$83,616,597.27
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
among
AMERICA WEST AIRLINES, INC.
VARIOUS LENDERS
and
BT COMMERCIAL CORP.
as ADMINISTRATIVE AGENT
-------------------------------
Dated as of September 30, 1993
-------------------------------
TABLE OF CONTENTS Page
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . 3
1.01 Defined Terms . . . . . . . . . . . . . . . 3
1.02 Other Definitional Provisions . . . . . . . 26
SECTION 2. LOANS . . . . . . . . . . . . . . . . . . . 26
2.01 Commitments and Loans . . . . . . . . . . . 26
2.02 [Reserved] . . . . . . . . . . . . . . . . . 27
2.03 [Reserved] . . . . . . . . . . . . . . . . . 27
2.04 [Reserved] . . . . . . . . . . . . . . . . . 27
2.05 Notes . . . . . . . . . . . . . . . . . . . 27
2.06 [Reserved] . . . . . . . . . . . . . . . . . 27
2.07 Interest . . . . . . . . . . . . . . . . . . 27
2.08 Principal Repayments . . . . . . . . . . . . 28
2.09 Interest Period Indemnification . . . . . . 28
2.10 Taxes . . . . . . . . . . . . . . . . . . . 29
2.11 Cost Indemnities . . . . . . . . . . . . . . 32
2.12 Distribution of Proceeds . . . . . . . . . . 34
SECTION 3. FEES . . . . . . . . . . . . . . . . . . . 37
3.01 Facility Fee . . . . . . . . . . . . . . . . 37
3.02 Fees of Administrative Agent and Collateral
Agent . . . . . . . . . . . . . . . . . . . 37
SECTION 4. PREPAYMENTS; PAYMENTS . . . . . . . . . . . 37
4.01 Voluntary Prepayments . . . . . . . . . . . 37
4.02 Mandatory Prepayments . . . . . . . . . . . 38
4.03 Method and Place of Payment . . . . . . . . 40
4.04 Net Payments . . . . . . . . . . . . . . . . 40
SECTION 5. CONDITIONS PRECEDENT AND RELATED PROVISIONS 40
5.01 Conditions to the Effective Date . . . . . . 40
5.02 Conditions to All Loans . . . . . . . . . . 46
5.03 Conditions Precedent to Amendment Effective
Date . . . . . . . . . . . . . . . . . . . 48
5.04 Conditions Precedent to Second Amendment
Effective Date . . . . . . . . . . . . . . 53
5.05 Conditions Precedent to Third Amendment
Effective Date . . . . . . . . . . . . . . 61
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS 65
6.01 Corporate Status . . . . . . . . . . . . . . 66
6.02 Corporate Power and Authority . . . . . . . 66
6.03 No Violation . . . . . . . . . . . . . . . . 66
6.04 Governmental Approvals . . . . . . . . . . . 67
6.05 Priority; Security Interests . . . . . . . . 67
6.06 Financial Statements; Financial Condition;
Undisclosed Liabilities; etc . . . . . . . 67
6.07 Litigation . . . . . . . . . . . . . . . . . 69
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6.08 True and Complete Disclosure . . . . . . . . 69
6.09 Use of Proceeds; Margin Regulations . . . . 69
6.10 Tax Returns and Payments . . . . . . . . . . 70
6.11 Compliance with ERISA . . . . . . . . . . . 70
6.12 Subsidiaries . . . . . . . . . . . . . . . . 71
6.13 Compliance with Statutes, etc . . . . . . . 71
6.14 Investment Company Act . . . . . . . . . . . 72
6.15 Public Utility Holding Company Act . . . . . 72
6.16 End of Fiscal Year; Fiscal Quarters . . . . 73
6.17 The Orders . . . . . . . . . . . . . . . . . 73
6.18 Operations . . . . . . . . . . . . . . . . . 73
6.19 GPA Agreements/Kawasaki Agreements . . . . . 74
SECTION 7. AFFIRMATIVE COVENANTS . . . . . . . . . . . 74
7.01 Information Covenants . . . . . . . . . . . 75
7.02 Books, Records and Inspections . . . . . . . 80
7.03 Maintenance of Property; Insurance . . . . . 80
7.04 Corporate Franchises . . . . . . . . . . . . 81
7.05 Compliance with Statutes, etc . . . . . . . 81
7.06 End of Fiscal Years; Fiscal Quarters . . . . 81
7.07 Performance of Obligations . . . . . . . . . 82
7.08 Minimum Designated Collateral Balances . . . 82
7.09 Hazardous Materials . . . . . . . . . . . . 85
7.10 Cash Management . . . . . . . . . . . . . . 85
7.11 Further Assurances . . . . . . . . . . . . . 88
SECTION 8. NEGATIVE COVENANTS . . . . . . . . . . . . 90
8.01 Liens . . . . . . . . . . . . . . . . . . . 90
8.02 Consolidation, Merger, Sale of Assets, etc . 93
8.03 Distributions . . . . . . . . . . . . . . . 94
8.04 Leases . . . . . . . . . . . . . . . . . . . 95
8.05 Indebtedness . . . . . . . . . . . . . . . . 95
8.06 Advances, Investments and Loans . . . . . . 96
8.07 Capital Expenditures . . . . . . . . . . . . 97
8.08 Limitation on Repayments, etc . . . . . . . 98
8.09 Transactions with Affiliates . . . . . . . . 102
8.10 Subsidiaries . . . . . . . . . . . . . . . . 102
8.11 Chapter 11 Claims . . . . . . . . . . . . . 102
8.12 Final Extension Loan Order . . . . . . . . . 102
8.13 Conversion to Chapter 7 . . . . . . . . . . 102
8.14 Operation of Specified Aircraft/Engines. . 103
8.15 Operating Plan Covenants . . . . . . . . . . 103
8.16 Slots and Routes . . . . . . . . . . . . . . 105
8.17 Seizures . . . . . . . . . . . . . . . . . . 106
8.18 ERISA . . . . . . . . . . . . . . . . . . . 106
SECTION 9. EVENTS OF DEFAULT . . . . . . . . . . . . . 107
9.01 Payments . . . . . . . . . . . . . . . . . . 107
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9.02 Representations, etc . . . . . . . . . . . . 107
9.03 Covenants . . . . . . . . . . . . . . . . . 107
9.04 The Case, etc . . . . . . . . . . . . . . . 107
9.05 Credit Documents and Kawasaki Credit
Agreement . . . . . . . . . . . . . . . . . 108
9.06 Judgments . . . . . . . . . . . . . . . . . 108
9.07 GPA Agreements/Kawasaki Agreements . . . . . 109
9.08 Governance . . . . . . . . . . . . . . . . . 110
9.09 Casualties . . . . . . . . . . . . . . . . . 110
9.10 ERISA . . . . . . . . . . . . . . . . . . . 110
9.11 Other Indebtedness . . . . . . . . . . . . . 111
9.12 Change of Control . . . . . . . . . . . . . 111
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . 113
10.01 Payment of Expenses, etc . . . . . . . . . 113
10.02 Survival . . . . . . . . . . . . . . . . . 115
10.03 Notices . . . . . . . . . . . . . . . . . . 115
10.04 Benefit of Agreement . . . . . . . . . . . 115
10.05 No Waiver; Remedies Cumulative . . . . . . 117
10.06 Payments Pro Rata . . . . . . . . . . . . . 117
10.07 Calculations; Computations . . . . . . . . 118
10.08 GOVERNING LAW . . . . . . . . . . . . . . . 118
10.09 Counterparts . . . . . . . . . . . . . . . 118
10.10 Headings Descriptive . . . . . . . . . . . 118
10.11 Amendment or Waiver . . . . . . . . . . . . 118
10.12 Domicile of Loans . . . . . . . . . . . . . 120
10.13 Confidentiality . . . . . . . . . . . . . . 120
10.14 Set-Off . . . . . . . . . . . . . . . . . . 121
10.15 WAIVER OF JURY TRIAL . . . . . . . . . . . 122
10.16 Time of the Essence . . . . . . . . . . . . 122
10.17 Specified Lien Releases . . . . . . . . . . 122
10.18 Administrative Agent; Collateral Agent . . 123
10.19 Dating and Effectiveness . . . . . . . . . 123
10.20 Participation by Commerce and Economic
Development Commission . . . . . . . . . . 123
10.21 Covenants Do Not Preclude Negotiation of a
Plan of Reorganization . . . . . . . . . . 124
10.22 Certain Consents . . . . . . . . . . . . . 124
10.23 Certain Waivers . . . . . . . . . . . . . . 124
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Page
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ANNEX
Annex 1 Lenders' Commitments and Addresses
SCHEDULES
Schedule 1 A320 Leases
Schedule 2 Designated Collateral
Schedule 3 [Reserved]
Schedule 4 [Reserved]
Schedule 5 Deferral Aircraft
Schedule 6 Designated Aircraft Leases
Schedule 7 Engine Leases
Schedule 8 Real Property
Schedule 9 Liabilities and Obligations
Schedule 10 Litigation
Schedule 11 Slots, Routes and Domestic Schedule Gates
Schedule 12 Insurance Policies and Programs
Schedule 13 [Reserved]
Schedule 14 Permitted First Liens
Schedule 15 Existing Debt
Schedule 16 Existing Investments
Schedule 17 Kawasaki Leases
Schedule 18 Stipulations
Schedule 19 Aircraft Rental and Loan Reductions and
Deferrals
Schedule 20 [Reserved]
Schedule 21 [Reserved]
EXHIBITS
Exhibit A Promissory Note
Exhibit B [Reserved]
Exhibit C Officer's Certificate
Exhibit D-1 Interim Order
Exhibit D-2 Final Order
Exhibit D-3 GPA Order
Exhibit D-4 Northwest Order
Exhibit D-5 Additional Loan Order and Kawasaki Order
Exhibit D-6 Second Additional Loan Order
Exhibit D-7 Interim Extension Loan Order
Exhibit D-8 Final Extension Loan Order
Exhibit E Action Plan Summary
Exhibit F Security Agreement
Exhibit G Aircraft/Engine Mortgage
Exhibit H Parts Mortgage
Exhibit I Initial Cash Management Agreement
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Page
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Exhibit J-1 Real Property Mortgage
Exhibit J-2 Lessor Consent Agreement
Exhibit J-3 Senior Lender Agreement
Exhibit J-4 Assignment of Gate Leases
Exhibit K Slot Deed of Conveyance
Exhibit L Slot Lease Agreement
Exhibit M Collateral Certificate
Exhibit N Agency Agreement
Exhibit O Daily Cash Management Report
Exhibit P By-Law Letter Agreement
Exhibit Q Officer's Certificate
Exhibit R First Amendment to Cash Management
Agreement
Exhibit S First Amendment to Agency Agreement
Exhibit T First Amendments to Deeds of Trust
Exhibit U Amendment No. 1 to Assignment of Gate
Leases
Exhibit V-1 First Amendment to Consent of the City of
Phoenix (Hangar)
Exhibit V-2 First Amendment to Consent of the City of
Phoenix (11 acre parcel)
Exhibit W Consent of First Interstate Bank of
Arizona, N.A.
Exhibit X Kawasaki Letter Regarding Intercreditor
Agreements
Exhibit Y Officer's Certificate
Exhibit Z Second Amendment to Cash Management
Agreement
Exhibit AA Second Amendment to Agency Agreement
Exhibit BB Second Amendments to Deeds of Trust
Exhibit CC Assignment of Gate Leases Amendment No. 2
Exhibit DD-1 Second Amendment to Consent of the City of
Phoenix (Hangar)
Exhibit DD-2 Second Amendment to Consent of the City of
Phoenix (11 acre parcel)
Exhibit EE Consent of First Interstate Bank of
Arizona N.A.
Exhibit FF Letter Regarding Intercreditor Agreements
Exhibit GG First Amendment to Security Agreement
Exhibit HH Amendment No. 3 to Aircraft/Engine Mortgage
Exhibit II Amendment No. 1 to Parts Mortgage
Exhibit JJ First Amendment to Slot Lease Agreement
Exhibit KK Management Letter Agreement
Exhibit LL Northwest Release and Termination
Exhibit MM Third Amendments to Deeds of Trust
Exhibit NN Assignment of Gate Leases Amendment No. 3
Exhibit OO Third Amendments to Consents of the City of
Phoenix
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Page
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Exhibit PP Second Amendment to Slot Lease Agreement
Exhibit QQ Ansett Release and Termination
Exhibit RR Amended and Restated Management Letter
Agreement
Exhibit SS Amendment No. 2 to Parts Mortgage
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THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of September 30, 1993, is entered into among
AMERICA WEST AIRLINES, INC. (the "Borrower"), a Delaware
--------
corporation, as debtor and debtor-in-possession under
Chapter 11 of Title 11 of the United States Code entitled
"Bankruptcy" (the "Bankruptcy Code"), the Lenders, and BT
---------------
COMMERCIAL CORP., acting in the manner and to the extent
described in the Agency Agreement (in such capacity, the
"Administrative Agent"), and, subject to the terms and
--------------------
conditions set forth herein, amends and restates in its
entirety the Credit Agreement, dated as of August 26, 1991,
among the Borrower, the Existing Lenders (other than
Kawasaki) and the Administrative Agent (the "Original Credit
---------------
Agreement"), as heretofore amended and restated by the
---------
Amended and Restated Credit Agreement, dated as of December
1, 1991, among the Borrower, the Existing Lenders, Northwest
and the Administrative Agent (such Amended and Restated
Credit Agreement being referred to herein as the "First
-----
Amended and Restated Credit Agreement"), and as heretofore
--------------------------------------
further amended and restated by the Second Amended and
Restated Credit Agreement, dated as of September 1, 1992,
among the Borrower, the Existing Lenders, Ansett, the Second
Amendment Lenders and the Administrative Agent (such Second
Amended and Restated Credit Agreement being referred to
herein as the "Second Amended and Restated Credit
----------------------------------
Agreement", and the Second Amended and Restated Credit
---------
Agreement, as amended and restated hereby, and as further
amended, modified or supplemented from time to time, being
referred to herein as this "Agreement").
---------
R E C I T A L S:
WHEREAS, all capitalized terms used herein shall
have the meanings provided in Section 1 below;
WHEREAS, on June 27, 1991, the Borrower filed a
voluntary petition with the Bankruptcy Court initiating the
Case and has continued in the possession of its assets and
in the management of its business pursuant to Sections 1107
and 1108 of the Bankruptcy Code;
WHEREAS, pursuant to and subject to the terms and
conditions of the Original Credit Agreement, the Existing
Lenders (other than Kawasaki) and Northwest agreed to make
Loans to the Borrower in an aggregate principal amount not
to exceed $55,000,000;
WHEREAS, pursuant to the First Amended and
Restated Credit Agreement, the Original Credit Agreement was
amended and restated to, among other things, provide for the
NY1-53665.4
making of an additional Loan by Kawasaki to the Borrower in
the principal amount of $23,000,000;
WHEREAS, pursuant to the Second Amended and
Restated Credit Agreement, the First Amended and Restated
Credit Agreement was amended and restated to, among other
things, provide for the making of additional Loans by GPA
Sub and the Second Amendment Lenders to the Borrower in the
principal amount of $53,000,000;
WHEREAS, simultaneously with the making of such
additional Loans by GPA Sub and the Second Amendment
Lenders, the Borrower prepaid from the proceeds of such
additional Loans all of the Loans made by Northwest under
the Original Credit Agreement and outstanding under the
First Amended and Restated Credit Agreement in an aggregate
principal amount of $9,876,364;
WHEREAS, after giving effect to the making of such
additional Loans by GPA Sub and the Second Amendment Lenders
and the prepayment of the Loans made by Northwest under the
Original Credit Agreement, on the Second Amendment Effective
Date, there were Loans outstanding under the Second Amended
and Restated Credit Agreement in an aggregate principal
amount of $110,783,636.00;
WHEREAS, after giving effect to the making by the
Borrower of scheduled payments and mandatory prepayments of
Loans pursuant to and in accordance with the Second Amended
and Restated Credit Agreement (including, without
limitation, the waiving by the Lenders of certain mandatory
prepayments), on the date hereof, there are Loans
outstanding under the Second Amended and Restated Credit
Agreement in an aggregate principal amount of $91,913,239.20
(of which $8,296,641.93 are Ansett Loans);
WHEREAS, the Borrower has requested the Lenders to
extend the maturity of the Loans to the Maturity Date (as
hereinafter defined);
WHEREAS, all of the Lenders are willing to extend
the maturity of the Loans to the Maturity Date (as
hereinafter defined), but Ansett desires that the Ansett
Loans mature and be paid in full on September 30, 1993;
WHEREAS, after giving effect to the foregoing
extension of the maturity of the Loans to the Maturity Date
(as hereinafter defined) and the foregoing payment of the
Ansett Loans, there will be Loans outstanding under the
Second Amended and Restated Credit Agreement in an aggregate
principal amount of $83,616,597.27;
NY1-53665.4 -2-
WHEREAS, subject to the terms and conditions set
forth herein, the Borrower, the Lenders and the
Administrative Agent desire that the Second Amended and
Restated Credit Agreement be amended and restated in its
entirety to provide (among other things) for the foregoing
extension of the maturity of the Loans to the Maturity Date
(as hereinafter defined) and the foregoing payment of the
Ansett Loans;
NOW, THEREFORE, THE PARTIES HERETO AGREE THAT THE
AMENDED AND RESTATED CREDIT AGREEMENT IS AMENDED AND
RESTATED TO READ IN ITS ENTIRETY AS FOLLOWS:
SECTION 1. DEFINITIONS.
-----------
1.01 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):
"A320 Leases" shall mean those certain Aircraft
-----------
Sublease Agreements listed on Schedule 1 hereto, as the same
may be amended, supplemented or otherwise modified.
"Additional Credit" shall have the meaning
-----------------
provided in Section 5.02(c).
"Additional Loan Order" shall mean an order of the
---------------------
Bankruptcy Court in the form of Exhibit D-5 (as such form
may be modified in a manner acceptable to each of the
Lenders, in their sole and absolute discretion) to the
extent, and only to the extent, such order does not
constitute the "Kawasaki Order" (as such term is defined
herein).
"Administrative Agent" shall have the meaning
--------------------
provided in the first paragraph of this Agreement and
includes any successor in such capacity.
"Affiliate" shall mean, with respect to any
---------
Person, any other Person (i) directly or indirectly con-
trolling (including, but not limited to, all directors and
officers of such Person), controlled by, or under direct or
indirect common control with, such Person or (ii) that
directly or indirectly owns more than 25% of the voting
securities of such Person; provided, however, in no event
-------- -------
shall any of the GPA Entities, Kawasaki, Kawasaki
Enterprises Inc., Kawasaki Steel Corporation or any other
Lender be considered an Affiliate of the Borrower. A Person
shall be deemed to control a corporation if such Person
NY1-53665.4 -3-
possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of such
corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Agency Agreement" shall mean the Agency Agreement
----------------
among the Borrower, the Administrative Agent, the Collateral
Agent and the Lenders in the form of Exhibit N hereto, as
modified, supplemented or amended from time to time.
"Agreement" shall mean this Third Amended and
---------
Restated Credit Agreement, as modified, supplemented or
amended from time to time.
"Aircraft/Engine Mortgage" shall mean,
------------------------
collectively, the Aircraft and Engine Chattel Mortgage and
Security Agreement in the form of Exhibit G hereto, and the
Spare Parts Chattel Mortgage and Security Agreement in the
form of Exhibit H hereto, as same may be amended, modified
or supplemented from time to time.
"Aircraft Finance Agreement" shall mean the
--------------------------
Aircraft Finance Agreement, dated as of September 28, 1990,
between the Borrower and Kawasaki, as amended and restated
in its entirety by the Kawasaki Restructuring Agreement, the
Kawasaki Put Agreement and the Kawasaki Credit Agreement,
and as further amended, supplemented or modified from time
to time.
"Amended and Restated Management Letter Agreement"
------------------------------------------------
shall mean a letter agreement in the form of Exhibit RR
hereto, as the same may be amended, modified or supplemented
from time to time.
"Amendment Effective Date" shall have the meaning
------------------------
specified in Section 5.03.
"Ansett" shall mean Ansett Worldwide Aviation,
------
U.S.A., a Nevada partnership, and its successors and
assigns.
"Ansett Loans" shall mean all of the loans made by
------------
Ansett under the Second Amended and Restated Credit
Agreement and outstanding immediately prior to the Third
Amendment Effective Date in an aggregate principal amount of
$8,296,641.93.
"Asset Sale" shall mean the sale, transfer or
----------
other disposition to any Person after the Filing Date of any
property or other assets of the Borrower; provided, however,
-------- -------
Asset Sale shall not include the sale, transfer or other
NY1-53665.4 -4-
disposition of property or other assets referred to in
Section 8.02(i) to the extent that the aggregate Net
Proceeds in any one fiscal year of the Borrower from the
sale, transfer or other disposition of all such property or
other assets do not exceed $1,000,000.
"Assignment of Gate Leases" shall mean an
-------------------------
Assignment of Gate Leases in the form of Exhibit J-4 hereto,
as same may be amended, modified or supplemented from time
to time.
"Authorized Officer" shall mean and include the
------------------
Chief Executive Officer, the Chief Operating Officer, a
Senior Vice President, an Executive Vice President, the
Treasurer, an Assistant Treasurer, or the Vice President and
Controller of the Borrower.
"Aviation Act" shall mean the Federal Aviation Act
------------
of 1958, as amended from time to time, or any similar legis-
lation of the United States enacted in substitution or
replacement thereof.
"Bankruptcy Code" shall have the meaning provided
---------------
in the first paragraph of this Agreement.
"Bankruptcy Court" shall mean the United States
----------------
Bankruptcy Court, District of Arizona, or such other court
having jurisdiction over the Case from time to time.
"Borrower" shall have the meaning specified in the
--------
first paragraph of this Agreement.
"Business Day" shall mean any day except Saturday,
------------
Sunday and any other day which shall be in New York City a
legal holiday or a day on which banking institutions are
authorized by law or other government action to close and,
when used with respect to a Loan or interest thereon, shall
include a London Business Day.
"By-Law Letter Agreement" shall mean a letter
-----------------------
agreement in the form of Exhibit P hereto, as same may be
amended, modified or supplemented from time to time.
"Capital Expenditures" shall have the meaning
--------------------
provided in Section 8.07.
"Case" shall mean the Chapter 11 case of the
----
Borrower pending in the Bankruptcy Court.
"Cash Covenant Amount" shall have the meaning
--------------------
provided in Section 8.15(d).
NY1-53665.4 -5-
"Cash Equivalents" shall mean, as to any Person,
----------------
(i) securities issued or directly and fully guaranteed or
insured by the United States or any agency or instrumental-
ity thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having matur-
ities of not more than six months from the date of acqui-
sition, (ii) domestic time deposits and certificates of
deposit of any commercial bank incorporated in the United
States of recognized standing having capital and surplus in
excess of $500,000,000 and having unsecured debt rated at
least A or the equivalent thereof from Standard & Poor's
Corporation (an "Eligible Bank") on the date of making of
-------------
the deposit with maturities of not more than six months from
the date of acquisition by such Person, (iii) repurchase
obligations entered into with an Eligible Bank with a term
of not more than seven days for underlying securities of the
types described in clause (i) above, (iv) commercial paper
issued by the parent corporation of any Eligible Bank on the
date of the acquisition of the commercial paper (provided
that the parent corporation and the bank are both incorpor-
ated in the United States) and commercial paper issued by
any Person incorporated in the United States rated, on the
date of the acquisition of the commercial paper, at least
A-1 or the equivalent thereof by Standard & Poor's
Corporation or at least P-1 or the equivalent thereof by
Moody's Investors Service, Inc., and in each case maturing
not more than six months after the date of acquisition by
such Person and (v) shares or interests in any money market
mutual fund substantially all of the assets of which are
required to be invested in securities of the type described
in clause (i) above and which is rated AAA or the equivalent
by Standard & Poor's Corporation and P-1 or the equivalent
by Moody's Investors Service, Inc.
"Code" shall mean the Internal Revenue Code of
----
1986, as amended from time to time. Section references to
the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provisions of the Code
amendatory thereof, supplemental thereto or substituted
therefor.
"Collateral" shall mean all "Collateral" under,
----------
and as defined in, the Orders or any Security Document.
"Collateral Agent" shall mean the Administrative
----------------
Agent acting as collateral agent, or any Person engaged or
otherwise designated by the Administrative Agent to act as
collateral agent, pursuant to the Agency Agreement and the
Security Documents.
NY1-53665.4 -6-
"Commitment" shall mean, with respect to each
----------
Lender, (i) at any time on or prior to the Second Amendment
Effective Date, the amount of such Lender's aggregate
commitment to make loans under the Original Credit
Agreement, the First Amended and Restated Credit Agreement
and/or the Second Amended and Restated Credit Agreement, as
set forth opposite such Lender's name in Annex I thereto
directly below the column entitled "Commitment", and (ii) at
any time after the Second Amendment Effective Date, the
loans of such Lender outstanding under the Second Amended
and Restated Credit Agreement and this Agreement.
"Concentration Account" shall have the meaning
---------------------
provided in the Initial Cash Management Agreement or any
other cash management arrangements entered into by the
Borrower at the request of the Required Lenders pursuant to
Section 7.10.
"Confidential Material" shall have the meaning
---------------------
provided in Section 10.13.
"Contingent Obligation" shall mean, as to any
---------------------
Person, any obligation of such Person guaranteeing any
indebtedness, leases, dividends or other obligations
("primary obligations") of any other Person (the "primary
------------------- -------
obligor") in any manner, whether directly or indirectly,
-------
including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds
(x) for the purchase or payment of any such primary obliga-
tion or (y) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (iii) to purchase prop-
erty, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such
primary obligation, or (iv) otherwise to assure or hold
harmless or give "comfort" to the holder of such primary
obligation against loss in respect thereof; provided,
--------
however, that the term Contingent Obligation shall not
-------
include endorsements of instruments for deposit or collec-
tion in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal
to the stated or determinable amount of the primary obliga-
tion in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by
such Person in good faith.
NY1-53665.4 -7-
"Controlled Group" shall mean all members of a
----------------
controlled group of corporations and all trades or
businesses (whether or not incorporated) under common
control which, together with and including the Borrower, are
treated as a single employer under Section 414(b) or 414(c)
of the Code.
"Credit Documents" shall mean this Agreement, each
----------------
Note, the Agency Agreement, each Security Document, each
certificate delivered hereunder or thereunder and each other
document designated as such.
"Customary Permitted Liens" shall mean
-------------------------
(i) Liens (other than Environmental Liens
and any Lien imposed under ERISA) for taxes, assess-
ments or charges of any Governmental Authority or claim
not yet due or which are being contested in good faith
by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are
being maintained;
(ii) Liens perfected after the Filing Date
under Section 546 of the Bankruptcy Code, statutory
Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other similar Liens (other
than any Lien imposed under ERISA) imposed by law
created in the ordinary course of business for amounts
not yet due or which are being contested in good faith
by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are
being maintained;
(iii) Liens (other than any Lien imposed under
ERISA) incurred or deposits made in the ordinary course
of business (including, without limitation, surety
bonds and appeal bonds) in connection with workers'
compensation, unemployment insurance and other types of
social security benefits or to secure the performance
of tenders, bids, contracts (other than for the repay-
ment of Indebtedness or with respect to leases of real
or personal property), statutory obligations and other
similar obligations or arising as a result of progress
payments under government contracts;
(iv) easements (including, without limita-
tion, reciprocal easement agreements and utility
agreements), rights-of-way and land use covenants
(whether or not recorded), which do not interfere
materially with the ordinary conduct of the business of
the Borrower and which do not materially detract from
NY1-53665.4 -8-
the value or transferability of the property to which
they attach or impair the use thereof to the Borrower
or as Collateral;
(v) rights of tenants, subtenants,
franchisees or parties in possession (other than a
debtor in possession, trustee in bankruptcy or receiver
of the Borrower of Real Property owned or leased by the
Borrower), or options or rights of first refusal,
whether pursuant to leases, subleases, franchise
agreements, other occupancy agreements or otherwise,
with respect to real property owned by the Borrower, if
such rights were vested on the Filing Date or created
thereafter in the ordinary course of business in
transactions permitted under this Agreement;
(vi) extensions, renewals or replacements of
any Lien referred to in paragraphs (i) through (iv)
above, provided, that the principal amount of the
--------
obligation secured thereby is not increased and that
any such extension, renewal or replacement is limited
to the property originally encumbered thereby;
(vii) building restrictions, zoning laws and
other statutes, laws, rules, regulations, ordinances
and restrictions related to the use of Real Property,
and any amendments thereto, now or at any time
hereafter adopted by any Governmental Authority having
jurisdiction; and
(viii) pooling, interchange and other similar
arrangements customary in the ordinary course of the
Borrower's business as and to the extent permitted
under the Permitted First Liens and the Security
Documents.
"Default" shall mean any event, act or condition
-------
which with notice or lapse of time, or both, would
constitute an Event of Default.
"Deferral Aircraft" shall mean the aircraft
-----------------
described on Schedule 5 hereto.
"Designated Aircraft Leases" shall mean those
--------------------------
certain Aircraft Lease Agreements listed on Schedule 6
hereto, as the same may be amended, supplemented or
otherwise modified from time to time.
"Designated Collateral" shall mean the Collateral
---------------------
described in Schedule 2.
NY1-53665.4 -9-
"Distribution", with respect to any Person, shall
------------
mean that such Person has declared or paid any dividend or
returned any capital to, its stockholders or authorized or
made any other distribution, payment or delivery of property
or cash to its stockholders as such, or redeemed, retired,
purchased, or otherwise acquired, directly or indirectly,
for consideration, any shares of any class of its capital
stock (or any options or warrants issued by such Person with
respect to its capital stock), or set aside any funds for
any of the foregoing purposes, or shall have permitted any
of its Subsidiaries to purchase or otherwise acquire for a
consideration any shares of any class of the capital stock
of such Person (or any options or warrants issued by such
Person with respect to its capital stock), or shall have
paid or made provision for payment of any profit sharing
arrangement. Without limiting the foregoing,
"Distributions" with respect to any Person shall also
include all payments made or required to be made by such
Person with respect to any stock appreciation rights plans,
equity incentive or achievement plans or any similar plans
or the setting aside of any funds for the foregoing
purposes.
"Dollars" and the sign "$" shall each mean freely
------- -
transferable lawful money of the United States (expressed in
dollars).
"Domestic Gates" shall mean each landing gate
--------------
located at an airport within the United States.
"DOT" shall mean the United States Department of
---
Transportation or similar regulatory authority established
in replacement thereof.
"Effective Date" shall have the meaning provided
--------------
in Section 5.01.
"1110 Indebtedness" shall mean any Indebtedness
-----------------
secured by a Lien described in Section 1110 of the
Bankruptcy Code.
"Eligible Receivable" shall mean, at the time of
-------------------
any determination thereof, any Receivable (as defined in the
Security Agreement) of the Borrower which meets the follow-
ing standards of eligibility:
(i) the Borrower has lawful and absolute title to
such Receivable;
(ii) such Receivable is a valid, binding and
legally enforceable obligation of the Account
NY1-53665.4 -10-
Debtor (as defined in the Security Agreement)
who is obligated under such Receivable;
(iii) such Receivable is not subject to any
litigation, or other proceeding, dispute,
setoff, counterclaim or other claim or
defense on the part of the Account Debtor
denying liability under such Receivable in
whole or in part;
(iv) the Borrower has the full and unqualified
right to assign and grant Liens in such
Receivable to the Collateral Agent as
security for the Obligations;
(v) such Receivable is not subject to any Lien in
favor of any other Person;
(vi) such Receivable is a bona fide Receivable
---- ----
consisting of a proper and accurate amount
due from the Account Debtor arising from the
sale of goods or the rendering of services in
the ordinary course of the Borrower's
business and which does not consist of a
prepaid expense, warranty payment or claim
against any manufacturer, vendor, supplier or
other Person or an adjustment for unreported
sales or any other travel agency adjustment,
except that 75% of the amount of an
adjustment for unreported sales or any other
travel agency adjustment may constitute an
Eligible Receivable;
(vii) with respect to such Receivable, no Account
Debtor is
(a) incorporated in or primarily conducting
business in any jurisdiction located
outside the United States;
(b) an Affiliate of the Borrower;
(c) a foreign government or any agency,
department, or instrumentality thereof;
(d) the subject of any reorganization,
bankruptcy, receivership, custodianship,
insolvency, or other like condition,
except an Account Debtor that is an
airline whose Receivable is through the
Airline Clearing House;
NY1-53665.4 -11-
(e) an agency, department, or instrumental-
ity of the United States or any state or
local governmental authority in the
United States unless the requirements of
the Assignment of Claims Act of 1940, as
amended, and any similar state or local
legislation shall have been satisfied in
respect thereof and the Required Lenders
are satisfied as to the absence of set-
offs, counterclaims and other defenses
to payment on the part of the United
States or such state or local govern-
mental authority; or
(f) a Person as to which the Borrower has
modified its standard terms of payment
as a result of concerns about the
creditworthiness of such Account Debtor
(e.g., by requiring prepayment or cash
----
on delivery);
(viii) such Receivable is not outstanding more than
180 days;
(ix) such Receivable is not a Receivable owing by
an Account Debtor which, at the time of any
determination of Eligible Receivables, owes
any amount with respect to any Receivable
that has been outstanding more than 180 days;
(x) with respect to the Account Debtor under such
Receivable, the Borrower is not indebted to
such Account Debtor for any goods provided or
services rendered by such Account Debtor or
otherwise, except an Account Debtor that is
an airline whose Receivable is through the
Airline Clearing House;
(xi) such Receivable is not payable in any
consideration other than cash and in U.S.
Dollars; and
(xii) such Receivable is evidenced by an invoice or
other writing, if any, customary and
appropriate in the air transportation
business, and is not evidenced by any
instrument or chattel paper.
A Receivable which is at any time an Eligible Receivable,
but which subsequently fails to meet any of the foregoing
requirements, shall forthwith cease to be an Eligible
NY1-53665.4 -12-
Receivable until such time as it once again meets all of the
foregoing requirements. Notwithstanding the provisions of
the preceding clause (iii), a Receivable which is at any
time subject to a dispute on the part of the Account Debtor
denying liability under such Receivable in part shall
constitute an Eligible Receivable to the extent of the
portion thereof which is not in dispute (so long as such
Receivable otherwise satisfies all of the foregoing
requirements). In addition, any such Receivable which is in
dispute as to a portion thereof shall not preclude another
Receivable of the same Account Debtor from constituting an
Eligible Receivable pursuant to the provisions of the
preceding clause (ix).
"Engine Collateral" shall mean the three CFM 56-3B
-----------------
engines of the Borrower bearing manufacturer's serial
numbers 720601, 720772 and 720867.
"Engine Leases" shall mean those certain Engine
-------------
Sublease Agreements listed on Schedule 7 hereto, as the same
may be amended, supplemented or otherwise modified.
"Environmental Lien" shall mean a Lien in favor of
------------------
any Governmental Authority for (i) any liability under
Hazardous Materials Laws or (ii) damages arising from or
costs incurred by such Governmental Authority in response to
a release or threatened release of Hazardous Materials.
"ERISA" shall mean the Employees Retirement Income
-----
Security Act of 1974, as amended from time to time. Section
references to ERISA, are to ERISA, as in effect at the date
of this Agreement, and to any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or
substituted therefor.
"Event of Default" shall have the meaning provided
----------------
in Section 9.
"Event of Default Collateralization Amount" shall
-----------------------------------------
have the meaning provided in Section 7.10(b).
"Existing Debt" shall have the meaning provided in
-------------
Section 8.05.
"Existing Lenders" shall mean GPA Leasing USA I,
----------------
Inc., GPA Sub and Kawasaki Leasing International Inc.
"Existing Secured Debt" shall mean all Indebted-
---------------------
ness of the Borrower secured on the Filing Date by Permitted
First Liens.
NY1-53665.4 -13-
"FAA" shall mean the Federal Aviation Adminis-
---
tration or similar regulatory authority established in
replacement thereof.
"Facility Fee" shall have the meaning provided in
------------
Section 3.01.
"Fees" shall mean all amounts payable pursuant to
----
or referred to in Section 3.01.
"Filing Date" shall have the meaning provided in
-----------
the second Whereas clause of this Agreement.
"Final Extension Loan Order" shall mean an order
--------------------------
of the Bankruptcy Court in the form of Exhibit D-8 (as such
form may be modified pursuant to Section 7.10(a) in a manner
acceptable to the Required Lenders, in their sole and
absolute discretion, and as such form may otherwise be
modified in a manner acceptable to each of the Lenders, in
its sole and absolute discretion).
"Final Order" shall have the meaning provided in
-----------
Section 5.02(c).
"First Amended and Restated Credit Agreement"
-------------------------------------------
shall have the meaning specified in the first paragraph of
this Agreement.
"Foreign Lender" shall have the meaning provided
--------------
in Section 2.10(a).
"Governmental Actions" shall mean any regulations,
--------------------
authorizations, applications, approvals, consents, exemp-
tions, filings, licenses, notices, registrations, orders,
rulings, decrees, judgments, permits, guidance, policy or
program and other requirements of, to or with any
Governmental Authority.
"Governmental Authority" shall mean any government
----------------------
(federal, foreign, state, local or other) and any
governmental or quasi-governmental, regulatory, judicial or
public authority, board, body, commission, bureau, agency or
the like.
"GPA Agreements" shall mean, collectively, the
--------------
A320 Leases, the Engine Leases, the Put Agreement and the
Designated Aircraft Leases.
"GPA Entity" shall mean GPA Group plc or any
----------
Subsidiary thereof, and their successors and assigns.
NY1-53665.4 -14-
"GPA Order" shall have the meaning provided in
---------
Section 5.01(h).
"GPA Sub" shall mean GPA Leasing USA Sub I, Inc.,
-------
a Connecticut corporation, and its successors and assigns.
"Hazardous Materials" shall mean (i) any oil,
-------------------
flammable substance, explosives, radioactive materials,
hazardous wastes or substances, toxic wastes or substances,
asbestos or any other materials or pollutants which because
of characteristics of flammability, ignitibility, corros-
sivity or reactivity, or because they exist in such quantity
or manner, are required by a Governmental Authority to be
reported or remediated; (ii) any chemical, material sub-
stance or constituent defined as or included in the defini-
tion of "hazardous pollutants" (under Section 112 of the
Clean Air Act, as it may be amended from time to time),
"hazardous substance," "hazardous waste," "hazardous
materials," "extremely hazardous waste," "restricted
hazardous waste," or "toxic substances" or words of similar
import under any applicable local, state or federal law or
under the regulations adopted, or publications promulgated
pursuant thereto, including, without limitation, the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et
--
seq.; the Hazardous Materials Transportation Act, as
---
amended, 49 U.S.C. Section 1801, et seq.; the Resource
-- ---
Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901,
et seq.; the Clean Water Act, as amended, 33 U.S.C. Section 1251,
-- ---
et seq.; Toxic Substances Control Act, 15 U.S.C.
-- ---
Section 2601-2629; Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. Section 136-136y; or similar state statutes; and
(iii) any other chemical, material or substance, release or
discharge of which or exposure to which is prohibited,
limited or regulated by any Governmental Authority or may or
could pose a hazard to the health and safety of the
occupants of any of the properties of the Borrower or the
owners and/or occupants of property under, adjacent to or
surrounding any such property. References herein to
Collateral in respect of Hazardous Materials also include
all property on (including but not limited to buildings,
improvements, soils or ground waters) or under the surface
thereof or adjacent thereto or surrounding the property on
or under which the Collateral is located.
"Hazardous Materials Claims" shall mean any and
--------------------------
all enforcement, remediation, clean-up, removal or other
Governmental Actions instituted or completed by any Person
pursuant to any Hazardous Materials Laws, or any written
notice of any enforcement, clean-up, removal or other
Governmental Actions or orders pursuant to any Hazardous
NY1-53665.4 -15-
Materials Laws, together with all claims made by any third
party against the Borrower or any of its properties relating
to damage, contribution, cost recovery, compensation, loss
or injury resulting from any Hazardous Materials.
"Hazardous Materials Laws" shall mean any and all
------------------------
federal, state or local laws, ordinances, rules, regula-
tions, or other enforceable requirements now or hereafter
existing or enacted relating to the environment, health and
safety, and Hazardous Materials (including, without limita-
tion, the use, handling, transfer, consolidation, transpor-
tation, production, disposal, discharge or storage thereof)
or to industrial hygiene or the environmental conditions on,
under or about any of the property of the Borrower,
including, without limitation, soil and groundwater
conditions.
"High Density Airport" shall mean and include each
--------------------
of John F. Kennedy, Washington National, Newark and O'Hare
Airports.
"Indebtedness" shall mean, as to any Person, with-
------------
out duplication, (i) all indebtedness (including principal,
interest, fees and charges) of such Person for borrowed
money or for the deferred purchase price of property or
services, (ii) the face amount of all letters of credit
issued for the account of such Person and all drafts drawn
thereunder, (iii) all liabilities of the types described in
clauses (i), (ii), (iv), (v), (vi) and (vii) of this
definition and secured by any Lien on any property
(including, without limitation, a leasehold interest) owned
by such Person, whether or not such liabilities have been
assumed by such Person, (iv) the aggregate amount required
to be capitalized under leases under which such Person is
the lessee, (v) all Contingent Obligations of such Person,
(vi) all obligations of such Person under "take-or-pay" or
other similar arrangements and (vii) all obligations of such
Person under interest rate or currency exchange protection
or other similar agreements, provided that Indebtedness
--------
shall not include trade payables and accrued expenses, in
each case arising in the ordinary course of business, or the
Permitted Expenses.
"Initial Cash Management Agreement" shall mean the
---------------------------------
Cash Management Agreement among the Local Bank, the
Collateral Agent and the Borrower in the form of Exhibit I
hereto, as modified, supplemented or amended from time to
time.
"Inter-Creditor Agreement" means the Inter-
------------------------
Creditor Agreement dated as of August 26, 1991 between the
NY1-53665.4 -16-
Collateral Agent, the Lenders and First Interstate Bank of
Arizona, N.A., as same may be amended, modified or
supplemented from time to time.
"Interest Payment Date" shall have the meaning
---------------------
provided in Section 2.07(c).
"Interest Period" shall mean, with respect to each
---------------
Loan, the period from the date of the disbursement of such
Loan to the first Interest Payment Date and each period
thereafter beginning and ending on successive Interest
Payment Dates; provided, however, that in the event that any
-------- -------
amount is not paid when due, "Interest Period" shall mean
such period consisting of one Business Day, one week, one
month or three months as the Administrative Agent may select
in its sole and absolute discretion. The Administrative
Agent shall notify the Lenders and the Borrower of any such
selection.
"Interim Extension Loan Order" shall mean an order
----------------------------
of the Bankruptcy Court in the form of Exhibit D-7 (as such
form may be modified in a manner acceptable to each of the
Lenders, in its sole and absolute discretion).
"Interim Order" shall have the meaning provided in
-------------
Section 5.02(c).
"Investment Account" shall have the meaning
------------------
provided in the Initial Cash Management Agreement or any
other cash management arrangements entered into by the
Borrower at the request of the Required Lenders pursuant to
Section 7.10.
"Investment Account Minimum" shall have the
--------------------------
meaning provided in Section 8.15(e).
"Kawasaki" shall mean Kawasaki Leasing
--------
International Inc., a Delaware corporation.
"Kawasaki Agreements" shall mean and include
-------------------
(i) the Aircraft Finance Agreement, (ii) the Kawasaki
Leases, (iii) the Kawasaki Credit Agreement, (iv) the
Kawasaki Restructuring Agreement, (v) the Kawasaki Put
Agreement, and (vi) all leases and subleases entered into
from time to time under and pursuant to the Kawasaki Put
Agreement.
"Kawasaki Credit Agreement" shall mean the Loan
-------------------------
Restructuring Agreement, dated as of December 1, 1991,
between the Borrower and Kawasaki, as amended, supplemented
or modified from time to time.
NY1-53665.4 -17-
"Kawasaki Leases" shall mean those certain
---------------
agreements listed on Schedule 17 hereto, as the same may be
amended, supplemented or modified from time to time.
"Kawasaki Order" shall mean an order of the
--------------
Bankruptcy Court in the form of Exhibit D-5 (as such form
may be modified in a manner acceptable to Kawasaki, in its
sole and absolute discretion) to the extent, and only to the
extent, such order relates to the Kawasaki Agreements (and
the authorization of the Borrower to enter into and perform
its obligations under the Kawasaki Agreements) and affords
administrative priority to the obligations of the Borrower
under the Kawasaki Credit Agreement.
"Kawasaki Put Agreement" shall mean the Put
----------------------
Agreement, dated as of December 1, 1991, between the
Borrower and Kawasaki, as amended, supplemented or modified
from time to time.
"Kawasaki Restructuring Agreement" shall mean the
--------------------------------
Restructuring Agreement, dated as of December 1, 1991,
between the Borrower and Kawasaki, as amended, supplemented
or modified from time to time.
"Kawasaki Stipulations" shall mean and include
---------------------
(i) the Joint Stipulation with Respect to Bankruptcy Code
Section 1110 . . . [N160AW], (ii) the Joint Stipulation with
Respect to Bankruptcy Code Section 1110 . . . [N910AW], and
(iii) the Joint Stipulation with Respect to Bankruptcy Code
Section 1110 . . . [720-601, 720-772, 720-867].
"Lender" shall mean each institution listed in
------
Annex I, as well as any Person that becomes a "Lender"
hereunder pursuant to Section 10.04.
"Lessor Lenders" shall mean (i) GPA Leasing USA I,
--------------
Inc., GPA Sub and each other Subsidiary of GPA Group plc
which is or hereafter becomes a Lender, and (ii) Kawasaki
and each Subsidiary of Kawasaki Enterprises, Inc. which is
or hereafter becomes a Lender; provided that each such
--------
Person shall only be a "Lessor Lender" at such times as it
is a Lender hereunder.
"LIBOR" shall mean for each Interest Period:
-----
(i) the rate of interest determined by the
Administrative Agent as follows:
(y) On the second London Business Day prior
to the first day of an Interest Period (a "LIBOR
-----
Determination Date"), the Administrative Agent will
------------------
NY1-53665.4 -18-
determine the arithmetic mean of the offered rates for
deposits in United States dollars for the period in its
good faith judgment comparable to the Interest Period
which appear on the Reuters Screen LIBO Page at
approximately 11:00 A.M., London time, on such LIBOR
Determination Date. "Reuters Screen LIBO Page" means
------------------------
the display designated as Page "LIBO" on the Reuters
Monitor Money Rate Service (or such other page as may
replace the LIBO page on that service for the purpose
of displaying London interbank offered rates of major
banks). If only one such rate is quoted, then LIBOR
shall mean such quoted rate; or
(z) If no offered rates appear on the
Reuters Screen LIBO Page, the Administrative Agent will
request the principal London offices of each of four
major banks in the London interbank market, as selected
by the Administrative Agent, to provide the Adminis-
trative Agent with its offered quotations, or the rate
at which it would offer, for deposits in United States
dollars for a period comparable to the Interest Period
to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such LIBOR
Determination Date and in a principal amount equal to
an amount of not less than U.S. $1 million that is
representative of a single transaction in such market
at such time, and LIBOR will be the arithmetic mean of
all such quotations provided or, if only one quotation
is provided, such quotation; in either case divided by
-------
(ii) an amount equal to one minus the
aggregate (but without duplication) weighted average of
the maximum rates (expressed as a decimal) of reserve
requirements in effect from time to time (including,
without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board
of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect
thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of such
Board) as in effect from time to time or offshore
Dollar liabilities which are required to be maintained
by a member bank of such System (such rate to be
adjusted to the next higher 1/100 of 1%).
"Lien" shall mean any mortgage, pledge, hypothe-
----
cation, encumbrance, lien (statutory or other), or other
security agreement of any kind or nature whatsoever (includ-
ing, without limitation, any conditional sale or other title
retention agreement and any lease having substantially the
NY1-53665.4 -19-
same effect as any of the foregoing and any assignment or
deposit arrangement in the nature of a security device).
"Lien Termination Date" shall have the meaning
---------------------
provided in Section 10.17.
"Loan" shall mean a loan by a Lender to the
----
Borrower under and pursuant to the Original Credit
Agreement, the First Amended and Restated Credit Agreement
and/or the Second Amended and Restated Credit Agreement.
"Local Bank" shall have the meaning provided in
----------
the Initial Cash Management Agreement.
"London Business Day" shall mean any day on which
-------------------
dealings in deposits in United States dollars are transacted
in the London interbank market.
"Margin Stock" shall have the meaning provided in
------------
Regulation U of the Board of Governors of the Federal
Reserve System.
"Management Letter Agreement" shall mean a letter
---------------------------
agreement in the form of Exhibit KK hereto, as the same may
be amended, modified or supplemented from time to time.
"Maturity Date" shall mean the earliest of
-------------
(x) June 30, 1994, (y) the effective date of a confirmed
plan of reorganization for the Borrower under Chapter 11 of
the Bankruptcy Code and (z) the date of substantial
consummation (as such term is defined in Section 1101 of the
Bankruptcy Code) of a plan of reorganization for the
Borrower under Chapter 11 of the Bankruptcy Code.
"Merchant Agreement Supplement" shall mean an
-----------------------------
amendment to the Supplement to Merchant Agreement, dated as
of March 15, 1991, between the Borrower and First Interstate
Bank of Arizona, N.A., as modified, supplemented or amended
from time to time with the prior written consent of the
Required Lenders.
"Mortgage" shall mean the Mortgages in the forms
--------
of Exhibit J-1 hereto, as same may be amended, modified or
supplemented from time to time.
"Mortgaged Property" shall have the meaning
------------------
provided in Section 5.01(f).
"Multiemployer Plan" shall mean a "multiemployer
------------------
plan" as defined in Section 4001(a)(3) of ERISA.
NY1-53665.4 -20-
"Net Proceeds" shall mean for each Asset Sale the
------------
proceeds (net of expenses actually paid by the Borrower as a
result thereof) received by the Borrower from such Asset
Sale less any Existing Secured Debt or any Indebtedness
secured by a Permitted First Lien, including, without
limitation, interest period breakage or make-whole premiums
payable in connection therewith, of the Borrower required,
as permitted by the Bankruptcy Court, to be repaid with such
proceeds.
"Northwest" shall mean Northwest Airlines, Inc., a
---------
Minnesota corporation.
"Northwest Order" shall have the meaning provided
---------------
in Section 5.01(h).
"Note" shall have the meaning provided in Section
----
2.05(a).
"Notice Office" shall mean the office of the
-------------
Administrative Agent shown opposite its name on the signa-
ture pages hereof, or such other office as the Administra-
tive Agent may hereafter designate in writing as such to the
other parties hereto.
"Obligations" and "Credit Agreement Obligations"
----------- ----------------------------
shall mean all amounts payable at any time or from time to
time and all other liabilities and obligations of the
Borrower owing to the Administrative Agent, the Collateral
Agent or any Lender pursuant to the terms of this Agreement
or any other Credit Document.
"Official Committee" shall mean any official
------------------
committee appointed in the Case with the approval of the
Bankruptcy Court.
"Operating Plan" shall mean the Borrower's Summary
--------------
Pro Forma Financial Statements, Plan Revision No. 9, June
1993 through December 1994, dated July 15, 1993, a certified
copy of which has been delivered to the Administrative Agent
and each Lender, as the same has been amended, supplemented
and modified by the Borrower's Plan Revision No. 9
Amendments, dated September 21, 1993, a certified copy of
which has been delivered to the Administrative Agent and
each Lender, and as the same may be further amended,
supplemented or otherwise modified with the consent of the
Required Lenders.
"Operating Route" shall mean any Route which is
---------------
being operated such that it is not likely to be deemed
"dormant" by the DOT.
NY1-53665.4 -21-
"Orders" shall mean and include the Interim Order,
------
the Final Order, the Additional Loan Order, the Second
Additional Loan Order, the Interim Extension Loan Order and
the Final Extension Loan Order.
"Original Credit Agreement" shall have the meaning
-------------------------
specified in the first paragraph of this Agreement.
"Payment Office" shall mean the account of the
--------------
Administrative Agent located at One Bankers Trust Plaza, New
York, New York 10006, or such other account as the Adminis-
trative Agent may hereafter designate in writing as such to
the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty
----
Corporation established pursuant to Section 4002 of ERISA or
any successor thereto.
"Pension Plan" shall mean any employee benefit
------------
plan which is subject to the provisions of Title IV of ERISA
and which is maintained for employees of the Borrower or any
member of the Controlled Group, other than a Multiemployer
Plan.
"Percentage" shall mean, for each Lender, a
----------
fraction (expressed as a percentage), the numerator of which
is the outstanding principal amount of the Loans of such
Lender, as in effect at the time of determination, and the
denominator of which is the outstanding principal amount of
the Loans of all of the Lenders, as in effect at such time.
"Permitted Expenses" shall mean all fees and
------------------
expenses of professionals retained pursuant to Section 327
of the Bankruptcy Code by the Borrower or by an Official
Committee, and expenses of members of an Official Committee,
and all compensation awarded under Sections 503(b)(2)
through 503(b)(6) of the Bankruptcy Code, as such may be
allowed by the Bankruptcy Court and paid by the Borrower
from time to time, provided, however, that upon the
-------- -------
occurrence of an Event of Default, then, from and after such
event, Permitted Expenses shall mean the sum of (i) all
amounts previously paid by the Borrower to professionals
retained by the Borrower or an Official Committee, or
Official Committee members' expenses, and all compensation
awarded under Sections 503(b)(2) through 503(b)(6) of the
Bankruptcy Code, as of the date of such Event of Default,
and (ii) $1,000,000 of such expenses if such date occurs
prior to January 1, 1992 and $2,000,000 of such expenses if
such date occurs after December 31, 1991, and, provided,
--------
further, however, that Permitted Expenses shall not include
------- -------
expenses incurred in connection with any objection to the
NY1-53665.4 -22-
validity, priority or extent of any Lien or priority status
granted to the Lenders hereunder or pursuant to any of the
Orders or to the enforceability of any rights granted
hereunder or under the other Credit Documents, the GPA
Agreements or the Kawasaki Agreements or any of the Orders
or the GPA Order or the Kawasaki Order.
"Permitted First Liens" shall mean the Liens
---------------------
described in clauses (i), (v), (viii) and (ix) of Section
8.01.
"Person" shall mean any individual, partnership,
------
joint venture, firm, corporation, association, trust or
other enterprise or Governmental Authority.
"Projections" shall have the meaning provided in
-----------
Section 6.06(e).
"Put Agreement" shall mean that certain A320 Put
-------------
Agreement, dated as of June 25, 1991, between GPA Group plc
and the Borrower, as the same may be amended, supplemented
or otherwise modified from time to time.
"Real Property" shall mean all of the right, title
-------------
and interest of the Borrower in and to land, improvements
and fixtures, including leaseholds and Domestic Gates.
"Required Lenders" at any time shall mean Lenders
----------------
the principal amount of whose Loans outstanding exceed 75%
of the total principal amount of Loans outstanding (it being
understood that the use of the term "Required Lenders" shall
be subject to the provisions of the first sentence of
Section 10.11, which provisions may require the consent of
or other action by Lenders whose Loans exceed a greater
percentage than the percentage stated in this definition).
"Routes" shall mean international route
------
authorities held by the Borrower.
"SEC" shall have the meaning provided in Section
---
7.01(e).
"Second Additional Loan Order" shall mean an order
----------------------------
of the Bankruptcy Court in the form of Exhibit D-6 (as such
form may be modified pursuant to Section 7.10(a) in a manner
acceptable to the Required Lenders, in their sole and
absolute discretion, and as such form may otherwise be
modified in a manner acceptable to all of the Lenders, in
their sole and absolute discretion).
NY1-53665.4 -23-
"Second Amended and Restated Credit Agreement"
--------------------------------------------
shall have the meaning specified in the first paragraph of
this Agreement.
"Second Amendment Effective Date" shall have the
-------------------------------
meaning specified in Section 5.04.
"Second Amendment Lender" shall mean Ansett and
-----------------------
each Lender (other than an Existing Lender) that became a
Lender and made a Loan on the Second Amendment Effective
Date.
"Section 7.10(c) Amount" shall have the meaning
----------------------
provided in Section 7.10(c).
"Secured Creditors" shall mean each of the
-----------------
Lenders, the Collateral Agent and the Administrative Agent.
"Security Agreement" shall mean a Security
------------------
Agreement in the form of Exhibit F hereto, as the same may
be amended, modified or supplemented from time to time.
"Security Documents" shall mean and include the
------------------
Orders, the Security Agreement, the Inter-Creditor
Agreement, the Mortgage, the Assignment of Gate Leases, the
Aircraft/Engine Mortgage, the Slot Deed of Conveyance, the
Slot Lease, the Initial Cash Management Agreement and the
other agreements related to the Concentration Account and/or
the Investment Account, and any ancillary documentation
which is required or otherwise executed to evidence and/or
perfect the liens and security interests and other rights
granted to the Collateral Agent on behalf of the Lenders
pursuant to this Agreement, the Orders, the Security
Agreement, the Inter-Creditor Agreement, the Mortgage, the
Aircraft/Engine Mortgage, the Slot Deed of Conveyance, the
Slot Leases, the Initial Cash Management Agreement and the
other agreements related to the Concentration Account and/or
the Investment Account.
"Slot" shall mean all of the rights, titles,
----
interest and privileges of an air carrier in and to the
primary operating authority granted by the FAA pursuant to
Title 14, to conduct one Instrument Flight Rule (as defined
under the Aviation Act) take-off or landing in a specified
one-hour or half-hour period at a High Density Airport. The
term "Slot" as used herein shall include all Slots created
after the date hereof pursuant to Title 14.
"Slot Collateral" means the Slots of the Borrower
---------------
at O'Hare Airport and John F. Kennedy Airport.
NY1-53665.4 -24-
"Slot Deed of Conveyance" shall mean the Deed of
-----------------------
Conveyance and Assignment of Allocated Instrument Flight
Rules Operations Times of the Slots made by the Borrower in
favor of the Collateral Agent in the form of Exhibit K, as
modified, supplemented or amended from time to time.
"Slot Lease" shall mean, collectively, the Slot
----------
Lease Agreement with respect to the Slots made by the
Collateral Agent to the Borrower in form attached hereto as
Exhibit L, as modified, supplemented or amended from time to
time.
"Specified Aircraft and Engines" shall mean and
------------------------------
include the Aircraft and Engines described on Part A of
Schedule 1 to the Aircraft and Engine Chattel Mortgage and
Security Agreement in the form of Exhibit G hereto, as such
Schedule may be modified, supplemented or amended from time
to time.
"Subsidiary" shall mean, as to any Person, (i) any
----------
corporation more than 50% of whose stock of any class or
classes having by the terms thereof ordinary voting power to
elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any
class or classes of such corporation shall have or might
have voting power by reason of the happening of any
contingency) is at the time owned by such Person and/or one
or more subsidiaries of such Person and (ii) any partner-
ship, association, joint venture or other entity in which
such Person and/or one or more subsidiaries of such Person
has more than a 50% equity interest at the time. Unless
otherwise expressly provided, all references herein to
"Subsidiary" shall mean a Subsidiary of the Borrower.
"Successor Merchant Bank Arrangement" shall have
-----------------------------------
the meaning provided in Section 7.10(a).
"Taxes" shall have the meaning provided in Section
-----
2.10(a).
"Termination Event" shall mean (i) a "Reportable
-----------------
Event" described in Section 4043 of ERISA and the
regulations issued thereunder (other than a "Reportable
Event" not subject to the provision for 30-day notice to the
PBGC under such regulations), (ii) the withdrawal of the
Borrower or any member of the Controlled Group from a
Pension Plan during a plan year in which it was a
"substantial employer", as defined in Section 4001(a)(2) of
ERISA, (iii) the filing of a notice of intent to terminate a
Pension Plan or the treatment of a Pension Plan amendment as
a termination under Section 4041 of ERISA, (iv) the insti-
NY1-53665.4 -25-
tution of proceedings to terminate a Pension Plan by the
PBGC, or (v) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Pension Plan.
"Third Amendment Effective Date" shall have the
------------------------------
meaning specified in Section 5.05.
"Title 14" shall mean Title 14 of the Code of
--------
Federal Regulations, Part 93, Subparts K and S, as amended
from time to time or any recodification thereof.
"UCC" shall mean the Uniform Commercial Code as
---
from time to time in effect in the relevant jurisdiction.
"United States" and "U.S." shall each mean the
------------- ----
United States of America.
"Written" or "in writing" shall mean any form of
------- ----------
written communication or a communication by means of telex,
telecopier or facsimile device, telegraph or cable.
1.02 Other Definitional Provisions. References
-----------------------------
herein to "Sections", "Exhibits" and "Schedules" shall be to
Sections of, and Exhibits or Schedules attached to, this
Agreement unless otherwise specifically provided. Refer-
ences herein to "this Agreement", "herein", "hereof" or
"hereunder" shall be to this Agreement, as amended, supple-
mented or otherwise modified from time to time in accordance
with Section 10.11. Except as otherwise expressly provided
herein, references to other agreements or instruments shall
mean such agreements or instruments as the same may be
amended, supplemented or modified from time to time.
SECTION 2. LOANS.
-----
2.01 Commitments and Loans.
---------------------
(a) Subject to and upon the terms and conditions
set forth in the Original Credit Agreement, the First
Amended and Restated Credit Agreement and/or the Second
Amended and Restated Credit Agreement, each Lender honored
its Commitment and made its Loans (it being acknowledged and
agreed that on and as of the date hereof the Loans of each
Lender are outstanding in the aggregate principal amount set
forth opposite such Lender's name in Annex I to this
Agreement).
NY1-53665.4 -26-
(b) Amounts prepaid or repaid under the Original
Credit Agreement, the First Amended and Restated Credit
Agreement, the Second Amended and Restated Credit Agreement
and this Agreement may not be reborrowed (it being
acknowledged and agreed that the Lenders are not obligated
to make any further or additional loans under this
Agreement).
2.02 [Reserved].
----------
2.03 [Reserved].
----------
2.04 [Reserved].
----------
2.05 Notes.
-----
(a) The Borrower's obligation to pay the prin-
cipal of, and interest on, all Loans made by each Lender is
evidenced in part by a promissory note duly executed and
delivered to such Lender by the Borrower substantially in
the form of Exhibit A hereto (each a "Note" and collectively
----
the "Notes").
-----
(b) Each Note issued to each Lender (i) is
payable to the order of such Lender and is dated the
Effective Date or such later date on which such Lender
acquired or increased its Commitment, (ii) is in a stated
principal amount equal to the Commitment of such Lender as
in effect on the date of issuance thereof or the increase in
the Commitment of such Lender on the date of issuance
thereof and is payable in the outstanding principal amount
of the Loans evidenced thereby from time to time, (iii)
matures on the Maturity Date, (iv) bears interest as
provided in Section 2.07 in respect of the Loans evidenced
thereby and (v) is entitled to the benefits of this
Agreement and all other Credit Documents.
(c) Each Lender will note on its internal records
the amount of each Loan made by it and each payment in
respect thereof and will, prior to any transfer, record the
outstanding principal amount of Loans evidenced thereby.
Failure to make any such notation shall not affect any of
the Borrower's obligations in respect of such Loans.
2.06 [Reserved].
----------
2.07 Interest.
--------
(a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Loan from the
date the proceeds thereof are made available to the Borrower
NY1-53665.4 -27-
until maturity thereof (whether by acceleration or other-
wise) at a rate per annum which shall be 3-1/2% in excess of
the applicable LIBOR in effect from time to time.
(b) Overdue principal and overdue interest in
respect of each Loan and all other amounts not paid when due
under the Credit Documents shall bear interest at a rate per
annum which shall be 5-1/2% in excess of the applicable
LIBOR for the Interest Period selected by the Administrative
Agent in effect from time to time. Interest which accrues
under this Section 2.07(b) shall be payable on demand.
(c) Except as provided in Section 2.07(b),
accrued (and theretofore unpaid) interest shall be payable
in respect of each Loan in arrears (i) on the last Business
Day of each calendar quarter, (ii) at maturity (whether by
acceleration or otherwise) and (iii) after such maturity, on
demand. Each date described in clauses (i), (ii) and (iii)
of the preceding sentence of this Section 2.07(c) is
referred to herein as an "Interest Payment Date".
---------------------
2.08 Principal Repayments. The Borrower shall
--------------------
repay the principal amount of the Loans outstanding in
installments in the following amounts and on the following
dates: (i) on March 31, 1994, in a principal amount equal
to $5,000,000.00; and (ii) on June 30, 1994, in a principal
amount equal to $78,616,597.27 or such lesser principal
amount of the Loans as is then outstanding. Notwithstanding
anything herein to the contrary, (i) if on or prior to
October 8, 1993, the Final Extension Loan Order shall not
have been entered or, if entered, shall have been stayed,
reversed, vacated, rescinded, modified or amended in any
respect (other than modifications or amendments acceptable
to each of the Lenders, in its sole and absolute
discretion), on October 8, 1993, the aggregate unpaid
balance of all principal of and all accrued and unpaid
interest (including, without limitation, accrued and unpaid
interest at the rate specified in Section 2.07(b) for each
day subsequent to September 30, 1993 and prior to the date
of payment) on the Loans and all other amounts due hereunder
or under any other Credit Document shall be due and payable
in full, and (ii) if not theretofore paid as provided in the
preceding clause (i), on the Maturity Date, the aggregate
unpaid balance of all principal and all accrued and unpaid
interest on the Loans and all other amounts due hereunder or
under any other Credit Document shall be due and payable in
full.
2.09 Interest Period Indemnification. Without
-------------------------------
limiting Section 2.11 hereof, the Borrower agrees to
indemnify each Lender and to hold each Lender harmless from
NY1-53665.4 -28-
any loss or expense, including, without limitation, any such
loss or expense arising from interest, fees or indemnities
payable by such Lender to lenders of funds obtained by it in
order to maintain its Loans hereunder and any such loss or
expense (including, without limitation, loss of anticipated
profit) incurred in liquidating or reemploying swaps, loans
or deposits from which such funds were obtained or priced,
which such Lender may sustain or incur as a consequence of
(i) default by the Borrower in the payment when due of the
principal of or interest on any Loan hereunder, (ii) failure
or default by the Borrower to repay or prepay after the
Borrower has given a notice of repayment or prepayment or is
required to make a prepayment pursuant to Section 4, and
(iii) the making of any repayment or prepayment of a Loan or
payment of interest in respect thereof (including, without
limitation, pursuant to Sections 4.01 or 4.02) on a day
which is not the last day of an applicable Interest Period.
The Borrower shall pay to each Lender any amounts owing to
such Lender pursuant to this Section 2.09 within five (5)
Business Days after it receives the Lender's certificate
certifying in reasonable detail the amount of such loss or
expense, which certificate shall be conclusive in the
absence of manifest error. Such Lender shall deliver a copy
of any such certificate to the Administrative Agent at the
same time such certificate is delivered to the Borrower.
2.10 Taxes.
-----
(a) The Borrower shall pay all amounts payable
hereunder or under the Credit Documents to the Adminis-
trative Agent and each Lender free and clear of, and without
deduction or withholding for or on account of, any present
and future taxes, levies, imposts, duties, fees, assess-
ments, deductions, withholdings or other charges imposed by
any country, jurisdiction or any political subdivision or
taxing authority thereof or therein, excluding (i) net
income and franchise taxes (including minimum, net worth or
capital taxes) imposed on such Person by any taxing
authority of the United States of America (or the principal
country of tax residence of the ultimate parent corporation
of such Person pursuant to this Agreement) or political
subdivision thereof or by any country, jurisdiction or any
political subdivision or taxing authority thereof or therein
in which the lending office with respect to the Loans of
such Lender hereunder or principal office of such Person is
located and (ii) withholding taxes described in the second
paragraph of this Section 2.10(a) (all such nonexcluded
taxes, levies, imposts, duties, fees, assessments, deduc-
tions, withholdings and other charges being hereinafter
referred to as "Taxes"). If any Taxes shall be required by
-----
law to be deducted or withheld from any payment of an amount
NY1-53665.4 -29-
payable hereunder or under the other Credit Documents by the
Borrower or the Administrative Agent (other than the with-
holding taxes described in the next paragraph), the Borrower
shall increase the amount paid so that the Administrative
Agent or such Lender receives when due (and is entitled to
retain), after deduction or withholding for or on account of
such Taxes (including, without limitation, any taxes,
levies, imposts, duties, fees, deductions, withholdings
(other than withholdings permitted pursuant to the next
paragraph), assessments or other charges applicable to
additional amounts payable under this Section), the full
amount of the payment provided for herein or in the other
Credit Documents. In the event the Borrower is required by
a Lender to pay any additional amount to such Lender
pursuant to this Section 2.10, such Lender will designate a
different lending office if such designation will avoid the
need for, or reduce, such additional amount and will not be
otherwise disadvantageous to such Lender in its sole and
absolute judgment.
The Borrower or the Administrative Agent may
properly as required by law deduct any withholding taxes
from or in respect of any sum payable hereunder to any
Lender or the Administrative Agent and such withholdings
shall not be subject to indemnification (i) if any Lender
which is organized under the laws of a jurisdiction outside
of the United States (a "Foreign Lender") fails or is unable
--------------
to furnish to the Borrower or the Administrative Agent a
statement (for example, an Internal Revenue Service Form
1001 or Form 4224) when reasonably requested by the Borrower
or the Administrative Agent which, had it been furnished,
would have provided the Borrower or the Administrative Agent
a complete exemption from any duty to withhold, (ii) if a
Foreign Lender furnishes to the Borrower or Administrative
Agent a statement of the type described in preceding clause
(i), but only to the extent such statement does not provide
the basis for a complete exemption from withholding, (iii)
if a Foreign Lender notifies the Borrower or the
Administrative Agent that circumstances on which such an
exemption was based no longer exist or (iv) if the taxation
authority notifies the Borrower or the Administrative Agent
that the Borrower or the Administrative Agent, as the case
may be, may not rely on such a statement, that such an
exemption is not available, or that withholding is required.
Each Foreign Lender further agrees to furnish to the
Borrower and the Administrative Agent annually and before
the first payment is made by the Borrower to or for the
benefit of such Foreign Lender, an appropriate statement in
duplicate that the income it receives hereunder, is, or is
expected to be, either effectively connected with a United
States trade or business or exempt from withholding pursuant
NY1-53665.4 -30-
to the terms of an income tax treaty (for example, an
Internal Revenue Service Form 1001 or Form 4224) or other-
wise is exempt from withholding tax. In addition, if (x)
any Lender fails to provide its employer identification
number (or otherwise qualify for exemption from back-up
withholding), (y) there is a notified payee underreporting,
or (z) there has been a payee certification failure, the
Borrower or the Administrative Agent may properly treat
itself as required by law to deduct any back-up withholding
taxes for or in respect of any sum payable hereunder to any
Lender or the Administrative Agent and such withholding
taxes shall not be subject to indemnification hereunder.
(b) The Borrower shall pay on or prior to the due
date and in accordance with applicable law (i) all past,
present and future Taxes imposed with respect to payments by
the Borrower or amounts payable or deemed payable by the
Borrower under the Credit Documents or the execution,
delivery, acquisition, recordation, filing, registration, or
enforcement of any Credit Document, (ii) all past, present
and future stamp, documentary, transfer, recording, property
(real or personal and including intangible personal
property)), excise or other similar Taxes, levies, imposts,
duties, fees, assessments and other charges imposed by any
jurisdiction with respect to any payment by the Borrower
under a Credit Document or the execution, delivery, acqui-
sition, recordation, filing, registration, or enforcement of
any Credit Document, (iii) all past, present and future
Taxes, levies, imposts, duties, fees, assessments and other
charges imposed by any jurisdiction with respect to any
payment or reimbursement by the Borrower pursuant to this
Section 2.10, and (iv) any interest, penalties, or additions
to tax or other charges or expenses incurred in connection
with any amount required to be paid under this Section 2.10,
unless such interest, penalties or additions to tax are the
result of the gross negligence of the applicable Lender or
the Administrative Agent.
(c) The Administrative Agent or any Lender may
pay, but shall not be obligated to pay, any amount which is
to be paid by the Borrower pursuant to this Section 2.10.
The Administrative Agent or such Lender shall, to the extent
practicable, give prior notice to the Borrower of the pay-
ment of any such amount (and, if practicable, the method of
calculating such Tax), or, if not practicable to give prior
notice, shall give notice to the Borrower of the payment of
any such amount (and, if practicable, the method of
calculating such Tax) promptly thereafter. The Borrower
shall, within five (5) Business Days after demand of the
Administrative Agent or any Lender and whether or not such
amount shall have been correctly or legally asserted or
NY1-53665.4 -31-
imposed, reimburse the Administrative Agent or such Lender
for such amount together with interest thereon at the rate
for defaults on payments then in effect from and including
the date paid by the Administrative Agent or such Lender to
and excluding the date on which the Administrative Agent or
such Lender is reimbursed by the Borrower in full. The
Borrower shall also reimburse the Administrative Agent or
any Lender for any and all Taxes and interest, penalties and
expenses thereon or with regard thereto within five (5)
Business Days after demand therefor. The Borrower may
contest with the relevant taxing authorities, at the
Borrower's expense, any Taxes (whether or not paid by the
Administrative Agent or the Lender) that, in the Borrower's
reasonable opinion, have been incorrectly calculated or
imposed, provided, that the Borrower shall pay all amounts
--------
owing to the Administrative Agent or respective Lenders as
provided above and shall not be permitted to await the
outcome of the respective contest. The Administrative Agent
or such Lender shall cooperate with the Borrower in any such
tax contest. In the event that any amount paid by the
Administrative Agent or any Lender pursuant to this Section
2.10 is found not to be owed by the Borrower and is repaid
or reimbursed to the Administrative Agent or such Lender,
the Administrative Agent or such Lender shall promptly
reimburse such amount (and any additional related amounts
paid by the Borrower to such Lender or the Administrative
Agent pursuant to Section 2.10(a) hereof) to the Borrower.
(d) Upon request of the Administrative Agent or
any Lender, the Borrower shall provide to the Administrative
Agent or such Lender original tax receipts, or notarized
copies thereof, evidencing payment of all applicable Taxes
(whether on interest, fees or other amounts) to the
appropriate Governmental Authority within 10 Business Days
of the earlier of the date on which any such payment is due
or the date of such request of the Administrative Agent or
such Lender.
2.11 Cost Indemnities. Within five (5) Business
----------------
Days after demand therefor, the Borrower agrees to pay for,
reimburse and indemnify and hold each Lender harmless from
and against any and all losses, costs, expenses, claims,
charges and indemnities of any type whatsoever which are
directly related to the Loans of such Lender (including by
any reasonable attribution or allocation) which are payable
by, charged to or asserted against such Lender by any
provider of funds to such Lender or provider of an interest
or currency exchange agreement to such Lender, as a result
of any increased costs or decreased rate of return
applicable to such provider of funds or as a result of a
Default or Event of Default hereunder, including, without
NY1-53665.4 -32-
limitation, make whole premiums, increased costs, capital
adequacy charges, reserve charges, or withholding taxes. In
addition, with respect to each Lender, the Borrower agrees
to pay the following (without duplication):
(a) Increased Costs. If any applicable law, rule
---------------
or regulation or any change in any law, rule or regulation
or in the interpretation or administration thereof by any
Governmental Authority (including, without limitation, any
central bank or comparable agency charged with the interpre-
tation or administration thereof) or compliance by any
Lender (or its lending office) with any request or directive
of any such Governmental Authority, whether or not having
the force of law:
(i) shall subject any Lender (or its lending
office) to any tax, duty or other charge with respect
to its obligation to make Loans or its Loans or shall
change the basis of taxation of payments to any Lender
(or its lending office) of the principal of or interest
with respect to its Loans or any other amounts due in
respect of its Loans or in respect of its obligation to
make Loans (except for changes in the rate of tax on
the overall net income of such Lender or its lending
office imposed by the jurisdiction in which such
Lender's principal office or lending office is
located); or
(ii) shall impose, modify or deem applicable
any reserve (including, without limitation, any imposed
by the Board of Governors of the Federal Reserve
System), special deposit, compulsory loan, capital
adequacy or similar requirement against assets of, or
deposits or other liabilities with or for the account
of, or credit or credit commitments extended by, or any
acquisition of funds by or for the account of, any
Lender (or its lending office) or shall impose on any
Lender (or its lending office) or the applicable
interbank market any other condition affecting its
Loans, or its obligations to make or continue Loans;
and the result of any of the foregoing is to increase the
cost to such Lender (or its lending office) of (x) being
obligated to make, (y) making or (z) maintaining its Loans,
or reduce the amount of any sum received or receivable by
such Lender (or its lending office) under this Agreement, by
an amount deemed by such Lender to be material, then, within
five (5) Business Days after demand by such Lender, which
demand shall be delivered in writing to the Borrower, with a
copy to the Administrative Agent, the Borrower will pay to
such Lender such additional amount or amounts as will
NY1-53665.4 -33-
compensate such Lender for such increased cost or reduction
for so long as such Lender is subject to such increased cost
or reduction. Such Lender will designate a different
lending office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not be
otherwise disadvantageous to such Lender in its sole and
absolute judgment. A certificate of such Lender setting
forth in reasonable detail such additional amount or amounts
necessary to compensate such Lender shall be conclusive in
the absence of manifest error. In determining such amount,
such Lender may use any reasonable averaging or attribution
methods.
(b) Capital Adequacy. If any Lender shall have
----------------
determined that compliance with any applicable law, rule or
regulation regarding capital adequacy or any interpretation
or administration thereof, of any Governmental Authority
(including, without limitation, any central bank or compar-
able agency charged with the interpretation or administra-
tion thereof), or compliance by any Lender (or its lending
office) or any corporation controlling such Lender with any
request or directive regarding capital adequacy whether or
not having the force of law of any such Governmental
Authority, has or would have the effect of increasing the
amount of capital required or expected to be maintained by
such Lender or any corporation controlling such Lender and
that the amount of such capital is increased by or based
upon the existence of such Lender's obligations hereunder
(including, without limitation, its Loans) or under other
obligations of such type or otherwise have the effect of
reducing the rate of return on such Lender's or any such
controlling corporation's capital as a consequence of its
obligations hereunder (including, without limitation, its
Loans) or under other obligations of such type, then from
time to time, within five (5) Business Days after demand by
such Lender (with a copy to the Administrative Agent), the
Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such corporation
in such circumstances, to the extent such Lender determines
such increase in capital or reduction is allocable to such
Lender's obligations (including, without limitation, its
Loans) hereunder. A certificate of any Lender claiming
compensation under this Section and setting forth in
reasonable detail the additional amount or amounts to be
paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may
use any reasonable averaging and attribution methods.
2.12 Distribution of Proceeds. Upon and after
------------------------
the occurrence and during the continuance of an Event of
Default, if the Administrative Agent, the Collateral Agent
NY1-53665.4 -34-
or a Secured Creditor receives funds in respect of any sale,
disposition, set-off or other realization on or with respect
to the Collateral, the Administrative Agent, the Collateral
Agent or such Secured Creditor shall distribute and each
Secured Creditor shall apply such funds in the following
order of priority:
(i) first, to pay all fees, expenses and
-----
other amounts due the Administrative Agent or the
Collateral Agent under the Credit Documents;
(ii) second, to pay all accrued and unpaid
------
interest on the Loans, pro rata, in accordance with the
outstanding principal amounts of the Loans;
(iii) third, to pay all principal of the
-----
Loans, pro rata, in accordance with the outstanding
principal amounts of the Loans; and
(iv) fourth, to pay all other Obligations,
------
pro rata, in accordance with the respective amounts of
such Obligations which are then due and payable to each
Secured Creditor.
Notwithstanding anything to the contrary in this
Section 2.12:
(i) if at the time of receipt by the
Administrative Agent, the Collateral Agent or a Secured
Creditor of funds in respect of any sale, disposition,
set-off or other realization on or with respect to the
Slot Collateral (or any part or portion thereof) any
Loans held by the GPA Entities or any accrued interest
thereon remains unpaid, the first $10 million of such
funds shall be applied to pay Loans held by the GPA
Entities and any accrued interest thereon to the
holders thereof in such proportion or priority as they
may agree among themselves or, in the absence of any
such agreement, as may be directed by GPA Sub, and the
balance of such funds shall be applied to pay all other
Obligations in the order of priority set forth in the
first paragraph of this Section 2.12; and
(ii) if funds in respect of any sale,
disposition, set-off or other realization on or with
respect to any Collateral other than the Slot
Collateral shall be distributed to the Secured
Creditors pursuant to this Section 2.12 prior to the
distribution to the Secured Creditors pursuant to this
Section 2.12 of funds in respect of the sale,
disposition, set-off or other realization on or with
NY1-53665.4 -35-
respect to the Slot Collateral (or any portion
thereof), then, promptly after the final distribution
to the Secured Creditors pursuant to this Section 2.12
of funds in respect of the final sale, disposition,
set-off or other realization on or with respect to all
of the Slot Collateral, GPA Sub shall pay to each other
Lender an amount which, when added to the aggregate
amount of funds theretofore received by such Lender
pursuant to this Section 2.12, shall result in such
Lender having received an aggregate amount of funds
equal to the amount of funds such Lender would have
received pursuant to this Section 2.12 had all of the
proceeds of the sale, disposition, set-off or other
realization on or with respect to all of the Slot
Collateral (in the amount actually realized) been
distributed to the Secured Creditors pursuant to this
Section 2.12 prior to the distribution to the Secured
Creditors pursuant to this Section 2.12 of any funds in
respect of any sale, disposition, set-off or other
realization on or with respect to any other Collateral.
Any Secured Creditor may allocate internally
amounts received hereunder in a different order, although
for purposes of making subsequent distributions pursuant to
this Section 2.12 all such amounts shall be deemed applied
in the order required above, and any such different
allocation shall have no effect on the rights or obligations
of the Borrower, the Administrative Agent, the Collateral
Agent or the other Secured Creditors hereunder. In making
distributions hereunder, the Collateral Agent shall be
entitled to conclusively rely on statements received by it
from the respective Secured Creditors as to the respective
amounts owing to them pursuant to, or as described in, the
relevant provisions of this Section 2.12. Furthermore, the
Collateral Agent shall be entitled to wait for its receipt
of any such information before making a distribution in
accordance with this Section 2.12. The parties expressly
acknowledge and agree that the proceeds of any sale,
disposition, set-off or other realization on or with respect
to any Collateral that are referred to in this Section 2.12
shall not, and shall not be construed to, include any such
proceeds that are received by a Secured Creditor in its
capacity as the holder of a Permitted First Lien on such
Collateral.
NY1-53665.4 -36-
SECTION 3. FEES.
----
3.01 Facility Fee.
------------
The Borrower shall pay to the Administrative Agent
(i) on the Third Amendment Effective Date, for the account
of and distribution to each Lender, a fee in an amount equal
to 0.75% of the principal amount of the Loans of such Lender
outstanding on the Third Amendment Effective Date, and (ii)
on March 31, 1994 (but only if all or any portion of the
Loans are then outstanding), for the account of and
distribution to each Lender, a fee in an amount equal to
0.25% of the principal amount of the Loans of such Lender
outstanding on the Third Amendment Effective Date (the fees
described in the preceding clauses (i) and (ii) being
referred to, collectively, as the "Facility Fee").
------------
3.02 Fees of Administrative Agent and Collateral
-------------------------------------------
Agent.
-----
The Borrower shall pay to the Administrative Agent
and to the Collateral Agent, for their respective own
accounts, or shall reimburse the Lenders for payment of,
such fees as the Administrative Agent or the Collateral
Agent (including, without limitation, their respective
successors and assigns), as the case may be, and the
Borrower have agreed separately for performance of the
services of the Administrative Agent and the Collateral
Agent hereunder and under the other Credit Documents;
provided, however, that the Borrower and the Administrative
-------- -------
Agent or the Collateral Agent, as the case may be, shall
obtain the prior written consent of the Required Lenders to
such fees.
SECTION 4. PREPAYMENTS; PAYMENTS.
---------------------
4.01 Voluntary Prepayments. The Borrower shall
---------------------
have the right to prepay the Loans, without premium or
penalty (except as provided in Section 2.09 or 2.11), in
whole or in part from time to time on the following terms
and conditions: (i) the Borrower shall give the
Administrative Agent irrevocable notice in writing of its
intent to make a prepayment at its Notice Office at least
one Business Day prior to the date of such prepayment, which
notice in each case shall indicate the amount of such
prepayment and which notice the Administrative Agent shall
promptly transmit to each of the Lenders; and (ii) each
partial prepayment shall be in an aggregate principal amount
of at least $1 million. Each prepayment pursuant to this
Section 4.01 in respect of the Loans shall be applied pro
NY1-53665.4 -37-
rata to the Loans of each Lender and shall reduce the
aggregate installment repayments of Loans required by
Section 2.08 in inverse order of their maturity.
4.02 Mandatory Prepayments. If on any date
---------------------
(i) the required amounts of rotables,
equipment or receivables described in Section 7.08 are
less in any category than as required in Section 7.08,
the Borrower shall repay on such date that principal
amount of Loans as is equal to such deficiency,
provided that in lieu of prepayment of Loans by reason
--------
of each deficiency in the required amounts of rotables
specified in Section 7.08, the Investment Account
Minimum shall be increased, effective as of the 20th
day next following the last day of the month to which
such deficiency relates, by an amount equal to the
amount of such deficiency (as the amount of such
deficiency is determined on the basis of the report
delivered pursuant to Section 7.01(h) and the amount of
such increase is set forth in the report delivered
pursuant to Section 7.01(o)); or
(ii) an Asset Sale is consummated, the
Borrower shall repay on the last Business Day of the
month in which such Asset Sale is consummated the Loans
in an amount equal to the Net Proceeds of such Asset
Sale; provided, however, that in the event no Default
-------- -------
or Event of Default has occurred and is continuing or
would result therefrom and such Asset Sale is of
property or other assets of the Borrower which is not
Designated Collateral, Slot Collateral or Engine
Collateral, the Collateral Agent or the Lenders shall
release 30% of the Net Proceeds to the Borrower to be
used as working capital and the remaining 70% of the
Net Proceeds shall be used to prepay the Loans as
aforesaid; and provided further, however, if the
-------- ------- -------
property which is the subject of the Asset Sale is Slot
Collateral (or any part or portion thereof), the first
$10 million of the Net Proceeds from such Asset Sale
shall be used to repay the Loans (subject to and in
accordance with clause (v) of this Section 4.02) and
the balance of such Net Proceeds shall be deposited in
the Investment Account; and provided further, however,
-------- ------- -------
if the property which is the subject of the Asset Sale
is Engine Collateral (or any part or portion thereof),
the Net Proceeds from such Asset Sale shall be
deposited in the Investment Account; or
(iii) an Event of Loss (as defined in the
Aircraft/Engine Mortgage or the Slot Lease) or other
NY1-53665.4 -38-
casualty or any condemnation, taking or requisition
with respect to any Collateral occurs and (x) the
property which is the subject of the loss is not
repaired or replaced so as to be of at least equal
value and utility as was the property subject thereto
prior to the applicable Event of Loss, casualty,
condemnation, taking or requisition (assuming it was in
the condition required under the Credit Documents) and
subjected to the Lien in favor of the Collateral Agent
in the priority contemplated hereunder within the time
period specified in and in accordance with the
provisions of the applicable Security Document or, if
no time is specified, within sixty (60) days of such
casualty, the Borrower shall repay on such date the
Loans in an amount equal to the greater of the value
attributed to such Collateral on the most recent
collateral certificate delivered pursuant to Section
7.01(h) or the proceeds of any insurance with respect
thereto (after payment of any Existing Secured Debt of
the Borrower or any Indebtedness secured by a Permitted
First Lien required to be repaid with such proceeds) or
(y) the property is so repaired or replaced, the
Borrower shall repay the Loans in an amount equal to
any insurance proceeds remaining after repair or
replacement of the Collateral as above provided;
provided, however, that if the Event of Loss is with
-------- -------
respect to the Slot Collateral (or any part or portion
thereof), the repayment of Loans shall be applied as if
resulting from a sale of such Slot Collateral (or such
part or portion thereof) in accordance with clause (v)
of this Section 4.02; and provided further, however, if
-------- ------- -------
the Event of Loss is with respect to the Engine
Collateral (or any part or portion thereof), in lieu of
repaying Loans as provided in this clause (iii), the
Borrower shall deposit in the Investment Account an
amount of moneys equal to the principal amount of Loans
which would otherwise be required to be repaid as
provided in this clause (iii); or
(iv) the amount of "net available cash" (as
such term is defined in Section 8.15(d)) exceeds
$125,000,000, the Borrower shall give prompt written
notice of such excess to the Lenders in accordance with
Section 7.01(n) and, if requested by the Required
Lenders, the Borrower shall repay on such date as is
specified by the Required Lenders the Loans in an
amount equal to the amount of such excess or such
lesser amount as may be specified by the Required
Lenders; or
NY1-53665.4 -39-
(v) Each prepayment pursuant to this Section
4.02 in respect of the Loans shall be applied pro rata
to the Loans of each Lender; provided, however, that
-------- -------
the first $10 million of Net Proceeds of any sale or
other disposition of the Slot Collateral (or any part
or portion thereof) shall be used to repay Loans held
by the GPA Entities to the holders thereof in such
proportion or priority as such holders may agree among
themselves or, in the absence of any such agreement, as
may be directed by GPA Sub. After Loans held by the
GPA Entities have been repaid as provided in the
immediately preceding sentence, all remaining Net
Proceeds of any sale or other disposition of the Slot
Collateral (or any part or portion thereof) shall be
deposited in the Investment Account. Each payment of
Loans pursuant to this Section 4.02 shall be applied to
reduce the aggregate installment payments of Loans
required to be paid pursuant to Section 2.08 in the
inverse order of their maturity. The foregoing shall
not be construed as a waiver of any of the provisions
of this Agreement or the other Credit Documents.
4.03 Method and Place of Payment. Except as
---------------------------
otherwise specifically provided herein, all payments under
this Agreement or any Note shall be made to the Adminis-
trative Agent for the account of the Lender or Lenders
entitled thereto not later than 12:00 Noon (New York time)
on the date when due and shall be made in Dollars in
immediately available funds at the Payment Office of the
Administrative Agent. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a
day which is not a Business Day, the due date thereof shall
be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable
at the applicable rate during such extension.
4.04 Net Payments. All payments made by the
------------
Borrower hereunder, under any Note or under any other Credit
Document will be made without setoff, counterclaim or other
defense.
SECTION 5. CONDITIONS PRECEDENT AND RELATED
--------------------------------
PROVISIONS.
----------
5.01 Conditions to the Effective Date. The
--------------------------------
obligation of the Lenders (such term and all other
capitalized terms used in this Section 5.01 having the
respective meanings stated or ascribed in the Original
Credit Agreement and references in this Section 5.01 to
"hereof" and "this Agreement" being references to the
NY1-53665.4 -40-
Original Credit Agreement) to make Loans under this
Agreement became effective on the date (the "Effective
---------
Date") on which each of the following conditions was
----
satisfied:
(a) Execution of Agreement; Notes. (i) The
-----------------------------
Borrower, the Administrative Agent and each institution then
a Lender hereunder shall have executed a counterpart hereof
(whether the same or different counterpart) and shall have
delivered the same to the Administrative Agent at its Notice
Office or, in the case of the Lenders, shall have given to
the Administrative Agent written notice (actually received)
at such office that the same has been signed and mailed to
it and (ii) there shall have been delivered to the
Administrative Agent for the account of each of the Lenders
the appropriate Note executed by the Borrower in the amount,
maturity and as otherwise provided herein.
(b) Corporate Documents; Proceedings; Officer's
-------------------------------------------
Certificates. The Lenders shall have received from the
------------
Borrower a certificate, dated the Effective Date, signed by
the President and Chief Operating Officer, Senior Vice
President-Finance or the Vice President and Controller of
the Borrower and attested to by the Secretary or any
Assistant Secretary of the Borrower in the form of Exhibit C
with appropriate insertions, together with copies of the
Certificate of Incorporation and By-Laws of the Borrower and
the resolutions of the Borrower referred to in such
certificate, together with such other certificate or
certificates pertaining to the subject matter of the By-Law
Letter Agreement as any Initial Lender shall have requested,
and the foregoing shall be satisfactory to all of the
Lenders.
(c) Opinions of Counsel. The Lenders shall have
-------------------
received opinions, addressed to the Administrative Agent and
each of the Lenders and dated the Effective Date, from
(i) Daugherty, Bradford & Fowler, covering the filing,
perfection and priority of the Aircraft/Engine Mortgages,
(ii) from Streich Lang covering the due authority, legality,
enforceability and other matters related to the Credit
Documents and the requirements hereof, (iii) from Faegre &
Benson covering the entry of the Interim Order, the Final
Order, the GPA Order, the Northwest Order, the taking of any
appeals therefrom and Liens on the property or other assets
of the Borrower approved by the Bankruptcy Court, if any,
and (iv) from Winthrop, Stimson, Putnam & Roberts covering
the United States citizenship of the Borrower, the Slot
Lease and other matters involving the DOT and FAA, and such
other opinions with respect to other matters incident to
transactions contemplated herein, as any Initial Lender may
NY1-53665.4 -41-
request and as are acceptable to all of the Lenders in their
sole and absolute discretion.
(d) Slots. Title to the Slots described on
-----
Annex A to the Slot Deed of Conveyance shall have been
transferred to the Collateral Agent pursuant to the Slot
Deed of Conveyance and the Borrower shall have duly
authorized, executed and delivered the Slot Lease, which
Slot Lease shall be in full force and effect.
(e) Security Agreement. The Borrower shall have
------------------
duly authorized, executed and delivered the Security
Agreement, which shall be in full force and effect covering
all of the "Collateral" referred to therein, together with:
(i) proper Form UCC-1 financing statements
and such other proper documents for filing or recording
in the appropriate offices;
(ii) certified copies of Requests for
Information or Copies (Form UCC-11) or equivalent
reports listing all effective financing statements or
other recordations that name the Borrower as debtor
that are filed in Arizona, Nevada, California, Hawaii
and New York, together with copies of such other
financing statements or other recordations (none of
which shall cover the Collateral referred to in the
Security Agreement except to the extent evidencing
Permitted First Liens);
(iii) evidence that all other actions
necessary or, in the opinion of any Initial Lender,
desirable to perfect and protect the security interests
created by the Security Agreement have been taken; and
(iv) any other documents, instruments or
chattel paper required under the Security Agreement.
(f) Mortgage. The Borrower shall have (i) duly
--------
authorized, executed, delivered and filed with the
appropriate Governmental Authorities (a) the Mortgage, which
Mortgage shall cover all of the Real Property owned or
leased by the Borrower as listed in Schedule 8 (each, a
"Mortgaged Property" and collectively the "Mortgaged
------------------ ---------
Properties"), and (b) the Assignment of Gate Leases, (ii)
----------
obtained the consent of any landlord with respect to any
Real Property leased to the Borrower by such landlord, which
consent shall be substantially in the form of Exhibit J-2
hereto, and (iii) obtained the consent of any holder of a
Permitted First Lien on such Real Property in substantially
the form of Exhibit J-3 hereto and shall have provided to
NY1-53665.4 -42-
the Lenders A.L.T.A. surveys and title reports in form and
substance, and showing title vested in the Borrower and the
absence of Liens other than Permitted First Liens and
Customary Permitted Liens which (except as described in
clauses (iv) and (vii) of the definition thereof) are junior
and subordinate to the Lien of the Mortgage, in form and
substance acceptable to all of the Lenders in their sole and
absolute discretion with respect to all of the Mortgaged
Properties.
(g) Aircraft/Engine Mortgage. The Borrower shall
------------------------
have duly authorized, executed and delivered the
Aircraft/Engine Mortgage covering all aircraft, engines and
spare parts then owned by the Borrower (other than any
thereof the exclusion of which shall have been consented to
by each Initial Lender acting in its sole and absolute
discretion), together with evidence of filing for recording
with the FAA of such Aircraft/Engine Mortgage and with the
priority contemplated hereby and thereby, in form and
substance acceptable to all of the Lenders in their sole and
absolute discretion.
(h) GPA Agreements/Northwest Agreements. The
-----------------------------------
Bankruptcy Court shall have issued an order in the form of
Exhibit D-3 hereto (as such form may be modified in a manner
acceptable to each of the GPA Entities, in their sole and
absolute discretion, the "GPA Order") authorizing the
---------
Borrower to assume each of the GPA Agreements pursuant to
Section 365 of the Bankruptcy Code, and the Bankruptcy Court
shall have issued a final order in the form of Exhibit D-4
hereto (as such form may be modified in a manner acceptable
to Northwest in its sole and absolute discretion, the
"Northwest Order") authorizing the Borrower to enter into
---------------
and perform its obligations under each of the Northwest
Agreements pursuant to applicable provisions of the
Bankruptcy Code and each such Order shall be in full force
and effect and not subject to any appeal, stay or
injunction. The Borrower shall have (x) paid in full all
payment obligations then due (after giving effect to the
rent deferrals in the case of the Designated Aircraft
Leases) under each of the GPA Agreements, and by doing so
shall have satisfied the Borrower's obligations with respect
thereto under Section 365 of the Bankruptcy Code and (y)
executed and delivered each of the Northwest Agreements,
each of which shall be in full force and effect.
(i) Payment of Fees, etc. The Borrower shall
---------------------
have paid all costs, fees and expenses owing in connection
with the Credit Documents and due to the Administrative
Agent, the Collateral Agent or any Lender on or before the
NY1-53665.4 -43-
Effective Date (including, without limitation, legal fees
and expenses).
(j) Specified Aircraft. Immediately prior to the
------------------
effectiveness of the filing of the Aircraft/Engines Mortgage
with the FAA the Specified Aircraft and Engines shall be
located in the United States of America.
(k) Operating Plan. The Board of Directors of
--------------
the Borrower shall have adopted the Operating Plan (as
defined in the Credit Agreement) and the Borrower shall have
provided evidence satisfactory to all of the Lenders in
their sole and absolute discretion that the "Action Plan
Summary" terms set forth on Exhibit E have been implemented
and are in full force and effect and the Borrower is in
compliance therewith.
(l) Inter-Creditor Agreement. The Borrower and
------------------------
First Interstate Bank of Arizona shall have entered into the
Merchant Agreement Supplement and the Collateral Agent, the
Lenders and First Interstate Bank of Arizona, N.A. shall
have entered into the Inter-Creditor Agreement, in each
case, relating to and providing for the relative priorities
of the Liens of First Interstate Bank of Arizona, N.A. and
the Collateral Agent on certain of the Collateral, and the
Bankruptcy Court shall have issued an order in substantially
the form of Exhibit C to the Merchant Agreement Supplement
authorizing the amendments effected by the Merchant
Agreement Supplement; and the Merchant Agreement Supplement,
the Inter-Creditor Agreement and such order shall be in form
and substance acceptable to all of the Lenders in their sole
and absolute discretion.
(m) Lease Amendments. The A320 Leases and the
----------------
Engine Leases shall have been amended in form and substance
reasonably satisfactory to the GPA Entities party thereto to
provide for the elimination of the "net worth" covenant
during the Case and the reinstitution of a comparable "net
worth" covenant upon the effective date of a confirmed plan
of reorganization for the Borrower under Chapter 11 of the
Bankruptcy Code.
(n) Other Funds. The Borrower shall have
-----------
received binding commitments or such other assurances, in
each case as may be acceptable to all of the Lenders in
their sole and absolute discretion, for the provision of
additional funds to the Borrower, consisting of Indebtedness
or equity or proceeds from the sale of the Nagoya Route, in
an aggregate amount not less than $40 million, which, if
Indebtedness, shall be (i) unsecured, but up to $30 million
of which Indebtedness may have administrative priority under
NY1-53665.4 -44-
Section 364(c)(1) of the Bankruptcy Code which is pari passu
---- -----
with, but not senior to, the Obligations, or (ii) secured
for an amount of up to $30 million subject to and in
accordance with Section 8.01(vi) (and without the benefit of
any administrative priority described in the preceding
clause (i) of this paragraph), and in each case on terms and
conditions acceptable to the Lenders in their sole and
absolute discretion.
(o) By-Laws and Related Actions. The Lenders
---------------------------
(which did not include Kawasaki) shall have received
evidence, satisfactory in form and substance to them, that
all actions described in the By-Law Letter Agreement to be
taken on or prior to the Effective Date shall have been
taken, including, without limitation, the adoption of
requisite resolutions of the Board of Directors of the
Borrower with respect thereto, which resolutions shall be in
full force and effect on and as of the Effective Date.
(p) Initial Cash Management Arrangements. The
------------------------------------
Borrower, the Collateral Agent and the Local Bank shall have
duly authorized, executed and delivered the Initial Cash
Management Agreement and the Borrower shall have otherwise
established an accounts receivables collection system
(including, without limitation, lock box accounts) and cash
concentration and management system, and entered into
agreements related thereto, satisfactory to the Required
Lenders in their sole and absolute discretion whereby the
Investment Account has been established with the Collateral
Agent in the name of the Collateral Agent for the benefit of
the Secured Creditors and the Concentration Account has been
established with the Local Bank in the name of the
Collateral Agent for the benefit of the Secured Creditors to
which all cash received by, or deposited by, or paid to the
Borrower at accounts (including lock box accounts in the
name of the Collateral Agent for the benefit of the Secured
Creditors) at the Local Bank and all other financial insti-
tutions or otherwise are transferred on a daily basis, all
of which accounts shall be subject to a first priority
perfected security interest in favor of the Collateral Agent
under the Security Agreement and the Orders, and which
arrangements shall provide for minimum required balances in
the Investment Account as set forth in Section 7.10.
(q) Insurance Certificates and Opinions. The
-----------------------------------
Borrower shall have provided the Lenders with all insurance
certificates, opinions and schedules referred to in Section
7.03 and under the Security Documents.
(r) Consents. The Borrower shall have provided
--------
to the Lenders the confirmation by the FAA of the transfer
NY1-53665.4 -45-
of the Slots as contemplated by Section 5.01(d), the notices
to the Japanese lessors under all applicable Japanese
leveraged leases, the filing under the Assignment of Claims
Act of 1940 necessary or advisable to perfect the Borrower's
assignment of claims against the United States Government
and all other notices, consents, approvals, licenses or
other action as may be necessary or advisable in the opinion
of any Lender to provide the Secured Creditors with the
benefits of the Collateral, in each case in form and
substance acceptable to all of the Lenders in their sole and
absolute discretion.
5.02 Conditions to All Loans. The obligation of
-----------------------
each Lender to make any Loans was subject, at the time of
the making of such Loans and after giving effect thereto, to
the satisfaction of the following conditions (other than, in
the case of the Loans made on the Second Amendment Effective
Date, the condition set forth in the following paragraph
(f)):
(a) No Default. There shall exist no Default or
----------
Event of Default.
(b) Representations and Warranties. All
------------------------------
representations and warranties of or on behalf of the
Borrower herein and in the other Credit Documents shall be
true and correct in all material respects with the same
effect as though such representations and warranties had
been made on and as of the date of the making of such Loans.
(c) Orders. The Lenders shall have received a
------
certified copy of an order of the Bankruptcy Court in the
form of Exhibit D-1 (as such form may be modified in a
manner acceptable to each of the Lenders, in their sole and
absolute discretion, the "Interim Order"), and the Interim
-------------
Order shall be in full force and effect and shall not have
been stayed, reversed, vacated, rescinded, modified or
amended in any respect (other than modifications acceptable
to each of the Lenders, in their sole and absolute
discretion), provided that upon the earlier of (i)
--------
September 25, 1991 and (ii) the making of any Loan the
aggregate amount of which, when added to the sum of the
principal amount of all Loans then outstanding would exceed
the credit availability amount authorized by the Bankruptcy
Court in the Interim Order (collectively, the "Additional
----------
Credit"), each of the Lenders shall have received a
------
certified copy of an order of the Bankruptcy Court in the
form of Exhibit D-2, or as otherwise acceptable to each of
the Lenders (the "Final Order"), and at the time of the
-----------
extension of any Additional Credit the Final Order shall be
in full force and effect, and shall not have been stayed,
NY1-53665.4 -46-
reversed, vacated, rescinded, modified or amended in any
respect (other than modifications acceptable to each of the
Lenders, in their sole and absolute discretion); and if
either the Interim Order or the Final Order is the subject
of a pending appeal in any respect, neither the making of
the Loans nor the performance by the Borrower of any of its
obligations under any of the Credit Documents or any other
document or instrument referred to herein shall be the
subject of a presently effective stay pending appeal.
Neither the GPA Order nor the Northwest Order shall have
been appealed, amended, stayed, vacated or rescinded.
(d) Effective Date. The Effective Date shall
--------------
have occurred.
(e) Collateral Certificate. The Administrative
----------------------
Agent shall have received a certificate substantially in the
form of Exhibit M executed by the Chief Financial Officer,
Senior Vice President-Finance, Treasurer or Vice President
and Controller of the Borrower of the description, value and
location of the Collateral as of the date of the making of
such Loans, the value of which Collateral shall, among other
things, be equal to or in excess of the applicable value set
forth in Section 7.08.
(f) Deferrals. The Borrower shall have provided
---------
evidence in form and substance acceptable to the Required
Lenders in their sole and absolute discretion that the
Borrower has obtained from the lessors and debt holders in
respect of the Deferral Aircraft rental and principal and
interest moratoriums (or rebates with respect to such
obligations to adjust for such obligations with respect to
leases or debt for which rental or principal or interest, as
the case may be, is not payable during such period) in an
aggregate amount of not less than $100,000,000 (or such
lesser amount as the Required Lenders shall approve in their
sole and absolute discretion) and as are necessary to
provide the Borrower with the minimum number of aircraft
required under the Operating Plan; and the terms and
conditions of such moratoriums shall be in full force and
effect (without any unfulfilled conditions to the
effectiveness thereof or subject only to such conditions to
the effectiveness thereof as the Required Lenders shall
approve in their sole and absolute discretion) and provide
for repayment of the deferred amounts with an interest rate
of not more than 10.5% per annum over a term of not less
than four years commencing December 1991 or as otherwise
approved by the Required Lenders in their sole and absolute
discretion; and the terms of the stipulations with respect
to, and the documentation evidencing, such moratoriums (or
NY1-53665.4 -47-
rebates) shall be satisfactory in form and substance to the
Required Lenders in their sole and absolute discretion.
(g) Governmental Action. No Governmental Action
-------------------
shall purport to, and no Governmental Action or other action
or proceedings shall have been filed, instituted, threatened
or issued which seeks to, enjoin or restrain or otherwise
adversely affect the making of such Loans or the proposed
use of the proceeds of any Loan or the Borrower's compliance
with the terms of the Credit Documents.
(h) Additional Corporate Documents. All
------------------------------
corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated
in this Agreement and the other Credit Documents shall be
satisfactory in form and substance to the Required Lenders,
and the Lenders shall have received all information and
copies of all documents and papers, including records of
corporate proceedings and governmental approvals, if any,
and such additional certificates and opinions, which any
Lender reasonably may have requested in connection
therewith, such documents and papers where appropriate to be
certified by proper corporate or governmental authorities.
(i) Payment of Fees, etc. The Borrower shall
---------------------
have paid all costs, fees and expenses owing in connection
with the Credit Documents and due to the Administrative
Agent, the Collateral Agent or any Lender on or before the
date of the making of such Loans (including, without
limitation, legal fees and expenses).
The request by the Borrower for the making of each Loan and
the acceptance by the Borrower of each Loan constituted a
representation and warranty by the Borrower to each of the
Lenders making such Loan that all the representations and
warranties in Section 6 of the Original Credit Agreement,
the First Amended and Restated Credit Agreement or the
Second Amended and Restated Credit Agreement, as applicable,
were true and correct on and as of the date of such Loan as
though repeated thereon, that after giving effect to such
Loan no Default or Event of Default was in existence and
that applicable conditions specified in Section 5 of the
Original Credit Agreement, the First Amended and Restated
Credit Agreement or the Second Amended and Restated Credit
Agreement, as applicable, were satisfied or waived in
writing as of that time.
5.03 Conditions Precedent to Amendment Effective
-------------------------------------------
Date. The amendment and restatement of the Original Credit
----
Agreement (such term and all other capitalized terms used in
this Section 5.03 having the respective meanings stated or
NY1-53665.4 -48-
ascribed in the First Amended and Restated Credit Agreement
and references in this Section 5.03 to "hereof" and "this
Agreement" being references to the First Amended and
Restated Credit Agreement) pursuant to the First Amended and
Restated Credit Agreement, and the obligation of each Lender
under the First Amended and Restated Credit Agreement
(including, without limitation, Kawasaki) to make Loans
under the First Amended and Restated Credit Agreement
(subject to the terms and conditions thereof), became
effective on December 13, 1991 (the "Amendment Effective
-------------------
Date"), the date on which each of the following conditions
----
was satisfied or waived in writing by all of the Lenders in
their sole and absolute discretion:
(a) Execution of Agreement; Note. (i) The
----------------------------
Borrower, the Administrative Agent and the Lenders shall
have executed a counterpart hereof (whether the same or
different counterpart) and shall have delivered the same to
the Administrative Agent at its Notice Office or, in the
case of the Lenders, shall have given to the Administrative
Agent written notice (actually received) at such office that
the same has been signed and mailed to it and (ii) there
shall have been delivered to the Administrative Agent for
the account of Kawasaki a Note executed by the Borrower in
the amount, maturity and as otherwise provided in this
Agreement.
(b) Corporate Documents; Proceedings; Officer's
-------------------------------------------
Certificate. The Lenders shall have received from the
-----------
Borrower a certificate, dated the Amendment Effective Date,
signed by the President and Chief Executive Officer, Senior
Vice President-Finance or the Vice President and Controller
of the Borrower and attested to by the Secretary or any
Assistant Secretary of the Borrower in the form of Exhibit Q
with appropriate insertions, together with copies of the
Certificate of Incorporation and By-Laws of the Borrower and
the resolutions of the Borrower referred to in such certifi-
cate, and the foregoing shall be satisfactory to all of the
Lenders.
(c) Opinions of Counsel. The Lenders shall have
-------------------
received opinions, addressed to the Administrative Agent and
each of the Lenders and dated the Amendment Effective Date,
from (i) Streich Lang covering the due authority, legality,
enforceability and other matters related to this Agreement
and the other Credit Documents and the requirements hereof
and thereof, and (ii) Faegre & Benson covering the entry of
the Additional Loan Order and the Kawasaki Order and the
taking of any appeals therefrom and Liens on the property or
other assets of the Borrower approved by the Bankruptcy
Court, and such other opinions with respect to other matters
NY1-53665.4 -49-
incident to transactions contemplated herein, as any Lender
may request and as are acceptable to all of the Lenders in
their sole and absolute discretion; and Kawasaki shall have
received letters from Daugherty, Bradford & Fowler and from
Winthrop, Stimson, Putnam & Roberts entitling Kawasaki to
rely on the opinions delivered by such counsel pursuant to
Section 5.01(c) of this Agreement.
(d) Cash Management Agreement. The Borrower, the
-------------------------
Collateral Agent and the Local Bank shall have duly
authorized, executed and delivered the First Amendment to
Cash Management Agreement in substantially the form of
Exhibit R, amending the Initial Cash Management Agreement.
(e) Agency Agreement. Each of the Borrower, the
----------------
Administrative Agent, the Collateral Agent and the Lenders
shall have authorized, executed and delivered the First
Amendment to Agency Agreement in substantially the form of
Exhibit S, amending the Agency Agreement.
(f) Mortgage and Assignment of Gate Leases. The
--------------------------------------
Borrower shall have (i) duly authorized, executed and
delivered and filed with the appropriate Governmental
Authorities (a) the First Amendments to Deeds of Trust in
substantially the forms of Exhibits T-1, T-2 and T-3,
amending each Mortgage encumbering the Mortgaged Properties,
and (b) the First Amendment to Assignment of Gate Leases in
substantially the form of Exhibit U, amending the Assignment
of Gate Leases, and (ii) provided to the Lenders title
reports in form and substance satisfactory to the Lenders,
and showing title vested in the Borrower and the absence of
Liens other than Liens shown on the title reports delivered
on the Effective Date.
(g) Mortgage Consents. The City of Phoenix, as
-----------------
landlord, and the Collateral Agent shall have duly
authorized, executed and delivered the First Amendments to
Consent Agreement in substantially the forms of Exhibits V-1
and V-2. First Interstate Bank of Arizona, N.A., as first
mortgagee, shall have duly authorized, executed and
delivered the consent letter in substantially the form of
Exhibit W.
(h) Additional Loan Order and Kawasaki Order.
----------------------------------------
The Lenders shall have received a certified copy of an order
of the Bankruptcy Court in the form of Exhibit D-5, and such
order shall be in full force and effect and shall not have
been stayed, reversed, vacated, rescinded, modified or
amended in any respect (other than modifications acceptable
to each of the Lenders, in their sole and absolute
discretion).
NY1-53665.4 -50-
(i) Kawasaki Agreements and Kawasaki
--------------------------------
Stipulations. The Borrower and Kawasaki shall have executed
------------
and delivered each of the Kawasaki Agreements and each of
the Kawasaki Agreements shall be acceptable in form and
substance to each of the Lenders, in their sole and absolute
discretion. Pursuant to the Kawasaki Credit Agreement, all
of the credit advances payable under the Aircraft Finance
Agreement shall have been restructured into the Loan (as
defined in the Kawasaki Credit Agreement). Stipulations
amending the Kawasaki Stipulations to permit Kawasaki to
terminate the lease or financing which is the subject of
each such Stipulation upon three months' notice, exercisable
after December 15, 1991, and to permit rent payments and
debt service thereunder to be brought current shall have
been executed and delivered by the respective parties
thereto and approved by the Bankruptcy Court. The Borrower
shall have paid in full all payment obligations then due
under each of the Kawasaki Agreements.
(j) Intercreditor Agreements. Kawasaki shall
------------------------
have executed and delivered a letter in substantially the
form of Exhibit X pursuant to which Kawasaki agrees to be
bound by the provisions of the intercreditor agreements
listed on Schedule 1 to such letter.
(k) Consent of Certain Lessors. The lessors
--------------------------
party to the stipulations with the Borrower listed on
Schedule 18 hereto shall have consented to the lien of the
Lenders pursuant to the Security Agreement on the Borrower's
right, title and interest in and to the aircraft leases
identified in such stipulations.
(l) Insurance. The Borrower shall have provided
---------
to the Lenders all insurance certificates, opinions and
schedules required by Section 7.03 and the Security
Documents to be provided to the Lenders on the Effective
Date (as if references therein to the Effective Date were to
the Amendment Effective Date).
(m) Operating Plan. The Operating Plan, in the
--------------
form and with the content approved by each of the Lenders,
acting in its sole and absolute discretion, shall have been
adopted by the management of the Borrower; and the Borrower
shall have provided evidence satisfactory to all of the
Lenders in their sole and absolute discretion that the
Borrower is in compliance with the Operating Plan
(including, without limitation, the implementation of all
plans and programs required by the terms of the Operating
Plan to be implemented on or prior to the Amendment
Effective Date).
NY1-53665.4 -51-
(n) Credit Documents. The Borrower shall have
----------------
provided to Kawasaki (i) copies of each of the Credit
Documents (including, without limitation, the Security
Documents), certified by an appropriate officer of the
Borrower as being true, correct and complete and in full
force and effect on and as of the Amendment Effective Date
and (ii) evidence, reasonably satisfactory to Kawasaki, in
its sole and absolute discretion, that all actions described
in Section 5.01 of the Credit Agreement and all other
actions which, in the reasonable opinion of Kawasaki, are
necessary or desirable to perfect and protect the Liens
created by the Security Documents have been taken.
(o) Payment of Fees, etc. The Borrower shall
---------------------
have paid all costs, fees and expenses owing in connection
with this Agreement, the other Credit Documents and the
documents referred to herein and therein and due to the
Administrative Agent, the Collateral Agent and each Lender
on or before the Amendment Effective Date (including,
without limitation, legal fees and expenses).
(p) Representations and Warranties. All
------------------------------
representations and warranties of or on behalf of the
Borrower in this Agreement and all the other Credit
Documents shall be true and correct in all material respects
with the same effect as though such representations and
warranties had been made on and as of the Amendment
Effective Date.
(q) Other Action. There shall have been taken
------------
such other actions, and the Lenders shall have received such
other documents, instruments, opinions, reliance letters,
certifications and copies of governmental consents, permits,
licenses and approvals, as any Lender shall have reasonably
requested and which are acceptable to all of the Lenders in
their sole and absolute discretion.
On the Amendment Effective Date, Kawasaki became a Lender
under the First Amended and Restated Credit Agreement, with
a Commitment equal to the amount set forth opposite its name
on Annex I attached thereto. The Borrower and each of the
Existing Lenders acknowledged that, pursuant to the Original
Credit Agreement and the By-Law Letter Agreement, the
Borrower granted to each Existing Lender certain rights of
approval with respect to members of the Board of Directors
of the Borrower and the Executive Committee of such Board of
Directors. The Borrower and each Existing Lender further
acknowledged that Kawasaki was not then, and had not at any
time been, a party to the Original Credit Agreement or to
the By-Law Letter Agreement, and that the Borrower did not
at any time grant to Kawasaki any rights of approval with
NY1-53665.4 -52-
respect to members of the Board of Directors of the Borrower
or the Executive Committee of such Board of Directors. The
Lenders, the Borrower and Kawasaki agreed that neither
Kawasaki nor any of its officers, directors or advisors
would be liable or responsible to any Person for any
exercise of the rights of any Existing Lender under the
Original Credit Agreement or the By-Law Letter Agreement or
for any act or omission of any Director of the Borrower
approved by any Existing Lender. The Borrower, each
Existing Lender and Kawasaki agreed and acknowledged that no
agency relationship has existed or was intended to be
created by the First Amended and Restated Credit Agreement
between Kawasaki on the one hand and any Existing Lender or
any Director approved by such Existing Lender on the other
hand. On the Amendment Effective Date, the By-Law Letter
Agreement was terminated and became of no further force or
effect.
Subject to and upon the terms and conditions set forth in
the First Amended and Restated Credit Agreement (including,
without limitation, Section 5.02 thereof), on the Amendment
Effective Date, each Lender made the Loan provided by clause
(c) of Section 2.02 thereof to be made by such Lender on the
Amendment Effective Date. All of such Loans were made
simultaneously by the Lenders following acknowledgement and
agreement by the Lenders that the Amendment Effective Date
had occurred.
Notwithstanding the amendment and restatement of the
Original Credit Agreement by the First Amended and Restated
Credit Agreement, all of the Obligations continued to be
secured by the Collateral (as defined in the First Amended
and Restated Credit Agreement) and the Borrower acknowledged
and agreed that the Collateral (as defined in the Original
Credit Agreement) remained subject to a lien and security
interest in favor of the Collateral Agent for the benefit of
the Lenders and Northwest. The First Amended and Restated
Credit Agreement was intended as a substitution of, and not
as payment of, the Obligations of the Borrower under the
Original Credit Agreement and all amounts outstanding and
owing by the Borrower under the Original Credit Agreement
were deemed to be outstanding and owing by the Borrower
under the First Amended and Restated Credit Agreement.
5.04 Conditions Precedent to Second Amendment
----------------------------------------
Effective Date. The amendment and restatement of the First
--------------
Amended and Restated Credit Agreement pursuant to the Second
Amended and Restated Credit Agreement, and the obligation of
GPA Sub and each Second Amendment Lender under the Second
Amended and Restated Credit Agreement to make Loans referred
to in clause (d) of Section 2.02 of the Second Amended and
NY1-53665.4 -53-
Restated Credit Agreement (subject to the terms and
conditions of the Second Amended and Restated Credit
Agreement), became effective on September 17, 1992 (the
"Second Amendment Effective Date"), the date on which each
-------------------------------
of the following conditions was satisfied or waived in
writing by all of the Lenders in their sole and absolute
discretion (it being understood that all capitalized terms
used in this Section 5.04 and defined in the Second Amended
and Restated Credit Agreement have the meanings defined in
the Second Amended and Restated Credit Agreement and that
all references in this Section 5.04 to "hereof" and "this
Agreement" are references to the Second Amended and Restated
Credit Agreement):
(a) Execution of Agreement; Notes. (i) The
-----------------------------
Borrower, the Administrative Agent and each Lender shall
have executed a counterpart hereof (whether the same or a
different counterpart) and shall have delivered the same to
the Administrative Agent at its Notice Office or, in the
case of the Lenders, shall have given to the Administrative
Agent written notice (actually received) at such office that
the same has been signed and mailed to it and (ii) there
shall have been delivered to the Administrative Agent for
the account of GPA Sub and each Second Amendment Lender
Notes for such Lenders executed by the Borrower in the
amounts, maturity and as otherwise provided in this
Agreement.
(b) Corporate Documents; Proceedings; Officer's
-------------------------------------------
Certificate. The Lenders shall have received from the
-----------
Borrower a certificate, dated the Second Amendment Effective
Date, signed by the President and Chief Executive Officer,
Senior Vice President-Finance or the Vice President and
Controller of the Borrower and attested to by the Secretary
or any Assistant Secretary of the Borrower in the form of
Exhibit Y with appropriate insertions, together with copies
of the Certificate of Incorporation and By-Laws of the
Borrower and the resolutions of the Borrower referred to in
such certificate, and the foregoing shall be satisfactory to
all of the Lenders in their sole and absolute discretion.
(c) Opinions of Counsel. The Lenders shall have
-------------------
received opinions, addressed to the Administrative Agent and
each of the Lenders and dated the Second Amendment Effective
Date, from (i) Streich Lang covering the due authority,
legality, enforceability and other matters related to this
Agreement and the other Credit Documents and the require-
ments hereof and thereof, (ii) Faegre & Benson covering the
entry of the Second Additional Loan Order and the taking of
any appeals therefrom and Liens on the property or other
assets of the Borrower approved by the Bankruptcy Court,
NY1-53665.4 -54-
(iii) Daugherty, Fowler & Peregrin, covering the filing,
perfection and priority of the Aircraft/Engine Mortgage (and
amendments thereto), and (iv) Winthrop, Stimson, Putnam &
Roberts covering the United States citizenship of the
Borrower, the Slot Lease (and amendments thereto) and other
matters involving the DOT and the FAA, and such other
opinions with respect to other matters incident to
transactions contemplated herein, as any Lender may request
and as are acceptable to all of the Lenders in their sole
and absolute discretion.
(d) Cash Management Agreement. The Borrower, the
-------------------------
Collateral Agent and the Local Bank shall have duly autho-
rized, executed and delivered the Second Amendment to Cash
Management Agreement in substantially the form of Exhibit Z,
amending the Initial Cash Management Agreement.
(e) Agency Agreement. Each of the Borrower, the
----------------
Administrative Agent, the Collateral Agent and the Lenders
shall have authorized, executed and delivered the Second
Amendment to Agency Agreement in substantially the form of
Exhibit AA, amending the Agency Agreement.
(f) Mortgage and Assignment of Gate Leases. The
--------------------------------------
Borrower shall have (i) duly authorized, executed and deliv-
ered and filed with the appropriate Governmental Authorities
(a) the Second Amendments to Deeds of Trust in substantially
the forms of Exhibits BB-1, BB-2 and BB-3, amending each
Mortgage encumbering the Mortgaged Properties, and (b) the
Second Amendment to Assignment of Gate Leases in substan-
tially the form of Exhibit CC, amending the Assignment of
Gate Leases, and (ii) provided to the Lenders title reports
in form and substance satisfactory to all of the Lenders in
their sole and absolute discretion, and showing title vested
in the Borrower and the absence of Liens other than Liens
shown on the title reports delivered on the Effective Date.
(g) Mortgage Consents. The City of Phoenix, as
-----------------
landlord, and the Collateral Agent shall have duly autho-
rized, executed and delivered the Second Amendments to
Consent Agreement in substantially the forms of Exhibits
DD-1 and DD-2. First Interstate Bank of Arizona, N.A., as
first mortgagee, shall have duly authorized, executed and
delivered the consent letter in substantially the form of
Exhibit EE.
(h) Second Additional Loan Order. The Lenders
----------------------------
shall have received a certified copy of the Second
Additional Loan Order, and the Second Additional Loan Order
shall be entered by the Court and in full force and effect
and shall not have been stayed, reversed, vacated,
NY1-53665.4 -55-
rescinded, modified or amended in any respect (other than
modifications acceptable to all of the Lenders, in their
sole and absolute discretion), and no appeal shall been
taken from the Second Additional Loan Order and the time to
take any such appeal shall have expired.
(i) Intercreditor Agreements. Each of the
------------------------
Lenders shall have executed and delivered a letter in
substantially the form of Exhibit FF pursuant to which each
Lender affirms or reaffirms, as the case may be, that it
shall be bound by the provisions of the intercreditor
agreements listed on Schedule 1 to such letter.
(j) Consent of Certain Lessors. The lessors
--------------------------
party to the stipulations with the Borrower listed on
Schedule 18 hereto shall have consented to the lien of the
Lenders pursuant to the Security Agreement on the Borrower's
right, title and interest in and to the aircraft leases
identified in such stipulations.
(k) Insurance. The Borrower shall have provided
---------
to the Lenders all insurance certificates, opinions and
schedules required by Section 7.03 and the Security Docu-
ments to be provided to the Lenders on the Effective Date
(as if references therein to the Effective Date were to the
Second Amendment Effective Date).
(l) Operating Plan and Consultant's Report. The
--------------------------------------
Operating Plan and the report thereon of Simat, Helliesen &
Eichner, Inc., the Borrower's consultant, shall be
satisfactory in form and content to all of the Lenders,
acting in their sole and absolute discretion, and the
Operating Plan shall have been adopted by the management and
the Board of Directors of the Borrower; and the Borrower
shall have provided evidence satisfactory to all of the
Lenders in their sole and absolute discretion that the
Borrower is in compliance with the Operating Plan (includ-
ing, without limitation, the achievement and implementation
of all actions required by, and the further cost reductions
outlined in, the Operating Plan to be achieved or
implemented on or prior to the Second Amendment Effective
Date).
(m) Security Agreement. The Borrower and the
------------------
Collateral Agent shall have duly authorized, executed and
delivered the First Amendment to Security Agreement in
substantially the form of Exhibit GG, amending the Security
Agreement.
(n) Aircraft/Engine Mortgage and Spare Parts
----------------------------------------
Mortgage. The Borrower and the Collateral Agent shall have
--------
NY1-53665.4 -56-
duly authorized, executed and delivered (i) Amendment No. 3
to Aircraft/Engine Mortgage in substantially the form of
Exhibit HH, amending the Aircraft/Engine Mortgage, and
(ii) Amendment No. 1 to the Spare Parts Mortgage in
substantially the form of Exhibit II, amending the Spare
Parts Mortgage, together with evidence of filing for
recording with the FAA of such amendments and with the
priority contemplated hereby and thereby.
(o) Slots. The Borrower and the Collateral Agent
-----
shall have duly authorized, executed and delivered the First
Amendment to Slot Lease Agreement in substantially the form
of Exhibit JJ, amending the Slot Lease Agreement, and all
matters involving the DOT and the FAA relating to the Slots
shall be acceptable to all of the Lenders in their sole and
absolute discretion.
(p) Financial Accommodations. The Borrower shall
------------------------
have received from third parties a minimum of $11 million in
financial accommodations on terms acceptable to all of the
Lenders in their sole and absolute discretion, including,
without limitation, the financial accommodations set forth
on Schedule 20 hereto; and the Borrower shall have provided
evidence thereof in form and substance satisfactory to all
of the Lenders in their sole and absolute discretion.
(q) Prepayment of Northwest Loans and Release and
---------------------------------------------
Termination by Northwest. Simultaneously with the
------------------------
effectiveness of this Agreement and the funding by GPA Sub
and the Second Amendment Lenders of the Loans referred to in
clause (d) of Section 2.02 hereof, (i) all of the Loans made
by Northwest under the Original Credit Agreement and
outstanding under the Credit Agreement shall be prepaid in
full, together with accrued and unpaid interest thereon, as
provided in Section 2.04, and (ii) Northwest shall have duly
authorized, executed and delivered a Release and Termination
in substantially the form of Exhibit LL releasing all of its
right, title and interest in and to the Collateral, the
Loans and the Credit Documents.
(r) Aircraft Rental and Loan Reductions and
---------------------------------------
Deferrals. The Borrower shall have provided evidence in
---------
form and substance acceptable to all of the Lenders in their
sole and absolute discretion that the Borrower shall have
received from aircraft providers (other than the GPA
Entities) rental and interest rate reductions, rental and
principal payment deferrals and aircraft fleet reductions in
the amounts, for the periods and otherwise as set forth in
Schedule 19 (or on such other terms as all of the Lenders
shall approve in their sole and absolute discretion); and
the terms and conditions of such rental and interest rate
NY1-53665.4 -57-
reductions, rental and principal payment deferrals and
aircraft fleet reductions shall be in full force and effect
(without any unfulfilled conditions to the effectiveness
thereof or subject only to such conditions to the
effectiveness thereof as all of the Lenders shall approve in
their sole and absolute discretion); and the terms of the
stipulations with respect to, and the documentation
evidencing, such interest rate reductions, rental and
principal payment deferrals and aircraft fleet reductions
shall be satisfactory in form and substance to all of the
Lenders in their sole and absolute discretion.
(s) Corporate Governance and Related Actions.
----------------------------------------
The Borrower shall have duly authorized, executed and
delivered the Management Letter Agreement substantially in
the form of Exhibit KK and the Lenders (other than Kawasaki)
shall have received evidence, satisfactory in form and
substance to all of the Lenders (other than Kawasaki) in
their sole and absolute discretion, that all actions
described in the Management Letter Agreement to be taken on
or prior to the Second Amendment Effective Date shall have
been taken to the satisfaction of all of the Lenders (other
than Kawasaki) in their sole and absolute discretion.
(t) A320 Put Agreements. Pursuant to
-------------------
documentation, satisfactory in form and substance to all of
the Lenders in their sole and absolute discretion, (i) each
of Kawasaki and GPA Group plc shall have cancelled its right
to put A320 aircraft to the Borrower pursuant to the
Kawasaki Put Agreement and the Put Agreement, respectively,
on or prior to December 31, 1993, (ii) the Borrower shall
have agreed that, if in the discretion of its management,
the Borrower increases its fleet of A320 aircraft on or
after January 1, 1993 and on or prior to December 31, 1993,
then (in lieu of taking A320 aircraft from other sources and
subject to availability from Kawasaki and the GPA Entities)
the Borrower will take A320 aircraft first from Kawasaki and
then from the GPA Entities on the same terms and conditions
as would have been applicable under the Kawasaki Put
Agreement and the Put Agreement, respectively, had the put
options thereunder not been so cancelled, and (iii) the
Borrower shall have granted to Kawasaki the right to put
four A320 aircraft (each of which shall have fewer than 100
flight hours of commercial operation) to the Borrower during
the period January 1, 1994 through December 31, 1994 on the
terms provided in the Kawasaki Put Agreement.
(u) Directors' and Officers' Liability Insurance.
--------------------------------------------
The Borrower shall have provided the Lenders with evidence
satisfactory to all of the Lenders in their sole and
absolute discretion that the Borrower has in effect on the
NY1-53665.4 -58-
Second Amendment Effective Date (i) directors' and officers'
liability insurance, and (ii) corporate indemnification of
directors, in each case, sufficient to facilitate and
support the changes in the corporate governance of the
Borrower contemplated by the Management Letter Agreement.
(v) No Material Adverse Change. In the opinion
--------------------------
of the Lenders, no material adverse change shall have
occurred since August 18, 1992 in (i) the financial
condition, business or prospects of the Borrower or (ii) the
airline industry.
(w) Credit Documents. The Borrower shall have
----------------
provided to each of the Second Amendment Lenders (i) copies
of each of the Credit Documents (including, without limita-
tion, all amendments thereto), certified by an appropriate
officer of the Borrower as being true, correct and complete
and in full force and effect on and as of the Second Amend-
ment Effective Date and (ii) evidence, reasonably satisfac-
tory to all of the Second Amendment Lenders, in their sole
and absolute discretion, that all actions described in
Section 5.01 of the Credit Agreement have been taken.
(x) Payment of Fees, etc. The Borrower shall
---------------------
have paid all costs, fees and expenses owing in connection
with this Agreement, the other Credit Documents and the
documents referred to herein and therein and due to the
Administrative Agent, the Collateral Agent and each Lender
on or before the Second Amendment Effective Date (including,
without limitation, legal fees and expenses).
(y) Representations and Warranties. All repre-
------------------------------
sentations and warranties of or on behalf of the Borrower in
this Agreement and all the other Credit Documents shall be
true and correct in all material respects on and as of the
Second Amendment Effective Date with the same effect as
though such representations and warranties had been made on
and as of the Second Amendment Effective Date.
(z) Retention of Consultant. The Lenders shall
-----------------------
have received evidence, satisfactory to all of the Lenders
in their sole and absolute discretion, that Simat, Helliesen
& Eichner, Inc. has been retained by the Borrower as a
consultant to advise and assist the Borrower with respect to
the implementation of the Operating Plan.
(aa) Other Action. There shall have been taken
------------
such other actions, and all of the Lenders shall have
received such other documents, instruments, opinions,
reliance letters, certifications and copies of governmental
consents, permits, licenses and approvals, as any Lender
NY1-53665.4 -59-
shall have reasonably requested and which are acceptable to
all of the Lenders in their sole and absolute discretion.
On the Second Amendment Effective Date, each Second
Amendment Lender became a Lender under the Second Amended
and Restated Credit Agreement, with a Commitment equal to
the amount set forth opposite its name on Annex I attached
to the Second Amended and Restated Credit Agreement and the
Commitment of GPA Sub was increased to the amount set forth
opposite its name on Annex I to the Second Amended and
Restated Credit Agreement. The Borrower and each of the
Lenders (other than Kawasaki) acknowledged that, pursuant to
the Second Amended and Restated Credit Agreement and the
Management Letter Agreement, the Borrower granted to each
Lender (other than Kawasaki) certain rights of approval with
respect to members of the Board of Directors of the Borrower
and the Executive Committee of such Board of Directors. The
Borrower and each Lender (other than Kawasaki) further
acknowledged that Kawasaki is not a party to the Management
Letter Agreement, and that the Borrower did not grant to
Kawasaki any rights of approval with respect to members of
the Board of Directors of the Borrower or the Executive
Committee of such Board of Directors. The Lenders, the
Borrower and Kawasaki agreed that neither Kawasaki nor any
of its officers, directors or advisors would be liable or
responsible to any Person for any exercise of the rights of
any other Lender under the Management Letter Agreement or
for any act or omission of any Director of the Borrower
approved by any such Lender. The Borrower and each Lender
(including Kawasaki) agreed and acknowledged that no agency
relationship has existed or was intended to be created by
the Second Amended and Restated Credit Agreement, between
Kawasaki on the one hand and any other Lender or any
Director approved by such Lender on the other hand.
Subject to and upon the terms and conditions set forth in
the Second Amended and Restated Credit Agreement (including,
without limitation, Section 5.02 thereof), on the Second
Amendment Effective Date, GPA Sub and each Second Amendment
Lender made the Loan provided by clause (d) of Section 2.02
of the Second Amended and Restated Credit Agreement to be
made by such Lender on the Second Amendment Effective Date.
All of such Loans were made simultaneously by GPA Sub and
the Second Amendment Lenders following acknowledgement and
agreement by GPA Sub and the Second Amendment Lenders that
the Second Amendment Effective Date had occurred.
Notwithstanding the amendment and restatement of the First
Amended and Restated Credit Agreement by the Second Amended
and Restated Credit Agreement, all of the Obligations
continued to be secured by the Collateral (as defined in the
NY1-53665.4 -60-
First Amended and Restated Credit Agreement) and the
Borrower acknowledged and agreed that the Collateral (as
defined in the First Amended and Restated Credit Agreement)
remained subject to a lien and security interest in favor of
the Collateral Agent for the benefit of the Secured Cred-
itors. The Second Amended and Restated Credit Agreement was
intended as a substitution of, and not as payment of, the
Obligations of the Borrower under the First Amended and
Restated Credit Agreement and all amounts outstanding and
owing by the Borrower under the First Amended Credit
Agreement were deemed to be outstanding and owing by the
Borrower under the Second Amended and Restated Credit
Agreement.
5.05 Conditions Precedent to Third Amendment
---------------------------------------
Effective Date. The amendment and restatement of the Second
--------------
Amended and Restated Credit Agreement pursuant to this
Agreement, and the agreement of each Lender to extend the
maturity of the Loans of such Lender to the Maturity Date
(as defined in this Agreement) shall become effective on the
date (the "Third Amendment Effective Date"), which date must
------------------------------
occur not later than September 30, 1993, on which each of
the following conditions is satisfied unless waived in
writing by all of the Lenders in their sole and absolute
discretion:
(a) Execution of Agreement. The Borrower, the
----------------------
Administrative Agent and each Lender shall have executed a
counterpart hereof (whether the same or a different counter-
part) and shall have delivered the same to the Administra-
tive Agent at its Notice Office or, in the case of the
Lenders, shall have given to the Administrative Agent
written notice (actually received) at such office that the
same has been signed and mailed to it.
(b) Corporate Documents; Proceedings; Officer's
-------------------------------------------
Certificate. The Lenders shall have received from the
-----------
Borrower a certificate, dated the Third Amendment Effective
Date, signed by the Chairman of the Board of Directors, the
President and Chief Executive Officer, the Senior Vice
President-Finance or the Vice President and Controller of
the Borrower and attested to by the Secretary or any
Assistant Secretary of the Borrower in substantially the
form of Exhibit Y with appropriate insertions, together with
copies of the Certificate of Incorporation and By-Laws of
the Borrower and the resolutions of the Borrower referred to
in such certificate, and the foregoing shall be satisfactory
to all of the Lenders in their sole and absolute discretion.
(c) Opinions of Counsel. The Lenders shall have
-------------------
received opinions, addressed to the Administrative Agent and
NY1-53665.4 -61-
each of the Lenders and dated the Third Amendment Effective
Date, from (i) Andrews & Kurth L.L.P. and Martin J. Whalen
covering the due authority, legality, enforceability and
other matters related to this Agreement and the other Credit
Documents and the requirements hereof and thereof,
(ii) Faegre & Benson covering the entry of the Interim
Extension Loan Order and the taking of any appeals therefrom
and Liens on the property or other assets of the Borrower
approved by the Bankruptcy Court, and (iii) Winthrop,
Stimson, Putnam & Roberts covering the United States
citizenship of the Borrower and other matters involving the
DOT and the FAA, and such other opinions with respect to
other matters incident to transactions contemplated herein,
as any Lender may request and as are acceptable to all of
the Lenders in their sole and absolute discretion.
(d) Mortgage and Assignment of Gate Leases. The
--------------------------------------
Borrower shall have (i) duly authorized, executed and deliv-
ered and filed with the appropriate Governmental Authorities
(a) the Third Amendments to Deeds of Trust in substantially
the forms of Exhibits MM-1, MM-2 and MM-3, amending each
Mortgage encumbering the Mortgaged Properties, and (b) the
Third Amendment to Assignment of Gate Leases in substan-
tially the form of Exhibit NN, amending the Assignment of
Gate Leases, and (ii) provided to the Lenders title reports
in form and substance satisfactory to all of the Lenders in
their sole and absolute discretion, and showing title vested
in the Borrower and the absence of Liens other than Liens
shown on the title reports delivered on the Effective Date.
(e) Mortgage Consents. The City of Phoenix, as
-----------------
landlord, and the Collateral Agent shall have duly autho-
rized, executed and delivered the Third Amendments to
Consent Agreement in substantially the forms of Exhibits
OO-1 and OO-2.
(f) Slots. The Borrower and the Collateral Agent
-----
shall have duly authorized, executed and delivered the
Second Amendment to Slot Lease Agreement in substantially
the form of Exhibit PP.
(g) Interim Extension Loan Order. The Lenders
----------------------------
shall have received a certified copy of the Interim
Extension Loan Order, and the Interim Extension Loan Order
shall have been entered by the Bankruptcy Court and shall be
in full force and effect and shall not have been stayed,
reversed, vacated, rescinded, modified or amended in any
respect (other than modifications acceptable to all of the
Lenders, in their sole and absolute discretion), and no
appeal shall been taken from the Interim Extension Loan
Order.
NY1-53665.4 -62-
(h) Operating Plan. The Operating Plan and the
--------------
recommendations contained in the report thereon of Simat,
Helliesen & Eichner, Inc., the Borrower's consultant, shall
have been adopted by the management and the Board of
Directors of the Borrower.
(i) Payment of Ansett Loans and Release and
---------------------------------------
Termination by Ansett. Prior to or simultaneously with the
---------------------
effectiveness of this Agreement and the extension of the
maturity of the Loans to the Maturity Date (as defined
herein), (i) all of the Ansett Loans shall be paid in full,
together with accrued and unpaid interest thereon, and
(ii) Ansett shall have duly authorized, executed and
delivered a Release and Termination in substantially the
form of Exhibit QQ releasing all of its right, title and
interest in and to the Collateral, the Loans and the Credit
Documents.
(j) Corporate Governance and Related Actions.
----------------------------------------
The Borrower shall have duly authorized, executed and
delivered the Amended and Restated Management Letter
Agreement substantially in the form of Exhibit RR and the
Lenders (other than Kawasaki) shall have received evidence,
satisfactory in form and substance to all of the Lenders
(other than Kawasaki) in their sole and absolute discretion,
that all actions described in the Amended and Restated
Management Letter Agreement to be taken on or prior to the
Third Amendment Effective Date shall have been taken to the
satisfaction of all of the Lenders (other than Kawasaki) in
their sole and absolute discretion.
(k) No Material Adverse Change. In the opinion
--------------------------
of the Lenders, no material adverse change shall have
occurred since September 15, 1993 in the financial
condition, business or prospects of the Borrower.
(l) Payment of Fees, etc. The Borrower shall
---------------------
have paid all costs, fees and expenses owing in connection
with this Agreement, the other Credit Documents and the
documents referred to herein and therein and due to the
Administrative Agent, the Collateral Agent and each Lender
on or before the Third Amendment Effective Date (including,
without limitation, legal fees and expenses).
(m) No Default; Representations and Warranties.
------------------------------------------
No Default or Event of Default shall have occurred and be
continuing on and as of the Third Amendment Effective Date
and all representations and warranties of or on behalf of
the Borrower in this Agreement and all the other Credit
Documents shall be true and correct in all material respects
on and as of the Third Amendment Effective Date with the
NY1-53665.4 -63-
same effect as though such representations and warranties
had been made on and as of the Third Amendment Effective
Date (it being understood and agreed that in the event of
any inconsistency between the representations and warranties
of or on behalf of the Borrower in this Agreement and the
representations and warranties of or on behalf of the
Borrower in the other Credit Documents, the representations
and warranties of or on behalf of the Borrower in this
Agreement shall control); and the Lenders shall have
received a certificate, dated the Third Amendment Effective
Date, and signed by the Vice President and Controller of the
Borrower, to such effect.
(n) Governmental Action. No Governmental Action
-------------------
shall purport to, and no Governmental Action or other action
or proceedings shall have been filed, instituted, threatened
or issued which seeks to, enjoin or restrain or otherwise
adversely affect the extension of the maturity of the Loans
to the Maturity Date (as defined herein) or the other
transactions provided for herein or contemplated hereby or
the Borrower's compliance with the terms hereof or of the
other Credit Documents.
(o) Other Action. There shall have been taken
------------
such other actions, and all of the Lenders shall have
received such other documents, instruments, opinions,
reliance letters, certifications and copies of governmental
consents, permits, licenses and approvals, as any Lender
shall have reasonably requested and which are acceptable to
all of the Lenders in their sole and absolute discretion.
On the Third Amendment Effective Date, the maturity of the
Loans of each Lender shall be extended to the Maturity Date
(as defined herein) and the Loans of each Lender shall
continue to be outstanding in an aggregate principal amount
equal to the amount set forth opposite its name on Annex I
attached hereto (and each Lender shall be deemed to have
waived any mandatory prepayments of the Loans of such Lender
otherwise required pursuant to Sections 4.02(i), 4.02(ii)
and 4.02(iv) of the Second Amended and Restated Credit
Agreement during the period July 1, 1993 through September
30, 1993). The Borrower and each of the Lenders (other than
Kawasaki) hereby acknowledge that, pursuant to this
Agreement and the Amended and Restated Management Letter
Agreement, the Borrower has granted to each Lender (other
than Kawasaki) certain rights of approval with respect to
members of the Board of Directors of the Borrower and the
Executive Committee of such Board of Directors. The
Borrower and each Lender (other than Kawasaki) further
acknowledge that Kawasaki is not a party to the Amended and
Restated Management Letter Agreement, and that the Borrower
NY1-53665.4 -64-
has not granted to Kawasaki any rights of approval with
respect to members of the Board of Directors of the Borrower
or the Executive Committee of such Board of Directors.
Neither Kawasaki nor any of its officers, directors or
advisors shall be liable or responsible to any Person for
any exercise of the rights of any other Lender under the
Amended and Restated Management Letter Agreement or for any
act or omission of any Director of the Borrower approved by
any such Lender. The Borrower and each Lender (including
Kawasaki) agree and acknowledge that no agency relationship
exists or is intended to be created hereby between Kawasaki
on the one hand and any other Lender or any Director
approved by such Lender on the other hand. On the Third
Amendment Effective Date, the Management Letter Agreement
shall be amended and restated in its entirety as provided in
the Amended and Restated Management Letter Agreement (and
the Management Letter Agreement shall be of no further force
or effect).
Notwithstanding the amendment and restatement of the Second
Amended and Restated Credit Agreement, all of the
Obligations shall continue to be secured by the Collateral
and the Borrower acknowledges and agrees that the Collateral
remains subject to a lien and security interest in favor of
the Collateral Agent for the benefit of the Secured Cred-
itors. Except as provided herein and in the Release and
Termination executed and delivered by Ansett pursuant
hereto, this Agreement is intended as a substitution of, and
not as payment of, the Obligations of the Borrower under the
Second Amended and Restated Credit Agreement and all amounts
outstanding and owing by the Borrower under the Second
Amended and Restated Credit Agreement shall be deemed to be
outstanding and owing by the Borrower hereunder.
Notwithstanding anything herein or in any of the other
Credit Documents which may be to the contrary, for all
purposes hereof and thereof, the Maturity Date shall be as
provided herein.
SECTION 6. REPRESENTATIONS, WARRANTIES AND
-------------------------------
AGREEMENTS.
----------
In order to induce the Lenders to enter into this
Agreement and to extend the maturity of the Loans to the
Maturity Date (as defined herein), the Borrower makes the
following representations, warranties and agreements as of
the Third Amendment Effective Date, which shall survive the
execution and delivery of this Agreement and the extension
of the maturity of the Loans to the Maturity Date (as
defined herein).
NY1-53665.4 -65-
6.01 Corporate Status. The Borrower (i) is a
----------------
duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its
incorporation, (ii) has the power and authority to own its
property and assets and to transact the business in which it
is engaged and (iii) is duly qualified as a foreign
corporation and in good standing in each jurisdiction where
the ownership, leasing or operation of its property or the
conduct of its business requires such qualification except
where the failure to be so qualified is not reasonably
likely to have a material adverse effect on the business,
operations, property or other assets or condition (financial
or otherwise) of the Borrower or on the Collateral or the
rights or remedies of the Collateral Agent in respect
thereof.
6.02 Corporate Power and Authority. Subject to
-----------------------------
the entry of the Interim Extension Loan Order by the
Bankruptcy Court, the Borrower has the corporate power to
execute, deliver and perform the terms and provisions of
each of the Credit Documents to which it is a party and has
taken all necessary corporate action to authorize the
execution, delivery and performance by it of each of such
Credit Documents. The Borrower has duly executed and
delivered each of the Credit Documents to which it is a
party, and each of such Credit Documents constitutes its
legal, valid and binding obligation enforceable against the
Borrower in accordance with its terms.
6.03 No Violation. Neither the execution,
------------
delivery or performance by the Borrower of the Credit
Documents to which it is a party, nor compliance by it with
the terms and provisions thereof, (i) will contravene any
provision of any law, statute, rule or regulation or any
order, writ, injunction or decree of any court or govern-
mental instrumentality, (ii) will conflict or be incon-
sistent with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien (except
pursuant to the Security Documents) upon any of the property
or assets of the Borrower pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan
agreement or any other material agreement, contract or
instrument to which the Borrower is a party or by which its
property or assets are bound or to which it may be subject,
in each case to the extent entered into or assumed on or
after the Filing Date, or (iii) will violate any provision
of the Certificate of Incorporation or By-Laws of the
Borrower.
NY1-53665.4 -66-
6.04 Governmental Approvals. No order, consent,
----------------------
approval, license, authorization or validation of, or
filing, recording or registration with (except the entry of
the Orders and those which have been obtained or made or may
be required to be made in the future under any Credit
Document and cannot be obtained until such future time) or
exemption by, any governmental or public body or authority,
or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery and
performance of any Credit Document or (ii) the legality,
validity, binding effect or enforceability of any Credit
Document.
6.05 Priority; Security Interests.
----------------------------
(a) The Obligations constitute allowed adminis-
trative expense claims in the Case having priority over all
administrative expenses of the kind specified in Section
503(b) or 507(b) of the Bankruptcy Code, except for the
Permitted Expenses and except as expressly permitted by
Section 8.05(vi).
(b) The Obligations shall be at all times secured
by a Lien on the Collateral in favor of the Collateral Agent
for the benefit of the Secured Creditors, which Lien shall
be a first priority Lien on all Collateral and perfected by
operation of the Orders, except that the Lien securing the
Obligations may be junior in priority to the Permitted First
Liens with respect to the property encumbered thereby. The
Borrower has good and marketable title to all Collateral
owned by it free and clear of all Liens, except (i) Liens
securing the Obligations, (ii) the Permitted First Liens and
(iii) other Liens permitted by Section 8.01, all of which
Liens referred to in this clause (iii) (other than the Liens
permitted by clause (vi) of Section 8.01) are and shall be
junior and subordinate to the Liens securing the
Obligations. All filings, notices, recordings and other
actions taken or made in the United States or any State
thereof or in any other jurisdiction necessary to perfect
the Liens on the Collateral created pursuant to the Security
Documents and the Orders have been made, given or
accomplished.
6.06 Financial Statements; Financial Condition;
------------------------------------------
Undisclosed Liabilities; etc.
-----------------------------
(a) The consolidated balance sheet of the
Borrower at December 31, 1992 and the related consolidated
statements of operations, shareholders' equity and cash
flows of the Borrower for the fiscal year ended on such date
and heretofore furnished to the Lenders present fairly in
NY1-53665.4 -67-
all material respects the financial position of the Borrower
at the date of such balance sheet and the results of
operations of the Borrower for such periods covered in the
statements of operations except as expressly disclosed
therein and in the notes thereto in conformity with
generally accepted accounting principles and practices
consistently applied.
(b) The consolidated balance sheet of the
Borrower at June 30, 1993 and the related consolidated
statements of operations and cash flows of the Borrower for
the six month period ended on such date and heretofore
furnished to the Lenders present fairly in all material
respects the financial position of the Borrower at the date
of such balance sheet and the results of the operations of
the Borrower for such periods covered in the statements of
operations thereby, except as otherwise disclosed therein
and in the notes thereto in conformity with generally
accepted accounting principles and practices consistently
applied, subject to appropriate year-end audit adjustments.
(c) Since September 15, 1993, there has been no
material adverse change in the business, operations,
property or other assets or condition (financial or
otherwise) of the Borrower, including, without limitation,
as a result of any casualty, strike, lockout or labor
dispute.
(d) Except as fully reflected in the financial
statements (including the footnotes thereto) referred to in
Section 6.06 (b) or in Schedule 9 hereto, there are no
liabilities or obligations (excluding current obligations
and liabilities incurred in the ordinary course of business)
with respect to the Borrower of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and
whether or not due), which either individually or in
aggregate are or would be reasonably likely to be materially
adverse to the ability of the Borrower to satisfy the
Obligations in accordance with their terms or the ability of
the Borrower to consummate the transactions contemplated by
the Credit Documents.
(e) The projections presented in the Operating
Plan (the "Projections") are based on good faith estimates
-----------
and assumptions made by the management of the Borrower on
and as of the date of the Operating Plan; and the management
of the Borrower believes that the Projections are reasonable
and attainable, it being recognized by the Lenders, however,
that projections as to future events are not to be viewed as
facts and that the actual results during the period or
NY1-53665.4 -68-
periods covered by the Projections may differ from the
projected results and that such differences may be material.
(f) The property register furnished by the
Borrower to the Lenders on and as of the Effective Date was
a true, complete and accurate description of all aircraft,
engines, rotables, Slots, Real Property and other material
property or other material assets of the Borrower.
6.07 Litigation. Except as set forth in Schedule
----------
10 hereto, there are no actions, suits or proceedings, other
than the Case, pending or, to the knowledge of the Borrower,
threatened that are reasonably likely to materially and
adversely affect the business, operations, property or other
assets or condition (financial or otherwise) of the Borrower
or the ability of the Borrower to perform its obligations
hereunder or under any of the other Credit Documents.
6.08 True and Complete Disclosure. All factual
----------------------------
information (taken as a whole) furnished on or prior to the
Third Amendment Effective Date by the Borrower in writing to
any Lender (including, without limitation, all information
contained in the Credit Documents but excluding (i) the
Projections and any other forecasts and projections of
financial information and results submitted to any Lender,
and (ii) factual information which was superseded or re-
placed on or prior to the date hereof) for purposes of or in
connection with this Agreement, or any transaction con-
templated herein, is true and accurate as of the date hereof
in all material respects and not incomplete by omitting to
state any fact necessary to make such information (taken as
a whole) not misleading in any material respect at such time
in light of the circumstances under which such information
was provided.
6.09 Use of Proceeds; Margin Regulations.
-----------------------------------
(a) All proceeds of the Loans were used for the
Borrower's working capital purposes in accordance with the
Operating Plan as defined in the Original Credit Agreement,
the First Amended and Restated Credit Agreement and/or the
Second Amended and Restated Credit Agreement, as applicable
(including, without limitation, to pay amounts due under the
A320 Leases, the Engine Leases and the Kawasaki Leases).
(b) No part of the proceeds of any Loan were used
by the Borrower to purchase or carry any Margin Stock or to
extend credit to others for the purposes of purchasing or
carrying any Margin Stock. Neither the making of any Loan
nor the use of the proceeds thereof violated or was
NY1-53665.4 -69-
inconsistent with the provisions of Regulations G, T, U or X
of the Board of Governors of the Federal Reserve System.
6.10 Tax Returns and Payments. The Borrower has
------------------------
filed all federal income tax returns and all other tax
returns required to be filed by it and has paid all income
and other taxes payable by it which have become due pursuant
to such tax returns and all other taxes and assessments
payable by it which have become due, other than those (x)
not yet delinquent, (y) contested in good faith and for
which adequate reserves have been established or (z) the
payment of which is excused or stayed as a result of the
Borrower's commencement of the Case. The Borrower has paid,
or has provided adequate reserves for the payment of, all
federal and state income taxes applicable for all prior
fiscal years and for the current fiscal year to the date
hereof.
6.11 Compliance with ERISA.
---------------------
(a) The Borrower and each member of the
Controlled Group is in compliance in all respects with any
applicable provisions of ERISA and the regulations and
published interpretations thereunder including all
procedural and fiduciary provisions.
(b) No Pension Plan has an accumulated or waived
funding deficiency within the meaning of Section 412 of the
Code and no Pension Plan is insolvent or in reorganization.
(c) No Termination Event has occurred or is
reasonably expected to occur with respect to any Pension
Plan administered by the Borrower or any member of the
Controlled Group or any administrator designated by the
Borrower or any member of the Controlled Group.
(d) There are no unfunded vested liabilities
under any Pension Plans administered by the Borrower or any
member of the Controlled Group or any administrators
designated by the Borrower or any member of the Controlled
Group.
(e) Neither the Borrower nor any member of the
Controlled Group has incurred or reasonably expects to incur
any withdrawal liability under ERISA to any Multiemployer
Plan or any similar liability or exposure.
(f) Neither the Borrower nor any member of the
Controlled Group has incurred, or expects to incur, any
material liability to or on account of any Pension Plan
NY1-53665.4 -70-
pursuant to Section 515, 4062, 4063, 4064, 4201, or 4204 of
ERISA.
(g) No Lien imposed under the Code or ERISA on
the assets of the Borrower nor any member of the Controlled
Group exists or is likely to arise on account of any Pension
Plan.
6.12 Subsidiaries. There are no Subsidiaries of
------------
the Borrower and the Borrower does not hold, directly or
indirectly, legally or beneficially, more than 5% of the
outstanding voting stock or similar interests of any other
Person.
6.13 Compliance with Statutes, etc.
------------------------------
(a) The Borrower is in compliance with all
applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all Governmental
Authorities, domestic or foreign, in respect of the conduct
of its businesses and the ownership of its property, except
(x) such noncompliances as are not likely to, in the
aggregate, have a material adverse effect on the business,
operations, property or other assets or condition (financial
or otherwise) of the Borrower or on its ability to perform
its obligations hereunder or under the other Credit
Documents or on the Collateral or any rights or remedies of
the Collateral Agent or the Lenders in respect thereof or
(y) any statute, regulation, order or restriction with which
the Borrower is not required to comply by virtue of the
Bankruptcy Code, the pendency of the Case or of any order
issued in the Case.
(b) Without limiting the foregoing, no Hazardous
Materials (i) exist on, under or about the Borrower's assets
or otherwise with respect to the Collateral, or (ii) have at
any time been transported to or from such property or used,
generated, manufactured, stored or disposed of on, under or
about such assets which, in the case of clauses (i) and (ii)
above, would violate any permits, regulations or other
Governmental Actions or would give rise to any Hazardous
Materials Claim materially and adversely affecting any
Collateral, including, without limitation, the economic
value, use, operation or transferability of any Collateral
or for which the Administrative Agent or any Lender could
have any liability or obligation with respect thereto or
would have a material adverse effect on the business,
property or other assets, condition, financial or otherwise,
or operations of the Borrower or could give rise to an
Environmental Lien. The Borrower has obtained all permits,
licenses and authorizations required under all Hazardous
NY1-53665.4 -71-
Materials Laws and is in compliance with the terms and
conditions of such permits, licenses and authorizations and
all applicable Hazardous Materials Laws except where the
failure to obtain such permit, license or authorization or
where such noncompliance would not affect any Collateral,
would not result in any liability of the Administrative
Agent or any Lender, and would not have a material adverse
effect on the business, property or other assets, condition,
financial or otherwise, or operations of the Borrower or on
its ability to perform its obligations hereunder or under
the other Credit Documents or on the Collateral or any
rights or remedies of the Collateral Agent or the Lenders in
respect thereof. The Borrower has not been notified that it
is liable for any penalties, fines or forfeitures for
failure to comply with any of the foregoing in the manner
set forth above. The Borrower is in compliance with, and
not in breach of or default under, any applicable writ,
order, judgment, injunction, decree, lease, first mortgage,
or other agreement or instrument to which the Borrower is a
party which would materially and adversely affect the
ability of the Borrower to operate any portion of the Real
Property or personal property owned or leased by it and no
event has occurred and is continuing which, with the passage
of time or the giving of notice or both, would constitute
noncompliance, breach of or default thereunder the breach of
which is likely to have a material adverse effect on the
property or other assets, business operation, condition
(financial or otherwise) of the Borrower. There are no
legal or governmental proceedings pending or, to the
knowledge of the Borrower, threatened, which (a) question
the validity, term or entitlement of the Borrower for any
permit, license, order or registration required for the
operation of any facility or personal property which the
Borrower currently operates and (b) wherein an unfavorable
decision, ruling or finding would have a material adverse
effect on the business, operation, property or other assets
or condition (financial or otherwise) of the Borrower or on
its ability to perform its obligations hereunder or under
the other Credit Documents or on the Collateral or any
rights or remedies of the Collateral Agent or the Lenders in
respect thereof.
6.14 Investment Company Act. The Borrower is not
----------------------
an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
6.15 Public Utility Holding Company Act. The
----------------------------------
Borrower is not a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
NY1-53665.4 -72-
6.16 End of Fiscal Year; Fiscal Quarters. The
-----------------------------------
last day of the fiscal year of the Borrower shall be on
December 31 and the last day of each of the fiscal quarters
of the Borrower shall be on March 31, June 30, September 30
and December 31.
6.17 The Orders. The Final Order has been
----------
entered and has not been amended, stayed, vacated or
rescinded (except (i) to the extent superseded by the Final
Order and (ii) as amended in a manner satisfactory to all of
the Lenders in their sole and absolute discretion), and the
obligations of the parties to the Credit Documents have not
been stayed. Upon the maturity (whether by acceleration or
otherwise) of any of the Obligations, the Lenders shall be
entitled to immediate payment of such Obligations without
further application to or order by the Bankruptcy Court.
Upon any Event of Default the Collateral Agent shall be
entitled to take the actions or enforce the remedies set
forth in the Orders and the Security Documents without
further application to or order by the Bankruptcy Court or
any notice to (other than as expressly provided in the
provisos to the third to last sentence of Section 9) or
consent of any other Person. The GPA Order has been duly
entered, and the GPA Order has not been appealed, amended,
stayed, vacated or rescinded. The Additional Loan Order and
the Kawasaki Order have been entered and have not been
amended, stayed, vacated or rescinded (except as amended in
a manner satisfactory to all of the Lenders in their sole
and absolute discretion). The Second Additional Loan Order
has been entered and has not been amended, stayed, vacated
or rescinded (except as amended in a manner satisfactory to
all of the Lenders in their sole and absolute discretion).
The Interim Extension Loan Order has been entered and has
not been amended, stayed, vacated or rescinded (except as
amended in a manner satisfactory to all of the Lenders in
their sole and absolute discretion).
6.18 Operations.
----------
(a) Set forth on Schedule 11 is a true, correct
and complete list of (x) all Slots and Routes held or used
by the Borrower and (y) all Domestic Gates owned or leased
by the Borrower, in each case, as of the Third Amendment
Effective Date. The Borrower represents and warrants that
it holds the Slots held by it pursuant to Title 14, subject
only to the regulations of the FAA, and that it has, at all
times after obtaining such Slots, complied in all material
respects with all of the terms, conditions and regulations
set forth in Title 14, including, without limitation, the
usage requirements set forth in 93.227 thereof, and that
there exists no material violation of such terms, conditions
NY1-53665.4 -73-
and regulations that gives the FAA the right to terminate,
cancel, withdraw or modify any such Slots. Furthermore, the
Borrower shall not use any Slot which is to be used in
essential air service operations (as defined by the FAA) for
international or non-essential air service operations.
(b) The Borrower is a "citizen of the United
States" as defined in section 101(16) of the Aviation Act
and a duly certificated "air carrier" within the meaning of
the Aviation Act authorized to transport passengers and
cargo in domestic and international air transportation and
certificated under Sections 401 and 604(b) of the Aviation
Act. All such certificates are in full force and effect and
duly issued to the Borrower by the DOT (or the Civil
Aeronautics Board) and the FAA, and the Borrower has in full
force and effect and duly issued to it all licenses,
permits, authorizations, certificates of compliance,
certificates of public convenience and necessity and other
certificates (including, without limitation, air carrier
operating certificates and operations specifications issued
by the FAA pursuant to Part 121 of the Regulations of the
FAA and all applicable aircraft registration requirements of
the FAA, including those set forth in Part 47 of the
regulations of the FAA) which are required by the DOT or the
FAA for the conduct of the business of the Borrower as now
conducted. There are no license fees owed on the Borrower's
DOT or FAA licenses. The Borrower is in compliance with all
material requirements of the certificates and authorizations
issued to it by the DOT and the FAA.
6.19 GPA Agreements/Kawasaki Agreements. Each of
----------------------------------
the GPA Agreements and the Kawasaki Agreements is in full
force and effect, no "Default" or "Event of Default" under
and as defined in any such agreement (other than an event of
default which consists of the existence of the Case) has
occurred and is continuing and each of the representations
and warranties of the Borrower in the GPA Agreements and the
Kawasaki Agreements is true and correct as if made on the
Third Amendment Effective Date (except to the extent any
such representation or warranty expressly refers to a prior
date).
SECTION 7. AFFIRMATIVE COVENANTS.
---------------------
The Borrower covenants and agrees that, unless the
Required Lenders otherwise consent in their sole and absol-
ute discretion, on and after the Third Amendment Effective
Date and until the Loans and the Notes, together with all
interest, fees and other Obligations payable hereunder or
under the other Credit Documents, are paid in full:
NY1-53665.4 -74-
7.01 Information Covenants. The Borrower will
---------------------
furnish to each Lender:
(a) Weekly and Monthly Reports. By the Wednesday
--------------------------
after the end of each week, beginning with the first week or
part thereof in which the Third Amendment Effective Date
occurs, internal reports on the operations of the Borrower
in respect of such week and for the period from the
beginning of the current fiscal year to the end of such
week, in a format, and in a level of detail, reasonably
acceptable to and agreed upon by the Required Lenders; and
within 20 days after the end of each month, other than a
month which ends a fiscal quarter or a fiscal year of the
Borrower, the balance sheet of the Borrower as at the end of
such month and the related statements of operations and cash
flows for such month and for the elapsed portion of the
fiscal year ended with the last day of such month, in each
case setting forth comparative figures for the related
periods in the prior fiscal year, all of which shall be
certified on behalf of the Borrower by the Chief Financial
Officer, Treasurer or Vice President and Controller of the
Borrower (subject to year-end audit adjustments); and within
20 days after the end of each month, a report with respect
to sales of assets during such month, in a format, and in a
level of detail, reasonably acceptable to the Required
Lenders and demonstrating compliance with the provisions of
Sections 8.02(i), 8.02(iii) and 4.02(ii) of this Agreement;
and within 20 days after the end of each month, a report
with respect to leases entered into during such month, in a
format, and in a level of detail, reasonably acceptable to
the Required Lenders, and demonstrating compliance with the
provisions of Section 8.04 of this Agreement.
(b) Financial Statements. Within 50 days after
--------------------
the close of the first three fiscal quarters in each fiscal
year of the Borrower and within 105 days after the last
fiscal quarter in any fiscal year of the Borrower (or, if
earlier, at the time of filing with the SEC in the case of
any accounting period ending after the Effective Date), the
balance sheet of the Borrower as at the end of such
quarterly period and the related statements of operations,
cash flows and stockholders' equity for such quarterly
period and for the elapsed portion of the fiscal year ended
with the last day of such quarterly period, in each case
setting forth comparative figures for the related periods in
the prior fiscal year, all of which shall be certified on
behalf of the Borrower by the Chief Financial Officer,
Treasurer or Vice President and Controller of the Borrower
(subject to appropriate year-end audit adjustments in the
case of statements relating to the first three quarters of
any fiscal year) and, in the case of statements relating to
NY1-53665.4 -75-
the last quarter of the fiscal year and for such fiscal
year, certified by KPMG Peat Marwick or another independent
certified public accounting firm of recognized national
standing selected by the Borrower and reasonably acceptable
to the Required Lenders without qualification as to the
scope of the audit or as to generally accepted accounting
principles or practices.
(c) Officer's Certificates. At the time of the
----------------------
delivery of the financial statements provided for in
Section 7.01(b), a certificate of the Chief Financial
Officer, Treasurer or Vice President and Controller of the
Borrower, stating that he has reviewed the terms of this
Agreement and the Credit Documents and has made or caused to
be made under this provision a review in reasonable detail
of the transactions and condition of the Borrower during the
period covered thereby and is authorized to act on behalf of
the Borrower, to the effect that to the best of his
knowledge, no Default or Event of Default has occurred and
is continuing, or if such Chief Financial Officer, Treasurer
or Vice President and Controller is unable to make the
certifications required herein, he shall supply a statement
setting forth the reasons for such inability, specifying the
nature and extent of such reasons. Such certificate shall
also set forth the calculations required to establish
whether the Borrower was in compliance with each of the
provisions of Section 7.08 and Section 8, at the end of such
fiscal quarter or year, as the case may be.
(d) Notice of Default or Litigation. Promptly,
-------------------------------
and in any event within three Business Days after the
Borrower obtains knowledge thereof, notice of (i) the occur-
rence of any Default or Event of Default or (ii) any
litigation or governmental proceeding not filed in the Case
commenced (x) against the Borrower which could materially
and adversely affect the business, operations, property or
other assets or condition (financial or otherwise) of the
Borrower or its ability to perform its obligations hereunder
or under the other Credit Documents or the Collateral or the
rights or remedies of the Collateral Agent in respect
thereof or (y) with respect to any Credit Document.
(e) Other Reports and Filings. Promptly, copies
-------------------------
of (i) all financial information, proxy materials and other
information and reports concerning material developments in
the business, operations, property or other assets or
condition (financial or otherwise) of the Borrower, which
the Borrower (x) has filed with the Securities and Exchange
Commission or any governmental agencies substituted therefor
(the "SEC") or any comparable agency outside of the United
---
States, including periodic filings required as of the
NY1-53665.4 -76-
Effective Date by such agency, (y) has filed with the FAA or
the DOT, or, in each case, any comparable agency outside of
the United States or (z) has delivered to the Board of
Directors, any member of an Official Committee (exclusive of
materials delivered to members of an Official Committee in
their individual non-representative capacity) or holders of,
or to any agent or trustee with respect to, Indebtedness of
the Borrower in its capacity as such a holder, agent or
trustee (unless such information or materials have
theretofore been delivered to the Lenders pursuant to this
Section 7.01), and (ii) all financial and management reports
regarding the Borrower in connection with any audit by its
independent accountants, including, without limitation, any
report making accounting control recommendations or noting
deficiencies.
(f) Pleadings, etc. Promptly after the same is
---------------
available, (i) copies of all material pleadings, motions,
applications, judicial information, financial information
and other documents not generally noticed to all parties-
in-interest on the official service list in the Case (x)
filed by or on behalf of the Borrower with the Bankruptcy
Court in the Case or (y) distributed by or on behalf of the
Borrower to any Official Committee, except information which
is publicly available and information which the Borrower
reasonably believes is in the possession of, or generally
available to, the Lenders and (ii) copies of all pleadings,
motions and applications filed by third parties (it being
understood that any of the foregoing relating to ordinary
course of business matters and customary for bankruptcy
proceedings shall not be deemed material for this clause
(f)).
(g) Slot Use; Notice of Slot Use Prohibition.
----------------------------------------
(i) In the event that the Borrower shall have determined not
to use any Operating Route or Slot held by it in accordance
with Title 14 or any applicable law or regulation, the
Borrower shall give written notice to the Lenders no later
than three days following the date of such determination,
which notice shall identify such Slot or Operating Route,
and the extent of use of such Slot or Operating Route in the
twelve months preceding such notice, and (ii) in the event
of the proposal or imposition of any law, rule or regulation
with respect to Routes or Slots, which law, rule or regula-
tion could have the effect of (x) prohibiting or restricting
in any respect the ability of the Borrower to acquire, hold,
sell or otherwise transfer the right to hold or use the
Operating Routes or Slots, or (y) in any other respect,
adversely affecting the interests of the Lenders, the
Borrower will, in each case, within three days of such
event, give written notice of such proposal or imposition.
NY1-53665.4 -77-
(h) Collateral Schedules. On or before the 20th
--------------------
day of each month, a certificate executed by the Chief
Financial Officer, Treasurer or Vice President and Control-
ler of the Borrower of the existing Collateral, the value
thereof (showing, among other things, by type and category
of Collateral in detail reasonably acceptable to the
Required Lenders, compliance with Section 7.08 and Section
4.02(i)) and all locations thereof, plus any additional
filing, registration, or other action necessary or advisable
to fully perfect the Collateral Agent's security interest
therein under applicable law (other than under the
Bankruptcy Code by reason of the Orders) in substantially
the form of Exhibit M hereto.
(i) ERISA. Promptly (and in no event later than
-----
10 days) after becoming aware of the occurrence of any (i)
Termination Event, or (ii) "prohibited transaction," as such
term is defined in Section 4975 of the Code, in connection
with any Pension Plan of the Borrower or any trust created
thereunder, a written notice from an officer of the Borrower
specifying the nature thereof, what action the Borrower
proposes to take with respect thereto, and, when known, any
action taken or threatened by the Internal Revenue Service
or the PBGC with respect thereto; and with reasonable
promptness copies of (iii) all notices received by the
Borrower or any member of the Controlled Group of the PBGC's
intent to terminate any Pension Plan or to have a trustee
appointed to administer any Pension Plan; (iv) each Form
5500 annual report, including Schedule B thereto (Actuarial
Information) filed by the Borrower or any member of the
Controlled Group with the Internal Revenue Service with
respect to each Pension Plan; and (v) all notices received
by the Borrower or any member of the Controlled Group from a
Multiemployer Plan sponsor concerning the imposition or
amount of withdrawal liability pursuant to Section 4202 of
ERISA.
(j) Compliance Reports. In March of 1994,
------------------
(x) reports of the type described in Section 5.01(e)(ii) in
each jurisdiction in which the UCC-1 financing statements
referred to in Section 5.01(e)(i) were filed and in which
any other UCC-1 financing statements were subsequently filed
(which shall show UCC-1 financing statements covering all
applicable Collateral duly filed and none of which shall
disclose evidence of any Liens other than Permitted First
Liens), and (y) an opinion of FAA counsel referred to in
Section 5.01(c)(i) (or other FAA counsel reasonably
acceptable to the Required Lenders) showing the filing,
perfection and priority of all Collateral covered by the
Aircraft/Engine Mortgage and the absence of any Liens other
NY1-53665.4 -78-
than Permitted First Liens, such opinion to be in form and
substance reasonably acceptable to the Required Lenders.
(k) Other Information. From time to time, such
-----------------
other information or documents (financial or otherwise),
including, without limitation, board papers and minutes, and
further including, without limitation, revised cash flow
statements and revised profit and loss statements, in each
case, supporting or relating to transactions with respect to
which the Borrower seeks or is required to obtain the
consent, concurrence, approval and/or waiver of the Required
Lenders, as the Administrative Agent or any Lender may
request in its sole and absolute discretion.
(l) Board and Committee Meetings. Upon the
----------------------------
request of any Lender (other than Kawasaki), such Lender may
(but shall be under no obligation to) attend (on a non-
participating basis) meetings of the Borrower's Executive
Committee (as such Executive Committee is constituted on the
Second Amendment Effective Date) or portions of meetings of
the Borrower's Board of Directors or committees thereof at
which matters relating to the Operating Plan and its
implementation, monitoring and oversight are discussed.
(m) Monthly Projections. Within ten days after
-------------------
the end of each month, internal projections for the three-
month period following the end of such month, which
projections shall (i) be based upon the Borrower's most
recent internal performance information, (ii) set forth
profit and loss projections on no less than a monthly basis
and cash flow projections on a daily basis, and (iii)
otherwise be in a form acceptable to the Required Lenders.
(n) Excess of "net available cash" Over
-----------------------------------
$125,000,000. If on any date the amount of "net available
------------
cash" (as such term is defined in Section 8.15(d)) exceeds
$125,000,000, then, within two Business Days of such date,
the Borrower shall give written notice of such excess to the
Lenders.
(o) Increase in Investment Account Minimum
--------------------------------------
pursuant to Section 4.02(i). On or before the 20th day of
---------------------------
each month, a certificate executed by the Chief Financial
Officer, Treasurer or Vice President and Controller of the
Borrower and furnished to the Lenders, the Collateral Agent
and the Administrative Agent, setting forth (i) the amount
by which the Investment Account Minimum is required to be
increased pursuant to Section 4.02(i) by reason of a
deficiency in the value of rotables as of the last day of
such month, and (ii) the amount to which the Investment
Account Minimum is increased by reason of such deficiency.
NY1-53665.4 -79-
7.02 Books, Records and Inspections. The
------------------------------
Borrower will keep proper books of record and account in
which full, true and correct entries in conformity with
generally accepted accounting principles and all require-
ments of applicable law shall be made of all dealings and
transactions in relation to its business and activities.
The Borrower will permit officers and designated repre-
sentatives of the Administrative Agent, the Collateral Agent
or any Lender to visit and inspect any of the properties of
the Borrower to the extent permitted by law, and to examine
the books of account of the Borrower and discuss the
affairs, finances and accounts of the Borrower with, and be
advised as to the same by, its and their officers, all at
such reasonable times and intervals and to such reasonable
extent as the Administrative Agent, the Collateral Agent or
any Lender may request.
7.03 Maintenance of Property; Insurance. The
----------------------------------
Borrower shall maintain or cause to be maintained in good
repair, working order and condition, excepting ordinary wear
and tear and damage due to casualty, all of its aircraft,
aircraft engines, ground equipment, simulators, terminals,
offices and all other properties material to its operations
and will make or cause to be made all appropriate repairs,
renewals and replacements thereof, consistent with past
practice as in effect prior to the Filing Date. The
Borrower shall maintain or cause to be maintained, with
financially sound and reputable insurers the liability and
property insurance policies and programs listed on Schedule
12 hereto or substantially similar programs or policies and
amounts or other programs, policies and amounts reasonably
acceptable to the Administrative Agent and the Required
Lenders. On or before the expiration or renewal date
thereof, the Borrower shall deliver or cause to be delivered
to the Lenders insurance certificates and opinions
evidencing compliance with the requirements hereof and of
each Credit Document for each such policy or program then in
effect: (i) the amount of such policy, (ii) the risks
insured against by such policy, (iii) the name of the
insurer, each insured party under such policy and the loss
payees under any property damage insurance and (iv) the
policy number of such policy. All such policies shall
contain an endorsement providing for naming of the
Administrative Agent, the Collateral Agent and the other
Secured Creditors as additional insureds, for payment to the
Collateral Agent on behalf of the Lenders in the case of
hull and other property damage insurance of all money due or
to become due thereunder except to the extent the holder of
a Permitted First Lien is the loss payee for such proceeds,
prior notice to the Administrative Agent of cancellation or
material changes in the terms of the insurance and such
NY1-53665.4 -80-
other terms as the Administrative Agent may reasonably
request. The provisions of this Section 7.03 shall be
deemed to be in addition to, but not in limitation of, the
provisions of any of the Security Documents that require the
maintenance of insurance.
7.04 Corporate Franchises. The Borrower will do
--------------------
or cause to be done all things necessary to preserve and
keep in full force and effect its existence and its rights
(including, franchises, licenses and patents), except in all
cases with respect to such rights, other than with respect
to Slots and Routes, where (x) the failure to do so is not
reasonably likely to have a material adverse effect on the
business, operations, property, assets or condition
(financial or otherwise) of the Borrower or (y) the failure
to do so is excused by virtue of the status of the Borrower
as a debtor-in-possession in the Case or any order issued in
the Case; provided, however, that in all cases the Borrower
-------- -------
shall preserve and keep in full force and effect all rights
which are applicable to the Collateral or the loss of which
could have a material adverse effect on the Collateral,
including, without limitation, on the value or transfer-
ability thereof.
7.05 Compliance with Statutes, etc. The Borrower
------------------------------
will comply with all applicable laws, statutes, regulations
and orders of, and all applicable restrictions imposed by,
all Governmental Authorities, domestic or foreign, in
respect of the conduct of its business and the ownership of
its property (including applicable statutes, regulations,
orders and restrictions relating to environmental standards
and controls), except such noncompliances as (x) are not
reasonably likely to (A) result in a forfeiture or
cancellation of the right of the Borrower to use the Slots
held or used by it or (B) in the aggregate, have a material
adverse effect on the business, operations, property or
other assets or condition (financial or otherwise) of the
Borrower or (y) are excused by virtue of the status of the
Borrower as the debtor-in-possession in the Case or any
order issued in the Case; provided, however, that in all
-------- -------
cases the Borrower shall comply with all laws, statutes,
regulations, orders and restrictions which are applicable to
the Collateral or if noncompliance therewith could have a
material adverse affect on the Collateral, including,
without limitation, on the value or transferability thereof.
7.06 End of Fiscal Years; Fiscal Quarters. After
------------------------------------
the Third Amendment Effective Date, the Borrower shall not
change the date on which any of its fiscal quarters or its
fiscal year shall end.
NY1-53665.4 -81-
7.07 Performance of Obligations. The Borrower
--------------------------
will perform all of its obligations arising after the Filing
Date, and not stayed as a result of the Case, under the
terms of each agreement by which it is bound, except such
non-performances as are not reasonably likely to, in the
aggregate, have a material adverse effect on the business,
operations, property, assets or condition (financial or
otherwise) of the Borrower or which are described in the
Operating Plan as agreements that will not be assumed or
otherwise performed.
7.08 Minimum Designated Collateral Balances.
--------------------------------------
Without limiting any other provision of this Agreement or
the other Credit Documents, the Borrower shall maintain at
all times Collateral of the following types and with the
following values as of the last day of each calendar month:
(a) Rotables Minimum Value
-------- -------------
B747-200 Rotables - $11 million
B757-200 Rotables - $23 million
B737-300 Rotables - $17 million
B737-200 Rotables - $21 million
Total Rotables - $72 million; less
for each category of rotables the amounts by
which the Investment Account Minimum is
increased as the result of a deficiency in
the required value of rotables in such
category; and provided, however, that the
-------- -------
amount (if any) by which the aggregate value
of B757-200 and B737-300 rotables exceeds the
aggregate minimum value specified above for
B757-200 and B737-300 rotables may be added,
without duplication, to (i) the value of
B737-200 rotables for the purpose of
determining compliance with the required
minimum value of B737-200 rotables and/or
(ii) the value of B747-200 rotables for the
purpose of determining compliance with the
required minimum value of B747-200 rotables;
and provided further, however, that if
-------- ------- -------
rotables of any category are the subject of
an Asset Sale (to which the Required Lenders
shall have consented in their sole and
absolute discretion), then the aggregate
minimum value specified above for the
rotables of such category and for total
rotables shall be reduced by the greater of
the net book value of the rotables that are
NY1-53665.4 -82-
the subject of such Asset Sale (calculated as
provided in the succeeding paragraph of this
Section 7.08(a)) and the gross proceeds of
such Asset Sale.
The value of rotables shall be deemed to be the
net book value of the rotables after giving effect to
depreciation thereof in accordance with the Borrower's
accounting principles and practices in effect as of the date
hereof (which principles and practices the Borrower repre-
sents and warrants were in effect for the Borrower's most
recent full fiscal year and agrees shall not be changed);
provided, however, that overhaul, refurbishment and other
-------- -------
such costs may be capitalized and included in the net book
value of the applicable rotables only to the extent such
costs would be included in accordance with such accounting
principles and practices and shall in any event be included
only with respect to rotables for auxiliary power units,
constant speed drives and landing gear and, provided
--------
further, however, that in all cases, as of the last day of
------- -------
each month, not less than 65% of the total value of all
rotables shall be in serviceable condition with FAA tags and
in the possession of the Borrower and no more than 35% of
the total value of all rotables shall be in the possession
of overhaul agencies, vendors or any Person other than the
Borrower.
(b) Certain
Equipment Minimum Value
--------- -------------
Ground support, $30 million, less
----
maintenance, depreciation charges
passenger service, properly taken with
food service, respect thereto on and
telecommunication, after August 1, 1991
surface transpor- and less the principal
----
tation, office, amount of any Loans
computer and repaid pursuant to
storage Section 4.02(i) as the
result of a deficiency in
the required value of
such equipment.
The value of such equipment shall be deemed to be
the net book value thereof after deducting depreciation
thereof in accordance with the Borrower's accounting
principles and practices in effect as of the date hereof
(which principles and practices the Borrower represents and
warrants were in effect for the Borrower's most recent
fiscal year and agrees shall not be changed).
NY1-53665.4 -83-
(c) Receivables Minimum Value
----------- -------------
Non Offsettable $20 million
Eligible
Receivables
Total Eligible $65 million
Receivables less the principal
----
(Offsettable amount of any Loans
and Non- repaid pursuant to
Offsettable Section 4.02(i) as a
Receivables) result of a deficiency
in the required value of
total receivables;
provided, however, that the amount of cash or Cash Equiva-
-------- -------
lents on deposit in or to the credit of the Investment
Account which is in excess of the Investment Account Minimum
may be added to the value of Total Eligible Receivables (but
not Non-Offsettable Eligible Receivables) for the purpose of
determining compliance with the required minimum value of
total receivables (but not Non-Offsettable Receivables).
The value of Eligible Receivables shall be deemed
to be the net book value thereof after deducting an
allowance for bad debts in accordance with the Borrower's
accounting principles and practices in effect as of the date
hereof (which principles and practices the Borrower
represents and warrants were in effect for the Borrower's
most recent fiscal year and agrees shall not be changed).
The categorization of Non-Offsettable Receivables
and Offsettable Receivables shall be made based on the
Borrower's accounting principles and practices in effect as
of the date hereof (which principles and practices the
Borrower represents and warrants were in effect for the
Borrower's most recent fiscal year and agrees shall not be
changed), but in no event shall Non-Offsettable Receivables
include Receivables for goods which have not been shipped or
delivered or for services which have not been performed,
Airline Clearing House Universal Air Travel Card
Receivables, travel agency area settlement plan Receivables,
travel agency non area settlement plan Receivables, or
credit card Receivables; provided, however, that to the
-------- -------
extent the Borrower demonstrates the sufficiency thereof
through analyses and supportive documentation acceptable to
the Required Lenders, the Required Lenders may in their sole
and absolute discretion, agree to allow the Borrower to
characterize a portion of such Receivables as Non-
Offsettable Receivables.
NY1-53665.4 -84-
7.09 Hazardous Materials. The Borrower will
-------------------
handle, store, utilize, dispose of, transport, discharge or
emit any Hazardous Materials only in accordance with
applicable laws or other requirements of any Governmental
Authority. The Borrower will promptly take any and all
necessary remedial action required by any Governmental
Authority or by any Hazardous Material Law or prudent under
the circumstances in response to the presence, storage, use,
disposal, transportation or discharge of any Hazardous
Materials on, under or about any of its assets which would
affect the Collateral or could result in any liability or
obligation to the Administrative Agent or any Lender with
respect thereto or would have a material adverse effect upon
the business, operations, property or other assets or
condition (financial or otherwise) of the Borrower. In the
event the Borrower undertakes any remedial action with
respect to any Hazardous Material on, under or about any of
its assets, the Borrower shall conduct and complete such
remedial action in compliance with all applicable federal,
state and local laws, regulations, rules, ordinances and
policies, and in accordance with the orders and directives
of all Governmental Authorities except in each case where
such presence, storage, use, disposal, transportation or
discharge of any Hazardous Materials is being contested in
good faith. The Borrower shall promptly notify the
Administrative Agent of any such remedial action and provide
to the Administrative Agent such information or reports
relating thereto as it may request.
7.10 Cash Management.
---------------
(a) The Borrower shall comply with all terms and
conditions of the Initial Cash Management Agreement and any
other cash management arrangements entered into pursuant to
Section 5.01(p). In addition, the Borrower shall institute
and comply with such other account and cash management
arrangements as the Required Lenders may request in their
sole and absolute discretion, including, without limitation,
changes in the banks at which the accounts are held, the
existing lock box system, the collection of receivables and
the concentration of cash. In furtherance of the foregoing,
the Borrower shall execute and deliver such additional lock
box and concentration account cash management agreements as
are contemplated by the Initial Cash Management Agreement or
as the Required Lenders may request in their sole and
absolute discretion. The Borrower shall not enter into a
new or revised merchant bank arrangement with respect to the
VISA/Master Card credit card program (a "Successor Merchant
------------------
Bank Arrangement") unless (i) the Borrower shall have given
----------------
to all of the Lenders at least 20 days' prior written notice
of such Successor Merchant Bank Arrangement, (ii) all
NY1-53665.4 -85-
documents evidencing and/or relating to such Successor
Merchant Bank Arrangement shall be satisfactory in form and
substance to the Required Lenders in their sole and absolute
discretion, and (iii) prior to or simultaneously with the
entry by the Borrower into such Successor Merchant Bank
Arrangement, (a) the Borrower shall have delivered, and/or
caused to be delivered, all such amendments, supplements
and/or replacements of the Initial Cash Management Agreement
and all documents relating thereto as the Required Lenders
shall have requested, each in form and substance
satisfactory to the Required Lenders in their sole and
absolute discretion, and (b) to the extent deemed necessary
or appropriate by the Required Lenders in their sole and
absolute discretion, there shall have been entered an
amendment, in form and substance satisfactory to the
Required Lenders in their sole and absolute discretion, to
the Second Additional Loan Order and/or the Loan Extension
Order which reflects and accommodates, on a basis no less
favorable to the Lenders than that contained in the Second
Additional Loan Order and/or the Loan Extension Order in
respect of the predecessor merchant bank arrangement, any
Liens on cash collateral granted pursuant to the aforesaid
documents relating to such Successor Merchant Bank
Arrangement and the release of any Liens on cash collateral
that secure the predecessor merchant bank arrangement.
(b) The Borrower shall cause (i) to be deposited
in the Concentration Account all unrestricted cash funds of
the Borrower, (ii) to be transferred from the Concentration
Account and deposited in the Investment Account from time to
time any surplus of the moneys on deposit in the
Concentration Account over an amount equal to $5 million
(plus such other amounts as may be included in the
"Concentration Account Maximum" as such term is defined in
the Initial Cash Management Agreement), and (iii) to be
deposited in the Investment Account from time to time all
proceeds of the investment of moneys on deposit in the
Investment Account in Cash Equivalents; provided, however,
-------- -------
that the Borrower may cause to be withdrawn from the
Investment Account and deposited in the Concentration
Account from time to time amounts that are required to meet
the operating cash flow requirements of the Borrower after
application of amounts on deposit in the Concentration
Account and available for such purpose, so long as no
Default or Event of Default shall have occurred and be
continuing on the date of each such withdrawal and so long
as after giving effect to each such withdrawal the amount on
deposit in the Investment Account shall be at least equal to
the Investment Account Minimum for such day. Amounts
deposited in the Concentration Account pursuant to this
NY1-53665.4 -86-
Section 7.10(b) shall be used by the Borrower to meet the
cash flow requirements of the Borrower.
(c) Notwithstanding the provisions of Section
7.10(b), the "Section 7.10(c) Amount" (required as a
----------------------
condition to the use of amounts on deposit in the Investment
Account in accordance with the provisos to the remedies of
the Lenders contained in Section 9) shall, as of any day, be
an amount at least equal to the Investment Account Minimum
for such day.
(d) Notwithstanding the provisions of Section
7.10(b), if at any time following the occurrence and
continuance of an Event of Default, there shall be on
deposit in the Investment Account an amount (referred to as
the "Event of Default Collateralization Amount") equal to
-----------------------------------------
the sum of (i) the outstanding principal amount of the
Loans, (ii) interest accrued and to accrue on the Loans to
the next Interest Payment Date for the Loans, and (iii) all
other amounts due and to become due under this Agreement to
the next Interest Payment Date for the Loans (as the Event
of Default Collateralization Amount is confirmed by the
Required Lenders to the Borrower, the Collateral Agent and
the Local Bank), then the Borrower may, without the
necessity to obtain the consent of the Required Lenders,
(A) cause to be withdrawn from the Investment Account and
deposited in the Concentration Account from time to time
amounts that are in excess of the Event of Default
Collateralization Amount and are required to meet the
operating cash flow requirements of the Borrower after
application of amounts on deposit in the Concentration
Account and available for such purpose, and (B) cause to be
withdrawn from the Concentration Account and used for such
purpose amounts that are from time to time on deposit in the
Concentration Account; and provided further, however, that
-------- ------- -------
the Borrower shall cause amounts to be withdrawn from the
Concentration Account and used for such purpose prior to
causing amounts on deposit in the Investment Account to be
withdrawn and used for such purpose.
(e) At any time the amount on deposit in the
Investment Account shall be less than the Investment Account
Minimum, the Borrower shall (i) cause the Local Bank and/or
the Collateral Agent to notify the Lenders of the amount on
deposit in the Investment Account and the Concentration
Account as of the close of business on each day, and (ii)
furnish to the Lenders on each day a certificate of the
Chief Financial Officer, Treasurer or Vice President and
Controller of the Borrower, in the form of Exhibit O,
containing (x) a projection of the Borrower's cash inflow
and cash outflow for the next succeeding day, (y) the amount
NY1-53665.4 -87-
of moneys withdrawn from the Concentration Account and the
Investment Account on such day to meet the operating cash
flow requirements of the Borrower, and (z) such other
information as is set forth in and required by Exhibit O.
(f) The covenants of the Borrower contained in
Sections 7.10(b), (c), (d) and (e) shall not limit, alter or
modify in any respect any provision of any cash management
arrangement described or referred to in Section 7.10(a).
7.11 Further Assurances.
------------------
(a) Whenever and so often as reasonably requested
by the Administrative Agent, the Collateral Agent or the
Required Lenders, the Borrower will promptly execute and
deliver or cause to be executed and delivered, at its own
expense, all such other and further instruments, documents
or assurances, and promptly do or cause to be done all such
other and further things as may be necessary and reasonably
required, in order to further and more fully vest in the
Collateral Agent all rights, interests, powers, benefits,
privileges and advantages conferred or intended to be
conferred by this Agreement, the other Credit Documents and
the Orders.
(b) The Borrower agrees that any time and from
time to time, at the expense of the Borrower, it will
promptly execute and deliver all further instruments and
documents, including, without limitation, aircraft, aircraft
engines, aircraft parts mortgages and gates assignments and
take all further action that may be necessary or desirable,
or that the Administrative Agent, the Collateral Agent or
the Required Lenders may request, to perfect and protect any
Lien granted or purported to be granted hereby, by the other
Credit Documents or the Orders, and including in any event
the execution and delivery of an amendment or supplement
(including detailed property descriptions) to the Mortgage
in respect of Real Property acquired after the Effective
Date, or to enable the Collateral Agent to exercise and
enforce its rights and remedies with respect to any
Collateral. Without limiting the generality of the
foregoing, the Borrower will record the Mortgages if not
already recorded and provide promptly upon the request of
the Required Lenders A.L.T.A. title insurance in an amount
not less than the value of such Real Property as set forth
in Schedule 8 hereto with respect to the Lien of the
Collateral Agent on all or any Real Property, A.L.T.A.
surveys, and a "phase I" environmental report on Hazardous
Materials with respect to Real Property, in each case in
form and substance reasonably acceptable to the Required
Lenders. Also, without limiting the generality of the fore-
NY1-53665.4 -88-
going, the Borrower will execute and file such financing or
continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or
desirable, or that the Administrative Agent, the Collateral
Agent or the Required Lenders may request, to protect and
preserve the Liens granted or purported to be granted hereby
and by the other Credit Documents and the Orders.
Furthermore, without limiting the generality of the
foregoing, the Borrower will execute and record Amendment
No. 2 to Parts Mortgage in substantially the form of Exhibit
YY and cause to be furnished to the Lenders an opinion of
FAA Counsel, in reasonably acceptable form, with respect
thereto.
(c) The Borrower hereby authorizes the Collateral
Agent to file one or more financing or continuation state-
ments or other applicable documents, and amendments thereto,
relative to all or any part of the Collateral without the
signature of the Borrower, where permitted by law. A
carbon, photographic or other reproduction of the applicable
Security Document or any financing statement covering the
Collateral or any part thereof shall be sufficient as a
financing statement or other applicable document where
permitted by law. The Collateral Agent will promptly send
to the Borrower any such documents which it files without
the signature of the Borrower and the Collateral Agent will
promptly send the filing or recordation information with
respect thereto.
(d) In the event that the Collateral Agent shall
exercise any of its rights and remedies pursuant to the
Orders or any Security Document with respect to a sale of
any portion of the Collateral, the Borrower shall cooperate
in good faith with the Collateral Agent in effecting such
sale and execute such agreements, documents and instruments
as requested by the Collateral Agent in connection
therewith.
(e) Upon the request of the Collateral Agent, the
Borrower shall deliver certificates, chattel paper or
instruments representing any Collateral covered by any
Security Document and/or take such other action under any
Security Document as the Collateral Agent may request in
order to protect the security interests purported to be
granted thereby.
(f) Upon the request of the Required Lenders, the
Borrower shall cause to be prepared and delivered to the
Lenders an audit and valuation, prepared by a firm of
independent consultants acceptable to the Required Lenders,
with respect to the Borrower's rotables and/or receivables.
NY1-53665.4 -89-
SECTION 8. NEGATIVE COVENANTS.
------------------
The Borrower agrees that, unless the Required
Lenders otherwise consent in their sole and absolute
discretion, subject to the provisions of Section 10.21 of
this Agreement, on and after the Third Amendment Effective
Date and until the Loans, and the Notes, together with all
interest, fees and other Obligations payable hereunder or
under the other Credit Documents, are paid in full:
8.01 Liens. The Borrower will not create, incur,
-----
assume or suffer to exist any Lien upon or with respect to
any property or other assets (real or personal, tangible or
intangible) of the Borrower whether now owned or hereafter
acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to
repurchase such property or assets (including sales of
accounts receivable with or without recourse to the Bor-
rower), or assign any right to receive income or permit the
filing of any financing statement under the UCC or any other
similar notice of Lien under any recording or notice statute
(except in connection with the Liens permitted below), or
apply to the Bankruptcy Court for the authority to do any of
the foregoing; provided that the creation, incurrence,
--------
assumption or existence of the following shall be permitted
(and the Borrower may apply to the Bankruptcy Court for
approval of):
(i) valid and enforceable Liens in existence
on the Filing Date to the extent described in Schedule
14 hereto and to the extent of the principal of the
Indebtedness secured thereby on the Filing Date, toget-
her with interest, fees, expenses and other charges
then and thereafter payable in respect of such
Indebtedness in accordance with the terms of such
Indebtedness as in effect on the Filing Date, and after
giving effect to any cross-collateralization of such
Indebtedness in accordance with the terms of such
Indebtedness as in effect on the Filing Date,
(including, without limitation, Liens securing
Indebtedness consisting of the payment deferrals
referred to in Section 5.02(f), but excluding in any
event a Lien on any Collateral or any other Lien in
favor of First Interstate Bank of Arizona, N.A., except
Liens on Collateral as set forth on Schedule 14
attached hereto and a Lien on cash constituting part of
the "Reserve" or the "Original Reserve" in accordance
with the Merchant Agreement Supplement), without giving
effect to any extensions or replacements of such Liens,
only to the extent encumbering the assets described in
such Schedule 14 on the Filing Date and proceeds and
NY1-53665.4 -90-
replacement assets of a similar type (A) if a Lien
thereon was expressly provided in the security
agreement providing for the Lien referred to in
Schedule 14 and only to the extent of the principal of
the Indebtedness secured thereby on the Filing Date,
together with interest, fees, expenses and other
charges then and thereafter payable in respect of such
Indebtedness in accordance with the terms of such
Indebtedness as in effect on the Filing Date, and after
giving effect to any cross-collateralization of such
Indebtedness in accordance with the terms of such
Indebtedness as in effect on the Filing Date, or (B) if
such Lien is approved after the Filing Date by an order
of the Bankruptcy Court as a first or prior Lien;
(ii) Liens securing the Obligations;
(iii) Liens arising under capitalized leases
to the extent permitted by Section 8.05(iii);
(iv) Customary Permitted Liens;
(v) Liens securing purchase money
Indebtedness permitted under Sections 8.05(vii) and
8.07 incurred after the Filing Date to acquire the
property subject to such Lien so long as such Lien
attaches only to the property so acquired and the
amount of the Indebtedness incurred in connection
therewith and secured by such Lien does not exceed 95%
of the acquisition price of the property subject to
such Lien;
(vi) Liens on the Collateral securing the
Indebtedness permitted by Section 8.05(vi), provided
--------
that such Liens are pari passu with, but not senior to,
---- -----
the Liens of the Security Documents, and provided
--------
further that all documentation relating to such Liens
-------
and Indebtedness is reasonably satisfactory to all of
the Lenders;
(vii) Liens securing the Indebtedness under
the Spares Credit Agreement, dated as of September 28,
1990, between the Borrower and IAE International Aero
Engines AG, as amended and supplemented, and the Credit
Agreement, dated as of September 28, 1990, between the
Borrower and IAE International Aero Engines AG, as
amended and supplemented, on assets of the Borrower not
subject to the Liens of such Spares Credit Agreement
and such Credit Agreement on the Filing Date but
thereafter subjected to such Liens pursuant to Section
4.03 of such Spares Credit Agreement and Section 3.03
NY1-53665.4 -91-
of such Credit Agreement, which Liens are subject and
subordinate to the Liens securing the Obligations and
all extensions, modifications, renewals and replace-
ments thereof, provided that, in each case, (i) the
--------
respective documentation with respect to such Liens
shall expressly provide that the holder or holders of
such Liens shall not, and shall have no right to,
exercise any right to foreclose or otherwise realize on
the assets subject thereto, or exercise any remedies
thereunder, prior to the occurrence of the Lien
Termination Date hereunder, and (ii) the respective
documentation with respect to such Liens shall express-
ly provide that such Liens shall terminate upon any
release or termination (including any such releases or
terminations pursuant to Section 8.02 hereof or as a
result of any sale or other disposition of the
Collateral as a result of the enforcement of the
remedies contained herein and in the Security
Documents) of the Liens created pursuant to the
Security Documents (other than such releases occurring
solely as a result of the occurrence of the Lien
Termination Date hereunder), with the rights of the
holders of such Liens in the event of any realization
or foreclosure of the respective Collateral being only
to receive any excess proceeds remaining from such
realization or disposition after the repayment in full
of all Obligations and the occurrence of the Lien
Termination Date hereunder;
(viii) Liens constituting security deposits,
maintenance reserves and similar arrangements (a) in
effect prior to the Filing Date, (b) approved by order
of the Bankruptcy Court prior to the Effective Date, or
(c) approved in writing by the Required Lenders; and
Liens on cash or investments constituting proceeds of
drawings under letters of credit issued for the account
of the Borrower prior to the Filing Date and held as,
or in lieu of, security deposits, maintenance reserves
or similar arrangements; and
(ix) Liens on cash collateral securing the
obligations of the Borrower in connection with any
Successor Merchant Bank Arrangement, provided that such
--------
Liens are in replacement or substitution or otherwise
in lieu of Liens on cash collateral securing the
obligations of the Borrower in connection with a
predecessor merchant bank arrangement, and provided
--------
further that all documents relating to such Liens are
-------
satisfactory to the Required Lenders, and provided
--------
further that all conditions precedent to such Successor
-------
Merchant Bank Arrangement set forth in Section 7.10(a)
NY1-53665.4 -92-
have been satisfied; and with respect to the Successor
Merchant Bank Arrangement to which Electronic Data
Systems Corporation is a party, the liens on Real
Property (securing the obligations of the Borrower in
connection therewith) to which the Required Lenders
consented pursuant to letter agreement, dated April 14,
1993, with the Borrower.
8.02 Consolidation, Merger, Sale of Assets, etc.
-------------------------------------------
The Borrower will not wind up, liquidate or dissolve its
affairs or enter into any transaction of merger or consoli-
dation, or convey, sell, lease or otherwise dispose of (or
agree to do any of the foregoing at any future time) all or
any part of its property or other assets, or enter into any
partnerships, joint ventures or sale-leaseback transactions,
or purchase or otherwise acquire (in one or a series of
related transactions) any part of the property or other
assets (other than purchases or other acquisitions of
inventory, materials, equipment and other property in the
ordinary course of business) of any Person, or apply to the
Bankruptcy Court to do any of the foregoing, except that the
foregoing shall not preclude (and the Borrower may apply to
the Bankruptcy Court for approval of):
(i) subject to maintaining the required
levels of certain types of Collateral described in
Section 7.08, sales and leases by the Borrower of
inventory, materials, equipment and other property
(exclusive in any case of aircraft, engines, Real
Property, Slots and receivables), in the ordinary
course of business not required to be approved by the
Bankruptcy Court under Section 363 of the Bankruptcy
Code;
(ii) Capital Expenditures to the extent not
in violation of Section 8.07;
(iii) Asset Sales (exclusive of Designated
Collateral except to the extent permitted by clause (i)
above) by the Borrower for cash at fair market value
(as approved by the Board of Directors of the Borrower)
pursuant to the Operating Plan, so long as (x) prior to
any such Asset Sale, the Borrower shall have received
written consent of the Required Lenders with respect
thereto, which consent may be withheld or granted in
their sole and absolute discretion, provided that the
--------
written consent of the Required Lenders shall not be
required with respect to any such Asset Sale or Asset
Sales if (I) the net book value of each item of the
property subject to such Asset Sale or Asset Sales is
less than $50,000, (II) the proceeds of the sale or
NY1-53665.4 -93-
other disposition of each such item is at least equal
to 40% of the net book value of such item, and (III)
the Net Proceeds of all such Asset Sales effected in
any one month without the prior written consent of the
Required Lenders do not exceed $100,000, (y) after
giving effect to any such Asset Sale (including any
such Asset Sale effected without the written consent of
the Required Lenders), the requirements of Sections
4.02 and 7.08 are satisfied and no Default or Event of
Default shall have occurred and be continuing or would
result therefrom after giving effect thereto, and (z)
the proceeds received from the consummation of such
Asset Sale are applied as provided in Section 4.02;
(iv) terminations of leases by way of
rejection under the Bankruptcy Code and in accordance
with the Operating Plan and terminations of leases of
aircraft by reason of the exercise of call rights under
such leases in accordance with the terms of such call
rights as set forth on Schedule 19; or
(v) to the extent expressly indicated on
Schedule 19 with respect to particular aircraft,
transfers of such aircraft to the holders of the
Permitted First Liens on such aircraft or to the
lessors of such aircraft.
To the extent the Required Lenders waive the provisions of
this Section 8.02 with respect to the sale of any
Collateral, or any Collateral is sold as permitted by this
Section 8.02 and/or the definition of the term "Asset Sale"
contained in Section 1.01, the Collateral Agent shall (if
applicable, following any required prepayment of the Loans
as provided in Section 4.02) take such action, at the
Borrower's expense, as the Borrower may reasonably request
to release the Collateral Agent's lien on the Collateral
subject to the Asset Sale, but not the proceeds thereof, so
that it may be free and clear of the Liens created by the
applicable Security Document and the Orders. Nothing
contained in this Section 8.02 shall preclude the Borrower
from entering into agreements or transactions which
contemplate or provide for the payment in full of all
Obligations and the occurrence of the Lien Termination Date
so long as such repayment and occurrence are conditions
precedent to the consummation of such agreements or
transactions and such conditions precedent are fulfilled
(and not waived).
8.03 Distributions. The Borrower shall not
-------------
authorize, declare or pay any Distributions or apply to the
Bankruptcy Court for the authority to do so.
NY1-53665.4 -94-
8.04 Leases. The Borrower will not permit the
------
aggregate annual minimum or base rent payments (excluding
(i) any property taxes, insurance costs, maintenance charges
or other amounts paid as additional rent or lease payments
and (ii) payments arising from capitalized lease obliga-
tions), and net of income arising from subleases to third
parties entered into or existing in the ordinary course of
business to the extent permitted by the Operating Plan, by
the Borrower under agreements to rent or lease any real or
personal property to exceed 105% of the applicable amount
set forth in the Operating Plan for the applicable period
set forth therein, provided that in any event the Borrower
--------
will not, on or after the Third Amendment Effective Date,
enter into any agreement (including, without limitation, any
agreement in the nature of an extension or renewal) to rent
or lease any aircraft or engines (but excluding any leases
entered into in accordance with or pursuant to the Put
Agreement or the Kawasaki Put Agreement or any amendment or
modification to either thereof which is referred to in
Section 5.04) or any real property unless, in each case, the
Required Lenders shall have consented thereto in writing;
and provided further that in any event the Borrower will
-------- -------
not, on or after the Third Amendment Effective Date, enter
into any agreement (including, without limitation, any
agreement in the nature of an extension or renewal) to rent
or lease any personal property (not described in the
preceding proviso), whether pursuant to an operating lease,
a capitalized lease or otherwise, unless (i) the aggregate
amount of all payments required or provided to be made by
the Borrower during the term of such agreement does not
exceed $500,000, or (ii) the Required Lenders have consented
thereto in writing.
8.05 Indebtedness. The Borrower will not
------------
contract, create, incur, assume or suffer to exist any
Indebtedness, or apply to the Bankruptcy Court for the
authority to do so, except (and the Borrower may apply to
the Bankruptcy Court for approval of):
(i) Indebtedness of the Borrower incurred
pursuant to this Agreement and the other Credit
Documents;
(ii) Indebtedness of the Borrower incurred
prior to, and outstanding on, the Filing Date
(including Indebtedness arising from reimbursement
obligations for letter of credit drawings occurring
after the Filing Date on letters of credit outstanding
on the Filing Date) and listed on Schedule 15 hereto
("Existing Debt"), without giving effect to any
-------------
extensions, renewals or refinancings thereof;
NY1-53665.4 -95-
(iii) Indebtedness secured by Liens consisting
of (a) capitalized lease obligations outstanding on the
Filing Date and (b) capitalized lease obligations
permitted under Section 8.07 up to an aggregate
principal amount at any one time outstanding of $5
million;
(iv) surety bonds and appeal bonds arising in
the ordinary course of business or in connection with
the enforcement of rights or claims of the Borrower or
arising out of any judgment not constituting an Event
of Default;
(v) Indebtedness consisting of the payment
deferrals referred to in Section 5.02(f) and Section
5.04(r);
(vi) Indebtedness in an amount of up to $25
million which is (i) incurred at any time prior to the
Maturity Date, (ii) secured by the Collateral on a
basis which is pari passu with, but not senior to, the
---- -----
Obligations, (iii) entitled to administrative priority
under Section 364(c)(1) of the Bankruptcy Code which is
pari passu with, but not senior to, the Obligations,
---- -----
(iv) on terms and conditions which are substantially
the same as the terms and conditions of this Agreement
and the other Credit Documents and (v) governed and
secured by the Credit Documents (which shall be
amended, supplemented or otherwise modified to provide
for such Indebtedness in a manner reasonably
satisfactory to all of the Lenders, including, without
limitation, an increase in the Investment Account
Minimum for each day subsequent to the date of issuance
of such Indebtedness to reflect the issuance of such
Indebtedness and ensure that the ratio of the
Investment Account Minimum to the aggregate principal
amount of all Indebtedness secured thereby remains
unchanged after the issuance of such Indebtedness);
(vii) Indebtedness of the Borrower incurred
pursuant to the Kawasaki Credit Agreement; and
(viii) Indebtedness consisting of purchase
money Indebtedness secured by a Lien permitted under
Sections 8.01(v) and otherwise permitted under Section
8.07 up to an aggregate principal amount of $5 million.
8.06 Advances, Investments and Loans. The
-------------------------------
Borrower will not lend money or credit or make advances to
any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital
NY1-53665.4 -96-
contribution to, any other Person, or apply to the
Bankruptcy Court for the authority to do any of the fore-
going, except that the following shall be permitted (and the
Borrower may apply to the Bankruptcy Court for approval
thereof):
(i) the Borrower may acquire receivables
owing to it, if created or acquired in the ordinary
course of business and payable or dischargeable in
accordance with customary trade terms;
(ii) cash and Cash Equivalents to or for the
credit of the Concentration Account and the Investment
Account;
(iii) the loans, advances and other invest-
ments made by the Borrower prior to, and outstanding
on, the Filing Date and listed on Schedule 16 hereto;
(iv) the Borrower may make advances to
employees for moving, relocation and travelling
expenses, drawing accounts and similar expenditures in
the ordinary course of business not to exceed
$1,000,000 at any time outstanding;
(v) cash and Cash Equivalents held as cash
collateral constituting Liens permitted under
Section 8.01(i) which are not greater than the amount
held on the Filing Date, except in the case of the Lien
on cash collateral in favor of First Interstate Bank of
Arizona, N.A. as and to the extent provided in Section
8.01(i); and
(vi) credit extended by the Borrower (other
than by means of cash payment) in the ordinary course
of business to employees in connection with share
purchases under employee benefit programs applicable to
all or substantially all employees.
8.07 Capital Expenditures. The Borrower will not
--------------------
make any expenditure for fixed or capital assets (excluding
expenditures for the maintenance and repair of aircraft,
engines and parts which should be capitalized in accordance
with generally accepted accounting principles, but including
capitalized lease obligations) (collectively, "Capital
-------
Expenditures"), in excess of 105% of the applicable amount
------------
(exclusive of such maintenance and repairs) set forth in the
Operating Plan for the applicable period set forth therein,
provided that in any event the Borrower will not, on or
--------
after the Third Amendment Effective Date, make any Capital
Expenditure, or enter into any agreement relating to or
NY1-53665.4 -97-
providing for the making of a Capital Expenditure, unless
(i) the amount of such Capital Expenditure does not exceed
$500,000, or (ii) the Required Lenders have consented
thereto in writing.
8.08 Limitation on Repayments, etc. Except for
------------------------------
(i) payments in respect of the A320 Leases,
the Engine Leases, the Put Agreement and any leases
entered into in connection with the Put Agreement or
any amendment or modification thereto which is referred
to in Section 5.04,
(ii) payments in respect of the Kawasaki
Leases, the Kawasaki Put Agreement and any leases
entered into in connection with the Kawasaki Put
Agreement or any amendment or modification thereto
which is referred to in Section 5.04,
(iii) payments of scheduled lease payments
under capitalized and operating leases of the Borrower
existing on the Filing Date to the extent such leases
are assumed by Borrower pursuant to the Case and in
accordance with the Operating Plan and only if the
lessors or lenders thereunder have (x) agreed to the
deferral described in Section 5.02(f) or such other
deferral arrangements as may have been disclosed to and
approved by the Required Lenders as provided in Section
5.02(f), and (y) agreed to the rental reductions and
deferrals described in Section 5.04(r) or such other
arrangements as may have been disclosed to and approved
by the Lenders as provided in Section 5.04(r) and, in
each case, the same is in full force and effect,
provided that, except as expressly set forth on
--------
Schedule 19 with respect to a particular lease of
particular aircraft, scheduled lease payments shall not
include, or be deemed to include, any amounts payable
as or constituting or representing termination or other
liquidated damage payments, but scheduled lease
payments shall include amounts necessary to meet return
condition requirements upon termination of leases upon
expiration of the stated terms thereof or upon exercise
of call rights thereunder in accordance with the terms
of such call rights as set forth on Schedule 19, and
provided further that scheduled lease payments shall
-------- -------
not include payments (or portions thereof) that are
deferred as provided in Sections 5.02(f) and 5.04(r)
(unless and until such payments (or portions thereof)
are payable in accordance with the terms of the
deferrals referred to in such Sections), and provided
--------
NY1-53665.4 -98-
further that scheduled payments with respect to a
-------
particular lease of a particular aircraft (determined
as aforesaid) may be reduced from those provided for in
Schedule 19 and the Operating Plan if (I) such
reduction (x) is agreed to in writing by the Borrower
and the applicable aircraft lessor, (y) does not
involve, require or result in the payment by the
Borrower, whether on a particular payment date or over
the term of the lease or otherwise, of any amount or
amounts in excess of those otherwise provided for in
Schedule 19 and the Operating Plan, and (z) does not,
cannot and will not result in a Default or an Event of
Default, and (II) the agreement relating to such
reduction, together with such other documents and
information reasonably requested by the Required
Lenders, has been reviewed by the Required Lenders and
approved by the Required Lenders for purposes of
ensuring compliance with the provisions of this Section
8.08(iii) (it being understood and agreed that the
approval rights of the Required Lenders shall be
limited to such purposes),
(iv) payments initially of defaulted amounts
owing, and thereafter of amounts when due, under 1110
Indebtedness outstanding on the Filing Date to the
extent such Indebtedness has been assumed by Borrower
and in accordance with the Operating Plan and then only
if lenders thereunder have (x) agreed to the deferral
described in Section 5.02(f) or such other deferral
arrangements as may have been disclosed to and approved
by the Required Lenders as provided in Section 5.02(f),
and (y) agreed to the rental reductions and deferrals
described in Section 5.04(r) or such other arrangements
as may have been disclosed to and approved by the
Lenders as provided in Section 5.04(r) and, in each
case, the same is in full force and effect, provided
--------
that, except as expressly set forth on Schedule 19 with
respect to particular 1110 Indebtedness secured by
particular aircraft, the foregoing amounts shall not
include any amounts payable or accruing after or by
reason of the return, redelivery or repossession of the
aircraft which secures any 1110 Indebtedness, and
provided further that the foregoing amounts shall not
-------- -------
include any amounts (or portions thereof) that are
deferred as provided in Sections 5.02(f) and 5.04(r)
(unless and until such payments (or portions thereof)
are payable in accordance with the terms of the
deferrals referred to in such Sections), and provided
--------
further that the foregoing amounts payable with respect
-------
to particular 1110 Indebtedness secured by particular
aircraft (determined as aforesaid) may be reduced from
NY1-53665.4 -99-
those provided for in Schedule 19 and the Operating
Plan if (I) such reduction (x) is agreed to in writing
by the Borrower and the applicable lender, (y) does not
involve, require or result in the payment by the
Borrower, whether on a particular payment date or over
the term of the 1110 Indebtedness or otherwise, of any
amount or amounts in excess of those otherwise provided
for in Schedule 19 and the Operating Plan, and (z) does
not, cannot and will not result in a Default or an
Event of Default, and (II) the agreement relating to
such reduction, together with such other documents and
information reasonably requested by the Required
Lenders, has been reviewed by the Required Lenders and
approved by the Required Lenders for purposes of
ensuring compliance with the provisions of this Section
8.08(iv) (it being understood and agreed that the
approval rights of the Required Lenders shall be
limited to such purposes),
(v) payments in respect of Existing Secured
Debt from the proceeds of Asset Sales to the extent
such Asset Sales are permitted in accordance with the
terms of this Agreement),
(vi) payments in respect of prepetition
obligations owing to Persons who because they are not
citizens of, or resident in, the United States are not
subject to the jurisdiction of the Bankruptcy Court not
to exceed $4,800,000 in aggregate amount at any time
after the Effective Date and to the extent provided for
in the Operating Plan (as defined in the Original
Credit Agreement at all times prior to the Amendment
Effective Date, the First Amended and Restated Credit
Agreement at all times prior to the Second Amendment
Effective Date, the Second Amended and Restated Credit
Agreement at all times prior to the Third Amendment
Effective Date and this Agreement at all times after
the Third Amendment Effective Date),
(vii) payments of interest and payments of
other amounts not exceeding $53,015 per month under
Existing Secured Debt with respect to property
necessary for the Borrower's operations in accordance
with the Operating Plan approved by the Bankruptcy
Court for adequate protection required under Sections
362 and 363 of the Bankruptcy Code,
(viii) payments not exceeding $2,000,000 in
aggregate amount at any time after the Effective Date
which are made in accordance with the Operating Plan
(as defined in the Original Credit Agreement at all
NY1-53665.4 -100-
times prior to the Amendment Effective Date, the First
Amended and Restated Credit Agreement at all times
prior to the Second Amendment Effective Date, the
Second Amended and Restated Credit Agreement at all
times prior to the Third Amendment Effective Date and
this Agreement at all times after the Third Amendment
Effective Date) in respect of prepetition obligations
(including any such payments required pursuant to order
of the Bankruptcy Court and any such payments in
respect of the Borrower's leasehold interest in Real
Property), and
(ix) scheduled payments of principal and
interest under Existing Secured Debt not otherwise
described in the preceding clauses (i) through (viii)
which (A) do not exceed $55,000,000 in principal, plus
interest thereon, during 1993, and $21,000,000 in
principal, plus interest thereon, during 1994, and (B)
are made in accordance with the Operating Plan on a
monthly basis without increase in any monthly payment
by more than 5% of the monthly payment provided for in
the Operating Plan,
and, in each case, only so long as no Default or Event of
Default has occurred and is continuing or would result
therefrom, the Borrower will not pay or apply to the
Bankruptcy Court for the authority to (w) assume or make any
payments (including, without limitation, for settlement
payments) in respect of any leases of real or personal
property and executory contracts except for leases and
executory contracts (1) entered into after the Filing Date
or (2) which do not relate to aircraft and have been or will
be assumed, and in each case in accordance with the
Operating Plan on a monthly basis without increase in any
monthly payment by more than 5% of the monthly payment
provided for in the Operating Plan, (x) make any payment or
prepayment on or redemption or acquisition for value
(including, without limitation, by way of depositing with
the trustee with respect thereto money or securities before
due for the purpose of paying when due) of any Indebtedness
of the Borrower incurred or created prior to the Filing
Date, (y) pay any interest on any Indebtedness or other
obligations of the Borrower incurred or created prior to the
Filing Date (whether in cash, in kind securities or
otherwise) or (z) pay any amounts with respect to trade or
ordinary course of business payables or other obligations
(other than payments contemplated under the Operating Plan
pursuant to and authorized by the Bankruptcy Court pursuant
to its orders styled (A) "Order Authorizing Payment or
Honoring of Prepetitions Obligations to America West
Ticketholders, Other Airlines With Whom America West Has
NY1-53665.4 -101-
Interline Arrangements, Travel Agents, Clearing Houses, Tour
Service Providers, Foreign Vendors, Fuel Suppliers, and
Other Essential Suppliers" dated June 27, 1991; (B) "Order
Authorizing Payment of Prepetition Wages, Salaries and
Commissions, Employee Business Expense Reimbursement
Contributions to Employee Benefit Plans, and other Employee
Benefits" dated June 27, 1991; (C) "Order Authorizing
Payment on Honoring of Certain Prepetition Claims of Outside
Mechanics and Repairmen" dated June 27, 1991; and (D) any
amended orders or further orders with respect to the matters
addressed in the orders listed above) of the Borrower
incurred or created prior to the Filing Date. Nothing in
this Section shall prevent the Borrower from paying post-
petition trade payables (including required utility deposits
and aircraft maintenance) or post-petition accrued expenses
arising in the ordinary course of business.
8.09 Transactions with Affiliates. The Borrower
----------------------------
will not, and will not apply to the Bankruptcy Court for the
authority to, enter into any transaction or series of
related transactions, whether or not in the ordinary course
of business, with any Affiliate of the Borrower, other than
on terms and conditions substantially as favorable to such
Person as would be obtainable by such Person at the time in
a comparable arm's-length transaction with a Person other an
Affiliate. Nothing in this Section 8.09 shall prohibit any
transactions permitted under Sections 8.05 and 8.06.
8.10 Subsidiaries. The Borrower will not
------------
establish, create, permit to exist or acquire any
Subsidiary.
8.11 Chapter 11 Claims. Except as expressly
-----------------
permitted by Section 8.05(vi), the Borrower will not apply
to the Bankruptcy Court for the authority to incur, create,
assume, suffer or permit any administrative expense claim
under Section 364, 503 or 507 of the Bankruptcy Code, Lien
against the Borrower or its property or other assets in the
Case to be pari passu with, or senior to, the Obligations
---- -----
and the Liens of the Collateral Agent and Secured Creditors
hereunder, except for the Permitted Expenses.
8.12 Final Extension Loan Order. The Borrower
--------------------------
shall cause, on or prior to October 8, 1993, the Final Order
to have been entered and to be in full force and effect.
8.13 Conversion to Chapter 7. The Borrower shall
-----------------------
not without giving the Lenders 10 Business Days prior
written notice, apply to the Bankruptcy Court to convert the
Case to a case under Chapter 7 of the Bankruptcy Code
pursuant to Section 1112(a) of the Bankruptcy Code. After
NY1-53665.4 -102-
giving the Lenders such notice, the Borrower shall take all
actions requested by the Lenders in connection with the
protection of the Collateral and the security interests
therein securing the Obligations.
8.14 Operation of Specified Aircraft/Engines.
---------------------------------------
The Borrower shall not (i) operate any Specified Aircraft
and Engines outside the United States, Canada, Mexico or
Japan, except for occasional other foreign use on charters
where the pilots used are the pilots of the Borrower and all
operational control and possession remains with the Borrower
and maintenance and insurance continue to be provided by the
Borrower, or lease the same to any other Person, or (ii)
(except as otherwise agreed in writing by the Required
Lenders) allow any Specified Aircraft and Engines to undergo
any major maintenance or structural work by any Person other
than employees of the Borrower or an FAA certified repair
station in the United States the location of which is set
forth in Annex B to the Security Agreement (so long as it
shall have no Lien rights against any Collateral except for
Liens subordinate to the Liens in favor of the Collateral
Agent contemplated hereunder to the extent (if any) provided
for in the Bankruptcy Code) or (iii) (except as otherwise
agreed in writing by the Required Lenders) allow any parts
covered by the Aircraft/Engine, Mortgage or other Collateral
covered by the Security Agreement to be located any where
other than the locations provided for in such Security
Document.
8.15 Operating Plan Covenants. The Borrower
------------------------
shall:
(a) Aircraft. Not have in its fleet on or after
--------
the Third Amendment Effective Date in excess of 86 aircraft
(exclusive of aircraft under leases entered into in
accordance with or pursuant to the Put Agreement or the
Kawasaki Put Agreement or any amendment or modification to
either thereof which is referred to in Section 5.04).
(b) Operating Profit/Loss. Cause its "operating
---------------------
loss" or "operating profit" to be not greater in the case of
an operating loss and not less in the case of an operating
profit than (i) $7.5 million more in the case of a loss or
$7.5 million less in the case of a profit than that
projected in the Operating Plan for any calendar month
including in any applicable month operating profit for the
cumulative number of prior months in such period in excess
of that projected for such period on a cumulative basis, and
(ii) $15 million more in the case of a loss or $15 million
less in the case of a profit than that projected in the
Operating Plan for any quarter ending March 31, June 30,
NY1-53665.4 -103-
September 30 or December 31. Operating profit and operating
loss have the same meanings set forth in the Operating Plan
and shall be calculated in the same manner as in the
Operating Plan.
(c) Net Income/Loss. Cause its "net income" or
---------------
"net loss" to be not less in the case of income or more in
the case of loss by the same applicable variance amount set
forth in clause (b) above than the amount projected in the
Operating Plan for such monthly or quarterly period
described in clause (b) above after, as the case may be,
adjusting the projected net losses during each such period
by excluding losses resulting from provisions for pre-
petition claims made in the Case and other losses and write-
offs which result from the Case which do not at any time
result in a cash expenditure by the Borrower. Net income
and net loss shall have the meanings set forth in the
Operating Plan and shall be calculated in the same manner as
in the Operating Plan.
(d) Cash Balance. Maintain "net available cash"
------------
(which term shall have the same meaning as set forth in the
Operating Plan and shall be calculated in the same manner as
in the Operating Plan, but shall in any event exclude all
deposits, advance payments not enumerated on Schedule 20,
holdbacks, reserves, cash collateral and other amounts held
by Persons other than the Borrower and all other cash to
which the Borrower's access is legally restricted in any way
except that cash and Cash Equivalents in or to the credit of
the Investment Account shall be included in "net available
cash") as of the end of each day occurring after the Third
Amendment Effective Date in an amount not less than the sum
of (i) $55,000,000, (ii) the aggregate amount of any Net
Proceeds of the Slot Collateral (or any part or portion
thereof) and/or the Engine Collateral (or any part or
portion thereof) theretofore required to be deposited in the
Investment Account pursuant to Section 4.02(ii), (iii) or
(v), and (iii) if such day is a day other than a day on
which the Loans are repaid to the full extent required
pursuant to Section 4.02(ii), the aggregate amount of the
Net Proceeds of Asset Sales that are required to be applied
to the repayment of the Loans pursuant to Section 4.02(ii)
but that have not been so applied; and in the event that as
of the end of any day occurring after the Third Amendment
Effective Date, the amount of "net available cash" exceeds
$125,000,000, notify the Lenders as provided in Section
7.01(n) and, if applicable, prepay the Loans as provided in
Section 4.02(iv). The amount of "net available cash"
required to be maintained pursuant to this Section 8.15(d)
on a given day is referred to herein as the "Cash Covenant
-------------
Amount" for such day. Notwithstanding anything herein which
------
NY1-53665.4 -104-
may be to the contrary and without creating any obligation
on the part of any Lender to extend, or to consent to the
extension of, the Maturity Date, the Cash Covenant Amount
for each day occurring after the Maturity Date shall be
determined simultaneously with, or prior to, any extension
of the Maturity Date.
(e) Investment Account Balance. Maintain cash
--------------------------
and Cash Equivalents on deposit in the Investment Account as
of the end of each day occurring after the Third Amendment
Effective Date in an amount not less than the sum of (i) (a)
$36,390,000 if such day is a day occurring on or prior to
December 30, 1993, or (b) $41,390,000 if such day is a day
occurring after December 30, 1993, (ii) the aggregate amount
of any Net Proceeds of the Slot Collateral (or any part or
portion thereof) and/or the Engine Collateral (or any part
or portion thereof) theretofore required to be deposited in
the Investment Account pursuant to Section 4.02(ii), (iii)
or (v), (iii) if such day is a day other than a day on which
Loans are repaid to the full extent required pursuant to
Section 4.02(ii), the aggregate amount of the Net Proceeds
of Asset Sales that are required to be applied to the
repayment of Loans pursuant to Section 4.02(ii) but that
have not been so applied, and (iv) the aggregate amount of
all increases in the Investment Account Minimum theretofore
required and effective pursuant to Section 4.02(i). The
amount of cash and Cash Equivalents required to be on
deposit in the Investment Account on a given day pursuant to
this Section 8.15(e) is referred to herein as the
"Investment Account Minimum" for such day. Notwithstanding
--------------------------
anything herein which may be to the contrary and without
creating any obligation on the part of any Lender to extend,
or to consent to the extension of, the Maturity Date, the
Investment Account Minimum for each day occurring after the
Maturity Date shall be determined simultaneously with, or
prior to, any extension of the Maturity Date.
8.16 Slots and Routes. Except in the case of
----------------
Slots and Routes subject to an Asset Sale permitted in
accordance with this Agreement, the Borrower shall not fail
to take all actions necessary or, in the reasonable judgment
of the Collateral Agent or Required Lenders, advisable in
order to maintain the value and utility of its respective
Slots and Routes. In addition to any other remedies for a
violation of this Section 8.16, if the Borrower does not
utilize any Slots in a manner, and with a degree of
frequency, needed to assure their continued status as assets
of the Borrower, then the Collateral Agent shall be entitled
(but shall not be required) to use or contract for the use
of such Slots so that same are not forfeited until such time
as the Borrower determines to fully utilize same or until
NY1-53665.4 -105-
same are sold by the Collateral Agent pursuant to the
exercise of its rights pursuant to the Security Documents.
8.17 Seizures. The Borrower shall not cause,
--------
permit or suffer to occur any seizure or similar restraint
of any aircraft or other assets owned or leased by the
Borrower intended to be used or operated under and in
accordance with the Operating Plan.
8.18 ERISA. The Borrower shall not, and shall
-----
not permit any member of the Controlled Group to:
(a) engage in any transaction in connection with
which the Borrower or any member of the Controlled Group
could be subject to either a civil penalty assessed pursuant
to Section 502(i) of ERISA or a tax imposed by Section 4975
of the Code;
(b) terminate any employee benefit plan within
the meaning of Section 3 of ERISA in a manner, or take any
other action, which could result in any liability of the
Borrower or any member of the Controlled Group to the PBGC.
(c) fail to make full payment when due of all
amounts which, under the provisions of any Pension Plan, the
Borrower or any member of the Controlled Group is required
to pay as contributions thereto, or permit to exist any
accumulated funding deficiency, whether or not waived, with
respect to any Pension Plan;
(d) permit the current value of all vested
accrued benefits under all Pension Plans which are subject
to Title IV of ERISA to exceed the current value of the
assets of such Pension Plans allocable to such vested
accrued benefits; or
(e) fail to make any payments to any
Multiemployer Plan that the Borrower or any member of the
Controlled Group may be required to make under any agreement
relating to such Multiemployer Plan, or any law pertaining
thereto.
As used in this Section 8.18, the term
"accumulated funding deficiency" has the meaning specified
in Section 302 of ERISA and Section 412 of the Code, the
term "accrued benefit" has the meaning specified in Section
3 of ERISA and the term "current value" has the meaning
specified in Section 4062(b)(1)(A) of ERISA.
NY1-53665.4 -106-
SECTION 9. EVENTS OF DEFAULT.
-----------------
Upon the occurrence of any of the following
specified events (each an "Event of Default"):
----------------
9.01 Payments. The Borrower shall (i) default in
--------
the payment when due of any payment of principal of its
Loans or Notes or (ii) default, and such default shall
continue for at least two Business Days, in any payment of
interest on its Loans or any Fees or any other amounts owing
by it hereunder or the Credit Documents; or
9.02 Representations, etc. Any representation,
---------------------
warranty or statement made by the Borrower herein or in any
other Credit Document or in any certificate delivered
pursuant hereto or thereto shall prove to be untrue in any
material respect when made; or
9.03 Covenants. The Borrower shall (i) default
---------
in the due performance or observance by it of any term,
covenant or agreement contained in Section 7.01(d)(i), 7.08,
7.10, 7.11 or Section 8 or in any Security Document or
(ii) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred
to in Sections 9.01 and 9.02 and clause (i) of this Section
9.03) contained in this Agreement or any other Credit
Document and such default shall continue unremedied for a
period of 15 days after written notice to the Borrower and
each Official Committee by the Administrative Agent or the
Required Lenders; or
9.04 The Case, etc.
--------------
(a) The Case shall be dismissed or converted to a
case under Chapter 7 of the Bankruptcy Code; a Chapter 11
trustee shall be appointed in the Case; or an application
shall be filed by the Borrower for the approval of, or there
shall arise, (i) any claims for recovery for amounts under
Section 506(c) of the Bankruptcy Code arising pursuant to a
final, nonappealable order of the Bankruptcy Court from the
preservation or disposal of Collateral or (ii) any other
administrative expense claim (except for the Permitted
Expenses and except as expressly permitted by Section
8.05(vi), having any priority over, or being pari passu
---- -----
with, the administrative expenses priority of the
Obligations in the Case; or
(b) The Bankruptcy Court shall enter an order
granting relief from the automatic stay applicable under
Section 362 of the Bankruptcy Code to the holder or holders
NY1-53665.4 -107-
of any security interest in any assets which constitute
Designated Collateral or are otherwise not expressly
contemplated to be disposed of or returned by the Borrower
under the Operating Plan of the Borrower and allowing such
holder or holders to foreclose or otherwise realize upon any
such security interests; or
(c) An order of the Bankruptcy Court shall be
entered in the Case appointing an examiner with powers
beyond investigatory powers under Section 1106(b) of the
Bankruptcy Code; or
(d) An order of the Bankruptcy Court or any other
court shall be entered amending, supplementing, staying,
vacating or otherwise modifying any of the Orders, provided,
--------
that no Event of Default shall occur under this clause (d)
to the extent that any such amendment, supplement or other
modification is made in compliance with this Agreement and
is not adverse, in the sole and absolute judgment of the
Required Lenders, to the rights and interests of the Lenders
under this Agreement and the other Credit Documents; or
9.05 Credit Documents and Kawasaki Credit
------------------------------------
Agreement. Any Credit Document shall, except in accordance
---------
with its terms, cease to be in full force and effect, any
Lien purported to be created by any Credit Document or any
of the Orders in any of the Collateral purported to be
covered thereby shall, for any reason, cease to be valid and
perfected with the priority contemplated hereby or the
Borrower or any Official Committee shall contest, deny or
seek to disaffirm any of the Borrower's obligations under
any Credit Document, or, on any date which is prior to the
Maturity Date, any principal of or interest on any loan
outstanding under the Kawasaki Credit Agreement shall be
paid or prepaid without the written consent of the Required
Lenders (not including Kawasaki) or any term or provision of
Section 7, 8 or 10 of the Kawasaki Credit Agreement (as in
effect on the Amendment Effective Date) or of the proviso at
the end of Section 9 of the Kawasaki Credit Agreement (as in
effect on the Amendment Effective Date) shall be amended
without the written consent of the Required Lenders (not
including Kawasaki), provided that a good faith dispute
--------
regarding the factual existence of an Event of Default shall
not be considered to be an Event of Default under this
Section 9.05; or
9.06 Judgments.
---------
(a) One or more judgments as to a post-petition
liability shall be entered against the Borrower in an amount
in the aggregate (to the extent not paid or fully covered
NY1-53665.4 -108-
(subject to a deductible not in excess of 10% of such
liability) by insurance) of (i) $2,500,000 or more
outstanding at any one time in regard to such liability
constituting or giving rise to an administrative expense
claim in the Case (not having priority over, or being pari
----
passu with, the administrative expenses priority of the
-----
Obligations in the Case), or (ii) $250,000 or more
outstanding at any one time in regard to any other such
liability, and either (x) enforcement by any creditor upon
such judgments occurs or is authorized pursuant to order of
the Bankruptcy Court or (y) there shall be any period of 10
consecutive days during which a stay of enforcement of such
judgments, by reason of a pending appeal or otherwise, shall
not be in effect; or
(b) Any non-monetary judgment or order with
respect to a post-petition event shall be rendered against
the Borrower which could reasonably be expected to (i) cause
a material adverse change in the condition (financial or
otherwise), business, operations or properties or other
assets of the Borrower, (ii) have a material adverse effect
on the ability of the Borrower to perform its obligations
under any Credit Document, or (iii) have a material adverse
effect on the Collateral (including, without limitation, the
value or transferability thereof) or the rights and remedies
of the Administrative Agent, the Collateral Agent or any
Lender under any Credit Document, and there shall be any
period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
9.07 GPA Agreements/Kawasaki Agreements. (i) Any
----------------------------------
of the GPA Agreements or the Kawasaki Agreements is
terminated, or purported in writing to be terminated, or
otherwise ceases to be in full force and effect other than
pursuant to an express termination thereof by the applicable
GPA Entity or by Kawasaki, as the case may be (except as a
result of the Borrower's breach thereunder or an "Event of
Default" thereunder), or an "Event of Default" (other than
an "Event of Default" which consists of the existence of the
Case) under and as defined in any of the GPA Agreements or
the Kawasaki Agreements (other than the Kawasaki Credit
Agreement) occurs and continues thereunder; or (ii) an order
of the Bankruptcy Court or any other court is entered
amending, supplementing, staying, vacating or otherwise
modifying the GPA Order or the Kawasaki Order to the extent
adverse, in the sole and absolute judgment of the GPA
Entities or Kawasaki, as the case may be; or (iii) the
Borrower or any Person (including, without limitation, an
Official Committee) acting by or on behalf of the Borrower
or such Person, shall contest, deny or seek to disaffirm the
NY1-53665.4 -109-
Borrower's or its obligations under any GPA Agreement or any
Kawasaki Agreement; or
9.08 Governance. The By-Laws or the Certificate
----------
of Incorporation of the Borrower shall be amended or
modified after the Third Amendment Effective Date without
the prior written consent of the Required Lenders (which
consent may be withheld in their sole and absolute
discretion); or the Borrower or the Board of Directors or
the stockholders of the Borrower shall take or authorize any
action in contravention of the By-Laws or the Certificate of
Incorporation of the Borrower or the Amended and Restated
Management Letter Agreement, in any case, without the prior
written consent of the Required Lenders (which consent may
be withheld in their sole and absolute discretion); or for
any reason, without the prior written consent of the
Required Lenders (which consent may be withheld in their
sole and absolute discretion), the membership of the Board
of Directors of the Borrower shall not be in compliance with
any term, condition or provision of the second paragraph of
the Amended and Restated Management Letter Agreement; or
9.09 Casualties. Any "Event of Loss" as defined
----------
in the Aircraft/Engine Mortgage shall occur with respect to
any aircraft or engine or parts covered thereby (without
giving effect to the grace periods contained in such
definitions) or any other casualty with respect to any other
Designated Collateral shall occur and the insurer of such
property shall not have paid the claim on such loss in full
within 90 days of such Event of Loss; or
9.10 ERISA. Any Pension Plan maintained by the
-----
Borrower or any member of the Controlled Group shall be
terminated within the meaning of Title IV of ERISA or a
trustee shall be appointed by an appropriate United States
district court to administer any Pension Plan, or the PBGC
shall institute proceedings to terminate any Pension Plan or
to appoint a trustee to administer any Pension Plan if as of
the date thereof the Borrower's liability or any member of
the Controlled Group's liability (after giving effect to the
tax consequences thereof) to the PBGC for unfunded
guaranteed vested benefits under the Pension Plans not
covered by insurance exceeds the then current value of
assets accumulated in such Pension Plan (or in the case of a
termination involving the Borrower or any member of the
Controlled Group as a "substantial employer" (as defined in
Section 4001(a)(2) of ERISA)) the withdrawing employer's
proportionate share of such excess; or the Borrower or any
member of the Controlled Group as employer under a Multi-
employer Plan shall have made a complete or partial
withdrawal from such Multiemployer Plan and the Plan sponsor
NY1-53665.4 -110-
of such Multiemployer Plan shall have notified such
withdrawing employer that such employer has incurred a
withdrawal liability; or
9.11 Other Indebtedness. Any "event of default"
------------------
under the terms of any Indebtedness permitted by
Section 8.05(vi) or Section 8.05(vii), or other similar
event or condition which under the terms thereof would
permit any holder of such Indebtedness or Trustee on behalf
of such holder, to accelerate or require mandatory
prepayment of such Indebtedness, occurs and is continuing;
or
9.12 Change of Control. The acquisition, whether
-----------------
directly or indirectly, by any Person or "group" (as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended) (other than an employee benefit or stock
ownership plan of the Borrower) of more than 30% of the
voting stock of the Borrower shall have occurred;
THEN, and in any such event, and at any time thereafter if
any Event of Default shall then be continuing and without
further order of or application to the Bankruptcy Court, the
Administrative Agent shall upon the written request of the
Required Lenders or, in the case of an Event of Default
described in Section 9.01, 9.04 (except clause (c) thereof),
9.05 or 9.07 any Lessor Lender (but in each case, only to
the extent the respective Event of Default is adverse with
respect to such Lessor Lender or its Obligations), without
notice to the Borrower, take any or all of the following
actions, without prejudice to any other rights of the
Administrative Agent, any Lender or the holder of any Note
to enforce its claims against the Borrower hereunder, under
the other Credit Documents or at law or in equity:
(i) declare the principal of and any accrued interest in
respect of any and all Loans and all other Obligations owing
hereunder or under any other Credit Document to be,
whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or notice of any kind,
all of which are hereby waived by the Borrower; (ii)
instruct the Collateral Agent to exercise any rights or
remedies in its capacity as Collateral Agent under the
Credit Documents, including, without limitation, to sell
Collateral, and to set off and apply any amounts in or to
the credit of any account to the Obligations (except for
such cash as may be required to pay unpaid Permitted
Expenses then outstanding); and (iii) terminate the ability
of the Borrower to maintain Loans hereunder, whereupon such
ability shall forthwith terminate immediately and the
Borrower shall repay all Loans, unpaid accrued interest and
other Obligations owing hereunder or under any other Credit
NY1-53665.4 -111-
Document; provided, however, that prior to taking any action
-------- -------
described in the preceding clause (ii), other than any
action which precludes the withdrawal by or for the benefit
of the Borrower of any funds from the Investment Account,
the Concentration Account or any other account referred to
in the Initial Cash Management Agreement (but which does not
constitute set off against such funds), the Administrative
Agent, the Collateral Agent or such Lessor Lender, as the
case may be, shall have given to the Borrower and each
Official Committee not less than two Business Days' prior
written notice thereof; provided further, however, that
-------- ------- -------
promptly after taking any action which precludes the
withdrawal by or for the benefit of the Borrower of any
funds from the Investment Account, the Concentration Account
or any other account referred to in the Initial Cash
Management Agreement, the Administrative Agent, the
Collateral Agent or such Lessor Lender, as the case may be,
shall give to the Borrower and each Official Committee
written notice thereof; and provided further, however, that
-------- ------- -------
the failure to give any of the foregoing notices shall not
impair or otherwise affect any action taken pursuant to the
preceding clause (ii); and provided further, however, that
-------- ------- -------
notwithstanding any provision of this Agreement or the
Security Documents which may be to the contrary, the
Borrower may, without further order of the Bankruptcy Court
or further consent of the Required Lenders, use amounts on
deposit in the Concentration Account and/or amounts on
deposit in the Investment Account which are in excess of the
Section 7.10(c) Amount, during the period of two Business
Days after the taking by the Administrative Agent, the
Collateral Agent or any Required Lender of any action which
(but for this proviso) would preclude the withdrawal by or
for the benefit of the Borrower of such amounts, for the
purpose of making such payments as (i) are necessary (a) to
avoid immediate and irreparable harm to property of or in
the possession of the Borrower, and/or (b) to protect the
public health and safety, and (ii) do not exceed in the
aggregate $2,000,000; and provided further, however, that
-------- ------- -------
notwithstanding any provision of this Agreement or the
Security Documents which may be to the contrary, the
Borrower may, without further order of the Bankruptcy Court
or further consent of the Required Lenders, use amounts on
deposit in the Concentration Account and/or amounts on
deposit in the Investment Account which are in excess of the
Section 7.10(c) Amount for the purpose of making such
payments as (i) are claimed against the Borrower by (present
or former) directors of the Borrower for reimbursement of
the costs of defending claims against such directors which
are not covered by directors' and officers' liability
insurance, and (ii) do not exceed $100,000 in the aggregate;
and provided further, however, that the Borrower shall use
-------- ------- -------
NY1-53665.4 -112-
amounts on deposit in the Concentration Account for the
purpose described in the next preceding provisos prior to
using amounts on deposit in the Investment Account for such
purpose. Nothing contained herein or in any of the Security
Documents shall be deemed to impair or restrict the right of
the Borrower to apply to the Bankruptcy Court, upon motion,
notice and hearing, to use cash collateral, other than the
Section 7.10(c) Amount, subject to and in accordance with
the applicable provisions of the Bankruptcy Code (it being
acknowledged that, pursuant to the Orders, the Borrower is
expressly prohibited from seeking to use cash collateral on
deposit in the Investment Account which is not in excess of
the Section 7.10(c) Amount). If any Lessor Lender directs
the Administrative Agent to take the actions described in
clause (i) of the preceding sentence, then such Lessor
Lender may, except as provided in clause (iii) of the
proviso to Section 3.03(b) of the Agency Agreement, instruct
the Administrative Agent and the Collateral Agent as to the
disposition and other action to be taken in the exercise of
remedies pursuant to the Security Documents, provided that
--------
the Required Lenders may at any time furnish such instruc-
tions with respect thereto (although the Administrative
Agent shall follow all instructions received from the
respective Lessor Lender until it receives any additional or
contrary instructions from the Required Lenders with respect
thereto) so long as such instructions by the Required
Lenders will not have the effect of materially delaying such
disposition or other action, and the Administrative Agent
and the Collateral Agent shall not incur any liability from
relying on any such instructions of any Lessor Lender or the
Required Lenders, as the case may be.
SECTION 10. MISCELLANEOUS.
-------------
10.01 Payment of Expenses, etc. The Borrower
------------------------
agrees to: (i) whether or not the transactions herein
contemplated are consummated, pay all reasonable out-of-
pocket costs and expenses of the Lenders party hereto on the
Third Amendment Effective Date and the Administrative Agent
and the Collateral Agent and their designees, or reimburse
each of them therefor, in connection with the preparation,
execution and delivery of the Credit Documents and the
documents and instruments referred to therein, and the
ongoing administration thereof (including, without limita-
tion, the reasonable fees and disbursements of Paul,
Hastings, Janofsky & Walker; Milbank, Tweed, Hadley &
McCloy; Snell & Wilmer; and of any local counsel,
syndication expenses, the cost of inspections, field
examinations and collateral audits, the fees and expenses of
Simat, Helliesen & Eichner, Inc. (upon application to the
NY1-53665.4 -113-
Bankruptcy Court), the costs of the receivables management
arrangements described in Section 5.01(p)), the reasonable
expenses of Franke & Company, Inc. and the reasonable fees
and expenses of financial advisors to each of the Lessor
Lenders); (ii) pay all reasonable out-of-pocket costs and
expenses of the Lenders party hereto on the Third Amendment
Effective Date and the Administrative Agent and the
Collateral Agent and their designees in connection with any
amendment, waiver or consent relating to the Credit
Documents and the documents and instruments referred to
therein (including, without limitation, the reasonable fees
and disbursements of Paul, Hastings, Janofsky & Walker;
Milbank Tweed, Hadley & McCloy; Snell & Wilmer; and of any
local counsel) and of the Administrative Agent and the
Collateral Agent and their designees and each of the Lenders
in connection with the enforcement of the Credit Documents
and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and
disbursements of counsel for the Administrative Agent and
the Collateral Agent and their designees and for each of the
Lenders); (iii) pay and hold each of the Lenders harmless
from and against any and all present and future stamp and
other similar taxes with respect to the foregoing matters
and save each of the Lenders harmless from and against any
and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to
such Lender) to pay such taxes; (iv) indemnify the
Administrative Agent and the Collateral Agent and their
designees and each Lender, and its Affiliates, and each of
their officers, directors, employees, representatives and
agents from and hold each of them harmless against any and
all losses, liabilities, claims, damages, or expenses
incurred by any of them as a result of, or arising out of,
or in any way related to, or by reason of, any investiga-
tion, litigation or other proceeding (whether or not any
such Person is a party thereto) related to the entering into
and/or performance of any Credit Document or the use or
proposed use of the proceeds of any Loans hereunder or the
transactions contemplated in any Credit Document, including,
without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the
extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified); and (v)
indemnify Kawasaki and its Affiliates, and each of their
officers, directors, employees, representatives and agents
from and hold each of them harmless against any and all
losses, liabilities, claims, damages, or expenses incurred
by any of them as a result of, or arising out of, or in any
way related to, or by reason of, the By-Law Letter
NY1-53665.4 -114-
Agreement, the Management Letter Agreement, the Amended and
Restated Management Letter Agreement or any rights of
approval with respect to members of the Board of Directors
of the Borrower and the Executive Committee of such Board of
Directors granted to, or exercised by, the Lenders at any
time party to the Original Credit Agreement, the Credit
Agreement, the Amended and Restated Credit Agreement and
this Agreement (other than Kawasaki) or any act or omission
of any Director of the Borrower approved by any such
Lenders.
10.02 Survival. All indemnities set forth herein
--------
including, without limitation, in Sections 2.09, 2.10, 2.11
and 10.01 shall survive the execution and delivery of this
Agreement and the Notes and the making and repayment of the
Loans and the termination of this Agreement.
10.03 Notices. Except as otherwise expressly
-------
provided herein, all notices and other communications
provided for hereunder shall be in writing (including
telegraphic, telex, telecopier) and mailed (by certified or
registered mail), telegraphed, telexed, telecopied, cabled
or delivered, if to the Borrower, at its address specified
opposite its signature below or in any Credit Document
executed by it; if to any Lender, at its address specified
on Annex I attached hereto; and if the Administrative Agent,
at its Notice Office; or, as to the Borrower or the
Administrative Agent, at such other address as shall be
designated by such party in a written notice to the other
parties hereto and, as to each other party, at such other
address as shall be designated by such party in a written
notice to the Borrower and the Administrative Agent. All
such notices and communications shall, when mailed (by
certified or registered mail), telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, be
effective upon receipt.
10.04 Benefit of Agreement.
--------------------
(a) This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective
parties hereto and the successors and assigns of the parties
hereto, but no benefits hereunder shall inure to or be
enforceable by any other Person; provided however, that the
-------- -------
Borrower may not assign or transfer any of its rights and
obligations under any Credit Document without the prior
written consent of all of the Lenders; and provided further,
-------- -------
however, that, although any Lender may grant participations
in its rights and obligations hereunder and under the Notes,
such Lender shall remain a "Lender" for all purposes
hereunder (and may not transfer or assign its Loans
NY1-53665.4 -115-
hereunder) and the participant shall not constitute a
"Lender" hereunder; and provided further, however, that no
-------- ------- -------
Lender shall grant any participation under which the
participant shall have rights to approve any amendment to or
waiver of this Agreement except to the extent such amendment
or waiver would (i) extend the final maturity of the Loans
in which such participant is participating, or reduce the
rate of interest or Fees thereon, or reduce the principal
amount thereof, or change the date for payment of any such
amounts, or increase such participant's participating
interest in any Loan over the amount thereof then in effect,
or (ii) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this
Agreement, or (iii) consent to the release of all or
substantially all of the Collateral or to the release of any
cash Collateral if the effect of such release of such cash
Collateral is to cause or permit the amount of cash and Cash
Equivalents on deposit in or to the credit of the Investment
Account to be reduced below an amount equal to 33-1/3% of the
aggregate principal amount of the Loans then outstanding.
In the case of any such participation, the participant shall
not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such
Lender in respect of such participation to be those set
forth in the agreement executed by such Lender in favor of
the participant relating thereto and to be monitored solely
by the participant and such Lender) and all amounts payable
by the Borrower hereunder shall be determined as if such
Lender had not sold such participation.
(b) Notwithstanding anything to the contrary in
Section 10.04(a), (x) any Lender may assign a portion of its
Loans and its rights and obligations to any of its
Affiliates or to one or more Lenders or any of their
Affiliates, and (y) any Lender may assign a portion, in an
amount of at least $1 million of its Loans and its rights
and obligations hereunder to another Person (including,
without limitation, a leasing company or credit corporation)
which is not an "air carrier" certificated under Section 401
of the Aviation Act or any Person of which such "air
carrier" is a Subsidiary, each of which assignees agrees to
become a party to this Agreement as a Lender prior to or
after the date thereof by executing an amendment to this
Agreement or by executing a supplemental agreement with the
assigning Lender, provided that, in the case of each such
assignment, (i) at the time it receives a copy of the
aforesaid amendment or agreement, together with the
processing fee referred to below, Annex I shall be modified
by the Administrative Agent to reflect the Loans of such
assignee Lender and of the existing Lenders, (ii) the
Administrative Agent shall have received from the parties to
NY1-53665.4 -116-
such assignment a processing fee of $2,500 and (iii) the
Borrower shall, if such assignee Lender so requests, issue
new Notes to such assignee Lender and to the assigning
Lender in conformity with the requirements of Section 2.05
to the extent needed to reflect the revised Loans of the
Lenders. To the extent of any assignment pursuant to this
Section 10.04(b), the assigning Lender shall be relieved of
its obligations hereunder with respect to its assigned
Loans.
10.05 No Waiver; Remedies Cumulative. No failure
------------------------------
or delay on the part of the Administrative Agent, the
Collateral Agent or any Lender or any holder of a Note in
exercising any right, power or privilege hereunder or under
any other Credit Document and no course of dealing between
the Borrower and the Administrative Agent or any Lender or
the holder of any Note shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power
or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exer-
cise of any other right, power or privilege hereunder or
thereunder. The rights and remedies herein expressly
provided are cumulative and not exclusive of any rights or
remedies which the Administrative Agent, or any Lender or
the holder of any Note would otherwise have. No notice to
or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights
of the Administrative Agent, the Lenders or the holder of
any Note to any other or further action in any circumstances
without notice or demand.
10.06 Payments Pro Rata.
-----------------
(a) Except as otherwise provided in Sections 2.12
and 4.02, the Administrative Agent agrees that promptly
after its receipt of each payment from or on behalf of the
Borrower in respect of any Obligations of the Borrower here-
under or under any Credit Document, it shall distribute such
payment to the Lenders pro rata based upon their respective
shares, if any, of the Obligations with respect to which
such payment was received.
(b) Except as otherwise provided in Sections 2.12
and 4.02, each of the Lenders agrees that, if it should
receive any amount hereunder (whether by voluntary payment,
by realization upon security, by the exercise of the right
of setoff or banker's lien, by counterclaim or cross action,
by the enforcement of any right under the Credit Documents,
or otherwise), which is applicable to the payment of the
principal of, or interest on, the Loans, or Facility Fee, of
NY1-53665.4 -117-
a sum which with respect to the related sum or sums received
by other Lenders is in a greater proportion than the total
of such Obligation then owed and due to such Lender bears to
the total of such Obligation then owed and due to all of the
Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash with-
out recourse or warranty from the other Lenders an interest
in the Obligations of the Borrower to such Lenders in such
amount as shall result in a proportional participation by
all the Lenders in such amount; provided that if all or any
--------
portion of such excess amount is thereafter recovered from
such Lender, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but
without interest.
10.07 Calculations; Computations.
--------------------------
(a) The financial statements to be furnished to
the Lenders pursuant hereto shall be made and prepared in
accordance with generally accepted accounting policies and
principles consistently applied throughout the periods
involved (except as set forth in the notes thereto).
(b) All computations of interest and Fees
hereunder shall be made on the actual number of days elapsed
over a period of 360 days.
10.08 GOVERNING LAW. THIS AGREEMENT AND THE
-------------
OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE UNITED
STATES OF AMERICA, TO THE EXTENT APPLICABLE, AND THE STATE
OF NEW YORK.
10.09 Counterparts. This Agreement may be exe-
------------
cuted in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
A set of counterparts executed by all the parties hereto
shall be lodged with the Borrower, the Administrative Agent
and each Lender.
10.10 Headings Descriptive. The headings of the
--------------------
several sections and subsections of this Agreement are
inserted for convenience only and shall not in any way
affect the meaning or construction of any provision of this
Agreement.
10.11 Amendment or Waiver. Neither this Agree-
-------------------
ment nor any other Credit Document nor any terms hereof or
NY1-53665.4 -118-
thereof may be changed, waived, discharged or terminated
unless such change, waiver, discharge or termination is in
writing signed by the Required Lenders; provided, however,
-------- -------
that no such change, waiver, discharge or termination shall,
without the written consent of each Lender affected thereby,
(i) extend the Maturity Date or alter the amortization
schedule of the Loans, or reduce the rate of interest or
Fees thereon, or reduce the principal amount thereof, or
change the date for payment of any such amounts, or increase
the Loans of any Lender over the amount thereof then in
effect, (ii) amend, modify or waive any provision of this
Section, or Sections 2, 3, 4 (except as permitted by the
following proviso to this sentence), 7.02, 7.06, 8.03,
8.05(vi), 8.11, 10.01, 10.04, 10.06, 10.07(b), 10.14 or
10.17 or any provision in the Credit Documents which
provides for a determination by all of the Lenders
(including the definitions of terms as used in the Sections
and provisions referred to in this clause (ii)),
(iii) change the definition of Required Lenders or (iv) con-
sent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement; and
provided further, however, that no such change, waiver,
-------- ------- -------
discharge or termination shall, without the written consent
of Lenders the principal amount of whose Loans outstanding
at the time exceed 85% of the total principal amount of
Loans outstanding at the time, permit or result in (a) the
amount of cash and Cash Equivalents on deposit in or to the
credit of the Investment Account to be reduced below such
amount as equals 33-1/3% of the aggregate principal amount
of the Loans then outstanding, or (b) the release to the
Borrower or other application for a purpose other than, or
in a manner inconsistent with, the repayment of Loans as
provided in Sections 4.02(ii) and (v), of any portion of the
Net Proceeds of an Asset Sale of Designated Collateral which
is in excess of 20% of the amount of such Net Proceeds, or
(c) the determination as to whether and to what extent Loans
should be prepaid pursuant to Sections 4.02(iv) and (v) by
reason of any excess of "net available cash" (as such term
is defined in Section 8.15(d)) over $125,000,000; and
provided further, however, that (i) each Lessor Lender shall
-------- ------- -------
have the exclusive right to waive for itself any Event of
Default under Section 9.01, 9.04, 9.05 or 9.07 or its right
to exercise remedies in respect of such Event of Default,
(ii) the rights of the Lessor Lenders under Section 9 may be
amended only with the written consent of each Lessor Lender,
and (iii) no provision of Section 9.01, 9.04, 9.05 or 9.07
(or the definitions of terms as used therein) may be amended
without the written consent of each Lender. The Borrower
shall give each Lender a copy of each report, notice or
other information furnished to any other Lender pursuant to
an express requirement of this Agreement; and the Borrower
NY1-53665.4 -119-
shall give each Lender written notice of any amendment or
waiver of any provision of this Agreement or the other
Credit Documents (which notice shall be accompanied by a
copy of such amendment or waiver). The Borrower shall give
each Official Committee written notice of any material
amendment or waiver of any provision of this Agreement. No
amendments of the Agency Agreement, or amendments of the
other Credit Documents which increase, change or modify the
rights or duties of the Administrative Agent, may be made
without the consent of the Administrative Agent. No amend-
ments of the Agency Agreement, or amendments of the other
Credit Documents which increase, change or modify the duties
of the Collateral Agent, may be made without the consent of
the Collateral Agent. Notwithstanding anything to the
contrary contained herein, the modifications contemplated by
Section 10.04, to the extent needed to make new Lenders
party to this Agreement, shall be permitted in accordance
with the terms thereof. Notwithstanding anything to the
contrary contained herein, no change, waiver, amendment or
modification of this sentence or of Section 2.12 or clauses
(ii), (iii), (iv), and (v) of Section 4.02 shall in any case
be effective without the prior written consent of GPA Sub.
Notwithstanding anything to the contrary contained herein or
in the Kawasaki Credit Agreement, if all Obligations shall
not have been paid in full on or prior to the Maturity Date,
the priority of the lien on and security interest in the
Collateral for the benefit of the lenders under the Kawasaki
Credit Agreement shall be subject to the prior written
consent of each of the Required Lenders (not including
Kawasaki). All amendments effected in compliance with this
Section 10.11 shall be effective and enforceable against all
parties hereto without further application to, or order of,
the Bankruptcy Court.
10.12 Domicile of Loans. Except as otherwise
-----------------
provided in Section 2.10(a) or 2.11(a), each Lender may
transfer and carry its Loans at, to or for the account of
any branch, office, or Affiliate of such Lender.
10.13 Confidentiality. Each Lender shall hold
---------------
all non-public information furnished by or on behalf of the
Borrower in connection with such Lender's evaluation of
whether to become a Lender hereunder or obtained pursuant to
the requirements of this Agreement, which has been expressly
identified as such by the Borrower by the conspicuous
designation thereof as "confidential" (collectively, the
"Confidential Material"), in accordance with its customary
---------------------
procedure for handling confidential information of this
nature and in any event may make disclosure reasonably
required by any bona fide transferee or participant in
connection with the contemplated transfer of any Loans or
NY1-53665.4 -120-
participation therein or to its accountants, professional
advisors, lawyers, investment bankers and others as required
or requested by any Governmental Authority or representative
thereof or pursuant to legal process, provided that, unless
--------
specifically prohibited by applicable law or court order,
each Lender shall notify the Borrower of any request by any
Governmental Authority or representative thereof (other than
any such request in connection with an examination of the
financial condition of such Lender by such Governmental
Authority) for disclosure of any such non-public information
prior to disclosure of such information, and provided,
--------
further, that in no event shall any Lender be obligated or
-------
required to return any materials furnished by or on behalf
of the Borrower. Each Lender (including the Administrative
Agent) agrees that it will not provide to prospective
assignees, transferees or participants any of the
Confidential Material unless such Person has executed an
agreement to be bound by this Section 10.13.
10.14 Set-Off. The Borrower hereby acknowledges
-------
and agrees that any participation referred to in this
Agreement will give rise to a direct obligation of the
Borrower to the participant. The Borrower hereby authorizes
the Collateral Agent, the Administrative Agent, each Lender,
and each participant, in case of an Event of Default, at any
time and from time to time, without notice or demand, to set
off and apply all deposits (general, special, custodial or
for safekeeping, time or demand, provisional or final) and
other property (including, without limitation, money and
securities) at any time held by or in the possession of or
to the account of the Administrative Agent, the Collateral
Agent (including any lock box accounts, the Concentration
Account, the Investment Account and any other account or
cash Collateral), such Lender or participant, and other
obligations at any time owing by the Administrative Agent,
the Collateral Agent, such Lender or such participant to or
for the credit or account of the Borrower, in each of which
deposits, property and other obligations the Collateral
Agent, such Lender or such participant for the ratable
benefit of the Administrative Agent, and (except to the
extent prohibited by the Orders) each Lender is hereby
granted a security interest as security for any and all
obligations of the Borrower now or hereafter existing under
the Credit Documents (irrespective of whether or not the
Administrative Agent, the Collateral Agent, such Lender or
participant shall have made any demand for payment and
although the Borrower's obligations may be contingent and
unmatured). The rights of the Administrative Agent, the
Collateral Agent, the Lenders and their participants under
this Section are in addition to other rights and remedies
(including other rights of set-off) which the Collateral
NY1-53665.4 -121-
Agent, the Lenders or any such participants may have.
Promptly after effecting any such set-off, the Collateral
Agent shall give the Borrower notice thereof, but a failure
to give such notice shall not impair or otherwise affect the
effectiveness of the set-off. Notwithstanding any of the
foregoing, the Administrative Agent, the Collateral Agent,
the Lenders, or any participant shall not in any event set
off amounts such that the amounts remaining in all accounts
are not sufficient to cover all of the unpaid Permitted
Expenses then outstanding.
By acceptance of any interest in the Indebtedness
of the Borrower outstanding under this Agreement or any
rights under any other Credit Document, a participant agrees
to share proceeds obtained by it pursuant to the foregoing
sentence in accordance with the provisions of this
Agreement.
10.15 WAIVER OF JURY TRIAL. THE BORROWER, THE
--------------------
ADMINISTRATIVE AGENT AND EACH LENDER HEREBY AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THE CREDIT
DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS TRANSACTION AND THE LENDER/BORROWER
RELATIONSHIP THAT IS BEING ESTABLISHED, including, without
limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. The
Administrative Agent, each Lender and the Borrower warrant
and represent that each has reviewed this waiver with its
legal counsel, and that each knowingly and voluntarily
waives its jury trial rights following consultation with
such legal counsel. THIS WAIVER IS IRREVOCABLE, AND CANNOT
BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THE LOAN DOCUMENTS. In the
event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
10.16 Time of the Essence. Time is of the
-------------------
essence as to each provision herein or in the other Credit
Documents in which time is a factor.
10.17 Specified Lien Releases. Each of the
-----------------------
Administrative Agent and the Secured Creditors agrees that
(i) the Collateral Agent shall release its Lien on
Collateral consisting of cash to the extent necessary to pay
Permitted Expenses, (ii) to the extent expressly provided in
the penultimate sentence of Section 8.02, the Lien of the
Collateral Agent on the assets described therein shall be
released as provided therein and (iii) the Lien of the
Collateral Agent shall be released upon the first date (such
NY1-53665.4 -122-
date, the "Lien Termination Date") upon which all principal
---------------------
of, and interest accrued on, the Loans has been repaid in
full and all other Obligations have been repaid in full. In
determining whether the test set forth in clause (iii) of
the immediately preceding sentence has been met, the
Collateral Agent shall be entitled to rely upon the Required
Lenders in determining whether such test has been met and
shall be entitled to refrain from taking any action until it
has received a response to its request from the Required
Lenders, and upon receiving such response shall be entitled
to rely thereon with no liability hereunder. The occurrence
of the Lien Termination Date as provided above shall in no
event affect the Borrower's obligation to pay any
Obligations which thereafter become due and payable, and
shall in no event affect the administrative expense priority
granted to the Obligations by the Bankruptcy Court. Nothing
contained in this Agreement or in any Security Document
shall be construed to secure the obligations of the Borrower
under the GPA Agreements or the Kawasaki Agreements by the
Collateral.
10.18 Administrative Agent; Collateral Agent. In
--------------------------------------
acting pursuant to this Agreement and the other Credit
Documents, the Administrative Agent and Collateral Agent
shall act in the manner, and shall be subject to the rights
and duties, provided in the Agency Agreement, the provisions
of which are incorporated by reference herein as fully as if
the terms thereof were set forth herein in their entirety.
Each Person which becomes a Secured Creditor agrees to such
provisions, and to the rights and duties of the
Administrative Agent and Collateral Agent as set forth in
the Agency Agreement, and to the indemnities contained
therein, as fully as if said Secured Creditor were an
original party thereto.
10.19 Dating and Effectiveness. Although this
------------------------
Agreement is dated as of the date first written above for
convenience, the actual dates of execution hereof by the
parties hereto are respectively the dates set forth under
the signatures hereto, and this Agreement shall be effective
on the Third Amendment Effective Date.
10.20 Participation by Commerce and Economic
--------------------------------------
Development Commission. Participation by Commerce and
----------------------
Economic Development Commission in the transactions
contemplated by this Agreement and the other Credit
Documents is subject to the provisions of Arizona Revised
Statutes Section 38-511; and by this reference, each of the other
Credit Documents to which Commerce and Economic Development
Commission is or becomes a party shall be deemed to include
a statement to such effect.
NY1-53665.4 -123-
10.21 Covenants Do Not Preclude Negotiation of a
------------------------------------------
Plan of Reorganization. Nothing contained in the covenants
----------------------
of the Borrower set forth in Section 8 of this Agreement
(including, without limitation, the covenants in Section
8.08 which restrict payments by the Borrower to aircraft
lessors and financiers) shall, or shall be construed to, (i)
preclude the Borrower from negotiating any plan of
reorganization or any financial or other accommodation in
anticipation of any plan or reorganization (including,
without limitation, any modification of payments by the
Borrower to its aircraft lessors or financiers) so long as,
without the prior written consent of the Required Lenders,
no breach of any of such covenants and no related Default or
Event of Default occurs prior to the occurrence of the
Maturity Date and the repayment in full of the Loans and the
payment in full of all of the other Obligations, or (ii)
preclude the Borrower from entering into agreements or other
contractual arrangements evidencing the results of such
negotiations so long as, pursuant to express terms, such
agreements or other contractual arrangements do not and
cannot become effective prior to the confirmation of such
plan of reorganization and the repayment in full of the
Loans and all other amounts payable under the Credit
Documents.
10.22 Certain Consents. The Lenders, in their
----------------
capacities as Lenders hereunder, and lenders under the
Second Amended and Restated Credit Agreement, hereby consent
to (i) the amendment of the By-Laws of the Borrower to
delete therefrom Section 4.16 thereof and replace the same
with the word "Reserved", and (ii) the actions taken and
resolutions adopted by the Board of Directors of the
Borrower to eliminate the Executive Committee of the Board
of Directors of the Borrower and, in consequence thereof, to
terminate all appointments to such Executive Committee.
10.23 Certain Waivers. The Lenders hereby waive
---------------
the condition precedent to the Third Amendment Effective
Date contained in clause (iii) of Section 5.05(c) that the
Lenders receive an opinion of Winthrop, Stimson, Putnam &
Roberts covering the United States citizenship of the
Borrower and other matters involving the DOT and the FAA;
provided, however, that the Borrower agrees that (i) the
-------- -------
Borrower shall cause such opinion (in substantially the same
form and with substantially the same content as the opinion
delivered by such firm on the Second Amendment Effective
Date) to be delivered to the Lenders on or before October 8,
1993, and (ii) breach by the Borrower of the covenant
contained in the preceding clause (i) shall constitute an
Event of Default (with the same effect as if such covenant
were referred to in clause (i) of Section 9.03).
NY1-53665.4 -124-
IN WITNESS WHEREOF, the parties hereto have caused
their duly authorized officers to execute and deliver this
Agreement as of the respective dates set forth below.
"Borrower"
Notice Address: AMERICA WEST AIRLINES, INC.
--------------
4000 East Sky Harbor Blvd.
Phoenix, Arizona 85034
Attention: Senior Vice By: _________________________________
President-Finance
Title: ______________________________
Date: _______________________________
"Administrative Agent"
Notice Office: BT COMMERCIAL CORP.,
-------------
14 Wall Street as Administrative Agent
New York, New York 10005
Attention: Albert Fischetti
By: _________________________________
Title: ______________________________
Date: _______________________________
"Lenders"
GPA LEASING USA I, INC.
By: _________________________________
Title: ______________________________
Date: _______________________________
GPA LEASING USA SUB I, INC
By: _________________________________
Title: ______________________________
Date: _______________________________
NY1-53665.4 -125-
KAWASAKI LEASING
INTERNATIONAL INC.
By: _________________________________
Title: ______________________________
Date: _______________________________
B&B HOLDINGS, INC.
d/b/a PHOENIX CARDINALS
By: _________________________________
Title: ______________________________
Date: _______________________________
BANK OF AMERICA ARIZONA
By: _________________________________
Title: ______________________________
Date: _______________________________
BANK ONE, ARIZONA, N.A.
By: _________________________________
Title: ______________________________
Date: _______________________________
COMMERCE AND ECONOMIC
DEVELOPMENT COMMISSION
By: _________________________________
Title: ______________________________
Date: _______________________________
NY1-53665.4 -126-
THE DIAL CORP.
By: _________________________________
Title: ______________________________
Date: _______________________________
DMB HOLDING LIMITED
PARTNERSHIP
By: _________________________________
Title: ______________________________
Date: _______________________________
EL DORADO INVESTMENT COMPANY
By: _________________________________
Title: ______________________________
Date: _______________________________
FIRST INTERSTATE BANK OF
ARIZONA, N.A.
By: _________________________________
Title: ______________________________
Date: _______________________________
PHELPS DODGE CORPORATION
By: _________________________________
Title: ______________________________
Date: _______________________________
NY1-53665.4 -127-
PHOENIX NEWSPAPERS, INC.
By: _________________________________
Title: ______________________________
Date: _______________________________
PHOENIX SUNS LTD. PARTNERSHIP
By: _________________________________
Title: ______________________________
Date: _______________________________
NY1-53665.4 -128-
ANNEX I
-------
List of Loan Amounts and Addresses
----------------------------------
Outstanding
Principal
Amount of Loans
as of the Third
Amendment
Effective Date
--------------
GPA Leasing USA I, Inc. $9,894,424.48
Address:
-------
c/o GPA Capital, Incorporated
9 West 57th Street
New York, New York 10019
Attention: General Counsel
Telephone: (212) 980-3313
Telecopy: (212) 980-6655
GPA Leasing USA Sub I, Inc $48,002,561.42
Address:
-------
c/o GPA Capital, Incorporated
9 West 57th Street
New York, New York 10019
Attention: General Counsel
Telephone: (212) 980-3313
Telecopy: (212) 980-6655
Kawasaki Leasing International Inc. $19,082,287.16
Address:
-------
65 East 55th Street
New York New York 10022
Attention: President
Telephone: (212) 223-1800
Telecopy: (212) 223-2199
B&B Holdings, Inc. $207,381.08
d/b/a Phoenix Cardinals
Address:
-------
8701 S. Hardy Drive
Tempe, Arizona 85284
Attention: Mr. William V. Bidwill
Telephone: (602) 379-1804
Telecopy: (602) 379-1819
NY1-53665.4
Bank of America Arizona $829,685.74
Address:
-------
101 North First Avenue
31st Floor
Phoenix, Arizona 85003
Attention: Mr. David S. Hanna
Telephone: (602) 262-4136
Telecopy: (602) 262-4354
Bank One, Arizona, N.A. $1,078,585.97
Address:
-------
36th Floor
241 North Central Avenue
Phoenix, Arizona 85004
Attention: Mr. John T. Byrd
Telephone: (602) 221-2173
Telecopy: (602) 221-1535
Commerce and Economic $829,685.74
Development Commission
Address:
-------
3800 N. Central Avenue
Suite 1500
Phoenix, Arizona 85007
Attention: Mr. Jim Tuvell
Telephone: (602) 280-1369
Telecopy: (602) 280-1358
The Dial Corp. $1,078,585.97
Address:
-------
Dial Tower
Phoenix, Arizona 85077-2348
Attention: Mr. F. Edward Lake
Telephone: (602) 207-5657
Telecopy: (602) 207-5100
DMB Holding Limited Partnership $207,381.08
Address:
-------
4201 North 24th Street
Phoenix, Arizona 85018
Attention: Mr. Drew Brown
Telephone: (602) 956-7877
Telecopy: (602) 956-7961
NY1-53665.4 - 2 -
El Dorado Investment Company $207,381.08
Address:
-------
400 E. Van Buren, Suite 650
Phoenix, Arizona 85072-2132
Attention: Mr. Gregory S. Anderson
Telephone: (602) 252-1450
Telecopy: (602) 252-3444
First Interstate Bank of $1,078,585.87
Arizona, N.A.
Address:
-------
100 West Washington
Phoenix, Arizona 85003
Attention: Mr. William S. Randall
Telephone: (602) 229-4547
Telecopy: (602) 229-4525
Phelps Dodge Corporation $456,335.30
Address:
-------
2600 North Central Avenue
Phoenix, Arizona 85004-3014
Attention: Mr. Thomas M. St. Claire
Telephone: (602) 234-8131
Telecopy: (602) 234-8150
Phoenix Newspapers, Inc. $456,335.30
Address:
-------
120 East Van Buren
Phoenix, Arizona 85004
Attention: Mr. Louis A. (Chip) Weil, III
Telephone: (602) 271-8478
Telecopy: (602) 271-8340
Phoenix Suns Ltd. Partnership $207,381.08
Address:
-------
201 East Jefferson, 4th Floor
Phoenix, Arizona 85004
Attention: Mr. Jerry Colangelo
Telephone: (602) 379-7999
Telecopy: (602) 379-7990
NY1-53665.4 - 3 -