<PAGE> 1
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
[ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to __________
Commission File Number 0-29558
ASA Holdings, Inc.
(Exact name of registrant as specified in its charter)
Georgia 58-2258221
------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number )
100 Hartsfield Centre Parkway, Suite 800, Atlanta, Georgia 30354
----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(404) 766-1400
--------------
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days Yes X No
--- ---
As of August 3, 1998 there were 29,916,177 shares of common stock outstanding.
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ASA HOLDINGS, INC.
INDEX
<TABLE>
<CAPTION>
Part I-Financial Information
Item 1. Condensed Consolidated Financial Statements Page No.
<S> <C>
Balance Sheets- June 30, 1998 and December 31, 1997
Assets 3
Liabilities and Shareholders' Equity 4
Statements of Income- Three months and six months ended
June 30, 1998 and June 30, 1997 5
Statements of Cash Flows- Six months ended
June 30, 1998 and June 30, 1997 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Part II-Other Information
Item 4. Submission of Matters to a Vote of Security Holders 17
Item 6. Exhibits and Reports on Form 8-K 17
Signatures 18
Exhibits 19
</TABLE>
10(a) ASA Holdings, Inc. 1998 Nonqualified Stock Option Plan for
Non-Employee Directors (filed as Appendix A to the Company's
Proxy Statement for the 1998 Annual Meeting of Shareholders
and incorporated by reference herein).
10(b) Credit Agreement dated as of June 26, 1998 by and among ASA
Holdings, Inc., the Lenders named therein and NationsBank,
N.A., as Issuing Bank and Administrative
Agent.
27 Financial Data Schedule (for SEC use only)
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<PAGE> 3
Part I -- Financial Information
Item 1. Condensed Consolidated Financial Statements
ASA HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
-------- ------------
(unaudited) (audited)
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $133,699 $112,393
Marketable securities 76,652 71,487
Accounts receivable 9,763 6,663
Expendable parts 6,989 6,544
Other current assets 6,714 3,683
-------- --------
233,817 200,770
Property and Equipment
Flight equipment 505,688 468,667
Other property and equipment 17,229 16,766
Advance payments on property and equipment 27,230 26,167
-------- --------
550,147 511,600
Less accumulated depreciation and amortization 244,149 231,045
-------- --------
305,998 280,555
Other Assets
Investments - 11,777
Other assets 12,196 12,858
-------- --------
12,196 24,635
-------- --------
Total Assets $552,011 $505,960
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE> 4
ASA HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
-------- ------------
(unaudited) (audited)
<S> <C> <C>
Liabilities and Shareholders' Equity
Current Liabilities
Current portion of long-term debt $ 20,503 $ 21,852
Accounts payable 22,882 25,411
Air traffic liability 3,351 2,408
Accrued compensation and related expenses 11,290 11,148
Accrued interest payable 939 1,058
Other accrued expenses 4,342 2,520
Income taxes payable 2,691 6,395
--------- ---------
65,998 70,792
Long-Term Debt 91,528 72,792
Other Non-Current Liabilities 2,416 2,232
Deferred Income Taxes 64,195 64,219
Shareholders' Equity
Common stock, $.10 par value; authorized 150,000,000 shares;
issued - 29,916,177 and 29,730,877 shares, respectively 2,992 2,973
Retained earnings 324,912 292,937
Unrealized holding (loss) gain on investments (30) 15
--------- ---------
327,874 295,925
--------- ---------
Total Liabilities and Shareholders' Equity $ 552,011 $ 505,960
========= =========
</TABLE>
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<PAGE> 5
ASA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Share and Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
For The Three Months Ended For The Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Operating Revenues:
Passenger $ 104,430 $ 97,899 $ 195,988 $ 185,630
Other 2,237 1,739 4,427 3,623
------------ ------------ ------------ ------------
Total Operating Revenues 106,667 99,638 200,415 189,253
Operating Expenses:
Flying operations 22,061 22,322 43,184 43,846
Maintenance 16,665 16,658 32,959 35,202
Passenger service 5,164 4,397 10,002 8,818
Aircraft and traffic servicing 12,458 10,607 25,057 21,701
Reservation, commission and other 10,902 10,193 18,429 18,710
General and administrative 3,674 6,669 8,485 9,255
Depreciation, amortization and obsolescence 6,462 7,411 13,163 14,394
Other 418 147 914 343
------------ ------------ ------------ ------------
Total Operating Expenses 77,804 78,404 152,193 152,269
Income from Operations 28,863 21,234 48,222 36,984
Non-Operating (Income) Expense, net:
Interest income (2,853) (2,880) (5,591) (5,393)
Interest expense 939 1,090 1,637 2,334
Other (614) (3) (622) (12)
------------ ------------ ------------ ------------
(2,528) (1,793) (4,576) (3,071)
Income before Income Taxes 31,391 23,027 52,798 40,055
Income Taxes
Current 11,850 8,232 19,931 14,511
Deferred - 23 - 40
------------ ------------ ------------ ------------
11,850 8,255 19,931 14,551
------------ ------------ ------------ ------------
Net Income $ 19,541 $ 14,772 $ 32,867 $ 25,504
============ ============ ============ ============
Earning per Common Share $ 0.65 $ 0.50 $ 1.10 $ 0.85
Weighted Average Common Shares Outstanding 29,839,451 29,813,164 29,839,315 29,891,583
Earnings per Common Share - Diluted $ 0.65 $ 0.49 $ 1.09 $ 0.85
Weighted Average Common Shares and Share Equivalents
Outstanding - Diluted 30,016,421 30,004,611 30,019,486 30,017,675
Cash Dividends per Share $ 0.11 $ 0.10 $ 0.22 $ 0.20
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE> 6
ASA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
For The Six Months Ended
June 30,
------------------------
1998 1997
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 32,867 $ 25,504
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation 12,625 13,623
Amortization and provision for obsolescence 538 771
Amortization of engine overhauls 3,739 3,635
Deferred income taxes (24) 55
Other 2,737 120
Changes in Operating Assets and Liabilities:
Receivables (3,160) (229)
Expendable parts (696) 1,642
Other assets (2,935) 23
Accrued compensation and related expenses 326 2,780
Accrued interest payable (119) (153)
Other liabilities 236 722
Income taxes payable (3,704) 3,550
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 42,430 52,043
INVESTING ACTIVITIES
Purchase of Marketable Securities (83,482) (79,733)
Proceeds from Sale of Marketable Securities 78,285 71,125
Decrease in Investments 11,777 -
Purchases of Property and Equipment including
Advance Payments (42,175) (30,382)
Other 1,332 (16,145)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (34,263) (55,135)
FINANCING ACTIVITIES
Proceeds from Long-Term Debt 28,535 -
Principal Payments on Long-Term Debt (11,148) (13,634)
Dividends Paid (6,575) (5,983)
Purchase of Common Stock (6,584) (4,216)
Proceeds from Exercise of Stock Options 8,911 -
--------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 13,139 (23,833)
INCREASE IN CASH AND CASH EQUIVALENTS 21,306 (26,925)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 112,393 137,469
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 133,699 $ 110,544
--------- ---------
</TABLE>
See notes to condensed consolidated financial statements
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<PAGE> 7
ASA HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary to
present fairly the financial position as of June 30, 1998 and results of
operations for the six-month periods ended June 30, 1998 and 1997 and cash
flows for the six-month periods ended June 30, 1998 and 1997. The
accounting adjustments contained in the financial statements are of a
normal recurring nature. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange
Commission (SEC) for Form 10-Q. It is suggested that these unaudited
condensed consolidated financial statements be read in conjunction with the
audited consolidated financial statements and the notes thereto included in
the 1997 Annual Report on Form 10-K filed by the Company with the SEC under
the Securities Exchange Act of 1934 on March 30, 1998.
2. Results of operations for the six-month periods ended June 30, 1998 and
1997 are not necessarily indicative of the results to be expected for the
year.
3. Earnings per share - Diluted are based on the weighted average number of
common and common equivalent shares outstanding. The calculations are as
follows:
<TABLE>
<CAPTION>
For the Three Months Ended June 30,
1998 1997
---- ----
<S> <C> <C>
Numerator:
Net Income $19,540,483 $14,771,651
Denominator:
For Earnings per Common Share:
Weighted Average Common
Shares Outstanding 29,839,451 29,813,164
Effect of Dilutive Securities:
Stock Options/SARs 176,970 191,447
For Earnings per Common Share- Diluted:
Weighted Average Common Shares and
Share Equivalents Outstanding 30,016,421 30,004,611
Earnings per Common Share $ 0.65 $ 0.50
Earnings per Common Share - Diluted $ 0.65 $ 0.49
</TABLE>
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
1998 1997
---- ----
<S> <C> <C>
Numerator:
Net Income $32,866,643 $25,504,133
Denominator:
For Earnings per Common Share:
Weighted Average Common
Shares Outstanding 29,839,315 29,891,583
Effect of Dilutive Securities:
Stock Options/SARs 180,171 126,092
For Earnings per Common Share- Diluted:
Weighted Average Common Shares and
Share Equivalents Outstanding 30,019,486 30,017,675
Earnings per Common Share $ 1.10 $ 0.85
Earnings per Common Share - Diluted $ 1.09 $ 0.85
</TABLE>
4. Marketable securities, which consist of investments with maturity dates
longer than three months and less than one year, and long-term investments
are reported at fair market value.
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<PAGE> 8
5. During the second quarter of 1998, the Company established a new $100
million unsecured credit facility to enhance the Company's flexibility for
future growth. The current pricing on a loan would be LIBOR plus 27.5 basis
points. In addition, the Company pays a facility commitment fee of 12.5
basis points on the amount of the revolving commitment regardless of
whether and to what extent the revolving commitment is utilized. The new
line of credit has a five year term which expires on June 26, 2003 and
contains customary covenants.
6. As of June 30, 1998, ASA had entered into swap transactions hedging
approximately 37.5% of its projected fuel requirements for the second half
of 1998. In addition, approximately 25% of its fuel requirements for the
first six months of 1999 are hedged.
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<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
This Item 2 should be read in conjunction with the unaudited condensed
consolidated financial statements included in Item 1 hereto.
This Form 10-Q, including Management's Discussion and Analysis which
follows, contains forward-looking statements in addition to historical
information, including but not limited to statements regarding the Company's
current views with respect to future events, trends, market conditions and
financial performance. Such forward-looking statements are subject to certain
factors that could cause actual results to differ materially from historical
results or anticipated events, trends or results. These factors include, but are
not limited to, material changes in the Company's relationship with Delta Air
Lines, Inc. (Delta); the cost and supply of aviation fuel; the acquisition and
phase-in of new aircraft; competitive pressures on pricing; changes in
regulations affecting the Company; potential adverse effects of the Year 2000
computer problem; seasonal factors and general economic conditions affecting
demand for air transportation; and labor relations, particularly the outcome of
ongoing contract negotiations with the pilots' union. These and other factors
affecting the Company's future performance are further detailed in publicly
available reports filed from time to time by the Company with the Securities and
Exchange Commission, such as the Company's Annual Report on Form 10-K for the
year ended December 31, 1997.
ASA Holdings, Inc. (ASA Holdings) is a holding company the principal
assets of which are the shares of its wholly owned subsidiaries Atlantic
Southeast Airlines, Inc. (ASA) and ASA Investments, Inc. (ASA Investments). All
references to the Company contained in this section refer collectively to ASA
Holdings and its subsidiaries, ASA and ASA Investments. ASA Holdings considers
the airline business of ASA to be its only industry segment. All significant
intercompany transactions have been eliminated.
Liquidity and Capital Resources
Working capital increased to $167.8 million with a current ratio of 3.5
at June 30, 1998 compared with working capital of $130.0 million and a current
ratio of 2.8 at December 31, 1997. Cash, cash equivalents and investments in
marketable securities increased by $26.5 million primarily due to $42.4 million
in cash from operations, $8.9 million from the exercise of stock options, $17.4
million net increase in long-term debt related to aircraft acquisitions, and an
$11.8 million reclassification of long-term investments to short-term marketable
securities. These increases were partially offset by a $42.2 million investment
in property and equipment, $6.6 million of dividends paid and $6.6 million of
common stock repurchases. In June 1998, ASA purchased two Canadair Regional Jet
aircraft (CRJs) which ASA plans to sell and leaseback and which causes the
Company's fixed assets and debt to be temporarily higher than at year-end. The
sale leaseback financing arrangements are expected to be completed during the
third quarter of 1998.
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<PAGE> 10
As of June 30, 1998, the Company had unsecured lines of credit totaling
$108 million with several banks. During the second quarter of 1998, the Company
established a new $100 million unsecured committed credit facility to enhance
the Company's flexibility for future growth. The current pricing on a loan would
be LIBOR plus 27.5 basis points. In addition, the Company pays a facility
commitment fee of 12.5 basis points on the amount of the revolving commitment
regardless of whether and to what extent the revolving commitment is utilized.
The new line of credit has a five year term which expires on June 26, 2003 and
contains customary covenants. As of June 30, 1998, only $.7 million of these
lines was committed to support a letter of credit and there were no outstanding
amounts against these lines of credit. Both of these lines of credit are
available for general corporate purposes on an as needed basis.
On April 21, 1997, ASA announced that it had executed an acquisition
agreement with Bombardier, Inc. for 30 CRJs with options for an additional 60
CRJ aircraft. The CRJ is a 50-passenger jet with four-abreast seating that will
be used to promote growth in new markets as well as replace some turboprop
equipment on existing routes. The value of the 30 aircraft, including spare
parts and spare engines, will be approximately $600 million. Delivery of these
aircraft began in August 1997, and ASA had acquired a total of 12 CRJ aircraft
as of June 30, 1998, ten of which were through operating leases with 16.5 year
terms. As mentioned above, ASA purchased the two CRJ aircraft acquired in June
1998 and plans a sale leaseback transaction on these two aircraft during the
third quarter of 1998. ASA obtained a commitment from the Export Development
Corporation (EDC) of Canada to provide financing to ASA for up to approximately
85% of the purchase price of each of the CRJs. This facility, which ASA is not
obligated to use for its acquisition of all or any of the CRJs, is available on
an aircraft by aircraft basis in the form of either direct loans or leases, with
interest payable at various interest rate options determined by reference to
U.S. treasury rates or LIBOR, and on various repayment terms. Future deliveries
of the remaining 18 CRJs are anticipated to be at an approximate rate of one
aircraft per month and the financing arrangements have not yet been determined.
ASA may finance the CRJs as well as other anticipated expenditures through a
combination of existing cash reserves, internally generated funds and lease and
debt financing. Given the nature of the considerations relevant to the
determination of the most advantageous form of financing at a given time, the
Company cannot predict with any certainty the anticipated amount of funds which
may be provided from such possible financing sources.
The Company's percentage of long-term debt to equity increased to 28%
at June 30, 1998 compared with 25% at December 31, 1997. Long-term debt
increased to $91.5 million from $72.8 million at the end of 1997. As mentioned
above, the net increase was due to debt associated with the purchase of two CRJs
in June 1998, offset by long-term debt payments during the six months ended
June 30, 1998.
Shareholders' equity per share increased to $10.96 at June 30, 1998
from $9.95 at the end of 1997. Net worth increased $31.9 million primarily due
to net income of $32.9 million in the first six months of 1998 and $12.3 million
from the exercise of stock options, offset by dividends paid of $6.6 million and
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<PAGE> 11
common stock repurchases of $6.6 million. In February 1998, ASA Holdings
announced that its Board of Directors authorized the repurchase of up to an
additional $50.0 million of its common stock on the open market during the
following twelve month period. The repurchased shares will be held as treasury
stock and used for general corporate purposes or will be canceled.
As of June 30, 1998, ASA had entered into swap transactions hedging
approximately 37.5% of its projected fuel requirements for the second half of
1998. In addition, approximately 25% of its fuel requirements for the first six
months of 1999 are hedged.
For the second quarter of 1998, the Board of Directors declared a
quarterly cash dividend of 11 cents per share compared with 10 cents per share
for the similar period of 1997.
During 1987, the Air Line Pilots Association (ALPA) was certified to
represent the Company's pilots for collective bargaining purposes. Since that
time, the Company and ALPA have executed two successive collective bargaining
agreements. The latest agreement became amendable on October 29, 1995, and ASA
and ALPA entered into negotiations for a new collective bargaining agreement. In
1996, ASA and ALPA entered federal mediation with respect to those negotiations
which continued throughout 1997. In January 1998, ASA and ALPA reached a
tentative agreement on a new collective bargaining agreement, pending
ratification of the agreement by the pilots. In March 1998, the members of ALPA
voted to reject the tentative accord, and negotiations with ALPA continued under
the auspices of the National Mediation Board. On July 24, 1998, the Company
announced that it had reached a new tentative agreement with ALPA, subject to
ratification by the members of the union. The existing collective bargaining
agreement between ASA and ALPA will remain in effect until a new agreement is
reached and ratified or until the procedures of the Railway Labor Act (RLA),
which governs labor relations of air carriers and employees in the airline
industry, are exhausted. There can be no assurance that ASA will be able to
settle contract negotiations without wage increases, work rule changes or other
provisions that could have a material adverse effect on the Company's operations
or financial performance.
The Company has implemented a Year 2000 compliance program designed to
ensure that the Company's computer systems and applications will function
properly beyond 1999. The Company believes that it has allocated adequate
resources for this purpose and expects its Year 2000 conversions to be completed
on a timely basis. The Company is not aware of any Year 2000 issues that would
materially adversely affect operations or results thereof and does not expect
implementation to have a material impact on the financial statements. However,
there can be no assurance that the systems of third parties upon which the
Company's business relies will be Year 2000 compliant on a timely basis. The
failure of the Company's computer systems or applications or those operated by
third parties could have a material adverse effect on the Company's business,
results of operations and financial condition.
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<PAGE> 12
Based on information currently available to it, the Company believes
that available resources will be sufficient to meet its existing expenditure
commitments (including current maturities of long-term debt and aircraft lease
payments) as well as its anticipated capital expenditures and other working
capital requirements for the foreseeable future. As previously indicated,
financial resources anticipated to be available to the Company for such purposes
include existing cash reserves, internally generated funds, amounts available
under the existing lines of credit, and short and long-term financing
arrangements that the Company believes are available to it.
New Accounting Standards
The Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income," in
June 1997. Statement No. 130 establishes standards for reporting and displaying
comprehensive income, as defined, and its components in financial statements
issued for fiscal years beginning after December 15, 1997. Management believes
that the adoption of Statement No. 130 will not have a material impact on the
financial statements.
Results of Operations
For the three months ended June 30, 1998 and 1997
The Company had record passenger traffic, operating revenues and net
income for the second quarter of 1998. Net income for the second quarter
increased by 32% to $19.5 million compared with $14.8 million for the same
period in 1997. Diluted earnings per common share for the second quarter of 1998
increased to $.65 compared with $.49 for the second quarter of 1997. Net income
for the second quarter of 1997 included an after-tax expense accrual of $1.6
million or $.05 per share related to the Company's decision to return all of the
BAe-146 aircraft to their lessor, as well as after-tax expense of $1.9 million
or $.07 per share associated with the cancellation of the Company's outstanding
Stock Appreciation Rights (SARs) and the adoption of a Nonqualified Stock Option
Plan (Option Plan) which the shareholders approved on May 21, 1997.
Total revenues in the second quarter of 1998 were $106.7 million
compared with $99.6 million for the second quarter of 1997. Factors for the
second quarters of 1998 and 1997 which affect passenger revenue are detailed
below:
<TABLE>
<CAPTION>
Quarter Ended June 30,
1998 1997
---- ----
<S> <C> <C>
Revenue Passenger Miles (000,000) 273.0 242.3
Passengers (000) 1,061.5 992.5
Load Factor 57.9% 52.4%
Average Passenger Yield 38.3(cent) 40.4(cent)
Average Trip Length 257.2 244.2
</TABLE>
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<PAGE> 13
Passenger revenue increased primarily due to higher traffic, offset by
a lower yield per revenue passenger mile. Both revenue passenger miles (RPMs)
and load factor were higher in the second quarter of 1998 compared with the same
period of 1997 due to the increased passenger traffic.
Operating expenses remained relatively constant at $77.8 million for
the quarter ended June 30, 1998 compared with $78.4 million for the same period
of 1997 . The Company increased capacity (measured by available seat miles, or
"ASM's") for the second quarter of 1998 by 2% compared with the same quarter in
1997. The second quarter of 1997 included (1) pre-tax option compensation/SARs
expense of $3.1 million and (2) the pre-tax expense accrual of $2.6 million
related to the early return of all BAe-146 aircraft to their lessor. Excluding
these one-time expenses, operating cost per ASM would have been 15.7 cents for
the second quarter of 1997 compared with 16.5 cents for the second quarter of
1998.
The following table compares components of operating cost per ASM and
operating expense as a percentage of total operating expense for the three month
periods ended June 30, 1998 and 1997:
<TABLE>
<CAPTION>
Cost per ASM % Operating Cost
Quarter Ended Quarter Ended
June 30, June 30,
-----------------------------------
1998 1997 1998 1997
-----------------------------------
<S> <C> <C> <C> <C>
Labor and related 4.3(cent) 4.7(cent) 26% 27%
Fuel 1.5 1.7 9 10
Direct maintenance 2.7 2.8 17 17
Passenger related 2.1 2.1 12 12
Depreciation and aircraft rent 2.5 2.5 16 15
Other 3.4 3.2 20 19
-----------------------------------
Total operating expense 16.5(cent) 17.0(cent) 100% 100%
</TABLE>
Labor and related costs decreased to $20.1 million for the second
quarter of 1998 compared with $21.5 million for the same period in 1997. The
average number of employees remained relatively constant at 2,486 as of June 30,
1998 compared with 2,472 at June 30, 1997. On May 21, 1997, the Company's
shareholders approved the cancellation of all outstanding SARs and the adoption
of the Option Plan. SARs expense of $3.1 million was recorded for the second
quarter of 1997 based on the closing price of the Company's stock on May 21,
1997. Without the SARs adjustments, labor and related costs would have been 4.0
cents per ASM and 24% of total operating expenses for the second quarter of
1997. The increase for the second quarter of 1998 was due primarily to higher
salaries and cost of benefits.
Fuel expense decreased to 1.5 cents per ASM for the second quarter of
1998, compared with 1.7 cents for the quarter ended June 30, 1997. Fuel expense
decreased $.9 million spread over a 2% increase in capacity. The average price
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<PAGE> 14
per gallon, including taxes and into plane fees, decreased 14% to 61.6 cents
from 71.6 cents, due primarily to lower crude oil prices.
Other expenses increased to $16.0 million for the second quarter of
1998 compared with $14.7 million for the second quarter of 1997. The increase in
1998 was primarily attributable to higher station rental and passenger-related
expenses.
Non-operating income/expense for the second quarter of 1998 was $2.5
million compared with $1.8 million for the second quarter of 1997. This was
primarily due to capitalized interest related to deposits on the CRJ aircraft
and a gain on the sale of non-operating aircraft equipment.
The break-even load factor increased slightly to 40.8% for the three
months ended June 30, 1998 compared with 40.3% for the same period in the prior
year.
For the six months ended June 30, 1998 and 1997
Total revenues for the six months ended June 30, 1998 increased 6% to
$200.4 million compared with $189.3 million for the same period of 1997.
Passenger revenue increased 6% to $196.0 million in the first six months of 1998
primarily due to a 6% increase in traffic, offset somewhat by a lower yield per
revenue passenger mile. The other factors that impact passenger revenue are
detailed below:
<TABLE>
<CAPTION>
Six Months Ended June 30,
1998 1997
---- ----
<S> <C> <C>
Revenue Passenger Miles (000,000) 494.2 446.1
Passengers (000) 1,930.7 1,829.0
Load Factor 55.2% 49.8%
Average Passenger Yield 39.7(cent) 41.6(cent)
Average Trip Length 255.9 243.9
</TABLE>
The Company's net income for the first six months of 1998 increased 29%
to $32.9 million compared with net income of $25.5 million for the same period
of 1997. Diluted earnings per common share for the first six months of 1998 was
$1.09 compared with $.85 for the same period in 1997. The financial results for
1997 included a one-time after-tax accrual of $1.6 million or $.05 per share
related to the Company's decision to exercise its option for the early return of
all BAe-146 aircraft to their lessor, as well as after-tax expense of $1.6
million or $.05 per share associated with the cancellation of the outstanding
SARs and the adoption of the Option Plan during the second quarter of 1997 as
described above.
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<PAGE> 15
Operating expenses remained constant at $152.2 million or 17.0 cents
per ASM for the six month periods ended June 30, 1998 and 1997. Excluding (1)
pre-tax option compensation/SARs expense of $2.6 million for the six months
ended June 30, 1997, and (2) the pre-tax expense accrual of $2.6 million in 1997
related to the early return of all BAe-146 aircraft to their lessor, operating
cost per ASM would have been approximately 16.4 cents for 1997 compared with
17.0 cents for 1998.
The following table compares components of operating cost per ASM and
operating expense as a percentage of total operating expense for the six month
periods ended June 30, 1998 and 1997:
<TABLE>
<CAPTION>
Cost per ASM % Operating Cost
Year to Date Year to Date
June 30, June 30,
----------------------------------
1998 1997 1998 1997
----------------------------------
<S> <C> <C> <C> <C>
Labor and related 4.4(cent) 4.4(cent) 26% 26%
Fuel 1.6 1.8 9 11
Direct maintenance 2.8 3.1 16 18
Passenger related 1.8 2.0 11 11
Depreciation and aircraft rent 2.7 2.5 16 15
Other 3.7 3.2 22 19
----------------------------------
Total operating expense 17.0(cent) 17.0(cent) 100% 100%
</TABLE>
Labor and related costs remained constant at $40.0 million for the six
months ended June 30, 1998 and 1997. The average number of employees grew 2%
from 2,474 to 2,520 as of June 30, 1998. As mentioned above, the Company's
shareholders approved the Option Plan on May 21, 1997. During the first six
months of 1997, SARs expense of $2.6 million was recorded based on the closing
price of the Company's stock on May 21, 1997. The Company does not intend to
incur any additional SARs expense in the future. For the six months ended June
30, 1997, labor and related costs without the SARs adjustments would have been
4.1 cents per ASM and 25% of total operating costs compared with 4.4 cents per
ASM and 26% of total operating costs for the six months ended June 30, 1998. The
increase in 1998 was due primarily to higher salaries and cost of benefits.
Fuel expense decreased to 1.6 cents per ASM for the six months ended
June 30, 1998, compared with 1.8 cents for the same period in 1997. Fuel expense
decreased $2.6 million spread over the same capacity. The average price per
gallon, including taxes and into plane fees, decreased 17% to 63.2 cents from
75.9 cents, due primarily to lower crude oil prices.
Direct maintenance cost, excluding labor and related expenses,
decreased 9% to $24.9 million for the six months ended June 30, 1998. The lower
expense was due primarily to the timing of maintenance inspections and overhauls
of time controlled components. In mid-1997, ASA elected to exercise its option
for the early return of all of its BAe-146 aircraft to their lessor. As a
result, the first six months of 1998 included less maintenance expense for the
-15-
<PAGE> 16
BAe-146 aircraft. The new CRJ aircraft, which was first added to ASA's fleet
during the second half of 1997, is expected to be used over longer routes, which
should create a higher capacity over which maintenance costs can be distributed.
Passenger related expenses, which include a majority of the expenses
under the caption "Reservation, commission and other" on the Company's
Consolidated Statements of Income, were $16.4 million for the first six months
of 1998 compared with $17.5 million for the same period in 1997. This decrease
was primarily attributable to lower rates for travel agency commissions.
Depreciation and aircraft rent increased 6% to $23.9 million for the
six months ended June 30, 1998. This increase was due primarily to higher
aircraft rental incurred as a result of the acquisition of five CRJs during the
last half of 1997 and an additional seven CRJs during the first six months of
1998, offset by a reduction in rent expense on the BAe-146 aircraft which were
returned to the lessor.
Other expenses increased to $33.0 million for the first six months of
1998 compared with $28.3 million for the same period in the prior year. The
increase in 1998 was primarily attributable to higher station rental and
passenger-related expenses, and costs associated with the negotiations related
to the pilot contract.
Non-operating income/expense for the first six months of 1998 was $4.6
million compared with $3.1 million for the same period of 1997. This was
primarily due to capitalized interest related to deposits on the CRJ aircraft
and a gain on the sale of non-operating aircraft equipment.
The break-even load factor for the six months ended June 30, 1998
increased to 40.7% compared with 39.3% for the same period in 1997.
-16-
<PAGE> 17
Part II- Other Information
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of ASA Holdings, Inc. was
held on Thursday, May 21, 1998.
The first matter submitted to a vote of the shareholders at
this meeting was the election of seven directors. John W.
Beiser, George Berry, Jean A. Mori, Parker H. Petit, George F.
Pickett, Alan M. Voorhees, and Ralph W. Voorhees were elected
at the Annual Meeting by the holders of Common Stock by the
following votes: (a) Mr. Beiser: 26,365,427 votes for and
1,470,935 votes withheld, (b) Mr. Berry: 26,336,829 votes for
and 1,499,533 votes withheld, (c) Mr. Mori: 26,354,658 votes
for and 1,481,704 votes withheld, (d) Mr. Petit: 26,384,386
votes for and 1,451,976 votes withheld, (e) Mr. Pickett:
26,366,321 votes for and 1,470,041 votes withheld, (f) Mr.
Alan Voorhees: 26,330,811 votes for and 1,505,551 votes
withheld, and (g) Mr. Ralph Voorhees: 26,354,316 votes for and
1,482,046 votes withheld. There are no broker non-votes for
purposes of any such votes.
The second matter submitted to a vote and approved by
shareholders was the adoption of the 1998 Nonqualified Stock
Option Plan for Non-Employee Directors. The vote was as
follows: (a) Voting For: 25,495,196 shares, (b) Voting
Against: 2,203,042 shares, and (c) Abstentions: 138,124
shares.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report.
10(a) ASA Holdings, Inc. 1998 Nonqualified Stock Option Plan for
Non-Employee Directors (filed as Appendix A to the Company's
Proxy Statement for the 1998 Annual Meeting of Shareholders
and incorporated by reference herein).
10(b) Credit Agreement dated as of June 26, 1998 by and among ASA
Holdings, Inc., the Lenders named therein and NationsBank,
N.A., as Issuing Bank and Administrative Agent.
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K. There were no reports on Form 8-K filed
during the quarter ended June 30, 1998.
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<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ASA Holdings, Inc.
/s/ Ronald V. Sapp
-------------------------
Ronald V. Sapp
Chief Financial Officer
Senior Vice President - Finance
Date: August 13, 1998
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<PAGE> 1
EXHIBIT 10(b)
CREDIT AGREEMENT
Dated as of June 26, 1998
by and among
ASA HOLDINGS, INC., as Borrower,
the Lenders named herein,
NATIONSBANK, N.A., as Issuing Bank and Administrative Agent,
and
NATIONSBANC MONTGOMERY SECURITIES LLC,
as Arranger
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE 1. DEFINITIONS............................................................ 1
Section 1.1. Definitions................................................. 1
Section 1.2. General..................................................... 21
ARTICLE 2. SYNDICATE LOAN AND LETTER OF CREDIT FACILITY........................... 21
Section 2.1. Syndicate Loans............................................. 21
Section 2.2. Borrowings of Syndicate Loans............................... 21
Section 2.3. Disbursements of Syndicate Loans............................ 22
Section 2.4. Repayment of Syndicate Loans................................ 23
Section 2.5. Several Obligations......................................... 23
Section 2.6. Continuation and Conversion of Syndicate Loans.............. 23
Section 2.7. Unavailability of Certain Loans; Illegality................. 25
Section 2.8. Treatment of Affected Loans................................. 25
Section 2.9. Compensation................................................ 26
Section 2.10. Letters of Credit/Lenders' Participation................... 26
Section 2.11. Method of Issuance of Letters of Credit.................... 28
Section 2.12. Letter of Credit Reimbursement............................. 28
Section 2.13. Nature of Issuing Bank's Duties/Unconditional Nature of
Reimbursement Obligation......................................... 30
Section 2.14. Expiration or Maturity Date of Letters of Credit Past
Termination Date................................................. 31
Section 2.15. Collateral Account......................................... 31
Section 2.16. Voluntary Reductions of the Revolving Commitment........... 32
ARTICLE 3. COMPETITIVE BID FACILITY............................................... 32
Section 3.1. Competitive Bid Option...................................... 32
Section 3.2. Borrower's Request for Competitive Bid Quotes............... 33
Section 3.3. Offer for Lenders to make Competitive Bid Quotes............ 33
Section 3.4. Notice to Borrower.......................................... 34
Section 3.5. Acceptance and Notice by Borrower........................... 35
Section 3.6. Allocation by the Administrative Agent...................... 35
Section 3.7. Lender's Obligation to Make Competitive Bid Loans........... 36
Section 3.8. Repayment of Competitive Bid Loans.......................... 36
ARTICLE 4. SECURITY............................................................... 36
Section 4.1. Security.................................................... 36
Section 4.2. Further Assurances.......................................... 36
Section 4.3. Appraisals.................................................. 37
ARTICLE 5. OTHER LOAN AND PAYMENT PROVISIONS...................................... 37
Section 5.1. Maximum Amount of Obligations............................... 37
Section 5.2. Mandatory Prepayment of Loans............................... 37
Section 5.3. Voluntary Prepayment of Loans............................... 38
Section 5.4. Maximum Number of Interest Periods for Loans................ 38
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C> <C>
Section 5.5. Rates and Payment of Interest on Loans...................... 38
Section 5.6. Interest Upon Event of Default.............................. 39
Section 5.7. Notes....................................................... 39
Section 5.8. Computations................................................ 39
Section 5.9. Usury....................................................... 39
Section 5.10. Agreement Regarding Interest and Charges................... 40
Section 5.11. Payments................................................... 40
Section 5.12. Pro Rata Treatment......................................... 41
Section 5.13. Sharing of Payments, Etc................................... 41
Section 5.14. Facility Fee............................................... 42
Section 5.15. Letter of Credit Fees...................................... 43
Section 5.16. Administrative and Arrangement Fees........................ 44
Section 5.17. Increased Costs/Capital Adequacy........................... 44
Section 5.18. Statements of Account...................................... 45
Section 5.19. Defaulting Lender's Status................................. 46
Section 5.20. Administrative Agent's Reliance............................ 46
Section 5.21. Taxes...................................................... 46
Section 5.22. Affected Lenders........................................... 48
Section 5.23. Change of Lending Office................................... 49
ARTICLE 6. CONDITIONS PRECEDENT................................................... 49
Section 6.1. Conditions Precedent to Initial Loans and Letter of Credit.. 49
Section 6.2. Conditions Precedent to Syndicate Loans and Letters of
Credit........................................................... 51
ARTICLE 7. REPRESENTATIONS AND WARRANTIES......................................... 52
Section 7.1. Representations and Warranties.............................. 52
Section 7.2. Survival of Representations and Warranties, Etc............. 57
ARTICLE 8. AFFIRMATIVE COVENANTS.................................................. 58
Section 8.1. Preservation of Existence; Status as an Air Carrier......... 58
Section 8.2. Compliance with Applicable Law.............................. 58
Section 8.3. Maintenance of Property..................................... 58
Section 8.4. Conduct of Business......................................... 58
Section 8.5. Insurance................................................... 58
Section 8.6. Payment of Taxes and Claims................................. 59
Section 8.7. Visits and Inspections...................................... 59
Section 8.8. Use of Proceeds/Letters of Credit........................... 59
Section 8.9. Material Subsidiaries....................................... 59
Section 8.10. Environmental Matters...................................... 60
Section 8.11. Asset Pool................................................. 60
ARTICLE 9. INFORMATION............................................................ 61
Section 9.1. Quarterly Financial Statements.............................. 61
Section 9.2. Year-End Statements......................................... 62
Section 9.3. Compliance Certificate...................................... 62
Section 9.4. Notice of Litigation and Other Matters...................... 62
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 9.5. ERISA Reporting............................................. 63
Section 9.6. Copies of Other Reports..................................... 65
Section 9.7. Other Information........................................... 65
ARTICLE 10. NEGATIVE COVENANTS.................................................... 65
Section 10.1. Financial Covenants........................................ 65
Section 10.2. Indebtedness............................................... 65
Section 10.3. Investments/Acquisitions................................... 66
Section 10.4. Liens/Agreements Regarding Liens/Other Matters............. 68
Section 10.5. Restricted Payments........................................ 68
Section 10.6. Merger, Consolidation, Sales of Assets and Other
Arrangements..................................................... 69
Section 10.7. Transactions with Affiliates............................... 70
Section 10.8. Plans...................................................... 70
Section 10.9. Fiscal Year................................................ 71
Section 10.10. Margin Regulations........................................ 71
ARTICLE 11. DEFAULT............................................................... 71
Section 11.1. Events of Default.......................................... 71
Section 11.2. Remedies................................................... 74
Section 11.3. Rights Cumulative.......................................... 75
ARTICLE 12. THE AGENT............................................................. 76
Section 12.1. Authorization and Action................................... 76
Section 12.2. Administrative Agent's Reliance, Etc....................... 76
Section 12.3. NationsBank as Lender...................................... 77
Section 12.4. Lender Credit Decision, Etc................................ 77
Section 12.5. Knowledge of Default....................................... 78
Section 12.6. Indemnification............................................ 79
Section 12.7. Successor Administrative Agent............................. 79
ARTICLE 13. MISCELLANEOUS......................................................... 80
Section 13.1. Notices.................................................... 80
Section 13.2. Expenses................................................... 81
Section 13.3. Setoff..................................................... 82
Section 13.4. Litigation/Jurisdiction/Other Matters/Waivers.............. 82
Section 13.5. Assignability and Participations........................... 83
Section 13.6. Amendments................................................. 85
Section 13.7. Nonliability of Administrative Agent, Arranger and
Lenders.......................................................... 86
Section 13.8. Information................................................ 86
Section 13.9. Indemnification............................................ 87
Section 13.10. Survival.................................................. 89
Section 13.11. Titles and Captions....................................... 89
Section 13.12. Severability of Provisions................................ 90
Section 13.13. Governing Law............................................. 90
Section 13.14. Counterparts.............................................. 90
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C> <C>
Section 13.15. Obligations with Respect to Loan Parties.................. 90
Section 13.16. Independent Nature of Lenders' Rights..................... 90
Section 13.17. No Fiduciary Relationship................................. 90
Section 13.18. Limitation of Liability................................... 91
Section 13.19. Entire Agreement.......................................... 91
Section 13.20. Construction.............................................. 91
Annex I List of Lenders, Commitments, Credit Percentages and Lending Offices
</TABLE>
-iv-
<PAGE> 6
THIS CREDIT AGREEMENT dated as of June 26, 1998 by and among ASA
HOLDINGS, INC., a corporation organized under the laws of the State of Georgia
(the "Borrower"), the Lenders named herein and NATIONSBANK, N.A., as Issuing
Bank and as Administrative Agent.
WHEREAS, the Agent and the Lenders desire to make available to the
Borrower certain financial accommodations on the terms and conditions contained
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
ARTICLE 1. DEFINITIONS
SECTION 1.1. DEFINITIONS.
In addition to terms defined elsewhere herein, the following terms
shall have the following meanings for the purposes of this Agreement:
"Absolute Rate" shall have the meaning assigned to such term in Section
3.3.
"Adjusted Interest Coverage Ratio" means, with respect to the Borrower
and its Subsidiaries, the ratio of (i) Consolidated EBITDAR for the Four-Quarter
Period ending on the date of computation thereof to (ii) the sum of: (a)
Consolidated Net Interest Expense for such Four-Quarter Period plus (b)
Consolidated Rental Expense for such Four-Quarter Period; provided, however,
that if a Work Stoppage has occurred during a Four-Quarter Period, the Borrower
shall be permitted to calculate the Adjusted Interest Coverage Ratio using the
Consolidated EBITDAR of any four quarters during the Six-Quarter Period ending
on the date that such Four-Quarter Period ends, and the Consolidated Net
Interest Expense and Consolidated Rental Expense of the same four fiscal
quarters selected by the Borrower for calculating Consolidated EBITDAR.
"Adjusted LIBO Rate" means, for any LIBOR Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100th of 1%) determined by the Administrative Agent to be equal to the
quotient obtained by dividing (i) LIBOR for such LIBOR Loan for such Interest
Period by (ii) 1 minus the Reserve Requirement for such LIBOR Loan for such
Interest Period.
"Administrative Agent" means NationsBank, N.A., as agent for the
Lenders under the terms of this Agreement, and any successor agent.
"Affiliate" means (i) any Person: (a) directly or indirectly
controlling, controlled by, or under common control with, the Borrower or any
Subsidiary thereof; (b) directly or indirectly owning or holding five percent
(5%) or more of any equity interest in the Borrower or any Subsidiary thereof;
or (c) five percent (5%) or more of whose voting stock or other equity interest
is directly or indirectly owned or held by the Borrower,
<PAGE> 7
(ii) Delta Air Lines, Inc. or any Subsidiary or Affiliate thereof, or (iii) any
officer or director of the Borrower or any Subsidiary thereof. For purposes of
this definition, "control" (including with correlative meanings, the terms
"controlling", "controlled by" and "under common control with") means the
possession directly or indirectly of the power to direct or cause the direction
of the management and policies of a Person, whether through the ownership of
voting securities or by contract or otherwise.
"Agent" means the Administrative Agent.
"Agreement" means this Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"Agreement Date" means the date as of which this Agreement is dated.
"Alternative Rating Agency" has the meaning assigned to such term in
the definition of "Applicable Margin" in Section 1.1. hereof.
"Applicable Law" means all applicable laws, including all applicable
provisions of constitutions, statutes, rules, ordinances, regulations and orders
of all Governmental Authorities and all orders, rulings, writs and decrees of
all courts, tribunals and arbitrators.
"Applicable Margin" means, for each LIBOR Loan, that percent per annum
set forth below which shall be (i) determined based upon the rating of each
class of the Borrower's long-term, senior unsecured Indebtedness including,
without limitation, Indebtedness hereunder (the "Rated Debt") assigned by S&P
(the "Debt Rating") as specified below and (ii) applicable to all LIBOR Loans
existing on and after the first date a specific Debt Rating is effective and
continuing until, but not including, the date any change in such Debt Rating is
effective (the "Debt Rating Date"):
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
DEBT RATING/ APPLICABLE MARGIN FOR
CONSOLIDATED FUNDED DEBT TO CAPITALIZATION LIBOR LOANS
RATIO
--------------------------------------------------------------------------
<S> <C>
BBB+ or higher/ Less than or equal to .40 to 1.00 0.250%
--------------------------------------------------------------------------
BBB/Greater than .40 to 1.00 but less than or
equal to .55 to 1.00 0.275%
--------------------------------------------------------------------------
BBB-/Greater than .55 to 1.00 but less than or
equal to .65 to 1.00 0.350%
--------------------------------------------------------------------------
BB+ or lower/Greater than .65 to 1.00 0.550%
--------------------------------------------------------------------------
</TABLE>
In the event S&P shall not make a rating of any class of Rated Debt,
the above calculations shall be made based on the rating provided by a
nationally recognized securities rating agency selected by the Agent, which
shall be substituted for S&P (the
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<PAGE> 8
"Alternative Rating Agency"), of the Rated Debt and the Alternative Rating
Agency's equivalent rating levels shall be substituted for the Debt Rating
levels of S&P, provided further, that in the event that no Alternative Rating
Agency shall make a rating of each class of Rated Debt, the Applicable Margin
shall be the percentage rate set forth above corresponding to the Consolidated
Funded Debt/Capitalization Ratio of the Borrower in effect at such time. If the
Applicable Margin is to be determined using the Consolidated Funded
Debt/Capitalization Ratio, the Applicable Margin shall initially be that
corresponding to the Consolidated Funded Debt/Capitalization Ratio as at the end
of the most recent fiscal quarter of the Borrower, as determined pursuant to an
officer's certificate delivered to the Administrative Agent. Thereafter, the
Consolidated Funded Debt/Capitalization Ratio shall be determined by the
Administrative Agent promptly after the receipt of the financial statements
required to be delivered by the Borrower pursuant to Section 9.1 and 9.2, as
applicable, and any adjustment to the Applicable Margin shall be effective on
and as of the date on ("the "Adjustment Date") which the quarterly (or annual)
financial statements are required to be delivered to the Administrative Agent;
provided, however, that, with respect to any LIBOR Loans outstanding on the
Adjustment Date, no such adjustment shall be made to the Applicable Margin
relating to such LIBOR Loan until the end of the Interest Period then in effect
for such LIBOR Loan..
Furthermore, and notwithstanding any of the foregoing, at any time the
Borrower, pursuant to the proviso set forth in the definition of "Adjusted
Interest Coverage Ratio", is permitted to, and in fact elects to, calculate the
Adjusted Interest Coverage Ratio utilizing a Six-Quarter Period by reason of the
occurrence of a Work Stoppage, the Applicable Margin shall be the percentage
rate set forth above corresponding to the BB+ Debt Rating during such time. Such
Applicable Margin shall take effect upon the date the Borrower delivers to the
Administrative Agent a compliance certificate pursuant to Section 9.3 hereof
that so indicates, that the Borrower has the elected to utilize a Six-Quarter
Period as set forth in such proviso. Such Applicable Margin shall be in effect
until the date for Borrower deliver a subsequent compliance certificate
indicating that it no longer makes such election.
"Appraisal" shall mean a "desk-top" appraisal report prepared by AVITAS
(or such other nationally recognized aircraft appraisal firm selected by the
Administrative Agent) and dated on or about the date of the delivery thereof.
Such report will not include a physical inspection of the aircraft, engines or
maintenance records, and will assume the equipment is half-life in its
maintenance cycle and shall determine fair market value in accordance with the
definition thereof promulgated by the International Society of Transport
Aircraft Trading.
"Arranger" means NationsBanc Montgomery Securities LLC.
"ASA" shall mean Atlantic Southeast Airlines, Inc. and its successors
and assigns.
"Asset Sale" shall mean the sale (including any transaction that has
the economic effect of a sale), transfer or other disposition by the Borrower or
any Subsidiary to any Person (other than the Borrower or another Subsidiary) of
(a) any capital stock of any
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<PAGE> 9
Subsidiary or (b) any other assets of the Borrower or any Subsidiary (other than
inventory, obsolete or worn out assets and scrap, in each case disposed of in
the ordinary course of business).
"Assignment Agreement" has the meaning given that term in Section
13.5.(c).
"Available Revolving Commitment" means, on any date of determination
thereof: (a) the Revolving Commitment in effect on such date minus (b) the sum
of: (i) the aggregate outstanding principal amount of all Loans on such date,
(ii) the aggregate Stated Amount of all Letters of Credit outstanding on such
date and (iii) the aggregate amount of Reimbursement Obligations unpaid on such
date (other than any such Reimbursement Obligations to be paid on such date).
"Base Rate" means, for any day, the rate per annum equal to the higher
of: (a) the Federal Funds Rate for such day plus one-half of one percent (0.5%)
per annum or (b) the Prime Rate for such day. Any change in the Base Rate due to
a change in the Prime Rate or the Federal Funds Rate, as the case may be, shall
be effective on the effective date of such change in the Prime Rate or Federal
Funds Rate, as the case may be.
"Base Rate Loans" means Loans bearing interest at a rate based on the
Base Rate.
"Beneficiary" means any third Person designated by the Borrower to whom
the Issuing Bank is to make payment or on whose order payment is to be made
under a Letter of Credit.
"Board of Directors" means, as to any Person, the board of directors of
such Person (or management body having a similar function) or any duly
authorized committee thereof.
"Borrower" has the meaning set forth in the introductory paragraph
hereof and shall include the Borrower's successors and permitted assigns.
"Borrowing" means a borrowing by the Borrower of Loans pursuant to
Section 2.2. or Article 3.
"Business Day" means any day other than a Saturday, Sunday or other day
on which banks in Atlanta, Georgia or New York, New York are authorized or
required to close.
"Business Unit" means the assets constituting the business or a
division or operating unit thereof of any Person.
"Capitalized Lease Obligation" means, with respect to any Person at any
time of determination, the obligations of such Person under a lease that are
required to be classified and accounted for as capital lease obligations in
accordance with GAAP, and
-4-
<PAGE> 10
the amount of such obligations at any date shall be the capitalized amount
of such obligations at such date determined in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interest (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means: (i) securities issued, guaranteed or insured
by the United States or any of its agencies with maturities of not more than one
year from the date acquired; (ii) certificates of deposit with maturities of not
more than one year from the date acquired issued by a U.S. federal or state
chartered commercial bank of recognized standing, which has capital and
unimpaired surplus in excess of $1 billion and which bank or its holding company
has a short-term commercial paper rating of at least A-2 or the equivalent by
Standard & Poor's Ratings Services, a division of McGraw-Hill, Inc. or at least
P-2 or the equivalent by Moody's Investors Services, Inc.; (iii) reverse
repurchase agreements with terms of not more than seven days from the date
acquired, for securities of the type described in (i) above and entered into
only with commercial banks having the qualifications described in (ii) above;
(iv) commercial paper or finance company paper issued by any Person incorporated
under the laws of the United States or any state thereof and rated at least A-2
or the equivalent thereof by Standard & Poor's Ratings Services, a division of
McGraw-Hill, Inc. or at least P-2 or the equivalent thereof by Moody's Investors
Services, Inc., in each case with maturities of not more than one year from the
date acquired; and (v) investments in money market funds registered under the
Investment Company Act of 1940, which have net assets of at least $1 billion and
at least eighty-five percent (85%) of whose assets consist of securities and
other obligations of the type described in clauses (i) through (iv) above.
"Collateral" means, collectively, all property of the Borrower or any
Subsidiary or any other Person (including any Eligible Fixed Asset Collateral)
in which the Administrative Agent or any Lender is granted a lien as security
for all or any portion of the Obligations.
"Collateral Account" means a special interest bearing deposit account
maintained with the Issuing Bank and under the sole dominion and control of the
Issuing Bank.
"Commitment" means, as to each Lender, such Lender's obligation to make
Syndicate Loans hereunder in an amount up to, but not exceeding, the amount set
forth for such Lender on Annex I as such Lender's "Initial Commitment Amount",
as the same may be reduced from time to time pursuant to Section 2.16.
"Competitive Bid Borrowing Notice" has the meaning set forth in Section
3.5.
-5-
<PAGE> 11
"Competitive Bid Loan" shall mean a loan made by a Lender to the
Borrower pursuant to Article 3.
"Competitive Bid Note" has the meaning set forth in Section 5.7.
"Competitive Bid Quote" shall mean an offer from a Lender pursuant to
Section 3.3. to make a Competitive Bid Loan.
"Competitive Bid Quote Request" shall have the meaning given such term
in Section 3.2. hereof.
"Consolidated EBIT" means, with respect to the Borrower and its
Subsidiaries for any period of computation thereof, the sum of, without
duplication, (a) Consolidated Net Income of the Borrower and its Subsidiaries
for such period plus (b) to the extent deducted in determining Consolidated Net
Income, Consolidated Interest Expense of the Borrower and its Subsidiaries for
such period (excluding intercompany items) minus (c) to the extent added in
determining Consolidated Net Income, consolidated interest income of the
Borrower and its Subsidiaries for such period (excluding intercompany items)
plus (d) to the extent deducted in determining Consolidated Net Income, all
income taxes of the Borrower and its Subsidiaries paid or accrued during such
period, all in accordance with GAAP.
"Consolidated EBITDAR" means, with respect to the Borrower and its
Subsidiaries for any period of computation thereof, the sum of, without
duplication, (a) Consolidated EBIT for such period plus (b) to the extent
deducted in determining Consolidated Net Income: (i) amortization expense of the
Borrower and its Subsidiaries for such period plus (ii) depreciation expense of
the Borrower and its Subsidiaries for such period plus (iii) Consolidated Rental
Expense during such period, all in accordance with GAAP plus (iv) all non-cash
charges and expenses that were deducted when calculating Consolidated Net
Income; provided, however, that any subsequent cash payments made with respect
to any non-cash charge or expense that was added back for purposes of
calculating Consolidated EBITDAR by virtue of this subparagraph (iv) shall be
deducted for purposes of calculating Consolidated EBITDAR during the period such
cash payment was made.
"Consolidated Funded Debt" means, on the date of any computation
thereof, with respect to the Borrower and its Subsidiaries (determined on a
consolidated basis but without duplication): (a) all indebtedness for money
borrowed of the Borrower and its Subsidiaries regardless of maturity including
all revolving and term indebtedness and all other lines of credit; (b) all
indebtedness: (i) represented by notes payable, and drafts accepted, that
represent extensions of credit; (ii) constituting obligations evidenced by
bonds, debentures, notes or similar instruments; or (iii) constituting purchase
money indebtedness, conditional sales contracts, title retention debt
instruments or other similar instruments upon which interest charges are
customarily paid or that are issued or assumed as full or partial payment for
property; (c) all Capitalized Lease Obligations under which the Borrower and/or
its Subsidiaries are obligated; (d) all reimbursement
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obligations under any standby letters of credit or acceptances (whether or not
drawings thereunder have been then presented for payment) issued for the account
of the Borrower or its Subsidiaries or under which the Borrower and its
Subsidiaries are otherwise obligated; and (e) any Guaranty by the Borrower or
any Subsidiary of any Consolidated Funded Debt described in the above
subparagraphs (a) through (d).
"Consolidated Funded Debt/Capitalization Ratio" means, with respect to
the Borrower and its Subsidiaries at the time of the computation thereof, the
ratio of (i) the sum of: (A) Consolidated Funded Debt outstanding at such time
plus (B) the product of: (x) the amount set forth as the "Minimum future lease
payments under all non-cancelable operating leases" for the fiscal year in which
this ratio is then being calculated as set forth in the Borrower's consolidated
fiscal year-end financial statements delivered to the Administrative Agent or
the Lenders pursuant to Section 9.2 for the previous fiscal year times (y) seven
(7) to (ii) the sum of (A) the amount computed in subparagraph (i) above plus
(B) Consolidated Net Worth at such time.
"Consolidated Interest Expense" means, with respect to the Borrower for
any period, the sum of (without duplication): (i) the consolidated interest
expense of the Borrower and its Subsidiaries for such period, whether paid or
accrued (including, without limitation, amortization of original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings), plus (ii) the
consolidated interest expense of the Borrower and its Subsidiaries that was
capitalized during such period (excluding any foregone interest on cash deposits
for aircraft purchase agreements), plus (iii) any interest expense on
Indebtedness of another Person that is Guaranteed by the Borrower or one of its
Subsidiaries or secured by a Lien on assets of the Borrower or one of its
Subsidiaries (whether or not such Guarantee or Lien is called upon), in each
case, on a consolidated basis and excluding intercompany items, and in
accordance with GAAP.
"Consolidated Net Income" means, with respect to the Borrower and its
Subsidiaries for any period of computation thereof, the net income (or loss) of
the Borrower and its Subsidiaries on a consolidated basis for such period (taken
as a single accounting period) determined in conformity with GAAP; provided,
however, that the following shall be excluded when determining Consolidated Net
Income: (i) the income (or loss) for such fiscal period of any Person prior to
the date such Person becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries, or such Person's
assets are acquired by the Borrower or any of its Subsidiaries; (ii) any
after-tax item of gain or loss resulting from sale, conversion, exchange or
other disposition of assets other than in the ordinary course of business
(including abandonment of reserves relating thereto); (iii) any after-tax gains
or losses on the acquisition, retirement, sale or other disposition of capital
stock and other securities of the Borrower and its Subsidiaries; (iv) the net
income of any Person, other than a Subsidiary of the Borrower, except to the
extent of cash dividends or distributions paid to the Borrower or a Wholly Owned
Subsidiary of the Borrower; (v) the cumulative effect
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of any change in accounting principles; (vi) net gains or losses on the
collection of proceeds of life insurance policies; and (vii) any write-up of any
asset.
"Consolidated Net Interest Expense" means, with respect to the
Borrower, (i) Consolidated Interest Expense for any period minus (ii) all
interest income of the Borrower and its Subsidiaries for such period, in each
case excluding intercompany items and calculated in accordance with GAAP.
"Consolidated Net Worth" means, with respect to the Borrower and its
Subsidiaries, the Borrower's consolidated total shareholder's equity (including
capital stock, additional paid-in capital and retained earnings, after deducting
treasury stock) which would appear as such on a balance sheet of such Person
prepared in accordance with GAAP (determined on a consolidated basis and
excluding intercompany items and excluding any upward adjustments after the
Agreement Date due to revaluation of assets).
"Consolidated Rental Expense" means, with respect to the Borrower and
its Subsidiaries for any period, the aggregate amount of all payments (including
as such all payments which the lessee is obligated to make to the lessor on
termination of the lease or surrender of the leased property) payable by the
Borrower or any of its Subsidiaries, as lessee or sublessee under any lease of
personal property or real property and shall include any amounts required to be
paid by the Borrower or any of its Subsidiaries (whether or not designated as
rents or additional rents) to the lessor on account of maintenance, repairs,
insurance, taxes and similar charges during such period.
"Continue", "Continuation" and "Continued" shall refer to the
continuation of a LIBOR Loan from one Interest Period to the next Interest
Period pursuant to Section 2.6.
"Continuing Directors" means, as of the date of determination, any
member of the Board of Directors of the Borrower who (i) was a member of such
Board of Directors on the Agreement Date or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Convert", "Conversion" and "Converted" shall refer to the conversion
of a Loan of one Type into a Loan of another Type pursuant to Section 2.6.
"Credit Event" means any of the following: (a) the making (or deemed
making) of any Loan; (b) the Conversion or Continuation of a Loan; and (c) the
issuance of a Letter of Credit.
"Credit Percentage" means, as to each Lender, the ratio, expressed as a
percentage, of (a) the amount of such Lender's Commitment to (b) the aggregate
amount of the Commitments of all Lenders hereunder; provided, however, that if
at the time of determination the Commitments have terminated or been reduced to
zero, the "Credit Percentage" of each Lender shall be the Credit Percentage of
such Lender in effect immediately prior to such termination or reduction.
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"Date of Issuance" means the date of issuance by the Issuing Bank of a
Letter of Credit under this Agreement.
"Debt Rating" has the meaning assigned to such term in the definition
of "Applicable Margin" in Section 1.1. hereof.
"Debt Rating Date" has the meaning assigned to such term as in the
definition of "Applicable Margin" in Section 1.1. hereof.
"Default" means any of the events specified in Section 11.1., whether
or not there has been satisfied any requirement for the giving of notice, the
lapse of time, a determination of materiality or the happening of any other
condition.
"Defaulting Lender" has the meaning set forth in Section 2.3.(c).
"Dollars" or "$" means the lawful currency of the United States of
America.
"Drawing" means a drawing by a Beneficiary under any Letter of Credit.
"Effective Date" means the later of: (a) the Agreement Date; and (b)
the date on which all of the conditions precedent set forth in Section 6.1.
shall have been fulfilled or waived in writing by the Requisite Lenders.
"Eligible Assignee" means (i) a Lender; (ii) an affiliate of a Lender
having a tangible net worth, or combined capital and surplus, of at least $1
billion; and (iii) any other Person approved by the Administrative Agent and the
Borrower; provided, however, that (a) the approval of the Borrower shall not be
unreasonably withheld or delayed and such approval shall be deemed given by the
Borrower if no objection is received by the assigning Lender and the
Administrative Agent from the Borrower within five (5) Business Days after
notice of such proposed assignment has been provided by the assigning Lender to
the Borrower; (b) the approval of the Administrative Agent and the Borrower
shall not be required if an Event of Default has occurred and is continuing at
the time any assignment is effected in accordance with Section 13.5.; and (c)
neither the Borrower nor an affiliate of the Borrower shall qualify as an
Eligible Assignee.
"Eligible Fixed-Asset Collateral" shall mean aircraft, aircraft engines
and related aircraft parts (and other equipment of the Borrower and its
Subsidiaries that is acceptable to the Administrative Agent and the Requisite
Lenders) and where, in each case, good and marketable title thereto shall be
vested in the Borrower and/or such Subsidiaries and the Borrower and/or such
Subsidiaries shall own such Eligible Fixed-Asset Collateral free and clear of
any Lien and such Eligible Fixed-Asset Collateral shall not be subject to any
lease, conditional sale agreement or other agreement affecting title thereto.
"Environmental Laws" means any Applicable Law relating to environmental
protection or the manufacture, storage, disposal or clean-up of Hazardous
Materials
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including, without limitation, the following: Clean Air Act, 42 U.S.C. ss. 7401
et seq; Federal Water Pollution Control Act, 33 U.S.C. ss. 1251 et seq.; Solid
Waste Disposal Act, 42 U.S.C. ss. 6901 et seq.; Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq.; National
Environmental Policy Act, 42 U.S.C. ss. 4321 et seq.; regulations of the
Environmental Protection Agency and any applicable rule of common law and any
judicial interpretation thereof relating primarily to the environment or
Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
in effect from time to time, or any successor law.
"ERISA Affiliate" means any entity required at any relevant time to be
aggregated with the Borrower or any Subsidiary under Sections 414(b) or (c) of
the Internal Revenue Code. In addition, for purposes of any provision of this
Agreement that relates to Section 412(n) of the Internal Revenue Code, the term
ERISA Affiliate shall mean any entity aggregated with the Borrower or any
Subsidiary under Sections 414(b), (c), (m) or (o) of the Internal Revenue Code.
"Event of Default" means any of the events specified in Section 11.1.,
provided that any requirement for notice or lapse of time or any other condition
has been satisfied.
"Existing Consolidated Funded Debt" means the Consolidated Funded Debt
of the Borrower and its Subsidiaries outstanding as of the Agreement Date and
set forth on Schedule 1.1(a) attached hereto.
"Existing Liens" means Liens on the property and assets of the Borrower
and its Subsidiaries in existence as of the Agreement Date and described on
Schedule 1.1(b) hereof.
"Expiration Date" means, as to any Letter of Credit, the date set forth
in such Letter of Credit as the date by which the Beneficiary must have
presented such Letter of Credit, drafts, and any required documents for payment,
acceptance or negotiation in accordance with the terms of such Letter of Credit.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to NationsBank on such
day on such transactions as determined by the Administrative Agent.
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"Fee Letters" has the meaning set forth in Section 5.16.
"Fees" means the fees and commissions provided for or referred to in
Sections 5.14., 5.15. and 5.16. and any other fees payable by the Borrower
hereunder or under any other Loan Document.
"Foreign Lender" means any Lender organized under the laws of a
jurisdiction other than the United States of America or any state thereof.
"Four-Quarter Period" means the previous four full consecutive fiscal
quarters of the Borrower ending on the day of any computation of any ratio
contained herein.
"GAAP" means generally accepted accounting principles in the United
States generally outlined in Statements on Auditing Standards No. 69 entitled
"The Meaning of 'Present Fairly in Conformity with Generally Accepted Accounting
Principles in the Independent Auditors Reports'" issued by the Auditing
Standards Board of the American Institute of Certified Public Accountants.
Unless otherwise agreed, references to GAAP herein shall be to GAAP as in effect
on the Agreement Date.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, bureau or entity (including, without limitation, the
Federal Deposit Insurance Corporation, the Comptroller of the Currency or the
Federal Reserve Board, any central bank or any comparable agency or authority)
or any arbitrator with authority to bind a party at law.
"Guarantor" means, as of the Agreement Date, ASA Investments, Inc. and
ASA, and after the Agreement Date, each other Material Subsidiary required to
execute and deliver a Guaranty pursuant to Section 8.9.
"Guaranty", "Guaranteed" or to "Guarantee" as applied to any
Indebtedness means and includes:
(a) a guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), directly or
indirectly, in any manner, of any part or all of any Indebtedness; or
(b) an agreement, direct or indirect, contingent or otherwise, and
whether or not constituting a guaranty, the practical effect of which is to
assure the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such Indebtedness whether by:
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(i) the purchase of securities or obligations;
(ii) the purchase, sale or lease (as lessee or lessor) of
property or the purchase or sale of services primarily for the purpose
of enabling the obligor with respect to such Indebtedness to make any
payment or performance (or payment of damages in the event of
nonperformance) of or on account of any part or all of such
Indebtedness, or to assure the owner of such Indebtedness against loss;
(iii) the supplying of funds to or in any other manner
investing in the obligor with respect to such Indebtedness;
(iv) repayment of amounts drawn down by beneficiaries of
letters of credit (including Letters of Credit); or
(v) the supplying of funds to or investing in a Person on
account of all or any part of such Person's Indebtedness under a
Guaranty of any obligation or indemnifying or holding harmless, in any
way, such Person against any part or all of such Indebtedness.
As the context requires, "Guaranty" shall also mean each guaranty executed and
delivered by each Material Subsidiary pursuant to Section 8.9.
"Hazardous Materials" means all or any of the following: (a) substances
that are defined or listed in, or otherwise classified pursuant to, any
applicable Environmental Laws as "hazardous substances", "hazardous materials",
"hazardous wastes", "toxic substances" or any other formulation intended to
define, list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity or
"TLCP" toxicity, "EP" toxicity; (b) oil, petroleum or petroleum derived
substances, natural gas, natural gas liquids or synthetic gas and drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources; (c)
any flammable substances or explosives or any radioactive materials; and (d)
asbestos in any form or electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million.
"Indebtedness" as applied to a Person means, without duplication, (a)
Consolidated Funded Debt and all other items which in accordance with GAAP would
be included in determining total liabilities as shown on the liability side of a
balance sheet of such Person as at the date as of which Indebtedness is to be
determined, and (b) any Guaranty of any obligation described in subparagraph (a)
above executed by such Person or under which such Person is obligated.
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"Interest Period" means:
(a) for each LIBOR Loan, the period commencing on the date of the
Borrowing, Conversion or Continuation of such LIBOR Loan and ending on the last
day of the period selected by the Borrower pursuant to this clause (a). The
duration of each Interest Period for a LIBOR Loan shall be one, two, three or
six months, in each case as the Borrower may, in an appropriate Notice of
Syndicate Borrowing, Notice of Continuation or Notice of Conversion, select. In
no event shall an Interest Period for a LIBOR Loan extend beyond the Termination
Date. Whenever the last day of any Interest Period for a LIBOR Loan would
otherwise occur on a day other than a LIBOR Business Day, the last day of such
Interest Period for such LIBOR Loan shall be extended to occur on the next
succeeding LIBOR Business Day; provided, however, that if such extension would
cause the last day of such Interest Period for such LIBOR Loan to occur in the
next following calendar month, the last day of such Interest Period for such
LIBOR Loan shall occur on the next preceding LIBOR Business Day; and
(b) for each Competitive Bid Loan, the period commencing on the
date of the Borrowing of such Competitive Bid Loan and ending on the last day of
the period selected by the Borrower pursuant to this clause (b). The duration of
each Interest Period for a Competitive Bid Loan shall be a period of not less
than 7 and not more than 180 days commencing on a Business Day selected by the
Borrower pursuant to Section 3.2. In no event shall an Interest Period for a
Competitive Bid Loan extend beyond the Termination Date. Whenever the last day
of any Interest Period for a Competitive Bid Loan would otherwise occur on a day
other than a Business Day, the last day of such Interest Period for such
Competitive Bid Loan shall be extended to occur on the next succeeding Business
Day.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended or any successor federal tax code.
"Investment" means, with respect to any Person and whether or not such
investment constitutes a controlling interest in such Person:
(a) the purchase or other acquisition of any share of capital
stock, evidence of Indebtedness or other security issued by any other Person;
(b) the purchase or acquisition of the assets of another Person
not in the ordinary course of business;
(c) any loan, advance or extension of credit to, or contribution
(in the form of money or goods) to the capital of, any other Person, excluding
trade credit;
(d) any Guaranty of the Indebtedness of any other Person;
(e) any other investment in any other Person (including the
entering of any joint venture or partnership (whether as a general or limited
partner)); and
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<PAGE> 19
(f) any commitment or option to make an Investment in any other
Person.
"Issuing Bank" means NationsBank, N.A., and its successors and assigns.
"Issuing Bank Fees" has the meaning set forth in Section 5.15.
"L/C Commitment Amount" equals $5,000,000.
"Lender" means each of the financial institutions from time to time
identified as Lenders on the then current Annex I attached hereto, including any
Lender who makes Competitive Bid Loans, together with its respective successors
and permitted assigns.
"Lending Office" means, for each Lender and for each Type of Loan, the
"Lending Office" of such Lender (or affiliate of such Lender) designated for
such Type of Loan on the signature pages hereof or such other office of such
Lender (or an affiliate of such Lender) as such Lender may from time to time
specify to the Administrative Agent and the Borrower by written notice in
accordance with the terms hereof as the office by which its Loans of such Type
are to be made and maintained.
"Letter of Credit" means a standby letter of credit issued, or deemed
issued, by the Issuing Bank pursuant to Section 2.10. or 2.11.
"Letter of Credit Facility" means the facility described in Sections
2.10. through 2.13. pursuant to which the Letters of Credit are to be issued.
"Letter of Credit Request" has the meaning set forth in Section
2.11.(a).
"LIBOR" means, for any LIBOR Loan for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two LIBOR Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period. If for any reason such rate is not
available, the term "LIBOR" shall mean, for any LIBOR Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two LIBOR Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).
"LIBOR Business Day" means any day on which banks are scheduled to be
open for business and quoting interest rates for Dollar deposits on the London
interbank market and which is also a Business Day.
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"LIBOR Loans" means Syndicate Loans that bear interest at rates based
upon the Adjusted LIBO Rate.
"Lien" as applied to the property of any Person means: (a) any security
interest, encumbrance, mortgage, deed to secure debt, deed of trust, pledge,
lien, charge or lease constituting a Capitalized Lease Obligation, conditional
sale or other title retention agreement, or other security title or encumbrance
of any kind in respect of any property of such Person, or upon the income or
profits therefrom; (b) any arrangement, express or implied, under which any
property of such Person is transferred, sequestered or otherwise identified for
the purpose of subjecting the same to the payment of Indebtedness or performance
of any other obligation in priority to the payment of the general, unsecured
creditors of such Person; and (c) the filing of, or any agreement to give, any
financing statement under the Uniform Commercial Code or its equivalent in any
jurisdiction.
"Loan Document" means this Agreement, each of the Notes, each of the
Guaranties, each Security Document and each other document or instrument now or
hereafter executed and delivered by a Loan Party in connection with or pursuant
to this Agreement, the Revolving Credit Facility or the Letter of Credit
Facility.
"Loan Party" means each of the Borrower, each Guarantor, each other
Person who guarantees all or a portion of the Obligations and/or who pledges any
Collateral.
"Loans" means, collectively, the Syndicate Loans and the Competitive
Bid Loans; and "Loan" means any Syndicate Loan or any Competitive Bid Loan.
"Material Adverse Change" means, with respect to any Person, a material
adverse change in such Person's business, assets, liabilities, financial
condition, results of operations or business prospects; provided, however, that
the occurrence of a labor dispute or a Work Stoppage will not in itself
constitute a Material Adverse Change.
"Material Adverse Effect" means, with respect to any Person, a material
adverse effect upon (a) such Person's business, assets, liabilities, financial
condition, results of operations or business prospects (provided, that the
occurrence of a labor dispute or Work Stoppage will not in itself constitute a
Material Adverse Effect); (b) the rights and remedies of the Lenders, the
Issuing Bank and the Administrative Agent under the Loan Documents, or the
ability of the Borrower or any Subsidiary to perform its obligations under the
Loan Documents to which it is a party, as applicable; or (c) the legality,
validity or enforceability of any Loan Documents. Unless otherwise set forth
herein, any reference to a "Material Adverse Effect" shall be a reference to the
effect on the Borrower and its Subsidiaries, taken as a whole.
"Material Subsidiary" means each Subsidiary of the Borrower, now
existing or hereafter established or acquired, that has or acquires total assets
in excess of $1,000,000 or that accounted or produced more than 5% of
Consolidated EBITDAR of the Borrower during any of the three most recently
completed fiscal years of the Borrower.
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"Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 4001(a)(3) of ERISA to which contributions have been made by the
Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA.
"NationsBank" means NationsBank, N.A., in its individual capacity and
not as an Agent.
"Non-Material Subsidiary" means any Subsidiary of the Borrower that
does not constitute a Material Subsidiary.
"Notes" means, collectively, the Syndicate Notes and the Competitive
Bid Notes; and "Note" means each Syndicate Note and each Competitive Bid Note.
"Notice of Continuation" means a notice in the form of Exhibit B to be
delivered to the Administrative Agent pursuant to Section 2.6. evidencing the
Borrower's request for the Continuation of a LIBOR Loan.
"Notice of Conversion" means a notice in the form of Exhibit C to be
delivered to the Administrative Agent pursuant to Section 2.6. evidencing the
Borrower's request for the Conversion of a Loan from one Type to another Type.
"Notice of Syndicate Borrowing" means a notice in the form of Exhibit
A-1 to be delivered to the Administrative Agent pursuant to Section 2.2.
evidencing the Borrower's request for a Borrowing of Syndicate Loans.
"Obligations" means, individually and collectively: (a) all Loans and
the obligation of the Borrower to repay the same and the accrued interest
thereon in accordance with this Agreement; (b) all Reimbursement Obligations;
and (c) all other present and future indebtedness, liabilities, obligations,
covenants and duties of the Borrower and the other Loan Parties owing to the
Agent, the Issuing Bank and/or the Lenders of every kind, nature and
description, under or in respect of this Agreement or any of the other Loan
Documents including, without limitation, the Fees and indemnification
obligations, whether direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any promissory note.
"Outstanding Credit" means, at any given time, the sum of: (a) the
aggregate principal amount of Loans (including all Syndicate Loans and all
Competitive Bid Loans) outstanding at such time plus (b) the aggregate Stated
Amount of all Letters of Credit outstanding at such time plus (c) the aggregate
amount of all unpaid Reimbursement Obligations outstanding at such time.
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
agency.
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<PAGE> 22
"Payment Date" means any date the Issuing Bank disburses funds under a
Letter of Credit to or on the order of a Beneficiary in response to a Drawing.
"Permitted Liens" means, as to any Person: (a) Liens securing taxes,
assessments and other charges or levies imposed by any Governmental Authority,
or judgments, the entry of which do not constitute and Event of Default
hereunder, or the claims of materialmen, mechanics, carriers, warehousemen or
landlords for labor, materials, supplies or rentals incurred in the ordinary
course of business which are not delinquent or which are being contested in good
faith; (b) Liens consisting of deposits or pledges made, in the ordinary course
of business, in connection with, or to secure payment of, obligations under
workmen's compensation, unemployment insurance or similar Applicable Laws; (c)
Liens consisting of encumbrances in the nature of zoning restrictions,
easements, and rights or restrictions of record on the use of real property,
which do not materially detract from the value of such property or impair the
use thereof in the business of such Person; (d) Existing Liens not required to
be terminated pursuant to Section 6.1.; (e) Purchase Money Liens and Liens
constituting Capital Lease Obligations but only to the extent the Indebtedness
secured by such Liens is permitted pursuant to Section 10.2.(c) and (d); (f)
Liens on aircraft, aircraft engines and related aircraft parts and equipment so
long as, (i) immediately after giving effect to the granting of any such Lien,
the Borrower and its Subsidiaries are in compliance with Section 8.11. hereof
and (ii) the Indebtedness secured by such Liens is permitted pursuant to Section
10.2. hereof and (g) Liens securing claims, other than those described in
clauses (a) through (f), not in excess of $2,000,000.
"Person" means an individual, corporation, partnership (general,
limited or limited liability), limited liability company, association, trust or
unincorporated organization, or a government or any agency or political
subdivision thereof.
"Plan" means an employee benefit or pension plan maintained for
employees of the Borrower, any of the other Loan Parties or any affiliate
thereof that is covered by Title IV of ERISA, or subject to minimum funding
standards under Section 412 of the Internal Revenue Code, including such plans
as may be established after the Agreement Date.
"Prime Rate" means the per annum rate of interest established from time
to time by NationsBank as its prime rate, which rate may not be the lowest rate
of interest charged by NationsBank to its customers.
"Principal Office" means the main office of the Administrative Agent
located at 101 North Tryon Street, 15th Floor, Charlotte, North Carolina
28255-0001, Attention: Margaret Rhodes, or any other office which the
Administrative Agent may designate as such in a written notice to the Borrower
and the Lenders.
"Purchase Money Debt" means any Indebtedness incurred at the time of or
within 180 days prior to or after the acquisition of any property (other than
inventory) for the purpose of financing all or any part of the purchase price
thereof.
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"Purchase Money Lien" means a Lien on any item of equipment acquired
after the Agreement Date; provided, however, that: (a) such Lien shall attach
only to the equipment to be acquired; (b) the Purchase Money Debt incurred in
connection with such acquisition shall not exceed the amount of the purchase
price of such item of equipment then being financed and any related expenses;
and (c) such Lien shall secure only such Purchase Money Debt.
"Quarterly Dates" means the last day of each fiscal quarter of the
Borrower, the first of which shall be June 30, 1998. The Borrower agrees that
the fiscal quarters of the Borrower shall be set in a manner such that the
fiscal year of the Borrower shall be divided into four periods of relatively
equal length.
"Rated Debt" has the meaning assigned to such term in the definition of
"Applicable Margin" in Section 1.1 hereof.
"Reimbursement Obligation" means the absolute, unconditional and
irrevocable obligation of the Borrower to reimburse the Issuing Bank for any
Drawing pursuant to Section 2.12.
"Reportable Event" has the meaning set forth in Section 4043(b) of
ERISA, but shall not include a Reportable Event as to which the provision for 30
days' notice to the PBGC is waived under applicable regulations.
"Requisite Lenders" means (a) so long as no Event of Default has
occurred and is continuing, Lenders whose combined Credit Percentages equal or
exceed 66 2/3% and (b) during the continuance of an Event of Default, Lenders
who, on a combined basis, hold at least 66 2/3% of the Outstanding Credit.
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against "Eurocurrency
liabilities" (as such term is used in Regulation D of the Board of Governors of
the Federal Reserve System). Without limiting the effect of the foregoing, the
Reserve Requirement shall reflect any other reserves required to be maintained
by such member banks with respect to (i) any category of liabilities which
includes deposits by reference to which the Adjusted LIBO Rate is to be
determined, or (ii) any category of extensions of credit or other assets which
include LIBOR Loans. The Adjusted LIBO Rate shall be adjusted automatically on
and as of the effective date of any change in the Reserve Requirement.
"Restricted Payment" means: (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of the
Borrower or any of its Subsidiaries now or hereafter outstanding, except a
dividend payable solely in shares of that class of stock to the holders of that
class; (b) any redemption, conversion, exchange,
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retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of the Borrower
or any of its Subsidiaries now or hereafter outstanding; and (c) any payment
made to retire, or to obtain the surrender of, any outstanding warrants, options
or other rights to acquire shares of any class of stock of Borrower or any of
its Subsidiaries now or hereafter outstanding.
"Revolving Commitment" means $100,000,000, as the same may be reduced
from time to time pursuant to the terms of this Agreement.
"Revolving Credit Facility" means the loan and letter of credit
facility described in Article 2.
"S&P" means Standard & Poor's Rating Group, a division of McGraw-Hill
Companies, Inc.
"Security Documents" means, collectively, any and all agreements,
instruments, financing statements, mortgages, filings, recordations and other
documents, pursuant to which the Borrower or any Subsidiary shall grant or
convey to the Administrative Agent and/or the Lenders a Lien in property as
security for all or any portion of the Obligations, as any of them may be
amended, modified or supplemented from time to time.
"Security Event" means the occurrence and continuance of a Work
Stoppage for a period of greater than 60 consecutive days.
"Six-Quarter Period" means the previous six full consecutive fiscal
quarters of the Borrower ending on the day of any computation of any ratio
contained herein.
"Solvent" means, when used with respect to any Person, that (a) the
fair value and the fair salable value of its assets (excluding any Indebtedness
due from any Affiliate of such Person) are each in excess of the fair valuation
of its total liabilities (including all contingent liabilities); and (b) such
Person is able to pay its debts or other obligations in the ordinary course as
they mature and (c) that the Person has capital not unreasonably small to carry
on its business and all business in which it proposes to be engaged.
"Stated Amount" means the amount available to be drawn by a Beneficiary
under a Letter of Credit from time to time, as the Stated Amount of any such
Letter of Credit may be increased or reduced from time to time in accordance
with the terms of such Letter of Credit.
"Statement of Funds Flow" has the meaning set forth in Section 6.1.
"Subsidiary" means (i) a Person of which an aggregate of 50% or more of
the issued and outstanding capital stock of any class or classes having by the
terms thereof ordinary voting power to elect the directors (or other management
personnel) of such Person or 50% or more of other voting or equity interests is
owned of record, directly or beneficially, by another Person, or by one or more
Subsidiaries of such other Person, or
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by such other Person and one or more Subsidiaries of such Person and (ii) any
other Person whose financial statements are required to be consolidated with the
Borrower in accordance with GAAP.
"Syndicate Loan" means a loan made by a Lender to the Borrower pursuant
to Section 2.1.
"Syndicate Note" has the meaning set forth in Section 5.7.
"Termination Date" means June 26, 2003.
"Termination Event" means (a) the filing of a notice of intent to
terminate a Plan or the treatment of a Plan amendment as a termination under
Section 4041 of ERISA; (b) the institution of proceedings to terminate a Plan by
the PBGC under Section 4042 of ERISA, or the appointment of a trustee to
administer any Plan; (c) the withdrawal of the Borrower, any Subsidiary or any
ERISA Related Party from a Plan during a plan year in which such employer was a
"substantial employer" as defined in ERISA Section 4001(a)(2); (d) the partial
or complete withdrawal from a Multiemployer Plan within the meaning of ERISA
Section 4203 and 4205; or (e) an event that could result in the Borrower, its
Subsidiaries or any ERISA Related Party providing security as required by
Internal Revenue Code Section 401(a)(29).
"Transaction Costs" shall mean, with respect to a given transaction,
all reasonable brokerage and investment banking fees, fees and expenses of
appraisers and accountants, fees and disbursements of legal counsel and other
reasonable out-of-pocket costs and expenses incurred by Borrower or a Subsidiary
(or required to be paid by Borrower or a Subsidiary) in connection with such
transaction.
"Type" with respect to any Syndicate Loan, refers to whether such Loan
is a LIBOR Loan or Base Rate Loan.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person of which all of the issued and outstanding capital stock is owned by such
Person or a Wholly Owned Subsidiary of such Person.
"Work Stoppage" means any strikes, slow downs, walkouts or other labor
disputes resulting in a cessation of all or a material portion of the flight
operations of the Borrower and its Subsidiaries.
"Year 2000 Compliant" has the meaning assigned to such term in Section
7.1 hereof.
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SECTION 1.2. GENERAL.
Unless otherwise indicated, all accounting terms, ratios and
measurements shall be interpreted or determined in accordance with GAAP in
effect as of the Agreement Date. When determining the "Minimum future lease
payments under all non-cancelable operating leases" for purposes of this
Agreement, the Borrower shall use the same manner and method as that used in the
most recent year-end audited financial statements delivered to the
Administrative Agent prior to the Agreement Date. References in this Agreement
to "Sections", "Articles", "Exhibits" and "Schedules" are to sections, articles,
exhibits and schedules herein and hereto unless otherwise indicated. References
in this Agreement to any document, instrument or agreement (a) shall include all
exhibits, schedules and other attachments thereto, (b) shall include all
documents, instruments or agreements issued or executed in replacement thereof,
and (c) shall mean such document, instrument or agreement, or replacement or
predecessor thereto, as amended, modified or supplemented from time to time and
in effect at any given time. Wherever from the context it appears appropriate,
and pronouns stated in the masculine, feminine or neuter gender shall include
the masculine, the feminine and the neuter. Unless explicitly set forth to the
contrary, a reference to "Subsidiary" means a Subsidiary of the Borrower or a
Subsidiary of such Subsidiary and a reference to an "Affiliate" means a
reference to an Affiliate of the Borrower. Unless otherwise indicated, all
references to time are references to Eastern Standard Time or Eastern Daylight
Savings Time, as the case may be.
ARTICLE 2. SYNDICATE LOAN AND LETTER OF CREDIT FACILITY
SECTION 2.1. SYNDICATE LOANS.
Subject to Section 5.1 and the other terms and conditions hereof, and
in reliance upon the representations and warranties of the Borrower set forth
herein, during the period from the Effective Date to but excluding the
Termination Date, each Lender severally and not jointly agrees to make Syndicate
Loans to the Borrower in an aggregate principal amount at any one time
outstanding up to, but not exceeding, the Revolving Commitment times such
Lender's Credit Percentage. Subject to the terms and conditions of this
Agreement, during the period from the Effective Date to the Termination Date,
the Borrower may borrow, repay and reborrow Syndicate Loans hereunder.
SECTION 2.2. BORROWINGS OF SYNDICATE LOANS.
Each Borrowing of Syndicate Loans shall be in an aggregate minimum
amount of $5,000,000 and integral multiples of $1,000,000 in excess of that
amount. The Borrower shall give the Administrative Agent written notice pursuant
to a Notice of Syndicate Borrowing or telephonic notice of each Borrowing of a
Syndicate Loan. Any such telephonic notice shall include all information to be
specified in a written Notice of Syndicate Borrowing and shall be promptly
confirmed in writing by the Borrower pursuant to a Notice of Syndicate Borrowing
sent to the Administrative Agent by facsimile transmission on the same day of
such telephonic notice. The Administrative Agent will promptly transmit by
facsimile transmission the Notice of Syndicate
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Borrowing (or the information contained in such Notice of Syndicate Borrowing)
to each Lender. The Notice of Syndicate Borrowing shall specify the aggregate
principal amount of Syndicate Loans to be borrowed from the Lenders pursuant to
the Notice of Syndicate Borrowing, the Type of Loans, and the proposed date such
Syndicate Loans are to be borrowed. Each Notice of Syndicate Borrowing shall be
delivered to the Administrative Agent before 11:00 a.m. (a) in the case of LIBOR
Loans, on the date three LIBOR Business Days prior to the proposed date of such
Borrowing and (b) in the case of Base Rate Loans, on the date of the proposed
Borrowing. Each Notice of Syndicate Borrowing or telephonic notice of each such
Borrowing shall be irrevocable once given and binding on the Borrower.
SECTION 2.3. DISBURSEMENTS OF SYNDICATE LOANS.
(a) No later than 12:00 noon on the date specified in the Notice
of Syndicate Borrowing, each Lender will make available for the account of its
applicable Lending Office to the Administrative Agent at its Principal Office,
in immediately available funds, the Syndicate Loan to be made by such Lender
using the wiring instructions for the Administrative Agent set forth on Annex I
or as otherwise directed by the Administrative Agent. With respect to Syndicate
Loans to be made after the Effective Date, unless the Administrative Agent shall
have been notified by any Lender prior to the specified date of Borrowing of a
Syndicate Loan that such Lender does not intend to make available to the
Administrative Agent the Syndicate Loan to be made by such Lender on such date,
the Administrative Agent may assume that such Lender will make the proceeds of
such Syndicate Loan available to the Administrative Agent on the date of the
requested Borrowing as set forth in the Notice of Syndicate Borrowing and the
Administrative Agent may, in reliance upon such assumption (but shall not be
obligated to), make available to the Borrower the amount of such Syndicate Loan
to be provided by such Lender.
(b) Provided that the applicable conditions set forth in Article
6. for such Borrowing of Syndicate Loans are fulfilled, the Administrative Agent
will make the proceeds of such Borrowing of Syndicate Loans available to the
Borrower at the account specified by the Borrower in such Notice of Syndicate
Borrowing.
(c) If, with respect to Syndicate Loans to be made after the
Effective Date: (i) a Lender (such Lender being hereinafter referred to as a
"Defaulting Lender") does not make the amount of such Lender's Syndicate Loan
available to the Administrative Agent (including any Syndicate Loan to be made
pursuant to Section 2.12.); (ii) such Lender has not notified the Administrative
Agent that it will not make such amount available to the Administrative Agent;
and (iii) the Administrative Agent has nevertheless made available to the
Borrower the amount of the Syndicate Loan to be provided by such Lender, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Defaulting Lender. If such Defaulting Lender does not pay such
corresponding amount immediately upon the Administrative Agent's demand, the
Administrative Agent shall promptly notify the Borrower and the Borrower shall
promptly (but in no event later than one Business Day after such demand) pay
such corresponding amount to the Administrative Agent. The Administrative Agent
shall also
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be entitled to recover from such Defaulting Lender interest on such
corresponding amount for each day from the date such amount was made available
by the Administrative Agent to the Borrower to the date such amount is recovered
by the Administrative Agent at a rate per annum equal to the applicable Federal
Funds Rate. The Administrative Agent shall be entitled to recover from the
Borrower the amount of interest accruing on such amount of such Syndicate Loan
at the rate therefor in accordance with its Type; provided, however, any amount
paid by the Defaulting Lender pursuant to the immediately preceding sentence
shall reduce the amounts owed by the Borrower under this sentence. The
Administrative Agent shall also be entitled to recover from the Borrower and
such Defaulting Lender an amount equal to any costs (including reasonable legal
expenses) and losses incurred as a result of the failure of such Defaulting
Lender to provide such amount as provided in this Agreement. Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its
commitments hereunder or to prejudice any rights which the Borrower may have
against any Defaulting Lender, including, without limitation, the right of the
Borrower to seek reimbursement from any Defaulting Lender for any amounts paid
by the Borrower under this Section because of such Defaulting Lender's default.
If the Borrower and the Defaulting Lender fail to reimburse the Administrative
Agent as provided above, in addition to the rights the Administrative Agent may
have under Applicable Law or under this Agreement, the Administrative Agent
shall be subrogated to the rights of such Defaulting Lender under this Agreement
to the extent of such failure and shall thereafter (until such Defaulting Lender
shall so reimburse the Administrative Agent) be entitled to the percentage of
voting rights of such Defaulting Lender under this Agreement.
SECTION 2.4. REPAYMENT OF SYNDICATE LOANS.
Unless payable earlier pursuant to the terms of this Agreement, the
Borrower shall repay the outstanding principal balance of all Syndicate Loans,
and all accrued but unpaid interest and fees thereon, on the Termination Date.
SECTION 2.5. SEVERAL OBLIGATIONS.
No Lender shall be responsible for the failure of any other Lender to
make a Loan to be made by such other Lender hereunder and the failure of any
Lender to make a Loan to be made by it hereunder shall not relieve the
obligation of each other Lender to make any Loan to be made by such other
Lender.
SECTION 2.6. CONTINUATION AND CONVERSION OF SYNDICATE LOANS.
(a) So long as no Event of Default shall have occurred and be
continuing, the Borrower may on any LIBOR Business Day, with respect to any
LIBOR Loan, elect to maintain such LIBOR Loan or any portion thereof as a LIBOR
Loan by selecting a new Interest Period for such LIBOR Loan. Each new Interest
Period selected under this Section for a Syndicate Loan shall commence on the
last day of the immediately preceding Interest Period for such Syndicate Loan.
Each selection of a new Interest Period shall be made by the Borrower's giving
of a Notice of Continuation not later than 12:00 noon on the third LIBOR
Business Day prior to the date of any such Continuation
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to the Administrative Agent. Promptly after receipt of a Notice of Continuation,
the Administrative Agent shall notify each Lender by telex or telecopy, or other
similar form of transmission of the proposed Continuation. Such notice by the
Borrower of a Continuation shall be by telephone or telecopy, confirmed
immediately in writing if by telephone, in the form of a Notice of Continuation,
specifying (a) the date of such Continuation, (b) the LIBOR Loan and portion
thereof subject to such Continuation and (c) the duration of the selected
Interest Period, all of which shall be specified in such manner as is necessary
to comply with all limitations on Syndicate Loans outstanding hereunder. Upon
receipt of a Notice of Continuation, the Administrative Agent shall determine
the Adjusted LIBO Rate and promptly notify the Borrower and the Lenders by
telephone (promptly confirmed in writing by telecopier) or in writing by
telecopier. Each Notice of Continuation shall be irrevocable by and binding on
the Borrower once given. If the Borrower shall fail to select in a timely manner
a new Interest Period for any LIBOR Loan in accordance with this Section, such
Loan will automatically, on the last day of the current Interest Period
therefore, Convert into a Base Rate Loan notwithstanding failure of the Borrower
to comply with Section 2.2. At such time as an Event of Default has occurred and
is continuing, and unless all Loans have been accelerated pursuant to Article 11
hereof, LIBOR Loans may continue to be outstanding but such Loans shall be
automatically converted into Base Rate Loans and shall accrue interest as
provided in Section 5.6 hereof.
(b) So long as no Event of Default shall have occurred and be
continuing, the Borrower may on any Business Day, upon the Borrower's giving of
a Notice of Conversion to the Administrative Agent, Convert the entire amount of
all or a portion of a Loan of one Type into a Loan of another Type. Promptly
after receipt of a Notice of Conversion, the Administrative Agent shall notify
each Lender by telex or telecopy, or other similar form of transmission of the
proposed Conversion. Any Conversion of a LIBOR Loan into a Base Rate Loan shall
be made on, and only on, the last day of an Interest Period for such LIBOR Loan.
Each such Notice of Conversion shall be given not later than 12:00 noon on the
Business Day prior to the date of any proposed Conversion into Base Rate Loans
and on the third LIBOR Business Day prior to the date of any proposed Conversion
into LIBOR Loans. Subject to the restrictions specified above, each such notice
by the Borrower of a Conversion shall be by telephone or telecopy, confirmed
immediately in writing if by telephone, in the form of a Notice of Continuation
specifying (a) the requested date of such Conversion, (b) the Type of Loan to be
Converted, (c) the portion of such Type of Loan to be Converted, (d) the Type of
Loan such Loan is to be Converted into and (e) if such Conversion is into a
LIBOR Loan, the requested duration of the Interest Period of such Loan. Each
Notice of Conversion shall be irrevocable by and binding on the Borrower once
given. Each Conversion from a Base Rate Loan to a LIBOR Loan shall be in an
aggregate amount for the Loans of all Lenders of not less than $5,000,000 or
integral multiples of $1,000,000 in excess of that amount. Upon receipt of a
Notice of Conversion, the Administrative Agent shall determine the Adjusted LIBO
Rate or the Base Rate, as the case may be, and promptly notify the Borrower and
the Lenders by telephone (promptly confirmed in writing by telecopier) or in
writing by telecopier.
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SECTION 2.7. UNAVAILABILITY OF CERTAIN LOANS; ILLEGALITY.
(a) If on or prior to the first day of any Interest Period for any
LIBOR Loan, the Administrative Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the London interbank or
other relevant market, adequate and reasonable means do not exist for
ascertaining LIBOR for such Interest Period, then the Administrative Agent shall
give the Borrower prompt notice thereof, and so long as such condition remains
in effect, the Lenders shall be under no obligation to make additional LIBOR
Loans, Continue LIBOR Loans, or to Convert Base Rate Loans into LIBOR Loans and
the Borrower shall, on the last day(s) of the then current Interest Period(s)
for the outstanding LIBOR Loans, either prepay such LIBOR Loans or Convert such
Loans into Base Rate Loans in accordance with the terms of this Agreement.
(b) Notwithstanding any other provision of this Agreement, in the
event that it becomes unlawful for any Lender or its Lending Office to make,
maintain, or fund LIBOR Loans hereunder, then such Lender shall promptly notify
the Borrower and the Administrative Agent thereof and such Lender's obligation
to make or Continue LIBOR Loans and to Convert Base Rate Loans into LIBOR Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund LIBOR Loans (in which case the provisions of Section 2.8. shall be
applicable).
SECTION 2.8. TREATMENT OF AFFECTED LOANS.
If the obligation of any Lender to make or Continue a LIBOR Loan, or to
Convert Base Rate Loans into LIBOR Loans shall be suspended pursuant to Section
2.6., 2.7. or 5.17. (such Loans being herein called "Affected Loans"), such
Lender's Affected Loans shall be automatically Converted into Base Rate Loans on
the last day(s) of the then current Interest Period(s) for Affected Loans (or,
in the case of a Conversion required by Section 2.7., on such earlier date as
such Lender may specify to the Borrower with a copy to the Administrative Agent)
and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 2.7. or 5.17. that gave rise to such
Conversion no longer exist (or in the case of Section 2.6., the applicable Event
of Default has been cured or waived pursuant to the terms hereof):
(a) to the extent that such Lender's Affected Loans have been so
Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender's Affected Loans shall be applied instead to its Base
Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such
Lender as LIBOR Loans shall be made or Continued instead as Base Rate Loans, and
all Loans of such Lender that would otherwise be Converted into LIBOR Loans
shall be Converted instead into (or shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the
Administrative Agent) that the circumstances specified in Section 2.7. or 5.17.
hereof that gave rise to the Conversion of such Lender's Affected Loans pursuant
to this Section 2.8. no longer exist (which such Lender agrees to do promptly
upon such circumstances ceasing to exist) (or
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in the case of Section 2.6., the applicable Event of Default has been cured or
waived pursuant to the terms hereof) at a time when LIBOR Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding LIBOR Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding LIBOR Loans and by such
Lender are held pro rata (as to principal amounts, Types, and Interest Periods)
in accordance with their respective Commitments.
SECTION 2.9. COMPENSATION.
Upon the request of any Lender, the Borrower shall pay to such Lender,
such amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any actual loss, cost or expense incurred by such
Lender as a result of:
(a) any payment, mandatory or optional prepayment or Conversion of
a LIBOR Loan for any reason (including, without limitation, acceleration or by
reason of a mandatory prepayment pursuant to Section 10.6.) on a date other than
the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any of the applicable conditions precedent specified
in Article 6. to be satisfied) to borrow, Continue, Convert or prepay a LIBOR
Loan on the date for such borrowing, Continuation, Conversion or prepayment
under this Agreement.
Such compensation shall include, without limitation, an amount equal
any actual funding losses incurred by such Lender and such Lender's normal
administrative charges, if any, associated with such payment, prepayment,
Conversion or failure to borrow. Any determination of the amount of such loss,
cost or expense shall be conclusive absent manifest error.
SECTION 2.10. LETTERS OF CREDIT/LENDERS' PARTICIPATION.
(a) Subject to the terms and conditions of this Agreement, the
Issuing Bank, on behalf of the Lenders, agrees to issue and amend (including,
without limitation, to extend or renew) for the account of the Borrower for the
period from and including the Effective Date to, but excluding, the Termination
Date one or more standby letters of credit in such form and containing such
terms as may be requested from time to time by the Borrower and acceptable to
the Issuing Bank up to a maximum aggregate Stated Amount at any one time
outstanding equal to the L/C Commitment Amount; provided, however, that the
initial Stated Amount of any Letter of Credit issued pursuant to this Section
shall not exceed the Available Revolving Commitment at the time of such
issuance.
(b) Subject to the terms and conditions of this Agreement,
including subsection (a) above, at the time of issuance, the terms and
conditions of each Letter of Credit, and of any drafts or acceptances
thereunder, shall be subject to approval by the Issuing Bank. The Expiration
Date of all Letters of Credit issued hereunder shall not be
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later than the earlier to occur of: (i) the date 364 days from the date of
issuance or (b) the date two Business Days prior to the Termination Date.
Accordingly, each Letter of Credit containing an evergreen renewal provision
shall also contain a provision pursuant to which, notwithstanding any other
provisions thereof, it shall have a final Expiration Date no later than two
Business Days prior to the Termination Date.
(c) Immediately upon the issuance (or deemed issuance) by the
Issuing Bank of any Letter of Credit in accordance with the procedures set forth
in this Section, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from the Issuing Bank, without recourse
or warranty, an undivided interest and participation to the extent of such
Lender's Credit Percentage of the liability of the Issuing Bank with respect to
such Letter of Credit (including, without limitation, all obligations of the
Borrower with respect thereto, other than amounts owing to the Issuing Bank
consisting of fronting fees) and any security therefor or guaranty pertaining
thereto. Accordingly, each Lender severally agrees that it shall be
unconditionally and irrevocably liable, without regard to the occurrence of any
Default or Event of Default or any condition precedent whatsoever, to the extent
of such Lender's Credit Percentage, to reimburse the Issuing Bank on demand in
immediately available funds in Dollars for the amount of each Drawing paid by
the Issuing Bank under each Letter of Credit issued by the Issuing Bank to the
extent such amount is not reimbursed by the Borrower pursuant to Section 2.12.;
provided, however, that the Lenders shall not be obligated to so reimburse the
Issuing Bank in the event that the Issuing Bank's honoring of such Drawing
constitutes gross negligence or willful misconduct (as determined by a court of
competent jurisdiction). The failure of any Lender to honor its obligations
hereunder shall not relieve any other Lender of its duty to honor its
obligations hereunder.
(d) Each payment made by a Lender pursuant to the immediately
preceding subsection (c) shall be paid to the Administrative Agent for the
account of the Issuing Bank at the Principal Office of the Administrative Agent
and shall be treated as the purchase by such Lender of a participating interest
in the Borrower's Reimbursement Obligation under Section 2.12.(a) in an amount
equal to such payment. Each Lender, so long as it has made the payment required
to be made by it pursuant to such subsection, shall share in accordance with its
Credit Percentage in any interest which accrues pursuant to Section
2.12.(a)(ii). All amounts recovered by the Issuing Bank hereunder or under any
other Loan Document and which are applied by the Issuing Bank to the
Reimbursement Obligations of the Borrower under Section 2.12. and any letter of
credit fee paid by the Borrower pursuant to the first sentence of Section 5.15.
shall be distributed by the Issuing Bank to the Lenders who have made the
payments required to be made by them pursuant to paragraph (c) above pro rata in
accordance with their respective Credit Percentages.
(f) In addition to other remedies the Issuing Bank may have under
Applicable Law and under this Agreement, if and to the extent that any Lender
shall fail to make available to the Issuing Bank the amount required to be paid
by such Lender pursuant to the immediately preceding subsection (c), the Issuing
Bank shall be subrogated to the rights of such Lender under this Agreement to
the extent of such failure and shall
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thereafter (until such Lender shall make such amount available to the Issuing
Bank) be entitled to the percentage of voting rights of such Lender under this
Agreement. If any Lender fails to reimburse the Issuing Bank as provided in such
subsection, such unreimbursed amount shall bear interest from the due date
thereof until such amount is paid at the Federal Funds Rate, such interest to be
payable by such Lender upon demand therefor by the Issuing Bank.
SECTION 2.11. METHOD OF ISSUANCE OF LETTERS OF CREDIT.
(a) The Borrower shall give the Issuing Bank and the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) at least five Business Days prior to the requested Date of Issuance of
a Letter of Credit, such notice to be in substantially the form of Exhibit D (a
"Letter of Credit Request"). The Borrower shall also execute and deliver such
customary letter of credit application forms as requested from time to time by
the Issuing Bank.
(b) Provided the Borrower has given the notice prescribed by the
immediately preceding subsection and subject to the other terms and conditions
of this Agreement, including without limitation the satisfaction of any
applicable conditions precedent set forth in Article 6., the Issuing Bank shall
issue the requested Letter of Credit on the requested Date of Issuance as set
forth in the applicable Letter of Credit Request on behalf of the Lenders for
the benefit of the stipulated Beneficiary and shall deliver the original of such
Letter of Credit to the Beneficiary at the address specified in the applicable
Letter of Credit Request. Upon the written request of the Borrower, the Issuing
Bank shall deliver to the Borrower a copy of each issued Letter of Credit within
a reasonable time after the Date of Issuance thereof.
(c) The Issuing Bank shall deliver to each Lender, upon the
written request of a Lender, a copy of each Letter of Credit issued hereunder
and any other information with respect to each Letter of Credit then outstanding
or in connection with any Drawing thereunder. Promptly following the end of each
calendar quarter, the Issuing Bank shall deliver to the Administrative Agent,
and upon the request of any Lender the Administrative Agent shall deliver to
each Lender, a notice describing the aggregate undrawn amount of all Letters of
Credit as at the end of such quarter. Other than as set forth in this
subsection, neither the Administrative Agent nor the Issuing Bank shall have any
duty to notify the Lenders regarding the issuance or other matters regarding
Letters of Credit issued hereunder. The failure of the Issuing Bank to perform
its requirements under this subsection shall not relieve the Lenders'
reimbursement obligations under Section 2.10.(c).
SECTION 2.12. LETTER OF CREDIT REIMBURSEMENT.
(a) The Borrower hereby agrees to pay to the Issuing Bank at the
office designated by the Issuing Bank (and if no office is designated by the
Issuing Bank, to the Administrative Agent for the account of the Issuing Bank at
the Principal Office of the Administrative Agent):
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(i) On each Payment Date, an amount in Dollars equal to
the amount paid by the Issuing Bank under the applicable Letter of
Credit; and
(ii) If any Drawing shall be reimbursed to the Issuing
Bank after 2:00 p.m. on the Payment Date, interest on any and all
amounts required to be paid pursuant to subsection (i) above from and
after the due date thereof until payment in full, payable on demand, at
an annual rate of interest equal to the Base Rate plus the Applicable
Margin for Base Rate Loans.
(b) The Borrower shall reimburse the Issuing Bank for each Drawing
under any Letter of Credit in the following manner:
(i) the Borrower shall immediately reimburse the Issuing
Bank in accordance with subsection (a) above; or
(ii) (A) if the Borrower has not reimbursed the Issuing
Bank pursuant to subsection (a) above and (B) the applicable conditions
set forth in Article 6. have been fulfilled and (C) the Available
Revolving Commitment in effect at such time exceeds the amount of the
Drawing to be reimbursed, with the proceeds of a Syndicate Loan; or
(iii) pursuant to Section 5.11., either the Issuing Bank or
the Administrative Agent may debit any deposit account of the Borrower
maintained with the Issuing Bank or the Administrative Agent and
appropriate and apply an amount of funds in such account equal to the
Reimbursement Obligations outstanding at such time.
(c) The Issuing Bank shall notify the Administrative Agent and the
Borrower of each Drawing as promptly as practical following receipt by the
Issuing Bank of such Drawing; provided, however, that failure to so notify the
Administrative Agent and the Borrower of such Drawing shall not affect the
rights of the Issuing Bank, or the obligations of the Borrower, under any Loan
Document.
(d) Unless the Borrower notifies the Issuing Bank and the
Administrative Agent to the contrary, the Borrower shall be deemed to have
requested that a Drawing be reimbursed with the proceeds of a Syndicate Loan in
the amount of such Drawing. Upon any Drawing, the Administrative Agent shall
notify the Lenders if the Borrower has elected (or deemed to have elected) to
reimburse the Issuing Bank using the proceeds of Syndicate Loans. Upon receipt
of such notice and if the applicable conditions set forth in subsection (b)(ii)
above have been satisfied, each Lender agrees to deliver to the Administrative
Agent for the account of the Issuing Bank its pro rata share of the amount of
Syndicate Loans necessary to reimburse the Issuing Bank for any payment made by
the Issuing Bank pursuant to such Drawing (plus any interest which may accrue on
such amount pursuant to Section 2.12.(a)(ii)) not later than one Business Day
after receipt of such notice. Unless the Borrower complies with the applicable
notice requirements as set
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forth in Section 2.2. regarding LIBOR Loans, any Syndicate Loan used to repay
any Reimbursement Obligation shall initially be a Base Rate Loan.
SECTION 2.13. NATURE OF ISSUING BANK'S DUTIES/UNCONDITIONAL NATURE OF
REIMBURSEMENT OBLIGATION.
In determining whether to honor any Drawing under any Letter of Credit,
the Issuing Bank shall be responsible only to determine that the documents and
certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit. The Borrower otherwise assumes all risks of the acts and
omissions of, or misuse of the Letters of Credit issued by the Issuing Bank by,
the respective Beneficiaries of such Letters of Credit. In furtherance and not
in limitation of the foregoing, neither the Issuing Bank nor any of the Lenders
shall be responsible for: (a) the form, validity, sufficiency, accuracy,
genuineness or legal effects of any document submitted by any party in
connection with the application for and issuance of or any drawing honored under
any Letter of Credit even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (b) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit, or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (c) the failure of the Beneficiary of any
Letter of Credit to comply fully with conditions required in order to draw upon
such Letter of Credit; (d) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telex, telecopy or
otherwise; (e) errors in interpretation of technical terms; (f) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any Letter of Credit, or of the proceeds thereof; (g) the
misapplication by the Beneficiary of any Letter of Credit or the proceeds of any
Drawing under such Letter of Credit; and (h) any consequences arising from
causes beyond the control of the Issuing Bank or the Lenders. None of the above
shall affect, impair or prevent the vesting of any of the Issuing Bank's rights
or powers hereunder. Any action taken or omitted to be taken by the Issuing Bank
under or in connection with any Letter of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create against the
Issuing Bank any liability to the Borrower or any Lender. In this connection,
the obligation of the Borrower to reimburse the Issuing Bank for any Drawing
made under any Letter of Credit shall be absolute, unconditional and irrevocable
and shall be paid strictly in accordance with the terms of this Agreement under
all circumstances including the following circumstances: (i) any lack of
validity or enforceability of any Letter of Credit or any other agreement; (ii)
the existence of any claim, set-off, defense or other right which the Borrower
or any of its Affiliates, the Issuing Bank, the Administrative Agent or any
Lender may at any time have against a Beneficiary, the Issuing Bank, the
Administrative Agent, any Lender, or any other Person, whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between the Borrower or any of
its Affiliates and the Beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
(iv) payment by the Issuing
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Bank under any Letter of Credit against presentation of a demand, draft or
certificate or other document which does not comply with the terms of such
Letter of Credit; provided, however, that, in the case of any payment by the
Issuing Bank under any Letter of Credit, the Issuing Bank has not acted with
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction) in determining that the demand for payment under such Letter of
Credit complies on its face with any applicable requirements for a demand for
payment under such Letter of Credit; (v) any other circumstance or happening
whatsoever, which is similar to any of the foregoing; or (vi) the fact that a
Default or an Event of Default shall have occurred and be continuing.
SECTION 2.14. EXPIRATION OR MATURITY DATE OF LETTERS OF CREDIT PAST
TERMINATION DATE.
If on the date (the "Facility Termination Date") this Agreement and the
Letter of Credit Facility are terminated prior to the Expiration Date of any
Letters of Credit outstanding hereunder (whether voluntarily, by reason of the
occurrence of an Event of Default or otherwise), the Borrower shall, on the
Facility Termination Date, deposit with the Issuing Bank an amount of money
equal to the Stated Amount of such Letter(s) of Credit in the Collateral
Account. If a Drawing pursuant to such Letter of Credit occurs on or prior to
the Expiration Date of such Letter of Credit but after the Facility Termination
Date, the Borrower authorizes the Issuing Bank to use the monies deposited in
the Collateral Account to make payment to the Beneficiary with respect to such
Drawing or the payee with respect to such presentment. If no Drawing occurs on
or prior to the Expiration Date of such Letter of Credit, the Issuing Bank shall
return to the Borrower the monies deposited in the Collateral Account with
respect to such outstanding Letter of Credit on or before the date thirty
Business Days after the Expiration Date with respect to such Letter of Credit.
SECTION 2.15. COLLATERAL ACCOUNT.
The Collateral Account shall be in the name of the Issuing Bank as a
cash collateral account and the Issuing Bank shall have sole dominion and
control over, and sole access to, the Collateral Account. Neither the Borrower
nor any Person claiming on behalf of or through the Borrower shall have any
right to withdraw any of the funds held in the Collateral Account. The Borrower
agrees that it will not (i) sell or otherwise dispose of any interest in the
Collateral Account or any funds held therein, or (ii) create or permit to exist
any Lien upon or with respect to the Collateral Account or any funds held
therein, except as provided in or contemplated by this Agreement. The Issuing
Bank shall exercise reasonable care in the custody and preservation of any funds
held in the Collateral Account and shall be deemed to have exercised such care
if such funds are accorded treatment substantially equivalent to that which the
Issuing Bank accords other funds deposited with the Issuing Bank, it being
understood that the Issuing Bank shall not have any responsibility for taking
any necessary steps to preserve rights against any parties with respect to any
funds held in the Collateral Account. Subject to the right of the Issuing Bank
to withdraw funds from the Collateral Account as provided herein, the Issuing
Bank shall invest funds on deposit in the Collateral Account, reinvest proceeds
of any such investments which may mature or be sold, and invest interest or
other income
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received from any such investments, in each case, in Cash Equivalents, as the
Issuing Bank may select or in such other investments as shall be agreed upon by
the Issuing Bank and the Borrower. Unless the Facility Termination Date has
occurred by reason of the occurrence of an Event of Default, the proceeds of
such investments shall be the property of the Borrower and the Issuing Bank
shall account to the Borrower for any such investments from time to time as
agreed upon by the Borrower and the Issuing Bank. However, if an Event of
Default has occurred and is continuing and any Obligations remain outstanding,
proceeds of investments shall be distributed to the Lenders pro rata in
accordance with their respective Credit Percentages at such times as the
Administrative Agent and the Issuing Bank shall reasonably designate. After
payment in full of all Obligations and/or the expiration of all Letters of
Credit and the distribution of monies contained therein to the Lenders as
provided above, the Issuing Bank shall deliver to the Borrower any monies
remaining in the Collateral Account.
SECTION 2.16. VOLUNTARY REDUCTIONS OF THE REVOLVING COMMITMENT.
The Borrower shall have the right to terminate or reduce the amount of
the Revolving Commitment at any time and from time to time without penalty or
premium upon not less than five Business Days prior written notice to the
Administrative Agent of each such termination or reduction, which notice shall
specify the effective date thereof and the amount of any such reduction (which
in the case of any partial reduction of the Revolving Commitment shall not be
less than $10,000,000 and integral multiples of $1,000,000 in excess of that
amount) and shall be irrevocable once given and effective only upon receipt by
the Administrative Agent. The Administrative Agent will promptly transmit such
notice to each Lender. The Revolving Commitment, once reduced pursuant to this
Section, shall not be increased. The Borrower shall pay all interest and Fees on
the Loans accrued to the date of such reduction or termination of the Revolving
Commitment to the Administrative Agent for the account of the Lenders.
ARTICLE 3. COMPETITIVE BID FACILITY
SECTION 3.1. COMPETITIVE BID OPTION.
Subject to Section 5.1 and the other terms and conditions hereof,
during the period from the Effective Date to but excluding the Termination Date,
the Borrower may from time to time request the Lenders to make offers to make
Competitive Bid Loans to the Borrower in Dollars. Each Lender may, but shall
have no obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section.
There may not be outstanding at any one time more than three Competitive Bid
Loans. Further, Competitive Bid Loans made pursuant to the same Competitive Bid
Quote Request and having the same Interest Period but extended by different
Lenders shall be deemed to be a single Competitive Bid Loan made hereunder. The
aggregate principal amount of Competitive Bid Loans extended by a Lender
hereunder at any time may exceed the Commitment of such Lender in effect at such
time; provided, however, that the making of Competitive Bid Loans by a Lender
shall not in any way affect, impair or reduce the obligation of such Lender to
make Syndicate Loans under Section 2.1.
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SECTION 3.2. BORROWER'S REQUEST FOR COMPETITIVE BID QUOTES.
In order to request offers to make Competitive Bid Loans, the Borrower
shall give the Administrative Agent written notice thereof in the form of
Exhibit A-2 (a "Competitive Bid Quote Request") no later than 11:00 a.m. on the
date one Business Day prior to the date of Borrowing proposed therein specifying
the following:
(a) the proposed date of Borrowing of such Competitive
Bid Loan, which shall be a Business Day;
(b) the aggregate principal amount of such Competitive
Bid Loan, which shall be at least $5,000,000 (and integral multiples of
$1,000,000 in excess thereof) but shall not cause the limits specified
in Section 5.1 to be violated;
(c) the Interest Period or Interest Periods applicable
thereto; and
(d) the date on which the Competitive Bid Quotes are to
be submitted if it is before the proposed date of Borrowing (the date
on which such Competitive Bid Quotes are to be submitted is called the
"Quotation Date").
The Borrower may request offers to make Competitive Bid Loans for up to two
different Interest Periods in a single Competitive Bid Quote Request; provided,
however, that the request for each separate Interest Period shall be deemed to
be a separate Competitive Bid Quote Request for a separate Borrowing. No
Competitive Bid Quote Request shall be made by the Borrower within five (5)
Business Days of any other Competitive Bid Quote Request. Any Competitive Bid
Quote Request that does not conform substantially to the requirements of this
Section may be rejected by the Administrative Agent and the Administrative Agent
shall promptly notify the Borrower of any such rejection.
SECTION 3.3. OFFER FOR LENDERS TO MAKE COMPETITIVE BID QUOTES.
Promptly and in any event before the close of business of the
Administrative Agent on the same Business Day of receipt of a Competitive Bid
Quote Request that is not rejected by the Administrative Agent, the
Administrative Agent shall send to each of the Lenders by telecopy a copy of the
Competitive Bid Quote Request received by the Administrative Agent, which shall
constitute an offer by the Borrower to each Lender to submit Competitive Bid
Quotes offering to make Competitive Bid Loans to which such Competitive Bid
Quote Request relates.
(a) Each Lender may, in its sole discretion, submit a
Competitive Bid Quote containing an offer or offers to make Competitive
Bid Loans in response to any Competitive Bid Quote Request; provided,
however, that, if the Borrower's request under Section 3.2. specified
more than one Interest Period, such Lender may make a single submission
containing one or more Competitive Bid Quotes for each such Interest
Period. Each Competitive Bid Quote must be received by the
Administrative Agent by telecopy not later than 10:00 a.m. on the
Quotation
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Date; provided, however, that Competitive Bid Quotes submitted by
NationsBank may only be submitted if NationsBank notifies the Borrower
of the terms of the offer or offers contained therein not later than
9:45 a.m. on the Quotation Date. Subject to terms hereof, any
Competitive Bid Quote so made shall be irrevocable once made except
with the consent of the Administrative Agent given on the instructions
of the Borrower.
(b) Each Competitive Bid Quote shall be substantially in
the form of Exhibit A-3 and shall specify:
(i) the proposed date of Borrowing thereof;
(ii) the Interest Period or Interest Periods
therefor;
(iii) the principal amount of each Competitive Bid
Loan for which each such offer is being made, which principal
amount shall be at least $5,000,000 and integral multiples of
$1,000,000 in excess thereof; provided that the aggregate
principal amount of all Competitive Bid Loans for which a
Lender submits a Competitive Bid Quote shall not exceed the
principal amount of the Competitive Bid Loan for a particular
Interest Period for which offers were requested;
(iv) the rate of interest per annum (rounded
upwards, if necessary, to the nearest 1/1,000th of 1%) offered
for each such Competitive Bid Loan (the "Absolute Rate");
(v) the minimum amount, if any, of a Competitive
Bid Loan which may be accepted by the Borrower; and
(vi) the identity of the quoting Lender.
The Administrative Agent shall reject any Competitive Bid Quote that: (A) is not
substantially in the form of Exhibit A-3 or does not specify all of the
information required by this subsection (b); (B) contains qualifying,
conditional or similar language (other than as provided in clause (v) of this
subsection (b); (C) proposes terms other than or in addition to those set forth
in the applicable Competitive Bid Quote Request; or (D) arrives after the time
specified in subsection (a) above. If any Competitive Bid Quote shall be
rejected pursuant to the immediately preceding sentence, the Administrative
Agent shall promptly notify the relevant Lender of such rejection.
SECTION 3.4. NOTICE TO BORROWER.
The Administrative Agent shall promptly upon receipt notify the
Borrower of the terms (i) of any Competitive Bid Quote submitted by a Lender
that is not rejected by the Administrative Agent and is otherwise in accordance
with Section 3.3.; and (ii) of any Competitive Bid Quote that attempts to amend
or modify a previous Competitive Bid Quote submitted by such Lender with respect
to the same Competitive Bid Quote
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Request; provided, that any such subsequent Competitive Bid Quote shall be
disregarded by the Administrative Agent unless such subsequent Competitive Bid
Quote specifically states (and the Administrative Agent so determines) that it
is submitted solely to correct a manifest error in such former Competitive Bid
Quote and such subsequent Competitive Bid Quote is received within the time
specified in Section 3.3.(a). The Administrative Agent's notice to the Borrower
shall specify the aggregate principal amount of Competitive Bid Loans for which
offers have been received for each Interest Period specified in the related
Competitive Bid Quote Request, the respective principal amounts of Absolute
Rates so offered and the amount which is required to be accepted for any
Competitive Bid Loan pursuant to Section 3.3.(b)(v).
SECTION 3.5. ACCEPTANCE AND NOTICE BY BORROWER.
Not later than 11:00 a.m. on the Quotation Date, the Borrower shall
notify the Administrative Agent in writing of its acceptance or rejection of the
offers so notified to it pursuant to Section 3.4.; provided, however, that the
failure by the Borrower to give such notice to the Administrative Agent shall be
deemed to be a rejection of all such offers. In the case of acceptance, such
notice (a "Competitive Bid Borrowing Notice") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted. The
Borrower may accept any Competitive Bid Quote in whole or in part (subject to
the terms of Section 3.3.(b)(v) and 3.2.(b)); provided that:
(a) the aggregate principal amount of each Competitive
Bid Loan may not exceed the applicable amount set forth in the related
Competitive Bid Quote Request;
(b) the aggregate principal amount of such requested
Competitive Bid Loans shall not cause the limits specified in Section
5.1 to be violated;
(c) except as provided in Section 3.6., acceptance of
offers may only be made on the basis of ascending Absolute Rates; and
(d) the Borrower may not accept any offer that is
rejected by the Administrative Agent pursuant to the terms of this
Agreement.
SECTION 3.6. ALLOCATION BY THE ADMINISTRATIVE AGENT.
If offers are made by two or more Lenders with the same Absolute Rates
for a greater aggregate principal amount than the amount in respect of which
offers are accepted for the related Interest Period, and if the Borrower elects
to accept any such offers, the principal amount of Competitive Bid Loans in
respect of which such offers are accepted shall be allocated by the
Administrative Agent among such Lenders in proportion to the aggregate principal
amount of such offers; provided, however, that no Lender shall be allocated a
portion of any Competitive Bid Loan which is less than the minimum amount which
such Lender has indicated that it is willing to accept. Allocations by the
Administrative Agent of the amounts of Competitive Bid Loans shall be conclusive
in the absence of manifest error.
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SECTION 3.7. LENDER'S OBLIGATION TO MAKE COMPETITIVE BID LOANS.
Any Lender whose offer to make any Competitive Bid Loan has been
accepted shall, not later than 12:00 noon on the date specified for the making
of such Competitive Bid Loan, make the amount of such Competitive Bid Loan
available to the Borrower on such date by depositing the same, in Dollars and in
immediately available funds, with the Administrative Agent at the Principal
Office of the Administrative Agent using the wiring instructions set forth on
such Annex I. Provided that the applicable conditions set forth in Article 6.
for Borrowing are fulfilled, the Administrative Agent will, by 2:00 p.m. on the
date of such Borrowing, make the funds so received from the Lender(s) available
to the Borrower by crediting the principal amount thereof, in immediately
available funds, to the account specified by the Borrower to the Administrative
Agent.
SECTION 3.8. REPAYMENT OF COMPETITIVE BID LOANS.
Unless payable earlier pursuant to the terms of this Agreement, the
Borrower shall repay the outstanding principal balance of, and all accrued but
unpaid interest on, each Competitive Bid Loan on the earlier of: (i) the end of
the Interest Period applicable thereto and (ii) the Termination Date.
ARTICLE 4. SECURITY
SECTION 4.1. SECURITY.
As security for the full and timely payment and performance of the
Obligations, upon the occurrence of a Security Event, the Borrower will
immediately grant, and/or shall cause one or more of the Subsidiaries of the
Borrower to grant, to the Administrative Agent, for the ratable benefit of the
Lenders, a first-priority Lien in Eligible Fixed Asset Collateral having a value
of up to $50,000,000. For purposes of this Section 4.1., Eligible Fixed Asset
Collateral shall be valued at fair market value pursuant to one or more
Appraisals. Such Lien shall automatically terminate at the end of the first full
fiscal quarter during which the Borrower is in compliance with the covenants set
forth in Section 10.1 hereof following the fiscal quarter during which the Work
Stoppage terminates and so long as no other Event of Default has occurred and is
continuing.
SECTION 4.2. FURTHER ASSURANCES.
At the request of the Administrative Agent and upon or after the
occurrence of a Security Event, the Borrower shall and shall cause all
applicable Subsidiaries to, execute such Security Documents as the
Administrative Agent shall deem necessary or appropriate to carry out the
provisions of Section 4.1 hereof and shall, and shall cause all applicable
Subsidiaries to, procure any such certificate, instrument, statement or
document, or to take such action (and pay all connected costs and expenses)
which the Administrative Agent determines necessary or appropriate from time to
time to continue or preserve the Liens granted in any Eligible Fixed-Asset
Collateral (and the perfection and priority thereof) of the Administrative Agent
contemplated hereby and by any
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Security Document. Further, upon the execution and delivery of any Security
Documents hereunder, the Borrower shall cause to be delivered to the
Administrative Agent an opinion of outside counsel to the Borrower and the
Subsidiaries regarding the due authorization, execution and delivery of such
Security Documents, the enforceability of such Security Documents, the
non-contravention of the Security Documents with the organizational documents of
the Borrower and such Subsidiaries and with the other agreements, contracts and
instruments to which the Borrower and the Subsidiaries are a party, and the due
creation, validity and perfection of the Liens in favor of the Administrative
Agent created pursuant to the Security Documents and as to such other matters as
counsel to the Administrative Agent shall reasonably request, together with
accompanying resolutions of the board of directors of the Borrower and such
Subsidiaries, all of which shall be in form and substance reasonably
satisfactory to the Administrative Agent.
SECTION 4.3. APPRAISALS.
Together with the execution of delivery of the documents described in
Section 4.2 hereof, the Borrower shall deliver to the Administrative Agent for
further distribution to the Lenders an Appraisal for each aircraft in which the
Borrower and/or its Subsidiaries has granted a Lien pursuant to Section 4.1.
Further, during the continuance of the Work Stoppage giving rise to the Security
Event, the Administrative Agent may require that the Borrower deliver an updated
Appraisal with respect to each such aircraft on a quarterly basis.
ARTICLE 5. OTHER LOAN AND PAYMENT PROVISIONS
SECTION 5.1. MAXIMUM AMOUNT OF OBLIGATIONS.
In no event shall the Outstanding Credit at any time exceed the
Revolving Commitment in effect at such time. Further, the Borrower shall not
request any Borrowing which would result in a violation of this Section.
SECTION 5.2. MANDATORY PREPAYMENT OF LOANS.
(a) If at any time the Outstanding Credit exceeds the Revolving
Commitment in effect at such time, the Borrower shall immediately pay to the
Administrative Agent for the respective accounts of the Lenders the amount of
such excess. Such payment shall be applied: first, to pay all amounts of
principal outstanding on the Syndicate Loans pro rata in accordance with the
first sentence of Section 5.12., and second, to pay all amounts of principal
outstanding on the Competitive Bid Loans pro rata in accordance with the amount
of such principal owing to the Lenders of such Loans at such time; provided,
however, that any payments to be applied to Syndicate Loans shall first be
applied to Base Rate Loans and then to LIBOR Loans in direct order of Interest
Period maturities, and the remainder, if any, shall be deposited into the
Collateral Account for application to any Reimbursement Obligations. If the
Borrower is required to pay any outstanding LIBOR Loans or Competitive Bid Loans
by reason of this Section prior to the end of the
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applicable Interest Period therefor, the Borrower shall indemnify each Lender
against the losses, costs and expenses described in Section 2.9. incurred by
such Lender.
(b) The Borrower shall make any mandatory prepayment of Loans
pursuant to certain Asset Sales as provided in Section 10.6. and the Borrower
shall indemnify each Lender against the losses, costs and expenses described in
Section 2.9. incurred by such Lender.
SECTION 5.3. VOLUNTARY PREPAYMENT OF LOANS.
The Borrower may voluntarily prepay any Loan at any time; provided,
however, that: (i) any prepayment shall be in an aggregate principal amount of
$5,000,000 and in integral multiples of $1,000,000 in excess of that amount and
(ii) in the event the Borrower prepays any LIBOR Loan or Competitive Bid Loan
prior to the end of the applicable Interest Period therefor, the Borrower shall
pay the applicable Lender(s) any amounts due under Section 2.9. Subject to the
foregoing, the Borrower may prepay any Base Rate Loan at any time without
penalty or premium.
SECTION 5.4. MAXIMUM NUMBER OF INTEREST PERIODS FOR LOANS.
There may be no more than three different Interest Periods for LIBOR
Loans outstanding at the same time. There may be no more than an aggregate of
six separate Interest Periods for all Loans outstanding at the same time.
SECTION 5.5. RATES AND PAYMENT OF INTEREST ON LOANS.
(a) Interest on LIBOR Loans. Subject to the provisions of Section
5.6., interest on each LIBOR Loan shall accrue at an interest rate per annum
during the Interest Period for such Loan equal to the Adjusted LIBO Rate for the
Interest Period in effect for such LIBOR Loan plus the Applicable Margin. All
such accrued interest shall be payable (i) on the last day of each Interest
Period with respect thereto and, if such Interest Period is longer than three
months, on each three-month "anniversary" of the first day of such Interest
Period, (ii) on the date of Conversion of such LIBOR Loan (or a portion thereof)
to another Type of Loan, (iii) upon any prepayment of such LIBOR Loan (but only
on the principal amount so prepaid) and (iv) at maturity of such Loan (and after
maturity of such Loan (whether by acceleration or otherwise) upon demand). The
Administrative Agent upon determining the Adjusted LIBO Rate and the interest
rate applicable to the Syndicate Loans hereunder for any Interest Period shall
promptly notify the Borrower and the Lenders by telephone or in writing thereof
via facsimile transmission. Each determination by the Administrative Agent of an
interest rate hereunder shall be conclusive and binding on the Lenders and the
Borrower for all purposes, absent manifest error.
(b) Interest on Base Rate Loans. Subject to the provisions of
Section 5.6., interest on each Base Rate Loan shall accrue at an interest rate
per annum equal to the Base Rate then in effect. All such accrued interest shall
be payable (i) monthly on the last
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day of each month, (ii) upon any prepayment of such Base Rate Loan (but only on
the principal amount so prepaid) and (iii) at maturity of such Base Rate Loan
(and after maturity (whether by acceleration or otherwise) upon demand).
(c) Interest on Competitive Bid Loans. Subject to the provisions
of Section 5.6., interest on each Competitive Bid Loan shall accrue at an
interest rate per annum during the Interest Period for such Competitive Bid Loan
equal to the Absolute Rate accepted by the Borrower for such Interest Period
then in effect for such Competitive Bid Loan and shall be payable (i) for each
Interest Period applicable thereto on the last day of such Interest Period and,
if such Interest Period is longer than three months, at three-month intervals
following the first day of such Interest Period, (ii) upon any prepayment of
such Competitive Bid Loan (but only on the principal amount so prepaid) and
(iii) at maturity of such Competitive Bid Loan (and after maturity (whether by
acceleration or otherwise) upon demand).
SECTION 5.6. INTEREST UPON EVENT OF DEFAULT.
If an Event of Default has occurred and is continuing, all Loans and
all other Obligations shall bear interest until paid in full at a rate per annum
that is two percent (2.0%) in excess of the Base Rate. If this Agreement or the
other Loan Documents do not specify an interest rate for a particular
Obligation, such Obligation shall, for purposes of this Section 5.6., be deemed
to be a Base Rate Loan.
SECTION 5.7. NOTES.
The obligation of the Borrower to repay the principal of and accrued
interest on the Syndicate Loans shall be evidenced by promissory notes (each a
"Syndicate Note") in substantially the form of Exhibit E-1. Each Syndicate Note
delivered to a Lender shall be dated the Agreement Date, payable to the order of
such Lender and shall be in a face amount equal to such Lender's Credit
Percentage of the Revolving Commitment as originally in effect. The obligation
of the Borrower to repay the principal of and accrued interest on the
Competitive Bid Loans shall be evidenced by promissory notes (each a
"Competitive Bid Note") in substantially the form of Exhibit E-2. Each
Competitive Bid Note delivered to a Lender shall be dated the Agreement Date and
payable to the order of such Lender.
SECTION 5.8. COMPUTATIONS.
Unless otherwise expressly set forth herein, any accrued interest on
any Loan and any Fees due hereunder shall be computed on the basis of a year of
360 days and the actual number of days elapsed.
SECTION 5.9. USURY.
In no event shall the amount of interest due or payable on the Loans
exceed the maximum rate of interest allowed by Applicable Law and, if any such
payment is paid by
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the Borrower or received by any Lender, then such excess sum shall be credited
as a payment of principal, unless the Borrower shall notify the respective
Lender in writing that the Borrower elects to have such excess sum returned to
it forthwith. It is the express intent of the parties hereto that the Borrower
not pay and the Lenders not receive, directly or indirectly, in any manner
whatsoever, interest in excess of that which may be lawfully paid by the
Borrower under Applicable Law.
SECTION 5.10. AGREEMENT REGARDING INTEREST AND CHARGES.
The parties hereto hereby agree and stipulate that the only charge
imposed upon the Borrower for the use of money in connection with this Agreement
is and shall be the interest described in Section 5.5. The parties hereto
further agree and stipulate that all agency fees, syndication fees, facility
fees, letter of credit fees, underwriting fees, default charges, late charges,
funding or "breakage" charges, increased cost charges, attorneys' fees and
reimbursement for costs and expenses paid by the Administrative Agent or any
Lender to third parties or for damages incurred by the Administrative Agent or
any Lender, are charges made to compensate the Administrative Agent or any such
Lender for underwriting or administrative services and costs or losses performed
or incurred, and to be performed or incurred, by the Administrative Agent and
the Lenders in connection with this Agreement and shall under no circumstances
be deemed to be charges for the use of money pursuant to Official Code of
Georgia Annotated Sections 7-4-2 and 7-4-18. All charges other than charges for
the use of money shall be fully earned and nonrefundable when due.
SECTION 5.11. PAYMENTS.
Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Borrower under this
Agreement, the Notes or any other Loan Document shall be made in Dollars, in
immediately available funds, without deduction (including any proposed deduction
by reason of the assertion by the Borrower that a claim, cause of action or
counterclaim may exist against the Administrative Agent the Issuing Bank or a
Lender or Lenders) or set-off, to the Administrative Agent at its Principal
Office, not later than 2:00 p.m. on the date on which such payment shall become
due (each such payment made after such time on such due date to be deemed to
have been made on the next succeeding Business Day) and shall be made in
accordance with the wiring instructions set forth for the Administrative Agent
on Annex I attached hereto or as otherwise directed by the Administrative Agent.
Subject to Sections 5.12. and 5.13., the Administrative Agent, the Issuing Bank
or any Lender for whose account any such payment is made, may (but shall not be
obligated to) debit the amount of any such payment which is not made by such
time from any special or general deposit account of the Borrower with the
Administrative Agent, the Issuing Bank or such Lender, as the case may be (with
notice to the Borrower, the other Lenders and the Administrative Agent). The
Borrower shall, at the time of making each payment under this Agreement or any
Note, specify to the Administrative Agent the amounts payable by the Borrower
hereunder to which such payment is to be applied (and in the event that it fails
to so specify, or an Event of Default has occurred and is continuing, the
Administrative Agent may apply such payment to the Loans, any Reimbursement
Obligation or any other
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obligation of the Borrower under the Loan Documents in accordance with the
direction of the Requisite Lenders). Each payment received by the Administrative
Agent for the account of the Lenders under this Agreement or any Note shall be
paid promptly to such Lender, by wire transfer of same day funds in accordance
with the wiring instructions set forth for such Lender on the Annex I attached
hereto, for the account of such Lender at the applicable Lending Office of such
Lender. In the event the Administrative Agent fails to pay such amounts to the
Lenders as provided in the previous sentence, the Administrative Agent shall pay
interest on such amount at a rate per annum equal to the Federal Funds Rate from
time to time in effect. If the due date of any payment under this Agreement or
any Note would otherwise fall on a day which is not a Business Day such date
shall be extended to the next succeeding Business Day and interest shall be
payable for the period of such extension. The Borrower agrees that all of its
payment obligations hereunder shall be absolute, unconditional and, for the
purposes of making payments hereunder, the Borrower hereby waives any right to
assert any setoff or reduction. This Section 5.11. shall not constitute or be
construed as a waiver of any existing or future claims, counterclaims or causes
of action the Borrower may allege to have against the Administrative Agent, the
Issuing Bank or any Lender. However, the assertion of the existence of any such
claim, counterclaim or cause of action shall not be invoked as a defense to
making any payment due hereunder.
SECTION 5.12. PRO RATA TREATMENT.
Unless set forth to the contrary herein, (a) each Borrowing of
Syndicate Loans, (b) each payment by the Borrower with respect to any Syndicate
Loan, (c) each other payment to be made by the Borrower or any Loan Party
hereunder or under any Loan Document in respect of the Syndicate Loans, and (d)
each voluntary reduction of the Commitments pursuant to Section 2.16., shall be
made by, or credited to the account of, the Lenders pro rata in accordance with
their respective Credit Percentages. Each payment of interest on the Syndicate
Loans made by the Borrower shall be made for the account of the Lenders pro rata
in accordance with the amounts of interest due and payable to the respective
Lenders. The fees referred to in Section 5.16. shall be for the account of only
the Administrative Agent. The Issuing Bank Fees and fronting fees shall be for
the account of only the Issuing Bank.
SECTION 5.13. SHARING OF PAYMENTS, ETC.
The Borrower agrees that, in addition to (and without limitation of)
any right of set-off, banker's lien or counterclaim a Lender, the Issuing Bank
or the Administrative Agent may otherwise have, each Lender, the Issuing Bank
and the Administrative Agent shall be entitled, at its option, to offset
balances held by it for the account of the Borrower at any of such Lender's (or
the Issuing Bank's or the Administrative Agent's) offices, in Dollars or in any
other currency, against any principal of, or interest on, any of such Lender's
Loans hereunder (or other Obligations owing to such Lender, the Issuing Bank or
the Administrative Agent hereunder) which is not paid when due (regardless of
whether such balances are then due to the Borrower), in which case such Lender,
the Issuing Bank or the Administrative Agent (as the case may be) shall promptly
notify the Borrower, all other Lenders and the Administrative Agent thereof;
provided, however, the
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failure of such Lender, the Issuing Bank or the Administrative Agent (as the
case may be) to give such notice shall not affect the validity of such offset.
If a Lender shall obtain payment of any principal of, or interest on, any Loan
made by it to the Borrower under this Agreement, or shall obtain payment on any
other Obligation owing by the Borrower or a Loan Party through the exercise of
any right of set-off, banker's lien or counterclaim or similar right or
otherwise or through voluntary prepayments directly to a Lender or other
payments made by the Borrower to a Lender not in accordance with the terms of
this Agreement and such payment, pursuant to Section 5.12., should be
distributed to the Lenders pro rata in accordance with their respective Credit
Percentages, such Lender shall promptly purchase from the other Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Syndicate Loans made by the other Lenders or other Obligations
owed to such other Lenders in such amounts, and make such other adjustments from
time to time as shall be equitable, to the end that all the Lenders shall share
the benefit of such payment (net of any reasonable expenses which may be
incurred by such Lender in obtaining or preserving such benefit) pro rata in
accordance with their respective Credit Percentages. To such end, all the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. The Borrower agrees that any Lender so purchasing a participation
(or direct interest) in the Syndicate Loans or other Obligations owed to such
other Lenders made by other Lenders may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender were a direct holder of Loans in the amount of such
participation. Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Borrower.
SECTION 5.14. FACILITY FEE.
The Borrower agrees to pay to the Administrative Agent for the account
of each Lender a facility fee for the period from the Effective Date through and
including the Termination Date on the amount of the Revolving Commitment from
time to time in effect and regardless of whether and to the extent the Revolving
Commitment is utilized hereunder. The facility fee shall be payable quarterly in
arrears on each Quarterly Date and calculated on a percentage per annum basis
using the percentage rates set forth below corresponding to the Debt Rating of
the Borrower's Rated Debt in effect at such time:
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<PAGE> 48
<TABLE>
<CAPTION>
------------------------------------------------------
DEBT RATING/ FACILITY FEE
CONSOLIDATED FUNDED DEBT TO PERCENTAGE
CAPITALIZATION RATIO
------------------------------------------------------
<S> <C>
BBB+ or higher/Less than or equal to 0.100%
.40 to 1.00
------------------------------------------------------
BBB/Greater than .40 to 1.00 but less
than or equal to .55 to 1.00 0.125%
------------------------------------------------------
BBB-/Greater than .55 to 1.00 but less
than or equal to .65 to 1.00 0.150%
------------------------------------------------------
BB+ or lower/ Greater than .65 to 1.00 0.200%
------------------------------------------------------
</TABLE>
The facility fee shall be determined by the Administrative Agent on a quarterly
basis in accordance with the provisions contained in this section. Any
adjustment to the facility fee based upon the Debt Rating shall be effective on
and after the first date a specific Debt Rating is effective and continuing
until, but not including, the date any change in such Debt Rating is effective.
In the event S&P shall not make a rating of any class of Rated Debt, the above
calculations shall be made based on the rating an Alternative Rating Agency, of
the Rated Debt and the Alternative Rating Agency's equivalent rating levels
shall be substituted for the Debt Rating levels of S&P, provided further, that
in the event that no Alternative Rating Agency shall make a rating of each class
of Rated Debt, the facility fee percentage shall be the percentage rate set
forth above corresponding to the Consolidated Funded Debt/Capitalization Ratio
of the Borrower in effect at such time. If the facility fee is to be determined
using the Consolidated Funded Debt/Capitalization Ratio, the facility fee shall
initially be that corresponding to the Consolidated Funded Debt/Capitalization
Ratio as at the end of the most recent fiscal quarter of the Borrower, as
determined pursuant to an officer's certificate delivered to the Administrative
Agent. Thereafter, the Consolidated Funded Debt/Capitalization Ratio shall be
determined by the Administrative Agent promptly after the receipt of the
financial statements required to be delivered by the Borrower pursuant to
Section 9.1 and 9.2, as applicable, and any adjustment to the facility fee shall
be effective on and as of the date on which the quarterly (or annual) financial
statements are required to be delivered to the Administrative Agent.
The facility fee hereunder shall be payable in arrears on (a) each Quarterly
Date, (b) the date of each reduction in the Revolving Commitment (but only on
the amount of the reduction), (c) on the Termination Date, (d) on the date the
Commitments are otherwise terminated or reduced to zero and (e) thereafter from
time to time on demand of the Administrative Agent.
SECTION 5.15. LETTER OF CREDIT FEES.
(a) During the period any Letter of Credit is outstanding, the
Borrower agrees to pay to the Administrative Agent, for the account of the
Lenders, a letter of credit fee
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equal to the Applicable Margin for LIBOR Loans then in effect times the Stated
Amount of each such outstanding Letter of Credit. In addition, the Borrower
agrees to pay to the Issuing Bank for its own account (and not the account of
any Lender) a fronting fee in respect of each Letter of Credit equal to
one-eighth of one percent (0.125%) multiplied times the Stated Amount of such
outstanding Letter of Credit. The foregoing fees shall be calculated on a per
annum basis and shall be paid in advance (a) on the Effective Date and (b) on
each Quarterly Date thereafter, and such fees shall be deemed fully earned when
due and non-refundable.
(b) The Borrower shall also pay directly to the Issuing Bank from
time to time on demand all commissions, charges, costs and expenses in the
amounts customarily charged by the Issuing Bank from time to time in like
circumstances with respect to the issuance of each Letter of Credit, Drawings,
amendments and other transactions relating thereto (collectively, the "Issuing
Bank Fees"). All Issuing Bank Fees shall be deemed fully earned upon the
issuance of a Letter of Credit and shall not be refundable.
SECTION 5.16. ADMINISTRATIVE AND ARRANGEMENT FEES.
The Borrower agrees to pay (a) the administrative and other fees of the
Administrative Agent as set forth in a letter agreement by and among the
Borrower, the Administrative Agent and the Arranger and (b) the fees of the
Arranger as set forth in a letter agreement among the Administrative Agent, the
Arranger and the Borrower (each of the foregoing fee letters described in this
Section, the "Fee Letters").
SECTION 5.17. INCREASED COSTS/CAPITAL ADEQUACY.
(a) If, after the Agreement Date, the adoption of any Applicable
Law or any change in any Applicable Law or any change in the interpretation or
administration thereof by any Governmental Authority or compliance by any Lender
(or its Lending Office) with any request or directive (whether or not having the
force of law) of any such Governmental Authority:
(i) shall subject such Lender (or its Lending Office) to
any tax, duty, or other charge with respect to any LIBOR Loans, such
Lender's Note, or the obligation of such Lender to make LIBOR Loans, or
change the basis of taxation of any amounts payable to such Lender (or
its Lending Office) under this Agreement or such Lender's Note in
respect of any LIBOR Loans (other than taxes imposed on the overall net
income of such Lender by the United States or any State thereof or any
other jurisdiction in which such Lender has an office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted LIBO
Rate) relating to any extensions of credit or other assets of, or any
deposits with or other liabilities or commitments of, such Lender (or
its Lending Office), including the Commitment of such Lender hereunder;
or
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(iii) shall impose on such Lender (or its Lending Office)
or the London interbank market any other condition affecting this
Agreement or such Lender's Note or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Lending Office) of making, Converting into, Continuing, or maintaining
any LIBOR Loans or to reduce any sum received or receivable by such Lender (or
its Lending Office) under this Agreement or such Lender's Note with respect to
any LIBOR Loans, then the Borrower shall pay to such Lender on demand such
amount or amounts as will compensate such Lender for such increased cost or
reduction. If any Lender requests compensation by the Borrower under this
Section 5.17., the Borrower may, by notice to such Lender (with a copy to the
Administrative Agent), suspend the obligation of such Lender to make or Continue
LIBOR Loans or to Convert Base Rate Loans into LIBOR Loans, until the event or
condition giving rise to such request ceases to be in effect (in which case the
provisions of Section 2.10. shall be applicable); provided that such suspension
shall not affect the right of such Lender to receive the compensation so
requested.
(b) If, after the Agreement Date, any Lender shall have determined
that the adoption of any Applicable Law regarding capital adequacy or any change
therein or in the interpretation or administration thereof by any Governmental
Authority, or any request or directive regarding capital adequacy (whether or
not having the force of law) of any such Governmental Authority, has or would
have the effect of increasing the amount of capital required to be maintained by
such Lender or any corporation controlling such Lender, and that increase has or
would have the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of such
Lender's obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) Each Lender shall promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
Agreement Date, which will entitle such Lender to compensation pursuant to this
Section. Any Lender claiming compensation under this Section shall furnish to
the Borrower and the Administrative Agent a statement setting forth in
reasonable detail the additional amount or amounts to be paid to it hereunder
and the basis therefor which shall be conclusive in the absence of error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
SECTION 5.18. STATEMENTS OF ACCOUNT.
The Administrative Agent will account to the Borrower quarterly with a
statement of Loans, outstanding Letters of Credit, accrued interest and Fees,
charges and payments made pursuant to this Agreement and the other Loan
Documents, and such account rendered by the Administrative Agent shall be deemed
binding upon Borrower unless the Borrower notifies the Administrative Agent in
writing within thirty days after the date
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<PAGE> 51
each statement is delivered to Borrower that the Borrower objects to the
information, calculations or items therein contained and identifies such
objections. The failure of the Administrative Agent to deliver such a statement
of accounts shall not relieve or discharge the Borrower from its obligations
hereunder.
SECTION 5.19. DEFAULTING LENDER'S STATUS.
Notwithstanding anything contained herein to the contrary, but in
addition to provisions regarding the failure of a Lender to perform its
obligations hereunder set forth elsewhere in this Agreement, so long as any
Lender shall be in default in its obligation to fund a Loan or participate to
the extent of such Lender's Credit Percentage of any Reimbursement Obligation or
shall have rejected its Commitment, then such Lender shall not be entitled to
receive any payments of principal of, or interest on, its Commitment or the
Loans or Reimbursement Obligations or its share of any commitment or other fees
payable hereunder, and for purposes of voting or consenting to matters with
respect to the Loan Documents, such Lender shall be deemed not to be a "Lender"
hereunder and such Lender's Commitment shall be deemed to be zero ($0), unless
and until (a) all other Obligations have been paid in full, (b) such failure to
fulfill its obligation to fund is cured and such Lender shall have paid, as and
to the extent provided in this Agreement, to the applicable party, such amount
then owing together with interest on the amount of funds that such Lender failed
to timely fund or (c) the Obligations under this Agreement shall have been
declared or shall have become immediately due and payable. No Commitment of any
Lender shall be increased or otherwise affected by any such failure or rejection
by any Lender. Any payments of principal or interest which would, but for this
subsection, be paid to any Lender, shall be paid to the Lenders who shall not be
in default under their respective Commitments and who shall not have rejected
any Commitment, for application to the Loans or to provide cash collateral in
such manner and order as shall be determined by the Administrative Agent.
SECTION 5.20. ADMINISTRATIVE AGENT'S RELIANCE.
Neither the Administrative Agent nor any Lender shall incur any
liability to the Borrower (nor shall the Administrative Agent incur any
liability to the Lenders) for acting upon any telephonic notice referred to in
this Agreement which the Administrative Agent believes in good faith to have
been given by a person authorized to deliver such notice or for otherwise acting
in good faith hereunder.
SECTION 5.21. TAXES.
(a) Any and all payments by the Borrower to or for the account of
any Lender, the Issuing Bank or the Administrative Agent hereunder or under any
other Loan Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all penalties, interest and other liabilities with
respect thereto, excluding, in the case of each Lender, the Issuing Bank and the
Administrative Agent, taxes imposed on its income, and franchise taxes imposed
on it, by the United States or any state thereof or any other jurisdiction under
the laws of which such Lender (or its Lending Office), the Issuing
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<PAGE> 52
Bank or the Administrative Agent (as the case may be) is organized or located or
any political subdivision thereof (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings, and liabilities being hereinafter
referred to as "Taxes"). If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable under this Agreement or any other
Loan Document to any Lender, the Issuing Bank or the Administrative Agent, (i)
the sum payable hereunder or under such other Loan Document shall be increased
as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 5.21.) such Lender, the
Issuing Bank or the Administrative Agent receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with Applicable
Law, and (iv) the Borrower shall furnish to the Administrative Agent, at its
address referred to in Section 13.1., the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise, privilege, intangible,
registration, recordation or property taxes or charges or similar levies, taxes
and charges (but excluding any income or franchise tax) which arise from any
payment made under this Agreement or any other Loan Document or from the
execution, delivery, performance and enforcement of, or otherwise with respect
to, this Agreement or any other Loan Document (hereinafter referred to as "Other
Taxes").
(c) The Borrower agrees to indemnify each Lender, the Issuing Bank
and the Administrative Agent for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or asserted by
any jurisdiction on amounts payable under this Section 5.21.) paid by such
Lender, the Issuing Bank or the Administrative Agent (as the case may be) and
any liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto. Payment of this indemnification shall be made within 30
days from the date such Lender, the Issuing Bank or the Administrative Agent
delivers a certificate to the Borrower certifying and setting forth in
reasonable detail the calculation thereof as to the amount and type of such
Taxes or Other Taxes. Any such certificate submitted by the Lender, the Issuing
Bank or the Administrative Agent in good faith to the Borrower shall, absent
error, be final, conclusive and binding on all parties.
(d) Each Foreign Lender, on or prior to the Agreement Date in the
case of each Lender listed on the signature pages hereof, and on or prior to the
date on which it becomes a Lender, in the case of each other Lender, and from
time to time thereafter if requested in writing by the Borrower or the
Administrative Agent (but only so long as such Lender remains lawfully able to
do so), shall provide the Borrower and the Administrative Agent with (i)
Internal Revenue Service Form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to full exemption under an income tax treaty to which the United States
is a party which eliminates all withholding tax on payments of interest or
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<PAGE> 53
certifying that the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United States, (ii)
Internal Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and (iii) any other form or
certificate required by any taxing authority (including any certificate required
by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that
such Lender is entitled to an exemption from or a reduced rate of tax on
payments pursuant to this Agreement or any of the other Loan Documents.
(e) For any period with respect to which a Foreign Lender has
failed to provide the Borrower and the Administrative Agent with the appropriate
form pursuant to subsection (d) above (unless such failure is due to a change in
treaty, law, or regulation occurring subsequent to the date on which a form
originally was required to be provided), such Lender shall not be entitled to
indemnification under subsection (a) or (b) above with respect to Taxes imposed
by the United States; provided, however, that should a Lender, which is
otherwise exempt from or subject to a reduced rate of withholding tax, become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Lender shall reasonably request to
assist such Lender to recover such Taxes.
(f) Within thirty (30) days after the date of any payment by the
Borrower of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent the original or a certified copy of a receipt evidencing
such payment.
(g) Without prejudice to the survival of any other covenant or
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 5.21. shall survive the termination of the
Commitments and the payment in full of the Notes and other Obligations.
SECTION 5.22. AFFECTED LENDERS.
If the Borrower is obligated to pay to any Lender any amount under
Sections 5.17. or 5.21., the Borrower may, if (i) no Event of Default then
exists and (ii) Requisite Lenders have not made a claim for indemnification
under such Section(s), replace such Lender with another lender acceptable to the
Administrative Agent, and such Lender hereby agrees to be so replaced subject to
the following:
(a) The obligations of the Borrower hereunder to the Lender to be
replaced (including such increased or additional costs incurred from the date of
notice to the Borrower of such increase or additional costs through the date
such Lender is replaced hereunder) shall be paid in full to such Lender
concurrently with such replacement;
(b) The replacement Lender shall be a bank or other financial
institution that is not seeking indemnification for the increased costs arising
under such section(s) which may have effectuated the Borrower's election to
replace any Lender hereunder, and each such replacement Lender shall execute and
deliver to the Administrative Agent such documentation satisfactory to the
Administrative Agent pursuant to which such replacement Lender is to become a
party hereto, conforming to the provisions of
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Section 13.5., with a Commitment equal to that of the Lender being replaced and
shall make Loans in the aggregate principal amount equal to the aggregate
outstanding principal amount of the Loans of the Lender being replaced;
(c) Upon such execution of such documents referred to in clause
(b) and repayment of the amounts referred to in clause (a), the replacement
lender shall be a "Lender" with a Commitment as specified hereinabove and the
Lender being replaced shall cease to be a "Lender" hereunder, except with
respect to indemnification provisions under this Agreement, which shall survive
as to such replaced Lender;
(d) The Administrative Agent shall reasonably cooperate in
effectuating the replacement of any Lender under this Section, but at no time
shall the Administrative Agent be obligated to initiate any such replacement;
and
(e) Any Lender replaced under this Section shall be replaced at
the Borrower's sole cost and expenses and at no cost or expense to the
Administrative Agent or any of the Lenders.
SECTION 5.23. CHANGE OF LENDING OFFICE.
Each Lender agrees that it will use reasonable efforts to designate an
alternate Lending Office with respect to any of its Loans affected by the
matters or circumstances described in Sections 5.17. and 5.21. to reduce the
liability of Borrower or avoid the results provided thereunder, so long as such
designation would not have an adverse effect on its business, operations, or
financial condition, or result in such Lender's incurring any additional cost
not indemnified against by the Borrower in performing its obligations under this
Agreement.
ARTICLE 6. CONDITIONS PRECEDENT
SECTION 6.1. CONDITIONS PRECEDENT TO INITIAL LOANS AND LETTER OF
CREDIT.
The obligation of the Lenders to make any Syndicate Loans to the
Borrower in accordance with the terms hereof, and the obligation of the Issuing
Bank to issue any Letters of Credit in accordance with the terms hereof, are
subject to the condition precedent that the Borrower deliver to the
Administrative Agent each of the following, each of which shall be reasonably
satisfactory in form and substance to the Administrative Agent and the Lenders:
(a) Corporate Diligence
(i) certified copies (certified by the respective
Secretary or Assistant Secretary of each Loan Party (each such Person
shall be the "Authenticating Person" with respect to such Loan Party))
of all corporate or other necessary action taken by each Loan Party to
authorize the execution, delivery and performance of the Loan Documents
to which it is a party;
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(ii)(A) with respect to each Loan Party, the articles or
certificate of incorporation (certified by the applicable Secretary of
State) and by-laws of such Person; (B) with respect to each Loan Party,
a certificate of existence or other good standing certificate issued by
the Secretary of State of the jurisdiction in which such Person was
formed; and (C) certificates of incumbency and specimen signatures
signed by the appropriate Authenticating Person with respect to each of
the officers or other Persons of each Loan Party who are authorized to
execute and deliver the Loan Documents to which such Loan Party is a
party;
(iii) an opinion of Troutman Sanders LLP, counsel to the
Borrower and the other Loan Parties, addressed to the Administrative
Agent, the Issuing Bank and the Lenders in substantially the form of
Exhibit F;
(iv) copies of all Governmental Approvals required to be
made or obtained by each Loan Party in connection with the execution
and delivery of this Agreement and the other Loan Documents and the
consummation of the transactions contemplated hereby;
(v) a certificate of the Borrower executed on its behalf
by the chief executive officer, chief financial officer or treasurer of
the Borrower, stating that: (a) on such date, and after giving effect
to the transactions contemplated hereby, no Event of Default has
occurred and is continuing; (b) no Material Adverse Change in the
condition (financial or otherwise), operations, business or assets of
the Borrower or any of its Subsidiaries, taken as a whole, has occurred
since December 31, 1997; (c) the representations and warranties of the
Loan Parties set forth herein and in the other Loan Documents are true
and correct in all material respects on and as of such date with the
same effect as though made on and as of such date (except to the extent
such representations and warranties relate to an earlier date, in which
case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date); and
(d) on such date each Loan Party is in compliance with all the terms
and provisions set forth in this Agreement and the other Loan Documents
on its part to be observed and performed; and
(vi) a letter authorizing the independent certified public
accountants of the Borrower to communicate with the Agent and the
lenders and acknowledging reliance by the Agent and the Lenders on
past, present and future financial statements.
(b) Supplemental Closing Documents.
(i) a Syndicate Note and a Competitive Bid Note executed
by the Borrower, payable to the order of the Lenders and complying with
the terms of Section 5.7.;
(ii) a Guaranty executed by each Material Subsidiary;
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(iii) the Fee Letters; and
(iv) (1) favorable UCC, tax, judgment and lien search
reports with respect to the Borrower, any appropriate Subsidiary and
any appropriate Loan Party in all necessary or appropriate
jurisdictions and under all legal and appropriate trade names
indicating that there are no Liens on any assets of such Person other
than Permitted Liens; and (2) UCC-1 notice filings naming the Loan
Parties as "Debtors" and the Administrative Agent as "Secured Party" to
be filed with the Clerk of the Superior Court of Fulton County, Georgia
with respect to the negative pledge set forth in Section 10.4.
(c) Other Documents
(i) evidence that all Fees and other amounts due the
Agent, the Arranger, the Issuing Bank and the Lenders hereunder and
under the other Loan Documents have been paid; and
(ii) such other documents and instruments as the
Administrative Agent or a Lender may reasonably request.
SECTION 6.2. CONDITIONS PRECEDENT TO SYNDICATE LOANS AND LETTERS OF
CREDIT.
The obligation of the Lenders to make Syndicate Loans, Competitive Bid
Loans and of the Issuing Bank to issue Letters of Credit is subject to the
further condition precedent that, as of the date of each such Loan or Date of
Issuance of each such Letter of Credit and after giving effect thereto: (a) no
Event of Default shall have occurred and be continuing; (b) the representations
and warranties made or deemed made by the Borrower in this Agreement and the
other Loan Documents to which it is a party and by each other Loan Party in the
Loan Documents to which it is a party, shall be true and correct on and as of
the date of the making of such Loan or Date of Issuance of such Letter of Credit
with the same force and effect as if made on and as of such date except to the
extent that such representations and warranties expressly relate solely to an
earlier date (in which case such representations and warranties shall have been
true and accurate on and as of such earlier date); (c) no Material Adverse
Change with respect to the Borrower and its Subsidiaries, taken as a whole,
shall have occurred since the Effective Date; (d) there is no pending or
threatened suit, cause of action or proceeding against any Loan Party that could
reasonably have a Material Adverse Effect on the Borrower or any of its
Subsidiaries taken as a whole; and (e) if any suit, action, arbitration,
investigation or other proceeding is then pending against any Loan Party, no
event or circumstance has occurred with relation to such suit, action,
arbitration, investigation or other proceeding which could reasonably be
expected to have a Material Adverse Effect on the Borrower or any of its
Subsidiaries taken as a whole. Each Credit Event other than the conversion or
continuation of a Loan shall constitute a certification by the Borrower to the
effect set forth in the preceding sentence (both as of the date of the giving of
notice relating to such Credit Event and, unless the Borrower otherwise notifies
the Administrative Agent prior to the date of such Credit Event, as of the date
of such Credit Event).
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ARTICLE 7. REPRESENTATIONS AND WARRANTIES
SECTION 7.1. REPRESENTATIONS AND WARRANTIES.
In order to induce the Administrative Agent, the Issuing Bank and each
Lender to enter into this Agreement, to make Loans and to issue Letters of
Credit, the Borrower represents and warrants to the Administrative Agent, the
Issuing Bank and each Lender as follows:
(a) Organization; Power; Qualification. Each of the Loan Parties
is a corporation, duly organized, validly existing and in good standing under
the jurisdiction of its incorporation, has the corporate power and authority to
own or lease its respective properties and to carry on its respective business
as substantially now being and hereafter proposed to be conducted and is duly
qualified and is in good standing as a foreign corporation, and authorized to do
business, in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification or authorization and where
the failure to be so qualified or authorized would have a Material Adverse
Effect.
(b) Ownership Structure; Subsidiaries. Schedule 7.1.(b) correctly
sets forth, as of the Agreement Date, the corporate structure and ownership
interests (including percentage ownership) of the Borrower and all of its
Subsidiaries including the correct legal name of the Borrower and each
Subsidiary, and, in the case of Subsidiaries, the partners or shareholders, as
applicable, or other Persons holding equity interests in such Subsidiaries and
their percentage equity or voting interest in such Subsidiaries.
(c) Authorization and Enforceability. The Borrower and each other
Loan Party has the right and power, and has taken all necessary action to
authorize it, to borrow hereunder (in the case of the Borrower) and to execute,
deliver and perform this Agreement, the Notes and the other Loan Documents to
which it is a party in accordance with their respective terms and to consummate
the transactions contemplated hereby. This Agreement, the Notes and each of the
other Loan Documents to which the Borrower or other Loan Party is a party have
been duly executed and delivered by such Person and each is a legal, valid and
binding obligation of such Person enforceable against such Person in accordance
with its respective terms.
(d) Compliance of Agreement, Notes, Loan Documents and Borrowing
with Laws, etc. The execution, delivery and performance of this Agreement, the
Notes and the other Loan Documents to which the Borrower or any other Loan Party
is a party in accordance with their respective terms and the Borrowings
hereunder do not and will not: (i) require any Governmental Approval or violate
any Applicable Law relating to the Borrower or any other Loan Party; (ii)
conflict with, result in a breach of or constitute a default under (A) the
articles of incorporation or the bylaws of the Borrower or the organizational
documents of any other Loan Party, or (B) any indenture, agreement or other
instrument to which the Borrower or any other Loan Party is a party or by which
it or any of its properties may be bound the violation of which could have a
Material Adverse Effect and, in any event, any agreement, indenture or
instrument evidencing any
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Consolidated Funded Debt; or (iii) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by the Borrower or any other Loan Party other than in favor
of the Administrative Agent for the benefit of the Lenders. Neither the making
of the Loans nor the use of proceeds thereof will violate, or be inconsistent
with, the provisions of Regulations T, U or X of the Board of Governors of the
Federal Reserve System.
(e) Governmental Approvals; Status as Air Carrier.
(i) ASA is a duly certificated air carrier and there are
in force any and all certificates or other appropriate authority issued
by the appropriate governmental authorities necessary to authorize ASA
to engage in intrastate and interstate air transportation of persons,
property and mail over the routes operated by ASA, and ASA is in
substantial compliance with all statutes, rules and regulations
necessary to maintain and preserve the status of a duly certificated
air carrier;
(ii) no proceedings are pending, by or before any public
body, agency or authority, including, but not limited to proceedings to
alter, amend, modify, suspend, or revoke such certificates in whole or
in part, which reasonably may be expected to seriously affect adversely
the income from, title to, or possession of, any of the properties of
the Borrower, to an extent which would constitute a Material Adverse
Effect in the business or condition of the Borrower; and
(iii) the Borrower, each Subsidiary and each other Loan
Party is in compliance with each other Governmental Approval applicable
to it and in compliance with all other Applicable Law relating to the
Borrower, a Subsidiary or such Loan Party except for noncompliances
which, and Governmental Approvals the failure to possess which, would
not, singly or in the aggregate, constitute a Material Adverse Effect.
(f) Titles to Properties; No Liens. The Borrower, its Subsidiaries
and the other Loan Parties have good, marketable and legal title to, or a valid
leasehold interest in, its respective properties and assets including, but not
limited to, those reflected on the consolidated balance sheet of the Borrower as
of December 31, 1997, except those which have been disposed of by the Borrower
subsequent to such date in the ordinary course of business. None of the assets
of the Borrower or any of its Subsidiaries is subject to any Lien other than
Permitted Liens.
(g) Indebtedness and Guarantees. Schedule 1.1(a) is a complete and
correct listing of all (i) Existing Consolidated Funded Debt of the Borrower and
its Subsidiaries and the other Loan Parties, (ii) Guarantees of the Borrower and
its Subsidiaries and the other Loan Parties of any Indebtedness and (iii) all
letters of credit and acceptance facilities extended to the Borrower and/or any
Subsidiary or other Loan Parties in each case only if representing an actual or
contingent obligation of $1 million or more to the same obligee. Schedule
1.1.(b) sets forth all Liens on any property of the Borrower and
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its Subsidiaries securing any Indebtedness in excess of $1 million. No event of
default exists with respect to any such Indebtedness or Guaranty.
(h) Litigation. Except as set forth on Schedule 7.1.(h), there are
no actions, suits or proceedings pending (nor, to the knowledge of the Borrower,
are there any actions, suits or proceedings threatened, nor is there any basis
therefor) against or in any other way relating adversely to or affecting the
Borrower, any Subsidiary or any other Loan Party or any of its respective
property before or by any Governmental Authority which, if adversely determined,
could have a Material Adverse Effect, and there are no Work Stoppages in
progress relating to the Borrower, any Subsidiary or any other Loan Party.
(i) Taxes. All federal and material state and other tax returns of
the Borrower and any Subsidiary or Loan Party required by Applicable Law to be
filed have been filed, and all federal, state and other taxes, assessments and
other governmental charges or levies upon and received by the Borrower, any
Subsidiary and each Loan Party and its properties, income, profits and assets
which are due and payable have been paid, except any such nonpayment which is at
the time permitted under Section 8.6. All charges, accruals and reserves on the
books of the Borrower and each of its Subsidiaries in respect of any taxes or
other governmental charges are in accordance with GAAP.
(j) Financial Statements and Condition; Solvency. The Borrower has
heretofore furnished to each of the Lenders (i) the consolidated balance sheet
of the Borrower and its Subsidiaries as at December 31, 1997 and the related
consolidated statements of income, retained earnings and cash flow of the
Borrower and its Subsidiaries for the fiscal year ended on said date, with the
opinion thereon of Ernst & Young LLP (collectively, the "Audited Financial
Statements"); and (ii) the consolidated unaudited balance sheet of the Borrower
and its Subsidiaries as at March 31, 1998 and the related consolidated
statements of income, retained earnings and cash flow of the Borrower and its
Subsidiaries for the fiscal year ended on said date (collectively, the
"Unaudited Financial Statements"; the Audited Financial Statements and the
Unaudited Financial Statements are collectively referred to as the "Financial
Statements"). The Financial Statements are complete and correct and fairly
present the consolidated financial condition of the Borrower and its
Subsidiaries as at said dates and the consolidated results of their operations
for the fiscal year ended on said dates, all in accordance with GAAP. None of
the Borrower nor any of its Subsidiaries has on the Agreement Date any material
contingent liabilities, liabilities for taxes, unusual or long-term commitments
or unrealized or forward anticipated losses from any unfavorable commitments,
except as referred to or reflected or provided for in the Financial Statements.
Since March 31, 1998, no Material Adverse Change has occurred. Each of the
Borrower, the Loan Parties and the other Subsidiaries is Solvent.
(k) ERISA. Each Plan, and, to the knowledge of the Borrower, each
Multiemployer Plan, is in compliance in all respects with, and has been
administered in all respects in compliance with, the applicable provisions of
ERISA, the Internal Revenue Code and any other Applicable Law except where
failure to be so in compliance or to be
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so administered could not result in a Material Adverse Effect, and, on and as of
the Agreement Date, no event or condition has occurred and is continuing as to
which the Borrower would be under an obligation to furnish a report to the
Lenders under Section 9.5.
(l) Absence of Defaults. Neither the Borrower, any Subsidiary
thereof nor any Loan Party is in default under its articles or certificate of
incorporation or its bylaws, and no event has occurred, which has not been
remedied, cured or waived: (i) which constitutes a Default or an Event of
Default; or (ii) which constitutes, or which with the passage of time or the
giving of notice or both, would constitute, a default or event of default by the
Borrower, any Subsidiary or any Loan Party under any agreement (other than this
Agreement) or judgment, decree or order to which the Borrower or any Subsidiary
or Loan Party is a party or by which the Borrower or any Subsidiary or Loan
Party or any of their respective properties may be bound where such default or
event of default would, individually or in the aggregate, have a Material
Adverse Effect.
(m) Environmental Laws. Except as set forth on Schedule 7.1.(m)
hereof, the Borrower, its Subsidiaries and each other Loan Party is in
compliance with all Environmental Laws, the failure with which to comply would
have a Material Adverse Effect. The Borrower is not aware of, and has not
received notice of, any past, present, or future events, conditions,
circumstances, activities, practices, incidents, actions, or plans which, with
respect to the Borrower, its Subsidiaries and each other Loan Party, may
interfere with or prevent compliance or continued compliance with Environmental
Laws, or may give rise to any common-law or legal liability, or otherwise form
the basis of any claim, action, demand, suit, proceeding, hearing, study, or
investigation, based on or related to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling or the emission,
discharge, release or threatened release into the environment, of any pollutant,
contaminant, chemical, or industrial, toxic, or other Hazardous Material, that
(as to all of the foregoing), individually or collectively, reasonably may be
expected to have a Materially Adverse Effect; and there is no civil, criminal,
or administrative action, suit, demand, claim, hearing, notice, or demand
letter, notice or violation, investigation, or proceeding pending or, to the
Borrower's knowledge, threatened, against the Borrower, its Subsidiaries and
each other Loan Party relating in any way to Environmental Laws, that (as to all
of the foregoing), individually or collectively, reasonably may be expected to
have a Materially Adverse Effect.
(n) Use of Proceeds. All proceeds of the Loans and Letters of
Credit will be used only in accordance with Sections 8.8. and 10.11.
(o) Investment Company; Public Utility Holding Company. Neither
the Borrower nor any of the Subsidiaries or Loan Parties is (i) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, (ii) a "holding company" or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended, or (iii) subject
to any other industry-specific law
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which purports to regulate or restrict its ability to borrow money or to
consummate the transactions contemplated by this Agreement or the other Loan
Documents or to perform its obligations hereunder or thereunder.
(p) Margin Stock. Neither the Company, any Subsidiary nor any Loan
Party is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying "margin stock" within the meaning of Regulations
T, U and X of the Board of Governors of the Federal Reserve System.
(q) Affiliate Transactions. Except as set forth on Schedule
7.1.(q) or as permitted by Section 10.7., neither the Borrower nor any
Subsidiary or Loan Party is a party to or bound by any agreement or arrangement
(whether oral or written) to which any Affiliate of the Borrower or any
Subsidiary is a party except (i) in the ordinary course of and pursuant to the
reasonable requirements of the Borrower's or such Subsidiary's business and (ii)
upon fair and reasonable terms no less favorable to the Borrower and such
Subsidiary than it could obtain in a comparable arm's-length transaction with an
unaffiliated Person. Neither the Borrower nor any Subsidiary is a party to any
agreement or arrangement which restricts or prohibits the payment of dividends
or the repayment of inter-company loans by a Subsidiary to the Borrower.
(r) Intellectual Property. The Borrower and its Subsidiaries own
or have the right to use, under valid license agreements or otherwise, all
material patents, licenses, franchises, trademarks, trademark rights, trade
names, trade name rights, trade secrets and copyrights necessary to the conduct
of their businesses as now conducted, without known conflict with any patent,
license, franchise, trademark, trade secrets and confidential commercial or
proprietary information, trade name, copyright, rights to trade secrets or other
proprietary rights of any other Person.
(s) Year 2000.
(i) The Borrower has (A) begun analyzing the operations
of the Borrower and its Subsidiaries that could be adversely affected
by the failure to become "Year 2000 compliant" (that is, that computer
applications, imbedded microchips and other systems or flight data
applications will be able to perform date-sensitive functions prior to
and after December 31, 1999) and (B) begun to develop a plan for
becoming Year 2000 compliant in a timely manner, the implementation of
which is on schedule in all material respects. The Borrower and its
Subsidiaries reasonably believe that they will become Year 2000
compliant for their operations on a timely basis except to the extent
the failure to do so could not be reasonably be expected to have a
Material Adverse Effect upon the financial condition of the Borrower or
its Subsidiaries.
(ii) the Borrower will promptly notify the Agent in the
event the Borrower determines that any computer application which is
material to the operations of the Borrower or any of its Subsidiaries
or any of its material vendors
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or suppliers will not be fully Year 2000 compliant on a timely basis,
except to the extent that such failure could not reasonably be expected
to have a Material Adverse Effect upon the financial condition of the
Borrower or its Subsidiaries.
(t) Accuracy and Completeness of Information. All written
information, reports and other papers and data furnished to the Administrative
Agent, the Issuing Bank or any Lender by, on behalf of, or at the direction of,
the Borrower, any Subsidiary or any other Loan Party were, at the time the same
were so furnished, complete and correct in all material respects and not
materially misleading, to the extent necessary to give the recipient a true and
accurate knowledge of the subject matter, or, in the case of financial
statements, present fairly, in accordance with GAAP consistently applied
throughout the periods involved, the financial position of the Persons involved
as at the date thereof and the results of operations for such periods. All
financial projections and other pro forma financial information delivered to the
Administrative Agent and/or the Lenders have been and will be based on good
faith estimates and assumptions believed by the Borrower and its Subsidiaries to
be reasonable at the time made and at the time furnished to the Administrative
Agent and/or the Lenders. No fact specific to the Borrower and its Subsidiaries
is known to the Borrower which has had, or is reasonably likely in the future to
have (so far as the Borrower can reasonably foresee), a Material Adverse Effect
which has not been set forth in the financial statements referred to in Section
7.1.(j) or in such information, reports or other papers or data or otherwise
disclosed in writing to the Administrative Agent and the Lenders prior to the
Agreement Date. No document furnished or written statement made by the Borrower
to the Administrative Agent, the Issuing Bank or any Lender in connection with
the negotiation, preparation or execution of this Agreement or any of the other
Loan Documents contains or will contain any untrue statement of a fact material
to the creditworthiness of the Borrower, any Subsidiary or any other Loan Party
or omits or will omit to state a material fact specific to the Borrower and its
Subsidiaries necessary in order to make the statements contained therein not
materially misleading.
SECTION 7.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.
All statements contained in any certificate, financial statement or
other instrument delivered by or on behalf of the Borrower or any Loan Party to
the Administrative Agent, the Issuing Bank or any Lender pursuant to or in
connection with this Agreement or any of the other Loan Documents (including any
statement contained in any certificate, financial statement or other instrument
delivered by or on behalf of the Borrower prior to the Agreement Date and
delivered to the Administrative Agent, the Issuing Bank or the Lenders in
connection with closing the transactions contemplated hereby) shall constitute
representations and warranties made by the Borrower under this Agreement. All
representations and warranties made under this Agreement shall be deemed to be
made at and as of the Agreement Date, the Effective Date and at and as of the
date of any Credit Event, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and except for changes in factual circumstances specifically
permitted hereunder.
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ARTICLE 8. AFFIRMATIVE COVENANTS
For so long as any of the Obligations remains outstanding, unpaid or
unperformed, or this Agreement is in effect, the Borrower shall, and shall cause
each Subsidiary and the other Loan Parties to:
SECTION 8.1. PRESERVATION OF EXISTENCE; STATUS AS AN AIR CARRIER.
(a) Preserve and maintain its respective existence, rights,
franchises, licenses and privileges in the jurisdiction of its formation and
qualify and remain qualified and authorized to do business in each jurisdiction
in which the character of its properties or the nature of its business requires
such qualification and authorization and where the failure to be so authorized
and qualified would have a Material Adverse Effect.
(b) Preserve and maintain any and all certificates or other
appropriate authority issued by the appropriate governmental authorities
necessary to authorize ASA to remain engaged in intrastate and interstate air
transportation of persons, property and mail over the routes then operated by
ASA;
SECTION 8.2. COMPLIANCE WITH APPLICABLE LAW.
Comply with all Applicable Laws, including the obtaining of all
Governmental Approvals, if the failure to comply with which would have a
Material Adverse Effect.
SECTION 8.3. MAINTENANCE OF PROPERTY.
In addition to, and not in derogation of, the requirements of any of
the other Loan Documents, (a) protect and keep safe from injury, harm or
destruction all of its material properties, including, but not limited to,
copyrights, patents, trade names and trademarks, and maintain in good repair,
working order and condition all tangible properties, and (b) maintain all of its
properties and equipment used or useful in its business in good working order
and condition as necessary to comply with all applicable Governmental Approvals,
except for obsolete equipment in each case (clauses (a) and (b)) if the failure
to do so would have a Material Adverse Effect.
SECTION 8.4. CONDUCT OF BUSINESS.
At all times carry on its respective businesses in the same fields as
the Loan Parties are engaged in on the Agreement Date and not enter into any
field of business not otherwise engaged in as of the Agreement Date or otherwise
reasonably related thereto.
SECTION 8.5. INSURANCE.
Keep adequately insured, by financially sound and reputable insurers,
all property of the character usually insured by corporations engaged in the
same or similar businesses similarly situated, against loss or damage of the
kind customarily insured against by such corporations, and carry adequate
liability insurance and other insurance of a kind
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generally carried by corporations engaged in the same or similar businesses
similarly situated; provided, however, that nothing herein contained shall be
construed to mean that a deductibility clause in any such insurance, which , in
effect, results in self-insurance of a level or portion of losses considered
reasonable by the Borrower's or its Subsidiaries management, shall render such
insurance inadequate, and provided, further, that in the case of a lease to the
United States Government or an agency thereof of any aircraft or other property,
indemnity therefrom by the United States Government will be considered adequate
insurance against the risks that are the subject of any such indemnity.
SECTION 8.6. PAYMENT OF TAXES AND CLAIMS.
Pay or discharge when due (a) all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or upon any
properties belonging to it, and (b) all lawful claims of materialmen, mechanics,
carriers, warehousemen and landlords for labor, materials, supplies and rentals
which, if unpaid, might become a Lien on any properties of such Person;
provided, however, that this Section shall not require the payment or discharge
of any such tax, assessment, charge, levy or claim which is being contested in
good faith by appropriate proceedings which operate to suspend the collection
thereof and for which adequate reserves have been established on the books of
the Borrower or Subsidiary, as appropriate, in accordance with GAAP.
SECTION 8.7. VISITS AND INSPECTIONS.
Permit representatives or agents of any Lender or the Administrative
Agent, from time to time, as often as may be reasonably requested to: (a) visit
and inspect all properties of the Borrower or any Material Subsidiary; (b)
inspect and make extracts from their respective books and records; and (c)
discuss with its principal officers, and its independent accountants, business,
assets, liabilities, financial conditions, results of operations and business
prospects.
SECTION 8.8. USE OF PROCEEDS/LETTERS OF CREDIT.
(a) Use the proceeds of the initial Loans in accordance with the
Statement of Funds Flow referred to in Section 6.1.; and (b) use the proceeds of
all subsequent Loans and all Letters of Credit only for (i) working capital,
capital expenditures and other general corporate purposes, and (ii) acquisitions
to the extent permitted under Section 10.3.
SECTION 8.9. MATERIAL SUBSIDIARIES.
Upon (a) the acquisition, incorporation or other creation of a Material
Subsidiary or (b) a Subsidiary becoming a Material Subsidiary, the Borrower
shall cause such Material Subsidiary to execute and deliver in favor of the
Administrative Agent for the benefit of the Lenders within 10 Business Days of
such acquisition, incorporation, creation or coming into existence a Guaranty in
the form of Exhibit G. The delivery of any such Guaranty to the Administrative
Agent shall be accompanied by an opinion of outside counsel to the Borrower and
such Material Subsidiary (or Material Subsidiaries,
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as the case may be) as to matters regarding due authorization, execution and
delivery and enforceability of such Guaranty, non-contravention of such Guaranty
with the organizational documents of such Material Subsidiary and with other
agreements, contracts and instruments to which such Material Subsidiary and the
Borrower and its other Subsidiaries are a party and to such other matters as the
Administrative Agent or its counsel shall reasonably request, together with
accompanying board resolutions, good standing certificates and the like.
Further, at no time during the term of this Agreement shall (i) the aggregate
book value of all Non-Material Subsidiaries exceed $10,000,000 and (ii) the
aggregate Consolidated EBITDAR of all Non-Material Subsidiaries (as determined
in a manner consistent with determining the Consolidated EBITDAR of the Borrower
pursuant to the terms hereof) for any period of computation thereof exceed 10%
of the Consolidated EBITDAR of the Borrower and all of its Subsidiaries during
the same period.
SECTION 8.10. ENVIRONMENTAL MATTERS.
Except as described in Schedule 7.1.(m) hereof, comply in all respects
with all Environmental Laws the failure to comply with which would have a
Material Adverse Effect. If the Borrower or any of the Subsidiaries shall (a)
receive written notice from any Governmental Authority asserting that any
violation of any Environmental Law may have been committed or is about to be
committed by the Borrower or any of the Subsidiaries, (b) receive notice that
any administrative or judicial complaint or order has been filed or is about to
be filed against the Borrower or any of the Subsidiaries alleging violations of
any Environmental Law or requiring the Borrower or any of the Subsidiaries to
take any action in connection with the release of Hazardous Materials or (c)
receive any notice from a Governmental Authority or private party alleging that
the Borrower or any of the Subsidiaries may be liable or responsible for costs
associated with a response to or cleanup of a release of a Hazardous Material or
any damages caused thereby, and such notices, individually or in the aggregate,
could have a Material Adverse Effect, then the Borrower shall provide the
Administrative Agent and each Lender with a copy of such notice within 10
Business Days after the receipt thereof by the Borrower or any of the
Subsidiaries. Within thirty days after the Borrower learns of the enactment or
promulgation of any Environmental Law which could have a Material Adverse
Effect, the Borrower shall provide the Administrative Agent and each Lender with
notice thereof. The Borrower shall, and shall cause its Subsidiaries and the
other Loan Parties to, promptly take all actions necessary to prevent the
imposition of any Liens on any of their respective properties arising out of or
related to any Environmental Laws.
SECTION 8.11. ASSET POOL.
Maintain, hold good and marketable title to, and own free and clear, at
all times during the period this Agreement is in effect, assets and properties
of the Borrower and its Material Subsidiaries constituting an Unencumbered Asset
Pool in an amount at least equal to or greater than 150% of the Revolving
Commitment in effect at such time. For purposes of this Agreement, "Unencumbered
Asset Pool" shall mean assets owned by the Borrower and its Material
Subsidiaries comprised of: (i) cash or Cash Equivalents in an amount at all
times and regardless of the then Revolving Commitment of at least equal to,
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or greater than, $50,000,000 and (ii) aircraft, aircraft engines and
aircraft-related parts and aircraft-related equipment and which, in each such
case, are not subject to, or encumbered by, any Lien other than Permitted Liens
of the type described in clause (a) and (c) of the definition of Permitted
Liens. For purposes of the assets described in subparagraph (ii), the value of
such assets shall be determined at fair market value. The Administrative Agent
may from time to time require the Borrower to deliver an Appraisal of each
aircraft that is included in the Unencumbered Asset Pool; provided, however,
that the Borrower shall not be obligated to deliver an Appraisal for a given
aircraft more than once per year.
ARTICLE 9. INFORMATION
For so long as any of the Obligations remains outstanding, unpaid or
unperformed, or this Agreement is in effect, the Borrower shall furnish to the
Administrative Agent at its Principal Office and to each Lender at its Lending
Office:
SECTION 9.1. QUARTERLY FINANCIAL STATEMENTS.
As soon as available and in any event within 60 days after the close of
each of the first, second and third fiscal quarters of the Borrower, the
consolidated balance sheets of the Borrower and its Subsidiaries as at the end
of such period and the related consolidated statements of income, retained
earnings and cash flows of the Borrower and its Subsidiaries for such period,
setting forth in each case in comparative form the figures for the corresponding
periods of the previous fiscal year, all of which shall be certified by the
chief financial officer or the treasurer of the Borrower, in his or her opinion,
to present fairly, in accordance with GAAP, the consolidated financial position
of the Borrower and its Subsidiaries as at the date thereof and the results of
operations for such period (subject to normal year-end audit adjustments).
SECTION 9.2. YEAR-END STATEMENTS.
As soon as available and in any event within 120 days after the end of
each fiscal year of the Borrower (commencing with the fiscal year of the
Borrower ending December 31, 1998), the consolidated balance sheets of the
Borrower and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for such fiscal year, setting forth in comparative
form the figures as at the end of and for the previous fiscal year, all of which
shall be certified by the chief financial officer or the treasurer of the
Borrower, in his or her opinion, to present fairly, in accordance with GAAP, the
financial position of the Borrower as at the date thereof and the result of
operations for such period and by Ernst & Young LLP or another independent
certified public accountants of recognized national standing and reasonably
acceptable to the Administrative Agent and the Requisite Lenders, whose
certificate shall be in scope and substance reasonably satisfactory to the
Administrative Agent and the Requisite Lenders.
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SECTION 9.3. COMPLIANCE CERTIFICATE.
At the time the financial statements are furnished pursuant to Sections
9.1. and 9.2., in the case of the Borrower's interim quarterly financial
statements, a certificate executed on behalf of the Borrower by its chief
financial officer or treasurer substantially in the form of Exhibit I attached
hereto, or in the case of the audited annual financial statements, a certificate
executed by the independent public accountants performing the audit of such
statements as noted in (c) below:
(a) setting forth as at the end of such quarterly accounting
period or fiscal year, as the case may be, the calculations required to
establish whether or not the Borrower, and when appropriate its Subsidiaries,
were in compliance with the covenants contained in Article 10.; and
(b) stating that, to the best of his or their knowledge,
information and belief, no Default or Event of Default exists, or, if such is
not the case, specifying such Default or Event of Default and its nature, when
it occurred and, in the case of the certificate executed by the chief financial
officer or the treasurer, whether it is continuing and the steps being taken by
the Borrower with respect to such event, condition or failure.
(c) so long as not contrary to the then current professional
standards of the American Institute of Certified Public Accountants, the fiscal
year-end financial statements delivered pursuant to Section 9.2 above shall be
accompanied by a written statement (which statement may be limited to the extent
required by professional standards) of the Borrower's independent public
accountants that in performing their audit of such financial statements, nothing
has come the their attention that would lead them to believe that the Borrower
had violated any provisions of Article 10 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
SECTION 9.4. NOTICE OF LITIGATION AND OTHER MATTERS.
Prompt notice of:
(a) to the extent the Borrower is aware of the same, the
commencement of all proceedings and investigations by or before any Governmental
Authority and all actions and proceedings in any court or other tribunal or
before any arbitrator against or in any other way relating adversely to, or
adversely affecting, the Borrower, any Subsidiary or any other Loan Party or any
of their respective properties, assets or businesses which, if adversely
determined or resolved, would have a Material Adverse Effect;
(b) any change in the business, assets, liabilities, financial
condition, results of operations or business prospects of the Borrower, any
Subsidiary or any other Loan Party which has had or may have Material Adverse
Effect;
(c) the occurrence of any Default or Event of Default;
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(d) any order, judgment or decree in excess of $1,000,000 having
been entered against the Borrower, any of the Subsidiaries or any other Loan
Party or any of their respective properties or assets;
(e) the acquisition, incorporation or other creation of any
Subsidiary and the purpose therefor and the amount and nature of the assets to
be owned thereby;
(f) the proposed sale, transfer or other disposition, not in the
ordinary course of business, of any material assets of the Borrower or any
Subsidiary to any Subsidiary, Affiliate or other Person; or
(g) the occurrence of a Work Stoppage.
SECTION 9.5. ERISA REPORTING.
The Borrower shall deliver to the Administrative Agent and each Lender,
at the Borrower's expense, the following information at the times specified
below:
(a) within ten Business Days after the Borrower, any Subsidiary or
any ERISA Affiliate knows or has reason to know that a Termination Event has
occurred, a written statement of the chief financial officer or the treasurer of
the Borrower describing such Termination Event and the action, if any, which the
Borrower or other such entities have taken, are taking or propose to take with
respect thereto, and when known, any action taken or threatened by the Internal
Revenue Service, Department of Labor or PBGC with respect thereto;
(b) within ten Business Days after the Borrower, any Subsidiary or
any ERISA Affiliate knows or has reason to know that a non-exempt prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the Internal
Revenue Code) has occurred with respect to a Plan, a statement of the chief
financial officer of the Borrower describing such transaction and the action
which the Borrower or other such entities have taken, are taking or propose to
take with respect thereto, except where the liability resulting therefrom could
not reasonably exceed $1,000,000;
(c) within ten Business Days after the request by Administrative
Agent therefor, after the filing thereof with the Department of Labor, Internal
Revenue Service or PBGC, copies of each annual report (form 5500 series),
including Schedule B thereto, filed with respect to each Plan which is a defined
benefit plan as defined in ERISA ss.3(35);
(d) within ten Business Days after the request by Administrative
Agent therefor, after receipt by the Borrower, any Subsidiary or any ERISA
Affiliate of each actuarial report for any Plan which is a defined benefit plan
as defined in ERISA ss.3(35) or Multiemployer Plan and each annual report for
any Multiemployer Plan, copies of each such report;
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(e) within ten Business Days upon the occurrence thereof,
notification of any increase in the benefits of any existing Plan (other than
payroll practices) or the establishment of any new Plan (other than payroll
practices) or the commencement of contributions to any Plan (other than payroll
practices) to which the Borrower, any Subsidiary or any ERISA Affiliate was not
previously contributing, except where the increased liability resulting
therefrom could not reasonably exceed $1,000,000;
(f) within ten Business Days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of the PBGC's intention to terminate a Benefit
Plan or to have a trustee appointed to administer a Benefit Plan, copies of each
such notice;
(g) within ten Business Days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of any unfavorable determination letter from
the Internal Revenue Service regarding the qualification of a Plan under Section
401(a) of the Internal Revenue Code, copies of each such letter;
(h) within ten Business Days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of a notice regarding the imposition of
withdrawal liability under a Multiemployer Plan, copies of each such notice;
(i) within three Business Days after the Borrower, any Subsidiary
or any ERISA Affiliate fail to make a required installment payment in excess of
$100,000 or any other required payment under Section 412 of the Internal Revenue
Code (as calculated by the Plan actuary or as reflected in any Plan actuarial
report available before the due date for such payment) to a Plan on or before
the due date for such payment, a notification of such failure; and
(j) within three Business Days after the Borrower, any Subsidiary
or any ERISA Affiliate knows (a) a Multiemployer Plan has been terminated, (b)
the administrator or plan sponsor of a Multiemployer Plan intends to terminate a
Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings
under Section 4042 of ERISA to terminate a Multiemployer Plan, in each case
where liability resulting therefrom could reasonably be expected to exceed
$1,000,000, a written statement setting forth any such event or information.
For purposes of this Section 9.5., the Borrower, any Subsidiary and any
ERISA Affiliate shall be deemed to know all facts known by the administrator of
any Plan of which such entity is the plan sponsor.
The Borrower shall establish, maintain and operate all Plans to comply
in all material respects with the provisions of ERISA, Internal Revenue Code,
and all other Applicable Laws, and the regulations and interpretations
thereunder other than to the extent that Borrower is in good faith contesting by
appropriate proceedings the validity or implication of any such provision, law,
rule, regulation or interpretation.
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SECTION 9.6. COPIES OF OTHER REPORTS.
(a) Promptly upon their becoming available, copies of all
registration statements and other periodic or special reports containing
material information or developments regarding the Borrower and its Subsidiaries
which the Borrower shall file with the Securities and Exchange Commission (or
any Governmental Authority substituted therefor) or any national securities
exchange; and
(b) Promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed.
SECTION 9.7. OTHER INFORMATION.
(a) Upon the request of the Administrative Agent, a statement or
statements in conformity with the requirements of Federal Reserve Forms G-3
and/or U-1 referred to in Regulation U of the Board of Governors of the Federal
Reserve System and other documents evidencing its compliance with the margin
regulations.
(b) From time to time and promptly upon each request, such data,
certificates, reports, statements, documents or further information regarding
the business, assets, liabilities, financial condition, results of operations or
business prospects of the Borrower, its Subsidiaries and the other Loan Parties
as any Lender or the Administrative Agent may reasonably request. The rights of
the Lenders and the Administrative Agent under this Section are in addition to
and not in limitation of their rights under any other provision of this
Agreement or any of the other Loan Documents.
ARTICLE 10. NEGATIVE COVENANTS
For so long as any of the Obligations remains outstanding, unpaid or
unperformed, or this Agreement is in effect, the Borrower shall not, directly or
indirectly:
SECTION 10.1. FINANCIAL COVENANTS.
(a) Consolidated Funded Debt/Capitalization Ratio. Permit, as at
the end of each fiscal quarter of the Borrower, the Consolidated Funded
Debt/Capitalization Ratio to be greater than 0.75 to 1.00.
(b) Adjusted Interest Coverage Ratio. Permit, as at the end of
each fiscal quarter of the Borrower, the Adjusted Interest Coverage Ratio to be
less than 2.00 to 1.00.
SECTION 10.2. INDEBTEDNESS.
Create, assume or suffer to exist or be created, or permit any
Subsidiary to create, assume or suffer to exist or be created, any Consolidated
Funded Debt other than the following:
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(a) the Obligations;
(b) Existing Consolidated Funded Debt (other than Existing
Consolidated Funded Debt to be repaid with the proceeds of the initial Loans as
identified in the Statement of Funds Flow) and any extensions, renewals,
replacements or refinancings thereof; provided, however, that (i) the principal
amount of any Consolidated Funded Debt incurred by the Borrower, the purpose of
which is to replace or refinance Existing Consolidated Funded Debt, may not
exceed the then outstanding amount of the Existing Consolidated Funded Debt to
be refinanced without the prior written consent of the Requisite Lenders unless
such Consolidated Funded Debt would otherwise be permitted under paragraph (f)
below and (ii) the principal amount of any Consolidated Funded Debt incurred by
a Subsidiary, the purpose of which is to replace or refinance the Existing
Consolidated Funded Debt of such Subsidiary, may not exceed the then outstanding
amount of the Existing Consolidated Funded Debt to be replaced or refinanced
unless the Borrower or such Subsidiary shall give the Administrative Agent prior
written notice of such increase;
(c) Purchase Money Debt and Capitalized Lease Obligations incurred
directly for the purchase or other acquisition of aircraft, aircraft engines and
related aircraft parts and equipment;
(d) Purchase Money Debt and Capitalized Lease Obligations incurred
directly for the purchase or other acquisition of assets not described in
paragraph (c) above of up to an aggregate amount of $10,000,000 at any one time
outstanding;
(e) Consolidated Funded Debt owing to the Borrower by its
Subsidiaries;
(f) Consolidated Funded Debt not secured by any Lien incurred
pursuant to the issuance by the Borrower of registered, publicly-traded debt
securities and/or debt securities of the Borrower issued in a private placement
thereof pursuant to Rule 144A of the Securities Act of 1933, as amended, in an
original aggregate principal amount not to exceed $150,000,000;
(g) other Consolidated Funded Debt not described in clauses (a)
through (f) up to an aggregate amount of $10,000,000 at any one time
outstanding; and
(h) Guarantees by the Borrower or any Subsidiary of any
Consolidated Funded Debt permitted by this Section 10.2.; provided, however,
that if a Subsidiary has guaranteed any Consolidated Funded Debt permitted
hereby but such Subsidiary has not guaranteed the Obligations, such Subsidiary
shall comply with the obligations set forth in Section 8.9. hereof as if such
Subsidiary were a Material Subsidiary.
SECTION 10.3. INVESTMENTS/ACQUISITIONS.
(a) Acquire or purchase, or permit any Subsidiary to acquire or
purchase, any Business Unit or (b) acquire, make or purchase, or permit any
Subsidiary to acquire,
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make or purchase, any Investment or (c) permit any Investment of the Borrower or
any Subsidiary to be outstanding other than the following:
(i) Investments in (A) Subsidiaries in existence on the
Agreement Date and disclosed on Schedule 7.1.(b); and (B) Wholly Owned
Subsidiaries created or acquired after the Agreement Date so long as
the Borrower complies with Section 8.9. (to the extent applicable) and,
if the creation or acquisition of such Subsidiary is in connection with
the acquisition or purchase of assets or capital stock of another
Person, such transaction is permitted by subparagraph (vi) below;
(ii) Investments (other than in Subsidiaries) in existence
on the Agreement Date and set forth on Schedule 10.3.(a) attached
hereto;
(iii) Investments in Cash Equivalents and certain other
investments in accordance with ASA and ASA Investments, Inc. Investment
Guidelines as set forth on Schedule 10.3(b) attached hereto ;
(iv) Indebtedness owing by Subsidiaries to the Borrower;
(v) Loans and advances to employees for moving,
entertainment, travel and other similar expenses in the ordinary course
of business consistent with past practices;
(vi) the Borrower, or any of its Subsidiaries, may acquire
or purchase all or a portion of the assets or properties of another
Person or any Business Unit of another Person and may acquire or
purchase all of the Capital Stock of another Person so long as the
following conditions are satisfied: (A) that immediately prior to, and
immediately after, the consummation of such acquisition or purchase, no
Event of Default has occurred and is continuing; (B) the assets or
Person so purchased or acquired relate directly to a line or lines of
business in which the Borrower is engaged on the Agreement Date; (C) if
the Borrower creates a Subsidiary to effect such acquisition or
purchase, such Subsidiary shall be a Wholly Owned Subsidiary and the
Borrower and such Subsidiary (if it becomes a Material Subsidiary)
shall comply with the provisions of Section 8.9. hereof; (D) the Board
of Directors of the Person to be acquired recommends to its
shareholders (or other similar equity holders) that the shareholders
(or other similar equity holders) approve such acquisition; (E) if such
acquisition or purchase is consummated through a merger or
consolidation, the Borrower (or, after giving effect to the merger, a
Wholly Owned Subsidiary of the Borrower including the acquired entity
if it is the survivor of the merger) shall be the surviving
corporation; and (F) immediately after giving effect to such
acquisition or purchase, the Borrower would be in compliance with the
financial covenants set forth in Section 10.1.
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(vii) other Investments in joint ventures and other Persons
not to exceed 25% the Borrower's Consolidated Net Worth as of March 31,
1998.
SECTION 10.4. LIENS/AGREEMENTS REGARDING LIENS/OTHER MATTERS.
(a) Create, assume, incur or permit or suffer to exist or to be
created, assumed or incurred, or permit any Subsidiary to create, assume or
suffer to exist or be created, any Lien upon any of its properties whether now
owned or hereafter acquired other than Permitted Liens;
(b) Enter into or assume any agreement (other than any Loan
Document), or permit any Subsidiary to enter into or assume any agreement (other
than any Loan Document), prohibiting the creation or assumption of any Lien upon
its properties, whether now owned or hereafter acquired unless such agreement
permits the Obligations hereunder to be secured as required by this Agreement;
or
(c) Create or otherwise cause or suffer to exist or become
effective, or permit any Subsidiary to create or otherwise cause or suffer to
exist or become effective, any consensual encumbrance or restriction of any kind
on the ability of any Subsidiary to: (i) pay dividends or make any other
distribution on any of such Subsidiary's capital stock owned by the Borrower or
any Subsidiary of the Borrower; (ii) pay any Consolidated Funded Debt or other
indebtedness or obligation owed to the Borrower or any other Subsidiary; (iii)
make loans or advances to the Borrower or any other Subsidiary; or (iv) transfer
any of its property or assets to the Borrower or any other Subsidiary.
SECTION 10.5. RESTRICTED PAYMENTS.
Declare or make, or permit any Subsidiary to declare or make, any
Restricted Payment; provided, however, that (a) Subsidiaries may make or declare
Restricted Payments to the Borrower and (b) the Borrower may make or declare
Restricted Payments in cash, subject to the satisfaction of each of the
following conditions on the date of such Restricted Payment after giving effect
thereto: (i) both immediately before and, after giving effect to such Restricted
Payment, no Event of Default shall have occurred and be continuing; and (ii) the
aggregate amount of Restricted Payments made or declared during the period
commencing on March 31, 1998 through and including the last day of the fiscal
quarter most recently ended prior to the date of such Restricted Payment shall
not exceed 50% of the positive Consolidated Net Income, if any, of the Borrower
and its Subsidiaries for such period (treated for these purposes as a single
accounting period on a cumulative basis) plus $65,000,000; provided, however, at
such time as ASA has executed a definitive union contract with the Air Line
Pilots Association, such amount shall increase to $100,000,000.
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SECTION 10.6. MERGER, CONSOLIDATION, SALES OF ASSETS AND OTHER
ARRANGEMENTS.
(a) Enter into, or permit any Subsidiary to enter into, any
transaction of merger or consolidation; (b) liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution) or permit any Subsidiary to do
any of the foregoing (unless, in the case of liquidations, wind-ups or
dissolutions of Subsidiaries, the assets of such Subsidiary or Subsidiaries are
conveyed to the Borrower or a Guarantor); or (c) convey, sell, lease, sublease,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business or assets, or the capital stock of
or other equity interests in any of its Subsidiaries, whether now owned or
hereafter acquired or permit any Subsidiary to do any of the foregoing;
provided, however, that:
(i) Subsidiaries of the Borrower may merge or consolidate
with other Subsidiaries of the Borrower; provided further, however,
that if the surviving Person of such merger or consolidation is a
Material Subsidiary, such Person shall execute a Guaranty as provided
in Section 8.9.;
(ii) a Subsidiary may sell, transfer or dispose of its
assets to the Borrower or another Subsidiary of the Borrower; provided
further, however, that if such transferee becomes a Material Subsidiary
as a result of such sale, transfer or other disposition, such
transferee shall execute a Guaranty as provided in Section 8.9.;
(iii) the Borrower or any Subsidiary may sell inventory in
the ordinary course of business;
(iv) the Borrower and its Subsidiaries may conduct any
Asset Sale; provided, however, that the fair market value of all the
assets sold, transferred or otherwise disposed of pursuant to this
Section 10.6. shall not exceed $40,000,000 on a cumulative basis during
the term of this Agreement. Notwithstanding the foregoing, (x) the
Borrower and its Subsidiaries may conduct Asset Sales of aircraft in
the ordinary course of business and such Asset Sales shall not be
subject to the dollar limitation set forth above so long as, within 180
days of the sale or other disposition of an aircraft, the Borrower or
its Subsidiaries acquires a replacement aircraft having a fair market
value greater than the aircraft so sold, (y) the Borrower and its
Subsidiaries may enter into sale and leaseback transactions regarding
aircraft; and (z) the Borrower may not conduct any Asset Sale
(including the sale or disposition of aircraft) during the continuance
of a Work Stoppage unless, immediately upon the consummation of such
Asset Sale, the Revolving Commitment is permanently reduced by an
amount equal to the sale proceeds of such Asset Sale net of Transaction
Costs and the aggregate principal amount of all Loans outstanding in
excess of the Revolving Commitment as so reduced, if any, are
immediately repaid by the Borrower. Any Asset Sale otherwise permitted
by this Section 10.6. shall not be permitted unless (A) such sale,
transfer or other disposition is for consideration at least 80% of
which is cash, (B) such consideration is at least equal to the fair
market value of
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the assets sold, transferred or disposed of and (C) after giving effect
to such Asset Sale, the Borrower is in compliance with its obligations
under Section 8.11. hereof.
Notwithstanding the foregoing, neither the Borrower nor any of its Subsidiaries
shall enter into any receivables securitization transaction, factoring
arrangement or other similar transaction or otherwise sell or transfer its
receivables.
SECTION 10.7. TRANSACTIONS WITH AFFILIATES.
Enter into, or permit any Subsidiary to enter into, any transaction
including, without limitation, the purchase, sale, leasing or exchange of
property, real or personal, or the rendering of any service, with any Affiliate
of the Borrower or with any officer, director or employee of the Borrower or any
Subsidiary, except (a) the transactions and agreements described on Schedule
7.1.(q) and any renewals, replacements or extensions thereof, (b) that such
Persons may render services to the Borrower or its Subsidiaries for compensation
at the same rates generally paid by Persons engaged in the same or similar
businesses for the same or similar services and (c) in the ordinary course of
and pursuant to the reasonable requirements of the Borrower's (or any
Subsidiary's) business consistent with past practice of the Borrower and its
Subsidiaries (to the extent applicable) and upon fair and reasonable terms no
less favorable to the Borrower (or any Subsidiary) than would be obtained in a
comparable arm's-length transaction with a Person not an Affiliate.
SECTION 10.8. PLANS.
Neither Borrower nor any Subsidiary of Borrower shall:
(a) permit the occurrence of any Termination Event which would
result in a liability to any Loan Party or ERISA Affiliate in excess of
$5,000,000;
(b) permit the present value of all benefit liabilities under all
Plans to exceed the current value of the assets of such Plans allocable to such
benefit liabilities by more than $5,000,000;
(c) permit any accumulated funding deficiency in excess of
$5,000,000 (as defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code) with respect to any Plan, whether or not waived;
(d) fail to make any contribution or payment to any Multiemployer
Plan which any Loan Party or ERISA Affiliate may be required to make under any
agreement relating to such Multiemployer Plan, or any law pertaining thereto
which results in or is likely to result in a liability in excess of $5,000,000;
or
(e) engage, or permit any Loan Party or ERISA Affiliate to engage,
in any prohibited transaction under Section 406 of ERISA or Section 4975 of the
Internal Revenue Code for which a civil penalty pursuant to Section 502(i) of
ERISA or a tax
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pursuant to Section 4975 of the Internal Revenue Code in excess of $5,000,000 is
imposed.
SECTION 10.9. FISCAL YEAR.
Change its fiscal year from that in effect as of the Agreement Date.
SECTION 10.10. MARGIN REGULATIONS.
Use, or permit any Subsidiary to use, directly or indirectly, the
proceeds of any Loan or any Letter of Credit issued hereunder for the purpose of
purchasing or carrying any "margin stock" or "margin security" as defined in
Regulations T, U and X (12 C.F.R. Parts 221 and 224) of the Board of Governors
of the Federal Reserve System (herein called "margin stock") or for the purpose
of reducing or retiring any indebtedness which was originally incurred to
purchase or carry stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of such Regulations T, U and
X. Further, neither the Borrower nor any bank acting on its behalf shall take
any action which might cause this Agreement or the Notes to violate Regulations
T, U or X or any other regulation of the Board of Governors of the Federal
Reserve System, as now in effect or as the same may hereafter be in effect.
ARTICLE 11. DEFAULT
SECTION 11.1. EVENTS OF DEFAULT.
Each of the following shall constitute an Event of Default, whatever
the reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of Applicable Law or pursuant to any judgment or order of
any Governmental Authority:
(a) Default in Payment. (i) The Borrower shall fail to pay when
due (whether upon demand, at maturity, by reason of acceleration or otherwise)
the principal of any of the Loans or any Reimbursement Obligation, (ii) the
Borrower shall fail to pay when due any interest or any of the other Obligations
owing by the Borrower under this Agreement or any other Loan Document and such
failure shall continue for a period of five Business Days or (iii) any other
Loan Party shall fail to pay when due any Obligation owing by such Loan Party
under any Loan Document to which it is a party and such failure shall continue
for a period of five Business Days.
(b) Misrepresentations. Any statement, representation or warranty
made or deemed made by the Borrower or any other Loan Party under this Agreement
or under any other Loan Document, or any amendment hereto or thereto, or in any
other writing or statement at any time furnished or made or deemed made by the
Borrower or any other Loan Party to the Administrative Agent or any Lender,
shall at any time prove to have been incorrect or misleading in any material
respect when furnished or made.
(c) Default in Performance. (i) The Borrower shall fail to perform
or observe Section 8.8. or 8.11. hereof or any term, covenant, condition or
agreement contained in
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Article 10. or (ii) the Borrower or any Loan Party shall fail to perform or
observe any term, covenant, condition or agreement contained in this Agreement
or any other Loan Document to which it is a party and not otherwise mentioned in
this Section 11.1. and such failure shall continue for a period of thirty days
after the earlier of (x) the date upon which the Borrower or such Loan Party
obtains knowledge of such failure or (y) the date upon which the Borrower has
received written notice of such failure from the Administrative Agent sent at
the request of any Lender.
(d) Indebtedness Cross-Acceleration/Cross-Default. (i) ASA shall
(x) fail to pay any principal or interest due in request of any Indebtedness
owing by it (other than Indebtedness hereunder or under the other Loan
Documents) outstanding on the Agreement Date and having a principal amount of
$10,000,000 or more, when and as the same shall become due and payable (subject
to any grace period) or (y) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or instrument evidencing or
governing any such Indebtedness if the effect of any such failure is to cause
such Indebtedness to become due prior to its stated maturity by reason of
acceleration or (ii) the Borrower or any Loan Party shall (x) fail to pay any
principal or interest due in respect of any Indebtedness (other than (A)
Indebtedness hereunder or under the other Loan Documents, or (B) Indebtedness
owing by ASA and described in subparagraph (i) above) having a principal amount
of $10,000,000 or more, when and as the same shall become due and payable
(subject to any grace period) or (y) fail to observe or perform any other term,
covenant, condition or agreement contained in any agreement or instrument
governing any such Indebtedness if the effect of any such failure is to cause,
or to permit the holder or holders of such Indebtedness (or a trustee on behalf
of such holder or holders) to cause, such Indebtedness to become due prior to
its stated maturity (whether by acceleration, mandatory prepayment or redemption
or otherwise).
(e) Voluntary Bankruptcy Proceeding. The Borrower, any Subsidiary
or any other Loan Party shall: (i) commence a voluntary case under the
Bankruptcy Code of 1978, as amended or other federal bankruptcy laws (as now or
hereafter in effect); (ii) file a petition seeking to take advantage of any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts; (iii) consent
to, or fail to contest in a timely and appropriate manner, any petition filed
against it in an involuntary case under such bankruptcy laws or other laws or
consent to any proceeding or action described in the immediately following
subsection; (iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, or liquidator of itself or of a majority of its
property, domestic or foreign; (v) admit in writing its inability to pay its
debts as they become due; or (vi) make a general assignment for the benefit of
creditors.
(f) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against the Borrower, any Subsidiary or any other Loan Party,
in any court of competent jurisdiction seeking: (i) relief under the Bankruptcy
Code of 1978, as amended or other federal bankruptcy laws (as now or hereafter
in effect) or under any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization,
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winding-up, or composition or adjustment of debts; or (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of such Person, or of all
or any substantial part of the assets, domestic or foreign, of such Person; and
such case or other proceeding shall continue and shall not be discharged or
dismissed for a period of sixty days.
(g) Judgment. A final judgment or order for the payment of money
in excess of $5,000,000 in the aggregate (exclusive of judgment amounts to the
extent covered by insurance) shall be rendered by a one or more Governmental
Authorities having jurisdiction and such judgment or order shall continue for a
period of thirty days without being stayed, discharged, vacated or dismissed
through appropriate appellate proceedings.
(h) Attachment. A warrant or writ of attachment or execution or
similar process shall be issued against any property of the Borrower, a
Subsidiary or any Loan Party which exceeds, individually or together with all
other such warrants, writs and processes, $5,000,000 in amount and such warrant,
writ or process shall not be discharged, vacated, stayed or bonded for a period
of 30 days; provided, however, that in the event a bond has been issued in favor
of the claimant or other Person obtaining such attachment or writ, the issuer of
such bond shall execute a waiver or subordination agreement in form and
substance satisfactory to the Administrative Agent pursuant to which the issuer
of such bond subordinates its right of reimbursement, contribution or
subrogation to the Obligations and waives or subordinates any Lien it may have
on the assets of any Loan Party.
(i) Loan Documents. An Event of Default (as defined therein) shall
occur under any of the other Loan Documents.
(j) Change of Control. The occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Borrower and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d) (3) of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act")), (ii) the
adoption of a plan relating to the liquidation or dissolution of the Borrower;
(iii) the consummation of any transaction (including, without limitation, any
merger or consolidation), the result of which is that any "person" (as defined
above) becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is currently exercisable or is exercisable only upon
the occurrence of a subsequent condition), directly or indirectly, of more than
50% of the Voting Stock of the Borrower (measured by voting power rather than
number of shares); or (iv) the first day on which a majority of the members of
the Board of Directors of the Borrower are not Continuing Directors.
(k) Injunction. The Borrower or any of its Material Subsidiaries
is enjoined, restrained or in any way prevented by the order of any Governmental
Authority from
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conducting all or substantially all of its business and such order continues for
more than 90 days.
(l) Delta Marketing Agreement. If at any time there is no longer
in effect a master agreement between Delta Air Lines, Inc. and the Borrower
and/or ASA regarding code sharing, the sharing of reservation systems, frequent
flyer programs and other joint operational and marketing programs.
SECTION 11.2. REMEDIES.
Upon the occurrence of an Event of Default the following provisions
shall apply:
(a) Acceleration; Termination of Facilities.
(i) Automatic. Upon the occurrence of an Event of Default
specified in Sections 11.1.(e) or 11.1.(f), (A)(1) the principal of,
and all accrued interest on, the Loans and the Notes at the time
outstanding, (2) an amount equal to the Stated Amount of all Letters of
Credit outstanding as of the date of the occurrence of the Event of
Default and (3) all of the other Obligations of the Borrower,
including, but not limited to, the other amounts owed to the Lenders
and the Administrative Agent under this Agreement or any of the other
Loan Documents shall become immediately and automatically due and
payable by the Borrower without presentment, demand, protest, or other
notice of any kind, all of which are expressly waived by the Borrower
and (B) the Commitments, the Revolving Credit Facility and the Letter
of Credit Facility shall immediately and automatically terminate.
(ii) Optional. If any other Event of Default shall have
occurred and be continuing, the Requisite Lenders may direct the
Administrative Agent to, and the Administrative Agent if so directed
shall: (A) declare (1) the principal of, and accrued interest on, the
Loans and the Notes at the time outstanding, (2) an amount equal to the
Stated Amount of all Letters of Credit outstanding as of the date of
the occurrence of the Event of Default and (3) all of the other
Obligations, including, but not limited to, the other amounts owed to
the Lenders and the Administrative Agent under this Agreement, the
Notes or any of the other Loan Documents to be forthwith due and
payable, whereupon the same shall immediately become due and payable
without presentment, demand, protest or other notice of any kind, all
of which are expressly waived by the Borrower and (B) terminate the
Commitments, the Revolving Credit Facility and the Letter of Credit
Facility.
(b) Loan Documents. The Requisite Lenders may direct the
Administrative Agent to, and, subject to the terms hereof, the Administrative
Agent if so directed shall, exercise any and all of its rights under any and all
of the other Loan Documents.
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(c) Applicable Law. The Administrative Agent may, at the direction
of the Requisite Lenders, exercise all other rights and remedies it may have
under any Applicable Law.
(d) Appointment of Receiver. To the extent permitted by Applicable
Law, the Lenders shall be entitled to the appointment of a receiver for the
assets and properties of the Borrower and its Subsidiaries, without notice of
any kind whatsoever and without regard to the adequacy of any security for the
Obligations or the solvency of any party bound for its payment, to take
possession of all or any portion of the Collateral and/or the business
operations of the Borrower and its Subsidiaries and to exercise such power as
the court shall confer upon such receiver.
(e) Cash Collateral. (i) In the case of the occurrence of an Event
of Default specified in Sections 11.1.(e) or 11.1.(f), the Borrower shall
automatically and without further notice or demand deposit into the Collateral
Account the amounts specified in Section 2.15. hereof and (ii) in the case of
the occurrence of any other Event of Default, the Requisite Lenders may direct
the Administrative Agent, and the Administrative Agent if so directed shall,
require the Borrower to deposit into the Collateral Account the amounts
specified in Section 2.15.
SECTION 11.3. RIGHTS CUMULATIVE.
The rights and remedies of the Administrative Agent and the Lenders
under this Agreement and each of the other Loan Documents shall be cumulative
and not exclusive of any rights or remedies which any of them may otherwise have
under Applicable Law. In exercising their respective rights and remedies the
Administrative Agent and the Lenders may be selective and no failure or delay by
the Administrative Agent or any of the Lenders in exercising any right shall
operate as a waiver of it, nor shall any single or partial exercise of any power
or right preclude its other or further exercise or the exercise of any other
power or right.
If at any time after acceleration of the maturity of the Loans, the
Borrower shall pay all arrears of interest and all payments on account of
principal of the Loans which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Events of
Default and Defaults (other than nonpayment of principal of and accrued interest
on the Loans and other Obligations due and payable solely by virtue of
acceleration) shall be remedied or waived, then by written notice to the
Borrower, the Requisite Lenders may elect, in the sole discretion of such
Requisite Lenders, to rescind and annul the acceleration and its consequences;
but such action shall not affect any subsequent Default or Event of Default or
impair any right or remedy consequent thereon. The provisions of the preceding
sentence are intended merely to bind the Lenders to a decision which may be made
at the election of the Requisite Lenders; they are not intended to benefit the
Borrower and do not give the Borrower the right to require the Lenders to
rescind or annul any acceleration hereunder, even if the conditions set forth
herein are satisfied and (c) after giving effect to such Asset Sale, the
Borrower is in compliance with its obligations under Section.
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ARTICLE 12. THE AGENT
SECTION 12.1. AUTHORIZATION AND ACTION.
Each Lender hereby irrevocably appoints and authorizes the
Administrative Agent to act as agent on such Lender's behalf under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to the Administrative Agent by the terms hereof and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. The power of attorney set forth hereinabove shall be
irrevocable and coupled with an interest. The relationship between the
Administrative Agent and the Lenders shall be that of principal and agent only
and nothing herein shall be construed to deem the Administrative Agent a trustee
or fiduciary for any Lender nor to impose on the Administrative Agent duties or
obligations other than those expressly provided for herein. At the request of a
Lender, the Administrative Agent will forward to each Lender copies or, where
appropriate, originals of the documents delivered to the Administrative Agent
pursuant to this Agreement or the other Loan Documents. The Administrative Agent
will also furnish to any Lender, upon the request of such Lender, a copy of any
certificate or notice furnished to the Administrative Agent by the Borrower, any
Loan Party or any other Affiliate of the Borrower, pursuant to this Agreement or
any other Loan Document not already delivered to such Lender pursuant to the
terms of this Agreement or any such other Loan Document. As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of any of the Obligations), the Administrative Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Requisite
Lenders, and such instructions shall be binding upon all Lenders and all holders
of any of the Obligations; provided, however, that, notwithstanding anything in
this Agreement to the contrary, the Administrative Agent shall not be required
to take any action which exposes the Administrative Agent to personal liability
or which is contrary to this Agreement or any other Loan Document or Applicable
Law or unless it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking any such action. Not in limitation of the foregoing, the
Administrative Agent shall not exercise any right or remedy it or the Lenders
may have under any Loan Document upon the occurrence of a Default or an Event of
Default unless the Requisite Lenders have so directed the Administrative Agent
to exercise such right or remedy.
SECTION 12.2. ADMINISTRATIVE AGENT'S RELIANCE, ETC.
Neither the Administrative Agent nor any of its directors, officers,
agents, employees or counsel shall be liable for any action taken or omitted to
be taken by it or any of them under or in connection with this Agreement, except
for its or their own gross negligence or willful misconduct. The Administrative
Agent may employ agents and attorneys-in-fact and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
the Administrative Agent with reasonable care. Without limiting the generality
of the foregoing, the Administrative Agent: (a) may
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deem and treat the payee of any Note as the holder thereof for all purposes
until the Administrative Agent receives and accepts an Assignment Agreement
executed in accordance with Section 13.5.; (b) may consult with and rely upon
legal counsel (including its own counsel or counsel for the Borrower or any Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Lender or any other Person and shall
not be responsible to any Lender or any other Person for any statements,
warranties or representations made by any Person in or in connection with this
Agreement or any other Loan Document; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of any of this Agreement or any other Loan Document or the
satisfaction of any conditions precedent under this Agreement or any Loan
Document on the part of the Borrower or other Persons or inspect the property,
books or records of the Borrower or any other Person; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document, any other instrument or document furnished pursuant thereto or
any Collateral covered thereby or the perfection or priority of any Lien in
favor of the Administrative Agent on behalf of the Lenders in any such
Collateral; and (f) shall incur no liability under or in respect of this
Agreement or any other Loan Document by acting upon (and shall be entitled to
rely upon) any notice, consent, certificate, instrument, writing or other
communication (which may be by telephone or telecopy) believed by it to be
genuine and correct and signed, sent or given by or on behalf of the proper
Person or Persons.
SECTION 12.3. NATIONSBANK AS LENDER.
NationsBank, as a Lender, shall have the same rights and powers under
this Agreement and any other Loan Document as any other Lender and may exercise
the same as though it were not the Administrative Agent; and the term "Lender"
or "Lenders" shall, unless otherwise expressly indicated, include NationsBank in
each case in its individual capacity. NationsBank and its affiliates may each
accept deposits from, maintain deposits or credit balances for, invest in,
provide services to, lend money or otherwise provide credit to, act as trustee
under indentures of, serve as financial advisor to, and generally engage in any
kind of business with the Borrower, any Loan Party or any other affiliate
thereof as if it were any other bank and without any duty to account therefor to
the other Lenders. Further, the Administrative Agent and any affiliate may
accept fees and other consideration from the Borrower for services in connection
with this Agreement and otherwise without having to account for the same to the
other Lenders.
SECTION 12.4. LENDER CREDIT DECISION, ETC.
Each Lender expressly acknowledges and agrees that neither the
Administrative Agent nor the Arranger, nor any of their respective officers,
directors, employees, agents, counsel, attorneys-in-fact or other affiliates has
made any representations or warranties as to the financial condition,
operations, creditworthiness, solvency or other information concerning the
business or affairs of the Borrower, any Loan Party, any Subsidiary or
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other Person to such Lender and that no act by the Administrative Agent or the
Arranger hereinafter taken, including any review of the affairs of the Borrower,
shall be deemed to constitute any such representation or warranty by the
Administrative Agent or the Arranger to any Lender. Each Lender acknowledges
that it has, independently and without reliance upon the Administrative Agent,
the Arranger, any other Lender or counsel to the Administrative Agent, or any of
their respective officers, directors, employees and agents, and based on the
financial statements of the Borrower, the Subsidiaries, the other Loan Parties
or any other Affiliate thereof, and inquiries of such Persons, its independent
due diligence of the business and affairs of the Borrower, the other Loan
Parties, the Subsidiaries and other Persons, its review of the Loan Documents,
the legal opinions required to be delivered to it hereunder, the advice of its
own counsel and such other documents and information as it has deemed
appropriate, made its own credit and legal analysis and decision to enter into
this Agreement and the transaction contemplated hereby. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, the Arranger, any other Lender or counsel to the
Administrative Agent or any of their respective officers, directors, employees
and agents, and based on such review, advice, documents and information as it
shall deem appropriate at the time, continue to make its own decisions in taking
or not taking action under the Loan Documents. Each Lender acknowledges that the
Administrative Agent's Legal counsel in connection with the transactions
contemplated by this Agreement is only acting as counsel to the Agent and is not
acting as counsel to such Lender. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall have no duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Borrower, any Loan Party or any other Affiliate thereof
which may come into possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or other affiliates.
SECTION 12.5. KNOWLEDGE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless the
Administrative Agent has received written notice from a Lender or the Borrower
specifying such Default or Event of Default and stating that such notice is a
"Notice of Default". In the event that the Administrative Agent receives such a
notice of the occurrence of a Default or Event of Default, the Administrative
Agent shall give prompt notice thereof to the Lenders. The Administrative Agent
shall (subject to Sections 12.1. and 12.2. hereof) take such action with respect
to such Default or Event of Default as shall reasonably be directed by the
Requisite Lenders; provided, that, unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as the Administrative Agent shall
deem advisable in the best interest of the Lenders.
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SECTION 12.6. INDEMNIFICATION.
Each Lender agrees to indemnify the Administrative Agent and the
Arranger (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so) pro rata in accordance with such Lender's
respective Credit Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees) or disbursements of any kind or nature
whatsoever which may at any time be imposed on, incurred by, or asserted against
the Administrative Agent and/or the Arranger (including by any Lender) in any
way relating to or arising out of the Loan Documents, the transactions
contemplated thereby or any action taken or omitted by the Administrative Agent
and/or the Arranger under the Loan Documents; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the Administrative Agent's gross negligence or
willful misconduct. Without limiting the generality of the foregoing, each
Lender agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including fees of the counsel(s) of
the Administrative Agent's own choosing) incurred by the Administrative Agent in
connection with the preparation, execution, administration, or enforcement of,
or legal advice with respect to the rights or responsibilities of the parties
under, the Loan Documents, any suit or action brought by the Administrative
Agent to enforce the terms of the Loan Documents and/or collect any Obligations,
any "lender liability" suit or claim brought against the Administrative Agent
and/or the Lenders, and any claim or suit brought against the Administrative
Agent and/or the Lenders arising under any Environmental Laws, to the extent
that the Administrative Agent is not reimbursed for such expenses by the
Borrower. Such out-of-pocket expenses (including counsel fees) shall be advanced
by the Lenders on the request of the Administrative Agent notwithstanding any
claim or assertion that the Administrative Agent is not entitled to
indemnification hereunder upon receipt of an undertaking by the Administrative
Agent that the Administrative Agent will reimburse the Lenders if it is actually
and finally determined by a court of competent jurisdiction that the
Administrative Agent is not so entitled to indemnification. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder or under the other Loan Documents and the termination of this
Agreement.
SECTION 12.7. SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign at any time as Administrative Agent
under the Loan Documents by giving notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Requisite Lenders shall have the right,
with the consent of the Borrower, such consent not to be unreasonably withheld,
to appoint a successor Administrative Agent. If no successor Administrative
Agent shall have been so appointed by the Requisite Lenders and the Borrower,
and shall have accepted such appointment, within thirty days after the
Administrative Agent's giving of notice of resignation, then the resigning
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States of America having combined capital and unimpaired
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surplus in excess of $1 billion. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor agent, such successor agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the former Administrative Agent, and the former Administrative
Agent shall be discharged from its duties and obligations under the Loan
Documents. After any Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Administrative
Agent under the Loan Documents.
ARTICLE 13. MISCELLANEOUS
SECTION 13.1. NOTICES.
Unless otherwise provided herein, all notices, requests and other
communications provided for hereunder shall be in writing (including without
limitation, by fax) and shall be mailed, telecopied or delivered as follows:
If to the Borrower:
Atlantic Southeast Airlines, Inc.
100 Hartsfield Centre Parkway
Suite 800
Atlanta, Georgia 30354-1356
Attention: R. Mark Bole
Telecopy Number: (404) 209-1753
Telephone Number: (404) 766-1400 ext. 259
If to the Administrative Agent, the Issuing Bank or NationsBank:
NationsBank, N.A.
600 Peachtree Street, 9th Floor
Atlanta, Georgia 30308
Attention: Kathryn W. Robinson
Telecopy Number: (404) 607-6467
Telephone Number: (404) 607-5887
with a copy to:
NationsBank, N.A.
Independence Center
101 North Tryon Street, 15th Floor
Charlotte, North Carolina 28255-0001
Attention: Margaret Rhodes, Agency Services
Telecopy Number: (704) 386-9923
Telephone Number: (704) 386-2881
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If to a Lender, to such Lender's address or telecopy number, as
applicable, set forth on the then current Annex I attached hereto.
or as to each party at such other address as shall be designated by such party
in a written notice to the other parties delivered in compliance with this
Section. All such notices, requests and other communications shall be effective
(a) if mailed, when received; (b) if telecopied, when transmitted; or (c) if
hand delivered, when delivered. Notwithstanding the immediately preceding
sentence, all notices or communications to the Administrative Agent or any
Lender under Articles 2. and 3. shall be effective only when actually received.
SECTION 13.2. EXPENSES.
The Borrower agrees to pay, within 30 days after demand accompanied by
reasonably detailed verification, all reasonable costs and expenses of the
Administrative Agent in connection with the negotiation, preparation, execution,
delivery and administration (other than out-of-pocket costs and expenses
incurred in connection with the assignment of Commitments or sales of
participations pursuant to Section 13.5.) of this Agreement, the Notes and each
of the other Loan Documents, whenever the same shall be executed and delivered,
including the reasonable fees and disbursements of counsel retained by the
Administrative Agent (and the cost of internal counsel). Further, the Borrower
agrees to pay, within 30 days after demand accompanied by reasonably detailed
verification, all reasonable future costs and expenses of the Administrative
Agent and each of the Lenders (including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent and the Lenders
and the cost of their internal counsel) in connection with: (a) the negotiation,
preparation, execution and delivery of any waiver, amendment or consent by the
Administrative Agent or any Lender relating to this Agreement, the Notes or any
of the other Loan Documents; (b) the execution and delivery of any Security
Document and all costs and expenses in connection with the filing and/or
recordation of such Security Documents and the perfection of any Lien created
thereby including all recording taxes, fees and costs and all intangibles and
stamp taxes; (c) any restructuring, refinancing or "workout" of the transactions
contemplated by this Agreement, the Notes and the other Loan Documents, or any
material amendment to the terms of this Agreement or any other Loan Document;
and (d) if an Event of Default exists, consulting with one or more Persons
engaged by the Administrative Agent, including appraisers, accountants and
lawyers, concerning or related to the servicing of this Agreement or the nature,
scope or value of any right or remedy of the Administrative Agent or any of the
Lenders hereunder, under the Notes or under any of the other Loan Documents,
including any review of factual matters in connection therewith.
The Borrower agrees to pay on demand all costs and expenses of the
Administrative Agent in connection with (w) the collection or enforcement of the
Obligations; (x) prosecuting or defending any claim in any way arising out of,
related to, or connected with this Agreement, the Notes or any of the other Loan
Documents; (y) the exercise by the Administrative Agent or any Lender of any
right or remedy granted to it under this Agreement, the Notes or any of the
other Loan Documents; and (z) to the
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extent not already covered by any of the preceding subsections, any bankruptcy
or other proceeding of the type described in Sections 11.1.(e) or 11.1.(f), and
the fees and disbursements of counsel to the Administrative Agent and any Lender
incurred in connection with the representation of the Administrative Agent or
such Lender in any matter relating to or arising out of any such proceeding
including, without limitation (i) any motion for relief from any stay or similar
order, (ii) the negotiation, preparation, execution and delivery of any document
relating to the Obligations and (iii) the negotiation and preparation of any
debtor-in-possession financing or any plan of reorganization of the Borrower,
whether proposed by the Borrower, the Lenders or any other Person, and whether
such fees and expenses are incurred prior to, during or after the commencement
of such proceeding or the confirmation or conclusion of any such proceeding.
SECTION 13.3. SETOFF.
Subject to Section 5.13. and in addition to, and not in limitation of,
any rights now or hereafter granted under Applicable Law, the Administrative
Agent, the Issuing Bank and each Lender is hereby authorized by the Borrower, at
any time or from time to time, without notice to the Borrower or to any other
Person, any such notice being hereby expressly waived, to set-off and to
appropriate and to apply any and all deposits which, under Applicable Law, are
subject to offset (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, the Issuing
Bank or such Lender or any affiliate of such Lender, to or for the credit or the
account of the Borrower against and on account of any of the Obligations which
are then due and payable and have which not been paid, irrespective of whether
or not the Requisite Lenders shall have declared any or all of the Loans and all
other Obligations to be due and payable as permitted by Section 11.2.; provided,
however, that no Lender shall exercise such right of setoff without prior
consent of the Administrative Agent, such consent not to be unreasonably
withheld.
SECTION 13.4. LITIGATION/JURISDICTION/OTHER MATTERS/WAIVERS.
EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN
OR AMONG THE BORROWER, THE AGENTS, THE ISSUING BANK OR ANY OF THE LENDERS WOULD
BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT. ACCORDINGLY, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE LENDERS, THE ISSUING BANK, THE
AGENTS AND THE BORROWER HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE
BORROWER, THE AGENTS, THE ISSUING BANK AND EACH LENDER EACH HEREBY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL DISTRICT COURT OF THE NORTHERN
DISTRICT OF GEORGIA AND ANY STATE COURT LOCATED IN FULTON COUNTY, GEORGIA FOR
THE PURPOSE OF ALL LEGAL PROCEEDINGS ARISING OUT
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OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. EACH PARTY HERETO WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH PROCEEDING IN ANY SUCH COURT OR THAT
SUCH PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO
PLEAD OR CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT
BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE AGENTS, THE ISSUING BANK
OR ANY LENDER OR THE ENFORCEMENT BY THE AGENTS, THE ISSUING BANK OR ANY LENDER
OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.
THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF COUNSEL AND WITH A FULL
UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT
OF THE LOANS AND ALL OTHER OBLIGATIONS AND THE TERMINATION OF THIS AGREEMENT.
SECTION 13.5. ASSIGNABILITY AND PARTICIPATIONS.
(a) The Borrower shall not have the right to assign this Agreement
or any interest therein or obligations hereunder except with the prior written
consent of the Administrative Agent and all of the Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an affiliate of such
Lender except to the extent such transfer would result in increased costs to the
Borrower.
(c) Each Lender may assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Loans, its Note and its Commitment);
provided, however, that (i) each such assignment shall be to an Eligible
Assignee; (ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this Agreement, any
such partial assignment shall, unless the Borrower and the Administrative Agent
otherwise agree, be in an amount at least equal to $5,000,000 or an integral
multiple of $1,000,000 in excess thereof; (iii) each such assignment by a Lender
shall be of a constant (and not a varying) percentage of all of its rights and
obligations under this Agreement and the other Loan Documents; and (iv) each
such assignment shall be effected by means of an Assignment and Assumption
Agreement substantially in the form of Exhibit H (an "Assignment Agreement")
executed by the parties and delivered to the Administrative Agent for its
acceptance, together with any Note subject to such assignment and a processing
fee of $3,500. Upon the execution, delivery and acceptance of the Assignment
Agreement as provided therein, from and after the date specified as the
effective date in the Assignment Agreement (the "Acceptance Date"), (x) the
assignee thereunder shall be deemed to be a party hereto, and, to the extent
that rights and obligations hereunder have been assigned to it pursuant to such
Assignment Agreement, such assignee shall have the rights and obligations of a
"Lender" hereunder and (y) the assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment Agreement, relinquish its rights (other than
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any rights it may have pursuant to Sections 5.2., 5.21., 13.2., and 13.9. which
will survive such assignment) and be released from its obligations under this
Agreement (and, in the case of an Assignment Agreement covering all of an
assigning Lender's rights and obligations under this Agreement, the Notes and
the other Loan Documents, such Lender shall cease to be a party hereto). If the
assignee is not incorporated under the laws of the United States of America or a
State thereof, it shall deliver to the Borrower and the Administrative Agent
certification as to exemption from deduction or withholding of Taxes in
accordance with Section 5.21.
(d) The Administrative Agent shall maintain at the Principal
Office a copy of each Assignment Agreement delivered to and accepted by it and a
register for the recording of the names and addresses of the Lenders and the
Commitments of, and principal amounts of the Loans owing to, each Lender from
time to time (the "Register"). The entries in the Register shall be conclusive
and binding for all purposes, absent error, and the Borrower, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
and copies of each Assignment Agreement shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice to the Administrative Agent.
(e) Upon its receipt of an Assignment Agreement executed by an
assigning Lender, together with the Syndicate Note subject to such assignment
(the "Surrendered Note"), the Administrative Agent shall, if such Assignment
Agreement has been completed and the Administrative Agent receives the
processing and recording fee described in the immediately preceding subsection
(c), (i) accept such Assignment Agreement, (ii) record the information contained
therein in the Register, (iii) give prompt notice thereof to the parties thereto
and (iv) revise the information set forth on Annex I to reflect the effect of
such Assignment Agreement and promptly provide a copy of such revised Annex I to
the Documentation Agent and to the Borrower. Failure of the Administrative Agent
to so distribute a revised Annex I shall not relieve or modify the obligations
of the Borrower, the Loan Parties or the Lenders owing hereunder. Within five
Business Days after its receipt of such notice, the Borrower shall acknowledge
such Assignment Agreement and shall execute and deliver to the Administrative
Agent in exchange for the Surrendered Note, a new Syndicate Note or Notes to the
order of the assignee in an amount equal to the Commitment assumed by it
pursuant to such Assignment Agreement and a Competitive Bid Note payable to the
order of the assignee in an amount equal to the Revolving Commitment and, if the
assigning Lender has retained a Commitment hereunder, a new Syndicate Note to
the order of the assigning Lender in an amount equal to the Commitment retained
by it hereunder. Such new Note or Notes shall re-evidence the indebtedness
outstanding under the old Note or Notes and shall be in an aggregate principal
amount equal to the aggregate principal amount of such Surrendered Note or
Surrendered Notes, shall be dated the Acceptance Date and shall otherwise be in
substantially the form, of the Note or Notes subject to such assignments. The
assignment by a Lender of a Commitment or portion thereof to another Person and
the execution and delivery of a new Note or Notes shall not constitute a
novation of the
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indebtedness evidenced by the Surrendered Note or Surrendered Notes and incurred
in connection with such assigned Commitment.
(f) Each Lender may sell participations (without the consent of
the Administrative Agent, the Borrower or any other Lender) to one or more
Persons (each a "Participant") in all or a portion of its rights, obligations or
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment, the Loans owing to it and the Note or Notes held
by it); provided, however, that: (i) such Lender's obligations under this
Agreement (including, without limitation, its Commitment hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the Participant shall not
be entitled to the benefit of the yield protection provisions contained in
Sections 2.10., 5.17. and 5.21. or the right of set-off contained in Section
13.3.; (iv) the Borrower shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and such Lender shall retain the sole right to enforce the obligations
of the Borrower relating to its Loans and its Note(s) and to approve any
amendment, modification or waiver of any provision of this Agreement; provided,
however, that any participation agreement between a Lender and a Participant may
provide that any amendments, modifications or waivers decreasing the amount of
principal of or the rate at which interest is payable on such Loans or Note(s),
extending any scheduled principal payment date or date fixed for the payment of
interest on such Loans or Note(s) or extending its Commitment must be approved
by the Participant before the Lender may approve such amendment, modification or
waiver).
(g) In connection with the efforts of any Lender to assign its
rights or obligations or to participate interests, such Lender may disclose any
(on a confidential basis if so furnished to that Lender) information in its
possession regarding the Borrower or any Loan Party.
(h) In addition to the other assignments and participations
permitted under the foregoing provisions of this Section, any Lender may assign
and pledge all or any portion of its Loans and its Note(s) to any Federal
Reserve Bank as collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve Bank, and such Loans and Note(s) shall
be fully transferable as provided therein. No such assignment shall release the
assigning Lender from its obligations hereunder.
SECTION 13.6. AMENDMENTS.
Except as otherwise expressly provided in this Agreement, any consent
or approval required or permitted by this Agreement or in any Loan Document to
be given by the Lenders may be given, and any term of this Agreement or of any
other Loan Document may be amended, and the performance or observance by the
Borrower or any Loan Party or Subsidiary of any terms of this Agreement or such
other Loan Document or the continuance of any Default or Event of Default may be
waived (either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Requisite Lenders
(and, in the case of an amendment to any Loan Document, the written consent of
the Borrower). Notwithstanding the foregoing, no
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amendment, waiver or consent shall, unless in writing, and signed by all of the
Lenders, do any of the following: (i) increase the Commitments of the Lenders or
subject the Lenders to any additional obligations; (ii) reduce the principal of,
or interest rates that have accrued or that will be charged on the outstanding
principal amount of, any Loans or other Obligations; (iii) reduce the amount of
any Fees payable hereunder; (iv) postpone any date fixed to any payment of any
principal of, interest on, or Fees with respect to, any Loans or any other
Obligations; (v) change the Credit Percentages (or any minimum requirement
necessary for the Lenders or Requisite Lenders to take action hereunder); or
(vi) amend this Section or amend the definitions of the terms used in this
Agreement or the other Loan Documents insofar as such definitions affect the
substance of this Section. Further, no amendment, waiver or consent unless in
writing and signed by the Administrative Agent, in addition to the Lenders
required hereinabove to take such action, shall affect the rights or duties of
the Administrative Agent under this Agreement or any of the other Loan
Documents. No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon and any amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose set forth therein. No course of dealing or delay or omission on the part
of any Lender or the Administrative Agent in exercising any right shall operate
as a waiver thereof or otherwise be prejudicial thereto. Except as otherwise
explicitly provided for herein or in any other Loan Document, no notice to or
demand upon the Borrower shall entitle the Borrower to other or further notice
or demand in similar or other circumstances. Notwithstanding any of the
foregoing to the contrary, the consent of the Borrower shall not be required for
any amendment, modification or waiver of the provisions of Article 12. (other
than the provisions of Section 12.7.). In addition, the Borrower and the Lenders
hereby authorize the Administrative Agent to modify this Agreement by
unilaterally amending or supplementing Annex I from time to time in the manner
requested by the Borrower, the Administrative Agent or any Lender in order to
reflect any assignments or transfers of the Commitments as provided for
hereunder; provided, however, that the Administrative Agent shall promptly
deliver a copy of any such modification to the Borrower and each Lender as
requested by such party.
SECTION 13.7. NONLIABILITY OF ADMINISTRATIVE AGENT, ARRANGER AND
LENDERS.
The relationship between the Borrower and the Lenders shall be solely
that of borrower and lender. Neither the Administrative Agent, the Arranger nor
any Lender shall have any fiduciary responsibilities to the Borrower. Neither
the Administrative Agent, the Arranger nor any Lender undertakes any
responsibility to the Borrower to review or inform the Borrower of any matter in
connection with any phase of the Borrower's business or operations. Without
limiting any of the provisions in this Section and/or Sections 13.17. and
13.18., the parties hereto acknowledge and agree that the Arranger (in its
capacities as such) shall have no obligations, duties or liabilities under this
Agreement or the other Loan Documents.
SECTION 13.8. INFORMATION.
Except as otherwise provided by Applicable Law, the Administrative
Agent and each Lender shall not disclose any non-public information obtained
pursuant to the
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requirements of this Agreement which has been identified as confidential or
proprietary by the Borrower, but may utilize all such information in accordance
with customary procedure of the Administrative Agent or such Lender, as the case
may be, for handling confidential information of this nature and in accordance
with safe and sound banking practices but in any event the Administrative Agent
and the Lenders may make disclosure: (a) to any of their respective affiliates
(provided such affiliates shall agree to keep such information confidential in
accordance with the terms of this Section); (b) as reasonably required by any
bona fide transferee or participant in connection with the contemplated transfer
of any Commitment or participations therein as permitted hereunder; (c) as
required by any Governmental Authority or representative thereof or pursuant to
legal process; (d) to the Administrative Agent's or such Lender's independent
auditors and other professional advisors (provided they shall be notified of the
confidential nature of the information); and (e) after the happening and during
the continuance of an Event of Default, to any other Person, in connection with
the exercise of the Lender's rights hereunder or under any of the other Loan
Documents.
SECTION 13.9. INDEMNIFICATION.
(a) The Borrower shall and hereby agrees to indemnify, defend and
hold harmless the Administrative Agent, the Issuing Bank, the Arranger, any
affiliate of the foregoing Persons and each of the Lenders and their respective
directors, officers, shareholders, agents, employees and counsel (each referred
to herein as an "Indemnified Party") from and against any and all losses,
claims, damages, liabilities, deficiencies, judgments, costs and expenses of
every kind and nature (including, without limitation, amounts paid in
settlement, court costs and the reasonable fees and disbursements of counsel
incurred in connection with any litigation, investigation, claim or proceeding
or any advice rendered in connection therewith) (the foregoing items referred to
herein as "Claims and Expenses") that may be incurred by or asserted or awarded
against an Indemnified Party, in each case arising out of or by reason of any
suit, cause of action, claim, arbitration, investigation or settlement, consent
decree or other proceeding (the foregoing referred to herein as an "Indemnity
Proceeding") which arise out of, or are in any way related directly or
indirectly to: (i) this Agreement or any other Loan Document or the transactions
contemplated thereby; (ii) the making of any Loans or issuance of Letters of
Credit hereunder; (iii) any actual or proposed use by the Borrower of the
proceeds of the Loans or Letters of Credit; (iv) the Administrative Agent's, the
Arranger's, the Issuing Bank's or any Lender's entering into this Agreement; (v)
the fact that the Administrative Agent, the Arranger, the Issuing Bank and the
Lenders have established the credit facility evidenced hereby in favor of the
Borrower and the Subsidiaries; (vi) the fact that the Administrative Agent, the
Arranger, the Issuing Bank and the Lenders are creditors of the Borrower and
have or are alleged to have information regarding the financial condition,
strategic plans or business operations of the Borrower and the Subsidiaries;
(vii) the fact that the Administrative Agent, the Arranger, the Issuing Bank and
the Lenders are material creditors of the Borrower and the Subsidiaries and are
alleged to influence directly or indirectly the business decisions or affairs of
the Borrower and the Subsidiaries or their financial condition; (viii) the
exercise of any right or remedy the Administrative Agent, the Issuing Bank or
the Lenders may have under this Agreement or the other Loan Documents including,
but not limited to, the foreclosure
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upon, or seizure of, any Collateral or the exercise of any other rights of a
secured party; provided, however, that the Borrower shall not be obligated to
indemnify any Indemnified Party for any acts or omissions of such Indemnified
Party in connection with matters described in this subparagraph (viii) that are
found in a final, non-appealable judgment by a court of competent jurisdiction
to have resulted from such Indemnified Party's gross negligence or willful
misconduct; (ix) any violation or non-compliance by the Borrower or any
Subsidiary of any Applicable Law (including any Environmental Law) including,
but not limited to, any Indemnity Proceeding commenced by the Internal Revenue
Service or state taxing authority or any Indemnity Proceeding commenced by any
Governmental Authority or other Person under any Environmental Law including any
Indemnity Proceeding commenced by a Governmental Authority or other Person
seeking remedial or other action to cause the Borrower or its Subsidiaries (or
its respective properties) (or the Administrative Agent and/or the Lenders as
successors to the Borrower) to be in compliance with such Environmental Laws.
(b) This indemnification shall apply to all Indemnity Proceedings
arising out of, or related to, the foregoing whether or not an Indemnified Party
is a named party in such Indemnity Proceeding. In this connection, this
indemnification shall cover all costs and expenses of any Indemnified Party in
connection with any deposition of any Indemnified Party or compliance with any
subpoena (including any subpoena requesting the production of documents). This
indemnification shall, among other things, apply to any Indemnity Proceeding
commenced by the Borrower, other creditors of the Borrower or any Subsidiary,
any shareholder, director, or employee or union of employees of the Borrower or
any Subsidiary (whether such shareholder(s) or director(s) are prosecuting such
Indemnity Proceeding in their individual capacity or derivatively on behalf of
the Borrower), any account debtor of the Borrower or any Subsidiary or by any
Governmental Authority or any other Person and whether or not the transactions
contemplated hereby are consummated.
(c) This indemnification shall apply to any Indemnity Proceeding
arising during the pendency of any bankruptcy proceeding filed by or against the
Borrower and/or any Subsidiary.
(d) All out-of-pocket fees and expenses of, and all amounts paid
to third-persons by, an Indemnified Party shall be advanced by the Borrower at
the request of such Indemnified Party notwithstanding any claim or assertion by
the Borrower that such Indemnified Party is not entitled to indemnification
hereunder upon receipt of an undertaking by such Indemnified Party that such
Indemnified Party will reimburse the Borrower if it is actually and finally
determined by a court of competent jurisdiction that such Indemnified Party is
not so entitled to indemnification hereunder.
(e) An Indemnified Party may engage its own counsel and conduct
its own investigation and defense of, and may formulate its own strategy with
respect to, any Indemnified Proceeding covered by this Section and, as provided
above, all costs and expenses incurred by the Indemnified Party shall be
reimbursed by the Borrower; provided, however, that the Borrower shall not be
liable for the fees and disbursements of
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more than one separate firm for all Indemnified Parties hereunder in connection
with any one Indemnity Proceeding or separate but substantially similar
Indemnity Proceeding(s) in the same jurisdiction; provided further, however,
that if (i) the engagement of a single counsel would present a conflict of
interest which would prevent such counsel from effectively defending such action
on behalf of the Indemnified Parties or (ii) Indemnified Party reasonably
concludes that there may be legal defenses available to it that are different
from or in addition to those available to any other Indemnified Party, then the
Indemnified Parties or any one of them may employ separate counsel to represent
or defend them or it in any such action or proceeding and the Borrower shall pay
the fees and disbursements of such counsel. No action taken by legal counsel
chosen by an Indemnified Party in investigating or defending against any such
Indemnified Proceeding shall vitiate or in any way impair the obligations and
duties of the Borrower hereunder to indemnify and hold harmless each such
Indemnified Party; provided, however, that (i) if the Borrower is required to
indemnify an Indemnified Party pursuant hereto and (ii) the Borrower has
provided evidence reasonably satisfactory to such Indemnified Party that the
Borrower has the financial wherewithal to reimburse such Indemnified Party for
any amount paid by such Indemnified Party with respect to such Indemnified
Proceeding, such Indemnified Party shall not settle or compromise any such
Indemnified Proceeding without the prior written consent of the Borrower (which
consent shall not be unreasonably withheld or delayed).
(f) If and to the extent that the obligations of the Borrower
hereunder are unenforceable for any reason, the Borrower hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under Applicable Law.
(g) The Borrower's obligations hereunder shall survive any
termination of this Agreement and the other Loan Documents and the payment in
full of the Obligations, and are in addition to, and not in substitution of, any
other of their obligations set forth in this Agreement.
SECTION 13.10. SURVIVAL.
Notwithstanding any termination of this Agreement, or of the other Loan
Documents, the indemnities and other reimbursement obligations to which the
Agents, the Issuing Bank and the Lenders are entitled under the provisions of
Sections 5.2., 5.21., 13.2., and 13.9. and any other provision of this Agreement
and the other Loan Documents, the waivers of jury trial and submissions to
jurisdiction contained in Section 13.4., shall continue in full force and effect
and shall protect the Administrative Agent, the Issuing Bank and the Lenders
against events arising after such termination as well as before.
SECTION 13.11. TITLES AND CAPTIONS.
Titles and captions of Articles, Sections, subsections and clauses in
this Agreement are for convenience only, and neither limit nor amplify the
provisions of this Agreement.
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SECTION 13.12. SEVERABILITY OF PROVISIONS.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 13.13. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF GEORGIA WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS
PRINCIPLES.
SECTION 13.14. COUNTERPARTS.
This Agreement and any amendments, waivers, consents or supplements may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each fully-executed set of which when so executed and
delivered shall be deemed an original, but all of which counterparts together
shall constitute but one and the same instrument. This Agreement shall become
effective upon the execution of a counterpart hereof by each of the parties
hereto.
SECTION 13.15. OBLIGATIONS WITH RESPECT TO LOAN PARTIES.
The obligations of the Borrower to direct or prohibit the taking of
certain actions by the other Loan Parties as specified herein shall be absolute
and not subject to any defense the Borrower may have that the Borrower does not
control such Loan Parties.
SECTION 13.16. INDEPENDENT NATURE OF LENDERS' RIGHTS.
Nothing contained in any Loan Document and no action taken by
Administrative Agent or any Lender or the Borrower or any Loan Party pursuant
hereto or thereto shall be deemed to constitute Lenders and/or the
Administrative Agent and/or any Loan Party to be a partnership, an association,
a joint venture or any other kind of entity. The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.
SECTION 13.17. NO FIDUCIARY RELATIONSHIP.
No provision in this Agreement or in any of the other Loan Documents
and no course of dealing between the parties shall be deemed to create any
fiduciary duty (a) by the Administrative Agent, the Issuing Bank or any Lender
to the Borrower or any other Loan Party or (b) by the Administrative Agent or
the Issuing Bank to any Lender.
-90-
<PAGE> 96
SECTION 13.18. LIMITATION OF LIABILITY.
Neither the Administrative Agent, the Issuing Bank, the Arranger, any
Lender, any affiliate, officer, director, employee, attorney, or agent of such
Persons shall have any liability with respect to, and the Borrower hereby
waives, releases, and agrees not to sue any of them upon, any claim for any
special, indirect, incidental, or consequential damages suffered or incurred by
the Borrower in connection with, arising out of, or in any way related to, this
Agreement or any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents. The Borrower
hereby waives, releases, and agrees not to sue the Administrative Agent, the
Arranger, the Issuing Bank or any Lender or any of their respective affiliates,
officers, directors, employees, attorneys, or agents for punitive damages in
respect of any claim in connection with, arising out of, or in any way related
to, this Agreement or any of the other Loan Documents, or any of the
transactions contemplated by this Agreement or financed hereby.
SECTION 13.19. ENTIRE AGREEMENT.
This Agreement, the Notes, and the other Loan Documents referred to
herein embody the final, entire agreement among the parties hereto and supersede
any and all prior commitments, agreements, representations, and understandings,
whether written or oral, relating to the subject matter hereof and may not be
contradicted or varied by evidence of prior, contemporaneous, or subsequent oral
agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto.
SECTION 13.20. CONSTRUCTION.
The Administrative Agent, the Issuing Bank, the Borrower and each
Lender acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the
Administrative Agent, the Issuing Bank, the Borrower and each Lender.
[SIGNATURES ON NEXT PAGE]
-91-
<PAGE> 97
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed by their authorized officers all as of the day and year
first above written.
THE BORROWER:
ASA HOLDINGS, INC.
By:
--------------------------------------------
Title: Senior Vice President-Finance
THE ADMINISTRATIVE AGENT AND ISSUING BANK:
NATIONSBANK, N.A., as Administrative Agent
and Issuing Bank
By:
--------------------------------------------
Title: Senior Vice President
[SIGNATURES CONTINUED ON NEXT PAGE]
-92-
<PAGE> 98
[SIGNATURE PAGE TO ASA HOLDINGS, INC. CREDIT AGREEMENT
DATED AS JUNE 26, 1998]
THE LENDERS:
NATIONSBANK, N.A., as a Lender
By
--------------------------------------------
Title:
-------------------------------------
SUNTRUST BANK, ATLANTA
By
--------------------------------------------
Title:
-------------------------------------
By
--------------------------------------------
Title:
-------------------------------------
WACHOVIA BANK, N.A.
By
--------------------------------------------
Title:
-------------------------------------
-93-
<PAGE> 99
ANNEX I TO CREDIT AGREEMENT
LIST OF LENDERS, COMMITMENTS, CREDIT
PERCENTAGES AND LENDING OFFICES
ADMINISTRATIVE AGENT:
NationsBank, N.A.
Independence Center
101 North Tryon Street, 15th Floor
Charlotte, North Carolina 28255-0001
Attention: Margaret Rhodes, Agency Services
Telecopy Number: (704) 386-9923
Telephone Number: (704) 386-2881
Wiring Instructions for Disbursements and Payments of Loans:
NationsBank, N.A.
ABA #053000196
Account #: 1364212200600
Attention: Corporate Credit Services
Ref: ASA Holdings, Inc.
LENDERS:
NATIONSBANK, N.A.
Lending Office (All Types of Loans): Initial Commitment Amount:
- -------------- --------------------------
600 Peachtree Street, 9th Floor $50,000,000.00
Atlanta, Georgia 30308
Attn: Kathryn W. Robinson Initial Credit Percentage: 50%
Telecopier: (404) 607-6467
Telephone: (404) 607-5887
Wiring Instructions: Same as above
I-1
<PAGE> 100
SUNTRUST BANK, ATLANTA
Lending Office (All Types of Loans): Initial Commitment Amount:
- -------------- --------------------------
25 Park Place, Mail Code 127 $25,000,000.00
Atlanta, Georgia 30303
Attn: Candace Bird-Diaz Initial Credit Percentage: 25%
Telecopier: (404) 230-1940
Telephone: (404) 581-1601
Wiring Instructions:
SunTrust Bank, Atlanta, Georgia
ABA #016-000-104
Benefit: Wire Clearing
Account #9088000112
Attention: Pat Ethridge x8358
Reference: ASA
WACHOVIA BANK, N.A.
Lending Office (All Types of Loans): Initial Commitment Amount:
- -------------- --------------------------
191 Peachtree Street, N.E. $25,000,000.00
Atlanta, Georgia 30303
Attn: Lanny Nixon Initial Credit Percentage: 25%
Telecopier: (404) 332-5016
Telephone: (404) 332-4884
Wiring Instructions:
Wachovia Bank, N.A.
ABA #016-000-010
Account #18800621
Attention: Margaret C. Pace
Reference: Atlantic Southeast Airlines, Inc.
TOTAL COMMITMENTS = $100,000,000
I-2
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ASA HOLDINGS, INC. FOR THE SIX MONTHS ENDED JUNE 30,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 133,699
<SECURITIES> 76,652
<RECEIVABLES> 10,064
<ALLOWANCES> (301)
<INVENTORY> 6,989
<CURRENT-ASSETS> 233,817
<PP&E> 550,147
<DEPRECIATION> 244,149
<TOTAL-ASSETS> 552,011
<CURRENT-LIABILITIES> 65,998
<BONDS> 91,528
0
0
<COMMON> 2,992<F1>
<OTHER-SE> 324,882<F2>
<TOTAL-LIABILITY-AND-EQUITY> 552,011
<SALES> 0
<TOTAL-REVENUES> 200,415
<CGS> 0
<TOTAL-COSTS> 152,193
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 60
<INTEREST-EXPENSE> 1,637
<INCOME-PRETAX> 52,798
<INCOME-TAX> 19,931
<INCOME-CONTINUING> 32,867
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,867
<EPS-PRIMARY> 1.10
<EPS-DILUTED> 1.09
<FN>
<F1> Reduced by approximately $72,310 allocable to 723,100 shares of Treasury
Stock.
<F2> Reduced by approximately $20,752,000 allocable to 723,100 shares of
Treasury Stock.
</FN>
</TABLE>
