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LOAN AGREEMENT
Dated as of March 31, 2006
Among
US AIRWAYS GROUP, INC.,
as Borrower,
ITS SUBSIDIARIES FROM
TIME TO TIME PARTY HERETO,
THE SEVERAL LENDERS FROM
TIME TO TIME PARTY HERETO,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
* * *
GE CAPITAL MARKETS, INC.,
as Joint Lead Arranger and Sole Bookrunner
MORGAN STANLEY SENIOR FUNDING, INC.,
as Joint Lead Arranger
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS................1
Section 1.1 Defined Terms.............................................1
Section 1.2 Computation of Time Periods..............................37
Section 1.3 Accounting Terms and Principles..........................37
Section 1.4 Certain Terms............................................37
ARTICLE II THE LOAN.......................................................38
Section 2.1 The Loan.................................................38
Section 2.2 Scheduled Repayment of the Loan..........................38
Section 2.3 Evidence of Debt.........................................38
Section 2.4 Optional Prepayments.....................................39
Section 2.5 Mandatory Prepayments....................................40
Section 2.6 Interest.................................................41
Section 2.7 Fees.....................................................42
Section 2.8 Payments and Computations................................42
Section 2.9 Certain Provisions Governing the Loan....................44
Section 2.10 Capital Adequacy.........................................45
Section 2.11 Taxes....................................................46
Section 2.12 Substitution of Lenders..................................48
ARTICLE III CONDITIONS PRECEDENT TO EFFECTIVENESS..........................48
ARTICLE IV REPRESENTATIONS AND WARRANTIES.................................51
Section 4.1 Organization, Qualification, Subsidiaries, etc...........52
Section 4.2 Authorization of Loan Documents, etc.....................52
Section 4.3 Financial Condition......................................53
Section 4.4 No Material Adverse Change; No Defaults..................54
Section 4.5 Title to Properties; Liens...............................54
Section 4.6 Litigation; Adverse Facts................................54
Section 4.7 Payment of Taxes.........................................54
Section 4.8 Performance of Agreements; Materially Adverse
Agreements...............................................55
Section 4.9 Governmental Regulation..................................55
Section 4.10 Securities Activities....................................55
Section 4.11 Employee Benefit Plans...................................55
Section 4.12 Environmental Protection.................................56
Section 4.13 Disclosure...............................................57
Section 4.14 Compliance with Laws.....................................57
Section 4.15 Indebtedness.............................................57
Section 4.16 Insurance................................................57
Section 4.17 Perfected Security Interests.............................57
Section 4.18 Absence of Labor Disputes................................57
Section 4.19 Compliance with certain Gates............................57
Section 4.20 Slot Utilization.........................................57
Section 4.21 Deposit Accounts and Securities Accounts.................57
ARTICLE V AFFIRMATIVE COVENANTS..........................................58
Section 5.1 Accounting Controls; Financial Statements and Other
Reports..................................................58
Section 5.2 Corporate Existence......................................63
Section 5.3 Payment of Taxes and Claims..............................63
Section 5.4 Maintenance of Properties; Insurance.....................63
Section 5.5 Inspection...............................................64
Section 5.6 Compliance with Laws, Etc................................64
Section 5.7 Remedial Action Regarding Hazardous Materials............64
Section 5.8 Additional Obligors; Collateral..........................65
Section 5.9 Employee Benefit Plans...................................66
Section 5.10 FAA Matters; Citizenship.................................66
Section 5.11 Control of Deposit Accounts and Securities Accounts......67
Section 5.12 Contractual Obligations..................................67
Section 5.13 Slot Utilization.........................................67
Section 5.14 Stock Exchange Listing...................................67
Section 5.15 Further Assurances.......................................68
Section 5.16 Credit Rating............................................68
Section 5.17 Collateral Reports and Appraisals........................68
Section 5.18 Software.................................................69
Section 5.19 Cape Town Convention.....................................69
Section 5.20 Post-Closing Matters.....................................69
ARTICLE VI NEGATIVE COVENANTS.............................................70
Section 6.1 Liens and Related Matters................................70
Section 6.2 Investments..............................................72
Section 6.3 Restricted Payments......................................73
Section 6.4 Financial Covenants......................................74
Section 6.5 Restriction on Acquisitions; Change in Fiscal Year.......75
Section 6.6 Sales-Leasebacks.........................................76
Section 6.7 Transactions with Affiliates.............................76
Section 6.8 Conduct of Business......................................77
Section 6.9 Merger or Consolidation..................................77
Section 6.10 Limitations on Amendments................................78
Section 6.11 No Further Negative Pledges..............................78
Section 6.12 Speculative Transactions.................................78
Section 6.13 Asset Sales..............................................79
Section 6.14 Hazardous Materials......................................79
Section 6.15 ERISA Events.............................................79
ARTICLE VII EVENTS OF DEFAULT..............................................79
Section 7.1 Events of Default........................................79
Section 7.2 Remedies.................................................82
ARTICLE VIII THE ADMINISTRATIVE AGENT.......................................82
Section 8.1 Appointment and Duties...................................82
Section 8.2 Binding Effect...........................................83
Section 8.3 Use of Discretion........................................83
Section 8.4 Delegation of Rights and Duties..........................84
Section 8.5 Reliance and Liability...................................84
Section 8.6 Administrative Agent Individually........................85
Section 8.7 Lender Credit Decision...................................85
Section 8.8 Expenses; Indemnities....................................85
Section 8.9 Resignation of Administrative Agent......................86
Section 8.10 Release of Collateral or Guarantors......................86
Section 8.11 Additional Secured Parties...............................87
ARTICLE IX MISCELLANEOUS..................................................87
Section 9.1 Amendments, Waivers, Etc.................................87
Section 9.2 Assignments and Participations; Successors and
Assigns..................................................89
Section 9.3 Costs and Expenses.......................................91
Section 9.4 Indemnities..............................................91
Section 9.5 Right of Set-Off.........................................92
Section 9.6 Sharing of Payments, Etc.................................92
Section 9.7 Notices..................................................93
Section 9.8 No Waiver; Remedies......................................93
Section 9.9 Governing Law............................................93
Section 9.10 Submission to Jurisdiction; Service of Process...........94
Section 9.11 Waiver of Jury Trial.....................................94
Section 9.12 Marshaling; Payments Set Aside...........................94
Section 9.13 Section Titles...........................................94
Section 9.14 Execution in Counterparts................................94
Section 9.15 Severability.............................................95
Section 9.16 Confidentiality..........................................95
Section 9.17 Independence of Representations, Warranties and
Covenants................................................95
Section 9.18 Electronic Transmissions.................................96
Section 9.19 Non-Public Information...................................97
Section 9.20 Patriot Act Notice.......................................97
Annexes
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Annex A Addresses for Notices
Schedules
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Schedule I Commitments
Schedule 1.1(a) [Intentionally Omitted]
Schedule 1.1(b) Excluded Asset Sales
Schedule 3(m) Landlord Waivers
Schedule 4.1(b) Operating Authority
Schedule 4.1(c) Subsidiaries
Schedule 4.1(d) Obligor Information
Schedule 4.2(c) Consents, Approvals, etc.
Schedule 4.6 Material Litigation
Schedule 4.7(a) Payment of Taxes
Schedule 4.7(b) Government Tax Claims
Schedule 4.11(a) Plans and Multiemployer Plans
Schedule 4.12(b) Hazardous Material Activity
Schedule 4.12(c) Environmental Claims
Schedule 4.15 Indebtedness
Schedule 4.16 Insurance
Schedule 4.19 Gates
Schedule 4.21 Deposit Accounts and Securities Accounts
Schedule 5.20 Post-Closing Matters
Schedule 6.1(a) Permitted Liens
Schedule 6.1(b) Permitted Payment Restrictions
Schedule 6.2 Investments
Schedule 6.6 Sale-Leasebacks
Schedule 6.7(b) Transactions with Affiliates
Exhibits
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Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Note
Exhibit C Form of Aircraft Mortgage
Exhibit D Form of SGR Security Agreement
Exhibit E Form of Security Agreement
Exhibit F Form of Mortgage
Exhibit G Form of Collateral Value Certificate
Exhibit H Form of Guaranty
Exhibit I Form of Slot Utilization Report
Exhibit J Form of Subsidiary Joinder
Exhibit K Form of Landlord Waiver
Exhibit L Form of Notice of Conversion/Continuation
Exhibit M Investment Guidelines
Exhibit N Form of Notice of Borrowing
LOAN AGREEMENT, dated as of March 31, 2006, among US AIRWAYS GROUP,
INC., a Delaware corporation (the "Borrower"), the direct and indirect
Subsidiaries of the Borrower party hereto from time to time, the several banks
and other financial institutions or entities from time to time party to this
Agreement as Lenders, and GENERAL ELECTRIC CAPITAL CORPORATION ("GE Capital"),
as administrative agent for the Lenders (in such capacity, together with its
successors and permitted assigns, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make available for
the purposes specified in this Agreement a term loan facility; and
WHEREAS, the Lenders are willing to make available to the Borrower such
term loan facility 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):
"Account Debtor" means any Person who may become obligated to any
Obligor under, with respect to, or on account of, an Account.
"Accounts" means all "accounts", as such term is defined in the UCC.
"Adjusted Loan Balance" means, at any time, the amount equal to the sum
of (i) the then aggregate outstanding principal amount of the Loan plus (ii) the
amount of all prepayments of the Loan with proceeds of any Asset Sale that
constitutes Eligible Collateral on or after the Closing Date.
"Administrative Agent" has the meaning specified in the preamble to
this Agreement.
"Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Affiliate Transaction" has the meaning specified in Section 6.7(a).
"After-Acquired Gates" means Gates acquired by an Obligor after the
Closing Date in conjunction with After-Acquired Slots.
"After-Acquired Slots" means Slots acquired by an Obligor after the
Closing Date, other than Slots that are used as Permitted Reinvestment
Collateral.
"After-Acquired Section 1110 Equipment" means Section 1110 Equipment
acquired by an Obligor after the Closing Date.
"Aggregate Amounts Due" has the meaning specified in Section 9.6.
"Agreement" means this Loan Agreement.
"Airbus Financing Letter Agreement" means the A350/A330 Financing
Letter Agreement, dated as of September 27, 2005, among US Airways, AWA, the
Borrower, and AVSA, S.A.R.L., or any financing pursuant thereto, as amended,
restated, supplemented or modified.
"Airbus Loan Agreements" means, collectively, the $161,000,000 Loan
Agreement and the $89,000,000 Loan Agreement, each dated as of September 27,
2005, among US Airways, AWA, the Borrower, Airbus Financial Services,
individually and as loan agent, and Wells Fargo Bank Northwest, National
Association, as collateral agent, each as amended, restated, supplemented or
modified.
"Air Carrier" means each of US Airways, AWA, Piedmont and PSA Airlines.
"Aircraft" has the meaning ascribed to it in the Aircraft Mortgage.
"Aircraft Mortgage" means the Aircraft, Engines and Spare Parts
Mortgage and Security Agreement in favor of the Administrative Agent executed or
required herein to be executed by any Obligor in substantially the form of
Exhibit C or otherwise in form and substance reasonably satisfactory to the
Administrative Agent.
"Aircraft Related Equipment" means each Obligor's aircraft fleet
(including engines, airframes, propellers and appliances), spare aircraft
engines and propellers, spare parts, aircraft parts, simulators and other
training devices, 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 Index Margin" means the per annum interest rate from time
to time in effect and payable in addition to the Index Rate applicable to the
Loan, as determined by reference to the definition of "Applicable Margin".
"Applicable LIBOR Margin" means the per annum interest rate from time
to time in effect and payable in addition to the LIBOR Rate applicable to the
Loan, as determined by reference to the definition of "Applicable Margin".
"Applicable Margin" means a percentage equal to (a) during the period
commencing on the Closing Date and ending on the earlier of (i) the next date of
determination that is at least 180 days after the Closing Date and (ii) the date
of determination for the fiscal quarter ending September 30, 2006, the
percentage set forth in the applicable column opposite Level IV in the table set
forth in clause (b) below and (b) thereafter, as of each date of determination
(and until the next such date of determination), a percentage equal to the
percentage set forth below in the applicable column opposite the level
corresponding to the Adjusted Loan Balance as of the last day of the most
recently ended fiscal quarter:
- ----------------------------- --------------------------- ----------------------------- ------------------------------
Level: Adjusted Loan Balance: Applicable Index Margin: Applicable LIBOR Margin:
- ----------------------------- --------------------------- ----------------------------- ------------------------------
I = $600 million 1.50% 2.50%
- ----------------------------- --------------------------- ----------------------------- ------------------------------
II > $600 million and = $750 2.00% 3.00%
million
- ----------------------------- --------------------------- ----------------------------- ------------------------------
III > $750 million and = $900 2.25% 3.25%
million
- ----------------------------- --------------------------- ----------------------------- ------------------------------
IV > $900 million and = 2.75% 3.75%
$1,100 million
- ----------------------------- --------------------------- ----------------------------- ------------------------------
; provided, however, that (i) subject to clause (ii) below, if the
Credit Rating is B1 or better from Moody's and B+ or better from S&P as of the
last day of the most recently ended fiscal quarter, then (A) the Applicable
LIBOR Margin will be the lower of 3.25% and the rate otherwise applicable based
upon the Adjusted Loan Balance and (B) the Applicable Index Margin will be the
lower of 2.25% and the rate otherwise applicable based upon the Adjusted Loan
Balance and (ii) if the Credit Rating is Ba3 or better from Moody's and BB- or
better from S&P as of the last day of the most recently ended fiscal quarter,
then the Applicable LIBOR Margin will be 2.50% and the Applicable Index Margin
will be 1.50%.
Each date of determination for the "Applicable Margin" shall be the
date that is 3 Business Days after delivery by the Borrower to the
Administrative Agent of a new Officer's Certificate pursuant to Section
5.1(b)(iv). Notwithstanding anything to the contrary set forth in this Agreement
(including the then effective Adjusted Loan Balance and the Credit Rating), the
Applicable Margin shall equal the percentage set forth in the appropriate column
opposite Level IV in the table above, effective immediately upon the occurrence
of any Event of Default and for as long as such Event of Default shall be
continuing.
"Appraisal Report" means, with respect to each category of Appraised
Collateral, (i) the Baseline Appraisal and (ii) each subsequent appraisal
pursuant to Section 5.17, each in form and substance reasonably satisfactory to
the Administrative Agent and prepared by an Appraiser, which certifies, at the
time of determination, the current market value of the assets subject to such
appraisal; provided that except as otherwise agreed to by the Administrative
Agent, each Appraisal Report obtained subsequent to the preparation of the
Baseline Appraisal with respect to each category of Appraised Collateral shall
be (A) prepared by the same Appraiser used in the Baseline Appraisal for such
category of Appraised Collateral, unless such Appraiser is no longer providing
appraisals for such type of property or the Administrative Agent determines (if
no Default or Event of Default has occurred and is continuing, with the consent
of the Borrower not to be unreasonably withheld) to change Appraisers and (B) in
any event, based on the same methodologies and assumptions (including, without
limitation, the time period for the disposition of such Appraised Collateral and
the market conditions perceived to exist at the time) used in the Baseline
Appraisal for such category of Appraised Collateral.
"Appraised Collateral" means Spare Engines, Spare Parts, Ground Service
Equipment, Flight Simulators, Real Estate, Slots, Gates, Aircraft and such other
assets as are acceptable to the Administrative Agent in its sole discretion that
constitute Collateral and for which the Obligors elect to obtain Appraisal
Reports.
"Appraised Value" means, with respect to any item of Appraised
Collateral, the current market value of such Collateral as reflected in the most
recent Appraisal Report obtained in respect of such Appraised Collateral in
accordance with this Agreement.
"Appraiser" means (i) with respect to Spare Parts, Sage Popovich, Inc.,
(ii) with respect to Real Estate, CB Richard Ellis, (iii) with respect to all
other Appraised Collateral, Simat Helliesen & Eichner, Inc. or (iv) any other
firm of nationally recognized, independent appraisers as may be selected by the
Administrative Agent and, so long as no Default or Event of Default has occurred
and is continuing, reasonably acceptable to the Borrower.
"Approved Fund" means, with respect to any Lender, any Person (other
than a natural Person) that (a) is or will be engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business and (b) is advised or managed by
(i) such Lender, (ii) any Affiliate of such Lender or (iii) any Person (other
than an individual) or any Affiliate of any Person (other than an individual)
that administers or manages such Lender.
"Asset Sale" means any sale, transfer or other disposition (including
by way of merger, consolidation, exchange of assets or sale-leaseback
transactions) by an Obligor to any Person other than another Obligor of (i) all
or any of the Capital Stock of any Obligor other than the Borrower or (ii) any
other property or assets of an Obligor (including spare parts); provided that
the term "Asset Sale" shall not include (a) any sale or disposition of spare
parts, inventory (including available seat miles and frequent flier miles
(including dividend and flightfund miles)) and fuel, in each case in the
ordinary course of business; provided that with respect to a sale or disposition
of spare parts, the aggregate Appraised Value of the remaining spare parts which
would be counted in the computation of Collateral Value as of such date is not
less than 90% of the Appraised Value of the spare parts set forth in the
Baseline Appraisal; (b) any licensing or sublicensing of intellectual property
in the ordinary course of business of the Obligors; (c) any leasing or
subleasing of property in the ordinary course of business; (d) a sale, transfer
or other disposition resulting from a casualty or a condemnation by a
Governmental Authority; (e) any sale or disposition (in a single transaction or
related series of transactions) of obsolete or worn out property (other than
spare parts) in the ordinary course of business that generate(s) consideration
to the Obligors of $250,000 or less; provided, however, that all such sales or
dispositions pursuant to this clause (e) shall not exceed $5,000,000 in the
aggregate during the term of this Agreement; (f) the contemporaneous exchange
(or other exchange qualifying under Section 1031 of the Internal Revenue Code,
as amended), in the ordinary course of business, of property for property of a
like kind; (g) any disposition of property which is not Collateral in connection
with the making of an Investment permitted under Section 6.2; (h) a sale or
disposition of cash or Cash Equivalents; (i) any sale or disposition of
receivables in the ordinary course of business, provided that the face amount of
all receivables sold or disposed of pursuant to this clause (i) shall not exceed
$5,000,000 per Fiscal Year; (j) any sale or disposition of the Tempe Property or
any Investment permitted pursuant to Section 6.2(xiii); (k) any sale or
disposition of the airframes and engines listed on Schedule 1.1(b); or (l) any
sale or disposition of Credit Card holdbacks in connection with the financing
thereof, provided that the amount financed pursuant to this clause (l) shall be
consistent with the Obligors' historical holdback amounts.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Lender, consented to by the Borrower (if
applicable) and accepted by the Administrative Agent (unless consummated
pursuant to Section 9.2(d)), in substantially the form of Exhibit A.
"Available Cash" means Unrestricted Cash and Cure Collateral.
"Aviation Authority" means any nation or government or national or
governmental authority of any nation, state, province or other political
subdivision thereof, and any agency, department, regulator, airport authority,
air navigation authority or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
in respect of the regulation of commercial aviation or the registration,
airworthiness or operation of civil aircraft and having jurisdiction over the
Obligors including, without limitation, the FAA and the United States Department
of Transportation.
"AWA" means America West Airlines, Inc., a Delaware corporation.
"AWA Convertible Notes" means AWA Holdings' 7 1/2% Convertible Senior
Notes due 2009 issued pursuant to the Indenture, dated as of January 18, 2002,
between AWA Holdings and Wilmington Trust Company, as Trustee.
"AWA Holdings" means America West Holdings Corporation, a Delaware
corporation.
"AWA Loan Agreement" means that certain Amended and Restated Loan
Agreement dated as of September 27, 2005 among AWA, as borrower thereunder, the
Borrower, the other direct and indirect Subsidiaries of the Borrower parties
thereto, Citibank, N.A., in its capacity as lender thereunder, Citibank, N.A.,
in its capacity as agent thereunder, Wilmington Trust Company, in its capacity
as collateral agent thereunder, and the Air Transportation Stabilization Board.
"Bankruptcy Code" means Title 11 of the United States Code as now and
hereafter in effect, or any successor statute.
"Baseline Appraisal" means, as to each category of Appraised
Collateral, the initial Appraisal Report with respect to such category of
Appraised Collateral delivered to the Administrative Agent on or around the
Closing Date.
"Borrower" has the meaning specified in the preamble to this Agreement.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York, New York or Phoenix, Arizona and, if the
applicable Business Day relates to notices, determinations, fundings and
payments in connection with the LIBOR Rate, a day on which dealings in Dollar
deposits are also carried on in the London interbank market.
"Cape Town Convention" means the Cape Town Convention on International
Interests in Mobile Equipment and the Cape Town Protocol to the Convention on
International Interests in Mobile Equipment on Matters Specific to Aircraft
Equipment prepared under the joint auspices of the International Institute for
the Unification of Private Law and the International Civil Aviation
Organization.
"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.
"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, or corresponding equity
rights in any partnership, limited liability company or other entity, whether
now outstanding or issued after the date of this Agreement, including, without
limitation, all Common Stock.
"Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States government or (b) issued by any
agency or instrumentality of the United States the obligations of which are
backed by the full faith and credit of the United States, in each case maturing
within one year after such date; (ii) marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any instrumentality thereof, in each case maturing within one year
after such date and having, at the time of the acquisition thereof, the highest
rating obtainable from either S&P or Moody's; (iii) commercial paper not issued
by the Borrower maturing no more than one year after such date and having, at
the time of the acquisition thereof, a rating of at least A-2 from S&P or at
least P-2 from Moody's; (iv) certificates of deposit or bankers' acceptances
maturing within one year after such date and issued or accepted by any Lender or
by any commercial bank organized under the laws of the United States of America
or any state thereof or the District of Columbia that (a) is at least
"adequately capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $500,000,000; (v) shares of any money market mutual fund that
(a) has at least 95% of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $500,000,000, and (c) has the highest rating obtainable from either
S&P or Moody's; (vi) auction rate preferred securities that have the highest
rating obtainable from either S&P or Moody's and with a maximum reset date at
least every 30 days and (vii) investments made pursuant to the Investment
Guidelines, so long as an amount equal to 100% of the Minimum Available Cash
Amount required to be maintained at such time pursuant to Section 6.4(a) is
maintained in cash and/or investments covered in clauses (i) through (vi) above.
"Cash Proceeds" means, (a) with respect to any Asset Sale, the cash or
Cash Equivalents proceeds of such Asset Sale, including payments of deferred
payment obligations (to the extent corresponding to the principal, but not the
interest component thereof) when received in the form of cash or Cash
Equivalents and proceeds from the conversion of other property received when
converted to cash or Cash Equivalents and (b) with respect to any Replacement
Secured Financing, the cash proceeds of such Replacement Secured Financing.
"CFC" means a "controlled foreign corporation" under Section 957 of the
Internal Revenue Code.
"Change of Control" means (i) the acquisition at any time by any Person
of "beneficial ownership" (within the meaning of Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder ("Section 13(d)")) in
excess of 35% of the outstanding Voting Stock of the Borrower; (ii) the sale,
lease, transfer or other disposition, of all or substantially all of the assets
of the Borrower to any Person as an entirety or substantially as an entirety in
one transaction or a series of related transactions; (iii) the merger or
consolidation of the Borrower with or into another corporation, or the merger of
another corporation into the Borrower, or any other transaction, with the effect
that a Person acquires as a result of such transaction "beneficial ownership" in
excess of 35% of the outstanding Voting Stock of the Borrower; (iv) the
liquidation or dissolution of the Borrower; (v) if a majority of the board of
directors of the Borrower shall no longer be composed of individuals (a) who
were members of said board on the Closing Date, (b) whose election or nomination
to said board was approved by individuals referred to in clause (a) above
constituting at the time of such election or nomination at least a majority of
said board, or (c) whose election or nomination to said board was approved by
individuals referred to in clauses (a) and (b) above constituting at the time of
such election or nomination at least a majority of said board; or (vi) the
Borrower shall cease to own and control legally and beneficially all of the
economic and voting rights associated with ownership of all outstanding Capital
Stock of US Airways, AWA Holdings and AWA (except as permitted by Section 6.9);
provided, however, that notwithstanding the provisions of clauses (i) through
(vi) above, entry by the Obligors into any contract or arrangement that provides
for or is conditioned upon payment in full in cash of all Obligations shall not
constitute a "Change of Control" hereunder. For purposes of this definition, the
term Person includes a "person" or "group" within the meaning of Rule 13d-3
under the Exchange Act but does not include any other Obligor.
"Closing Date" has the meaning specified in Article III hereof.
"Collateral" means all of the properties and assets that are (or are
purported to be) from time to time subject to the Liens granted to the
Administrative Agent pursuant to the Collateral Documents as security for the
Obligations but not including Excluded Property.
"Collateral Account" means a deposit account or securities account in
the name of the Borrower with banks or financial institutions with which they
and the Administrative Agent have entered into Control Agreements in form and
substance reasonably satisfactory to the Administrative Agent and under the sole
control (as defined in the applicable UCC) of the Administrative Agent for the
deposit of Cure Collateral and other cash and Cash Equivalents from the Obligors
required to be deposited in a Collateral Account pursuant to the Loan Documents
and (a) in the case of a deposit account, from which the Borrower may not make
withdrawals except as permitted by the Administrative Agent and (b) in the case
of a securities account, with respect to which the Administrative Agent shall be
the entitlement holder and the only Person authorized to give entitlement orders
with respect thereto.
"Collateral Coverage Ratio" means, at any date for which such ratio is
to be determined, the ratio expressed as a percentage of (a) the Collateral
Value at such time to (b) the aggregate outstanding principal amount of the Loan
at such time.
"Collateral Documents" means, collectively, (i) the Aircraft Mortgage;
(ii) the SGR Security Agreement; (iii) the Security Agreement; (iv) the IP
Security Agreement (as defined in the Security Agreement); (v) the Mortgages;
(vi) each other certificate, agreement or document executed and delivered by any
Obligor pursuant to any of the foregoing agreements, and any Control Agreement,
certificate, agreement or document delivered pursuant hereto or to the terms of
Section 5.8; and (vii) any consents of lessors of any of the Collateral to the
pledge of such Collateral pursuant to the agreements or documents listed in (i)
through (v) above.
"Collateral Release Value" means, for each item of Appraised Collateral
with respect to which the Lien of the Administrative Agent is being released (or
subordinated) in connection with a Replacement Secured Financing, an amount
equal to the Appraised Value of such Collateral (based on the then most current
Appraisal Report).
"Collateral Value" means, as of any date of determination, the sum of
(a) the Appraised Value of all Eligible Appraised Collateral, as stated in the
then most current Appraisal Report(s) therefor, (b) 85% of the Eligible Accounts
as of such date, (c) Unrestricted Cash of the Obligors in an amount up to 50% of
the Minimum Available Cash Amount at such time and (d) 100% of the Cure
Collateral as of such date; provided that Ineligible Collateral shall not be
included in the computation of Collateral Value.
"Collateral Value Certificate" means a certificate executed by a
Responsible Officer of the Borrower in substantially the form of Exhibit G
annexed hereto (provided that such certificate may be incorporated into a
certificate contemporaneously delivered pursuant to clause (iv) of Section
5.1(b)).
"Collection Account" means that certain account of the Administrative
Agent, account number 502-328-54 in the name of the Administrative Agent at
Deutsche Bank Trust Company Americas in New York, New York, ABA No. 021-001-033,
Account Name: GECC/CAF Depository, Reference: CFN#8600, or such other account as
may be specified in writing by the Administrative Agent as the "Collection
Account."
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make Loans to the Borrower, which commitment is in the amount set
forth opposite such Lender's name on Schedule I under the caption "Commitment",
as amended to reflect each Assignment and Acceptance executed by such Lender and
as such amount may be reduced pursuant to this Agreement. The aggregate amount
of the Commitments on the date hereof equals $1,100,000,000.
"Commodity Agreement" means any agreement or arrangement the value of
which fluctuates based on the value of a commodity.
"Common 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 common stock, whether now outstanding or
issued after the date of this Agreement, including, without limitation, all
series and classes of such common stock.
"Consolidated EBITDAR" means, with respect to any Person, for any
period, the sum of (i) the operating income of such Person for such period, (ii)
rental expenses of such Person for such period under aircraft Operating Leases
and (iii) depreciation and amortization and stock compensation expenses and
extraordinary charges and non-cash unusual items of such Person that were
recognized in arriving at the amount of such operating income for such period,
all as determined on a consolidated basis in accordance with GAAP; provided,
however, that (i) for the fiscal quarter ending June 30, 2006, Consolidated
EBITDAR for the relevant period shall be deemed to equal Consolidated EBITDAR
for the 2 fiscal quarters then ended, and (ii) for the fiscal quarter ending
September 30, 2006, Consolidated EBITDAR for the relevant period shall be deemed
to equal Consolidated EBITDAR for the 3 fiscal quarters then ended.
"Consolidated Fixed Charges" means, with respect to any Person, for any
period, the sum of (a) the aggregate gross interest expense relating to
Indebtedness of such Person for such period (calculated without regard to any
limitations on the payment thereof), including the corresponding amounts for
such period under Capital Lease obligations and Synthetic Lease obligations of
such Person, (b) the aggregate rental expenses of such Person for such period
under aircraft Operating Leases, and (c) dividends or any other payments or
distributions in respect of any class of Capital Stock of such Person, including
in connection with any redemption, purchase, retirement or other acquisition,
directly or indirectly of any such class of Capital Stock, paid or payable
during such period (but only to the extent payment thereof is permitted under
this Agreement), all determined on a consolidated basis; provided, however, that
(i) for the fiscal quarter ending June 30, 2006, Consolidated Fixed Charges for
the relevant period shall be deemed to equal Consolidated Fixed Charges for the
2 fiscal quarters then ended, and (ii) for the fiscal quarter ending September
30, 2006, Consolidated Fixed Charges for the relevant period shall be deemed to
equal Consolidated Fixed Charges for the 3 fiscal quarters then ended.
"Contractual Obligation" means, as applied to any Person, any provision
of any equity security issued by that Person or of any indenture, mortgage, deed
of trust, contract, lease, license, undertaking, agreement or other 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.
"Control Agreement" has the meaning specified in Section 5.11 hereof.
"Covenant Suspension Conditions" means, at any time, the satisfaction
of each of the following conditions: (i) the Collateral Coverage Ratio shall be
greater than 225%, (ii) the aggregate outstanding principal amount of the Loan
shall be less than $600,000,000, (iii) no Default or Event of Default shall have
occurred and be continuing and (iv) the Borrower shall have Unrestricted Cash on
a Pro Forma Basis of at least $1,200,000,000.
"Covenant Suspension Period" means any period (i) beginning on the
first Business Day on which the Covenant Suspension Conditions have been
satisfied and notice of such satisfaction is provided to the Administrative
Agent pursuant to Section 5.1(b)(xxi) and (ii) ending on the first Business Day
on which (a) any of clauses (i) through (iii) of the Covenant Suspension
Conditions are no longer satisfied or (b) clause (iv) of the Covenant Suspension
Conditions is no longer satisfied for 3 consecutive days.
"Credit Card" means any agreement or plan relating to a credit card,
debit card, charge card, purchasing card or other similar system, including but
not limited to the American Express Card, Diners Club, MasterCard, Visa Card,
Carte Blanche and Discover Card.
"Credit Card Receivables" means any right to payment in Dollars
(including, but not limited to, rights to payment for goods, services,
insurance, fees, taxes, prepayment penalties and finance charges) from (i) any
issuer of a Credit Card arising from goods or services provided or to be
provided by an Obligor or (ii) to the extent that the right to such payment
described in clause (i) has been transferred in whole or part to JPMorgan Chase
Bank, N.A. ("JPMCB"), Bank of America, N.A. ("BOA") or any other settlement
and/or processing system, or, alternatively, to the extent JPMCB, BOA or any
other settlement and/or processing system has received any collections with
respect to such right of payment, any right to payment from JPMCB, BOA or any
other settlement and/or processing system arising from the transfer to or by
JPMCB, BOA or any other settlement and/or processing system of such claims
against an issuer of a Credit Card.
"Credit Rating" means, as of any date, the credit rating by Moody's or
S&P, as the case may be, for the Loan Facility. For purposes of the foregoing,
(a) if any credit rating established by Moody's or S&P shall be changed, such
change shall be effective as of the date on which such change is announced by
the rating agency making such change, (b) if Moody's or S&P shall change the
basis on which credit ratings are established by it, each reference to the
Credit Rating announced by Moody's or S&P shall refer to the then equivalent
credit rating by Moody's or S&P, as the case may be, and (c) if Moody's or S&P
shall cease to be in the business of rating corporate debt obligations, the
Applicable Margin shall be determined using the Credit Rating by Moody's or S&P,
as the case may be, most recently in effect prior to such cessation.
"Cure Collateral" means Unrestricted Cash that is deposited in the
Collateral Account pursuant to Section 5.8(c).
"Currency Agreement" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement.
"DCA" means Ronald Reagan Washington National Airport.
"Default" means any condition or event which with the required passing
of time or the giving of any required notice or both would, unless cured or
waived, become an Event of Default.
"Desk-top Aircraft Appraisal Methodology" means, in determining an
opinion as to the current market value of Eligible Aircraft, including but not
limited to, taking at least the following actions: (i) reviewing the most recent
Collateral Report; (ii) reviewing the Appraiser's internal value database for
values applicable to such Aircraft; and (iii) checking other sources, such as
manufacturers, other airlines and U.S. government procurement data, for orderly
liquidation prices of such Aircraft.
"Desk-top Spare Engines Appraisal Methodology" means, in determining an
opinion as to the current market value of Eligible Spare Engines, including but
not limited to, taking at least the following actions: (i) reviewing the most
recent Appraisal Report; (ii) reviewing the Appraiser's internal value database
for values applicable to Spare Engines; and (iii) checking other sources, such
as manufacturers, other airlines and U.S. government procurement data, for
orderly liquidation prices of such Spare Engines.
"Desk-top Spare Parts Appraisal Methodology" means, in determining an
opinion as to the current market value of Eligible Spare Parts, including but
not limited to, taking at least the following actions: (i) reviewing the most
recent Appraisal Report; (ii) reviewing the Appraiser's internal value database
for values applicable to Spare Parts; (iii) developing a representative sampling
of a reasonable number of the different Spare Parts for which a market check
will be conducted; (iv) checking other sources, such as manufacturers, other
airlines, U.S. government procurement data and airline parts pooling price
lists, for orderly liquidation prices of the sample Spare Parts referred to in
clause (iii); (v) conducting a limited review of the inventory reporting system
applicable to the Spare Parts, including checking information reported in such
system against information determined through physical inspection pursuant to
the preceding clause (vi); and (vi) reviewing a sampling of the Spare Parts'
serviceability tags, books and records (including tear-down reports).
"Dilution" means, for any period, the ratio (defined as a percentage)
of (a) the aggregate amount of all non-cash credits and other offsets against
the Obligors' Accounts, to (b) the aggregate amount of the Obligors' sales, in
each case for such period.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Electronic Transmission" means each document, instruction,
authorization, file, information and any other communication transmitted, posted
or otherwise made or communicated by e-mail or otherwise to or from an E-System
or other equivalent service.
"Eligible Accounts" means, as of any date of determination, all
Accounts shown on the consolidated balance sheet of the Borrower as of the end
of the then most recently ended fiscal quarter, net of, without duplication, all
reserves against such Accounts and all Accounts owed by another Obligor, and
except, without duplication, any Account of the Obligors:
(a) that does not arise from the air transportation of passengers,
freight and cargo or the sale of goods or performance of services by the
Obligors in the ordinary course of their business;
(b) (i) upon which any Obligor's right to receive payment is not
absolute or is contingent upon the fulfillment of any condition whatsoever
or (ii) as to which any Obligor is not able to bring suit or otherwise
enforce its remedies against the Account Debtor through judicial process, or
(iii) if the Account represents a progress billing consisting of an invoice
for goods sold or used or services rendered pursuant to a contract under
which the Account Debtor's obligation to pay that invoice is subject to any
Obligor's completion of further performance under such contract or is
subject to the equitable lien of a surety bond issuer; provided, that
clauses (i) and (iii) above shall not apply to receivables in respect of the
transportation of passengers in the ordinary course of business;
(c) to the extent that any defense, counterclaim, setoff or dispute is
asserted as to such Account;
(d) that is not a true and correct statement of bona fide indebtedness
incurred in the amount of the Account for goods and services sold to or
services rendered, or to be rendered with respect to receivables in respect
of the transportation of passengers, and goods accepted by the applicable
Account Debtor;
(e) with respect to which an invoice, reasonably acceptable to the
Administrative Agent in form and substance (it being understood that the
form of invoice customarily used by the applicable Obligor on the Closing
Date shall be deemed to be satisfactory to the Administrative Agent), has
not been sent to the applicable Account Debtor;
(f) that is owed by any director, officer, other employee or Affiliate
of any Obligor;
(g) that is the obligation of an Account Debtor that is the United
States government or a political subdivision thereof, or any state, county
or municipality or department, agency or instrumentality thereof unless the
Obligor, if necessary or desirable, has complied with respect to such
obligation with the Federal Assignment of Claims Act of 1940, or any
applicable state, county or municipal law restricting the assignment thereof
with respect to such obligation and such assignment has been accepted and
acknowledged by the appropriate governmental officers;
(h) that is the obligation of an Account Debtor located in a foreign
country other than Canada unless payment thereof is assured by a letter of
credit assigned and delivered to the Administrative Agent, satisfactory to
the Administrative Agent as to form, amount and issuer;
(i) with respect to receivables in respect of the transportation of
passengers, to the extent any Obligor owed the applicable Account Debtor for
services sold or rendered by such Account Debtor to such Obligor but only to
the extent of the potential offset, including, without limitation under code
share arrangements, interline agreements or other agreements between
airlines in which tickets may be purchased on one airline and honored by
another airline;
(j) that is in default and such default is reasonably likely to result
in such Account Debtor's failure to make payment with respect to such
Account; provided, that, without limiting the generality of the foregoing,
an Account shall be deemed in default upon the occurrence of any of the
following: (i) the Account is not paid within ninety (90) days following its
original invoice date (and in determining the aggregate amount from the same
Account Debtor that is unpaid hereunder there shall be excluded the amount
of any notes receivable held by an Account Debtor which are unpaid more than
90 days after the due date for payment), (ii) the Account Debtor obligated
upon such Account suspends business, makes a general assignment for the
benefit of creditors or fails to pay its debts generally as they come due or
(iii) a petition is filed by or against any Account Debtor obligated upon
such Account under any bankruptcy law or any other federal, state or foreign
(including any provincial) receivership, insolvency relief or other law or
laws for the relief of debtors;
(k) that is the obligation of an Account Debtor if fifty percent (50%)
or more of the Dollar amount of all Accounts owing by that Account Debtor
are ineligible under the other criteria set forth in clause (j) above;
(l) as to which the Lien of the Administrative Agent for the benefit of
the Secured Parties is not a first priority perfected Lien;
(m) as to which any of the representations or warranties in the Loan
Documents with respect to such specific Account are untrue;
(n) to the extent such Account is evidenced by a judgment, instrument
or chattel paper;
(o) except with respect to Credit Card Receivables, to the extent that
such Account, together with all other Accounts owing by such Account Debtor
and its Affiliates as of any date of determination exceed 10% of all
Eligible Accounts;
(p) that is payable in any currency other than Dollars;
(q) that arises from interline activity including services and billings
performed between airlines (but excluding the transportation of passengers)
and the payment of which is handled through third party domestic or foreign
clearing houses; or
(r) which Obligor has not been subject to a field examination;
provided, however, that to the extent that Dilution exceeds 5%, the Eligible
Accounts as of such date shall be reduced by the amount of such excess
multiplied by the aggregate of all Accounts of the Obligors.
"Eligible Aircraft" means all of the Aircraft owned by the Obligors and
reflected in the most recent Collateral Value Certificate delivered by the
Borrower to the Administrative Agent, except any Aircraft that constitutes
Ineligible Collateral.
"Eligible Appraised Collateral" means Appraised Collateral constituting
Eligible Spare Engines, Eligible Spare Parts, Eligible Ground Service Equipment,
Eligible Flights Simulators, Eligible Real Estate, Eligible Slots, Eligible
Gates, Eligible Aircraft and such other assets as are acceptable to the
Administrative Agent in its sole discretion that constitute Collateral and for
which the Obligors elect to obtain Appraisal Reports, in each case other than
Ineligible Collateral.
"Eligible Collateral" means Eligible Accounts and Eligible Appraised
Collateral.
"Eligible Flight Simulators" means all of the Flight Simulators owned
by the Obligors and reflected in the most recent Collateral Value Certificate
delivered by the Borrower to the Administrative Agent, except (a) any Flight
Simulators for which an assignment of the applicable flight simulator software
to the Administrative Agent requires the consent of a third party and such
consent is not obtained and (b) any Flight Simulators that constitute Ineligible
Collateral.
"Eligible Gates" means all of the Gates leased by the Obligors and
reflected in the most recent Collateral Value Certificate delivered by the
Borrower to the Administrative Agent, except (i) any Gate subject to a lease or
other agreement under which the applicable Obligor is in default and (ii) any
Gates that constitute Ineligible Collateral.
"Eligible Ground Service Equipment" means all Ground Service Equipment
owned by the Obligors and reflected in the most recent Collateral Value
Certificate delivered by the Borrower to the Administrative Agent, except any
Ground Service Equipment that constitutes Ineligible Collateral.
"Eligible Leased Real Estate" means, as of any date of determination,
any parcel of Real Estate in the United States leased by the Obligors as to
which each of the following conditions has been satisfied at such time:
(a) a valid and enforceable first priority Lien on such leasehold
interest (subject only to Permitted Encumbrances and other Liens approved by
the Administrative Agent) shall have been granted by the applicable Obligor
in favor of the Administrative Agent for the benefit of the Secured Parties
pursuant to a Mortgage;
(b) except as otherwise permitted by the Administrative Agent, the
Administrative Agent and, where applicable, the relevant title insurance
company shall have received in form and substance reasonably satisfactory to
the Administrative Agent all Mortgage Supporting Documents in respect of
such leasehold interest;
(c) the Administrative Agent shall have received an appraisal
conforming to FIRREA with respect to such leasehold interest in form and
substance reasonably satisfactory to the Administrative Agent and performed
by an appraiser that is reasonably satisfactory to the Administrative Agent;
(d) no casualty shall have occurred materially affecting the use,
operation or value of such leasehold interest if such casualty has not been
restored or repaired in accordance with the Mortgage encumbering such
leasehold interest;
(e) no condemnation or taking by eminent domain shall have occurred nor
shall any written notice of any pending or threatened condemnation or other
similar proceeding against such parcel of Real Estate have been delivered to
the lessee or, to the knowledge of the lessee, the owner of such parcel of
Real Estate that would materially affect the use, operation or value of such
parcel of Real Estate;
(f) no default shall exist beyond any notice and cure period under the
relevant Mortgage encumbering such leasehold interest;
(g) each written sublease, license or other use or occupancy agreement
now or hereafter affecting all or any portion of the leasehold interest
shall, by its express terms, be subject and subordinate to the relevant
Mortgage;
(h) each lease, license, or other use or occupancy agreement between an
Obligor, as sublessor, and any Affiliate thereof, as sublessee, now or
hereafter affecting all or any portion of such leasehold interest shall be
subject and subordinate to the relevant Mortgage or shall be terminable
(without fee) on 60 days' prior written notice by the sublessor of such
leasehold interest;
(i) an environmental assessment report has been completed and delivered
to the Administrative Agent in form and substance reasonably satisfactory to
the Administrative Agent and which does not indicate any pending, threatened
or existing Environmental Claim or noncompliance with, or liability under,
any Environmental Law (except if a reserve satisfactory to the
Administrative Agent has been established with respect thereto); and
(j) the applicable Obligor shall not be in default beyond any notice
and grace period with the terms of any such lease, license, or other use or
occupancy agreement between such Obligor and the applicable landlord.
"Eligible Lender" means (a) a Lender or an Affiliate or Approved Fund
of any Lender, (b) a commercial bank having total assets whose Dollar equivalent
exceeds $5,000,000,000, (c) a finance company, insurance company or any other
financial institution or fund, in each case reasonably acceptable to the
Administrative Agent and regularly engaged in making, purchasing or investing in
loans and having a net worth, determined in accordance with GAAP, whose Dollar
equivalent exceeds $250,000,000 (or, to the extent net worth is less than such
amount, a finance company, insurance company, other financial institution or
fund, reasonably acceptable to the Administrative Agent and the Borrower) or (d)
a savings and loan association or savings bank organized under the laws of the
United States or any State thereof having a net worth, determined in accordance
with GAAP, whose Dollar equivalent exceeds $250,000,000; provided, however, that
the following Persons shall not be deemed to be an "Eligible Lender": (i) an
airline, a commercial aircraft operator, an air freight forwarder or an entity
principally engaged in the business of parcel transport by air, (ii) an
Affiliate of any Person described in clause (i) above or (iii) the Persons
designated by the Borrower in writing to the Administrative Agent on or prior to
the Closing Date.
"Eligible Owned Real Estate" means, as of any date of determination,
any parcel of Real Estate in the United States owned in fee simple by the
Obligors as to which each of the following conditions has been satisfied at such
time:
(a) a valid and enforceable first priority Lien on such parcel of Real
Estate (subject only to Permitted Encumbrances and other Liens approved by
the Administrative Agent) shall have been granted by the applicable Obligor
in favor of the Administrative Agent for the benefit of the Secured Parties
pursuant to a Mortgage;
(b) except as otherwise permitted by the Administrative Agent, the
Administrative Agent and, where applicable, the relevant title insurance
company shall have received in form and substance reasonably satisfactory to
the Administrative Agent all Mortgage Supporting Documents in respect of
such parcel of Real Estate;
(c) the Administrative Agent shall have received an appraisal
conforming to FIRREA with respect to such parcel of Real Estate in form and
substance reasonably satisfactory to the Administrative Agent and performed
by an appraiser that is reasonably satisfactory to the Administrative Agent;
(d) no casualty shall have occurred materially affecting the use,
operation or value of such parcel of Real Estate if such casualty has not
been restored or repaired in accordance with the Mortgage encumbering such
parcel of Real Estate;
(e) no condemnation or taking by eminent domain shall have occurred nor
shall any notice of any pending or threatened condemnation or other similar
proceeding against such parcel of Real Estate have been delivered to the
owner of such parcel of Real Estate that would materially affect the use,
operation or value of such parcel of Real Estate;
(f) no default shall exist beyond any notice and cure period under the
relevant Mortgage encumbering such parcel of Real Estate;
(g) each written lease, license or other use or occupancy agreement now
or hereafter affecting all or any portion of such parcel of Real Estate
shall, by its express terms, be subject and subordinate to the relevant
Mortgage;
(h) each lease, license, or other use or occupancy agreement between an
Obligor, as landlord, and any Affiliate thereof, as tenant, now or hereafter
affecting all or any portion of such parcel of Real Estate shall be subject
and subordinate to the relevant Mortgage or shall be terminable (without
fee) on 60 days' prior written notice by the owner of such Real Estate; and
(i) an environmental assessment report has been completed and delivered
to the Administrative Agent in form and substance reasonably satisfactory to
the Administrative Agent and which does not indicate any pending, threatened
or existing Environmental Claim or noncompliance with, or liability under,
any Environmental Law (except if a reserve satisfactory to the
Administrative Agent has been established with respect thereto).
"Eligible Real Estate" means Eligible Owned Real Estate and Eligible
Leased Real Estate.
"Eligible Slots" means Slots at DCA, John F. Kennedy International
Airport, LGA or any other airport acceptable to the Administrative Agent in its
sole discretion, except any such Slots that constitute Ineligible Collateral.
"Eligible Spare Engines" means all of the Spare Engines owned by the
Obligors and reflected in the most recent Collateral Value Certificate delivered
by the Borrower to the Administrative Agent, except for any Spare Engines that
constitute Ineligible Collateral.
"Eligible Spare Parts" means all of the Spare Parts owned by the
Obligors and reflected in the most recent Collateral Value Certificate delivered
by the Borrower to the Administrative Agent, except for any Spare Parts that
constitute Ineligible Collateral.
"Environmental Claim" means any investigation, notice, claim, suit,
proceeding, demand or order, by any Governmental Authority or any Person arising
in connection with any alleged or actual violation of Environmental Laws or with
any Hazardous Materials Activity, or any actual or alleged damage, or harm to
health, safety, property or the environment.
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
governmental authorizations, or any other requirement of Governmental
Authorities relating to (a) the prevention or control of pollution or protection
of the environment, (b) solid, gaseous or liquid waste generation, handling,
treatment, storage, disposal, discharge, Release, emission or transportation, or
(c) exposure to Hazardous Materials. "Environmental Laws" shall include, but not
be limited to, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. 9601 et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. 6901 et seq.), the National Environmental Policy Act (42 U.S.C.
4321 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. 1801 et
seq.), the Toxic Substances Control Act (49 U.S.C. 2601 et seq.), the Clean Air
Act (42 U.S.C. 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.), the Safe Drinking Water Act (42 U.S.C. 3007 et seq.), the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. 11001 et seq.),
the Occupational Safety and Health Act (29 U.S.C. 641 et seq.), and the State of
Arizona Environmental Quality Act (A.R.S. 49-101 et seq.).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate" means, with respect to any Obligor, (i) any
corporation which is, or (other than for purposes of the first sentence of each
of Section 4.11(a) and Section 5.1(b)(viii)) was at any time in the preceding
six (6) years, a member of a controlled group of corporations within the meaning
of Section 414(b) of the Internal Revenue Code of which the Obligor 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 Internal Revenue Code of which the Obligor is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which the Obligor, 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 or
Multiemployer Plan (other than an event for which the thirty-day notice is
waived); (b) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Internal Revenue Code or Section
302 of ERISA); (c) the filing pursuant to Section 412(d) of the Internal Revenue
Code or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan or Multiemployer Plan; (d) the
imposition of a lien under Section 412 of the Code or Section 302 of ERISA on
any Obligor or any of its ERISA Affiliates; (e) the incurrence by any Obligor or
any of its ERISA Affiliates of any liability (contingent or otherwise) under
Title IV of ERISA with respect to the termination of any Plan; (f) (i) the
receipt by any Obligor or any of its ERISA Affiliates from the PBGC of a notice
of determination that PBGC intends to seek termination of any Plan or
Multiemployer Plan or to have a trustee appointed for any Plan or Multiemployer
Plan, or (ii) the filing by any Obligor or any of its ERISA Affiliates of a
notice of intent to terminate any Plan or the treatment of any Plan amendment as
a termination under Section 4041 of ERISA; (g) the incurrence by any Obligor or
any of its ERISA Affiliates of any liability (contingent or otherwise) (i) with
respect to the withdrawal from any Plan pursuant to Section 4063 of ERISA, (ii)
with respect to the termination of any Plan pursuant to Section 4064 of ERISA,
(iii) with respect to any facility closing pursuant to Section 4062(e) of ERISA,
or (iv) the complete or partial withdrawal of any Obligor or any of its ERISA
Affiliates from any Multiemployer Plan; (h) the receipt by any Obligor or any of
its ERISA Affiliates of any notice concerning the imposition of Withdrawal
Liability or a determination that any Multiemployer Plan is, or is expected to
be, insolvent or in reorganization, within the meaning of Title IV of ERISA; (i)
the failure of any Obligor or any of its ERISA Affiliates to make when due
required contributions to any Plan subject to Title IV of ERISA or any
Multiemployer Plan; or (j) any other event or condition that would reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan subject to Title IV
of ERISA or Multiemployer Plan or the imposition of any liability under Title IV
of ERISA, other than for PBGC premiums due but not delinquent under Section 4007
of ERISA.
"E-Signature" means the process of attaching to or logically
associating with an Electronic Transmission an electronic symbol, encryption,
digital signature or process (including the name or an abbreviation of the name
of the party transmitting the Electronic Transmission) with the intent to sign,
authenticate or accept such Electronic Transmission.
"E-System" means any electronic system, including Intralinks(R) and any
other Internet or extranet-based site, whether such electronic system is owned,
operated or hosted by the Administrative Agent, any of its Related Persons or
any other Person, providing for access to data protected by passcodes or other
security system.
"Event of Default" has the meaning specified in Section 7.1.
"Excess Cash Flow" means, for any period, (i) Consolidated EBITDAR of
the Borrower for such period, minus (plus) (ii) any increase (decrease) in
Working Capital of the Borrower from the first day of such period to the last
day of such period, minus (iii) the sum of (A) payments by the Obligors of
principal and interest with respect to the consolidated Indebtedness of the
Borrower (but excluding Indebtedness that is solely the obligation of any
Subsidiary that is not an Obligor) during such period, to the extent such
payments are not prohibited under this Agreement, (B) income taxes paid during
such period, (C) aircraft rentals paid during such period under Operating
Leases, (D) cash used during such period for capital expenditures, (E) deposit
and pre-delivery payments made in respect of Aircraft Related Equipment, and (F)
an amount equal to pension or FASB 106 payments made in excess, if any, of
pension or FASB 106 expenses, plus (iv) an amount equal to the excess of pension
or FASB 106 expense in excess, if any, of pension or FASB 106 payments.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Excluded Cash" means cash and Cash Equivalents maintained in accounts
that are segregated from all Unrestricted Cash and not subject to Control
Agreements to the extent that such accounts are any of the following:
(i) subject to 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,
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 by, or are pledged to, such Persons to secure amounts that may be
owed to such Persons under the Obligors' agreements with them in connection
with their provision of credit card processing, travel charge processing or
clearinghouse services to the Obligors;
(ii) subject to 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;
(iii) subject to Liens incurred or deposits made in each case required
under or in connection with the Trust Agreements (not including the
Obligors' residuary interest in, claims to or refunds of any such trust
funds);
(iv) subject to Liens securing reimbursement obligations in respect of
letters of credit issued for the account of any 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;
(v) subject to Liens securing reimbursement or other margin
requirements in connection with, in the case of Liens contemplated in this
clause (v), (x) 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, (y) transactions designed to hedge interest rates
entered into with respect to notional amounts not to exceed actual or
anticipated Indebtedness, not entered into for speculative purposes and (z)
transactions designed to hedge against risks associated with fluctuations in
currencies entered into in the ordinary course of business;
(vi) subject to Liens securing prepaid fuel and healthcare expenses in
the ordinary course of business and consistent with past practice;
(vii) subject to Liens incurred or deposits (other than with respect to
the Plans described in Section 4.11) 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 (including Liens securing Trade Payables arising from the Obligors'
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); or
(viii) payroll, trust, or fiduciary accounts, including the Trust
Accounts.
"Excluded Property" means (i) any lease or other written agreement
under which an Obligor leases real property (other than Gates and the
Philadelphia Airport Lease) and (1) that requires such Obligor to pay annual
rentals of $10,000,000 or more but where the grant of a Lien in favor of the
Administrative Agent would violate such lease or other written agreement, (2)
that requires such Obligor to pay annual rentals of less than $10,000,000, or
(3) that the Administrative Agent has agreed in its sole discretion is not
material; (ii) any property which is subject to a Lien of the type described in
Section 6.1(a)(ii), (iii), (iv), (vi), (ix), (x), (xi), (xii) or (xiii) but only
while subject to such Lien; (iii) any After-Acquired Section 1110 Equipment,
After-Acquired Gates or After-Acquired Slots which the Obligors have owned for a
period of less than fifteen (15) days; (iv) any right in any agreement (A) the
grant of a security interest in which would violate the agreement under which
such right arises except to the extent provided under Sections 9-406, 9-407,
9-408 or 9-409 of the UCC, if such Obligor has failed to obtain a waiver or
other relief from such provision, or (B) to the extent that the pledge or
assignment of such agreement requires the consent of any third party, unless
such third party has consented thereto, except to the extent provided under
Sections 9-406, 9-407, 9-408 or 9-409 of the UCC; (v) Excluded Cash; (vi) 100%
of the Capital Stock of Excluded Subsidiaries, 35% of the Voting Stock of
Subsidiaries of the Obligors that are CFCs, and all beneficiary interests of
third parties in the trusts created by or pursuant to the Trust Agreements
(which does not include the Obligors' residuary interest in, claims to or
refunds of any trust funds in respect of such trusts); (vii) aircraft purchase
agreements which by their terms are not assignable; and (viii) the Tempe
Property and any Investments permitted under Section 6.2(xiii); provided that if
an Obligor nonetheless elects not to treat such assets as "Excluded Property"
and pledges to the Administrative Agent pursuant to Section 5.8 or otherwise
assets that otherwise would constitute Excluded Property absent this proviso,
unless or until the Lien with respect to such assets is released in accordance
with this Agreement and the applicable Collateral Document, such assets shall
constitute Collateral for all purposes under this Agreement and under the other
Loan Documents and shall not be treated as Excluded Property.
"Excluded Subsidiaries" means (i) FTCHP LLC, a Delaware limited
liability company, if and for so long as (A) the assets of and ownership
interests in FTCHP LLC are pledged to secure its obligations under that certain
Senior Secured Term Loan Agreement dated as of December 23, 2004 among FTCHP
LLC, AWA, Heritage Bank, SSB, Citibank, N.A. and the other lenders named therein
(and any amendments, restatements, supplements, modifications, refinancings or
replacements thereof) or (B) restrictions contained in its constituent documents
prevent it from becoming an Obligor under the Loan Documents, (ii) Airways
Assurance Limited LLC, (iii) AWHQ LLC and (iv) America West Company Store LLC.
"FAA" means the Federal Aviation Administration, and any successor
Governmental Authority.
"FAA 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 DCA, John F. Kennedy International Airport, LGA, or any
other airport.
"Facilities" means any and all real property now, hereafter or
heretofore owned, leased, operated or used by an Obligor.
"Fair Market Value" means, with respect to any asset subject to an
Asset Sale, the price that could be obtained for such asset by a seller in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer.
"FASB" means the Financial Accounting Standards Board.
"Federal Aviation Act" means that portion of Title 49 of the United
States Code comprising those provisions formerly referred to as the Federal
Aviation Act of 1958, as amended, or any subsequent legislation that amends,
supplements or supersedes such provisions.
"Federal Funds Rate" means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"Fiscal Year" means the Borrower's fiscal year referenced in the
financial statements to be delivered by the Borrower pursuant to Section 5.1.
"Flight Simulators" means the flight simulators and flight training
devices of the Borrower or any other Obligor.
"Foreign Slots" means all of the rights and operational authority, now
held or hereafter acquired, of the Obligors to conduct one landing or takeoff
operation during a specific hour or other period at each non-U.S. airport as
necessary to operate any of the Routes.
"GAAP" means, subject to the limitations on the application thereof set
forth in Section 1.3, generally accepted accounting principles in the United
States, as in effect from time to time as set forth in opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of FASB approved
by a significant segment of the accounting profession in the United States.
"Gates" shall have the meaning ascribed to it in the SGR Security
Agreement.
"GE 2001 Credit Agreement" means the Credit Agreement, dated as of
November 16, 2001, among US Airways, the Borrower, and General Electric Capital
Corporation, as amended, restated, supplemented or modified, including pursuant
to that certain Credit Agreement Amendment No. 1, dated as of January 30, 2003,
that certain Credit Agreement Amendment No. 2, dated as of March 31, 2003, among
the parties thereto, and that certain Amended and Restated Credit Agreement,
dated as of July 15, 2005 among US Airways, the Borrower and General Electric
Capital Corporation.
"GE Capital" has the meaning specified in the preamble to this
Agreement.
"GE Engine Financing" means the Loan Agreement [Engines], dated as of
September 3, 2004, among AWA, General Electric Capital Corporation, individually
and as administrative agent, Wells Fargo Bank Northwest, National Association,
as security trustee, and the lenders party thereto, as amended, restated,
supplemented or modified.
"GE Financings" means the GE Engine Financing and the GE Spare Parts
Financing.
"GE Spare Parts Financing" means the Loan Agreement [Spare Parts],
dated as of September 3, 2004, among AWA, General Electric Capital Corporation,
individually and as administrative agent, Wells Fargo Bank Northwest, National
Association, as security trustee, and the lenders party thereto, as amended,
restated, supplemented or modified.
"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 powers or functions
of or pertaining to government.
"Governmental Authorization" means any permit, license, certificate,
authorization, plan, directive, consent order or consent decree or agreement of,
from or with any Governmental Authority.
"Ground Service Equipment" means the ground service equipment,
de-icers, ground support equipment, aircraft cleaning devices, materials
handling equipment, passenger walkways and other similar equipment used to
service equipment of the Borrower and the other Obligors.
"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), (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 any 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.
"Guaranty" means the Guaranty Agreement dated as of the date hereof
made by the Borrower and the Subsidiary Guarantors, in substantially the form of
Exhibit H.
"Hazardous Materials" means all substances defined as Hazardous
Substances, Oil, Pollutants or Contaminants in the National Oil and Hazardous
Substances Pollution Contingency Plan, 40 C.F.R. ss. 300.5, or defined as such
by or regulated as such under, any Environmental Law.
"Hazardous Materials Activity" means any past, current, proposed, or
threatened use, storage, Release, generation, treatment, remediation or
transportation of any Hazardous Material (i) from, under, in, into or on the
Facilities or surrounding property; and (ii) caused by, or undertaken by or on
behalf of, an Obligor or any of their respective predecessors or Affiliates.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness 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 and unpaid purchase price of property or services,
which purchase price is due more than six (6) months after the date of placing
such property in service or taking delivery and title thereto or the completion
of such services, except Trade Payables; (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 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 Matters" has the meaning specified in Section
9.4(a).
"Indemnified Taxes" has the meaning specified in Section 2.11(a).
"Indemnitees" has the meaning specified in Section 9.4(a).
"Index Rate" means, for any day, a floating rate equal to the
higher of (i) the rate publicly quoted from time to time by The Wall Street
Journal as the "prime rate" (or, if The Wall Street Journal ceases quoting a
prime rate, the highest per annum rate of interest published by the Federal
Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus 50 basis points per annum. Each change in any
interest rate provided for in this Agreement based upon the Index Rate shall
take effect at the time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing interest by
reference to the Index Rate.
"Ineligible Collateral" means any Appraised Collateral that:
(a) is not subject to a valid and enforceable first priority Lien on
such Collateral (subject only to Permitted Encumbrances and other Liens
approved by the Administrative Agent) granted by the applicable Obligor in
favor of the Administrative Agent for the benefit of the Secured Parties
pursuant to a Collateral Document;
(b) is placed on consignment, is in transit or is out for repair,
except for Collateral (other than Spare Parts) in transit between domestic
locations of Obligors as to which the Liens of the Administrative Agent for
the benefit of the Secured Parties have been perfected at origin and
destination, and except for aircraft, airframes and engines located outside
of the United States pursuant to flight operations in the ordinary course of
business which would be Eligible Collateral but for this clause (b);
(c) is covered by a negotiable document of title, unless such document
has been delivered to the Administrative Agent with all necessary
endorsements;
(d) is not of a type used in the ordinary course of the Obligors'
business;
(e) as to which any of the representations or warranties pertaining to
Collateral set forth in the Loan Documents are untrue;
(f) consists of Hazardous Materials or goods that can be transported or
sold only with licenses that are not readily available;
(g) is not covered by casualty insurance as required to be maintained
under the Loan Documents;
(h) is subject to any patent or trademark license requiring the payment
of royalties or fees or requiring the consent of the licensor for a sale
thereof by the Administrative Agent;
(i) constitutes Technology Equipment;
(j) has not been appraised in accordance with Section 5.17 of this
Agreement;
(k) is property or assets subject to any event of loss, damage or other
casualty that has materially and adversely affected the value of such
Collateral, whether insured or not, if such loss, damage or other casualty
has not been restored or repaired; provided, however, that such property or
assets shall not be deemed "Ineligible Collateral" to the extent of its
current market value after such event of loss, damage or other casualty
(excluding any insurance proceeds);
(l) with respect to Spare Parts, is located at a location other than a
Spare Parts Location; or
(m) the applicable Obligor is not in compliance with the terms of, or
there shall exist a default under, any lease, license, use or occupancy
agreement between such Obligor and the applicable landlord, lessor or
licensor now or hereafter affecting all or any portion of such Collateral
that could reasonably be expected to have an adverse effect on the ability
of the Administrative Agent to access, or exercise remedies against such
Collateral.
"Initial Indebtedness" has the meaning specified in Section 6.10(a).
"Interest Payment Date" means (a) as to any Index Rate Loan, the first
Business Day of each calendar quarter to occur while such Loan is outstanding,
and (b) as to any LIBOR Loan, the last day of the applicable LIBOR Period;
provided, that in the case of any LIBOR Period greater than three months in
duration, interest shall be payable at three month intervals and on the last day
of such LIBOR Period; provided, further, that in addition to the foregoing, each
of (x) the date upon which all of the Loans have been paid in full and (y) the
Maturity Date shall be deemed to be an "Interest Payment Date" with respect to
any interest that has then accrued under this Agreement.
"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.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"International Interest" has the meaning as expressed in the Cape Town
Convention.
"Investment" means with respect to any Person, any direct or indirect
advance, loan (other than loans or advances to customers in the ordinary course
of business that are recorded as accounts receivable on the balance sheet of
such Person or its Subsidiaries) or other extensions of credit or capital
contribution or other equity investment by such Person to any other Person,
including by means of any transfer of cash or other property to others or any
payment for property or services for the account or use of others, any Guarantee
(including any support for a letter of credit issued on behalf of such Person)
incurred for the benefit of such Person or any purchase or acquisition by such
Person of Capital Stock (or warrants, options or rights convertible into or
exercisable for Capital Stock), bonds, notes, debentures or other similar
instruments issued by any other Person; provided that advances or loans by any
Obligor to any other Obligor, Guarantees (including any support for a letter of
credit issued on behalf of another Obligor) incurred by any Obligor for the
benefit of any other Obligor, capital contributions or other equity investments
by an Obligor in any other Obligor and deposits made by any Obligor in
connection with the purchase by an Obligor of Aircraft Related Equipment, Slots
or other property shall not constitute an "Investment."
"Investment Guidelines" means investment guidelines in the form
attached hereto as Exhibit M, together with any amendments, restatements,
supplements or other modifications thereof permitted in accordance with Section
6.10(c).
"IRS" means the Internal Revenue Service of the United States or any
successor thereto.
"Juniper Financing" means the America West Co-Branded Card Agreement,
dated January 25, 2005, between AWA and Juniper Bank, as amended, restated,
supplemented or modified, including pursuant to the Assignment and First
Amendment to the America West Co-Branded Card Agreement, dated as of August 8,
2005, among AWA, Group and Juniper Bank.
"Landlord Waiver" means landlord waiver in substantially the form of
Exhibit K or otherwise in form and substance reasonably satisfactory to the
Administrative Agent.
"Lender" means any Person that (a) is listed on the signature pages
hereof as a "Lender" or (b) from time to time becomes a party hereto by
execution of an Assignment and Acceptance, in each case together with its
successors.
"Lending Office" means, with respect to any Lender, the office of such
Lender specified as its "Lending Office" opposite its name on Annex A or on the
Assignment and Acceptance by which it became a Lender or such other office of
such Lender as such Lender may from time to time specify to the Borrower and the
Administrative Agent.
"LGA" means LaGuardia Airport.
"Liabilities" means all claims, actions, suits, judgments, damages,
losses, liability, obligations, responsibilities, fines, penalties, sanctions,
costs, fees, taxes, commissions, charges, disbursements and expenses, in each
case of any kind or nature (including interest accrued thereon or as a result
thereto and fees, charges and disbursements of financial, legal and other
advisors and consultants), whether joint or several, whether or not indirect,
contingent, consequential, actual, punitive, treble or otherwise.
"LIBOR Loan" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a Business Day selected by the Borrower pursuant to this Agreement
and ending one, two, three or six months thereafter, as selected by the
Borrower's irrevocable notice to the Administrative Agent as set forth in
Section 2.6(d); provided, that the foregoing provision relating to LIBOR Periods
is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
Business Day, such LIBOR Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such
LIBOR Period into another calendar month in which event such LIBOR Period
shall end on the immediately preceding Business Day;
(b) any LIBOR Period that would otherwise extend beyond the Maturity
Date shall end on or prior to such date;
(c) any LIBOR 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 LIBOR Period) shall end on the last
Business Day of a calendar month;
(d) the Borrower shall select LIBOR Periods so that there shall be no
more than 10 separate LIBOR Loans in existence at any one time; and
(e) the provisions in Section 2.6(d) with respect to conversions into
and continuations of LIBOR Loans.
"LIBOR Rate" means for each LIBOR Period, a rate of interest determined
by the Administrative Agent equal to the offered rate for deposits in Dollars
for the applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00
a.m. (London time), on the second full Business Day next preceding the first day
of such LIBOR Period (unless such date is not a Business Day, in which event the
next succeeding Business Day will be used). If such interest rates shall cease
to be available from Telerate News Service, the LIBOR Rate shall be determined
from such financial reporting service or other information as shall be mutually
acceptable to the Administrative Agent and Borrower.
"Lien" means any lien, mortgage, pledge, assignment for security,
security interest, charge, hypothecation, lease or encumbrance of any kind
(including any conditional sale or other title retention agreement, 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" has the meaning specified in Section 2.1(a).
"Loan Documents" means, collectively, this Agreement, the Notes, the
Collateral Documents, the Guaranty, and each certificate, agreement or document
executed by an Obligor and delivered to the Administrative Agent or the Lenders
in connection with or pursuant to this Agreement.
"Loan Facility" means the Commitments and the provisions
herein related to the Loans.
"Marketing and Service Agreements" means those certain business,
marketing and service agreements among an Obligor and any of Mesa Airlines,
Inc., Chautauqua Airlines, Inc., Trans States Airlines, Inc., United Air Lines,
Inc., Republic Airline, Inc., and Air Wisconsin Airlines Corporation and such
other parties or agreements from time to time that include, but are not limited
to, code-sharing, pro-rate, capacity purchase, service, frequent flyer, ground
handling and marketing agreements that are entered into in the ordinary course
of business.
"Material Adverse Effect" means (a) a material adverse effect on (i)
the business, condition (financial or otherwise), operations, performance,
prospects, assets or properties of the Obligors, taken as a whole or (ii) the
legality, validity, binding effect or enforceability against any Obligor of any
Loan Document, or the rights and remedies of the Administrative Agent or any
Lender under any Loan Document, or (b) any material adverse effect on or
material impairment of (i) the ability of the Obligors, taken as a whole, to
perform their payment or other material obligations under the Loan Documents or
(ii) the value of the Collateral or the validity and priority of the Liens on
the Collateral in each case taken as a whole.
"Maturity Date" means March 31, 2011, except that if such date is not a
Business Day, then the Maturity Date shall be the immediately preceding Business
Day.
"Minimum Available Cash Amount" has the meaning specified in Section
6.4(a).
"Moody's" means Moody's Investors Service, Inc. and any successor
thereto that is a nationally recognized rating agency.
"Mortgage" means any mortgage, deed of trust or other similar document
executed or required herein to be executed by any Obligor and granting a
security interest over real property or leasehold interests in real property in
substantially the form of Exhibit F or otherwise in form and substance
reasonably satisfactory to the Administrative Agent.
"Mortgage Supporting Documents" means, with respect to any Mortgage,
each document (including title policies or marked-up unconditional insurance
binders (in each case, together with copies of all exception documents referred
to therein), maps, ALTA (or TLTA, if applicable) as-built surveys (in form and
as to date that is sufficiently acceptable to the title insurer issuing title
insurance to the Administrative Agent for such title insurer to deliver
endorsements to such title insurance as reasonably requested by the
Administrative Agent), environmental assessments and reports and evidence
regarding recording and payment of fees, insurance premium and taxes) that the
Administrative Agent may reasonably request, to create, register, perfect,
maintain, evidence the existence, substance, form or validity of or enforce a
valid lien on such parcel of or leasehold interest in real property in favor of
the Administrative Agent for the benefit of the Secured Parties, subject only to
Permitted Encumbrances and such other Liens as the Administrative Agent may
approve.
"Multiemployer Plan" means a multiemployer plan as defined Section
4001(a)(3) of ERISA, and in respect of which any Obligor or any of its ERISA
Affiliates 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 the Borrower and its 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 Sale, all as
determined in conformity with GAAP, but limited to the period of the required
reserve.
"Net Condemnation Proceeds" means an amount equal to: (i) any cash
payments or proceeds received by an Obligor as a result of any condemnation or
other taking or temporary or permanent requisition of any property, any interest
therein or right appurtenant thereto, or any change of grade affecting any
property, as the result of the exercise of any right of condemnation or eminent
domain by a Governmental Authority (including a transfer to a Governmental
Authority in lieu or anticipation of a condemnation), minus (ii) (a) any actual
and reasonable costs incurred by an Obligor in connection with any such
condemnation or taking (including reasonable fees and expenses of counsel), (b)
provisions for all taxes payable as a result of such condemnation, without
regard to the consolidated results of operations of the Borrower and its
Subsidiaries, taken as a whole, (c) the amount of any Indebtedness secured by a
Lien on any property subject to such condemnation or taking 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 condemnation or taking.
"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 the Borrower and its 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.
"Net Issue Proceeds" means, with respect to any Replacement Secured
Financing, the Cash Proceeds of such Replacement Secured Financing net of (i)
any reasonable and customary brokers' and advisors' fees, any underwriting
discounts and commissions and other costs incurred in connection with such
transaction (provided that evidence of such fees, discounts, commissions and
costs is provided to the Administrative Agent), (ii) provisions for all taxes
payable as a result of such transaction without regard to the consolidated
results of operations of the Borrower and its Subsidiaries, taken as a whole,
and (iii) payments made to repay Indebtedness or any other obligation
outstanding at the time of such Replacement Secured Financing that is secured by
a Lien on the property or assets pledged to secure such Replacement Secured
Financing.
"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 Internal Revenue Code.
"Note" and "Notes" have the meanings specified in Section 2.3(d).
"Notice of Borrowing" has the meaning specified in Section 2.1(b).
"Notice of Conversion/Continuation" has the meaning specified in
Section 2.6(d).
"Obligations" means all payment and performance obligations of every
nature of any Obligor from time to time owed to the Administrative Agent and the
Lenders (together with their respective permitted successors and assigns), or
any of their respective Affiliates, officers, directors, employees, agents or
advisors under or in respect of any Loan Document, whether for principal,
interest, fees, expenses, indemnification or otherwise, whether direct or
indirect (regardless of whether acquired by assignment), absolute or contingent,
due or to become due, whether liquidated or not, now existing or hereafter
arising and however acquired, and whether or not evidenced by any instrument or
for the payment of money, including, without limitation, (a) if such Obligor is
the Borrower, the Loans, (b) all interest, whether or not accruing after the
filing of any petition in bankruptcy or after the commencement of any
insolvency, reorganization or similar proceeding, and whether or not a claim for
post-filing or post-petition interest is allowed in any such proceeding, and (c)
all other fees, expenses (including fees, charges and disbursement of counsel),
interest, commissions, charges, costs, disbursements, indemnities and
reimbursement of amounts paid and other sums chargeable to such Obligor under
any Loan Document.
"Obligors" means the Borrower and each Subsidiary Guarantor, and their
respective successors and assigns.
"Officer" means, as applied to any corporation, each Responsible
Officer, the Chairman of the board of directors (if an officer), Assistant
Treasurer, Secretary or Assistant Secretary.
"Officer's Certificate" means, as applied to the Borrower, a
certificate executed by a Responsible Officer of such Person in his/her capacity
as such; provided that every Officer's Certificate shall include a statement
that, in the opinion of the signer, such Responsible Officer has made or has
caused to be made such examination or investigation as is necessary to enable
such Responsible Officer to express an informed opinion as to the substance of
such Officer's Certificate in light of the provisions hereof pursuant to which
it is being delivered.
"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 property (whether real, personal or mixed) under which such
Person is lessee, that is not a Capital Lease.
"Other Taxes" has the meaning specified in Section 2.11(b).
"Participant" has the meaning specified in Section 9.2(e) hereof.
"Payee" has the meaning specified in Section 9.12.
"Payment Restriction" means, with respect to a Subsidiary of any
Person, any encumbrance, restriction or limitation, whether by operation of the
terms of its charter or by reason of any agreement or instrument, on the ability
of (i) such Subsidiary to (a) pay dividends or make other distributions on its
Capital Stock or make payments on any obligation, liability or Indebtedness owed
to such Person or any other Subsidiary of such Person, (b) make loans or
advances to such Person or any other Subsidiary of such Person or (c) transfer
any of its property or assets to such Person or any other Subsidiary of such
Person or (ii) such Person or any other Subsidiary of such Person to receive or
retain any such (a) dividend, distributions or payments, (b) loans or advances
or (c) property or assets.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Acquisition Financing" means Indebtedness incurred by an
Obligor in connection with an acquisition, merger or consolidation which is
permitted by Section 6.5 and/or Section 6.9 (as applicable) 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; provided, however, that
both immediately before and after giving effect thereto, (a) no Default or Event
of Default shall have occurred and be continuing and (b) the Borrower shall be
in compliance on a Pro Forma Basis with the financial covenants in Section 6.4.
"Permitted Counterparty" means any counterparty to a Secured Hedging
Contract that (a) (i) at the time such Person entered into such Secured Hedging
Contract, was the Administrative Agent, a Lender, or an Affiliate of the
Administrative Agent or a Lender and (ii) is designated by the Borrower to the
Administrative Agent as a "Permitted Counterparty", or (b) (i) is reasonably
acceptable to the Administrative Agent, (ii) is designated by the Borrower to
the Administrative Agent as a "Permitted Counterparty" and (iii) has executed
and delivered to the Administrative Agent an acknowledgement in form and
substance reasonably satisfactory to the Administrative Agent to the extent
requested by the Administrative Agent pursuant to Section 8.11.
"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 Internal
Revenue 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 4.11) 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 (including Liens securing Trade Payables arising from the Obligors'
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, 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 by, or are
pledged to, such Persons to secure amounts that may be owed to such Persons
under the Obligors' agreements with them in connection with their provision
of credit card processing, travel charge processing or clearinghouse
services to the Obligors;
(iv) with respect to real property, easements, rights-of-way,
restrictions, 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; provided that such
charges or encumbrances, if affecting any of the Eligible Real Estate, do
not violate the terms of the applicable Mortgage;
(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
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
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 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) any licensing or sublicensing of intellectual property in the
ordinary course of business of the Obligors;
(xii) Liens arising from precautionary UCC and similar financing
statements relating to Operating Leases not otherwise prohibited under any
Loan Document; and
(xiii) Liens created under the Collateral Documents.
"Permitted Refinancing Indebtedness" means Indebtedness of any Obligor
the cash proceeds of which are used to refinance (for purposes of this
definition, "Refinancing Indebtedness") then outstanding Indebtedness (for
purposes of this definition, "Old Indebtedness") (including by way of an
extension, renewal or replacement of, or substitution for, such Old
Indebtedness) in an amount not to exceed the then outstanding principal amount
of the Old Indebtedness, plus accrued and unpaid interest, premiums, fees and
expenses; provided that: (a) if the Old Indebtedness is subordinated in right of
payment to the Loan, the Refinancing Indebtedness, by its terms or by the terms
of any agreement or instrument pursuant to which it is outstanding, is expressly
made subordinate in right of payment to the Loan, (b) the Refinancing
Indebtedness does not have a final scheduled maturity prior to the final
scheduled maturity of the Old Indebtedness, (c) the average life of the
Refinancing Indebtedness calculated as of the consummation of the refinancing is
not less than the remaining average life of the Old Indebtedness and (d) if the
Old Indebtedness is secured, the Liens securing the Refinancing Indebtedness do
not extend to any assets other than the assets securing the Old Indebtedness.
"Permitted Reinvestment Collateral" means, (i) with respect to Net Cash
Proceeds, replacement assets useful in the Obligors' business; provided,
however, with respect to Net Cash Proceeds from Asset Sales of Appraised
Collateral, such replacement assets must constitute Appraised Collateral, and
(ii) with respect to Net Insurance Proceeds or Net Condemnation Proceeds, to
acquire, construct, repair, restore or replace (including through acquisition or
construction) the Collateral from which such Net Insurance Proceeds or Net
Condemnation Proceeds derived.
"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.
"Philadelphia Airport Lease" means that certain Lease between The City
of Philadelphia and The United States Postal Service, dated December 23, 1974,
as assigned pursuant to the Assignment of Lease dated May 26, 1998 between The
United States Postal Service and US Airways.
"Piedmont" means Piedmont Airlines, Inc.
"Plan" means any "employee benefit plan" as defined in Section 3(3) of
ERISA which is, or (other than for purposes of the first sentence of Section
4.11(a)) was at any time during the preceding six (6) years, maintained or
contributed to, or required to be contributed to, by any Obligor or any of its
ERISA Affiliates, other than a multiemployer plan, within the meaning of Section
4001(a)(3) of ERISA.
"Primary Slots" has the meaning specified in the SGR Security
Agreement.
"Principal Obligors" means the Borrower, US Airways and AWA.
"Pro Forma Basis" means, with respect to compliance with any covenant
hereunder, compliance with such covenant after giving effect to the acquisition
(whether by purchase, merger or otherwise) or disposition (whether by sale,
merger or otherwise) of any company, entity or business or any asset by any
Obligor or any other action which requires compliance on a Pro Forma Basis. In
making any determination of compliance on a Pro Forma Basis, such determination
shall be performed using the consolidated financial statements of such Obligor
which shall be reformulated as if any such acquisition, disposition or other
action had been consummated at the beginning of the period specified in the
covenant with respect to which Pro Forma Basis compliance is required.
"Proceedings" has the meaning specified in Section 5.1(b)(vii).
"PSA Airlines" means PSA Airlines, Inc., a Pennsylvania corporation.
"Real Estate" means the fee or leasehold interests in real property of
a Person, together with the right, title and interest of such Person, if any, in
and to the streets, the real property lying in the bed of any streets, roads or
avenues, opened or proposed, the air space and development rights pertaining to
the real property and the right to use such air space and development rights,
all rights of way, privileges, liberties, tenements, hereditaments and
appurtenances belonging or in any way appertaining thereto, all fixtures, all
easements now or hereafter benefiting the real property and all royalties and
rights appertaining to the use and enjoyment of the real property, including all
alley, vault, drainage, mineral, water, oil and gas rights, together with all of
the buildings and other improvements now or hereafter erected on the real
property and any fixtures appurtenant thereto.
"Redeemable Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise (i) is required to be redeemed prior to
the Maturity Date, (ii) may be required to be redeemed at the option of the
holder of such class or series of Capital Stock at any time prior to the
Maturity Date or (iii) is convertible into or exchangeable for (a) Capital Stock
referred to in clause (i) or (ii) above or (b) Indebtedness having a scheduled
maturity prior to the Maturity Date; provided that any Capital Stock that would
constitute Redeemable Stock solely because of the provisions thereof offering
holders thereof the right to require the issuer thereof to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" occurring prior to the
Maturity Date shall not constitute Redeemable Stock if the asset sale provisions
contained in such Capital Stock specifically provide that, in respect of any
particular asset sale proceeds, the issuer thereof will not be required to
repurchase or redeem any such Capital Stock pursuant to such provisions so long
as the Borrower applies the full amount of such proceeds (net of associated
taxes and transaction costs) to the permanent reduction of the aggregate
outstanding principal amount of the Loan.
"Refinancing" means the refinancing of the AWA Loan Agreement, the US
Airways Loan Agreement, the GE Financings and the Airbus Loan Agreements.
"Register" has the meaning specified in Section 2.3(e).
"Reinvestment Event" means the date on which Net Cash Proceeds, Net
Insurance Proceeds or Net Condemnation Proceeds are deposited in the Collateral
Account.
"Reinvestment Prepayment Date" means, with respect to any Reinvestment
Event, the earliest of (a) the date occurring 365 days after such Reinvestment
Event, unless, prior to any such date, the Borrower or the applicable Subsidiary
has (i) entered into an agreement for the acquisition of or replacement with
Permitted Reinvestment Collateral or (ii) commenced the construction of
Permitted Reinvestment Collateral or the repair or restoration of the original
assets, (b) the date that is five (5) Business Days after the date on which the
Borrower shall have notified the Administrative Agent of the Borrower's
determination not to acquire or construct Permitted Reinvestment Collateral or
repair or restore the original assets with all or any portion of such Net Cash
Proceeds, Net Insurance Proceeds or Net Condemnation Proceeds and (c) the date
the Administrative Agent delivers a notice of the occurrence of an Event of
Default to the Borrower.
"Reinvestment Release Request" means a written notice executed by a
Responsible Officer of the Borrower stating that no Event of Default has
occurred and is continuing, that the Borrower (directly or indirectly through
one of the Subsidiary Guarantors) requests the release of Net Cash Proceeds, Net
Insurance Proceeds or Net Condemnation Proceeds, as applicable, from the
Collateral Account for the acquisition or construction of or replacement with
(or for payments or reimbursement with respect to) Permitted Reinvestment
Collateral, or for the repair or restoration of the original assets as specified
therein.
"Related Person" means, with respect to any Person, each Affiliate of
such Person and each director, officer, employee, agent and advisor of or to
such Person or any of its Affiliates.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facilities, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"Replacement Secured Financing" means any financing transaction,
whether structured as Indebtedness, sale-leaseback or otherwise, (a) which is
secured by any of the Obligors' Appraised Collateral and (b) the Net Issue
Proceeds of which are at least equal to the Collateral Release Value of any
Eligible Appraised Collateral released in connection with such transaction,
other than a financing transaction referred to in the proviso to Section 5.8(b)
with respect to After-Acquired Section 1110 Equipment, After-Acquired Slots or
After-Acquired Gates.
"Requirements of Law" means, with respect to any Person, collectively,
the common law and all federal, state, local, foreign, multinational or
international laws, statutes, codes, treaties, standards, rules and regulations,
guidelines, ordinances, orders, judgments, writs, injunctions, decrees
(including administrative or judicial precedents or authorities) and the
interpretation or administration thereof by, and other determinations,
directives, requirements or requests of, any Governmental Authority, in each
case whether or not having the force of law and that are applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.
"Requisite Lenders" means, at any time, Lenders having at such time in
excess of 50% of the aggregate principal amount of the Loan then outstanding.
"Responsible Officer" means with respect to an Obligor, any of its
Chief Executive Officer, President, Chief Financial Officer, General Counsel,
Treasurer or Controller, but in any event, with respect to financial matters,
its Chief Financial Officer, Treasurer or Controller.
"Restricted Payment" means, with respect to any Person (i) any
declaration or payment of dividends on or making of any distributions in respect
of the Capital Stock of such Person (other than dividends or distributions
payable solely in shares of Capital Stock (other than Redeemable Stock) or in
options, warrants, or other rights to purchase Capital Stock (other than
Redeemable Stock)) to holders of Capital Stock of such Person, (ii) any
purchase, redemption or other acquisition or retirement for value (other than
through the issuance solely of Capital Stock (other than Redeemable Stock) or
options, warrants or other rights to purchase Capital Stock (other than
Redeemable Stock)) of any Capital Stock or warrants, rights (other than
exchangeable or convertible Indebtedness of such Person not prohibited under
clause (iii) below) or options to acquire Capital Stock of such Person, and
(iii) any prepayment, redemption, repurchase, defeasance (including, but not
limited to, in substance or legal defeasance) or other acquisition or retirement
for value (other than through the issuance solely of Capital Stock (other than
Redeemable Stock) or warrants, rights or options to acquire Capital Stock (other
than Redeemable Stock)) of Indebtedness of such Person or any Subsidiary of such
Person, directly or indirectly (including by way of setoff or amendment of the
terms of any Indebtedness in connection with any retirement or acquisition of
such Indebtedness), which is made other than at any scheduled maturity thereof
or by any scheduled repayment or scheduled sinking fund payment (collectively, a
"prepayment"); provided that the following shall not constitute Restricted
Payments: (a) any declaration, payment, distribution, purchase, redemption,
acquisition or retirement for value, repurchase or defeasance referred to in
clauses (i) through (iii) above in each case solely among Obligors, (b)
repayment of the Loan, (c) payments of cash in lieu of fractional shares in
connection with repurchases or conversions of securities of an Obligor not
prohibited hereunder and (d) any mandatory prepayment of Indebtedness (other
than Indebtedness that is contractually subordinated to the Loan) of the
Borrower or any of its Subsidiaries in accordance with the terms thereof.
"Routes" means all of the Routes as defined in the SGR Security
Agreement.
"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 Securities and Exchange Commission of the United States
or any successor thereto.
"Secondary Slots" has the meaning specified in the SGR Security
Agreement.
"Section 1110 Equipment" means airframes, aircraft, aircraft engines,
propellers and appliances which are not spare parts (as such terms are used in
Section 1110 of the Bankruptcy Code).
"Secured Hedging Contact" means any Currency Agreement or Interest Rate
Agreement between an Obligor and a Permitted Counterparty that is designated by
the Borrower to the Administrative Agent as a "Secured Hedging Contract".
"Secured Obligations" means (i) the Obligations and (ii) all amounts,
obligations, covenants and duties owing by the Borrower to the Permitted
Counterparties under the Secured Hedging Contracts; provided, however, that the
aggregate amount of all Secured Obligations under this clause (ii) shall not
exceed $50,000,000.
"Secured Parties" means the Lenders, the Administrative Agent, the
Permitted Counterparties and any other holder of any Secured Obligation.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"Security Agreement" means that certain Security Agreement, dated as of
the date hereof, among the Obligors and the Administrative Agent, in
substantially the form of Exhibit E.
"SGR Security Agreement" means that certain Slot, Gate and Route
Security Agreement, dated as of the date hereof, among US Airways, AWA,
Piedmont, PSA Airlines and the Administrative Agent, in substantially the form
of Exhibit D.
"Slot Regulations" means 49 U.S.C. ss. 40103 and 14 C.F.R. ss.ss.
93.211 - 93.227, and any amendment, supplement or other modification thereto, or
successor, replacement or substitute federal law or regulation, or any foreign
law or regulation, as applicable, concerning the right or operational authority
to conduct landing or takeoff operations at any airports.
"Slots" means all FAA Slots and all Foreign Slots.
"Slot Utilization" means, with respect to any FAA Slot, (a) a
Slot which is used for a take-off or landing operation, (b) if, by regulation or
other regulatory notice, the FAA considers such Slot as "used" for purposes of
the Slot Regulations, regardless whether or not such Slot was, in fact, used
(e.g., holidays, labor actions), (c) if, by waiver, the FAA considers such Slot
as "used" for purposes of the Slot Regulations, or (d) if the FAA otherwise
waives the utilization requirement of the Slot Regulations.
"Slot Utilization Report" has the meaning specified in Section 5.13(a).
"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 Engines" means all of the "Engines" as defined in the Aircraft
Mortgage.
"Spare Parts" means all of the "Spare Parts" as defined in the Aircraft
Mortgage.
"Spare Parts Location" has the meaning specified in the Aircraft
Mortgage.
"SPV" means any special purpose funding vehicle identified as such in a
writing by any Lender to the Administrative Agent.
"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.
"Subsidiary Guarantor" means each Person that is a direct or indirect
Subsidiary of the Borrower as of the Closing Date (other than the Excluded
Subsidiaries) and each other Subsidiary of the Borrower that becomes a party to
the Guaranty pursuant to Section 5.8(a), but excluding in each case any
Subsidiary that is a CFC and any Person that is released as a guarantor pursuant
to Section 8.10(a). As of the Closing Date the Subsidiary Guarantors are US
Airways, AWA Holdings, AWA, Piedmont, Material Services Company, Inc. and PSA
Airlines.
"Syndication Letter" means the letter agreement, dated March 7, 2006,
addressed to the Borrower from the Administrative Agent and accepted by the
Borrower, with respect to certain fees to be paid from time to time to the
Administrative Agent and its Affiliates.
"Synthetic Lease" means (a) a so-called synthetic, off-balance sheet
lease or lease in which the lessee is contractually entitled to the tax benefits
of ownership of the leased assets, or (b) an agreement for the use or possession
of property creating obligations that do not appear on the balance sheet of such
Person but which, upon the insolvency or bankruptcy of such Person, would be
characterized as the indebtedness of such Person (without regard to accounting
treatment).
"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 by any Governmental Authority.
"Technology Equipment" means technology assets including mainframe
computers, servers, general computer equipment, printers, monitors, hard drives,
memory, storage devices and call centers/ACD systems but excluding Flight
Simulators.
"Tempe Property" means AWA's fee interests in the real property (i)
located at 250 W. Rio Salado Parkway, Tempe, Arizona 85281 and (ii) identified
as OFFICE PLAZA 222 condominium plat according to Book 236 of Maps, Page 48,
Maricopa Country, Arizona.
"Title 49" means 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 but limited to current liabilities in accordance with GAAP.
"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 relating to (a)
federal income tax withholding and backup withholding tax, employment taxes,
transportation excise taxes and security related charges, including (i) federal
payroll withholding taxes, as described in Sections 3101, 3111 and 3402 of the
Internal Revenue Code; (ii) federal Unemployment Tax Act taxes, as described in
Chapter 23 of Subtitle C of the Internal Revenue Code; (iii) federal air
transportation excise taxes, as described in Sections 4261 and 4271 of the
Internal Revenue Code; (iv) federal security charges, as described in Title 49
of the Code of Federal Regulations of 2002 (referred to in this definition as
the "CFR"), Chapter XII, Part 1510; (v) federal Animal and Plant Health
Inspection Service of the United States Department of Agriculture (APHIS) user
fees, as described in Title 21 United States Code (2002) (referred to in this
definition as "U.S.C.") Section 136a and 7 CFR Section 354.3; (vi) U.S.
Citizenship and Immigration Services fees, as described in 8 U.S.C. Section 1356
and 8 CFR Part 286; (vii) federal customs fees as described in 19 U.S.C. Section
58c and 19 CFR Section 24.22; and (viii) federal jet fuel taxes as described in
Sections 4091 and 4092 of the Internal Revenue Code collected on behalf of and
owed to the federal government, (b) any and all state and local income tax
withholding, employment taxes and related charges and fees and similar taxes,
charges and fees, including, but not limited to, state and local payroll
withholding taxes, unemployment and supplemental unemployment taxes, disability
taxes, workman's or workers' compensation charges and related charges and fees
that are analogous to those described in Subtitle C of the Internal Revenue Code
and that are described in or are analogous to Chapter 23 of Title 19 Delaware
Code Annotated (2002) (referred to in this definition as "D.C.A.") collected on
behalf of and owed to state and local authorities, agencies and entities, (c)
Passenger Facility Charges as described in Title 49 United States Code Section
40117 (2004) and Title 14 of the Code of Federal Regulations, Subchapter 1, Part
158 collected on behalf of and owed to various administrators, institutions,
authorities, agencies and entities and (d) voluntary and/or other
non-statutorily required employee payroll deductions, whether authorized by the
employee, imposed by court order, agreed to pursuant to collective bargaining
arrangement or otherwise, including (i) employee contributions made for the
purpose of participating in any employer-sponsored retirement plan as described
and defined in Section 401(k) of the Internal Revenue Code (including repayment
of any 401(k) related loans made to the employee but excluding any funds matched
and/or contributed by the employer on behalf of any employee), (ii) employee
payments made for the purpose of participating in any employer-sponsored
medical, dental or related health plan, (iii) employee payments made for the
purpose of satisfying periodic union dues, (iv) employee payments made for the
purpose of purchasing United States Savings Bonds, (v) employee payments made
for the purpose of making deposits to an account at or making repayment of an
extension of credit from an employer-associated credit union, (vi) employee
payments made for the purpose of purchasing life, accident, disability or other
insurance, (vii) employee payments made for the purpose of participating in any
employer-sponsored cafeteria plan as described and defined in Section 125 of the
Internal Revenue Code, (viii) employee-directed donations to charitable
organizations and (ix) levies, garnishments and other attachments on employee
compensation (as described in Sections 6305 and 6331 of the Internal Revenue
Code, in Section 4913 of Title 10 of D.C.A. or in any analogous provision of
other applicable federal, state or local law) collected on behalf of any
Governmental Authority or any other Person authorized to receive funds of the
type described in this clause (d).
"Two-Month FAA Reporting Period" means the period for which air
carriers provide slot utilization reports to the FAA pursuant to 14 C.F.R. ss.
93.227(i).
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be enacted and in effect in the State of New York; provided, that to the
extent that the UCC is used to define any term herein or in any Loan Document
and such term is defined differently in different Articles or Divisions of the
UCC, the definition of such term contained in Article or Division 9 shall
govern; provided, further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, the Administrative Agent's or Lender's Lien on any
Collateral is governed by the Uniform Commercial Code as enacted and in effect
in a jurisdiction other than the State of New York, the term "UCC" shall mean
the Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"United States Citizen" has the meaning specified in Section 4.1(b).
"Unrestricted Cash" means cash and Cash Equivalents of the Obligors
that (i) may be classified, in accordance with GAAP, as "unrestricted" on the
consolidated balance sheets of the Borrower or (ii) may be classified, in
accordance with GAAP, as "restricted" on the consolidated balance sheets of
Borrower solely in favor of the Administrative Agent and the Lenders pursuant to
the Loan Documents; provided, however, that Unrestricted Cash shall not include
(a) Cure Collateral held in the Collateral Account, (b) passenger facility
charges and (c) Excluded Cash.
"US Airways" means US Airways, Inc., a Delaware corporation.
"US Airways Convertible Notes" means the Borrower's 7% Senior
Convertible Notes due 2020 issued pursuant to the Indenture, dated as of
September 30, 2005, between the Borrower, the guarantors listed therein and U.S.
Bank National Association, as Trustee.
"US Airways Loan Agreement" means that certain Amended and Restated
Loan Agreement dated as of September 27, 2005 among US Airways, as borrower
thereunder, the Borrower, the other direct and indirect Subsidiaries of the
Borrower parties thereto, the several lenders from time to time party thereto,
Citibank, N.A., in its capacity as agent thereunder, Citicorp North America,
Inc., in its capacity as Govco administrative agent, Wilmington Trust Company,
in its capacity as collateral agent thereunder, and the Air Transportation
Stabilization Board.
"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.
"Warrants" means the Warrant to purchase up to 386,925 shares of the
Borrower's Common Stock issued by the Borrower to AFS Cayman Limited, which
Warrant is being issued in replacement for the Warrant to purchase up to 938,000
shares of AWA Holdings' class B common stock issued by AWA Holdings to AFS
Cayman Limited on January 18, 2002.
"Withdrawal Liability" means liability (whether or not assessed) with
respect to a Multiemployer Plan as a result of (i) a complete or partial
withdrawal from such Multiemployer Plan pursuant to Section 4201 of ERISA or
(ii) increases in contributions required to be made pursuant to Section 4243 of
ERISA.
"Working Capital" means, as of any date, (i) the current assets
(excluding cash and Cash Equivalents) of the Borrower minus (ii) the current
liabilities of the Borrower (other than the current portion of long term debt),
in each case, determined on a consolidated basis and otherwise, in accordance
with GAAP as of such date.
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.
(a) Accounting Terms. 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.
(b) Change in GAAP. If any change in accounting principles used in the
preparation of the most recent financial statements referred to in Section 5.1
is hereafter required or permitted by the rules, regulations, pronouncements and
opinions of FASB or the American Institute of Certified Public Accountants (or
any successor thereto) and such change is adopted by an Obligor with the
agreement of its independent public accountants and results in a change in any
of the calculations required by Article VI had such accounting change not
occurred, the parties hereto agree to promptly enter into good faith
negotiations in order to amend such provisions so as to equitably reflect such
change with the desired result that the criteria for evaluating compliance with
such covenants by the Obligors shall be the same after such change as if such
change had not been made; provided, however, that no change in GAAP that would
affect a calculation that measures compliance with any covenant contained in
Article VI shall be given effect until such provisions are amended to reflect
such changes in GAAP.
Section 1.4 Certain Terms.
(a) Certain References. 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) References to Exhibits, Schedules, etc. 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 unless otherwise indicated.
(c) References to Agreements. 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 to such
agreement shall be to such agreement as so amended, restated, supplemented or
modified.
(d) References to Statutes. 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) Miscellaneous. 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 LOAN
Section 2.1 The Loan.
(a) The Commitment. Subject to the terms and conditions hereof, each
Lender agrees to make a loan (collectively, the "Loan") on the Closing Date to
the Borrower in an aggregate principal amount equal to its Commitment. The
obligations of each Lender hereunder shall be several and not joint. Amounts of
the Loan repaid may not be reborrowed.
(b) Borrowing Procedures. The borrowing of the Loan shall be made on
notice given by the Borrower to the Administrative Agent not later than 12:00
noon (New York City time), one Business Day prior to the anticipated Closing
Date. Such notice may be made in a writing substantially in the form of Exhibit
N (a "Notice of Borrowing") duly completed and executed by the Borrower. The
Administrative Agent shall give to each Lender prompt notice of the
Administrative Agent's receipt of a Notice of Borrowing. Each Lender shall,
before 11:00 a.m. (New York City time) on the Closing Date, make available to
the Administrative Agent an amount equal to the Loan to be made by such Lender.
Upon fulfillment or due waiver on the Closing Date of the applicable conditions
set forth in Article III, the Administrative Agent shall make such funds
available to the Borrower.
Section 2.2 Scheduled Repayment of the Loan. The Borrower shall repay
the aggregated outstanding principal amount of the Loan in full together with
accrued and unpaid interest thereon and all other amounts owing hereunder in
respect thereof on the Maturity Date (or, if earlier, the date the Loan is
accelerated pursuant to Section 7.2).
Section 2.3 Evidence of Debt.
(a) Lenders' Accounts. Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing such Lender's portion of
the Loan outstanding from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time under this Agreement.
(b) Administrative Agent's Records of Loan. The Administrative Agent
shall establish and maintain a register for recording with respect to the Loan
(i) the date and amount of each payment on the Loan made by or on behalf of, or
collected from, the Borrower, (ii) the amount of each such payment applied in
accordance with Section 2.8(d) and (e) or other applicable terms hereof to
scheduled principal of or interest on the Loan, and (iii) the then outstanding
principal balance of the Loan (without reliance on the Lenders' accounts).
(c) Entries Prima Facie Evidence. The entries made in the accounts
maintained pursuant to this Section 2.3 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 Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrower to repay the Loan in
accordance with its terms.
(d) Notes. Any Lender may elect, by notice to the Borrower and the
Administrative Agent, to have such Lender's Loan be evidenced by a Note issued
to that Lender. Upon such request, the Borrower shall execute and deliver a
promissory note substantially in the form of Exhibit B (each a "Note" and
collectively the "Notes") to the applicable Lender, in the principal amount of
the Loan owing to such Lender, dated the Closing Date and otherwise
appropriately completed. Each Note shall be made payable to the applicable
Lender at the office of the Administrative Agent. If no such Note is requested,
such Lender may rely on the Register as evidence of the amount of Obligations
with respect to the Loan from time to time owing to it. If a Note is mutilated,
lost, stolen or destroyed, the Borrower shall issue a new Note, in the same
principal amount and having the same interest rate, date and maturity as the
Note so mutilated, lost, stolen or destroyed endorsed to indicate all payments
thereon. In the case of any lost, stolen or destroyed Note, there shall first be
furnished to the Borrower an instrument of indemnity from the applicable Lender
and evidence of such loss, theft or destruction reasonably satisfactory to each
of them.
(e) Register. The Administrative Agent will establish and maintain a
record of ownership (the "Register") in which the Administrative Agent agrees to
register by book entry the Administrative Agent's and each Lender's interest in
the Loan, 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 Administrative Agent
shall maintain a copy of each Assignment and Acceptance delivered to and
accepted by it and shall record the names and addresses of the Lenders and
principal amount of the Loan owing to each Lender from time to time. Solely for
purposes of this Section 2.3(e), the Administrative Agent shall be the
Borrower's agent for purposes of establishing and maintaining the Register. The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the Register as a Lender for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower, the Administrative Agent or any Lender (with respect to
information regarding its Loan) at any reasonable time and from time to time
upon reasonable prior notice.
Section 2.4 Optional Prepayments.
(a) Notice. The Borrower may, upon at least fifteen (15) days' prior
revocable notice to the Administrative Agent stating the proposed date and
aggregate principal amount of the prepayment, elect to prepay the outstanding
principal amount of the Loan, in whole or in part (but not less than a minimum
amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof),
together with accrued interest to the date of such prepayment on the principal
amount prepaid; provided, however, that upon any prepayment of all or a portion
of the Loan by the Borrower, or if the Borrower revokes such notice pursuant to
clause (b) below, the Borrower shall also pay any amounts owing pursuant to
Section 2.9(d).
(b) Amounts Due upon Notice. Upon the giving of any notice of
prepayment under Section 2.4(a), the principal amount of the Loan specified to
be prepaid together with accrued and unpaid interest thereon shall (subject to
the proviso below) become due and payable on the date specified for such
prepayment; provided, however, that the Borrower may revoke any notice of
prepayment given under Section 2.4(a) by notice to the Administrative Agent no
later than 10:00 a.m. (New York City time) on the date specified for such
prepayment (which notice may be provided telephonically or in person if promptly
confirmed in writing).
(c) Application of Optional Prepayments. Any partial prepayment of the
Loan under this Section 2.4 shall be applied to the outstanding principal amount
of the Loan ratably as to each Lender. Any such prepayment shall be paid to the
Administrative Agent for application as provided in Section 2.8. The Borrower
shall have no right to optionally prepay the principal amount of the Loan other
than as provided in this Section 2.4.
Section 2.5 Mandatory Prepayments.
(a) Replacement Secured Financing. Upon receipt by an Obligor of any
Cash Proceeds from any Replacement Secured Financing, the Borrower shall prepay
the Loan from the proceeds thereof in the manner provided below in an aggregate
amount equal to the Collateral Release Value for each item or category (as
applicable) of Collateral subject to such Replacement Secured Financing. Any
prepayment of the Loan under this subsection shall be made on the Business Day
following the receipt by such Obligor of the proceeds of the applicable
Replacement Secured Financing.
(b) Asset Sales. Upon receipt by an Obligor of any Cash Proceeds from
an Asset Sale permitted under Section 6.13, the Borrower shall prepay the Loan
as follows:
(i) with respect to Net Cash Proceeds from an Asset Sale in a
sale-leaseback transaction of (A) Aircraft Related Equipment that is not
(and is not required to be pursuant to the terms of the Loan Documents)
Collateral or (B) After-Acquired Section 1110 Equipment, After-Acquired
Slots and After-Acquired Gates which have been pledged (or would be pledged
within 15 days) as Collateral but is subject to release pursuant to Section
5.8(b), the Borrower shall prepay the Loan in an amount equal to fifty
percent (50%) of the Net Cash Proceeds of such sale-leaseback; provided that
the Obligors shall not be required to prepay the Loan with the Net Cash
Proceeds from any such sale-leaseback transaction entered into within
twenty-four (24) months of the acquisition of such Aircraft Related
Equipment, After-Acquired Section 1110 Equipment, After-Acquired Slots or
After-Acquired Gates (as applicable); and
(ii) with respect to all other Asset Sales, the Borrower shall prepay
the Loan in an aggregate amount equal to one hundred percent (100%) of the
Net Cash Proceeds from such Asset Sales; provided, however, that the
Borrower shall not be obligated to so prepay the Loan (A) if the Borrower
deposits 100% of such Net Cash Proceeds in the Collateral Account, to be
applied in accordance with Section 2.5(g), (B) with Net Cash Proceeds from
Asset Sales to the extent such Net Cash Proceeds do not exceed $5,000,000 in
the aggregate per Fiscal Year, or (C) from the sale or disposition of
Investments permitted to be made pursuant to Section 6.2 hereof, other than
the Investments permitted under clauses (ii), (vii), (viii), (x), (xi) and
(xiv) of Section 6.2 (except to the extent the Investment is permitted under
another clause of Section 6.2).
Any prepayment of the Loan under this subsection (b) shall be made no later than
three (3) Business Days following the receipt by such Obligor of the proceeds of
such Asset Sale.
(c) Insurance/Condemnation Proceeds. No later than three (3) Business
Days following the date of receipt by an Obligor of any Net Insurance Proceeds
or Net Condemnation Proceeds, or in the case of the Collateral, such other time
as provided in the applicable Collateral Document, the Borrower shall prepay the
Loan in an amount equal to the amount by which the aggregate amount of the sum
of such Net Insurance Proceeds and Net Condemnation Proceeds in any Fiscal Year
exceeds $5,000,000; provided the Borrower shall not be obligated to so prepay
the Loan if and to the extent that the Borrower deposits 100% of such Net
Insurance Proceeds or Net Condemnation Proceeds in excess of $5,000,000 in any
Fiscal Year in the Collateral Account, to be applied in accordance with Section
2.5(g); provided, further, that any Net Insurance Proceeds, Net Condemnation
Proceeds and Insurance Proceeds (as defined in the Aircraft Mortgage) received
by the Administrative Agent and not required to be applied pursuant to this
clause (c) or the applicable Collateral Document shall be returned by the
Administrative Agent to the Borrower.
(d) Change of Control. Upon the occurrence of a Change of Control, the
Borrower shall prepay the Loan in full, together with accrued interest thereon
to the date of such prepayment. Any prepayment of the Loan under this subsection
(d) shall be made on the date of occurrence of such Change of Control.
(e) Collateral Coverage Ratio; Slots.
(i) If at any time the Borrower is not in compliance with the
Collateral Coverage Ratio, the Borrower shall prepay the Loan to the extent
required pursuant to Section 5.8(c).
(ii) If at any time Primary Slots shall have been withdrawn by the FAA
or otherwise revoked or terminated by or with the FAA on a final basis after
all appeals have been exhausted during the term of the Loan as the result of
failure by any Obligor or by any lessee or licensee of any Obligor to comply
with the Slot Regulations, the Borrower shall prepay the Loan in an amount
equal to 100% of the Appraised Value of such Slots (which Appraised Value
shall be based on the then most current Appraisal Report as of the date of
such withdrawal, revocation or termination). Any prepayment of the Loan
under this clause (ii) shall be made no later than three (3) Business Days
following the date of such withdrawal, revocation or termination.
(f) Application of Prepayments. Any partial prepayments of the Loan
made by the Borrower in accordance with this Section 2.5 shall be applied to the
outstanding principal balance of the Loan ratably as to each Lender. The
Borrower shall also pay any amounts owing pursuant to Section 2.9(d) in
connection with any prepayment under this Section 2.5. All prepayments under
this Section 2.5 shall be paid to the Administrative Agent for application as
provided in Section 2.8.
(g) Reinvestment. Except as otherwise provided in the Aircraft
Mortgage, any Net Cash Proceeds, Net Insurance Proceeds or Net Condemnation
Proceeds deposited in the Collateral Account pursuant to Section 2.5(b)(ii),
Section 2.5(c) or any other provision in the Loan Documents shall, within five
(5) Business Days of delivery of a Reinvestment Release Request, be released to
the Borrower to acquire, construct, or replace with Permitted Reinvestment
Collateral, or repair or restore the original assets, or to reimburse any
Obligor for payments or disbursements with regard to any of the foregoing, until
the Reinvestment Prepayment Date corresponding thereto, on which date the Net
Cash Proceeds, Net Insurance Proceeds or Net Condemnation that are subject to
such Reinvestment Prepayment Date, if any, shall be applied to prepay the Loan.
Section 2.6 Interest.
(a) Rate of Interest. Except as otherwise provided in Section 2.6(c)
and Section 2.9, the Borrower shall pay interest to the Administrative Agent,
for the ratable benefit of Lenders, in arrears on each applicable Interest
Payment Date, at the Index Rate plus the Applicable Index Margin per annum or,
at the election of the Borrower, the applicable LIBOR Rate plus the Applicable
LIBOR Margin per annum.
(b) Interest Payments. Interest accrued on the Loan shall be payable in
arrears on each Interest Payment Date, upon the payment or prepayment thereof in
whole or in part, and, if not previously paid in full, at maturity (whether by
acceleration or otherwise). Interest on the Loan shall be calculated on the
basis of a year of 360 days (or in the case of interest calculated based upon
the Index Rate, a 365/366 day year) and actual number of days elapsed.
(c) Default Interest. Notwithstanding the rate of interest specified in
Section 2.6(a), effective immediately upon (i) the occurrence of any Event of
Default under Sections 7.1(a) (with respect to principal due on the Maturity
Date and scheduled interest payments only), 7.1(f) or 7.1(g) or (ii) the
delivery of a notice by the Administrative Agent or the Requisite Lenders to the
Borrower declaring default interest to be payable during the continuance of any
other Event of Default and, in each case, for as long as such Event of Default
shall be continuing, the principal balance of all Obligations (including any
Obligation that bears interest by reference to the rate applicable to any other
Obligation) then due and payable shall bear interest at a rate that is 2% per
annum in excess of the interest rate applicable to such Obligations from time to
time, payable on demand or, in the absence of demand, on the date that would
otherwise be applicable.
(d) Conversion/Continuation. So long as no Event of Default has
occurred and is continuing, the Borrower shall have the option to (i) convert at
any time all or any part of the outstanding Loans from Index Rate Loans to LIBOR
Loans, (ii) convert any LIBOR Loan to an Index Rate Loan, subject to payment of
LIBOR breakage costs in accordance with Section 2.9(d) if such conversion is
made prior to the expiration of the LIBOR Period applicable thereto, or (iii)
continue all or any portion of any Loan as a LIBOR Loan upon the expiration of
the applicable LIBOR Period, and the succeeding LIBOR Period of that continued
Loan shall commence on the first day after the last day of the LIBOR Period of
the Loan to be continued. Any Loan or group of Loans having the same proposed
LIBOR Period to be made or continued as, or converted into, a LIBOR Loan must be
in a minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess
of such amount. Any such election must be made by 11:00 a.m. (New York time) on
the third Business Day prior to (1) the date of any proposed Loan which is to
bear interest at the LIBOR Rate, (2) the end of each LIBOR Period with respect
to any LIBOR Loans to be continued as such, or (3) the date on which the
Borrower wishes to convert any Index Rate Loan to a LIBOR Loan for a LIBOR
Period designated by the Borrower in such election. If no election is received
with respect to a LIBOR Loan by 11:00 a.m. (New York time) on the third Business
Day prior to the end of the LIBOR Period with respect thereto (or if an Event of
Default has occurred and is continuing), that LIBOR Loan shall be converted to
an Index Rate Loan at the end of its LIBOR Period. The Borrower must make such
election by notice to the Administrative Agent in writing, by telecopy or
overnight courier. In the case of any conversion or continuation, such election
must be made pursuant to a written notice (a "Notice of
Conversion/Continuation") in the form of Exhibit L. No Loan may be made as or
converted into a LIBOR Loan until after five (5) Business Days following the
Closing Date and, until the earlier of ninety (90) days following the Closing
Date and completion of primary syndication of the Loans as determined by the
Administrative Agent, no Loan may be converted into or continued as a LIBOR Loan
that has an interest period of more than one month.
Section 2.7 Fees.
(a) Agency Fees. The Borrower shall pay to the Administrative Agent and
its Affiliates the fees described in the Syndication Letter.
(b) Fees Non-refundable. All fees paid under this Section 2.7 shall be
non-refundable.
(c) Interest on Fees. If any fee or other amount payable by the
Borrower hereunder is not paid when due, such overdue amount shall bear interest
at a rate which is two percent (2.0%) per annum in excess of the then applicable
interest rate on Index Rate Loans.
Section 2.8 Payments and Computations.
(a) Payments. The Borrower shall make each payment hereunder (including
fees and expenses) not later than 12:00 noon (New York City time) on the day
when due, in Dollars, to the Administrative Agent at the Collection Account, in
immediately available funds without set-off, defense, recoupment or
counterclaim. All payments in respect of any Obligations shall at all times be
made to the Administrative Agent, whether or not a demand shall have been made.
The Administrative 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 Section 2.8(d) or (e), or both, as applicable.
Payments received by the Administrative Agent after 12:00 noon (New York City
time) shall be deemed to be received on the next Business Day.
(b) Computation. Each determination by the Administrative Agent of an
interest rate and fees hereunder shall be conclusive and binding for all
purposes, absent manifest error.
(c) Payments on Business Days. Whenever any payment hereunder shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fees, as the case
may be.
(d) Application of Payments - No Event of Default. So long as no Event
of Default under any of clauses (a) (including any failure to pay all amounts
hereunder upon acceleration as a result of any other Event of Default), (f) or
(g) of Section 7.1 has occurred and is continuing or would result therefrom, the
Administrative Agent shall apply all payments in respect of any Obligations in
the following order:
(i) first, to pay any fees then due and payable under Section 2.7(a) to
the Administrative Agent;
(ii) second, to pay interest then due and payable in respect of the
Loan to the Lenders on a pro rata basis;
(iii) third, to pay principal then due and payable on the Loan to the
Lenders, on a pro rata basis; and
(iv) fourth, to pay any other Obligations then due and payable to the
Administrative Agent and the Lenders, on a pro rata basis.
(e) Application of Payments After Event of Default. After the
occurrence and during the continuance of an Event of Default under any of
clauses (a) (including any failure to pay all amounts hereunder upon
acceleration as a result of any other Event of Default), (f) or (g) of Section
7.1, the Administrative Agent shall apply all payments in respect of any Secured
Obligations (including amounts received by the Administrative Agent upon the
exercise of remedies under the Collateral Documents) in the following order:
(i) first, to pay Obligations in respect of any expenses, fees,
indemnities or other sums owing hereunder then due to the Administrative
Agent;
(ii) second, to pay Obligations in respect of any expenses, fees,
indemnities or other sums owing hereunder not referred to in clauses (iii)
and (iv) below then due to the Lenders, on a pro rata basis;
(iii) third, to pay on a pro rata basis interest then due and payable
in respect of the Loan to the Lenders;
(iv) fourth, to pay or prepay principal payments on the Loan to the
Lenders and to pay amounts owing with respect to the Secured Hedging
Contracts, on a pro rata basis; and
(v) fifth, to pay any other Secured Obligations then due and payable to
the Secured Parties, on a pro rata basis.
(f) Funding Defaults. Unless the Borrower has notified the
Administrative Agent, prior to the date any payment is required to be made by it
to the Administrative Agent hereunder, that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has timely made
such payment and may (but shall not be so required to), in reliance thereon,
make available a corresponding amount to the Person entitled thereto. If and to
the extent that such payment was not in fact made to the Administrative Agent in
immediately available funds, then each Lender shall forthwith on demand repay to
the Administrative Agent the portion of such assumed payment that was made
available to such Lender in immediately available funds, together with interest
thereon in respect of each day from and including the date such amount was made
available by the Administrative Agent to such Lender to the date such amount is
repaid to the Administrative Agent in immediately available funds (at the
applicable Federal Funds Rate from time to time in effect for the first Business
Day and thereafter, at the rate applicable to Index Rate Loans). A notice of the
Administrative Agent to the Lenders with respect to any amount owing under this
subsection (f) shall be conclusive, absent manifest error.
Section 2.9 Certain Provisions Governing the Loan.
(a) Interest Rate Unascertainable, Inadequate or Unfair. In the event
that (i) the Administrative Agent determines that adequate and fair means do not
exist for ascertaining the applicable interest rates by reference to which the
LIBOR Rate is determined or (ii) the Requisite Lenders notify the Administrative
Agent that the LIBOR Rate for any LIBOR Period will not adequately reflect the
cost to the Lenders of making or maintaining such Loans for such LIBOR Period,
the Administrative Agent shall promptly so notify the Borrower and the Lenders,
whereupon the obligation of each Lender to make or to continue LIBOR Rate Loans
shall be suspended as provided in clause (e) below until the Administrative
Agent shall notify the Borrower that the Requisite Lenders have determined that
the circumstances causing such suspension no longer exist.
(b) Increased Costs. If at any time any Lender shall determine that as
a result of the introduction of or any change after the date hereof in or in the
interpretation of any law, treaty or governmental rule, regulation or order or
the compliance by such Lender with any guideline, request or directive after the
date hereof from any central bank or other Governmental Authority (whether or
not having the force of law), there shall be any increase in the cost to such
Lender of agreeing to make or making, funding, guaranteeing or maintaining any
portion of the Loan (except in respect of Taxes), then the Borrower shall from
time to time, within five (5) Business Days of a demand (which demand shall be
accompanied by a statement 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 to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender or additional amounts sufficient to
compensate such Lender for such increased cost; provided that no Lender shall be
entitled to claim any such additional amount for amounts incurred more than six
(6) months prior to the making of such demand. A certificate as to the amount of
such increased cost, submitted to the Borrower (and the Administrative Agent) by
such Lender shall be conclusive and binding for all purposes, absent manifest
error. Each Lender shall promptly notify in writing the Borrower and the
Administrative Agent of any event of which such Lender has knowledge, occurring
after the date hereof, which would entitle such Lender to compensation pursuant
to this Section 2.9(b) and will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender be otherwise disadvantageous to it.
(c) Illegality. If any Lender determines that the introduction of, or
any change in or in the interpretation of, any Requirement of Law after the date
of this Agreement shall make it unlawful, or any Governmental Authority shall
assert that it is unlawful, for any Lender or its applicable lending office to
make LIBOR Rate Loans or to continue to fund or maintain LIBOR Rate Loans, then,
on notice thereof and demand therefor by such Lender to the Borrower through the
Administrative Agent, the obligation of such Lender to make or to continue LIBOR
Rate Loans shall be suspended as provided in clause (e) below until such Lender
shall, through the Administrative Agent, notify the Borrower that it has
determined that it may lawfully make LIBOR Rate Loans.
(d) Breakage Costs. In addition to all amounts required to be paid by
the Borrower pursuant to Section 2.5, the Borrower shall compensate each Lender
upon demand, for all 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, but excluding Taxes) which that Lender may sustain
(i) if for any reason any portion of the Loan is prepaid (including mandatorily
pursuant to Section 2.5 or this Section 2.9) on a date which is not the last day
of the applicable LIBOR Period or (ii) as a consequence of any failure by a
Borrower to repay any portion of the Loan when required by the terms hereof. The
Lender making demand for such compensation shall deliver to the Borrower (with a
copy to the Administrative Agent) concurrently with such demand a written
statement as to such losses, expenses and liabilities, and this statement shall
be conclusive as to the amount of compensation due to that Lender absent
manifest error, and such compensation shall be paid to the Administrative Agent
for the account of such Lender.
(e) Effect of Suspension. If the obligation of any Lender to make or to
continue LIBOR Rate Loans is suspended, (i) the obligation of such Lender to
convert Index Rate Loans into LIBOR Rate Loans shall be suspended, (ii) such
Lender shall make an Index Rate Loan at any time such Lender would otherwise be
obligated to make a LIBOR Rate Loan, (iii) the Borrower may revoke any pending
Notice of Conversion/Continuation to make or continue any LIBOR Rate Loan or to
convert any Index Rate Loan into a LIBOR Rate Loan and (iv) each LIBOR Rate Loan
of such Lender shall automatically and immediately (or, in the case of any
suspension pursuant to clause (a) above, on the last day of the current LIBOR
Period thereof) be converted into an Index Rate Loan.
Section 2.10 Capital Adequacy. If at any time any Lender determines
that (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 from any central bank or other Governmental Authority or any
accounting board or authority (whether or not a Governmental Authority) which is
responsible for the establishment or interpretation of national or international
accounting principles (in each case, 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 with respect to Taxes) to a level below that
which such Lender or corporation could have achieved but for such adoption,
change, compliance or interpretation, then, upon demand from time to time by
such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall within five (5) Business Days of such demand pay to the
Administrative 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; provided that the Borrower shall not be required to
compensate a Lender pursuant to this Section 2.10 for any amounts incurred more
than six (6) months prior to the date of such demand. A certificate as to such
amounts submitted to the Borrower (and the Administrative Agent) by such Lender
shall be conclusive and binding for all purposes absent manifest error. Each
Lender shall promptly notify the Borrower and the Administrative Agent of any
event of which such Lender or has knowledge, occurring after the date hereof,
which would entitle such Lender to compensation pursuant to this Section 2.10
and will designate a different lending office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. For the avoidance
of doubt, any interpretation of Accounting Research Bulletin No. 51 by FASB
(including Interpretation No. 46 - Consolidation of Variable Interest Entities)
shall constitute an adoption, change, request or directive, and any
implementation thereof shall be, subject to this Section 2.10.
Section 2.11 Taxes.
(a) No Withholding, etc. Except as otherwise provided in the next
sentence and Section 9.2, any and all payments by the Obligors 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
Administrative Agent, Taxes measured by its net income and franchise Taxes, in
each case if imposed on it as a result of such Person being organized under the
laws of the jurisdiction imposing such Taxes or doing business in such
jurisdiction unrelated to the transactions contemplated by any Loan Document,
(ii) in the case of each Lender and each Participant, Taxes measured by its net
income and franchise Taxes imposed on it by the jurisdiction in which its
Lending Office is located or in which it booked its participation for tax
accounting purposes, (iii) in the case of each Lender, each Participant and the
Administrative Agent, Taxes imposed on it as a result of its failure to comply
with its obligations under Section 2.11(f), Section 2.11(g) or Section 9.2, (iv)
in the case of each Lender, each Participant and the Administrative Agent (A)
that is a party hereto or Participant, as the case may be, on the Closing Date,
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 and (B) that becomes a party hereto or Participant, as the case may
be, after the Closing Date, 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 date of the Assignment and Acceptance pursuant to
which it becomes a Lender or after the date such Person becomes a Participant,
or the Administrative Agent, as applicable, and (v) Taxes imposed as a result of
such Person's gross negligence or willful misconduct (all such non-excluded
Taxes being hereinafter referred to as "Indemnified 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 Administrative Agent (1)
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 2.11) such Lender or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (2) the Obligors shall make such deductions, and (3) the
Obligors shall pay the full amount deducted to the relevant taxing authority or
other authority in accordance with applicable law.
(b) Other Taxes. In addition, the Obligors 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 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 (collectively, "Other Taxes") to the
Administrative Agent for the account of the affected party.
(c) Tax Indemnity. The Obligors will indemnify each Lender and the
Administrative Agent for the full amount of Indemnified Taxes or Other Taxes
(including any Taxes imposed by any jurisdiction on amounts payable under this
Section 2.11) paid by such Lender or the Administrative Agent (as the case may
be) and any liability (including for penalties, interest and expenses) arising
therefrom or with respect thereto, other than any liability, including for
penalties, interest and expenses, arising from the gross negligence or willful
misconduct of the Lender or the Administrative Agent, as the case may be. This
indemnification shall be made to the Administrative Agent for account of the
relevant Lender or the Administrative Agent, as the case may be, within 30 days
from the date such Lender or the Administrative Agent (as the case may be) makes
written demand therefor (with a copy to the Administrative 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) Evidence of Payment. Within 30 days after the date of any payment
of Indemnified Taxes or Other Taxes, the Obligors will furnish to the
Administrative Agent the original or a certified copy of a receipt evidencing
payment thereof or other documentation reasonably satisfactory to the
Administrative Agent.
(e) Survival. Without prejudice to the survival of any other agreement
of the Obligors hereunder, the agreements and obligations of the parties
contained in this Section 2.11 shall survive the payment in full of the
Obligations.
(f) Certain Withholding Tax Matters. Each Lender, each Participant and
the Administrative Agent that is a Non-U.S. Person and that is entitled at such
time to an exemption from United States withholding tax, or that is subject to
such tax at a reduced rate under an applicable tax treaty, shall, on or prior to
the Closing Date or on or prior to the date of the Assignment and Acceptance
pursuant to which it becomes a Lender or on or prior to the date such Person
becomes a Participant or the Administrative Agent, as applicable, and from time
to time thereafter if requested by the Administrative Agent or the Borrower,
provide the Administrative Agent and the Borrower with two completed copies of
either IRS Form W-8BEN or W-8ECI or other applicable form, certificate or
document prescribed by the IRS certifying as to such Non-U.S. Person's
entitlement to such exemption from United States withholding tax or reduced rate
with respect to all payments to be made to such Non-U.S. Person under the Loan
Documents. In addition, each Lender, each Participant and the Administrative
Agent that is a Non-U.S. Person, as the case may be, shall deliver to the
Borrower and the Administrative Agent, notice of any event (other than a change
in applicable law, including income tax conventions) requiring a change in the
most recent form previously delivered by such Person to the Borrower and the
Administrative Agent. Each Lender, each Participant and the Administrative Agent
(other than an entity treated as a corporation for U.S. federal income tax
purposes) that is a "United States person" within the meaning of Section
7701(a)(30) of the Internal Revenue Code shall deliver two duly signed and
completed copies of IRS Form W-9 to the Administrative Agent and the Borrower,
at the times and in the manner described above with respect to IRS Forms W-8.
Unless the Administrative Agent and the Borrower have received forms or other
documents satisfactory to them indicating that payments under the Loan Documents
are not subject to United States withholding tax or are subject to such tax at a
rate reduced by an applicable tax treaty, the Administrative Agent or the
Borrower shall, notwithstanding the provisions of Section 2.11(a) and (c) and
without impairing any obligation of the Obligors under this Section 2.11 with
respect to such tax, withhold such United States withholding taxes from such
payments at the appropriate rate; provided that if such Person is a Lender,
Participant, or Administrative Agent and shall have satisfied the requirement of
this Section 2.11(f) on the date it became a Lender, Participant, or
Administrative Agent, nothing in this Section 2.11(f) shall relieve the Obligors
of their obligation to pay any amounts pursuant to this Section 2.11 in the
event that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in governmental
interpretation, administration or application thereof, such Lender, Participant,
or Administrative Agent is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing that it is not
subject to withholding or is subject to withholding at a reduced rate. The
obligation of the Obligors under this Section 2.11 shall survive the repayment
of all other Obligations hereunder and the resignation of the Administrative
Agent.
(g) Mitigation. Any Lender claiming any additional amounts payable
pursuant to this Section 2.11 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 reasonable judgment of
such Lender, be otherwise disadvantageous to such Lender.
Section 2.12 Substitution of Lenders.
(a) Substitution Right. In the event that any Lender (an "Affected
Lender") (i) makes a claim under Section 2.9(b) or Section 2.10, (ii) notifies
the Borrower pursuant to Section 2.9(c) that it becomes illegal for such Lender
to continue to fund or make any LIBOR Loans, or (iii) is entitled to (and does
not waive) any increased payment attributable to Indemnified Taxes or makes a
claim for payment pursuant to Section 2.11(a) or 2.11(c), the Borrower may
either pay in full the Obligations owed to such Affected Lender or substitute
for such Affected Lender any Lender or any Affiliate or Approved Fund of any
Lender or any other Eligible Lender acceptable (which acceptance shall not be
unreasonably withheld or delayed) to the Administrative Agent (in each case, a
"Substitute Lender").
(b) Procedure. To substitute such Affected Lender or pay in full the
Obligations owed to such Affected Lender, the Borrower shall deliver a notice to
the Administrative Agent and such Affected Lender. The effectiveness of such
payment or substitution shall be subject to the delivery to the Administrative
Agent by the Borrower (or, as may be applicable in the case of a substitution,
by the Substitute Lender) of (i) payment for the account of such Affected
Lender, of, to the extent accrued through, and outstanding on, the effective
date for such payment or substitution, all Obligations owing to such Affected
Lender (including those that will be owed because of such payment), and (ii) in
the case of a substitution, (A) payment of the assignment fee set forth in
Section 9.2(b) and (B) an assumption agreement in form and substance
satisfactory to the Administrative Agent whereby the Substitute Lender shall,
among other things, agree to be bound by the terms of the Loan Documents.
(c) Effectiveness. Upon satisfaction of the conditions set forth in
clause (b) above, the Administrative Agent shall record such substitution or
payment in the Register, whereupon in the case of any substitution, (i) the
Affected Lender shall sell and be relieved of, and the Substitute Lender shall
purchase and assume, all rights and claims of such Affected Lender under the
Loan Documents, except that the Affected Lender shall retain such rights
expressly providing that they survive the repayment of the Obligations and the
termination of the Commitments, (ii) the Substitute Lender shall become a
"Lender" hereunder and (iii) the Affected Lender shall execute and deliver to
the Administrative Agent an Assignment and Acceptance to evidence such
substitution and deliver any Note in its possession; provided, however, that the
failure of any Affected Lender to execute any such Assignment and Acceptance or
deliver any such Note shall not render such sale and purchase (or the
corresponding assignment) invalid.
ARTICLE III
CONDITIONS PRECEDENT TO EFFECTIVENESS
This Agreement shall become effective on the date hereof (the "Closing
Date") subject to the satisfaction (in the judgment of the Administrative Agent
and the Lenders (except as otherwise provided below in this Article III)) of all
of the following conditions precedent (except as otherwise provided in Section
5.20):
(a) Certain Agreements and Documents. The Administrative Agent shall
have received on or prior to the Closing Date each of the following, each dated
as of the Closing Date, in form and substance satisfactory to the Administrative
Agent and the Lenders:
(i) this Agreement, duly executed and delivered by the parties hereto;
(ii) the Notes, duly executed by the Borrower and conforming to the
requirements set forth in Section 2.3(d), to the extent requested by each
Lender;
(iii) the Guaranty, duly executed and delivered by the parties thereto;
(iv) the Collateral Documents specified in clauses (i) through (iv) of
the definition thereof, duly executed and delivered by the parties thereto,
together with the following:
(A) UCC-1 financing statements in form and substance reasonably
acceptable to the Administrative Agent, as may be required or advisable
to perfect the Administrative Agent's security interests in the
Collateral (subject to the terms hereof and of the other Loan
Documents) in accordance with the UCC as enacted in all relevant
jurisdictions;
(B) insurance certificates and brokers' reports evidencing the
insurance coverages required under the Loan Documents, including with
respect to the Collateral (in accordance with the requirements of the
Collateral Documents) naming the Administrative Agent as loss payee or
additional insured, as applicable, and otherwise in form and substance
reasonably acceptable to the Administrative Agent;
(C) a Collateral Value Certificate, together with the Baseline
Appraisal in respect of the Appraised Collateral;
(D) Control Agreements with respect to the deposit accounts and
securities accounts of the Obligors to the extent required pursuant to
Section 5.11 hereof;
(E) original stock certificates representing the Obligors'
interests in all of the certificated Initial Pledged Equity (as defined
in the Security Agreement), together with undated stock powers executed
in blank, and all instruments representing the Initial Pledged Debt (as
defined in the Security Agreement), together with undated endorsements
executed in blank;
(F) a Mortgage with respect to the Philadelphia Airport Lease and
all Mortgage Supporting Documents relating thereto; and
(G) evidence of the completion of all recordings and filings of
or with respect to the Aircraft Mortgage that the Administrative Agent
may deem necessary or desirable in order to perfect the security
interest created by the Aircraft Mortgage, including, without
limitation, filings required by the Cape Town Convention and the
Federal Aviation Act;
(v) the favorable opinions of (A) Skadden, Arps, Slate, Meagher & Flom
LLP, special counsel to the Obligors; (B) James E. Walsh III, Senior Vice
President and General Counsel of the Borrower, (C) Kozloff Stoudt, special
Pennsylvania real estate counsel to the Obligors, and (D) McGuire Woods LLP,
special local counsel to the Obligors in Maryland and Pennsylvania;
(vi) a copy of the certificate of incorporation of each Obligor,
certified as of a recent date by the Secretary of State of the state of its
incorporation or organization, together with a "long-form" certificate of
such official attesting to the good standing of such Person;
(vii) a certificate of each Obligor 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 on or
prior to the Closing Date 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;
(viii) an Officer's Certificate of the Borrower certifying (A) that all
representations and warranties in Article IV hereof are true and correct in
all material respects on and as of the Closing Date, as though made on and
as of such date, (B) that no Default or Event of Default has occurred and is
continuing and (C) as to the matters specified in subsections (i) and (k) of
this Article III; and
(ix) an Officer's Certificate of the Borrower certifying that after
giving effect to the Loans to be made on the Closing Date, the consummation
of the Refinancing and the payment of all transaction costs in connection
with the foregoing, the Obligors taken as a whole are Solvent.
(b) Refinancing. (i) The Refinancing shall have been consummated, (ii)
each of the AWA Loan Agreement, US Airways Loan Agreement, GE Financings and
Airbus Loan Agreements shall have been terminated on terms satisfactory to the
Administrative Agent, and (iii) the Administrative Agent shall have received
payoff letters duly executed and delivered by the applicable agents or lenders
or other evidence of the terminations referred to in clause (ii) above, in each
case in form and substance satisfactory to the Administrative Agent.
(c) Fees and Expenses Paid. The Borrower shall have paid all fees due
and payable on the Closing Date (including, without limitation, the fees
referenced in Section 2.7), and all expenses of the Administrative Agent and its
Affiliates due and payable on or before the Closing Date.
(d) Consents, Etc. The Obligors shall have received all consents and
authorizations required pursuant to any material Contractual Obligation with any
other Person in form and substance reasonably satisfactory to the Administrative
Agent and the Lenders and shall have obtained all consents, waivers and
authorizations of, and effected all notices to and filings with, any
Governmental Authority as may be necessary to allow the Obligors lawfully to
execute, deliver and perform, in all material respects, their obligations under
the Loan Documents to which they are, or shall be, a party and each other
agreement or instrument to be executed and delivered by them, pursuant thereto
or in connection therewith.
(e) No Illegality. No law or regulation shall be applicable in the
judgment of the Administrative Agent that restrains, prevents or imposes
materially adverse conditions upon the transactions contemplated hereby.
(f) Representations and Warranties of the Obligors. All representations
and warranties set forth in Article IV hereof shall be true and correct in all
material respects on and as of the Closing Date as though made on and as of such
date (except to the extent any such representation or warranty by its terms is
made as of a different specified date in which event such representation or
warranty shall be true and correct in all material respects as of such specified
date).
(g) No Event of Default. No Default or Event of Default shall have
occurred and be continuing.
(h) Corporate and Other Proceedings. All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to the Administrative Agent.
(i) No Material Adverse Change. (i) Since December 31, 2005, no material
adverse change, individually or in the aggregate, shall have occurred
in the business, financial or other condition of the Borrower and its
Subsidiaries taken as a whole, the industry in which the Borrower or
any Subsidiary operates, the Collateral, or in the prospects or
projections of the Borrower and its Subsidiaries taken as a whole, (ii)
there shall be no litigation which, if successful, will have a material
adverse impact on the Borrower and its Subsidiaries taken as a whole,
their business or their ability to repay the Loans, or which will
challenge the transactions contemplated hereunder, and (iii) since
December 31, 2005, there shall have occurred no material increase in
the liabilities, liquidated or contingent, of the Borrower and its
Subsidiaries taken as a whole, or a material decrease in the assets of
the Borrower and its Subsidiaries taken as a whole.
(j) Projections. The Lenders shall have received a satisfactory budget
for fiscal year 2006 and satisfactory projections and pro forma financial
information for the Borrower (on a consolidated basis) for the fiscal years 2007
through the Maturity Date, in each case on a quarterly basis, and which budget
and projections shall be certified by the Chief Executive Officer, the Chief
Financial Officer, Controller or Treasurer of the Borrower as being reasonable
estimates as of the Closing Date of future financial performance and based upon
assumptions that are reasonable in light of conditions and facts known to the
Borrower as of the Closing Date.
(k) Unrestricted Cash. After giving effect to the Loans to be made on
the Closing Date, the consummation of the Refinancing and the payment of all
transaction costs in connection with the foregoing, the Obligors shall have as
of the Closing Date Unrestricted Cash of not less than $1,200,000,000.
(l) Credit Ratings. The Administrative Agent shall have received
evidence of the Credit Ratings from Moody's and S&P in effect on the Closing
Date.
(m) Landlord Waivers. The Borrower shall have used commercially
reasonable efforts to obtain Landlord Waivers for each of the Spare Parts
Locations listed on Schedule 3(m).
(n) Documents and Information. The Administrative Agent and the Lenders
shall have received such other certificates, documents, agreements and
information respecting the Obligors as each of them may have reasonably
requested.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the other parties (excluding any other Obligors) to enter
into this Agreement, each of the Obligors represents and warrants to each other
party hereto (excluding any other Obligors) that, on and as of the Closing Date:
Section 4.1 Organization, Qualification, Subsidiaries, etc.
(a) Organization, Power and Authority. Each Obligor is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Each Obligor has all requisite corporate power and
authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Loan Documents to
which it is a party and to carry out the transactions contemplated hereby and
thereby.
(b) Foreign Qualification; "Air Carrier Status". 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 not reasonably be expected to have a Material Adverse
Effect. Each Air Carrier holds a certificate under Section 41102 of Title 49.
Each Air Carrier 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).
(c) Subsidiaries. All of the Subsidiaries of each Obligor, in each
case, as of the Closing Date, are identified in Schedule 4.1(c). Schedule 4.1(c)
correctly sets forth as of the Closing Date the equity and voting interest of
the Borrower in each of the Subsidiaries identified therein. There are no
limitations on the rights of the Borrower to vote the Capital Stock it owns of
any Person listed on Schedule 4.1(c). Airways Assurance Limited, a Bermuda
corporation, is a wholly-owned Subsidiary of the Borrower whose business is
limited to securing insurance for the Obligors. AWHQ LLC, an Arizona limited
liability company, is a wholly-owned Subsidiary of the Obligors, owned 99% by
Holdings and 1% by AWA, whose business is limited to acting as a real estate
holding company. America West Company Store LLC, an Arizona limited liability
company, is a wholly-owned Subsidiary of AWA whose business is limited to
operation of the America West company store.
(d) Obligor Information. Schedule 4.1(d) sets forth as of the Closing
Date the name, address of principal place of business and taxpayer
identification number of the Borrower and each other Obligor.
Section 4.2 Authorization of Loan Documents, etc.
(a) Authorization. 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.
(b) No Conflicts. The execution, delivery and performance by each
Obligor of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents to which it is a party do not and will not
(i) violate any provision of any law or any governmental rule or regulation
applicable to any Obligor, the certificate or articles of incorporation or
bylaws of any Obligor or any order, judgment or decree of any court or other
agency of government binding on any Obligor, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default or
require any payment under (A) any Loan Document or (B) any other Contractual
Obligation of any Obligor, except that with respect to clause (B), for any such
conflict, breach, default or requirement of payment which could not reasonably
be expected to have a Material Adverse Effect, (iii) result in or require the
creation or imposition of any Lien upon any of the properties or assets of any
Obligor (other than the Liens created under the Collateral Documents) or (iv)
require any approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of any Obligor, except for such approvals or
consents (A) which will have been obtained on or before the Closing Date and
have been disclosed in writing to the Administrative Agent or (B) with respect
to any Contractual Obligation, which if not obtained, could not reasonably be
expected to have a Material Adverse Effect.
(c) No Consents, Approvals, etc. 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
such Obligor is a party do not and will not require (i) 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 (ii) any
registration with, consent or approval of, or material notice to, or other
action to, with or by, any other Person, in each case, which is required to be
obtained or made on or prior to the Closing Date and which has not been obtained
or made, except as is disclosed on Schedule 4.2(c).
(d) Execution, Delivery, Enforceability. Each Obligor has duly executed
and delivered each of the Loan Documents to which it is party and each such Loan
Document is the 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).
Section 4.3 Financial Condition.
(a) The Borrower has heretofore delivered to the Administrative Agent
(i) the audited consolidated balance sheets of the Borrower as at December 31,
2005, and the related consolidated statements of income, stockholders' equity
and cash flows of the Borrower for the Fiscal Year then ended, and (ii) the
unaudited consolidated balance sheets of the Borrower as at January 31, 2006 and
the related unaudited consolidated statements of income, stockholders' equity
and cash flows of the Borrower for the one month then ended. All such financial
statements were prepared in accordance with GAAP (except that any unaudited
financial statements are subject to normal year-end adjustments and may not be
accompanied by footnotes) and fairly present, in all material respects, the
consolidated financial position of such Persons as at the date thereof and the
consolidated results of operations and cash flows of such Person for the period
then ended.
(b) After giving effect to the Loans to be made on the Closing Date,
the consummation of the Refinancing and the payment of all transaction costs in
connection with the foregoing, (i) the Obligors taken as a whole are Solvent 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 reflected in the
projections and pro forma financial information delivered pursuant to clause (j)
of Article III.
(c) The Borrower maintains disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the Obligors and has (i) caused such disclosure controls and procedures to
be designed to ensure that material information relating to the Obligors is
reported internally, and (ii) caused such internal controls over financial
reporting to be designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP.
Section 4.4 No Material Adverse Change; No Defaults. Since December 31,
2005, no material adverse change, individually or in the aggregate, has occurred
in the business, financial or other condition of the Borrower and its
Subsidiaries taken as a whole, the industry in which the Borrower or any
Subsidiary operates, the Collateral, or in the prospects or projections of the
Borrower and its Subsidiaries taken as a whole, or in the Borrower's ability to
repay the Loan or perform its obligations under the Loan Documents or with
respect to the matters included in the financial projections delivered to the
Administrative Agent on February 28, 2006. No event or occurrence which would
constitute a Default or Event of Default has occurred and is continuing.
Section 4.5 Title to Properties; Liens. Each Obligor has (i) good and
insurable fee title to (in the case of fee interests in real property), (ii)
valid, and in the case of leasehold interests in real property, insurable,
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 necessary to the conduct of its business
including property and assets reflected in the financial statements referred to
in Section 4.3, except for assets disposed of since the date of such financial
statements in the ordinary course of business. Except as otherwise permitted by
this Agreement and the Collateral Documents, all such properties and assets are
free and clear of Liens.
Section 4.6 Litigation; Adverse Facts. Except as disclosed in the
Borrower's Form 10-K for the fiscal year ended December 31, 2005 or on Schedule
4.6, there are no material actions, suits, proceedings, arbitrations or
investigations (whether or not purportedly on behalf of the Borrower or any
other Obligor) at law or in equity or before or by any Governmental Authority
pending or, to the knowledge of any Responsible Officer of any Principal
Obligor, threatened against or affecting (in either case, whether asserted or
unasserted) any of the Obligors or any property of the Obligors. Except as
disclosed in the Borrower's Form 10-K for the fiscal year ended December 31,
2005 or on Schedule 4.6, there are no actions, suits, proceedings, arbitrations
or investigations (whether or not purportedly on behalf of the Borrower or any
other Obligor) at law or in equity or before or by any Governmental Authority
pending or, to the knowledge of any Responsible Officer of any Principal
Obligor, threatened against or affecting (in either case, whether asserted or
unasserted) any of the Obligors or any property of the Obligors that challenge
the legality, validity or binding effect of, or seeks to restrain or enjoin any
Obligor from entering into or performing under, any Loan Document including,
without limitation, this Agreement or any Collateral Document. No Obligor is
subject to any final judgments, writs, injunctions or decrees of any court or
any Governmental Authority, compliance with which could reasonably be expected
to have a Material Adverse Effect, or is in default with respect to any such
judgments, writs, injunctions or decrees, which default could reasonably be
expected to have a Material Adverse Effect.
Section 4.7 Payment of Taxes.
(a) Except as otherwise set forth on Schedule 4.7(a): (i) the Obligors
have timely filed all material Tax returns and reports required to have been
filed, and have paid or made adequate provision for payment of all material
Taxes levied or imposed upon them or their properties (including the
Collateral), income or assets that have become due and payable, except in those
instances in which such Taxes are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been made
in accordance with GAAP; (ii) there is no proposed Tax assessment against any
Obligor that relates to a material amount of Taxes, and no Principal Obligor
knows of any basis for any such assessment; and (iii) no Obligor is party to any
Tax sharing agreement with any Person other than another Obligor, other than tax
indemnity agreements in leasing transactions entered into in the ordinary course
of business.
(b) Schedule 4.7(b) is a true and complete list of each claim of a
governmental unit of the kind entitled to priority in payment, as specified in
section 502(i) and 507(a)(8) of the Bankruptcy Code, that the Obligors will or
expect to pay or to be required to pay during the six (6) years immediately
following the Closing Date.
Section 4.8 Performance of Agreements; Materially Adverse Agreements.
(a) No Default. No Obligor is in default in the performance, observance
or fulfillment of any Contractual Obligations other than defaults which are not
reasonably expected to have a Material Adverse Effect, and no condition exists
that, with the giving of notice or the lapse of time or both, would constitute
such a default.
(b) No Adverse Agreements. No Obligor is a party to or is otherwise
subject to any agreements or instruments or any charter or other internal
restrictions which, individually or in the aggregate, could reasonably be
expected to impair the ability of the Obligors, taken as a whole, to perform
their payment or other material obligations under the Loan Documents.
Section 4.9 Governmental Regulation. No Obligor is subject to
regulation under the Public Utility Holding Company Act of 1935, the Public
Utility Holding Company Act of 2005, enacted as part of the Energy Policy Act of
2005, Pub. L. No. 109-58 as codified at ss.ss. 1261 et seq., and the regulations
adopted thereunder, the Federal Power Act or the Investment Company Act of 1940
or under any other federal or state statute or regulation (other than the
Bankruptcy Code) which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of its Obligations unenforceable.
Section 4.10 Securities Activities. No Obligor owns or is engaged
principally in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock (as defined below), and no proceeds of the Loan were
used to purchase or carry Margin Stock or to extend credit to any Person for the
purpose of purchasing or carrying any Margin Stock in a manner that violated or
caused a violation of Regulations T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors. For
purposes of this Section 4.10, the term "Margin Stock" has the meaning assigned
to that term in Regulation T, U or X of the Board of Governors of the Federal
Reserve System as in effect from time to time.
Section 4.11 Employee Benefit Plans.
(a) Schedule 4.11(a) lists each Plan and each Multiemployer Plan
maintained or contributed to, or required to be contributed to, by each Obligor
or any of its ERISA Affiliates as of the Closing Date. Each Plan has been
operated and administered in compliance with its terms and all applicable
requirements of ERISA, the Code and other laws, except where the failure to do
so could not reasonably be expected to have, taking all instances in the
aggregate, a Material Adverse Effect. Each Plan intended to qualify under
Section 401 of the Internal Revenue Code does so qualify, and any trust created
thereunder is exempt from tax under the provisions of Section 501 of the
Internal Revenue Code, except where the failure to do so could not reasonably be
expected to have, taking all instances in the aggregate, a Material Adverse
Effect.
(b) Full payment has been made by each Obligor and any of its ERISA
Affiliates of all minimum amounts which such entities are required to pay under
the terms of each Plan and Multiemployer Plan except where the failure to so
comply, taking all instances in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.
(c) No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to have a Material
Adverse Effect.
(d) Neither any Obligor nor any of its ERISA Affiliates maintains or
contributes to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) which provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any employee pension benefit
plan (as defined in Section 3(2) of ERISA), other than a Plan the obligations
with respect to which, when taken together with the projected contributions
thereto reflected in the projections and pro forma financial information
delivered pursuant to clause (j) of Article III, could not reasonably be
expected to have a Material Adverse Effect.
(e) No Plan maintained by any Obligor or any of its ERISA Affiliates is
underfunded (based on the present value of all accumulated benefit obligations
thereunder) except to the extent that the aggregate amount of underfunding with
respect to all such plans, when taken together with the projected contributions
thereto reflected in the projections and pro forma financial information
delivered pursuant to clause (j) of Article III, could not reasonably be
expected to have a Material Adverse Effect.
Section 4.12 Environmental Protection.
(a) Compliance with Environmental Laws. All Facilities and operations
of each Obligor are, and have been to the knowledge of each Principal Obligor,
in compliance with all Environmental Laws except for any noncompliance which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(b) Hazardous Materials Activity. Except as disclosed in the Borrower's
Form 10-K for the fiscal year ended December 31, 2005 or on Schedule 4.12(b),
there are no, and have been no, conditions, occurrences, or Hazardous Materials
Activity (i) arising at any Facilities or (ii) arising in connection with the
operations of the Obligors or of past or current Affiliates of any Obligor
(while under the control of a Principal Obligor or otherwise to the knowledge of
a Principal Obligor) (including the transportation of Hazardous Materials in
accordance with applicable regulations), which conditions, occurrences or
Hazardous Materials Activity could reasonably be expected to form the basis of a
material Environmental Claim against any Obligor.
(c) Environmental Claims. Except as disclosed in the Borrower's Form
10-K for the fiscal year ended December 31, 2005 or on Schedule 4.12(c), there
are no pending or, to the knowledge of any Principal Obligor, threatened
material Environmental Claims against any Obligor, and no Principal Obligor has
received any notices, inquiries, or requests for information with respect to any
material Environmental Claims.
(d) Orders, Decrees, etc. No Obligor is currently operating or required
to be operating under any compliance order, schedule, decree or agreement, any
consent decree, order or agreement, and/or any corrective action decree, order
or agreement issued or entered into under any Environmental Law the failure to
comply with which could reasonably be expected to have a Material Adverse
Effect.
(e) Absence of Control. Each Obligor hereby acknowledges and agrees
that the Administrative Agent (i) is not now, and has not ever been, in control
of any of the Real Estate of the Obligors or of any Obligor's affairs, and (ii)
does not have the capacity through the provisions of the Loan Documents or
otherwise to influence any Obligor's conduct with respect to the ownership,
operation or management of any of its Real Estate or compliance with
Environmental Laws.
Section 4.13 Disclosure. No representation or warranty or certification
of any Obligor or of any Responsible Officer of the Borrower or any other
Officer of any Obligor contained in this Agreement, any other Loan Document or
in any other document, certificate or written statement furnished to the
Administrative Agent or the Lenders by or on behalf of any Obligor (as modified
or supplemented by other written information so furnished) for use in connection
with the negotiation and closing of the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein at the time, and in light
of the circumstances under which they were made, not misleading; provided that
with respect to projected financial information contained in any such document
or furnished to any party hereto by or on behalf of the Obligors, the Obligors
represent only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time, it being recognized that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered thereby may differ from the
projected results.
Section 4.14 Compliance with Laws. Each Obligor is in compliance with
all laws, statutes, rules, regulations and orders binding on or applicable to
such Obligor, and all of its properties, except to the extent failure to so
comply (either individually or in the aggregate) could not reasonably be
expected to have a Material Adverse Effect.
Section 4.15 Indebtedness. Schedule 4.15 correctly sets forth the
consolidated Indebtedness of the Borrower and its Subsidiaries as of the Closing
Date and identifies each primary obligor and each guarantor or other secondary
obligor thereof, if any.
Section 4.16 Insurance. Schedule 4.16 sets forth as of the Closing Date
a summary of all insurance policies maintained by the Borrower and its
Subsidiaries. The properties, business and operations of the Obligors are
insured or reinsured with financially sound and reputable insurance companies or
by the United States of America, in such amounts, with such deductibles and
covering such risks as are insured against (including, but not limited to, war
risk and third party liability) and carried in accordance with applicable law
and prudent industry practice by major U.S. commercial air carriers similarly
situated with the Obligors and owning or operating similar properties, aircraft
and engines.
Section 4.17 Perfected Security Interests. The Administrative Agent, on
behalf of the Lenders and the other Secured Parties, has valid, first priority
(other than Permitted Encumbrances) security interests in the Collateral, which
security interests are perfected to such extent as is provided in the Collateral
Documents.
Section 4.18 Absence of Labor Disputes. No strikes, boycotts, work
stoppages or lockouts with respect to any of the Obligors exist, and no Obligor
has received written notice, sanctioned by any collective bargaining unit
representing employees of such Obligor, threatening a strike, boycott or work
stoppage.
Section 4.19 Compliance with certain Gates. Each Obligor is in
compliance in all material respects with all Gates with respect to the airports
listed on Schedule 4.19.
Section 4.20 Slot Utilization. The Obligors maintain personnel,
policies, procedures and a computer database for the monitoring, utilization and
management of the FAA Slots in compliance with the Slot Regulations so as to
ensure, to the greatest extent operationally feasible, that the Slot Regulations
are complied with and no FAA Slot becomes subject to withdrawal by the FAA.
Section 4.21 Deposit Accounts and Securities Accounts. Schedule 4.21
contains a true, complete and correct list of all deposits accounts and
securities accounts of the Obligors, including, with respect to each account,
the name of such account, the account number, the bank or financial institution
with which such account is maintained and, with respect to the deposit accounts
and securities accounts subject to Control Agreements pursuant to Section 5.13,
the balance therein as of the date immediately prior to the Closing Date.
ARTICLE V
AFFIRMATIVE COVENANTS
To induce the other parties to enter into this Agreement (excluding any
other Obligor), the Obligors agree with each other party hereto (excluding any
other Obligor) that, so long as any of the Obligations (other than contingent
indemnification obligations) remain outstanding:
Section 5.1 Accounting Controls; Financial Statements and Other
Reports.
(a) Accounting Controls. Each Obligor will maintain a system of
accounting established and administered in accordance with sound business
practices and applicable law, rules and regulations issued by any Governmental
Authority to permit preparation of financial statements in conformity with GAAP,
including, without limitation, as set forth in Section 4.3(c).
(b) Financial Certificates; Information. The Borrower will deliver to
the Administrative Agent:
(i) Quarterly Financials: within two (2) Business Days after the date
on which the Borrower files or is required to file its Form 10-Q under the
Exchange Act (after giving effect to any extension pursuant to Rule 12b-25
under the Exchange Act (or any successor rule)) (or, if the Borrower is not
required to file a Form 10-Q under the Exchange Act, within 45 days after
the end of each of the first 3 fiscal quarters of each Fiscal Year), (A) the
consolidated balance sheets of the Borrower as at the end of such fiscal
quarter and the related consolidated statements of income of the Borrower
for such fiscal quarter for the period from the beginning of the then
current Fiscal Year to the end of such fiscal quarter and cash flows of such
Person for the period from the beginning of the then current Fiscal Year to
the end of such fiscal quarter, setting forth in each case in comparative
form the corresponding figures from the corresponding dates and periods of
the previous Fiscal Year, all prepared in accordance with GAAP (except that
any unaudited financial statements are subject to normal year-end
adjustments and may not be accompanied by footnotes) and in reasonable
detail and certified by the Chief Financial Officer, Controller, Chief
Executive Officer or Treasurer of the Borrower that they fairly present in
all material respects the consolidated financial condition of such Person as
at the dates indicated and the results of its operations and its cash flows
for the periods indicated, and (B) a narrative report describing the
operations of the Borrower in the form prepared for presentation to senior
management for such fiscal quarter and for the period from the beginning of
the then current Fiscal Year to the end of such fiscal quarter; provided
that delivery of the Borrower's Form 10-Q for such fiscal quarter shall be
deemed to satisfy all of the requirements of this clause (i); provided,
further, that in lieu of delivering a hard copy of Form 10-Q hereunder, the
Borrower may transmit an electronic copy of such document;
(ii) Monthly Reporting: commencing with the month ending May 31, 2006,
within 45 days after the end of each calendar month, the consolidated
balance sheets of the Borrower as at the end of such month and the related
consolidated statements of income of the Borrower for such calendar month
and for the period from the beginning of the then current Fiscal Year to the
end of such month and cash flows of the Borrower for the period from the
beginning of the then current Fiscal Year to the end of such calendar month,
all prepared in accordance with GAAP (except that any unaudited financial
statements are subject to normal year-end adjustments and may not be
accompanied by footnotes) and in reasonable detail and certified by the
Chief Financial Officer, Chief Executive Officer, Controller or Treasurer of
the Borrower that they fairly present in all material respects the
consolidated financial condition of the Borrower at the dates indicated and
the results of its operations and its cash flows for the periods indicated;
(iii) Year-End Financials: within two (2) Business Days after the date
on which the Borrower files or is required to file its Form 10-K under the
Exchange Act (after giving effect to any extension pursuant to Rule 12b-25
under the Exchange Act (or any successor rule)) (or, if the Borrower is not
required to file a Form 10-K under the Exchange Act, within 90 days after
the end of each Fiscal Year), (A) the consolidated balance sheets of the
Borrower at the end of such Fiscal Year and the related consolidated
statements of income, stockholders' equity and cash flows of the Borrower
for such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the corresponding
figures from the annual financial plan delivered pursuant to clause (ix) of
this Section 5.1(b) for the Fiscal Year covered by such financial statements
of the Borrower, all in reasonable detail, and certified by the Chief
Financial Officer or the Chief Executive Officer of the Borrower that they
fairly present in all material respects the consolidated financial condition
of the Borrower as at the date indicated and the results of its operations
and its cash flows for the periods indicated, (B) a narrative report
describing the operations of the Borrower in the form prepared for
presentation to senior management for such Fiscal Year, and (C) an
accountant's report thereon of KPMG LLP or other independent certified
public accountants of recognized national standing selected by the Borrower,
which report (1) shall be unqualified as to scope, (2) shall not contain a
going concern qualification, and (3) shall state that such consolidated
financial statements fairly present the consolidated financial position of
the Borrower 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 been made in accordance with generally accepted auditing standards;
provided that (x) references in such report to changes in GAAP, changes in
accounting standards, highlighting contents of footnotes, limitations in the
scope of the audit or exclusions from the audit information not required by
GAAP that are, in each case, customary in industry practice and not
prejudicial to the opinion stated therein shall not be deemed to be
"qualifications" for the purpose of clause (C) of this Section 5.1(b)(iii)
and (y) delivery of the Borrower's Form 10-K for such Fiscal Year, and which
satisfy the requirements of clause (C) above, shall be deemed to satisfy the
requirements of this Section 5.1(b)(iii); provided, further, that in lieu of
delivering a hard copy of Form 10-K hereunder, the Borrower may transmit an
electronic copy of such document;
(iv) Officers' Certificates: together with each delivery of financial
statements pursuant to clauses (i) and (iii) above, an Officer's Certificate
of the Borrower (which certificate may incorporate the Collateral Value
Certificate deliverable on such date pursuant to clause (xix) of this
Section 5.1(b)) (A) stating that the signer has made, or caused to be made
under his or her supervision, a review of the terms of this Agreement and of
the transactions and condition of the Obligors during the accounting period
covered by such financial statements and that such review has not disclosed
the existence, and that the signer does not have knowledge of the existence
as at the date of such Officer's Certificate, of any condition or event that
constitutes a Default or an Event of Default, or, if any such condition or
event existed at the date of the certificate, specifying the nature and
period of existence thereof and what action the Obligors have taken, are
taking and propose to take with respect thereto, (B) demonstrating in
reasonable detail compliance (or noncompliance) during and at the end of the
applicable accounting periods with the restrictions contained in Section
6.4, (C) with respect to the delivery of financial statements pursuant to
clause (iii) above, stating whether any change in GAAP or in the application
thereof has occurred since the date of delivery of the preceding year-end
financial statements, and if any such change has occurred, describing the
effect of such change on the financial statements of the Borrower, (D)
stating the Credit Rating obtained as of the end of the preceding fiscal
quarter pursuant to Section 5.16, (E) stating the Adjusted Loan Balance as
of the last day of the most recently ended fiscal quarter, (F) with respect
to the delivery of financial statements pursuant to clause (iii) above,
setting forth computations in reasonable detail of Excess Cash Flow for the
preceding Fiscal Year and (G) certifying that all certificates, statements,
notices, updates and other documents required to be delivered pursuant to
the Collateral Documents by any Obligor in the preceding fiscal quarter
(including notice of any locations of Spare Parts that are not Spare Parts
Locations, other than locations with Spare Parts with a fair market value
less than $200,000 individually and $2,000,000 in the aggregate) have been
delivered thereunder (or, to the extent not previously delivered, providing
the information required thereunder); provided, however, that the reporting
requirements set forth in this clause (G) are in addition to, and are not
intended to and shall not replace or otherwise modify, any obligation of any
Obligor under any Collateral Document;
(v) SEC Filings and Press Releases: promptly upon their filing, copies
of (A) all financial statements, reports, notices and proxy statements sent
or made available generally by the Borrower to its security holders and (B)
all regular, periodic and current reports (including all Form 8-K reports)
and all registration statements and prospectuses, if any, filed by the
Borrower with any securities exchange or with the SEC or any Governmental
Authority or private regulatory authority; provided that in lieu of
delivering a hard copy of any such document, the Borrower may transmit an
electronic copy of such document;
(vi) Notice of Events of Default, etc.: promptly upon any Responsible
Officer of a Principal Obligor obtaining knowledge of (A) any condition or
event that constitutes a Default or an Event of Default or (B) the
occurrence of any event or change that has had, or is reasonably expected to
have, a Material Adverse Effect (disregarding for purposes of this clause
(vi) publicly known facts, circumstances, events or conditions applicable to
the airline and travel industries generally), an Officer's Certificate of
the Borrower specifying the nature and period of existence of such Default
or Event of Default or condition, event or change and what action the
Obligors have taken, are taking and propose to take with respect thereto;
(vii) Litigation or Other Proceedings: to the extent not otherwise
disclosed pursuant to this Section 5.1, promptly upon any Responsible
Officer of a Principal Obligor obtaining knowledge of (A) the institution
of, or threat of, any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration against or
affecting any Obligor or any property of any Obligor, unless the Borrower's
general counsel or outside legal counsel has determined that a favorable
outcome to such Obligor is reasonably likely (collectively, "Proceedings")
or (B) any material development in any Proceeding that, in either case:
(1) would be reasonably likely to have a Material Adverse Effect;
or
(2) seeks to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to the Obligors to enable the Administrative Agent and
its counsel to evaluate such matters;
(viii) ERISA Reports: promptly after the receipt by the Borrower of a
request therefor by the Administrative Agent, copies of any annual and other
reports (including Schedule B thereto) with respect to a Plan filed by an
Obligor or any ERISA Affiliate with the United States Department of Labor,
the IRS or the PBGC;
(ix) Financial Plan and Projections: annually, as soon as practicable
after preparation thereof in the ordinary course of business but in no event
later than February 28 of each year, copies of the Borrower's annual
financial plans and projections for such fiscal year, on a monthly basis;
(x) Environmental Audits and Assessments: as soon as practicable
following receipt thereof by a Principal Obligor, copies of all
environmental audits and assessments, whether prepared by personnel of an
Obligor or by independent consultants (except to the extent protected by the
"attorney work product" privilege or similar privilege expressly granted by
statute with respect to the work product of environmental consultants), with
respect to material environmental matters at any Facility or which relate to
an Environmental Claim which could reasonably be expected to result in an
Obligor incurring Liabilities pursuant to Environmental Laws in excess of
$1,000,000;
(xi) Ratings Change: promptly after any private release by S&P or
Moody's raising or lowering (i) an Obligor's general unsecured credit rating
or (ii) the Credit Rating obtained pursuant to Section 5.16 hereof, notice
of such change;
(xii) Insurance Reports: no later than January 30 of each year,
insurance brokers reports with respect to all insurance maintained by the
Obligors, together with schedules detailing the type and amount of coverage
provided and the insurance carrier;
(xiii) Insurance/Condemnation Proceeds: in addition to any similar
reporting obligations under the Collateral Documents but without the
duplication of any such obligation, upon (A) a Responsible Officer of a
Principal Obligor obtaining knowledge of the occurrence of an event of loss
or damage to, or any taking, condemnation or requisition by any Governmental
Authority of, any property of any Obligor having fair market value in excess
of $5,000,000 whether or not such loss or damage is expected to result in
receipt of insurance or condemnation proceeds or of any other event of loss
or damage that the Obligors reasonably expect to result in proceeds
reasonably estimated by them to exceed $5,000,000 and (B) the receipt of
insurance proceeds or condemnation proceeds from an event of loss or
material damage to, or any taking, condemnation or requisition by any
Governmental Authority of, any property of any Obligor giving rise to a
mandatory prepayment obligation under Section 2.5, notice of such
occurrence;
(xiv) Replacement Secured Financings and Asset Sales: prior to an
Obligor consummating any Replacement Secured Financing or Asset Sale greater
than $1,000,000 in an individual transaction or series of related
transactions giving rise to a mandatory prepayment obligation under Section
2.5, notice of such event; provided that in the case of a Replacement
Secured Financing, the applicable Obligor shall give no less than fifteen
(15) Business Days' prior notice of such event and include therein (A) a
specific identification of the Collateral proposed to be pledged, (B) the
Collateral Release Values therefor together with copies of the Appraisal
Reports upon which such Collateral Release Values are based, if applicable,
and (C) a detailed summary of the terms and conditions of such Replacement
Secured Financing;
(xv) 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 of
a Principal Obligor 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;
(xvi) Funding Changes and New Plan Benefits: promptly after the change,
a notification of any material increases in the benefits, or material 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 previously
contributing, except to the extent that such an event could not reasonably
be expected to have a Material Adverse Effect;
(xvii) 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;
(xviii) 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;
(xix) Collateral Value Certificates: no later than the date upon which
monthly financial statements are required to be delivered under clause (ii)
of this Section 5.1(b) (or, with respect to the month ending April 30, 2006,
no later than the date that is 45 days after the end of such month), a
Collateral Value Certificate certifying the Collateral Value (with respect
to the Eligible Appraised Collateral, based on the most recently completed
Appraisal Report), in each case as of a date no earlier than the end of the
calendar month to which such financial statements relate, together with the
Appraisal Report upon which such Collateral Value Certificate is based, and
any supporting detail and documentation as requested by the Administrative
Agent in its reasonable discretion;
(xx) Available Cash: within one Business Day following the end of each
calendar week, the Available Cash as of the last Business Day of the prior
calendar week;
(xxi) Covenant Suspension Conditions: promptly after the occurrence
thereof, an Officer's Certificate from a Responsible Officer of the Borrower
certifying the satisfaction of the Covenant Suspension Conditions or the
termination of a Covenant Suspension Period, together with all information
reasonably requested by the Administrative Agent to determine such
satisfaction or termination;
(xxii) Spare Parts Locations. if the consent of Northwest Airlines with
respect to the SCEPTRE software required by Schedule 5.20 is not received on
or before May 31, 2006 and the Borrower's Unrestricted Cash as of the end of
any calendar week is less than $1,200,000,000, then on the first Business
Day following the end of such calendar week, a report from the Borrower's
inventory tracking software itemizing the location of the Obligors' Spare
Parts; provided, however, that if a Default or Event of Default has occurred
and is continuing, the Borrower shall provide such reports each Business Day
upon the request of the Administrative Agent; and
(xxiii) Other Information: with reasonable promptness, such other
information and data with respect to an Obligor as from time to time may be
reasonably requested by the Administrative Agent.
Section 5.2 Corporate Existence. Except as permitted by Section 6.9,
each Obligor 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 Obligor and the material rights, permits,
licenses (charter and statutory) and franchises of each Obligor; provided that
subject to Section 5.10, no Obligor shall be required to preserve any such
right, permit, license or franchise, and, subject to compliance with Section
6.9, as applicable, no Obligor (other than the Borrower) shall be required to
preserve any such corporate, partnership or other existence, if in each case,
the Chief Executive Officer of the Borrower shall determine in the exercise of
his or her business judgment that the preservation thereof is no longer
desirable in the conduct of the business of the Obligors taken as a whole and
that abandonment of any such right, permit, license or franchise or failure to
preserve such existence could not reasonably be expected to have a Material
Adverse Effect.
Section 5.3 Payment of Taxes and Claims. Each Obligor will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material Taxes levied or imposed upon an Obligor or upon the
income, profits or property of an Obligor except where the amount, applicability
or validity of such Taxes are being contested in good faith by appropriate
proceedings and for which adequate reserves have been made in accordance with
GAAP and (ii) all lawful claims for labor, materials and supplies that, if
unpaid, might by law become a Lien on the property of an Obligor. No Obligor
will file or consent to the filing of, any consolidated income tax return with
any Person (other than any other Obligor or any Subsidiary of any Obligor).
Section 5.4 Maintenance of Properties; Insurance.
(a) Maintenance of Properties. Each Obligor will maintain all
properties used or useful in the conduct of the business of the Obligors in good
condition, repair and working order (ordinary wear and tear excepted) and supply
such properties with all necessary equipment and make all necessary repairs,
renewals, replacements, betterments and improvements thereto, all as in the
reasonable judgment of an Obligor may be necessary so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times; provided, however, that no Obligor shall be restricted from discontinuing
the operation and maintenance of any such properties if such discontinuance is,
in the good faith judgment of the Borrower, desirable in the conduct of the
business of such Obligor and could not reasonably be expected to have a Material
Adverse Effect, but subject in each case to all applicable provisions of the
Collateral Documents.
(b) Insurance. Each Obligor will (a) insure and keep insured or
reinsured with financially sound and reputable insurance companies that are not
Affiliates of the Obligors or by the United States of America, their businesses
and operations and such of their respective properties, in such amounts, with
such deductibles and covering such risks as are insured against (including, but
not limited to, war risk and third party liability) and carried in accordance
with applicable law and prudent industry practice by U.S. commercial air
carriers similarly situated with the Obligors and owning or operating similar
properties, aircraft and engines, including such insurance coverage as is
required to be maintained under the Collateral Documents, and (b) cause all such
insurance relating to any Collateral or any other property of any Obligor to
name the Administrative Agent as additional insured or loss payee, as
appropriate, and to provide not less than thirty (30) days' (or in the case of
war risk coverage, the maximum time as is available) prior notice to the
Administrative Agent of termination, lapse or cancellation of such insurance or
reinsurance; provided that this Section 5.4(b) shall not prohibit any Obligor
from procuring and maintaining all or any portion of its insurance through
Airways Assurance Limited LLC so long as Airways Assurance Limited LLC reinsures
100% of such risk as provided above in this Section 5.4(b) and such reinsurance
policies contain a cut-through endorsement. Section 5.5 Inspection. Each Obligor
will permit any authorized representatives designated by the Administrative
Agent to visit and inspect any of the properties of the Obligors, including
their financial and accounting records, and to make copies and take extracts
therefrom, and to discuss their affairs, finances and accounts with its and
their officers and independent public accountants (it being understood that a
representative of an Obligor will be present), at the Borrower's expense, all
upon reasonable notice and at such reasonable times during normal business hours
and as often as may be reasonably requested; provided that so long as no Default
or Event of Default has occurred and is continuing, such inspection shall not be
materially disruptive to the business of the Obligors. Without limiting the
generality of the foregoing, the Obligors will meet with the Administrative
Agent on a quarterly basis (in person or, if deemed appropriate by the
Administrative Agent, telephonically) to review the Obligors' financial and
accounting records and will make their officers and independent public
accountants available to discuss with the Administrative Agent the Obligors'
affairs, financial condition, results of operations, business plan, prospects,
projections, accounts and other related matters, and otherwise will cooperate
with the Administrative Agent and provide such information as it may reasonably
request.
Section 5.6 Compliance with Laws, Etc. Each Obligor will comply with
all applicable statutes, rules, regulations, orders, restrictions and
Governmental Authorizations of any applicable Governmental Authority, in respect
of the conduct of the businesses of the Obligors and the ownership of their
respective properties (including, without limitation, Gates and Slots), except
such as are being contested in good faith by appropriate proceedings and except
for such noncompliance as could not in any case or in the aggregate reasonably
be expected to have a Material Adverse Effect. None of the Obligors shall
conduct any Hazardous Materials Activity at any Facility or at any other
location in a manner that does not comply with Environmental Laws, except for
such noncompliance as could not in any case or in the aggregate reasonably be
expected to have a Material Adverse Effect. Each Obligor will use commercially
reasonable efforts to cause all other Persons operating or occupying any of
their properties to comply with Environmental Laws, except for such
noncompliance as could not in any case or in the aggregate reasonably be
expected to have a Material Adverse Effect.
Section 5.7 Remedial Action Regarding Hazardous Materials.
(a) To the extent required by Environmental Laws, each Obligor will
take any and all necessary remedial action (except to the extent that such
remedial action is taken by other Persons responsible for such remedial action
through contractual arrangements with an Obligor) in connection with the
presence, storage, use, disposal, transportation, Release or threatened Release
of any Hazardous Materials on, under or about any Facility in order to comply
timely with all applicable Environmental Laws and Governmental Authorizations
except for such non-compliance as could not in any case or in the aggregate
reasonably be expected to have a Material Adverse Effect. In the event any
Obligor undertakes any remedial action with respect to any Hazardous Materials
on, under or about any Facility, the Borrower or such Obligor will conduct and
complete such remedial action (or will cause such action to be taken pursuant to
contractual rights of such Obligor against third parties) in compliance with all
applicable Environmental Laws, and in accordance with the policies, orders and
directives of all federal, state and local Governmental Authorities except when,
and only to the extent that, such Obligor's liability for such presence,
storage, use, disposal, transportation or discharge of any Hazardous Materials
is being contested in good faith and by appropriate proceedings diligently
conducted by such Obligor or except for such non-compliance as could not in any
case or in the aggregate reasonably be expected to have a Material Adverse
Effect.
(b) The Requisite Lenders may request (i) from time to time, if and
when such Person(s) have reason to believe that an Environmental Claim or
Release of Hazardous Materials which could reasonably be expected to have a
Material Adverse Effect may exist at or with respect to any Facility, and (ii)
not more than once during any twelve month period for the purpose of determining
whether there is belief that an Environmental Claim or Release of Hazardous
Materials which could reasonably be expected to have a Material Adverse Effect
exists at or with respect to any Facility, and in the case of any such request,
the Borrower will provide to the Lenders, within sixty (60) days after such
request, at the expense of the Borrower, an environmental site assessment report
for any of its, or any other Obligor's properties described in such request,
prepared by an environmental consulting firm reasonably acceptable to the
Administrative Agent evaluating the Environmental Claim or Release of Hazardous
Materials and estimating the cost of any required compliance, removal or
remedial action in connection with the Environmental Claim or Release of
Hazardous Materials. Without limiting the generality of the foregoing clause
(b), if the Administrative Agent determines at any time that a material risk
exists that any such report will not be provided in the time referred to above,
the Administrative Agent may retain an environmental consulting firm to prepare
such report at the expense of the Borrower, and each Obligor hereby agrees to
grant at the time of such request, to the Administrative Agent, the Lenders,
such firm and any agents or representatives thereof an irrevocable non-exclusive
license, subject to the rights of tenants, to enter into their respective
properties to undertake such an assessment.
Section 5.8 Additional Obligors; Collateral.
(a) With reasonable promptness (and in any event within 30 days)
following the formation or acquisition by any Obligor of a Subsidiary, or
acquisition of any Capital Stock of any other Person having a fair market value
in excess of $25,000, the Borrower (i) shall provide the Administrative Agent
the name, corporate structure and allocation of Voting Stock and equity
interests of such Subsidiary or other Person, (ii) in the case of any such
Subsidiary that is not a CFC, shall cause such Subsidiary to execute and deliver
to the Administrative Agent a Subsidiary Joinder in the form of Exhibit J
hereto, pursuant to which such Subsidiary shall become a party to this
Agreement, and a joinder to the Guaranty pursuant to which such Subsidiary shall
become a guarantor thereunder, and (iii) shall deliver to the Administrative
Agent documents of the types referred to in clauses (a)(vi) and (a)(vii) of
Article III, all in form, content and scope reasonably satisfactory to the
Administrative Agent.
(b) Each Obligor (including, without limitation, each Subsidiary
created or acquired after the Closing Date that is required to be a Subsidiary
Guarantor) will cause all of its properties and assets as of the Closing Date
(or the date such Person was created or acquired) and all properties and assets
acquired thereafter (including, without limitation, the Capital Stock of each
Subsidiary created or acquired and the Capital Stock of each other Person
acquired after the Closing Date having a fair market value in excess of
$25,000), other than Excluded Property and any other assets as to which the
Administrative Agent shall determine that the cost of obtaining such Lien is
excessive in relation to the benefit to the Lenders of the security afforded
thereby, to be pledged to the Administrative Agent, with such priority and
perfected to such extent as is provided in the Collateral Documents, to secure
the Obligations, and will take all such actions as the Administrative Agent
deems reasonably necessary or advisable in connection with the foregoing,
including without limitation, (i) delivering to the Administrative Agent duly
executed joinders and amendments to the Collateral Documents, (ii) using
commercially reasonable efforts to obtain Landlord Waivers for all Spare Parts
Locations leased by an Obligor at which Eligible Spare Parts with an Appraised
Value of 1% or more of the Appraised Value for all Eligible Spare Parts are
located and any other locations leased by an Obligor reasonably requested by the
Administrative Agent at which any Appraised Collateral is located, (iii)
delivering all certificates, if any, and instruments representing all Capital
Stock and other securities pledged pursuant to clause (i) above, together with
undated powers or endorsements duly executed in blank and (iv) to the extent
reasonably requested by the Administrative Agent, delivering to the
Administrative Agent legal opinions relating to the matters described in this
clause (b), which opinions shall be in form and substance and from counsel
reasonably satisfactory to, the Administrative Agent; provided that if the
Borrower or another Obligor enters into an agreement to finance any pledged
After-Acquired Section 1110 Equipment, After-Acquired Slots or After-Acquired
Gates within 24 months of the acquisition of such After-Acquired Section 1110
Equipment, After-Acquired Slots or After-Acquired Gates, the Administrative
Agent shall, and is hereby directed to, release its Lien on such After-Acquired
Section 1110 Equipment, After-Acquired Slots or After-Acquired Gates upon its
receipt from the Borrower of an Officer's Certificate describing in reasonable
detail the After-Acquired Section 1110 Equipment, After-Acquired Gates or
After-Acquired Slots proposed to be financed and certifying that such
transaction complies with the Loan Documents; provided, further, that Control
Agreements for deposit accounts and securities accounts shall only be required
to the extent required pursuant to clause (d) below and Section 5.11.
(c) If as of the date of delivery of each Collateral Value Certificate
pursuant to Section 5.1(b)(xix) there exists a default under Section 6.4(c), the
Borrower shall do one of the following to the extent (but only to the extent)
necessary to cure such default: (i) prepay the Loan, (ii) deposit additional
Cure Collateral in the Collateral Account, or (iii) prepay the Loan as provided
in clause (i) above and deposit additional Cure Collateral as provided in clause
(ii) above, in each case, until such default no longer exists (whether as a
result of prepayments of the Loan, deposit of additional Cure Collateral or any
combination of the foregoing).
(d) If additional Cure Collateral is being deposited in accordance with
Section 5.8(c), such additional Cure Collateral shall be free and clear of any
Liens (other than Liens pursuant to the Collateral Documents and Liens expressly
permitted by the applicable Control Agreements) and the pledgor(s) shall execute
and deliver to the Administrative Agent such Control Agreements (in form and
substance reasonably satisfactory to the Administrative Agent) necessary to
grant a security interest to the Administrative Agent and shall take all other
actions (as are in the reasonable judgment of the Administrative Agent)
necessary or desirable to cause the Liens created thereby to be perfected first
priority Liens (other than Liens expressly permitted by the applicable Control
Agreements) under applicable law and shall otherwise comply with the provisions
of the applicable Collateral Documents that apply to a pledge of such
Collateral.
(e) In connection with each prepayment or pledge of additional Cure
Collateral pursuant to subsection (c) of this Section 5.8, the Borrower shall
deliver to the Administrative Agent a Collateral Value Certificate which
establishes that the default under Section 6.4(c) no longer exists.
Section 5.9 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 5.10 FAA Matters; Citizenship. Each Air Carrier shall at all
times hereunder hold a certificate under 49 U.S.C. Section 41102(a)(1) as
currently in effect or as may be amended or recodified from time to time. Each
Air Carrier and any other Obligor engaged in operations as an "air carrier" will
at all times hereunder be a United States Citizen holding 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 5.11 Control of Deposit Accounts and Securities Accounts. The
Obligors shall maintain deposit accounts and securities accounts with an
aggregate balance at all times equal to at least the Minimum Available Cash
Amount with banks or financial institutions with which they and the
Administrative Agent have entered into control agreements in form and substance
reasonably satisfactory to the Administrative Agent (each, a "Control
Agreement"). If the Borrower deposits Cure Collateral to the Administrative
Agent pursuant to Section 5.8(c), the Borrower shall cause such Cure Collateral
to be deposited in the Collateral Account.
Section 5.12 Contractual Obligations. Each Obligor will perform, observe or
fulfill the obligations, covenants and conditions contained in each of its
Contractual Obligations, provided that a failure to so perform, observe or
fulfill such obligations, covenants and conditions that (i) could not (either
individually or in the aggregate) reasonably be expected to have a Material
Adverse Effect or (ii) does not preclude continued operations by the Obligors at
any of the airport terminals listed on Schedule 4.20 shall not constitute a
breach of this Section 5.12.
Section 5.13 Slot Utilization.
(a) As soon as available, but in any event no later than the date on
which each report referred to in clause (i) below is submitted to the FAA, the
Borrower shall deliver to the Administrative Agent each of the following: (i) a
true and complete copy of each Slot Utilization report required to be delivered
to the FAA under the Slot Regulations, (ii) any related requests for waivers or
other documentation provided to the FAA in connection therewith, and (iii) a
Slot Utilization Report, in the form of Exhibit I (a "Slot Utilization Report"),
of Slot Utilization during the period covered by the report to the FAA referred
to in (i) above.
(b) Subject to transfers, exchanges and other dispositions permitted by
this Agreement and the SGR Security Agreement, from and after the Closing Date,
each Obligor shall cause the FAA Slots to have sufficient Slot Utilization, for
purposes of the Slot Regulations, and shall at the end of Week 4 of any
respective Two-Month FAA Reporting Period for Slots, present to the
Administrative Agent a certification from the Borrower that the Borrower intends
to effectuate full compliance with all of the slot utilization covenants
pursuant to exchanging slots at such airports with third party air carriers and
such officer has no reason to believe that the Borrower will fail to comply with
the Slot Regulations; provided, however, that the Obligors shall not be required
to so utilize Secondary Slots to the extent the Obligors determine that such
Secondary Slots are no longer commercially required.
(c) Subject to transfers, exchanges and other dispositions permitted by
this Agreement and the SGR Security Agreement, utilize any Foreign Slots in a
manner consistent in all material respects with applicable regulations and
contracts in order reasonably to preserve its right to hold and operate the
Foreign Slots, taking into account any waivers or other relief granted by any
applicable Aviation Authority; provided, however, that the Obligors shall not be
required to so utilize Foreign Slots that do not constitute Appraised Collateral
and are not associated with any Primary Routes (as defined in the SGR Security
Agreement).
(d) The Obligors shall maintain personnel, policies, procedures and a
computer database for the monitoring, utilization and management of the FAA
Slots in compliance with the Slot Regulations so as to ensure, to the greatest
extent operationally feasible, that no FAA Slot becomes subject to withdrawal by
the FAA or is otherwise revoked or terminated based upon the failure to comply
with the Slot Regulations.
Section 5.14 Stock Exchange Listing. The Borrower will comply in all
material respects with all applicable corporate governance listing standards of
the New York Stock Exchange (or any other national securities exchange or
national automated interdealer quotation system listing the Borrower's common
stock), including standards relating to the composition, duties and
responsibilities, and functioning of boards of directors and board committees.
Section 5.15 Further Assurances. Promptly upon the request of the
Administrative Agent, each Obligor will, at its expense, promptly execute,
acknowledge and deliver such further documents and do such other acts and things
as the Administrative Agent may reasonably request in order to effect fully the
purposes of the Loan Documents and to maintain and ensure the validity,
effectiveness, priority and perfection of the Administrative Agent's Liens
pursuant to the Collateral Documents.
Section 5.16 Credit Rating. The Borrower agrees to obtain at the end of
each fiscal quarter (or, if the aggregate outstanding principal amount of the
Loan is less than $600,000,000, each Fiscal Year) for the term of the Loan, and
at the expense of the Borrower, Credit Ratings from S&P and Moody's, which
ratings may be obtained by subscribing to S&P's and Moody's' ongoing rating
monitoring services, if available.
Section 5.17 Collateral Reports and Appraisals. The Borrower shall
deliver or cause to be delivered to the Administrative Agent the following:
(a) Appraisal Reports. Appraisal Reports, and each Obligor shall permit
the Administrative Agent to have an Appraiser conduct appraisals for such
Appraisal Reports, at the Borrower's expense, for purposes of determining
eligibility and monitoring the value of such Collateral as follows:
(i) with respect to Spare Engines, one time per Fiscal Year using the
Desk-top Spare Engines Appraisal Methodology and one time per Fiscal Year
based on physical inspection;
(ii) with respect to Spare Parts, three times per Fiscal Year using the
Desk-top Spare Parts Appraisal Methodology and one time per Fiscal Year
based on physical inspection;
(iii) with respect to Aircraft, one time per Fiscal Year using the
Desk-top Aircraft Appraisal Methodology and one time per Fiscal Year based
on physical inspection; and
(iv) with respect to all other Collateral, once per Fiscal Year;
provided, however, that if a Default or Event of Default has occurred
and is continuing, the Administrative Agent may request, at the Borrower's
expense, such additional Appraisal Reports of any or all of the Collateral in
the Administrative Agent's discretion; provided, further, that if additional
assets become Appraised Collateral, the Administrative Agent may request, at the
Borrower's expense, such additional Appraisal Reports with respect to such
assets in the Administrative Agent's discretion.
(b) Field Examinations. Field examination reports with respect to
Accounts, and each Obligor shall permit the Administrative Agent to conduct
field examinations for such reports, at the Borrower's expense, for purposes of
determining eligibility and monitoring the value of such Collateral, two times
per Fiscal Year; provided, however, that so long as a Default or Event of
Default shall not have occurred and be continuing, such field examination shall
not be materially disruptive to the business of the Obligors; provided, further,
that if a Default or Event of Default has occurred and is continuing, the
Administrative Agent may request, at the Borrower's expense, such additional
field examinations in the Administrative Agent's discretion.
(c) Engine Reports. By the tenth Business Day of January, April, July
and October of each year, commencing with such date in July 2006, a report
stating, with respect to each Eligible Spare Engine as of the last day of the
calendar month immediately preceding the date of such report prior to the date
of such report: (i) if such Engine is then installed on an airframe, the
applicable Obligor's tail number of such airframe, or, if not so installed, the
status and location of such Engine, (ii) the hours and cycles of operation of
such Engine since new and since its last major overhaul and (iii) the most
limiting life limited part on such engine (the "limiter") and the cycles
remaining on such limiter.
(d) Other Information. Such other reports, statements and
reconciliations with respect to the Eligible Collateral or any of the other
Collateral of any or all of the Obligors as the Administrative Agent shall from
time to time request in its reasonable discretion.
Section 5.18 Software. The Borrower hereby agrees that it shall
maintain a spare parts inventory tracking system at all times prior to the
Maturity Date.
Section 5.19 Cape Town Convention. With respect to the Cape Town
Convention which has been ratified by, and is in full force and effect in the
United States of America, the parties hereto hereby agree to permit the
interests created under the Loan Documents to constitute International Interests
under the Cape Town Convention. Upon request by the Administrative Agent, the
Borrower at its own cost and expense shall from time to time do or cause to be
done any and all acts and things (other than acts and things under the control
of the Administrative Agent) which may be required or desirable (in the
reasonable opinion of Administrative Agent) to ensure that each of the Secured
Parties has the full benefit of the Cape Town Convention in connection with any
Aircraft and Spare Engines, including:
(a) any matters connected with registering, perfecting, preserving
and/or enhancing any International Interest vested in the Secured Parties with
respect to any Aircraft and Spare Engines and constituted by the Loan Documents;
(b) entry in to agreements (subordination or otherwise) to protect
and/or enhance and/or, improve the priority of any International Interest
referred to in the foregoing paragraph (a);
(c) excluding, in writing, the application of any provisions of the
Cape Town Convention that the Administrative Agent may deem desirable in
connection with the foregoing, provided in each case that such acts and things
do not result in any of the Borrower's other obligations under the Loan
Documents being made any greater; and
(d) if any subsequent action taken by any party, including any
permitted sublease or re-registration of any Aircraft or Spare Engines, gives
rise to a new International Interest under the Cape Town Convention, registering
such interest with the International Registry (as such term is defined in the
Cape Town Convention) with the consent of the Administrative Agent, or any duly
authorized agent thereof, and any other party hereto as necessary to complete
such registration.
Section 5.20 Post-Closing Matters. The Obligors shall deliver each of
the documents, instruments and agreements and take each of the actions set forth
on Schedule 5.20 within the time periods set forth on such Schedule.
ARTICLE VI
NEGATIVE COVENANTS
To induce the other parties to enter into this Agreement (excluding any
other Obligor), the Obligors agree with each other party hereto (excluding any
other Obligor) that, so long as any of the Obligations (other than contingent
indemnification obligations) remain outstanding:
Section 6.1 Liens and Related Matters.
(a) Prohibition on Liens. No Obligor will, nor will it permit any other
Obligor 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
Obligor, 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:
(i) Permitted Encumbrances;
(ii) (A) Liens existing on the Closing Date on Aircraft Related
Equipment, Gates, Slots or Supporting Route Facilities securing Indebtedness
used to acquire, finance or refinance such Aircraft Related Equipment,
Gates, Slots or Supporting Route Facilities, (B) Liens on Aircraft Related
Equipment, Gates, Slots or Supporting Route Facilities acquired after the
Closing Date created or incurred in connection with the financing of such
Aircraft Related Equipment, Gates, Slots or Supporting Route Facilities
(including a financing transaction referred to in the proviso to Section
5.8(b) with respect to After-Acquired Section 1110 Equipment, After-Acquired
Gates or After-Acquired Slots), (C) Liens on Aircraft Related Equipment and
related property as contemplated under the GE 2001 Credit Agreement, (D)
Liens on Aircraft Related Equipment, Gates, Slots or Supporting Route
Facilities securing Permitted Refinancing Indebtedness in respect of
Indebtedness previously secured by such Aircraft Related Equipment, Gates,
Slots or Supporting Route Facilities in accordance with subclause (A) or (B)
above, including in each case, Liens securing special facility revenue bonds
that finance Aircraft Related Facilities, (E) Liens incurred or deposits
made in the ordinary course of business to secure the performance of
contracts for the purchase of aircraft, (F) Liens in existence on the
Closing Date (1) on aircraft and engines (other than Collateral covered by
the Aircraft Mortgage) and (2) securing special facility revenue bonds; (G)
Liens on assets described on Schedule 1.1(b) and (H) Liens on any insurance
and requisition proceeds received with respect to any Aircraft, the benefit
of all standard airframe and engine warranties relating to such Aircraft and
such other security as is being made available and/or has been made
available by any of the Obligors during the 12 months preceding any
financing to financiers in the international aviation finance markets for
similar aircraft financing transactions, in each case as contemplated under
the Airbus Financing Letter Agreement;
(iii) other Liens on (A) assets acquired after the Closing Date, (B)
Engines or Propellers (each as defined in the Aircraft Mortgage) substituted
by the applicable Obligor pursuant to Section 3.5(e) of the Aircraft
Mortgage and (C) Airframes substituted by the applicable Obligor pursuant to
Section 3.6(a) of the Aircraft Mortgage, in each case, 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;
(iv) Liens described in Schedule 6.1(a);
(v) judgment and attachment Liens not (A) giving rise to an Event of
Default or (B) relating to an action or judgment giving rise to an Event of
Default under Section 7.1(h);
(vi) Liens on the assets of any entity or on any asset existing at the
time such entity or asset is acquired by an Obligor, whether by merger,
consolidation, purchase of assets or otherwise; provided that (A) such Liens
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, (B) such Liens were created to secure the financing of Aircraft
Related Equipment or other specific assets, (C) such Liens do not extend to
any other assets of any Obligor other than the assets acquired with such
financing and (D) the Indebtedness secured by such Liens is permitted
pursuant to this Agreement;
(vii) (A) leases or subleases of real or personal property granted by
any Obligor to other Persons not interfering in any material respect with
the ordinary conduct of the business of the Obligors, taken as a whole, (B)
leases and/or subleases of Aircraft Related Equipment, Gates, Slots or
Supporting Route Facilities to any Obligor or any US Airways Express
affiliate that is not an Obligor and operates such Aircraft Related
Equipment, Gates, Slots or Supporting Route Facilities for the Borrower or
another Obligor pursuant to a services agreement with the Borrower or such
Obligor, which lease or sublease is entered into in connection with the debt
financing or leasing of such Aircraft Related Equipment, Gates, Slots or
Supporting Route Facilities, 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,
Gates, Slots or Supporting Route Facilities or, in the case of a sublease,
to any Person leasing such Aircraft Related Equipment, Gates, Slots or
Supporting Route Facilities to the Borrower or such Obligor, and (C) Liens
on an Obligor's interest as lessee or sublessor in respect of any Aircraft
Related Equipment, Gates, Slots or Supporting Route Facilities or interests
related thereto (including without limitation subleases, refunds or rebates,
security deposits, rent, supplemental rent, reserves, or return condition
adjustment payments);
(viii) Liens on cash and Cash Equivalents securing (A) reimbursement
obligations in respect of letters of credit issued for the account of any
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, (B) reimbursement or other margin requirements in
connection with transactions contemplated by the proviso in Section 6.12,
(C) prepaid fuel and healthcare expenses in the ordinary course of business
and consistent with past practice and (D) obligations in respect of the
financing of Credit Card holdbacks, so long as the aggregate amount of such
cash and Cash Equivalents does not exceed the amount of the holdbacks
subject to such financing;
(ix) Liens on assets pledged in connection with a Replacement Secured
Financing; provided that the Borrower prepays the Loan with the Net Issue
Proceeds of such Replacement Secured Financing as provided in Section
2.5(a);
(x) 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;
(xi) any renewal or substitution of any Lien for any of the preceding
clauses (ii), (iv),(vi), (ix) or (xiv); provided that any such Liens are not
extended to additional assets;
(xii) (A) purchase money Liens granted by the Borrower or any of its
Subsidiaries securing purchase money Indebtedness in an aggregate principal
amount not to exceed $10,000,000 incurred by the Borrower or any of its
Subsidiaries to finance 50% or more of the cost of acquiring any fixed
assets and limited in each case to the property purchased with the proceeds
of such purchase money Indebtedness and (B) purchase money Liens granted by
the Borrower or any of its Subsidiaries securing purchase money Indebtedness
incurred by the Borrower or any of its Subsidiaries to finance all or more
than 90% of the cost of acquiring any fixed assets and limited in each case
to the property purchased with the proceeds of such purchase money
Indebtedness; provided, however, that in each case, such Liens exist prior
to the acquisition of, or attach substantially simultaneously with, or
within 90 days after, the acquisition, repair, improvement or construction
of, such property financed;
(xiii) other Liens on (A) assets acquired after the Closing Date, (B)
Engines or Propellers (each as defined in the Aircraft Mortgage) substituted
by the applicable Obligor pursuant to Section 3.5(e) of the Aircraft
Mortgage and (C) Airframes substituted by the applicable Obligor pursuant to
Section 3.6(a) of the Aircraft Mortgage, in each case, 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 $25,000,000 at any time outstanding, so long as both immediately
before and after giving effect to the creation or assumption of such Lien, a
Covenant Suspension Period is in effect; provided, that if at the time of
the creation or assumption of such Lien, such Lien was permitted under this
clause (xiii) based on a Covenant Suspension Period in effect at such time,
the subsequent termination of such Covenant Suspension Period shall not
cause a violation of this Section 6.1; and
(xiv) Liens on the Tempe Property and any Investments permitted
pursuant to Section 6.2(xiii), in each case granted in connection with
financing the development of such property;
provided that the Obligors may not utilize clauses (ii)(H), (iii) or (xiii)
above for any property of any Obligor if such property constitutes Collateral
(other than, with respect to clause (ii)(H), Collateral consisting of cash and
Cash Equivalents).
(b) No Restrictions on Subsidiary Distributions. Except (i) as provided
herein or in the other Loan Documents, (ii) as described on Schedule 6.1(b),
(iii) for restrictions on the use of proceeds from a permitted financing of
Aircraft Related Equipment, Slots or Gates, (iv) Payment Restrictions contained
in refinancings or replacements of the financings listed in clause (a)(ii) or
(vi) above that are not more restrictive in a material respect than the
corresponding Payment Restrictions in the original financing, or (v) for
restrictions binding on an entity at the time such entity first becomes a
Subsidiary of an Obligor, whether by merger, consolidation, purchase of assets
or otherwise (provided that such restrictions are not created, incurred or
assumed by such entity in contemplation of or in connection with the financing
of such entity's becoming a Subsidiary of an Obligor), no Obligor will, nor will
it permit any other Obligor to, create or otherwise cause to exist any Payment
Restriction with respect to any Subsidiary of any Obligor.
Section 6.2 Investments. No Obligor will, nor will it permit any other
Obligor to, make any Investment other than (i) Investments consisting of Cash
Equivalents; (ii) accounts receivable if credited or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; (iii) payroll advances and advances for business and travel
expenses in the ordinary course of business; (iv) Investments made by way of any
endorsement of negotiable instruments received by any Obligor in the ordinary
course of its business and presented by it to any bank for collection or
deposit; (v) stock, obligations or securities received in settlement of amounts
owing to any Obligor in the ordinary course of business or in a distribution
received in respect of an Investment permitted hereunder; (vi) Investments made
in connection with the Trust Agreements; (vii) in addition to any other
permitted investments, any other Investments by the Obligors in an aggregate
outstanding amount not exceeding $50,000,000 at any time; (viii) Investments
pursuant to and in compliance with Section 6.5 or Section 6.9; (ix) Investments
made in Excluded Subsidiaries consistent with past practice and not to exceed
$10,000,000 per Fiscal Year in the aggregate; (x) Investments in travel or
airline related businesses made in connection with Marketing and Service
Agreements, alliance agreements, distribution agreements, agreements with
respect to fuel consortium, agreements relating to flight training, agreements
relating to insurance arrangements, agreements relating to spare parts
management systems and other similar agreements which Investments under this
clause (x) (excluding Investments existing on the date hereof) shall not exceed
$100,000,000 in the aggregate at any time outstanding; (xi) Investments
constituting non-cash consideration received in respect of a transaction
pursuant to and in compliance with Section 6.13; (xii) Investments existing on
the date hereof and set forth on Schedule 6.2; (xiii) Investments received in
consideration of the contribution or other disposition of the Tempe Property to
a joint venture, partnership or other entity for the purpose of developing the
Tempe Property and (xiv) additional Investments not otherwise prohibited under
this Agreement, so long as both immediately before and after giving effect to
such Investment pursuant to this clause (xiv), a Covenant Suspension Period is
in effect; provided, that if at the time of the making of such Investment, such
Investment was permitted under this clause (xiv) based on a Covenant Suspension
Period in effect at such time, the subsequent termination of such Covenant
Suspension Period shall not cause a violation of this Section 6.2.
Section 6.3 Restricted Payments. No Obligor will, nor will it permit
any other Obligor to, directly or indirectly, declare, order, pay, make or set
apart, or be obligated to declare, order, pay, make or set apart, any sum for
any Restricted Payment, except that:
(a) the Obligors may prepay (i) Indebtedness which is secured by a Lien
on property or assets sold in an Asset Sale which is permitted hereunder or
subject to a condemnation, taking, temporary or permanent requisition, or change
of grade, or a covered loss under a casualty insurance policy, in each case in
this clause (a)(i), to the extent that such Indebtedness is required by its
terms to be paid as a result of such Asset Sale, condemnation, taking, temporary
or permanent requisition, change of grade, or covered loss, as applicable, (ii)
Indebtedness with the proceeds of Permitted Refinancing Indebtedness, or (iii) a
Capital Lease of property which is obsolete, worn out or no longer required in
the businesses of the Obligors;
(b) the Obligors may purchase or redeem (i) the Warrants held by AFS
Cayman Limited and (ii) Capital Stock (including options on any such Capital
Stock or related stock appreciation rights or similar securities) that was
issued as compensation from their officers, directors and employees (or their
estates or beneficiaries under their estates) upon death, disability,
retirement, termination of employment or pursuant to the terms of any plan or
any other agreement under which such Capital Stock or related rights were
issued, in an amount not to exceed $1,000,000 per Fiscal Year;
(c) (i) the Borrower may redeem the US Airways Convertible Notes in a
principal amount up to $144,000,000 if (A) (I) the closing sale price of the
Borrower's common stock is greater than $24.12 and the Borrower mails the
applicable redemption notice to the holders of the US Airways Convertible Notes
within 30 days thereof and (II) after giving effect to such a redemption, no
Default or Event of Default shall have occurred and be continuing; and (B) (I)
the closing sale price of the Borrower's common stock is less than $24.12 per
share and the Borrower mails the applicable redemption notice to the holders of
the US Airways Convertible Notes within 30 days thereof, (II) at the time of
mailing such redemption notice, the Borrower has, and after giving effect to
such a redemption, the Borrower expects in good faith to have Unrestricted Cash
of at least $1,200,000,000 and (III) after giving effect to such a redemption,
no Default or Event of Default shall have occurred and be continuing and (ii)
the Borrower may redeem (or cause AWA Holdings to redeem) the AWA Convertible
Notes in a principal amount up to $112,000,000;
(d) the Borrower may pay dividends in respect of its Capital Stock each
Fiscal Year in an amount up to 50% of Excess Cash Flow for the immediately
preceding Fiscal Year, so long as, both immediately before and after giving
effect to such payment, (i) no Default or Event of Default has occurred and is
continuing, (ii) the Borrower is in pro forma compliance with the financial
covenants in Section 6.4 and (iii) the Borrower has pro forma Unrestricted Cash
of at least $1,200,000,000;
(e) the Borrower shall be permitted to make other payments in respect
of subordinated Indebtedness, so long as, both immediately before and after
giving effect to such payment, a Covenant Suspension Period is in effect;
(f) the Borrower shall be permitted to make other payments in respect
of Indebtedness (other than Indebtedness that is contractually subordinated to
the Loans) so long as, both immediately before and after giving effect to such
prepayment, the Borrower has pro forma Unrestricted Cash of at least
$1,200,000,000; and
(g) the Borrower shall be permitted to pay other dividends in respect
of its Capital Stock so long as, in the case of this clause (g), both
immediately before and after giving effect to such dividend, a Covenant
Suspension Period is in effect.
Section 6.4 Financial Covenants.
(a) Minimum Available Cash. The Borrower shall not, at the close of any
Business Day, permit the aggregate amount of Available Cash to be less than the
Minimum Available Cash Amount (as hereinafter defined). The term "Minimum
Available Cash Amount" means, at any time, the amount set forth in the table
below across from the then aggregate outstanding principal amount of the Loan:
-------------------------------------------- ----------------------------------------
Outstanding Principal Amount Minimum Available Cash Amount
-------------------------------------------- ----------------------------------------
>/= $700,000,000 $750,000,000
-------------------------------------------- ----------------------------------------
< $700,000,000 and >/= $650,000,000 $700,000,000
-------------------------------------------- ----------------------------------------
< $650,000,000 and >/= $600,000,000 $650,000,000
-------------------------------------------- ----------------------------------------
< $600,000,000 and >/= $550,000,000 $600,000,000
-------------------------------------------- ----------------------------------------
< $550,000,000 and >/= $500,000,000 $550,000,000
-------------------------------------------- ----------------------------------------
< $500,000,000 and >/= $450,000,000 $500,000,000
-------------------------------------------- ----------------------------------------
< $450,000,000 and >/= $400,000,000 $450,000,000
-------------------------------------------- ----------------------------------------
< $400,000,000 and >/= $350,000,000 $400,000,000
-------------------------------------------- ----------------------------------------
< $350,000,000 and >/= $300,000,000 $350,000,000
-------------------------------------------- ----------------------------------------
< $300,000,000 and >/= $250,000,000 $300,000,000
-------------------------------------------- ----------------------------------------
< $250,000,000 and >/= $200,000,000 $250,000,000
-------------------------------------------- ----------------------------------------
< $200,000,000 and >/= $150,000,000 $200,000,000
-------------------------------------------- ----------------------------------------
< $150,000,000 and >/= $100,000,000 $150,000,000
-------------------------------------------- ----------------------------------------
< $100,000,000 and >/= $50,000,000 $100,000,000
-------------------------------------------- ----------------------------------------
< $50,000,000 $50,000,000
-------------------------------------------- ----------------------------------------
(b) Minimum Fixed Charge Coverage Ratio. The Borrower shall not permit
its ratio of Consolidated EBITDAR to Consolidated Fixed Charges for the four
consecutive fiscal quarters ending on the dates specified below, to be less than
the applicable ratio specified below:
------------------------------------ ----------------------------------
Period Applicable Ratio
------------------------------------ ----------------------------------
June 30, 2006 0.95 to 1.00
------------------------------------ ----------------------------------
September 30, 2006 0.96 to 1.00
------------------------------------ ----------------------------------
December 31, 2006 0.92 to 1.00
------------------------------------ ----------------------------------
March 31, 2007 0.92 to 1.00
------------------------------------ ----------------------------------
June 30, 2007 0.98 to 1.00
------------------------------------ ----------------------------------
September 30, 2007 1.05 to 1.00
------------------------------------ ----------------------------------
December 31, 2007 1.11 to 1.00
------------------------------------ ----------------------------------
March 31, 2008 1.13 to 1.00
------------------------------------ ----------------------------------
June 30, 2008 1.16 to 1.00
------------------------------------ ----------------------------------
September 30, 2008 1.18 to 1.00
------------------------------------ ----------------------------------
December 31, 2008 1.21 to 1.00
------------------------------------ ----------------------------------
March 31, 2009 1.24 to 1.00
------------------------------------ ----------------------------------
June 30, 2009 1.29 to 1.00
------------------------------------ ----------------------------------
September 30, 2009 1.33 to 1.00
------------------------------------ ----------------------------------
December 31, 2009 1.37 to 1.00
------------------------------------ ----------------------------------
March 31, 2010 1.41 to 1.00
------------------------------------ ----------------------------------
June 30, 2010 1.46 to 1.00
------------------------------------ ----------------------------------
September 30, 2010 1.50 to 1.00
------------------------------------ ----------------------------------
December 31, 2010 1.54 to 1.00
------------------------------------ ----------------------------------
March 31, 2011 1.54 to 1.00
------------------------------------ ----------------------------------
; provided, however, that the financial covenant in this clause (b) shall not be
applicable if a Covenant Suspension Period is then in effect.
(c) Minimum Collateral Coverage Ratio. The Borrower shall not permit
the Collateral Coverage Ratio to be less than 125% at any time; provided,
however, that if at any time, it is determined that the Borrower is not in
compliance with the minimum Collateral Coverage Ratio, the Borrower shall,
within fifteen (15) Business Days of the date of such determination, prepay the
Loan or deposit additional Cure Collateral pursuant to Section 5.8(c), in each
case in an amount sufficient to enable the Borrower to comply with the minimum
Collateral Coverage Ratio.
Section 6.5 Restriction on Acquisitions; Change in Fiscal Year.
(a) No Obligor will, nor will it permit any other Obligor to, acquire
by purchase or otherwise all or substantially all of the business, property or
assets of any Person or any division or line of business of any Person
(excluding purchases and acquisitions in the ordinary course of business by an
Obligor of property from any Person not constituting all or substantially all of
the property of such Person), or all or substantially all of the Capital Stock
or other evidence of beneficial ownership of any Person, or acquire any Person
as a new Subsidiary, except that the Obligors may make acquisitions of Capital
Stock, the assets and/or the business of another Person (including any division
or line of business of such Person) or acquire any Person as a new Subsidiary so
long as (i) the acquisition primarily involves the acquisition of assets to be
used in the business of an Obligor as engaged in by such Obligor on the date
hereof, (ii) immediately before and after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing, (iii) immediately after
giving effect to the acquisition, the Obligors shall be in compliance on a Pro
Forma Basis with Section 6.4 (in the case of Section 6.4(b), based on
Consolidated EBITDAR for the four quarters ended as of the end of the most
recently ended fiscal quarter) and such compliance shall be evidenced by an
Officer's Certificate of the Borrower demonstrating such compliance, (iv) prior
to the consummation of such acquisition, neither S&P nor Moody's shall have
lowered the Credit Rating to below B- and B3, respectively, as a result of such
acquisition (whether or not in combination with other factors), (v) the
aggregate purchase price in connection with all such acquisitions (including
therein any Indebtedness assumed in connection with such acquisitions)
consummated after the date hereof does not exceed $100,000,000 during any twelve
(12) month period and $300,000,000 in the aggregate during the term of the Loan,
(vi) if the acquisition is structured as a consolidation or merger, it complies
with Section 6.9, and (vii) the Obligors comply with their obligations under
Section 5.8(a) and/or (b) with respect to the properties, assets or Person so
acquired (as applicable).
(b) No Obligor shall change its Fiscal Year.
Section 6.6 Sales-Leasebacks. Except with respect to Aircraft Related
Equipment, no Obligor will, nor will it permit any other Obligor to, directly or
indirectly, become liable after the Closing Date as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, in each case which (a) an Obligor has sold or transferred or
is to sell or transfer to any other Person (other than another Obligor) or (b)
an Obligor intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred by such Obligor to any
Person (other than another Obligor) in connection with such lease; provided that
after the Closing Date the Obligors may become and remain liable as lessee,
guarantor or other surety with respect to (i) any such lease if and to the
extent that (A) the annual aggregate rentals under all such leases (other than
leases with respect to Aircraft Related Equipment) shall not exceed $30,000,000
and (B) the Obligors comply with any prepayment obligations under Section
2.5(b), and (ii) in addition to those leases permitted under clause (i) above,
additional leases if and to the extent that (A) the annual aggregate rentals
under all such leases (other than leases with respect to Aircraft Related
Equipment) shall not exceed $20,000,000, (B) the Obligors comply with any
prepayment obligations under Section 2.5(b), and (C) both immediately before and
after giving effect to such lease pursuant to this clause (ii), a Covenant
Suspension Period is in effect; provided, that if at the time of entering into
such lease, such lease was permitted under this clause (ii) based on a Covenant
Suspension Period in effect at such time, the subsequent termination of such
Covenant Suspension Period shall not cause a violation of this Section 6.6; and
provided, further, that the restrictions contained in this Section 6.6 shall not
apply to the transactions described on Schedule 6.6.
Section 6.7 Transactions with Affiliates.
(a) No Obligor shall, directly or indirectly, (i) sell, lease, transfer
or otherwise dispose of any of its properties or assets, or issue securities to,
(ii) purchase any property, assets or securities from, (iii) make any Investment
in or (iv) enter into any contract or agreement with or for the benefit of, any
Affiliate that is not an Obligor or holder (other than an Obligor) of 5% or more
of any class of Capital Stock (and any Affiliate of such holder) of any Obligor
(an "Affiliate Transaction"), other than (x) Affiliate Transactions permitted
under Section 6.7(b) and (y) Affiliate Transactions (including lease
transactions) which are on fair and reasonable terms no less favorable to such
Obligor than those as might reasonably have been obtainable at such time from an
unaffiliated party; provided that if an Affiliate Transaction or series of
related Affiliate Transactions involves or has a value in excess of $10,000,000,
such Obligor shall not enter into such Affiliate Transaction or series of
Affiliate Transactions unless a majority of the disinterested members of the
board of directors of the Borrower shall reasonably and in good faith determine
that such Affiliate Transaction is fair and reasonable to such Obligor or is on
terms no less favorable to such Obligor than those that might reasonably have
been obtained at such time from an unaffiliated party. For purposes of this
Section 6.7, Section 9.9 notwithstanding, the determination of whether a
transaction is "fair" shall be governed by the Delaware General Corporation Law,
including decisional law thereunder.
(b) The provisions of Section 6.7(a) shall not apply to (i) the
agreements listed on Schedule 6.7(b) as in effect on the Closing Date or any
transaction contemplated thereby; (ii) reasonable and customary fees and
compensation paid to, and indemnity provided on behalf of, officers, directors
and employees of any Obligor or Excluded Subsidiary, as determined by the board
of directors of such Obligor or the senior management of the Borrower in good
faith; (iii) any Restricted Payments permitted by Section 6.3; (iv) transactions
contemplated by the Marketing and Service Agreements; and (v) transactions
between any Obligor with any employee labor unions or other employee groups of
such Obligor provided such transactions are not otherwise prohibited by this
Agreement. The Obligors expressly acknowledge and agree that, in the case of any
sale, transfer or other disposition of assets or property which are Collateral
from one Obligor to another Obligor (or to an Excluded Subsidiary), whether
pursuant to this Section 6.7, Section 6.9 or otherwise, the Lien of the
Administrative Agent in such assets or property immediately prior to such sale,
transfer or other disposition shall continue and survive such transaction and
remain attached to (and perfected in) such assets or property following such
transaction, and each Obligor which takes title to such assets or property
acknowledges and agrees that such title is subject to the Lien of the
Administrative Agent.
Section 6.8 Conduct of Business. From and after the date hereof, (a) no
Obligor shall engage in any principal line of business other than (i) the
businesses engaged in by the Obligors on the date hereof and related businesses
and (ii) such other lines of business as may be consented to by the Requisite
Lenders, and (b) each of the Excluded Subsidiaries shall not engage in any
business other than the business engaged in by it on the Closing Date.
Section 6.9 Merger or Consolidation. No Obligor will consolidate with
or merge with any other Person or convey, lease or transfer its properties and
assets substantially as an entirety to any Person, unless: (i) (a) in the case
of a consolidation or merger involving a Principal Obligor, such Principal
Obligor is the surviving entity, or (b) in the case of a consolidation or merger
involving any other Obligor, such Obligor is the surviving entity or if such
Obligor is not the surviving entity, such surviving entity or the Person that
acquires by conveyance, lease or transfer the properties and assets of such
Obligor substantially as an entirety, shall be a corporation organized and
existing under the laws of the United States of America or any State thereof or
the District of Columbia, and shall expressly assume, by an agreement executed
and delivered to the Administrative Agent, in form and substance reasonably
satisfactory to the Administrative Agent, all of such Obligor's obligations
under each Loan Document to which it is a party; (ii) immediately before and
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing and immediately after giving effect to such
transaction, the Borrower shall be in compliance, on a Pro Forma Basis, with
Section 6.4 (in the case of Section 6.4(b), based on Consolidated EBITDAR for
the four quarters ended as of the end of the most recently ended fiscal
quarter); and (iii) the Borrower has delivered to the Administrative Agent an
Officer's Certificate and an opinion of counsel from counsel reasonably
satisfactory to the Administrative Agent, in form and substance reasonably
satisfactory to the Administrative Agent, stating that such consolidation,
merger, conveyance, lease or transfer and such agreement comply with this
Section 6.9 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 Administrative Agent. Notwithstanding
anything to the contrary contained in this Section 6.9, (A) any Obligor may
merge or consolidate with any other Obligor; provided that in the case of each
such merger or consolidation involving a Principal Obligor, such Principal
Obligor shall be the continuing or surviving Person, (B) any Obligor (other than
a Principal Obligor) may convey, lease or transfer its properties and assets
substantially as an entirety to any other Obligor and (C) any Principal Obligor
may merge or consolidate with any other Principal Obligor; provided that in the
case of each such merger or consolidation involving the Borrower, the Borrower
shall be the continuing or surviving Person.
Section 6.10 Limitations on Amendments.
(a) No Obligor shall amend, waive or modify, nor shall it consent to or
request any amendment, waiver or modification, of any of the material terms,
conditions, representations and covenants contained in any Indebtedness for
borrowed money that (i) shortens the final maturity date of such Indebtedness to
a date earlier than 180 days after the Maturity Date (without giving effect to
any amendment, waiver or modification, the "Initial Indebtedness") or (ii)
requires the acceleration of the final scheduled maturity date and/or any
principal payments, including but not limited to scheduled payments and
mandatory prepayments, and/or increases the principal amount payable on any date
(including, without limitation, pursuant to mandatory prepayments) prior to the
dates of analogous payments of such Initial Indebtedness; provided, however,
that this Section 6.10(a) shall not prohibit the incurrence of Permitted
Refinancing Indebtedness, the repayment of the Indebtedness being refinanced, or
any amendment, waiver or modification of the terms of the Indebtedness being
refinanced necessary to effect such repayment.
(b) No Obligor will, nor will it permit any other Obligor to, amend,
adopt or terminate any Plan (i) unless such action could not reasonably be
expected to have a Material Adverse Effect, or (ii) in any manner that could
reasonably be expected to give the PBGC a sound and just basis to commence
Proceedings against the Obligors on the basis that such action constitutes a
subsequent change in connection with the Obligor's termination or replacement of
the defined benefit Retirement Income Plan for Pilots of US Airways, Inc. with
the 2003 Pilots Defined Contribution Plan.
(c) No Obligor shall amend, restate, supplement or modify (or consent
to or permit any amendment, restatement, supplement or modification of) its
Investment Guidelines without the prior written consent of the Administrative
Agent; provided, that, for the avoidance of doubt, this Section 6.10(c) shall
not be deemed to prohibit the adoption of the Investment Guidelines by any
Obligor.
Section 6.11 No Further Negative Pledges. Except with respect to (a)
specific property encumbered to secure payment of particular Indebtedness or to
be sold pursuant to an executed agreement with respect to a permitted Asset Sale
(including sale-leaseback transactions not prohibited by this Agreement), (b)
restrictions by reason of customary provisions restricting pledges, Liens,
assignments, subletting or other transfers contained in leases, licenses and
similar agreements entered into in the ordinary course of business (provided
that such restrictions are limited to the property or assets secured by such
Liens or the property or assets subject to such leases, licenses or similar
agreements, as the case may be), (c) negative pledges contained in the Airbus
Financing Letter Agreement and Permitted Acquisition Financing (and any
Permitted Refinancing Indebtedness thereof), and (d) Permitted Refinancing
Indebtedness of Indebtedness outstanding on the Closing Date, after the date
hereof, no Obligor will, nor will it permit any other Obligor to, enter into any
agreement prohibiting the creation or assumption of any Lien to secure the
Obligations upon any of its properties or assets, whether now owned or hereafter
acquired to the extent that such properties or assets are required to be pledged
to secure the Obligations.
Section 6.12 Speculative Transactions. No Obligor will, nor will it
permit any other Obligor to, become a general partner in any general or limited
partnership or joint venture engaged or involved in, nor will any Obligor engage
in any transaction involving, commodity options or future contracts or any
similar speculative transactions; provided, however, that the following
transactions shall not be prohibited by this Section 6.12: (i) 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, (ii)
transactions designed to hedge interest rates entered into in the ordinary
course of business with respect to notional amounts not to exceed actual or
anticipated Indebtedness and not entered into for speculative purposes and (iii)
transactions designed to hedge against risks associated with fluctuations in
currencies entered into in the ordinary course of business, and not entered into
for speculative purposes.
Section 6.13 Asset Sales. No Obligor will, nor will it permit any other
Obligor to, directly or indirectly, consummate any Asset Sale, except that the
following Asset Sales shall be permitted: (i) any Asset Sales if and to the
extent that the aggregate Net Cash Proceeds from all such Asset Sales does not
exceed $250,000,000 per Fiscal Year (subject to compliance with Section 2.5(b),
if applicable), (ii) sale-leasebacks not prohibited by Section 6.6 (subject to
compliance with Section 2.5(b), if applicable), (iii) any sale or disposition of
Spare Parts in the ordinary course of business (subject to compliance with
Section 2.5(b), if applicable); provided, however, that the aggregate Appraised
Value of all Spare Parts sold or disposed of pursuant to this clause (iii) shall
not exceed 15% of the Appraised Value of the Spare Parts set forth in the
Baseline Appraisal; and (iv) other Asset Sales so long as both immediately
before and after giving effect to such Asset Sale pursuant to this clause (iv),
a Covenant Suspension Period is in effect (subject to compliance with Section
2.5(b), if applicable); provided, however, that with respect to each Asset Sale
pursuant to this Section 6.13, (a) the consideration received in respect of such
Asset Sale is at least equal to the Fair Market Value of the assets subject to
such Asset Sale and (b) at least 85% of the value of the consideration received
by such Obligor in respect of such Asset Sale (net of the amount of any
Indebtedness secured by the assets sold in such Asset Sale which is assumed by
the purchaser thereof) is in the form of cash or Cash Equivalents.
Section 6.14 Hazardous Materials. No Obligor shall cause or knowingly
permit a Release of any Hazardous Material on, at, in, under, above, to, from or
about any of the Collateral where such Release would (a) violate in any respect,
or form the basis for any Liabilities pursuant to Environmental Laws, or (b)
otherwise adversely effect the value or marketability of any of the Collateral,
other than in the case of each of clauses (a) and (b), such violations, Releases
or Liabilities pursuant to Environmental Laws that could not reasonably be
expected to have a Material Adverse Effect.
Section 6.15 ERISA Events. No Obligor shall, or shall cause or permit
any ERISA Affiliate to, cause or permit to occur (i) an event that could result
in the imposition of a lien under Section 412 of the Internal Revenue Code or
Section 302 or 4068 of ERISA or (ii) an ERISA Event, except in each case to the
extent such lien or such ERISA Event could not reasonably be expected to have a
Material Adverse Effect.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 Events of Default. Each of the following events shall
constitute an "Event of Default":
(a) (i) failure by the Borrower to pay any installment of principal of
the Loan when due, whether at stated maturity, by acceleration, by mandatory
prepayment or otherwise or (ii) failure by the Borrower to pay any interest on
the Loan or any fee or any other amount due under this Agreement or any other
Loan Document within five (5) Business Days after the date due; or
(b) any Obligor (i) fails to make when due (after giving effect to
applicable cure or grace periods, and whether as primary obligor or as guarantor
or other surety) payments in respect of rents, principal, interest or premium or
other payments, if any, under or in respect of one or more Capital Leases or
other Indebtedness or Operating Leases (other than Indebtedness referred to in
clause (a) of this Section 7.1 and the Juniper Financing) and such failure
relates to Capital Leases or other Indebtedness which has a principal amount
that equals or exceeds $25,000,000 or Operating Leases under which the aggregate
net present value of the remaining basic rent payments (as determined in
accordance with the formulas for calculating "net present value" under the
applicable leases or for leases without such formulas, in accordance with
formulas under leases for comparable terms and comparable amounts) equals or
exceeds $25,000,000 or (ii) fails to duly observe, perform or comply with any
agreement with any Person or any term or condition of any instrument, if such
failure, either individually or in the aggregate, shall have (A) resulted in the
acceleration of, or entitles any Person to accelerate, the payment of
Indebtedness (other than the Juniper Financing) owed by such Obligor which,
together with all other accelerated Indebtedness and Indebtedness that is
entitled to be accelerated, has a principal amount that equals or exceeds
$25,000,000, (B) given rise under one or more Operating Leases to obligations
by, or rights of any other Person(s) to require, an Obligor to make payments
that equal or exceed, or to return assets leased by an Obligor and having a fair
market value that equals or exceeds, $25,000,000 or (C) resulted in the
termination of or given rise to rights of any other Person(s) to terminate one
or more Operating Leases under which the aggregate net present value of the
remaining basic rent payments (as determined in accordance with the formulas for
calculating "net present value" under the applicable leases or for leases
without such formulas, in accordance with formulas under leases for comparable
terms and comparable amounts) equals or exceeds $25,000,000; provided that the
failure by an Obligor to make one or more payments that are attributable to and
relate solely to return conditions under aircraft leases shall not constitute an
Event of Default under this Section 7.1(b) so long as the Obligor is, in good
faith, disputing the amount of such payments; or
(c) failure by an Obligor to perform or comply with any term or
condition contained in Section 5.2, Section 5.10 or Article VI of this Agreement
(other than Section 6.4); or
(d) any representation, warranty, certification or other statement made
by any Obligor in any Loan Document or in any statement or certificate at any
time given by any 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; or
(e) any default by any Obligor in the performance of or compliance with
any provision contained in this Agreement or any of the other Loan Documents
required to be performed or complied with by it (other than any such provision
referred to in any other clause of this Section 7.1) (which in the case of
Section 6.4(c), shall be after giving effect to the Borrower's right to cure
such default within the time period provided in Section 6.4(c)), and (i) with
respect to a default under Section 6.4(a), such default shall not have been
waived within two (2) Business Days after the date of such default and (ii) with
respect to any other default, such default shall not have been remedied or
waived within thirty (30) days after the earlier of (A) a Responsible Officer of
a Principal Obligor obtaining knowledge of such default (which, in the case of
Section 6.4(b), will be presumed to have occurred no later than the date of the
delivery of financial statements pursuant to Section 5.1 for the end of the
accounting period as of which such default exists) or (B) receipt by the
Borrower of notice from the Administrative Agent of such default; or
(f) (i) a court shall enter a decree or order for relief in respect of
any Obligor 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 relief described in clause (ii) below or other similar relief shall be
granted under any applicable federal or state law; or (ii) an involuntary case
shall be commenced against any Obligor seeking (A) relief under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, (B) the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
such Obligor, or over all or a substantial part of its property, or (C) the
appointment of an interim receiver, trustee or other custodian of any Obligor
for all or a substantial part of its property, and any such event described in
this clause (ii) against such Obligor shall continue for 60 days without being
dismissed or discharged; or (iii) a warrant of attachment, execution or similar
process shall have been issued against all or any substantial part of the
property of any Obligor; or
(g) (i) any Obligor 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 (ii)
any Obligor shall make any assignment for the benefit of creditors; or (iii) the
board of directors of any Obligor (or any committee thereof) shall adopt any
resolution to approve any of the actions referred to in clauses (i) or (ii)
above; or
(h) (i) one or more final judgments or orders for the payment of money
in an aggregate amount in excess of $25,000,000 and which are not covered by
insurance (treating any deductibles, self-insurance (except to the extent
reinsured) or retention as not so covered) or (ii) one or more non-monetary
judgments or orders that could reasonably be expected to have a Material Adverse
Effect shall have been entered against one or more Obligors and, in each case,
shall remain undischarged or unstayed, by reason of a pending appeal or
otherwise, for a period in excess of sixty (60) days; or
(i) any order, judgment or decree shall be entered against any Obligor
decreeing the dissolution of such Obligor and such order shall remain
undischarged or unstayed for a period in excess of thirty (30) days; or
(j) (i) (A) any of the Loan Documents shall cease to be enforceable
against any Obligor party thereto or in full force and effect or (B) any Obligor
shall so assert or (ii) any Lien under the Collateral Documents on any Eligible
Collateral with a fair market value in excess of $1,000,000 in the aggregate or
a material portion of any other Collateral that does not constitute Eligible
Collateral shall cease to be valid and enforceable and of the same effect
purported to be created thereby or shall fail or cease to be a perfected Lien
with the priority required by the applicable Collateral Document, and except in
the case of clause (i)(A) of this subsection (j), such default shall continue
unremedied for a period of ten (10) days; or
(k) any of the insurance coverages required to be maintained by the
Obligors pursuant hereto or under the Collateral Documents shall lapse,
terminate or otherwise cease to be in full force and effect, other than coverage
of losses and liabilities that in the aggregate are reasonably expected to be
immaterial to the operations or financial condition of the Obligors taken as a
whole; or
(l) any Obligor shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or
(m) (i) Primary Slots, (x) shall have been withdrawn by the FAA or
otherwise revoked or terminated by or with the FAA on a final basis after all
appeals have been exhausted during the term of the Loan as the result of failure
by any Obligor or by any lessee or licensee of any Obligor to comply with the
Slot Regulations and (y) the aggregate Appraised Value of such Slots (which
Appraised Value shall be based on the then current Appraisal Report as of the
date of such withdrawal, revocation or termination) shall have exceeded 50% of
the aggregate Appraised Value of all Slots set forth in the Baseline Appraisal;
or (ii) any Obligor implements a cessation, cancellation or curtailment of
flight operations or a change in flight schedules which, assuming no subsequent
further action (such as the sale, lease or trade of the affected Slots or their
allocation to new or additional flights) is taken, could reasonably be expected
to result in the withdrawal by the FAA or other revocation or termination based
upon failure to comply with the Slot Regulations of Primary Slots, the aggregate
Appraised Value of which (as of the date of such cessation, cancellation or
curtailment) exceeds 50% of the aggregate Appraised Value of all Slots set forth
in the Baseline Appraisal; it being understood, however, that an Event of
Default shall not have occurred under this clause (ii) if the Primary Slots
otherwise affected are sold, leased or traded in arm's length transactions or
allocated to new or additional flights prior to the implementation of such
cessation, cancellation or curtailment of flight operations or change in flight
schedules; or
(n) (i) any ERISA Event occurs which could, individually or in the
aggregate, reasonably be expected to result in liability to any Obligor in an
amount which would exceed $25,000,000, (ii) any Lien shall arise on the assets
of any Obligor in favor of the PBGC or a Plan to the extent that such Lien could
reasonably be expected to result in liability to any Obligor in an amount which
would exceed $25,000,000 or (iii) any Obligor makes any payment in excess of
$25,000,000 as a result of an ERISA Event; or
(o) suspension of all or substantially all of the Obligors' flight and
other operations for longer than two days (excluding, however, any such
suspension as a result of an order by an Aviation Authority due to a force
majeure or any other extraordinary event similarly affecting all major U.S.
commercial carriers).
Section 7.2 Remedies. During the continuance of any Event of Default,
the Administrative Agent may, and at the request of the Requisite Lenders, shall
declare that the Loan, all interest thereon and all other amounts and
Obligations payable under this Agreement to be immediately due and payable,
whereupon the Loan, all such interest and all such amounts and Obligations shall
become and be immediately due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that upon the occurrence of an Event of Default
specified in clause (f) or (g) of Section 7.1, the Loan, all such interest and
all such amounts and Obligations shall automatically become and be immediately
due and payable, without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Borrower. In addition to the
remedies set forth above, the Administrative Agent may exercise any remedies
provided for by the Collateral Documents or any other remedies provided by
applicable law.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.1 Appointment and Duties.
(a) Appointment of Administrative Agent. Each Lender hereby appoints GE
Capital (together with any successor Administrative Agent pursuant to Section
8.9) as the Administrative Agent hereunder and authorizes the Administrative
Agent to (i) execute and deliver the Loan Documents and accept delivery thereof
on its behalf from any Obligor, (ii) take such action on its behalf and to
exercise all rights, powers and remedies and perform the duties as are expressly
delegated to the Administrative Agent under such Loan Documents and (iii)
exercise such powers as are reasonably incidental thereto.
(b) Duties as Collateral and Disbursing Agent. Without limiting the
generality of clause (a) above, the Administrative Agent shall have the sole and
exclusive right and authority (to the exclusion of the Lenders), and is hereby
authorized, to (i) act as the disbursing and collecting agent for the Lenders
with respect to all payments and collections arising in connection with the Loan
Documents (including in any bankruptcy, insolvency or similar proceeding), and
each Person making any payment in connection with any Loan Document to any
Secured Party is hereby authorized to make such payment to the Administrative
Agent, (ii) file and prove claims and file other documents necessary or
desirable to allow the claims of the Secured Parties with respect to any
Obligation in any bankruptcy, insolvency or similar proceeding (but not to vote,
consent or otherwise act on behalf of such Secured Party), (iii) act as
collateral agent for each Secured Party for purposes of the perfection of all
Liens created by such agreements and all other purposes stated therein, (iv)
manage, supervise and otherwise deal with the Collateral, (v) take such other
action as is necessary or desirable to maintain the perfection and priority of
the Liens created or purported to be created by the Loan Documents, (vi) except
as may be otherwise specified in any Loan Document, exercise all remedies given
to the Administrative Agent and the other Secured Parties with respect to the
Collateral, whether under the Loan Documents, applicable requirements of law or
otherwise and (vii) execute any amendment, consent or waiver under the Loan
Documents on behalf of any Lender that has consented in writing to such
amendment, consent or waiver; provided, however, that the Administrative Agent
hereby appoints, authorizes and directs each Lender to act as collateral
sub-agent for the Administrative Agent and the Lenders for purposes of the
perfection of all Liens with respect to the Collateral, including any deposit
account maintained by an Obligor with, and cash and Cash Equivalents held by,
such Lender, and may further authorize and direct the Lenders to take further
actions as collateral sub-agents for purposes of enforcing such Liens or
otherwise to transfer the Collateral subject thereto to the Administrative
Agent, and each Lender hereby agrees to take such further actions to the extent,
and only to the extent, so authorized and directed.
(c) Limited Duties. Under the Loan Documents, the Administrative Agent
(i) is acting solely on behalf of the Lenders (except to the limited extent
provided in Section 2.3(e) with respect to the Register and in Section 8.11),
with duties that are entirely administrative in nature, notwithstanding the use
of the defined term "Administrative Agent", the terms "agent", "administrative
agent" and "collateral agent" and similar terms in any Loan Document to refer to
the Administrative Agent, which terms are used for title purposes only, (ii) is
not assuming any obligation under any Loan Document other than as expressly set
forth therein or any role as agent, fiduciary or trustee of or for any Lender or
any other Secured Party and (iii) shall have no implied functions,
responsibilities, duties, obligations or other liabilities under any Loan
Document, and each Lender hereby waives and agrees not to assert any claim
against the Administrative Agent based on the roles, duties and legal
relationships expressly disclaimed in clauses (i) through (iii) above.
Section 8.2 Binding Effect. Each Lender agrees that (i) any action
taken by the Administrative Agent or the Requisite Lenders (or, if expressly
required hereby, a greater proportion of the Lenders) in accordance with the
provisions of the Loan Documents, (ii) any action taken by the Administrative
Agent in reliance upon the instructions of Requisite Lenders (or, where so
required, such greater proportion) and (iii) the exercise by the Administrative
Agent or the Requisite Lenders (or, where so required, such greater proportion)
of the powers set forth herein or therein, together with such other powers as
are reasonably incidental thereto, shall be authorized and binding upon all of
the Secured Parties.
Section 8.3 Use of Discretion.
(a) No Action without Instructions. The Administrative Agent shall not
be required to exercise any discretion or take, or to omit to take, any action,
including with respect to enforcement or collection, except any action it is
required to take or omit to take (i) under any Loan Document or (ii) pursuant to
instructions from the Requisite Lenders (or, where expressly required by the
terms of this Agreement, a greater proportion of the Lenders).
(b) Right Not to Follow Certain Instructions. Notwithstanding clause
(a) above, the Administrative Agent shall not be required to take, or to omit to
take, any action (i) unless, upon demand, the Administrative Agent receives an
indemnification satisfactory to it from the Lenders (or, to the extent
applicable and acceptable to the Administrative Agent, any other Secured Party)
against all Liabilities that, by reason of such action or omission, may be
imposed on, incurred by or asserted against the Administrative Agent or any
Related Person thereof or (ii) that is, in the opinion of the Administrative
Agent or its counsel, contrary to any Loan Document or applicable Requirement of
Law.
Section 8.4 Delegation of Rights and Duties. The Administrative Agent
may, upon any term or condition it specifies, delegate or exercise any of its
rights, powers and remedies under, and delegate or perform any of its duties or
any other action with respect to, any Loan Document by or through any trustee,
co-agent, employee, attorney-in-fact and any other Person (including any Secured
Party). Any such Person shall benefit from this Article VIII to the extent
provided by the Administrative Agent.
Section 8.5 Reliance and Liability.
(a) The Administrative Agent may, without incurring any liability
hereunder, (i) treat the payee of any Note as its holder until such Note has
been assigned in accordance with Section 9.2(c), (ii) rely on the Register to
the extent set forth in Section 2.3(e), (iii) consult with any of its Related
Persons and, whether or not selected by it, any other advisors, accountants and
other experts (including advisors to, and accountants and experts engaged by,
any Obligor) and (iv) rely and act upon any document and information (including
those transmitted by Electronic Transmission) and any telephone message or
conversation, in each case believed by it to be genuine and transmitted, signed
or otherwise authenticated by the appropriate parties.
(b) None of the Administrative Agent and its Related Persons shall be
liable for any action taken or omitted to be taken by any of them under or in
connection with any Loan Document, and each Lender and each other Secured Party,
hereby waives and shall not assert any right, claim or cause of action based
thereon, except to the extent of liabilities resulting primarily from the gross
negligence or willful misconduct of the Administrative Agent or, as the case may
be, such Related Person (each as determined in a final, non-appealable judgment
by a court of competent jurisdiction) in connection with the duties expressly
set forth herein. Without limiting the foregoing, the Administrative Agent:
(i) shall not be responsible or otherwise incur liability for any
action or omission taken in reliance upon the instructions of the Requisite
Lenders or for the actions or omissions of any of its Related Persons
selected with reasonable care (other than employees, officers and directors
of the Administrative Agent, when acting on behalf of the Administrative
Agent);
(ii) shall not be responsible to any Secured Party for the due
execution, legality, validity, enforceability, effectiveness, genuineness,
sufficiency or value of, or the attachment, perfection or priority of any
Lien created or purported to be created under or in connection with, any
Loan Document;
(iii) makes no warranty or representation, and shall not be
responsible, to any Secured Party for any statement, document, information,
representation or warranty made or furnished by or on behalf of any Related
Person or any Obligor in connection with any Loan Document or any
transaction contemplated therein or any other document or information with
respect to any Obligor, whether or not transmitted or (except for documents
expressly required under any Loan Document to be transmitted to the Lenders)
omitted to be transmitted by the Administrative Agent, including as to
completeness, accuracy, scope or adequacy thereof, or for the scope, nature
or results of any due diligence performed by the Administrative Agent in
connection with the Loan Documents; and
(iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any provision of any Loan Document, whether any
condition set forth in any Loan Document is satisfied or waived, as to the
financial condition of any Obligor or as to the existence or continuation or
possible occurrence or continuation of any Default or Event of Default and
shall not be deemed to have notice or knowledge of such occurrence or
continuation unless it has received a notice from the Borrower or any Lender
describing such Default or Event of Default clearly labeled "notice of
default" (in which case the Administrative Agent shall promptly give notice
of such receipt to all Lenders);
and, for each of the items set forth in clauses (i) through (iv) above, each
Lender, each other Secured Party, the Borrower and each other Obligor hereby
waives and agrees not to assert any right, claim or cause of action it might
have against the Administrative Agent based thereon.
Section 8.6 Administrative Agent Individually. The Administrative Agent
and its Affiliates may make loans and other extensions of credit to, acquire
Capital Stock of, engage in any kind of business with, any Obligor or Affiliate
thereof as though it were not acting as Administrative Agent and may receive
separate fees and other payments therefor. To the extent the Administrative
Agent or any of its Affiliates makes any Loan or otherwise becomes a Lender
hereunder, it shall have and may exercise the same rights and powers hereunder
and shall be subject to the same obligations and liabilities as any other Lender
and the terms "Lender", "Requisite Lender" and any similar terms shall, except
where otherwise expressly provided in any Loan Document, include, without
limitation, the Administrative Agent or such Affiliate, as the case may be, in
its individual capacity as Lender, or as one of the Requisite Lenders,
respectively.
Section 8.7 Lender Credit Decision. Each Lender acknowledges that it
shall, independently and without reliance upon the Administrative Agent, any
Lender or any of their Related Persons or upon any document solely or in part
because such document was transmitted by the Administrative Agent or any of its
Related Persons, conduct its own independent investigation of the financial
condition and affairs of each Obligor and make and continue to make its own
credit decisions in connection with entering into, and taking or not taking any
action under, any Loan Document or with respect to any transaction contemplated
in any Loan Document, in each case based on such documents and information as it
shall deem appropriate. Except for documents expressly required by any Loan
Document to be transmitted by the Administrative Agent to the Lenders, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of any
Obligor or any Affiliate of any Obligor that may come in to the possession of
the Administrative Agent or any of its Related Persons.
Section 8.8 Expenses; Indemnities.
(a) Each Lender agrees to reimburse the Administrative Agent and each
of its Related Persons (to the extent not reimbursed by any Obligor) promptly
upon demand for such Lender's pro rata share with respect to the Loan of any
costs and expenses (including fees, charges and disbursements of financial,
legal and other advisors and Other Taxes paid in the name of, or on behalf of,
any Obligor) that may be incurred by the Administrative Agent or any of its
Related Persons in connection with the preparation, syndication, execution,
delivery, administration, modification, consent, waiver or enforcement (whether
through negotiations, through any work-out, bankruptcy, restructuring or other
legal or other proceeding or otherwise) of, or legal advice in respect of its
rights or responsibilities under, any Loan Document.
(b) Each Lender further agrees to indemnify the Administrative Agent
and each of its Related Persons (to the extent not reimbursed by any Obligor),
from and against such Lender's aggregate pro rata share with respect to the Loan
of the Liabilities (including taxes, interests and penalties imposed for not
properly withholding or backup withholding on payments made to on or for the
account of any Lender) that may be imposed on, incurred by or asserted against
the Administrative Agent or any of its Related Persons in any matter relating to
or arising out of, in connection with or as a result of any Loan Document, any
Related Document or any other act, event or transaction related, contemplated in
or attendant to any such document, or, in each case, any action taken or omitted
to be taken by the Administrative Agent or any of its Related Persons under or
with respect to any of the foregoing; provided, however, that no Lender shall be
liable to the Administrative Agent or any of its Related Persons to the extent
such liability has resulted primarily from the gross negligence or willful
misconduct of the Administrative Agent or, as the case may be, such Related
Person, as determined by a court of competent jurisdiction in a final
non-appealable judgment or order.
Section 8.9 Resignation of Administrative Agent.
(a) The Administrative Agent may resign at any time by delivering 10
days' prior notice of such resignation to the Lenders and the Borrower. If the
Administrative Agent delivers any such notice, the Requisite Lenders shall have
the right to appoint a successor Administrative Agent. If, within 10 days after
the retiring Administrative Agent having given notice of resignation, no
successor Administrative Agent has been appointed by the Requisite Lenders that
has accepted such appointment, then the retiring Administrative Agent's
resignation shall nevertheless thereupon become effective and the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent from among the Lenders, or, if no successor Administrative
Agent has accepted appointment as Administrative Agent, the Lenders shall assume
and perform all of the duties of the Administrative Agent until a successor
Administrative Agent shall have accepted a valid appointment hereunder. Each
appointment of a successor Administrative Agent under this clause (a) shall be
subject to the prior consent of the Borrower, which may not be unreasonably
withheld but shall not be required during the continuance of a Default or an
Event of Default.
(b) Effective immediately upon its resignation, (i) the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Loan Documents and (ii) the retiring Administrative Agent and its Related
Persons shall no longer have the benefit of any provision of any Loan Document
other than with respect to any actions taken or omitted to be taken while such
retiring Administrative Agent was, or because such Administrative Agent had
been, validly acting as Administrative Agent under the Loan Documents. Subject
to its rights under Section 8.2, the retiring Administrative Agent shall take
such action as may be reasonably necessary to assign to the successor
Administrative Agent its rights as Administrative Agent under the Loan
Documents. Effective immediately upon its acceptance of a valid appointment as
Administrative Agent, a successor Administrative Agent shall succeed to, and
become vested with, all the rights, powers, privileges and duties of the
retiring Administrative Agent under the Loan Documents.
Section 8.10 Release of Collateral or Guarantors. Each Lender hereby
consents to the release and hereby directs the Administrative Agent to release
(or, in the case of clause (b)(iii) below, release or subordinate) the
following:
(a) any Subsidiary of the Borrower from its guaranty of any Obligation
of any Obligor if all of the Capital Stock of such Subsidiary owned by the
Borrower or any of its Subsidiaries are sold in a sale permitted under the Loan
Documents (including pursuant to a waiver or consent), to the extent that, after
giving effect to such sale, such Subsidiary would not be required to guaranty
any Obligations pursuant to Section 5.8; and
(b) any Lien held by the Administrative Agent for the benefit of the
Secured Parties against (i) any Collateral that is sold by an Obligor (A) in a
sale permitted by the Loan Documents (including pursuant to a valid waiver or
consent), to the extent all Liens required to be granted in such Collateral
pursuant to Section 5.8 after giving effect to such sale have been granted and
with respect to which the relevant Obligor complies with Section 2.5(b), as
applicable, or (B) in connection with any Replacement Secured Financing with
respect to which the relevant Obligor complies with Section 2.5(a), (ii) any
Collateral to the extent the release of any Lien in such Collateral is permitted
or required under any Loan Document (including, without limitation, the proviso
in Section 5.8(b)) and (iii) all of the Collateral and all Obligors, upon (A)
termination of the Commitments, (B) payment and satisfaction in full of all
Loans and all other Obligations that the Administrative Agent has been notified
in writing are then due and payable, (C) deposit of cash collateral with respect
to all contingent Obligations as to which claims have been asserted or are
pending, in amounts and on terms and conditions and with parties satisfactory to
the Administrative Agent and each Indemnitee that is owed such Obligations and
(D) to the extent requested by the Administrative Agent, receipt by the Secured
Parties of mutual liability releases from the Obligors and the Administrative
Agent, each in form and substance acceptable to the Administrative Agent.
Each Lender hereby directs the Administrative Agent, and the Administrative
Agent hereby agrees, upon receipt of reasonable advance notice from the
Borrower, to execute and deliver or file such documents and to perform other
actions reasonably necessary to release the guaranties and Liens when and as
directed in this Section 8.10; provided, that the Administrative Agent shall not
be obligated to release any guaranty or Lien pursuant to this Section 8.10 until
its receipt from the Borrower of an Officer's Certificate certifying that such
release complies with this Section 8.10, and the Administrative Agent shall be
fully protected in relying on such Officer's Certificate in connection
therewith.
Section 8.11 Additional Secured Parties. The benefit of the provisions
of the Loan Documents directly relating to the Collateral or any Lien granted
thereunder shall extend to and be available to any Secured Party that is not a
Lender as long as, by accepting such benefits, such Secured Party agrees, as
among the Administrative Agent and all other Secured Parties, that such Secured
Party is bound by (and, if requested by the Administrative Agent, shall confirm
such agreement in a writing in form and substance acceptable to the
Administrative Agent) this Article VIII, Section 9.5, Section 9.6 and Section
9.16 and the decisions and actions of the Administrative Agent and the Requisite
Lenders (or, where expressly required by the terms of this Agreement, a greater
proportion of the Lenders) to the same extent a Lender is bound; provided,
however, that, notwithstanding the foregoing, (a) such Secured Party shall be
bound by Section 8.7 only to the extent of Liabilities, costs and expenses with
respect to or otherwise relating to the Collateral held for the benefit of such
Secured Party, in which case the obligations of such Secured Party thereunder
shall not be limited by any concept of pro rata share or similar concept, (b)
each of the Administrative Agent and the Lenders shall be entitled to act at its
sole discretion, without regard to the interest of such Secured Party,
regardless of whether any Secured Obligation to such Secured Party thereafter
remains outstanding, is deprived of the benefit of the Collateral, becomes
unsecured or is otherwise affected or put in jeopardy thereby, and without any
duty or liability to such Secured Party or any such Secured Obligation and (c)
such Secured Party shall not have any right to be notified of, consent to,
direct, require or be heard with respect to, any action taken or omitted in
respect of the Collateral or under any Loan Document.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendments, Waivers, Etc.
(a) Amendments and Waivers. 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:
(i) no amendment, modification, waiver or consent shall, unless in
writing and signed by each Lender affected thereby, do any of the following:
(1) increase the Commitment of such Lender or subject such Lender
to any additional obligations;
(2) extend the scheduled final maturity of the Loan or change the
amount of or extend the scheduled date fixed for the payment of any
principal of the Loan (it being understood that the waiver of any
mandatory prepayment of the Loan pursuant to Section 2.5 shall not
constitute an extension of any scheduled date fixed for the payment of
any principal of the Loan);
(3) decrease the rate of interest on the Loan (other than as a
result of waiving the applicability of any post-default increase in
interest rates) or any fee, indemnity or other amount payable to such
Lender or extend any date fixed for payment of such interest, indemnity
or other amount or fees (it being understood that the waiver of any
mandatory prepayment of the Loan pursuant to Section 2.5 shall not
constitute an extension of any date fixed for payment of such interest,
indemnity or other amount or fees);
(4) amend the definition of "Requisite Lenders," or this Section
9.1;
(5) release all or substantially all of the Collateral or any
Subsidiary Guarantor from its guaranty of any Obligation of the
Borrower; and
(6) modify the application of payments to the Loan under Section
2.8; and
(ii) no amendment, modification, waiver or consent shall, unless in
writing and signed by the Administrative Agent, in addition to the Persons
required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or the other Loan Documents.
(b) Execution of Amendments and Waivers by the Administrative Agent.
The Administrative 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 given. No
notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances.
(c) Non-Consenting Lenders. In connection with any proposed amendment,
modification, waiver or termination requiring the consent of all affected
Lenders, if the consent 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, so long as the Lender that is acting as the
Administrative Agent is not a Non-Consenting Lender, at the Borrower's request,
the Administrative Agent or an Eligible Lender that is acceptable to the
Administrative Agent, and, so long as no Event of Default shall have occurred
and be continuing, the Borrower, shall have the right with the Administrative
Agent's consent and in the Administrative 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 Administrative Agent's
request, sell and assign to the Lender that is acting as the Administrative
Agent or such Eligible Lender, 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 Acceptance.
Section 9.2 Assignments and Participations; Successors and Assigns.
(a) Right to Assign. Each Lender may sell, transfer, negotiate or
assign all or a portion of its rights and obligations hereunder (including all
or a portion of its Commitments and its rights and obligations with respect to
the Loans) to (i) any existing Lender, (ii) any Affiliate or Approved Fund of
any existing Lender or (iii) any other Eligible Lender acceptable (which
acceptance shall not be unreasonably withheld or delayed) to the Administrative
Agent and, as long as no Event of Default is continuing, the Borrower; provided,
however, that (x) such assignments must be ratable among the obligations owing
to and owed by such Lender with respect to the Loan Facility and (y) the
aggregate outstanding principal amount (determined as of the effective date of
the applicable Assignment and Acceptance) of the Loans and Commitments subject
to any such assignment shall be an integral multiple of $1,000,000, unless such
assignment is made to an existing Lender or an Affiliate or Approved Fund of any
existing Lender, is of the assignor's (together with its Affiliates and Approved
Funds) entire interest in the Loan Facility or is made with the prior consent of
the Borrower and the Administrative Agent.
(b) Procedure. The parties to each assignment made in reliance on
clause (a) above (other than those described in clause (d) or (e) below) shall
deliver to the Administrative Agent (and the Administrative Agent shall keep a
copy of all documents required to be delivered) the following: (i) an Assignment
and Acceptance, executed by the assignor(s) and the assignees(s), evidencing
such assignment; (ii) any existing Note subject to such assignment (or any
affidavit of loss therefor acceptable to the Administrative Agent); (iii) any
tax forms required to be delivered pursuant to Section 2.11(f), and (iv) an
assignment fee in the amount of $3,500; provided, that (1) if an assignment by a
Lender is made to an Affiliate or an Approved Fund of such assigning Lender,
then no assignment fee shall be due in connection with such assignment, and (2)
if an assignment by a Lender is made to an assignee that is not an Affiliate or
Approved Fund of such assigning Lender, and concurrently to one or more
Affiliates or Approved Funds of such assignee, then only one assignment fee of
$3,500 shall be due in connection with such assignment. Upon receipt of all the
foregoing, and conditioned upon such receipt and upon the Administrative Agent
consenting to such Assignment and Acceptance, from and after the effective date
specified in such Assignment and Acceptance, the Administrative Agent shall
record or cause to be recorded in the Register the information contained in such
Assignment and Acceptance.
(c) Effectiveness. Effective upon the entry of such record in the
Register, (i) such assignee shall become a party hereto and, to the extent that
rights and obligations under the Loan Documents have been assigned to such
assignee pursuant to such Assignment and Acceptance, shall have the rights and
obligations of a Lender, (ii) any applicable Note shall be transferred to such
assignee through such entry and (iii) the assignor thereunder shall, to the
extent that rights and obligations under this Agreement have been assigned by it
pursuant to such Assignment, relinquish its rights (except for those surviving
the termination of the Commitments and the payment in full of the Obligations)
and be released from its obligations under the Loan Documents, other than those
relating to events or circumstances occurring prior to such assignment (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under the Loan Documents, such
Lender shall cease to be a party hereto except that each Lender agrees to remain
bound by Article VIII, Section 9.5 and Section 9.6 to the extent provided in
Section 8.11); provided, however, that the Obligors shall not be obligated to
pay any greater amount under Section 2.9(b) or Section 2.11 to such assignee
than the Obligors would have been obligated to pay to the assigning Lender as of
the date of such assignment in such Sections prior to such assignment.
(d) Grant of Security Interests. In addition to the other rights
provided in this Section 9.2, each Lender may grant a security interest in, or
otherwise assign as collateral, any of its rights under this Agreement, whether
now owned or hereafter acquired (including rights to payments of principal or
interest on the Loans), to (A) any federal reserve bank (pursuant to Regulation
A of the Federal Reserve Board), without notice to the Administrative Agent or
(B) any holder of, or trustee for the benefit of the holders of, such Lender's
securities by notice to the Administrative Agent; provided, however, that no
such holder or trustee, whether because of such grant or assignment or any
foreclosure thereon (unless such foreclosure is made through an assignment in
accordance with clause (a) above), shall be entitled to any rights of such
Lender hereunder and no such Lender shall be relieved of any of its obligations
hereunder.
(e) Participants and SPVs. In addition to the other rights provided in
this Section 9.2, each Lender may, (x) with notice to the Administrative Agent,
grant to an SPV the option to make all or any part of any Loan that such Lender
would otherwise be required to make hereunder (and the exercise of such option
by such SPV and the making of Loans pursuant thereto shall satisfy the
obligation of such Lender to make such Loans hereunder) and such SPV may assign
to such Lender the right to receive payment with respect to any Obligation and
(y) without notice to or consent from the Administrative Agent or the Borrower,
sell participations to one or more Persons in or to all or a portion of its
rights and obligations under the Loan Documents (including all its rights and
obligations with respect to the Loans) (any such purchaser of a participation
being referred to as a "Participant"); provided, however, that, whether as a
result of any term of any Loan Document or of such grant or participation, (i)
no such SPV or Participant shall have a commitment, or be deemed to have made an
offer to commit, to make Loans hereunder, and, except as provided in the
applicable option agreement, none shall be liable for any obligation of such
Lender hereunder, (ii) such Lender's rights and obligations, and the rights and
obligations of the Obligors and the Secured Parties towards such Lender, under
any Loan Document shall remain unchanged and each other party hereto shall
continue to deal solely with such Lender, which shall remain the holder of the
Obligations in the Register, except that (A) each such Participant and SPV shall
be entitled to the benefit of Sections 2.9, 2.10 and 2.11, but only to the
extent such Participant or SPV delivers the tax forms such Lender is required to
collect pursuant to Section 2.11(f) and then only to the extent of any amount to
which such Lender would be entitled in the absence of any such grant or
participation and (B) each such SPV may receive other payments that would
otherwise be made to such Lender with respect to Loans funded by such SPV to the
extent provided in the applicable option agreement and set forth in a notice
provided to the Administrative Agent by such SPV and such Lender, provided,
however, that in no case (including pursuant to clause (A) or (B) above) shall
an SPV or Participant have the right to enforce any of the terms of any Loan
Document, and (iii) the consent of such SPV or Participant shall not be required
(either directly, as a restraint on such Lender's ability to consent hereunder
or otherwise) for any amendments, waivers or consents with respect to any Loan
Document or to exercise or refrain from exercising any powers or rights such
Lender may have under or in respect of the Loan Documents (including the right
to enforce or direct enforcement of the Obligations), except for those described
in clauses (2) and (3) of Section 9.1(a)(i) and, in the case of Participants,
except for those described in Section 9.1(a)(i)(5). Notwithstanding the
foregoing, each Lender agrees that none of the following Persons shall become a
Participant hereunder: (I) an airline, a commercial aircraft operator, an air
freight forwarder or an entity principally engaged in the business of parcel
transport by air, or (II) an Affiliate of any Person described in clause (I)
above. No party hereto shall institute (and the Borrower shall cause each other
Obligor not to institute) against any SPV grantee of an option pursuant to this
clause (e) any bankruptcy, reorganization, insolvency, liquidation or similar
proceeding, prior to the date that is one year and one day after the payment in
full of all outstanding commercial paper of such SPV; provided, however, that
each Lender having designated an SPV as such agrees to indemnify each Indemnitee
against any Liability that may be incurred by, or asserted against, such
Indemnitee as a result of failing to institute such proceeding (including a
failure to get reimbursed by such SPV for any such Liability). The agreement in
the preceding sentence shall survive the termination of the Commitments and the
payment in full of the Obligations.
(f) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns; provided that except as otherwise expressly provided herein,
no Obligor may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Lenders and the
Administrative Agent (and any attempted assignment or transfer by an Obligor
without such consent shall be null and void).
Section 9.3 Costs and Expenses. Whether or not the transactions
contemplated hereby shall be consummated, the Obligors agree to pay promptly (i)
all reasonable costs and expenses incurred by the Administrative Agent in
connection with the negotiation, preparation, execution and delivery of the Loan
Documents and all documents relating thereto (including reasonable legal fees
and expenses), (ii) all reasonable costs and expenses incurred by the
Administrative Agent in connection with any consents, amendments, waivers or
other modifications hereto (including reasonable legal fees and expenses) and
(iii) all costs and expenses, including reasonable legal fees and expenses
incurred by the Administrative Agent and the Lenders in enforcing any
Obligations of, or in collecting any payments due from, the Obligors hereunder
or under the other Loan Documents, including any such costs and expenses
incurred after the filing of a bankruptcy or insolvency proceeding with respect
to any Obligor.
Section 9.4 Indemnities.
(a) Each Obligor agrees to indemnify, hold harmless and defend the
Administrative Agent, each Lender and each of their respective Related Persons
(each such Person being an "Indemnitee") from and against all Liabilities
(including brokerage commissions, fees and other compensation) that may be
imposed on, incurred by or asserted against any such Indemnitee in any matter
relating to or arising out of, in connection with or as a result of (i) any Loan
Document, any Obligation (or the repayment thereof), the use or intended use of
the proceeds of any Loan, the Refinancing, or any securities filing of, or with
respect to, the Borrower and its Subsidiaries, (ii) any commitment letter,
proposal letter or term sheet with any Person or any Contractual Obligation,
arrangement or understanding with any broker, finder or consultant, in each case
entered into by or on behalf of the Borrower, its Subsidiaries or any Affiliate
of any of them in connection with any of the foregoing and any Contractual
Obligation entered into in connection with any E-Systems or other Electronic
Transmissions, (iii) any actual or prospective investigation, litigation or
other proceeding, whether or not brought by any such Indemnitee or any of its
Related Persons, any holders of securities or creditors (and including
reasonable attorneys' fees in any case), whether or not any such Indemnitee,
Related Person, holder or creditor is a party thereto, and whether or not based
on any securities or commercial law or regulation or any other Requirement of
Law or theory thereof, including common law, equity, contract, tort or
otherwise, or (iv) any other act, event or transaction related, contemplated in
or attendant to any of the foregoing (collectively, the "Indemnified Matters");
provided, however, that the Obligors shall not have any liability under this
Section 9.4 to any Indemnitee with respect to any Indemnified Matter, and no
Indemnitee shall have any liability with respect to any Indemnified Matter other
than (to the extent otherwise liable), to the extent such liability has resulted
primarily from the gross negligence or willful misconduct of such Indemnitee, as
determined by a court of competent jurisdiction in a final non-appealable
judgment or order. Furthermore, each Obligor waives and agrees not to assert
against any Indemnitee any right of contribution with respect to any Liabilities
that may be imposed on, incurred by or asserted against any Related Person.
(b) Without limiting the foregoing, "Indemnified Matters" includes all
Environmental Claims, including those arising from, or otherwise involving, any
property of the Borrower or any of its Subsidiaries or any actual, alleged or
prospective damage to property or natural resources or harm or injury alleged to
have resulted from any Release of Hazardous Materials on, upon or into such
property or natural resource or any property on or contiguous to any real
property of the Borrower or any of its Subsidiaries, whether or not, with
respect to any such Environmental Claims, any Indemnitee is a mortgagee pursuant
to any leasehold mortgage, a mortgagee in possession, the successor-in-interest
to the Borrower or any of its Subsidiaries or the owner, lessee or operator of
any property of the Borrower or any of its Subsidiaries through any foreclosure
action, in each case except to the extent such Environmental Claims (i) are
incurred solely following foreclosure by any Secured Party or following any
Secured Party having become the successor-in-interest to any Obligor and (ii)
are attributable solely to acts of such Indemnitee.
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, the Administrative Agent, each Lender
and each of their respective Affiliates are hereby authorized by the Obligors at
any time or from time to time, with notice to the Obligors and to each other
Lender and the Administrative Agent, 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 the Administrative Agent
or that Lender to or for the credit or the account of any Obligor against and on
account of the obligations and liabilities of such Obligor to the Administrative
Agent or that Lender under this Agreement, the Guaranty, the Notes and the other
Loan Documents, including, but not limited to, all claims of any nature or
description arising out of or connected with this Agreement, the Guaranty, the
Notes, or any other Loan Document, irrespective of whether or not (i) the
Administrative Agent or that Lender shall have made any demand hereunder or (ii)
the principal of or the interest on the Loan or any other amounts due hereunder
shall have become due and payable pursuant to Section 7.2 and although said
obligations and liabilities, or any of them, may be contingent or unmatured.
Section 9.6 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 the Lenders hereunder or under the other
Loan Documents (collectively, the "Aggregate Amounts Due") which is greater than
the proportion received by any other Lender in respect of the Aggregate Amounts
Due to such other Lender, then the Lender receiving such proportionately greater
payment shall (i) notify the Administrative Agent and each other Lender of the
receipt of such payment and (ii) apply a portion of such payment to purchase
participations equal to the portion of the Aggregate Amounts Due to the other
Lenders (which participations shall be deemed to have been purchased and
payments made simultaneously upon the receipt by the seller of its portion of
such payment, and which participations will be permitted notwithstanding any
prohibition to the contrary in Section 9.2(e)) 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 Borrower
or otherwise, those purchases or other payments shall be rescinded and the
purchase prices paid for such participations or other payments shall be returned
to such purchasing Lender ratably to the extent of such recovery, but without
interest. The Borrower expressly consents 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 Borrower to that holder with respect thereto as fully as if
that holder were owed the amount of the participation held by that holder.
Section 9.7 Notices.
(a) Addresses. All notices, demands, requests, directions and other
communications required or expressly authorized to be made by this Agreement
shall, whether or not specified to be in writing but unless otherwise expressly
specified to be given by any other means, be given in writing and (i) addressed
to (A) if to the Borrower or any other Obligor, to US Airways Group, Inc., 111
West Rio Salado Parkway, Tempe, AZ 85281, Attention: Attn: Thomas T. Weir, Tel:
(480) 693-3685, Fax: (480) 693-5886, with a copy to James E. Walsh III, Tel:
(480) 693-5787, Fax: (480) 693-5155, (B) if to the Administrative Agent, to
General Electric Capital Corporation, 350 South Beverly Drive, Suite 200,
Beverly Hills, CA 90212-4811, Attention: Patricia Green, Tel: (310) 284-2744,
Fax: (310) 284-2701, with a copy to Weil, Gotshal & Manges LLP, 767 Fifth
Avenue, New York, NY 10153, Attention: Douglas R. Urquhart, Tel: (212) 310-8001,
Fax: (212) 310-8007, and (C) otherwise to the party to be notified at its
address specified opposite its name on Annex A or on the signature page of any
applicable Assignment and Acceptance, (ii) posted to Intralinks(R) (to the
extent such system is available and set up by or at the direction of the
Administrative Agent prior to posting) in an appropriate location by uploading
such notice, demand, request, direction or other communication to
www.intralinks.com, faxing it to 866-545-6600 with an appropriate bar-coded fax
coversheet or using such other means of posting to Intralinks(R) as may be
available and reasonably acceptable to the Administrative Agent prior to such
posting, (iii) posted to any other E-System set up by or at the direction of the
Administrative Agent in an appropriate location or (iv) addressed to such other
address as shall be notified in writing (A) in the case of the Borrower and the
Administrative Agent, to the other parties hereto and (B) in the case of all
other parties, to the Borrower and the Administrative Agent. Transmission by
electronic mail shall not be sufficient or effective to transmit any such notice
under this clause (a) unless such transmission is an available means to post to
any E-System.
(b) Effectiveness. All communications described in clause (a) above and
all other notices, demands, requests and other communications made in connection
with this Agreement shall be effective and be deemed to have been received (i)
if delivered by hand, upon personal delivery, (ii) if delivered by overnight
courier service, upon delivery by such courier service, (iii) if delivered by
facsimile (other than to post to an E-System pursuant to clause (a)(ii) or
(a)(iii) above), upon sender's receipt of confirmation of proper transmission,
and (iv) if delivered by posting to any E-System, on the later of the date of
such posting in an appropriate location and the date access to such posting is
given to the recipient thereof in accordance with the standard procedures
applicable to such E-System; provided, however, that no communications to the
Administrative Agent pursuant to Article II or Article VIII shall be effective
until received by the Administrative Agent.
Section 9.8 No Waiver; Remedies. No failure on the part of any Lender
or the Administrative 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 9.9 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 9.10 Submission to Jurisdiction; Service of Process.
(a) Submission to Jurisdiction. BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OBLIGOR HEREBY AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT AGAINST IT
IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND ACCEPTS 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) Service of Process. EACH OF THE OBLIGORS HEREBY IRREVOCABLY
CONSENTS 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 IT IN ACCORDANCE WITH THE PROVISIONS
OF Section 9.7.
(c) No Limitation. Nothing contained in this Section 9.10 shall affect
the right of the Administrative Agent or any Lender or other party hereto to
serve process in any other manner permitted by law or commence legal proceedings
or otherwise proceed against any Obligor in any other jurisdiction.
Section 9.11 Waiver of Jury Trial. EACH OBLIGOR IRREVOCABLY WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT.
Section 9.12 Marshaling; Payments Set Aside. Neither the Administrative
Agent nor any Lender shall be under any obligation to marshal any assets in
favor of any Obligor or any other party or against or in payment of any or all
of the Obligations. To the extent that any Obligor makes a payment or payments
to the Administrative 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 Administrative Agent as the Administrative 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 such Obligor distributed by the
Administrative Agent to such Payee hereunder.
Section 9.13 Section Titles. The Section titles and subtitles 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.
Section 9.14 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 Borrower and the Administrative Agent.
Section 9.15 Severability. In case any provision in or obligation under
this Agreement, the Notes or the other Loan Documents 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 9.16 Confidentiality.
(a) 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 reasonably consider necessary to protect its interest;
(ii) to any potential assignee or transferee of any party's rights
under this Agreement or any of the Loan Documents or any other person
proposing to enter into contractual arrangements with any party in relation
to this Agreement or any of the other Loan Documents, subject to the
relevant party obtaining an undertaking from such potential assignee or
transferee or other person in corresponding terms to this Section 9.16;
(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;
(iv) to bank examiners or any other regulatory authority or rating
agencies or similar entities, if requested to do so;
(v) to its auditors, legal, tax or to other professional advisers;
(vi) to its Affiliates and their respective directors, officers,
employees and agents; or
(vii) in connection with the exercise of any remedy under any Loan
Document.
(b) The provisions of this Section 9.16 shall survive any termination
of this Agreement or any other Loan Document or any assignment, transfer or
participation under this Agreement or any other Loan Document.
Section 9.17 Independence of Representations, Warranties and Covenants.
All representations and warranties made in and covenants under this Agreement
shall be given independent effect so that (a) if a particular representation and
warranty is unqualified, the fact that another representation and warranty is
qualified shall not affect the operation of the former provision; and (b) if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Default if such action is taken or condition exists.
Section 9.18 Electronic Transmissions.
(a) Authorization. Subject to the provisions of Section 9.7(a), each of
the Administrative Agent, the Borrower, the other Obligors, the Lenders and each
of their Related Persons is authorized (but not required) to transmit, post or
otherwise make or communicate, in its sole discretion, Electronic Transmissions
in connection with any Loan Document and the transactions contemplated therein.
Each of the Borrower, the other Obligors and each Secured Party hereby
acknowledges and agrees that the use of Electronic Transmissions is not
necessarily secure and that there are risks associated with such use, including
risks of interception, disclosure and abuse and each indicates it assumes and
accepts such risks by hereby authorizing the transmission of Electronic
Transmissions.
(b) Signatures. Subject to the provisions of Section 9.7(a), (i)(A) no
posting to any E-System shall be denied legal effect merely because it is made
electronically, (B) each E-Signature on any such posting shall be deemed
sufficient to satisfy any requirement for a "signature" and (C) each such
posting shall be deemed sufficient to satisfy any requirement for a "writing",
in each case including pursuant to any Loan Document, any applicable provision
of any UCC, the federal Uniform Electronic Transactions Act, the Electronic
Signatures in Global and National Commerce Act and any substantive or procedural
Requirement of Law governing such subject matter, (ii) each such posting that is
not readily capable of bearing either a signature or a reproduction of a
signature may be signed, and shall be deemed signed, by attaching to, or
logically associating with such posting, an E-Signature, upon which each Secured
Party and Obligor may rely and assume the authenticity thereof, (iii) each such
posting containing a signature, a reproduction of a signature or an E-Signature
shall, for all intents and purposes, have the same effect and weight as a signed
paper original and (iv) each party hereto or beneficiary hereto agrees not to
contest the validity or enforceability of any posting on any E-System or
E-Signature on any such posting under the provisions of any applicable
Requirement of Law requiring certain documents to be in writing or signed;
provided, however, that nothing herein shall limit such party's or beneficiary's
right to contest whether any posting to any E-System or E-Signature has been
altered after transmission.
(c) Separate Agreements. All uses of an E-System shall be governed by
and subject to, in addition to Section 9.7 and this Section 9.18, separate terms
and conditions posted or referenced in such E-System and related Contractual
Obligations executed by Secured Parties and Obligors in connection with the use
of such E-System.
(d) LIMITATION OF LIABILITY. ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS
SHALL BE PROVIDED "AS IS" AND "AS AVAILABLE". NONE OF ADMINISTRATIVE AGENT OR
ANY OF ITS RELATED PERSONS WARRANTS THE ACCURACY, ADEQUACY OR COMPLETENESS OF
ANY E-SYSTEMS OR ELECTRONIC TRANSMISSION, AND EACH DISCLAIMS ALL LIABILITY FOR
ERRORS OR OMISSIONS THEREIN. NO WARRANTY OF ANY KIND IS MADE BY THE
ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PERSONS IN CONNECTION WITH ANY E
SYSTEMS OR ELECTRONIC COMMUNICATION, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS. Each of the Borrower, the other
Obligors and each Secured Party agrees that the Administrative Agent has no
responsibility for maintaining or providing any equipment, software, services or
any testing required in connection with any Electronic Transmission or otherwise
required for any E-System.
Section 9.19 Non-Public Information. Each Lender acknowledges and
agrees that (a) it may receive material non-public information hereunder
concerning the Obligors and their Affiliates and securities, (b) it will use
such information in compliance with all relevant policies, procedures and
Contractual Obligations and applicable requirements of laws (including United
States federal and state security laws and regulations) and (c) it will
designate to the Administrative Agent an individual Person who will receive all
such information and have the authority to act upon such information on behalf
of the Lender.
Section 9.20 Patriot Act Notice. Each Lender subject to the USA Patriot
Act of 2001 (31 U.S.C. 5318 et seq.) hereby notifies the Borrower that, pursuant
to Section 326 thereof, it is required to obtain, verify and record information
that identifies the Borrower, including the name and address of the Borrower and
other information allowing such Lender to identify the Borrower in accordance
with such act.
[SIGNATURE PAGES FOLLOW]
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.
US AIRWAYS GROUP, INC.
By: /s/ Thomas T. Weir
------------------------------------
Name: Thomas T. Weir
Title: Vice President and Treasurer
US AIRWAYS, INC.
By: /s/ Thomas T. Weir
------------------------------------
Name: Thomas T. Weir
Title: Vice President and Treasurer
AMERICA WEST HOLDINGS CORPORATION
By: /s/ Thomas T. Weir
------------------------------------
Name: Thomas T. Weir
Title: Vice President and Treasurer
AMERICA WEST AIRLINES, INC.
By: /s/ Thomas T. Weir
------------------------------------
Name: Thomas T. Weir
Title: Vice President and Treasurer
MATERIAL SERVICES COMPANY, INC.
By: /s/ Caroline B. Ray
------------------------------------
Name: Caroline B. Ray
Title: Secretary
PSA AIRLINES, INC.
By: /s/ Caroline B. Ray
------------------------------------
Name: Caroline B. Ray
Title: Secretary
PIEDMONT AIRLINES, INC.
By: /s/ Caroline B. Ray
------------------------------------
Name: Caroline B. Ray
Title: Secretary
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent and Lender
By: /s/ Joseph J. Jordan
------------------------------------
Name: Joseph J. Jordan
Title: Duly Authorized Signatory
MORGAN STANLEY SENIOR FUNDING, INC., as
Lender
By: /s/ Roger Gilbert
------------------------------------
Name: Roger Gilbert
Title: Managing Director