Exhibit 10.4
EXECUTION COPY
*** CERTAIN CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
$89,000,000
LOAN AGREEMENT
DATED AS OF SEPTEMBER 27, 2005
AMONG
US AIRWAYS, INC.
AND
AMERICA WEST AIRLINES, INC.,
AS BORROWERS,
US AIRWAYS GROUP, INC.,
AS GUARANTOR,
AIRBUS FINANCIAL SERVICES,
AS INITIAL LENDER AND LOAN AGENT
AND
WELLS FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION
AS COLLATERAL AGENT
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS .............. 1
SECTION 1.1 DEFINED TERMS ......................................... 22
SECTION 1.2 COMPUTATION OF TIME PERIODS ........................... 22
SECTION 1.3 ACCOUNTING TERMS AND PRINCIPLES ....................... 22
SECTION 1.4 CERTAIN TERMS ......................................... 22
ARTICLE II THE LOANS .................................................... 22
SECTION 2.1 THE LOANS ............................................. 22
SECTION 2.2 BORROWING PROCEDURES .................................. 24
SECTION 2.3 SCHEDULED REPAYMENT OF THE LOANS ...................... 25
SECTION 2.4 EVIDENCE OF DEBT; USE OF PROCEEDS ..................... 25
SECTION 2.5 OPTIONAL PREPAYMENTS .................................. 27
SECTION 2.6 MANDATORY PREPAYMENTS ................................. 28
SECTION 2.7 INTEREST .............................................. 30
SECTION 2.8 FEES .................................................. 30
SECTION 2.9 PAYMENTS AND COMPUTATIONS ............................. 31
SECTION 2.10 CERTAIN PROVISIONS GOVERNING THE LOANS ................ 32
SECTION 2.11 CAPITAL ADEQUACY ...................................... 35
SECTION 2.12 SUBSTITUTION OF LENDERS ............................... 36
SECTION 2.13 TAXES ................................................. 37
SECTION 2.14 PRO RATA TREATMENT AND PAYMENTS ....................... 41
ARTICLE III CONDITIONS TO CLOSING AND FUTURE FUNDINGS ................... 41
SECTION 3.1 CONDITIONS PRECEDENT .................................. 41
ARTICLE IV REPRESENTATIONS AND WARRANTIES ............................... 46
SECTION 4.1 ORGANIZATION, POWERS, QUALIFICATION; AIR CARRIER
LICENSES, FRANCHISES AND PERMITS ...................... 46
SECTION 4.2 AUTHORIZATION OF BORROWING, ETC. ...................... 47
SECTION 4.3 FINANCIAL CONDITION ................................... 48
SECTION 4.4 NO MATERIAL ADVERSE EFFECT ............................ 49
SECTION 4.5 TITLE TO PROPERTIES; LIENS ............................ 49
SECTION 4.6 LITIGATION: ADVERSE FACTS ............................. 49
SECTION 4.7 TAX RETURNS ........................................... 50
SECTION 4.8 NO DEFAULT OR EVENT OF DEFAULT ........................ 50
SECTION 4.9 GOVERNMENTAL REGULATION ............................... 50
SECTION 4.10 EMPLOYEE BENEFIT PLANS ................................ 50
SECTION 4.11 COMPLIANCE WITH LAWS .................................. 50
SECTION 4.12 SECURITY DOCUMENTS .................................... 51
SECTION 4.13 CONCERNING THE COLLATERAL ............................. 51
SECTION 4.14 REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL
AGENT ................................................. 53
ARTICLE V COVENANTS ..................................................... 54
SECTION 5.1 FINANCIAL STATEMENTS AND OTHER INFORMATION ............ 54
SECTION 5.2 CORPORATE EXISTENCE ................................... 56
SECTION 5.3 PAYMENT OF TAXES ...................................... 56
SECTION 5.4 MAINTENANCE OF PROPERTIES; INSURANCE .................. 56
SECTION 5.5 INSPECTION ............................................ 57
SECTION 5.6 COMPLIANCE WITH LAWS, ETC ............................. 57
SECTION 5.7 FURTHER ASSURANCES .................................... 57
SECTION 5.8 EMPLOYEE BENEFIT PLANS ................................ 58
SECTION 5.9 FAA MATTERS; CITIZENSHIP .............................. 58
SECTION 5.10 DELIVERY OF POST-RECORDING FAA OPINION ................ 58
SECTION 5.11 SOFTWARE .............................................. 58
SECTION 5.12 COMPLIANCE WITH MORTGAGE .............................. 58
SECTION 5.13 PROHIBITION ON LIENS .................................. 58
SECTION 5.14 MERGER OR CONSOLIDATION ............................... 61
SECTION 5.15 CERTAIN APPROVALS UNDER THE ATSB LOAN AGREEMENT ....... 61
ARTICLE VI EVENTS OF DEFAULT ............................................ 61
SECTION 6.1 EVENTS OF DEFAULT ..................................... 61
SECTION 6.2 REMEDIES .............................................. 63
ARTICLE VII THE LOAN AGENT AND THE COLLATERAL AGENT ..................... 64
SECTION 7.1 AUTHORIZATION AND ACTION .............................. 64
SECTION 7.2 AGENT'S RELIANCE, ETC ................................. 65
SECTION 7.3 AGENT AND AFFILIATES .................................. 65
SECTION 7.4 REPRESENTATIONS OF THE LENDERS ........................ 66
SECTION 7.5 EVENTS OF DEFAULT ..................................... 66
SECTION 7.6 LOAN AGENT'S AND COLLATERAL AGENT'S RIGHT TO
INDEMNITY ............................................. 66
SECTION 7.7 INDEMNIFICATION OF LOAN AGENT AND COLLATERAL AGENT .... 66
SECTION 7.8 SUCCESSOR LOAN AGENT AND COLLATERAL AGENT ............. 67
SECTION 7.9 COLLATERAL AND GUARANTEE MATTERS ...................... 67
ARTICLE VIII GUARANTEE .................................................. 68
SECTION 8.1 GUARANTEE ............................................. 68
SECTION 8.2 NO SUBROGATION ........................................ 68
SECTION 8.3 AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS ...... 69
SECTION 8.4 GUARANTEE ABSOLUTE AND UNCONDITIONAL .................. 69
SECTION 8.5 REINSTATEMENT ......................................... 70
SECTION 8.6 PAYMENTS .............................................. 70
ARTICLE IX MISCELLANEOUS ................................................ 71
SECTION 9.1 AMENDMENTS, WAIVERS, ETC .............................. 71
SECTION 9.2 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND
ASSIGNMENTS ........................................... 72
SECTION 9.3 COSTS AND EXPENSES .................................... 75
SECTION 9.4 INDEMNITIES ........................................... 75
SECTION 9.5 RIGHT OF SET-OFF ...................................... 76
ii
SECTION 9.6 JOINT AND SEVERAL LIABILITY; MAXIMUM LIABILITY;
WAIVER OF SUBROGATION ................................. 76
SECTION 9.7 SHARING OF PAYMENTS, ETC .............................. 78
SECTION 9.8 NOTICES, ETC .......................................... 79
SECTION 9.9 NO WAIVER; REMEDIES ................................... 79
SECTION 9.10 GOVERNING LAW ......................................... 79
SECTION 9.11 SUBMISSION TO JURISDICTION; SERVICE OF PROCESS ........ 79
SECTION 9.12 WAIVER OF JURY TRIAL .................................. 80
SECTION 9.13 MARSHALING; PAYMENTS SET ASIDE ........................ 80
SECTION 9.14 SECTION TITLES ........................................ 80
SECTION 9.15 EXECUTION IN COUNTERPARTS ............................. 81
SECTION 9.16 SEVERABILITY .......................................... 81
SECTION 9.17 CONFIDENTIALITY ....................................... 81
SECTION 9.18 APPOINTMENT OF INDENTURE TRUSTEE ...................... 82
Annexes
Annex A - Notice Addresses
Annex B - Lending Office
Annex C - Lender Commitments
Schedules
Schedule 1.1(a) - Existing Pass Through Certificates
Schedule 1.1 (b) - Specified Engines
Schedule 4.12 - Financing Statements, Filings and Recordings
Schedule 5.13 - Liens
Exhibits
Exhibit A - Form of Assignment and Assumption
Exhibit B - Form of Note
Exhibit C - Form of Notice of Borrowing
iii
LOAN AGREEMENT, dated as of September 27, 2005, among US AIRWAYS,
INC., a Delaware corporation ("US Airways"), AMERICA WEST AIRLINES, INC., a
Delaware corporation ("America West", and together with US Airways, the
"Borrowers", and each, a "Borrower"); US AIRWAYS GROUP, INC., a Delaware
corporation, as guarantor (the "Guarantor"); AIRBUS FINANCIAL SERVICES as the
initial lender (together with its successors and permitted assigns, the "Initial
Lender"), as loan agent for the Lenders (in such capacity, together with its
successors and permitted assigns, the "Loan Agent"), and WELLS FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION, as collateral agent (in such capacity, together
with its successors and permitted assigns, the "Collateral Agent").
WITNESSETH:
WHEREAS, on September 12, 2004 (the "Petition Date"), the Guarantor
and each of its domestic subsidiaries as of such date, including US Airways
(collectively, the "Debtors") filed voluntary petitions (the "Cases") for relief
under the Bankruptcy Code with the United States Bankruptcy Court for the
Eastern District of Virginia, Alexandria Division (the "Bankruptcy Court") and
continued in possession of their property and in the management of their
businesses pursuant to Bankruptcy Code Sections 1107 and 1108;
WHEREAS, on May 19, 2005, the Guarantor, Barbell Acquisition Corp., a
Delaware corporation and Wholly-Owned Subsidiary of the Guarantor (the "Merger
Sub"), and America West Holdings, Corporation entered into an Agreement and Plan
of Merger (the "Merger Agreement");
WHEREAS, (x) the Bankruptcy Court has entered an order (the
"Confirmation Order") confirming the Plan of Reorganization under Chapter 11 of
the Bankruptcy Code (as in effect on the date of confirmation thereof pursuant
to the Confirmation Order, the "Plan of Reorganization") and (y) the Effective
Time (as defined in the Merger Agreement) has occurred, and the Borrowers have
requested that the Lenders make available to the Borrowers the Loans for the
purposes specified herein; and
WHEREAS, the Lenders are willing to make available to the Borrowers
the Loans upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
SECTION 1.1 DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"A319/A320/A321 Purchase Agreement" means the A319/A320/A321 Purchase
Agreement, dated as of October 31, 1997, as amended, between AVSA, S.A.R.L. and
the Guarantor.
"A319/A320 Purchase Agreement" means the A319/A320 Purchase Agreement,
dated as of September 12, 1997, as amended, between AVSA, S.A.R.L. and America
West.
"A330/A340 Purchase Agreement" means the A330/A340 Purchase Agreement
dated as of November 24, 1998, as amended, between AVSA, S.A.R.L. and the
Guarantor.
"A321 Airbus Financings" mean the note purchase agreements, trust
indenture and mortgages, secured notes and related loan documents entered into
between Aviateur International Limited, as initial lender, and certain
Affiliates, on the one hand, US Airways Inc., on the other hand, and U.S. Bank
National Association (as successor in interest to State Street Bank and Trust
Company of Connecticut, N.A.), as Indenture Trustee, as amended or supplemented
from time to time, providing for the mortgage loan financing of five (5) Airbus
A321 model aircraft bearing FAA registration numbers N184US, N185UW, N186US,
N187US and N188US, respectively.
"A321 Aircraft" means, individually or collectively as the context may
require, the Airbus A321 aircraft having FAA registration numbers N184US,
N185UW, N186US, N187US, and N188US.
"A350/A340 Financing Letter Agreement" means the A350/A330 Financing
Letter Agreement dated as of September 27, 2005 as amended, among AVSA, S.A.R.L.
and the Obligors.
"Actual Knowledge" means, with respect to any Person, actual knowledge
of a vice president or more senior officer of such Person or any other officer
of such Person having responsibility for the transactions contemplated by the
Loan Documents.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Aggregate Original Principal Amount" means the aggregate outstanding
principal amount of the Loans on the earliest of (x) the close of business on
December 31, 2007, (y) the date the Commitments are fully utilized and (z) the
date when the Commitments are terminated.
"Agreement" means this Loan Agreement.
"Airbus" means Airbus S.A.S.
2
"Aircraft Mortgage" means the five (5) Trust Indenture and Mortgages
dated the date hereof between US Airways and US Bank National Association, as
Indenture Trustee, providing for second mortgages on the A321 Aircraft, as
supplemented or amended from time to time.
"Aircraft Related Equipment" means aircraft (including aircraft
engines installed thereon) in the fleet of any Obligor or any of their
Subsidiaries, spare aircraft engines and propellers, spare parts, aircraft
parts, simulators and other training devices, and passenger loading bridges or
other flight or ground equipment and Aircraft Related Facilities.
"Aircraft Related Facilities" means (i) airport terminal facilities,
including without limitation, baggage systems, loading bridges and related
equipment, building, infrastructure and maintenance, club rooms, apron, fueling
systems or facilities, signage/image systems, administrative offices,
information technology systems and security systems, (ii) airline support
facilities, including without limitation, cargo, catering, mail, ground service
equipment, ramp control, deicing, hangars, aircraft parts/storage, training and
reservations facilities and (iii) all equipment used in connection with the
foregoing.
"Applicable Interest Rate" means, for each Loan and for each Interest
Period, a rate per annum equal to LIBOR for such Interest Period plus the
Applicable Margin.
"Applicable Margin" means [...***...]% per annum; provided, however,
that on each of (A) the [...***...] anniversary of the Closing Date, and (B) on
the [...***...] anniversary of the Closing Date (each an "Applicable Margin
Determination Date"), the Applicable Margin shall be reviewed and adjusted or
not adjusted based on the most recently published corporate credit rating
assigned by S&P to the Guarantor and its consolidated subsidiaries, taken
together, as follows: for each grade (for illustration purposes, the change from
B to B+ or to B- being a single grade) by which such credit rating is lower
than, or higher than, B, the Applicable Margin shall be increased or decreased,
respectively, by [...***...]%; provided, further, that, notwithstanding the
foregoing, the Applicable Margin shall not be higher than [...***...]% per annum
or lower than [...***...]% per annum.
"Asset Sale" means, with respect to any property, any sale, transfer
or other disposition (including by way of merger, consolidation, exchange of
assets or sale leaseback transactions or by reason of any condemnation or other
taking or permanent requisition) of such property, in one transaction or a
series of related transactions, by any Obligor or any of its Subsidiaries to any
Person other than such Obligor or any of its Subsidiaries; provided that sales
of spare parts subject to the Lien of the Spare Parts Mortgage which are made
pursuant to Section 3.02(b)(4) thereof shall not constitute Asset Sales.
*** CONFIDENTIAL TREATMENT REQUESTED
3
"Assignment and Assumption" means an Assignment and Assumption entered
into by a Lender and an Assignee, in substantially the form of Exhibit A or any
other form approved by the Loan Agent.
"ATSB" means the Air Transportation Stabilization Board, or any
successor thereto.
"ATSB Loan Agreements" means (i) the Amended and Restated Loan
Agreement, dated as of September 27, 2005, among US Airways, the Guarantor, the
other subsidiaries of the Guarantor party thereto, the lenders from time to time
party thereto, the Loan Administrator and agents party thereto, and the ATSB,
and (ii) the Amended and Restated Loan Agreement, dated as of September 27,
2005, among America West, the Guarantor, the other subsidiaries of the Guarantor
party thereto, the lenders from time to time party thereto, the Loan
Administrator and agents party thereto, and the ATSB, each as in effect on the
Closing Date.
"AWA Holdings" means America West Holdings Corporation.
"Bankruptcy Code" means Title 11 of the United States Code as now and
hereafter in effect, or any successor statute.
"Bankruptcy Court" has the meaning specified in the recitals hereto.
"Borrower" has the meaning specified in the preamble to this
Agreement.
"Borrowing" means the borrowing of a Loan on the Closing Date or on
another Funding Date.
"Business Day" means any day other than a Saturday, Sunday, or other
day on which commercial banks in New York, New York, Dublin, Ireland, or
Phoenix, Arizona are authorized or required by law to remain closed; provided
that when used in connection with LIBOR, the term "Business Day" shall mean any
day on which banks in London, England are open for dealings in dollar deposits
in the interbank market.
"Business Plan" means the business plan of the Borrowers dated as of
July 7, 2005, provided to the Loan Agent.
"Cape Town Convention" means the Convention on International Interests
in Mobile Equipment and the Protocol to the Convention on Matters Specific to
Aircraft Equipment signed in Cape Town on 16 November 2001.
"Capital Lease," as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is required to be accounted for as a capital lease on the
balance sheet of that Person, and the amount of Indebtedness represented by such
lease shall be the capitalized amount of the obligations evidenced thereby
determined in accordance with GAAP.
4
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital stock, whether now outstanding or
issued after the date of this Agreement.
"Cases" has the meaning specified in the recitals hereto.
"Cash" means money, currency or a credit balance.
"Cash Equivalents" has the meaning given in the ATSB Loan Agreements.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended to the date
hereof and from time to time hereafter.
"Collateral" means the property comprising the collateral security
provided by the Collateral Documents.
"Collateral Documents" means, collectively, (i) the Aircraft
Mortgages, as amended or supplemented from time to time, (ii) the Spare Parts
Mortgage and Security Agreement, (iii) the Engine Mortgage and Security
Agreement, (iv) the Purchase Agreement Security Agreement, and (v) such other
security documents as may be executed and delivered by the Obligors pursuant to
the terms of Section 5.6.
"Commitments" is a collective reference to the Tranche A Commitments,
the Tranche B Commitments, the Tranche C Commitments, the Tranche D Commitments
and the Tranche E Commitments. The initial aggregate amount of the Commitments
is $0,000,000.
"Commodity Agreement" means any agreement or arrangement designed to
protect any Obligor or any of their Subsidiaries against fluctuations in the
prices of commodities used by any Obligor or any of their Subsidiaries in the
ordinary course of its business.
"Confirmation Order" has the meaning specified in the recitals hereto.
"Consummation of the Plan" means substantial consummation of the Plan
of Reorganization within the meaning of Section 1101(2) of the Bankruptcy Code.
"Contractual Obligation," as applied to any Person, means any
provision of any equity security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or other
material instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
"Cross-Collateral" shall mean (i) all collateral security supporting
payment of the Cross-Default Obligations, and (ii) all right, title and
interest, if any, of
5
any Obligor in, to or with respect to predelivery payments or deposits made
under any aircraft purchase agreement between any Obligor or any of its
Affiliates, on the one hand, and Airbus or any of its Affiliates, on the other
hand.
"Cross-Default Obligations" means all Obligations of any Obligor (i)
held, directly or indirectly (through a trustee or otherwise) by Airbus or any
Affiliate under or with respect to (A) the A321 Airbus Financings, or (B) the
Other Loan Agreement or any other lease, loan, trade receivable, or other
extension of credit between Airbus or any of its Affiliates, on the one hand,
any Obligor or any of its Affiliates, on the other hand, whether such lease,
loan, trade receivable, or other extension of credit is direct or is indirect
through a lease, structured financing or otherwise, including without
limitation, any Pass Through Certificates listed on Schedule 1.1(a) or acquired
in an original issuance after the Closing Date, or (C) any aircraft purchase
agreement between any Obligor, on the one hand, and Airbus or any of its
Affiliates, on the other hand, or (ii) under any Principal Credit Facility. For
purposes of this definition, the term "Obligations" shall mean with respect to
any of the agreements referred to in clauses (A), (B) or (C) of the preceding
sentence, the unpaid principal of and interest thereon (including interest
accruing after the maturity thereof and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Obligor, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
and all other obligations and liabilities of the Obligors thereunder, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
therewith, or any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement designed to protect any Obligor or any of its
Subsidiaries against fluctuations in currency values.
"Debtors" has the meaning specified in the recitals thereto.
"Default" means any event which with the passing of time or the giving
of notice or both would, unless cured or waived, become an Event of Default.
"Designated Locations" has the meaning specified in the Spare Parts
Security Agreement.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Effective Date" means the date on which the conditions precedent set
forth in Section 3.1(a), (j) and (p) have been satisfied, but not later than
December 2, 2005.
6
"Engine Mortgage and Security Agreement" means the Engine Mortgage and
Security Agreement dated as of the date hereof between America West and the
Collateral Agent.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means, as applied to either Borrower, (i) any
corporation which is, or was at any time, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Code of which such
Borrower is a member; (ii) any trade or business (whether or not incorporated)
which is a member of a group of trades or businesses under common control within
the meaning of Section 414(c) of the Code of which such Borrower is a member;
and (iii) any member of an affiliated service group within the meaning of
Section 414(m) or (o) of the Code of which such Borrower, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member.
"ERISA Event" means (a) any "reportable event," as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which reporting is waived); (b) the existence with respect to
any Plan of an "accumulated funding deficiency" (as defined in Section 412 of
the Code or Section 302 of ERISA); (c) the filing pursuant to Section 412(d) of
the Code or Section 303(d) of ERISA of an application for a waiver of the
minimum funding standard with respect to any Plan; (d) the incurrence by
Guarantor or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan; (e)(i) the receipt by
Guarantor or any ERISA Affiliate from the PBGC of a notice of determination that
PBGC intends to seek termination of any Plan or to have a trustee appointed for
any Plan, or (ii) the filing by Guarantor or any ERISA Affiliate of a notice of
intent to terminate any Plan; (f) the incurrence by Guarantor or any of its
ERISA Affiliates of any liability (i) with respect to the withdrawal from a
Multiemployer Plan pursuant to Sections 4063 and 4064 of ERISA, (ii) with
respect to a facility closing pursuant to Section 4062(e) of ERISA, or (iii)
with respect to the withdrawal or partial withdrawal from any Multiemployer
Plan; or (g) the receipt by Guarantor or any ERISA Affiliate of any notice
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Event of Default" has the meaning specified in Section 6.1.
"Event of Loss" has the meaning specified in the Engine Mortgage and
Security Agreement or in the Aircraft Mortgages.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Excluded Taxes" has the meaning specified in Section 2.13(a).
"FAA" means the Federal Aviation Administration.
7
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"Final Order" means an order or judgment of the Bankruptcy Court, or
other court of competent jurisdiction, as entered on the docket in the Cases or
the docket of any other court of competent jurisdiction, that has not been
reversed, stayed, modified or amended, and as to which the time to appeal or
seek reargument, reconsideration, or certiorari has expired and no appeal,
motion for reconsideration or reargument or petition for certiorari has been
timely taken, or as to which any appeal that has been taken or any petition for
certiorari, motion for reconsideration or reargument that has been or may be
filed has been resolved by the highest court to which the order or judgment was
appealed or from which reargument, reconsideration, or certiorari was sought and
the time to take any further appeal, petition for certiorari or move for
reargument shall have expired.
"Fiscal Year" means the Borrowers' fiscal year referenced in the
financial statements to be delivered by the Borrowers pursuant to Section 5.1.
"Funding Date" means each date on which one or more Borrowings of
Loans is made in accordance with Sections 2.1 and 2.2.
"GAAP" means generally accepted accounting principles in the United
States of America.
"GECC" means General Electric Capital Corporation.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such first Person (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), including any pledge of assets to secure
indebtedness of another or (iii) to maintain working capital, equity capital or
any other financial statement condition or liquidity or level of income or cash
flow of such other Person so as to enable such Person to pay such Indebtedness.
The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" has the meaning specified in the preamble to this
Agreement.
8
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all obligations of such Person for
borrowed money; (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto); (iv) all obligations of such
Person to pay the deferred purchase price of property or services, which
purchase price is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the completion of
such services, except (x) Trade Payables and similar obligations incurred in the
ordinary course of business and (y) earn-outs and other contingent payouts in
respect of acquisitions; (v) all Capital Lease obligations of such Person (the
amount of the Indebtedness in respect of Capital Lease obligations to be
determined as provided in the definition of Capital Lease in this Section 1.1);
(vi) all Indebtedness of other Persons secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person; provided
that in the case of Indebtedness issued without recourse to such Persons, the
amount of such Indebtedness shall be the lesser of (A) the fair market value of
such asset at such date of determination and (B) the stated principal amount of
such Indebtedness, provided, however, that if such Indebtedness is assumed by
such Person or provides for recourse against such Person, the amount of such
Indebtedness shall be the greater of (A) and (B) above; (vii) all Indebtedness
of other Persons Guaranteed by such Person to the extent such Indebtedness is
Guaranteed by such Person; (viii) to the extent not otherwise included in this
definition and to the extent treated as a liability under GAAP, obligations
under Currency Agreements, Interest Rate Agreements and Commodity Agreements
(ix) the capitalized amount of remaining lease payments owing by such Person
under Synthetic Leases that would appear on the balance sheet of such Person if
such lease were treated as a Capital Lease; (x) the aggregate amount of
uncollected accounts receivable of such Person subject at such time to a sale of
receivables (or similar transaction) to the extent such transaction is effected
with recourse to such Person (whether or not such transaction would be reflected
on the balance sheet of such Person in accordance with GAAP); (xi) the
Indebtedness of any partnership or unincorporated joint venture in which such
Person is a general partner or a joint venturer to the extent such Indebtedness
is recourse to such Person; and (xii) all prepaid forward sales in bulk of
dividend miles or available seat miles or like transactions other than in the
ordinary course of business. The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability, upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations at
such date; provided that the amount outstanding at any time of any Indebtedness
issued with original issue discount is the face amount of such Indebtedness less
the remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with GAAP. "Indemnified
Liabilities" has the meaning specified in Section 9.4.
"Indemnified Taxes" has the meaning specified in Section 2.13(a).
"Indemnitees" has the meaning specified in Section 9.4.
9
"Indenture Trustee" means U.S. Bank National Association, Indenture
Trustee under the Aircraft Mortgages, and its successors.
"Initial Lender" has the meaning specified in the preamble to this
Agreement.
"Intercreditor Agreement" means the intercreditor agreement with GECC
as described in Section 3.1(c)(3).
"Interest Payment Date" has the meaning specified in Section 2.7(b).
"Interest Period" means, for each Loan, (a) made on the first Funding
Date, the period commencing on September 26, 2005 and ending three months
thereafter, (b) with respect to any other initial funding of a Loan, the period
commencing on the initial Funding Date for such Loan and ending on the last day
of the current Interest Period for any other Tranche then outstanding, or if no
other Tranche is then outstanding, ending three months after the initial Funding
Date, and (c) thereafter, a period commencing on the last day of the immediately
preceding Interest Period therefor and ending three months thereafter; provided,
however, that:
(i) the final scheduled Interest Period shall end on the Loan
Maturity Date;
(ii) if any Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension would be to
extend such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Business Day
and for the avoidance of doubt, interest computation shall be adjusted
accordingly;
(iii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and
(iv) each "Interest Period" beginning after the occurrence and
during the continuance of an Event of Default shall be for a period
duration of one month.
"Interest Rate Agreement" means any interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement designed to protect any Obligor or any of
their Subsidiaries against fluctuations in interest rates or under which any
Obligor or any of their Subsidiaries is a party or a beneficiary on the date of
this Agreement or becomes a party or a beneficiary thereafter.
10
"IRS" means the Internal Revenue Service of the United States or any
successor thereto.
"Lenders" mean (i) the Initial Lender, and (ii) each financial
institution or other entity that from time to time becomes a party hereto as a
lender hereunder pursuant to an Assignment and Assumption, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and Assumption
or otherwise.
"Lending Office" means, with respect to any Lender, the office of such
Lender specified as its "Lending Office" opposite its name on Annex B or on the
Assignment and Assumption by which it became a Lender or such other office of
such Lender as such Lender may from time to time specify to the Borrowers and
the Loan Agent.
"LIBOR" means the rate per annum (rounded to the nearest 1/100 of 1%)
equal to the quotation that appears on page 3750 of the Telerate Screen (or
otherwise on such screen or on such other screen, page or service as may replace
the Telerate Screen) as of 11:00 A.M., London time, two Business Days prior to
the beginning of the applicable Interest Period as the rate for dollar deposits
to be delivered on the first day of such Interest Period and maintained for such
Interest Period (or, in the case of the initial Interest Period, for three
months) in an amount comparable to the principal amount of the Loan. In the
event that such rate does not so appear on the Telerate Screen (or otherwise as
aforesaid), the "LIBOR" for purposes of this definition shall be the arithmetic
average (rounded to the nearest 1/100 of 1%) of the offered quotation to
first-class banks in the interbank Eurodollar market by each Reference Bank in
London for dollar deposits of amounts in same day funds comparable to the
principal amount of the Loan, with maturities comparable to the applicable
Interest Period (or, in the case of the initial Interest Period, for three
months) determined as of 11:00 A.M. (London time) on the date which is two
Business Days prior to the commencement of such Interest Period. If any one or
more of the Reference Banks shall not furnish such timely information to the
Loan Agent for the purpose of determining any such interest rate, the Loan Agent
shall determine such interest rate on the basis of timely information furnished
by the remaining Reference Bank or Reference Banks.
"Lien" means, with respect to any asset, any lien, mortgage, pledge,
assignment for security purposes, security interest, charge, hypothecation,
lease or encumbrance of any kind on or of such asset (including any conditional
sale or other title retention agreement and any lease in the nature thereof, any
easement, right of way or other encumbrance on title to real property and any
agreement to give any security interest). "Loan" means any loan made by a Lender
pursuant to this Agreement.
"Loan Agent" has the meaning specified in the preamble to this
Agreement.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Other Loan Agreement, the Other Loan Agreement Notes, the Collateral Documents,
the Intercreditor Agreement and each certificate, agreement or document executed
by the
11
Borrowers and delivered to the Loan Agent or the Lenders in connection with or
pursuant to this Agreement.
"Loan Maturity Date" means December 31, 2010, except that if such date
is not a Business Day, then the Loan Maturity Date shall be the immediately
succeeding Business Day.
"Material Adverse Change" means a material adverse change in the
financial condition of any Obligor between the Effective Date and the date of
provision of the relevant Loan which would materially and adversely affect such
Obligor's ability to perform any of its payment or other material obligations
under any Loan Document.
"Merger Agreement" has the meaning specified in the recitals hereto.
"Merger Sub" has the meaning specified in the recitals hereto.
"Material Adverse Effect" means, with respect to the Obligors, (a) an
event of the type described in Section 6.1(f) or 6.1(g), or (b) the cessation of
commercial passenger service by either Borrower for a period of ten Business
Days, other than as a result of the action of any Governmental Authority, or (c)
a material adverse effect on (i) the validity or enforceability of any material
provision of this Agreement or any of the other Loan Documents or any of the
material rights or remedies of the Loan Agent, the Collateral Agent or the
Lenders hereunder or thereunder, or (ii) the Lien of the Collateral Documents.
"MOU" means that certain Memorandum of Understanding between AVSA,
S.A.R.L., the Guarantor, and the Borrowers, dated as of May 18, 2005.
"Multiemployer Plan" means a multiemployer plan as defined Section
4001(a)(3) of ERISA, and in respect of which Guarantor or any ERISA Affiliate is
(or with the application of Section 4212(c) of ERISA would be) (a) an "employer"
as defined in Section 3(5) of ERISA or (b) a "seller" as defined in Section 4204
of ERISA.
"Net Cash Proceeds" means, with respect to any Asset Sale, the cash
proceeds of such Asset Sale, net of (i) reasonable and customary brokerage
commissions and other reasonable and customary fees and expenses (including
reasonable fees and expenses of counsel, investment bankers, accountants and
other professionals, consultants and advisors) related to such Asset Sale, (ii)
provisions for all taxes payable as a result of such Asset Sale without regard
to the consolidated results of operations of Guarantor, the Borrowers and their
respective Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
(or any related expenses required to be paid to third parties pursuant to
documentation related to the financing of the assets subject to such Asset Sale)
that (A) is secured by a Lien on the property or assets sold and (B) is required
by its terms to be paid as a result of such Asset Sale and (iv) appropriate
amounts to be provided by any Obligor as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset
12
Sale, all as determined in conformity with GAAP, but limited to the period of
the required reserve.
"Net Insurance Proceeds" means an amount equal to: (i) any cash
payments or proceeds received by an Obligor under any casualty insurance policy
in respect of a covered loss thereunder with respect to tangible, real or
personal property, minus (ii) (a) any actual and reasonable costs incurred by an
Obligor in connection with the adjustment or settlement of any claims of an
Obligor in respect thereof (including reasonable fees and expenses of counsel),
(b) provisions for all taxes payable as a result of such event without regard to
the consolidated results of operations of Guarantor, the Borrowers and their
respective Subsidiaries, taken as a whole, (c) the amount of any Indebtedness
secured by a Lien on any property subject to such covered loss and any related
expenses of third parties, in each case, required by the documentation related
to such Indebtedness to be discharged or paid from the proceeds thereof and (d)
any amounts required to be paid to any Person (other than an Obligor) owning a
beneficial interest in the property subject to such loss.
"Non-Consenting Lender" has the meaning specified in Section 9.1(c).
"Non-U.S. Person" means a Person that is not a United States person as
defined in section 7701(a)(30) of the Code.
"Note" has the meaning specified in Section 2.4(d).
"Notice of Borrowing" has the meaning specified in Section 2.2(a).
"Obligations" means the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Obligor, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of the Obligors to the Loan
Agent, the Collateral Agent, the Indenture Trustee or to any Lender, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement or any other Loan Document, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including all fees, charges and disbursements of counsel to the Loan
Agent, the Collateral Agent or to any Lender that are required to be paid by any
Obligor pursuant hereto) or otherwise.
"Obligor" means Guarantor or either Borrower.
"Officer's Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer), president, one of its vice presidents, chief financial officer,
controller, treasurer or assistant treasurer or an assistant secretary.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any
13
property (whether real, personal or mixed) under which such Person is Lessee,
that is not a Capital Lease.
"Other Loan Agreement" means, the Loan Agreement, dated as the date
hereof, among the parties hereto, providing for secured loans in the maximum
amount of $161,000,000.
"Other Loan Agreement Loans" means the "Loans" (as defined in the
Other Loan Agreement).
"Other Loan Agreement Loan Agent" means the "Loan Agent" (as defined
in the Other Loan Agreement).
"Other Loan Agreement Notes" means the "Notes" (as defined in the
Other Loan Agreement).
"Other Loan Agreement Tranche A Commitment Reduction Amount" shall
mean the "Tranche A Commitment Reduction Amount", as defined in the Other Loan
Agreement.
"Other Loan Agreement Tranche B Commitment Reduction Amount" shall
mean the "Tranche B Commitment Reduction Amount", as defined in the Other Loan
Agreement.
"Other Loan Agreement Tranche C Commitment Reduction Amount" shall
mean the "Tranche C Commitment Reduction Amount", as defined in the Other Loan
Agreement.
"Other Loan Agreement Tranche D Commitment Reduction Amount" shall
mean the "Tranche D Commitment Reduction Amount", as defined in the Other Loan
Agreement.
"Other Loan Agreement Tranche E Commitment Reduction Amount" shall
mean the "Tranche E Commitment Reduction Amount", as defined in the Other Loan
Agreement.
"Other Obligations" means the "Obligations" (as defined in the Other
Loan Agreement).
"Other Taxes" has the meaning specified in Section 2.13(b).
"Participant" has the meaning specified in Section 9.2(c)(i).
"Pass Through Certificates" means the US Airways 2001-1C Trust
Certificates and any other certificates issued under a similarly structured
financing sponsored by an Obligor or an Affiliate thereof. References to amounts
"due and payable" on a given date, when used with respect to Pass Through
Certificates shall refer to amounts legally due and payable thereunder or to
amounts expected to be distributed
14
on or before such date to the holders thereof, and "default" when used with
respect to Pass Through Certificates shall have a correlative meaning.
"Permitted Acquisition Financing" means Indebtedness incurred by an
Obligor in connection with an acquisition, merger or consolidation which is
permitted under Section 6.5 and/or 6.9 (as applicable) of the ATSB Loan
Agreements if and to the extent used (i) to refinance existing Indebtedness of
the Person acquired or Indebtedness secured by the assets acquired or (ii) to
pay consideration or related expenses in connection with such transaction.
"Permitted Encumbrances" means the following types of Liens (other
than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Code
or by ERISA) as applied to property
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is either (a) not delinquent for a period of
more than 30 days or (b) being contested in good faith by appropriate
proceedings, if such reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor, as set forth in
Section 5.3;
(ii) statutory Liens of landlords and Liens of carriers, vendors,
warehousemen, repairmen, mechanics and materialmen and other Liens imposed
by law incurred in the ordinary course of business for sums either (a) not
delinquent for a period of more than thirty (30) days or (b) being
contested in good faith by appropriate proceedings, if such reserve or
other appropriate provision, if any, as shall be required by GAAP shall
have been made therefor;
(iii) (A) Liens incurred or deposits (other than with respect to
the Plans described in Section 4.10) made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money
bonds, reimbursement obligations and chargeback rights of Persons
performing services for an Obligor or a Subsidiary of an Obligor (including
Liens securing Trade Payables arising from the Obligors' and their
Subsidiaries' use in the ordinary course of business, consistent with past
practice, of credit advance facilities to purchase goods and services) and
other similar obligations (exclusive of obligations for the payment of
borrowed money) and (B) Liens arising or granted in the ordinary course of
business in favor of Persons performing credit card processing services,
travel charge processing services or clearinghouse services for any Obligor
or any of their Subsidiaries, including IATA, Diners Club, Discover Card,
NPC, ARC and American Express, so long as such Liens are on cash and Cash
Equivalents that are subject to holdbacks
15
by, or are pledged (in lieu of such holdbacks) to, such Persons to secure
amounts that may be owed to such Persons under the Obligors' or their
Subsidiaries' agreements with them in connection with their provision of
credit card processing, travel charge processing or clearinghouse services
to the Obligors or any of their Subsidiaries;
(iv) with respect to real property, easements, rights-of-way,
restrictions, minor defects, encroachments or irregularities in title and
other similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of an Obligor or any of
its Subsidiaries;
(v) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in connection with the
importation of goods in the ordinary course of business;
(vi) any interest or title of a lessor in property leased by an
Obligor or any of their Subsidiaries under any Capital Lease obligation or
Operating Lease which, in each case, is not prohibited under this
Agreement;
(vii) Liens in favor of collecting or payor banks and other banks
providing cash management services, in each case, having a right of setoff,
revocation, refund or chargeback against money or instruments of any
Obligor or any of their Subsidiaries on deposit with or in possession of
such bank arising for the payments of bank fees and other similar amounts
owed in the ordinary course of business;
(viii) Liens of creditors of any Person to whom any Obligor's or
any of their Subsidiaries' assets are consigned for sale in the ordinary
course of business;
(ix) Liens incurred or deposits made in connection with the Trust
Agreements;
(x) any renewal of or substitution for any Lien permitted by any
of the preceding clauses,; provided that the Indebtedness secured is not
increased nor the Lien extended to any additional assets;
(xi) licensing or sublicensing of intellectual property in the
ordinary course of business of the Obligors or their Subsidiaries;
(xii) Liens arising from precautionary UCC and similar financing
statements relating to Operating Leases not otherwise prohibited under any
Loan Document; and
16
(xiii) Liens created under the Collateral Documents.
"Permitted Invoice" means invoices for amounts due in respect of goods
and services purchased by the Guarantor or any of its Affiliates from Airbus or
any of its Affiliates.
"Permitted Refinancing Indebtedness" has the meaning given in the ATSB
Loan Agreements.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity, or a Governmental
Authority.
"Petition Date" has the meaning specified in the recitals hereto.
"Plan" means any "employee benefit plan" as defined in section 3(3) of
ERISA which is, or was at any time, maintained or contributed to or required to
be contributed to by the Borrowers or any of their ERISA Affiliates, other than
a multiemployer plan, within the meaning of section 4001(a)(3) of ERISA.
"Plan Effective Date" means the date on which the Plan of
Reorganization became effective as provided therein.
"Plan of Reorganization" has the meaning specified in the recitals
hereto.
"Pledged Engines" means the "Engines" (as defined in the Engine
Mortgage and Security Agreement).
"Pledged Spare Parts" has the meaning specified in the Spare Parts
Mortgage and Security Agreement.
"Principal Credit Facility" shall mean, for any Obligor, (i) any
credit agreement to which it is a party guaranteed (or otherwise supported) in
whole or in part by the ATSB, and (ii) from and after the date on which any such
ATSB credit facility of a Borrower is repaid, refinanced or replaced, the
refinancing or replacing credit, note, bond or other loan facility (or, in the
absence of, or after the repayment, refinancing or replacement of, any such
refinancing or replacing facility, then the largest recourse credit, note or
other loan or note facility or issuance of the relevant Obligor from time to
time), other than any such facility or issuance which is secured by and is for
the purpose of financing or refinancing Aircraft Related Equipment and other
than any such facility or issuance which cannot be accelerated or terminated
upon nonperformance or default thereunder.
"Pro Forma Balance Sheet" has the meaning given in Section 4.3(a).
"Proposed Change" has the meaning specified in Section 9.1(c).
17
"Purchase Agreement Security Agreement" means the Purchase Agreement
Security Agreement, dated as of the date hereof, between the Borrower and the
Collateral Agent.
"Reference Banks" means Citibank, N.A., Calyon and JPMorgan Chase
Bank, and each of their respective successors.
"Register" has the meaning specified in Section 2.4(e).
"Replacement Secured Financing" means any financing transaction,
whether structured as Indebtedness, sale-leaseback or otherwise, (a) which is
secured by any of the Obligors' (i) Slots, (ii) rotable, repairable and
expendable spare parts, (iii) aircraft, or (iv) spare engines, in each case
which immediately prior to such transaction constituted Collateral for purposes
of the ATSB Loan Agreements and (b) which satisfies the further definitional
requirements set forth in the ATSB Loan Agreements.
"Requisite Lenders" means, collectively, Lenders having greater than
fifty percent (50%) of (i) the aggregate principal amount of Loans then
outstanding plus the aggregate unused Commitments then in effect or, (ii) prior
to the making of the initial Loan, the aggregate Commitments in effect.
"Responsible Officer" means, with respect to any Person, any of the
Chief Executive Officer, Executive Vice Presidents and Chief Financial Officer
of such Person, but in any event, with respect to financial matters, the Chief
Financial Officer, Treasurer or Controller of such Person.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto that is a nationally
recognized rating agency.
"SEC" means the United States Securities and Exchange Commission, or
any United States Governmental Authority succeeding to the functions of such
Securities and Exchange Commission.
"Senior Mortgages" shall mean each of the "Senior Engine Mortgage" and
the "Senior Spare Parts Mortgage," each as defined in the Spare Parts Mortgage
and Security Agreement or the Engine Mortgage and Security Agreement
"Slot Regulations" means 49 U.S.C. Section 40103 and 14 C.F.R.
Sections 93.211 - 93.227, and any amendment, supplement or other modification
thereto, or successor, replacement or substitute federal law or regulation
concerning the right or operational authority to conduct landing or takeoff
operations at any airports.
"Slots" means all of the rights and operational authority granted
under the Slot Regulations and now or hereafter acquired or held by each Obligor
to conduct one instrument flight rule landing or takeoff operation in a
specified time period at Ronald
18
Reagan Washington National Airport, John F. Kennedy International Airport,
LaGuardia Airport, or any other airport.
"Software" has the meaning specified in the Spare Parts Security
Agreement.
"Solvent" means, with respect to any Person, that as of the date of
determination (a) the then fair saleable value of the business of such Person is
not less than the amount that will be required to pay the probable liabilities
on such Person's then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to such Person; (b) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction; and (c)
such Person does not intend to incur, or believes that it will not incur, debts
beyond its ability to pay such debts as they become due. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"Spare Parts Mortgage and Security Agreement" means the Spare Parts
Mortgage and Security Agreement dated as of the date hereof between America West
and the Collateral Agent.
"Specified Engines" means the Pledged Engines listed on Schedule
1.1(b), each of which is eligible for the benefits of Section 1110 of the
Bankruptcy Code.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association, limited liability company, trust or estate, joint
venture or other business entity of which more than 50% of the issued and
outstanding shares of Voting Stock at the time of determination are owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"Taxes" means any and all present or future taxes, levies, fees,
duties, imposts, deductions, charges or withholdings of any nature, and all
interest, penalties and other liabilities thereon or computed by reference
thereto imposed, levied, collected, withheld or assessed by any Governmental
Authority.
"Title 49" shall mean Title 49 of the United States Code, as amended
and in effect from time to time, and the regulations promulgated pursuant
thereto.
"Trade Payables" means, with respect to any Person, any accounts
payable or any other Indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries and
arising in the ordinary course of business in connection with the acquisition of
goods or services.
"Tranche" means a Tranche of the Loans, consisting of Tranche A Loans,
Tranche B Loans, Tranche C Loans, Tranche D Loans and Tranche E Loans.
"Tranche A Loan" has the meaning specified in Section 2.1(a).
19
"Tranche A Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche A Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C. The aggregate amount of
the Tranche A Commitments is initially zero; provided that the aggregate amount
of the Tranche A Commitments of the Lenders shall be automatically increased by
the Tranche A Commitment Increase Amount of the Lenders.
"Tranche A Commitment Increase Amount" shall mean the Other Loan
Agreement Tranche A Commitment Reduction Amount of the Lenders.
"Tranche A Note" means a promissory note evidencing Tranche A Loans,
substantially in the form of Exhibit B hereto.
"Tranche B Loan" has the meaning specified in Section 2.1(b).
"Tranche B Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche B Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C. The aggregate amount of
the Tranche B Commitments is initially zero; provided that the aggregate amount
of the Tranche B Commitments of the Lenders shall be automatically increased by
the Tranche B Commitment Increase Amount of the Lenders.
"Tranche B Commitment Increase Amount" shall mean the Other Loan
Agreement Tranche B Commitment Reduction Amount of the Lenders.
"Tranche B Note" means a promissory note evidencing Tranche B Loans,
substantially in the form of Exhibit B hereto.
"Tranche C Loan" has the meaning specified in Section 2.1(c).
"Tranche C Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche C Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C. The aggregate amount of
the Tranche C Commitments is initially zero; provided that the aggregate amount
of the Tranche C Commitments of the Lenders shall be automatically increased by
the Tranche C Commitment Increase Amount of the Lenders.
"Tranche C Commitment Increase Amount" shall mean the Other Loan
Agreement Tranche C Commitment Reduction Amount of the Lenders.
"Tranche C Note" means a promissory note evidencing Tranche C Loans,
substantially in the form of Exhibit B hereto.
"Tranche D Loan" has the meaning specified in Section 2.1(d).
"Tranche D Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche D Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C. The aggregate amount of
the
20
Tranche D Commitments is initially zero; provided that the aggregate amount
of the Tranche D Commitments of the Lenders shall be automatically increased by
the Tranche D Commitment Increase Amount of the Lenders.
"Tranche D Commitment Increase Amount" shall mean the Other Loan
Agreement Tranche D Commitment Reduction Amount of the Lenders.
"Tranche D Note" means a promissory note evidencing Tranche D Loans,
substantially in the form of Exhibit B hereto.
"Tranche E Loan" has the meaning specified in Section 2.1(e).
"Tranche E Commitment" means, as to any Lender, the obligation of such
Lender to make Tranche E Loans hereunder in a principal amount not to exceed the
amount set forth opposite such Lender's name in Annex C. The aggregate amount of
the Tranche E Commitments is initially zero; provided that the aggregate amount
of the Tranche E Commitments of the Lenders shall be automatically increased by
the Tranche E Commitment Increase Amount of the Lenders.
"Tranche E Commitment Increase Amount" shall mean the Other Loan
Agreement Tranche E Commitment Reduction Amount of the Lenders.
"Tranche E Note" means a promissory note evidencing Tranche E Loans,
substantially in the form of Exhibit B hereto.
"Trust Agreements" means all special purpose trust funds established
by any Obligor to manage the collection and payment of amounts collected by the
Obligors for the express benefit of third-party beneficiaries identified as such
in the ATSB Loan Agreements.
"United States Citizen" has the meaning specified in Section 4.1(b).
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to vote for the election of directors, managers or trustees of any
Person (or Persons performing similar functions) irrespective of whether or not
at the time stock of any such class or classes will have or might have such
voting power by the reason of the happening of any contingency.
"Wholly-Owned" denotes a Subsidiary all of the Voting Stock of which
(other than any director's qualifying shares or investments by foreign nationals
mandated by applicable law) is owned directly or indirectly by the Person named.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
21
SECTION 1.2 COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including."
SECTION 1.3 ACCOUNTING TERMS AND PRINCIPLES. All accounting terms not
specifically defined herein shall be construed in conformity with GAAP and all
accounting determinations required to be made pursuant hereto shall, unless
expressly otherwise provided herein, be made in conformity with GAAP.
SECTION 1.4 CERTAIN TERMS.
(a) The words "herein," "hereof" and "hereunder" and similar
words refer to this Agreement as a whole, and not to any particular
Article, Section, subsection or clause in, this Agreement.
(b) Except as otherwise expressly provided, references in this
Agreement to an Exhibit, Schedule, Article, Section, subsection or clause
refer to the appropriate Exhibit or Schedule to, or Article, Section,
subsection or clause in this Agreement.
(c) Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. If the prior written consent of
any Person is required hereunder for an amendment, restatement, supplement
or other modification to any such agreement and the consent of each such
Person is obtained, references in this Agreement to such agreement shall be
to such agreement as so amended, restated, supplemented or modified. If no
such consent is required, references in this Agreement shall be to such
agreement as so amended, restated, supplemented, or modified.
(d) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect at the time any such reference
is operative.
(e) The term "including" when used in any Loan Document means
"including without limitation" except when used in the computation of time
periods.
ARTICLE II
THE LOANS
SECTION 2.1 THE LOANS.
(a) Tranche A Loans. On the terms and subject to the conditions
contained in this Agreement and in reliance upon the representations and
warranties of the Obligors set forth herein, each Lender agrees to make one
or more Loans to the Borrowers (each, a "Tranche A Loan") on Funding Dates
occurring on
22
or after the date of delivery of the last A319/A320 Aircraft currently on
order by America West and not rescheduled in accordance with paragraph 5 of
the MOU, as requested by a Borrower in a Notice of Borrowing given in
accordance with Section 2.2 in an amount not to exceed, in the aggregate
for all Tranche A Loans made by such Lender on all Funding Dates, the
Tranche A Commitment of such Lender. No Tranche A Loan shall be made prior
to the date of delivery of the last A319/A320 aircraft on order by America
West on the date hereof and not rescheduled in accordance with paragraph 5
of the MOU. The last such aircraft is currently scheduled to be delivered
in February 2006. There may be multiple Borrowings of Tranche A Loans.
Tranche A Loans repaid or prepaid may not be reborrowed hereunder.
(b) Tranche B Loans. On the terms and subject to the conditions
contained in this Agreement and in reliance upon the representations and
warranties of the Obligors set forth herein, each Lender further agrees to
make one or more Loans to the Borrowers (each, a "Tranche B Loan") on the
Closing Date and on each other Funding Date requested by a Borrower in a
Notice of Borrowing given in accordance with Section 2.2 in an amount not
to exceed, in the aggregate for all Tranche B Loans made by such Lender on
all Funding Dates, the Tranche B Commitment of such Lender. No Tranche B
Loan, when combined with the aggregate amount of prior Tranche B Loans,
shall exceed the principal and interest amount paid or prepaid under the
Airbus A321 Financings from and after the date of the MOU (May 18, 2005) to
and including the Funding Date for such Tranche B Loan (including, for the
avoidance of doubt, principal and interest to be paid with the proceeds of
the proposed Tranche B Loan). No Tranche B Loan shall be made unless all
amounts which are due and payable on the Funding Date for such Tranche B
Loan under the A321 Airbus Financings have been, or immediately following
the application of the proceeds of such Tranche B Loan will have been, paid
in full. There may be multiple Borrowings of Tranche B Loans. Tranche B
Loans repaid or prepaid may not be reborrowed hereunder.
(c) Tranche C Loans. On the terms and subject to the conditions
contained in this Agreement and in reliance upon the representations and
warranties of the Obligors set forth herein, each Lender further agrees to
make one or more Loans to the Borrowers (each, a "Tranche C Loan") on the
Closing Date and each other Funding Date requested by a Borrower in a
Notice of Borrowing given in accordance with Section 2.2 in an amount not
to exceed, in the aggregate for all Tranche C Loans made by such Lender on
all Funding Dates, the Tranche C Commitment of such Lender. No Tranche C
Loan shall be made prior to the due date for the payment of the Permitted
Invoices with respect to which such Tranche C Loan is being made. Each
Tranche C Loan shall be in an amount not to exceed the aggregate amount of
all Permitted Invoices not used to support prior Borrowings of Tranche C
Loans. No Tranche C Loan shall be made until at least thirty (30) days
after all issued and outstanding Permitted Invoices relating to such
Tranche C Loan have been paid in full. Copies of the Permitted Invoices
supporting each Tranche C Loan shall be attached to the applicable Notice
of Borrowing. There may be multiple
23
Borrowings of Tranche C Loans. Tranche C Loans repaid or prepaid may not be
reborrowed hereunder.
(d) Tranche D Loans. On the terms and subject to the conditions
contained in this Agreement and in reliance upon the representations and
warranties of the Obligors set forth herein, each Lender further agrees to
make one or more Loans to the Borrowers (each, a "Tranche D Loan") on any
Funding Date, as requested by a Borrower in a Notice of Borrowing given in
accordance with Section 2.2 in an amount not to exceed, in the aggregate
for all Tranche D Loans made by such Lender on all Funding Dates, the
Tranche D Commitment of such Lender. There may be multiple Borrowings of
Tranche D Loans. Tranche D Loans repaid or prepaid may not be reborrowed
hereunder.
(e) Tranche E Loans. On the terms and subject to the conditions
contained in this Agreement and in reliance upon the representations and
warranties of the Obligors set forth herein, each Lender further agrees to
make one or more Loans to the Borrowers (each, a "Tranche E Loan") on the
Closing Date and on each other Funding Date requested by a Borrowing in a
Notice of Borrowing given in accordance with Section 2.2 in an amount not
to exceed, in the aggregate for all Tranche E Loans made by such Lender on
all Funding Dates, the Tranche E Commitment of such Lender. There may be
multiple Borrowings of Tranche E Loans. Tranche E Loans repaid or prepaid
may not be reborrowed hereunder.
(f) Final Funding Date. No Funding Date shall occur after
December 31, 2007.
(g) Commitment Reduction. The aggregate Commitments of the
Lenders shall be reduced by $9,187,764.19 if but only for so long as the
Tranche B-2 of the America West ATSB loan is guaranteed by AFS Cayman
Limited pursuant to the letter agreement dated as of September 27, 2005,
among America West, Airbus, Citibank, N.A., and ATSB.
SECTION 2.2 BORROWING PROCEDURES.
(a) Each Borrowing shall be made on notice given by a Borrower to
the Loan Agent not later than 11:00 a.m. (New York City time) at least two
Business Days prior to the applicable Funding Date. Each such notice shall
be in substantially the form of Exhibit C (a "Notice of Borrowing") or be
given by telephone and confirmed in writing within one Business Day
following such notice, in each case, specifying (A) the proposed Funding
Date, (B) the aggregate amount of the proposed Borrowing (which must be in
a minimum amount of $1,000,000 or a whole multiple of $100,000 above that
amount), or if less, the remaining undrawn amount of the Loan, (C) the
Tranche designations of the various Loans to be made on the proposed
Funding Date, and (D) the corporate credit rating of the Guarantor and its
consolidated Subsidiaries then most recently published by S&P. The Notice
of Borrowing shall be irrevocable. A Notice of Borrowing with respect to a
Tranche C Loan shall be accompanied by copies of Permitted Invoices. Each
Notice of
24
Borrowing shall be accompanied by a copy of any Notice of Borrowing (as
defined therein) given under the Other Loan Agreement for Borrowings on the
same date.
(b) The Loan Agent shall give to the Lenders prompt notice of the
Loan Agent's receipt of a Notice of Borrowing and the Applicable Interest
Rate with respect thereto. Each Lender shall, subject to the terms of any
mutually agreed funding agreement, severally, before 11:00 a.m. (New York
City time) on the date of the proposed Borrowing, make available to the
Loan Agent at the account referenced in Section 2.9(a), in immediately
available funds, an amount equal to its ratable portion of each Tranche of
the proposed Borrowing. After the Loan Agent's receipt of such funds, the
Loan Agent will make such funds available to the particular Borrower which
is actually to apply such funds in accordance with Section 2.4(f). The
failure of any Lender to make its ratable portion of any Loan as required
hereunder shall not relieve any other Lender of its obligations to make its
ratable portion of such Loan or any other Loan as required hereunder.
SECTION 2.3 SCHEDULED REPAYMENT OF THE LOANS.
(a) Accrued Interest due on the Loans on each Interest Payment
Date shall be capitalized and added to the outstanding principal amount of
the Loans.
(b) The outstanding principal amount of the Loans shall be due
and payable on the Loan Maturity Date.
(c) Notwithstanding any other provision of the Loan Documents,
the outstanding principal amount of the Loans will be forgiven in writing
by the Loan Agent on the Loan Maturity Date (as defined in the Other Loan
Agreement) or an earlier date, if on that date the outstanding principal
amount of, accrued interest on, and all other amounts due under the Other
Loan Agreement Loans and the Other Loan Agreement Notes have been paid in
full and the Other Obligations, if any, then due have been indefeasibly
paid in full.
SECTION 2.4 EVIDENCE OF DEBT; USE OF PROCEEDS.
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing such Lender's portion of the
Loans outstanding from time to time, including, by Tranche, the amounts of
principal and interest payable and paid to such Lender from time to time
under this Agreement.
(b) The Loan Agent shall establish and maintain a Register on
behalf of the Borrowers pursuant to Section 2.4(e), and a subaccount for
each Lender therein, in which shall be recorded (i) the amount of each Loan
hereunder and each Interest Period applicable thereto; (ii) the amount of
any principal or interest due and payable or to become due and payable from
the Borrowers to each Lender hereunder; (iii) the date and amount of each
payment on the Loans, by Tranche, made
25
by or on behalf of, or collected from, the Borrowers and (iv) the amount of
each such payment applied in accordance with each clause of Section 2.9(d)
and (e) or other applicable terms hereof to scheduled principal of or
interest on the Loans.
(c) The entries made in the accounts maintained pursuant to
clauses (a) and (b) of this Section 2.4 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of any
Lender or the Loan Agent to maintain such accounts or any error therein
shall not in any manner affect the obligations of the Borrowers to repay
the Loans in accordance with the terms hereof.
(d) The Borrowers shall execute and deliver to the Loan Agent on
the Closing Date a single promissory note for each Tranche, each
substantially in the forms of Exhibit B, in the principal amount of the
aggregate Commitments for such Tranche dated the Closing Date and otherwise
appropriately completed (each such note, including any replacement note
therefor issued in accordance with the provisions of this Section 2.4(d)
but excluding any note so replaced, a "Note"). Promptly following each Loan
on each Funding Date, each Lender shall update the grid attached to its
Note and deliver a certified copy thereof to the Borrowers. If a Note is
mutilated, lost, stolen or destroyed, the Borrowers shall, at the cost and
expense of the Lender, issue a new Note in the same principal amount and
having the same interest rate, date, maturity and Tranche as the Note so
mutilated, lost, stolen or destroyed, endorsed to indicate all payments
thereon, together with an Officer's Certificate of the Borrowers certifying
and warranting as to the due authorization, execution and delivery of the
new Note. In the case of any lost, stolen or destroyed Note, there shall
first be furnished (i) to the Borrowers, at Borrowers' option, either
adequate security to hold Borrowers harmless with respect to such lost,
mutilated, stolen or destroyed Note or an instrument of indemnity from the
relevant Lender and (ii) to the Borrowers and the Loan Agent evidence of
such loss, theft or destruction reasonably satisfactory to each of them.
(e) The Notes are registered instruments. The original of each
Note shall be evidence of the rights of each Lender under this Agreement
and such Note. Neither this Agreement nor any Note is a bearer instrument.
The Loan Agent will establish and maintain on behalf of the Borrowers a
record of ownership (the "Register") in which the Loan Agent agrees to
register by book entry the Loan Agent's and each Lender's interest in the
Loans, the Notes and this Agreement, and in the right to receive any
payments hereunder or thereunder and any assignment of any such interest or
rights. In connection with any assignment pursuant to Section 9.2, the Loan
Agent shall maintain a copy of each Assignment and Assumption delivered to
and accepted by it and shall record the names and addresses of the Lenders
and principal amount of the Loans, by Tranche, owing to each Lender from
time to time. The Borrowers, upon request and at the expense of the
relevant Lender and the return of the Note to be replaced to the Borrowers
marked "cancelled" (or, if the Note to be replaced has been mutilated,
lost, stolen or destroyed, adequate security or an instrument of indemnity
as described in the last sentence of Section 2.4(d)), agree to issue
replacement Notes upon any assignment or participation made pursuant to
26
Section 9.2. The identities of the Note holders entered in the Register
shall be conclusive and binding for all purposes, absent manifest error,
and the Obligors, the Loan Agent and the Lenders shall treat each Person
whose name is recorded in the Register as the owner of the Obligations as
indicated in the Register for all purposes of this Agreement. The Register
shall be available for inspection by the Borrowers, the Loan Agent, or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(f) Use of Proceeds.
(i) The Borrowers shall use the proceeds of the Loans as
follows:
(1) The proceeds of Tranche A Loans, Tranche D Loans,
and Tranche E Loans shall be used by the Borrowers for working capital and
general corporate purposes of either of them, including, without
limitation, capital expenditures and acquisitions.
(2) The proceeds of Tranche B Loans shall be used by
the Borrowers solely to make debt service payments due through June, 2006
under the A321 Airbus Financings or to reimburse US Airways for any such
payments made on or after the date of the MOU (May 18, 2005) but prior to
the date of such Loan.
(3) The proceeds of Tranche C Loans shall be used by
the Borrowers solely to pay, or to reimburse either of them for the payment
on or after the date of the MOU (May 18, 2005) of, Permitted Invoices.
(ii) No portion of the proceeds of any Loans shall be used
by the Borrowers or any of their Subsidiaries in any manner that would
cause the borrowing or the application of such proceeds to violate
Regulation U, Regulation T or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors
or to violate Section 7(c) of the Exchange Act, in each case as in effect
on the date or dates of such borrowing and such use of proceeds.
SECTION 2.5 OPTIONAL PREPAYMENTS.
(a) The Borrowers may on any Business Day, upon revocable notice
to the Loan Agent not less than ten (10) Business Days prior thereto,
prepay all or any portion of the outstanding principal amount of such Loans
held directly or indirectly by Airbus or its Affiliates, in whole or in
part (but, with respect to any partial prepayment, not less than a minimum
amount of $1,000,000, plus any whole multiple of $100,000, or such lesser
amount as results in a prepayment of such Loans in full), together with
accrued interest to the date of such prepayment on the principal amount
prepaid; provided, however, that if any prepayment of all or a portion of
such Loans is made by the Borrowers other than on an Interest Payment
27
Date, the Borrowers shall also pay any amounts owing pursuant to Section
2.10(e). Except for any such amounts owing pursuant to Section 2.10(e),
prepayments pursuant to this Section 2.5(a) shall be without premium or
penalty.
(b) Upon the giving of any notice of prepayment under clause (a)
of this Section 2.5, the principal amount of the Loans specified to be
prepaid together with accrued and unpaid interest thereon and other
amounts, if any, due with respect thereto as provided in Section 2.5(a),
shall become due and payable on the date specified for such prepayment;
provided, however, that any failure to make any such prepayment in full on
such date shall be deemed to be an automatic revocation of the notice of
prepayment given under Section 2.5(a) and such failure shall not constitute
a Default or an Event of Default hereunder; provided, further, however,
that the Borrowers shall be obligated to pay on such date any amounts owing
under Section 2.10(e) due to such failure to prepay.
(c) Any partial prepayment of the Loans under Section 2.5(a)
shall be applied pro rata as among the outstanding Tranches of the Loans
held directly or indirectly by Airbus or its Affiliates and pro rata among
the Loans in each such Tranche, and to the then remaining installments of
the outstanding principal amount of the Loans held, directly or indirectly,
by Airbus or its Affiliates on a pro rata basis. Any such prepayment shall
be paid to the Loan Agent for application as provided in Section 2.9. The
Borrowers shall have no right to optionally prepay the principal amount of
the Loans held, directly or indirectly, by Airbus or its Affiliates other
than as provided in this Section 2.5 and Section 2.10, 2.12 or 9.1.
(d) The Borrowers shall have the same prepayment rights with
respect to Loans not held, directly or indirectly, by Airbus or its
Affiliates as set forth above in this Section 2.5; provided, however, that
if requested by the Initial Lender in connection with a transfer or sell
down transaction into the capital markets as envisioned in Section 9.2(e),
the Borrowers shall have such prepayment rights as are determined as
provided in Section 9.2(c).
SECTION 2.6 MANDATORY PREPAYMENTS.
(a) Collateral Sales. Upon receipt by any Borrower or any
Subsidiary of Net Cash Proceeds of an Asset Sale of any Collateral
(including without limitation, any Airbus A321 model aircraft then subject
to an A321 Airbus Financing). The Borrowers shall prepay the Loans and the
other Obligations then due in an aggregate amount equal to the Net Cash
Proceeds of such sale, which have not been applied to payment of the Other
Loan Agreement Loans under Section 2.6(a) of the Other Loan Agreement,
provided that no such prepayment shall be required for Asset Sales of Spare
Parts until the aggregate amount thereof (not applied to prior prepayments)
exceeds $100,000. In the event that any such Asset Sale results in a note
payable to any Borrower or any Subsidiary, such note shall be pledged by
such Borrower or Subsidiary, as the case may be, as collateral security for
the obligations and the Cross-Default Obligations in a manner reasonably
satisfactory to the Loan Agent. Any partial prepayments of the Loans made
by the Borrowers in accordance
28
prepayments of the Loans made by the Borrowers in accordance with this
Section 2.6(a) shall be applied pro rata as among the outstanding Tranches
of the Loans and pro rata among the Loans in each such Tranche and to the
then remaining installments of the outstanding principal balance of the
Loan on a pro rata basis. If any such prepayment is made by the Borrowers
other than on an Interest Payment Date, subject to clause (c) below, the
Borrowers shall also pay any amounts owing pursuant to Section 2.10(e). Any
such prepayment of the Loan shall be paid to the Loan Agent for application
as provided in Section 2.9.
(b) Insurance/Condemnation Proceeds. No later than three Business
Days following the date of receipt by the Borrowers or any of their
Subsidiaries of any Net Insurance Proceeds of any Collateral, except as
provided in Section 3.04(a) of the Engine Mortgage and Security Agreement
if an Engine (as defined therein) is being replaced, in Section 6.01(a) of
any Aircraft Mortgage, if an Aircraft or Airframe is being replaced, and in
Section 3.05(d)(1) of the Spare Parts Mortgage and Security Agreement, if a
Spare Part is being replaced, the Borrower shall prepay the Loans and any
other Obligations then due in an amount equal to the amount of such Net
Insurance Proceeds; provided that no such prepayment shall be required
until the aggregate amount thereof (not applied to prior prepayments)
exceeds $100,000; and provided, further that in the case of a prepayment
required by Section 3.04(a) of the Engine Mortgage and Security Agreement
or Section 6.01(a) of any Aircraft Mortgage on a date before the date on
which Net Insurance Proceeds has been received, such prepayment of the
Loans in the amount specified in the next sentence hereof, and on the date
specified in such Senior Mortgage, shall be made in lieu of the prepayment
out of the Net Insurance Proceeds required by this sentence. The amount to
be prepaid pursuant to the proviso to the preceding sentence shall be the
Agreed Value (as defined in the applicable Senior Mortgage) minus the
applicable prepayment amount under such applicable Senior Mortgage. Any
partial prepayments of the Loans made by the Borrowers in accordance with
this Section 2.6(b) shall be applied pro rata as among the outstanding
Tranches of the Loans and pro rata among the Loans in each such Tranche and
to the then remaining installments of the outstanding principal balance of
the Loan on a pro rata basis. If any such prepayment is made by the
Borrowers other than on an Interest Payment Date, subject to clause (c)
below the Borrowers shall also pay any amounts owing pursuant to Sections
2.5(d) and 2.10(e). Any such prepayment of the Loans shall be paid to the
Loan Agent for application as provided in Section 2.9.
(c) Notwithstanding the foregoing, if no Default or Event of
Default has occurred and is continuing, the Borrower shall be entitled to
postpone the date of prepayment under Section 2.6(a) or (b) as follows. At
least one (1) Business Day prior to the required date of such prepayment,
Borrower shall notify the Loan Agent and each Lender of its election to
postpone the date of such prepayment to the next succeeding Interest
Payment Date and on the date required for such prepayment the Borrower
shall pay to the Loan Agent, for deposit in a collateral account
established with the Loan Agent and under its name and sole dominion and
control, as security for the Obligations and the Cross-Default Obligations,
an amount equal to the amounts the Borrower would have paid under Section
2.6(a) or (b), as the case may be, as a prepayment of the Loans on such
date. The Loan shall remain
29
outstanding and on the next succeeding Interest Payment Date the Borrower
shall pay the installment of interest and principal and any other amounts
then due, plus the amount required to prepay the Loan in whole or in part
on such Interest Payment Date (calculated as provided in Section 2.6(a) or
(b), as the case may be, less the amount available to the Loan Agent (out
of the funds held by it as aforesaid as collateral security) which shall be
applied in reduction of the Borrower's obligations on such Interest Payment
Date. Notwithstanding the foregoing, if an Event of Default shall occur and
be continuing, funds on deposit in the aforesaid collateral account shall
be subject to distribution under Section 2.9(d) and the provisions of
Section 6.2 shall not be prejudiced by the foregoing prepayment
arrangement.
(d) Notwithstanding any other provision hereof or of the
Collateral Documents, no mandatory prepayment of the loans under this
Section 2.6 shall be required before the date on which any amount of
principal of, or accrued interest on, the Loans becomes due (at maturity,
by reason of acceleration or otherwise).
SECTION 2.7 INTEREST.
(a) Rate of Interest. Except as otherwise provided in Section
2.7(c) and Section 2.10, each Loan shall bear interest on the unpaid
principal amount thereof for each day such Loan is outstanding during any
Interest Period at the Applicable Interest Rate for such Interest Period.
Notwithstanding any other provision hereof, interest on the Loans shall not
exceed the maximum allowable under applicable law.
(b) Interest Payments. Interest accrued on each Loan and each
Note shall be payable in arrears on the last day of each applicable
Interest Period (an "Interest Payment Date"), upon the payment or
prepayment thereof in whole or in part (solely to the extent of the portion
paid or prepaid), and, if not previously paid in full, at maturity (whether
by acceleration or otherwise), subject to the provisions of Section 2.3(c).
Interest on each Loan shall be calculated on the basis of a year of 360
days and actual number of days elapsed.
(c) Default Interest. Notwithstanding the rate of interest
specified in Section 2.7(a) or elsewhere herein, if any principal of or
interest on a Loan or any fee or other amount payable by the Borrowers
hereunder is not paid when due, whether at stated maturity, upon
acceleration, by mandatory prepayment or otherwise (but other than any
voluntary prepayment), such overdue amount shall bear interest at a rate
which is two percent per annum in excess of the Applicable Interest Rate as
in effect from time to time.
SECTION 2.8 FEES. No up-front, commitment or other fees are payable on
or with respect to the Commitments or the Loans.
30
SECTION 2.9 PAYMENTS AND COMPUTATIONS.
(a) The Borrowers shall make each payment hereunder (including
fees and expenses) not later than 12 noon (New York City time) on the day
when due, in Dollars, to the Loan Agent in immediately available funds
without set-off, counterclaim, claim of recoupment or other defense (except
for any required withholding taxes not subject to indemnification
hereunder) to the following account (unless otherwise advised):
ACCOUNT OF : AIRBUS FINANCIAL SERVICES
ACCOUNT AT : CALYON, NEW YORK
SWIFT CODE : CRLYUS33
CHIPS ID : 807
ABA REF : 026 008 073
ACCOUNT NO : 01 22456 0001 00
All payments in respect of any Obligations shall at all times be made to the
Loan Agent. The Loan Agent will promptly cause all such payments received by it
to be distributed to the Person entitled thereto in accordance with the
priorities of payment set forth below in clause (d) or (e) of this Section 2.9
or both, as applicable. Payments received by the Loan Agent after 2:00 p.m. (New
York City time) shall, solely for the calculation and accrual of interest
pursuant to the provisions hereof, be deemed to be received on the next Business
Day.
(b) Each determination by the Loan Agent of an interest rate
hereunder shall be presumed correct, absent manifest error.
(c) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be due on the next
succeeding Business Day, unless the result of such extension would be to
extend such payment date into another calendar month, in which event such
payment date shall end on the immediately preceding Business Day and for
the avoidance of doubt, interest computation shall be adjusted accordingly.
(d) So long as no Event of Default under any of Sections 6.1(a)
(including any failure to pay all amounts hereunder upon acceleration as a
result of any other Event of Default), (f) and (g) has occurred and is
continuing or would result therefrom, the Loan Agent shall promptly apply
all payments received by it in respect of any Obligations in the following
order:
(i) first, to pay interest then due and payable in respect
of the Loans to the Lenders, on a pro rata basis;
(ii) second, to pay principal then due and payable on the
Loans to the Lenders, on a pro rata basis;
31
(iii) third, to pay any other Obligations then due and
payable to the Loan Agent, the Collateral Agent and the Lenders, on a pro
rata basis; and
(iv) fourth, to the Borrowers or their respective designees.
(e) After the occurrence and during the continuance of an Event
of Default under any of Sections 6.1(a) (including any failure to pay all
amounts hereunder upon acceleration as a result of any other Event of
Default), (f) or (g), the Loan Agent shall promptly apply all payments in
respect of any Obligations or Cross-Default Obligations (including amounts
received by the Collateral Agent upon the exercise of remedies with respect
to the Collateral or the Cross-Collateral) in the following order:
(i) first, to pay Obligations in respect of any expenses,
indemnities or other amounts owing hereunder not referred to in clauses
(ii) through (v) below then due and payable to the Lenders, the Loan Agent
or the Collateral Agent, on a pro rata basis;
(ii) second, to pay interest then due and payable in respect
of the Loans to the Lenders, on a pro rata basis;
(iii) third, to pay or prepay principal payments on the
Loans to the Lenders or other Obligations to the respective parties
entitled thereto, on a pro rata basis, or to be held by, the Loan Agent as
additional collateral for any Obligations which are not at the time due and
payable;
(iv) fourth, to pay any Cross-Default Obligations then due
and payable to the respective parties entitled thereto, on a pro rata
basis, or to be held by the Loan Agent as Collateral for any Cross-Default
Obligations which are not at the time due and payable; and
(v) fifth, after payment in full of the Cross-Default
Obligations, to the Borrowers or their respective designees.
SECTION 2.10 CERTAIN PROVISIONS GOVERNING THE LOANS.
(a) Certain Determinations. LIBOR for each Interest Period for
each Loan shall be determined by the Loan Agent pursuant to the procedures
set forth in the definition of "LIBOR", and shall promptly thereafter be
notified to the Borrowers and each Lender together with the Applicable
Margin and the Applicable Interest Rate for such Interest Period (in
writing or by email or by telephone confirmed in writing or by email). The
Tranche A, Tranche B, Tranche C, Tranche D and Tranche E Commitment
Increase Amount for the Lenders (and for each Lender) shall be determined
by the Loan Agent as provided in the respective definitions of those terms,
and promptly upon receipt of notice thereof from the Other Loan
32
Agreement Loan Agent shall be notified by the Loan Agent to each Lender,
the Borrower and the Collateral Agent. The Tranche A, Tranche B, Tranche C,
Tranche D and Tranche E Commitment Increase Amounts for the Lenders shall
not exceed $89,000,000. A certificate of the Loan Agent setting forth the
applicable LIBOR, the Applicable Margin and the adjusted Applicable
Interest Rate, or the Tranche A, Tranche B, Tranche C, Tranche D or Tranche
E Commitment Increase Amounts, shall be presumed correct absent manifest
error. The Loan Agent shall, at the request of either Borrower, deliver to
the Borrowers a statement showing the quotations used by the Loan Agent to
determine LIBOR, the Applicable Margin and the Applicable Interest Rate,
such statement to be in sufficient detail for the Borrowers to reasonably
determine whether any such manifest error has occurred.
(b) Interest Rate Unascertainable. In the event that the Loan
Agent determines that, at the time the Loan Agent is to determine the
Applicable Interest Rate for an Interest Period, by reason of circumstances
affecting the London interbank market for U.S. Dollar deposits, adequate
and fair means do not exist for ascertaining the applicable interest rates
by reference to which the LIBOR then being determined is to be fixed, the
Loan Agent shall forthwith so notify the Borrowers and the Lenders,
whereupon during the 30 days following the date of any such notice given to
the Borrowers, the Loan Agent and the Borrowers shall negotiate in good
faith in order to arrive at a mutually acceptable alternative basis for
determining the interest rate from time to time applicable to the Loans
(the "Substitute Basis"). If within the 30 days following the date of any
such notice to the Borrowers, the Loan Agent and the Borrowers shall agree
upon a Substitute Basis, such Substitute Basis shall be retroactive to and
effective from the first day of the then current Interest Period until and
including the last day of such Interest Period. If after 30 days from the
date of such notice, the Loan Agent and the Borrowers shall have failed to
agree upon a Substitute Basis, then the Loan Agent (upon instructions from
the Requisite Lenders) shall certify in writing to the Borrowers the
interest rate at which such Lenders are prepared to maintain their portion
of the Loans for such Interest Period, it being understood that such
Lenders' interest rate shall be not more than a rate per annum equal to a
rate which adequately and fairly reflects the cost to such Lenders of
obtaining the funds necessary to maintain their portion of the Loans for
such Interest Period. If no Substitute Basis is established, upon receipt
of notice of the interest rates at which the Requisite Lenders are prepared
to maintain their respective portion of the Loans, and on the last day of
each Interest Period thereafter, the Borrowers shall have the right
exercisable upon ten Business Days' prior notice to the Loan Agent (i) to
continue to borrow the Loans at the interest rate so advised by the Loan
Agent (as such rate may be modified, from time to time, at the outset of
each subsequent Interest Period) or (ii) to prepay in full the Loans
together with accrued but unpaid interest thereon at the Applicable
Interest Rate most recently in effect, whereupon the Loans shall become due
and payable on the date specified by the Borrowers in such notice.
(c) Increased Costs. If at any time (i) the introduction after
the date hereof of or any change after the date hereof in or in the
interpretation of any law, treaty or governmental rule, regulation or order
binding on any Lender or (ii) the
33
compliance by any Lender with any guideline, request or directive enacted
or imposed or made after the date hereof from any central bank or other
Governmental Authority (whether or not having the force of law) shall (A)
impose, modify, or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender, or (ii) impose on any Lender any other
condition, and the result of any of the foregoing shall be to materially
increase the cost to such Lender of agreeing to make or making, funding, or
maintaining any portion of the Loans (except with respect to Excluded
Taxes), then the Borrowers shall from time to time, within ten Business
Days of written demand (which demand shall be accompanied by a certificate
setting forth the basis for such demand and a calculation of the amount
thereof in reasonable detail) by such Lender (with a copy of such demand
and certificate to the Loan Agent), pay to the Loan Agent for the account
of such Lender, additional amounts sufficient to compensate such Lender for
such increased cost. Such a certificate submitted to the Borrowers and the
Loan Agent by such Lender shall be presumptively correct absent manifest
error. Notwithstanding the provisions of this paragraph, (x) the Borrowers
shall not be obligated to pay any amounts pursuant to this paragraph for
periods occurring prior to the 60th day before the giving of such
certificate, provided that if the circumstances giving rise to such claim
have a retroactive effect then such 60 day period shall be extended to then
include such period of retroactive effect, and (y) the Borrowers shall not
be required to make any payment otherwise required hereby to any Lender
unless such Lender states in its written demand that such claim is not
being made on a basis that discriminates against the Borrower as compared
to comparable extensions of credit with similarly situated borrowers.
(d) Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation
of any law, treaty or governmental rule, regulation or order, in each case
after the date of this Agreement, shall make it unlawful for any Lender to
continue to fund or maintain its portion of the Loans as contemplated
hereby, then, on notice thereof by such Lender to the Borrowers through the
Loan Agent, the obligation of such Lender to continue to fund or maintain
its portion of the Loan shall be terminated and the Borrowers shall prepay
such affected portion of the Loan to such Lender together with accrued but
unpaid interest thereon and all other sums payable hereunder with respect
thereto on the last day of the then current Interest Period or earlier if
necessary to avoid such illegality. Any such partial prepayment of the Loan
shall be applied ratably to the then unpaid installments thereof in
accordance with the amount of each such unpaid installment.
(e) Breakage Costs. In addition to all amounts required to be
paid by the Borrowers pursuant to Section 2.7, the Borrowers shall
compensate each Lender, at the time specified herein, or if no such time is
specified, within ten Business Days of written demand (with a copy of such
demand to the Loan Agent), for all net losses, expenses and liabilities
(including any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender or the
termination of any other financial arrangement it may have entered into to
fund or maintain or support such Lender's portion of the Loan, including
any net
34
loss of interest but excluding any other lost profit or any Taxes based on
the overall net income of such Lender) which such Lender actually sustains
as a consequence of (i) any proposed Borrowing not occurring on a date
specified therefor in any Notice of Borrowing given by any Borrower, (ii)
any portion of the Loans being prepaid (including, subject to Section
2.6(c), mandatorily pursuant to Section 2.6 or this Section 2.10) on a date
which is not the last day of the applicable Interest Period, or (iii) any
failure by any Borrower to repay any portion of the Loans when required by
the terms hereof (after giving effect to any grace periods). Any written
demand by a Lender under this Section 2.10(e) shall be accompanied by a
certificate setting forth the basis for such demand and a calculation of
the amount thereof in reasonable detail by such Lender. Such a certificate
submitted to the Borrowers and the Loan Agent by a Lender shall be
presumptively correct absent manifest error. Amounts paid under this
Section 2.10(e) shall be paid to the Loan Agent for the account of the
applicable Lender. Notwithstanding the provisions of this paragraph, the
Borrowers shall not be obligated to pay any amounts pursuant to this
paragraph for periods occurring prior to the 60th day before the giving of
such certificate, provided that if the circumstances giving rise to such
claim have a retroactive effect then such 60 day period shall be extended
to then include such period of retroactive effect.
SECTION 2.11 CAPITAL ADEQUACY. If at any time (a) the adoption of or
any change in or in the interpretation of any law, treaty or governmental rule,
regulation or order after the date of this Agreement regarding capital adequacy,
(b) compliance with any such law, treaty, rule, regulation, or order, or (c)
compliance with any guideline or request or directive made after the date hereof
from any central bank or other Governmental Authority (whether or not having the
force of law) shall have the effect of reducing the rate of return on such
Lender's (or any corporation controlling such Lender's) capital as a consequence
of its obligations hereunder (other than for changes in the rate of tax on the
overall net income of such Lender) to a level below that which such Lender or
such corporation could have achieved but for such adoption, change, compliance
or interpretation by an amount deemed by such Lender to be material, then,
within ten Business Days following written demand from time to time by such
Lender (with a copy of such demand to the Loan Agent), the Borrowers shall pay
to the Loan Agent for the account of such Lender from time to time as specified
by such Lender additional amounts sufficient to compensate such Lender for such
reduction. Any written demand by a Lender under this Section 2.11 shall be
accompanied by a certificate setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail by such Lender. Such a
certificate submitted to the Borrowers and the Loan Agent by a Lender shall be
presumptively correct absent manifest error. Notwithstanding the provisions of
this paragraph, (x) the Borrowers shall not be obligated to pay any amounts
pursuant to this paragraph for periods occurring prior to the 60th day before
the giving of such certificate, provided that if the circumstances giving rise
to such claim have a retroactive effect then such 60 day period shall be
extended to then include such period of retroactive effect, and (y) the
Borrowers shall not be required to make any payment otherwise required hereby to
any Lender unless such Lender is generally demanding payment under comparable
provisions of its agreements with similarly situated borrowers.
35
SECTION 2.12 SUBSTITUTION OF LENDERS.
(a) In the event that no Event of Default has occurred and is
continuing and (i) any Lender makes a claim under Section 2.10(c) or (e) or
Section 2.11, (ii) it becomes unlawful for any Lender to continue to fund
or maintain its portion of the Loans as contemplated hereby and such Lender
notifies the Borrowers pursuant to Section 2.10(d), (iii) any Obligor is
required to make any payment pursuant to Section 2.13 that is attributable
to a particular Lender, (iv) any Lender fails to fund any Loans as required
hereby or (v) there shall exist a Non-Consenting Lender in respect of a
Proposed Change to which the Loan Agent consents (any such Lender, an
"Affected Lender"), the Borrowers may substitute any other Lender or any
other financial institution which will eliminate the continued need to make
such payments and which is reasonably acceptable to the Loan Agent (a
"Substitute Institution") for such Affected Lender hereunder, after
delivery of a written notice (a "Substitution Notice") by the Borrowers to
the Loan Agent and the Affected Lender following the occurrence of any of
the events described in clauses (i) through (v) above that the Borrowers
intend to make such substitution.
(b) If the Substitution Notice was properly issued under this
Section 2.12, the Affected Lender shall sell, and the Substitute
Institution shall purchase, in accordance with Section 9.2, all rights and
obligations (except with respect to prior periods) of such Affected Lender
under the Loan Documents. Such purchase and sale (and the corresponding
assignment of all rights and obligations (except with respect to prior
periods) hereunder) shall be effective on the later of (i) the receipt by
the Affected Lender of an amount equal to the unpaid principal amount,
accrued interest on, and other amounts due in respect of, its outstanding
Loans, together with any other Obligations owing to it, (ii) the receipt by
the Loan Agent of an Assignment and Assumption whereby the Substitute
Institution shall agree to be bound by the terms hereof and (iii) without
duplication, the payment in full to the Affected Lender in cash of all
unreimbursed costs and expenses and indemnities accrued and unpaid through
such effective date.
(c) If any Lender requests compensation under Section 2.10(c) or
(e), 2.11 or 2.13, or if any Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 2.13, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or Affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.10(c) or (e), 2.11 or 2.13, as the
case may be, in the future and (ii) would not subject such Lender to any
material unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender.
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SECTION 2.13 TAXES.
(a) Except as otherwise provided in Section 9.2 or as required by
applicable law, any and all payments by the Borrowers under each Loan
Document shall be made free and clear of and without deduction for any and
all Taxes, excluding (i) in the case of each Lender, each Participant and
the Loan Agent taxes measured by its net income, and franchise taxes
(imposed in lieu of net income taxes) imposed on it, by the jurisdiction
under the laws of which such Lender, such Participant or the Loan Agent (as
the case may be) is organized or is otherwise treated as doing business
(other than a jurisdiction in which such Person is treated as doing
business as a result of its execution and delivery of any Loan Document or
its exercise of its rights or performance of its obligations or the receipt
of income thereunder), (ii) in the case of each Lender and each
Participant, taxes measured by its net income, and franchise taxes (imposed
in lieu of net income taxes) imposed on it, by the jurisdiction in which
such Lender's Lending Office is located or in which such Participant booked
its participation for tax accounting purposes, (iii) in the case of each
Lender, each Participant, and the Loan Agent, Taxes imposed as a result of
such Person or the Loan Agent failing to comply with its obligations under
Section 2.13(g), (iv) in the case of each Lender, each Participant, and the
Loan Agent, as the case may be, United States federal withholding taxes
except to the extent imposed as a result of a change in applicable law,
including income tax conventions, after the Closing Date or, with respect
to an assignment, acquisition, participation, designation of a different
office or jurisdiction for purposes of receiving or paying amounts
hereunder, or the appointment of a Loan Agent, the effective date thereof,
except (x) to the extent that such Person's predecessor was entitled to
such amounts (or in the case of a designation of a new jurisdiction, to the
extent such Person was entitled to such amounts with respect to its prior
jurisdiction) or (y) in the case of an assignment or change of lending
office pursuant to Section 2.13(g), and (v) Taxes to the extent imposed as
a result of the gross negligence or willful misconduct of the Loan Agent,
such Lender or any of their Affiliates (all such non-excluded Taxes being
referred to as "Indemnified Taxes" and all Taxes listed in clauses (i)
through (v) of this clause (a) being referred to as "Excluded Taxes"). If
any Indemnified Taxes shall be required by law to be deducted from or in
respect of any sum payable under any Loan Document to any Lender or the
Loan Agent (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable
to additional sums payable under this Section 2.13) such Lender, or the
Loan Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrowers
shall make such deductions, and (iii) the Borrowers shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable law.
(b) In addition, the Borrowers agree to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges
or similar levies of the United States or any political subdivision thereof
or any applicable foreign jurisdiction, and all liabilities with respect
thereto, which arise from any payment made under any Loan Document or from
the execution, delivery or registration of, or otherwise with respect to,
any Loan Document excluding, in each
37
case, such amounts that result from an assignment, grant of a
participation, transfer or designation of a new Lending Office or other
office for receiving payments under any Loan Document unless (x) the same
takes place in connection with an Event of Default (so long as such Event
of Default is continuing) or at Borrower's written request (collectively,
"Other Taxes") to the Loan Agent for the account of the affected party or
(y) in the case of an assignment or change of lending office pursuant to
Section 2.13(g).
(c) The Borrowers will indemnify each Lender and the Loan Agent
for the full amount of Indemnified Taxes or Other Taxes, without
duplication, (including any Taxes imposed by any jurisdiction on amounts
payable under this Section 2.13) paid by such Lender or the Loan Agent (as
the case may be) and any liability (including for penalties, interest and
expenses) arising therefrom or with respect thereto. This indemnification
shall be made to the Loan Agent for account of the relevant Lender or the
Loan Agent, as the case may be, within 30 days from the date such Lender or
the Loan Agent (as the case may be) makes written demand therefor (with a
copy to the Loan Agent if made by a Lender, and accompanied by a statement
setting forth the basis for such taxation and the calculation of the amount
thereof in reasonable detail).
(d) Within 30 days after the date of any payment of Indemnified
Taxes or Other Taxes, the Borrowers will furnish to the Loan Agent the
original or a certified copy of a receipt evidencing payment thereof or
other documentation reasonably satisfactory to the Loan Agent.
(e) Without prejudice to the survival of any other agreement of
the Borrowers hereunder, the agreements and obligations of the parties
contained in this Section 2.13 shall survive the payment in full of the
Obligations.
(f) Each Lender, each Participant and the Loan Agent shall, on or
prior to the Closing Date or on or prior to the date of the Assignment and
Assumption pursuant to which it becomes a Lender or on or prior to the date
such Person becomes a Participant or the Loan Agent, as applicable, and
from time to time thereafter if reasonably requested by the Loan Agent or
the Borrowers, provide the Loan Agent and the Borrowers, with two completed
copies of IRS Form W-8BEN, W-8ECI, W-8IMY, W-9 and/or other applicable
forms, certificates and documents prescribed by the IRS with respect to
United States withholding and/or backup withholding tax with respect to all
payments to be made to such Person under the Loan Documents. In addition,
each Lender, each Participant and the Loan Agent, as the case may be, shall
deliver to the Borrowers and the Loan Agent, notice of any event (other
than a change in applicable law, including income tax conventions)
requiring a change in the most recent form certificates and/or documents
previously delivered by such Person to the Borrowers and the Loan Agent and
any additional, updated or changed forms, certificates or documents. Unless
the Loan Agent and the Borrowers have received forms, certificates, and/or
other documents reasonably satisfactory to them indicating that payments
under the Loan Documents to or for a Non-U.S. Person are not subject to
United States withholding tax or are subject to
38
such tax at a rate reduced by an applicable tax treaty, the Loan Agent or
the Borrowers shall, notwithstanding the provisions of Section 2.13(a), (b)
and (d) and without impairing any obligation of the Borrowers under this
Section 2.13 with respect to such tax, withhold such United States
withholding taxes from such payments at the appropriate rate.
(g) Any Lender claiming any additional amounts payable pursuant
to this Section 2.13 shall use its reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if the making of such a change would
avoid the need for, or reduce the amount of, any such additional amounts
which would be payable or may thereafter accrue and would not, in the sole
determination of such Lender, be otherwise disadvantageous to such Lender.
(h) If the Borrower or Guarantor pays any amount under this
Section 2.13 to a Lender, Participant or the Loan Agent (each, a "Tax
Indemnitee") and such Tax Indemnitee determines in its sole discretion that
it has actually realized in connection therewith a net cash benefit
(including a net cash benefit which the relevant taxing authority applies
to satisfy any liability of such Tax Indemnitee for Taxes) due to any
refund or any reduction of, or credit against, its liabilities for Taxes in
any taxable year, provided that no Event of Default shall have occurred and
be continuing, such Tax Indemnitee shall, to the extent it can do so
without prejudice to the retention of such benefit, pay to the Borrower or
Guarantor (as the case may be) an amount that the Tax Indemnitee shall, in
its sole discretion, determine (subject to confirmation as provided below)
is equal to such net cash benefit which was obtained by Tax Indemnitee in
such year as a consequence of such refund, reduction or credit realized in
connection with the payment of such amount. A Tax Indemnitee shall, upon
written request from the Borrower, provide to the Borrower a letter from
independent accountants selected by the Tax Indemnitee and reasonably
acceptable to the Borrower confirming the accuracy of the Lender's
calculations of the amount of any net benefit determined by the Tax
Indemnitee pursuant to the preceding sentence, provided that the
interpretation of this Agreement or any other Loan Document shall not be
within the scope of the accountants' confirmation. Nothing contained in
this Section 2.13(h) shall be construed as requiring any Tax Indemnitee to
conduct its business or arrange or alter in any respect its Tax or
financial affairs so that it is entitled to receive a refund, reduction or
credit or shall require any Tax Indemnitee to provide to the Borrower or
its agents copies of any Tax returns or other information with respect to
the income, assets or operations attesting to such Tax Indemnitee's
determination. The Borrower shall reimburse such Tax Indemnitee for all
costs and expenses incurred by such Tax Indemnitee in obtaining such
accountants' letter, provided that the accountants' letter confirms, in all
material respects, such Tax Indemnitee's determination.
(i) Borrower shall have no obligation to pay, or indemnify any
Tax Indemnitee for, any amount under this Section 2.13 or for any United
States federal income tax or withholding tax which was required by law to
be deducted or withheld by the Borrower or the Loan Agent from any payment
to or for the benefit
39
of such Tax Indemnitee but which was not deducted or withheld due to the
Borrower's or the Loan Agent's reasonable reliance the withholding forms,
certificates and/or documents theretofore delivered by such Tax Indemnitee
or the Loan Agent pursuant to Section 2.13(f) if such form, certificate
and/or document was inaccurate in any material respect when delivered by
such Tax Indemnitee and/or the Loan Agent and such Tax Indemnitee or the
Loan Agent had Actual Knowledge of such inaccuracy at the time such Tax
Indemnitee or the Loan Agent delivered such form.
(j) If a Tax Indemnitee receives a written claim from any taxing
authority for any Tax for which the Borrower is liable pursuant to Section
2.13 (a "Tax Claim"), such Tax Indemnitee shall promptly notify the
Borrower in writing. If requested by the Borrower in writing within 30 days
after receipt of such Tax Indemnitee's written notice (provided that if a
response to such Tax Claim is due less than 40 days after the Borrower's
receipt of such Tax Indemnitee's notice, the Borrower's request must be
made within 15 days or, if longer, the period ending not later than the
10th day before the day on which the response to such Tax Claim is due),
such Tax Indemnitee shall in good faith contest or, at such Tax
Indemnitee's election, permit the Borrower to contest (unless such contest
involves Taxes not indemnified or paid by the Borrower or Guarantor or, in
such Tax Indemnitee's reasonable, good faith judgment, permitting the
Borrower to contest may have a material adverse effect on such Tax
Indemnitee), in each case in accordance with and to the extent permitted by
applicable law and at the Borrower's expense, such Tax Claim, provided that
no Tax Indemnitee shall have any obligation to commence or continue the
contest of any such Tax Claim unless the following conditions are satisfied
at the time the contest is to be commenced and at all times during the
contest:
(i) no Event of Default shall have occurred and be
continuing,
(ii) contesting such Tax Claim would not result in (A) any
risk of sale, forfeiture, confiscation, seizure or loss of, or the
imposition of a Lien (other than a Lien for the Tax that is the subject of
such contest provided that enforcement of such Lien is stayed until the
final determination of such contest and the Borrower maintains adequate
reserves with respect to such Lien) or (B) any risk of imposition of
criminal liability,
(iii) the aggregate amount of the Taxes that are to be
contested exceeds Twenty-Five Thousand Dollars ($25,000),
(iv) such Tax Indemnitee shall have received a written
confirmation of the Borrower that the Taxes that are the subject of such
Tax Claim are Tax for which the Borrower is liable pursuant to Section
2.13, provided that the Borrower shall not be bound by such confirmation to
the extent that the final determination of the contest articulates
conclusions of law and fact that clearly demonstrate that the
40
Taxes that are the subject of such Tax Claim are not Taxes for which the
Borrower is liable pursuant to Section 2.13,
(v) the Borrower, upon the written request of such Tax
Indemnitee, shall have provided such Tax Indemnitee, at the expense of the
Borrower, with an opinion of counsel selected by such Tax Indemnitee and
reasonably acceptable to the Borrower to the effect that there is a
substantial basis in law and fact to contest such Tax Claim and a realistic
expectation that a contest of such Tax Claim would be successful,
(vi) if such Tax Indemnitee decides to contest such Tax
Claim by paying the Taxes that are the subject of such Tax Claim and taking
action to obtain a refund thereof, the Borrower shall have made an
interest-free advance to such Tax Indemnitee in an amount equal to the
amount of those Taxes and shall have delivered to such Tax Indemnitee a
written undertaking to indemnify such Tax Indemnitee and its Affiliates on
an after-tax basis for any adverse Tax consequences (taking into account
all relevant Tax benefits and Tax detriments) to such Tax Indemnitee or any
of its Affiliates resulting from such interest-free advance, and
(vii) the Borrower shall be paying, on demand and on an
after-tax basis, all reasonable costs and expenses incurred by such Tax
Indemnitee or the Loan Agent with the conduct of such contest (including,
without limitation, reasonable attorneys' and accountants' fees and
disbursements).
(k) Subject to Section 9.2(c)(2), a Participant will be entitled
to the benefits and subject to the requirements of this Section 2.13 to the
same extent as if such Person were a Lender.
SECTION 2.14 PRO RATA TREATMENT AND PAYMENTS. Each Borrowing by either
Borrower from the Lenders hereunder, and each payment by either Borrower on
account of any reduction of the Commitments of the Lenders shall be made pro
rata according to the respective Commitments of the relevant Lenders. Each
payment (including each prepayment) by either Borrower on account of principal
of and interest on or other amounts in respect of the Loans shall be made pro
rata according to the respective outstanding principal amounts of the Loans then
held by the Lenders (except as otherwise provided in Section 2.10, 2.11, 2.13 or
9.4).
ARTICLE III
CONDITIONS TO CLOSING AND FUTURE FUNDINGS
SECTION 3.1 CONDITIONS PRECEDENT. The effectiveness of this Agreement
and the several obligations of the Lenders to make the Loans requested to be
made on each Funding Date are subject to the satisfaction or waiver of all of
the following conditions precedent on or before such Funding Date:
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(a) Certain Documents. On or before the first Funding Date, the
Loan Agent and the Initial Lender shall have received each of the
following, each dated appropriately:
(i) this Agreement, duly executed and delivered by the
parties hereto;
(ii) the Notes duly executed by the Borrowers and conforming
to the requirements set forth in Section 2.4(d) hereof;
(iii)the documents described in clauses (i), (ii), and (iii)
of the definition of "Collateral Documents", duly executed and delivered by
the parties thereto;
(iv) the favorable opinions of (A) Skadden, Arps, Slate,
Meagher & Flom LLP and Vedder, Price, Kaufman & Kammholz, P.C., counsel to
America West, (B) Arnold & Porter, counsel to US Airways and the Guarantor,
(C) General Counsel of America West in form and substance satisfactory to
the Loan Agent and each Lender and (D) General Counsel of US Airways and
the Guarantor;
(v) a copy of the articles or certificate of incorporation
of each of the Borrowers and the Guarantor, certified as of a recent date
by the Secretary of State of the state of organization of such Person,
together with a "long-form" certificate of such official attesting to the
good standing of such Person;
(vi) a certificate of each of the Borrowers and the
Guarantor signed on behalf of such Person by its Secretary or an Assistant
Secretary certifying (A) the names and true signatures of each officer of
such Person who has been authorized to execute and deliver each Loan
Document required to be executed and delivered by or on behalf of such
Person hereunder or thereunder, (B) the by-laws of such Person as in effect
on the date of such certification, (C) the resolutions of such Person's
board of directors approving and authorizing the execution, delivery and
performance of each Loan Document to which it is a party and (D) that there
have been no changes in the certificate of incorporation of such Person
from the certificate of incorporation delivered pursuant to the immediately
preceding clause;
(vii) a certificate of each of the Borrowers and the
Guarantor, signed by its duly authorized officer, certifying (i) that all
representations and warranties of such Person contained in Article IV
hereof are true and correct in all material respects on and as of the
Closing Date, before and after giving effect to any Borrowing to be made on
such date and to the application of the proceeds therefrom, and (ii) that
no Default or Event of Default has occurred and is continuing, or would
result
42
from any Borrowing to be made on such date and the application of the
proceeds therefrom; and
(viii) a copy of the ATSB Loan Agreements and of each
counter-guarantee or guarantee delivered thereunder, all in form and
substance satisfactory to the Loan Agent and each Lender.
(b) No Material Adverse Change. On each Funding Date, since the
Effective Date, there shall have been no Material Adverse Change.
(c) Amendments; New Aircraft Transaction. Before the first
Funding Date:
(i) the relevant security agreements for the Cross-Default
Obligations shall have been amended in a manner reasonably satisfactory to
the Loan Agent to provide for cross-collateralization to the Obligations;
(ii) the America West ATSB loan documents shall have been
amended in a manner reasonably satisfactory to the Loan Agent to provide
for the release of any prepayment obligation thereunder to the extent
conflicting with any mandatory prepayment obligation of the Borrowers under
Section 2.6;
(iii) an intercreditor agreement (and any necessary
amendments to the GECC loan and security agreements) consistent with the
MOU and otherwise reasonably satisfactory to the Loan Agent shall have been
entered into with GECC with respect to spare parts and any other Collateral
held in common with GECC (and any necessary amendments to the GECC loan and
security agreements);
(iv) each of the A319/A320/A321 Purchase Agreement and the
A330/A340 Purchase Agreement shall have been amended as contemplated in the
MOU and the other transactions provided for therein shall have been
consummated as set forth therein and Guarantor shall have obtained
Bankruptcy Court approval to assume by Final Order, and shall have assumed,
the A319/A330/A321 Purchase Agreement and the A330/A340 Purchase Agreement,
each, as so amended; all of the foregoing to the reasonable satisfaction of
the Loan Agent;
(v) definitive documentation with respect to the new
aircraft transaction for twenty (20) A350 aircraft shall have been entered
into by all relevant parties, as contemplated in paragraph 4 of the MOU;
(vi) with respect to the Pass-Through Trust Certificates,
Series 2001-1 transactions, all aircraft leases and other assumable
agreements included therein or comprising such transactions
43
shall have been assumed following Bankruptcy Court approval by Final Order,
all to the satisfaction of the Loan Agent;
(vii) the Co-Branded Card and Merchant Services Agreement,
dated May 20, 2003, as amended, between US Airways and Bank of America,
shall have been assumed following Bankruptcy Court approval by Final Order;
(viii) all other assumable contracts of US Airways or its
Affiliates which are Debtors with Airbus or its Affiliates shall have been
assumed with Bankruptcy Court Approval by Final Order; and
(ix) on the first Funding Date, the Loan Agent and the
Initial Lender shall have received a certificate of US Airways and the
Guarantor signed by its duly authorized officer as to the assumptions of
contracts referred to in the preceding clauses (iv), (vi), (vii) and
(viii).
(d) Expenses Paid. On each Funding Date, the Obligors shall have
paid all legal fees and expenses of the Loan Agent, the Initial Lender and
the Collateral Agent due and payable on or before such Funding Date if the
Borrowers are responsible therefor under Section 9.3 and have received
reasonably detailed invoices therefor promptly following the relevant
Notice of Borrowing.
(e) Consents, Etc. On each Funding Date, the Borrowers and the
Guarantor shall have received all consents and authorizations required to
be received by them to be able to execute, deliver and perform, in all
material respects, their obligations under the Loan Documents to which any
of them is, or shall be, a party.
(f) No Illegality. On each Funding Date, no law or regulation
shall be applicable that restrains, prevents or imposes materially adverse
conditions upon the transactions contemplated hereby.
(g) Representations and Warranties of Obligors. On each Funding
Date, all representations and warranties of each Borrower and of the
Guarantor set forth in Article IV hereof shall be true and correct in all
material respects on and as of such Funding Date, both before and after
giving effect to any Borrowing to be made on such date and to the
application of the proceeds therefrom as though made on and as of such date
(except to the extent such representations and warranties by their terms
expressly relate to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects on and
as of such earlier date).
(h) No Event of Default. On each Funding Date, no Event of
Default or Default shall have occurred and be continuing, or would result
from the Borrowing to be made on such date and the application of the
proceeds therefrom.
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(i) Corporate and Other Proceedings. On the first Funding Date,
all corporate and other proceedings, and all documents, instruments and
other legal matters in connection with the transactions contemplated hereby
shall be satisfactory in form and substance to the Loan Agent.
(j) Chief Executive Officer. On the first Funding Date, W.
Douglas Parker shall be the Chief Executive Officer of the Guarantor.
(k) Additional Investments. On the first Funding Date, Guarantor
shall have received one or more unrestricted equity investments in an
aggregate amount equal to not less than $375 million and a cash payment of
not less than $125 million from one or more sources in addition to the
liquidity amounts described in the Business Plan.
(l) Effective Date. On or before the first Funding Date, the
Effective Date shall have occurred.
(m) Pro Forma Balance Sheet; Financial Statements. On the first
Funding Date, the Lenders shall have received (i) the Pro Forma Balance
Sheet and (ii) the financial statements referred to in Section 4.3(b).
(n) Lien Searches. On each Funding Date, the Loan Agent shall
have received, if it desires, the results of a recent UCC lien search in
each appropriate jurisdiction and FAA liens search, and in each case, such
search shall reveal (1) no Liens other than those listed in Section 5.13 or
otherwise permitted by Section 5.13 and (2) no Liens on any material
portion of the Collateral except in respect of Liens permitted on the
Collateral by Section 5.13 and not otherwise prohibited under the
Collateral Documents.
(o) Filings, Registrations and Recordings. On each Funding Date,
each document (including any Uniform Commercial Code financing statement)
required by the Collateral Documents or under law or reasonably requested
by the Loan Agent to be filed, registered or recorded in order to create in
favor of the Loan Agent, for the benefit of the Lenders, a perfected Lien
on the Collateral described therein, prior and superior in right to any
other Person (other than with respect to Liens expressly permitted by
Section 5.13), shall have been delivered to the Loan Agent in proper form
for filing, registration or recordation.
(p) Plan of Reorganization; Confirmation Order; Effective Date of
Merger. On the first Funding Date, the Confirmation Order confirming the
Plan of Reorganization (i) shall have been provided to the Loan Agent and
(ii) shall be in full force and effect and shall not have been reversed or
modified and shall not be stayed or subject to a motion to stay, and the
Confirmation Order shall have become a Final Order. The Plan Effective Date
and the Effective Time (as defined in the Merger Agreement) shall have
occurred. On the First Funding Date, the Loan Agent and the Initial Lender
shall have received a certificate of each of the Borrowers and the
Guarantor, signed by its duly authorized officer, certifying to the effect
of the
45
preceding sentence and clause (ii) of the second preceding sentence. All
claims arising under or with respect to the A321 Airbus Financings and all
claims arising under or with respect to the Pass-Through Trust
Certificates, Series 2001-1 transactions shall have been allowed under the
Plan and shall be unimpaired and reinstated thereunder, in form and
substance reasonably acceptable to the Loan Agent.
(q) Concerning the Collateral.
(i) On each Funding Date, Collateral Agent shall have
received (or shall hold from prior closings) a broker's report and current
insurance certificate confirming the insurance coverages on the Collateral
which are required by the terms of the Collateral Documents.
(ii) On the first Funding Date, Borrower shall have obtained
from each Person with any interest in the real property and/or the
improvements thereon at each Designated Location (whether as fee owner,
landlord, tenant, ground lessor, mortgagee, leasehold mortgagee,
beneficiary of deed of trust, beneficiary of leasehold deed of trust or
otherwise), a waiver of any and all right or interest that such Person may
otherwise have in the Pledged Spare Parts and such Person's consent, if
applicable, to access by the Collateral Agent, and/or any Lender or any
representative of any of them to the premises in connection with the
exercise of any rights or remedies under or pursuant to the Spare Parts
Mortgage and Security Agreement (in each case, in form and substance
satisfactory to the Collateral Agent).
(r) Concerning the ATSB Loan Agreements. On or before the First
Funding Date, the warrant for the purchase of 386,925 shares of common
stock of the Guarantor shall have been delivered to AFS Cayman Limited.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Loan Agent and the Lenders to enter into this Agreement,
each of the Obligors jointly and severally represents and warrants to the Loan
Agent and the Lenders, on and as of the Closing Date and on and as of each date
as required by Section 3.1, as provided below in Sections 4.1 through 4.13,
that:
SECTION 4.1 ORGANIZATION, POWERS, QUALIFICATION; AIR CARRIER LICENSES,
FRANCHISES AND PERMITS.
(a) Each Obligor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. As
of the Closing Date, each Borrower is Wholly-Owned by the Guarantor. Each
Obligor has all requisite corporate power and authority (i) to carry on its
business as now conducted, and (ii) to enter into the Loan Documents to
which it is a party and to carry out the transactions contemplated hereby
and thereby.
46
(b) Each Obligor is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary
to carry out its business and operations, except in jurisdictions where the
failure to be so qualified or in good standing could reasonably be expected
to result in a Material Adverse Effect.
(c) Each Borrower is an "air carrier" within the meaning of Title
49 and holds a certificate under Sections 41102 of Title 49.
(d) Each of the Borrower and any other Obligor engaged in
operations as an "air carrier" is a "citizen of the United States" within
the meaning of Section 40102(a)(15) of Title 49, as interpreted by the
United States Department of Transportation (a "United States Citizen") and
holds an air carrier operating certificate issued pursuant to Chapter 447
of Title 49 for aircraft capable of carrying 10 or more individuals or
6,000 pounds or more of cargo. Each Obligor possesses all necessary
certificates, franchises, licenses, permits, rights and concessions and
consents which are material to the conduct of its business and operations
as currently conducted (including in the case of each Obligor engaged in
operations as an "air carrier", the operation of the routes flown by it), a
true and complete list of which are set forth on Schedule 4.1(b) to the
ATSB Loan Agreements.
(e) The Borrowers possess all necessary franchises, licenses, and
permits necessary to authorize the Borrowers to lawfully engage in air
transportation and to carry on scheduled commercial passenger service as
currently conducted, except where the failure to so hold any such
franchise, license, or permit could not reasonably be expected to have a
Material Adverse Effect.
SECTION 4.2 AUTHORIZATION OF BORROWING, ETC.
(a) Each Obligor has duly authorized by all necessary corporate
action the execution, delivery and performance of the Loan Documents to
which it is a party. The execution, delivery and performance by each
Obligor of the Loan Documents to which it is a party and the consummation
of the transactions contemplated by the Loan Documents to which it is a
party do not and will not (i) (A) violate any provision of any law or any
governmental rule or regulation or order applicable to or binding on such
Obligor, (B) violate any provision of the Certificate or Articles of
Incorporation or Bylaws of such Obligor, (C) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of such Obligor or any of its
Subsidiaries except to the extent of any such violation, conflict, breach,
default, or imposition of Lien (of which no Obligor has Actual Knowledge)
which could not reasonably be expected to have a Material Adverse Effect,
or (D) result in or require the creation or imposition of any Lien on any
of the Collateral (except as permitted in the applicable Collateral
Document) or on any other property (except as permitted under Section 5.13
hereof), or (ii) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of such Obligor or
any of its Subsidiaries, except for such approvals or consents which will
have been obtained on or before the
47
Closing Date, except for any such approval or consent under a Contractual
Obligation and the failure to obtain which could not reasonably be expected
to result in a Material Adverse Effect.
(b) The execution, delivery and performance by each Obligor of
the Loan Documents to which it is a party and the consummation of the
transactions contemplated by the Loan Documents to which it is a party and
the use of the proceeds of the Loans do not and will not require any
registration with, consent or approval of, or notice to, or other action
to, with or by, any federal, state or other Governmental Authority or
regulatory body or any other Person which is required to be obtained or
made on or prior to the Closing Date and which has not previously been
obtained or made.
(c) Each Obligor has duly executed and delivered each of the Loan
Documents to which it is party and each such Loan Document is the legally
valid and binding obligation of such Obligor, enforceable against such
Obligor in accordance with its respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
or other similar laws relating to or affecting the enforcement of
creditors' rights generally, including materiality, reasonableness, good
faith and fair dealing, and by general principles of equity (regardless of
whether considered in a proceeding in equity or at law).
(d) No part of the proceeds of the Loans will be used, directly
or indirectly, for any purpose that entails a violation of Regulations U or
X of the Federal Reserve Board.
SECTION 4.3 FINANCIAL CONDITION. Each Obligor has heretofore delivered
to the Lenders the following financial statements and information:
(a) The unaudited pro forma consolidated balance sheet of the
Guarantor and its consolidated Subsidiaries for the Fiscal Years 2005
through 2008 (including the notes thereto) (the "Pro Forma Balance Sheet"),
which has been prepared giving effect (as if such events had occurred on
such date) to (i) the occurrence of the Effective Time (as defined in the
Merger Agreement), (ii) the Loans to be made on the Closing Date and the
use of proceeds thereof and (iii) the payment of fees and expenses in
connection with the foregoing. The Pro Forma Balance Sheet was prepared in
good faith based upon assumptions believed to be reasonable at the time
made, assuming that the events specified in the preceding sentence had
actually occurred at such date.
(b) (i) The audited consolidated balance sheets of US Airways and
Guarantor as at December 31, 2004 and the related consolidated statements
of income, stockholders' equity and cash flows of US Airways and Guarantor
for the Fiscal Year then ended, (ii) the unaudited consolidated balance
sheets of US Airways and Guarantor as at June 30, 2005 and the related
unaudited consolidated statements of income, stockholders' equity and cash
flows of US Airways and Guarantor for the six months then ended, and (iii)
audited consolidated
48
balance sheets of AWA Holdings and America West as at December 31, 2004,
and the related consolidated statements of income, stockholders' equity and
cash flows of AWA Holdings and America West for the Fiscal Year then ended,
and (iv) the unaudited consolidated balance sheets of AWA Holdings and
America West as at June 30, 2005 and the related unaudited consolidated
statements of income, stockholders' equity and cash flows of AWA Holdings
and America West for the six months then ended. All such consolidated
statements were prepared in conformity with GAAP and fairly present the
consolidated financial position of the applicable Obligor as at the
respective dates thereof and the consolidated results of operations and
cash flows of such Obligor for each of the periods then ended subject, in
the case of the unaudited consolidated statements, to year-end audit and
adjustments. Except as disclosed in writing to the Loan Agent prior to the
date of this Agreement, neither Obligor has any contingent liability or
liability for taxes, long-term lease or unusual forward or long-term
commitment (A) that is not reflected in the foregoing consolidated
financial statements (or, in the case of the Borrowers, in the most
recently delivered consolidated financial statements delivered pursuant to
Section 5.1) or the notes thereto and (B) which in any such case would
result in a Material Adverse Effect.
(c) After giving effect to the Consummation of the Plan, (i) the
Obligors taken as a whole are or were Solvent on the First Funding Date
after giving effect to the Borrowings on such date, and (ii) no Obligor has
any material liability, including reasonably likely contingent liability or
liability for taxes, long-term lease or any unusual forward or long-term
commitment of a type required to be reflected in financial statements
prepared in conformity with GAAP, that is not taken into account in the
preparation of the annual report on Form 10-K for the fiscal year ended
December 31, 2004 of such Reporting Obligor.
SECTION 4.4 NO MATERIAL ADVERSE EFFECT. Since the Effective Date there
has not been a Material Adverse Change.
SECTION 4.5 TITLE TO PROPERTIES; LIENS. Each Obligor and its
Subsidiaries have (i) good, sufficient and legal title to (in the case of fee
interests in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), or (iii) good title to (in
the case of all other personal property), all of the properties and assets
reflected in the financial statements referred to in Section 4.3 or, in the most
recent financial statements delivered pursuant to Section 5.1, in each case
except for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under Section 6.5. Except
as otherwise permitted by this Agreement, all such properties and assets are
free and clear of Liens.
SECTION 4.6 LITIGATION; ADVERSE FACTS. Except as set forth in either
Borrowers' or Guarantors Annual Reports on Form 10-K for 2004, as amended
through the Closing Date, or in any Quarterly Report on Form 10-Q or Current
Report on Form 8-K filed by such Borrower or Guarantor with the SEC subsequent
to such Form 10-K (in each case, as amended through the Closing Date) and except
as disclosed in other publicly available filings of either of the Borrowers or
the Guarantor with the SEC
49
or as disclosed in any publicly available filing with the Bankruptcy Court in
the Cases, there are no actions, suits, proceedings, arbitrations or
governmental investigations (whether or not purportedly on behalf of any Obligor
or any of its Subsidiaries) at law or in equity or before or by any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, pending or, to the knowledge of
the Obligors, threatened against any Obligor or any of its Subsidiaries or any
property of any Obligor or any of its Subsidiaries that, if adversely
determined, would have a Material Adverse Effect or seeks to restrain or enjoin
any Obligor from entering into or performing under any Loan Document.
SECTION 4.7 TAX RETURNS. Each Obligor and each of their respective
Subsidiaries have timely filed all Federal income tax returns and all other
material tax returns that are required to be filed by them (or extensions have
been obtained with respect thereto) and have paid all material Taxes shown to be
due pursuant to such returns or pursuant to any assessment received by such
Person, other than (i) any such assessment being contested in good faith through
appropriate proceedings and with respect to which an adequate reserve has been
established by the Obligors or their Subsidiaries to the extent required by GAAP
and (ii) that the Debtors' obligations to pay taxes that relate to a tax period
(or portion thereof) ending on or before the commencement of the Cases and which
first became due and payable after the time of the commencement of the Cases,
have been stayed or enjoined pursuant to the Plan of Reorganization, the
Confirmation Order or the Bankruptcy Code, it being understood that the
exception in clause (ii) above does not affect the Debtors' representation that
they have made adequate provision for such Taxes.
SECTION 4.8 NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default has occurred and is continuing.
SECTION 4.9 GOVERNMENTAL REGULATION. None of the Obligors is (i) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940, or (ii) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 4.10 EMPLOYEE BENEFIT PLANS. Within the last 6 years, each
Plan maintained, contributed to, or required to be contributed to by the
Borrowers or an ERISA Affiliate is in compliance with all applicable laws,
except to the extent failure to so comply could not be reasonably expected,
individually or in the aggregate, to have a Material Adverse Effect. Neither the
Borrowers nor any ERISA Affiliate have incurred any liability under Title IV of
ERISA within the last 6 years which remains unsatisfied nor, to the best of
their knowledge, do the Borrowers reasonably expect to incur any liability under
Title IV of ERISA, which in either event, could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
SECTION 4.11 COMPLIANCE WITH LAWS. Each Obligor and each of its
Subsidiaries is in compliance with all laws, statutes, rules, regulations and
orders binding on or applicable to such Obligor, its Subsidiaries and all of
their respective properties,
50
except to the extent failure to so comply could not reasonably be expected to
have a Material Adverse Effect.
SECTION 4.12 SECURITY DOCUMENTS. Each of the Borrowers has good title
to the Collateral free and clear of Liens other than Liens permitted by Section
5.13 and not prohibited by the applicable Collateral Document. No Person holds
any right or interest in any of the Pledged Spare Parts under the Spare Parts
Security Agreement by virtue of any interest that such person may have in real
property or improvements at any of the Designated Locations (as defined
therein). The Collateral Documents are effective to create in favor of the
Collateral Agent, for the benefit of the Lenders, a legal, valid and enforceable
security interest in the Collateral described therein and proceeds thereof. When
appropriate financing statements, filings and recordings with the FAA, and other
filings and recordings specified on Schedule 4.12, in appropriate form are filed
in the offices specified on Schedule 4.12, the Collateral Documents shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Borrowers in such Collateral and the proceeds thereof, as
security for the Obligations and the Cross-Default Obligations, in each case
prior and superior in right to any other Person (except Liens permitted by
Section 5.13 and not prohibited by the applicable Collateral Document, none of
which are of record except for the Liens of the Senior Mortgages).
SECTION 4.13 CONCERNING THE COLLATERAL.
(a) Section 1110. The Collateral Agent is entitled to the
benefits of Section 1110 of the Bankruptcy Code with respect to the
Specified Engines as provided in the Engine Mortgage and Security Agreement
and to not less than the Minimum 1110 Percentage (determined on the basis
of Appraisal Value as of the Closing Date) of the Rotables included within
the Pledged Spare Parts as provided in the Spare Parts Security Agreement
in the event of a case under Chapter 11 of the Bankruptcy Code in which a
Borrower is a debtor. Defined terms in this paragraph not otherwise defined
herein shall have the respective meanings specified in the Spare Parts
Security Agreement.
(b) Condition. All Pledged Spare Parts are in the condition and
state of repair required under the FAA-approved maintenance program of the
applicable Borrower relating to such Pledged Spare Parts, and no
appliances, parts, interests, appurtenances, accessories or other equipment
of whatever nature which are incorporated or installed in or attached to
such Pledged Spare Parts are leased by the Borrower. Each Pledged Engine is
in the condition and state of repair required under the FAA-approved
maintenance program of Borrower relating to such Engine, and no appliances,
parts, interests, appurtenances, accessories or other equipment of whatever
nature which are incorporated or installed in or attached to any Pledged
Engine are leased by the Borrower.
(c) Location, Identification and Release of Pledged Spare Parts.
All of the Pledged Spare Parts are or will (upon becoming subject to the
Lien of the Mortgage) be maintained by or on behalf of the Borrower at the
Designated
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Locations, subject to Section 3.02 of the Spare Parts Mortgage and Security
Agreement.
(d) Software. (i) Each Borrower owns the Software currently used
by such Borrower to track the location, use and maintenance status of its
spare parts, including the source code and user interfaces associated
therewith, free and clear of any Liens other than Liens permitted under the
Spare Parts Security Agreement, (ii) such Borrower pays no license fees in
respect of such Software to any Person, (iii) no approval or consent by any
Person is required in respect of such Borrower's right to use such Software
or in order to recognize or give effect to the rights granted in the Spare
Parts Mortgage and Security Agreement by the Borrower to the Collateral
Agent in respect of such Software in the Spare Parts Mortgage and Security
Agreement, and (iv) no Person has any contractual right, whether contingent
or otherwise, to terminate such Borrower's right to use such Software.
(e) Records. America West shall maintain its records with respect
to Pledged Spare Parts at Sky Harbor Airport in Phoenix, Arizona, or at an
applicable Designated Location.
(f) Spare Parts. It is the intention of the parties to this
Agreement that all Pledged Spare Parts be "spare parts" as defined in
Section 40102(a)(38) of Title 49 of the United States Code. Each Borrower
represents that it maintains the Pledged Spare Parts for the purpose of
installing the Spare Parts on aircraft, aircraft engines or appliances as
defined in Sections 40102(a)(6), (7) and (11) of the United States Code.
(g) No Event of Loss. To the Borrowers' knowledge, on the First
Funding Date, no Event of Loss has occurred with respect to any Pledged
Engine, or A321 Aircraft subject to an A321 Airbus Financing, and no
circumstance, condition, act or event has then occurred that, with the
giving of notice or lapse of time or both gives rise to or constitutes an
Event of Loss with respect to any Pledged Engine, unless arrangements
satisfactory to the Loan Agent have been made for the Loan Agent to
receive, out of Net Insurance Proceeds or otherwise, the prepayment
envisioned under Section 3.04(a) of the Engine Mortgage and Security
Agreement for Pledged Engines which have suffered an Event of Loss. On each
subsequent Funding Date, No Event of Loss has occurred with respect to any
Pledged Engine, or A321 Aircraft subject to an A321 Airbus Financing, with
respect to which any Obligor or any of its Subsidiaries has not complied in
all material respects with its applicable obligations under the Collateral
Documents and the documents related to the A321 Airbus Financings; and no
circumstance, condition, act or event has occurred that, with the giving of
notice or lapse of time or both gives rise to or constitutes an Event of
Loss with respect to any Pledged Engine, of which the Loan Agent has not
been notified by the Borrowers.
(h) Outstanding Amount. The outstanding principal amount of
Indebtedness secured by the Senior Mortgages is $110,563,891 ($75,563,891
for the Senior Spare Parts Mortgage and $35,000,000 for the Senior Engine
Mortgage).
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SECTION 4.14 REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL AGENT.
The Collateral Agent represents and warrants to the other parties hereto, in its
individual capacity, on and as of the Closing Date and on each date as required
by Section 3.1, that:
(a) Powers and Authorizations. It is a national banking
association duly organized and validly existing in good standing under the
laws of the United States and has full power and authority, in its
individual capacity, to execute and deliver this Agreement and the
Collateral Documents to which it is a party and (assuming the due
authorization, execution and delivery of this Agreement by the other
parties hereto) perform its obligations thereunder. The execution, delivery
and performance by the Collateral Agent of the Loan Documents to which it
is or will be a party have been duly authorized by all necessary action on
its part and do not contravene the Charter or By-laws of the Collateral
Agent; and the Loan Documents to which the Collateral Agent is or will be a
party have been duly authorized, executed and delivered by the Collateral
Agent and constitute the legal, valid and binding obligations, enforceable
against it in accordance with its terms. This Agreement and the other Loan
Documents to which the Collateral Agent is or will be a party, upon the due
execution and delivery hereof, will constitute the legal, valid and binding
obligations of the Collateral Agent in its individual capacity, and the
performance by the Collateral Agent (in its individual or trust capacity,
as the case may be) of any of its obligations hereunder and thereunder does
not contravene any federal law or regulation or contractual restriction
binding on or governing the banking or trust powers of the Collateral Agent
(in its individual or trust capacity, as the case may be);
(b) Litigation. There are no pending (or, to the Collateral
Agent's knowledge, threatened) actions, suits, investigations or
proceedings against or affecting it before any court, arbitrator, or
administrative or governmental body which, individually or in the
aggregate, if decided adversely to the interests of the Collateral Agent
would materially and adversely affect the ability of the Collateral Agent,
either in its individual capacity or as Collateral Agent, as the case may
be, to perform its obligations under this Agreement or any other Loan
Document or which questions or would affect the legality or validity of
this Agreement or such Loan Document;
(c) No Legal Bar. Neither the execution and delivery by the
Collateral Agent of this Agreement or any other Loan Document nor the
consummation by the Collateral Agent of any of the transactions
contemplated hereby or thereby requires or will require the consent or
approval of or the giving of notice to, the registration with, or the
taking of any other action in respect of, any federal governmental
authority or agency governing its banking or trust powers.
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ARTICLE V
COVENANTS
To induce the other parties to enter into this Agreement, each of the
Obligors jointly and severally agrees with the Loan Agent and each Lender that,
as long as any of the Obligations remain outstanding:
SECTION 5.1 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Obligors
will maintain, and cause each of their respective Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. The Obligors will deliver to the Loan Agent:
(a) Financial Statements.
(i) Quarterly Financials: within 60 days after the end of
each fiscal quarter of each Fiscal Year (other than the last quarter of
each Fiscal Year), (a) the unaudited consolidated balance sheets of each of
the Obligors as at the end of such fiscal quarter and the related
consolidated statements of income and stockholders' equity of each such
company for such fiscal quarter and consolidated cash flows of each such
company for the period from the beginning of then current Fiscal Year to
the end of such fiscal quarter, all such financial statements to be in the
form prepared for the management of the Borrowers and certified by the
chief financial officer, controller or treasurer of such company being
fairly stated in all material respects (subject to normal year-end audit
adjustments); provided that delivery of such company's Form 10-Q for such
fiscal quarter shall be deemed to satisfy all of the requirements of this
Section 5.1(a)(i) and in lieu of actual delivery of such Form 10-Q, the
Borrowers may notify the Loan Agent that such report has been filed with
the SEC and that such report is publicly available; and
(ii) Year-End Financials: within 105 days after the end of
each Fiscal Year, (a) the consolidated balance sheets of each of the
Obligors at the end of such Fiscal Year and the related consolidated
statements of income, stockholders' equity and cash flows of such company
for such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year, all in reasonable
detail, and (b) an accountant's report thereon of KPMG LLP or other
independent certified public accountants of recognized national standing
selected by such company, which report shall state that such consolidated
financial statements fairly present the consolidated financial position of
such company as at the dates indicated and the results of their operations
and their cash flows for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years and that the examination by
such accountants in connection with such consolidated financial statements
has
54
been made in accordance with generally accepted auditing standards;
provided that delivery of such company's Form 10-K for such Fiscal Year
shall be deemed to satisfy all of the requirements of this Section
5.1(a)(ii) and in lieu of actual delivery of such Form 10-K, the Borrowers
may notify the Loan Agent that such report has been filed with the SEC and
that such report is publicly available.
(b) Officer's Certificate: together with each delivery of
financial statements of the Obligors pursuant to Section 5.1(a) (or SEC reports
in lieu thereof), an Officer's Certificate of each of the Obligors stating
whether the signer has Actual Knowledge of the existence as at the date of such
Officer's Certificate of any Event of Default or Default, and, if so, specifying
the nature and period of existence thereof and what action the Obligors have
taken, are taking and proposes to take with respect thereto; and
(c) Certain Notices. The Obligors will:
(i) promptly notify the Loan Agent, the Collateral Agent and
each Lender, upon a Responsible Officer of any Obligor obtaining Actual
Knowledge of the occurrence of an event of loss or damage to any equipment
owned or operated by either Borrower that is reasonably expected to result
in receipt of insurance proceeds to be received by a Borrower which are
expected to result in a prepayment under Section 2.6;
(ii) prior to either Borrower consummating any Asset Sale
expected to result in a prepayment under Section 2.6; and
(iii) promptly notify the Loan Agent of any proposed
amendment, waiver or consent with respect to an ATSB Loan Agreement or the
GECC spare parts financing facility of either Borrower, with details of any
such amendment, waiver or consent.
(d) Plan Audits and Liabilities: promptly after (A) an Obligor or
any ERISA Affiliate contacts the IRS or the PBGC for the purpose of
participating in a closing agreement or any voluntary resolution program with
respect to a Plan or Multiemployer Plan which could reasonably be expected to
have a Material Adverse Effect, or (B) a Responsible Officer knows or has reason
to know that any event with respect to any Plan or Multiemployer Plan occurred
that could reasonably be expected to have a Material Adverse Effect, notice of
such contact or the occurrence of such event;
(e) Funding Changes and New Plan Benefits: promptly after the
change, a notification of any increases in the benefits, or change in funding
method, with respect to which an Obligor may have any liability, under any Plan
or Multiemployer Plan or the establishment of any material new Plan or
Multiemployer Plan with respect to which an Obligor may have any liability or
the commencement of contributions to any Plan or Multiemployer Plan to which an
Obligor or any ERISA Affiliate was not
55
previously contributing, except to the extent that such an event could not
reasonably be expected to have a Material Adverse Effect;
(f) Claims and Proceedings: promptly after receipt of written
notice of commencement thereof, notification of all (A) claims made by
participants or beneficiaries with respect to any Plan and (B) actions, suits
and proceedings before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, affecting an Obligor or
any ERISA Affiliate with respect to any Plan, except those which, in the
aggregate, if adversely determined, could not reasonably be expected to have a
Material Adverse Effect;
(g) ERISA Event: promptly after the occurrence of any ERISA Event
(A) that could reasonably be expected to have a Material Adverse Effect or (B)
that relates to the occurrence or existence of an event or condition that could
reasonably be expected to have a Material Adverse Effect, notice of such ERISA
Event; and
(h) Other Information: promptly following request therefor, such
other nonconfidential information regarding the Collateral or the operations,
business affairs, and financial condition of any Obligor, or compliance with the
terms of the Loan Documents, as the Loan Agent or any Lender shall reasonably
request.
SECTION 5.2 CORPORATE EXISTENCE. Except as permitted under Section
5.8, each of the Obligors will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of each Subsidiary of each Obligor and
the material rights (charter and statutory) and franchises of any of them;
provided, that, subject to Section 5.14, neither the Guarantor nor either
Borrower shall be required to preserve any such corporate, partnership or other
existence of any Subsidiary or any such right or franchise, if the chief
executive officer or the board of directors of the Guarantor shall determine in
the exercise of its business judgment that the preservation thereof is no longer
desirable in the conduct of the business of the Obligors and their respective
Subsidiaries taken as a whole.
SECTION 5.3 PAYMENT OF TAXES. The Guarantor and the Borrowers will,
and will cause its Subsidiaries to, pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, all taxes, assessments and
governmental charges levied or imposed upon the Guarantor, either Borrower or
any Subsidiary or upon the income profits or property of the Guarantor, either
Borrower or any Subsidiary; provided, however, that the Guarantor and each
Borrower shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment or governmental charge the amount,
applicability or validity of which is being contested in good faith by
appropriate proceedings and with respect to which an adequate reserve has been
established by the Guarantor or the Borrowers to the extent required by GAAP.
SECTION 5.4 MAINTENANCE OF PROPERTIES; INSURANCE. The Guarantor and
the Borrowers will, and will cause each of its Subsidiaries to, maintain all
properties used or useful in the conduct of its business in good condition,
repair and
56
working order and supply such properties with all necessary equipment and make
all necessary repairs, renewals, replacements, betterments and improvements
thereto, all as in the judgment of the Guarantor and the Borrowers may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Guarantor, either Borrower or any
Subsidiary from discontinuing the operation and maintenance of any such
properties if such discontinuance is, in the good faith judgment of the
Guarantor, the Borrowers or such Subsidiary, as the case may be, desirable in
the conduct of its respective business and shall not impair the ability of the
Guarantor or either Borrower to perform their payment or other material
obligations under the Loan Documents. The Guarantor and each Borrower will
insure and keep insured, and will cause each of its Subsidiaries to insure and
keep insured, with reputable insurance companies, such of their respective
properties, to such an extent and against such risks, and will maintain
liability insurance, to the extent (i) that property of a similar character is
usually so insured by companies engaged in a similar business and owning similar
properties in accordance with good business practice and (ii) with respect to
the Collateral or Cross Collateral, required by any of the Collateral Documents
or those relevant to a Cross-Default Obligation, respectively.
SECTION 5.5 INSPECTION. The Guarantor and each Borrower will, and will
cause its Subsidiaries to, permit any authorized representatives designated by
the Loan Agent to discuss its and their affairs, finances and accounts with its
and their officers upon reasonable notice and at such reasonable times during
normal business hours and as often as may be reasonably requested; provided that
such access to officers shall not be disruptive to the Guarantor or either
Borrower's business, as reasonably determined by the Guarantor and the
Borrowers.
SECTION 5.6 COMPLIANCE WITH LAWS, ETC. Each Obligor will, and will
cause each of its Subsidiaries to, comply with all applicable statutes, rules,
regulations, orders and restrictions of the United States of America, all states
and municipalities thereof, and of any governmental department, commission,
board, regulatory authority, bureau, agency and instrumentality of the
foregoing, in respect of the conduct of their respective businesses and the
ownership of their respective properties, except such as are being contested in
good faith by appropriate proceedings and except for such noncompliance as could
not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.7 FURTHER ASSURANCES. At any time or from time to time
following the request of the Loan Agent, the Obligors will, at their expense,
promptly execute, acknowledge and deliver such further documents and do such
other acts and things as the Loan Agent may reasonably request in order to
effect fully the purposes of the Loan Documents. From the date on which the Cape
Town Convention becomes effective, each of the Obligors, at no cost to the
Lenders, shall enter into such documentation, as reasonably requested by the
Loan Agent and is necessary (i) to establish "international interest(s)" under
the Cape Town Convention, (ii) to enhance the enforceability of the agreements
of the parties established under the Loan Documents under the Cape Town
Convention and shall take, any and all steps as reasonably
57
requested by the Loan Agent and necessary to register such interest(s) in the
International Registry relating thereto.
SECTION 5.8 EMPLOYEE BENEFIT PLANS. Each Obligor will ensure that the
Plans and Multiemployer Plans with respect to which the Obligors may have any
liability are operated in compliance with all applicable laws, except to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
SECTION 5.9 FAA MATTERS; CITIZENSHIP. Each Borrower will at all times
hereunder be an "air carrier" within the meaning of Title 49 and hold a
certificate under 49 U.S.C. Section 41102(a)(1) as currently in effect or as
amended or recodified from time to time. Each Borrower will at all times
hereunder hold an air carrier operating certificate issued pursuant to Chapter
447 of Title 49 for aircraft capable of carrying 10 or more individuals or 6,000
pounds or more of cargo.
SECTION 5.10 DELIVERY OF POST-RECORDING FAA OPINION. Promptly upon the
recording of the Spare Parts Mortgage and Security Agreement and the Engine
Security Agreement with the FAA, the Borrowers will cause Daugherty, Fowler,
Peregrin & Haught, FAA counsel in Oklahoma City, Oklahoma, to deliver to the
Loan Agent and the Borrowers a favorable opinion addressed to each of them as to
such recordation and the lack of filing of any intervening documents creating a
Lien with respect to the Collateral.
SECTION 5.11 SOFTWARE. Each Borrower will maintain a spare parts
inventory tracking system at all times prior to payment in full of the
Obligations.
SECTION 5.12 COMPLIANCE WITH MORTGAGE. The Borrowers will comply with
the terms and provisions of the Collateral Documents.
SECTION 5.13 PROHIBITION ON LIENS. Neither Borrower shall, nor shall
it permit any of its Subsidiaries (other than Airways Assurance Limited LLC or
FTCHP LLC) to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any property or asset of any kind (including any
document or instrument in respect of goods or accounts receivable) of any
Borrower or any of its Subsidiaries (other than Airways Assurance Limited LLC or
FTCHP LLC), whether now owned or hereafter acquired, or any income or profits
therefrom, or file or consent to the filing of any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any state or under any similar recording or notice
statute, except:
(a) Permitted Encumbrances;
(b) (A) Liens existing on the Closing Date on Aircraft Related
Equipment securing Indebtedness used to acquire such Aircraft Related
Equipment, (B) Liens on Aircraft Related Equipment acquired after the
Effective Date created or incurred in connection with the financing of such
Aircraft Related Equipment, (C) Liens on Aircraft Related Equipment and
related property created or incurred in connection with debt financings of
such Aircraft Related Equipment, as
58
contemplated under the A350/A330 Financing Letter Agreement (or any
financing pursuant thereto), the Senior Mortgages, the GE 2001 Credit
Agreement (as defined in the ATSB Loan Agreements), and the GECC RJ
Agreement (as defined in the ATSB Loan Agreements), (D) leases and/or
subleases of Aircraft Related Equipment to any Obligor or any Subsidiary of
an Obligor or any US Airways Express affiliate that is not an Obligor (or a
Subsidiary of an Obligor) and operates such Aircraft Related Equipment for
an Obligor or a Subsidiary of an Obligor pursuant to a services agreement
with such Obligor or Subsidiary, which lease or sublease is entered into in
connection with the debt financing or leasing of such Aircraft Related
Equipment, as applicable, and the assignment of any such lease or sublease
and the proceeds thereof, in the case of a lease, to any Person owed
Indebtedness used to acquire such Aircraft Related Equipment or, in the
case of a sublease, to any Person leasing such Aircraft Related Equipment
to such Obligor or Subsidiary, (E) Liens on Aircraft Related Equipment
securing Permitted Refinancing Indebtedness in respect of Indebtedness
previously secured by such Aircraft Related Equipment in accordance with
subclause (A) or (B) above, including in each case, Liens securing special
facility revenue bonds that finance Aircraft Related Facilities, (F) Liens
incurred or deposits made in the ordinary course of business to secure the
performance of contracts for the purchase of aircraft, (G) Liens in
existence on the Closing Date (1) on aircraft and engines (other than
Pledged Engines) and (2) securing special facility revenue bonds, and (H)
Liens on an Obligor's interest as lessee or sublessor in respect of any
Aircraft Related Equipment or interests related thereto (including without
limitation subleases, refunds or rebates, security deposits, supplemental
rent, reserves, or return condition adjustment payments);
(c) other Liens on assets acquired after the Closing Date
securing or relating to Indebtedness and other liabilities and obligations
in each case not otherwise prohibited under this Agreement in an aggregate
amount not to exceed $5,000,000 at any time outstanding;
(d) Liens described in Schedule 5.13, except to the extent such
Liens cover any of the Collateral;
(e) judgment and attachment Liens not giving rise to an Event of
Default;
(f) Liens on the assets of any entity or on any asset existing at
the time such entity or asset is acquired by an Obligor or a Subsidiary of
an Obligor, whether by merger, consolidation, purchase of assets or
otherwise; provided that such Liens (A) are not created, incurred or
assumed by such entity in contemplation of or in connection with the
financing of such entity's being acquired by an Obligor or a Subsidiary of
an Obligor, (B) were created to secure the financing of Aircraft Related
Equipment or other specific assets, (C) do not extend to any other assets
of any Obligor or Subsidiary of an Obligor other than the assets acquired
with such financing and (D) the Indebtedness secured by such Lien is
permitted pursuant to this Agreement;
59
(g) leases or subleases of real or personal property granted by
any Obligor or Subsidiary of an Obligor to other Persons not interfering in
any material respect with the ordinary conduct of the business of the
Obligors or their Subsidiaries, taken as a whole;
(h) Liens on cash and Cash Equivalents securing (A) reimbursement
obligations in respect of letters of credit issued for the account of any
Obligor or Subsidiary of an Obligor in the ordinary course of business and
consistent with past practice, so long as the aggregate amount of such cash
and Cash Equivalents does not exceed 115% of the maximum available amount
under the secured letters of credit, and (B) reimbursement or other margin
requirements in connection with, in the case of Liens contemplated in this
clause (B), (1) transactions designed to hedge against fluctuations in fuel
costs, entered into in the ordinary course of business, consistent with
past business practice or then current industry practice, and not entered
into for speculative purposes, (2) transactions designed to hedge interest
rates entered into with respect to notional amounts not to exceed actual or
anticipated Indebtedness and not entered into for speculative purposes and
(3) transactions designed to hedge against risks associated with
fluctuations in currencies entered into in the ordinary course of business,
and (C) prepaid fuel and healthcare expenses in the ordinary course of
business and consistent with past practice;
(i) Liens securing the obligations of the Obligors with respect
to or relating to the Indebtedness as provided for in the ATSB Loan
Agreements;
(j) Liens on assets pledged in connection with a Replacement
Secured Financing permitted under the ATSB Loan Agreements;
(k) Liens on assets pledged to secure a Permitted Acquisition
Financing; provided that the Liens attach only to assets acquired in
connection with the acquisition financed by such Permitted Acquisition
Financing;
(l) any renewal or substitution of any Lien for any of the
preceding clauses (b), (d) or (f); provided that any such Liens are not
extended to additional assets; and
(m) any renewal or substitution or (in the case of Clause (i))
amendment of any Lien for any of the preceding clauses (b), (d), (f), (h),
(i), (j) or (k), provided that (i) the Indebtedness secured is not
increased beyond the outstanding amount of such Indebtedness on the Closing
Date, if such Indebtedness was outstanding on the Closing Date and (ii) any
such Lien securing any such Indebtedness outstanding on the Closing Date
are not extended to assets in addition to those subject to such Lien on the
Closing Date, or required on the Closing Date under the security agreement
for such Lien to be subject thereto thereafter, to such Lien;
provided that the Obligors will not create, incur, assume or permit to exist any
Lien permitted under any of clauses (b) through (e) above on any property of an
Obligor
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already constituting Collateral, other than pursuant to the Senior Mortgages and
the Aircraft Mortgages.
SECTION 5.14 MERGER OR CONSOLIDATION. No Obligor shall consolidate
with or into or merge with or into, or enter into another form of corporate
combination with or into, any Person, or, in one or a series of transactions,
convey, lease or transfer all or substantially all its properties and assets to
any Person, unless: (i) either (A) such Obligor, or, if the transaction involves
more than one Obligor, an Obligor, is the surviving entity, or (B) an Obligor is
not the surviving entity and such surviving entity or the Person that acquires
by conveyance, lease or transfer all or substantially all the properties and
assets of an Obligor, shall be a corporation organized and existing under the
laws of the United States of America or any State or the District of Columbia,
and shall expressly assume, by an agreement executed and delivered to the Loan
Agent, in form and substance reasonably satisfactory to the Loan Agent, all of
such Obligor's obligations under the Loan Documents; (ii) immediately before and
after giving effect to such transaction, no Event of Default or Default shall
have occurred and be continuing; and (iii) the Obligors have delivered to the
Loan Agent an Officer's Certificate and an opinion of counsel from counsel
satisfactory to the Loan Agent, in form and substance satisfactory to the Loan
Agent, stating that such transaction and such agreement comply with this Section
and that all conditions precedent herein provided for relating to such
transaction have been complied with and addressing such other matters as may be
reasonably requested by the Loan Agent; provided, however, that no such
transaction or merger, consolidation, corporate combination, conveyance, lease
or transfer shall involve a manufacturer of aircraft or airframes, or an
Affiliate thereof, other than Airbus.
SECTION 5.15 CERTAIN APPROVALS UNDER THE ATSB LOAN AGREEMENT. Neither
Borrower will give its approval or consent to a sale of any right, obligation or
interest under an ATSB Loan Agreement, or any note or loan document referred to
therein (i) pursuant to clause (c) of the last sentence of Section 9.2(a)
thereof, or (ii) involving Tranche B-1.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.1 EVENTS OF DEFAULT. Each of the following events shall be
an Event of Default:
(a) Failure by the Borrowers to pay any installment of principal
of the Loans when due, or in the case of interest, within five Business
Days after the date due, whether at stated maturity, by acceleration, by
mandatory prepayment or otherwise; or (ii) failure by the Borrowers to pay
any other amount due under this Agreement or any other Loan Document within
ten Business Days after the
61
receipt by the Borrowers of written notice from the Loan Agent that such
payment is due or overdue; or
(b) Any representation or warranty by any Obligor in any Loan
Document or in any statement or certificate at any time given by either
Obligor in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which
made, such false representation or warranty is material at the time in
question, and, if curable, the same shall remain uncured for a period in
excess of 30 days (or in the case of any representation or warranty as to
the existence of a Default, 60 days) after the date of written notice
thereof from the Loan Agent to the Borrowers; or
(c) Failure by any Obligor to perform or comply in any material
respect with any term or condition contained in Sections 2.4(f), 5.2 and
5.9 of this Agreement; or
(d) Failure by any Obligor to perform or comply in any material
respect with any term contained in this Agreement or any of the other Loan
Documents (other than any such term referred to in any other subsection of
this Section 6.1), such failure to comply is material at the time in
question, and such failure to comply shall not have been remedied or waived
within 30 days after receipt by the Borrowers of notice from the Loan Agent
of such failure to comply; provided that if such failure to comply is
capable of being corrected and the Borrowers are diligently proceeding to
correct such failure, then there shall be no Event of Default under this
clause (c) unless such failure to comply shall not have been remedied or
waived within 90 days after receipt by the Borrowers of such notice; or
(e) (i) With respect to any Cross-Default Obligation identified
in clause (i) of the definition therein, any of the Obligors shall default
(after the expiration of any applicable grace period) under or in the
performance of any material term, provision or condition contained in any
agreement under which any such Cross-Default Obligation was created or is
governed; or (ii) with respect to any Cross-Default Obligation identified
in clause (ii) of the definition thereof, any material "event of default"
(however described) shall occur and be continuing (after the expiration of
any applicable grace period), and shall not thereafter have been waived,
remedied or cured, under any agreement (as amended or modified from time to
time) under which any such Cross-Default Obligation was created or is
governed; provided, however, that this Section 6.1(e) shall cease to be of
any further force and effect if at any time prior to payment in full of the
Obligations, Airbus or its Affiliates cease to hold at least 51% of the
outstanding principal amount of the Loans.
(f) (i) A court shall enter a decree or order for relief in
respect of any Obligor or any of its Subsidiaries in an involuntary case
under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect; or any other similar
relief shall be granted under any applicable federal or state law; or (ii)
an involuntary case shall be commenced against any Obligor or any of its
Subsidiaries under the Bankruptcy Code or under any other
62
applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having
similar powers over any Obligor or any of its Subsidiaries, or over all or
a substantial part of its property, shall have been entered; or there shall
have occurred the involuntary appointment of an interim receiver, trustee
or other custodian of any Obligor or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of any Obligor or any of its Subsidiaries, and any such event
described in clause (i) above or this clause (ii) shall continue for 90
days unless dismissed, bonded or discharged; or
(g) (i) Any Obligor or any of its Subsidiaries shall have an
order for relief entered with respect to it or commence a voluntary case
under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, or shall consent to
the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian of all or a substantial part of its property; or
any Obligor or any of its Subsidiaries shall make any assignment for the
benefit of creditors; or (ii) any Obligor or any of its Subsidiaries shall
be unable, or shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or the board of
directors of any Obligor or any of its Subsidiaries (or any committee
thereof) shall adopt any resolution or otherwise authorize any action to
approve any of the actions referred to in clause (i) above or this clause
(ii); or
(h) Any order, judgment or decree shall be entered against any
Obligor decreeing the dissolution or split up of such Obligor and such
order shall remain undischarged or unstayed for a period in excess of 60
days; or
(i) Any of the Collateral Documents shall cease, for any reason,
other than discharge of the Lien thereof in accordance with its terms, to
be in full force and effect, or any Borrower or any Affiliate of any
Borrower shall so assert, or any Lien created by any of the Collateral
Documents shall cease, for any reason other than discharge of the Lien
thereof in accordance with its terms, to be in full force and effect, to be
enforceable and of the same effect and priority purported to be created
thereby; or
(j) Any Borrower shall cease to carry and maintain, or cause to
be carried and maintained, insurance on and in respect of the Collateral in
accordance with the requirements of any applicable Collateral Document.
SECTION 6.2 REMEDIES. During the continuance of any Event of Default,
the Loan Agent shall, solely at the request of the Requisite Lenders, by notice
to the Borrowers declare that the Loans, all interest accrued thereon and all
other amounts and Obligations payable under this Agreement and the Loan
Documents to be immediately due and payable, whereupon the Loans, all such
interest and all such amounts and Obligations shall become and be immediately
due and payable, and/or
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declare the Commitments to be terminated, whereupon the Commitment of each
Lender shall be terminated, all without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrowers;
provided, however, that upon the occurrence of the Event of Default specified in
Section 6.1(f) or 6.1(g), the Loans, all such interest and all such amounts and
Obligations shall automatically become and be immediately due and payable, and
the Commitments shall terminate, all without presentment, demand, protest or any
notice of any kind, all of which are hereby expressly waived by the Obligors.
ARTICLE VII
THE LOAN AGENT AND THE COLLATERAL AGENT
The parties hereto agree as follows:
SECTION 7.1 AUTHORIZATION AND ACTION. Each Lender hereby appoints and
authorizes each of the Loan Agent and the Collateral Agent to take such action
as administrative agent and collateral agent, respectively, on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated by such Lender to it as Loan Agent or Collateral Agent by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto, and each of the Loan Agent and the Collateral Agent hereby accepts such
authorization and appointment. As to any matters not expressly provided for by
this Agreement and the other Loan Documents or provided for with specific
reference to this Section 7.1 (including, without limitation, enforcement or
collection of any Note), neither the Loan Agent nor the Collateral Agent shall
be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from action) upon the instructions of the Requisite Lenders and such
instructions shall be binding upon all Lenders; provided, however, that neither
the Loan Agent nor the Collateral Agent shall be required to take any action
which exposes either the Loan Agent or the Collateral Agent to liability or
which is contrary to this Agreement, any other Loan Document or applicable law.
As to any provisions of this Agreement under which action may be taken or
approval given by the Requisite Lenders, the action taken or approval given by
the Requisite Lenders, shall be binding upon all Lenders to the same extent and
with the same effect as if each Lender had joined therein. Each of the Loan
Agent and the Collateral Agent shall be entitled to rely upon any note, notice,
consent, certificate, affidavit, letter, telegram, teletype message, facsimile
transmission, statement, order or other document believed by it to be genuine
and correct and to have been signed or sent by the proper person or persons and,
in respect of legal matters, upon the opinion of counsel selected by the Loan
Agent or the Collateral Agent. Each of the Loan Agent and the Collateral Agent
may deem and treat the payee of the Notes as the owner thereof for all purposes
hereof unless and until a written notice of the assignment or transfer thereof
shall have been filed with the Loan Agent. Any request, authority or consent of
any Person who at the time of making such request or giving such authority or
consent is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note. The Lenders agree and
acknowledge that the Collateral Agent, in addition to being appointed by and
acting on behalf of the Lenders
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hereto, is also (as of the date hereof) being appointed by and acting on behalf
of the lenders party to the Other Loan Agreement. Therefore, the Collateral
Agent is an agent of and is acting for and on behalf of all of the Lenders party
hereto and, in addition, all of the lenders party to the Other Loan Agreement.
SECTION 7.2 AGENT'S RELIANCE, ETC. Neither the Loan Agent nor the
Collateral Agent nor any of their respective Affiliates, directors, officers,
agents or employees shall be liable to any Lender for any action taken or
omitted to be taken by it or by such directors, officers, agents or employees
under or in connection with this Agreement, the Notes or any other Loan
Document, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, each of the Loan Agent
and the Collateral Agent: (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to any
Lender for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such experts; (ii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether oral or written) made in or
in connection with this Agreement, the Notes or any other Loan Document; (iii)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement, the
Notes or any other Loan Document on the part of Guarantor or the Borrowers or to
inspect the property (including the books and records) of Guarantor, the
Borrowers or any of their respective Subsidiaries; (iv) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the Notes or any other Loan
Document, or any other instrument or document furnished pursuant thereto; (v)
shall incur no liability under or in respect to this Agreement, the Notes or any
other Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, facsimile transmission, cable
or telex) believed by it to be genuine and signed or sent by the proper party or
parties; and (vi) may deem and treat each Lender which makes a loan hereunder as
the holder of the indebtedness resulting therefrom for all purposes hereof until
the Loan Agent receives and accepts an Assignment and Assumption entered into by
such Lender, as assignor, and an eligible assignee as provided in Section 9.2
hereof.
SECTION 7.3 AGENT AND AFFILIATES. If and so long as the Loan Agent or
the Collateral Agent shall remain a Lender, the Loan Agent or the Collateral
Agent, as applicable, shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Loan Agent or the Collateral Agent; and the term "Lender" or "Lenders"
shall, unless otherwise expressly indicated, include the Loan Agent and the
Collateral Agent, each in its individual capacity. Unrelated to its role as Loan
Agent or Collateral Agent as set forth herein, the Loan Agent and the Collateral
Agent and their respective Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, and generally engage in any kind of business
with, the Borrowers, Guarantor, any of their respective Subsidiaries and any
Person who may do business with or own securities of the Borrowers, Guarantor,
or any of their respective Subsidiaries, all as if it were not the Loan Agent or
the Collateral Agent, as applicable, hereunder and without any duty to account
therefor to the Lenders.
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SECTION 7.4 REPRESENTATIONS OF THE LENDERS. Each Lender has actively
engaged in the negotiation of all of the terms of this Agreement. Each of the
Loan Agent and the Collateral Agent has no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect to the Borrowers whether coming into its
possession as of the date of this Agreement or at any time thereafter, or to
notify any Lender of any Event of Default except as provided in Section 7.5
hereof. This Agreement and all instruments or documents delivered in connection
with this Agreement have been reviewed and approved by each Lender and none of
the Lenders have relied on the Loan Agent or the Collateral Agent as to any
legal or factual matter in connection therewith or in connection with the
transactions contemplated thereunder.
SECTION 7.5 EVENTS OF DEFAULT. In the event of the occurrence of any
Default or Event of Default, any Lender knowing of such event may (but shall
have no duty to) give the Loan Agent and the Collateral Agent written notice
specifying such Event of Default or other event and expressly stating that such
notice is a "notice of default". Neither the Loan Agent nor the Collateral Agent
shall be deemed to have knowledge of such events unless the Loan Agent or the
Collateral Agent, as applicable, has received such notice, or unless the Event
of Default consists of a failure of payment of principal or interest on the
Note. In the event that the Loan Agent or the Collateral Agent receives such a
notice of the occurrence of an Event of Default, the Loan Agent or the
Collateral Agent, as applicable, shall give written notice thereof to the
Lenders. The Loan Agent and the Collateral Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed in
writing by the Requisite Lenders, provided, however, that, unless and until the
Loan Agent or the Collateral Agent shall have received such direction, the Loan
Agent and the Collateral Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Event of
Default as it shall deem advisable and in the best interest of the Lenders.
SECTION 7.6 LOAN AGENT'S AND COLLATERAL AGENT'S RIGHT TO INDEMNITY.
Except for action expressly required of the Loan Agent or the Collateral Agent
hereunder without instructions from any Person, the Loan Agent and the
Collateral Agent shall be fully justified in failing or refusing to take any
action hereunder on behalf of any Lender unless it shall first be indemnified to
its satisfaction by such Lender against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
SECTION 7.7 INDEMNIFICATION OF LOAN AGENT AND COLLATERAL AGENT. The
Lenders hereby agree to indemnify the Loan Agent and the Collateral Agent and
all of their respective affiliates, directors, officers, employees, advisors and
representatives thereof (to the extent not reimbursed by the Borrowers), ratably
as most recently in effect prior to the date indemnification is sought, from and
against any and all costs, losses, liabilities, claims, damages or expenses
which may be incurred by or asserted or awarded against the Loan Agent or the
Collateral Agent in any way relating to or arising out of this Agreement and/or
the other Loan Documents or any action taken or omitted by the Loan Agent or the
Collateral Agent under this Agreement and/or the other Loan Documents; provided,
however, that no Lender shall be liable for any portion of such
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liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Loan Agent's or the
Collateral Agent's gross negligence or willful misconduct. Without limiting the
foregoing, each Lender agrees to reimburse the Loan Agent and the Collateral
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by the Loan Agent or the Collateral Agent in
connection with the administration, or enforcement of, or the preservation of
any rights under, this Agreement and/or the other Loan Documents, to the extent
that the Loan Agent or the Collateral Agent is not reimbursed for such expenses
by the Borrowers.
SECTION 7.8 SUCCESSOR LOAN AGENT AND COLLATERAL AGENT. Each of the
Loan Agent and the Collateral Agent may with the consent (not to be unreasonably
withheld) of the Lenders and, if no Event of Default has occurred and is
continuing, the Borrowers (or, if an Event of Default has occurred and is
continuing and if legally permissible, upon notice to the Borrowers), resign at
any time by giving written notice thereof to the Lenders and may, at any time,
with or without cause, be removed by the Requisite Lenders acting through the
Loan Agent with, if no Event of Default has occurred and is continuing and if
the Collateral Agent is not in default of any Obligation under the Loan
Documents and if no representation or warranty of the Collateral Agent under the
Loan Documents has proven to be incorrect in any material respect, the consent
(not to be unreasonably withheld) of the Borrowers (or, if an Event of Default
has occurred and is continuing, upon notice to the Borrowers). Upon any such
resignation or removal, the Borrowers shall have the right to appoint a
successor agent, subject to consent of the Lenders. If no successor agent shall
have accepted such appointment within 30 days after (i) the retiring Loan
Agent's or Collateral Agent's, as applicable, giving of notice of resignation or
(ii) the Loan Agent giving notice, if legally permissible, of such removal, the
Loan Agent or the Collateral Agent, as applicable, may, with the consent (not to
be unreasonably withheld) of the Requisite Lenders and, if no Event of Default
has occurred and is continuing, the Borrowers, appoint a successor Loan Agent or
Collateral Agent, as applicable, who shall be willing to accept such
appointment. Upon the acceptance of any appointment as Loan Agent or Collateral
Agent hereunder by a successor Loan Agent or Collateral Agent, such successor
Loan Agent or Collateral Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring or removed Loan
Agent or Collateral Agent, and the retiring or removed Loan Agent or Collateral
Agent shall be discharged from its duties and obligations as agent under this
Agreement. After any Loan Agent's or Collateral Agent's resignation or removal
hereunder as Loan Agent or Collateral Agent, as applicable, the provisions of
this Article 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Loan Agent or Collateral Agent under this Agreement.
SECTION 7.9 COLLATERAL AND GUARANTEE MATTERS. The Lenders irrevocably
authorize and direct the Collateral Agent to release any Lien on the Collateral
as provided for in the Collateral Documents.
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ARTICLE VIII
GUARANTEE
SECTION 8.1 GUARANTEE.
(a) The Guarantor hereby unconditionally and irrevocably
guarantees to the Loan Agent, for the ratable benefit of the Lenders and
their respective successors, indorsees, transferees and assigns, the prompt
and complete payment and performance by the Borrowers when due (whether at
the stated maturity, by acceleration or otherwise) of the Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of the Guarantor hereunder and under
the other Loan Documents shall in no event exceed the amount which can be
guaranteed by the Guarantor under applicable federal and state laws
relating to the insolvency of debtors.
(c) The Guarantor agrees that the Obligations may at any time and
from time to time exceed the amount of the liability of the Guarantor
hereunder without impairing the guarantee contained in this Article VIII or
affecting the rights and remedies of the Loan Agent or any Lender
hereunder.
(d) The guarantee contained in this Article VIII shall remain in
full force and effect until all the Obligations (including contingent
Obligations contained in any Loan Document that survive the termination
thereof) shall have been satisfied by payment in full and the Commitments
shall be terminated.
(e) No payment made by either Borrower or the Guarantor, any
other guarantor or any other Person or received or collected by the Loan
Agent or any Lender from either Borrower, the Guarantor, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of the Guarantor
hereunder which shall, notwithstanding any such payment (other than any
payment made by the Guarantor in respect of the Obligations or any payment
received or collected from such Guarantor in respect of the Obligations),
remain liable for the Obligations up to the maximum liability of the
Guarantor hereunder until the Obligations are paid in full and the
Commitments are terminated.
SECTION 8.2 NO SUBROGATION. Notwithstanding any payment made by the
Guarantor hereunder or any set-off or application of funds of the Guarantor by
the Loan Agent or any Lender, the Guarantor shall not be entitled to be
subrogated to any of the rights of the Loan Agent or any Lender against either
Borrower or any other guarantor or any collateral security or guarantee or right
of offset held by the Loan Agent, the Collateral Agent or any Lender for the
payment of the Obligations, nor shall the Guarantor seek or be entitled to seek
any contribution or reimbursement from either
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Borrower or any other guarantor in respect of payments made by such guarantor
hereunder, until all amounts owing to the Loan Agent and the Lenders by the
Borrower on account of the Obligations (other than contingent obligations
contained in any Loan Document that survive the termination thereof) are paid in
full and the Commitments are terminated. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time when all of the
Obligations (other than contingent obligations contained in any Loan Document
that survive the termination thereof) shall not have been paid in full, such
amount shall be held by the Guarantor in trust for the Loan Agent and the
Lenders, segregated from other funds of the Guarantor, and shall, forthwith upon
receipt by the Guarantor, be turned over to the Loan Agent in the exact form
received by the Guarantor (duly indorsed by the Guarantor to the Loan Agent, if
required), to be applied against the Obligations, whether matured or unmatured,
in such order as the Loan Agent may determine.
SECTION 8.3 AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS. The
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor and without notice to or further
assent by the Guarantor, any demand for payment of any of the Obligations made
by the Loan Agent or any Lender may be rescinded by the Loan Agent or such
Lender and any of the Obligations continued, and the Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Loan Agent or
any Lender, and the Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Loan Agent (or the Requisite Lenders or
all Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the Loan
Agent or any Lender for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Loan Agent nor any Lender shall
have any obligation to protect, secure, perfect or insure any Lien at any time
held by it as security for the Obligations or for the guarantee contained in
this Section 8.3 or any property subject thereto.
SECTION 8.4 GUARANTEE ABSOLUTE AND UNCONDITIONAL. The Guarantor waives
any and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Loan Agent or any Lender
upon the guarantee contained in this Article VIII or acceptance of the guarantee
contained in this Article VIII; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this
Article VIII; and all dealings between the Borrower and the Guarantor, on the
one hand, and the Loan Agent, the Collateral Agent and the Lenders, on the other
hand, likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Article VIII. The Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or the Guarantor with respect to the
Obligations. The Guarantor understands and agrees that the guarantee contained
in this Article VIII shall be construed as a continuing, absolute and
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unconditional guarantee of payment without regard to (a) the validity or
enforceability of any other provisions of this Agreement or any other Loan
Document, any of the Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Loan Agent, the Collateral Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower or any other Person against the Loan Agent, the Collateral Agent or any
Lender, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of a Borrower or the Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Obligations, or of the Guarantor under the guarantee contained in this Article
VIII, in bankruptcy or in any other instance. When making any demand hereunder
or otherwise pursuing its rights and remedies hereunder against the Guarantor,
the Loan Agent, the Collateral Agent or any Lender may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against either Borrower, any other guarantor or any
other Person or against any collateral security or guarantee for the Obligations
or any right of offset with respect thereto, and any failure by the Loan Agent,
the Collateral Agent or any Lender to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Borrower, any other
guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower, any other guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve the Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the Loan
Agent, the Collateral Agent or any Lender against the Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
SECTION 8.5 REINSTATEMENT. The guarantee contained in this Article
VIII shall continue to be effective, or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any of the Obligations is rescinded or
must otherwise be restored or returned by the Loan Agent, the Collateral Agent
or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of either Borrower or the Guarantor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, either Borrower or the Guarantor or any substantial part of
its property, or otherwise, all as though such payments had not been made.
SECTION 8.6 PAYMENTS. The Guarantor hereby guarantees that payments
hereunder will be paid to the Loan Agent without set-off, counterclaim, claim of
recoupment or other defense in Dollars at the office specified in Section
2.9(a).
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 AMENDMENTS, WAIVERS, ETC.
(a) No amendment, modification or waiver of any provision of this
Agreement or any other Loan Document nor consent to any departure by any
Obligor therefrom shall in any event be effective unless the same shall be
in writing and signed by the Requisite Lenders, and then any such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment,
modification, waiver or consent shall, unless in writing and signed by each
Lender, do any of the following:
(i) subject the Lenders to any additional obligations;
(ii) change the scheduled final maturity of the Loans, or
change the amount or date for payment of any date fixed for the payment or
reduction of principal;
(iii) change the principal amount of any Loan (other than by
the payment or prepayment thereof);
(iv) change the rate of interest on any Loan or any fee,
indemnity or other amount payable to any Lender;
(v) change any date fixed for payment of such interest,
indemnity or other amount or fees;
(vi) amend the definition of "Requisite Lenders" or this
Section 9.1(a);
(vii) modify the application of payments to the Loan under
Section 2.9; or
(viii) release all or substantially all of the Collateral or
release the Guarantor from the guarantee contained in Article VIII;
and provided, further, that no amendment, modification, waiver or consent shall,
unless in writing and signed by the Loan Agent in addition to the Persons
required above to take such action, affect the rights or duties of the Loan
Agent under this Agreement or the other Loan Documents.
(b) The Loan Agent may, but shall have no obligation to, with the
written concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of that Lender. Any waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which it was
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given. No notice to or demand on the Borrowers in any case shall entitle
the Borrowers to any other or further notice or demand in similar or other
circumstances.
(c) In connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change") requiring the consent of all
affected Lenders, if the consent of the Loan Agent and of the Requisite
Lenders is obtained, but the consent of other Lenders whose consent is
required is not obtained (any such Lender whose consent is not obtained as
described in this Section 9.1 being referred to as a "Non-Consenting
Lender"), then (i) at the Borrowers' request, the Loan Agent shall have the
right in the Loan Agent's sole discretion (but shall have no obligation) to
purchase from such Non-Consenting Lender, and such Non-Consenting Lender
agrees that it shall, upon the Loan Agent's request, sell and assign to the
Lender that is acting as the Loan Agent, all of the portion of the Loan of
such Non-Consenting Lender for an amount equal to the principal balance of
such portion of the Loan held by the Non-Consenting Lender and all accrued
interest and fees with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment and
Assumption, and (ii) the Borrowers may effect a substitution of the
Non-Consenting Lender pursuant to Section 2.12.
SECTION 9.2 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby, except that (i) the Borrowers may not assign
or otherwise transfer any of their rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or
transfer by the Borrowers without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more entities (each, an "Assignee"),
including by means of a capital markets, private placement or
securitization transaction, all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitments and the
Loans at the time owing to it) and subject to the following additional
conditions:
(A) such Assignee shall not be an airline, a commercial
aircraft operator, an air freight forwarder, an entity engaged in the
business of parcel transport by air, other similar Person, or a
holding company Affiliate of any of the foregoing; and
(B) prior written notice of any such assignment shall
be provided to the Borrowers unless an Event of Default has occurred
and is continuing;
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(C) in the event of an assignment involving a
widespread syndication or offering, if the Guarantor or any Borrower
indicates that the proposed transaction would interfere with its own
debt financing efforts, such Lender agrees to cooperate in good faith
with the Guarantor or such Borrower in order not to hinder the
Guarantor's or such Borrower's attempt to finalize its financing; and
(D) an assignee or participant that acquires its
interest in the Obligations pursuant to or in connection with a
capital markets, private placement, or securitization transaction
pursuant to which ten or more persons acquire interests in the
Obligations shall not be entitled to the benefits of Section 2.13.
(ii) Assignments shall be subject to the additional
condition that the parties to each assignment shall execute and deliver to
the Loan Agent an Assignment and Assumption.
(iii) Subject to acceptance and recording thereof pursuant
to paragraph (b)(iv) below, from and after the effective date specified in
each Assignment and Assumption the Assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections 2.10, 2.11, 2.13,
9.3 and 9.4). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section
10.2 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.
(iv) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an Assignee, the Loan Agent
shall accept such Assignment and Assumption and record the information
contained therein in the Register. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(v) The Initial Lender agrees to notify the Borrowers
promptly following the date on which it or its Affiliate has fully
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or partially assigned or sold all or a portion of its rights and
obligations under this Agreement.
(c) (i) Any Lender may, without the consent of the Borrowers or
the Loan Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its
Commitments and the Loans owing to it); provided that (A) such Participant
shall not be an airline, a commercial aircraft operator, an air freight
forwarder, an entity engaged in the business of parcel transport by air,
other similar Person, or a holding company Affiliate of any of the
foregoing, (B) such Lender's obligations under this Agreement shall remain
unchanged, (C) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (D) the
Obligors, the Loan Agent, and the Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the
sole right to enforce this Agreement. Subject to paragraph (c)(ii) of this
Section, the Borrowers agree that, if its interest is entered in the
Register, each Participant shall be entitled to the benefits of Sections
2.10, 2.11, 2.13, 9.3 and 9.4 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.5 as though it were a Lender,
provided such Participant shall be subject to Section 9.7 as though it were
a Lender.
(ii) Borrowers shall not be required to provide, and a
Participant shall not be entitled to receive any greater payment under
Section 2.10, 2.11 or 2.13 than the Borrowers would have been required to
pay and the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrowers' prior
written consent. Any Participant shall not be entitled to the benefits of
Section 2.13 unless such Participant complies with Section 2.13(f).
(d) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to
any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any
of its obligations hereunder or substitute any such pledgee or Assignee for
such Lender as a party hereto.
(e) The Obligors agree to cooperate with the efforts of the
Initial Lender to engage in a transfer or sell-down transaction as
envisioned in this Section 9.2, including by means of restructuring the
Loan Documents into tranches (not all of which need to be secured by the
Collateral), restructuring the Loan Documents into a capital markets style
indenture, cooperating in reasonable due
74
diligence meetings and investor phone calls, providing accountant comfort
letters and legal opinion reliance letters, and assisting with the
reasonable requests of rating agencies and investors, all at the cost of
the Initial Lender for the reasonable out-of-pocket expenses of Borrower in
cooperating as provided in this subparagraph. Without limiting the
generality of the foregoing, as part of the cooperation of the Obligors, if
requested by the Initial Lender in connection with a transfer or sell down
transaction as envisioned in this Section 9.2, the Loan Documents shall be
"marked-to-market" and amended accordingly, solely to reflect any
prepayment premiums or make-whole amounts or other prepayment terms and
conditions which are at the time customary for comparable financings in the
relevant markets, as determined in the opinion of two investment banks, one
selected by the Borrowers and the other by the Loan Agent, and if such
banks fail to agree on such prepayment premiums or make-whole amounts or
other prepayment terms and conditions, then a third investment bank
mutually selected by the Borrowers and the Loan Agent shall make such
determination.
SECTION 9.3 COSTS AND EXPENSES. Whether or not the first Funding Date
occurs, the Obligors agree to pay within ten Business Days (or as provided in
Section 3.1(d)) following receipt of a reasonably detailed invoice therefor (i)
all reasonable out-of-pocket costs and expenses (including reasonable legal fees
and expenses of one primary outside counsel and one special FAA counsel)
incurred by the Initial Lender, the Loan Agent and the Collateral Agent in
connection with the negotiation, preparation, execution and delivery of the Loan
Documents, and all documents relating thereto, (ii) all reasonable out-of-pocket
costs and expenses (including reasonable legal fees and expenses of one primary
outside counsel and one special FAA counsel) incurred by the Loan Agent in
connection with any consents, amendments, waivers or other modifications hereto
or thereto, (iii) all reasonable out-of-pocket costs and expenses incurred by
the Loan Agent in connection with the syndication of the Loans (if any), and
(iv) all reasonable out-of-pocket costs and expenses (including reasonable legal
fees and expenses) incurred by the Loan Agent and the Lenders in enforcing any
Obligations of, or in collecting any payments due from, the Borrowers hereunder
or under the other Loan Documents.
SECTION 9.4 INDEMNITIES. Whether or not the transactions contemplated
hereby shall be consummated, the Obligors agree to defend, indemnify, pay and
hold harmless the Loan Agent, the Lenders, and their respective Affiliates,
officers, directors, employees, agents and controlling Persons (collectively
called the "Indemnitees") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including without limitation
the reasonable fees and disbursements of outside counsel for such Indemnitees,
but excluding Taxes) that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner arising out of this Agreement or the other
Loan Documents or the transactions contemplated hereby or thereby (including,
without limitation, the use or intended use of the proceeds of the Loan) or any
breach or default by the Borrowers of any provision of the Loan Documents
(collectively called the "Indemnified Liabilities"); provided that the Obligors
shall not have any obligation to any Indemnitee hereunder with respect to any
75
Indemnified Liabilities to the extent such Indemnified Liabilities (i) arise
from the gross negligence or willful misconduct of an Indemnitee, (ii) are
specifically addressed elsewhere in this Agreement (including, without
limitation, Section 2.10, (iii) arise from breaches by an Indemnitee of any Loan
Document to which it is a party, or (iv) constitute ordinary and usual operating
or overhead expenses of an Indemnitee (excluding, without limitation, costs and
expenses of any outside counsel, consultant or agent). To the extent that the
undertaking to defend, indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Obligors shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any
of them.
SECTION 9.5 RIGHT OF SET-OFF. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
to the fullest extent permitted by law, each Lender is hereby authorized by the
Obligors at any time or from time to time, without notice to the Obligors or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other Indebtedness at any time held or owing by
that Lender to or for the credit or the account of any Obligor against and on
account of the Obligations then due.
SECTION 9.6 JOINT AND SEVERAL LIABILITY; MAXIMUM LIABILITY; WAIVER OF
SUBROGATION.
(a) Each Borrower shall be liable for all amounts due to the
Lenders under this Agreement, regardless of which Borrowers actually
receives the Loans or other extensions of credit hereunder, or the amount
of such Loans received or the manner in which any Lender accounts for such
Loans or other extensions of credit on its books and records. Each
Borrower's liabilities with respect to Loans and extensions of credit made
to it, and each Borrower's liabilities arising as a result of the joint and
several liability of the Borrowers hereunder and under the other Loan
Documents with respect to Loans or other extensions of credit made to any
other Borrowers hereunder, shall be separate and distinct obligations, but
all such liabilities shall be primary obligations of each Borrower. The
joint and several liability of each Borrower shall in all respects be
continuing, absolute, unconditional and irrevocable, in all events and
circumstances, and shall continue in full force and effect until all
Obligations have been paid in full and all Commitments shall have
terminated, and will be paid strictly in accordance with the terms of this
Agreement and each other Loan Document under which they arise, regardless
of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of Lender or any
holder of any Loan or Note with respect thereto.
(b) Notwithstanding any payment made by either Borrower or the
Guarantor hereunder or any set-off or application of funds of either
Borrower or the Guarantor by the Loan Agent or any Lender, neither Borrower
shall be entitled
76
to be subrogated to any of the rights of the Loan Agent, the Collateral
Agent or any Lender against either Borrower or the Guarantor or any
collateral security or guarantee or right of offset held by the Loan Agent,
the Collateral Agent or any Lender for the payment of the Obligations, nor
shall either Borrower seek or be entitled to seek any contribution or
reimbursement from the other Borrower or the Guarantor in respect of
payments made by the Guarantor hereunder, until all amounts owing to the
Loan Agent, the Collateral Agent and the Lenders by the Borrowers on
account of the Obligations are paid in full and the Commitments are
terminated. If any amount shall be paid to either Borrower on account of
such subrogation rights at any time when all of the Obligations shall not
have been paid in full, such amount shall be held by such Borrower in trust
for the Loan Agent, the Collateral Agent and the Lenders, segregated from
other funds of such Borrower, and shall, forthwith upon receipt by such
Borrower, be turned over to the Loan Agent in the exact form received by
such Borrower (duly indorsed by such Borrower to the Loan Agent, if
required), to be applied against the Obligations, whether matured or
unmatured, in such order as the Loan Agent may determine.
(c) Each Borrower shall remain obligated hereunder
notwithstanding that, without any reservation of rights against the other
Borrower or the Guarantor and without notice to or further assent by the
other Borrower or the Guarantor, any demand for payment of any of the
Obligations made by the Loan Agent, the Collateral Agent or any Lender may
be rescinded by the Loan Agent, the Collateral Agent or such Lender and any
of the Obligations continued, and the Obligations, or the liability of any
other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time
to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Loan
Agent, the Collateral Agent or any Lender, and this Agreement and the other
Loan Documents and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or
in part, as the Loan Agent (or the Requisite Lenders or all Lenders, as the
case may be) may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Loan Agent,
the Collateral Agent or any Lender for the payment of the Obligations may
be sold, exchanged, waived, surrendered or released. Neither the Loan
Agent, the Collateral Agent nor any Lender shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as
security for the Obligations or for the guarantee contained in Article VIII
or any property subject thereto.
(d) Each Borrower waives any and all notice of the creation,
renewal, extension or accrual of any of the Obligations and notice of or
proof of reliance by the Loan Agent, the Collateral Agent or any Lender
upon the joint and several liability of the Borrowers and the guarantee
contained in Article VIII or acceptance thereof; the Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
joint and several liability of the Borrowers and the guarantee contained in
Article VIII; and all dealings between the Borrowers and the Guarantor,
77
on the one hand, and the Loan Agent, the Collateral Agent and the Lenders,
on the other hand, likewise shall be conclusively presumed to have been had
or consummated in reliance thereupon. Each Borrower waives diligence,
presentment, protest, demand for payment and notice of default or
nonpayment to or upon the other Borrower or the Guarantor with respect to
the Obligations. Each Borrower understands and agrees that its joint and
several liability hereunder for and with respect to the Obligations of the
other Borrower is continuing, absolute and unconditional without regard to
any circumstance whatsoever which constitutes, or might be construed to
constitute, an equitable or legal discharge of such Borrower for and with
respect to the Obligations of the other Borrower (or of the Guarantor), in
bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against either
Borrower, the Loan Agent, the Collateral Agent or any Lender may, but shall
be under no obligation to, make a similar demand on or otherwise pursue
such rights and remedies as it may have against the other Borrower, the
Guarantor or any other Person or against any collateral security or
guarantee for the Obligations or any right of offset with respect thereto,
and any failure by the Loan Agent, the Collateral Agent or any Lender to
make any such demand, to pursue such other rights or remedies or to collect
any payments from the other Borrower, the Guarantor or any other Person or
to realize upon any such collateral security or guarantee or to exercise
any such right of offset, or any release of the other Borrower, the
Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve a Borrower of any obligation or
liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Loan Agent, the Collateral Agent or any Lender against either Borrower. For
the purposes hereof "demand" shall include the commencement and continuance
of any legal proceedings.
(e) The joint liability of the Borrowers shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any of the Obligations is rescinded or must otherwise
be restored or returned by the Loan Agent, the Collateral Agent or any
Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of a Borrower or the Guarantor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, a Borrower or the Guarantor or any substantial part of
its property, or otherwise, all as though such payments had not been made.
SECTION 9.7 SHARING OF PAYMENTS, ETC. The Lenders hereby agree among
themselves that if any of them shall, whether by voluntary payment, by
realization upon security, through the exercise of any right of set-off or
banker's lien, by counterclaim or cross action or by the enforcement of any
right under the Loan Documents or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code, receive payment or
reduction of a proportion of the aggregate amount of principal, interest, fees
and other amounts then due and owing to that Lender hereunder or under the other
Loan Documents (collectively, except as provided in the immediately following
exception clause, the "Aggregate Amounts Due" to each Lender) which is greater
than the proportion received by any other Lender in respect of the Aggregate
Amounts Due to such other Lender, except by reason of
78
payments that are individual to a particular Lender under Sections 2.10(c),
2.10(e), 2.11, 2.13, 9.3 and 9.4, then the Lender receiving such proportionately
greater payment shall (i) notify the Loan Agent and each other Lender of the
receipt of such payment and (ii) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them, provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of the
Borrowers or otherwise, those purchases shall be rescinded and the purchase
prices paid for such participations shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest. The Obligors
expressly consent to the foregoing arrangement and agrees that any holder of a
participation so purchased may exercise any and all rights of banker's lien,
set-off or counterclaim with respect to any and all monies owing by the Obligors
to that holder with respect thereto as fully as if that holder were owed the
amount of the participation held by that holder.
SECTION 9.8 NOTICES, ETC. Unless otherwise specifically provided
herein, any notice, request or other communication herein required or permitted
to be given shall be in writing and may be personally served or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, or upon receipt
of telefacsimile, or five Business Days after depositing it in the United States
mail with postage prepaid and properly addressed; provided that notices shall
not be effective until received. For the purposes hereof, the address of each
party hereto shall be as set forth under such party's name on Annex A, or (i) as
to the Borrowers and the Loan Agent and the Collateral Agent, such other address
as shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party hereto, such other address as
shall be designated by such party in a written notice delivered to the Loan
Agent and the Collateral Agent.
SECTION 9.9 NO WAIVER; REMEDIES. No failure on the part of any Lender
or the Loan Agent or the Collateral Agent to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.10 GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereto shall be governed by, and construed in
accordance with, the law of the State of New York.
SECTION 9.11 SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.
(a) Any legal action or proceeding with respect to this Agreement
or any other Loan Document may be brought in the courts of the State of New
York or of the United States of America for the Southern District of New
York,
79
and, by execution and delivery of this Agreement, each of the parties
hereto hereby accept for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. The parties
hereto hereby irrevocably waive any objection, including any objection to
the laying of venue or based on the grounds of forum non conveniens, which
any of them may now or hereafter have to the bringing of any such action or
proceeding in such respective jurisdictions.
(b) Each of the parties hereto hereby irrevocably consent to the
service of any and all legal process, summons, notices and documents in any
suit, action or proceeding brought in the United States of America arising
out of or in connection with this Agreement or any of the other Loan
Documents by the mailing (by registered or certified mail, postage prepaid)
or delivering of a copy of such process to such Person in accordance with
the provisions of Section 9.8. Each Obligor agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by law.
(c) Nothing contained in this Section 9.12 shall affect the right
of any party hereto to serve process in any other manner permitted by law
or commence legal proceedings or otherwise proceed against any other party
hereto in any other jurisdiction.
SECTION 9.12 WAIVER OF JURY TRIAL. Each of the parties hereto
irrevocably waives trial by jury in any action or proceeding with respect to
this Agreement or any other Loan Document.
SECTION 9.13 MARSHALING; PAYMENTS SET ASIDE. Neither the Loan Agent,
the Collateral Agent nor any Lender shall be under any obligation to marshal any
assets in favor of the Obligors or any other party or against or in payment of
any or all of the Obligations. To the extent that an Obligor makes a payment or
payments to the Loan Agent for the account of any Lender (each, a "Payee") or
any Payee receives payment from exercise of their rights 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 (i) to
the extent of such recovery, the obligation or part thereof originally intended
to be satisfied, and all 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, and (ii) each Payee shall pay and return
such amount to the Loan Agent as the Loan Agent may be required to disgorge or
otherwise pay to a trustee, receiver or any other party in respect of the
portion of the payment from the Borrowers distributed by the Loan Agent to such
Payee hereunder.
SECTION 9.14 SECTION TITLES. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
80
SECTION 9.15 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are attached to the same
document. Delivery of an executed signature page of this Agreement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all parties
shall be lodged with the Borrowers, the Loan Agent and the Collateral Agent.
SECTION 9.16 SEVERABILITY. In case any provision in or obligation
under this Agreement or any Note shall be invalid, illegal or unenforceable in
any jurisdiction the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 9.17 CONFIDENTIALITY. Each party hereto shall, and shall
procure that its respective officers, employees and agents shall, keep
confidential and shall not, without the prior written consent of the other
parties, disclose to any third party this Agreement, any other Loan Document or
any of the information, reports or documents supplied by or on behalf of such
other party not otherwise publicly available, except that a party shall be
entitled to disclose this Agreement, any other Loan Document, and any such
information, reports or documents:
(i) in connection with any proceeding arising out of or in
connection with this Agreement or any of the other Loan Documents, to the
extent that such party may reasonable consider necessary to protect its
interest; or
(ii) to any potential assignee or transferee of any party's
rights under this Agreement or any of the Loan Documents (and to rating
agencies, underwriters, investors, lenders, placement agents, and other
parties, and their respective counsel, auditors, agents and advisers)
participating in an assignment or participation transaction under Section
10.2 or any other person proposing to enter into contractual arrangements
with any party in relation to this Agreement, any of the other Loan
Documents subject to the relevant party obtaining, in each case to the
extent reasonable and customary, an undertaking from such potential
assignee or transferee or other person in corresponding terms to this
Section 10.18; or
(iii) pursuant to any applicable laws, ordinances,
judgments, decrees, injunctions, writs, rules, regulations, orders,
interpretations, licenses, permits and orders of any competent court,
arbitrator or governmental agency or authority in any relevant
jurisdiction; or
81
(iv) to bank examiners or any other regulatory authority or
rating agencies or similar entities, if requested to do so; or
(v) to its auditors, legal, tax or to other professional
advisers; or
(vi) to its Affiliates and their respective directors,
officers, employees and agents.
SECTION 9.18 APPOINTMENT OF INDENTURE TRUSTEE. The Loan Agent and the
Initial Lender hereby appoint U.S. Bank National Association as Indenture
Trustee under the Aircraft Mortgages. Such appointment to be effected by
delivery of an authorization and direction to the Indenture Trustee.
82
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
AMERICA WEST AIRLINES, INC.
US AIRWAYS, INC
US AIRWAYS GROUP, INC.
By:
------------------------------------
Name: Derek J. Kerr
Title: Chief Financial Officer of
each Person listed above
AIRBUS FINANCIAL SERVICES,
as Initial Lender and Loan Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WELLS FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION,
as Collateral Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
83
ANNEX A
NOTICE ADDRESSES
If to the Borrowers:
America West Airlines, Inc.
400 E. Sky Harbor Blvd.
Phoenix, AZ 85034
Main Telephone: (480) 693-0800
Fax: (480) 693-5155
Attention: Derek J. Kerr
America West Holdings Corporation
111 West Rio Salado Parkway
Tempe, AZ 85281
Main Telephone: (480) 693-0800
Fax: (480) 693-5155
Attention: Derek J. Kerr
US Airways, Inc.
2345 Crystal Drive
Arlington, Virginia 22227
Main Telephone: (703) 872-5050
Fax: (703) 872-5960
Attention: Derek J. Kerr
If to the Initial Lender:
Airbus Financial Services
5th Floor, 6 Georges Dock
I.F.S.C.
Dublin 1, Ireland
Attention: Managing Director
Telephone: 011 3531 790 5500
Facsimile: 011 3531 670 2020
With a copy to:
Airbus North America Holdings, Inc.
198 Van Buren St. Suite 300
Hendon, Virginia 20170
Attn: Vice President - Sales Finance
Telephone: (703) 834-3400
Facsimile: (703) 834-3547
If to the Loan Agent:
Airbus Financial Services
5th Floor, 6 Georges Dock
I.F.S.C.
Dublin 1, Ireland
Attention: Managing Director
Telephone: 011 3531 790 5500
Facsimile: 011 3531 670 2020
With a copy to:
Airbus North America Holdings, Inc.
198 Van Buren St. Suite 300
Hendon, Virginia 20170
Attn: Vice President - Sales Finance
Telephone: (703) 834-3400
Facsimile: (703) 834-3547
If to the Collateral Agent:
Wells Fargo Bank Northwest, National Association
MAC: U1228-120
299 South Main Street, 12th Floor
Salt Lake City, Utah 84111
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
Attention: Corporate Trust Services
85
ANNEX B
LENDING OFFICE
Airbus Financial Services
5th Floor, 6 Georges Dock
I.F.S.C.
Dublin 1
Ireland
ANNEX C
LENDER COMMITMENTS
INITIAL AMOUNTS
TOTAL TRANCHE A TRANCHE B TRANCHE C TRANCHE D TRANCHE E
NAME OF LENDER COMMITMENT COMMITMENT COMMITMENT COMMITMENT COMMITMENT COMMITMENT
- ---------------- ---------- ---------- ---------- ---------- ---------- ----------
AIRBUS FINANCIAL $0 $0 $0 $0 $0 $0
SERVICES
EXHIBIT A
ASSIGNMENT AND ASSUMPTION
Reference is made to the Loan Agreement, dated as of September 27,
2005 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Loan Agreement"), among the Borrowers, the Guarantor,
Airbus Financial Services, as Initial Lender and Loan Agent, and Wells Fargo
Bank Northwest, National Association, as Collateral Agent. Unless otherwise
defined herein, terms defined in the Loan Agreement and used herein shall have
the meanings given to them in the Loan Agreement.
The Assignor identified on Schedule l hereto (the "Assignor") and the
Assignee identified on Schedule l hereto (the "Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee without
recourse to the Assignor, and the Assignee hereby irrevocably purchases and
assumes from the Assignor without recourse to the Assignor, as of the Effective
Date (as defined below), the interest described in Schedule 1 hereto (the
"Assigned Interest") in and to the Assignor's rights and obligations under the
Loan Agreement with respect to those credit facilities contained in the Loan
Agreement as are set forth on Schedule 1 hereto (individually, an "Assigned
Facility"; collectively, the "Assigned Facilities"), in a principal amount for
each Assigned Facility as set forth on Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim and (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Guarantor, the Borrower, any of its Affiliates or any
other obligor or the performance or observance by the Guarantor, the Borrower,
any of its Affiliates or any other obligor of any of their respective
obligations under the Loan Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto.
3. The Assignee (a) represents and warrants that it is legally authorized to
enter into this Assignment and Assumption; (b) confirms that it has received a
copy of the Loan Agreement, together with copies of the financial statements
delivered pursuant to Section 4.3 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption; (c) agrees that it will,
independently and without reliance upon the Assignor, the Loan Agents, the
Collateral Agent or any Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto; (d) appoints and authorizes the Loan Agent or the Collateral Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto as are delegated to
the Loan Agent and the Collateral Agent by the terms thereof, together with such
powers as are incidental thereto; and (e) agrees that it will be bound by the
provisions of the Loan Agreement and will perform in accordance with its terms
all the obligations which by the terms of the Loan Agreement are required to be
performed by it as a Lender including its obligations pursuant to Section
2.13(f) of the Loan Agreement.
4. The effective date of this Assignment and Assumption shall be the Effective
Date of Assignment described in Schedule 1 hereto (the "Effective Date").
Following the execution of this Assignment and Assumption, it will be delivered
to the Loan Agent for acceptance by it and recording by the Loan Agent pursuant
to the Credit Agreement, effective as of the Effective Date (which shall not,
unless otherwise agreed to by the Loan Agent, be earlier than five Business Days
after the date of such acceptance and recording by the Loan Agent).
5. Upon such acceptance and recording, from and after the Effective Date, the
Loan Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to the Effective Date and to the
Assignee for amounts which have accrued subsequent to the Effective Date.
6. From and after the Effective Date, (a) the Assignee shall be a party to the
Loan Agreement and, to the extent provided in this Assignment and Assumption,
have the rights and obligations of a Lender thereunder and under the other Loan
Documents and shall be bound by the provisions thereof and (b) the Assignor
shall, to the extent provided in this Assignment and Assumption, relinquish its
rights and be released from its obligations under the Loan Agreement.
7. This Assignment and Assumption shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
Schedule 1
to Assignment and Assumption with respect to
the Loan Agreement, dated as of September 27, 2005,
among the US Airways, Inc. and America West Airlines, Inc., as Borrowers,
the Guarantor, and Airbus Financial Services, as Initial Lender and Loan Agent,
and Wells Fargo Bank Northwest, National Association, as Collateral Agent
Name of Assignor: ______________________
Name of Assignee: ______________________
Effective Date of Assignment: _________________
Credit Facility Principal Commitment
Assigned Amount Assigned Percentage Assigned
- --------------- --------------- -------------------
$______________ __________________%
[Name of Assignee] [Name of Assignor]
By: By:
---------------------------------- ------------------------------------
Title: Title:
------------------------------ ---------------------------------
Accepted for Recordation in the
Register: Required Consents (if any):
_____________________________________, as US Airways, Inc.
Loan Agent
By: By:
--------------------------------- ------------------------------------
Title: Title:
------------------------------ ---------------------------------
America West Airlines, Inc.
By:
------------------------------------
Title:
---------------------------------
EXHIBIT B
FORM OF PROMISSORY NOTE
[TRANCHE __]
U.S.$_____________ Dated: _____, 2005
Tranche ___
FOR VALUE RECEIVED, the undersigned, US Airways, Inc., a Delaware
corporation, and America West Airlines, Inc., a Delaware corporation
(collectively, the "Borrowers"), HEREBY, JOINTLY AND SEVERALLY, PROMISE TO PAY
to Airbus Financial Services, Inc., as Loan Agent under the Loan Agreement
referred to below ____________ for the account of the Lenders as defined in the
Loan Agreement referred to below), subject to the provisions of Section 2.3(c)
of the Loan Agreement, the principal sum of U.S.$_________ or, if less, the
aggregate outstanding principal amount of all Tranche [___] Loans made by the
Lender to the Borrowers pursuant to the Loan Agreement dated as of September 27,
2005 among the Borrowers, Guarantor and Airbus Financial Services, as the
Initial Lender and Loan Agent, and Wells Fargo Bank Northwest, National
Association, as Collateral Agent (as amended or modified from time to time, the
"Loan Agreement"; the terms defined therein being used herein as therein
defined), plus the amount of accrued interest hereon capitalized and added to
the principal of the Loans pursuant to Section 2.3(a) of the Loan Agreement. The
outstanding principal amount of this Note shall be payable on the date specified
in Section 2.3(b) of the Loan Agreement, subject to the provisions of Section
2.3(c) of the Loan Agreement. The final payment required to be made on this
Promissory Note, after taking into account Section 2.3(c) of the Loan Agreement,
shall be in an amount sufficient to pay in full the accrued and unpaid interest
hereon.
The Borrowers, jointly and severally, subject to the provisions of
Section 2.3 of the Loan Agreement, promise to pay interest on the unpaid
principal amount hereof from the date hereof until such principal amount is paid
in full, at such interest rates, and payable at such times, as are specified in
the Loan Agreement.
Both principal and interest are payable in lawful money of the United
States of America to the Loan Agent, to the account specified in Section 2.9(a)
of the Loan Agreement, in same day funds.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Loan Agreement. The Loan Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified. The obligations of the Borrower under this Promissory Note
and the Loan Agreement are secured by collateral as provided in the Loan
Agreement and in the Collateral Documents.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
3
IN WITNESS WHEREOF, the Borrowers, jointly and severally, have caused
this Promissory Note to be executed and delivered by its duly authorized officer
as of the date and at the place set forth above.
AMERICA WEST AIRLINES, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
US AIRWAYS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
4
TRANCHE ___ PROMISSORY NOTE
Aggregate Outstanding
Principal Amount After
Giving Effect to Loans
Payment Principal Amount Principal Amount of S&P Rating at Made or Payments of
Funding Date Date of Loan Made Loan Repaid Funding Principal Received
- ------------ ------- ---------------- ------------------- ------------- ----------------------
EXHIBIT C
NOTICE OF BORROWING
Airbus Financial Services,
as Loan Agent under the
Loan Agreement referred to below
5th Floor, 6 Georges Dock
I.F.S.C.
Dublin 1
Ireland
Telephone: +353 1 790 5500
Facsimile: +353 1 670 2020
Attention: Managing Director
__________, 2005
Re: AMERICA WEST AIRLINES, INC. AND US AIRWAYS, INC. (the
"Borrowers")
Reference is made to the $89,000,000 Loan Agreement, dated as of September
27, 2005 (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the "Loan Agreement"), among the Borrowers, the
Guarantor, Airbus Financial Services, as Initial Lender and Loan Agent, and
Wells Fargo Bank Northwest, National Association, as Collateral Agent, and
entitled to the benefits thereof. Capitalized terms used herein and not
otherwise defined herein are used herein as therein defined.
The Borrowers hereby give you irrevocable notice, pursuant to Section 2.2
of the Loan Agreement, that the undersigned hereby requests a Borrowing under
the Loan Agreement and, in that connection, sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by Section 2.2
of the Loan Agreement:
(i) The date of the Proposed Borrowing is ________, 200__ (the
"Funding Date"), a date permitted under the applicable provisions of
Section 2.1 of the Loan Agreement.
(ii) The aggregate amount of the Proposed Borrowing is $________.
(iii) The Proposed Borrowing is for Tranche ___ Loans and such
proceeds shall be used in accordance with Section 2.4(f) of the Loan
Agreement.
(iv) As of the date hereof, the corporate credit rating assigned by
S&P to the Guarantor and its consolidated subsidiaries, taken together, is
____.
(v) [For Tranche B Borrowings] [All amounts due and payable under the
A321 Airbus Financings have been paid in full.]
(v) [For Tranche B Borrowings] [All amounts due and payable on the
Funding Date under the A321 Airbus Financings have been, or immediately
following the application of the proceeds of the Proposed Borrowing will
have been, paid in full.]
[(v) [For Tranche C Borrowings] Copies of the invoices for goods and
services referred to in Section 2.1(c) paid 30 or more days before the date
of this Proposed Borrowing not used to support prior Borrowings of Tranche
C Loans, are attached hereto.]
[(v) [For Tranche D Borrowings] All amounts due and payable on or
before September 20, 2005, under the Trust 2001 1C Certificates of US
Airways have been paid in full and received by the holders thereof.]
The undersigned hereby certifies that the following statements shall be
true on the Funding Date:
(i) the representations and warranties of each Borrower and the
Guarantor set forth in Article IV of the Loan Agreement are true and
correct in all material respects on and as of the Funding Date, before and
after giving effect to the Proposed Borrowing and to the application of the
proceeds therefrom as though made on and as of such date, (except to the
extent such representations and warranties by their terms expressly relate
to an earlier date, in which case the representations and warranties shall
have been true and correct in all material respects on and as of such
earlier date); and
(ii) no Event of Default or Default has occurred and is, or would
result from the Proposed Borrowing and the application of the proceeds
therefrom.
AMERICA WEST AIRLINES, INC.
By:
------------------------------------
Name:
----------------------------------
Title: Chief Financial Officer/
President/ Executive Officer
US AIRWAYS, INC.
By:
------------------------------------
Name:
----------------------------------
Title: Chief Financial Officer/
President/ Executive Officer