Exhibit 10.23
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
_________________________________________
ATLANTIC COAST AIRLINES HOLDINGS, INC.
ATLANTIC COAST AIRLINES
_________________________________________
__________________________________________
__________________________________________
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Date: February 8,1999
$50,000,000
__________________________________________
__________________________________________
__________________________________________
FLEET CAPITAL CORPORATION,
as Lender
__________________________________________
TABLE OF CONTENTS
Page
SECTION 1. CREDIT FACILITIES -1-
1.1 Revolver Loans. -1-
1.2 Bridge Loan. -2-
1.3 Letters of Credit; Letter of Credit Guaranties -2-
1.4 Use of Proceeds of Loans -4-
SECTION 2. INTEREST, FEES AND CHARGES -4-
2.1 Interest -4-
2.2 Fees -7-
2.3 Computation of Interest and Fees -8-
2.4 Reimbursement of Expenses -8-
2.5 Bank Charges -9-
2.6 Illegality. -9-
2.7 Increased Costs -10-
2.8 Capital Adequacy -11-
2.9 Funding Losses -11-
2.10 Maximum Interest. -12-
2.11 Limitation on Borrower's Payments -13-
SECTION 3. LOAN ADMINISTRATION. -13-
3.1 Manner of Borrowing and Funding Revolver Loans -13-
3.2 Special Provisions Governing LIBOR Rate Loans -14-
SECTION 4. PAYMENTS -15-
4.1 General Payment Provisions. -15-
4.2 Payment of Principal of Loans -15-
4.3 Payment of Interest -17-
4.4 Payment of Other Obligations. -17-
4.5 Mandatory Prepayments of Bridge Loan. -17-
4.6 Optional Prepayments of Loans. -17-
4.7 Application of Payments and Collateral Proceeds. -18-
4.8 Marshalling; Payments Set Aside. -18-
4.9 All Loans to Constitute One Obligation. -18-
4.10 Loan Account -18-
4.11 Statements of Account -19-
SECTION 5. TERM AND TERMINATION OF AGREEMENT -19-
5.1 Term of Agreement. -19-
5.2 Termination of Agreement -19-
SECTION 6. SECURITY INTERESTS -21-
6.1 Security Interest in Collateral. -21-
6.2 Other Collateral. -21-
6.3 Lien Perfection; Further Assurances. -22-
6.4 Lien on Leasehold Estate. -22-
6.5 Exclusion From Collateral. -22-
6.6 Release of Lien in Rotable Spare Parts. -22-
SECTION 7. COLLATERAL ADMINISTRATION -23-
7.1 General Provisions -23-
7.2. Administration of Accounts -24-
7.3 Administration of Rotable Spare Parts -26-
7.4 Payment of Charges -26-
SECTION 8. REPRESENTATIONS AND WARRANTIES -26-
8.1. General Representations and Warranties. -26-
8.2.Continuous Nature of Representations and Warranties. -32-
8.3. Survival of Representations and Warranties. -32-
SECTION 9. COVENANTS AND CONTINUING AGREEMENTS -32-
9.1 Affirmative Covenants -32-
9.2 Negative Covenants -36-
9.3 Specific Financial Covenants -38-
SECTION 10. CONDITIONS PRECEDENT -38-
10.1Conditions Precedent to Initial Revolver Loan on Closing Date-38-
10.2Conditions Precedent to All Loans and Letters of Credit and Letter
of
Credit Guaranties -41-
10.3 Waiver of Conditions Precedent -42-
SECTION 11. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON
DEFAULT -42-
11.1 Events of Default -42-
11.2 Acceleration of the Obligations -45-
11.3 Other Remedies -45-
11.4 Remedies Cumulative; No Waiver. -46-
SECTION 12 MISCELLANEOUS -47-
12.1 Power of Attorney -47-
12.2 Indemnity -48-
12.3 Survival of Indemnities -48-
12.4 Modification of Agreement -48-
12.5 Severability -49-
12.6 Successors and Assigns. -49-
12.7 Cumulative Effect; Conflict of Terms -49-
12.8 Execution in Counterparts -49-
12.9 Required Lender's Consent -49-
12.10 Notice -49-
12.11 Credit Inquiries. -50-
12.12 Time of Essence -50-
12.13 Entire Agreement -51-
12.14 Interpretation -51-
12.15 GOVERNING LAW; CONSENT TO FORUM -51-
12.16 WAIVERS -51-
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
"Agreement") is made this 8th day of February, 1999, by and among
ATLANTIC COAST AIRLINES ("Borrower"), a California corporation
with its chief executive office and principal place of business
at 515-A Shaw Road Sterling, Virginia 20166; and ATLANTIC COAST
AIRLINES HOLDINGS, INC. ("Parent"; Borrower and Parent being
herein collectively called the "Loan Parties" and, individually,
a "Loan Party"), a Delaware corporation with its chief executive
office and principal place of business at 515-A Shaw Road
Sterling, Virginia 20166; and FLEET CAPITAL CORPORATION, a Rhode
Island corporation with an office at 6100 Fairview Road Suite 200
Charlotte, North Carolina 28210 ("Lender"). Capitalized terms
used in this Agreement have the meanings assigned to them in
Appendix A, General Definitions.
BACKGROUND STATEMENT
The Loan Parties and Lender are parties to that certain Loan
and Security Agreement, dated October 12, 1995, as amended by
First Amendment thereto, dated June 1, 1997 (the "Existing Loan
Agreement"), by which Lender has agreed to extend credit to
Borrower. The Loan Parties have requested that Lender enter into
certain amendments to the Existing Loan Agreement and Lender has
agreed to such amendments, subject to all of the terms,
conditions and provisions hereof. Effective on the date on which
all of the conditions set forth in Section 10 hereof are
satisfied and Lender makes the initial Loan hereunder (such date
being herein called the "Closing Date"), this Agreement shall
amend and restate in its entirety the Existing Loan Agreement,
and shall represent the entire agreement between the Loan Parties
and Lender with respect to the terms and conditions upon which
Lender is to extend credit to Borrower from and after the Closing
Date. Amounts in respect of interest, fees, and other amounts
payable to or for the account of Lender shall be calculated (i)
in accordance with the provisions of the Existing Loan Agreement
with respect to any period (or a portion of any period) ending
prior to the Closing Date, and (ii) in accordance with the
provisions of this Agreement with respect to any period (or a
portion of any period) commencing on or after the Closing Date.
On the Closing Date, all Loans outstanding under the Existing
Loan Agreement shall be deemed Loans outstanding under this
Agreement.
SECTION 1.CREDIT FACILITIESSECTION 1. CREDIT FACILITIES
Subject to the terms and conditions of, and in reliance upon
the representations and warranties made in, this Agreement and
the other Loan Documents, Lender agrees to make a total credit
facility of $50,000,000 available upon Borrower's request
therefor as follows:
1.1 Revolver Loans. 1.1 Revolver Loans. Lender
agrees, for so long as no Default or Event of Default exists and
subject to the provisions of Section 10 below, to make Revolver
Loans to Borrower from time to time, as requested by Borrower in
the manner set forth in Section 3.1 hereof, up to a maximum
principal amount at any time outstanding equal to the lesser of
the Revolver Facility Amount or the Borrowing Base at such time.
The Revolver Loans may be repaid and reborrowed in accordance
with the provisions of this Agreement. Each Revolver Loan shall,
at the option of Borrower, be made or continued as, or converted
into, a Base Rate Loan, a Daily LIBOR Loan or a LIBOR Loan upon
the terms set forth herein. Upon the Closing Date, all Revolver
Loans outstanding under the Existing Loan Agreement shall,
without the necessity of any further action by Borrower or
Lender, be deemed Revolver Loans outstanding under this
Agreement.
1.2 Bridge Loan. 1.2 Bridge Loan. Lender agrees,
provided no Default or Event of Default exists and subject to the
provisions of Section 10 below, to make Bridge Loan Advances
under the Bridge Loan to Borrower, as requested by Borrower in
the manner set forth in Section 3.1 hereof, up to a maximum
amount of Bridge Loan Advances made in the amount of $15,000,000,
which shall be repayable in accordance with the terms of Section
4.2.2 of this Agreement and the Bridge Note and shall be secured
by all of the Collateral. Borrower shall not be entitled to
reborrow any amounts repaid with respect to the Bridge Loan.
Each Bridge Loan Advance shall, at the option of Borrower, be
made or continued as, or converted into, a Base Rate Loan, a
Daily LIBOR Loan or a LIBOR Loan, upon the terms set forth
herein.
1.3 Letters of Credit; Letter of Credit Guaranties1.3
Letters of Credit; Letter of Credit Guaranties.
1.3.1 Issuance of Letters of Credit and Letter of
Credit Guaranties. Lender agrees, for so long as no Default or
Event of Default exists and subject to the provisions of Section
10 below, to issue its, or cause to be issued its Affiliate's
Letters of Credit and Letter of Credit Guaranties, as requested
by Borrower, provided that the Letter of Credit Amount at any
time shall not exceed $15,000,000 and no Letter of Credit or
Letter of Credit Guaranty may have an expiration date that is
after the last day of the Original Term or the then applicable
Renewal Term. Upon the Closing Date, all Letters of Credit and
Letter of Credit Guaranties outstanding under the Existing Loan
Agreement, including, without limitation, the Bond Letter of
Credit and the Bond Letter of Credit Guaranty, shall, without the
necessity of any further action by Borrower, Lender or Lender's
Affiliates, be deemed Letter of Credit and Letter of Credit
Guaranties outstanding under this Agreement.
1.3.2 Reimbursement Obligations. All indebtedness,
liabilities or obligations whatsoever arising or incurred in
connection with any Letters of Credit or Letter of Credit
Guaranties shall be incurred solely as an accommodation to
Borrower and for Borrower's account. Borrower hereby
unconditionally agrees to reimburse Lender for the total amount
of all sums paid by Lender on Borrower's behalf under the terms
of any Letter of Credit or Letter of Credit Guaranty, any drawing
or demand under any Letter of Credit or Letter of Credit Guaranty
or any additional or further liability which may accrue against
Lender in connection with the same, immediately upon the date of
payment by Lender. Any such sum paid or liability incurred by
Lender in connection with any Letter of Credit or Letter of
Credit Guaranty shall, at Lender's option, if not reimbursed by
Borrower on the date paid or incurred by Lender, be treated for
all purposes and shall have the same force and effect as if such
amount had been loaned by Lender to Borrower as a Revolver Loan,
shall be secured by all of the Collateral and shall bear interest
and be payable at the same rate and in the same manner as
Revolver Loans that are Base Rate Loans.
1.3.3 Rights and Remedies. In the event that,
coincident with or subsequent to the occurrence of, and during
the continuance of, a Default or an Event of Default, Lender
becomes aware of the possibility of a draw, or enforcement of
Lender's obligations, under a Letter of Credit or Letter of
Credit Guaranty, Lender, at its option, may, but shall not be
required to, pay Borrower's obligations to the beneficiary or
holder of such Letter of Credit or Letter of Credit Guaranty
directly to such beneficiary or holder, and, in such event, the
amount of any such payment made by Lender shall be treated for
all purposes and shall have the same force and effect as if such
amount had been loaned by Lender to Borrower as a Revolver Loan,
shall be secured by all of the Collateral and shall bear interest
and be payable at the same rate and in the same manner as
Revolver Loans that are Base Rate Loans. Additionally, in the
event of Borrower's failure to reimburse Lender for the total
amount of all sums paid by Lender on Borrower's behalf under the
terms of any Letter of Credit or Letter of Credit Guaranty, any
drawing or demand under any Letter of Credit or Letter of Credit
Guaranty or any additional or further liability which may accrue
against Lender in connection therewith, Lender, in addition to
its rights under the Code and under this Agreement, shall be
fully subrogated to the rights and remedies of the issuer of the
Letter of Credit under any agreement made with Borrower relating
to the issuance of such Letter of Credit, each such agreement
being incorporated herein by reference, and Lender shall be
entitled to exercise all such rights and remedies thereunder and
under law in such regard as fully as if it were the issuer of the
Letter of Credit. If any Letter of Credit is drawn upon to
discharge any obligation of Borrower to the beneficiary of such
Letter of Credit, in whole or in part, Lender shall be fully
subrogated to the rights of such beneficiary with respect to the
obligation of Borrower to such beneficiary discharged with the
proceeds of such Letter of Credit.
1.3.4 Indemnification. Borrower hereby
unconditionally agrees to indemnify Lender and hold Lender
harmless from any and all losses, claims or liabilities arising
from any transactions or occurrences relating to Letters of
Credit or Letter of Credit Guaranties issued, established, opened
or accepted for Borrower's account, and any drafts or acceptances
thereunder, and all Letter of Credit Obligations incurred in
connection therewith; provided, however, the foregoing shall not
apply to losses, claims or liabilities arising out of Lender's
gross negligence or willful misconduct. This indemnity shall
survive the payment in full of all amounts payable to Lender
hereunder and the termination of this Agreement.
1.3.5 Termination. In the event that this
Agreement is terminated for any reason by either party as herein
provided, in addition to Lender's other rights under this
Agreement, unless all outstanding Letters of Credit and Letter of
Credit Guaranties are terminated or canceled and Lender and its
Affiliates released from all liability thereunder, Lender shall
be entitled to pay and discharge all Letter of Credit Obligations
with respect to all outstanding Letters of Credit and Letter of
Credit Guaranties which are not terminated or canceled, whether
such Letter of Credit Obligations are absolute or contingent, and
all sums paid by Lender in connection therewith shall be deemed
to have been loaned by Lender to Borrower as a Revolver Loan,
shall be secured by all of the Collateral and shall bear interest
and be payable at the same rate and in the same manner as
Revolver Loans that are Base Rate Loans.
1.4 Use of Proceeds of Loans. 1.4 Use of Proceeds of
Loans. The Borrower shall use the proceeds of the Loans as
follows:
(i) On the Closing Date, the proceeds of the
initial Revolver Loan, together with other funds then
available to Borrower, shall be used solely for the purposes
of (i) refinancing all of the Indebtedness for Money
Borrowed owed by Borrower to Fleet under the Existing Loan
Agreement, and (ii) to the extent of the balance, paying the
costs of the transactions contemplated by this Agreement;
(ii) All Revolver Loans made after the
Closing Date shall be used solely for Borrower's general
working capital needs in a manner consistent with the
provisions of this Agreement and Applicable Law and for any
other purposes not inconsistent with this Agreement; and
(iii) The Bridge Loan Advances shall be
used solely by Borrower to finance, or to reimburse the
Authority for the financing of, the costs of the
development, construction and related construction expenses
of a terminal facility located at the Dulles International
Airport on land owned by the Authority.
SECTION 2. INTEREST, FEES AND CHARGESSECTION 2.
INTEREST, FEES AND CHARGES
2.1 Interest2.1 Interest.
2.1.1 Rates of Interest - Loans. Subject to the
provisions of Section 2.1.6 of this Agreement, Borrower agrees to
pay interest on the unpaid principal amount of the Loans
outstanding from the respective dates such principal amounts are
advanced until paid (whether at stated maturity, on acceleration,
or otherwise) at a variable rate per annum equal to the
applicable rate indicated below:
(i) For Loans made or outstanding as Base
Rate Loans, the Base Rate in effect from time to time plus
the Applicable Percentage;
(ii) For Loans made or outstanding as Daily
LIBOR Loans, the Daily LIBOR Rate in effect from time to
time plus the Applicable Percentage; or
(iii) For Loans made or outstanding as
LIBOR Rate Loans, the relevant Adjusted LIBOR Rate for the
applicable Interest Period selected by Borrower in
conformity with this Agreement plus the Applicable
Percentage.
2.1.2 Computation of Interest. Upon determining the
Adjusted LIBOR Rate for any Interest Period requested by
Borrower, Lender shall promptly notify Borrower thereof by
telephone or in writing, and such Adjusted LIBOR Rate shall
remain in effect throughout the applicable Interest Period. Such
determination shall, absent manifest error, be final, conclusive
and binding on all parties and for all purposes. The applicable
rates of interest with respect to all Base Rate Loans shall be
increased or decreased, as the case may be, by an amount equal to
any increase or decrease in the Base Rate, with such adjustments
to be effective as of the opening of business on the day that any
such change in the Base Rate becomes effective. Interest on each
Loan shall accrue from and including the date of such Loan to but
excluding the date of any repayment thereof; provided, however,
that if a Loan is repaid on the same day made, one day's interest
shall be paid on such Loan.
2.1.3 Conversions and Continuations.
(i) Borrower may on any Business Day,
subject to the giving of a proper Notice of
Conversion/Continuation, elect to (a) continue all or any
part of the principal amount of a LIBOR Rate Loan by
selecting a new Interest Period therefor, to commence on the
last day of the Interest Period immediately preceding such
new Interest Period, or (b) convert all or any part of a
Loan of one Type into a Loan of another Type; provided,
however, that no outstanding Loans may be converted into or
continued as LIBOR Rate Loans when any Default or Event of
Default has occurred and is continuing, and no conversion of
any LIBOR Rate Loans into Base Rate Loans or Daily Rate
Loans shall be made except on the last day of the Interest
Period for such LIBOR Rate Loans.
(ii) Whenever Borrower desires to convert
or to continue Loans under Section 2.1.4(i) hereof, Borrower
shall give Lender written notice (or telephonic notice
promptly confirmed in writing), substantially in the form of
Exhibit B attached hereto (a "Notice of
Conversion/Continuation"), signed by an authorized officer
of Borrower, at least two (2) Business Days before the
requested conversion or continuation date. Each such Notice
of Conversion/Continuation shall be irrevocable and shall
specify the aggregate principal amount of the Loans to be
converted or continued, the date of such conversion or
continuation (which shall be a Business Day), and whether
the Loans are being converted into or continued as LIBOR
Rate Loans (and, if so, the duration of the Interest Period
to be applicable thereto), Daily LIBOR Loans or Base Rate
Loans. If, upon the expiration of any Interest Period in
respect of any LIBOR Rate Loans, Borrower shall have failed
to deliver a Notice of Conversion/Continuation, Borrower
shall be deemed to have elected to convert such LIBOR Rate
Loans to Base Rate Loans.
2.1.4 Interest Periods. In connection with the
making or continuation of, or conversion into, each Borrowing of
LIBOR Rate Loans, Borrower shall select an interest period (each
an "Interest Period") to be applicable to such LIBOR Rate Loan,
which interest period shall commence on the date such LIBOR Rate
Loan is made and shall end 30, 60, 90 or 180 days thereafter;
provided, however, that:
(i) The initial Interest Period for a
LIBOR Rate Loan shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing
consisting of LIBOR Rate Loans) and each Interest Period
occurring thereafter in respect of such Borrowing shall
commence on the date on which the next preceding Interest
Period expires;
(ii) If any Interest Period would otherwise
expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day;
(iii) No Interest Period shall extend
beyond the last day of the Original Term or the last day of
any Renewal Term; and
(iv) No Interest Period with respect to
any portion of principal of a Loan shall extend beyond a
date on which Borrower is required to make a scheduled
payment of such portion of principal.
2.1.5 Interest Rate Not Ascertainable. If Lender
shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) that on
any date for determining the Adjusted LIBOR Rate for any Interest
Period, by reason of any changes affecting the London interbank
market or Lender's or Bank's position in such market, adequate
and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of
Adjusted LIBOR Rate, then, and in any such event, Lender shall
forthwith give notice (by telephone confirmed in writing) to
Borrower of such determination. Until Lender notifies Borrower
that the circumstances giving rise to the suspension described
herein no longer exist, the obligation of Lender to make LIBOR
Rate Loans shall be suspended, and such affected Loans then
outstanding shall, at the end of the then applicable Interest
Period or at such earlier time as may be required by Applicable
Law, bear the same interest as Base Rate Loans.
2.1.6 Default Rate of Interest. During the
existence of an Event of Default, the principal amount of all
Loans (and, to the extent permitted by Applicable Law, all
accrued interest that is past due) shall bear interest at a rate
per annum equal to two percent (2%) above the interest rate
otherwise applicable thereto (the "Default Rate").
2.1.7 Daily LIBOR Loans. Notwithstanding any
provision to the contrary in this Agreement, the principal amount
of Loans outstanding on any date shall be deemed to be Daily
LIBOR Loans and shall bear interest at the rate otherwise
provided herein with respect to Daily LIBOR Loans, if and to the
extent that (i) Borrower shall request any such Loans to be Daily
LIBOR Loans in a Notice of Borrowing, (ii) Borrower shall have
converted an outstanding Base Rate Loan or LIBOR Rate Loan to a
Daily LIBOR Loan pursuant to a Notice of Conversion/Continuation,
or (iii) Borrower shall have failed to continue a LIBOR Rate Loan
upon the expiration of an applicable Interest Period for a new
Interest Period and shall not have elected to convert such LIBOR
Rate Loan to a Base Rate Loan, in either case pursuant to a
Notice of Conversion/Continuation. Lender shall have no
obligation to notify Borrower on any date of the Daily LIBOR Rate
effective for such date, unless requested to do so in writing by
Borrower for a specific date (but in no event shall Lender be
obligated to advise Borrower of the Daily LIBOR Rate more than
once each week). Each determination of the Daily LIBOR Rate
shall, absent manifest error, be final, conclusive and binding on
all parties and for all purposes. The applicable rate of
interest for all Loans bearing interest based upon the Daily
LIBOR Rate shall be increased or decreased, as the case may be,
by an amount equal to any increase or decrease in the Daily LIBOR
Rate, with such adjustments to be effective as of the opening of
business on the day that any such change in the Daily LIBOR Rate
becomes effective. The provisions of Section 2.1.5, 2.6 and 2.7
with respect to LIBOR Rate Loans (but specifically omitting
Section 2.9) shall apply to and govern the making and
administration of Daily LIBOR Loans.
2.2 Fees2.2 Fees.
2.2.1 Closing Fee. Borrower shall pay to Lender a
closing fee of $100,000 which shall be fully earned and non-
refundable on the Closing Date and shall be paid concurrently
with and from the proceeds of the initial Loan hereunder.
2.2.2 Unused Line Fee. Borrower shall pay to Lender
an unused line fee equal to the Applicable Percentage of the
amount by which seventy-five percent (75%) of the aggregate of
the Revolver Facility Amount exceeds the Average Monthly Revolver
Loan and Letter of Credit Balance. The unused line fee shall
begin to accrue on the Closing Date and shall be payable monthly
in arrears on the first day of each calendar month after the
Closing Date and upon the termination of this Agreement. The
Revolver Facility Amount in effect on the Closing Date and on the
first day of each month thereafter shall be used in the
calculation of the unused line fee payable for the month in which
the Closing Date occurs and each month thereafter.
2.2.3 Letter of Credit and Letter of Credit
Guaranty Fees. Borrower shall pay the following fees for all
Letters of Credit and Letter of Credit Guaranties issued by
Lender and its Affiliates pursuant to Section 1.3.1 hereof:
(i) Fees to Bank in the amounts and on the dates
as set forth in Section 2.03 of the Reimbursement Agreement;
and
(ii) Upon issuance of each other Letter of Credit
and Letter of Credit Guaranty:
(a) an issuance fee to Lender for
the account of both Lender and its Affiliate that
issues such other Letter of Credit equal to the
greater of (1) $500 or (2) the Applicable
Percentage of the undrawn amount of such Letter of
Credit, payable in advance upon the issuance of
each other Letter of Credit and Letter of Credit
Guaranty and on each extension of the stated
termination date thereof for so long as such other
Letter of Credit and Letter of Credit Guaranty is
outstanding; and
(b) the reasonable and customary
charges from time to time of the issuer of such
other Letter of Credit with respect to the
issuance, notification, amendment, transfer,
administration, cancellation and conversion of,
and drawings under, such other Letter of Credit,
all of which shall be payable to Lender for the
account of such issuer.
All fees in connection with each Letter of Credit and Letter
of Credit Guaranty as set forth in Sections 2.2.3(i) and (ii)(a)
hereof shall be deemed fully earned upon the issuance of the
Letter of Credit and Letter of Credit Guaranty and shall not be
subject to rebate or proration upon the termination of this
Agreement for any reason.
2.2.4 Agency Fee. In the event that Lender sells
any portion of the Loans and the Loan Documents to a
Participating Lender, then on the date that Borrower receives
notice of such sale from Lender and on each anniversary of such
date, Borrower shall pay to Lender an annual agency fee of
$10,000 per year, which fee shall not be subject to rebate or
proration upon the termination of this Agreement for any reason.
2.2.5 Interest on Unpaid Fees. Any amount of fees
payable by Borrower to Lender that is not paid when due shall
bear interest, from the date such amount of fees was due until
the date of payment in full, at the rate applicable to the
Revolver Loans that are Base Rate Loans, payable upon demand and
on the date of payment in full.
2.2.6 Audit and Appraisal Fees. Borrower shall
reimburse Lender for all reasonable out-of-pocket costs and
expenses from time to time incurred by Lender in connection with
all audits and appraisals of Borrower's books and records and of
the Collateral and such other matters related thereto as Lender
shall deem appropriate; provided, however, for so long as no
Default or Event of Default exists, the maximum amount of such
audit and appraisal expenses for which Borrower shall be
obligated to pay Lender for any Loan Year shall not exceed
$8,000.
2.3 Computation of Interest and Fees2.3 Computation of
Interest and Fees. All interest, fees and other charges provided
for in this Agreement shall be calculated daily and shall be
computed on the actual number of days elapsed over a year of 360
days. For the purpose of computing interest hereunder, all items
of payment received by Lender shall be deemed applied by Lender
on account of the Obligations (subject to final payment of such
items) on the Business Day of receipt by Lender of such items in
immediately available funds, and Lender shall be deemed to have
received such item of payment on the date specified in Section
4.1 hereof.
2.4 Reimbursement of Expenses2.4 Reimbursement of
Expenses. If, at any time or times regardless of whether or
not an Event of Default then exists, Lender incurs legal or
accounting expenses or any other costs or out-of-pocket expenses
in connection with (i) the negotiation and preparation of this
Agreement or any of the other Loan Documents, or any amendment of
or modification of this Agreement or any of the other Loan
Documents, or any sale or attempted sale of any interest herein
to a Participating Lender; (ii) reasonable charges for Persons
whom Lender may engage from time to time during the existence of
an Event of Default to render opinions concerning the books,
records and financial condition of Borrower and its Subsidiaries
and the condition and value of the Collateral; (iii) any
litigation, contest, dispute, suit, proceeding or action (whether
instituted by Lender, Borrower or any other Person) in any way
relating to the Collateral, this Agreement or any of the other
Loan Documents; provided, however, Borrower shall not be
obligated for the expenses and costs of Lender set forth in this
Section 2.4(iii) in connection with any litigation, contest,
dispute, suit, proceeding or action initiated by Lender or
Borrower in which Borrower is ultimately the prevailing party;
(iv) the enforcement of the rights of Lender against Borrower or
any other Person which may be obligated to Lender by virtue of
this Agreement or any of the other Loan Documents, including,
without limitation, the Account Debtors; (v) any attempt by
Lender to inspect, verify, protect, preserve, restore, collect,
sell, liquidate or otherwise dispose of or realize upon the
Collateral after the occurrence and during the continuance of an
Event of Default; (vi) the filing and recording of the Deed of
Trust and the financing statements and all other documents
required by Lender to perfect Lender's Lien in the Collateral,
and the conducting of searches in all filing offices at such
intervals as Lender may reasonably determine to confirm the
priority of Lender's Lien in the Collateral; and (vii) any
documentary stamp tax or any other taxes incurred by Lender
because of the filing or recording of the Deed of Trust or the
financing statements or the other documents required by Lender to
perfect Lender's Lien in the Collateral; then all such legal and
accounting expenses, other costs and out of pocket expenses of
Lender shall be charged to, and paid by, Borrower. Borrower
shall also reimburse Lender for expenses incurred by Lender in
its administration of the Collateral to the extent and in the
manner provided in Section 7 hereof or in any of the Loan
Documents.
2.5 Bank Charges2.5 Bank Charges. Borrower shall pay
to Lender, on demand, any and all fees, costs or expenses which
Lender pays to a bank or other similar institution arising out of
or in connection with (i) the forwarding to Borrower or any other
Person on behalf of Borrower by Lender of proceeds of Loans made
by Lender to Borrower pursuant to this Agreement, (ii) the
depositing for collection, by Lender of any Payment Item received
or delivered to Lender on account of the Obligations, and (iii)
the forwarding by Lender to any Participating Lender of any
payments on the Obligations received by Lender. Borrower
acknowledges and agrees that Lender may charge such costs, fees
and expenses to Borrower based upon Lender's good faith estimate
of such costs, fees and expenses as they are incurred by Lender.
2.6 Illegality.2.6 Illegality. Notwithstanding anything to
the contrary contained elsewhere in this Agreement, if (i) any
change in any law or regulation or in the interpretation thereof
by any governmental authority charged with the administration
thereof shall make it unlawful for Lender or any Participating
Lender to make or maintain a LIBOR Rate Loan or to give effect to
its obligations as contemplated hereby with respect to a LIBOR
Rate Loan or (ii) at any time Lender or any Participating Lender
reasonably determines that the making or continuance of any LIBOR
Rate Loan has become impracticable as a result of a contingency
occurring after the date hereof which materially and adversely
affects the London interbank market or the position of Lender in
such market, then, by written notice to Borrower, Lender may (a)
declare that LIBOR Rate Loans will not thereafter be made by
Lender, whereupon any request by Borrower for a LIBOR Rate Loan
shall be deemed a request for a Base Rate Loan unless Lender's or
such Participating Lender's declaration shall be subsequently
withdrawn; and (b) require that all outstanding LIBOR Rate Loans
made by Lender be converted to Base Rate Loans, in which event
all such LIBOR Rate Loans shall be automatically converted to
Base Rate Loans as of the date of Borrower's receipt of the
aforesaid notice from Lender.
2.7 Increased Costs2.7 Increased Costs. If, by reason of
(i) after the date hereof, the introduction of or any change
(including, without limitation, any change by way of imposition
or increase of Statutory Reserves or other reserve requirements)
in or in the interpretation of any Applicable Law, or (ii) the
compliance with any guideline or request from any central bank or
other governmental authority or quasi-governmental authority
exercising control over banks or financial institutions generally
(whether or not having the force of law):
(a) Lender shall be subject to any Tax, duty
or other charge with respect to any LIBOR Rate Loan or its
obligation to make LIBOR Rate Loans, or shall change the
basis of taxation of payment to Lender of the principal of
or interest on its LIBOR Rate Loans or its obligation to
make LIBOR Rate Loans (except for changes in the rate of Tax
on the overall net income of Lender); or
(b) any reserve (including, without
limitation, any imposed by the Board of Governors), special
deposits or similar requirement against assets of, deposits
with or for the account of, or credit extended by, Lender
shall be imposed or deemed applicable or any other condition
affecting its LIBOR Rate Loans or its obligation to make
LIBOR Rate Loans shall be imposed on Lender or the London
interbank market;
and as a result thereof there shall be any increase in the actual
cost to Lender of agreeing to make or making, funding or
maintaining LIBOR Rate Loans (except to the extent already
included in the determination of the applicable Adjusted LIBOR
Rate for LIBOR Rate Loans), or there shall be a reduction in the
amount received or receivable by Lender, then Borrower shall from
time to time, upon written notice from and demand by Lender, pay
to Lender within ten (10) Business Days after the date specified
in such notice and demand, an additional amount sufficient to
indemnify Lender against such increased cost. A certificate as
to the amount of such increased cost, submitted to Borrower by
Lender, shall be conclusive in the absence of manifest error.
Such certificate will set forth the nature of the occurrence
giving rise to such compensation, the additional amount of
amounts to be paid to Lender, and the method by which such
amounts were determined. In determining such amount, Lender may
use any reasonable averaging and attribution method. For
purposes of this Section 2.7, all references to Lender shall be
deemed to include any Participating Lender and bank holding
company or bank parent of Lender or any Participating Lender.
2.8 Capital Adequacy2.8 Capital Adequacy. If after the date
hereof Lender reasonably determines that (i) the adoption of any
Applicable Law, rule, or regulation regarding capital
requirements for banks or bank holding companies or the
subsidiaries thereof, (ii) any change in the interpretation or
administration of any such law, rule or regulation by any
governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or
(iii) compliance by Lender or its respective holding company with
any request or directive of any such governmental authority,
central bank or comparable agency regarding capital adequacy
(whether or not having the force of law), has the effect of
reducing the return on Lender's capital to a level below that
which Lender could have achieved (taking into consideration
Lender's and its respective holding company's policies with
respect to capital adequacy immediately before such adoption,
change or compliance and assuming that Lender's capital was fully
utilized prior to such adoption, change or compliance) but for
such adoption, change or compliance as a consequence of Lender's
commitment to make the Loans pursuant hereto by any amount deemed
by Lender to be material:
(a) Lender shall promptly, after Lender's
determination of such occurrence, give notice thereof to
Borrower; and
(b) Borrower shall pay to Lender, as an
additional fee from time to time, within ten (10) Business
Days after Lender's demand therefor, such amount as Lender
certifies to be the amount that will compensate Lender for
such reduction.
A certificate of Lender claiming entitlement to compensation
as set forth above will be conclusive in the absence of manifest
error. Such certificate will set forth the nature of the
occurrence giving rise to such compensation, the additional
amount or amounts to be paid to Lender, and the method by which
such amounts were determined. In determining such amount, Lender
may use any reasonable averaging and attribution method. For
purposes of this Section 2.8, all references to Lender shall be
deemed to include any Participating Lender and bank holding
company or bank parent of Lender or any Participating Lender.
2.9 Funding Losses.9 Funding Losses. Borrower shall
reimburse Lender for any loss, cost, expense or liability
(including, without limitation, any interest paid by Lender to
lenders of funds borrowed by Lender to make or carry the LIBOR
Rate Loans to the extent not recovered by Lender in connection
with the re-employment of such funds) sustained or incurred by
Lender if for any reason (other than a default by Lender): (i) a
Borrowing of, or conversion to or continuation of, a LIBOR Rate
Loan does not occur on the date specified therefor in a Notice of
Borrowing or Notice of Conversion/Continuation (whether or not
withdrawn); (ii) any repayment (including any conversions
pursuant to Section 2.1.3 hereof) of any LIBOR Rate Loans occurs
on a date that is not the last day of an Interest Period
applicable thereto; or (iii) Borrower defaults in its obligation
to repay LIBOR Rate Loans when required by the terms of this
Agreement. Borrower shall pay such amount within five (5)
Business Days after presentation by Lender of a statement setting
forth the amount and Lender's calculation thereof pursuant
hereto, which statement shall, except for manifest error, be
final, conclusive and binding. For purposes of this Section 2.9,
all references to Lender shall be deemed to include any
Participating Lender and bank holding company or bank parent of
Lender or any Participating Lender.
2.10 Maximum Interest..10 Maximum Interest. Regardless
of any provision contained in this Agreement or any of the other
Loan Documents, in no contingency or event whatsoever shall the
aggregate of all amounts that are contracted for, charged or
collected pursuant to the terms of this Agreement or any of the
other Loan Documents and that are deemed interest under
Applicable Law exceed the highest rate permissible under any
Applicable Law. No agreements, conditions, provisions or
stipulations contained in this Agreement or any of the other Loan
Documents, or the exercise by Lender of the right to accelerate
the payment or the maturity of all or any portion of the
Obligations, or the exercise of any option whatsoever contained
in any of the Loan Documents, or the prepayment by Borrower of
any of the Obligations, or the occurrence of any contingency
whatsoever, shall entitle Lender to charge or receive in any
event, interest or any charges, amounts, premiums or fees deemed
interest by Applicable Law (such interest, charges, amounts,
premiums and fees referred to herein collectively as "Interest")
in excess of the Maximum Rate and in no event shall Borrower be
obligated to pay Interest exceeding such Maximum Rate, and all
agreements, conditions or stipulations, if any, which may in any
event or contingency whatsoever operate to bind, obligate or
compel Borrower to pay Interest exceeding the Maximum Rate shall
be without binding force or effect, at law or in equity, to the
extent only of the excess of Interest over such Maximum Rate. If
any Interest is charged or received in excess of the Maximum Rate
("Excess"), Borrower acknowledges and stipulates that any such
charge or receipt shall be the result of an accident and bona
fide error, and such Excess, to the extent received, shall be
applied first to reduce the principal Obligations and the
balance, if any, returned to Borrower, it being the intent of the
parties hereto not to enter into a usurious or otherwise illegal
relationship. The right to accelerate the maturity of any of the
Obligations does not include the right to accelerate any interest
that has not otherwise accrued on the date of such acceleration,
and Lender does not intend to collect any unearned interest in
the event of any such acceleration. Borrower recognizes that,
with fluctuations in the rates of interest set forth in Section
2.1.1 of this Agreement, and in the Maximum Rate, such an
unintentional result could inadvertently occur. All monies paid
to Lender hereunder or under any of the other Loan Documents,
whether at maturity or by prepayment, shall be subject to any
rebate of unearned interest as and to the extent required by
Applicable Law. By the execution of this Agreement, Borrower
covenants that (i) the credit or return of any Excess shall
constitute the acceptance by Borrower of such Excess, and (ii)
Borrower shall not seek or pursue any other remedy, legal or
equitable, against Lender, based in whole or in part upon
contracting for, charging or receiving any Interest in excess of
the Maximum Rate. For the purpose of determining whether or not
any Excess has been contracted for, charged or received by
Lender, all interest at any time contracted for, charged or
received from Borrower in connection with any of the Loan
Documents shall, to the extent permitted by Applicable Law, be
amortized, prorated, allocated and spread in equal parts
throughout the full term of the Obligations. Borrower and Lender
shall, to the maximum extent permitted under Applicable Law, (i)
characterize any non-principal payment as an expense, fee or
premium rather than as Interest and (ii) exclude voluntary
prepayments and the effects thereof. The provisions of this
subsection shall be deemed to be incorporated into every Loan
Document (whether or not any provision of this Section is
referred to therein). All such Loan Documents and communications
relating to any Interest owed by Borrower and all figures set
forth therein shall, for the sole purpose of computing the extent
of Obligations, be automatically recomputed by Borrower, and by
any court considering the same, to give effect to the adjustments
or credits required by this Section.
2.11 Limitation on Borrower's Payments.11 Limitation on
Borrower's Payments. Notwithstanding anything contained in this
Agreement to the contrary, Borrower shall not have any obligation
to pay to Lender amounts owing under Sections 2.7 or 2.8 hereof
if such amounts relate to any period which is more than ninety
(90) days prior to the date upon which the request for payment
therefor is delivered to Borrower.
SECTION 3. LOAN ADMINISTRATION.SECTION 3. LOAN
ADMINISTRATION.
3.1 Manner of Borrowing and Funding Revolver Loans3.1
Manner of Borrowing and Funding Revolver Loans. Borrowings
pursuant to Section 1.1 hereof shall be made and funded as
follows:
3.1.1. Notice of Borrowing.
(i) Whenever Borrower desires to make a
Borrowing under Section 1.1 or 1.2 of this Agreement (other
than a Borrowing resulting from a conversion or continuation
pursuant to Section 2.1.4), Borrower shall give Lender prior
written notice (or telephonic notice promptly confirmed in
writing) of such Borrowing request (a "Notice of
Borrowing"), which shall be in the form of Exhibit C
attached hereto and signed by an authorized officer of
Borrower. Such Notice of Borrowing shall be given by
Borrower no later than 11:00 a.m., Charlotte, North Carolina
time, at the office of Lender designated by Lender from time
to time (a) on the Business Day of the requested funding
date of such Borrowing, in the case of all Base Rate Loans
and Daily LIBOR Loans, and (b) at least two (2) Business
Days prior to the requested funding date of such Borrowing
in the case of LIBOR Rate Loans. Notices received after
11:00 a.m., Charlotte, North Carolina time, shall be deemed
received on the next Business Day. All Loans made on the
Closing Date shall be made as Daily LIBOR Loans and
thereafter may be made or continued as or converted into
Base Rate Loans, Daily LIBOR Loans or LIBOR Rate Loans.
Each Notice of Borrowing (or telephonic notice thereof)
shall be irrevocable and shall specify (a) the principal
amount of the Borrowing, which, in the case of a Bridge Loan
Advance, shall be in a minimum amount of at least $500,000,
(b) the date of Borrowing (which shall be a Business Day),
(c) whether the Borrowing is to consist of Base Rate Loans,
Daily LIBOR Loans or LIBOR Rate Loans, and the amount of
each such Loan, and (d) in the case of LIBOR Rate Loans, the
duration of the Interest Period to be applicable thereto.
Borrower may not request any LIBOR Rate Loans or Daily LIBOR
Loans if a Default or Event of Default exists.
(ii) Unless payment is otherwise timely made
by Borrower, the becoming due of any amount required to be
paid under this Agreement or any of the other Loan
Documents, or under the Reimbursement Agreement, whether as
principal, accrued interest, fees, expenses or other
charges, including, without limitation, payments required to
be made pursuant to Section 1.3.2 hereof and payments
required to be made to Bank pursuant to Section 2.03 of the
Reimbursement Agreement, shall be deemed irrevocably to be a
request by Borrower for a Revolver Loan on the due date of,
and in an aggregate amount required to pay, such principal,
accrued interest, fees, expenses or other charges, and the
proceeds of each such Revolver Loan may be disbursed by
Lender by way of direct payment of the relevant Obligation.
Within a reasonable time after the payment by Lender of any
expenses or other charges that are not of a routine or
administrative nature, Lender shall give Borrower notice
thereof and send to Borrower (if available to Lender) any
invoice or other supporting documentation for such fee or
other charge.
(iii) As an accommodation to Borrower,
Lender may permit telephonic requests for Borrowings and
electronic transmittal of instructions, authorizations,
agreements or reports to Lender by Borrower; provided,
however, that Borrower shall confirm each such telephonic
request for a Borrowing of LIBOR Loans by delivery of the
required Notice of Borrowing to Lender by facsimile
transmission promptly, but in no event later than 5:00 p.m.,
Charlotte, North Carolina time, on the same day. Unless
Borrower specifically directs Lender in writing not to
accept or act upon telephonic or electronic communications
from Borrower, Lender shall have no liability to Borrower
for any loss or damage suffered by such Borrower as a result
of Lender's honoring of any requests, execution of any
instructions, authorizations or agreements or reliance on
any reports communicated to it telephonically or
electronically and purporting to have been sent to Lender by
Borrower and Lender shall have no duty to verify the origin
of any such communication or the identity or authority of
the Person sending it.
3.1.2. Disbursement Authorization. Borrower hereby
irrevocably authorizes Lender to disburse the proceeds of each
Revolver Loan requested, or deemed to be requested pursuant to
Section 3.1.1, as follows: (i) the proceeds of each Revolver
Loan requested under Section 3.1.1(i) shall be disbursed by
Lender in lawful money of the United States of America in
immediately available funds in accordance with the terms of the
written disbursement letter from Borrower in the case of the
initial Borrowing, and, in the case of each subsequent Borrowing,
by wire transfer to such bank account as may be agreed upon by
Borrower and Lender from time to time or elsewhere if pursuant to
a written direction from Borrower; and (ii) the proceeds of each
Revolver Loan requested under Section 3.1.1(ii) shall be
disbursed by Lender by way of direct payment of the relevant
interest or other Obligation.
3.2 Special Provisions Governing LIBOR Rate Loans3.2
Special Provisions Governing LIBOR Rate Loans.
3.2.1 Number of LIBOR Rate Loans. In no event may
the number of LIBOR Rate Loans outstanding in respect of the
Loans at any time exceed six (6).
3.2.2 Minimum Amount of each LIBOR Rate Loan. Each
election of a LIBOR Rate Loan pursuant to Section 3.1.1(i), and
each continuation of or conversion into a LIBOR Rate Loan
pursuant to Section 2.1.4 hereof, shall be in a minimum amount of
$500,000 and integral multiples of $100,000 in excess of that
amount.
3.2.3 LIBOR Lending Office. Lender's initial LIBOR
Lending Office is set forth opposite its name on the signature
pages hereof. Lender shall have the right at any time and from
time to time to designate a different office of itself or any
Affiliate as Lender's LIBOR Lending Office, and to transfer any
outstanding LIBOR Loans to such LIBOR Lending Office. No such
designation or transfer shall result in any liability on the part
of Borrower for increased costs or expenses resulting solely from
such designation or transfer (except any such transfer that is
made by Lender pursuant to Sections 2.6 or 2.7 hereof, or
otherwise for the purpose of complying with Applicable Law).
Increased costs for expenses resulting from a change in
Applicable Law occurring subsequent to any such designation or
transfer shall be deemed not to result solely from such
designation or transfer.
SECTION 4. PAYMENTSSECTION 4. PAYMENTS
4.1 General Payment Provisions. 4.1 General Payment
Provisions. All payments (including all prepayments) of the
principal of, and interest on, the Loans and all of the other
Obligations that are payable to Lender shall be made to Lender in
Dollars without any offset or counterclaim and free and clear of
(and without deduction for) any present or future Taxes. All
payments received by Lender in immediately available funds on a
Business Day for which Borrower shall have given Lender notice of
its intent to make such payment no later than 12:00 o'clock noon,
Charlotte, North Carolina, on such Business Day, shall be deemed
to be made on the Business Day of receipt. If payment is
received by Lender after such time, or if notice of Borrower's
intent to make such payment is not given by Borrower or, if
given, is given later than 12:00 o'clock noon, Charlotte, North
Carolina time, then such payment shall be deemed to have been
made on the next succeeding Business Day. If any payment under
this Agreement or the other Loan Documents shall be specified to
be made upon a day which is not a Business Day, it shall be made
on the next succeeding day which is a Business Day, and such
extension of time shall in such case be included in computing
interest and fees, if any, in connection with such payment.
4.2 Payment of Principal of Loans4.2 Payment of Principal
of Loans.
4.2.1 Payment of Principal of Revolver Loans. The
outstanding principal amounts of the Revolver Loans shall be due
and payable as follows:
(i) Any portion of the Revolver Loans
consisting of the principal amount of Base Rate Loans or
Daily LIBOR Loans shall be paid by Borrower to Lender unless
converted to a LIBOR Rate Loan in accordance with this
Agreement, immediately upon the earlier of (a) the receipt
by Lender or Borrower of any proceeds of any of the
Collateral, to the extent of such proceeds, or (b) the
termination of this Agreement by Borrower or Lender pursuant
to Section 5 hereof.
(ii) Any portion of the Revolver Loans
consisting of the principal amount of LIBOR Rate Loans shall
be paid by Borrower to Lender, unless converted to a Base
Rate Loan or Daily LIBOR Loan or continued as a LIBOR Rate
Loan in accordance with the terms of this Agreement, upon
the earlier of (a) the last day of the Interest Period
applicable thereto or (b) the termination of this Agreement
by Borrower or Lender pursuant to Section 5 hereof. In no
event shall Borrower be authorized to pay any LIBOR Rate
Loan prior to the last day of the Interest Period applicable
thereto unless otherwise agreed in writing by Lender or
Borrower is otherwise expressly authorized or required by
any other provision of this Agreement to pay any LIBOR Rate
Loan outstanding on a date other than the last day of the
Interest Period applicable thereto, and Borrower pays to
Lender concurrently with any prepayment of a LIBOR Rate Loan
the amount due Lender under Section 2.9 hereof as a result
of such prepayment.
(iii) Notwithstanding anything to the
contrary contained elsewhere in this Agreement, if an
Overadvance Condition shall exist, Borrower shall, without
the necessity of a demand, repay the outstanding Revolver
Loans that are Base Rate Loans or Daily LIBOR Loans in an
amount sufficient to reduce the aggregate unpaid principal
amount of all such Revolver Loans by an amount equal to such
excess; and, if such payment of Base Rate Loans or Daily
LIBOR Loans is not sufficient to cure the Overadvance
Condition, then Borrower shall immediately either (a)
deposit with Lender, for application to any outstanding
Revolver Loans bearing interest as LIBOR Rate Loans as the
same become due and payable at the end of the applicable
Interest Periods, cash in an amount sufficient to cure such
Overadvance Condition to be held by Lender in the Cash
Collateral Account, pending disbursement of same to Lender,
but subject to Lender's Lien therein and rights of offset
with respect thereto, or (b) pay the Revolver Loans that are
LIBOR Rate Loans to the extent necessary to cure such
Overadvance Condition and also pay to Lender any and all
amounts required by Section 2.9 hereof to be paid by reason
of the prepayment of a LIBOR Rate Loan prior to the last day
of the Interest Period applicable thereto.
4.2.2 Payment of Principal of Bridge Loan.
Borrower shall repay the principal balance of the Bridge Loan in
full on or before the Bridge Loan Maturity Date.
4.2.3 Cash Collateral Account. If at any time
Availability, when added to the amount of funds then on deposit
in the Cash Collateral Account, is less than the amount of the
Availability Reserve, then Borrower shall immediately pay to
Lender, on Lender's demand, an amount equal to the difference to
be held by Lender in the Cash Collateral Account as security for
the Obligations. If on any date the amount of funds on deposit
in the Cash Collateral Account, when added to Availability at
such time, is more than the Availability Reserve, then Lender
shall release to Borrower on such date that portion of the funds
then on deposit in the Cash Collateral Account equal to such
excess, if, and only to the extent that, immediately before and
after giving effect to such release, no Default, Event of Default
or Overadvance Condition has occurred and continues to exist.
4.3 Payment of Interest4.3 Payment of Interest. Interest
accrued on all of the Loans shall be paid upon the earlier of (i)
the first calendar day of each month for the immediately
preceding month, computed through the last calendar day of the
preceding month, or (ii) the termination of this Agreement by
Borrower or Lender pursuant to Section 5 hereof.
4.4 Payment of Other Obligations.4.4 Payment of Other
Obligations. Borrower shall pay all costs, fees and charges
pursuant to this Agreement as and when provided in Section 2.2
hereof, to Lender, or to any other Person designated by Lender in
writing. The balance of the Obligations requiring the payment of
money shall be payable by Borrower to Lender as and when provided
in this Agreement, the Other Agreements or the Security
Documents, or, if no date of payment is otherwise specified in
the Loan Documents, on demand.
4.5 Mandatory Prepayments of Bridge Loan.4.5 Mandatory
Prepayments of Bridge Loan. In addition to the payment in full
of the Bridge Loan on the Bridge Loan Maturity Loan as set forth
in Section 4.2.2 hereof and in the Bridge Note, Borrower shall
make mandatory payments of principal on the Bridge Loan as
follows:
(i) Upon the termination of this Agreement
for any reason, Borrower shall prepay the Bridge Loan in
full; and
(ii) If, at any time and for any reason, the
amount of the Escrow Funds pledged to Lender as security for
the Bridge Loan Obligations is less than the principal
balance of the Bridge Loan, Borrower shall pay to Lender the
amount of such deficiency.
Each mandatory prepayment applied to the Bridge Loan
pursuant to this Section 4.5 shall be applied first to Base Rate
Loans and Daily LIBOR Loans to the full extent thereof before
application to any LIBOR Rate Loans; provided, however, that, so
long as no Default or Event of Default has occurred and is
continuing, in lieu of application of such prepayment to LIBOR
Rate Loans prior to the expiration of the respective Interest
Periods with respect thereto and the resulting requirement to pay
the charges provided for in Section 2.9 hereof, Borrower may, at
its option, deposit with Lender cash funds equal to such
prepayment to be held by Lender in the Cash Collateral Account
for disbursement to Lender and application to the Bridge Loan on
the sooner to occur of the expiration of the Interest Period
applicable thereto or the termination of this Agreement by
Borrower or Lender pursuant to Section 5 hereof.
4.6 Optional Prepayments of Loans. .6 Optional Prepayments
of Loans. Borrower may, at its option, prepay the principal
owing on any Loan at any time in whole and from time to time in
part, but (i) any such prepayment in connection with a
termination of this Agreement shall be subject to the payment of
any applicable termination charge pursuant to Section 5.2.4
hereof, (ii) any partial prepayment of the Bridge Loan shall be
in amounts aggregating $500,000 or any greater multiple of
$100,000, and (iii) if such prepayment is made of a LIBOR Rate
Loan and on a date other than the last day of any applicable
Interest Period, by paying any charges required by Section 2.9
hereof. Borrower shall give written notice (or telephonic notice
confirmed in writing) to Lender of any intended prepayment not
less than one (1) Business Day prior to any prepayment of Daily
LIBOR Loans or Base Rate Loans and not less than two (2) Business
Days prior to any prepayment of LIBOR Rate Loans. Such notice,
once given, shall be irrevocable.
4.7. Application of Payments and Collateral Proceeds. .7.
Application of Payments and Collateral Proceeds. Except to the
extent that the manner of application to the Obligations of
payments or proceeds of Collateral is expressly governed by other
provisions of this Agreement, Borrower irrevocably waives the
right to direct the application of any and all payments and
Collateral proceeds at any time or times hereafter received by
Lender from or on behalf of Borrower, and Borrower does hereby
irrevocably agree that Lender shall have the continuing exclusive
right to apply and reapply any and all such payments and
Collateral proceeds received at any time or times hereafter by
Lender or its agent against the Obligations, in such manner as
Lender may deem advisable, notwithstanding any entry by Lender
upon any of its books and records, provided such application of
payments and collections is made in a manner consistent with this
Agreement and the other Loan Documents. If as the result of the
clearance and collections of all Accounts of Borrower through the
ACH and the direct payment of all funds credited to Borrower's
Clearing Bank Account to Lender for application to the
Obligations, all as provided in Sections 7.2.5 and 7.2.6 hereof,
a credit balance exists in the Loan Account, such credit balance
shall not accrue interest in favor of Borrower, but shall be
available to Borrower at any time or times for so long as no
Default or Event of Default exists.
4.8 Marshalling; Payments Set Aside..8 Marshalling;
Payments Set Aside. Lender shall be under no obligation to
marshall any assets in favor of Borrower or any other Person or
against or in payment of any or all of the Obligations. To the
extent that Borrower makes a payment or payments to Lender or
Lender receives payment from the proceeds of any Collateral or
exercises its right of setoff, and such payment or payments or
the proceeds of such setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other
party, then, to the extent of such recovery, the obligation or
part thereof originally intended to be satisfied, and all Liens,
rights and remedies therefor, shall be revived and continued in
full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred. The provisions of
the immediately preceding sentence of this Section 4.8 shall
survive any termination of this Agreement and payment in full of
the Obligations.
4.9 All Loans to Constitute One Obligation. .9 All Loans
to Constitute One Obligation. The Loans shall constitute one
general Obligation of Borrower and shall be secured by Lender's
Lien in all of the Collateral.
4.10 Loan Account.10 Loan Account. Lender shall enter
all Revolver Loans as debits to Borrower's Loan Account and shall
also record in the Loan Account all payments made by Borrower on
the Revolver Loans and all proceeds of Collateral which are
finally paid to Lender, and may record therein other debits and
credits, including interest and all charges and expenses,
properly chargeable to Borrower under this Agreement and the
other Loan Documents.
4.11 Statements of Account.11 Statements of Account. Lender
will account to Borrower monthly with a statement of Loans,
charges and payments made pursuant to this Agreement, and such
account rendered by Lender shall be deemed final, binding and
conclusive upon Borrower unless Lender is notified by Borrower in
writing to the contrary within thirty (30) days after the date on
which such accounting is deemed to have been sent pursuant to
Section 12.10 hereof. Such notice shall only be deemed an
objection to those items specifically objected to therein.
SECTION 5. TERM AND TERMINATION OF AGREEMENTSECTION 5.
TERM AND TERMINATION OF AGREEMENT
5.1 Term of Agreement. 5.1 Term of Agreement. Subject to
Lender's right to cease making Loans to Borrower during the
existence of any Default or Event of Default, this Agreement
shall be in effect from the date hereof through and including
September 30, 2000 (the "Original Term"), and this Agreement
shall automatically renew itself for one (1) year periods
thereafter (each a "Renewal Term"), unless terminated as provided
in Section 5.2 hereof.
5.2 Termination of Agreement.2 Termination of Agreement
5.2.1 Termination by Lender. Upon at least ninety
(90) days prior written notice to Borrower, Lender may terminate
this Agreement as of the last day of the Original Term or the
then current Renewal Term and Lender may terminate this Agreement
without notice during the existence of an Event of Default.
5.2.2 Termination by Borrower. Upon at least
ninety (90) days prior written notice to Lender, Borrower may, at
its option, terminate this Agreement; provided, however, no such
termination by Borrower shall be effective until Borrower has
satisfied all of the Obligations. For purposes hereof, the
Obligations shall not be deemed to have been satisfied until all
Obligations for the payment of money have been paid to Lender in
same day funds and all Obligations that are at the time in
question contingent have been fully cash securitized in favor and
to the satisfaction of Lender or Lender has received as
beneficiary a direct pay letter of credit in form and from an
issuing bank reasonably acceptable to Lender and providing for
direct payment to Lender of all such contingent Obligations at
the time they become fixed. Any notice of termination given by
Borrower shall be irrevocable unless Lender otherwise agrees in
writing. Borrower may elect to terminate this Agreement in its
entirety only. No section of this Agreement or type of Loan
available hereunder may be terminated by Borrower singly.
5.2.3 Termination Upon Expiration of United Express
Operating Agreement. This Agreement shall, at Lender's option,
automatically terminate three (3) months before the United
Express Termination Date.
5.2.4 Termination Charges. On the effective date
of termination of this Agreement for any reason, Borrower shall
pay to Lender (in addition to the then outstanding principal,
accrued interest and other charges owing under the terms of this
Agreement and any of the other Loan Documents) as liquidated
damages for the loss of the bargain and not as a penalty, an
amount equal to the product obtained by multiplying the highest
of the Average Monthly Loan and Letter of Credit Balance for any
month during the immediately preceding 12-month period ending
with the month immediately preceding the date of such termination
(or shorter period of time this Agreement is in effect), times
one-half percent (0.50%); provided however, in the event that the
credit rating of Bank as established by Standard and Poor's, Inc.
shall at any time while the Bond Letter of Credit is outstanding
fall below an "A" rating, and, as a result of such reduced credit
rating, the variable interest rate on the Bonds thereafter
remarketed by the Remarketing Agent shall be increased, as
confirmed by the written certification of the Remarketing Agent
delivered to Lender, Borrower may, within one hundred twenty
(120) days after the increase of the interest rate on the Bonds
remarketed by the Remarketing Agent, terminate this Agreement and
the foregoing termination charge shall be one-half of one percent
(0.50%) of the highest of the Average Monthly Revolver Loan
Balance during the immediately preceding 12-month period ending
with the month immediately preceding the date of such
termination. If termination occurs on the last day of the
Original Term or any Renewal Term, no termination charge shall be
payable.
5.2.5 Effect of Termination. On the effective date
of termination of this Agreement, all of the Obligations shall be
immediately due and payable and Lender shall have no obligation
to make any Loans. All undertakings, agreements, covenants,
warranties and representations of Borrower contained in the Loan
Documents shall survive any such termination and Lender shall
retain its Liens in the Collateral and all of its rights and
remedies under the Loan Documents notwithstanding such
termination until Borrower has satisfied the Obligations to
Lender, in full, in immediately available funds, together with
the applicable termination charge, if any. Notwithstanding the
payment in full of the Obligations, Lender shall not be required
to terminate its Liens in the Collateral unless, with respect to
any loss or damage Lender may incur as a result of dishonored
checks or other items of payment constituting uncollected funds
received by Lender from Borrower or any Account Debtor and
applied to the Obligations before final collection, Lender shall,
at its option, (i) have received a written agreement, executed by
Borrower and by any Person whose loans or other advances to
Borrower are used in whole or in part to satisfy the Obligations,
indemnifying Lender from any such loss or damage, or (ii) such
monetary reserves and Liens on the Collateral for such period of
time as Lender, in its reasonable discretion, may deem reasonably
necessary to protect Lender from any such loss or damage. All
obligations of Borrower to indemnify Lender pursuant to this
Agreement shall survive any termination of this Agreement.
Subject to the provisions of this Section 5.2.5, the termination
of this Agreement shall constitute a termination of all Loan
Documents; provided, however, that any and all provisions of such
Loan Documents that are intended to survive payment in full of
the Obligations shall survive such termination as and to the
extent provided in such Loan Documents.
SECTION 6. SECURITY INTERESTSSECTION 6.
SECURITY INTERESTS
6.1 Security Interest in Collateral.6.1 Security
Interest in Collateral. To secure the prompt payment and
performance to Lender of the Obligations, Borrower hereby grants
to Lender a continuing Lien upon all of the following Property
and interests in Property of Borrower, whether now owned or
existing or hereafter created, acquired or arising and
wheresoever located:
(i) All Accounts;
(ii)
All Rotable
Spare Parts;
(iii) All General Intangibles;
(iv) All Documents;
(v) All Instruments;
(vi) All Chattel Paper;
(vii) All tickets, exchange orders and other
billing documents for the air transportation of passengers
and property, whether processed or unprocessed;
(viii) All right, title and interest of Borrower in
and to the settlement accounts maintained with the Clearing
Bank and all sums now or hereafter in, payable to or
withdrawable from such accounts;
(ix) All monies and other Property of any kind now
or at any time or times hereafter in the possession or
under the control of Lender or a bailee or Affiliate of
Lender;
(x) All accessions to, substitutions for and all
replacements, products and cash and non-cash proceeds of (i)
through (ix) above, including, without limitation, proceeds
of and unearned premiums with respect to insurance policies
insuring any of the Collateral; and
(xi) All books and records (including, without
limitation, customer lists, credit files, computer programs,
print-outs, and other computer materials and records) of
Borrower pertaining to any of (i) through (x) above.
6.2 Other Collateral.6.2 Other Collateral. In addition
to the items of Property referred to in Section 6.1 above, (a)
the Bridge Loan Obligations shall be secured by the Escrow Funds
to the extent provided in the Escrow Agreement, and (b) all of
the Obligations shall also be secured by the Cash Collateral to
the extent provided herein and all of the other items of Property
from time to time described in any of the Security Documents as
security for any of the Obligations.
6.3 Lien Perfection; Further Assurances.6.3 Lien
Perfection; Further Assurances. At Lender's request, Borrower
shall execute, and shall cause each of its Subsidiaries to
execute, such UCC-1 financing statements as are required by the
Code and such other instruments, assignments or documents as are
necessary to perfect Lender's Lien upon any of the Collateral
and, at Lender's request, shall take such other action as may be
directed by Lender to perfect or to continue the perfection of
Lender's Lien upon the Collateral. Unless prohibited by
Applicable Law, Borrower hereby authorizes Lender to execute and
file any such financing statement on Borrower's behalf. The
parties agree that a carbon, photographic or other reproduction
of this Agreement shall be sufficient as a financing statement
and may be filed in any appropriate office in lieu thereof. At
Lender's request, Borrower shall also promptly execute or cause
to be executed and shall deliver to Lender any and all documents,
instruments and agreements deemed necessary by Lender to give
effect to or carry out the terms or intent of the Loan Documents.
6.4 Lien on Leasehold Estate.6.4 Lien on Leasehold Estate.
The due and punctual payment and performance of up to $9,579,932
of the Obligations shall also be secured by the Lien created by
the Deed of Trust upon Borrower's leasehold estate in the Realty
leased by Borrower from the Authority pursuant to the Lease. The
Deed of Trust shall be executed by Borrower in favor of Lender
and shall be duly recorded, at Borrower's expense, in each office
where such recording is required to constitute a fully perfected
Lien on the Property encumbered thereby. Borrower shall deliver
to Lender, at Borrower's expense, mortgagee title insurance
policies issued by a title insurance company satisfactory to
Lender, which policies shall be in form and substance
satisfactory to Lender and shall insure a valid first Lien in
favor of Lender on Borrower's leasehold estate in the Realty,
subject only to those exceptions acceptable to Lender and its
counsel.
6.5 Exclusion From Collateral. .5 Exclusion From
Collateral. The Collateral in which Lender is granted a Lien
pursuant to Section 6.1 of this Agreement shall not include any
licenses, permits, contracts or other agreements to the extent
that the grant of a Lien therein or assignment thereof is
prohibited under, or would result in a breach of the terms of,
any such license, permit, contract or other agreement, or is
prohibited by Applicable Law; provided, however, the foregoing
exclusion shall in no way be construed (i) to apply if any such
prohibition is unenforceable under Section 9-318 of the Uniform
Commercial Code or other Applicable Law or (ii) so as to limit,
impair or otherwise affect Lender's unconditional continuing
Liens in any rights or interests of Borrower in or to monies due
or to become due under any such license, permit, contract or
other agreement (including any Accounts).
6.6 Release of Lien in Rotable Spare Parts. .6 Release of
Lien in Rotable Spare Parts. Upon Borrower's written request,
Lender shall release its Lien in all Rotable Spare Parts, and, at
Borrower's expense, execute, deliver and record such termination
statements, instruments, documents and other agreements as
Borrower may reasonably request to release Lender's Lien in the
Rotable Spare Parts, provided that each of the following
conditions shall have first been satisfied: (i) concurrently with
such release, Borrower, Parent and Lender shall have executed and
delivered an amendment to this Agreement, in form and substance
reasonably satisfactory to Lender and its counsel, modifying the
definition of the Borrowing Base to eliminate as one of the
components thereof the Rotable Spare Parts Borrowing Base, and
(ii) immediately before, and after giving pro forma effect to,
such elimination of the Rotable Spare Parts Borrowing Base, no
Default, Event of Default or Overadvance Condition shall exist.
SECTION 7. COLLATERAL ADMINISTRATIONSECTION 7.
COLLATERAL ADMINISTRATION
7.1 General Provisions7.1 General Provisions
7.1.1 Location of Rotable Spare Parts. All of the
Rotable Spare Parts shall at all times be kept by Borrower at one
or more of the business locations set forth in Schedule 7.1.1
hereto and shall not, without the prior written approval of
Lender, be moved therefrom except, prior to an Event of Default,
for (i) the location of Rotable Spare Parts at locations within
the continental United States other than those shown in Schedule
7.1.1 hereto if, (a) Borrower gives Lender written notice of such
a location at least thirty (30) days prior to moving or locating
any Rotable Spare Parts to such location, (b) Lender's Lien in
such Rotable Spare Parts is and continues to be a duly perfected
Lien thereon (and Borrower shall have taken such action as may be
required pursuant to Section 6.3 hereof to perfect Lender's Lien
thereon, including, without limitation, the execution and
recordation in the registry of the FAA of an amendment or
supplement to the Rotable Spare Parts Security Agreement
designating such new location) subject to no other Lien thereon
except for Permitted Liens, and (c) neither Borrower's nor
Lender's right of entry upon the premises where the Rotable Spare
Parts are stored, or its right to remove the Rotable Spare Parts
therefrom, is restricted in any material respect; and (ii)
temporary transfers (for a period not to exceed three (3) months
in any event) of Rotable Spare Parts from any location set forth
in Schedule 7.1.1 hereto to another location if done for the
limited purpose of repairing, refurbishing or overhauling such
Rotable Spare Parts in the ordinary course of Borrower's
business, and, while such Rotable Spare Parts are away from any
location set forth in Schedule 7.1.1 hereto, they are excluded
from the Rotable Spare Parts Borrowing Base even if they satisfy
all other criteria set forth in the definition thereof.
7.1.2 Insurance. Borrower shall maintain and pay
for insurance upon all of the Rotable Spare Parts wherever
located and with respect to Borrower's business, covering
casualty, hazard, public liability and such other risks in such
amounts, with such deductibles and with such insurance companies
as are reasonably satisfactory to Lender. Borrower shall deliver
the originals or copies (which copies shall be certified if
requested by Lender) of such policies to Lender with satisfactory
lender's loss payable endorsements naming Lender as sole loss
payee, assignee or additional insured, as appropriate. Each
policy of insurance or endorsement shall contain a clause
requiring the insurer to give not less than thirty (30) days
prior written notice to Lender in the event of cancellation of
the policy for any reason whatsoever and a clause specifying that
the interest of Lender shall not be impaired or invalidated by
any act or neglect of Borrower or the owner of the Property or by
the occupation of the premises for purposes more hazardous than
are permitted by said policy. If Borrower fails to provide and
pay for such insurance, Lender may, at its option, but shall not
be required to, procure the same and charge Borrower therefor.
Borrower agrees to deliver to Lender, promptly, if requested by
Lender, true copies of all reports made in any reporting forms to
insurance companies. In addition to the insurance required
herein with respect to the Collateral, Borrower shall maintain,
with financially sound and reputable insurers, insurance with
respect to its Properties and business against such casualties
and contingencies of such type and in such amounts as is
customary in the business of Borrower, or as otherwise may be
reasonably required by Lender. All proceeds of insurance
received by Borrower or Lender on account of any casualty to the
Collateral shall be applied as follows:
(i) if an Event of Default exists, all such
insurance proceeds shall, at Lender's option, be deemed Net
Proceeds and paid to Lender and applied first, as a
mandatory prepayment of the Revolver Loans outstanding and
added to the Availability Reserve, and, after the Revolver
Loans are paid in full, to the other Obligations in such
order and against such particular Obligations as Lender
shall determine; and
(ii) if no Event of Default exists, all such
insurance proceeds of any claim of less than $500,000 shall
be released to Borrower for the purpose of Borrower's
repairing, replacing or restoring the damaged or destroyed
Collateral (and, if replaced, the replacement Collateral
shall be subject to Lender's duly perfected first priority
Lien therein subject to no other Lien other than Permitted
Liens), and all such insurance proceeds of any claim of more
than $500,000 shall be remitted to Lender and applied first,
as a mandatory prepayment of the Revolver Loans outstanding
and added to the Availability Reserve, and, after the
Revolver Loans are paid in full, added to the Cash
Collateral Account, and thereafter released from the
Availability Reserve and the Cash Collateral Account to
Borrower from time to time, but not more often than monthly,
against such evidence of repair, replacement or restoration
as Lender may reasonably require (subject, as aforesaid, in
the case of replacement Collateral).
7.1.3 Protection of Collateral. All expenses of
protecting, storing, warehousing, insuring, handling, maintaining
and shipping the Collateral, all Taxes imposed by any Applicable
Law on any of the Collateral or in respect of the sale thereof,
and all other payments required to be made by Lender to any
Person to realize upon the Collateral, shall be borne and paid by
Borrower. If Borrower fails to promptly pay any portion thereof
when due, Lender may, at its option, but shall not be required
to, pay the same and charge Borrower therefor. Lender shall not
be liable or responsible in any way for the safekeeping of any of
the Collateral or for any loss or damage thereto (except for
reasonable care in the custody thereof while any Collateral is in
Lender's actual possession) or for any diminution in the value
thereof, or for any act or default of any warehouseman, carrier,
forwarding agency, or other person whomsoever, but the same shall
be at Borrower's sole risk.
7.2. Administration of Accounts7.2. Administration of
Accounts.
7.2.1 Records, Schedules and Assignments of
Accounts. Borrower shall keep accurate and complete records in
accordance with standard air carrier industry practice of its
Accounts and all payments and collections thereon and shall
submit to Lender:
(i) On such periodic basis as Lender shall
request, but no less frequently than weekly, a Borrowing
Base Certificate;
(ii) Copies of each recap sheet submitted to the
ACH under the ACH Procedure Manual concurrently with the
sending thereof to ACH;
(iii) Copies of each monthly settlement sheet
received from ACH pursuant to the ACH Procedure Manual, no
later than the third (3rd) Business Day after the receipt
thereof; and
(iv) Upon Lender's request therefor, copies of all
interline invoices submitted to, or received from, ACH under
the ACH Procedure Manual, and such other matters and
information relating to the Accounts of Borrower included on
any Borrowing Base Certificate as Lender shall from time to
time reasonably request.
In addition, if Accounts owing by any Account Debtor to
Borrower in an aggregate amount in excess of $25,000 become
ineligible because they fall within one of the specified
categories of ineligibility set forth in the definition of
Eligible Accounts or otherwise established by Lender, Borrower
shall notify Lender of such occurrence no later than the second
(2d) Business Day following such occurrence and the Borrowing
Base shall thereupon be adjusted to reflect such occurrence.
7.2.2 Discounts, Allowances, Disputes. If Borrower
grants any discounts or allowances that are not reflected in the
calculation of the face value of each Account involved, Borrower
shall report such discounts or allowances to Lender as part of
the next required Borrowing Base Certificate. In the event any
amounts due and owing in excess of $25,000 are in dispute between
Borrower and any Account Debtor, Borrower shall provide Lender
with written notice thereof at the time of submission of the next
Borrowing Base Certificate, explaining in detail the reason for
the dispute, all claims related thereto and the amount in
controversy.
7.2.3 Taxes. If an Account of Borrower includes a
charge for any Tax, Lender is authorized, in its sole discretion,
to pay the amount thereof to the proper taxing authority for the
account of Borrower and to charge Borrower therefor, provided,
however, that neither Lender nor any Lender shall be liable for
any Taxes that may be due by Borrower.
7.2.4 Account Verification. Whether or not a
Default or an Event of Default has occurred, any of Lender's
officers, employees or agents shall have the right, at any time
or times hereafter, in the name of Lender, any designee of Lender
or Borrower, to take reasonable steps to verify the validity,
amount or any other matter relating to any Accounts of Borrower
by verbal or written communications. Borrower shall cooperate
fully with Lender in an effort to facilitate and promptly
conclude any such verification process.
7.2.5 Transmission of Funds. Borrower shall cause
all funds credited to its Clearing Bank Account to be sent by
federal funds wire transfer to the Payment Account.
7.2.6 Collection of Accounts and Other Proceeds of
Collateral. All Eligible Accounts of Borrower shall be cleared
and collected for payment by ACH pursuant to the ACH Procedure
Manual. After the occurrence of an Event of Default, all Payment
Items received by Borrower on account of, or with respect to, its
Accounts or the proceeds of any other Collateral shall be held as
Lender's property by Borrower as trustee of an express trust for
Lender's benefit and, no later than the first (1st) Business Day
after receipt, Borrower shall immediately forward the same in
kind to Lender for application to the Obligations. Borrower
shall obtain the agreement by the Clearing Bank in favor of
Lender to waive any offset rights the Clearing Bank may otherwise
have against the funds credited to the Clearing Bank Account.
Lender assumes no responsibility for the Clearing Bank Account or
its maintenance or operation, including, without limitation, any
claim of accord and satisfaction or release with respect to
deposits made by the Clearing Bank thereto.
7.3 Administration of Rotable Spare Parts7.3
Administration of Rotable Spare Parts.
7.3.1 Records and Reports of Rotable Spare Parts.
Borrower shall keep accurate and complete records of its Rotable
Spare Parts. Borrower shall furnish to Lender reports of its
Rotable Spare Parts in form and detail satisfactory to Lender at
such times as Lender may request, but at least once each month,
not later than the twentieth (20th) day of such month for Rotable
Spare Parts of Borrower as of the end of the preceding month.
Borrower shall conduct a physical inventory of its Rotable Spare
Parts no less frequently than annually and shall provide to
Lender a report based on each such physical inventory promptly
thereafter, together with such supporting information as Lender
shall request.
7.4 Payment of Charges7.4 Payment of Charges. All
amounts chargeable to Borrower under Section 7 hereof shall be
Obligations secured by all of the Collateral, shall be payable on
demand and shall bear interest from the date such advance was
made until paid in full at the rate applicable to Revolver Loans
from time to time.
SECTION 8. REPRESENTATIONS AND WARRANTIESSECTION 8.
REPRESENTATIONS AND WARRANTIES
8.1.General Representations and Warranties. .1. General
Representations and Warranties. To induce Lender to enter into
this Agreement and to make Loans and extend credit hereunder,
each Loan Party warrants and represents to Lender that:
8.1.1 Organization and Qualification. Each Loan
Party is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation. Each Loan Party is duly qualified and is
authorized to do business and is in good standing as a foreign
corporation in each state or jurisdiction listed on Schedule
8.1.1 hereto and in all other states and jurisdictions where the
character of its Properties or the nature of its activities make
such qualification necessary except where the failure of such
Loan Party or its respective Subsidiaries to be so qualified
cannot reasonably be expected to have a Material Adverse Effect.
Borrower is an air carrier holding a certificate issued by the
FAA under 49 U.S.C. 44705.
8.1.2 Corporate Power and Authority. Each Loan
Party is duly authorized and empowered to enter into, execute,
deliver and perform this Agreement and each of the other Loan
Documents to which it is a party. The execution, delivery and
performance of this Agreement and each of the other Loan
Documents by each Loan Party have been duly authorized by all
necessary corporate action and do not and will not (i) require
any consent or approval of the shareholders of such Loan Party;
(ii) contravene such Loan Party's charter, articles or
certificate of incorporation or by-laws; (iii) violate, or cause
such Loan Party to be in default under, any provision of any law,
rule, regulation, order, writ, judgment, injunction, decree,
determination or award in effect having applicability to such
Loan Party; (iv) result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which such Loan Party is a
party or by which it or its Properties may be bound or affected
that may reasonably be expected to have a Material Adverse
Effect; or (v) result in, or require, the creation or imposition
of any Lien (other than Permitted Liens) upon or with respect to
any of the Properties now owned or hereafter acquired by such
Loan Party.
8.1.3 Legally Enforceable Agreement. This
Agreement is, and each of the other Loan Documents when delivered
under this Agreement will be, a legal, valid and binding
obligation of each Loan Party enforceable against it in accor
dance with its respective terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a
proceeding in equity or in law.
8.1.4 Capital Structure. Schedule 8.1.4 hereto
states (i) the name of each corporate or joint venture Affiliates
of each Loan Party and the nature of the affiliation, (ii) the
number and nature of all outstanding Securities of each Loan
Party, and (iii) the number of authorized, issued and treasury
shares of each Loan Party. Each Loan Party has good title to all
of the shares it purports to own of the stock of each of its
Subsidiaries, free and clear in each case of any Lien other than
Permitted Liens. All such shares have been duly issued and are
fully paid and non-assessable. There are no outstanding options
to purchase, or any rights or warrants to subscribe for, or any
commitments or agreements to issue or sell, or any Securities or
obligations convertible into, or any powers of attorney relating
to, shares of the capital stock of any Loan Party or any its
respective Subsidiaries, except as listed on Schedule 8.1.4.
There are no outstanding agreements or instruments binding upon
any Loan Party's shareholders relating to the ownership of its
shares of capital. Borrower is a wholly-owned Subsidiary of
Parent and is the only Subsidiary of Parent. Borrower has no
Subsidiaries other than Atlantic Coast Airlines, Inc. and
Atlantic Coast Management, Inc., each a Delaware corporation
which, as of the Closing Date, is not conducting any activities
and has no material assets.
8.1.5 Corporate Names. No Loan Party has been
known as or used any corporate, fictitious or trade (other than
substantially similar variations of its respective corporate
name) names except those listed on Schedule 8.1.5 hereto. Except
as set forth on Schedule 8.1.5, no Loan Party has been the
surviving corporation of a merger or consolidation or acquired
all or substantially all of the assets of any Person.
8.1.6 Chief Executive Office. Each Loan Party's
chief executive office is as listed on Schedule 7.1.1 hereto.
8.1.7 Title to Properties; Priority of Liens. Each
Loan Party has good, indefeasible and marketable title to and fee
simple ownership of, or valid and subsisting leasehold interests
in, all of its real Property, and good title to all of the
Collateral and all of its other Property, and, in the case of the
Collateral, free and clear of all Liens except Permitted Liens.
Each Loan Party has paid or discharged all lawful claims which,
if unpaid, might become a Lien against any of such Loan Party's
Properties that is not a Permitted Lien. The Liens granted to
Lender under Section 6 hereof are first priority Liens, subject
only to those Permitted Liens that are expressly stated to have
priority over the Liens of Lender.
8.1.8 Accounts. Lender may rely, in determining
which Accounts of Borrower are Eligible Accounts, on all
statements and representations made by Borrower with respect to
any Account or Accounts. Unless otherwise indicated in writing
to Lender, with respect to each Account listed on a Borrowing
Base Certificate:
(i) It is genuine and in all respects what
it purports to be, and it is not evidenced by a judgment,
Instrument, Document or Chattel paper;
(ii) It arises out of a completed, bona fide
rendition of air transportation services by Borrower in the
ordinary course of its business and in accordance with the
terms and conditions of all contracts or other documents
relating thereto and forming a part of the contract between
Borrower and the Account Debtor;
(iii) It is for a liquidated amount
maturing as stated in the duplicate invoice covering such
service, a copy of which has been furnished or is available
to Lender;
(iv) To the best knowledge of Borrower, such
Account, and Lender's Lien therein, is not, and will not (by
voluntary act or omission of Borrower) be in the future,
subject to any offset, deduction, defense, dispute,
counterclaim or any other adverse condition except for, in
the case of Accounts owing by United, United's right of
setoff for current amounts owing under the United Express
Agreements, and in the case of all other Accounts, offsets
arising in the ordinary course of business for settlement
through the ACH under the ACH Agreement in accordance with
the ACH Procedure Manual, and each such Account is
absolutely owing to Borrower and is not contingent in any
respect or for any reason;
(v) Borrower has made no agreement with any
Account Debtor thereunder for any extension, compromise,
settlement or modification of any such Account or any
deduction therefrom, except for, in the case of Accounts
owing by United, United's right of setoff for amounts owing
under the United Express Agreements, and except for
discounts or allowances reported to Lender pursuant to
Section 7.2.1 hereof;
(vi) To the best knowledge of Borrower, there
are no facts, events or occurrences which in any way impair
the validity or enforceability of such Account;
(vii) To the best knowledge of Borrower,
the Account Debtor thereunder (1) had the capacity to
contract at the time any contract or other document giving
rise to the Account was executed and (2) such Account Debtor
is Solvent; and
(viii) To the best knowledge of Borrower,
there are no proceedings or actions which are threatened or
pending against any Account Debtor thereunder which might
result in any material adverse change in such Account
Debtor's financial condition or the collectibility of such
Account.
8.1.9 Financial Statements; Fiscal Year.
(i) The Consolidated balance sheets of the
Loan Parties and such other Persons described therein
(including the accounts of all Subsidiaries of each Loan
Party for the respective periods during which a Subsidiary
relationship existed) as of December 31, 1997 and November
30, 1998, and the related statements of income, changes in
stockholder's equity, and changes in financial position for
the periods ended on such dates, have been prepared in
accordance with GAAP, and present fairly the financial
position of the Loan Parties and such Persons as of such
dates and the results of the Loan Parties' operations for
such periods. Since September 30, 1998, there has been no
material change in the condition, financial or otherwise, of
any Loan Party and such other Persons as shown on the
Consolidated balance sheet as of such date;
(ii) The Consolidated balances sheets of the
Loan Parties and such other Persons described therein, and
the related statements of income, changes in stockholder's
equity, and changes in financial position, which are from
time to time delivered to Lender pursuant to Section 9.1.3
of this Agreement fairly present the financial position of
the Loan Parties and such Persons at such dates and the
results of the operations of the Loan Parties and such
Persons for the periods set forth therein; and
(iii) The fiscal year of each Loan Party ends on
December 31 of each year.
8.1.10 Full Disclosure. The financial statements
referred to in subsection 8.1.9 hereof do not, nor does this
Agreement or any other written statement of any Loan Party or its
respective Subsidiaries to Lender, contain any untrue statement
of a material fact or omit a material fact necessary to make the
statements contained therein or herein not misleading. To the
best of each Loan Party's knowledge, there is no fact (other than
matters of a general economic nature) which a Loan Party has
failed to disclose to Lender in writing which such Loan Party
reasonably expects may materially affect adversely the
Properties, business, prospects, profits or condition (financial
or otherwise) of a Loan Party or the ability of a Loan Party to
perform this Agreement or the other Loan Documents.
8.1.11 Solvent Financial Condition. The Loan
Parties are now and, after giving effect to the Loans to be made
hereunder, at all times will be, Solvent on a Consolidated basis.
8.1.12 Surety Obligations. Except for those
obligations of Borrower to the Authority with respect to the
Bridge Loan, no Loan Party is obligated as surety or indemnitor
under any surety or similar bond or other contract issued or
entered into any agreement to assure payment, performance or
completion of performance of any undertaking or obligation of any
Person other than the other Loan Party.
8.1.13 Taxes. The federal tax identification number
of each Loan Party is shown on Schedule 8.1.13 hereto. Each
Loan Party has filed all federal, state and local tax returns and
other reports it is required by law to file and has paid, or made
provision for the payment of, all Taxes upon it, its income and
Properties as and when such Taxes are due and payable, except to
the extent being Properly Contested. The provision for Taxes on
the books of each Loan Party is adequate for all years not closed
by applicable statutes, and for its current fiscal year.
8.1.14 Brokers. There are no claims for brokerage
commissions, finder's fees or investment banking fees in
connection with the transactions contemplated by this Agreement.
8.1.15 Patents, Trademarks, Copyrights and Licenses.
Each Loan Party owns or possesses all the patents, trademarks,
service marks, trade names, copyrights and licenses necessary for
the present and planned future conduct of its business, without
any known conflict with the rights of others. All such patents,
trademarks, service marks, tradenames, copyrights, licenses and
other similar rights of a material nature are listed on Schedule
8.1.15 hereto.
8.1.16 Governmental Consents. Each Loan Party has,
and is in good standing with respect to, all governmental con
sents, approvals, licenses, authorizations, permits, certifi
cates, inspections and franchises necessary to continue to
conduct its business as heretofore or proposed to be conducted by
it and to own or lease and operate its Properties as now owned or
leased by it.
8.1.17 Compliance with Laws. Each Loan Party has
duly complied with, and its Properties, business operations and
leaseholds are in compliance in all material respects with, the
provisions of all Applicable Law and there have been no
citations, notices or orders of noncompliance issued to any Loan
Party or any of its respective Subsidiaries under any such law,
rule or regulation where such non-compliance could reasonably be
expected to have a Material Adverse Effect. Each Loan Party and
its respective Subsidiaries has established and maintains an
adequate monitoring system to insure that it remains in
compliance with all federal, state and local laws, rules and
regulations applicable to it.
8.1.18 Restrictions. No Loan Party is a party or
subject to any contract, agreement, or charter or other corporate
restriction, which materially and adversely affects its business
or the use or ownership of any of its Properties. No Loan Party
is a party or subject to any contract or agreement which
restricts its right or ability to incur Indebtedness, other than
as set forth on Schedule 8.1.18 hereto, none of which prohibit
the execution of or compliance with this Agreement or the other
Loan Documents by any Loan Party or any of its respective
Subsidiaries, as applicable.
8.1.19 Litigation. Except as set forth on Schedule
8.1.19 hereto, there are no actions, suits, proceedings or
investigations pending on the date hereof or, to the knowledge of
the Loan Parties, threatened against or affecting any Loan Party,
or the business, operations, Properties, prospects, profits or
condition of any Loan Party, and no such action, suit or
proceeding will, if decided adversely, have a Material Adverse
Effect. No Loan Party is in default with respect to any order,
writ, injunction, judgment, decree or rule of any court,
governmental authority or arbitration board or tribunal which is
reasonably expected to have a Material Adverse Effect.
8.1.20 No Defaults. No event has occurred and no
condition exists which would, upon or after the execution and
delivery of this Agreement or any Loan Party's performance
hereunder, constitute a Default or an Event of Default. No Loan
Party is in default, and no event has occurred and no condition
exists which constitutes, or which with the passage of time or
the giving of notice or both would constitute, a default in the
payment of any Indebtedness to any Person for Money Borrowed in
excess of $500,000.
8.1.21 Leases. Each Loan Party is in compliance in
all material respects with all of the terms of each of its
respective capitalized and operating leases.
8.1.22 Pension Plans. Except as disclosed on
Schedule 8.1.22 hereto, no Loan Party has any Plan on the date
hereof. Each Loan Party is in full compliance with the
requirements of ERISA and the regulations promulgated thereunder
with respect to each Plan. No fact or situation that could
result in a Material Adverse Effect exists in connection with any
Plan. No Loan Party has any withdrawal liability in connection
with a Multiemployer Plan.
8.1.23 Trade Relations. There exists no actual or
threatened termination, cancellation or limitation of, or any
modification or change in, the business relationship between any
Loan Party and any customer or any group of customers whose
purchases individually or in the aggregate are material to the
business of any Loan Party, or with any material supplier
(unless such supplier can be readily replaced on terms which
cannot reasonably be expected to have a Material Adverse Effect),
and, the best of each Loan Party's knowledge, there exists no
present condition or state of facts or circumstances which would
materially affect adversely any Loan Party or prevent any Loan
Party from conducting such business after the consummation of the
transactions contemplated by this Agreement in substantially the
same manner in which it has heretofore been conducted.
8.1.24 Labor Relations. Except as described on
Schedule 8.1.24 hereto, no Loan Party is a party to any
collective bargaining agreement on the date hereof. There are no
material grievances, disputes or controversies with any union or
any other organization of any Loan Party's or any of its
respective Subsidiaries' employees, or threats of strikes, work
stoppages or any asserted pending demands for collective
bargaining by any union or organization.
8.1.25 Loans Outstanding Under Existing Loan
Agreement. All Loans and reimbursement obligations owing to
Lender under the Existing Loan Agreement which, upon the Closing
Date, shall be deemed Loans and reimbursement obligations owing
to Lender under this Agreement, are owing to Lender without any
defenses, offsets or claims of any nature.
8.2. Continuous Nature of Representations and Warranties.
.2. Continuous Nature of Representations and Warranties. The
representations and warranties made by Borrower in this Agreement
and the other Loan Documents shall be true and correct in all
material respects on the Closing Date and on the date of each
Borrowing under this Agreement except for any representation and
warranty relating to a specific period before the date of such
Borrowing. Each request for a Revolver Loan made by Borrower
pursuant to this Agreement shall constitute (i) an automatic
representation and warranty by Borrower to Lender that there does
not then exist any Default or Event of Default and (ii) a
reaffirmation as of the date of such request that all of the
representations and warranties of the Loan Parties contained in
this Agreement and the other Loan Documents are true in all
material respects, except for any representations and warranties
relating to a specific period before the date of such request and
except for any changes in the nature of the business or
operations of the Loan Parties and their respective Subsidiaries
that would render the information contained in any Schedule or
Exhibit attached hereto either inaccurate or incomplete, so long
as Lender has consented to such changes or such changes are not
prohibited by this Agreement.
8.3. Survival of Representations and Warranties. .3.
Survival of Representations and Warranties. All representations
and warranties of each Loan Party contained in this Agreement or
any of the other Loan Documents shall be true at the time of the
execution of this Agreement and the other Loan Documents, and
shall survive the execution, delivery and acceptance thereof by
Lender and the parties thereto and the closing of the
transactions described therein or related thereto.
SECTION 9. COVENANTS AND CONTINUING AGREEMENTSSECTION
9. COVENANTS AND CONTINUING AGREEMENTS
9.1 Affirmative Covenants9.1 Affirmative Covenants. During
the term of this Agreement, and thereafter for so long as there
are any Obligations to Lender, each Loan Party covenants that,
unless otherwise consented to by Lender in writing, it shall:
9.1.1 Visits and Inspections. Permit
representatives of Lender, from time to time, as often as may be
reasonably requested, but only during normal business hours upon
reasonable advance notice, to visit and inspect the Properties of
each Loan Party, inspect, audit and make extracts from its books
and records, and discuss with its officers, its employees and its
independent accountants, each Loan Party's business, assets,
liabilities, financial condition, business prospects and results
of operations.
9.1.2. Notices. Notify Lender in writing (i) of the
occurrence of any event or the existence of any fact which
renders any representation or warranty in this Agreement or any
of the other Loan Documents inaccurate, incomplete or misleading
in any material respect; (ii) promptly after a Loan Party's
learning thereof, of the commencement of any litigation affecting
any Loan Party or any of its Properties, whether or not the claim
is considered by such Loan Party to be covered by insurance, and
of the institution of any administrative proceeding which, in
either case, if decided adversely could reasonably be expected to
have a Material Adverse Effect; (iii) promptly after the
execution of any amendment or modification to the United Express
Operating Agreement that would extend the United Express
Termination Date and send to Lender a copy thereof; (iv) promptly
after a Loan Party's learning thereof, of any organized labor
dispute of a material nature to which a Loan Party may become a
party, any strikes or walkouts by organized labor relating to any
of its facilities, and the final expiration of any collective
bargaining agreement to which it is a party or by which it is
bound; (v) promptly after a Loan Party's learning thereof, of any
material default by any Loan Party under any note, indenture,
loan agreement, mortgage, lease, deed, guaranty or other similar
agreement relating to any Indebtedness of such Loan Party
exceeding $500,000; (vi) promptly after the occurrence thereof,
of any Default or Event of Default; (vii) promptly after the
occurrence thereof, of any default or event of default by
Borrower or United under any of the United Express Agreements;
(viii) promptly after the rendition thereof, of any judgment
rendered against a Loan Party in an amount exceeding $500,000
which is not fully covered by insurance; (ix) of the ordering of
any services from United under the United Express Emergency
Response Agreement, and give Lender full particulars of the
estimated costs thereof, to the extent not covered by insurance;
and (x) promptly upon any change of the fiscal year of the Loan
Parties.
9.1.3 Financial Statements . Keep, and cause each
Subsidiary to keep, adequate records and books of account with
respect to its business activities in which proper entries are
made in accordance with GAAP reflecting all its financial
transactions; and cause to be prepared and furnished to Lender
the following (all to be prepared in accordance with GAAP applied
on a consistent basis, unless Borrower's certified public
accountants concur in any change therein and such change is
disclosed to Lender and is consistent with GAAP):
(i) not later than ninety-one
(91) days after the close of each fiscal year of the Loan
Parties, audited financial statements of the Loan Parties as
of the end of such year, on a Consolidated basis, certified
by one of the big five national accounting firms or other
firm of independent certified public accountants of
recognized standing selected by the Loan Parties but
reasonably acceptable to Lender;
(ii) not later than sixty (60) days
after the end of the months of January, February and
December in each fiscal year of the Loan Parties, and thirty
(30) days after the end of each other month in each fiscal
year of the Loan Parties, unaudited interim financial
statements of the Loan Parties as of the end of such month
and of the portion of the Loan Parties' fiscal year then
elapsed, on a Consolidated basis, certified by a financial
officer of the Loan Parties as prepared in accordance with
GAAP and fairly presenting the Consolidated financial
position and results of operations of the Loan Parties for
such month and period subject only to changes from audit and
year-end adjustments and except that such statements need
not contain notes;
(iii) promptly after the sending or
filing thereof, as the case may be, copies of any proxy
statements, financial statements or reports which each Loan
Party has made available to its shareholders and copies of
any regular, periodic and special reports or registration
statements which each Loan Party files with the Securities
and Exchange Commission or any governmental authority which
may be substituted therefor, or any national securities
exchange;
(iv) promptly after the filing thereof,
copies of any annual report to be filed with ERISA in
connection with each Plan; and
(v) such other data and information
(financial and otherwise) maintained by the Loan Parties as
Lender, from time to time, may reasonably request, bearing
upon or related to the Collateral or each Loan Party's
financial condition or results of operations.
Concurrently with the delivery of the financial
statements described in clause (i) of this Section 9.1.3, the
Loan Parties shall cause to be prepared and shall furnish to
Lender a certificate of the aforesaid certified public
accountants certifying to Lender that, based upon their
examination of the financial statements of the Loan Parties
performed in connection with their examination of said financial
statements, they are not aware of any Default or Event of
Default, or, if they are aware of such Default or Event of
Default, specifying the nature thereof, and acknowledging, in a
manner satisfactory to Lender, that they are aware that Lender is
relying on such financial statements in making its decisions with
respect to the Loans. No later than ten days after receipt of
the accountants' letter to the management of the Loan Parties
that is prepared in connection with the financial statements
described in clause (i) of this Section 9.1.3, but in no event
later than 150 days after the end of each fiscal year, the Loan
Parties shall forward to Lender a copy of such accountants'
letter. Concurrently with the delivery of the financial
statements described in clause (i) of this Section 9.1.3 and
those financial statements described in clause (ii) of this
Section 9.1.3 which are for the last month in a fiscal quarter of
the Loan Parties, the Loan Parties shall cause to be prepared and
furnished to Lender a Compliance Certificate in the form of
Exhibit D hereto executed by a financial officer of the Loan
Parties.
9.1.4 Projections. No later than 45 days after the
end of each fiscal year of the Loan Parties, deliver to Lender
Projections of each Loan Party for the forthcoming fiscal year,
month by month.
9.1.5 Taxes and Liens. Pay and discharge, and
cause each Subsidiary to pay and discharge, all Taxes prior to
the date on which such Taxes become delinquent or penalties
attach thereto, except and only to the extent that such Taxes are
being Properly Contested. Each Loan Party shall also pay,
discharge or provide a bond with respect to, any lawful claims
which, if unpaid or unbonded, might become a Lien against any of
a Loan Party's Property except for Permitted Liens.
9.1.6 Tax Returns. File, and cause each Subsidiary
to file, all federal, state and local tax returns and other
reports any Loan Party is required by law to file and maintain
adequate reserves for the payment of all Taxes imposed upon it,
its income or its profits, or upon any Property belonging to it.
9.1.7 Compliance with Applicable Laws. Comply with
all Applicable Laws, and obtain and keep in force any and all
licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its Property or to
the conduct of its business, which violation or failure to obtain
might have a Material Adverse Effect.
9.1.8 Environmental Events. Notify Lender in
writing promptly after learning thereof (i) of any violation of
any Environmental Law, (ii) of any inquiry, proceeding,
investigation or other action, involving a request for
information or a notice of potential environmental liability from
any foreign, federal, state or local environmental agency or
board, or (iii) of the discovery of the release of any Hazardous
Material at, on, under or from any real Property owned or leased
by any Loan Party or any facility or equipment thereat in excess
of reportable or reliable standards or levels under any
Environmental Law, or in a manner and/or amount which could
reasonably be expected to result in liability under any
Environmental Law, in each case which would have a Material
Adverse Effect. In the event of the presence of any Hazardous
Materials on any real Property owned or leased by any Loan Party
which is in violation of, or which could reasonably be expected
to result in liability under, any Environmental Law, in each case
which would have a Material Adverse Effect, such Loan Party upon
discovery thereof, shall take all necessary steps to initiate and
expeditiously complete all remedial, corrective and other action
to mitigate and eliminate any such adverse effect, and shall keep
Lender informed of their actions and the results.
9.1.9 Computer Software. Establish an action plan,
and cause such action plan to be implemented by no later than
June 30, 1999, to reasonably assure that the essential items of
the computer software of each Loan Party is able to be used and
operated before, during and after calendar year 2000 A.D. without
error functions of a material nature relating to date data,
specifically including any error of a material nature relating
to, or the conduct of, date data which represents or references
different centuries or more than one century, and provide Lender
with assurances reasonably satisfactory to Lender that after June
30, 1999 the essential items of the computer software of the Loan
Parties will be able to recognize and perform without error
functions relating to date data before, during and after calender
year 2000 A.D.
9.2 Negative Covenants9.2 Negative Covenants. During
the term of this Agreement, and thereafter for so long as there
are any Obligations to Lender, each Loan Party covenants that,
unless Lender has first consented thereto in writing, it will
not:
9.2.1 Fundamental Changes. Merge or consolidate
with any Person or acquire all or any substantial part of the
Properties of any Person; provided, however, the foregoing
restriction shall not apply to (i) a merger by Parent with and
into Borrower with Borrower as the surviving corporation or (ii)
a merger by Borrower with and into Parent or with a Subsidiary of
Borrower, with Parent or such Subsidiary as the surviving
corporation, provided, in the case of a merger pursuant to clause
(ii) hereof, the following conditions are first satisfied by the
Loan Parties: (a) Borrower shall have given Lender not less than
fifteen (15) days prior written notice of the effective date of
such merger, (b) Lender shall have received, in form and
substance satisfactory to Lender and its counsel, an assumption
agreement as of the effective date of the merger, duly executed
by Parent or such Subsidiary into which Borrower proposes to
merge, pursuant to which Parent or such Subsidiary, as the case
may be, shall assume, adopt, ratify and confirm all of the
Obligations of Borrower under this Agreement and the other Loan
Documents, together with such other documents as Lender or its
counsel may reasonably require, (c) Lender shall have received
copies of all agreements, documents and instruments relating to
the merger as executed by the parties thereto, including the
certificates of merger as issued and certified by the Secretary
of States of the jurisdictions of incorporation of each Loan
Party, (d) Lender's Lien in the Collateral is and continues to be
a duly perfected Lien thereon (and each Loan Party shall have
taken such action as may be required pursuant to Section 6.3 and
any other provision of this Agreement or any other Loan Document
to perfect Lender's Lien thereon) subject to no other Lien
thereon except for Permitted Liens, and (e) no Default, Event of
Default or Overadvance Condition shall exist immediately before
or after giving effect to such merger.
9.2.2 Loans. Make any loans or other advances of
money to any Person, except:
(i) salary or other employment related
benefit, travel advances, advances against commissions and
other similar advances in the ordinary course of business,
including loans to pilots and other employees for the
payment of training courses;
(ii) loans or advances from one Loan
Party to the other Loan Party; and
(iii) other loans and advances not
in excess of $200,000 outstanding in the aggregate at any
one time.
9.2.3 Affiliate Transactions. Enter into, or be a
party to, any transaction with any Affiliate of a Loan Party
(other than the other Loan Party) or stockholder, except in the
ordinary course of and pursuant to the reasonable requirements of
such Loan Party's business and upon fair and reasonable terms
which are fully disclosed to Lender and are no less favorable to
such Loan Party than would be obtained in a comparable arm's
length transaction with a Person not an Affiliate of such Loan
Party.
9.2.4 Limitation on Liens. Create or suffer to
exist any Lien upon any of the Collateral, whether now owned or
hereafter acquired, except:
(i) Liens at any time granted in favor
of Lender;
(ii) Liens for taxes (excluding any Lien
imposed pursuant to any of the provisions of ERISA) not yet
due or that are being Properly Contested;
(iii) statutory Liens arising in
the ordinary course of such Loan Party's business by
operation of law or regulation, but only if payment in
respect of any such Lien is not at the time required or such
Liens are being Properly Contested and do not, in the
aggregate, materially detract from the value of the
Collateral or materially impair the use thereof in the
operation of such Loan Party's business; and
(iv) Purchase Money Liens in Rotable
Spare Parts, provided such Purchase Money Liens are limited
by their express terms to readily identifiable Rotable Spare
Parts and such Rotable Spare Parts are segregated by
Borrower from all of its other Rotable Spare Parts.
9.2.5 Distributions. Declare or make any
Distributions.
9.2.6 Disposition of Collateral. Sell, lease or
otherwise dispose of any of the Collateral except for
dispositions of the Rotable Spare Parts for so long as no
Default, Event of Default or Overadvance Condition then exists,
or, after giving effect to such disposition, will exist.
9.2.7 Restricted Investment. Make or have any
Restricted Investment.
9.2.8 Tax Consolidation. File or consent to the
filing of any consolidated income tax return with any Person
other than a Subsidiary of a Loan Party.
9.2.9 Guaranties. Become liable upon the
obligations of any Person (other than the other Loan Party), by
assumption, endorsement or guaranty thereto or otherwise (other
than to Lender), except the endorsement of checks in the ordinary
course of business and the issuance of guaranties in the ordinary
course of business of loans to pilots and other employees of a
Loan Party for the payment of training courses
9.2.10 United Express Agreements. Enter into, or agree
to, any amendment, modification, supplement or termination of any
United Express Agreement subsequent to the date of this Agreement
if the effect of such amendment, modification, supplement or
termination would (i) shorten the period during which the United
Express Operating Agreement is in effect or (ii) increase, or
could reasonably be expected to increase, in any material way the
structure or the basis of payment of the fees, charges or other
Indebtedness owing by Borrower to United which, pursuant to the
United Non-Offset Agreement, United is permitted to offset
against the Accounts of Borrower owing by United.
9.2.11 ACH Membership. Withdraw from being an
associate member of the ACH.
9.2.12 Subsidiaries. Hereafter divest itself of any
material assets by transferring them to any Subsidiary.
9.2.13 Subordinated Debt. Prepay or redeem any of the
Subordinated Debt before its scheduled maturity date or pay any
of the Subordinated Debt except in accordance with the terms of
the instrument under which such Subordinated Debt has been
subordinated to the payment of the Obligations.
9.3 Specific Financial Covenants9.3 Specific Financial
Covenants. During the term of this Agreement, and thereafter
for so long as there are any Obligations to Lender, each Loan
Party covenants that, unless Lender has first consented thereto
in writing, it shall comply with the following financial
covenants:
9.3.1 Consolidated Fixed Charge Coverage Ratio. The
Loan Parties and their respective Subsidiaries shall maintain a
Consolidated Fixed Charge Coverage Ratio as of the end of each
Testing Period, beginning with the Testing Period ending December
31, 1998, of not less than 1.6 to 1.0.
9.3.2 Consolidated Leverage Ratio. The Loan
Parties and their respective Subsidiaries shall maintain at all
times a Consolidated Leverage Ratio of no greater than 1.5 to
1.0.
9.3.3 Consolidated Senior Indebtedness/Consolidated
EBITDA Ratio. The Loan Parties and their respective Subsidiaries
shall maintain a Consolidated Senior Indebtedness/Consolidated
EBITDA Ratio as of the end of each Testing Period, beginning with
the Testing Period ending December 31, 1998, of no greater than
3.0 to 1.0.
SECTION 10. CONDITIONS PRECEDENT10. CONDITIONS
PRECEDENT
10.1 Conditions Precedent to Initial Revolver Loan on
Closing Date10.1 Conditions Precedent to Initial Revolver Loan
on Closing Date. Notwithstanding any other provision of this
Agreement or any of the other Loan Documents, and without
affecting in any manner the rights of Lender under the other
sections of this Agreement, it is understood and agreed that
Lender will have no obligation to make the initial Revolver Loan
under Section 1 of this Agreement on the Closing Date unless and
until, in addition to each of the conditions set forth in Section
10.2 hereof, each of the following conditions has been satisfied:
10.1.1 Documentation. Lender shall have received
the following documents, each to be in form and substance
satisfactory to Lender and its counsel:
(i) Certified copies of casualty
insurance policies of Borrower, together with loss payable
endorsements on Lender's standard form of Loss Payee
Endorsement naming Lender as loss payee as its interests may
appear, and certified copies of the liability insurance
policies of Borrower, together with endorsements naming
Lender as a coinsured;
(ii) Copies of all filing receipts or
acknowledgments issued by any governmental authority
(including, without limitation, the FAA) to evidence any
filing or recordation necessary to perfect the Liens of
Lender in the Collateral and evidence in a form acceptable
to Lender that such Liens constitute valid and perfected
first priority security interests and Liens, subject only to
those Permitted Liens which are expressly stated to have
priority over the Liens of Lender;
(iii) Copies of the Articles or
Certificate of Incorporation of each Loan Party and all
amendments thereto, certified by the Secretary of State or
other appropriate official of its respective jurisdiction of
incorporation;
(iv) Good standing certificates for
each Loan Party issued by the Secretary of State or other
appropriate official of such Loan Party's respective
jurisdiction of incorporation and each jurisdiction where
the conduct of such Loan Party's business activities
necessitates qualification and in which the failure of such
Loan Party to be so qualified would have a Material Adverse
Effect;
(v) A closing certificate signed
by the chief executive or financial officer of each Loan
Party, dated as of the Closing Date, stating that (a) the
representations and warranties set forth in Section 8 hereof
are true and correct in all material respects on and as of
such date, (b) such Loan Party is on such date in compliance
in all material respects with all the terms and provisions
set forth in this Agreement and the other Loan Documents and
(c) on such date no Default or Event of Default has occurred
and is continuing;
(vi) The Security Documents duly
executed, accepted and acknowledged by or on behalf of each
of the signatories thereto;
(vii) The Other Agreements duly
executed and delivered by each Loan Party;
(viii) The favorable, written opinion
of counsel to the Loan Parties as to the transactions
contemplated by this Agreement and the other Loan Documents;
(ix) Written instructions from the
Loan Parties directing the application of proceeds of the
Bridge Loan and the initial Revolver Loan made to the Loan
Parties pursuant to this Agreement on the Closing Date;
(x) Certificates of the Secretary
or an Assistant Secretary of each Loan Party certifying (a)
that attached thereto is a true and complete copy of the
Bylaws of such Loan Party, as in effect on the date of such
certification, (b) that attached thereto is a true and
complete copy of the resolutions adopted by the Board of
Directors of such Loan Party, authorizing the execution,
delivery and performance of this Agreement and the other
Loan Documents to which such Loan Party is a party and the
consummation of the transactions contemplated hereby and
thereby, and (c) as to the incumbency and genuineness of the
signature of each officer of such Loan Party executing this
Agreement or any of the Loan Documents;
(xi) An amendment to the Reimbursement
Agreement, duly executed by Borrower and Bank, conforming
the definition of the "Applicable Percentage" to the
definition of that term as set forth in this Agreement;
(xii) Certificate of the Secretary
of the Authority certifying (a) that attached thereto is a
true and complete copy of the resolutions adopted by the
Authority, authorizing the execution, delivery and
performance of the Escrow Agreement and the consummation of
the transactions contemplated thereby, and (b) as to the
incumbency and genuineness of the signature of each officer
of the Authority executing the Escrow Agreement;
(xiii) The favorable, written opinion
of counsel to the Authority as to the transactions
contemplated by the Escrow Agreement;
(xiv) an opinion from Lender's
special FAA counsel, certifying to Lender that Lender has a
first priority Lien in the Rotable Spare Parts of Borrower;
(xv) an amendment to the Deed of Trust,
duly executed by Borrower, the trustee under the Deed of
Trust and Lender, with all fees and taxes, if any, paid
thereon, reflecting the amendments to the Existing Loan
Agreement made by this Agreement;
(xvi) an endorsement to the policy
of title insurance currently insuring the lien of the Deed
of Trust, updating the effective date of such policy to the
recordation date of the amendment to the Deed of Trust
insured thereby executed pursuant to this Agreement, with
all premiums thereon paid, and
(xvii) Such other documents,
instruments and agreements as Lender shall reasonably
request in connection with the foregoing matters.
10.1.2 No Injunction, etc. No action, proceeding,
investigation, regulation or legislation shall have been
instituted, threatened or proposed before any court, governmental
agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, or which is related to or arises
out of this Agreement or the Loan Documents or the consummation
of the transactions contemplated hereby or which, in Lender's
reasonable judgment, would make it inadvisable to consummate the
transactions contemplated by this Agreement or any of the other
Loan Documents.
10.1.3 Consents. All approvals, licenses, consents
and filings necessary to permit the transactions contemplated by
this Agreement shall have been obtained and made.
10.1.4 Material Adverse Change. There shall not
have occurred any material adverse change in the financial
condition, results of operations or business of Borrower and its
Subsidiaries or the value of the Collateral from November 30,
1998 to the Closing Date, or any event, condition or state of
facts which would reasonably be expected to have a Material
Adverse Effect, as reasonably determined by Lender.
10.1.5 No Default or Event of Default. No Default
or Event of Default shall have occurred and be continuing.
10.1.6 Liens. Lender shall be satisfied that this
Agreement and the other Loan Documents create or will create, as
security for the Obligations, a valid and enforceable perfected
first priority security interest in and Lien upon all of the
Collateral in favor of Lender, subject to no other Liens other
than Permitted Liens which are expressly stated to have priority
over the Liens of Lender.
10.1.7 Escrow Funds. Lender shall have received
evidence that the Escrow Funds have been received by the Escrow
Agent to be held pursuant to the Escrow Agreement.
10.2 Conditions Precedent to All Loans and Letters of Credit
and Letter of Credit Guaranties10.2 Conditions Precedent to
All Loans and Letters of Credit and Letter of Credit Guaranties.
Notwithstanding any of the provisions of this Agreement or the
other Loan Documents, and without affecting in any manner the
rights of Lender under the other sections of this Agreement, it
is understood and agreed that Lender will have no obligation to
make any Loan (including the Bridge Loan Advances and the initial
Revolver Loan) and Lender will have no obligation to issue any
Letter of Credit or Letter of Credit Guaranty unless and until,
in addition to the conditions set forth in Section 10.1, each of
the following conditions has been and continues to be satisfied:
10.2.1 Events of Default. No Default, Event of
Default or Overadvance Condition shall exist.
10.2.2 Delivery of Documents. Lender shall have
received copies of all documents, reports and information
required to be delivered to Lender hereunder.
10.2.3 Representations and Warranties. The
representations and warranties contained in Section 8 of this
Agreement and in the Loan Documents shall be true and correct in
all material respects except for changes in the nature of a Loan
Party's business or operations that would render the information
contained in any Exhibit or Schedule attached hereto either
inaccurate, incomplete or misleading, except for any changes in
the nature of the business or operations of the Loan Parties and
their respective Subsidiaries that would render the information
contained in any Schedule or Exhibit attached hereto either
inaccurate or incomplete, so long as Lender has consented to such
changes or such changes are not prohibited by this Agreement.
10.2.4 Subordinated Debt. The Loan, if made, would
enjoy the benefits and privileges of being senior in right of
payment to all Subordinated Debt then outstanding.
10.3 Waiver of Conditions Precedent10.3 Waiver of Conditions
Precedent. If Lender makes any Loan or issues any Letter of
Credit or Letter of Credit Guaranty prior to the fulfillment of
any of the conditions precedent set forth in Sections 10.1 and
10.2 hereof, the making of such Loan or the issuance of such
Letter of Credit or Letter of Credit Guaranty shall constitute
only an extension of time for the fulfillment of such condition
and not a waiver thereof, and each Loan Party shall thereafter
use its best efforts to fulfill such condition promptly.
SECTION 11. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON
DEFAULTSECTION 11. EVENTS OF DEFAULT; RIGHTS
AND REMEDIES ON DEFAULT
11.1 Events of Default11.1 Events of Default. The
occurrence of one or more of the following events shall
constitute an "Event of Default":
11.1.1 Payment of Loans and Amounts for Cash
Collateral Account. Borrower shall fail to make any payment of
principal, interest or premium, if any, owing on the Loans, or
any amounts to be paid into the Cash Collateral Account pursuant
to Section 4.2.3 hereof, within two (2) Business Days of the due
date thereof (whether due at stated maturity, on demand, upon
acceleration or otherwise)."
11.1.2 Payment of Other Obligations. Borrower shall
fail to pay any of the other Obligations (other than those dealt
with specifically in Section 11.1.1 hereof) on the due date
thereof (whether due at stated maturity, on demand, upon
acceleration or otherwise) and such failure shall continue for a
period of three (3) Business Days after Lender's giving Borrower
written notice thereof.
11.1.3 Misrepresentations. Any representation,
warranty or other statement made or furnished to Lender by or on
behalf of any Loan Party or in this Agreement, any of the other
Loan Documents or any instrument, certificate or financial
statement furnished in compliance with or in reference thereto
proves to have been false or misleading in any material respect
when made or furnished or when reaffirmed pursuant to Section 8.2
hereof.
11.1.4 Breach of Specific Covenants. Any Loan Party
shall fail or neglect to perform, keep or observe any covenant
contained in Sections 6.3, 7.1.1, 7.2.5, 7.2.6, 9.1.1, 9.1.3,
9.2 or 9.3 hereof on the date that such Loan Party is required to
perform, keep or observe such covenant.
11.1.5 Breach of Loan Documents. Any Loan Party
shall fail or neglect to perform, keep or observe any covenant
contained in this Agreement (other than a covenant which is dealt
with specifically elsewhere in Section 11.1 hereof) or the other
Loan Documents and the breach of such other covenant or the other
Loan Documents is not cured within fifteen (15) days after the
sooner to occur of such Loan Party's receipt of notice of such
breach from Lender or the date on which such failure or neglect
first becomes known to any officer of such Loan Party.
11.1.6 Other Defaults. There shall occur any
default or event of default on the part of any Loan Party under
any agreement, document or instrument to which Borrower is a
party or by which a Loan Party or any of its Property is bound,
creating or relating to any Indebtedness for Money Borrowed in
excess of $200,000 in the aggregate (other than the Obligations)
and such default or event of default remains uncured beyond the
applicable notice and grace period, if any, with respect thereto.
11.1.7 Insolvency and Related Proceedings. Any Loan
Party shall cease to be Solvent; or United or any Loan Party
shall suffer the appointment of a receiver, trustee, custodian or
similar fiduciary, or shall make an assignment for the benefit of
creditors, or any petition for an order for relief shall be filed
by or against any Loan Party or United under the Bankruptcy Code
(if against a Loan Party or United, the continuation of such
proceeding for more than 60 days); or any Loan Party shall make
any offer of settlement, extension or composition to their
respective unsecured creditors generally.
11.1.8 Business Disruption. Any Loan Party shall
suffer the loss or revocation of any license or permit now held
or hereafter acquired by any Loan Party which is necessary to the
continued or lawful operation of a material part of its business;
or any Loan Party shall be enjoined, restrained, or otherwise
permanently prevented by court, governmental or administrative
order from conducting all or any material part of its business
affairs; or any material lease or agreement pursuant to which any
Loan Party leases, uses or occupies any Property shall be
canceled or terminated prior to the expiration of its stated
term; or any Loan Party or United ceases scheduled air
transportation services other than on a temporary basis.
11.1.9 Change of Ownership. Parent shall cease to
own and control, beneficially and of record, all of the issued
and outstanding stock of Borrower other than pursuant to a
transaction permitted by Section 9.2.1(i) or (ii) hereof.
11.1.10 Challenge to Agreement. Any Loan Party or
any Affiliate of any of them, shall challenge or contest in any
action, suit or proceeding the validity or enforceability of this
Agreement, or any of the other Loan Documents, the legality or
enforceability of any of the Obligations or the perfection or
priority of any Lien granted to Lender. Nothing set forth herein
shall preclude a Loan Party from enforcing its rights, and
Lender's duties and obligations, under this Agreement and the
other Loan Documents.
11.1.11 Criminal Forfeiture. Any Loan Party or any
Subsidiary of any Loan Party shall be criminally indicted or
convicted under any law that could lead to a forfeiture of any
Property of any Loan Party or any Subsidiary of any Loan Party
which can reasonably be expected to have a Material Adverse
Effect.
11.1.12 Judgments. One or more money judgments,
writs of attachment or similar process is filed against any Loan
Party or any Subsidiary of any Loan Party or any of their
respective Property involving liability of $200,000 or more in
the aggregate (to the extent not paid or fully covered by
insurance provided by a carrier who has acknowledged coverage),
and the same is not released, stayed, discharged or bonded within
thirty (30) days after the entry thereof.
11.1.13 Repudiation of or Default Under Guaranty
Agreement. Any Guarantor shall revoke or attempt to revoke the
Guaranty Agreement signed by such Guarantor, or shall repudiate
such Guarantor's liability thereunder or shall be in default
under the terms thereof.
11.1.14 ACH Procedure Manual. Borrower shall cease
scheduled air transportation services other than on a temporary
basis for a work stoppage and, in consequence thereof, ACH shall
have directed the Clearing Bank to withhold twenty-five percent
(25%) of the net funds due Borrower in any subsequent settlement
in which Borrower is a net creditor, pursuant to paragraph 8 of
the settlement regulations set forth in Section B of the ACH
Procedure Manual.
11.1.15 Withdrawal as Member. Borrower shall give
notice of withdrawal from the ACH Agreement.
11.1.16 Termination or Breach of the United Express
Operating Agreement or the United Express Agreements. The
termination for any reason of the United Express Operating
Agreement by Borrower without the prior written consent of Lender
as required by Section 9.2.11 hereof or by United; or Borrower
shall default in the payment (beyond the applicable grace period
with respect thereto, if any) with respect to any Indebtedness
owing under any of the United Express Agreements or fail to
perform or observe any term, covenant or agreement on its part to
be performed or observed pursuant to any of the United Express
Agreements, the effect of which failure is to cause, or permit,
United to terminate any of the United Express Agreements.
11.1.17 Default Under Reimbursement Agreement. There
shall occur any "Event of Default" under the Reimbursement
Agreement as such term is defined in Section 6.01 thereof.
11.2 Acceleration of the Obligations.2 Acceleration of the
Obligations. Without in any way limiting the right of Lender to
demand payment of any portion of the Obligations payable on
demand in accordance with Section 3.2 hereof, upon or at any time
after the occurrence of an Event of Default, all or any portion
of the Obligations shall, at the option of Lender and without
presentment, demand, protest or further notice by Lender, become
at once due and payable and Borrower shall forthwith pay to
Lender the full amount of such Obligations, provided, that upon
the occurrence of an Event of Default specified in subsection
11.1.7 hereof, all of the Obligations shall become automatically
due and payable without declaration, notice or demand by Lender.
11.3 Other Remedies.3 Other Remedies. During the
existence of an Event of Default, Lender may exercise from time
to time the following rights and remedies:
11.3.1. All of the rights and remedies of a secured
party under the Code or under other Applicable Law, and all other
legal and equitable rights to which Lender may be entitled, all
of which rights and remedies shall be cumulative and shall be in
addition to any other rights or remedies contained in this
Agreement or any of the other Loan Documents, and none of which
shall be exclusive.
11.3.2. The right to terminate this Agreement as
provided in Section 5.2.1 hereof.
11.3.3. The right to notify Account Debtors to make
remittance to Lender of all sums due on Accounts of Borrower,
collect such Accounts directly from the Account Debtors, and take
such other and further action with respect thereto as set forth
in Section 12.1.2 hereof.
11.3.4. The right to take immediate possession of the
Collateral, and to (i) require Borrower to assemble the
Collateral, at Borrower's expense, and make it available to
Lender at a place designated by Lender which is reasonably
convenient to both parties, and (ii) enter any premises where any
of the Collateral shall be located and to keep and store the
Collateral on said premises until sold (and if said premises be
the Property of Borrower, Borrower agrees not to charge Lender
for storage thereof).
11.3.5. The right to sell or otherwise dispose of all
or any Collateral in a commercially reasonable manner, at public
or private sale or sales, with such notice as may be required by
law, in lots or in bulk, for cash or on credit, all as Lender, in
its sole discretion, may deem advisable. Borrower agrees that 10
days written notice to Borrower of any public or private sale or
other disposition of Collateral shall be reasonable notice
thereof, and such sale shall be at such locations as Lender may
designate in said notice. Lender shall have the right to conduct
such sales on Borrower's premises, without charge therefor, and
such sales may be adjourned from time to time in accordance with
applicable law. Lender shall have the right to sell, lease or
otherwise dispose of the Collateral, or any part thereof, for
cash, credit or any combination thereof, and Lender may purchase
all or any part of the Collateral at public or, if permitted by
law, private sale and, in lieu of actual payment of such purchase
price, may set off the amount of such price against the
Obligations. The proceeds realized from the sale of any
Collateral may be applied, after allowing 2 Business Days for
collection, first to the reasonable costs, expenses and
attorneys' fees incurred by Lender in collecting the Obligations,
in enforcing the rights of Lender under the Loan Documents and in
collecting, retaking, completing, protecting, removing, storing,
advertising for sale, selling and delivering any Collateral,
second to the interest due upon any of the Obligations; and
third, to the principal of the Obligations. If any deficiency
shall arise, Borrower shall remain liable to Lender therefor. If
there shall be any surplus, Lender shall remit such surplus to
Borrower or other Person entitled thereto.
11.3.6 With respect to the face amount of all
Letters of Credit and Letter of Credit Guaranties then
outstanding, Lender may, at its option, require the Loan Parties
to deposit with Lender funds equal to such undrawn face amount,
and if the Loan Parties fail promptly to make such deposit,
Lender may advance such amount as a Revolver Loan. Any such
deposit or advance shall be held by Lender in the Cash Collateral
Account as a reserve to fund future payments on such Letters of
Credit or Letter of Credit Guaranties. At such time as all
Letters of Credit and Letter of Credit Guaranties have expired or
have been canceled or terminated and Lender and its Affiliates
released from all liability thereunder, any amounts remaining in
such reserves shall be applied against any outstanding
Obligations, or, to the extent all Obligations have been
indefeasibly paid and satisfied in full, returned to the Loan
Parties.
11.3.7 With respect to the Escrow Funds, the right
to notify the Escrow Agent of the existence of an Event of
Default and to demand that, pursuant to the terms of the Escrow
Agreement, so much of the Escrow Funds be remitted to Lender for
application to the Bridge Loan Obligations.
11.4 Remedies Cumulative; No Waiver. .4 Remedies
Cumulative; No Waiver. All covenants, conditions, provisions,
warranties, guaranties, indemnities, and other undertakings of
any Loan Party contained in this Agreement and the other Loan
Documents, or in any document referred to herein or contained in
any agreement supplementary hereto or in any schedule or
contained in any other agreement between Lender and any Loan
Party, heretofore, concurrently, or hereafter entered into, shall
be deemed cumulative to and not in derogation or substitution of
any of the terms, covenants, conditions, or agreements herein
contained. The failure or delay of Lender to require strict
performance by any Loan Party of any provision of this Agreement
or to exercise or enforce any rights, Liens, powers, or remedies
hereunder or under any of the aforesaid agreements or other
documents or security or Collateral shall not operate as a waiver
of such performance, Liens, rights, powers and remedies, but all
such requirements, Liens, rights, powers, and remedies shall
continue in full force and effect until all Loans and all other
Obligations owing or to become owing from Borrower to Lender
shall have been fully satisfied. None of the undertakings,
agreements, warranties, covenants and representations of any Loan
Party contained in this Agreement or any of the other Loan
Documents and no Event of Default by any Loan Party under this
Agreement or any other Loan Documents shall be deemed to have
been suspended or waived by Lender, unless such suspension or
waiver is by an instrument in writing specifying such suspension
or waiver and is signed by a duly authorized representative of
Lender and directed to the Loan Parties.
SECTION 12 MISCELLANEOUSSECTION 12 MISCELLANEOUS
12.1 Power of Attorney.1 Power of Attorney. Borrower hereby
irrevocably designates, makes, constitutes and appoints Lender
(and all Persons designated by Lender) as Borrower's true and
lawful attorney (and agent-in-fact) and Lender, or Lender's
agent, may, without notice to Borrower and in either Borrower's
or Lender's name, but at the cost and expense of Borrower:
12.1.1. At such time or times as Lender or said
agent, in its sole discretion, may determine, endorse Borrower's
name on any checks, notes, acceptances, drafts, money orders or
any other evidence of payment or proceeds of the Collateral which
come into the possession of Lender or under Lender's control for
application to the Obligations in accordance with this Agreement.
12.1.2. At such time or times during the existence of
an Event of Default, and during the continuance thereof, as
Lender or its agent in its sole discretion may determine: (i)
demand payment of the Accounts of Borrower from the Account
Debtors, enforce payment of such Accounts of Borrower by legal
proceedings or otherwise, and generally exercise all of
Borrower's rights and remedies with respect to the collection of
its Accounts; (ii) in a commercially reasonable manner settle,
adjust, compromise, discharge or release any of the Accounts of
Borrower or other Collateral or any legal proceedings brought to
collect any of the Accounts of Borrower or other Collateral;
(iii) sell or assign any of the Accounts of Borrower and other
Collateral upon and for such commercially reasonable terms, for
such amounts and at such time or times as Lender deems advisable;
(iv) take control, in any manner, of any item of payment or
proceeds relating to any Collateral; (v) prepare, file and sign
Borrower's name to a proof of claim in bankruptcy or similar
document against any Account Debtor or to any notice of lien,
assignment or satisfaction of lien or similar document in
connection with any of the Collateral; (vi) receive, open and
dispose of all mail addressed to Borrower and notify postal
authorities to change the address for delivery thereof to such
address as Lender may designate; (vii) endorse the name of
Borrower upon any of the Payment Items or proceeds relating to
any Collateral and deposit the same to the account of Lender on
account of the Obligations; (viii) endorse the name of such
Borrower upon any Chattel Paper, Document, Instrument, invoice,
freight bill, bill of lading or similar document or agreement
relating to the Accounts or Rotable Spare Parts of the Borrower
and any other Collateral; (ix) use Borrower's stationery for the
purpose of and sign the name of Borrower to verifications of its
Accounts and notices thereof to Account Debtors; (x) use the
information recorded on or contained in any data processing
equipment and computer hardware and software relating to the
Accounts and Rotable Spare Parts of Borrower and any other
Collateral; (xi) make and adjust claims under policies of
insurance; and (xii) do all other acts and things necessary, in
Lender's determination, to fulfill Borrower's obligations under
this Agreement.
12.1.3. The power of attorney granted pursuant to
this Section 14.1, being coupled with an interest, shall be
irrevocable by Borrower until all of the Obligations are paid and
satisfied in full.
12.2 Indemnity.2 Indemnity.
12.2.1 Indemnity by Borrower. Borrower hereby agrees
to indemnify the Lender and to hold the Lender harmless from and
against any liability, loss, damage, suit, action or proceeding
ever suffered or incurred by the Lender (including reasonable
attorneys fees and reasonable legal expenses) arising out of or
related to this Agreement or any of the other Loan Documents, the
performance by Lender of its duties or the exercise of any of its
rights and remedies hereunder, on account of, or as the result
of, a claim made, asserted or initiated by any Person other than
a Loan Party that any Loan Party has failed to observe, perform
or discharge such Loan Party's duties hereunder or under any of
the Loan Documents. In addition, Borrower shall also indemnify
and defend the Lender against and save the Lender harmless from
all Claims of any Person with respect to the Collateral.
Additionally, if any Taxes (excluding Taxes imposed upon or
measured by the net income of the Lender, but including, without
limitation, any intangibles tax, stamp tax, recording tax or
franchise tax) shall be payable by Lender or by any Loan Party or
any of its Subsidiaries on account of the execution or delivery
of this Agreement, or the execution, delivery, issuance or
recording of any of the other Loan Documents, or the creation of
any of the Obligations, by reason of any existing or hereafter
enacted federal, state, foreign or local statute, rule or
regulation, Borrower will pay (or will promptly reimburse Lender
for the payment of) all such Taxes, including, without
limitation, any interest and penalties thereon, and will
indemnify and hold Lender harmless from and against all liability
in connection therewith. The foregoing indemnities shall not
apply to protect Lender for the consequences of its gross
negligence or willful misconduct.
12.2.2 Indemnity by Lender. Lender hereby agrees to
indemnify Borrower against any liability, loss, damage or expense
which Borrower may suffer or occur as a result of Lender's breach
of any of its warranties and representations set forth in Section
4.02 of the Reimbursement Agreement or Lender's failure to comply
with any of the covenants set forth in Section 5.03 of the
Reimbursement Agreement and Bank's exercise of its rights under
Section 6.02 of the Reimbursement Agreement as a result thereof.
12.3 Survival of Indemnities.3 Survival of Indemnities.
Notwithstanding any contrary provision in this Agreement or the
other Loan Documents, the obligation of the Loan Parties and
Lender with respect to each indemnity given by it in this
Agreement or any of the other Loan Documents shall survive the
payment in full of the Obligations and the termination of this
Agreement.
12.4 Modification of Agreement.4 Modification of
Agreement. This Agreement may not be modified, altered or
amended, except by an agreement in writing signed by each Loan
Party and Lender. No Loan Party may sell, assign or transfer any
interest in this Agreement, any of the other Loan Documents, or
any of the Obligations, or any portion thereof, including,
without limitation, such Loan Party's rights, title, interests,
remedies, powers, and duties hereunder or thereunder. Each Loan
Party hereby consents to Lender's participation, sale,
assignment, transfer or other disposition, at any time or times
hereafter, of this Agreement and any of the other Loan Documents,
or of any portion hereof or thereof, including, without
limitation, Lender's rights, title, interests, remedies, powers,
and duties hereunder or thereunder; provided, however, no such
sale, assignment, participation, transfer or other disposition by
Lender will result in any diminution of the rights and
obligations of the Loan Parties under this Agreement and the
other Loan Documents. In the case of an assignment, the assignee
shall have, to the extent of such assignment, the same rights,
benefits and obligations as it would if it were "Lender"
hereunder and Lender shall be relieved of all obligations
hereunder upon any such assignments. Each Loan Party agrees that
it will use its best efforts to assist and cooperate with Lender
in any manner reasonably requested by Lender to effect the sale
of participations in or assignments of any of the Loan Documents
or any portion thereof or interest therein, including, without
limitation, assisting in the preparation of appropriate
disclosure documents. Each Loan Party further agrees that Lender
may disclose credit information regarding such Loan Party and its
Subsidiaries to any potential participant or assignee.
12.5 Severability.5 Severability. Wherever possible, each
provision of this Agreement shall be interpreted in such manner
as to be effective and valid under Applicable Law, but if any
provision of this Agreement shall be prohibited by or invalid
under Applicable Law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining
provisions of this Agreement.
12.6 Successors and Assigns. .6 Successors and Assigns.
This Agreement, the Other Agreements and the Security Documents
shall be binding upon and inure to the benefit of the successors
and assigns of Borrower and Lender.
12.7 Cumulative Effect; Conflict of Terms.7 Cumulative
Effect; Conflict of Terms. The provisions of the Other
Agreements and the Security Documents are hereby made cumulative
with the provisions of this Agreement. Except as otherwise
provided in any of the other Loan Documents by specific reference
to the applicable provision of this Agreement, if any provision
contained in this Agreement is in direct conflict with, or
inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern
and control.
12.8 Execution in Counterparts.8 Execution in
Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall
be deemed to be an original and all of which counterparts taken
together shall constitute but one and the same instrument.
12.9 Required Lender's Consent.9 Required Lender's
Consent. Whenever Lender's consent is required to be obtained
under this Agreement or any of the other Loan Documents as a
condition to any action, inaction, condition or event, Lender
shall be authorized to give or withhold its consent in its sole
and absolute discretion and to condition its consent upon the
giving of additional collateral security for the Obligations, the
payment of money or any other matter.
12.10Notice.10 Notice. All notices, requests and demands to
or upon a party hereto, to be effective, shall be in writing and
shall be sent by certified or registered mail, return receipt
requested, by personal delivery against receipt, by overnight
courier or by facsimile transmission and, unless otherwise
expressly provided herein, shall be deemed to have been validly
served, given or delivered immediately when delivered against
receipt, three (3) Business Days after deposit in the mail,
postage prepaid, or, in the case of facsimile transmission, when
received (if on a Business Day and, if not received on a Business
Day, then on the next Business Day after receipt), or one (1)
Business Day after deposit with an overnight courier, addressed
as follows:
If to Borrower: Atlantic Coast Airlines
515-A Shaw Road
Sterling, Virginia 20166
Attention: Director of Treasury
Management
Facsimile: 703-925-6299
If to Parent: Atlantic Coast Airlines, Inc.
515-A Shaw Road
Sterling, Virginia 20166
Attention: Chief Financial Officer
Facsimile: 703-925-6299
If to Lender: Fleet Capital Corporation
6100 Fairview Road
Suite 200
Charlotte, North Carolina 28210
Attention: Southeast Loan Administration
Facsimile No.: 704-553-6738
With a copy to: Carruthers & Roth, P.A.
235 N. Edgeworth Street
Greensboro, North Carolina 27401
Attention: Kenneth M. Greene, Esq.
Facsimile No.: 336-273-7885
or to such other address as each party may designate for itself
by notice given in accordance with this Section 12.10; provided,
however, that any notice, request or demand to or upon Lender
pursuant to subsection 3.1.1 or 5.2.2 hereof shall not be
effective until received by Lender. Any written notice or demand
that is not sent in conformity with the provisions hereof shall
nevertheless be effective on the date that such notice is
actually received by the noticed party.
12.11Credit Inquiries. .11 Credit Inquiries. Each Loan
Party hereby authorizes and permits Lender, at its discretion and
without any obligation to do so, to respond to credit inquiries
from third parties concerning a Loan Party or any of its
Subsidiaries.
12.12Time of Essence.12 Time of Essence. Time is of the
essence of this Agreement, the Other Agreements and the Security
Documents.
12.13Entire Agreement.13 Entire Agreement; Appendix A and
Exhibits and Schedules. This Agreement and the other Loan
Documents, together with all other instruments, agreements and
certificates executed by the parties in connection therewith or
with reference thereto, embody the entire understanding and
agreement between the parties hereto and thereto with respect to
the subject matter hereof and thereof and supersede all prior
agreements, understandings and inducements, whether express or
implied, oral or written. Appendix A and each of the exhibits
and schedules attached hereto are incorporated into this
Agreement and by this reference made a part hereof.
12.14Interpretation.14 Interpretation. No provision of
this Agreement or any of the other Loan Documents shall be
construed against or interpreted to the disadvantage of any party
hereto by any court or other governmental or judicial authority
by reason of such party having or being deemed to have structured
or dictated such provision.
12.15GOVERNING LAW; CONSENT TO FORUM.15 GOVERNING LAW;
CONSENT TO FORUM. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NORTH CAROLINA; PROVIDED, HOWEVER, THAT IF ANY OF THE
COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER
THAN NORTH CAROLINA, THE LAWS OF SUCH JURISDICTION SHALL
GOVERN THE METHOD, MANNER AND PROCEDURE FOR FORECLOSURE
OF LENDER'S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT
OF LENDER'S OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL
TO THE EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE
DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF NORTH
CAROLINA. EACH OF THE PARTIES HERETO HEREBY CONSENTS AND
AGREES THAT ANY STATE OR FEDERAL COURT IN MECKLENBURG COUNTY,
NORTH CAROLINA SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES AMONG THE LOAN PARTIES AND
LENDER PERTAINING TO THIS AGREEMENT OR TO ANY MATTER
ARISING OUT OF OR RELATED TO THIS AGREEMENT. EACH PARTY
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH
COURT, AND EACH PARTY HEREBY WAIVES ANY OBJECTION WHICH ANY
PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
12.16WAIVERS.16 WAIVERS. EACH LOAN PARTY WAIVES (i)
TO THE FULLEST EXTENT PROVIDED BY APPLICABLE LAW, THE
RIGHT TO TRIAL BY JURY (WHICH LENDER HEREBY ALSO WAIVES)
IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY
KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN
DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL; (ii)
PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT,
PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE,
COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR
ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS,
INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME
HELD BY LENDER ON WHICH THE LOAN PARTIES MAY IN ANY WAY
BE LIABLE; (iii) NOTICE PRIOR TO TAKING POSSESSION OR
CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH
MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING LENDER
TO EXERCISE ANY OF LENDER'S REMEDIES; (iv) THE BENEFIT OF
ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; AND (v)
NOTICE OF ACCEPTANCE HEREOF. EACH LOAN PARTY ACKNOWLEDGES
THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO
LENDER'S ENTERING INTO THIS AGREEMENT AND THAT LENDER IS
RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS
WITH THE LOAN PARTIES. EACH LOAN PARTY WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS
WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY
WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
IN WITNESS WHEREOF, this Agreement has been duly executed
on the day and year specified at the beginning of this Agreement.
ATTEST: ATLANTIC COAST AIRLINES
("Borrower")
__________________________________
By:____________________________
Richard J. Kennedy. Secretary Thomas J. Moore, Executive Vice
President and Chief Operating
Officer
[CORPORATE SEAL]
ATTEST: ATLANTIC COAST AIRLINES HOLDINGS,
INC.
("Parent")
__________________________________ By:___________________________
Richard J. Kennedy. Secretary Thomas J. Moore, Executive
Vice President and
Chief Operating Officer
[CORPORATE SEAL]
Accepted in Charlotte, North Carolina
FLEET CAPITAL CORPORATION
("Lender")
By:_______________________________________
Title:___________________________________
LIBOR Lending Office:
6100 Fairview Road
Suite 200 Charlotte, North Carolina
28210
Attention: Southeast Loan
Administration
Facsimile No.: 704-553-6738
APPENDIX A
GENERAL DEFINITIONS
When used in the Amended and Restated Loan and
Security Agreement, dated of even date herewith, by and
among ATLANTIC COAST AIRLINES ("Borrower"), and ATLANTIC
COAST AIRLINES HOLDINGS, INC. ("Parent"; Borrower and Parent
being herein collectively called the "Loan Parties" and,
individually, a "Loan Party"), and FLEET CAPITAL CORPORATION
("Lender"), the following terms shall have the following
meanings (terms defined in the singular to have the same
meaning when used in the plural and vice versa):
ACH - Airline Clearing House, Inc., a Delaware
corporation.
ACH Agreement - the Associate Membership
Agreement, dated January 3, 1992, which incorporates by
reference the Agreement Relating to the Settlement of
Interline Accounts through Airlines Clearing House,
Inc. dated as of February 1, 1948, as amended from time
to time, each among ACH, certain air carriers that are
and may become party thereto, and Borrower.
ACH Procedure Manual - the Manual of Procedure for
the clearing and settlement functions of ACH as in
effect from time to time.
ACH Settlement Date - in the case of ACH
transactions between Borrower and an Account Debtor,
the twenty-eighth (28th) calendar day of the month
following the month in which the air transportation
services are rendered and revenues earned, and, in the
case of IATA transactions between Borrower and an
Account Debtor, the fifteenth (15th) calendar day of
the second month following the month in which the air
transportation services are rendered and revenues
earned, and, if such calendar day falls on a Saturday,
Sunday or legal holiday observed by the Clearing Bank,
the ACH Settlement Date shall be the next working day.
Account - shall have the meaning ascribed to the
term "account" under the Code, and shall include,
without limitation, any right to payment for goods sold
or leased or for services rendered which is not
evidenced by an Instrument, Document or Chattel Paper,
whether secured or unsecured, and whether or not earned
by performance.
Account Debtor - any Person who is or may become
obligated under or on account of an Account.
Accounts Borrowing Base - at any date of
determination thereof, an amount equal to seventy-five
percent (75%) of the net amount of Eligible Accounts
outstanding at such date. For the purposes of
calculating the Accounts Borrowing Base, the net amount
of Eligible Accounts at any time shall be the face
amount of such Eligible Accounts less any and all
returns, rebates, discounts (which may, at Lender's
option, be calculated on shortest terms), sales taxes,
credits, allowances or excise taxes of any nature at
any time issued, owing, claimed by Account Debtors,
granted, outstanding or payable in connection with such
Accounts at such time (including current amounts owing
by Borrower to United under the United Express
Agreements).
Adjusted LIBOR Rate - with respect to each
Interest Period for a LIBOR Rate Loan, an interest rate
per annum (rounded to the nearest ten thousandth of 1%)
equal to the quotient of (i) the LIBOR Rate in effect
for such Interest Period divided by (ii) a percentage
(expressed as a decimal) equal to 100% minus Statutory
Reserves.
Affiliate - as to any Person, any other Person
(other than a Subsidiary): (i) which directly or
indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with,
such Person; (ii) which beneficially owns or holds 5%
or more of any class of the Voting Stock of such
Person; or (iii) 5% or more of the Voting Stock (or in
the case of a Person which is not a corporation, 5% or
more of the equity interest) of which is beneficially
owned or held by such Person or a Subsidiary of such
Person. For the purposes of the Agreement, United shall
not be deemed an Affiliate of a Loan Party.
Agreement - the Loan and Security Agreement
referred to in the first sentence of this Appendix A,
as the same may hereafter be amended, modified,
supplemented or restated from time to time, all
exhibits hereto and this Appendix A.
Appliance - an instrument, equipment, apparatus, a
part, an appurtenance, or an accessory used, capable of
being used, or intended to be used, in operating or
controlling aircraft in flight, including a parachute,
communication equipment, and another mechanism
installed in or attached to aircraft during flight, and
not a part of an aircraft, aircraft engine, or
propeller.
Applicable Law - all laws, rules and regulations
applicable to the Person, conduct, transaction,
covenant or Loan Documents in question, including, but
not limited to, all applicable common law and equitable
principles; all provisions of all applicable state and
federal constitutions, statutes, rules, regulations and
orders of governmental bodies; orders, judgments and
decrees of all courts and arbitrators and all
Environmental Laws.
Applicable Percentage - for any day, the rate per
annum set forth below opposite the applicable Level
then in effect, it being understood that the Applicable
Percentage for (i) the Revolver Loans that are LIBOR
Rate Loans or Daily LIBOR Loans shall be the percentage
set forth in Table I under the column Applicable
Percentage for LIBOR Loans, (ii) the Revolver Loans
that are Base Rate Loans shall be the percentage set
forth in Table I under the column Applicable Percentage
for Base Rate Loan, (iii) the portion of the Bridge
Loan that are LIBOR Rate Loans or Daily LIBOR Loans
shall be the percentage set forth in Table II under the
column Applicable Percentage for LIBOR Loans, (iv) the
portion of the Bridge Loan that are Base Rate Loans
shall be the percentage set forth in Table II under the
column Applicable Percentage for Base Rate Loans, (v)
the unused line fee shall be the percentage set forth
in Table I under the column Applicable Percentage for
Unused Line Fee; and (vi) the letter of credit fee
shall be the percentage set forth in Table I under the
column Applicable Percentage for Letter of Credit Fee:
Table I
Revolver Loans; Unused Line Fee; Letter of Credit Fee
Applicable Applicable
ApplicableApplicable
Percentage for Percentage for
Percentage for Percentage for
Level LIBOR Loan Base Rate
Loan Unused Line Fee Letter of Credit Fee
Level I .75% 0% .25% .75%
Level II 1.00% 0% .375% 1.0%
Level III 1.25% 0%
.375% 1.0%
Level IV 1.50% .25% .375% 1.0%
Level V 1.75% .25% .375% 1.25%
Table II
Bridge Loan
Applicable
Applicable
Percentage for Percentage for
Level LIBOR Loan Base
Rate Loan
Level I .25% 0%
Level II .50% 0%
Level III 0.75% 0%
Level IV 1.0% .25%
Level V 1.25% .25%
The Applicable Percentage shall, in each case, be
determined after receipt by Lender of the financial
statements as of the end of each fiscal quarter and for
that portion of the fiscal year of the Loan Parties
then ended which are required to be delivered to Lender
in accordance with the provisions of Section 9.1.3(ii)
of the Agreement, commencing with the fiscal quarter
ending March 31, 1999, and shall be adjusted effective
on the first day of the month following the receipt by
Lender of such financial statements (each, an
"Adjustment Date"). Such Applicable Percentage shall
be effective from such Adjustment Date until the next
such Adjustment Date. The initial Applicable
Percentages shall be based on Level IV until the first
Adjustment Date occurring after March 31, 1999.
Authority - the Metropolitan Washington Airports
Authority.
Availability - the amount of money which Borrower
is entitled to borrow from time to time as Revolver
Loans, such amount being the difference derived when
the sum of the principal amount of Revolver Loans then
outstanding (including any amounts which Lender may
have paid for the account of Borrower pursuant to any
of the Loan Documents and which have not been
reimbursed by Borrower) is subtracted from the
Borrowing Base. If the amount outstanding is equal to
or greater than the Borrowing Base, Availability is
zero (0).
Availability Reserve - On any date of
determination thereof, an amount equal to the sum of
(i) any amounts of past due rent or other charges
(other than project rental as specified in the Lease)
owing at such time by Borrower to the Authority under
the Lease; (ii) any amounts which Borrower is obligated
to pay pursuant to the provisions of the Loan Documents
but does not pay when due and which Lender elects to
pay pursuant to any of the Loan Documents for the
account of Borrower; (iii) the estimated cost of
services ordered by Borrower from United under the
United Express Emergency Response Agreement; (iv) the
amount of all Letter of Credit Obligations outstanding
at such date except for those with respect to the Bond
Letter of Credit and the Bond Letter of Credit
Guaranty; and (v) such reserves established by Lender
in such amounts, and with respect to such matters,
events, conditions or contingencies as to which Lender,
in its credit judgment based upon its usual and
customary credit and collateral considerations,
determines reserves should be established from time to
time, including, without limitation, with respect to
(1) improper billings, other billing and settlement
errors which occur from time to time under the ACH
Procedures Manual, (2) any diminution in the value of
any of the Rotable Spare Parts, to the extent not
otherwise taken into account in the calculation of the
Rotable Spare Parts Borrowing Base, and (3) other sums
chargeable against Borrower's Loan Account as Revolver
Loans under any section of the Agreement.
Average Monthly Revolver Loan and Letter of Credit
Balance - the amount obtained by adding the aggregate
unpaid balance of all Revolver Loans and Letter of
Credit Obligations outstanding at the end of each day
during the month in question and by dividing that sum
by the number of days in such month.
Average Monthly Revolver Loan Balance - the amount
obtained by adding the aggregate unpaid balance of all
Revolver Loans and all Letter of Credit Obligations
except for the Letter of Credit Obligations arising
under the Bond Letter of Credit Guaranty, in each case
which are outstanding at the end of each day during the
month in question and by dividing that sum by the
number of days in such month.
Bank - Fleet National Bank, and its successors and
assigns.
Base Rate - the rate of interest announced or
quoted by Bank from time to time as its base rate for
commercial loans, whether or not such rate is the
lowest rate charged by Bank to its most preferred
borrowers; and, if such base rate for commercial loans
is discontinued by Bank as a standard, a comparable
reference rate designated by Bank as a substitute
therefor shall be the Base Rate.
Base Rate Loan - a Loan, or portion thereof,
during any period in which it bears interest at a rate
based upon the Base Rate.
Board of Governors - the Board of Governors of the
Federal Reserve System of the United States.
Bond Documents - collectively, the Bond Loan
Agreement, the Bonds, the Indenture, the Reimbursement
Agreement, and all guaranties, agreements, opinions,
certificates or assurances executed in connection
therewith.
Bond Letter of Credit - Bank's irrevocable,
transferable direct-pay letter of credit in
substantially the form of Exhibit A to the
Reimbursement Agreement in the original undrawn amount
of $9,579,932.
Bond Letter of Credit Guaranty - the guaranty by
Lender of the reimbursement and other obligations owing
by Borrower to Bank in respect of the Bond Letter of
Credit as set forth in the Reimbursement Agreement
Bond Loan Agreement - that certain Financing
Agreement dated June 1, 1997 between the Issuer and the
Borrower, pursuant to which the proceeds of the sale of
the Bonds will be used by the Borrower for the purpose
of financing the cost of construction of a maintenance
facility and associated access roadway, vehicle parking
and maneuvering areas and aircraft paving aprons on
land controlled by the Authority.
Bond Trustee - FMB Trust Company, National
Association.
Bonds - Issuer's Variable Rate Demand/Fixed Rate
Revenue Bonds (Atlantic Coast Airlines Project) Series
1997 in the aggregate principal amount of $9,425,000.
Borrowing - a borrowing of one or more Loans,
including Bridge Loan Advances, made on the same day by
Lender.
.
Borrowing Base - as at any date of determination
thereof, an amount equal to the sum of:
(i) the Accounts Borrowing Base at
such date;
PLUS
(ii) subject to the provisions
of Section 6.6 of the Agreement, the Rotable Spare
Parts Borrowing Base at such date;
MINUS
(iii) the Availability
Reserve.
Borrowing Base Certificate - A certificate of an
officer of Borrower certifying to Lender the amount and
value of all of Borrower's Eligible Accounts and
Eligible Rotable Spare Parts, and other information
about the Collateral reasonably requested by Lender, as
of a specific date, such certificate to be in form and
detail reasonably satisfactory to Lender.
Bridge Loan - the Loan to Borrower by Lender as
provided in Section 1.2 of the Agreement.
Bridge Loan Advance - the principal amount of
loans, advances and disbursements made by Lender to
Borrower pursuant to Section 1.2 of the Agreement with
respect to the Bridge Loan.
Bridge Note - the Bridge Note to be executed by
Borrower in favor of Lender on or about the Closing
Date in the form of Exhibit A hereto.
Bridge Loan Maturity Date - the date that is the
earlier to occur of (a) September 30, 2000 or (b) the
date on which the Obligations have been declared or
have automatically become due and payable pursuant to
Section 11.2 of the Agreement.
Bridge Loan Obligations - that portion of the
Obligations consisting of the principal of, and
interest on, the Bridge Loan, and all expenses, fees,
attorneys' fees and any other amounts chargeable to, or
to be paid by, Borrower or any Guarantor under any of
the Loan Documents, in connection with the enforcement
by Lender of its rights to collect the Bridge Loan from
Borrower or any Guarantor in accordance with the terms
of the Loan Documents or to collect the Escrow Funds
from the Escrow Agent or otherwise realize upon the
Escrow Funds.
Business Day - any day excluding Saturday, Sunday
and any day which is a legal holiday under the laws of
the State of North Carolina or is a day on which
banking institutions located in such states are closed,
provided, however, that when used with reference to a
LIBOR Rate Loan (including the making, continuing,
prepaying or repaying of any LIBOR Rate Loan for an
Interest Period), the term "Business Day" shall also
exclude any day on which banks are not opened for
dealings in dollar deposits on the London interbank
market.
Cash Collateral - cash deposited with Lender in
accordance with the Agreement as security for the
Obligations to the extent provided in the Agreement.
Cash Collateral Account - an interest-bearing
account established by Lender on its books and to which
Lender shall credit all Cash Collateral deposited with
Lender in accordance with the Agreement.
Capital Expenditures - expenditures made or
liabilities incurred for the acquisition of any fixed
assets or improvements, replacements, substitutions or
additions thereto which have a useful life of more than
one year, including the total principal portion of
Capitalized Lease Obligations.
Capitalized Lease Obligation - any Indebtedness
represented by obligations under a lease that is
required to be capitalized for financial reporting
purposes in accordance with GAAP.
Cash Equivalents - (i) marketable direct
obligations issued or unconditionally guaranteed by the
United States Government and backed by the full faith
and credit of the United States Government having
maturities of not more than twelve (12) months from the
date of acquisition; (ii) certificates of deposit and
time deposits (including eurodollar time deposits)
having maturities of not more than twelve (12) months
from the date of acquisition, and banker's acceptances
having maturities of not more than twelve (12) months
from the date of acquisition and overnight bank
deposits, which in each case (unless issued by Lender)
are not subject to offset rights in favor of such bank
arising from any banking relationship with such bank;
(iii) repurchase obligations with a term of not more
than thirty (30) days for underlying securities of the
types described in clauses (i) and (ii); (iv)
commercial paper having a maturity within nine (9)
months after the date of acquisition thereof; (v) money
market mutual funds; (vi) municipal auction rate
preferred instruments; (vii) corporate auction rate
preferred instruments; (viii) municipal auction rate
bonds; and (ix) variable rate demand notes.
Chattel Paper - shall have the meaning ascribed to
"chattel paper" under the Code.
Claim - any and all claims, demands, liabilities,
obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever (including reasonable
attorneys' fees and expenses), whether arising under or
in connection with the Loan Documents, under any
Applicable Law (including any Environmental Law) or
otherwise.
Clearing Bank - The Chase Manhattan Bank, and any
successor clearing bank under the ACH Procedure Manual.
Clearing Bank Account - the account maintained by
Borrower at the Clearing Bank in which, pursuant to the
ACH Procedure Manual, all funds due and payable to
Borrower are credited.
Closing Date - the date on which all of the
conditions precedent in Section 10 of the Agreement are
satisfied and the initial Loan is made under the
Agreement.
Code - the Uniform Commercial Code as adopted and
in force in the State of North Carolina, as from time
to time in effect.
Collateral - all of the Property and interests in
Property of Borrower described in Section 6 of the
Agreement, and all other Property and interests in
Property of Borrower or any other Person that now or
hereafter secure the payment and performance of any of
the Obligations.
Consolidated - the consolidation in accordance
with GAAP of the accounts or other items as to which
such term applies.
Consolidated Adjusted Net Earnings From Operations
- with respect to any Person for any fiscal period,
means the net earnings (or loss) after provision for
income taxes for such fiscal period of such Person as
reflected on the financial statements of such Person
supplied to Lender pursuant to Section 9.1.3 of the
Agreement, but excluding:
(i) any gain or loss arising from
the sale of capital assets;
(ii) any gain arising from any
write-up of assets;
(iii) earnings of any Subsidiary
of such Person accrued prior to the date it became
a Subsidiary of such Person;
(iv) earnings of any corporation,
substantially all the assets of which have been
acquired in any manner by such Person, realized by
such corporation prior to the date of such
acquisition;
(v) any portion of the net
earnings of any Subsidiary of such Person which
for any reason is unavailable for payment of
dividends to such Person;
(vii) the earnings of any Person
to which any assets of such Person shall have been
sold, transferred or disposed of, or into which
such Person shall have merged, or been a party to
any consolidation or other form of reorganization,
prior to the date of such transaction;
(viii) any gain or loss arising
from the acquisition of any Securities of such
Person; and
(ix) any gain or loss arising from
extraordinary or non-recurring items.
Consolidated Cash Flow -with respect to any Person
for any fiscal period, the sum of (i) Consolidated
Adjusted Net Earnings From Operations of such Person
for such fiscal period, plus (ii) depreciation and
amortization expense of such Person for such fiscal
period which were subtracted from earnings in
calculating Consolidated Adjusted Earnings From
Operations of such Person for such fiscal period, minus
(iii) Capital Expenditures not financed by Purchase
Money Indebtedness which are incurred by such Person
during such fiscal period, minus (iv) Distributions
paid by such Person during such fiscal period.
Consolidated Current Assets - with respect to any
Person at any date, the amount at which all of the
Consolidated current assets of such Person would be
properly classified as Consolidated current assets
shown on a Consolidated balance sheet of such Person at
such date in accordance with GAAP except that amounts
due from Affiliates and investments in Affiliates shall
be excluded therefrom.
Consolidated Current Liabilities - with respect to
any Person at any date, the amount at which all of the
Consolidated current liabilities of such Person would
be properly classified as Consolidated current
liabilities on a Consolidated balance sheet of such
Person at such date in accordance with GAAP.
Consolidated EBITDA - with respect to any Person
for any fiscal period, the sum of (i) Consolidated
Adjusted Net Earnings From Operations of such Person
for such fiscal period, plus (ii) interest, taxes,
depreciation and amortization expenses of such Person
for such fiscal period which were subtracted from
earnings in calculating Consolidated Adjusted Net
Earnings From Operations of such Person for such fiscal
period.
Consolidated EBITDA - with respect to any Person
for any fiscal period, the sum of (i) Consolidated
EBITDA of such Person for such fiscal period, plus (ii)
rental expenses of such Person for such fiscal period
which were subtracted from earnings in calculating
Consolidated Adjusted Net Earnings From Operations of
such Person for such fiscal period.
Consolidated Fixed Charges - with respect to any
Person for any period, the sum of (i) interest expense
of such Person for such period in respect of all of its
Indebtedness for Money Borrowed, plus (ii) regularly
scheduled payments of principal on Indebtedness for
Money Borrowed required to be paid by such Person
during such period, plus (iii) rentals for aircraft,
engines and propellers required to be paid by such
Person during such period.
Consolidated Fixed Charges Coverage Ratio - on the
determination thereof with respect to any Person at the
end of each Testing Period, the ratio of (i)
Consolidated EBITDA of such Person for such Testing
Period to (ii) Consolidated Fixed Charges required to
be paid by such Person during such Testing Period.
Consolidated Leverage Ratio - with respect to any
Person at any date, means the ratio of (i) Indebtedness
of such Person and its Subsidiaries at such date to
(ii) Consolidated Net Worth of such Person and its
Subsidiaries at such date.
Consolidated Net Worth - with respect to any
Person at any date, the total stockholders' equity of
such Person and its Subsidiaries shown on its
Consolidated balance sheet at such date in accordance
with GAAP.
Consolidated Senior Indebtedness/Consolidated
EBITDA Ratio - on the determination thereof with
respect to any Person at the end of each Testing
Period, the ratio of (i) the aggregate principal
balance of all Senior Indebtedness for Money Borrowed
of such Person outstanding at the end of such Testing
Period to (ii) Consolidated EBITDA of such Person for
the Testing Period then ended.
Convertible Subordinated Notes - the 7% Event
Convertible Subordinated Notes issued by Parent
pursuant to an Indenture dated July 2, 1997 between
Parent and First Union National Bank of Virginia which
have a scheduled maturity date of July 1, 2004, as
outstanding on the Closing Date.
Daily LIBOR Loan - a Loan, or any portion thereof,
during any period in which it bears interest at a rate
based upon the Daily LIBOR Rate.
Daily LIBOR Rate - for each day that such rate is
in effect under the Agreement, an interest rate per
annum equal to the quotient of (a) the Fleet Bank
Posted LIBOR Rate in effect for such day divided by (b)
a percentage (expressed as a decimal) equal to 100%
minus Statutory Reserves.
Deed of Trust - the Credit Line Leasehold Deed of
Trust and Security Agreement executed by Borrower on or
about June 1, 1997 in favor of the trustees named
therein for the benefit of Lender, as it may be
amended, modified, supplemented or restated from time
to time, by which Borrower has granted and conveyed to
the trustees for the benefit of Lender, as security for
$9,579,932 of the Obligations, Liens upon Borrower's
leasehold estate in the Realty leased by Borrower from
the Authority pursuant to the Lease.
Default - an event or condition the occurrence of
which would, with the lapse of time or the giving of
notice, or both, become an Event of Default.
Default Rate - a rate per annum equal to two
percent (2%) in excess of the interest rates otherwise
applicable to the Loans.
Distribution - in respect of any corporation means
and includes: (i) the payment of any dividends or
other distributions on capital stock of the corporation
(except distributions in such stock) and (ii) the
redemption or acquisition of Securities (or any warrant
or option for the purchase of any such Securities)
unless made contemporaneously from the net proceeds of
the sale of Securities.
Document - shall have the meaning ascribed to the
term "document" under the Code.
Dollars - and the sign $ shall refer to currency
of the United States of America.
Eligible Account - an inter-airline Account of
Borrower arising and created in the ordinary course of
Borrower's business from the rendition of air
transportation and related services which Lender, in
its sole credit judgment, based upon its usual and
customary credit and collateral considerations, deems
to be an Eligible Account. To be an Eligible Account,
such Account must be subject to Lender's perfected Lien
and no other Lien other than a Permitted Lien, must be
cleared and collected through the Clearing Bank
pursuant to the ACH Procedure Manual, and must be
billed monthly by a recap sheet submitted to ACH, no
later than the nineteenth (19th) day of each month, for
all air transportation and related services rendered
and revenues earned during the preceding month.
Without limiting the generality of the foregoing, no
Account of Borrower shall be an Eligible Account if:
(i) it arises out of air
transportation and related services rendered by
Borrower to a Subsidiary, or an Affiliate of
Borrower, or to a Person controlled by an
Affiliate of Borrower; or
(ii) payment of such Account is
not received from the ACH within fifteen (15) days
after the ACH Settlement Date for such Account; or
(iii) any covenant,
representation or warranty contained in the
Agreement with respect to such Account has been
breached; or
(iv) in the case of Accounts
owing by United, are subject to any right of
offset other than United's right of setoff for
amounts owing under the United Express Agreements,
and, in the case of all other Accounts, the
Account Debtor is also Borrower's creditor or
supplier, or the Account Debtor has disputed
liability with respect to such Account, or the
Account Debtor has made any claim with respect to
any other Account due from such Account Debtor to
Borrower, or the Account otherwise is subject to
any right of setoff by the Account Debtor; or
(v) the Account Debtor has
commenced a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter
amended, or made an assignment for the benefit of
creditors, or a decree or order for relief has
been entered by a court having jurisdiction in the
premises in respect of the Account Debtor in an
involuntary case under the federal bankruptcy
laws, as now constituted or hereafter amended, or
any other petition or other application for relief
under the federal bankruptcy laws has been filed
against the Account Debtor, or if the Account
Debtor has failed, suspended business, ceased to
be Solvent, or consented to or suffered a
receiver, trustee, liquidator or custodian to be
appointed for it or for all or a significant
portion of its assets or affairs; or
(vi) the Account is evidenced by
Chattel Paper or an Instrument of any kind, or has
been reduced to judgment; or
(vii) the Account is contingent in any
respect or for any reason; or
(viii) the Account Debtor is the
United States of America or any department, agency
or instrumentality thereof, unless Borrower
assigns its right to payment of such Account to
Lender, in a manner satisfactory to Lender, so as
to comply with the Assignment of Claims Act of
1940 (31 U.S.C. 203 et seq., as amended); or
(ix) the Account is subject to a
Lien other than a Permitted Lien; or
(x) the air transportation and
related services giving rise to such Account have
not been performed by Borrower or the Account
otherwise does not represent a final sale; or
(xi) Borrower has made any
agreement with the Account Debtor for any
deduction therefrom, except, in the case of
Accounts owing by United, United's right of setoff
for amounts owing under the United Express
Agreements; or
(xii) Borrower has made an
agreement with the Account Debtor to extend the
time of payment thereof; or
(xiii) Borrower has failed to
comply with the provisions of Section 7.2.1 with
respect to such Account and the Account Debtor
obligated thereon; or
(xiv) It is not based upon or
evidenced by passenger tickets, exchange orders or
other passenger billing documents which have been
separated and put into batches in accordance with
the requirements of the ACH Procedure Manual.
Eligible Rotable Spare Parts - such Rotable Spare
Parts of Borrower which Lender, in its sole credit
judgment, based upon its usual and customary credit and
collateral considerations, deems to be Eligible Rotable
Spare Parts. Without limiting the generality of the
foregoing, no Rotable Spare Parts shall be Eligible
Rotable Spare Parts unless:
(i) it is in airworthy
condition in accordance with all Applicable Laws,
including all applicable FAA rules and
regulations, and is not obsolete;
(ii) it meets all standards
imposed by any applicable governmental agency or
authority;
(iii) it conforms in all
respects to the warranties and representations set
forth in the Agreement;
(iv) Lender shall have (and
shall have received reasonably satisfactory
evidence of) a first priority perfected Lien in
such Rotable Spare Parts and such Rotable Spare
Parts shall not be subject to any other Lien
except a Permitted Lien that is not a Purchase
Money Lien;
(v) it is situated at a
location in compliance with the Agreement; and
(vi) it is owned outright by
Borrower and not held by Borrower on consignment
or other sale or return basis.
Environmental Laws - all federal, state and local
laws, rules, regulations, ordinances, programs,
permits, guidances, orders and consent decrees relating
to health, safety and environmental matters.
ERISA - the Employee Retirement Income Security
Act of 1974, as amended, and all rules and regulations
from time to time promulgated thereunder.
Escrow Agent - FMB Trust, N.A., a national banking
association.
Escrow Funds - cash in the amount of $15,000,000
deposited by the Authority with the Escrow Agent
pursuant to the terms of the Escrow Agreement as
security for the Bridge Loan Obligations.
Escrow Agreement - the Escrow Agreement dated on
or about the Closing Date among Borrower, the Authority
and the Escrow Agent, in form and substance
satisfactory to Lender, by which the Authority deposits
with the Escrow Agent the Escrow Funds to be held by
the Escrow Agent as security for the Bridge Loan
Obligations and disbursed in the manner set forth
therein.
Eurocurrency Liabilities - shall have the meaning
ascribed thereto in Regulation D issued by the Board of
Governors.
Event of Default - as defined in Section 11.1 of
the Agreement.
FAA - the Federal Aviation Administration, an
agency of the United States of America.
Existing Loan Agreement - the Loan and Security
Agreement, dated October 12, 1995, between Lender and
the Loan Parties, as in effect on the Closing Date.
GAAP - generally accepted accounting principles in
the United States of America in effect from time to
time.
General Intangibles - with respect to any Person,
all general intangibles of such Person, including,
without limitation, all choses in action, causes of
action, corporate or other business records, deposit
accounts, inventions, blueprints, designs, patents,
patent applications, trademarks, trademark
applications, trade names, trade secrets, service
marks, goodwill, brand names, copyrights,
registrations, licenses, franchises, customer lists,
tax refund claims, computer programs, operational
manuals, all claims under guaranties, security
interests or other security held by or granted to such
Person to secure payment of any of the Accounts by an
Account Debtor, all rights to indemnification and all
other intangible property of every kind and nature
(other than Accounts). General Intangibles shall not
include any landing slots of Borrower at any airport.
Guarantor - Parent and any other Person who may
hereafter guarantee payment or performance of the whole
or any part of the Obligations.
Guaranty Agreement - the Guaranty Agreement
executed by each Guarantor in form and substance
satisfactory to Lender.
Hazardous Material - any pollutants, contaminants,
chemicals, toxic or hazardous substance or material
defined as such in (or for purposes of) the
Environmental Laws, including without limitation, any
waste constituents coming within the definition or list
of hazardous substances in 40 C.F.R. 261.1 through
261.33.
Hedging Obligations - with respect to any Person,
all liabilities of such Person under interest rate swap
agreements, interest rate cap agreements and interest
rate collar agreements, foreign exchange contracts,
currency swap agreements, and all other agreements or
arrangements designed to protect such Person against
fluctuations in interest rates or currency exchange
rates.
IATA - International Air Transport Association.
Improvements - the construction of a maintenance
facility and associated access roadway, vehicle parking
and maneuvering areas and aircraft paving aprons on the
Realty.
Indebtedness - as applied to a Person means,
without duplication:
(i) all items which in accordance
with GAAP would be included in determining total
liabilities as shown on the liability side of a
balance sheet of such Person as at the date as of
which Indebtedness is to be determined, including,
without limitation, Capitalized Lease Obligations,
(ii) all obligations of other
Persons which such Person has guaranteed,
(iii) in the case of Borrower
(without duplication), the Obligations.
Indenture - that certain Indenture of Trust, dated
June 1, 1997, between the Issuer and the Bond Trustee
pursuant to which Issuer has issued the Bonds.
Instrument - shall have the meaning ascribed to
the term "instrument" under the Code.
Interest Period - as defined in Section 2.1.4 of
the Agreement.
Internal Revenue Code - the Internal Revenue Code
of 1986, as amended from time to time.
Issuer - the Industrial Development Authority of
Loudoun County, Virginia.
Lease - that certain Ground Lease Agreement, dated
June 23, 1997 between the Authority and the Borrower.
Letter of Credit - any letter of credit issued by
Lender or any of Lender's Affiliates for the account of
Borrower pursuant to the Agreement.
Letter of Credit Amount - at any time, the
aggregate undrawn face amount of all Letters of Credit
and Letter of Credit Guaranties then outstanding.
Letter of Credit Guaranty - any guaranty issued by
Lender pursuant to which Lender shall guarantee the
payment or performance by Borrower of its reimbursement
obligations under a Letter of Credit.
Letter of Credit Obligations - that portion of the
Obligations constituting Borrower's obligation to
reimburse Lender for all amounts paid by Lender under
or with respect to a Letter of Credit Guaranty.
Level - as at the determination thereof at the end
of each Testing Period, the level set forth below
corresponding to the Consolidated Fixed Charges
Coverage Ratio as of the end of such Testing Period:
Level Ratio
Level I >2.5
Level II >2.2
but 2.5
Level III >2.0
but 2.2
Level IV >1.7
but 2.0
Level V 1.7
LIBOR Lending Office - with respect to Lender, the
office designated as the LIBOR Lending Office for
Lender on the signature pages of the Agreement (or on
any Assignment and Acceptance, in the case of an
assignee) and such other office of Lender or any of its
Affiliates that is hereafter designated by notice to
Lender.
LIBOR Rate - with respect to an Interest Period,
the rate per annum determined by Lender at which
deposits of Dollars of amounts equal to or comparable
to the amount of the LIBOR Rate Loan to which such
Interest Period relates and for a term comparable to
such Interest Period are offered to Bank by prime banks
in the London interbank foreign currency deposits
market at approximately 11:00 o'clock a.m., London
time, two (2) Business Days prior to the first day of
such Interest Period. Each determination by Lender of
any LIBOR Rate shall, in the absence of manifest error,
be conclusive.
LIBOR Rate Loan - a Loan, or portion thereof,
during any period in which it bears interest at a rate
based upon the applicable Adjusted LIBOR Rate.
Lien - any interest in Property securing an
obligation owed to, or a claim by, a Person other than
the owner of the Property, whether such interest is
based on common law, statute or contract. The term
"Lien" shall also include reservations, exceptions,
encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title
exceptions and encumbrances affecting Property. For
the purpose of this Agreement, Borrower shall be deemed
to be the owner of any Property which it has acquired
or holds subject to a conditional sale agreement or
other arrangement pursuant to which title to the
Property has been retained by or vested in some other
Person for security purposes.
Loan - the Bridge Loan and the Bridge Loan
Advances made thereunder, a Revolver Loan or all or any
of them as the context may require.
Loan Account - the loan account established on the
books of Lender pursuant to Section 4.10 of the
Agreement.
Loan Documents - the Agreement, the Other
Agreements and the Security Documents.
Margin Stock - shall have the meaning ascribed to
it in Regulation U of the Board of Governors.
Material Adverse Effect - the effect of any event
or condition which, alone or when taken together with
other events or conditions occurring or existing
concurrently therewith, (i) has or may be reasonably
expected to have a material adverse effect upon the
business, operations, Properties, condition (financial
or otherwise) of the Loan Parties and their respective
Subsidiaries taken as a whole; (ii) has or may be
reasonably expected to have any material adverse effect
whatsoever upon the validity or enforceability of the
Agreement or any of the other Loan Documents; (iii) has
or may be reasonably expected to have any material
adverse effect upon the Collateral, the Liens of Lender
with respect to the Collateral or the priority of such
Liens; or (iv) materially impairs the ability of the
Loan Parties and their respective Subsidiaries or any
Guarantor to perform their respective obligations under
the Agreement, any Guaranty Agreement or any of the
other Loan Documents or of Lender to enforce or collect
the Obligations or realize upon any of the Collateral
in accordance with the Loan Documents and Applicable
Law.
Maximum Rate - the maximum non-usurious rate of
interest permitted by Applicable Law that at any time,
or from time to time, may be contracted for, taken,
reserved, charged or received on the Indebtedness in
question or, to the extent permitted by Applicable Law,
under such Applicable Law that may hereafter be in
effect and which allow a higher maximum non-usurious
interest rate than Applicable Law now allows.
Notwithstanding any other provision hereof, the Maximum
Rate shall be calculated on a daily basis (computed on
the actual number of days elapsed over a year of 365 or
366 days, as the case may be).
Money Borrowed - with respect to any Person, (i)
Indebtedness arising from the lending of money by any
other Person to such Person; (ii) Indebtedness, whether
or not in any such case arising from the lending by any
other Person of money to such Person, (a) which is
represented by notes payable or drafts accepted that
evidence extensions of credit, (b) which constitutes
obligations evidenced by bonds, debentures, notes or
similar instruments, or (c) upon which interest charges
are customarily paid (other than accounts payable) or
that was issued or assumed as full or partial payment
for Property; (iii) Indebtedness that constitutes a
Capitalized Lease Obligation; (iv) Indebtedness of such
Person under any guaranty of obligations that would
constitute Indebtedness for Money Borrowed under
clauses (i) through (iii) hereof, if owed directly by
such Person.
Moody's - Moody's Investors Service, Inc., or any
successor thereto.
Multiemployer Plan - has the meaning set forth in
Section 4001(a)(3) of ERISA.
Notice of Borrowing - as defined in Section
3.1.1(i) of the Agreement.
Notice of Conversion/Continuation - as defined in
Section 2.1.4(ii) of the Agreement.
Obligations - collectively, (i) the Loans and all
other sums loaned or advanced by Lender to or on behalf
of Borrower pursuant to the Agreement or the other Loan
Documents, (ii) all liabilities, indebtedness and
obligations now or any time hereafter owing by Borrower
or any Guarantor to Lender under the Agreement or any
of the other Loan Documents, (iii) Hedging Obligations
in respect of the Loans owing to Lender or an Affiliate
thereof (unless the Lender or such Affiliate otherwise
agrees in writing), (iv) the Bridge Loan Obligations,
and (iv) all other liabilities, indebtedness and
obligations of any and every kind now or hereafter
owing or to become due from Borrower or any Guarantor
in respect of the Loans. The term includes, without
limitation, all principal, interest, charges, expenses,
fees, attorneys' fees and any other sums chargeable to,
or to be paid by, Borrower or any Guarantor under any
of the Loan Documents.
Original Closing Date - October 12, 1995.
Original Term - as defined in Section 5.1 of the
Agreement.
Other Agreements - any and all agreements,
instruments and documents (other than the Agreement and
the Security Documents), heretofore, now or hereafter
executed by a Loan Party, any Subsidiary of a Loan
Party, or any other third party and delivered to Lender
in respect of the transactions contemplated by the
Agreement.
Overadvance - a Revolver Loan made by Lender when
an Overadvance Condition exists or would result from
the making of such Revolver Loan.
Overadvance Condition - at any date, a condition
such that the principal amount of the Revolver Loans
outstanding to Borrower on such date exceeds the lesser
of the Borrowing Base or the Revolver Facility Amount
on such date.
Participating Lender - any Person who shall be
granted the right by Lender to participate in any of
the Loans described in the Agreement and who shall have
entered into a participation agreement in form and
substance satisfactory to Lender.
Payment Account - an account maintained by Lender
to which all monies from time to time deposited to a
Dominion Account shall be transferred and all other
payments shall be sent in immediately available federal
funds.
Payment Item - all checks, drafts or other items
of payment payable to Borrower, including proceeds of
any of the Collateral.
Permitted Liens - any Lien of a kind specified in
Section 9.2.4 of the Agreement.
Person - an individual, partnership, corporation,
limited liability company, joint stock company, land
trust, business trust, unincorporated organization, or
a government or agency or political subdivision
thereof.
Plan - an employee benefit plan now or hereafter
maintained for employees of a Loan Party that is
covered by Title IV of ERISA.
Projections - the Loan Parties' forecasted
Consolidated (i) balance sheets, (ii) profit and loss
statements, and (iii) cash flow statements, all
prepared on a consistent basis with the Loan Parties'
historical financial statements, together with
appropriate supporting details and a statement of
underlying assumptions.
Properly Contested -in the case of any
Indebtedness of any Loan Party or any of its
Subsidiaries (including, but not limited to, any Taxes)
that is not paid as and when due or payable by reason
of such Loan Party's or any Subsidiary's bona fide
dispute concerning its liability to pay same or
concerning the amount thereof, that (i) such
Indebtedness is being properly contested in good faith
by appropriate proceedings promptly instituted and
diligently conducted, (ii) such Loan Party has estab
lished appropriate reserves as shall be required in
conformity with GAAP, (iii) the non-payment of such
Indebtedness will not have a Material Adverse Effect;
(iv) no Lien is imposed upon such Loan Party's or any
Subsidiary's Property with respect to such Indebtedness
unless such Lien is at all times junior and subordinate
in priority to the Liens in favor of Lender (except
only with respect to Taxes that have priority as a
matter of any state's Applicable Laws); and (v) if such
contest is abandoned, settled or determined adversely
to such Loan Party or any of its Subsidiaries, such
Loan Party forthwith pays such Indebtedness and all
penalties and interest in connection therewith.
Property - any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or
intangible.
Purchase Money Indebtedness - means and includes
(i) Indebtedness (other than the Obligations) for the
payment of all or any part of the purchase price of any
Property, (ii) any Indebtedness (other than the
Obligations) incurred at the time of or within ten (10)
days prior to or after the acquisition of any Property
for the purpose of financing all or any part of the
purchase price thereof, and (iii) any renewals,
extensions or refinancings thereof.
Purchase Money Lien - a Lien upon Rotable Spare
Parts which secures Purchase Money Indebtedness, but
only if such Lien shall at all times be confined solely
to the Rotable Spare Parts the purchase price of which
was financed through the incurrence of the Purchase
Money Indebtedness secured by such Lien and shall not
extend to any other Property of Borrower.
Realty - the tract or parcels of real property
leased by Borrower from the Authority pursuant to the
Lease, together with the Improvements and the fixtures
attached thereto.
Regulation D - Regulation D of the Board of
Governors.
Reimbursement Agreement - that certain Letter of
Credit and Reimbursement Agreement, dated June 1, 1997,
among the Bank, Lender and Borrower, pursuant to which
Bank issued the Bond Letter of Credit, as amended,
modified, supplemented or restated from time to time.
Related United Express Agreements - those
agreements between United and Borrower described on
Schedule A attached hereto, as the same may be amended,
modified, supplemented or restated from time to time.
Remarketing Agent - shall have the meaning
ascribed to such term in the Indenture.
Renewal Term - as defined in Section 5.1 of the
Agreement.
Reportable Event - any of the events set forth in
Section 4043(b) of ERISA.
Restricted Investment - any investment made in
cash or by delivery of Property to any Person, whether
by acquisition of stock, Indebtedness or other
obligation or Security, or by loan, advance, deposit,
capital contribution or otherwise, or in any Property
except the following:
(i) investments in one or more
Subsidiaries of a Loan Party to the extent
existing on the Closing Date;
(ii) Property to be used in the
ordinary course of business;
(iii) Consolidated Current Assets
arising from the sale of goods and services in the
ordinary course of business of a Loan Party and
its Subsidiaries;
(iv) cash and Cash Equivalents;
and
(v) investments in certificates
of deposit (a) which issues a letter of credit for
the account of a Loan Party, (b) securing the
reimbursement obligations of a Loan Party with
respect to such letter of credit, and (c) maturing
on a date corresponding to the expiration date of
such letter of credit.
Revolver Facility Amount - at any date of the
determination thereof, the sum of (i) Thirty Five
Million Dollars ($35,000,000), less (ii) the Letter of
Credit Amount at such date.
Revolver Loan - a Loan made by Lender to Borrower
as provided in Section 1.1 of the Agreement.
Rotable Spare Parts - those Spare Parts which can
be economically restored to a serviceable condition
and, in the normal course of operations, can be
repeatedly rehabilitated to a fully serviceable
condition over a period approximating the life of the
flight equipment to which it is related.
Rotable Spare Parts Borrowing Base - at any date
of determination thereof, the lesser of (a) $8,000,000
or (b) sixty percent (60%) of the aggregate value of
Borrower's Eligible Rotable Spare Parts at such date,
in each case calculated on the basis of lower of book
value or market value, with book value calculated on
the basis of original cost less accumulated
depreciation in accordance with GAAP.
Rotable Spare Parts Security Agreement - the
Rotable Spare Parts Security Agreement to be executed
by Borrower on or about the Closing Date, in form and
substance satisfactory to Lender, by which Borrower
shall grant Lender Liens in all of its Rotable Spare
Parts, whether now owned or hereafter acquired, as
security for the Obligations.
Security - shall have the same meaning as in
Section 2(1) of the Securities Act of 1933, as amended.
Security Documents - the Rotable Spare Parts
Security Agreement, the Escrow Agreement, the Deed of
Trust, each Guaranty Agreement, and all other
instruments and agreements now or at any time hereafter
securing the whole or any part of the Obligations.
Senior Indebtedness for Money Borrowed - with
respect to any Person, all of such Person's
Indebtedness for Money Borrowed except for Subordinated
Debt.
Solvent - as to any Person, such Person (i) owns
Property whose fair saleable value is greater than the
amount required to pay all of such Person's
Indebtedness (including contingent debts), (ii) is
generally able to pay all of its Indebtedness as such
Indebtedness matures and (iii) has capital sufficient
to carry on its business and transactions and all
business and transactions in which it is about to
engage.
Spare Parts - (a) an accessory, appurtenance or
part of (i) an aircraft (except an aircraft engine or
propeller), (ii) aircraft engine (except a propeller),
or (iii) propeller, or (b) an Appliance, that is to be
installed at a later time in an aircraft, aircraft
engine, propeller or Appliance. Spare Parts shall not
include any aircraft engines, propellers or quick
engine change kits now owned or hereafter acquired by
Borrower.
Statutory Reserves - on any date, the percentage
(expressed as a decimal) established by the Board of
Governors which is the then stated maximum rate for all
reserves (including, but not limited to, any emergency,
supplemental or other marginal reserve requirements)
applicable to any member bank of the Federal Reserve
System in respect to Eurocurrency Liabilities (or any
successor category of liabilities under Regulation D).
Such reserve percentage shall include, without
limitation, those imposed pursuant to said Regulation
D. The Statutory Reserves shall be adjusted
automatically on and as of the effective date of any
change in such percentage.
Subordinated Debt - the Convertible Subordinated
Notes and any other Indebtedness of a Loan Party that
is subordinated to the Obligations in a manner and upon
terms satisfactory to Lender.
Subsidiary - any corporation of which a Person
owns, directly or indirectly through one or more
intermediaries, more than 50% of the Voting Stock at
the time of determination.
Taxes - any present or future taxes, levies,
imposts, duties, fees, assessments, deductions,
withholdings or other charges of whatever nature,
including income, receipts, excise, property, sales,
use, transfer, license, payroll, withholding, social
security and franchise taxes now or hereafter imposed
or levied by the United States, or any state, local or
foreign government or by any department, agency or
other political subdivision or taxing authority thereof
or therein and all interest, penalties, additions to
tax and similar liabilities with respect thereto, but
excluding, in the case of Lender, taxes imposed on or
measured by the net income or overall gross receipts of
Lender.
Testing Period - each period of four (4)
consecutive fiscal quarters.
Type - the type of Loan, which shall either be a
LIBOR Rate Loan or a Base Rate Loan.
United -United Airlines, Inc., a Delaware
corporation.
United Express Agreements -the United Express
Operating Agreement and the Related United Express
Agreements or any one or more of them as the context
may require.
United Express Emergency Response Agreement - the
Emergency Response Services Agreement between United
and Borrower dated June 23, 1995, which constitutes one
of the United Express Related Agreements.
United Express Operating Agreement - the United
Express Agreement between United and Borrower, dated
October 1, 1991, as the same is amended, modified,
supplemented or restated from time to time, pursuant to
which, among other things, Borrower has acquired a non-
exclusive license to use trademarks, service marks,
trade names, and logos and related intellectual
property rights in the operations of Borrower's
business.
United Express Termination Date - the termination
date of the United Express Operating Agreement as that
date may be modified pursuant to the terms of the
United Express Operating Agreement and as may be
permitted by the terms of the Agreement.
United Non-Offset Agreement - the non-offset
agreement, dated October 12, 1995, executed by Lender
and United pursuant to which United agreed to limit its
right of setoff against Borrower to current amounts
owing by Borrower to United under the United Express
Agreements, as amended by amendment thereto dated on or
about the Closing Date.
Voting Stock - Securities of any class or classes
of a corporation the holders of which are ordinarily,
in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons
performing similar functions).
Other Terms. All other terms contained in the
Agreement shall have, when the context so indicates, the
meanings provided for by the Code to the extent the same are
used or defined therein. Accounting terms not otherwise
specifically defined herein shall be construed in accordance
with GAAP consistently applied.
Certain Matters of Construction. The terms
"herein", "hereof" and "hereunder" and other words of
similar import refer to the Agreement as a whole and not to
any particular section, paragraph or subdivision. Whenever
in the Agreement the word "including" is used, it is
understood to mean "including, without limitation". Any
pronoun used shall be deemed to cover all genders. The
section titles, table of contents and list of exhibits
appear as a matter of convenience only and shall not affect
the interpretation of the Agreement. All references to
statutes and related regulations shall include any
amendments of same and any successor statutes and
regulations. All references to any of the Loan Documents
shall include any and all modifications thereto and any and
all extensions or renewals thereof. All references to any
Person shall mean and include successors and permitted
assigns of such Person. All references to "including" and
"include" shall be understood to mean "including, without
limitation".
IN WITNESS WHEREOF, the parties have caused this
Appendix to be duly executed by their duly authorized
officers on February 8, 1999.
ATTEST: ATLANTIC COAST AIRLINES
("Borrower")
__________________________
By:___________________________________
Richard J. Kennedy. Secretary Thomas J. Moore, Executive
Vice President and
Chief Operating Officer
[CORPORATE SEAL]
ATTEST: ATLANTIC COAST AIRLINES
HOLDINGS, INC.
("Parent")
_________________________ By:______________________________
Richard J. Kennedy. Secretary Thomas J. Moore, Executive
Vice President and
Chief Operating Officer
[CORPORATE SEAL]
FLEET CAPITAL CORPORATION
("Lender")
By:_______________________________________
Title:___________________________________