Exhibit 10.23(a)
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement (this "Agreement") is made
on December 23, 2002, between Wachovia Bank, National Association
(the "Lender"), Atlantic Coast Airlines, a California corporation
(the "Borrower") and Atlantic Coast Airlines Holdings, Inc., a
Delaware corporation (the "Guarantor").
RECITALS
1. The Borrower and the Lender are parties to a revolving line
of credit facility, evidenced by a Note dated September 28, 2001
in the face amount of Twenty-five Million Dollars
($25,000,000.00).
2. The terms and conditions of the revolving line of credit
facility are set forth in a Loan and Security Agreement dated as
of September 28, 2001, between the Borrower and the Lender.
3. The Guarantor guarantees payment of all debt of the Borrower
to the Lender pursuant to an Unconditional Guaranty dated
September 28, 2001.
4. Pursuant to a letter agreement dated December 6, 2002,
Wachovia agreed to waive its right to declare an Event of Default
under the Loan and Security Agreement by reason of the filing of
a voluntary petition by United Air Lines, Inc. under Chapter 11
of the Bankruptcy Code, subject to certain conditions.
5. On December 9, 2002, UAL Corporation and related entities,
including United Air Lines, Inc. filed Voluntary Petitions under
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the Northern District of Illinois, Eastern Division,
Case no. 02B48191.
6. The purpose of this Agreement is to implement certain terms
of the December 6, 2002 letter agreement.
NOW, THEREFORE, in consideration of the foregoing premises
and other good and valuable consideration, the receipt, adequacy
and sufficiency of which are acknowledged, the parties agree as
follows:
1. Recitals. The recitals set forth above are true and
correct in all material respects and are incorporated into this
Agreement by reference.
2. Amendment to Note. The first paragraph of the Note is
amended to change the principal sum from "Twenty-five Million and
No/100 Dollars ($25,000,000.00)" to "Seventeen Million Five
Hundred Thousand and No/100 DOLLARS ($17,500,000.00)".
3. Amendments to Loan and Security Agreement. The Loan
and Security Agreement is amended as follows:
A. Facility Amount. The definition of "Facility Amount" in
Section 1.01 is deleted and replaced with the following:
"Facility Amount" means at any date of
the determination thereof, the sum of (i)
Seventeen Million Five Hundred Thousand
Dollars ($17,500,000.00), less (ii) the
Letter of Credit Amount at such date.
B. Revolving Credit Commitment. The definition of "Revolving
Credit Commitment" in Section 1.01 of the Loan and Security
Agreement is deleted and replaced with the following:
"Revolving Credit Commitment" means
Seventeen Million Five Hundred Thousand
Dollars ($17,500,000.00), as such amount may
be reduced from time to time pursuant to
Sections 2.09, 2.10 and 2.11.
C. Unused Revolving Credit Commitment. The definition of
"Unused Revolving Credit Commitment" in Section 1.01 of the Loan
and Security Agreement is deleted and replaced with the
following:
"Unused Revolving Credit Commitment"
means, at any date, an amount equal to
Seventeen Million Five Hundred Thousand
Dollars ($17,500,000.00) less the average
outstanding principal balance of the
Revolving Credit Loan and the aggregate
outstanding amount of the Letter of Credit
Obligations for the prior calendar quarter.
D. Information. The following is added to Section 6.01 of the
Loan and Security Agreement:
(h) Promptly upon receipt, copies of
any notices of default or event of default,
or any demand notices, from any creditor of
the Borrower or the Guarantor with a claim in
excess of One Million Dollars ($1,000,000.00)
or any lessor under a lease with the Borrower
or the Guarantor with a value in excess of
One Million Dollars ($1,000,000.00);
and existing Section 6.01(h) is re-lettered to Section 6.01(i),
and existing Section 6.01(i) is re-lettered to Section 6.01(j).
E. Notices of Certain Events. Section 6.08(v) of the Loan and
Security Agreement is deleted in its entirety and replaced with
the following:
(v) promptly after a Loan Party's learning
thereof, of any default by a Loan Party under
any note, indenture, loan agreement,
mortgage, lease or similar agreement relating
to any Indebtedness of such Loan Party
exceeding One Million Dollars
($1,000,000.00).
F. Minimum Liquidity. Section 7.12 of the Loan and Security
Agreement is deleted and replaced with the following:
The Loan Parties shall not permit their
combined minimum Liquidity at any time to be
less than Sixty Million Dollars
($60,000,000.00).
G. Event of Default. Section 8.01(e) of the Loan and Security
Agreement is deleted and replaced with the following:
(e) the occurrence of a default or an
event of default with respect to a debt
obligation of the Borrower or the Guarantor
in excess of One Million Dollars
($1,000,000.00) or under any lease where the
Borrower or the Guarantor is the lessee which
has a value in excess of One Million Dollars
($1,000,000.00); or
H. Events of Default. The word "or" is added to Section
8.01(m) of the Loan and Security Agreement and a new Event of
Default is added as follows:
(n) If the Borrower and United enter
into a modification/amendment of the Restated
United Express Agreement dated as of November
22, 2000, as amended effective February 2,
2001, which becomes effective between the
parties, by reason of bankruptcy court
approval or otherwise, and which is not
acceptable to the Lender in its sole and
absolute discretion;
4. Ratification of Obligations. Except as specifically
modified by this Agreement, the Note and the Loan and Security
Agreement remain unmodified and in full force and effect. Each
of the Borrower and the Guarantor hereby ratifies and confirms
all of its respective obligations, liabilities and indebtedness
under the Note and the Loan and Security Agreement, as amended
pursuant to this Agreement. Nothing contained in this Agreement
shall be construed to extinguish, release, discharge, effect a
novation of, or otherwise impair any of the respective
obligations, indebtedness, and liabilities of the Borrower under
the Note and the Loan and Security Agreement, or any of the liens
and security interests created thereby.
5. Reaffirmation of Representations and Warranties. As an
inducement to the Lender to enter into this Agreement, the
Borrower represents and warrants to the Lender that all of the
representations and warranties set forth in the Loan and Security
Agreement are true and correct on the date hereof as if made on
the date hereof. As a further inducement to the Lender to enter
into this Agreement, the Guarantor represents and warrants to the
Lender that all of the representations and warranties set forth
in the Guaranty are true and correct on the date hereof as if
made on the date hereof.
6. Additional Representations and Warranties. The
Borrower and the Guarantor jointly and severally represent and
warrant to the Lender that:
A. The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of
California. The Guarantor is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware.
B. The execution and delivery by the Borrower and the Guarantor
of this Agreement have been duly authorized and approved by all
necessary corporate action by the Borrower and the Guarantor and
their directors and officers.
C. The execution and delivery by each of the Borrower and the
Guarantor of this Agreement, and the performance by each of them
of their respective obligations hereunder, do not and will not
(i) conflict with, (ii) result in any violation of or default
(with or without notice or the lapse of time or both) under,
(iii) give rise to a right of termination, cancellation, or
acceleration under, (iv) result in the creation or imposition of
any lien, security interest or other encumbrance under, or (v)
result in the loss of a material benefit under or with respect to
(a) any provision of its organizational documents, (b) any
provision of applicable law, (c) any order of any court or other
agency of government, or (d) any provision of any indenture,
agreement or other instrument to which the Borrower or the
Guarantor is a party or by which any of its properties or assets
is bound.
D. This Agreement has been duly executed and delivered by each
of the Borrower and the Guarantor and constitutes the legal,
valid and binding obligation of the Borrower or the Guarantor, as
applicable, enforceable in accordance with its terms.
E. Neither the Borrower nor the Guarantor is required to give
any notice to, or make any filing with, or obtain any
authorization, consent, permit, certificate or approval of any
government, governmental agency, or third party in order to
consummate the transactions contemplated by this Agreement.
F. Except as described in a letter to the Lender dated December
20, 2002, there is no (a) uninsured action, suit, claim,
proceeding or investigation pending or threatened against or
affecting the Borrower or the Guarantor, which involves claims or
amounts in excess of $500,000, at law or in equity, or before or
by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, (b) arbitration proceeding relating to the
Borrower or the Guarantor pending under collective bargaining
agreements or otherwise, or (c) governmental inquiry pending or
threatened against or affecting the Borrower or the Guarantor.
G. To the best of their knowledge, neither the Borrower nor the
Guarantor is in default in the performance, observance, or
fulfillment of any of the obligations, covenants or conditions
contained in any material agreement to which the Borrower or the
Guarantor is bound.
H. No event or condition currently exists which constitutes
(or, with the giving of notice, the passage of time, or both,
would constitute) a default under the Loan and Security
Agreement.
7. Conditions Precedent. This Agreement shall become
effective only upon the satisfaction of each of the following
conditions:
A. Each of the representations and warranties set forth in
Section 5 and Section 6 of this Agreement shall be true and
correct on the date hereof;
B. This Agreement shall have been executed by the Borrower and
the Guarantor and delivered to the Lender;
C. The Borrower shall have delivered to the Lender such
documents, agreements, instruments, certificates, opinions and
assurances as the Lender may reasonably require;
D. The Borrower shall have paid the costs, expenses, and fees
described in Section 10 below; and
E. All actions taken in connection with the execution of this
Agreement and all documents and papers relating thereto shall be
satisfactory to the Lender and its counsel.
8. Further Assurances. The Borrower and the Guarantor
will promptly execute and deliver to the Lender such further
documents, agreements, instruments, certificates, and assurances
and take such further action as the Lender from time to time may
reasonably request in order to carry out the intent and purpose
of this Agreement and to establish and protect the rights and
remedies created or intended to be created in favor of the Lender
under this Agreement and the Loan and Security Agreement, as
amended pursuant to this Agreement.
9. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same
instrument.
10. Expenses. The Borrower shall pay upon demand all
costs, expenses, and fees (including, without limitation,
attorneys' fees) incurred by the Lender in connection with the
preparation and execution of this Agreement and the consummation
of the transactions contemplated hereby.
11. Binding Effect; Assignment. This Agreement will be
binding upon and inure to the benefit of the parties hereto and
their respective heirs, personal representatives, successors and
assigns.
12. Severability. If any provision (or any part of any
provision) contained in this Agreement shall for any reason be
held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect
any other provision (or remaining part of the affected provision)
of this Agreement, and this Agreement shall be construed as if
such invalid, illegal, or unenforceable provision (or part
thereof) had never been contained herein, but only to the extent
such provision (or part thereof) is invalid, illegal, or
unenforceable.
13. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the
Commonwealth of Virginia, without giving effect to its conflicts
of laws provisions.
14. Survival. The representations, warranties, and
covenants contained in this Agreement shall survive the execution
and delivery hereof.
15. Entire Agreement; Amendment; Waiver. This Agreement
contains the entire understanding and agreement among the parties
hereto with respect to the subject matter hereof and supersedes
all prior discussions, understandings, and agreements (whether
oral or written) between them with respect thereto. No amendment
to, or modification or waiver of, any of the terms of this
Agreement shall be valid unless in writing and signed by the
party against whom enforcement of such amendment, modification or
waiver is sought.
16. Waiver of Jury Trial. EACH OF THE PARTIES HERETO
WAIVES ALL RIGHTS TO TRIAL BY JURY OF ANY CLAIMS OF ANY KIND
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. THE PARTIES HERETO ACKNOWLEDGE THAT THIS IS
A WAIVER OF A LEGAL RIGHT AND REPRESENT TO EACH OTHER THAT THESE
WAIVERS ARE MADE KNOWINGLY AND VOLUNTARILY AFTER CONSULTATION
WITH COUNSEL OF THEIR CHOICE. EACH OF THE PARTIES HERETO AGREES
THAT ALL SUCH CLAIMS SHALL BE TRIED BEFORE A JUDGE OF A COURT
HAVING JURISDICTION WITHOUT A JURY.
17. Release of Claims. As an inducement to the Lender to
enter into this Agreement, each of the Borrower and the
Guarantor, on its own behalf and on behalf of any and all of its
present and former directors, officers, employees, agents,
stockholders, representatives, attorneys, receivers, trustees,
parents, subsidiaries, affiliates, predecessors, heirs, personal
representatives, successors, and assigns (each a "Releasing
Obligor Party"; collectively, the "Releasing Obligor Parties")
hereby fully and finally releases, acquits, exonerates, and
forever discharges the Lender and its present and former
participants, directors, officers, employees, agents,
stockholders, representatives, attorneys, receivers, trustees,
personal representatives, parents, subsidiaries, affiliates,
predecessors, successors, and assigns (each a "Released Lender
Party"; collectively, the "Released Lender Parties") from any and
all claims, demands, suits, obligations, costs, damages, losses,
contracts, controversies, agreements, judgments, rights,
liabilities, debts, actions, and causes of action of whatever
kind or nature, whether known or unknown, foreseen or unforeseen,
suspected or unsuspected, at law or in equity, liquidated or
contingent, in contract or in tort, that the Borrower or the
Guarantor have or may have against the Released Lender Parties
(or any of them), from the beginning of time through the date of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement under seal as of the date first above written.
Witness: Wachovia Bank, National Association
By: /s
J. Kent Thompson, Senior Vice
President
Atlantic Coast Airlines
By: /s
Richard Surratt, Executive
Vice President and Chief Financial
Officer
Atlantic Coast Airlines Holdings,
Inc.
By: /s
Richard Surratt, Executive
Vice President and Chief Financial
Officer