shall be
made free and clear of and without deduction for any present or future Tax,
levy, impost, or any other charge, if any, of any nature whatsoever now or
hereafter imposed by any Tribunal. Except as otherwise provided in Section
2.19, if the making of such payments by the Company is prohibited by Law unless
such a Tax, levy, impost, or other charge is deducted or withheld therefrom,
the Company shall pay to the Administrative Agent, on the date of each such
payment, such additional amounts (without duplication of any other amounts
required to be paid by the Company pursuant to Section 2.13) as may be
necessary in order that the net amounts received by the Banks after such
deduction or withholding shall equal the amounts which would have been received
if such deduction or withholding were not required. The Company shall confirm
that all applicable Taxes, if any, imposed on this Agreement or transactions
hereunder shall have been properly and legally paid by it to the appropriate
taxing authorities by sending official Tax receipts or notarized copies of such
receipts to the Administrative Agent within 30 days after payment of any
applicable Tax.
Section 2.19 Tax Forms. With respect to each Bank which is organized
under the Laws of a jurisdiction outside the United States, within 30 days
after the Effective Date, and from time to time thereafter if requested by the
Company or the Administrative Agent, or as otherwise required by law, each
such Bank shall provide the Administrative Agent and the Company with the forms
prescribed by the Internal Revenue Service of the United States certifying as to
such Bank's status for purposes of determining exemption from United States
withholding Taxes with respect to all payments to be made to such Bank hereunder
or other documents satisfactory to the Company and the Administrative Agent
indicating that all payments to be made to such Bank hereunder are subject to
such Tax at a rate reduced by an applicable Tax treaty. Unless the Company and
the Administrative Agent have received such forms or such documents indicating
that payments hereunder are not subject to United States withholding Tax, the
Company or the Administrative Agent (after notice from the Administrative Agent
to such Bank of such non-receipt) shall withhold Taxes from such payments at
the applicable statutory rate (or any reduced applicable Tax treaty rate) in
the case of payments to or for any Bank organized under the Laws of a
jurisdiction outside the United States.
Section 2.20 Calculation of LIBO Rates. The provisions of this
Agreement relating to calculation of the LIBO Rate are included only for the
purpose of determining the rate of interest or other amounts to be paid
hereunder that are based upon such rate, it being understood that each Bank
shall be entitled to fund and maintain its funding of all or any part of a
Eurodollar Loan as it sees fit. All such determinations hereunder, however,
shall be made as if each Bank had actually funded and maintained funding of
each Eurodollar Loan through the purchase in the Eurodollar InterBank Market of
one or more eurodollar deposits in an amount equal to the principal amount of
such Loan and having a maturity corresponding to the Interest Period for such
Loan.
Section 2.21 Booking Loans. Subject to Section 2.19, any Bank may
make, carry, or, transfer Loans at, to, or for the account of any of its branch
offices or the office of any Affiliate.
Section 2.22 Quotation of Rates. It is hereby acknowledged that the
Company may call the Administrative Agent on or before the date on which notice
of a Borrowing is to be delivered by the Company in order to receive an
indication of the rate or rates then in effect, but that such projection shall
not be binding upon the Administrative Agent or any Bank nor affect the rate of
interest which thereafter is actually in effect when the election is made.
ARTICLE III
CONDITIONS OF LENDING
Section 3.1 Conditions Precedent. The effectiveness of this Agreement
is subject to the satisfaction of the following conditions precedent:
(a) The Administrative Agent shall have received the following, each
dated (unless otherwise indicated) the Effective Date:
(i) Officer's Certificates dated the Effective Date certifying,
inter alia, (i) true and correct copies of resolutions adopted by the
Board of Directors or Executive Committee, as appropriate, of the Company
authorizing the Company to borrow and effect other transactions
hereunder, (ii) a true and correct copy of the Company's bylaws in effect
on the date hereof, (iii) the incumbency and specimen signatures of the
Persons executing any documents on behalf of the Company, (iv) the truth
of the representations and warranties made by the Company in this
Agreement (or, if any such representation or warranty is expressly stated
to have been made as of a specific date, as of such specific date), and
(v) the absence of the occurrence and continuance of any Default or Event
of Default.
(ii) A copy of the Company's charter and all amendments thereto,
accompanied by certificates that such copy is correct and complete, one
certificate dated within a reasonable time prior to the Effective Date
and issued by the Secretary of State of Texas and one certificate dated
the Effective Date and executed by the corporate secretary or assistant
secretary of the Company.
(iii) Certificates (dated within twenty days prior to the
Effective Date) of existence and good standing of the Company from
appropriate officials of Texas.
(iv) The written opinions of internal and outside counsel to the
Company and counsel to the Agents, substantially in the form set out in
Exhibits E-1, E-2 and E-3, respectively, each dated the Effective Date.
(v) An Administrative Questionnaire (dated any date prior to the
Effective Date) completed by each Bank which is a party hereto on the
Effective Date.
(vi) Such other agreements, documents, instruments, opinions,
certificates, and evidences as the Administrative Agent may reasonably
request prior to the Effective Date.
(b) Any fees required to be paid on or before the Effective Date shall
have been paid.
(c) The commitments under the Existing Credit Agreement shall have been
terminated and all amounts owing thereunder shall have been paid in full. Each
party hereto that is also a party to the Existing Credit Agreement hereby waives
any requirement under the Existing Credit Agreement of advance notice for any
such termination or payment.
Section 3.2 Conditions Precedent to Each Committed Borrowing. The
obligation of each Bank to make a Committed Loan on the occasion of any
Committed Borrowing (including the initial Committed Borrowing) shall be
subject to the further conditions precedent that on the date of such Committed
Borrowing the following statements shall be true (and each of the giving of the
applicable Notice of Committed Borrowing and the acceptance by the Company of
the proceeds of such Committed Borrowing shall constitute a representation and
warranty by the Company that on the date of such Committed Borrowing such
statements are true):
(a) The representations and warranties contained in Article IV (except
Sections 4.2 and 4.5) are correct in all material respects on and as of the date
of such Committed Borrowing (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date), before and after giving effect to such Committed Borrowing, as though
made on and as of such date;
(b) No event has occurred and is continuing, or would result from such
Committed Borrowing, which constitutes either a Default or an Event of Default;
and
(c) Following the making of such Committed Borrowing and all other
Borrowings to be made on the same day under this Agreement, the sum of the
aggregate principal amount of all Loans then outstanding shall not exceed the
Total Commitment.
Section 3.3 Conditions Precedent to Each Competitive Borrowing. The
obligation of each Bank to make a Competitive Loan as part of a Competitive
Borrowing (including the initial Competitive Borrowing) is subject to the
further conditions precedent that (a) the Administrative Agent shall have
received a Competitive Bid Request with respect thereto, and (b) on the date of
such Competitive Borrowing the following statements shall be true (and each of
the giving of the applicable Competitive Bid Request and the acceptance by the
Company of the proceeds of such Competitive Borrowing shall constitute a
representation and warranty by the Company that on the date of such Competitive
Borrowing such statements are true):
(a) The representations and warranties contained in Article IV (except
Sections 4.2 and 4.5) are correct in all material respects on and as of the
date of such Competitive Borrowing (or if any such representation or warranty
is expressly stated to have teen made as of a specific date, as of such specific
date), before and after giving effect to such Competitive Borrowing, as though
made on and as of such date;
(b) No event has occurred and is continuing, or would result from such
Competitive Borrowing, which constitutes either a Default or an Event of
Default; and
(c) Following the making of such Competitive Borrowing and all other
Borrowings to be made on the same day under this Agreement, the sum of the
aggregate principal amount of all Loans then outstanding shall not exceed the
Total Commitment.
Section 3.4 Legal Details. All documents executed or submitted
pursuant hereto by the Company shall be reasonably satisfactory in form and
substance to the Administrative Agent and its counsel. The Administrative
Agent shall, promptly following satisfaction of the conditions specified in
Section 3.1, notify the Company and each of the Banks of such satisfaction and
the date of the Effective Date. The Administrative Agent and its counsel shall
receive all information, and such counterpart originals or certified or other
copies of such materials, as they may reasonably deem necessary or appropriate.
All legal matters incident to the transactions contemplated by this Agreement
(including without limitation matters arising from time to time as a result of
changes occurring with respect to any Laws) shall be reasonably satisfactory to
counsel to the Administrative Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agents and Banks as follows:
Section 4.1 Organization, Authority and Qualifications
(a) The Company and each of its Material Subsidiaries is a corporation
duly organized, validly existing, and in good standing under the Laws of the
jurisdiction of its incorporation;
(b) The Company has the corporate power and authority to execute,
deliver, and perform this Agreement and the other Loan Papers and to borrow
hereunder;
(c) On the Effective Date, the Company and each of its Material
Subsidiaries is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction where the character of its Properties or
nature of its activities make such qualification necessary, except where the
failure to be so qualified or in good standing would not have a Material
Adverse Effect; and
(d) On the Effective Date, the Company has no Material Subsidiaries.
Section 4.2 Financial Statements. The Current Financials present
fairly the consolidated financial position of the Company and its Subsidiaries
on the date thereof and the consolidated results of operations and changes in
financial position of the Company and its Subsidiaries for the period then
ended, all in conformity with GAAP. Except for transactions related to or
contemplated by the Loan Papers and transactions disclosed in writing to the
Administrative Agent before the Effective Date, there has been no Material
Adverse Change since December 31, 2001.
Section 4.3 Compliance with Agreement and Laws. On the Effective
Date, neither the Company nor any of its Material Subsidiaries is in default in
any material respect under the provisions of any instrument evidencing any
material obligation, indebtedness, or liability of the Company or any of its
Material Subsidiaries or of any agreement relating thereto. Neither the
Company nor any of its Material Subsidiaries is in violation of any Law, which
default or violation would have a Material Adverse Effect.
Section 4.4 Authorization; No Breach; and Valid Agreements. The
execution, delivery, and performance of this Agreement, the borrowings
hereunder, and the execution, delivery, and performance of the other Loan
Papers by the Company have been duly authorized by all requisite corporate
action on the part of the Company and will not violate its charter or bylaws
and will not violate any Law or any order of any Tribunal, and will not
conflict with, result in a breach of the provisions of or constitute a default
under, or result in the imposition of any Lien upon the Property of the Company
pursuant to the provisions of, any material loan agreement, credit agreement,
indenture, mortgage, deed of trust, franchise, permit, license, note, contract,
or other material agreement or instrument to which the Company is now a party.
The Loan Papers are the valid and binding obligations of the Company and are
enforceable in accordance with their respective terms.
Section 4.5 Litigation and Judgments. Except as previously disclosed
to the Administrative Agent in writing, neither the Company nor any of its
Subsidiaries is either party to or aware of the threat of any Litigation which
has, in the Company's opinion, a reasonable probability of success and which,
if determined adversely to the Company or such Subsidiary, would have a
Material Adverse Effect. To the knowledge of the Company, on the Effective
Date there is no outstanding unsatisfied money judgment against the Company or
any of its Subsidiaries in an amount in excess of $50,000,000, and there are no
outstanding unsatisfied money judgments against the Company or any of its
Subsidiaries which individually or in the aggregate have or would have a
Material Adverse Effect.
Section 4.6 Ownership of Properties. The Company and each of its
Material Subsidiaries has good and marketable title (except for Permitted Liens)
or valid leasehold interests in all of its material Properties which are owned
or used in connection with its business.
Section 4.7 Taxes. To the extent that failure to do so would have a
Material Adverse Effect, the Company and each of its Material Subsidiaries has
filed all Tax returns or reports required of it and has paid all Tax liability
shown thereon as due to the extent the same has become due and before it may
have become delinquent (except to the extent being contested in good faith by
appropriate proceedings and for which adequate reserves have been established).
The federal income tax liability of the Company and its Subsidiaries has been
audited by the Internal Revenue Service and has been finally determined and
satisfied for all taxable years up to and including the taxable year ended
December 31, 1991.
Section 4.8 Approvals Required. Neither the execution and delivery of
this Agreement and the other Loan Papers by the Company, nor the consummation
by the Company of any of the transactions contemplated hereby or thereby
requires the consent or approval of, the giving of notice to, or the
registration, recording, or filing of any document with, or the taking of any
other action in respect of any Tribunal except for the routine filing of copies
of this Agreement and certain other Loan Papers with the Securities and Exchange
Commission, except for any of the foregoing required of any Bank or Agent.
Section 4.9 Business; Status as Air Carrier. The Company is an air
carrier engaged in scheduled air transportation and is in all material respects
duly qualified and licensed under all applicable Laws to carry on its business
as a scheduled airline currently subject to regulation by the Federal Aviation
Administration and the Department of Transportation.
Section 4.10 ERISA Compliance. The Company is in compliance in all
material respects with ERISA and the rules and regulations thereunder. The
Company has no material unfunded vested liability under any Plan.
Section 4.11 Insurance. The Company maintains with insurance
companies or associations of recognized responsibility (or, as to workers'
compensation or similar insurance, with an insurance fund or by self-insurance
authorized by the jurisdictions in which it operates) insurance concerning its
Properties and businesses against such casualties and contingencies and of such
types and in such amounts (and with co-insurance, self-insurance and
deductibles) as is customary in the case of same or similar businesses.
Section 4.12 Purpose of Loan. The proceeds of the Loans will be used
for general corporate purposes, including acquisitions, and no part of the
proceeds of any Loan will be used for any purpose which would violate, or be
inconsistent with, any of the margin regulations of the Board.
Section 4.13 Investment Company Act. Neither the Company nor any of
its Subsidiaries is an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended.
Section 4.14 General. As of the Effective Date, there is no material
fact or condition relating to the Loan Papers or the financial condition and
business of the Company and its Subsidiaries which has a Material Adverse
Effect and which has not been related, in writing, to the Administrative Agent,
other than industry-wide risks in the ordinary course of business associated
with the types of business conducted by the Company and its Subsidiaries. All
writings exhibited or delivered to any of the Agents and Banks by or on behalf
of the Company are and will be genuine and in all material respects what they
purport and appear to be.
ARTICLE V
COVENANTS
So long as the Company may borrow hereunder and until the Obligation has
been paid in full, the Company covenants as follows:
Section 5.1 Performance of Obligations. The Company shall duly and
punctually pay and perform each of the Obligations under this Agreement and the
other Loan Papers.
Section 5.2 Compliance with Laws. The Company shall comply, and shall
cause each of its Material Subsidiaries to comply, in all material respects
with all applicable Laws, except for any noncompliance which individually or in
the aggregate would not have a Material Adverse Effect, and such compliance
shall include, without limitation, paying before the same become delinquent all
Taxes imposed upon the Company or any of its Material Subsidiaries or its or
their Properties, except to the extent contested diligently and in good faith by
proper proceedings, and for which adequate reserves are established in
accordance with GAAP.
Section 5.3 Maintenance of Existence Licenses and Franchises:
Compliance With Agreements. Except to the extent otherwise permitted in
Article V, the Company shall maintain, and shall cause each of its Material
Subsidiaries to maintain, its existence, and the Company shall preserve and
maintain, and shall cause each of its Material Subsidiaries to preserve and
maintain, all material licenses, privileges, franchises, certificates,
authorizations, and other permits and agreements necessary for the operation of
its business. The Company shall comply, and shall cause each of its Material
Subsidiaries to comply, with all material agreements binding on it or affecting
its properties or business, except for any noncompliance which individually or
in the aggregate would not have a Material Adverse Effect.
Section 5.4 Maintenance of Properties. The Company shall, and shall
cause each of its Material Subsidiaries to, cause all of its Properties used or
useful in the conduct of its business to be maintained and kept in good
condition, repair, and working order, and supplied with all necessary
equipment, and cause to be made all necessary repairs, renewals, replacements,
betterments, and improvements thereof, all as in the judgment of the Company
may be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times. Subject to the provisions
of this Section 5.4, the Company shall, at its expense, maintain, service,
repair, overhaul, improve, and rebuild the Aircraft so as to keep all Aircraft
in as good a condition as presently exists or as when acquired by the Company
if any Aircraft are hereafter acquired (ordinary wear and tear excepted),
and as required to meet the air-worthiness standards of the Federal Aviation
Administration and the Department of Transportation (to the extent such
standards are applicable to the Aircraft) or the standards observed by the
Company with respect to Property of similar type, whichever is higher. The
Company shall comply with all applicable mandatory maintenance, service,
repair, and overhaul manuals issued by the respective manufacturers of the
Aircraft. The Company shall comply with all Laws of Tribunals having
jurisdiction over the Company or the Aircraft, including all applicable
requirements of the Federal Aviation Administration and the Department of
Transportation as to operation, maintenance, or use of the Aircraft. In the
event that any such Law requires alteration of any Aircraft, the Company shall
conform thereto or obtain conformance therewith at no expense to the Agents or
the Banks and will maintain such Aircraft in proper operating condition under
such Laws; provided, however, that the Company may, in good faith, contest the
validity or application of any such Law in any reasonable manner which does not
materially adversely affect the Rights of the Agents or the Banks.
Section 5.5 Maintenance of Books and Records. The Company shall, and
shall cause each of its Subsidiaries to, maintain proper books of record and
account in which full, true, and correct entries in accordance with GAAP
consistently applied (except for any change with which the Company's
independent auditors concur) will be made of all dealings and transactions in
relation to their business and activities.
Section 5.6 Inspection. At reasonable times and upon reasonable
notice, the Company shall permit, and shall cause each of its Material
Subsidiaries to permit, any employees and other representatives of the
Administrative Agent or any Bank to visit and inspect any Properties, to
examine all books of account, records, reports, and other papers, to make
copies and extracts therefrom (subject to any confidentiality agreements,
copyright restrictions, and similar limitations), and to discuss the
Company's and Material Subsidiaries' affairs, finances, Properties, condition
(financial or otherwise) and accounts with the Company's and Material
Subsidiaries' officers, employees and independent certified public accountants,
at such times and as often as may be reasonably requested; provided, however,
that (a) any such inspection which includes Aircraft shall be a visual,
walk-around inspection and may not include opening any panels, bays or the like
of any Aircraft, (b) no exercise of any inspection rights provided for in this
Section 5.6 shall interfere with the normal operation or maintenance of the
Aircraft by, or the business of, the Company, and (c) the Administrative Agent
and each Bank shall cause their respective employees and representatives to
hold in strict confidence all information acquired pursuant to such Agent's or
Bank's Rights under this Section 5.6, except for necessary disclosure to
participants in the Loans or Commitments, disclosure in connection with
disputes relating to the Loan Papers, or disclosure compelled by judicial or
administrative process or by other requirements of Law.
Section 5.7 Insurance. The Company shall maintain insurance with such
insurers, in such amounts (including by way of self-insurance and deductibles),
in such forms and covering such risks as may be then customary in the domestic
airlines industry. Without in any way limiting the foregoing, the Company
shall maintain such insurance on the Aircraft, including "all-risk" hull
insurance and aviation liability insurance.
Section 5.8 Appraisals. On each Appraisal Delivery Date, the Company
shall submit an Appraisal of the Pool Assets to the Administrative Agent as of
the date which is no more than 30 days prior to such Appraisal Delivery Date;
provided, however, that if such Appraisal is to be delivered on such Appraisal
Delivery Date as a consequence of clause (c) of the definition thereof, the
Appraisal to be delivered on such date shall only be in respect of the assets
to be removed from and/or added to the Pool Assets.
Section 5.9 Coverage Ratio. The Company shall maintain at all times a
Coverage Ratio of not less than 1.25 to 1.0.
Section 5.10 Reporting Requirements. The Company shall furnish to the
Administrative Agent (with sufficient copies for each Bank):
(a) Within 120 days after the last day of each fiscal year of the
Company, Financial Statements (it being understood that delivery of the
Company's annual report on Form 10-K for any fiscal year as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, will satisfy this requirement with respect to such fiscal
year) showing the consolidated financial condition and results of operations of
the Company and its Subsidiaries as of, and for the year ended on, such last
day, accompanied by (i) the opinion, without material qualification, of
Auditors, based on an audit using generally accepted auditing standards, that
such Financial Statements were prepared in accordance with GAAP and present
fairly the consolidated financial condition and results of operations of the
Company and its consolidated Subsidiaries and (ii) a Financial Report
Certificate;
(b) Within 60 days after the last day of each of the first three fiscal
quarters of the Company (i) Financial Statements showing the consolidated
financial condition and results of operations of the Company and its
consolidated Subsidiaries as of. and for the period from the beginning of the
current fiscal year to, such last day (it being understood that delivery of the
Company's quarterly report on Form 10-Q for any fiscal quarter as filed with
the Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934, as amended, will satisfy this requirement with respect to such fiscal
quarter and, if applicable, the portion of the Company's fiscal year ended at
the end of such quarter), and (ii) a Financial Report Certificate;
(c) (i) Promptly after mailing, true copies of all reports, statements,
documents, plans, and other written communications furnished by or on behalf of
the Company or any of its Subsidiaries to stockholders generally and (ii)
promptly upon the filing thereof, copies of all registration statements (other
than the exhibits thereto and any registration statements on Form S-8 or its
equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
which the Company shall have filed with the Securities and Exchange
Commission;
(d) Notice, promptly after the Company or any of its Material
Subsidiaries knows or has reason to know of a Default or Event of Default,
specifying the nature thereof and what action the Company or any Subsidiary has
taken, is taking, or proposes to take with respect thereto;
(e) Prompt notice of any legal or arbitral proceedings, and of all
proceedings by or before any governmental or regulatory authority or agency, and
any material development in respect of such legal or other proceedings,
affecting the Company, except proceedings which, if adversely determined, would
not have a Material Adverse Effect or proceedings with respect to which the
Company, in good faith and upon consultation with outside counsel, believes an
adverse determination in respect thereof to be unlikely; and
(f) Promptly upon the Administrative Agent's reasonable request, such
other relevant information (not otherwise required to be furnished under the
Loan Papers) respecting the business affairs, assets, and liabilities of the
Company and any of its Material Subsidiaries.
In the case of paragraphs (a), (b) and (c) above (other than the Financial
Report Certificate) the Company may satisfy the reporting requirements in
respect thereof by making the documents referred to therein available to the
Banks on its website, provided that the Administrative Agent shall have been
given prior notice of each such availability. Notwithstanding the foregoing,
the Company shall deliver hard copies of any such documents to any Lender that
notifies the Company that such delivery is required by any Laws applicable to
such Lender.
Section 5.11 Use of Proceeds. Proceeds advanced hereunder shall be
used only as represented herein.
Section 5.12 Pool Assets. The Company (i) will ensure that the
Appraised Value of the Pool Assets shall satisfy the Collateral Coverage Test
(based upon the most recent Appraisal delivered to the Administrative Agent and
the Banks pursuant to the provisions of Section 5.8), and (ii) will not convey,
sell, lease, transfer or otherwise dispose of, whether voluntarily or
involuntarily (it being understood that loss of property due to theft,
destruction, confiscation, prohibition on use or similar event shall constitute
a disposal for purposes of this covenant), or remove or substitute, any Pool
Asset (or any engine included in the Pool Assets unless such engine is replaced
by another working engine or engines of comparable value, assuming half-time
condition) or agree to do any of the foregoing in respect of the Pool Assets at
any future time, except that:
(a) so long as no Event of Default exists, the Company may replace a
Pool Asset with another asset of the Company (and Schedule II shall be modified
to reflect such replacement), provided that (A) such replacement shall be made
on at least a dollar-for-dollar basis based upon (x) in the case of the asset
being removed from the Pool Assets, the Appraised Value of such Pool Asset (as
determined by the most recently delivered Appraisal with respect to such Pool
Asset) and (y) in the case of the asset being added to the Pool Assets, the
Appraised Value of such asset (as determined by an Appraisal performed at the
time of such replacement), and (B) prior to effecting the replacement, the
Company shall have delivered an Officer's Certificate to the Administrative
Agent certifying compliance with this Section 5.12 and attaching to such
certificate the Appraisal required by Section 5.8;
(b) so long as no Event of Default exists or would result therefrom, the
Company may remove an asset from the Pool Assets (and Schedule II shall be
modified to reflect such removal), provided that (A) after giving effect to such
removal, the Appraised Value of the remaining Pool Assets (as determined by an
Appraisal of all Pool Assets performed at the time of such removal) shall
satisfy the Collateral Coverage Test, and (B) prior to effecting the removal,
the Company shall have delivered an Officer's Certificate to the Administrative
Agent certifying that, and providing calculations demonstrating that, after
giving effect to such removal, the Appraised Value of the Pool Assets shall
satisfy the Collateral Coverage Test, and otherwise certifying compliance with
this Section 5.12 and attaching to such certificate Appraisals of all Pool
Assets obtained in connection with such removal; and
(c) in the event (x) that an Appraisal furnished pursuant to Section 5.8
discloses that the Collateral Coverage Test is not satisfied or (y) the
Collateral Coverage Test is not satisfied following an involuntary disposal of
any Pool Asset (or any engine included in the Pool Assets unless such engine is
replaced by another working engine or engines of comparable value, assuming
half-time condition) (whether by loss of property due to theft, destruction,
confiscation, prohibition on use, any similar event or otherwise), based upon
the most recent Appraisal of the Pool Assets (from which the appraised values
of the Pool Assets which are the subject of the involuntary disposition shall
be subtracted) furnished pursuant to Section 5.8, the Company shall within 60
days after the date of such Appraisal or involuntary disposal, as the case may
be, designate additional assets as Pool Assets to the extent that, after giving
effect to such designation the Appraised Value of the Pool Assets, based on the
most recently delivered Appraisal with respect to assets already constituting
Pool Assets and based on an Appraisal performed at the time of such addition
with respect to assets being added to Pool Assets, shall satisfy the Collateral
Coverage Test (and Schedule II shall be modified to reflect such addition),
provided that (A) at the time of such addition, the Administrative Agent and
the Banks shall have received an Officer's Certificate certifying that the
conditions set forth in this Section 5.12 shall have been satisfied after
giving effect to such addition and attaching thereto such Appraisal, and (B)
the asset being added shall constitute Stage 3 Equipment.
Section 5.13 Restrictions on Liens. The Company will not, nor will it
permit any Subsidiary to, create, assume or suffer to exist any Lien upon or
with respect to the Pool Assets, or enter into any arrangement with any Person
that would materially negatively impact the value of any Pool Asset realizable
by any third party or assign any right to receive the proceeds from the sale,
transfer or disposition of any of the Pool Assets, or file or suffer to exist
the filing with respect to any of the Pool Assets of any financing statement
naming the Company or any Subsidiary as debtor under the Uniform Commercial
Code or any similar notice of Lien naming the Company or any Subsidiary as
debtor under any similar recording or notice statute (including, without
limitation, any filing under Title 49, United States Code, Section 44107),
other than Permitted Liens affecting Pool Assets.
(b) The Company will not enter into or suffer to exist, and will not
permit any of its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon any Pool
Asset.
Section 5.14 Mergers and Dissolutions. Neither the Company nor any
Subsidiary will merge or consolidate with any Person other than any merger or
consolidation whereby the Company (or, if the Company is not involved, the
Subsidiary) is the surviving corporation and no Default or Event of Default
exists or would result therefrom. Neither the Company nor any Subsidiary
(excluding any Subsidiary existing on the Effective Date to the extent that it
does not contribute more than two percent of the consolidated net income or own
more than two percent of the consolidated assets of the Company and its
Subsidiaries at the time of any such liquidation or dissolution) will
liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution).
Section 5.15 Assignment. The Company will not assign or transfer any
of its Rights, duties, or obligations under any of the Loan Papers.
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
Section 6.1 Events of Default. Any one or more of the following
events shall be "Events of Default" hereunder (which shall include by
definition the expiration of any grace period with respect thereto), whether
the same shall occur and be continuing for any reason whatsoever (and whether
such occurrence shall be voluntary or involuntary or come about or be effected
by operation of Law or otherwise):
(a) Payment of Obligation. Failure to pay any installment of principal
on any Loan when due whether at maturity, by declaration as authorized by this
Agreement, or otherwise; or failure to pay, within 5 Business Days after the due
date thereof, any interest on any Loan; or failure to pay, within 5 Business
Days after the due date thereof, or if no due date therefor is herein specified
within 5 Business Days after written demand therefor is given to the Company
by the Administrative Agent, any other amount payable by the Company hereunder
or under any of the other Loan Papers.
(b) Covenants. Default shall be made in the observance or performance
of any other of the covenants, conditions, and agreements on the part of the
Company contained herein, or in any other Loan Papers and such default shall
continue for a period of 30 days after the Administrative Agent shall have given
the Company notice thereof in writing.
(c) Debtor Relief. The Company or any Material Subsidiary shall file a
voluntary petition in bankruptcy or a petition or answer seeking
reorganization, arrangement, composition, liquidation, receivership, or similar
relief under any Debtor Relief Law, or shall file a petition to take advantage
of any Debtor Relief Law, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts as they
become due, or shall fail generally to pay its debts as they become due, or
shall consent to the appointment of any receiver, trustee, custodian or
liquidator of it or all or a substantial part of its Property; or a proceeding
or action shall be instituted or commenced against the Company or any Material
Subsidiary seeking an order for relief or a reorganization, arrangement,
composition, liquidation, receivership, or similar relief under any Debtor
Relief Law or seeking the appointment, without the consent of the Company or
any Material Subsidiary, of any receiver, trustee, custodian or liquidator of
it or all or a substantial part of the Property of the Company or any Material
Subsidiary and such proceeding or action shall remain undismissed or unstayed
for a period of 90 days; or an order, decree, or judgment for an involuntary
petition adjudicating the Company or any Subsidiary insolvent shall be entered
by any court of competent jurisdiction and shall remain undismissed or unstayed
for a period of 90 days.
(d) Payment of Judgments. The Company or any of its Material
Subsidiaries fails to pay any judgment or order for the payment of money in
excess of $50,000,000 rendered against it or any of its assets (exclusive of
judgment amounts fully covered by insurance where the insurer has admitted
liability in respect thereof) and either (i) any enforcement proceedings shall
have been commenced by any creditor upon such judgment or order or (ii) the
same shall not be discharged (or provisions shall not be made for such
discharge), or a stay of execution thereof shall not be procured, within 30
days from the date of entry thereof and the Company or the relevant Material
Subsidiary shall not, within said period of 30 days, or such longer period
during which execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal.
(e) Default on Other Debt or Security. The Company or any Material
Subsidiary shall (i) fail to pay any principal of or interest on any Debt
(other than the Obligation) the principal or face amount of which exceeds
$50,000,000 when due (or, where permitted, within any applicable grace period),
whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise and such default continues unremedied for five Business Days after
such due date or applicable grace period, or (ii) fail to perform or observe
any other provision (other than a provision that is substantially identical to
a provision in this Agreement) contained in any agreement securing or relating
to such Debt (or any other breach or default under such Debt agreement occurs)
if the effect of such failure to perform or observe such other provisions (or
breach or default) is to cause such Debt to become due prior to its stated
maturity; provided, however, that if any such failure, breach or default shall
be waived or cured (as evidenced by a writing from such holder or trustee)
then, to the extent of such waiver or cure, the Event of Default hereunder by
reason of such failure, breach or default shall be deemed likewise to have
been thereupon waived or cured.
(f) ERISA. Any "Reportable Event" as such term is defined in ERISA
under any Plan, or the appointment by an appropriate Tribunal of a trustee to
administer any Plan, or the termination of any Plan within the meaning of Title
IV of ERISA, and any of the foregoing results in a material liability to the
Pension Benefit Guaranty Corporation; or any material accumulated funding
deficiency within the meaning of ERISA exists under any Plan.
(g) Misrepresentation. Any representation or warranty made by the
Company is untrue in any material respect, or any certificate, schedule,
statement, report, notice or writing (excluding any Appraisal, for which the
Company makes no representation) furnished by the Company to the Agents or to
the Banks, or any of them, is untrue in any material respect on the date as of
which the facts set forth are stated or certified, shall remain material at the
time of discovery and shall, if curable, remain incorrect in any material
respect after 30 days after written notice thereof to the Company (any failure
to include within any such schedule, statement, report, notice, or writing
information which failure would cause the material included to be misleading
shall be as much an untruth as a false statement contained therein).
Section 6.2 Remedies Upon Default. If an Event of Default specified
in Section 6.1(c) occurs, the Commitments of the Banks shall thereupon
automatically terminate and the aggregate unpaid principal balance of and
accrued interest on the Obligation shall thereupon become due and payable
concurrently therewith, without any action by the Administrative Agent or any
Bank and without diligence, presentment, demand, protest, notice of protest or
intent to accelerate, or notice of any other kind, all of which are hereby
expressly waived. Except as set forth in the preceding sentence, should any
other Event of Default occur and be continuing, the Administrative Agent may,
and if requested by the Majority Banks, shall, do any one or more of the
following:
(a) Acceleration. Declare (by written notice to the Company) the entire
unpaid balance of the Obligation, or any part thereof, immediately due and
payable, whereupon it shall be due and payable, without diligence, presentment,
demand, protest, notice of protest or intent to accelerate, or other notice of
any kind (except any notice or demand specified in this Agreement), all of
which are hereby expressly waived.
(b) Termination. Terminate the Commitments by written notice to the
Company.
(c) Judgment. Reduce any claim to judgment.
(d) Rights. Exercise any and all legal and equitable Rights available to
it.
Section 6.3 Remedies in General. If any Event of Default shall occur
and be continuing, the Administrative Agent may immediately proceed to protect
and enforce all or any Rights with respect thereto contained in this Agreement
or any other Loan Papers or may enforce any other legal or equitable Rights.
Any Right may be exercised from time to time, independently or concurrently,
and as often as shall be deemed expedient. No waiver of any Event of Default
shall extend to any subsequent Event of Default.
ARTICLE VII
THE AGENTS
Section 7.1 Authorization and Action. Each Bank hereby irrevocably
appoints and authorizes (a) JPMorgan Chase Bank to act as its Administrative
Agent hereunder and under each of the other Loan Papers, (b) Citibank, N.A. to
act as Syndication Agent hereunder and (c) Bank One Corporation and SunTrust
Bank to act as Documentation Agents hereunder. JPMorgan Chase Bank consents to
such appointment and agrees to perform the duties of the Administrative Agent
hereunder and under the other Loan Papers. Citibank, N.A. consents to such
appointment and agrees, in consultation with the Company and the Administrative
Agent, to select a syndicate of Banks to participate in the Commitments. Each
Bank authorizes and directs the Administrative Agent to act on its behalf and
to exercise such powers under this Agreement as are specifically delegated to
or required of such Agent by the terms hereto, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement or the other Loan Papers (including, without limitation,
enforcement or collection of the Loans or Notes), the Administrative Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of the Majority
Banks, and such instructions shall be binding upon all Banks and all holders of
Loans or Notes; provided, however, that no Agent shall be required to take any
action which exposes such Agent to personal liability or which is contrary to
this Agreement or applicable Law.
Section 7.2 Agents' Reliance, Etc. None of the Agents and none of
their respective Affiliates, directors, officers, agents, or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with the Loan Papers (i) with the consent or at the request of the
Majority Banks (or all the Banks, if required) or (ii) in the absence of its or
their own gross negligence or willful misconduct (it being the express intention
of the parties that the Agents and their respective directors, officers, agents,
and employees shall have no liability for actions and omissions under this
Section 7.2 resulting from their ordinary contributory negligence). Without
limitation of the generality of the foregoing, each Agent (i) may treat the
payee of each Loan or Note as the holder thereof until such Agent receives
written notice of the assignment or transfer thereof signed by such payee and
in form satisfactory to such Agent; (ii) may consult with legal counsel
(including counsel for the Company), independent public accountants, and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants, or experts; (iii) makes no warranty or representation to any Bank
and shall not be responsible to any Bank for any statements, warranties, or
representations made by or on behalf of the Company in or in connection with
any Loan Paper; (iv) except as otherwise expressly provided herein, shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants, or conditions of any Loan Paper or to inspect the
property (including the books and records) of the Company or any of its
Subsidiaries; (v) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, sufficiency, or value of any
Loan Paper or any other instrument or document furnished pursuant hereto or
thereto; and (vi) shall incur no liability under or in respect of any Loan
Paper by acting upon any notice, consent, certificate, or other instrument or
writing (which may be by telecopier) reasonably believed by it to be genuine
and signed or sent by the proper party or parties.
Section 7.3 Rights of Agents as Banks. With respect to their
Commitments, the Loans, if any, made by them and the Notes, if any, issued to
them, each Bank that is an Agent (including any Agent that hereafter becomes a
holder of a Loan or Note) and its Affiliates shall have the same rights and
powers under this Agreement or any other Loan Paper as any other Bank and may
exercise the same as though it were not an Agent; and the term "Bank" or
"Banks" shall, unless otherwise expressly indicated, include each Bank that is
an Agent (including any Agent that hereafter becomes a holder of a Loan or
Note), in its individual capacity. Each Bank that is an Agent (including any
Agent that hereafter becomes a holder of a Loan or Note) and its Affiliates may
accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, the Company, any of the
Subsidiaries and any Person who may do business with or own securities of the
Company or of the Subsidiaries, all as if such Bank were not an Agent, and
without any duty to account therefor to the Banks.
Section 7.4 Bank Credit Decision. Each Bank acknowledges and agrees
that it has, independently and without reliance upon any of the Agents or any
other Bank and based on the Current Financials and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges and agrees
that it will, independently and without reliance upon any of the Agents or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
Section 7.5 Agents' Indemnity. None of the Agents shall be required
to take any action hereunder or to prosecute or defend any suit in respect of
this Agreement or the Loans or Notes unless indemnified to such Agent's
satisfaction by the Banks against loss, cost, liability, and expense. If any
indemnity furnished to such Agent shall become impaired, it may call for
additional indemnity and cease to do the acts indemnified against until such
additional indemnity is given. In addition, the Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Company), ratably
according to the respective principal amounts of the Committed Loans then held
by each of them (or if no Committed Loans are at the time outstanding, ratably
according to either (i) the respective amounts of their Commitments, or (ii) if
the Commitments have terminated, the respective amounts of the Commitments
immediately prior to such termination), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against such Agent in any way
relating to or arising out of this Agreement or any action taken or omitted by
such Agent under this Agreement or the other Loan Papers (including, without
limitation, any action taken or omitted under Article II of this Agreement);
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements resulting from such Agent's fraud, gross negligence
or willful misconduct. Each Bank agrees, however, that it expressly intends,
under this Section 7.5, to indemnify each Agent ratably as aforesaid for all
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, and disbursements arising out of or resulting from such
Agent's ordinary or contributory negligence. Without limitation of the
foregoing, each Bank agrees to reimburse the Administrative Agent promptly upon
demand for its ratable share of any out-of-pocket expenses (including
reasonable counsel fees) incurred by such Agent in connection with the
preparation, execution, administration, or enforcement of, or legal advice in
respect of rights or responsibilities under, this Agreement and the other Loan
Papers to the extent that such Agent is not reimbursed for such expenses by the
Company. The provisions of this Section 7.5 shall survive the termination of
this Agreement and/or the payment or assignment of any of the Loans or Notes.
Section 7.6 Successor Administrative Agent. The Administrative Agent
may resign at any time by giving written notice thereof to the Banks and the
Company and may be removed as Administrative Agent under this Agreement and the
other Loan Papers at any time with or without cause by the Majority Banks.
Upon any such resignation or removal, the Majority Banks shall have the right,
with the consent of the Company (provided that the Company's consent shall not
be required during the continuance of a Default or an Event of Default), to
appoint a successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed and shall have accepted such appointment within 30
calendar days after the retiring Administrative Agent's giving notice of
resignation or the Majority Banks' removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf of the Banks, with
the consent of the Company (provided that the Company's consent shall not be
required during the continuance of a Default or Event of Default), appoint a
successor Administrative Agent, which shall be a commercial bank organized under
the Laws of the United States of America or of any state thereof and having a
combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as Administrative Agent hereunder and under the other Loan
Papers by a successor Administrative Agent, such successor Administrative Agent
shall thereupon succeed to and become vested with all rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement and the other Loan Papers. After any retiring Administrative
Agent's resignation or removal as the Administrative Agent hereunder and under
the other Loan Papers, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under this Agreement and the other Loan Papers.
Section 7.7 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent shall have received notice
from a Bank or the Company referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of default." If
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Banks; provided, however, if such notice is received
from a Bank, the Administrative Agent also shall give notice thereof to the
Company. The Administrative Agent shall be entitled to take action or refrain
from taking action with respect to such Default or Event of Default as provided
in Section 7.1 and Section 7.2.
Section 7.8 Documentation Agents and Syndication Agent. Neither the
Documentation Agents nor the Syndication Agent shall have any duties or
responsibilities hereunder in its capacity as such.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendments, Etc No amendment or waiver of any provision
of this Agreement or any other Loan Paper, nor consent to any departure by the
Company herefrom or therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Majority Banks (or the Administrative
Agent with the consent of the Majority Banks) in all cases, and then, in any
case, such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no
amendment, waiver, or consent shall, unless in writing and signed by each Bank
directly affected thereby (or the Administrative Agent with the consent of all
the Banks), do any of the following: (a) increase the amount of the Commitments
of any Banks or subject any Banks to any additional obligations, (b) reduce the
principal of, or rate or amount of interest applicable to, any Loan other than
as provided in this Agreement, or any fees hereunder, (c) postpone any date
fixed for any payment of principal of, or interest on, the Loans or any fees
hereunder, (d) eliminate or reduce the voting rights of any Bank under this
Section 8.1, or (e) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans, or the number of Banks, which
shall be required for the Banks or any of them to take any action hereunder;
and provided, further, that no amendment, waiver, or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Banks
required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Paper.
Section 8.2 Notices, Etc. Any Agent, any Bank, or the holder of any
Loan or Note giving consent or notice or making any request of the Company
provided for hereunder, shall notify each Bank and the Administrative Agent
thereof. In the event that the holder of any Loan or Note (including
any Bank) shall transfer such Loan or Note, it shall promptly so advise the
Administrative Agent which shall be entitled to assume conclusively that no
transfer of any Loan or Note has been made by any holder (including any Bank)
unless and until such Agent receives written notice to the contrary. Notices,
consents, requests, approvals, demands, and other communications (collectively
"Communications") provided for herein shall be in writing (including telecopy
Communications) and mailed, telecopied or delivered:
(a) If to the Company, to it at:
P.O. Box 36611
Love Field
Dallas, Texas 75235
Telecopy Number: (214) 792-4022
Attention: Laura Wright
(b) If to the Administrative Agent, to it at:
One Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Telecopy Number: (212) 552-5650
Attention: Jesus Sang
Loan and Agency Services Group
or, in the case of matters relating to Competitive Loans:
One Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Telecopy Number: (212) 552-5627
Attention: Chris Consomer
Loan and Agency Services Group
with a copy to (other than in the case of funding matters):
270 Park Avenue
New York, New York 10017
Telecopy Number: (212) 270-5100
Attention: Matthew Massie
(c) If to any Bank or any other Agent, as specified on Schedule I hereto
or, in the case of any party, such other address or telecopy number as such
party may hereafter specify for such purpose by notice to the other parties.
All Communications shall, when mailed, telecopied or delivered, be effective
and shall be deemed to have been duly given when sent by telecopier to any
party or the telecopier number as set forth herein or on the signature pages
hereof (or other telecopy number designated by such party in a written notice
to the other parties hereto), or five days after being mailed to the address as
set forth herein (or such other address designated by such party in a written
notice to the other parties hereto) respectively, or when delivered to such
address; provided, however, Communications to any Agent pursuant to Article II
or Article VII shall not be effective until received by such Agent.
Section 8.3 No Waiver; Remedies. No failure on the part of any Bank
or any Agent to exercise, and no delay in exercising, any Right hereunder or
under any other Loan Paper shall operate as a waiver thereof; nor shall any
single or partial exercise of any such Right, or any abandonment or
discontinuance of any steps to enforce such Right, preclude any other or
further exercise thereof or the exercise of any other Right. No notice to or
demand on the Company in any case shall entitle the Company to any other or
further notice or demand in similar or other circumstances. The Rights herein
provided are cumulative and not exclusive of any Rights provided by Law.
Section 8.4 Costs, Expenses and Taxes. The Company agrees to pay or
reimburse the Agents for paying: (i) all reasonable costs and expenses of the
Agents in connection with (A) the preparation, execution, delivery, and
administration of this Agreement and the other Loan Papers, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Agents with respect thereto and with respect to advising the Agents as to their
respective Rights and responsibilities under this Agreement and the other Loan
Papers, and (B) any amendment, modification, supplement, or waiver of any of
the terms of this Agreement, and (ii) all reasonable costs and expenses of
the Banks and the Agents (including reasonable counsel's fees, and including
reasonable allocated in-house counsel fees for any Bank or any Agent) in
connection with the enforcement of this Agreement and the other Loan Papers.
In addition, the Company shall pay any and all Taxes payable or determined to
be payable in connection with the execution and delivery of this Agreement and
the other Loan Papers, and agrees to save the Agents and each Bank harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omitting to pay such Taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of this
Agreement or any other Loan Paper. The obligations of the Company under this
Section 8.4 shall survive the termination of this Agreement and/or repayment of
the Loans.
Section 8.5 Indemnity. The Company agrees to indemnify and hold
harmless the Agents and the Banks and each of their respective Affiliates,
officers, directors, employees, agents, advisors and representatives against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, deficiencies, expenses, and disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against any Agent, any Bank, or any of their respective Affiliates, officers,
directors, employees, agents, advisors or other representatives in any way
relating to or arising out of the Loan Papers, any transaction related hereto,
or any act, omission, or transaction of the Company, its Subsidiaries, and
Affiliates, or any of their employees, officers, directors or other
representatives, to the extent that any of the same results, directly or
indirectly, from any claims made or actions, suits, or proceedings commenced by
or on behalf of any person other than an Agent or a Bank. The obligation of
the Company under this section shall continue for a period of one year after
payment of the Obligation and termination of any or all Loan Papers, and shall
not be relieved by any claim or allegation of negligence by any Agent or any
Bank; provided, however, that although each indemnified party shall have the
right to be indemnified from its own ordinary negligence, no indemnified party
shall have the right to be indemnified hereunder for its own fraud, gross
negligence, or willful misconduct.
Section 8.6 Right of Setoff. If any Event of Default shall have
occurred and be continuing, each Bank is hereby authorized at any time from
time to time, to the fullest extent permitted by Law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Bank to or
for the credit or the account of the Company against any and all obligations of
the Company now or hereafter existing, under this Agreement and the Loans held
by such Bank, irrespective of whether or not such Bank shall have made any
demand under this Agreement or any Note and although such obligations may be
unmatured. Each Bank agrees promptly to notify the Company and the
Administrative Agent after any such setoff and application made by such Bank,
but the failure to give such notice shall not affect the validity of such
setoff and application. The Rights of each Bank under this Section 8.6 are in
addition to the Rights and remedies (including, without limitation, other
Rights of setoff) which such Bank may have.
SECTION 8.7 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 8.8 Submission To Jurisdiction; Waivers. The Company hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Papers to which it is
a party, or for recognition and enforcement of any judgment in respect thereof,
to the non-exclusive general jurisdiction of the courts of the State of New
York, the courts of the United States for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Company, as the
case may be at its address set forth in Section 8.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto; and
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to sue
in any other jurisdiction.
Section 8.9 Survival of Representations and Warranties. All
representations and warranties contained herein or made in writing by the
Company in connection herewith shall survive the execution and delivery of this
Agreement and the other Loan Papers, and no investigation by any Agent or any
Bank or any closing shall affect the representations and warranties or the Right
of any Agent or any Bank to rely upon them.
Section 8.10 Binding Effect. This Agreement shall become effective
when it shall have been executed by the Company, the Agents, and each Bank and
thereafter shall be binding upon and inure to the benefit of the Company
(subject to the provisions of Section 8.11), the Agents, each Bank and their
respective successors and assigns.
Section 8.11 Successors and Assigns; Participations
(a) Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the successors and permitted assigns
of such party, and all covenants, promises, agreements, representations and
warranties by or on behalf of the Company, the Agents or the Banks that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns. The Company may not assign or transfer any
its rights or obligations hereunder without the prior written consent of all of
the Banks.
(b) Each Bank may without the consent of the Company sell participations
to one or more banks or other entities in all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment and the Loans owing to it and any Note or Notes held
by it); provided, however, that (i) such Bank's obligations under this
Agreement shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Bank shall remain the holder of its Loans and Notes (if
any) for all purposes of this Agreement, (iv) the participating banks or other
entities shall be entitled to the cost protection provisions contained in
Article II and Section 8.4, but only to the extent that such protection would
have been available to such Bank, calculated as if no such participations had
been sold, and the indemnity protection provisions contained in Section 8.5,
(v) the Company, the Agents, and the other Banks shall continue to deal solely
and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement, and (vi) such Bank shall not sell a
participation that conveys to the participant the right to vote or give or
withhold consents under this Agreement or any other Loan Papers, other than the
right to vote upon or consent to (y) amendments, modifications, or waivers with
respect to any fees payable hereunder (including the dates fixed for the
payment of any such fees) or the amount of principal or the rate of interest
payable on, or the dates fixed for any payment of principal of or interest on,
the Loans and (z) any extension of the Termination Date or Term-Out Maturity
Date.
(c) Each Bank may assign to one or more Persons, all or a portion of its
interests, rights, and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment and the same portion of the
Committed Loans at the time owing to it); provided, however, that (i) such
assignment, if not to a Bank or an Eligible Affiliate Assignee of the assigning
Bank, shall be consented to by the Company (which consent shall not be
unreasonably withheld and shall not be required after the occurrence or during
the continuance of a Default or Event of Default) and the Administrative Agent,
(ii ) each Bank's Commitment (including Loans owing to it) shall not be less
than $5,000,000 minus reductions pursuant to Section 2.6(a) unless (x)
otherwise agreed by the Company and the Administrative Agent or (y) in the case
of the assigning Bank, such amount is reduced to zero pursuant to such
assignment, (iii) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Bank's rights and obligations under
this Agreement (other than any Competitive Loans, any Competitive Notes
and any right to make Competitive Loans), (iv) the assignee thereof shall
deliver to the Company and the Administrative Agent any Internal Revenue
Service forms required by Section 2.19, and (v) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register (as defined below), an Assignment and
Acceptance substantially in the form of Exhibit G hereto (an "Assignment and
Acceptance"), together with a properly completed Administrative Questionnaire,
any Note or Notes subject to such assignment and a processing and recordation
fee of $3,500 (or such lesser amount as shall be acceptable to the
Administrative Agent); provided, however, no such fee shall be required in the
case of any assignment requested by the Company pursuant to Article II of this
Agreement. Upon such execution, delivery, acceptance, and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution thereof
(unless a shorter period shall be agreed to by the Company, the Administrative
Agent, and the assignor Bank), (x) the assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Bank hereunder and under the other Loan Papers and
(y) the assignor Bank thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this
Agreement and the other Loan Papers (and, in the case of an Assignment and
Acceptance covering all of the remaining portion of an assigning Bank's rights
and obligations under this Agreement and the other Loan Papers, such Bank shall
cease to be a party hereto and thereto).
(d) By executing and delivering an Assignment and Acceptance, the Bank
assignor thereunder and the assignee confirm to and agree with each other and
the other parties hereto as follows: (i) other than the representation and
warranty that it is a legal and beneficial owner of the interest being assigned
thereby free and clear of any adverse claim, such Bank assignor makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties, or representations made in or in connection with this
Agreement or any other Loan Paper or the execution, legality, validity,
enforceability, genuineness, sufficiency, or value of this Agreement, any other
Loan Paper or any other instrument or document furnished pursuant hereto;
(ii) such Bank assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company or the
performance or observance of its respective obligations under this Agreement,
any other Loan Paper or any other instrument or document furnished pursuant
hereto or thereto; (iii) such assignee confirms that it has received a copy of
this Agreement together with copies of financial information and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agents, such Bank
assignor, or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (v) such assignee appoints
and authorizes the Administrative Agent to take such action on behalf of such
assignee and to exercise such powers under this Agreement and the other Loan
Papers as are delegated to each such Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto; and (vi) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Bank.
(e) The Administrative Agent shall maintain at its office a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Banks and the Commitment of, and principal
amount of the Loan owing to, each Bank from time to time (the "Register"). The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Company, the Agents, and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Company, any
Bank or the Administrative Agent at any reasonable time and from time to time
upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and an assignee together with any Note or Notes subject to such
assignment and the written consent to such assignment, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is
substantially in the form of Exhibit G hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register, and
(iii) give prompt notice thereof to the Banks, the Administrative Agent and the
Company. Within five Business Days after receipt of such notice, the Company,
at its own expense, shall execute and deliver to the Administrative Agent in
exchange for the surrendered Note or Notes, if any, (x) a new Committed Note or
Committed Notes to the order of such assignee in an amount equal to its portion
of the Commitment assumed by it pursuant to such Assignment and Acceptance, (y)
if the assigning Bank has retained its Competitive Note, a new Competitive Note
to the order of the assignee, and (z) if the assigning Bank has retained any
Commitment hereunder, new Committed Notes to the order of the assigning Bank in
an amount equal to the Commitment retained by it hereunder. Such new Committed
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Committed Notes. Such new Committed Notes and
Competitive Notes shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit D-1 or
D-2 as applicable, hereto. Cancelled Notes shall be returned to the Company.
(g) Notwithstanding any other provision herein, any Bank may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 8.11, disclose to the assignee or
participant or proposed assignee or participant any information relating to the
Company and its Subsidiaries furnished to such Bank by or on behalf of the
Company; provided, that prior to any such disclosure, each such assignee or
participant or proposed assignee or participant shall agree for the benefit of
the Company to preserve the confidentiality of any confidential information
relating to the Company received from such Bank.
(h) Notwithstanding any other provision set forth in this Agreement, any
Bank may at any time create a security interest in all or any portion of its
Rights under this Agreement (including, without limitation, the Loans owing to
it and any Notes held by it) in favor of any Federal Reserve Bank in accordance
with Regulation A of the Board.
Section 8.12 Independence of Covenants. All covenants contained in
this Agreement shall be given independent effect so that if a particular action
or condition is not permitted by any such covenants, the fact that such action
or condition would be permitted by an exception to, or otherwise be within the
limitations of, another covenant shall not avoid the occurrence of a Default or
Event of Default if such action is taken or condition exists.
Section 8.13 Severability. Should any clause, sentence, paragraph, or
Section of this Agreement be judicially declared to be invalid, unenforceable,
or void, such decision will not have the effect of invalidating or voiding the
remainder of this Agreement, and the parties hereto agree that the part or
parts of this Agreement so held to be invalid, unenforceable, or void will be
deemed to have been stricken herefrom and the remainder will have the same
force and effectiveness as if such part or parts had never been included herein.
Section 8.14 Integration. This Agreement and the other Loan Papers
represent the entire agreement of the Company, the Administrative Agent and the
Banks with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Bank relative to the subject matter hereof not expressly set forth
or referred to herein or in the other Loan Papers.
Section 8.15 Descriptive Headings. The section headings appearing in
this Agreement have been inserted for convenience only and shall be given no
substantive meaning or significance whatever in construing the terms and
provisions of this Agreement.
Section 8.16 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Section 8.17 WAIVERS OF JURY TRIAL. THE COMPANY, THE ADMINISTRATIVE
AGENT AND THE BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
PAPER AND FOR ANY COUNTERCLAIM THEREIN
<Page>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SOUTHWEST AIRLINES CO.
By:
Name: ______________________________
Title:______________________________
<Page>
$30,000,000 JPMORGAN CHASE BANK, as a Bank, an Issuing
Bank and as Administrative Agent
By:
Name: ______________________________
Title:______________________________
$30,000,000 CITIBANK, N.A., as a Bank and as Syndication Agent
By:
Name: ______________________________
Title:______________________________
$25,000,000 BANK ONE CORPORATION, as a Bank and as
Documentation Agent
By:
Name: ______________________________
Title:______________________________
$25,000,000 SUNTRUST BANK, as a Bank and as
Documentation Agent
By:
Name: ______________________________
Title:______________________________
$17,500,000 ABN AMRO BANK N.V.
By:
Name: ______________________________
Title:______________________________
$17,500,000 BARCLAYS BANK PLC
By:
Name: ______________________________
Title:______________________________
$17,500,000 BNP PARIBAS
By:
Name: ______________________________
Title: _______________________________
$17,500,000 DEUTSCHE BANK AG, New York Branch
By:
Name: ______________________________
Title:______________________________
$17,500,000 SOCIETE GENERALE
By:
Name: ______________________________
Title:______________________________
$17,500,000 WELLS FARGO BANK, N.A.
By:
Name: ______________________________
Title: _____________________________
$12,500,000 COMERICA BANK
By:
Name: ______________________________
Title: _____________________________
$12,500,000 MERRILL LYNCH BANK USA
By:
Name: ______________________________
Title: _____________________________
$12,500,000 UBS AG, Stamford Branch
By:
Name: ______________________________
Title: _____________________________
$12,500,000 WACHOVIA BANK
By:
Name: ______________________________
Title: _____________________________
$12,500,000 THE BANK OF TOKYO-MITSUBISHI, LTD.
By:
Name: ______________________________
Title: _____________________________
By:
Name: ______________________________
Title: _____________________________
$10,000,000 THE MITSUBISHI TRUST AND BANKING
CORPORATION
By:
Name: ______________________________
Title: _____________________________