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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13E-3/A
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
(Amendment No. 1)
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COMAIR HOLDINGS, INC.
(Name of Issuer)
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COMAIR HOLDINGS, INC.
DELTA AIR LINES, INC.
DELTA AIR LINES HOLDINGS, INC.
KENTUCKY SUB, INC.
(Name of Person(s) Filing Statement)
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Common Stock, No Par Value
(Title of Class of Securities)
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199789 10 8
(CUSIP Number of Class of Securities)
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Robert S. Harkey, Esq. Randy D. Rademacher
Senior Vice President - General Counsel Senior Vice President and
Delta Air Lines, Inc. Chief Financial Officer
Hartsfield Atlanta International Airport Comair Holdings, Inc.
Atlanta, Georgia 30320 P.O. Box 75021
(404) 715-2387 (606) 767-2550
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Person(s) Filing Statement)
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With Copies to:
Joseph Rinaldi, Esq. Peter D. Lyons, Esq. Richard D. Siegel, Esq.
Davis Polk & Wardwell Shearman & Sterling Keating, Muething &
450 Lexington Avenue 599 Lexington Avenue Klekamp P.L.L.
New York, New York 10017 New York, New York 10022 1800 Provident Tower
(212) 450-4000 (212) 848-4000 One East Fourth Street
Cincinnati, Ohio 45202
(513) 579-6400
This statement is filed in connection with (check the appropriate box):
a. [X] The filing of solicitation materials or an information
statement subject to Regulation 14A, Regulation 14C or Rule
13e-3(c) under the Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities Act of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: [ ]
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<PAGE>
INTRODUCTION
This Amendment No.1 amends and supplements the Rule 13e-3 Transaction
Statement on Schedule 13E-3 (the "Schedule 13E-3") filed by Comair Holdings,
Inc., a Kentucky corporation ("Comair"), Delta Air Lines, Inc., a Delaware
corporation ("Delta"), Kentucky Sub, Inc., a Kentucky corporation ("Kentucky
Sub") and an indirect, wholly owned subsidiary of Delta, and Delta Air Lines
Holdings, Inc., a Delaware corporation ("Delta Holdings") and a direct wholly
owned subsidiary of Delta, pursuant to Section 13(e) of the Securities Exchange
Act of 1934, as amended, and Rule 13e-3 thereunder, in connection with the
Preliminary Information Statement on Schedule 14C filed by Comair with the
Securities and Exchange Commission (the "SEC") on November 16, 1999 (the
"Preliminary Information Statement"), and the Definitive Information Statement
on Schedule 14C filed by Comair with the SEC on the date hereof, in each case
relating to the special meeting of Comair shareholders to be conducted on
January 11, 2000. At the special meeting, Comair shareholders will vote to
approve the merger of Kentucky Sub with and into Comair pursuant to the terms of
the Agreement and Plan of Merger dated as of October 17, 1999, and amended as of
November 10, 1999, among Delta, Kentucky Sub and Comair.
Please note that all cross references in the Schedule 13E-3 to the
Preliminary Information Statement should now be deemed to be cross references to
the Definitive Information Statement, which is being filed by Comair on the date
hereof.
Item 1. Issuer and Class of Security Subject to the Transaction
Item 1 is hereby amended and supplemented by deleting paragraph (b) thereof
and replacing it in its entirety with the following paragraph:
"(b) The exact title of the class of equity securities that are
the subject of the transaction is the common stock, no par
value, of Comair (the "Shares"). As of December 7, 1999,
there were 95,526,431 Shares issued and outstanding and
approximately 1460 holders of record of Shares."
Item 17. Material to Be Filed as Exhibits
Item 17 is hereby amended and supplemented as follows:
(a)(2) Credit Agreement dated as of November 22, 1999, among Delta,
the banks party thereto, Commerzbank AG and Industrial Bank
of Japan, Limited, each in its capacity as co- documentation
agent, Citibank N.A., in its capacity as syndication agent,
and The Chase Manhattan Bank, in its capacity as
administrative agent.
(d)(10) Definitive Information Statement filed by Comair with the SEC
on the date hereof, which is hereby incorporated by reference.
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<PAGE>
After due inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
December 9, 1999
COMAIR HOLDINGS, INC.
By: /s/ Randy D. Rademacher
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Name: Randy D. Rademacher
Title: Senior Vice President Finance and
Chief Financial Officer
DELTA AIR LINES, INC.
By: /s/ M. Michele Burns
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Name: M. Michele Burns
Title: Vice President and Treasurer
DELTA AIR LINES HOLDINGS, INC.
By: /s/ Leslie P. Klemperer
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Name: Leslie P. Klemperer
Title: Vice President and Secretary
KENTUCKY SUB, INC.
By: /s/ Dean C. Arvidson
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Name: Dean C. Arvidson
Title: Secretary
<PAGE>
EXHIBIT INDEX
(a)(2) Credit Agreement dated as of November 22, 1999, among Delta, the
banks party thereto, Commerzbank AG and Industrial Bank of Japan,
Limited, each in its capacity as co-documentation agent, Citibank
N.A., in its capacity as syndication agent, and The Chase Manhattan
Bank, in its capacity as administrative agent.
(d)(10) Definitive Information Statement filed by Comair with the SEC on
the date hereof, which is hereby incorporated by reference.
EXECUTION COPY
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CREDIT AGREEMENT
among
DELTA AIR LINES, INC.,
The Several Banks from Time to Time Parties Hereto,
COMMERZBANK AG and INDUSTRIAL BANK OF JAPAN, LIMITED,
as Co-Documentation Agents
CITIBANK, N.A., as Syndication Agent
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of November 22, 1999
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CHASE SECURITIES INC., as Lead Arranger and Book Manager
<PAGE>
TABLE OF CONTENTS
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Page
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ARTICLE 1. DEFINITIONS.........................................................1
Section 1.1. Definitions......................................................1
ARTICLE 2. AMOUNT AND TERMS OF CREDIT..........................................8
Section 2.1. Commitment.......................................................8
Section 2.2. The Banks........................................................9
ARTICLE 3. THE TERM LOANS......................................................9
Section 3.1. Term Loans.......................................................9
Section 3.2. Notice and Place of Borrowing for Term Loans.....................9
Section 3.3. The Notes.......................................................10
Section 3.4. Interest........................................................10
Section 3.5. Place of Payment................................................11
Section 3.6. Voluntary Prepayment............................................11
Section 3.7. Pro Rata Treatment..............................................11
Section 3.8. Initial Determination of Interest Rate and Conversion of Term
Loans Between Eurodollar Rate and Base Rate.....................11
Section 3.9. Failure to Borrow...............................................12
Section 3.10. Commitment Fee.................................................12
Section 3.11. Termination of Credit Facility.................................12
Section 3.12. Maturity of Credit Facility....................................12
Section 3.13. Optional Reduction of Commitments..............................13
Section 3.14. Substitution of Banks..........................................13
Section 3.15. Capital Requirements...........................................14
Section 3.16. Mandatory Prepayment Upon Change in Control....................15
Section 3.17. Agent Fees.....................................................16
ARTICLE 4. CONDITIONS TO EFFECTIVENESS OF AGREEMENT AND FOR BORROWINGS........16
Section 4.1. Effectiveness...................................................16
Section 4.2. Initial and Subsequent Borrowing................................17
ARTICLE 5. REPRESENTATIONS AND WARRANTIES.....................................18
Section 5.1. Organization; Standing, Etc.....................................18
Section 5.2. Financial Statements............................................18
Section 5.3. Litigation......................................................19
Section 5.4. Business; Status as Air Carrier.................................19
Section 5.5. Funded Debt.....................................................19
Section 5.6. Title to Properties, Etc........................................19
Section 5.7. Tax Returns and Payments........................................19
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Section 5.8. Compliance With Other Instruments...............................20
Section 5.9. Offering of Notes...............................................20
Section 5.10. Use of Proceeds................................................20
Section 5.11. Governmental Regulation........................................20
Section 5.12. Subsidiaries...................................................21
Section 5.13. ERISA..........................................................21
Section 5.14. Environmental Matters..........................................21
Section 5.15. Year 2000 Matters..............................................21
ARTICLE 6. AFFIRMATIVE COVENANTS..............................................22
Section 6.1. Insurance.......................................................22
Section 6.2. Payment of Taxes................................................22
Section 6.3. Financial Statements............................................22
Section 6.4. Maintenance of Equipment........................................23
Section 6.5. Inspection......................................................23
Section 6.6. Security for Notes..............................................23
Section 6.7. Notice of Any Default or Event of Default.......................23
Section 6.8. ERISA Reporting Requirements....................................24
Section 6.9. Ratings.........................................................24
ARTICLE 7. NEGATIVE COVENANTS.................................................24
Section 7.1. Liens...........................................................24
Section 7.2. Debt............................................................24
Section 7.3. Mergers; Disposition of Assets..................................25
Section 7.4. Leases..........................................................25
Section 7.5. Financial Covenant..............................................25
ARTICLE 8. DEFAULTS...........................................................26
Section 8.1. Events of Default...............................................26
ARTICLE 9. YIELD PROTECTION...................................................28
Section 9.1. Increased Cost of Eurodollar Rate Loans.........................28
Section 9.2. Change of Law...................................................29
Section 9.3. Funding Losses..................................................29
Section 9.4. Mandatory Repayment or Conversion on Certain Events.............30
Section 9.5. Survival........................................................30
ARTICLE 10. THE ADMINISTRATIVE AGENT..........................................30
Section 10.1. Authorization and Action.......................................30
Section 10.2. Administrative Agent's Reliance, Etc...........................31
Section 10.3. Administrative Agent and Affiliates............................31
Section 10.4. Representations of the Banks...................................31
Section 10.5. Events of Default..............................................32
Section 10.6. Right to Indemnity.............................................32
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Section 10.7. Indemnification................................................32
Section 10.8. Successor Administrative Agent.................................33
Section 10.9. Syndication Agent and Co-Documentation Agents..................33
ARTICLE 11. MISCELLANEOUS.....................................................33
Section 11.1. Rights and Remedies............................................33
Section 11.2. Notices........................................................33
Section 11.3. Expenses, Indemnification, Etc.................................34
Section 11.4. Amendments to this Agreement and the Notes.....................36
Section 11.5. Agreement as to Right of Set-off, Sharing of Losses............36
Section 11.6. Successors and Assigns.........................................37
Section 11.7. Holidays.......................................................38
Section 11.8. Law Governing..................................................38
Section 11.9. Disclosure to Other Persons....................................38
Section 11.10. Execution and Effective Date..................................39
Section 11.11. Representation of Banks.......................................39
Section 11.12. Severability..................................................39
Section 11.13. Entire Agreement..............................................39
Section 11.14. Jurisdiction..................................................39
Section 11.15. Waivers of Jury Trial.........................................40
Exhibits and Schedules
Exhibit A The Banks on the Effective Date
Exhibit B Form of Term Note
Exhibit C-1 Form of Notice and Agreement Regarding Addition of Bank
Exhibit C-2 Form of Agreement of Existing Bank to Replace Replaced Bank
Exhibit D Form of Assignment and Assumption Agreement
Schedule I Funded Debt and Secured Obligations
Schedule II Subsidiaries
Schedule III Guaranty Liabilities
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<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of November 22, 1999 (this
"Agreement") by and among DELTA AIR LINES, INC., a corporation organized under
the laws of the State of Delaware (the "Company"), each of the financial
institutions initially a signatory hereto together with those assignees pursuant
to Section 11.6 hereof (collectively, the "Banks" and each individually, a
"Bank"), COMMERZBANK AG and INDUSTRIAL BANK OF JAPAN, LIMITED, each in its
capacity as co-documentation agent (the "Co-Documentation Agents"), CITIBANK,
N.A., in its capacity as syndication agent (the "Syndication Agent"), and THE
CHASE MANHATTAN BANK, in its capacity as administrative agent for the Banks (the
"Administrative Agent").
WHEREAS, the Company, through Kentucky Sub, Inc., an indirect,
wholly-owned Subsidiary of the Company incorporated under the laws of the State
of Kentucky ("Acquisition Subsidiary"), intends to acquire (the "Acquisition")
all of the outstanding common stock of Comair Holdings, Inc., a corporation
incorporated under the laws of the State of Kentucky (the "Target");
WHEREAS, the Acquisition will be accomplished by means of (i)
a tender offer (the "Tender Offer") being made by Acquisition Subsidiary for all
of the issued and outstanding shares (the "Shares") of common stock of Target,
which will be subject to, among other conditions, there being validly tendered
and not withdrawn Shares which, when taken together with Shares owned by the
Company or its affiliates, represent at least two-thirds of the then issued and
outstanding Shares on a fully diluted basis, and (ii) a merger transaction (the
"Merger") after and subject to completion of the Tender Offer pursuant to which
the Target will become an indirect, wholly-owned Subsidiary of the Company and
in connection with which any remaining Shares shall become entitled only to a
per-Share payment equal to the price per share paid in the Tender Offer;
WHEREAS, in order to provide financing for the Acquisition and
to pay related fees and expenses thereof, the Company has requested the Banks to
make available senior unsecured term loans in the aggregate amount of
$1,900,000,000; and
WHEREAS, the Banks desire to make available to the Company
such term loans on the terms and conditions contained herein;
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is 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:
"Administrative Agent" shall mean The Chase Manhattan Bank, in
its capacity as administrative agent for the Banks; provided, however, that if
The Chase Manhattan Bank shall have resigned or been removed as Administrative
Agent, then "Administrative Agent" shall mean the bank selected as
Administrative Agent pursuant to the provisions of Section 10.8 hereof.
<PAGE>
"Applicable Margin" shall mean, as of any date of
determination, the percentage rate set forth below for each type of Term Loan
corresponding to the long term senior unsecured debt rating of the Company, as
rated by S&P (the "S&P Rating") and Moody's (the "Moody's Rating"; each of the
S&P Rating and the Moody's Rating referred to herein as a "Rating"):
<TABLE>
- ---------------------------------------------------------------------------------------------------------
Long Term Senior Unsecured Debt Applicable Margin for Applicable Margin for
Level Rating of the Company Eurodollar Rate Base Rate Loans
(S&P/Moody's) Loans
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 BBB+ or higher or Baa1 or higher 0.750% 0%
- ---------------------------------------------------------------------------------------------------------
2 BBB or Baa2 0.875% 0%
- ---------------------------------------------------------------------------------------------------------
3 BBB- or Baa3 1.000% 0%
- ---------------------------------------------------------------------------------------------------------
4 BB+ or Ba1 1.250% 0.250%
- ---------------------------------------------------------------------------------------------------------
5 BB or lower or Ba2 or lower 2.00% 1.00%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
The Administrative Agent shall determine the Applicable Margin
from time to time in accordance with the above table and notify the Company and
the Banks of such determination from time to time. In the event the S&P Rating
and the Moody's Rating correspond to different levels on the above table
resulting in different Applicable Margin determinations, the following
provisions shall apply. In the event the S&P Rating and the Moody's Rating
differ by one level, the Applicable Margin shall be that corresponding to the
higher Rating. For example, a "BBB+" S&P Rating and a "Baa2" Moody's Rating
would result in an Applicable Margin for Eurodollar Rate Loans equal to 0.750%.
In the event the S&P Rating and the Moody's Rating differ by two levels, the
Applicable Margin shall be that corresponding to that level which is in between
the two applicable levels. For example, a "BBB" S&P Rating and a "Ba1" Moody's
Rating would result in an Applicable Margin for Eurodollar Rate Loans equal to
1.000%. In the event the S&P Rating and the Moody's Rating differ by three
levels, the Applicable Margin shall be that corresponding to the level
immediately below the higher of such Ratings. For example, a "BBB+" S&P Rating
and a "Ba1" Moody's Rating would result in an Applicable Margin for Eurodollar
Rate Loans equal to 0.875%. In the event the S&P Rating and the Moody's Rating
differ by four levels (i.e. a ratings split between level 1 and level 5), the
Applicable Margin shall be that corresponding to level 4. For example, a "BBB+"
S&P Rating and a "Ba2" Moody's Rating would result in an Applicable Margin for
Eurodollar Rate Loans equal to 1.250%.
In the event only one rating agency exists or continues rating
the Company's long term senior unsecured debt, such agency's rating shall be
used for purposes of the above table. In the event: (i) neither agency exists or
continues rating the Company's long term senior unsecured debt or (ii) the
Company no longer has any outstanding long term senior unsecured debt to be
rated, the Applicable Margin for the first 90 days after such occurrence shall
be the Applicable Margin in effect as determined using the above immediately
prior to such occurrence. During such 90-day period, the Administrative Agent
and the Company shall negotiate in good faith to agree upon a new pricing grid
or other appropriate pricing terms. Any such new grid or pricing terms shall be
approved by the Majority Banks. In the event the Administrative Agent, the
Company and Majority Banks cannot agree upon such new pricing grid or pricing
terms by the end of such 90-day period, the Applicable Margin shall be that
corresponding to level 3 of the above table for the remainder of the term of the
Agreement.
Any necessary adjustment in the Applicable Margin pursuant to
the terms hereof shall become effective immediately upon any change in a Rating.
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"Banks": shall have the meaning set forth in the preamble
hereto provided, that unless the context otherwise requires, each reference
herein to the Banks shall be deemed to include any Conduit Bank.
"Base Rate" shall mean the rate per annum which is the Prime
Rate in effect from time to time at a majority of the Reference Banks (or if no
two of such Banks have the same Prime Rate in effect, the Prime Rate in effect
at such Bank whose Prime Rate is neither the highest nor the lowest) plus the
Applicable Margin.
"Base Rate Loan" shall mean any Term Loan which bears interest
at the Base Rate.
"Business Day" shall mean any day during which the Main Office
of the Administrative Agent is scheduled to be open for the conduct of its
banking business and during which national banking associations located in New
York, New York are open for the conduct of banking business.
"Commitment" shall have the meaning set forth in Section 2.1
hereof.
"Commitment Fee" shall mean the fee required to be paid to the
Administrative Agent, for the account of the Banks, by the Company pursuant to
Section 3.10 hereof.
"Conduit Bank" shall mean any special purpose corporation
organized and administered by any Bank for the purpose of making Term Loans
hereunder otherwise required to be made by such Bank and designated by such
Bank, subject to the consent of, and pursuant to a written instrument in form
and substance satisfactory to, the Administrative Agent and the Company;
provided, that the designation by any Bank of a Conduit Bank shall not relieve
the designating Bank of any of its obligations to fund a Term Loan under this
Agreement if, for any reason, its Conduit Bank fails to fund any such Term Loan,
and the designating Bank (and not the Conduit Bank) shall have the sole right
and responsibility to deliver all consents and waivers required or requested
under this Agreement with respect to its Conduit Bank, provided, further, that
no Conduit Bank shall (a) be entitled to receive any greater amount pursuant to
Section 3.15, 9.1, 9.3 or 11.3 than the designating Bank would have been
entitled to receive in respect of the extensions of credit made by such Conduit
Bank or (b) be deemed to have any Commitment hereunder, and provided, further,
that the designating Bank shall act as administrative agent for its Conduit Bank
and give and receive notices on its Conduit Bank's behalf, any payments for the
account of its Conduit Bank shall be paid to the designating Bank as
administrative agent for its Conduit Bank and neither the Company nor the
Administrative Agent shall be responsible for such designating Bank's
application of such payments.
"Consolidated Aircraft Rentals" shall mean, for any period of
four consecutive fiscal quarters of the Company, the total consolidated aircraft
rent of the Company and its Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period of four
consecutive fiscal quarters of the Company, the consolidated operating income of
the Company and its Subsidiaries for such period plus amortization and
depreciation expenses that were deducted in arriving at the amount of such
consolidated operating income for such period, all as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period of
four consecutive fiscal quarters of the Company, the total interest expense of
the Company and its Subsidiaries for such period, as determined on a
consolidated basis in accordance with GAAP.
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"Convertible Subordinated Debt" shall mean any debt of the
Company convertible into shares of any or all classes of stock of the Company
and containing, or issued under agreements or indentures containing, provisions
effectively subordinating the same to the debt created by this Agreement.
"Credit Facility" shall mean the credit facility extended to
the Company by the Banks pursuant hereto.
"Current Debt" shall mean any obligation for borrowed money
(including notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money) payable on demand or
within a period of one year from the date of the creation thereof.
"Default" shall mean any of the events specified in paragraphs
(a) through (i) of Section 8.1 hereof, whether or not there has been satisfied
any requirement for giving of notice, lapse of time or the happening of any
other condition.
"Depositary" shall mean Harris Trust Company of New York.
"Dollar" and "$" shall mean lawful money of the United States
of America.
"Effective Date" shall mean the date upon which all of the
conditions of Section 4.1 hereof have been satisfied.
"Equity" shall mean the sum of: (i) the par value (or value
stated on the books of the Company) of the capital stock of all classes of the
Company (other than the Company's Series B ESOP Convertible Preferred Stock),
(ii) the amount of additional paid-in capital and reinvested earnings of the
Company, (iii) the amount of taxes deferred and unamortized investment tax
credits under Sections 167 and 168 of the Internal Revenue Code or similar
provisions of any applicable tax law and carried on the balance sheet under
those captions, (iv) the amount of any gain on the sale and leaseback of assets
which is deferred pursuant to generally accepted accounting principles, (v) the
principal amount of any Convertible Subordinated Debt outstanding, (vi) the
amount of any postretirement benefits (other than pensions) of the Company
accrued in accordance with the Statement of Financial Accounting Standards No.
106 (Financial Accounting Standards Board 1990) and generally accepted
accounting principles and classified as long term liabilities on the balance
sheet of the Company, and (vii) the difference between (a) the stated and
liquidation value of the Company's Series B ESOP Convertible Preferred Stock and
(b) the unearned compensation under the Company's employee stock ownership plan;
minus (viii) the unrealized loss on noncurrent marketable equity securities, net
of any deferred tax benefits, and minus (ix) treasury stock at cost.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time and any successor statute.
"Eurodollar Business Days" shall mean 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.
"Eurodollar Lending Office" shall mean, with respect to each
Bank, the office of such Bank identified as such from time to time to the
Administrative Agent and the Company as the office of such Bank or of its
affiliate at which the Eurodollar Rate Loans held by such Bank are to be
maintained.
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"Eurodollar Rate" shall mean a rate per annum (rounded upward,
if necessary, to the nearest l/100th of 1%) determined by the Administrative
Agent pursuant to the following formula:
Eurodollar Rate = LIBOR plus Applicable Margin.
"LIBOR" shall mean, with respect to any Interest Period for Eurodollar Rate
Loans, the offered rate in the London interbank market for deposits in United
States dollars of amounts equal or comparable to the principal amount of such
Eurodollar Rate Loan offered for a term comparable to such Interest Period, as
currently shown on the Reuters Screen LIBO page as of 11:00 a.m., GMT, two
Eurodollar Business Days prior to the first day of such Interest Period;
provided, however, that (A) if more than one offered rate as described above
appears on the Reuters Screen LIBO page, the rate used to determine LIBOR will
be the arithmetic average (rounded upward, if necessary, to the next higher
1/100 of 1%) of such offered rates, or (B) if no such offered rates appear, the
rate used for such Interest Period will be the arithmetic average (rounded
upward, if necessary, to the next higher 1/100 of 1% ) of rates quoted by the
Reference Banks at approximately 10:00 a.m., New York time, two Eurodollar
Business Days prior to the first day of such Interest Period for deposits in
United States dollars offered to leading European banks for a period comparable
to such Interest Period in an amount comparable to the principal amount of such
Eurodollar Rate Loans. If the Administrative Agent ceases to use the Reuters
Screen LIBO page for determining interest rates based on eurodollar deposit
rates, a comparable internationally recognized interest rate reporting service
shall be used to determine such offered rates.
"Eurodollar Rate Loan" shall mean any Term Loan which bears
interest at the Eurodollar Rate.
"Event of Default" shall mean any one of the events specified
in paragraphs (a) through (i) of Section 8.1 hereof, provided that any
requirement for notice or lapse of time or other condition contained therein has
been satisfied.
"Existing Credit Agreement" shall mean the Credit Agreement,
dated as of May 2, 1997, among the Company, the several financial institutions
which are parties thereto and Nationsbank, N.A. (South), as Agent Bank, as
amended, restated, modified, renewed, refunded, replaced or refinanced (in whole
or in part) from time to time.
"Funded Debt" shall mean any obligation for borrowed money or
the deferred purchase price of property, or any obligation arising under a
capital lease, other than Convertible Subordinated Debt, payable more than one
year from the date of the creation thereof which, under generally accepted
accounting principles in effect from time to time, is shown on the balance sheet
of the obligor as a liability; provided that any obligation shall be treated as
Funded Debt, regardless of its term, if such obligation is renewable pursuant to
the terms thereof or of a revolving credit or similar agreement effective for
more than one (1) year after the date of the creation of such obligation or may
be payable out of the proceeds of a similar obligation pursuant to the terms of
such obligation or of any such agreement.
"GAAP" shall mean the generally accepted accounting principles
in the United States as in effect from time to time.
"Immediate Replacement Event" shall mean a change in any law,
rule, or regulation, or any change in the interpretation or administration
thereof, or, a new law, rule, or regulation, having any of the consequences
specified in Section 9.1 hereof.
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<PAGE>
"Initial Term Loans" shall have the meaning set forth in
Section 3.1 hereof.
"Interest Period" shall mean, for each Eurodollar Rate Loan,
the period beginning on the date of such Term Loan or conversion thereof or on
the last day of an immediately preceding Interest Period for such Term Loan and
ending one, two, three, or six months later, as specified in the notice given by
the Company to the Administrative Agent; provided, however, that if the last day
of any Interest Period would fall on a day which is not a Eurodollar Business
Day that Interest Period shall be extended to the next succeeding day which is a
Eurodollar Business Day, unless the result of such extension should be to carry
such Interest Period to the next succeeding calendar month in which event such
Interest Period shall end on the immediately preceding Eurodollar Business Day,
further provided that any Interest Period that would extend beyond the Maturity
Date shall end on such date.
"Interest Rate" shall mean:
(a) With respect to a Eurodollar Rate Loan, the Eurodollar
Rate; and
(b) With respect to a Base Rate Loan, the Base Rate.
"Main Office" of the Administrative Agent shall be The Chase
Manhattan Bank, 270 Park Avenue, New York, New York.
"Majority Banks" shall mean, as of any date, Banks on such
date having Credit Exposures (as defined below) aggregating at least 51% of the
aggregate Credit Exposures of all the Banks on such date. For purposes of the
preceding sentence, the amount of the "Credit Exposure" of each Bank shall be
equal to the aggregate principal amount of the Term Loans owing to such Bank
plus the unutilized amount of such Bank's Commitment.
"Maturity Date" shall mean November 22, 2001 or such earlier
date on which the Term Loans shall become due and payable in accordance with the
terms of this Agreement.
"Merger Date" shall mean the date on which the Merger (as
defined in the recitals hereto) becomes effective.
"Moody's" shall mean Moody's Investors Service, Inc.
"Moody's Rating" shall have the meaning set forth in the
definition of Applicable Margin.
"Notes" shall have the meaning set forth in Section 3.3
hereof.
"Officer's Certificate" shall mean a certificate signed by the
Chairman of the Board, the President, or a principal financial officer of the
Company.
"Orderly Replacement Event" shall mean, as to any Eurodollar
Rate Loan, the determination by the Administrative Agent not later than two (2)
Eurodollar Business Days prior to the first day of any Interest Period that: (a)
for any reason whatsoever rates are not quoted for the offering of Dollars in
the London interbank market for deposit for a period comparable to such Interest
Period; or (b) the quoted rate for purposes of computing the rate of interest on
the Eurodollar Rate Loan does not accurately reflect the funding cost to the
Banks of making or maintaining such Term Loans.
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"Person" shall mean and include an individual, a partnership,
a joint venture, an estate, a corporation, a trust, an unincorporated
organization, a limited liability company, and a government or any department or
agency or political subdivision thereof.
"Prime Rate" shall mean, for any day, the rate which is quoted
by each Reference Bank as the respective bank's prime, reference, base, or
alternate base rate, as the case may be. The Company acknowledges that the Prime
Rate of any Reference Bank may not be the lowest or best interest rate offered
by such Reference Bank to its customers.
"Rating" shall have the meaning set forth in the definition of
Applicable Margin.
"Reference Bank" shall mean the Administrative Agent and the
Syndication Agent, and each of their respective successors and assigns.
"Required Number" shall mean in the case of notices relating
to Term Loans hereunder to the Administrative Agent: (a) relative to borrowings,
prepayments, elections of, and conversions into, the Eurodollar Rate, selections
of Interest Periods and other transactions in respect of Eurodollar Rate Loans,
not less than three (3) Eurodollar Business Days and (b) relative to all
transactions in respect of Base Rate Loans, not less than one (1) Business Day,
provided that for the Term Loans made on the Tender Offer Date the notice of
such borrowing will be sufficient if given no later than 11:00 a.m. New York
City time on the Tender Offer Date and such Term Loans may be made as Eurodollar
Rate Loans if the Company had (i) given notice to the Administrative Agent at
least three (3) Eurodollar Business Days prior to the Tender Offer Date (which
may have been given and will be effective for purposes hereof regardless of
whether this Agreement at that time had been executed by any of the parties
hereto) specifying the date, amount and initial Interest Period for such
borrowing and (ii) in connection therewith, delivered to the Administrative
Agent, for the benefit of the Banks to become party hereto, an undertaking with
respect to such borrowing agreeing to indemnify such Banks on a basis
substantially as set forth in Section 3.9.
"S&P" shall mean Standard & Poor's Ratings Services.
"S&P Rating" shall have the meaning set forth in the
definition of Applicable Margin.
"Specified Event of Default" shall mean any default in the
observance or performance of any Specified Restrictive Provision or the
occurrence of any Specified Restrictive Provision structured as an event of
default.
"Specified Restrictive Provision" shall have the meaning set
forth in Section 11.4 hereof.
"Subsequent Term Loans" shall have the meaning set forth in
Section 3.1 hereof.
"Subsidiary" shall mean any corporation, association or other
business entity, a majority (by number of votes) of the outstanding stock or
other ownership interest of which is, at the time at which any determination is
being made, owned by the Company either directly or through Subsidiaries
(excluding, until the Tender Offer Date, the Target and its subsidiaries).
"Tender Offer Date" shall mean the date on which the Company
is to deposit with the Depositary for the Tender Offer funds for payment of the
purchase price of Shares accepted for payment in the Tender Offer.
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"Term Loan" shall mean, collectively, the Eurodollar Rate
Loans and the Base Rate Loans.
"Termination Date" shall mean the earliest of (a) the date
that is fifteen (15) Business Days after the Merger Date or, if earlier, the
date on which Term Loans in connection with the Merger Date are made (after
giving effect to the making of any Term Loans on such date), (b) the date which
is 120 days after the Effective Date, and (c) the date the Total Commitments are
otherwise terminated pursuant to the applicable provisions of this Agreement.
"Total Commitments of the Banks" shall have the meaning set
forth in Section 2.l hereof.
ARTICLE 2. AMOUNT AND TERMS OF CREDIT
Section 2.1. Commitment.
Each Bank severally agrees to make Term Loans to the Company
on each of (i) a date on or after the expiry date of the Tender Offer and no
earlier than two Business days before the Tender Offer Date and (ii) a date on
or after the Merger Date and no later than fifteen (15) Business Days after the
Merger Date in the manner and upon, and subject to, the terms and conditions
hereinafter set forth up to an amount equal to such Bank's Commitment as set
forth in Section 2.2 hereof, as such Commitment on either such date may have
been adjusted from time to time in accordance with the terms of this Agreement.
The obligation of each Bank to make Term Loans to the Company is hereby referred
to as the Bank's "Commitment" and collectively as the "Total Commitments of the
Banks". Each Bank's Commitment shall automatically be permanently reduced on a
date on or after the expiry date of the Tender Offer and no earlier than two
Business Days before the Tender Offer Date by the amount of the Term Loan made
by such Bank on such date.
Section 2.2. The Banks.
See Exhibit A hereto.
ARTICLE 3. THE TERM LOANS
Section 3.1. Term Loans.
Subject to the terms and conditions hereof, on each of (i) a
date on or after the expiry date of the Tender Offer and no earlier than two
Business Days before the Tender Offer Date and (ii) a date on or after the
Merger Date and no later than fifteen (15) Business Days after the Merger Date,
each Bank severally and not jointly agrees to make Term Loans to the Company in
an aggregate principal amount up to, but not exceeding, such Bank's Commitment
on such date. Term Loans made in connection with the Tender Offer Date are
hereinafter referred to as the "Initial Term Loans", and Term Loans made in
connection with the Merger Date are hereinafter referred to as the "Subsequent
Term Loans".
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Section 3.2. Notice and Place of Borrowing for Term Loans.
The Company shall give written, facsimile or telephonic
(confirmed immediately in writing) notice to the Administrative Agent, such
notice to be given not later than 11:00 a.m. New York City time on a Business
Day which is at least the Required Number of days prior to each borrowing of
Term Loans and to contain the date of such borrowing, the amount of such
borrowing, the Interest Rate option selected, and, where applicable, the length
of the Interest Period. Upon receiving notice from the Company, the
Administrative Agent shall promptly give written, facsimile or telegraphic
notice to each Bank, such notice to contain the date of such borrowing, the
amount to be borrowed from such Bank, the Interest Rate option selected, and,
where applicable, the length of the Interest Period. Funds are to be disbursed
pursuant to this Agreement at the Main Office of the Administrative Agent. Not
later than 11:00 a.m. (or, in the case of any permitted same-day notice of
borrowing, 2:00 p.m.) New York City time on the date of borrowing of Term Loans
as specified in the notice from the Administrative Agent to the Banks, each Bank
shall have made available at the Main Office of the Administrative Agent, in
immediately available funds, the amount of Term Loans to be advanced by such
Bank, and the Administrative Agent shall immediately pay such funds to or upon
the order of the Company. Unless the Administrative Agent shall have received
notice from a Bank prior to the date of any such borrowing that such Bank will
not make available to the Administrative Agent such Bank's ratable portion of
such borrowing, the Administrative Agent may assume that such Bank has made such
portion available to the Administrative Agent on the date of such borrowing in
accordance with this Section 3.2, and the Administrative Agent may, in reliance
upon such assumption, make available to the Company on such date a corresponding
amount. If and to the extent such Bank shall not have made such ratable portion
available to the Administrative Agent, such Bank and the Company severally agree
to repay to the Administrative Agent immediately on demand such corresponding
amount together with interest thereon, for each day from the date such amount is
made available to the Company and until the date such amount is repaid to the
Administrative Agent, at (i) with respect to the Company, the Interest Rate
applicable at the time to the type of Term Loan comprising such borrowing, or
(ii) with respect to the Bank, at the applicable overnight federal funds rate.
If such Bank shall repay to the Administrative Agent such corresponding amount,
such amount so repaid shall constitute such Bank's advance as part of such
borrowing for purposes of this Agreement.
Section 3.3. The Notes.
The Term Loans made pursuant to this Agreement by each Bank
shall be evidenced by a promissory note executed and delivered by the Company in
form substantially the same as Exhibit B attached hereto and made a part hereof,
each dated the date of this Agreement, each drawn to the order of such Bank in
the amount of such Bank's respective Commitment, and each maturing on the
Maturity Date. Such promissory notes are hereinafter referred to as the "Notes"
and each as a "Note". Each Bank's records with respect to advances and
repayments of Term Loans hereunder shall, absent manifest error, be deemed to
prevail as to the Company's obligations hereunder.
Section 3.4. Interest.
The Company shall pay interest on the outstanding principal
amount of each Term Loan for the period commencing on the date of each such Term
Loan until such Term Loan shall be due and payable at the rates and times set
forth below:
(a) Interest on Eurodollar Rate Loans. Subject to the
provisions of subsection (c) immediately below, interest on each Eurodollar Rate
Loan shall be payable (i) on the last day of each
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Interest Period with respect thereto, provided, however, that if such Interest
Period is for a period of duration in excess of three (3) months, then such
interest shall also be payable on the date three (3) months after the first day
of such Interest Period, (ii) on the date of conversion of such Eurodollar Rate
Loan to a Base Rate Loan and (iii) at maturity of such Term Loan (and after
maturity of such Term Loan (whether by acceleration or otherwise) upon demand),
at an interest rate per annum during the Interest Period for such Term Loan
equal to the Eurodollar Rate for the Interest Period in effect for such
Eurodollar Rate Loan. Each determination by the Administrative Agent of an
Interest Rate hereunder shall be conclusive and binding on the Banks and the
Company for all purposes, absent manifest error.
(b) Interest on Base Rate Loans. Subject to the provisions of
subsection (c) immediately below, interest on each Base Rate Loan shall be
payable quarterly in arrears on the last day of each March, June, September and
December of each year and at maturity (and after maturity (whether by
acceleration or otherwise) upon demand) at an interest rate per annum equal to
the Base Rate.
(c) Interest Upon Event of Default. Any payment of principal
or interest on any Term Loan which is not paid when due, as herein provided,
shall bear interest (to the extent permitted by law) at that rate which is
one-quarter of one percent (1/4%) above the Base Rate in effect on each
respective day thereafter until paid in full and such interest shall be payable
on demand.
(d) Prepayment. Upon prepayment of any Term Loan hereunder,
interest accrued and unpaid on the amount so prepaid shall become due on the
date of such prepayment.
(e) Computations. Interest on Base Rate Loans shall be
computed on the basis of a year of 365/366 days and an actual day month.
Interest on Eurodollar Rate Loans shall be computed on the basis of a year of
360 days and an actual day month.
Section 3.5. Place of Payment.
Each payment (whether required or voluntary and whether of
principal or interest or both) on each Note and each payment of fees or other
amounts owing by the Company hereunder shall be payable, on or before 11:00
a.m., New York City time, on the due date of each payment, in immediately
available funds, to the Administrative Agent at its Main Office at such account
as the Administrative Agent shall from time to time notify the Company in
writing. The Administrative Agent shall then immediately transmit the applicable
pro rata share of such payment so received by the Administrative Agent in
immediately available funds to each Bank entitled thereto in the manner
specified by such Bank. Any required payment which would otherwise be due on a
day not a Business Day shall be made on the immediately succeeding Business Day.
Section 3.6. Voluntary Prepayment.
The Company may voluntarily prepay, at any time and from time
to time prior to maturity on one day's prior notice to the Administrative Agent,
any part or the whole of the principal of the Notes; provided, however, that any
voluntary prepayment shall be in a minimum amount of $25,000,000 and integral
multiples of $5,000,000 in excess thereof. Upon any such prepayment, the Company
shall simultaneously pay all accrued and unpaid interest on the amount of
principal voluntarily prepaid. However, any such prepayment of a Eurodollar Rate
Loan not made on the last day of the Interest Period therefor shall require the
Company also to pay any amounts owing pursuant to Section 9.3. All voluntary
prepayments provided for in this Section 3.6 shall be without premium or
penalty.
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Section 3.7. Pro Rata Treatment.
Except for Section 3.14 hereof, and except with respect to
payments to be made to a Bank pursuant to Sections 3.9, 3.15 or 11.3 and any
other indemnity in favor of a Bank or Banks hereunder, (a) each borrowing from,
and utilization of and reduction of the Commitments of, the Banks hereunder
shall be prorated among the Banks according to the respective Commitments of the
Banks as set forth in Section 2.2 hereof, as the same may be adjusted from time
to time under Section 3.13, 3.14 or 3.15 hereof and (b) each payment to the
Banks hereunder shall be prorated among the Banks according to the respective
Term Loans (or, in the case of Commitment Fees, Commitments) of the Banks.
Except as otherwise provided herein, (i) each payment on account of principal
and interest on any outstanding Term Loans shall be made to the Administrative
Agent for the account of the Banks pro rata in accordance with the aggregate
principal amount of all Term Loans then outstanding, and (ii) all payments to be
made by the Company for the account of each of the Banks on account of
principal, interest and fees, shall be made without set-off or counterclaim.
Section 3.8. Initial Determination of Interest Rate and
Conversion of Term Loans Between Eurodollar Rate and Base Rate.
Prior to the Initial Term Loan or Subsequent Term Loan
borrowings, the Company will specify the Interest Rate to be applicable to such
borrowings, and on any Business Day or Eurodollar Business Day, as applicable,
the Company may convert on a pro rata basis among the Banks any outstanding Base
Rate Loans or Eurodollar Rate Loans into the other type of Term Loans, subject
to the following limitations:
(a) No such conversion of any Eurodollar Rate Loan may be made
except on the last day of an Interest Period with respect thereto; and
(b) The Company shall give the Administrative Agent the
Required Number of days notice for such borrowing or conversion.
If, at the end of an Interest Period of a Eurodollar Rate Loan, the Company has
failed to specify in a timely manner the Interest Rate option applicable to such
Term Loan for the period after the expiration of the then current Interest
Period, the Company shall be deemed to have selected that such Term Loan shall
bear interest at the Base Rate and, at the end of such Interest Period, such
Term Loan shall automatically convert to a Base Rate Loan.
Section 3.9. Failure to Borrow.
The Company shall indemnify and hold harmless each Bank in
respect of any funding costs and/or losses in the event that any borrowing
notified to the Banks pursuant to Section 3.2, relative to Eurodollar Rate
Loans, shall not be consummated because of the Company's failure to satisfy one
or more of the applicable conditions precedent in Article 4 or because the
Company fails to borrow such Term Loans at the specified time.
Section 3.10. Commitment Fee.
The Company shall pay to the Administrative Agent, for the
account of the Banks to be distributed to the Banks pro rata in accordance with
their respective Commitments, a Commitment Fee for each day during the period
from the Effective Date to the Termination Date on the amount of the
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Commitments on such day (determined after giving effect to any reduction in the
amount of the Commitments effective on such day), at the per annum percentage
rate of 0.125%. Commitment Fees shall be computed on the basis of a year of
365/366 days, on an actual-day month. Accrued Commitment Fees shall be payable
in arrears and in immediately available funds on the last day of each fiscal
quarter of the Company (commencing on December 31, 1999) and on the Termination
Date. The Administrative Agent shall forthwith pay to each Bank its ratable
share of each payment of the Commitment Fee under this Section 3.10 in
immediately available funds.
Section 3.11. Termination of Credit Facility.
Unless earlier terminated pursuant to the terms hereof, the
Commitments of the Banks shall terminate on the Termination Date.
Section 3.12. Maturity of Credit Facility.
The Company shall pay the entire outstanding principal amount
of, and all accrued but unpaid interest on, the Term Loans and Notes, together
with any and all other amounts owing by the Company to the Banks and the
Administrative Agent hereunder or under the Notes, on the Maturity Date.
Section 3.13. Optional Reduction of Commitments.
The Company shall have the right at any time or from time to
time upon not less than two (2) Business Days' prior written notice to the
Administrative Agent to reduce the Total Commitments of the Banks, in whole or
in part, provided that each partial reduction shall be in an aggregate amount of
not less than $25,000,000 and an integral multiple of $5,000,000, and shall
reduce the respective Commitments of all the Banks proportionately. The
Administrative Agent shall give prompt written notice to each Bank of each such
reduction. Once the Company voluntarily reduces the Commitments pursuant to this
Section 3.13, the Company may not thereafter increase the Commitments.
Section 3.14. Substitution of Banks.
3.14.1
If any Bank shall default in the performance of its
Commitment, whether in whole or in part, then:
(a) such default shall not relieve any other Bank of its
Commitment; and
(b) the Company may, with the prior written approval of the
Administrative Agent (such approval not to be unreasonably withheld), terminate
the Commitment of such defaulting Bank and arrange for the Commitment of the
defaulting Bank to be taken over by one (1) or more of the other Banks, and to
the extent that such other Banks will not take over such Commitment, arrange for
its assumption by one (1) or more banks which are not at that time parties
hereto, each of which banks shall, except as otherwise provided herein upon
execution and delivery to the Company of a counterpart hereof, become a Bank
hereto to the extent of the Commitment taken over by it; and
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(c) the defaulting Bank shall immediately refund to the
Company that portion of all Commitment Fees which have been paid to it by the
Company with respect to the amount of its Commitment not made available to the
Company and shall be liable to the Company for any and all additional costs and
expenses incurred by the Company in connection with arranging, obtaining and
funding any substitute loan or loans and/or substitute commitment or
commitments, provided, however, that neither the payments by a defaulting Bank
required by this subsection, nor any action of the Company pursuant to this
Section 3.14, nor the prepayment of Notes pursuant to Section 3.14.2 hereof
shall constitute a waiver of or release of any right which the Company shall
have against the defaulting Bank for its failure to perform its obligations
hereunder.
3.14.2.
Loans previously made hereunder by a defaulting or withdrawing
Bank, or any portion thereof, which are included in the Commitment taken over by
any other Bank or Banks or by a bank or banks not then parties hereto, shall be
prepaid by the Company without penalty or premium but subject to offset of the
amounts due from such withdrawing Bank pursuant to Section 3.14.l(c).
3.14.3.
From time to time, the Company may replace a non-defaulting
Bank (the "Replaced Bank") with another financial institution (or institutions)
desiring to be a Bank hereunder (the "New Bank(s)") and/or with one or more
Banks already a party hereto ("Existing Bank(s)") so long as (a) the Replaced
Bank consents in writing to such replacement and receives all amounts owing to
such Replaced Bank hereunder on the effective date of such replacement, (b) the
New Bank(s) and/or Existing Bank(s), as the case may be, assume(s) all of the
obligations of a Bank hereunder having a Commitment equal to the Replaced Bank's
by executing, in the case of a New Bank(s), a letter agreement in substantially
the form of Exhibit C-1 attached hereto or, in the case of an Existing Bank(s),
a letter agreement in substantially the form of Exhibit C-2 hereto, (c) the
Commitment(s) of the New Bank(s), together with the additional Commitment(s) of
the Existing Bank(s) assumed by the Existing Bank(s) pursuant hereto, is equal
to the Commitment of the Replaced Bank and (d) the Company and the
Administrative Agent acknowledge and consent that the New Bank(s) shall become a
Bank hereunder (and/or that the Existing Bank(s) shall have an additional
Commitment hereunder equal to that of the Replaced Bank) by signing the
respective acknowledgments contained in the appropriate letter agreement
referred to in subparagraph (b) above.
3.14.4.
The respective amounts of the Commitments under Section 2.2
hereof shall be adjusted from time to time to reflect any changes made pursuant
to this Section 3.14 and notice of such adjustments shall be given by the
Company at the time thereof to each Bank or bank then a party hereto. Such
adjusted amounts of Commitments shall thereupon become the basis for pro rata
treatment under Section 3.7 of this Agreement.
3.14.5.
Upon the termination in whole of the Commitment of any Bank or
any bank which has become a party hereto, and the prepayment of all Loans
previously made under such Commitment, all as
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provided in this Section 3.14, such Bank or bank shall cease to be a party to
this Agreement except as otherwise provided herein.
Section 3.15. Capital Requirements.
If, as a result of the adoption after the date of this
Agreement, of any applicable law, rule or regulation affecting capital adequacy
or capital maintenance, or any change after the date of this Agreement in the
interpretation or administration of any law, rule or regulation affecting
capital adequacy or capital maintenance in existence as of the date hereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Bank with any
request or directive affecting capital adequacy or capital maintenance (whether
or not having the force of law) of any such authority, central bank or
comparable agency, any Bank determines that such adoption, change or compliance
has or would have the effect of reducing the rate of return on such Bank's
capital as a consequence of its Commitment or Term Loans to a level below that
which such Bank could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's policies with respect to capital
adequacy) by an amount deemed by such Bank to be material, such Bank shall give
prompt notice to the Company and the Administrative Agent, and then from time to
time, within 15 days after submission by such Bank to the Company (with a copy
to the Administrative Agent) of a written request therefor, the Company shall
pay to such Bank such additional amount or amounts as will compensate such Bank
for such reduction. Any request submitted by a Bank to the Company pursuant to
this Section 3.15 shall contain such calculations of the amounts requested
therein as such Bank shall deem reasonable in view of its customary practices,
and shall be submitted as soon as practicable, but in any event the initial such
request shall be submitted not more than 90 days after such Bank becomes aware
of the event by reason of which such request is being submitted. Subsequent
requests by such Bank shall be submitted quarterly. If any Bank requests payment
of any amount from the Company pursuant to this Section 3.15, the Company may,
pursuant to arrangements and documentation satisfactory to the Company and the
Administrative Agent, prepay the outstanding Term Loans, fees, and any other
amounts due to such Bank in full and terminate the Commitment of such Bank and
the Company may at its option arrange for all or part of the Term Loans and
Commitment of such Bank to be taken over by one (1) or more of the other Banks
and, to the extent such other Banks do not take over such Term Loans and
Commitment or part thereof, arrange for such Term Loans and Commitment to be
taken over in whole or in part by a bank or banks not a party hereto, each of
which banks shall, except as otherwise provided herein upon execution and
delivery to the Company of a counterpart hereof, become a full party hereto to
the extent of the Term Loans and Commitment taken over by it. The respective
amounts of the Commitments under Section 2.2 hereof shall be adjusted from time
to time to reflect any changes made pursuant to this Section 3.15 and notice of
such adjustments shall be given by the Company at the time thereof to each Bank
or bank then a party hereto. Such adjusted amounts of Commitments shall
thereupon become the basis for pro rata treatment under Section 3.7 hereof. Upon
the termination in whole of the Commitment of any Bank or any bank which has
become a party hereto, and the prepayment of all Term Loans previously made
under such Commitment, all as provided in this Section 3.15, such Bank or bank
shall cease to be a party to this Agreement except as otherwise provided herein.
Section 3.16. Mandatory Prepayment Upon Change in Control.
In the event that (i) any Person or two (2) or more Persons
acting in concert shall have acquired beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission under the Securities and
Exchange Act of 1934, as amended), directly or indirectly, of securities of the
Company (or other securities convertible into such securities) representing
fifty percent
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(50%) or more of the combined voting power of all securities of the Company
entitled to vote in the election of directors, other than securities having such
power only by reason of the happening of a contingency, or (ii) during any
period of up to twelve (12) consecutive months, commencing before or after the
date of this Agreement, individuals who at the beginning of such twelve (12)
month period were directors of the Company shall cease for any reason (other
than death, mental or physical disability, or retirement) to constitute a
majority of the board of directors of the Company, then: (a) the Commitments of
the Banks to the Company hereunder shall be immediately terminated and (b) any
amounts outstanding under the Notes or under this Agreement shall,
notwithstanding any other provisions of this Agreement or the Notes, become
immediately due and payable.
Section 3.17. Agent Fees.
The Company agrees to pay to the Administrative Agent a fee to
compensate the Administrative Agent for the administration of the Credit
Facility and for other services, such fee to be agreed upon by the
Administrative Agent and the Company.
ARTICLE 4. CONDITIONS TO EFFECTIVENESS OF AGREEMENT
AND FOR BORROWINGS
Section 4.1. Effectiveness.
This Agreement shall not become effective until the
Administrative Agent shall have received the following, in form and substance
satisfactory to the Administrative Agent:
(a) The Notes dated as of the date hereof, payable to the
order of each of the Banks in the amounts of their respective Commitments, duly
executed and delivered by the Company; and
(b) An Officer's Certificate dated as of the date hereof
stating that the representations and warranties contained in Article 5 hereof
are true on and as of such date; and
(c) An incumbency certificate dated as of the date hereof for
each officer executing this Agreement and each other person who will sign the
Notes pursuant to this Agreement on behalf of the Company; and
(d) A copy of the Company's Board of Directors' resolutions
authorizing the borrowings under this Agreement, certified by the Secretary or
an Assistant Secretary of the Company as being in full force and effect as of
the date of the Effective Date; and
(e) A favorable opinion dated as of the date hereof from
counsel for the Company stating that:
(i) The Company is a corporation duly organized,
existing and in good standing under the laws of the State of
Delaware, and the execution, delivery and performance of this
Agreement and the Notes are within the Company's corporate
powers;
(ii) The Company has the necessary corporate power to
carry on its business as then being conducted;
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(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which the nature of the business
conducted by it makes such qualification necessary;
(iv) The Company is a duly certificated air carrier
and there are in force all permanent or temporary certificates
or other appropriate legal authority issued by appropriate
governmental authorities to authorize the Company to engage in
intrastate, interstate, overseas and foreign air
transportation of persons, property and mail over the routes
then operated by the Company;
(v) The Company has title to all of the flight
equipment which it owns free and clear of all liens and
encumbrances except as permitted by this Agreement;
(vi) All leases of flight equipment to which the
Company is a party are valid and binding upon the lessors;
(vii) No consent of stockholders of the Company to
the chattel mortgage or mortgages referred to in Section 6.6
hereof is required by law or by the Certificate of
Incorporation or Bylaws of the Company or otherwise;
(viii) All corporate steps necessary to authorize the
execution and delivery of this Agreement and the Notes and the
Company's performance thereunder have been taken and no
consent, approval, authorization, permit or license from any
federal, state or other regulatory authority is required in
connection therewith;
(ix) The borrowings hereunder, or the giving of the
Notes, will not violate any provision of the Delaware
Corporation Law or the Company's Certificate of Incorporation
or Bylaws or any agreement, indenture, note or other
instrument evidencing any material indebtedness for money
borrowed to which the Company is a party or by which the
Company or its assets is bound; and
(x) This Agreement and the Notes being issued to
evidence such borrowings are legal, valid and binding
obligations of the Company enforceable in accordance with
their respective terms, subject, however, to limitations
imposed by law in connection with bankruptcy and similar
proceedings; and
(f) All fees (including reasonable, invoiced fees and expenses
of counsel to the Administrative Agent) and other compensation required to be
paid to the Administrative Agent or the Banks to the extent due on or before the
Effective Date.
Section 4.2. Initial and Subsequent Borrowing.
The Banks shall not be obligated to make any Term Loans,
including the Initial Term Loans, unless at the time thereof the Company shall
have furnished to the Administrative Agent an Officer's Certificate bearing that
date, and stating that:
(a) There exists on that date no Default or Event of Default;
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(b) There exists on that date no Event of Default or default
under any instrument evidencing or any agreement given in connection
with Funded Debt of the Company;
(c) Such borrowing will not contravene any agreement,
indenture or instrument to which the Company is a party or by which it
may be bound and which is material to the financial condition of the
Company;
(d) The representations and warranties contained in Sections
5.1, 5.3, 5.4, 5.7(a), 5.7(c), 5.8, 5.9, 5.10, 5.11, 5.13, 5.14 and
5.15 hereof are true on and as of such date;
(e) The extension(s) of credit being made on such date are
legal, valid and binding obligations of the Company, the resolutions of
the Board of Directors of the Company referred to in Section 4.1(d)
hereof remain in full force and effect, and the officers of the Company
requesting such advances are duly authorized and empowered to do so;
(f) (i) In the case of the Initial Term Loans, they are being
made on a date on or after the expiry date of the Tender Offer and no earlier
than two Business Days before the Tender Offer Date and (ii) in the case of the
Subsequent Term Loans, they are being made on a date on or after the Merger Date
and no later than fifteen (15) Business Days after the Merger Date;
(g) The aggregate consideration expended by the Company and
its Subsidiaries to purchase Shares in connection with the Tender Offer and the
Merger does not exceed $1,900,000,000; and
(h) In connection with the Tender Offer, there were validly
tendered and not withdrawn Shares which, when taken together with Shares owned
by the Company or its affiliates, represent at least two-thirds of the then
issued and outstanding Shares on a fully diluted basis.
Further, the occurrence of the Tender Offer Date (after the
Target becomes a Subsidiary) and any conversion of a Term Loan from one type to
another as contemplated by Section 3.8 hereof shall be deemed to be a
representation by the Company that the matters referred to in paragraphs (a)
through (e) above continue to be true and correct.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
The Company hereby represents, covenants and warrants to the
Administrative Agent and each of the Banks as follows:
Section 5.1. Organization; Standing, Etc.
The Company is a corporation duly organized and existing under
the laws of the State of Delaware, has the corporate power to own its property
and carry on its business as being conducted, and is duly qualified to do
business as a foreign corporation and is in good standing in every jurisdiction
in which the nature of the business conducted by it makes such qualification
necessary.
Section 5.2. Financial Statements.
The Company has furnished the Banks with the following
financial statements, identified by the certificate of a principal financial
officer of the Company: balance sheets of the Company as at
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June 30, 1999 and September 30, 1999, and income and reinvested earnings
statements of the Company for the fiscal year or fiscal quarter, as the case may
be, ended on such dates, respectively, certified, in the case of financial
statements for the fiscal year ended June 30, 1999, by Arthur Andersen LLP. Such
financial statements are true and correct and have been prepared in accordance
with generally accepted accounting principles consistently followed throughout
the periods involved. The balance sheets and their accompanying notes present
fairly the condition of the Company as of the dates thereof, and the income and
reinvested earnings statements present fairly the results of the operations of
the Company for the periods indicated. There has been no material adverse change
in the condition or operation of the Company (on a pro forma basis assuming
consummation of the Acquisition) since September 30, 1999.
Section 5.3. Litigation.
There is no action or proceeding pending or threatened against
the Company before any court or administrative agency which, in the reasonable
opinion of the Company, is likely to be determined in a manner which would
result in any material adverse change in the condition or operation of the
Company and the Company is not in default with respect to any order, writ,
injunction or decree of any court or administrative agency, which would have a
material adverse effect on the Company.
Section 5.4. Business; Status as Air Carrier.
(a) The Company is a duly certificated air carrier and there
are in force any certificates or other appropriate authority issued by
appropriate governmental authorities necessary to authorize the Company to
engage in intrastate, interstate, overseas and foreign air transportation of
persons, property and mail over the routes operated by the Company; and
(b) no proceedings are pending or threatened, by or before any
public body, agency or authority, domestic or foreign, including but not limited
to proceedings to alter, amend, modify, suspend or revoke such certificates in
whole or in part, which might seriously affect adversely the income from, title
to, or possession of, any of the properties of the Company, to an extent which
would constitute a material adverse change in the business or condition of the
Company.
Section 5.5. Funded Debt.
The Company does not have outstanding any Funded Debt except
as set forth on Schedule I to this Agreement; and there exists no default under
the provisions of any instrument evidencing such indebtedness or agreement
relating thereto.
Section 5.6. Title to Properties, Etc.
The Company and its Subsidiaries have good and marketable
title to their respective properties and assets, including the properties and
assets reflected in the balance sheets described in Section 5.2 hereof, subject
to no mortgage, pledge, encumbrance, lien or charge of any kind except
mortgages, pledges, encumbrances, liens or charges permitted by Section 7.1
hereof.
Section 5.7. Tax Returns and Payments.
(a) The Company has filed all federal income tax returns which
are required to be filed, and has paid all taxes as shown on said returns and on
all assessments received by it to the extent
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that such taxes (other than those which the Company is contesting in good faith
by appropriate proceedings being diligently conducted) have become due;
(b) The federal income tax liability of the Company has been
finally determined by the Internal Revenue Service and satisfied for all fiscal
years prior to and including the fiscal year ended June 30, 1992, except for a
pending refund claim filed by the Company with the Internal Revenue Service with
respect to the fiscal year ended June 30, 1984;
(c) All other tax returns and reports of the Company which are
required to be filed have been duly filed, and all taxes and government charges
(other than those for which payment may be withheld without penalty or those
which the Company is contesting in good faith by appropriate proceedings being
diligently conducted) upon the Company, its assets, income or franchises which
are due and payable have been paid.
Section 5.8. Compliance With Other Instruments.
The Company is not a party to any contract or agreement or
subject to any charter or other corporate restriction which materially and
adversely affects its business, property or assets, or financial condition;
neither the execution nor delivery of this Agreement nor the Notes herein
described, nor fulfillment of nor compliance with the terms and provisions
hereof and of the Notes, nor the consummation of the Acquisition, nor the use of
proceeds of the Term Loans, will conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, the
Certificate of Incorporation or Bylaws of the Company or of any agreement or
instrument to which the Company is now a party, which breach would have a
material adverse effect on the condition or operation of the Company.
Section 5.9. Offering of Notes.
Neither the Company nor any agent acting on its behalf has
offered the Notes to be issued hereunder for sale to, or solicited any offers to
buy the said Notes from, any Person other than the Banks signatory to this
Agreement, and neither the Company nor any agent acting on its behalf will take
any action which would subject the issuance or sale of the said Notes to the
provisions of Section 5 of the Securities Act of 1933, as amended.
Section 5.10. Use of Proceeds.
The proceeds of the Term Loans shall be used for the purposes
described in the recitals hereto. No part of the proceeds of the Term Loans will
be used in a manner that would violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System. The Company is not engaged, principally
or as one of the Company's important activities, in the business of purchasing
or carrying any "margin stock" as such term is defined in Regulation U of the
Board of Governors of the Federal Reserve System. After giving effect to each
use of the proceeds of the Term Loans, not more than 25% of the value of the
assets of the Company and its Subsidiaries (determined on a consolidated basis)
shall be represented by "margin stock".
Section 5.11. Governmental Regulation.
No consent, approval, authorization, permit or license from
any federal, state or other regulatory authority is required in connection with
the making, delivery or performance of this Agreement or the Notes by the
Company, the consummation of the Acquisition or the use of proceeds of the Term
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Loans, except as have been obtained and are in full force and effect or, in the
case of consummation of the Acquisition, except where the failure to have so
obtained any such consent, approval, authorization, permit or license would not
have a material adverse effect on the Company and its Subsidiaries considered as
a whole (on a pro forma basis, assuming consummation of the Acquisition).
Section 5.12. Subsidiaries.
Schedule II is a complete and correct list of all Subsidiaries
as of the date hereof, all of which are corporations duly incorporated, in good
standing and with corporate power to transact the business presently conducted
by them. Except as disclosed in Schedule II, the Company owns, directly or
indirectly through one or more Subsidiaries, all the shares of each of such
Subsidiaries (except directors' qualifying shares, if any), and all such shares
are validly issued, fully paid and non-assessable and are free and clear of all
liens and rights of others whatsoever.
Section 5.13. ERISA.
The Company and each Subsidiary have met their minimum funding
requirements under the Employee Retirement Income Security Act of 1974, as
amended from time to time, with respect to all their employee benefit plans
covered by the minimum funding requirements of said Act, and have not incurred
any material liability to the Pension Benefit Guaranty Corporation (or any
entity succeeding to any or all of said Corporation's functions under said Act)
under said Act in connection with any such plan.
Section 5.14. Environmental Matters.
The Company and its Subsidiaries are in substantial compliance
with all applicable federal, state and local environmental laws, regulations and
ordinances governing their respective business, properties or assets with
respect to discharges into the ground and surface water, emissions into the
ambient air and generation, storage, transportation and disposal of waste
materials or process by-products, except such noncompliances as are not likely
to have a material adverse effect on the property, assets, business, operations
or condition (financial or otherwise) of the Company and its Subsidiaries taken
as a whole. All licenses, permits or registrations required for the business of
the Company and its Subsidiaries under any federal, state or local environmental
laws, regulations or ordinances have been secured, and the Company and each
Subsidiary are in substantial compliance therewith, except such licenses,
permits or registrations the failure to secure or to comply therewith are not
likely to have a material adverse effect on the property, assets, business,
operations or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole.
Section 5.15. Year 2000 Matters.
The Company has reviewed the areas within its consolidated
business and operations that could be adversely affected by, and has developed
or is developing a plan to address on a timely basis, the "Year 2000 Problem"
(that is, the risk that computer applications used by the Company and its
Subsidiaries may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999). Based on such review and plan, the Company reasonably believes that the
"Year 2000 Problem" will not have a material adverse effect on the consolidated
business or operation of the Company.
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ARTICLE 6. AFFIRMATIVE COVENANTS
The Company covenants and agrees that until all of its
obligations hereunder have been discharged and the obligations of the Banks to
make advances terminated, it will:
Section 6.1. 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 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
Company's 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 6.2. Payment of Taxes.
Duly file all federal income tax returns and all other tax
returns and reports which, to the knowledge of the officers of the Company are
required to be filed and pay when due all taxes and governmental charges
assessed against it, its assets, income or franchises, except to the extent and
so long as contested in good faith.
Section 6.3. Financial Statements.
Deliver to each Bank, so long as such Bank shall hold any Note
issued or Term Loan made hereunder or is committed to lend hereunder:
(a) As soon as practicable and in any event within two (2)
months after the end of each quarterly period (other than the last
quarterly period in each fiscal year) an income statement of the
Company for the period from the beginning of the current fiscal year to
the end of such quarterly period, and a balance sheet of the Company as
at the end of such quarterly period, setting forth in each case in
comparative form figures for the corresponding period in the preceding
fiscal year, all in reasonable detail and certified by a principal
financial officer of the Company, subject to changes resulting from
year-end adjustments; and a statement as of the end of such quarterly
period of the calculations made by the Company establishing its
compliance with the provisions of Sections 7.1, 7.2, 7.4 and, if
applicable, 7.5 hereof, in sufficient detail to permit the Banks to
determine how the conclusions on such statement were arrived at,
certified by a principal financial officer of the Company as accurate
in all material respects;
(b) As soon as practicable and in any event within three (3)
months after the end of each fiscal year, an income statement and a
statement of reinvested earnings of the Company for such year, and a
balance sheet of the Company as at the end of such year, setting forth
in each case in comparative form corresponding figures from the
preceding annual audit, all in reasonable detail and satisfactory in
scope to the Banks and certified by independent certified public
accountants of national standing selected by the Company; and a
statement as of the end of such fiscal year of the calculations made by
the Company establishing its compliance with the
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provisions of Sections 7.1, 7.2, 7.4 and, if applicable, 7.5 hereof, in
sufficient detail to permit the Banks to determine how the conclusions
on such statement were arrived at, certified by a principal financial
officer of the Company as accurate in all material respects;
(c) Copies of all financial statements, reports and returns
which it shall send to its stockholders;
(d) Promptly after the sending or filing thereof, copies of
all periodic reports, if any, which the Company shall have filed with
the Securities and Exchange Commission (or any governmental agency or
agencies substituted therefor) under ss.13 or ss.15(d) of the
Securities Exchange Act of 1934, as amended, or with any national
securities exchange; and
(e) With reasonable promptness such other financial data as
any Bank may reasonably request through the Administrative Agent.
Section 6.4. Maintenance of Equipment.
Maintain substantially all of its equipment (except surplus or
obsolete equipment) in good operating order.
Section 6.5. Inspection.
Permit any Person designated by any Bank in writing, to visit
and inspect any of the properties, corporate books and financial records of the
Company and its Subsidiaries at the Bank's expense, and to discuss the affairs,
finances, and accounts of any such corporation with the principal officers of
the Company, all at such reasonable times and as often as such Bank may
reasonably request. This covenant shall be subject to applicable governmental
and industrial security regulations.
Section 6.6. Security for Notes.
In the event the Company secures by mortgage, pledge,
encumbrance, lien or other charge any debt other than as permitted by Section
7.1 hereof, the Company shall secure equally and ratably the indebtedness
incurred hereunder.
Section 6.7. Notice of Any Default or Event of Default.
As soon as practicable (but in any event not more than five
(5) days after the Chairman of the Board, the President, or a principal
financial officer of the Company obtains knowledge of a Default or an Event of
Default as specified in Article 8 hereof), the Company will deliver to each Bank
an Officer's Certificate specifying the nature thereof, the period of existence
thereof and what action the Company has taken or proposes to take with respect
thereto.
Section 6.8. ERISA Reporting Requirements.
With respect to any employee benefit plan subject to Title IV
of ERISA, the Company shall, if requested by the Administrative Agent, provide
the Administrative Agent with copies of the most recent annual reports or
returns (IRS Form 5500), audited or unaudited financial statements and actuarial
valuations with respect to such plans. In addition, the Company shall provide
the Administrative Agent copies of any notice filed with the Pension Benefit
Guaranty Corporation with respect to any "Reportable
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Event" as defined in Section 4043 of ERISA, and the Administrative Agent shall
forward copies of any such notice to the Banks.
Section 6.9. Ratings.
Notify the Administrative Agent promptly after the Company
becomes aware of any public announcement of the occurrence of any change in the
S&P Rating or the Moody's Rating.
ARTICLE 7. NEGATIVE COVENANTS
Until all of its obligations hereunder have been discharged
and the obligations of the Banks to make advances terminated, the Company
covenants that it will not and will not permit any Subsidiary to:
Section 7.1. Liens.
Create, assume or suffer to exist any mortgage, pledge,
encumbrance, lien or charge of any kind upon any of its property or assets,
whether now owned or hereafter acquired, except: (i) mortgages, pledges,
encumbrances, liens or charges where the aggregate indebtedness secured by such
mortgages, pledges, encumbrances, liens or charges at any time does not exceed
the sum of (a) the greater of $1,000,000,000 or fifteen percent (15%) of Equity
plus (b) the amount outstanding under the obligations described on Schedule I
hereof as "Secured"; (ii) liens for taxes not yet due or which are being
contested in good faith; (iii) other liens, charges and encumbrances incidental
to the conduct of its business or the ownership of its property and assets which
were not incurred to secure the repayment of borrowed money or other advances or
credit, and which do not in the aggregate materially detract from the value of
its property or assets or materially impair the use thereof in the operation of
its business; (iv) liens imposed by law, such as carriers',warehousemen's,
mechanics', materialmen's and vendors' liens, for sums not yet due or already
due but the validity of which is being contested in good faith; (v) mortgages,
pledges, encumbrances, liens or other charges on property or assets of a
Subsidiary to secure obligations of such Subsidiary to the Company or another
Subsidiary; and (vi) any mortgage, pledge, encumbrance, lien or other charge
required by Section 6.6 hereof.
Section 7.2. Debt.
Create, incur, assume or suffer to exist, for the Company and
the Subsidiaries taken together, (a) Current Debt in an aggregate principal
amount at any one time outstanding in excess of 100% of all accounts receivable
of the Company and its Subsidiaries outstanding as of the last day of the second
calendar month next preceding the month in which such calculation of Current
Debt is made, all computed in accordance with generally accepted accounting
principles as in effect from time to time; or (b) Convertible Subordinated Debt
in excess of 33.3% of Equity; or (c) Funded Debt, Current Debt (other than
Convertible Subordinated Debt) and all Guaranty Liabilities (as defined below)
in an amount at any one time which exceeds 150% of Equity at such time. For
purposes of this Section 7.2, "Guaranty Liabilities" shall mean all liabilities
of the Company and any Subsidiary of the Company as guarantor, surety,
accommodation endorser or other accommodation party on behalf of any Person
where the underlying obligation of such Person covered by, or the subject of,
such guaranty or contingent undertaking would constitute Current Debt or Funded
Debt, as defined herein, if such Person were the Company; provided, however,
that (x) guarantees or other contingent undertakings by the Company on behalf of
any Subsidiary, by any Subsidiary on behalf of any other Subsidiary, or by any
Subsidiary on
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behalf of the Company and (y) the contingent undertakings as set forth on
Schedule III hereto, shall not constitute Guaranty Liabilities.
Section 7.3. Mergers; Disposition of Assets.
Merge or consolidate with any corporation or sell, lease or
transfer or otherwise dispose of all or a substantial part of its assets in any
transaction or series of related transactions, except that (i) any Subsidiary
may merge or consolidate with the Company or any one or more other Subsidiaries;
(ii) any Subsidiary may sell, lease, transfer or otherwise dispose of any of its
assets to the Company or another Subsidiary; (iii) any Subsidiary may sell or
otherwise dispose of all or substantially all of its assets, provided that (a)
such sale or other disposition is for a consideration which represents fair
value (as determined in good faith by the Company) at the time of such sale or
disposition, and (b) the assets so disposed of do not constitute a substantial
part of the aggregate assets of the Company and the Subsidiaries; (iv) the
Company may dispose of aircraft in the ordinary course of its business, provided
that such sale or other disposition is for a consideration which represents fair
value (as determined in good faith by the Company) at the time of such sale or
disposition; and (v) the Company may merge or consolidate with another
corporation, provided that (a) the Company shall be the continuing or surviving
corporation, (b) a majority of the board of directors of the Company for a
period of six (6) months after the effective date of such merger consists of
individuals who were directors of the Company twelve (12) months prior to such
effective date, and (c) immediately after such merger or consolidation there
shall exist no Event of Default as defined in Article 8 hereof.
Section 7.4. Leases.
Enter into or permit to remain in effect any flight equipment
lease agreements which, as of the close of any fiscal year, cause the Company's
Consolidated Aircraft Rentals for such fiscal year to exceed eight percent (8%)
of the Company's consolidated operating revenues for such fiscal year, provided
that any such lease agreements as may be necessary in connection with
interchange agreements between the Company and other airline related businesses
shall not be included in such calculation.
Section 7.5. Financial Covenant.
On any date on which the S&P Rating is less than BBB- and the
Moody's Rating is less than Baa3, permit, as of the last day of the most recent
period of four consecutive fiscal quarters of the Company for which the relevant
financial information is available, the ratio of (a) Consolidated EBITDA for
such period plus Consolidated Aircraft Rentals for such period to (b)
Consolidated Interest Expense for such period plus Consolidated Aircraft Rentals
for such period to be less than 1.50 to 1.0.
ARTICLE 8. DEFAULTS
Section 8.1. Events of Default.
Upon the occurrence of any one of the following Events of
Default:
(a) Default in any interest payment or principal payment or
mandatory prepayment on any Note when due and the continuance thereof
for five (5) days; or
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(b) Default in the payment of any Commitment Fee, when the
same is due hereunder and the continuance thereof for ten (10) days; or
(c) The Company shall institute a voluntary case seeking
liquidation or reorganization under Chapter 7 or Chapter 11,
respectively, of the United States Bankruptcy Code, or shall consent to
the institution of an involuntary case thereunder against it; or the
Company shall otherwise institute any similar proceeding under any
other applicable federal or state law, or shall consent thereto, or the
Company shall apply for, or by consent or acquiescence there shall be
an appointment of, a custodian, receiver, liquidator, sequestrator,
trustee or other officer with similar powers, for the Company, or for
all or a material part of its properties; or the Company shall make an
assignment for the benefit of creditors, or the Company shall have
ceased to pay its debts generally as they become due; or if an
involuntary case shall be commenced seeking the liquidation or
reorganization of the Company under Chapter 7 or Chapter 11,
respectively, of the United States Bankruptcy Code or any similar
proceeding shall be commenced against the Company under any other
applicable federal or state law and (i) the petition commencing the
involuntary case is not timely controverted, (ii) the petition
commencing the involuntary case is not dismissed within forty-five (45)
days of its filing, (iii) an interim trustee is appointed to take
possession of all or a portion of the property and/or to operate all or
any part of the business of the Company, or (iv) an order for relief
(other than the petition itself) shall have been issued or entered
therein; or a decree or order of a court having jurisdiction in the
premises for the appointment of a custodian, receiver, liquidator,
sequestrator, trustee or other officer having similar powers for the
Company or for all or a part of its properties, shall have been
entered; or any other similar relief shall be granted against the
Company under any applicable federal or state law; or
(d) Default in the observance or performance of any of the
affirmative or negative covenants of the Company hereunder and, where
there has been a default in an affirmative covenant of the Company,
such default shall not have been remedied within thirty (30) days after
written notice thereof shall have been given the Company by any Bank;
or
(e) Any representation or warranty made by the Company herein
or in any certificate furnished to the Banks hereunder proves to have
been false or breached in any material respect on the date as of which
made or on the date of any extension of credit hereunder, or any
statement or certificate furnished by the Company pursuant hereto shall
prove to have been false in any material respect at any date as of
which the facts therein set forth were stated or certified; or
(f) Seizure under any legal process of a substantial share of
the assets of the Company if release is not obtained within thirty (30)
days of such seizure; or
(g) Default in any payment of principal or interest on any
other obligation for borrowed money or the deferred purchase price of
property beyond any period of grace provided with respect thereto, or
in the payment of any capital leases, or in the performance or
observance of any other agreement, term or condition contained in any
agreement under which any such obligation is created, if the effect of
such default is to cause, or permit the holder or holders of such
obligation (or a trustee acting on behalf of such holder or holders) to
cause, such obligation to become due prior to its stated maturity,
provided such obligations or agreements have aggregate outstanding
amounts of $25,000,000 or more; or
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(h) The Company shall have failed to meet its minimum funding
requirements under the Employee Retirement Income Security Act of 1974,
as amended from time to time (including any rules or regulations
promulgated thereunder) with respect to any of its employee benefit
plans which are covered by Title IV of said Act (or to which ss.412 of
the Internal Revenue Code of 1986, as amended, applies), which failure
has resulted in a material liability for excise tax under ss.4971 of
said Code, or any of its plans aforesaid shall be the subject of
voluntary or involuntary termination proceedings which may result in an
uninsured payment or repayment liability of the respective corporation
to the Pension Benefit Guaranty Corporation (or any entity succeeding
to any or all of its functions under said Act) in an amount which is
material in relation to the net worth of the Company; or
(i) A Specified Event of Default shall occur;
then, in the event that an Event of Default under (a), (b), or (d)
through (i) above should occur, the Majority Banks (through the
Administrative Agent) may, at their option, by a written notice to the
Company, if such Event of Default be continuing at the time such notice
is received by the Company, either: (i) declare the obligations of the
Banks to extend credit to the Company hereunder to be immediately
terminated, whereupon such obligations shall terminate; or (ii) declare
the Term Loans to be forthwith due and payable whereupon the Term
Loans, with accrued interest thereon, shall become forthwith due and
payable without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Company; or (iii)
all of the foregoing. In the event that an Event of Default under (c)
above should occur, the Total Commitments of the Banks shall
automatically terminate and the principal of and accrued interest on
any Term Loans then outstanding and any accrued fees shall
automatically become due and payable, without protest, presentment,
notice or demand, all of which are expressly waived by the Company.
ARTICLE 9. YIELD PROTECTION
Section 9.1. Increased Cost of Eurodollar Rate Loans.
(a) If, as a result of any change after the date of this
Agreement in (including the introduction of any new) applicable United States,
state or foreign laws or regulations or the adoption or making of any
interpretations, directives or requests thereof or thereunder by any court or
governmental authority charged with the interpretation or administration
thereof, one or more of the following events occur (herein called "Increased
Cost Changes"):
(i) the basis of taxation of payments to any Bank of
the principal of or interest on any Eurodollar Rate Loan or
any other amounts payable under this Agreement in respect
thereof (other than taxes imposed on the aggregate net income
of such Bank or of its Eurodollar Lending Office by the
jurisdiction in which the Bank has its principal office or
such Eurodollar Lending Office) is changed; or
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(ii) any reserve, special deposit or similar
requirements against the assets of, deposits with or for the
account of, or credit extended by, any Bank are imposed,
modified or deemed applicable; or
(iii) any other condition affecting this Agreement or
any Eurodollar Rate Loan is imposed on any Bank or (in the
case of Eurodollar Rate Loans) the London interbank market;
and a Bank determines that, by reason thereof, the cost to such Bank of making
or maintaining any of the Eurodollar Rate Loans is increased by an amount
reasonably determined by such Bank, or any amount receivable by such Bank
hereunder in respect of any of the Eurodollar Rate Loans is reduced by an amount
reasonably determined by such Bank (such increases in cost and reductions in
amounts receivable being herein called "Increased Costs"), then the Company
shall pay to such Bank on the next interest payment date for the affected
Eurodollar Rate Loans such additional amount or amounts (which shall be set
forth in a notice from such Bank to the Company stating the cause and amount of
such Increased Costs) as will compensate such Bank for such Increased Costs.
Each Bank will immediately notify the Company of any event of which such Bank
has knowledge that will entitle such Bank to compensation pursuant to this
Section 9.1(a) and will exercise reasonable diligence to designate a different
Eurodollar Lending Office, and/or take other measures which will avoid the need
for such compensation for Increased Costs and will not result in material cost
to such Bank, or be otherwise disadvantageous (in such Bank's sole
determination) to such Bank.
(b) Without limiting the effect of the foregoing, the Company
shall pay (without duplication as to amounts paid under Section 9.1(a) hereof)
to any Bank on each interest payment date as to Eurodollar Rate Loans so long as
such Bank may be required to maintain reserves against "Eurocurrency
liabilities" under Regulation D of the Board of Governors of the Federal Reserve
System an additional amount (determined by such Bank and notified to the Company
through Administrative Agent) equal to the sum of the products of the following
for each Eurodollar Rate Loan for each day on which such Bank is required to
maintain such reserves during the Interest Period for such Term Loan for which
interest is being paid:
(i) the principal amount of such Eurodollar Rate Loan
outstanding on such day; times
(ii) the remainder of (x) a fraction the numerator of
which is LIBOR (expressed as a decimal) used to determine the
Eurodollar Rate for such Eurodollar Rate Loan for such
Interest Period as provided in this Agreement and the
denominator of which is one minus the effective rate
(expressed as a decimal) at which such reserve requirements
are imposed on such Bank on such day minus (y) such numerator;
times
(iii) 1/360.
(c) Determinations by any Bank for purposes of this Section
9.1 of the effect of any Increased Cost Change on such Bank's costs of making or
maintaining Eurodollar Rate Loans or on amounts receivable by it in respect of
Eurodollar Rate Loans, and of the additional amounts required to compensate such
Bank in respect thereof, shall be conclusive, provided that such determinations
are made reasonably and in good faith.
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(d) If the Company is required to pay additional amounts to
any Bank under paragraph (a) or (b) of this Section 9.1, the Company may (in
addition to paying such additional amounts to such Bank) at the Company's option
at any time, subject to the provisions of Section 9.3 hereof, convert all of the
Eurodollar Rate Loans of such Bank which are affected by such Increased Costs to
Base Rate Loans in accordance with this Agreement.
Section 9.2. Change of Law.
Notwithstanding any other provision herein, in the event that
any change in applicable law, rule or regulation or in the interpretation or
administration thereof (including the issuance of any new law, rule, regulation
or interpretation, or any new administration thereof), of or in any jurisdiction
whatsoever, shall make it unlawful for any Bank to make or maintain a Eurodollar
Rate Loan (or to convert Base Rate Loans into Eurodollar Rate Loans), or shall
materially restrict the authority of any Bank to purchase or sell, or to take
deposits of Eurodollars, then the obligation of such Bank to make Eurodollar
Rate Loans (and the right of the Company to convert Base Rate Loans into
Eurodollar Rate Loans) shall be suspended for the duration of such illegality or
restriction and the Company shall forthwith convert all Eurodollar Rate Loans of
such Bank then outstanding to Base Rate Loans in accordance with the terms of
this Agreement.
Section 9.3. Funding Losses.
The Company shall indemnify a Bank against, and reimburse such
Bank on demand for, any loss or expense incurred or sustained by such Bank, as
reasonably determined by such Bank, as a result of any payment or prepayment
(whether by reason of a voluntary prepayment by the Company or by reason of a
mandatory prepayment of the Term Loans by reason of an Event of Default,
pursuant to Section 3.16 hereof or other mandatory prepayment provision relating
to all outstanding Term Loans set forth herein) or conversion of a Eurodollar
Rate Loan made by such Bank on a day other than the last day of an Interest
Period for such Term Loan.
Section 9.4. Mandatory Repayment or Conversion on Certain
Events.
On the last day of an Interest Period during which any Orderly
Replacement Event occurs (which relates to all Banks) and no later than four (4)
Eurodollar Business Days after any Immediate Replacement Event relating to one
or more Banks, all outstanding Eurodollar Rate Loans of such Banks shall, at the
option of the Company, be either: (a) prepaid in full by the Company, together
with any accrued and unpaid interest thereon, or (b) converted to Base Rate
Loans. Each Bank shall promptly notify the Company and Administrative Agent of
any Immediate Replacement Event and any Orderly Replacement Event known to such
Bank.
Section 9.5. Survival.
The obligations of the Company under Sections 9.1 through 9.3
of this Agreement shall survive the repayment of the Term Loans and the
cancellation of the Notes.
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ARTICLE 10. THE ADMINISTRATIVE AGENT
Section 10.1. Authorization and Action.
Each Bank hereby appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement and the Notes as are delegated to it as Administrative
Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto, and the Administrative Agent hereby accepts such
authorization and appointment. As to any matters not expressly provided for by
this Agreement and the Notes or provided for with specific reference to this
Section 10.1 (including, without limitation, enforcement or collection of the
Notes), 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 action)
upon the instructions of the Majority Banks and such instructions shall be
binding upon all Banks and all holders of the Notes; provided, however, that the
Administrative Agent shall not be required to take any action which exposes the
Administrative Agent to liability or which is contrary to this Agreement or the
Notes or applicable law. As to any provisions of this Agreement under which
action may be taken or approval given by the Majority Banks, the action taken or
approval given by the Majority Banks shall be binding upon all Banks to the same
extent and with the same effect as if each Bank had joined therein. The
Administrative Agent shall be entitled to rely upon any note, notice, consent,
certificate, affidavit, letter, telegram, teletype message, facsimile
transmission, statement, order or other document believed by it to be genuine
and correct and to have been signed or sent by the proper person or persons and,
in respect of legal matters, upon the opinion of counsel selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been filed with the
Administrative Agent. Any request, authority or consent of any Person who at the
time of making such request or giving such authority or consent is the holder of
any Note shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any note or notes issued in exchange therefor.
Section 10.2. Administrative Agent's Reliance, Etc.
Neither the Administrative Agent nor any of its directors,
officers, agents or employees shall be liable to any Bank for any action taken
or omitted to be taken by it or by such directors, officers, agents or employees
under or in connection with this Agreement or the Notes, except for its or their
own gross negligence or willful misconduct. Without limitation of the generality
of the foregoing, the Administrative Agent: (i) may consult with legal counsel,
independent public accountants and other experts selected by it and shall not be
liable to any Bank for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such experts; (ii) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations made in or in connection with this
Agreement or the Notes; (iii) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of this Agreement or the Notes on the part of the Company or to inspect the
property (including the books and records) of the Company; (iv) shall not be
responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the
Notes, or any other instrument or document furnished pursuant thereto; and (v)
shall incur no liability under or in respect of this Agreement or the Notes by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telegram, facsimile transmission, cable or telex) believed by
it to be genuine and signed or sent by the proper party or parties.
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Section 10.3. Administrative Agent and Affiliates.
With respect to its Commitment, the Term Loans made by it and
the Notes issued to it, the Administrative Agent shall have the same rights and
powers under this Agreement as any other Bank and may exercise the same rights
and powers under this Agreement as any other Bank and may exercise the same as
though it were not the Administrative Agent; and the term "Bank" or "Banks"
shall, unless otherwise expressly indicated, include the Administrative Agent in
its individual capacity. Unrelated to its role as Administrative Agent as set
forth herein, the Administrative Agent and its affiliates may accept deposits
from, lend money to, and generally engage in any kind of business with, the
Company, and any Person who may do business with or own securities of the
Company, all as if it were not the Administrative Agent and without any duty to
account therefor to the Banks.
Section 10.4. Representations of the Banks.
Each Bank acknowledges that it has, independently and without
reliance upon the Administrative Agent, or any affiliate or subsidiary of the
Administrative Agent, or any other Bank and based on the financial statements
referred to in Section 5.2 hereof and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement; and that each Bank has engaged in the negotiation of the terms
of this Agreement. Each Bank also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement or the Notes. The Administrative Agent has no duty or
responsibility, either initially or on a continuing basis, to provide any Bank
with any credit or other information with respect to the Company whether coming
into its possession as of the date of this Agreement or at any time thereafter,
or to notify any Bank of any Event of Default except as provided in Section 10.5
hereof. This Agreement and all instruments or documents delivered in connection
with this Agreement have been reviewed and approved by each Bank and the Banks
have not relied on the Administrative Agent as to any legal or factual matter in
connection therewith or in connection with the transactions contemplated
thereunder.
Section 10.5. Events of Default.
In the event of the occurrence of any Default or Event of
Default, any Bank knowing of such event may (but shall have no duty to), or the
Company pursuant to Section 6.7 hereof shall, give the Administrative Agent
written notice specifying such Event of Default or other event and expressly
stating that such notice is a "notice of default". The Administrative Agent
shall not be deemed to have knowledge of such events unless the Administrative
Agent has received such notice, or unless the Administrative Agent has actual
notice of such Default or Event of Default or other event in its capacity as one
(1) of the Banks or unless the Event of Default consists of a failure of payment
of principal or interest on any of the Notes. In the event that the
Administrative Agent receives such a notice of the occurrence of an Event of
Default, or has actual knowledge thereof, the Administrative Agent shall give
written notice thereof to the Banks. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed in writing by the Majority Banks; provided, however, that, unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may take such action, or refrain from taking such action,
with respect to such Event of Default as it shall deem advisable and in the best
interest of the Banks.
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Section 10.6. Right to Indemnity.
Except for action expressly required of the Administrative
Agent hereunder, the Administrative Agent shall be fully justified in failing or
refusing to take any action hereunder unless it shall first be indemnified to
its satisfaction by the Banks against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Section 10.7. Indemnification.
The Banks hereby agree to indemnify the Administrative Agent
(to the extent not reimbursed by the Company), ratably according to their
respective Commitments, or, after such Commitments have been terminated, ratably
according to their respective Term Loans as most recently in effect prior to the
date indemnification is sought, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Administrative Agent in any way relating
to or arising out of this Agreement and/or the Notes or any action taken or
omitted by the Administrative Agent under this Agreement and/or the Notes;
provided, however, that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each Bank
agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred by
the Administrative Agent in connection with the administration, or enforcement
of, or the preservation of any rights under, this Agreement and/or the Notes, to
the extent that the Administrative Agent is not reimbursed for such expenses by
the Company.
Section 10.8. Successor Administrative Agent.
The Administrative Agent may resign at any time by giving
written notice thereof to the Banks and the Company and may be removed at any
time with or without cause by the Majority Banks. Upon any such resignation or
removal, the Company shall have the right to appoint a successor Administrative
Agent, subject to confirmation by the Majority Banks. If no successor
Administrative Agent shall have accepted such appointment within 30 days after
the retiring Administrative Agent's giving of notice of resignation or the
Majority Banks' removal of the Administrative Agent the Administrative Agent
may, on behalf of the Banks, appoint a successor Administrative Agent who shall
be willing to accept such appointment. In any event such successor
Administrative Agent shall be a commercial bank organized under the laws of the
United States of America or of any State thereof and shall have a combined
capital and surplus of at least $1,000,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Administrative Agent, and the retiring or removed Administrative Agent
shall be discharged from its duties and obligations as agent under this
Agreement. After any Administrative Agent's resignation or removal hereunder as
Administrative Agent the provisions of this Article 10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
Section 10.9. Syndication Agent and Co-Documentation Agents.
The Syndication Agent and the Co-Documentation Agents shall
have no duties or responsibilities hereunder in their respective capacities as
such.
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ARTICLE 11. MISCELLANEOUS
Section 11.1. Rights and Remedies.
No delay or failure of the Banks or the Administrative Agent
or any one of them or of the Company in exercising any rights, powers or
privileges hereunder shall affect such right, power or privilege, nor shall any
single or partial exercise thereof preclude any further exercise thereof, or the
exercise of any other right, power or privilege. The rights and remedies of the
Banks and the Administrative Agent or any one of them and of the Company under
this Agreement are cumulative and not exclusive of any rights or remedies which
they would otherwise have. Failure on the part of any Bank, the Administrative
Agent or the Company to exercise any right, power or privilege given it
hereunder shall not be the breach of any obligation of the Bank or the Company
to any other party to this Agreement or to any other Person.
Section 11.2. Notices.
Except as otherwise expressly provided for herein, notices,
which may be given or are required to be given hereunder, shall be in writing
and may be mailed, postage prepaid, addressed as follows or sent by telex or
facsimile:
(a) If to the Company, both to:
"Delta Air Lines, Inc.
Attention: Joan Repetti,
Director - Corporate Finance
Dep't 860
1030 Delta Boulevard
Atlanta, Georgia 30320"
Facsimile: (404) 715-4862
And to:
"Delta Air Lines, Inc.
Attention: Paul Jacobson
Dep't 856
1030 Delta Boulevard
Atlanta, Georgia 30320"
Facsimile: (404) 715-4862
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(b) If to Administrative Agent:
"The Chase Manhattan Bank
Attention: Janet Belden
One Chase Manhattan Plaza, 8th Floor
New York, New York 10081"
Facsimile: (212) 552-5658
(c) If to any Bank other than Administrative Agent at that
address, telex number or facsimile number designated in writing to the Company
and the Administrative Agent from time to time.
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A party may specify a different address or facsimile number by furnishing such
change in writing to all other parties hereto. Additionally, notice may, in lieu
of being given by mail or facsimile, be delivered personally to any officer of
any party to whose attention it could have been addressed.
Section 11.3. Expenses, Indemnification, Etc.
(a) The Company shall pay all reasonable costs, expenses,
taxes and fees (i) incurred by the Administrative Agent in connection with the
preparation, execution and delivery of this Agreement, the Notes and all other
documents incident hereto or thereto (collectively, the "Loan Documents")
including, without limitation, the costs and professional fees of Simpson
Thacher & Bartlett, New York, New York, whether or not any transaction
contemplated hereby shall be consummated, and any and all stamp, intangible or
other taxes that may be payable or determined in the future to be payable in
connection therewith, (ii) incurred by the Administrative Agent in connection
with the administration of the Term Loans and the Loan Documents in accordance
with the provisions thereof and the preparation, execution and delivery of any
waiver, amendment or consent by the Banks or the Administrative Agent relating
to the Loan Documents including, without limitation, costs and professional fees
of counsel for the Administrative Agent; and (iii) actually incurred by the
Administrative Agent or any of the Banks in enforcing the Loan Documents
including, without limitation, reasonable attorneys' fees of counsel for the
Administrative Agent or the Banks.
(b) The Company shall indemnify the Administrative Agent and
each Bank and hold the Administrative Agent and each Bank (and all directors,
officers, employees and agents of any of the foregoing (the Administrative
Agent, the Banks and such directors, officers, employees and agents each
referred to as an "Indemnified Party")) harmless against, any and all costs,
losses, liabilities, claims, damages or expenses incurred by an Indemnified
Party, whether jointly or severally, and whether or not such Indemnified Party
is designated a party thereto, arising out of or by reason of, or relating
directly or indirectly to, (i) any investigation, litigation or other
proceeding, pending or threatened, regarding any actions or failure to act by
the Company involving this Agreement or any transaction contemplated hereby,
(ii) any actual or proposed use by the Company or any of its Subsidiaries of the
proceeds from any borrowing hereunder, or (iii) the Administrative Agent's, any
Bank's or the Company's entering into and complying with this Agreement or in
issuing or delivering the Notes and including, without limitation, the
reasonable fees and disbursements of such Indemnified Party's separate counsel
incurred in connection with any such investigation, litigation or other
proceeding (which shall be advanced by the Company on request notwithstanding
any claim or assertion that the Indemnified Party is not entitled to
indemnification hereunder upon receipt of an undertaking to reimburse the
Company if it is actually and finally determined by a court of competent
jurisdiction that the party is not so entitled). However, the indemnity of the
Company set forth herein shall not cover the costs, losses, liabilities, claims,
damages or expenses (x) incurred by an Indemnified Party arising out of the bad
faith or willful misconduct of such Indemnified Party (as actually and finally
determined by a court of competent jurisdiction) or (y) incurred by the
Administrative Agent in connection with a suit, claim or cause of action brought
against the Administrative Agent by a Bank pursuant to which such Bank alleges
that the Administrative Agent has failed to perform the ministerial duties of
the Administrative Agent as expressly set forth herein (such as administering
the funding and collection of Term Loans, determining interest rates and the
like).
(c) The Administrative Agent and each Bank agree that in the
event that any investigation, litigation, suit, action or proceeding is asserted
or threatened in writing or instituted against it or any other Indemnified Party
for which the Administrative Agent or any Bank may desire indemnity or defense
hereunder, the Administrative Agent or such Bank shall promptly notify the
Company thereof
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in writing and agree, to the extent appropriate to consult with the Company with
a view to minimizing the cost to the Company of its obligations under this
Section 11.3.
(d) No action taken by legal counsel chosen by an Indemnified
Party in defending against any such investigation, litigation, suit, action or
proceeding or requested remedial, removal or response action shall vitiate or in
any way impair the obligations and duties of the Company hereunder to indemnify
and hold harmless each Indemnified Party; provided, however, that if the Company
is required to indemnify any Indemnified Party pursuant hereto, such Indemnified
Party shall not settle or compromise any such investigation, litigation, suit,
action or proceeding without the prior written consent of the Company (which
consent shall not be unreasonably withheld or delayed) so long as the Company
has provided evidence reasonably satisfactory to such Indemnified Party that the
Equity of the Company and its Subsidiaries on a consolidated basis is not less
than zero.
(e) The obligations of the Company under this Section 11.3
shall survive transfer, payment or satisfaction of any Note and any amendment,
supplementation, modification or termination of this Agreement.
Section 11.4. Amendments to this Agreement and the Notes.
Any provisions of this Agreement and the Notes may be amended,
terminated waived or otherwise modified in writing by the Company and the
Majority Banks, and any such amendment, termination, waiver or other
modification shall be binding upon all of the Banks to the same extent and with
the same effect as if each Bank had joined therein, provided, however, that,
notwithstanding the foregoing: (a) any provisions of this Agreement and the
Notes with respect to any (i) extension of the expressed maturity date of the
whole or any principal or interest payable under any Note, (ii) reduction in the
rate of interest payable under any Note (other than any change in the rate of
interest pursuant to the next to last paragraph of the definition of Applicable
Margin), (iii) increase in the amount of any Commitment (except as permitted in
Sections 3.14 and 11.6), (iv) reduction in the amount or extension of the due
date of any fees payable hereunder, (v) extension of the due date of any
principal of, or interest on, any Term Loan or (vi) change in this Section 11.4,
may be amended or otherwise modified only in a writing signed by the Company and
each Bank directly affected thereby; and (b) no provisions of Article 10 shall
be amended, modified, or waived without the consent of the Administrative Agent.
The percentage set forth in the definition of "Majority Banks" as set forth
herein shall not be changed without the unanimous written consent of the Banks.
Notwithstanding the foregoing paragraph, in the event that the
Existing Credit Agreement shall at any time include any negative covenant or
event of default (each, a "Specified Restrictive Provision") that is not
contained in, or is more restrictive than those contained in, this Agreement
then, effective on the date such Specified Restrictive Provision is so included,
this Agreement shall automatically be deemed to have been amended to include
herein such Specified Restrictive Provision. It is understood that any
subsequent waiver, amendment or other modification to any Specified Restrictive
Provision contained in the Existing Credit Agreement that has the effect of
making such provision less restrictive shall not, unless otherwise agreed by the
Majority Banks, affect the terms of such provision as incorporated herein.
Section 11.5. Agreement as to Right of Set-off, Sharing of
Losses.
So long as any Term Loan is outstanding, each Bank agrees
that, if it has payment made to it on any Term Loan, whether by set-off or
otherwise, including, but not limited to, any payment
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received by such Bank under any applicable bankruptcy, insolvency or similar
laws, in a greater proportion than payments made on Term Loans held by any other
Bank, the Bank so receiving such greater proportionate payment agrees to
purchase a portion of the Term Loans held by the other Banks, so that after such
purchase each Bank will hold an unpaid balance on its Term Loan bearing the same
proportion to the then outstanding aggregate principal amount of the Term Loans
as such Bank's Commitment bears to the Banks' aggregate Commitments; provided
that if any amount so received by any Bank in payment of the Term Loan held by
it shall be, as a result of the reversal of the exercise of any such right
(whether by court order or voluntary action on the part of such Bank), returned
to the Company or the Subsidiary or paid as directed by such court order by such
Bank, then each other Bank which shall have theretofore received its share of
any such payment pursuant to this Section 11.5 shall, upon demand, promptly
repay, without interest, the amount of such share to such Bank, or, if the Bank
exercising such right shall not have made the purchases provided for in this
Section 11.5 prior to such reversal, the other Banks shall have no further
rights under this Section 11.5 in respect to such amount. Except as provided in
this Section and in Sections 10.6 and 10.7, no Bank shall be responsible to any
other Bank for losses or claims which such Bank may incur in connection with the
transactions contemplated by this Agreement. The Company agrees that any Bank so
purchasing a participation from another Bank pursuant to this Section 11.5 may
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Bank were the direct creditor of the
Company in the amount of such participation.
Section 11.6. Successors and Assigns.
This Agreement shall be binding upon the Company and the Banks
and their respective successors and assigns, and shall inure to the benefit of
the Company and the Banks and their respective successors and assigns. The
Company may not assign its rights or obligations hereunder, except as permitted
by Section 7.3 hereof. Other than by virtue of operation of law, no Bank shall
assign any portion of its Commitment or Term Loans hereunder unless (a) except
in the case of any assignment to another Bank or to any affiliate of any Bank,
the portion of the Bank's Commitment or Term Loans to be assigned is equal to or
greater than $5,000,000 (or such lesser amount as the Company may approve in its
sole discretion), unless the assigning Bank is assigning the entire amount of
its Commitment and Term Loans, (b) except in the case of any assignment to
another Bank or to any affiliate of any Bank, the assigning Bank has received
the prior written approval of the Company and the Administrative Agent to the
proposed assignment (such approval in each case not to be unreasonably
withheld); (c) the Administrative Agent has been paid an assignment fee of
$3,500 by the assigning Bank, and (d) the bank which has received the assignment
of the Commitment or Term Loans, the assigning Bank, the Company and the
Administrative Agent shall have executed the Form of Assignment and Assumption
Agreement as set forth on Exhibit D hereto. Upon compliance with the provisions
set forth above, such financial institution shall thereupon and thereafter be
deemed to be a Bank for all purposes hereunder. Other than as provided in the
next paragraph, there shall be no sale by any Bank of any participation in its
Commitment or Term Loans; provided, however, any Bank may pledge its Term Loans
and/or Notes hereunder to a Federal Reserve Bank in support of borrowings made
by such Bank from such Federal Reserve Bank. Notwithstanding the foregoing, no
Conduit Bank shall assign any portion of the Term Loans it may have funded
hereunder without the consent of the Company and the Administrative Agent unless
such assignment is to its designating Bank hereunder.
Any Bank other than a Conduit Bank may, without the consent of
the Company, in accordance with applicable law, at any time sell to one or more
banks, financial institutions or other entities (each, a "Participant")
participating interests in any Term Loan owing to such Bank, any Commitment of
such Bank or any other interest of such Bank hereunder and under the Notes. In
the event
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of any such sale by a Bank of a participating interest to a Participant, such
Bank's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Bank shall remain solely responsible for the
performance thereof, such Bank shall remain the holder of any such Term Loan for
all purposes under this Agreement and the Notes, and the Company and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement and
the Notes. In no event shall any Participant under any such participation have
any right to approve any amendment or waiver of any provision of this Agreement
or any Note, or any consent to any departure by the Company therefrom, except to
the extent that such amendment, waiver or consent would reduce the principal of,
or interest on, the Term Loans or any fees payable hereunder, or postpone the
date of the final maturity of the Term Loans, in each case to the extent subject
to such participation. The Company agrees that if amounts outstanding under this
Agreement and the Notes are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement and the Notes to the same extent as if the amount of
its participating interest were owing directly to it as a Bank under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Banks the proceeds
thereof as provided in Section 11.5 as fully as if it were a Bank hereunder. The
Company also agrees that each Participant shall be entitled to the benefits of
Sections 3.15, 9.1, 9.2 and 9.3 with respect to its participation in the
Commitments and the Term Loans outstanding from time to time as if it was a
Bank; provided that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Bank would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Bank to such Participant had no such transfer occurred.
Each of the Company, each Bank, and the Administrative Agent
hereby confirms that it will not institute against a Conduit Bank or join any
other Person in instituting against a Conduit Bank any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
state bankruptcy or similar law, for one year and one day after the payment in
full of the latest maturing commercial paper note issued by such Conduit Bank;
provided, however, that each Bank designating any Conduit Bank hereby agrees to
indemnify, save and hold harmless each other party hereto for any loss, cost,
damage or expense arising out of its inability to institute such a proceeding
against such Conduit Bank during such period of forbearance (and such agreement
contained in the foregoing proviso shall survive the termination of this
Agreement).
Section 11.7. Holidays.
When any payment hereunder falls due on a day that is not a
Business Day, such payment shall be made as herein provided on the next
succeeding Business Day. Interest shall continue to accrue on the principal to
be paid until it is paid.
Section 11.8. Law Governing.
This Agreement shall be construed and performance thereof
shall be determined according to the laws of the State of New York.
Section 11.9. Disclosure to Other Persons.
The Company acknowledges that any Bank may deliver copies of
any financial statements and other documents delivered to such Bank, and
disclose any other information disclosed to
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such Bank, by or on behalf of the Company or any Subsidiary in connection with
or pursuant to this Agreement to (i) its Conduit Bank, if any (and any such
Conduit Bank may also disclose any such documents and information pursuant to
the terms hereof as if it were a Bank hereunder), and to such of the Bank's
directors, officers, employees, agents and professional consultants as may
require such information in the performance of their respective duties, (ii) any
Person to which such Bank offers to assign any Commitment or Term Loan or any
part thereof if (a) such disclosure has been previously approved by the Company,
or (b) such disclosure is not of information previously designated by the
Company as "privileged" or "confidential", (iii) any federal or state regulatory
authority having jurisdiction over such Bank, or (iv) any other Person to which
such delivery or disclosure may be necessary or appropriate (a) in compliance
with any law, rule, regulation or order applicable to such Bank, (b) in response
to any subpoena or other legal process or (c) in connection with any litigation
to which such Bank is a party; provided, however, that such Bank, to the extent
legally permitted to do so, will use its best efforts to notify the Company
prior to any disclosure of information contemplated by this subparagraph (iv)
and will use its best efforts to give the Company the opportunity to object to
any such disclosure; provided, further, that the foregoing proviso shall not
require such Bank to withhold such information where such withholding would
subject such Bank to civil or criminal liabilities or penalties, as determined
by such Bank in its discretion.
Section 11.10. Execution and Effective Date.
This Agreement may be executed in any number of counterparts,
and any party hereto may execute the said Agreement by signing any such
counterpart. The Company shall deliver one such executed counterpart to
Administrative Agent and each Bank shall deliver one such executed counterpart
to the Administrative Agent for further delivery to the Company. This Agreement
shall be effective as of the Effective Date.
Section 11.11. Representation of Banks.
Each Bank represents for itself only that it is acquiring the
Notes to be acquired by it hereunder for its own account in the ordinary course
of extending credit as a banking or financial institution and not with a view to
the distribution or resale thereof, subject, nevertheless, to any requirement of
law that the disposition of the property of a Bank shall at all times be within
its control.
Section 11.12. Severability.
Any provision of this Agreement or of the Notes which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
Section 11.13. Entire Agreement.
This Agreement and the Notes express the entire understanding
of the parties with respect to the transactions contemplated hereby. Neither
this Agreement, the Notes nor any term hereof or thereof may be changed, waived,
discharged or terminated orally or in writing, except as provided in Section
11.4 hereof
38
<PAGE>
Section 11.14. Jurisdiction.
The Company hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the Notes, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York, the courts of the United
States for the Southern District of New York, and appellate courts from any
thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Company at its address set forth in Section 11.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
Section 11.15. Waivers of Jury Trial.
THE COMPANY, THE ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY NOTE AND FOR ANY COUNTERCLAIM THEREIN.
39
<PAGE>
[Signatures on Following Pages]
40
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed.
THE COMPANY:
DELTA AIR LINES, INC.
By: /s/ M. Michele Burns
------------------------------------
Title: Vice President and Treasurer
---------------------------------
By: /s/ Edward H. Bastian
------------------------------------
Title: Vice President - Controller
---------------------------------
THE ADMINISTRATIVE AGENT:
THE CHASE MANHATTAN BANK,
as Administrative Agent and
individually as a Bank
By: /s/ Robert Anastesis
------------------------------------
Title: Vice President
---------------------------------
THE SYNDICATION AGENT:
CITIBANK, N.A., as Syndication Agent and
individually as a Bank
By: /s/ David L. Harris
------------------------------------
Title: Vice President
---------------------------------
THE CO-DOCUMENTATION AGENTS:
COMMERZBANK AG, NEW YORK BRANCH and
GRAND CAYMAN BRANCH, as a Co-Documentation
Agent and individually as a Bank
By: [illegible]
------------------------------------
Title: SVP & Manager
---------------------------------
By: [illegible]
------------------------------------
Title: Vice President
---------------------------------
41
<PAGE>
[This page intentionally left blank]
42
<PAGE>
INDUSTRIAL BANK OF JAPAN, LIMITED,
as a Co-Documentation Agent and
individually as a Bank
By: [illegible]
------------------------------------
Title: Vice President
---------------------------------
BANCA DI ROMA
By: /s/ A. Paoli
------------------------------------
Title: Assist. Treasurer
---------------------------------
By: /s/ C. Strike
------------------------------------
Title: AVP
---------------------------------
BANK AUSTRIA CREDITANSTALT
INTERNATIONAL AG
By: [illegible]
------------------------------------
Title: [illegible]
---------------------------------
BANCA NAZIONALE DEL LAVORO SPA, NEW
YORK BRANCH
By: /s/ Giulio Giovine
------------------------------------
Title: Vice President
---------------------------------
By: /s/ Leonardo Valentini
------------------------------------
Title: First Vice President
---------------------------------
BANK ONE, NA (MAIN OFFICE CHICAGO)
By: [illegible]
------------------------------------
Title: Vice President
---------------------------------
BAYERISCHE HYPO-UND VEREINSBANK AG,
NEW YORK BRANCH
By: /s/ Marianno Weinzinger
------------------------------------
Title: Director
---------------------------------
By: /s/ Patricia M. Tresnan
------------------------------------
Title: Director
---------------------------------
43
<PAGE>
INTERNATIONAL TRANSPORT FINANCE
LIMITED
By: [illegible]
------------------------------------
Title: Director
---------------------------------
By: [illegible]
------------------------------------
Title: Authorized Signatory
---------------------------------
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
AG, CAYMAN ISLANDS BRANCH
By: /s/ Eric K. Zimmerman
------------------------------------
Title: Assistant Vice President
---------------------------------
By: /s/ Kurt A. Morris
------------------------------------
Title: Vice President
---------------------------------
KBC BANK N.V.
By: /s/ Robert Snauffer
------------------------------------
Title: First Vice President
------------------------------------
By: /s/ Raymond F. Murrai
------------------------------------
Title: First Vice President
---------------------------------
MITSUBISHI TRUST & BANKING CORP.
By: /s/ Scott L. Paige
------------------------------------
Title: Senior Vice President
---------------------------------
SUNTRUST BANK, ATLANTA
By: /s/ Deborah S. Armstrong
------------------------------------
Title: Vice President
---------------------------------
WACHOVIA BANK, N.A.
By: [illegible]
------------------------------------
Title: Vice President
---------------------------------
44
<PAGE>
WESTDEUTSCHE LANDESBANK GIROZENTRALE
By: /s/ Alan S. Bookspan
------------------------------------
Title: /s/ Director
---------------------------------
By: /s/ Barry S. Wadler
------------------------------------
Title: Associate
---------------------------------
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: [illegible]
------------------------------------
Title: Vice President
---------------------------------
CREDIT LYONNAIS NEW YORK BRANCH
By: [illegible]
------------------------------------
Title: Senior Vice President
---------------------------------
GOLDMAN SACHS CREDIT PARTNERS L.P.
By: [illegible]
------------------------------------
Title:
---------------------------------
THE DAI-ICHI KANGYO BANK LTD.
By: /s/ Robert P. Gallagher
------------------------------------
Title: Vice President
---------------------------------
THE SANWA BANK LTD.
By: /s/ Michael J. Lawrence
------------------------------------
Title: Senior Vice President
---------------------------------
BANK HAPOALIM B.M.
By: [illegible]
------------------------------------
Title: [illegible]
---------------------------------
By: [illegible]
------------------------------------
Title: VP
---------------------------------
45
<PAGE>
ABU DHABI INTERNATIONAL BANK
By: /s/ Pamela Sigda
------------------------------------
Title: Vice President
---------------------------------
By: /s/ Hien Luc
------------------------------------
Title: Asst. Vice President
---------------------------------
BANCA COMMERCIALE ITALIANA, NEW YORK
BRANCH
By: /s/ E. Bermant
------------------------------------
Title: FVP/Deputy Manager
---------------------------------
By: /s/ J. Michalisin
------------------------------------
Title: FVP
---------------------------------
BANK OF CHINA, NEW YORK BRANCH
By: [illegible]
------------------------------------
Title: Deputy General Manager
---------------------------------
BAYERISCHE LANDESBANK
By: /s/ James Boyle
------------------------------------
Title: Vice President
---------------------------------
By: /s/ Alex Kohnert
------------------------------------
Title: First VP
---------------------------------
CHRISTIANA BANK OG KREDITKASSE ASA
By: [illegible]
------------------------------------
Title: Vice President
---------------------------------
By: [illegible]
------------------------------------
Title: EVP
---------------------------------
DEUTSCHE BANK AG NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By: /s/ William W. McGinly
------------------------------------
Title: Director
---------------------------------
By: /s/ Nathan Pulster
------------------------------------
Title: Vice President
---------------------------------
46
<PAGE>
FUJI BANK, LTD.
By: /s/ Yuji Tanaka
------------------------------------
Title: Vice President & Manager
---------------------------------
LANDESBANK SCHLESWIG-HOLSTEIN
GIROZENTRALE
By: [illegible]
------------------------------------
Title: VP
---------------------------------
By: [illegible]
------------------------------------
Title: AVP
---------------------------------
NATEXIS BANQUE
By: /s/ Xavier Guyard
------------------------------------
Title: Senior Vice President
---------------------------------
By: /s/ Michel Heraud
------------------------------------
Title: Vice President
---------------------------------
THE BANK OF NEW YORK
By: /s/ Ronald R. Reedy
------------------------------------
Title: Vice President
---------------------------------
UNION EUROPEENNE DE CIC
By: /s/ Eric Longuet
------------------------------------
Title: Vice President
---------------------------------
By: /s/ Marie-Rose Sensenbrenner
------------------------------------
Title: Vice President
---------------------------------
FIRSTAR BANK, N.A.
By: [illegible]
------------------------------------
Title: Senior Vice President
---------------------------------
47
<PAGE>
LANDESBANK SACHSEN GIROZENTRALE
By: [illegible]
------------------------------------
Title: SVP
---------------------------------
By: [illegible]
------------------------------------
Title: Manager
---------------------------------
CARIPLO - CASSA DI RISPARMIO DELLE
PROVINCIE LOMBARDE SPA
By: /s/ Maria Elena Greene
------------------------------------
Title: Assistant Vice President
---------------------------------
By: /s/ Charles W. Kennedy
------------------------------------
Title: First Vice President
---------------------------------
GULF INTERNATIONAL BANK, B.S.C.
By: /s/ Mireille Khalidi
------------------------------------
Title: AVP
---------------------------------
By: /s/ Abdel-Fattah Tahoun
------------------------------------
Title: SVP
----------------------------------
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Loren S. Archibald
------------------------------------
Title: Managing Director
---------------------------------
CITY NATIONAL BANK
By: [illegible]
------------------------------------
Title: Vice President
---------------------------------
48
<PAGE>
EXHIBIT A
Bank Commitment
---- ----------
The Chase Manhattan Bank $ 114,000,000
Citibank, N.A. 112,000,000
Commerzbank AG, New York Branch and Grand Cayman Branch 112,000,000
Industrial Bank of Japan, Limited 112,000,000
Banca di Roma 100,000,000
Bank Austria Creditanstalt International AG 90,000,000
Banca Nazionale del Lavoro SpA, New York Branch 70,000,000
Bank One, NA (Main Office Chicago) 70,000,000
Bayerische Hypo-und Vereinsbank AG, New York Branch 70,000,000
International Transport Finance Limited 35,000,000
DG Bank Deutsche Genossenschaftsbank AG, Cayman Islands Branch 35,000,000
KBC Bank N.V. 70,000,000
Mitsubishi Trust & Banking Corp. 70,000,000
SunTrust Bank, Atlanta 70,000,000
Wachovia Bank, N.A. 70,000,000
Westdeutsche Landesbank Girozentrale 70,000,000
Bank of Tokyo-Mitsubishi Trust Company 50,000,000
Credit Lyonnais New York Branch 50,000,000
Goldman Sachs Credit Partners L.P. 50,000,000
The Dai-Ichi Kangyo Bank Ltd. 50,000,000
The Sanwa Bank Ltd. 50,000,000
Bank Hapoalim B.M. 40,000,000
Abu Dhabi International Bank 25,000,000
Banca Commerciale Italiana, New York Branch 25,000,000
Bank of China, New York Branch 25,000,000
Bayerische Landesbank 25,000,000
Christiania Bank OG Kreditkasse Asa, New York Branch 25,000,000
Deutsche Bank AG New York and/or Cayman Islands Branches 25,000,000
Fuji Bank, Ltd. 25,000,000
Landesbank Schleswig-Holstein Girozentrale 25,000,000
Natexis Banque 25,000,000
The Bank of New York 25,000,000
Union Europeenne de CIC 25,000,000
Firstar Bank, N.A. 15,000,000
Landesbank Sachsen Girozentrale 15,000,000
Cariplo - Cassa di Risparmio delle Provincie Lombarde SpA 10,000,000
Gulf International Bank, B.S.C. 10,000,000
Teachers Insurance and Annuity Association of America 10,000,000
City National Bank 5,000,000
Total Commitments of the Banks $1,900,000,000
1
<PAGE>
EXHIBIT B
FORM OF TERM NOTE
$---------------
-----------, ----
FOR VALUE RECEIVED, DELTA AIR LINES, INC., a Delaware
corporation (the "Maker"), promises to pay to the order of _____________________
(together with any successor and assign thereof or any subsequent holder hereof
referred to herein as the "Holder") the lesser of (a) __________________________
Dollars in lawful money of the United States or (b) the aggregate unpaid
principal amount of all Term Loans which are still outstanding and which were
made to the Maker by the Holder pursuant to that certain Credit Agreement dated
as of November __, 1999 (as the same may be amended, modified or supplemented
from time to time, the "Credit Agreement", terms used herein and not defined
herein have their respective defined meanings as set forth in the Credit
Agreement) by and among the Maker, the Banks set forth therein, Commerzbank AG
and Industrial Bank of Japan, Limited, as Co-Documentation Agents, Citibank,
N.A., as Syndication Agent, and The Chase Manhattan Bank, as Administrative
Agent, at the Main Office of the Administrative Agent or at such other place as
is otherwise specified in the Credit Agreement. The Company shall repay the
principal amount of this Note on the Maturity Date. The outstanding principal
amount hereof shall bear interest at the rates and shall be payable at the times
set forth in the Credit Agreement.
Any payment of principal or interest which is not paid when
due, as herein provided, shall bear interest (to the extent permitted by law) at
that rate which is one-quarter of one percent (1/4%) above the Base Rate in
effect on each respective day thereafter until paid in full and such interest
shall be payable on demand.
This Note is one of the Notes issued pursuant to, and is
entitled to the benefits of, the Credit Agreement. To the extent provided in the
Credit Agreement, this Note is subject to voluntary prepayment, in whole or in
part, without premium or penalty.
Upon the occurrence of an Event of Default, the aggregate
unpaid principal amount of all Term Loans evidenced hereby which are still
outstanding and accrued interest thereon may become due and payable in the
manner and with the effect provided in the Credit Agreement.
Time is of the essence of this Note, and in case this Note is
not paid when due, and is subsequently collected by law or through an attorney
at law, or under advice therefrom, the Maker agrees to pay all costs of
collection incurred by the Holder including, without limitation, the reasonable
fees and disbursements of counsel to the Holder.
The undersigned and all endorsers or other parties to this
Note hereby waive presentment, demand for payment, protest and notice of
nonpayment.
1
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed and
delivered this Note as of the date first written above.
DELTA AIR LINES, INC.
By:
-----------------------------------
Title:
--------------------------------
2
<PAGE>
[Reverse of Note]
Advance Payment
Date Loan Amount Principal Interest
3
<PAGE>
EXHIBIT C-1
FORM OF NOTICE AND AGREEMENT REGARDING ADDITION OF BANK
[Date]
The Chase Manhattan Bank, as Administrative Agent
270 Park Avenue
New York, New York 10017
Attention: Janet Belden
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, Georgia 30320
Attention: Joan Repetti, Director of Corporate Finance
Dep't 860
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of
November __, 1999 (the "Credit Agreement") by and among Delta Air Lines, Inc.
(the "Company"), the Banks party thereto, Commerzbank AG and Industrial Bank of
Japan, Limited, as Co-Documentation Agents, Citibank, N.A., as Syndication
Agent, and The Chase Manhattan Bank, as Administrative Agent. Terms used herein
and not defined herein have their respective defined meanings as set forth in
the Credit Agreement.
1. Pursuant to Section [3.14.1][3.14.3] of the Credit
Agreement, the undersigned hereby requests that it become a Bank under the
Credit Agreement. The proposed [Commitment] [Term Loans] of the undersigned as a
Bank under the Credit Agreement would equal $________. The undersigned proposes
that the undersigned shall become a Bank under the Credit Agreement on the later
of (a) the date the Administrative Agent and the Company consent thereto and (b)
_____________, ___________ (such later date, the "Effective Date").
2. Upon the Effective Date, the undersigned hereby assumes all
of the obligations of a Bank having [a Commitment] [Term Loans] of
$______________ under the Credit Agreement as if the undersigned were an
original Bank and signatory under the Credit Agreement including, but not
limited to, the obligation of a Bank to make advances to the Company thereunder
(if applicable) and to indemnify the Administrative Agent as provided therein.
In this connection, the undersigned hereby represents that it has received and
reviewed a copy of the Credit Agreement and hereby ratifies and approves all of
the terms and conditions of the Credit Agreement and the other documents
executed and delivered in connection therewith.
3. For purposes of delivering any notice to the undersigned as
a Bank under the Credit Agreement, the following sets forth the address of the
undersigned for such purpose:
1
<PAGE>
------------------------------------
------------------------------------
------------------------------------
Telecopy No.
------------------------
Attention:
-------------------------
4. The undersigned acknowledges that it has, independently and
without reliance upon the Administrative Agent, or on any affiliate or
subsidiary thereof, or any other Bank and based on the financial statements
supplied by the Company and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to become a Bank
under the Credit Agreement. The undersigned also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement or its respective Note. The Administrative
Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide the undersigned with any credit or other information with
respect to the Company or to notify the undersigned of any Event of Default
except as provided in Section 10.5 of the Credit Agreement. The undersigned has
not relied on the Administrative Agent as to any legal or factual matter in
connection therewith or in connection with the transactions contemplated
thereunder.
5. This letter agreement shall not be binding against the
undersigned unless and until the Company and the Administrative Agent have
executed their consent to the foregoing at the space provided below.
6. THIS LETTER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
7. This letter agreement may be executed in any number of
counterparts each of which when taken together, shall constitute one and the
same agreement.
Very truly yours,
[FINANCIAL INSTITUTION]
By:
-----------------------------------------
Title:
--------------------------------------
The Company hereby agrees that, on the Effective Date,
___________ ("___________") shall be a Bank under the Credit Agreement having [a
Commitment] [Term Loans] equal to $____________ pursuant to the terms and
conditions set forth above. The Company agrees that ______________ shall have
all of the rights and remedies of a Bank under the Credit Agreement as if
_______________ were an original Bank and signatory under the Credit Agreement
including, but not
2
<PAGE>
limited to, the right of a Bank to receive payments of principal and interest
with respect to the Term Loans made by the Banks and, if applicable, to receive
the commitment fees payable to the Banks as provided in the Credit Agreement.
Further, _______________ shall be entitled to the indemnification provisions
from the Company in favor of the Banks as provided in the Credit Agreement. The
Company further agrees, on the Effective Date, to execute in favor of
______________________ a promissory note in substantially the form of Exhibit B
to the Credit Agreement in the face amount of ________________'s [Commitment]
[Term Loans].
DELTA AIR LINES, INC.
By:
-----------------------------------------
Title:
--------------------------------------
The Administrative Agent hereby consents to _______________
becoming a Bank under the Credit Agreement pursuant to the foregoing terms and
conditions.
THE CHASE MANHATTAN BANK, as
Administrative Agent
By:
-----------------------------------------
Title:
--------------------------------------
3
<PAGE>
EXHIBIT C-2
FORM OF AGREEMENT OF EXISTING BANK
TO REPLACE REPLACED BANK
The Chase Manhattan Bank, as Administrative Agent
270 Park Avenue
New York, New York 10017
Attention: Janet Belden
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of
November __, 1999 (the "Credit Agreement") by and among Delta Air Lines, Inc.
(the "Company"), the Banks party thereto, Commerzbank AG and Industrial Bank of
Japan, Limited, as Co-Documentation Agents, Citibank, N.A., as Syndication
Agent, and The Chase Manhattan Bank, as Administrative Agent. Terms used herein
and not defined herein have their respective defined meanings as set forth in
the Credit Agreement.
Pursuant to Section [3.14.1][3.14.3] of the Credit Agreement,
the undersigned Bank (the "Existing Bank") hereby agrees to assume
[$___________] of the [Commitment] [Term Loans] of ____________ (the "Replaced
Bank") under the Credit Agreement. Accordingly, the [Commitment] [Term Loans] of
the Existing Bank shall be increased from $____________ to $_____________.
Except for the increase in the [Commitment] [Term Loans] contemplated hereby,
the Existing Bank shall continue to have all of the rights, remedies, duties and
obligations of a Bank under the Credit Agreement.
Very truly yours,
[EXISTING BANK]
By:
-----------------------------------------
Title:
--------------------------------------
The Administrative Agent hereby consents to the
above-described increase in the Commitment of [Insert Bank] under the Credit
Agreement.
THE CHASE MANHATTAN BANK, as
Administrative Agent
By:
-----------------------------------------
Title:
--------------------------------------
1
<PAGE>
EXHIBIT D
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of
______________, by and among __________ (the "Assignor"), _____________ (the
"Assignee") DELTA AIR LINES, INC. (the "Company") and THE CHASE MANHATTAN BANK,
as Administrative Agent.
WHEREAS, the Assignor is a Bank under that certain Credit
Agreement dated as of November __, 1999 (the "Credit Agreement", terms used
herein and not defined herein have their respective defined meanings as set
forth in the Credit Agreement) by and among the Company, the Banks named
therein, Commerzbank AG and Industrial Bank of Japan, Limited, as
Co-Documentation Agents, Citibank, N.A., as Syndication Agent, and the
Administrative Agent;
WHEREAS, the Assignor desires to assign to the Assignee [(a)]
[all] [a portion] of the Term Loans made by the Assignor to the Company under
the Credit Agreement, [and (b) [all] [a portion] of the Assignor's Commitment
under the Credit Agreement, all on the terms and conditions set forth herein];
WHEREAS, the Company and the Administrative Agent consent to
such assignment on the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the parties hereto,
the parties hereto hereby agree as follows:
1. Subject to the terms and conditions of this Agreement, the
Assignor hereby irrevocably transfers and assigns to the Assignee, without
recourse, [all of the Assignor's right title and interest in and to] [an
undivided ___________ percent interest in] all Term Loans made by the Assignor
to the Company under the Credit Agreement] [a principal amount of Term Loans
made by the Assignor to the Company under the Credit Agreement equal to
$_________] (such Term Loans herein referred to as the "Assigned Loans")
together with all rights of the Assignor to receive all payments of principal
and interest from the Company with respect to such Assigned Loans and all rights
of collection and enforcement the Assignor may have against the Company with
respect to such Assigned Loans. [Further, but subject to the terms and
conditions set forth herein, the Assignor hereby irrevocably transfers and
assigns to the Assignee [all of the Assignor's] [$ _____ of the Assignor's]
Commitment under the Credit Agreement (the "Assigned Commitment").] Such
assignment shall include all voting rights of the Assignor associated with such
amount of [Assigned Loans] [Assigned Commitment][, all rights to receive all
commitment fees with respect to such Assigned Commitment] and other rights of
the Assignor under the Credit Agreement with respect to such amount of [Assigned
Loans] [Assigned Commitment], all as if the Assignee were an original Bank and
signatory under the Credit Agreement having [a Commitment] [Term Loans] equal to
the Assigned [Commitment] [Loans]. The Assignee, subject to the terms and
conditions hereof, hereby assumes all obligations of the Assignor as if the
Assignee were an original Bank and signatory under the Credit Agreement
including, but not limited to, the obligation of the Assignor to make advances
to the Company with respect to the Assigned Commitment (if applicable) and to
indemnify the Administrative Agent as provided therein. The Assignor shall have
no further duties or obligations with respect to, and shall have no further
interest in, the Assigned [Commitment] [Loans].
1
<PAGE>
2. The Assignor hereby represents and warrants to the Assignee
that: [(a) the Assignor is a Bank under the Credit Agreement having a Commitment
under the Credit Agreement immediately prior to the effectiveness of this
Agreement equal to $________ and the Assignor is not in default of its
obligations under the Credit Agreement and (b)] immediately prior to the
effectiveness of this Agreement, the Assignor held $________ in principal amount
of Term Loans.
3. The Assigned Loans shall be without recourse to the
Assignor. The Assignee acknowledges and agrees that, except as provided in
paragraph 2 above, the Assignor is making no representations or warranties with
respect to, and the Assignee hereby releases and discharges the Assignor for any
responsibility or liability for: (i) the present or future solvency or financial
condition of the Company, (ii) any representations, warranties, statements or
information made or furnished by the Company in connection with the Credit
Agreement or otherwise, (iii) the validity, efficacy, sufficiency, or
enforceability of the Credit Agreement or any document or instrument executed in
connection therewith, or the collectibility of the Assigned Loans, (iv) the
perfection, priority or validity of any lien, security interest or pledge with
respect to any collateral at any time securing the obligations of the Company
under the Credit Agreement or the Assigned Loans under the Notes or the Credit
Agreement and (v) the performance or failure to perform by the Company of any
obligation under the Credit Agreement or any document or instrument executed in
connection therewith.
Further, the Assignee acknowledges that it has, independently
and without reliance upon the Administrative Agent, or on any affiliate or
subsidiary thereof, the Assignor or any other Bank and based on the financial
statements supplied by the Company and such other documents and information as
it has deemed appropriate, made its own credit analysis and decision to become a
Bank under the Credit Agreement. The undersigned also acknowledges that it will,
independently and without reliance upon the Administrative Agent, the Assignor
or any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement or its respective Note(s). The
Administrative Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide the Assignee with any credit or other
information with respect to the Company or to notify the Assignee of any Event
of Default except as provided in Section 10.5 of the Credit Agreement. The
Assignee has not relied on the Administrative Agent, the Assignor or any other
Bank as to any legal or factual matter in connection therewith or in connection
with the transactions contemplated thereunder.
4. Upon the execution and delivery of this Agreement, the
Assignee shall deliver to Assignor by wire transfer of immediately available
funds $__________ [Insert amounts owing with respect to Assigned Loans, etc.]
[Other consideration/adjustments].
5. The Company hereby agrees that the Assignee shall be a Bank
under the Credit Agreement having [a Commitment] [Term Loans] equal to the
Assigned [Commitment] [Loans]. The Company agrees that the Assignee shall have
all of the rights and remedies of a Bank under the Credit Agreement as if the
Assignee were an original Bank and signatory under the Credit Agreement
including, but not limited to, the right of a Bank to receive payments of
principal and interest with respect to the Assigned Loans, if any, and to the
Term Loans made by the Banks after the date hereof and, if applicable, to
receive the commitment fees payable to the Banks as provided in the Credit
Agreement. Further, the Assignee shall be entitled to the indemnification
provisions from the Company in favor of the Banks as provided in the Credit
Agreement. The Company further agrees, upon the execution and delivery of this
Agreement, to execute in favor of the Assignee a promissory note in
substantially the form of Exhibit B to the Credit Agreement in the face amount
of the Assigned Commitment. Further, the Company agrees
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that, upon the execution and delivery of this Agreement, the Company shall owe
the Assigned Loans to the Assignee as if the Assignee were the Bank originally
making such Term Loans.
6. For purposes of delivering any notice to the Assignee as a
Bank under the Credit Agreement, the following sets forth the address of the
Assignee for such purpose:
-----------------------
-----------------------
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Telecopy No.
-----------
Attention:
------------
7. The Administrative Agent hereby consents to the assignment
and assumption contemplated herein.
8. The Assignor agrees to pay the Administrative Agent a
servicing fee equal to $3,500 immediately upon the execution and delivery of
this Agreement.
9. This Agreement, and the assignment and assumption
contemplated herein, shall not be effective until (a) this Agreement is signed
by each of the Assignor, the Assignee, the Company and the Administrative Agent;
(b) the payment to the Assignor of the amounts owning by the Assignee pursuant
to paragraph 4 hereof; and (c) the payment to the Administrative Agent of the
fee owning to the Administrative Agent pursuant to paragraph 8 hereof.
10. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
11. This Agreement may be executed in any number of
counterparts each of which, when taken together, shall constitute one and the
same agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Assignment and Assumption Agreement as of the date and year first written above.
THE ASSIGNOR:
-------------------------------
By:
---------------------------
Title:
--------------------
THE ASSIGNEE:
------------------------------
By:
---------------------------
Title:
--------------------
THE COMPANY:
DELTA AIR LINES, INC.
By:
---------------------------
Title:
--------------------
THE ADMINISTRATIVE AGENT:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By:
---------------------------
Title:
--------------------
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