SCHEDULE 13D
Amendment No.
American West Airlines, Inc.
Class B Common Stock, $0.01 par value per share
Warrants to Purchase Class B Common Stock
Cusip # 023650203 & 023650112
Date of Event: August 25, 1994
Filing Fee: Yes
Cusip # 023650203 & 023650112
Item 1: Reporting Person - FMR Corp. - (Tax ID: 04-2507163)
Item 2: See Item #5
Item 4: PF, but see Item 3
Item 6: Commonwealth of Massachusetts
Item 7: 4,181,905 shares of Class B Common Stock (plus 656,767 shares
issuable upon exercise of Warrants)
Item 8: None
Item 9: 4,181,905 shares of Class B Common Stock (plus 656,767 shares
issuable upon exercise of Warrants)
656,767 Warrants
Item 10: None
Item 11: Class B Common Stock 4,838,672 shares (assumes exercise
of Warrants)
Warrants 656,767
Item 13: Class B Common Stock 10.90%
Warrants 6.30%
Item 14: HC
Item 1. Security and Issuer.
The securities to which this statement relates are the Class B common stock,
$0.01 par value per share (the "Class B Common Stock"), of America West
Airlines, Inc., a Delaware corporation (the "Company"), and the Company's
warrants to purchase shares of Class B Common Stock (the "Warrants," together
with the Class B Common Stock, the "Securities"). The principal executive
offices of the Company are located at 4000 East Sky Harbor Boulevard, Phoenix,
Arizona 85034.
Item 2. Identity and Background.
(a), (b), (c) and (f). This statement is being filed by FMR Corp., a
Massachusetts corporation ("FMR"). FMR is a holding company a principal asset
of which is the capital stock of a wholly-owned subsidiary, Fidelity
Management & Research Company, a Massachusetts corporation ("FMRC"). FMRC is
an investment adviser registered under Section 203 of the Investment Advisers
Act of 1940 which provides investment advisory services to more than thirty
investment companies which are registered under Section 8 of the Investment
Company Act of 1940 and serves as investment adviser to certain other funds
which are generally offered to limited groups of investors (collectively, the
"FMRC Funds"). Fidelity Management Trust Company, a wholly-owned subsidiary
of FMR and a bank as defined in Section 3(a)(6) of the Securities Exchange Act
of 1934, as amended ("FMTC"), serves as trustee or managing agent for various
private investment accounts, primarily employee benefit plans, and serves as
investment adviser to certain other funds which are generally offered to
limited groups of investors (collectively, the "FMTC Funds"). Various
directly or indirectly held subsidiaries of FMR are also engaged in investment
management, venture capital asset management, securities brokerage, transfer
and shareholder servicing and real estate development. The principal
executive offices of FMR, FMRC and FMTC are located at 82 Devonshire Street,
Boston, Massachusetts 02109.
Edward C. Johnson 3d owns 24.9% of the outstanding voting common stock and is
Chairman of FMR. The business address and principal occupation of Mr. Johnson
3d are set forth in Schedule A hereto.
The Securities to which this statement relates are owned directly by two FMTC
Funds, Belmont Fund, L.P., a Bermuda limited partnership ("Belmont I"), and
Belmont Capital Partners II, L.P., a Delaware limited partnership ("Belmont
II"), and one FMRC Fund, Fidelity Copernicus Fund, L.P., a Delaware limited
partnership ("Copernicus"). Belmont I, Belmont II and Copernicus are
sometimes referred to collectively herein as the "Funds" and each individually
as a "Fund."
Belmont II directly owns 857,962 shares of the Class B Common Stock and
523,279 Warrants. Assuming exercise of all of the Warrants held by
Belmont II, Belmont II would hold shares of Class B Common Stock representing
approximately 3.1% of the issued and outstanding shares of Class B Common
Stock. The Warrants held by Belmont II represent approximately 5.0% of the
outstanding Warrants. Belmont II is managed by a corporate general partner
which is a wholly-owned subsidiary of FMR.
Copernicus directly owns 2,506,365 shares of the Class B Common Stock and
100,116 Warrants. Assuming exercise of all of the Warrants held by
Copernicus, Copernicus would hold shares of Class B Common Stock representing
approximately 5.9% of the issued and outstanding shares of Class B Common
Stock. The Warrants held by Copernicus represent approximately 1.0% of the
outstanding Warrants. Copernicus is managed by a corporate general partner
which is an indirect wholly-owned subsidiary of FMR.
The name, residence or business address, principal occupation or employment
and citizenship of each of the executive officers and directors of FMR are set
forth in Schedule A hereto.
(d) and (e). During the last five years, none of the persons named in this
Item 2 or listed on Schedule A hereto has been convicted in any criminal
proceeding (excluding traffic violations or similar misdemeanors) or has been
a party to any civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to
a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violations with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
In connection with the Plan of Reorganization (the "Plan") of America West
Airlines, Inc. (prior to its reorganization, "Old AWA") which was confirmed by
the United States Bankruptcy Court for the District of Arizona (the
"Bankruptcy Court") on August 10, 1994 and which became effective on August
25, 1994 (the "Effective Date"), (i) Belmont I acquired 817,578 shares of
Class B Common Stock and 33,372 Warrants from the Company for $6,939,552 in
cash, (ii) Belmont II acquired (A) 601,686 shares of Class B Common Stock and
523,279 Warrants in exchange for 1,884,438 shares of common stock of Old AWA,
36,549.5 shares of Series C 9 3/4% preferred stock of Old AWA and $3,418,704
in cash, and (B) 256,276 shares of Class B Common Stock in exchange for
satisfaction of certain claims which Belmont II held against Old AWA, and
(iii) Copernicus acquired (A) 53,632 shares of Class B Common Stock in
exchange for satisfaction of certain claims which Copernicus held against Old
AWA and (B) 2,452,733 shares of Class B Common Stock and 100,116 Warrants for
$20,818,652 in cash. The numbers of shares of Class B Common Stock acquired
by Belmont II and Copernicus are estimated and are subject to adjustment under
the Plan. Belmont II and Copernicus each used its own assets to purchase
Securities and no part of the purchase price for such Securities consisted of
borrowed funds. Belmont I used funds borrowed under a Credit Agreement (the
"Credit Agreement") to purchase Securities. A copy of the Credit Agreement is
filed as an exhibit hereto and is hereby incorporated by reference.
Item 4. Purpose of Transaction.
The purpose of purchasing the Securities is to acquire an equity interest in
the Company in pursuit of the investment objectives established by each of the
Funds. The Funds hold the Securities for investment purposes.
FMRC (in the case of Copernicus) and FMTC (in the case of Belmont I and
Belmont II) intend to review continuously the equity position of the Funds in
the Company. Depending upon future evaluations of the business prospects of
the Company and upon other developments, including, but not limited to,
general economic and business conditions and money market and stock market
conditions, FMRC and/or FMTC may determine to increase or decrease the Funds'
equity interest in the Company by acquiring additional shares of Class B
Common Stock and/or Warrants, or by disposing of all or a portion of the
Securities. FMRC Funds and/or FMTC Funds other than the Funds may also
purchase additional shares of Class B Common Stock and/or Warrants subject to,
among other things, regulatory restrictions, the availability and prices of
shares for sale and other investment opportunities that may be available to
such funds.
Except as set forth herein, neither FMR, FMRC nor FMTC has any present plan or
proposal which relates to or would result in:
(a) the acquisition of additional securities of the Company, or the
disposition of securities of the Company;
(b) an extraordinary corporate transaction, such as a merger, reorganization
or liquidation involving the Company or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Company or any
of its subsidiaries;
(d) any change in the present board of directors or management of the
Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) any material change in the present capitalization or dividend policy of
the Company;
(f) any other material change in the Company's business or corporate
structure;
(g) changes in the Company's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Company by any person;
(h) a class of securities of the Company to be delisted from a national
securities exchange or to cease to be authorized to be quoted in the inter-
dealer quotation system of a registered national securities association;
(i) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act;
or
(j) any action similar to any of those enumerated above.
Item 5. Interest in Securities of Issuer.
(a) At the date hereof, Belmont II directly owns 857,962 shares of the Class
B Common Stock and 523,279 Warrants. Assuming exercise of all of the Warrants
held by Belmont II, Belmont II would beneficially own 1,381,241 shares of the
Class B Common Stock, representing approximately 3.1% of the issued and
outstanding shares of Class B Common Stock. The Warrants beneficially owned
by Belmont II represent approximately 5.0% of the outstanding Warrants.
At the date hereof, Copernicus directly owns 2,506,365 shares of the Class B
Common Stock and 100,116 Warrants. Assuming exercise of all of the Warrants
held by Copernicus, Copernicus would beneficially own 2,606,481 shares of the
Class B Common Stock, representing approximately 5.9% of the issued and
outstanding shares of Class B Common Stock. The Warrants beneficially owned
by Copernicus represent approximately 1.0% of the outstanding Warrants.
Each Warrant entitles the holder thereof to purchase one share of the Class B
Common Stock at an exercise price of $12.74, subject to confirmation of such
exercise price by the Bankruptcy Court and to certain adjustments for dilutive
events. The numbers of shares of Class B Common Stock owned by Belmont II
and Copernicus are estimated and are subject to adjustment under the Plan.
FMR beneficially owns, through its ownership of FMRC, FMTC and the general
partners of the Funds, 4,181,905 shares of Class B Common Stock and 656,767
Warrants. Assuming exercise of all of the Warrants held by the Funds, FMR
would beneficially own 4,838,672 shares of the Class B Common Stock,
representing approximately 10.9% of the issued and outstanding shares of Class
B Common Stock. The Warrants beneficially owned by FMR represent
approximately 6.3% of the outstanding Warrants.
Neither FMR, FMRC, FMTC, any of their respective affiliates nor, to the best
knowledge of FMR, any of the individuals named in Schedule A hereto,
beneficially owns any other shares of Class B Common Stock or Warrants.
(b) Belmont II, acting through its general partner, and FMTC, investment
manager to Belmont II, each has the power to vote and dispose of 857,962
shares of the Class B Common Stock and 523,279 Warrants. Copernicus, acting
through its general partner, and FMRC, investment manager to Copernicus, each
has the power to vote and dispose of 2,506,365 shares of the Class B Common
Stock and 100,116 Warrants. FMR, through its control of FMTC, FMRC and the
managing general partners of the Funds, has the power to vote and dispose of
4,181,905 shares of the Class B Common Stock and 656,767 Warrants.
(c) On the Effective Date and pursuant to the Plan, (i) Belmont I acquired
from the Company for $6,939,552 in cash, 817,578 shares of Class B Common
Stock and 33,372 Warrants and (ii) Copernicus acquired from the Company for
$20,818,652 in cash, 2,452,733 shares of Class B Common Stock and 100,116
Warrants, in each case pursuant to a Subscription Agreement dated June 28,
1994, as amended August 23, 1994 (the "Subscription Agreement"), among the
Funds and AmWest Partners, L.P. ("AmWest). Pursuant to the Subscription
Agreement, the Funds agreed to accept an assignment from AmWest of certain of
its rights under the Third Revised Investment Agreement dated April 21, 1994
(the "Investment Agreement") between AmWest and Old AWA, including AmWest's
right to purchase Class B Common Stock and Warrants from the Company.
Pursuant to the Investment Agreement, AmWest agreed to acquire on the
Effective Date, in connection with and as part of the Plan, certain voting
securities, debt securities and Warrants of the Company. A copy of each of
the Subscription Agreement and the Investment Agreement is filed as an exhibit
hereto and is hereby incorporated herein by reference.
On the Effective Date and pursuant to the Plan, (i) Copernicus also acquired
from the Company 53,632 shares of Class B Common Stock in exchange for
satisfaction of certain claims which Copernicus held against Old AWA and
(ii) Belmont II acquired from the Company (A) 601,686 shares of Class B Common
Stock and 523,279 Warrants in exchange for 1,884,438 shares of common stock of
Old AWA, 36,549.5 shares of Series C 9 3/4% preferred stock of Old AWA and
$3,418,704 in cash and (B) 256,276 shares of Class B Common Stock in exchange
for satisfaction of certain claims which Belmont II held against Old AWA.
Except as stated herein, no transactions in shares of Class B Common Stock or
Warrants were effected during the past sixty (60) days by FMR, or, to the best
knowledge of FMR, any of the individuals identified in Schedule A hereto.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to
Securities of the Issuer.
As contemplated by the Plan, the Company, the Funds and certain other
stockholders of the Company are parties to a Registration Rights Agreement
dated August 25, 1994 obligating the Company to register under the Securities
Act of 1933, as amended, the Securities and certain other securities of the
Company, including the Notes (as defined below).
As part of the Plan, the Company, Belmont I and Copernicus entered into a Note
Purchase Agreement dated August 25, 1994 pursuant to which (i) Belmont I
purchased from the Company $25,000,000 principal amount of the Company's 11.25%
Senior Unsecured Notes Due 2001 (the "Notes") and (ii) Copernicus purchased
from the Company $75,000,000 principal amount of the Notes. In order to
finance its acquisition of Notes, Copernicus entered into a Master Repurchase
Agreement (the "Repurchase Agreement") with Lehman Government Securities Inc.
("LGSI") pursuant to which the Notes purchased by Copernicus (the "Repurchase
Notes") were sold to LGSI. The Repurchase Agreement is terminable upon demand
by either party. During the term of the Repurchase Agreement, Copernicus is
entitled to all interest or other payments with respect to the Repurchase
Notes. Upon termination, Copernicus will be required to repurchase, and LGSI
will be obligated to sell, the Repurchase Notes.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 - Credit Agreement
Exhibit 2 - Investment Agreement
Exhibit 3 - Subscription Agreement
This statement speaks as of its date, and no inference should be drawn that no
change
has occurred in the facts set forth herein after the date hereof.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
FMR Corp.
By:/s/Arthur S. Loring
Name: Arthur S. Loring
Title: Vice President - Legal
Dated: September 19, 1994
Schedule A
The name and present principal occupation or employment of each executive
officer and director of FMR Corp. are set forth below. The business address
of each person is 82 Devonshire Street, Boston, Massachusetts 02109, and the
address of the corporation or organization in which such employment is
conducted is the same as his business address. All of the persons listed
below are U.S. citizens.
POSITION WITH PRINCIPAL
NAME FMR CORP. OCCUPATION
Edward C. Johnson 3d President, Director, Chairman of the
Board
CEO, Chairman & and CEO - FMR
Mng. Director
J. Gary Burkhead Director President - FMRC
Caleb Loring, Jr. Director, Mng. Director Director -
FMR
James C. Curvey Director, Sr. V.P. Sr. V.P. -
FMR
William L. Byrnes Vice Chairman, Vice Chairman - FIL
Director & Mng. Director
Robert C. Pozen Sr. V.P. & Gen'l Counsel Sr. V.P. &
Gen'l
Counsel -FMR
Mark Peterson Exec. V.P. - Management Exec., V.P.
- - Resources Management
Resources - FMR
Denis McCarthy Sr. Vice Pres. - Administration Vice
Pres., Chief
Chief Financial Officer Financial
Officer - FMR
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 11, 1994, by
and among BELMONT FUND, L.P. (the "Borrower"), a Bermuda limited partnership
with an office at Belmont Fund, L.P., c/o Fidelity Management Trust Company
F7E, 82 Devonshire Street, Boston, Massachusetts 02109, the Banks listed on
the signature pages hereof and each additional bank that may become a party
hereto pursuant to Section 11 hereof (each a "Bank" and collectively, the
"Banks") and [ ], a national banking association with its
head office at [ ], as agent for the Banks (in such capacity,
the "Agent").
WHEREAS, the Borrower is authorized to borrow money to leverage its
investment portfolio, and desires to enter into this Agreement on the terms
set forth below so that it may borrow funds from the Banks from time to time
for such purpose; and
WHEREAS, the Agent and the Borrower entered into a certain Credit
Agreement dated as of June 30, 1993, as amended (as so amended, the "Prior
Agreement"), providing for a revolving credit facility in the original
principal amount of $40,000,000; and
WHEREAS, pursuant to Assignment, Assumption and Agency Agreements each
dated October 8, 1993 (each an "Assignment Agreement"), each of [
] became parties to the Prior Agreement; and
WHEREAS, the Banks under the Prior Agreement wish to amend and restate
the Prior Agreement to incorporate the amendments thereto prior to the date
hereof, make certain conforming changes and increase the amount of the credit
facility thereunder; and
WHEREAS, the Banks are willing to advance funds to the Borrower from
time to time on the terms and subject to the conditions set forth below;
NOW, THEREFORE, in consideration of the mutual promises and agreements
of the parties set forth herein, the parties hereto amend and restate the
Prior Agreement, and supersede any conflicting or duplicative terms of the
Assignment Agreements, as follows:
Section 1. DEFINITIONS; INTERPRETATION.
Section 1.1. Definitions. As used herein, the following terms shall
have meanings assigned to them below:
Adjusted Eurodollar Rate. Applicable to any Interest Period, shall mean
a rate per annum determined pursuant to the following formula:
AER = [ IOR ]*
[ 1.00 - RP ]
AER = Adjusted Eurodollar Rate
IOR = Interbank Offered Rate
RP = Reserve Percentage
*The amount in brackets shall be rounded upwards, if
necessary, to the next higher 1/100 of l%.
Where:
"Interbank Offered Rate" applicable to any Eurodollar Loan
for any Interest Period means the rate of interest determined by
the Agent to be the prevailing rate per annum at which deposits in
U.S. dollars are offered to the Agent by first-class banks in the
interbank Eurodollar market in which it regularly participates on
or about 10:00 a.m. (Boston, Massachusetts time) two Business Days
before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Agent's portion
of the Eurodollar Loan to which such Interest Period is to apply
for a period of time approximately equal to such Interest Period.
"Reserve Percentage" applicable to any Interest Period means
the rate (expressed as a decimal), if any, applicable to member
banks of the Federal Reserve System during such Interest Period
under regulations issued from time to time by the Board of
Governors of the Federal Reserve System for determining the
maximum reserve requirement (including, without limitation, any
basic, supplemental, emergency or marginal reserve requirement) of
the Agent with respect to "Eurocurrency liabilities" as that term
is defined under such regulations.
The Adjusted Eurodollar Rate shall be adjusted automatically as of the
effective date of any change in the Reserve Percentage.
Agent. As defined in the preamble hereof and includes any successors
appointed pursuant to Section 14.8 hereof.
Agreement. This Amended and Restated Credit Agreement as originally
executed, or if amended or supplemented from time to time, as so amended or
supplemented. References to the Agreement shall mean and include references
to each of the Exhibits and Schedules hereto.
Bank. As defined in the preamble hereof.
Base Rate. The greater of (i) the annual rate of interest announced
from time to time by the Agent at its Head Office as its "Base Rate", and (ii)
the Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded upwards, if
necessary, to the next 1/8 of 1%).
Base Rate Loan. A Loan that bears interest at the Base Rate.
Borrower. As defined in the preamble hereof.
Borrowing Date. The date on which any Loan is made or is to be made
hereunder.
Business Day. (i) For all purposes other than as covered by clause (ii)
below, any day other than a Saturday, Sunday or legal holiday on which banks
in Boston, Massachusetts or New York, New York are open for the conduct of a
substantial part of their commercial banking business; and (ii) with respect
to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day that is a Business Day
described in clause (i) and that is also a day for trading by and between
banks in U.S. Dollar deposits in the interbank Eurodollar market.
Collateral Agency Agreement. The Collateral Agency Agreement,
substantially in the form of Exhibit C hereto, among the Borrower, the Agent
and the Custodian, to be delivered to the Agent for the benefit of the Banks
with respect to the Pledged Securities after any demand therefor, as
contemplated in Section 2.14 hereof.
Commitment Amount. The maximum amount of each Bank's commitment to make
Loans to the Borrower, as set forth next to the name of each Bank on the
signature pages hereof (as adjusted from time to time pursuant to Section 11
hereof). The aggregate amount of all Banks' Commitment Amounts initially
shall be $60,000,000, as the same may be reduced from time to time pursuant to
Section 2.2 hereof or terminated pursuant to Section 2.2 or Section 6.1
hereof.
Commitment Expiry Date. As defined in Section 2.4(e) hereof.
Custodian. Brown Brothers Harriman & Co. or such other entity that acts
as the Borrower's custodian of the Borrower's portfolio of securities.
Default. As defined in Section 6.1 hereof.
Eligible Assets. As of any date of determination, all assets then owned
by the Borrower not constituting Margin Stock, other than puts, calls and
combinations thereof.
Eurodollar Loans. Loans bearing interest at a rate determined with
reference to the Adjusted Eurodollar Rate.
Event of Default. As defined in Section 6.1 hereof.
Federal Funds Effective Rate. For any day, a fluctuating interest rate
per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by the Agent.
General Partner. Each of Fidelity International Services Limited, a
corporation organized under the laws of Bermuda;
[ ] and Fidelity Investments Capital Funding Corp., a corporation
organized under the laws of The Commonwealth of Massachusetts, in each such
company's capacity as general partner of the Borrower.
Head Office. The head office of the Agent, which at present is located
at [ ].
Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the Borrower's balance sheet as indebtedness, or to which reference
should be made by footnotes thereto, including, without limitation, in any
event and whether or not so classified: (i) all debt for money borrowed and
similar extensions of credit, whether direct or indirect; (ii) all liabilities
secured by any mortgage, pledge, security interest, lien, charge, or other
encumbrance existing on property owned or acquired subject thereto, whether or
not the liability secured thereby shall have been assumed; and (iii) all
guaranties, endorsements and other contingent obligations, whether direct or
indirect, in respect of Indebtedness of others, including any obligation to
supply funds to or in any manner to invest in, directly, or indirectly, the
debtor, to purchase Indebtedness, or to assure the owner of Indebtedness
against loss, through an agreement to purchase goods, supplies, or services
for the purpose of enabling the debtor to make payment of the Indebtedness
held by such owner or otherwise, and the obligations to reimburse the issuer
of any letters of credit; but excluding in any event obligations of the
Borrower with respect to unfunded liabilities on open commitments to purchase
loans and loan participations.
Interest Period. With respect to each Eurodollar Loan, the period
commencing on the date of the making of such Eurodollar Loan and ending one,
two, three or six months (or such other period as all Banks may agree to
provide in their sole discretion) thereafter, as the Borrower may elect in the
applicable Loan Request delivered pursuant to Section 2.2(a); provided that:
(i) any Interest Period (other than an Interest Period determined
pursuant to clause (iii) below) that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in the next calendar month, in which
case such Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (iii) below, end on the last Business
Day of a calendar month; and
(iii) any Interest Period that would otherwise end after the
Commitment Expiry Date shall end on the Commitment Expiry Date.
Loan or Loans. Singly, any of, and collectively, all of, the loans made
or to be made to the Borrower as contemplated by this Agreement.
Loan Account. As defined in Section 2.3 hereof.
Loan Documents. This Agreement, the Pledge Agreement, the Collateral
Agency Agreement, and all instruments, agreements and documents required to be
executed and/or delivered by the Borrower in connection with the transactions
contemplated hereby or thereby.
Loan Request. As defined in Section 2.2 hereof.
Management Agreement. The Management Agreement dated May 15, 1989
between the Borrower and Fidelity Management Trust Company, as amended from
time to time.
M Portion. As defined in the introductory paragraph to Section 2
hereof.
Margin Stock. As defined in Regulation U.
Maximum Amount. With respect to the Borrower, and on any date of
determination, an amount equal to the least of (i) $60,000,000, or (ii) 25% of
the value of the Borrower's total assets at such time, or (iii) the maximum
amount the Borrower is permitted to borrow hereunder at such time under:
(a) applicable federal or state laws, statutes and regulations;
(b) agreements (whether or not having the force of law) by the
Borrower with federal, state, local or foreign governmental agencies,
authorities or regulators, as more particularly described in Part 1 of
Schedule I hereto, as amended and in effect from time to time; or
(c) limitations on borrowing adopted by the Borrower and
described in the Partnership Agreement or elsewhere, as more
particularly described in Part 2 of Schedule I hereto, as amended and in
effect from time to time.
NM Portion. As defined in the introductory paragraph to Section 2
hereof.
Obligations. Any and all obligations of the Borrower to the Banks
hereunder of every kind and description, direct or indirect, absolute or
contingent, primary or secondary, due or to become due, now existing or
hereafter arising, regardless of how they arise or by what agreement or
instrument, if any, and including obligations to perform acts and refrain from
taking action as well as obligations to pay money.
Partnership Agreement. The Limited Partnership Agreement dated May 15,
1989, of the Borrower, as amended from time to time.
Pledge Agreement. The Pledge Agreement, substantially in the form of
Exhibit B hereto, executed by the Borrower in favor of the Agent on behalf of
the Banks and to be delivered to the Agent with respect to the Pledged
Securities after any demand therefor, as contemplated in Section 2.14 hereof.
Pledged Securities. The stock or other portfolio securities pledged to
the Agent, for the benefit of the Banks, pursuant to the Pledge Agreement and
Section 2.14 of this Agreement.
Regulation U. Regulation U promulgated by the Board of Governors of the
Federal Reserve System, as in effect from time to time.
Regulation X. Regulation X promulgated by the Board of Governors of the
Federal Reserve System, as in effect from time to time.
Required Banks. Banks holding 66-2/3% of the aggregate of all Banks'
Commitment Amounts or, if the Commitment Amounts have been reduced to zero,
Banks holding 66-2/3% of the outstanding Loans hereunder.
Revolving Loan or Loans. Singly, any of, and collectively, all of, the
revolving loans made to the Borrower as contemplated by Section 2.1(a).
Term Loans. The Term Loans made to the Borrower as contemplated by
Section 2.1(b).
Section 1.2. Interpretation. All terms of an accounting character not
specifically defined herein shall have the meanings assigned thereto by
generally accepted accounting principles in the United States of America,
unless the context otherwise requires. All terms not specifically defined
herein which are defined in the Uniform Commercial Code as in effect in The
Commonwealth of Massachusetts shall have the same meanings herein as therein.
Each reference herein to a particular person or entity shall include a
reference to the successors and permitted assigns of such person or entity.
The words "herein", "hereof", "hereunder", and words of like import shall
refer to this Agreement as a whole and not to any particular Section or
subdivision of this Agreement.
Section 2. CREDIT FACILITY. There is hereby established for the
Borrower a revolving credit facility described in Section 2.1 and a term loan
facility described in Section 2.2. Each such facility shall be divided into
two separate portions, referred to respectively as the "M Portion" and the "NM
Portion". The M Portion of the Loans shall be "indirectly secured", within
the meaning of Regulation U, first by the Margin Stock in the Borrower's
portfolio, and second, after the NM Portion of the Loans are paid in full, by
Eligible Assets. The NM Portion of the Loans shall be "indirectly secured",
within the meaning of Regulation U, first, by Eligible Assets, and second,
after the M Portion of the Loans are paid in full, by the Margin Stock in the
Borrower's portfolio.
Section 2.1. Commitment to Lend. (a) Subject to the terms and
conditions set forth in this Agreement, each Bank severally agrees to make
revolving loans (collectively as to all Banks, the "Revolving Loans") to the
Borrower from time to time on any Business Day during the period from the date
hereof to (but not including) the Commitment Expiry Date, as may be requested
by the Borrower. Each Revolving Loan made by the Banks shall be in the
principal amount stated in the applicable Loan Request, shall be in a minimum
principal amount of at least $1,000,000 and an integral multiple of $100,000,
and shall be allocated among the Banks ratably in proportion to their
respective Commitment Amounts, provided that (i) at no time shall the
aggregate outstanding principal amount of all Revolving Loans made by any Bank
exceed such Bank's Commitment Amount; (ii) at the time of such Revolving Loan,
and after giving effect thereto, the M Portion of all outstanding Revolving
Loans shall not exceed 50% of the current market value of the securities
constituting Margin Stock in the Borrower's investment portfolio, as set forth
on the schedule of portfolio securities delivered by the Borrower with the
applicable Loan Request; (iii) at the time of such Revolving Loan, and after
giving effect thereto, the NM Portion of all outstanding Revolving Loans shall
not exceed 50% of the current market value of Eligible Assets, as set forth on
the schedule of portfolio securities delivered by the Borrower with the
applicable Loan Request; and (iv) at no time shall the aggregate outstanding
principal amount of all Revolving Loans made by all Banks exceed the Maximum
Amount. Within the limits of the provisions of this Section 2.1, the Borrower
may borrow, repay pursuant to Section 2.9 or prepay pursuant to Section
2.10(a) and reborrow under this Section 2.1(a) from time to time until the
Commitment Expiry Date.
(b) Subject to the terms hereof, each Bank will lend to the Borrower,
on the Commitment Expiry Date, a term loan (collectively as to all Banks, the
"Term Loans") that shall not exceed, in the aggregate principal amount, the
lesser of (i) such Bank's Commitment Amount and (ii) the aggregate principal
amount of Revolving Loans made by such Bank then outstanding (it being
understood that the proceeds of such Loans will be applied to the repayment in
full of all such outstanding Revolving Loans); provided that (i) at the time
of such Term Loan, and after giving effect thereto, the M Portion of all
outstanding Term Loans shall not exceed 50% of the current market value of the
securities constituting Margin Stock in the Borrower's investment portfolio,
as set forth on the schedule of portfolio securities delivered by the Borrower
with the applicable Loan Request; (ii) at the time of such Term Loan, and
after giving effect thereto, the NM Portion of all outstanding Term Loans
shall not exceed 50% of the current market value of Eligible Assets, as set
forth on the schedule of portfolio securities delivered by the Borrower with
the applicable Loan Request; and (iii) at no time shall the aggregate
outstanding principal amount of all Term Loans made by all Banks exceed the
Maximum Amount. The Term Loans shall be payable in eight equal consecutive
quarterly installments on the last day of each calendar quarter, commencing on
the first of such dates to occur after the Commitment Expiry Date.
(c) Provided that no Default shall have occurred and be continuing,
the Borrower may convert all or any part (in integral multiples of $1,000,000)
pro rata among the Banks of any outstanding Loan into a Loan of any other type
provided for in this Agreement in the same aggregate principal amount, on any
Business Day (which, in the case of a conversion of a Eurodollar Loan, shall
be the last day of the Interest Period applicable to such Eurodollar Loan).
The Borrower shall give the Agent prior notice of each such conversion (which
notice shall be effective upon receipt) in accordance with Section 2.2.
Section 2.2. Notice and Manner of Borrowing. All Revolving Loans shall
be requested and funded in accordance with the procedures set forth below:
(a) Loan Requests. Each request by the Borrower for the making,
conversion or continuation of a Loan hereunder shall be made by telephonic
notice to the Agent (a "Loan Request") prior to 11:30 a.m., Boston time, on
the Borrowing Date, in the case of Base Rate Loans, and two days prior to the
Borrowing Date, in the case of Eurodollar Loans. Each Loan Request shall be
irrevocable and shall state (i) the principal amount of the requested Loan,
(ii) the portion of such Loan that the Borrower designates as being borrowed
under the M Portion of the facility; (iii) the portion of such Loan that the
Borrower designates as being borrowed under the NM Portion of the facility;
(iv) the interest rate to be applicable thereto, and, in the case of
Eurodollar Loans, (v) the Interest Period requested for such Loan (subject to
the definition of Interest Period). Each Loan Request shall also state the
maximum amount the Borrower is then permitted to borrow hereunder, determined
in accordance with Section 2.1 and the definition of Maximum Amount. Each
Loan Request shall be made by a duly authorized representative of the
Borrower, as specified by the Borrower in writing from time to time, and the
Agent may rely upon any telephone request that it reasonably believes is made
by such a representative. The Agent shall promptly advise the Banks of the
content of each such notice and, if an Interest Period of other than one, two,
three or six months is requested, request the consent of each Bank to such
Interest Period. Each Loan Request shall promptly be followed by a written
confirmation thereof, substantially in the form of Exhibit A hereto, provided
that if such written confirmation differs in any material respect from the
action of the Banks taken in good faith reliance upon such telephone request,
the records of the Banks shall control absent manifest error. The Agent shall
promptly notify the Borrower if any Bank has refused to allow an alternative
Interest Period, and the Borrower may thereafter modify its Loan Request to
specify an Interest Period of the duration permitted herein.
Each Loan Request made by the Borrower shall constitute a representation
and warranty by the Borrower to the Banks that (i) the Loan requested thereby
is permitted under the Partnership Agreement; (ii) such Loan will not, when
made, cause the aggregate indebtedness of the Borrower hereunder to exceed the
Maximum Amount then in effect; (iii) such Loan will not, when made, cause the
aggregate M Portions of all Loans hereunder to exceed 50% of the current
market value of the securities constituting Margin Stock in the Borrower's
investment portfolio; (iv) such Loan will not, when made, cause the aggregate
NM Portions of all Loans hereunder to exceed 50% of the current market value
of Eligible Assets; (v) the proceeds of such Loan will be used by the Borrower
only in accordance with the provisions of Section 2.13 hereof; and (vi) all of
the representations and warranties of the Borrower contained in Section 4
hereof are true and correct on and as of the date of such Loan Request and the
date of such Revolving Loan as though made on and as of such dates.
(b) Funding the Loans. Not later than 2:00 p.m. (Boston,
Massachusetts time) on the date of each Loan each Bank shall make available
its pro rata share of such Loan in immediately available funds at the head
office of the Agent in Boston, Massachusetts. The Agent shall thereafter
deposit or wire the proceeds of such Loan, on the same day, in immediately
available funds and at the Borrower's expense, to an account maintained on the
Borrower's behalf by the Custodian in accordance with the wiring instructions
set forth in Schedule II hereto, as amended and in effect from time to time.
If any Bank makes a Loan hereunder on a day on which the Borrower is to repay
all or any portion (including the repayment of any M Portion or any NM
Portion, as contemplated in Section 2.10(d)) of an outstanding Loan from such
Bank, such Bank shall apply the proceeds of its new Loan (or portion) to make
such repayment and only an amount equal to the difference (if any) between the
amount being borrowed and the amount being repaid shall be made available by
such Bank to the Agent, as provided in this Section 2.1(b), or remitted to the
Agent as provided in Section 2.9.
Section 2.3. Loan Account. The Agent will maintain a separate account
on its books for the Borrower (the "Loan Account") on which will be recorded,
in accordance with the Agent's customary accounting practice, (a) all Loans
made by the Banks to the Borrower and each Bank's pro rata share thereof, (b)
all payments of such Loans made to the Banks, and (c) all other charges and
expenses properly chargeable to the Borrower hereunder. The debit balance of
the Loan Account shall reflect the amount of the Borrower's indebtedness from
time to time to the Banks hereunder and, in the absence of manifest error,
constitute conclusive evidence of the indebtedness of the Borrower to the
Banks hereunder.
Section 2.4. Reduction or Termination of Commitment Amounts.
(a) Unless terminated earlier pursuant to the provisions of clauses
(b) or (c) of this Section 2.4, or extended pursuant to clause (d), the Banks'
several commitments to make Loans hereunder shall be in effect from the date
of this Agreement through December 30, 1994.
(b) Subject to Section 2.12 hereof, the Borrower may at any time on or
prior to the Commitment Expiry Date, (i) terminate this Agreement by giving
written notice thereof to the Agent and repaying in full all obligations of
the Borrower hereunder; or (ii) reduce pro rata the Commitment Amounts in part
in integral multiples of $1,000,000 by giving 30 Business Days' prior written
notice thereof to the Agent and repaying the amount, if any, by which the
aggregate unpaid principal amount of the Loans exceeds the then reduced
Commitment Amounts. The Agent shall promptly advise the Banks of each such
notice. Any such termination or reduction shall be accompanied by the payment
of any fees referred to in Section 2.6 accrued to the date of such termination
or reduction. Any such termination or reduction may be effected by the
Borrower without penalty. No termination or reduction of the Commitment
Amounts shall be subject to reinstatement.
(c) Upon the occurrence of an Event of Default (unless waived pursuant
to Section 16 hereof), the Banks may terminate their commitment to make Loans
hereunder, in the manner contemplated in Section 18, by written notice to the
Borrower, except as such written notice is not required by Section 6.1 hereof.
(d) On any date occurring not later than 60 days prior to the then
effective Commitment Expiry Date, the Borrower may request that the Banks
extend such Commitment Expiry Date for an additional year, by written notice
delivered to the Agent, which shall promptly notify the Banks thereof. If
each Bank, in its sole discretion, shall agree to so extend such Commitment
Expiry Date, such Bank shall so notify the Agent, which shall then notify the
Borrower, not later than 30 days prior to such Commitment Expiry Date. If all
Banks shall advise the Agent and the Borrower of their willingness to so
extend such Commitment Expiry Date, then effective on such Commitment Expiry
Date such Commitment Expiry Date shall thereupon be so extended for such
additional year. During such extended period, the terms and conditions of
this Agreement and the other Loan Documents shall remain in full force and
effect.
(e) The date on which the Banks' several commitments to make Loans
hereunder terminates or is terminated pursuant to this Section 2.4 is
sometimes herein referred to as the "Commitment Expiry Date".
Section 2.5. Repayment of Loans. (a) Each Revolving Loan that is a
Base Rate Loan shall mature and the principal amount thereof become due and
payable in full on the Commitment Expiry Date. Each Revolving Loan that is a
Eurodollar Loan shall mature and the principal amount thereof become due and
payable on the last day of the applicable Interest Period.
(b) The Term Loans shall become due and payable in accordance with the
provisions of Section 2.1(b).
Section 2.6. Fees. (a) The Borrower agrees to pay to the Agent the
fees described in a letter agreement dated the date hereof.
(b) The Borrower agrees to pay to the Agent, for the account of the
Banks, for the period commencing on the date this Agreement becomes effective
and ending on the Commitment Expiry Date, a commitment fee computed at the
rate of 1/4 of 1% per annum of the aggregate unused Commitment Amounts, such
fee to be payable quarterly in arrears on the last day of each March, June,
September and December and on the Commitment Expiry Date. Such commitment fee
shall be pro-rated for any quarter or any part thereof after the termination
of this Agreement by the Borrower pursuant to Section 2.4(b) or by the Banks
pursuant to Section 6.1.
Section 2.7. Interest Rates and Payments of Interest. (a) Each Base
Rate Loan shall bear interest on the outstanding principal amount thereof at a
rate per annum equal to the Base Rate, which rate shall change
contemporaneously with any change in the Base Rate. Such interest shall be
payable on the last day of each month, commencing June 30, 1993, and when such
Loan is due (whether at maturity, by reason of acceleration or otherwise).
(b) Each Eurodollar Loan shall bear interest on the outstanding
principal amount thereof, for each Interest Period applicable thereto, at a
rate per annum equal to the Adjusted Eurodollar Rate plus one and one-half of
one percent (1-1/2%). Such interest shall be payable for such Interest Period
on the last day thereof and when such Eurodollar Loan is due (whether at
maturity, by reason of acceleration or otherwise) and, if such Interest Period
is longer than three months, at intervals of three months after the first day
thereof.
(c) Overdue principal and (to the extent permitted by applicable law)
interest on each Loan and all other overdue amounts payable hereunder shall
bear interest compounded monthly and payable on demand at a rate per annum
equal to two percent above the greater of (i) the interest rate then in effect
for such Loan and (ii) the Base Rate, until such amount shall be paid in full
(whether before or after judgment).
(d) No provision of this Agreement shall require the payment or permit
the collection of interest in excess of the rate then permitted by applicable
law.
Section 2.8 Changed Circumstances. (a) In the event that:
(i) on any date on which the Adjusted Eurodollar Rate would
otherwise be set the Agent shall have determined in good faith (which
determination shall be final and conclusive) that adequate and fair
means do not exist for ascertaining the Interbank Offered Rate, or
(ii) at any time the Agent shall have received notice that:
(A) the making or continuation of or conversion of any Loan to a
Eurodollar Loan by any Bank has been made impracticable or unlawful by
(l) the occurrence of a contingency that materially and adversely
affects the interbank Eurodollar market in which such Bank regularly
participates or (2) compliance by any Bank in good faith with any
applicable law or governmental regulation, guideline or order or
interpretation or change thereof by any governmental authority charged
with the interpretation or administration thereof or with any request or
directive of any such governmental authority (whether or not having the
force of law); or
(B) the Adjusted Eurodollar Rate applicable to any proposed
Eurodollar Loan shall not fairly and adequately reflect the cost of the
Required Banks to fund such Loan;
then, and in any such event, the Agent shall forthwith so notify the Borrower
thereof. Until the Agent notifies the Borrower that the circumstances giving
rise to such notice no longer apply, the ability of the Borrower to select
Eurodollar Loans shall be suspended. If at the time the Agent so notifies the
Borrower, the Borrower has previously delivered a Loan Request for a
Eurodollar Loan but such Loan has not yet gone into effect, such Loan Request
shall be deemed to be void and the Borrower may borrow a Base Rate Loan by
giving a substitute Loan Request pursuant to Section 2.2 hereof.
Upon such date as shall be specified in such notice (which shall not be
earlier than the date such notice is given) the Borrower shall, with respect
to outstanding Eurodollar Loans, prepay the same, together with interest
thereon and any amounts required to be paid pursuant to Section 2.12, and may
borrow a Base Rate Loan by requesting such Loan in accordance with Section 2.2
hereof.
(b) In case any law, regulation, treaty or official directive or the
interpretation or application thereof by any court or by any governmental
authority charged with the administration thereof or the compliance with any
guideline or request of any central bank or other governmental authority
(whether or not having the force of law):
(i) subjects any Bank to any tax with respect to payments of
principal or interest or any other amounts payable hereunder by the
Borrower or otherwise with respect to the transactions contemplated
hereby (except for taxes on the overall net income of any Bank imposed
by the United States of America or any political subdivision thereof),
or
(ii) imposes, modifies or deems applicable any deposit insurance,
reserve, special deposit or similar requirement against assets held by,
or deposits in or for the account of, or loans by, any Bank (other than
such requirements as are already included in the determination of the
Adjusted Eurodollar Rate), or
(iii) imposes upon any Bank any other condition with respect to
its performance under this Agreement,
and the result of any of the foregoing is to increase the cost to such Bank,
reduce the income receivable by such Bank or impose any expense upon such Bank
with respect to any Loans, such Bank shall notify the Agent and the Agent
shall notify the Borrower thereof. The Borrower agrees to pay to such Bank
the amount of such increase in cost, reduction in income or additional expense
as and when such cost, reduction or expense is incurred or determined, upon
presentation by the affected Bank of a statement in the amount and setting
forth such Bank's calculation thereof, which statement shall be deemed true
and correct absent manifest error.
Section 2.9. Place and Mode of Payments; Computations.
(a) Each payment made or caused to be made by the Borrower to the
Banks under this Agreement shall be made to the Agent for the account of the
Banks in United States Dollars at the Agent's Head Office, not later than 2:00
p.m., Boston time, on the due date of each such payment, and in immediately
available and freely transferable funds.
(b) If any sum would, but for the provisions of this clause (b),
become due and payable to the Banks by the Borrower on any day that is not a
Business Day, then such sum shall become due and payable on the next
succeeding Business Day, and interest payable to the Banks under this
Agreement shall be adjusted accordingly.
(c) All computations of interest and fees payable under this Agreement
shall be made on the basis of a 360-day year and paid for the actual number of
days elapsed.
(d) The Agent will determine the Base Rate in effect from time to
time. Any change in the Base Rate shall, for all purposes of this Agreement,
become effective on, and from the beginning of, the day on which such change
shall first be announced or determined by the Agent in accordance with the
Agent's customary banking practices.
(e) Each payment by the Borrower under this Agreement shall be made
without set-off or counterclaim and free and clear of and without deduction or
withholding of any kind.
(f) Whenever the Borrower makes a payment or prepayment of Loans
hereunder, and to the extent it may reasonably do so, it shall identify the
source of the funds used to effect such payment (i.e., whether from the sale
or disposition of Margin Stock, the sale or liquidation of Eligible Assets, or
otherwise); and the Agent shall apply such funds to the payment or prepayment
of then outstanding Loans directly or indirectly secured by the assets in
question (i.e., Loans constituting the M Portion or the NM Portion). In the
absence of such identification, if the Agent is nevertheless aware of the
source of funds, it shall apply such funds to the payment or prepayment of
then outstanding Loans directly or indirectly secured by the assets in
question. If the Agent is not aware of the source of funds, it may apply such
funds to the payment or prepayment of such Loans as it in its sole discretion
shall determine.
(g) Unless the Agent shall have been notified by a Bank prior to the
date on which such Bank is scheduled to make payment to the Agent of the
proceeds of a Loan (which notice shall be effective upon receipt) that such
Bank does not intend to make such payment, the Agent may assume that such Bank
has made such payment when due and the Agent may in reliance upon such
assumption (but shall not be required to) make available to the Borrower the
proceeds of the Loan to be made by such Bank and, if any Bank has not in fact
made such payment to the Agent, such Bank shall, on demand, pay to the Agent
the amount made available to the Borrower attributable to such Bank together
with interest thereon in respect of each day during the period commencing on
the date such amount was made available to the Borrower and ending on (but
excluding) the date such Bank pays such amount to the Agent, at a rate per
annum equal to the Federal Funds Rate. If such amount is not received from
such Bank by the Agent immediately upon demand, the Borrower will, on demand,
repay to the Agent the proceeds of the Loan attributable to such Bank with
interest thereon at a rate per annum equal to the interest rate applicable to
the relevant Loan.
Section 2.10. Optional Prepayments; Certain Mandatory Prepayments. (a)
The Borrower shall have the right at any time to prepay any Loans, in whole or
in part, upon telephonic notice to the Agent received prior to 12:00 noon
(Boston, Massachusetts time), on the date such prepayment is to be made. The
Agent shall promptly advise the Banks of such prepayment. Each such
prepayment (except a prepayment in full) shall be made in an amount of
$1,000,000 or an integral multiple thereof. Eurodollar Loans may only be
prepaid on the last day of the applicable Interest Period.
(b) Upon any reduction of the Commitment Amounts pursuant to Section
2.4(b) hereof or otherwise, or if at any time the aggregate unpaid principal
amount of Loans exceeds the aggregate outstanding Commitment Amounts, the
Borrower agrees to immediately prepay the amount of such excess, together with
any amounts payable pursuant to Section 2.12 hereof.
(c) If at any time the aggregate unpaid principal amount of Loans
shall exceed the Maximum Amount, the Borrower shall immediately prepay the
amount of such excess, together with any amounts payable pursuant to Section
2.12 hereof.
(d) If at any time (i) the sale or disposition of any Margin Stock
would cause the aggregate unpaid principal amount of the M Portion of Loans to
exceed 50% of the current market value of all Margin Stock in the Borrower's
investment portfolio, or (ii) the sale or disposition of any Eligible Assets
would cause the aggregate unpaid principal amount of the NM Portion of Loans
to exceed 50% of the current market value of all Eligible Assets, the Borrower
shall immediately prepay such excess portion of the M Portion or the NM
Portion, as the case may be. Provided no Event of Default shall then have
occurred, such prepayment may be effected by the simultaneous borrowing of
Loans of the unaffected Portion, to the extent that the Borrower may do so in
accordance with the limitations set forth in Section 2.1.
(e) Upon each repayment or prepayment of any principal of any Loan
pursuant to any of the provisions of this Agreement, the Borrower hereby
absolutely and unconditionally promises to pay to the Banks, and there shall
become absolutely due and payable on the date of each such repayment or
prepayment, all of the unpaid interest accrued to such date on the amount of
the principal of the Loan being repaid or prepaid on such date. Whenever any
interest on and any principal of the Loans are paid simultaneously hereunder,
the whole amount paid shall be applied first to interest then due and payable.
Section 2.11. Increased Capital Requirements. If any law or any
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) or the interpretation thereof by a court or
governmental authority with appropriate jurisdiction affects the amount of
capital required to be maintained by any Bank or any corporation controlling
any Bank and such Bank determines that the amount of capital required is
increased by or based upon the existence of the credit facilities established
hereunder or any Loans made pursuant hereto, and such increase has or would
have effect of reducing the return on such Bank's equity to a level below that
which such Bank could have achieved (taking into consideration such Bank's
then existing policies with respect to capital adequacy and assuming the full
utilization of such Bank's capital) but for such law, rule, regulation,
policy, guideline or directive, then such Bank shall notify the Agent, in
writing of such fact, and the Agent shall forthwith so notify the Borrower.
The Borrower agrees to pay to the Agent, for the account of such Bank, the
amount of such reduction as and when such reduction is determined, upon
presentation by such Bank of a statement in the amount and setting forth such
Bank's calculation thereof, which statement shall be deemed true and correct
absent manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods. In this connection, such Bank
shall allocate such costs among its customers in good faith and on an
equitable basis.
Section 2.12. Funding Losses. If the Borrower for any reason makes any
payment of principal with respect to a Eurodollar Loan on any date other than
the scheduled maturity thereof (other than a mandatory prepayment and
simultaneous borrowing of a like amount made pursuant to Section 2.10(d)), or
fails to borrow a Eurodollar Loan after giving a Loan Request therefor, the
Borrower shall reimburse each Bank for any resulting loss or expense incurred
by it, including without limitation any loss incurred in obtaining,
liquidating or employing of deposits from third parties. The Borrower shall
pay to the Agent, for the account of each affected Bank, the amount of such
loss or expense upon presentation of a statement in the amount thereof, which
statement shall be deemed true and correct absent manifest error.
Section 2.13. Use of Proceeds. The proceeds of each Loan hereunder
shall be used only to leverage the Borrower's portfolio in accordance with the
Partnership Agreement and applicable law or regulation.
Section 2.14. Collateral Security for Loans. As a condition precedent
to making any Loan or continuing any Loan made hereunder, at any time after a
change in the condition or affairs (financial or otherwise) of the Borrower
reasonably deemed by the Required Banks to be adverse and material, the Agent
may require the Borrower to pledge its portfolio securities and other assets
(the "Pledged Securities") to the Agent, for the benefit of the Banks, as
collateral for the Obligations, as contemplated in and subject to the terms
and conditions of the Pledge Agreement. Upon demand by the Agent, the
Borrower shall forthwith grant to the Agent, for the benefit of the Banks, a
security interest in the Pledged Securities and deliver to the Agent a Pledge
Agreement and Collateral Agency Agreement with respect to such Pledged
Securities, and instruct the Custodian to take any action necessary under the
Collateral Agency Agreement as the Agent may require to realize the full
benefits of this Section 2.14 and the security interest described herein.
Section 2.15. Pro Rata Treatment.
(a) Each Loan shall be made, and each payment of commitment fee made
to the Agent for the account of the Banks shall be distributed, pro rata to
the Banks in the proportion that each Bank's Commitment Amount bears to the
aggregate of all Banks' Commitment Amounts. Each payment and prepayment of
Loans made to the Agent for the account of all of the Banks shall be
distributed pro rata to the Banks in proportion to the respective amounts of
the Loans outstanding immediately prior to such payment or prepayment.
(b) Each reduction of the Commitment Amounts pursuant to Section 2.4
shall reduce the applicable Commitment Amount of each Bank pro rata in the
proportion that each Bank's Commitment Amount bears to the aggregate of all
Banks' Commitment Amounts immediately prior to such reduction.
Section 3. CONDITIONS PRECEDENT.
Section 3.1. Conditions of Closing. This Agreement shall become
effective upon the receipt by the Agent, with copies for each Bank, of the
following:
(a) an executed original counterpart of this Agreement;
(b) certified copies of any amendments to the Partnership Agreement
and the Management Agreement since June 30, 1993;
(c) certified copies of all documents relating to the due
authorization and execution by the Borrower of this Agreement as the Agent may
reasonably request, including, without limitation, all partnership actions
taken by the Borrower authorizing (i) the execution and delivery by the
Borrower of this Agreement and the other Loan Documents, (ii) its performance
of all of its agreements and obligations under this Agreement and under the
other Loan Documents, and (iii) the borrowings and other transactions
contemplated by this Agreement and the other Loan Documents;
(d) an incumbency certificate, dated the date hereof, signed by an
authorized General Partner, setting forth the names and specimen signatures of
each individual authorized to give notices, sign or act on behalf of the
Borrower in connection with the transactions contemplated by this Agreement
and the other Loan Documents;
(e) certified copies of all documents relating to the General Partner
executing this Agreement on behalf of the Borrower as the Agent may reasonably
request, including, without limitation, all resolutions or other actions taken
by the Borrower authorizing the execution and delivery by the General Partner
on behalf of the Borrower of this Agreement and the other Loan Documents;
(f) an incumbency certificate, dated the date hereof, signed by the
Secretary or Assistant Secretary of the General Partner acting on behalf of
the Borrower hereunder, setting forth the names and specimen signatures of
each individual authorized to give notices, sign or act on behalf of the
Borrower in connection with the transactions contemplated by this Agreement
and the other Loan Documents;
(g) good standing certificates from each of (i) Bermuda and (ii)
Massachusetts with respect to the Borrower and each General Partner;
(h) a duly completed and executed Federal Reserve Form U-1, describing
all Margin Stock then held by the Borrower in its investment portfolio and all
Eligible Assets, in the form required by such Form U-1;
(i) an opinion from Judy K. Mencher, Esq., counsel to the Borrower,
and Conyers, Dill & Pearman, special Bermuda counsel, substantially in the
form of Exhibit E attached hereto, in each case given upon the express
instructions of the Borrower (and by its execution of this Agreement the
Borrower confirms that it has so instructed such counsel);
(j) receipt of the Agent's fee referred to in Section 2.6(a); and
(k) such other documents as any Bank shall have requested in order to
comply with applicable rules and regulations promulgated by the Federal
Reserve Board and other governmental and regulatory authorities.
Section 3.2. Conditions of Loans. The obligation of the Banks to make
any Loan on a Borrowing Date shall be subject to the satisfaction, at or
before the time each such Loan is made, of each of the following conditions
precedent (unless and to the extent that satisfaction of such conditions
precedent or any of them is waived pursuant to Section 16 hereof):
(a) The Agent shall have received a Loan Request from the Borrower as
required by Section 2.2, together with the schedule of Margin Stock and
Eligible Assets required by Section 2.1(a) or (b), as applicable;
(b) The representations and warranties contained in this Agreement and
the other Loan Documents and otherwise made by or on behalf of or with respect
to the Borrower in connection with the transactions contemplated by this
Agreement and the other Loan Documents shall (except to the extent that such
representations and warranties relate expressly to a specific date, and except
to the extent of changes resulting from the transactions contemplated or
permitted by this Agreement and the other Loan Documents and changes occurring
in the ordinary course of business that, singly or in the aggregate, do not
materially adversely affect the Borrower or its business, assets, operations,
prospects or its condition (financial or otherwise)), be true and correct at
and as of such Borrowing Date;
(c) There shall exist no Default or Event of Default or condition
which would, with the giving of notice or the passage of time or both, result
in a Default or Event of Default upon the making of the Loan;
(d) The Required Banks shall be satisfied that there has been no
material adverse change in the business, assets, operations, prospects or
condition (financial or otherwise) of the Borrower since December 31, 1992;
and
(e) The making of the Loan shall not contravene any law, regulation,
decree or order binding on the Borrower or any Bank, and the Agent shall have
received all such certificates and documents in relation thereto as the Agent
or the Agent's counsel shall have reasonably requested.
Section 4. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to the Banks that:
Section 4.1. Organization, Qualification, Etc. (a) The Borrower is
duly organized and validly existing as a limited partnership under the laws of
Bermuda and is duly qualified to do business in each other jurisdiction
wherein the nature of its properties or its business requires such
qualification and in which the failure to be so qualified could materially
adversely affect the business, assets or condition (financial or otherwise) of
the Borrower.
(b) Each of the Borrower's General Partners is duly organized and
validly existing under the laws of its jurisdiction of incorporation and is
duly qualified to do business in each other jurisdiction wherein the nature of
its properties or its business requires such qualification and in which the
failure to be so qualified could materially adversely affect the business,
assets or condition (financial or otherwise) of such General Partner.
Section 4.2. Authorization, Etc. The execution, delivery and
performance of this Agreement and the other Loan Documents by the Borrower and
the General Partner executing this Agreement and the other Loan documents on
behalf of the Borrower are within the powers of the Borrower, have been duly
authorized by all necessary and proper action, and do not and will not (i)
violate or contravene any provision of the constituent documents of the
Borrower or such General Partner, or any amendment thereof, (ii) conflict
with, or result in a breach of any material term, condition or provision of,
or constitute a default under or result in the creation of any mortgage, lien,
pledge, charge, security interest or other encumbrance upon any of the
property or assets of the Borrower (other than as contemplated by this
Agreement and the Pledge Agreement) under, any agreement, trust deed,
indenture, mortgage or other instrument to which the Borrower is a party or by
which the Borrower or any of its property or assets is bound or affected, or
(iii) violate or contravene any provision of any material law, regulation,
order, ruling or interpretation thereunder or any decree, order or judgment of
any court or governmental or regulatory authority, bureau, agency or official.
Section 4.3. Binding Effect of Agreement, Etc. This Agreement and the
other Loan Documents and all the provisions hereof and thereof constitute
legally valid and binding obligations of the Borrower and the General
Partners, enforceable against the Borrower and the General Partners in
accordance with their respective terms, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to
or affecting generally the enforcement of creditors' rights and except to the
extent that the availability of equitable remedies is subject to the
discretion of the court before which any proceeding therefor may be brought.
Section 4.4. Approvals, Etc. No authorization, approval, consent or
other action by, and no notice to or filing with, any shareholder or creditor
of the Borrower or any General Partner, or governmental or regulatory agency
or authority, is required to make valid and legally binding the execution,
delivery and performance by the Borrower and the General Partners of this
Agreement or the other Loan Documents or the consummation by the Borrower of
the transactions contemplated hereby or thereby or the exercise by the Banks
of their rights and remedies hereunder or thereunder.
Section 4.5. Compliance with Other Instruments. The Borrower is in
compliance with all investment policies and restrictions identified in the
Partnership Agreement and is in compliance with all other provisions contained
therein. The Borrower is not in default under any indenture or agreement to
which it is a party or by which it or any of its property or assets is bound,
or in violation of any material applicable laws or orders, regulations,
rulings, decrees or requirements of a court or governmental or regulatory
agency or authority by which it or any of its property or assets is bound,
which default or violation could have a material adverse effect on the
business, assets, operations, prospects or condition (financial or otherwise)
of the Borrower.
Section 4.6. Litigation. There are no pending or, to the best
knowledge of the Borrower, threatened actions, suits, investigations or
proceedings at law or in equity before any federal, state, local or foreign
court, governmental or regulatory authority, agency, commission, board, bureau
or instrumentality, or board of arbitration, against or affecting the Borrower
or its right, title and interest in or to any of its properties or assets.
Section 4.7. Taxes. The Borrower has made or filed all federal, state,
local, foreign and other tax returns, reports and declarations required by any
jurisdiction to which the Borrower is subject, and has paid all taxes and
other assessments and charges shown or determined to be due on such returns,
reports and declarations or pursuant to any matters raised by audits or for
other reasons known to it, except those being contested in good faith by
appropriate proceedings and as to which there have been set aside reserves
adequate with respect to such tax, assessment or charge so contested. The
Borrower has set aside on its books provisions reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes claimed to
be due by the taxing authority of any jurisdiction, and the Borrower knows of
no basis for any such claim.
Section 4.8. Financial Statements; No Material Changes. The Borrower
has furnished to the Banks its Annual Report dated as of December 31, 1992,
setting forth the statement of assets and liabilities, the statement of
portfolio holdings and the statements of capital accounts of the Borrower and
of each General Partner, as of the date of such Report; and the statement of
profits and loss of the Borrower as of the period then ended, in each case
certified by Coopers & Lybrand. The Borrower has also furnished to the Banks
its trial balance dated as of February 28, 1994, setting forth the statement
of assets and liabilities of the Borrower as of such date and the statements
of portfolio holdings and profits and loss of the Borrower as of the period
then ended, prepared by management of the Borrower. All such financial
statements are complete and correct, and fairly present the financial
condition of the Borrower as of such dates and the results of the operations
of the Borrower for the periods ended on such dates, all in accordance with
generally accepted accounting principles applied on a consistent basis. Since
December 31, 1992, there has been no change in the assets, liabilities,
business, condition (financial or otherwise) or results of operations of the
Borrower, that have been, in any case or in the aggregate, materially adverse.
Section 4.9. No Defaults. No Default or Event of Default has occurred
and is continuing.
Section 4.10. Disclosure. The Borrower has delivered to the Banks a
true and complete copy of the Partnership Agreement and the Management
Agreement. Neither of such agreements nor this Agreement, the other Loan
Documents nor any of the information concerning the Borrower submitted to the
Banks in connection herewith or therewith contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained therein not misleading in light of the circumstances in
which they are made. Except as disclosed herein or in the other Loan
Documents, there is no fact known to the Borrower that adversely affects, or
that, in the best judgment of the management of the Borrower, could in the
future materially adversely affect, the assets, business, prospects, condition
(financial or otherwise) or operations of the Borrower.
Section 5. COVENANTS. The Borrower covenants and agrees that, so long
as any amounts are owing under this Agreement or under any of the other Loan
Documents or, if no such amount is owing, so long as the Banks shall have any
commitment to make Loans hereunder as provided herein:
Section 5.1. Use of Proceeds. The Borrower shall use the proceeds of
Loans only for the purposes specified in Section 2.13.
Section 5.2. Punctual Payment. The Borrower will duly and punctually
pay or cause to be paid principal and interest and all other sums due under
this Agreement in accordance with the terms hereof.
Section 5.3. Taxes, Etc. The Borrower will file all federal, state,
local, foreign and other tax returns, reports and declarations required by any
jurisdiction to which the Borrower is subject on or before the due dates for
the returns, reports and declarations; and will pay and discharge, before the
same shall become in arrears, all taxes, assessments and other governmental
charges shown or determined to be due on such returns, reports and
declarations, unless, and in any such case, the same is being contested in
good faith by appropriate proceedings and an adequate reserve therefor has
been established.
Section 5.4. Compliance with Law, Etc. The Borrower will comply with
(i) all applicable federal, state and local laws, rules, regulations and
governmental or regulatory directives (whether or not having the force of
law), and all orders, writs, judgments, injunctions, decrees or awards to
which it may be subject; (ii) all of its investment policies and restrictions;
and (iii) the provisions of the Partnership Agreement and all agreements and
instruments by which it or any of its property or assets may be affected or
bound.
Section 5.5. Compliance with Regulations U and X. The Borrower will,
at any time and from time to time upon receipt of notice from the Agent, at
the request of any Bank, and at the Borrower's expense, promptly execute and
deliver or file all additional instruments and documents, and take all further
action, that may be necessary or desirable, or that any Bank may reasonably
request, in order to fully comply with the requirements of Regulation U and
Regulation X.
Section 5.6. Notice of Certain Events. The Borrower will give the
Agent prompt written notice of:
(a) any change in any federal, state or local law, rule or regulation
or governmental or regulatory directive (whether or not having the force of
law) materially affecting the Borrower, or any of its property or assets, or
affecting the Borrower's ability to repay the Loans and comply with the terms
of this Agreement;
(b) any change in its agreements with governmental authorities or
regulators or its investment policies or restrictions that would make any of
the information set forth in Schedule I hereto incorrect, incomplete or
misleading in any material respect, and will prepare and submit to the Agent
for attachment to this Agreement an amendment to Schedule I reflecting such
change;
(c) any material change in its method of business or amendments to the
Partnership Agreement (it being understood that any change in the investment
restrictions and limitations on indebtedness applicable to the Borrower shall
constitute material changes);
(d) the commencement of any litigation or any administrative,
regulatory or arbitration proceeding or investigation to which the Borrower
may hereafter become a party, that may involve any material risk of any
material final judgment or liability not adequately covered by insurance or
that may otherwise result in any material adverse change in the business,
assets, operations, prospects or condition (financial or otherwise) of the
Borrower;
(e) any sales or other dispositions of Margin Stock in the Borrower's
investment portfolio or of Eligible Assets that would cause the limitations
set forth in Section 2.1 to be breached, such notice to be accompanied by a
revised schedule of Margin Stock and Eligible Assets after giving effect to
such sales or other dispositions and any prepayment of Loans required by
Section 2.10(d); and
(f) the occurrence of any Default or Event of Default.
The Agent will promptly notify the Banks of each such notice from the
Borrower.
Section 5.7. Total Value, Net Asset Value, Etc. The Borrower will, at
any time and from time to time during normal business hours, notify the Agent
by telephone or in writing, as requested by notice to the Agent from any Bank,
of the composition (by issuer) of its portfolio securities, the portion of
such securities that constitute Margin Stock and Eligible Assets, identified
by issuer, if any Bank so requests, the total asset value of such Margin Stock
and Eligible Assets, the net asset value of such securities and the total
value of the unencumbered assets in the Borrower's portfolio, and any changes
in any of such values, in each case as most recently calculated.
Section 5.8. Reports, Additional Information, Etc. The Borrower will
furnish to the Banks:
(a) as soon as available, and not later than 125 days after the end of
each fiscal year of the Borrower, an Annual Report including audited financial
statements certified by Coopers & Lybrand or other independent public
accountants of national standing, setting forth the statement of assets and
liabilities, the statement of portfolio securities and the statement of
capital accounts of the Borrower, each as of the end of such fiscal year, and
a statement of profit and loss of the Borrower for the fiscal period then
ended;
(b) as soon as available, and not later than 50 days after the end of
the first six months of each fiscal year of the Borrower, a Semi-Annual Report
prepared by the Borrower, setting forth the Statement of Assets and
Liabilities and Statement of Portfolio Securities of the Borrower as of the
end of such fiscal quarter and a Statement of Profit and Loss of the Borrower
for the fiscal period then ended;
(c) on request by the Agent, on behalf on any Bank, and in any event
not later than 45 days after the end of the first and third fiscal quarters of
the Borrower, a trial balance sheet as of the last day of such quarter, and a
list of all portfolio securities (broken down by issuer and industry
concentrations, and indicating whether such securities are Margin Stock or
Eligible Assets) as of such date, certified by the principal financial officer
of the Borrower and accompanied by a revised schedule of Margin Stock and
Eligible Assets as of such date;
(d) upon request by the Agent, on behalf of any Bank, within 10
Business Days after the issuance thereof, copies of all other public regular
and periodic reports and any other reports that the Borrower may be required
to file with any governmental or regulatory agency or authority;
(e) upon execution thereof, a copy of any amendment to the Partnership
Agreement or the Management Agreement;
(f) promptly after delivery thereof, a copy of any report or
information delivered to the limited partners of the Borrower; and
(g) such other information with respect to the financial standing and
history or the business, property, assets or prospects of the Borrower as any
Bank may, at any time and from time to time, reasonably request.
Section 5.9. Further Assurances. The Borrower will, at any time and
from time to time, execute and deliver such additional instruments and take
such further action as the Agent may reasonably request to carry out to the
Agent's satisfaction the transactions contemplated by this Agreement and the
other Loan Documents, including without limitation such documents as may be
required by the Agent to ensure the validity, perfection or priority of its
security interest in the Pledged Securities.
Section 5.10. Negative Pledge on Assets. The Borrower will not create
or permit to exist any lien or encumbrance upon any of its property or assets
in favor of any person or entity other than the Banks, other than (i) liens
granted to secure the Borrower's obligations with respect to unfunded
liabilities on open commitments to purchase loans and loan participations, so
long as such liens do not exceed $2,000,000 individually or in the aggregate;
and (ii) liens granted in connection with short sales transactions engaged in
to the extent permitted by the Partnership Agreement and consistent with the
Borrower's investment policies.
Section 5.11. Limitation on Additional Indebtedness. The Borrower will
not incur or permit to exist or remain outstanding any Indebtedness to any
person or entity, other than the following:
(a) Indebtedness in respect of taxes, assessments and other
governmental charges to the extent that payment thereof is not at the time
required to be made or is being contested in good faith by appropriate
proceedings and for which an adequate reserve has been established;
(b) Indebtedness of the Borrower to the Banks arising under this
Agreement;
(c) unsecured Indebtedness of the Borrower to any partner of the
Borrower, provided that such Indebtedness is subordinated to the Obligations
on terms and conditions satisfactory to the Required Banks; and
(d) Indebtedness of the Borrower incurred in connection with short
sales transactions engaged in to the extent permitted by the Partnership
Agreement and consistent with the Borrower's investment policies; provided,
that all such Indebtedness permitted by clauses (b), (c) and (d) of this
Section 5.11 shall not at any time exceed 25% of the value of the total assets
of the Borrower; and provided, further, that if at any time the securities of
any single issuer shall constitute more than 20% of the current market value
of the total assets of the Borrower, due to market appreciation, then the
amount of Indebtedness permitted by clauses (b), (c) and (d) of this Section
5.11 shall be reduced by the amount of such excess.
Section 5.12. Restrictions on Portfolio Investments. The Borrower will
not at any time permit (i) the securities of issuers in any single industry to
constitute more than 35% of the value of the total assets of the Borrower,
valued at cost, (ii) the securities of any single issuer to constitute more
than 20% of the total assets of the Borrower, valued at cost; or (iii)
securities that are Margin Stock to constitute more than 50% of the total
assets of the Borrower, valued at cost.
Section 5.13. Restrictions on Fundamental Changes. The Borrower will
not change in any material manner its operations or any material provision of
the Management Agreement or the Partnership Agreement.
Section 6. EVENTS OF DEFAULT; ACCELERATION.
Section 6.1. Events of Default; Acceleration. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time
or both is required, then, prior to such notice and/or lapse of time,
"Defaults") shall occur:
(a) if the Borrower shall fail to pay any principal of any Loan
outstanding to it hereunder when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity or
at any other date fixed for payment;
(b) if the Borrower shall fail to pay any interest on any Loan
outstanding to it when the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment, and such failure shall continue unremedied for five
Business Days;
(c) if the Borrower shall fail to pay any fees due hereunder when the
same shall become due and payable, and such failure shall continue unremedied
for five Business Days;
(d) if the Borrower shall fail to perform, discharge, observe or
comply with any of the terms, covenants and agreements contained in Section
5.1, 5.6(e) or 5.7 through 5.13;
(e) if the Borrower shall fail to perform, discharge, observe or
comply with any of the terms, covenants and agreements contained herein (other
than those specified in clauses (a), (b), (c), and (d) of this Section 6.1),
and such failure shall continue unremedied for 30 days after written notice of
such failure has been given to the Borrower by Agent or any Bank;
(f) if any representation or warranty of the Borrower contained in
this Agreement or any other document or instrument delivered by the Borrower
pursuant to or in connection with this Agreement shall prove to have been
false or misleading in any material respect as of the time when made or deemed
to have been made;
(g) if the Borrower shall fail in the performance or the payment, at
maturity or within an applicable period of grace, of any obligation contained
in any agreement or instrument evidencing any other Indebtedness with respect
to borrowed money or credit received in amounts exceeding $2,000,000
(individually or in the aggregate), or any mortgage, pledge, agreement,
indenture or other agreement relating thereto, for such period of time as
would, or would have permitted (assuming the giving of appropriate notice if
required) the holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof;
(h) if the Borrower or any General Partner makes an assignment for the
benefit of creditors, or admits in writing its inability to pay or generally
fails to pay its debts as they mature or become due, or petitions or applies
for the appointment of a trustee or other custodian, liquidator or receiver of
the Borrower or such General Partner or of any substantial part of the
property or assets of the Borrower or such General Partner or commences any
case or other proceeding relating to the Borrower or such General Partner
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or takes any action to authorize or in furtherance of any
of the foregoing;
(i) if any such petition or application is filed or any such case or
other proceeding is commenced against the Borrower or any General Partner and
the Borrower or such General Partner indicates its approval thereof, consent
thereto or acquiescence therein or an order for relief or appointing any such
trustee, custodian, liquidator or receiver is entered adjudicating the
Borrower or such General Partner bankrupt or insolvent, or approving a
petition in any such case or other proceeding, and such order remains in
effect for more than 60 days, whether or not consecutive;
(j) if there shall remain in force, undischarged, unsatisfied and
unstayed, for more than 30 days, whether or not consecutive, any final
judgment against the Borrower that, with other outstanding final judgments
undischarged against the Borrower, (i) exceeds, in the aggregate, $2,000,000
or (ii) shall have a materially adverse effect upon the business, assets,
operations, prospects or condition (financial or otherwise) of the Borrower;
(k) if there shall occur a material adverse change in the business,
assets, operations, prospects or condition, financial or otherwise, of the
Borrower; then and in any such event and subject to the proviso at the end of
this Section 6.1, the Agent shall, at the request of the Required Banks, by
written notice to the Borrower declare (i) the obligation of the Banks to make
Loans to the Borrower to be terminated, whereupon the same shall terminate,
(ii) the Loans of the Borrower, all interest thereon and all other amounts
payable by the Borrower under this Agreement to be forthwith due and payable,
whereupon such Loans, all such interest and all such other amounts shall
become and be forthwith due and payable without presentment, demand, protest
or notice (other than as required above), all of which are expressly waived by
the Borrower, provided that upon the occurrence of any of the events specified
in clauses (h) or (i) of this Section 6.1, such termination of the obligations
to make Loans and acceleration of the maturity of the Loans shall occur
automatically and without any action by the Banks. In case any one or more of
the Events of Default shall have occurred and be continuing, and whether or
not the Banks shall have accelerated the maturity of the Loans of the Borrower
pursuant to the foregoing, the Agent shall, at the request of the Required
Banks, proceed to protect and enforce its rights by suit in equity, action at
law and/or other appropriate proceeding, whether for the specific performance
of any covenant or agreement contained in this Agreement or any instrument
pursuant to which the obligations of the Borrower to the Banks hereunder are
evidenced, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of the Banks hereunder and under the Pledge Agreement. No
remedy conferred upon the Banks herein and in the Pledge Agreement is intended
to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute or any other
provision of law.
Section 7. SET-OFF. Regardless of the adequacy of any collateral, any
deposits, balances or other sums credited by or due from any Bank or any of
their branch offices to the Borrower, other than participations in loans that
may have been purchased by the Borrower from such Bank, may, at any time and
from time to time after the occurrence and during the continuation of an Event
of Default hereunder, without notice to the Borrower or compliance with any
other condition precedent now or hereafter imposed by statute, rule of law, or
otherwise (all of which are hereby expressly waived) be set off, appropriated,
and applied by such Bank against any and all Obligations of the Borrower to
such Bank in such manner as such Bank in its sole discretion may determine,
and the Borrower hereby grants such Bank a continuing security interest in
such deposits, balances or other sums for the payment and performance of all
Obligations. Each Bank agrees with the other Banks that (a) if an amount to
be set off is to be applied to Indebtedness of the Borrower to such Bank other
than the Obligations, such amount shall be applied first to the Obligations
and the excess, if any, may be applied to such other Indebtedness and (b) if
such Bank shall receive from the Borrower, whether by voluntary payment,
exercise of the right of setoff, counterclaim, cross action, enforcement of
the Obligations of the Borrower owed to such Bank by proceedings against the
Borrower at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Obligations of the
Borrower owed to such Bank any amount in excess of its ratable portion of the
payments received by all Banks, such Bank will make such disposition and
arrangement with the other Banks with respect to such excess, either by way of
participation, distribution, assignment of claims, subrogation or otherwise as
shall result in each Bank's receiving in respect of the Obligations of the
Borrower owed to it, its ratable portion; provided, however, that if all or
any part of such excess payment is thereafter recovered from such Bank, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest. As used in this Section,
"ratable" shall refer to the proportion that each Bank's Loans bears to the
aggregate of all Banks' Loans.
Section 8. EXPENSES. Whether or not the transactions contemplated
hereby are consummated, the Borrower agrees to reimburse the Agent upon demand
for all reasonable expenses, including but not limited to reasonable
attorneys' fees and disbursements (and the allocated costs of in-house counsel
for the Agent), incurred or expended in connection with the preparation or
interpretation of this Agreement or any amendment hereof; and the Borrower
further agrees to reimburse each Bank upon demand for all reasonable expenses,
including but not limited to reasonable attorneys' fees and disbursements (and
the allocated costs of in-house counsel) incurred or expended in connection
with the enforcement of any obligations or the satisfaction of any
indebtedness of the Borrower hereunder, or in connection with any litigation,
legal proceeding or dispute hereunder in any way related to such Bank's
relationship hereunder.
Section 9. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein and in the other Loan Documents or
in any documents or other papers delivered by, or on behalf of, the Borrower
pursuant hereto shall be deemed to have been relied upon by the Banks,
notwithstanding any investigation heretofore or hereafter made by it, and
shall survive the making by the Banks of the Loans, as herein contemplated,
and shall continue in full force and effect so long as any amount due under
this Agreement remains outstanding and unpaid or any Bank has any obligation
to make any Loans hereunder. All statements contained in any certificate,
document or other paper delivered by any authorized person to the Agent or any
Bank at any time by or on behalf of the Borrower pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower hereunder.
Section 10. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless each Bank from and against any and all claims, actions and suits
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of this
Agreement or the transactions evidenced hereby; provided that no Bank shall
have the right to be indemnified hereunder with respect to any such claims,
actions, suits, liabilities, losses, damages and expenses to the extent
arising as a result of its own gross negligence or willful misconduct; and
provided, further that if the Borrower shall exercise its right to participate
in the resolution of any dispute, as contemplated in the following sentence,
the Borrower shall not be liable for any settlement, compromise or consent to
the entry of any order adjudicating or otherwise disposing of any claim,
action, suit, liability, loss, damage or expense effected without the consent
of the Borrower. Should any claim be made by a person not a party to this
Agreement with respect to any matter to which the foregoing indemnity relates,
the affected Bank shall promptly notify the Agent, which shall forthwith
notify the Borrower of any such claim, and the Borrower shall have the right
to direct and control the defense of such claim or any litigation based
thereon at its own expense through counsel of its own choosing, without
becoming a party to such litigation.
Section 11. EFFECT OF AGREEMENT; SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Agent and the Banks and their respective successors and
assigns; provided that the Borrower may not assign or transfer its rights
hereunder without the prior written consent of all of the Banks.
(b) Any Bank may (i) without the consent of the Agent or the Borrower
if the proposed assignee is a Bank hereunder or (ii) otherwise with the
consent of the Agent and the Borrower, which consent shall not be unreasonably
withheld or delayed, assign to one or more assignees (each, an "Assignee") all
or a portion of such Bank's interests, rights and obligations under this
Agreement and the other Loan Documents, its Commitment Amount and the Loans at
the time owing to it; provided, however, that (y) the aggregate Commitment
Amount and Loans subject to each such assignment (determined as of the date
the Assignment and Acceptance Agreement referred to in the following clause
(z) with respect to such assignment is delivered to the Agent) shall not be
less than $5,000,000, and (z) the parties to each such assignment shall
execute and deliver to the Agent an "Assignment and Acceptance Agreement",
substantially in the form of Exhibit D hereto, and a processing and
recordation fee of $2,500. Upon acceptance and recording pursuant to
subsection (d) of this Section 11, from and after the effective date specified
in each Assignment and Acceptance Agreement (which effective date shall be at
least five Business Days after the execution thereof) (A) the Assignee shall
be a party hereto and, to the extent provided in such Assignment and
Acceptance Agreement, have the rights and obligations of a Bank under this
Agreement and (B) the assigning Bank shall, to the extent provided in such
assignment, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance Agreement covering all or the remaining
portion of an assigning Bank's rights and obligations under this Agreement,
such Bank shall cease to be a party hereto but shall continue to be entitled
to the benefits of Section 10, as well as to any fees accrued for its account
hereunder and not yet paid).
(c) The Agent shall maintain at its head office in Boston,
Massachusetts a copy of each Assignment and Acceptance Agreement delivered to
it and a register for the recordation of the name and address of each Bank,
and the Commitment Amount of, and principal amount of the Loans owing to, each
Bank from time to time. The entries in such register shall be conclusive in
the absence of manifest error and the Borrower, the Agent, and the Banks may
treat each person whose name is recorded in the Register as a Bank for all
purposes of this Agreement. Such register shall be available for inspection
by the Borrower and the Banks, at any reasonable time upon reasonable prior
notice.
(d) Upon its receipt of a completed Assignment and Acceptance
Agreement executed by an assigning Bank and an Assignee together with the
processing and recordation fee referred to in subsection (b) above, the Agent
shall (i) accept such Assignment and Acceptance Agreement, (ii) record the
information contained therein in the register referred to in subsection (c)
and (iii) give prompt notice thereof to the Borrower.
(e) Each Bank may, without the consent of the Borrower or the Agent,
sell to one or more entities participations in all or a portion of its
interests, rights and obligations under this Agreement and the other Loan
Documents (including all or a portion of its Commitment Amount and the Loans
owing to it); provided, however, that (i) such Bank's obligations under this
Agreement shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations, and (iii) the Agent and such Bank shall continue to deal solely
and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement, and such Bank shall retain the sole right to
enforce the obligations of the Borrower relating to the Loans and to approve
any amendment, modification or waiver of any provision of this Agreement
(other than amendments, modifications or waivers with respect to the matters
set forth in Section 18 requiring the consent of all of the Banks).
(f) Each Bank may at any time pledge or assign all or any portion of
its rights under this Agreement to a Federal Reserve Bank, and the Borrower
agrees to issue to such Bank at such Bank's request a promissory note in form
and substance reasonably satisfactory to such Bank to facilitate such pledge
or assignment. No such pledge or assignment shall release such Bank from its
obligations hereunder.
Section 12. NOTICES, ETC. Except as otherwise expressly provided in
this Agreement, all notices and other communications made or required to be
given pursuant to this Agreement shall be in writing and shall be delivered by
hand, mailed by United States first class mail, postage prepaid, by accepted
express mail service, postage prepaid, or sent by telegraph, telex or such
Bank's facsimile transmission and confirmed by letter, addressed as follows:
(a) if to the Borrower, at:
Belmont Fund, L.P.
c/o Fidelity Management Trust Company
Mailzone F7E
82 Devonshire Street
Boston, MA 02109
Facsimile: (617) 570-7458
Attention: Portfolio Manager
and with a copy to:
Fidelity Management Trust Company
Mailzone N8A
82 Devonshire Street
Boston, MA 02109
Facsimile: (617) 227-3893
Attention: Manager Trust Operations
and with a copy to:
Judy K. Mencher, Esq.
Associate General Counsel
Fidelity Investments
Mailzone F7D
82 Devonshire Street
Boston, MA 02109
Facsimile: (617) 570-7688
or at such other address for notice as the Borrower shall last have
furnished in writing to the Agent; or
(b) if to the Agent, at
[ ]
[ ]
Boston, Massachusetts [ ]
Facsimile: [ ]
Attention: [ ]
or at such other address for notice as the Agent shall last have
furnished in writing to the Borrower; or
(c) if to any Bank, to the address set forth beneath the name of such
Bank on the signature pages hereof, or in the Assignment and Acceptance
Agreement applicable thereto, or at such other address for notice as any
Bank shall last have furnished in writing to the Agent and the Borrower.
Any such notice shall be deemed to have been duly given or made and to have
become effective (a) if delivered by hand to a responsible officer of the
party to which it is directed, at the time of receipt thereof by such officer,
(b) if sent by registered or certified first class mail, postage prepaid,
three Business Days after the posting thereof, (c) if sent by accepted express
mail service, postage prepaid, one Business Day after posting thereof, and (d)
if sent by facsimile transmission, telex or cable, at the time of receipt of
any automatic answer-back or other similar acknowledgment of receipt thereof.
Section 13. GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement is
intended to take effect as a sealed instrument and shall be governed by, and
construed in accordance with, the laws of The Commonwealth of Massachusetts.
The Borrower agrees that any suit for the enforcement of this Agreement or any
of the other Loan Documents may be brought in the courts of The Commonwealth
of Massachusetts or any Federal Court sitting therein and consents to the non-
exclusive jurisdiction of such court and to service of process in any such
suit being made upon the Borrower by mail at the address specified in Section
12 hereof. The Borrower hereby waives any objection that it may now or
hereafter have to the venue of any such suit or any such court or that such
suit was brought in an inconvenient court.
Section 14. THE AGENT.
Section 14.1. Appointment, Powers and Immunities. Each Bank hereby
appoints and authorizes the Agent to act as its agent hereunder and under the
other Loan Documents (including, without limitation, the authorization to
enter into the Loan Documents as agent on behalf of the Banks and to bind the
Banks to the terms thereof) with such powers as are specifically delegated to
the Agent by the terms of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto. The
Agent (which term as used in this sentence and in Section 14.4 hereof and the
first sentence of Section 14.5 hereof shall include reference to its officers,
directors, employees and agents): (i) shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Loan Documents, and shall not by reason of this Agreement or any other
Loan Document be a trustee for any Bank; (ii) shall not be responsible to the
Banks for any recitals, statements, representations or warranties of the
Borrower or any other Person contained in this Agreement or in any other Loan
Document or in any certificate or other document received by any of them
hereunder or thereunder, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure by the Borrower or any other person or entity to
perform any of its obligations hereunder or thereunder, or for the
satisfaction of any condition precedent specified in Section 3 hereof (except
receipt of documents required to be delivered to the Agent hereunder); (iii)
shall not be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Loan Document unless it shall have
been so directed by the Required Banks; and (iv) shall not be responsible for
any action taken or omitted to be taken by it hereunder or under any other
Loan Document, except for its own gross negligence or willful misconduct. The
Agent may employ agents and attorneys-in-fact selected by it in good faith.
The Agent may deem and treat each Bank as the party entitled to receive any
amounts hereunder for all purposes hereof unless and until a written notice of
the assignment or transfer thereof shall have been filed with the Agent.
Section 14.2. Reliance by Agent. The Agent shall be entitled to rely
upon any certificate, notice or other communication (including any thereof by
telephone, telex, telegram or cable) reasonably and in good faith believed by
it to be genuine and correct and to have been signed or sent by or on behalf
of the proper person or entity, and upon advice and statements of legal
counsel, independent accountants and other experts selected by the Agent. As
to any matters not expressly provided for by this Agreement or any other Loan
Document, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed by
the Required Banks, and such instructions of the Required Banks and any action
taken or failure to act pursuant thereto shall be binding on all of the Banks.
Section 14.3. Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default or an Event of Default (other than
the non-payment of principal of or interest on Loans or the non-payment of any
fees payable hereunder) unless the Agent has received notice from a Bank or
the Borrower specifying such Default or Event of Default and stating that such
notice is a "Notice of Default". In the event that the Agent receives such a
notice of the occurrence of a Default or an Event of Default, the Agent shall
give prompt notice thereof to the Banks (and shall give each Bank prompt
notice of each such non-payment). The Agent shall (subject to Sections 14.1
and 14.5 hereof) take such action with respect to such Default or Event of
Default as shall be directed by the Required Banks; provided, however, that
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Banks.
Section 14.4. Indemnification. The Banks agree to indemnify the Agent
(to the extent not reimbursed under Section 10 hereof, but without limiting
the obligations of the Borrower under said Section 10 hereof), ratably in
accordance with the aggregate principal amount of the Loans made by the Banks
(or, if no Loans are at the time outstanding, ratably in accordance with their
respective Commitment Amounts), for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising
out of this Agreement or any of the other Loan Documents or the transactions
contemplated hereby (including, without limitation, the costs and expenses
which the Borrower is obligated to pay under Section 10 hereof) or thereby or
the enforcement of any of the terms hereof or thereof, provided that no Bank
shall be liable for any of the foregoing to the extent they arise from the
gross negligence or willful misconduct of the Agent.
Section 14.5. Agent and Affiliates. With respect to its Commitment
Amount and the Loans made by it, the Agent shall have the same rights and
powers under the Loan Documents as any other Bank and may exercise the same as
though it were not the Agent; and the term "Bank" or "Banks" shall, unless
otherwise expressly indicated, include the Agent in its capacity as a Bank.
[ ] shall have no duty to disclose to the other Banks any
information obtained by it in its capacity as a Bank as opposed to any
information obtained by it in its capacity as the Agent. [ ] and
its affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Borrower
and any person or entity that may do business with or own securities of the
Borrower, all as if [ ] were not the Agent hereunder and
without any duty to account therefor to the Banks.
Section 14.6. Non-reliance on Agent. Each Bank (and each successor and
assignee thereof) agrees that it has, independently and without reliance on
the Agent or any other Bank, and based on such documents and information as it
has deemed appropriate, made its own credit analysis and evaluation of the
Borrower and its Subsidiaries and filings relating thereto, the manner of
perfection of the security interest in any collateral provided hereunder and
under the Pledge Agreement and its own decision to enter into the Loan
Documents and make the Loans and that it will, independently and without
reliance upon the 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
analysis and decisions in taking or not taking action under the Loan
Documents. The Agent shall not be required to keep itself informed as to the
performance or observance by the Borrower of this Agreement or the other Loan
Documents or to inspect the properties or books of any party. Except for
notices, reports and other documents and information expressly required to be
furnished to the Banks by the Agent hereunder or under the other Loan
Documents, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the affairs, financial
condition or business of the Borrower that may come into the possession of the
Agent or any of its affiliates as a result of its or their independent
dealings with the Borrower; provided that the Agent shall endeavor to provide
the Banks with such other information as it may receive in its capacity as
Agent hereunder.
Section 14.7. Failure to Act. Except for action expressly required of
the Agent hereunder or under any other Loan Document, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder or thereunder
unless it shall 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 14.8. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent
may resign at any time by giving notice thereof to the Banks and the Borrower;
and the Agent may be removed at any time with or without cause by the Required
Banks. Upon any such resignation or removal, the Required Banks shall have
the right to appoint a successor Agent reasonably satisfactory to the
Borrower. If no such successor Agent shall have been so appointed by the
Required Banks and shall have accepted such appointment within 30 days after
the retiring Agent's giving of notice of resignation or the Required Banks'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Banks, appoint a successor agent reasonably satisfactory to the Borrower,
which shall be a bank which has an office in the United States of America with
a combined capital and surplus of at least $500,000,000. Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations hereunder and under the
other Loan Documents. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Section 14 shall continue in effect
of its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Agent.
Section 15. MISCELLANEOUS. The rights and remedies herein expressed
are cumulative and not exclusive of any other rights that the Banks or the
Borrower, as the case may be, would otherwise have. The captions in this
Agreement are for convenience of reference only and shall not define or limit
the provisions hereof. This Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, but all of
which together shall constitute one instrument. In proving this Agreement, it
shall not be necessary to produce or account for more than one such
counterpart signed by the party against whom enforcement is sought.
Section 16. SEVERABILITY. If any of the provisions of this Agreement
or the application thereof to any party hereto or to any person or entity or
circumstance is held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
term or provision hereof or thereof or the application thereof to any other
party hereto or to any other person or entity or circumstance.
Section 17. ENTIRE AGREEMENT, ETC. This Agreement, together with the
other Loan Documents and any other documents executed in connection herewith
and therewith expresses the entire understanding of the parties with respect
to the transactions contemplated hereby. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated orally or in writing,
except as provided in Section 18 hereof.
Section 18. CONSENTS, AMENDMENTS, WAIVERS, ETC. (a) Except as
otherwise expressly provided in this Agreement, any consent or approval
required or permitted by this Agreement to be given by the Banks may be given,
and any term of this Agreement or of any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the
Borrower of any terms of this Agreement or such other instrument or the
continuance of any Default or Event of Default or any condition or term hereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of
the Borrower and the written consent of the Agent or the requisite number of
Banks, as provided in the immediately following sentence. The Agent shall
not, without the prior written consent of the Required Banks, agree to the
modification, amendment, waiver or release of any of the terms of this
Agreement, the Pledge Agreement, the Collateral Agency Agreement or the
Obligations, or any other document relative thereto, to consent to any action
or failure to act by the Borrower, and to exercise or refrain from exercising
any powers or rights which the Lenders may have under or in respect of this
Agreement, the Pledge Agreement, the Collateral Agency Agreement or the
Obligations or any collateral therefor, including, without limitation, the
right to enforce the obligations of the Borrower or any other party; provided
that the Agent shall not, without the prior written consent of the all of the
Banks, agree (i) to increase the Commitment Amounts; (ii) to reduce or forgive
the principal of or reduce the rate of interest on any Loan or postpone any
date fixed for any payment of principal of or interest on any Loan; (iii) to
reduce any fee payable under this Agreement or release any collateral granted
or to be granted in respect of the Obligations; (iv) to any amendment,
modification or waiver of the definition of "Required Banks", Section 2.8(b),
2.11, 2.12, 2.15, 7 or this Section 18; or (v) to agree to permit the Borrower
to change in any material manner its operations or any material provision of
the Management Agreement or the Partnership Agreement; and provided, further
that the Agent's consent shall be required for any such modification, waiver,
release or amendment that would affect the rights and liabilities of the
Agent. The Agent shall be fully protected in refraining from acting in
accordance with, and each Lender shall be bound by, the withholding of consent
by the Banks or Required Banks, as applicable.
(b) No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of dealing or delay
or omission on the part of the Agent or any Bank in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto. No notice to
the Borrower shall entitle the Borrower to other or further notice in similar
or other circumstances.
Section 19. WAIVER OF JURY TRIAL. THE BANKS AND THE BORROWER AGREE
THAT NONE OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN
ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION BASED UPON, OR
ARISING OUT OF, THIS AGREEMENT OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR
AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS
OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE BANKS AND THE BORROWER, AND
THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER ANY BANK NOR THE
BORROWER HAS AGREED WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF
THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed as an instrument under seal by its duly authorized officer
as of the date first written above.
BELMONT FUND, L.P.
By: Fidelity Management Trust Company,
pursuant to a Power of Attorney for
Fidelity International Services
Limited, Managing General Partner
By:____________________________________
Title:_________________________________
[ ], as Agent
By:____________________________________
Title:_________________________________
COMMITMENT AMOUNT [ ]
$40,000,000 [ ]
Boston, Massachusetts [ ]
By:____________________________________
Title:_________________________________
COMMITMENT AMOUNT [ ]
$10,000,000 [ ]
New York, New York [ ]
By:____________________________________
Title:_________________________________
COMMITMENT AMOUNT [ ]
$10,000,000 [ ]
[ ]
New York, New York [ ]
By:____________________________________
Title:_________________________________
TOTAL COMMITMENT AMOUNTS: $60,000,000
BELMONT FUND, L.P.
AMENDED AND RESTATED CREDIT AGREEMENT
Amendment No. 1
This Agreement dated as of August 17, 1994 (the "Agreement") is among
Belmont Fund, L.P., a Bermuda limited partnership (the "Company"), the Banks
party hereto and
[ ], as agent for itself and the other Banks. The parties agree
as follows:
1. Reference to Credit Agreement; Definitions. Reference is made to the
Amended and Restated Credit Agreement dated as of April 11, 1994, as in effect
on the date hereof prior to giving effect to this Agreement (the "Credit
Agreement"), among the Company, the Banks from time to time party thereto and
the Agent. Terms defined in the Credit Agreement as amended hereby (the
"Amended Credit Agreement") and not otherwise defined herein are used herein
with the meaning so defined.
2. Effectiveness. Upon the execution and delivery hereof, the amendments
set forth in Section 3 shall become effective as of August 17, 1994; provided,
however, that if the Commitment Expiry Date is extended pursuant to Section
2.4 (d) of the Credit Agreement, the amendments set forth in Sections 3.1.2,
3.2 and 3.3. hereof shall cease to be effective on December 30, 1994 and the
provisions of the Credit Agreement which were amended thereby shall revert and
read the same as said provisions read immediately prior to the effectiveness
of the amendments set forth in said Sections 3.1.2, 3.2 and 3.3 and on and
after December 30, 1994 the aggregate Commitment Amount of all Banks shall be
reduced to $60,000,000, pro rata in accordance with each Bank's Commitment
Amount immediately prior to the effectiveness of this Agreement.
3. Amendments to Credit Agreement.
3.1. Amendment to Section 1.1.
3.1.1. The definition of "Commitment Amount" is hereby
amended to read in its entirety as follows:
"Commitment Amount. The maximum amount of each Bank's commitment to
make Loans to the Borrower is as set forth next to the name of each Bank
on Exhibit A to Amendment Number 1 to this Agreement (adjusted as set
forth on said Exhibit A and as adjusted from time to time pursuant to
Section 11 hereof). The aggregate amount of all Banks' Commitment
Amount shall be $85,000,000 upon the effectiveness of Amendment Number 1
to this Agreement as the same may be reduced from time to time pursuant
to Section 2.4 hereof or pursuant to Section 2 of Amendment Number 1 to
this Agreement, or be terminated pursuant to Section 2.4 or Section 6.1
hereof."
3.1.2. The definition of "Maximum Amount" is hereby
amended to read in its entirety as follows:
"Maximum Amount. With respect to the Borrower, and on any date of
determination, an amount equal to the least of (i) $85,000,000, or (ii)
33% of the value of the Borrower's total assets at such time, or (iii)
the maximum amount the Borrower is permitted to borrow hereunder at such
time under:
(a) applicable federal or state laws, statutes and
regulations;
(b) agreements (whether or not having the force of law) by
the Borrower with federal, state, local or foreign governmental
agencies, authorities or regulators, as more particularly
described in Part 1 of Schedule I hereto, as amended and in effect
from time to time; or
(c) limitations on borrowing adopted by the Borrower and
described in the Partnership Agreement or elsewhere, as more
particularly described in Part 2 of Schedule I hereto, as amended
and in effect from time to time."
3.2. Amendment to Section 5.11. The proviso at the end of
Section 5.11 is hereby amended by substituting the figure "33%" for the
figure "25%" appearing therein and by substituting the figure "25%" for
the figure "20%" appearing therein.
3.3. Amendment to Clause (ii) of Section 5.12. Clause (ii) of
Section 5.12 is hereby amended by substituting the figure "25%" for the
figure "20%" appearing therein.
3.4. Deletion of Clause (iii) of Section 5.12. Clause (iii) of
Section 5.12 is hereby deleted, the word "or" appearing immediately
prior to said clause (iii) is hereby moved immediately prior to clause
(ii) of Section 5.12 and a period is substituted for the semicolon
appearing at the end of said clause (ii).
4. Representations and Warranties. In order to induce the Banks and the
Agent to enter in to this Agreement, the Borrower hereby represents and
warrants that after giving effect to the amendments provided for in this
Agreement, the representations and warranties set forth in Section 4 of the
Amended Credit Agreement are true and correct on and as of the date hereof.
5. Amendment Fee. Upon the effectiveness hereof, the Company will pay (a)
to each of the Banks for its account an amendment fee equal to .1% of each
Bank's Commitment Amount set forth in the first column of Exhibit A and (b) to
the Agent for its account an Agent's fee based on the increase in the Banks'
aggregate Commitment Amounts giving effect to this Agreement for the period
from the date hereof to and including December 30, 1994.
6. Closing Documents. The effectiveness of this Agreement shall be
conditioned upon the receipt by the Agent of such documents as the Agent may
reasonably request in order to evidence the due execution, delivery,
enforceability and legality of this Agreement and the Amended Credit
Agreement, including Federal Reserve Board Forms U-1 and opinions of counsel
addressed to the Banks.
7. Miscellaneous. This Agreement may be executed in any number of
counterparts, which together shall constitute one instrument, and shall bind
and inure to the benefit of the parties and their respective successors and
assigns, including as such successors and assigns all holders of any Note.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
(OTHER THAN THE CONFLICT OF LAWS RULES) OF THE COMMONWEALTH OF MASSACHUSETTS.
THIRD REVISED INVESTMENT AGREEMENT
April 21, 1994
America West Airlines, Inc.
4000 East Sky Harbor Boulevard
Phoenix, AZ 85034
Attention: William A. Franke
Chairman of the Board
Gentlemen:
This letter agreement (this Agreement ) sets forth the agreement
between America West Airlines, Inc., a Delaware corporation (including, on or
after the effective date of the Plan, as defined herein, its successors, as
reorganized pursuant to the Bankruptcy Code, as defined herein) (the Company
), and AmWest Partners, L.P., a Texas limited partnership ( Investor ).
The Company will issue and sell to Investor, and Investor hereby
agrees and commits to purchase from the Company, a package of securities of
the Company for $244,857,000 in cash (subject to adjustment as herein
provided), consisting of (i) shares of Class A Common Stock of the Company (
Class A Common ), (ii) shares of Class B Common Stock of the Company ( Class B
Common and, together with the Class A Common, Common Stock ), (iii) senior
unsecured notes of the Company ( Notes ) and (iv) warrants to purchase shares
of Class B Common ( Warrants ), all on the terms and subject to the terms and
conditions hereinafter set forth.
Investor's purchase of the securities referred to above (the
Investment ) will be made in connection with and as part of the transactions
to be consummated pursuant to a joint Plan of Reorganization of the Company
(the Plan ) and an order (the Confirmation Order ) confirming the Plan
issued by the Bankruptcy Court, as defined herein. The Plan will contain
provisions called for by, or otherwise consistent with, this Agreement.
In consideration of the agreements of Investor hereunder, and as a
precondition and inducement to the execution of this Agreement by Investor,
the Company has entered into the Third Revised Interim Procedures Agreement
with Investor, dated the date hereof (the Procedures Agreement ).
SECTION 1. Definitions. For purposes of this Agreement, except
as expressly provided herein or unless the context otherwise requires, the
following terms shall have the following respective meanings:
Affiliate shall mean (i) when used with reference to any partnership,
any Person that, directly or indirectly, owns or controls 10% or more of
either the capital or profit interests of such partnership or is a partner of
such partnership or is a Person in which such partnership has a 10% or greater
direct or indirect equity interest and (ii) when used with reference to any
corporation, any Person that, directly or indirectly, owns or controls 10% or
more of the outstanding voting securities of such corporation or is a Person
in which such corporation has a 10% or greater direct or indirect equity
interest. In addition, the term Affiliate, when used with reference to any
Person, shall also mean any other Person that, directly or indirectly,
controls or is controlled by or is under common control with such Person. As
used in the preceding sentence, (A) the term control means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of the entity referred to, whether through ownership
of voting securities, by contract or otherwise and (B) the terms controlling
and controls shall have meanings correlative to the foregoing.
Notwithstanding the foregoing, the Company will be deemed not to be an
Affiliate of Investor or any of its partners or assignees.
Alliance Agreements shall have the meaning specified in Section 5.
Approvals shall have the meaning specified in Section 8(b).
Bankruptcy Code shall mean Chapter 11 of the United States Bankruptcy
Code.
Bankruptcy Court shall mean the United States Bankruptcy Court for the
District of Arizona.
Business Combination means:
(i) any merger or consolidation of the Company with or into Investor
or any Affiliate of Investor;
(ii) any sale, lease, exchange, transfer or other disposition of all or
any substantial part of the assets of the Company to Investor or any Affiliate
of Investor;
(iii) any transaction with or involving the Company as a result of which
Investor or any of Investor's Affiliates will, as a result of issuances of
voting securities by the Company (or any other securities convertible into or
exchangeable for such voting securities) acquire an increased percentage
ownership of such voting securities, except pursuant to a transaction open on
a pro rata basis to all holders of Class B Common; or
(iv) any related series or combination of transactions having or which
will have, directly or indirectly, the same effect as any of the foregoing.
Class A Common shall have the meaning specified in the second
paragraph of this Agreement.
Class B Common shall have the meaning specified in the second
paragraph of this Agreement.
Common Stock shall have the meaning specified in the second paragraph
of this Agreement.
Company shall have the meaning specified in the first paragraph of
this Agreement.
Confirmation Date shall mean the date on which the Confirmation Order
is entered by the Bankruptcy Court.
Confirmation Order shall have the meaning specified in the third
paragraph of this Agreement.
Continental shall mean Continental Airlines, Inc.
Creditors' Committee shall mean the Official Committee of the
Unsecured Creditors of America West Airlines, Inc. appointed in the Company's
Chapter 11 case pending in the Bankruptcy Court.
Disclosure Statement shall mean a disclosure statement with respect to
the Plan.
Effective Date shall mean the effective date of the Plan; provided
that in no event shall the Effective Date be (a) earlier than 11 days after
the Bankruptcy Court approves and enters the Confirmation Order providing for
the confirmation of the Plan or (b) before all material Approvals are
obtained.
Electing Party shall have the meaning specified in Section
4(a)(2)(ii).
Equity Committee shall mean the Official Committee of Equity Holders
of America West Airlines, Inc. appointed in the Company's Chapter 11 case
pending in the Bankruptcy Court.
Equity Holders shall mean the Company's equity security holders
(including holders of common stock and preferred stock) of record as of the
applicable record date fixed by the Bankruptcy Court.
Governance Agreements shall have the meaning specified in Section 6.
GPA shall mean GPA Group plc or, if applicable, any direct or indirect
subsidiary thereof.
GPA Put Agreement shall have the meaning specified in Section 7(j).
Independent Directors shall have the meaning specified in Section
6(a)).
Initial Order shall have the meaning specified in Section 8(a).
Investment shall have the meaning specified in the third paragraph of
this Agreement.
Investor shall have the meaning specified in the first paragraph of
this Agreement.
Mesa shall mean Mesa Airlines, Inc.
Monthly Targets shall mean the amounts specified in the Monthly
Targets Schedule.
Monthly Targets Schedule shall mean the letter agreement between the
Company and Investor dated the date hereof.
Notes shall have the meaning specified in the second paragraph of this
Agreement. The Notes shall be subject to the terms and conditions set forth
in Exhibit B hereto.
Outside Date shall mean August 31, 1994; provided that Investor shall
have the right from time to time to irrevocably extend the Outside Date to a
date not later than November 30, 1994, but only if Investor gives the Company
prior written notice of its election to extend the then current Outside Date
(which notice shall specify the new Outside Date) and then only if, at the
time of the giving of such notice, Investor is not in breach of any of its
representations, warranties, covenants or obligations under this Agreement,
the Procedures Agreement or any Related Agreement (excluding any breach by
Investor which is not willful or intentional and which is capable of being
cured on or before the new Outside Date). Unless waived by the Company, any
notice given pursuant to this definition shall be delivered to the Company not
less than 15 days prior to the then current Outside Date except that, in the
event the Effective Date has not occurred for any reason arising within such
15 day period not due to a breach by Investor of any of its representations,
warranties, covenants or agreements hereunder, such notice shall be given as
soon as practicable but in no event later than the then current Outside Date.
Person means a natural person, a corporation, a partnership, a trust,
a joint venture, any Regulatory Authority or any other entity or organization.
Plan shall have the meaning specified in the third paragraph of this
Agreement.
Plan 9 means the Company's Plan Revision No. 9 which consists of the
Summary Pro Forma Financial Statements: June 1993 Through December 1994, dated
July 15, 1993.
Plan R 2 shall mean the Company's Summary Pro Forma Financial
Statements, 5 Year Plan: 1994 Through 1998, Plan No. R 2, dated January 13,
1994.
Procedures Agreement shall have the meaning specified in the fourth
paragraph of this Agreement.
Projections shall mean the projections set forth in Plan 9 on pages 15
and 18 of Tab E and pages 7 and 8 of Tab F.
Purchase Price shall have the meaning specified in Section 2.
Regulatory Approvals shall mean all approvals, permits,
authorizations, consents, licenses, rulings, exemptions and agreements
required to be obtained from, or notices to or registrations or filings with,
any Regulatory Authority (including the expiration of all applicable waiting
periods, if any, under the Hart Scott Rodino Antitrust Improvements Act of
1976, as amended) that are necessary or reasonably appropriate to permit the
Investment and the other transactions contemplated hereby and by the Related
Agreements and to permit the Company to carry on its business after the
Investment in a manner consistent in all material respects with the manner in
which it was carried on prior to the Effective Date or proposed to be carried
on by the reorganized Company.
Regulatory Authority shall mean any authority, agency, commission,
official or other instrumentality of the United States, any foreign country or
any domestic or foreign state, county, city or other political subdivision.
Related Agreements shall have the meaning specified in Section 3.
Securities shall mean the securities of the Company issued to the
Unsecured Parties, Investor and its assigns and GPA under this Agreement. The
Securities are described in Section 4.
Unsecured Creditors shall mean, as of any date, the Persons holding of
record as of such date the allowed or allowable prepetition unsecured claims
without priority of the Company.
Unsecured Parties shall mean the Equity Holders and the Unsecured
Creditors.
Warrants shall have the meaning specified in the second paragraph of
this Agreement.
SECTION 2. Commitment to Make Investment. Subject to the terms
and conditions of this Agreement and the Procedures Agreement, on the
Effective Date, the Company shall issue and sell and Investor shall purchase
Securities in accordance with this Agreement and the Plan. Such Securities
shall be issued, sold and delivered to Investor, its designees and or one or
more third party investors, and the $244,857,000 purchase price therefor, as
such purchase price may be adjusted pursuant hereto (the Purchase Price ),
shall be paid by wire transfer of immediately available funds on the Effective
Date.
SECTION 3. Related Agreements. The agreements necessary to
effect the Investment (the Related Agreements , such term to include the
Alliance Agreements and the Governance Agreements) shall be in form and
substance reasonably satisfactory to Investor and the Company, and shall
contain terms and provisions, including representations, warranties,
covenants, warranty termination periods, materiality exceptions, cure
opportunities, conditions precedent, anti dilution provisions (as
appropriate), and indemnities, as are in form and substance reasonably
satisfactory to such parties; provided, however, that the Related Agreements
shall contain provisions called for by, or otherwise consistent with, this
Agreement.
SECTION 4. Capitalization. (a) Upon consummation of the Plan,
the capitalization of the Company shall be as follows:
(1) Class A Common. There shall be 1,200,000 shares of Class A
Common, all of which shares shall, in accordance with the Plan, be issued to
Investor. Investor shall pay $8,960,400 for the Class A Common. At the
option of the holders thereof, shares of Class A Common shall be convertible
into shares of Class B Common on a share for share basis.
(2) Class B Common. There shall be 43,800,000 shares of Class B
Common, all of which shares shall, in accordance with the Plan, be issued as
follows:
(i) Investor. Investor shall be issued 13,875,000 shares plus the
number of shares (if any) to be acquired by Investor pursuant to clause (ii)
below minus the number of shares, if any, purchased by the Equity Holders
pursuant to the second sentence of clause (iii) below. For each share of
Class B Common issued to it, Investor shall pay $7.467; provided that (A) for
each share acquired by Investor pursuant to clause (ii) below and (B) for each
share not purchased by the Equity Holders pursuant to clause (iii) below,
Investor shall pay $8.889.
(ii) Unsecured Creditors. The Unsecured Creditors (or a trust created
for their benefit) shall be issued 26,775,000 shares. Notwithstanding the
foregoing, each Unsecured Creditor shall have the right to elect to receive
cash equal to $8.889 for each share of Class B Common otherwise allocable to
it under this clause (ii). The election of each such Person (the Electing
Party ) must be made on or before the date fixed by the Bankruptcy Court for
voting with respect to the Plan; provided, however, that in the event that
such elections of all Electing Parties aggregate to more than $100 million,
then (A) the amount of cash so paid shall be limited to $100 million and (B)
the Electing Parties shall each receive proportionate amounts of cash and
Class B Common in accordance with the Plan. Subject to the foregoing proviso,
Investor shall increase the Investment by the amount necessary to pay all
Electing Parties the cash amounts payable to them under this clause (ii) in
respect of the shares of Class B Common specified in their elections and, upon
payment of such amounts, such shares shall be issued to Investor without
further consideration. Notwithstanding the foregoing, Investor's acquisition
of shares of Class B Common pursuant to this clause (ii) shall, if permitted
by applicable securities and other laws, be consummated immediately after the
issuance of such shares to the Electing Parties on the Effective Date. If
such shares are not so acquired post consummation of the Plan, all shares of
Class B Common acquired by Investor pursuant to this clause (ii) shall, for
all purposes hereof, be deemed to be part of the Securities acquired by
Investor hereunder.
(iii) Equity Holders. The Equity Holders (or a trust created for their
benefit) shall be issued 2,250,000 shares. In addition, the Equity Holders
shall have the right to purchase up to 1,615,179 shares allocable to Investor
pursuant to clause (i) above at $8.889 per share. Such election must be made
by each Equity Holder on or before the date fixed by the Bankruptcy Court for
voting with respect to the Plan. The Plan shall set forth the terms and
conditions on which the foregoing rights may be exercised.
(iv) GPA. 900,000 shares shall be issued to GPA.
(3) Warrants. There shall be Warrants to purchase 10,384,615 shares
of Class B Common at the exercise price as specified in and subject to the
terms of Exhibit A hereto, and such Warrants shall, in accordance with the
Plan, be issued as follows:
(i) Warrants to purchase up to 2,769,231 shares of Class B Common
shall be issued to Investor; and
(ii) Warrants to purchase up to 6,230,769 shares of Class B Common
shall be issued to the Equity Holders or a trust or trusts created for their
benefit; and
(iii) Warrants to purchase up to 1,384,615 shares of Class B Common
shall be issued to GPA.
(4) Senior Unsecured Notes. Investor shall, in accordance with the
Plan and subject to the terms of Exhibit B hereto, be issued $100 million
principal amount of Notes against payment in cash of not less than 100% of the
principal amount thereof to the Company; provided, however, that the Company
shall have the right, exercised at any time prior to the date fixed by the
Bankruptcy Court for voting with respect to the Plan, to increase the
principal amount of the Notes to be so purchased by Investor to up to $130
million. GPA shall, in accordance with the Plan, be issued $30,525,000
principal amount of Notes; provided, however, that GPA shall have the right to
elect to receive cash in lieu of all or any portion of the Notes otherwise
issuable to it under this paragraph (4), such election to be made on or before
the date fixed by the Bankruptcy Court for voting with respect to the Plan.
(b) Holders of the Class A Common shall have fifty votes per
share. Holders of Class B Common shall have one vote per share. Holders of
Class A Common and holders of Class B Common shall vote together as a single
class except as otherwise required by law or the provisions of this Agreement.
Investor may elect, with respect to any shares of Class B Common held by it,
to suspend the voting rights relating to such shares by giving prior written
notice to the Company, which notice shall describe such shares in reasonable
detail and state whether or not the voting suspension is permanent or
temporary and, if temporary, specify the period thereof.
(c) Neither Investor nor any Affiliate of Investor or of any
partner of Investor will transfer or otherwise dispose of any Common Stock
(other than to an Affiliate of the transferor) if, after giving effect thereto
and to any concurrent transaction, the total number of shares of Class B
Common beneficially owned by the transferor is less than 200% of the total
number of shares of Class A Common beneficially owned by the transferor;
provided, however, than nothing in this paragraph (c) shall prohibit any
Person from transferring or otherwise disposing, in a single transaction or a
series of concurrent transactions, of all shares of Common Stock owned by
such Person.
SECTION 5. Business Alliance Agreements. Continental and the
Company shall enter into mutually acceptable business alliance agreements on
the Effective Date, which agreements may include, but shall not be limited to,
agreements to share ticket counter space, ground handling agreements,
agreements to link frequent flier programs, and combined purchasing
agreements, and schedule coordination and code sharing agreements. On the
Effective Date, Mesa shall enter into agreements with the Company extending
the existing contractual arrangements between the Company and Mesa for five
years from the Effective Date and modifying the termination provisions thereof
consistent with such extension. Such agreements with Continental and Mesa are
herein collectively referred to as the Alliance Agreements .
SECTION 6. Governance Agreements. On the Effective Date, the
Company, Investor and Investor's partners (other than any such partner holding
shares of Class B Common the voting rights with respect to which have been
suspended as contemplated by Section 4(b)) shall enter into one or more
written agreements (the Governance Agreements ) effectively providing as
follows:
(a) At all times during the three year period commencing on the
Effective Date, the Company's board of directors shall consist of 15 members
designated as follows:
(i) nine members (at least 8 of whom are U.S. citizens) shall be
designated by Investor, with certain of the partners of Investor having the
right to designate certain of Investor's designated directors;
(ii) three members (at least two of whom are U.S. citizens) shall be
designated bythe Creditors' Committee; provided that each such member shall be
reasonably acceptable to Investor at the time of his or her initial
designation;
(iii) one member shall be designated by the Equity Committee; provided
that such member shall be a U.S. citizen reasonably acceptable to Investor at
the time of his or her initial designation;
(iv) one member shall be designated by the Company's board of directors
as constituted on the date preceding the Effective Date; provided that such
member shall be a U.S. citizen reasonably acceptable to Investor at the time
of his or her initial designation; and
(v) one member shall be designated by GPA for so long as GPA shall own
at least 2% of the voting equity securities of the Company; provided that
such member shall be reasonably acceptable to Investor at the time of his or
her initial designation.
The directors (and their successors) referred to in clauses (ii), (iii) and
(iv) above are hereinafter referred to collectively as the Independent
Directors .
(b) In the case of the death, resignation, removal or disability of an
Independent Director after the Effective Date, his or her successor shall be
designated by the Stockholder Representatives, except that if such Independent
Director was initially designated by the Creditors' Committee or the Equity
Committee and if, at the time of such Independent Director's death,
resignation, removal or disability (as the case may be), the Creditors'
Committee or the Equity Committee (as the case may be) remains in effect, the
successor to such Independent Director shall be designated by the Creditors'
Committee or the Equity Committee (as the case may be). As used herein,
Stockholder Representatives shall mean, collectively, (A) one individual who,
on the date hereof, is serving as a director of the Company, (B) one
individualwho, on the date hereof, is serving as a member of the Creditors'
Committee and (C) one individual who, on the date hereof, is serving as a
member of the Equity Committee. The initial Stockholder Representatives shall
be selected on or before the Effective Date (x) by the Company's board of
directors in the case of the individual referred to in clause (A) above, (y)
by the Creditors' Committee in the case of the individual referred to in
clause (B) above and (z) by the Equity Committee in the case of the individual
referred to in clause (C) above. In case of the death, resignation, removal
or disability of a Stockholder Representative after the Effective Date, his or
her successor shall be designated by the remaining Stockholder
Representatives.
(c) Until the third anniversary of the Effective Date, Investor will
vote and cause to be voted all shares of Common Stock (other than those the
voting rights of which have been suspended) owned by Investor or any of its
partners or by the assignees or transferees of all or substantially all of the
Common Stock owned by Investor or any of its partners (other than a Person who
acquires such stock pursuant to a tender or exchange offer open to all
stockholders of the Company) in favor of the election as directors of any and
all individuals designated for such election as contemplated by clauses (ii),
(iii), (iv) and (v) of paragraph (a) above.
(d) No director nominated by Investor shall be an officer or employee
of Continental. All Company directors, if any, who are selected by, or who
are directors of, Continental shall recuse themselves from voting on, or
otherwise receiving any confidential Company information regarding, matters in
connection with negotiations between Continental and the Company (including,
without limitation, those relating to the Alliance Agreements) and matters in
connection with any action involving direct competition between Continental
and the Company. All Company directors, if any, who are selected by, or who
are directors, officers or employees of, Mesa shall recuse themselves from
voting on, or otherwise receiving any confidential Company information
regarding, matters in connection with negotiations between Mesa and the
Company (including, without limitation, those relating to the Alliance
Agreements) and matters in connection with any action involving direct
competition between Mesa and the Company.
(e) During the three year period commencing on the Effective Date, the
Company will not consummate any Business Combination unless such transaction
shall be approved in advance by at least three Independent Directors or by a
majority of the stock voted at the meeting held to consider such transaction
which is owned by stockholders of the Company other than Investor or any of
its Affiliates; provided, however, that neither Mesa nor any fund or account
managed or advised by Fidelity Management Trust Company or its Affiliates (or
any of their non Affiliated transferees) will be deemed an Affiliate of
Investor for purposes of voting on any Business Combination involving
Continental.
SECTION 7. Plan of Reorganization. The Plan shall (i) be
proposed jointly by the Company and Investor, (ii) contain terms and
conditions reasonably satisfactory to Investor and the Company, and (iii)
include the following provisions; provided that Investor and the Company may,
by mutual agreement, modify the Plan or otherwise restructure the Investment
in a manner consistent with the contemplated economic consequences to the
Company, Investor, the Unsecured Parties and GPA in order to enable the
Company, as reorganized, to more fully utilize its existing tax attributes:
(a) Debtor in Possession Financing. The Company's debtor in possession
financing shall be repaid in full in cash on the Effective Date.
(b) Administrative Claims. All allowed administrative claims shall be
paid as required pursuant to Section 1129(a) of the Bankruptcy Code, provided
that such claims do not exceed the amount set forth in Plan R 2 plus $15
million, and provided further that payment of such claims in excess of those
set forth in Plan R 2 would not, if payment was to be made in the month
immediately preceding the Effective Date, cause the Company to fail to meet
any of the Monthly Targets for such month.
(c) Tax Claims. All priority tax claims shall be paid over the
maximum term permitted by the Bankruptcy Code, as determined by the Bankruptcy
Court, with interest accruing at a rate determined by the Bankruptcy Court,
provided that such claims do not exceed the amounts set forth in Plan R 2 plus
$8.5 million, and provided further that payment of such claims in excess of
those set forth in Plan R 2 would not, if payment was to be made in the month
immediately preceding the Effective Date, cause the Company to fail to meet
any of the Monthly Targets for such month .
(d) Nontax Priority Claims. All nontax priority claims shall be paid
as required pursuant to Section 507 of the Bankruptcy Code, provided that such
claims do not exceed the amounts set forth in Plan R 2.
(e) Secured Claims. Secured debt claims shall be treated as provided
in Plan R 2 subject to (i) modification based on updated appraisals of
collateral values to be conducted by the Company and consistent with the
applicable provisions of the Bankruptcy Code, or (ii) such other terms as
shall be reasonably satisfactory to the Company and Investor.
(f) Unsecured Creditors. In consideration for the shares and cash
issued or paid, as the case may be, to the Unsecured Creditors pursuant to
Section 4(a)(2)(ii), the unsecured claims of the Unsecured Creditors shall be
cancelled as specified in the Plan.
(g) Equity Holders. In consideration for (A) the right to purchase
shares pursuant to Section 4(a)(2)(iii), (B) the shares issued to the Equity
Holders pursuant to Section 4(a)(2)(iii), and (C) the Warrants issued to the
Equity Holders pursuant to Section 4(a)(3)(ii), the equity interests of the
Equity Holders shall be cancelled as specified in the Plan.
(h) Leases. All aircraft leases which have been assumed prior to the
date hereof will be honored by the Company in accordance with their terms and
without reduction of rentals thereunder, provided that with the consent of the
Company, Investor and any applicable lessor, any such lease may be amended to
reduce the rentals payable thereunder, it being understood that, in
consideration of any such amendment and with the consent of the Creditors'
Committee, securities of the Company may be issued to such lessors from
securities otherwise allocable to the Unsecured Parties to the extent
consistent with any agreement in writing entered into by Investor and the
Equity Committee on or before the date hereof.
(i) Kawasaki. The contractual right of Kawasaki Leasing International
Inc. ( Kawasaki ) to require the Company to lease certain aircraft and
aircraft engines shall be modified on terms satisfactory to the Company,
Investor and Kawasaki or, in the absence of such modification, honored.
(j) GPA. In consideration for (A) the shares issued to GPA pursuant
to Section 4(a)(2)(iv), (B) the Warrants issued to GPA pursuant to Section
4(a)(3)(iii), (C) the Notes and cash issued or paid, as the case may be, to
GPA pursuant to Section 4(a)(4) and (D) the granting to GPA on the Effective
Date of the right (the New GPA Put ) to require the Company to lease from GPA
on or prior to June 30, 1999, up to eight aircraft of types consistent with
the fleet currently operated by the Company, GPA shall, as specified in the
Plan, cancel and waive all rights to put any aircraft to the Company which it
may have pursuant to the Put Agreement between GPA and the Company, dated as
of June 25, 1991 (the GPA Put Agreement ) and or the related Agreement
Regarding Rights of First Refusal for A320 Aircraft, dated as of September 1,
1992 (the First Refusal Agreement ) and all other claims of any kind or
nature arising out of or in connection with the GPA Put Agreement and or the
First Refusal Agreement (other than claims for reimbursement of expenses
incurred by GPA in connection therewith). Each such lease shall provide for
the payment by the Company of a fair market rental (determined at or about the
time of delivery of the related aircraft to the Company on the basis of
rentals then prevailing in the marketplace for comparable leases of comparable
aircraft to lessees of comparable creditworthiness); and each such lease shall
have such other terms and provisions and be in such form as is agreed upon by
the Company and GPA with the approval of Investor (which approval shall not be
unreasonably withheld or delayed) and attached to the agreement pursuant to
which GPA is granted the New GPA Put.
(k) Prepetition Aircraft Purchase Contracts. The prepetition contract
for the purchase of aircraft between the Company and The Boeing Company shall
either be modified on terms satisfactory to Investor, the Company and The
Boeing Company or, in the absence of such agreement, rejected. The Company's
aircraft purchase contract with AVSA, S.A.R.L. ( Airbus ) shall be amended on
terms consistent with the provisions of the AmWest A320 Term Sheet, dated as
of February 23, 1994 by and between Investor and Airbus.
(l) Employees. The Company shall have the right to release employees
from all currently existing obligations to the Company in respect of shares of
Company stock purchased by such employees pursuant to the Company's stock
purchase plan, such release to be in consideration for the cancellation of
such shares.
(m) Exculpation. The Plan will contain customary exculpation
provisions for the benefit of the Creditors' Committee and the Equity
Committee and their respective professionals.
SECTION 8. Conditions to Investor's Obligations Relating to the
Investment. The obligations of Investor to consummate the Investment and the
other transactions contemplated herein shall be subject to the satisfaction,
or the written waiver by Investor, of the following conditions:
(a) an initial order approving the Procedures Agreement, which order
shall be in form and substance reasonably satisfactory to Investor (the
Initial Order ), shall have been entered by the Bankruptcy Court on or prior
to May 6, 1994 and, once entered, shall be in effect and shall not be modified
in any material respect or stayed;
(b) subject to Section 10(b), the Company and Investor, as applicable,
shall have received all Regulatory Approvals, which shall have become final
and nonappealable or any period of objection by Regulatory Authorities shall
have expired, as applicable, and all other material approvals, permits,
authorizations, consents, licenses and agreements from other third parties
that are necessary or appropriate to permit the Investment and the other
transactions contemplated hereby and by the Related Agreements and to permit
the Company to carry on its business after the Effective Date in a manner
consistent in all material respects with the manner in which it was carried on
prior to the Effective Date (collectively with Regulatory Approvals, the
Approvals ), which Approvals shall not contain any condition or restriction
that, in Investor's reasonable judgment, materially impairs the Company's
ability to carry on its business in a manner consistent in all material
respects with prior practice or as proposed to be carried on by the
reorganized Company;
(c) the certificate of incorporation and bylaws of the Company shall
contain the terms contemplated by this Agreement and shall otherwise be
reasonably satisfactory to Investor;
(d) there shall be in effect no injunction, stay, restraining order or
decree issued by any court of competent jurisdiction, whether foreign or
domestic, staying the effectiveness of any of the Approvals, the Initial Order
or the Confirmation Order, and there shall not be pending any request or
motion for any such injunction, stay, restraining order or decree; provided,
however, that the foregoing condition shall not apply to any such injunction,
stay, order or decree requested, initiated or supported by Investor or any of
its partners or other Affiliates or to any such request or motion made,
initiated or supported by Investor or any its partners or other Affiliates;
(e) there shall not be threatened or pending any suit, action,
investigation, inquiry or other proceeding (collectively, Proceedings ) by or
before any court of competent jurisdiction or Regulatory Authority (excluding
the Company's bankruptcy case, but including adversary proceedings and
contested matters in such bankruptcy case, and excluding any such Proceedings
fully and accurately disclosed by the Company in Schedule I hereto), or any
adverse development occurring since December 31, 1993 in any such Proceedings,
which Proceedings or development, singly or in the aggregate, in the good
faith judgment of Investor, are reasonably likely to have a material adverse
effect on the Company's ability to carry on its business in a manner
consistent in all material respects with prior practices or are reasonably
likely to impair in any material respect Investor's ability to realize the
intended benefits and value of this Agreement, the Procedures Agreement or any
Related Agreement; provided, however, that the foregoing condition shall not
apply to any such Proceeding or development requested, initiated or supported
by Investor or any of its partners or other Affiliates;
(f) the Company shall have delivered to Investor appropriate closing
documents, including the instruments evidencing the Securities being issued to
Investor, certifications of the Company officers (including, but not limited
to, incumbency certificates, and certificates as to the truth and correctness
of statements made in the Disclosure Statement or any other offering document
distributed in connection with any securities issued in respect of this
Agreement or the Related Agreements) and opinions of legal counsel, all of
which shall be reasonably satisfactory to Investor;
(g) by no later than March 31, 1994, the Company shall have delivered
to Investor audited financial statements as of December 31, 1993, and for the
year then ended, which statements shall reflect a financial performance and a
financial position of the Company consistent in all material respects with the
unaudited results previously announced by the Company for such year, and, if
requested by Investor, the Company shall have discussed such financial
statements with Investor and provided an opportunity for Investor to discuss
such financial statements with the Company's auditors;
(h) since December 31, 1993, except for the matters disclosed in
Schedule I hereto, no material adverse change in the Company's condition
(financial or otherwise), business, assets, properties, operations or
relations with employees or labor unions shall have occurred and no matter
(except for the matters disclosed in Schedule I hereto) shall have occurred or
come to the attention of Investor that, in the reasonable judgment of
Investor, is likely to have any such material adverse effect;
(i) the following shall be true in all material respects (in each case
based on the Company's actual monthly or daily financial statements, which
shall be prepared by the Company in a manner consistent in all material
respects with its historical monthly and daily financial statements previously
furnished to Investor): (A) the Company's actual monthly Operating Cash Flow
(as defined on the Monthly Targets Schedule) shall not, in any month, be less
than the minimum amount therefor established as part of the Monthly Targets,
(B) the Company's actual 4 month Rolling Cash Flow (as defined on the Monthly
Targets Schedule) shall not be less, as of the end of any four calendar month
period, than the minimum amount therefor established as part of the Monthly
Targets, (C) the Company's actual end of month Reported Cash Balance (as
defined in the Monthly Targets Schedule) shall not, as of the end of any
calendar month, be less than the minimum amount therefor established as part
of the Monthly Targets, (D) the Company's actual five day average Minimum Cash
Balance (as defined in the Monthly Targets Schedule) shall not be, as of the
end of any five day period, less than the minimum amount therefor established
as part of the Monthly Targets; (E) the Company shall not have taken any
actions which the Company knew or reasonably should have known would likely
impair or hinder in any material respect the Company's ability to achieve the
Projections; (F) the amount and nature of the obligations and liabilities
(including, without limitation, tax liabilities and administrative expense
claims) required to be paid by the Company on the Effective Date or to be paid
by the Company following the Effective Date pursuant to obligations assumed by
the Company during the course of its bankruptcy proceedings shall not be in
excess of the amounts reflected in Plan R 2 plus any additional allowances
provided in Section 7 (as reduced by any repayments of the existing debtor in
possession loan made on or prior to the Effective Date) and shall not be
materially different in nature than those specified in Plan R 2 (except with
respect to administrative claims not known to the Company when Plan R 2 was
developed); and (G) the Company shall have paid all fees and expenses due
Investor under the Procedures Agreement;
(j) since the date hereof, there shall have occurred no outbreak or
escalation of hostilities or other international or domestic calamity, crisis
or change in political, financial or economic conditions or other adverse
change in the financial markets that impairs (or could reasonably be expected
to impair) in any material respect the Company's ability to carry on its
business in a manner consistent in all material respects with prior practice
or impairs (or could reasonably be expected to impair) in any material respect
Investor's ability to realize the intended benefits and value of this
Agreement or any Related Agreement;
(k) the Related Agreements, including all Alliance Agreements, to be
executed by the Company shall have been executed by the Company on or before
the Effective Date and, once executed, shall not have been modified without
the consent of Investor, shall be in effect and shall not have been stayed;
(l) the Company shall have performed in all material respects all
obligations on its part required to be performed on or before the Effective
Date under this Agreement, the Procedures Agreement and the Related Agreements
and all orders of the Bankruptcy Court in respect thereof that are consistent
with the provisions of such intruments;
(m) all representations and warranties of the Company under this
Agreement, the Procedures Agreement and the Related Agreements shall be true
in all material respects as of the Effective Date;
(n) the Plan and Disclosure Statement each shall have been filed by
the Company on or prior to May 15, 1994, and, once filed, shall have been
served by the Company on all appropriate parties and, once served, shall not
have been modified in any material respect without the prior consent of
Investor (which consent shall not be unreasonably withheld), withdrawn by the
Company or dismissed;
(o) the Disclosure Statement (in the form approved by the Bankruptcy
Court and as amended or supplemented, if applicable) shall have been true and
correct in all material respects as of the date first mailed to Unsecured
Parties and as of the date fixed by the Bankruptcy Court for voting on the
Plan and such Disclosure Statement shall not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein (taken as a whole), in light of the circumstances
under which they were made, not misleading; provided, however, that the
foregoing condition shall not apply to statements or other information
furnished or provided by Investor or any of its Affiliates for use in the
Disclosure Statement;
(p) the order approving the Disclosure Statement shall have been
entered by the Bankruptcy Court on or prior to June 30, 1994, and, once
entered, shall not have been modified in any material respect, shall be in
effect and shall not have been stayed;
(q) the Plan (including all securities of the Company to be issued
pursuant thereto and all contracts, instruments, agreements and other
documents to be entered into in connection therewith), the Disclosure
Statement and the Confirmation Order shall be consistent with the terms of
this Agreement and otherwise reasonably satisfactory in form and substance to
Investor;
(r) the Confirmation Order shall have been entered by the Bankruptcy
Court in form reasonably satisfactory to Investor on or before August 15,
1994, and, once entered, shall not have been modified in any material respect,
shall be in effect and shall not have been stayed and shall not be subject to
any appeal;
(s) the Effective Date shall have occurred on or prior to the Outside
Date unless the reason therefor shall be attributable to the breach by
Investor or its Affiliates of any of their respective representations,
warranties, covenants or obligations contained herein or in the Procedures
Agreement or any Related Agreement;.
(t) either pursuant to the Confirmation Order or otherwise, the
Bankruptcy Court shall have established one or more bar dates for
administrative expense claims pursuant to an order reasonably acceptable to
Investor, which bar date or dates shall occur on or before dates reasonably
acceptable to Investor; and
(u) the Securities and Exchange Commission shall have declared
effective a shelf registration statement with respect to the Securities
issuable to Investor.
In the event any of the conditions set forth in clause (a) (n), (p) or (r) is
not satisfied by the date specified in such clause (the Deadline ), then, on
the 15th day following the then current Deadline, the Deadline shall be
automatically extended on a day to day basis unless the Company and Investor
otherwise agree in writing or unless Investor gives a notice of termination to
the Company pursuant to Section 20(b) of the Procedures Agreement within such
15 day period. If any Deadline is automatically extended as aforesaid,
Investor may thereafter establish a new Deadline by giving notice to the
Company specifying the new Deadline, provided that the new Deadline may not be
sooner than 30 days after the date of such notice.
SECTION 9. Conditions to Company's Obligations Relating to
Investment. The Company's obligations to consummate or to cause the
consummation of the issuance and sale of the Securities and the other
transactions contemplated by this Agreement shall be subject to the
satisfaction, or to the effective written waiver by the Company, of the
condition described in Section 8(b) and the following additional conditions:
(a) payment of the Purchase Price;
(b) Investor shall have delivered to the Company appropriate closing
documents, including, but not limited to, executed counterparts of the Related
Agreements and certifications of officers, and opinions of legal counsel, all
of which shall be reasonably satisfactory to the Company;
(c) there shall be in effect no injunction, stay, restraining order or
decree issued by any court of competent jurisdiction, whether foreign or
domestic, staying the effectiveness of any of the Approvals, the Initial Order
or the Confirmation Order, and there shall not be pending any request or
motion for any such injunction, stay, restraining order or decree; provided,
however, that the foregoing condition shall not apply to any such injunction,
stay, order or decree requested, initiated or supported by the Company or to
any such request or motion made, initiated or supported by the Company;
(d) the Related Agreements to be executed by Investor or any of its
partners shall have been executed by such parties on or before the Effective
Date and, once executed, shall not have been modified without the consent of
the Company, shall be in effect and shall not have been stayed;
(e) Investor, Continental and Mesa shall have performed in all
material respects all obligations on their part required to be performed on or
before the Effective Date under this Agreement, the Procedures Agreement and
the Related Agreements and all orders of the Bankruptcy Court in respect
thereof that are consistent with the provisions of such instruments;
(f) all representations and warranties of Investor, Continental and
Mesa under this Agreement, the Procedures Agreement and the Related Agreements
shall be true and correct in all material respects as of the Effective Date;
(g) the Company shall be reasonably satisfied that the Alliance
Agreements, when fully implemented, shall result in an increase to the
Company's pretax income of not less than $40 million per year; provided,
however, that Investor shall have no liability for any failure of the Company
to achieve any such increase in net income except to the extent such failure
results from a default by Investor or its partners pursuant to the terms of
such Alliance Agreements;
(h) since the date hereof, there shall have occurred (A) no outbreak
or escalation of hostilities or other international or domestic calamity,
crisis or change in political, financial or economic conditions or other
adverse change in the financial markets or (B) any adverse change in the
condition (financial or otherwise), business, assets, properties or prospects
of Continental or Mesa, in each case that materially impairs the ability of
either Continental or Mesa to perform its obligations under the Alliance
Agreements or the Company's ability to realize the intended benefits and value
of this Agreement, the Alliance Agreements (as contemplated by clause (g)
above) or the other Related Agreements;
(i) since the time of their initial filing by the Company, neither the
Plan nor the Disclosure Statement shall have been modified in any material
respect without the prior consent of the Company (which consent shall not be
unreasonably withheld or delayed), withdrawn by Investor or dismissed;
(j) the certificate of incorporation and bylaws of the Company shall
contain the terms contemplated by this Agreement and shall otherwise be
reasonably satisfactory to the Company;
(k) the Plan (including all Securities to be issued pursuant thereto
and all contracts, instruments, agreements and other documents to be entered
into in connection therewith), the Disclosure Statement and the Confirmation
Order shall be consistent with the terms of this Agreement and otherwise
reasonably satisfactory in form and substance to the Company;
(l) the Confirmation Order shall have been entered by the Bankruptcy
Court in form reasonably acceptable to the Company and, once entered, shall
not have been modified in any material respect, shall be in effect and shall
not have been stayed and shall not be subject to any appeal; and
(m) the Effective Date shall have occurred on or prior to the Outside
Date unless the reason therefor shall be attributable to the breach by the
Company of any of its representations, warranties, covenants or obligations
contained herein or in the Procedures Agreement or any Related Agreement.
SECTION 10. Cooperation. (a) The Company and Investor will
cooperate in a commercially reasonable manner, and will use their respective
commercially reasonable efforts, to consummate the transactions contemplated
hereby, including all commercially reasonable efforts to satisfy the
conditions specified in this Agreement. The Company will use commercially
reasonable efforts, and Investor will cooperate in a commercially reasonable
manner in seeking, to obtain all Approvals.
(b) Notwithstanding anything in Section 8 or 9 to the contrary,
if prior to the Outside Date, the Department of Justice or any other
Regulatory Authority raises any antitrust objection to the consummation of the
Investment or the implementation of any Alliance Agreement, which objection
has not been resolved on or before the Outside Date, Investor nevertheless
shall be required to consummate the Investment and, to that end, agrees to
timely make such adjustment to the composition of its partnership and to the
Alliance Agreements as required to resolve such antitrust objection; provided,
however, that nothing in this paragraph (b) shall affect the rights of the
Company under Section 9(g) or obligate the Company to enter into or approve
any adjustment or modification of the Alliance Agreements which, in the
Company's reasonable judgment, is prejudicial to the Company or the Unsecured
Parties in any material respect and which, if entered into or approved, would
materially impair the Company's ability to realize the reasonably anticipated
benefits of such Alliance Agreements.
SECTION 11. Registration Rights Agreement. Investor and the
Company will enter into a registration rights agreement on terms acceptable to
Investor and the Company. The registration rights agreement will reflect the
understanding of the parties with respect to their registration rights and
obligations and will provide that Investor, its partners and any assignees and
transferees, shall have the right to cause the Company to (i) include the
Securities issuable to Investor pursuant to the Plan (including any such
Securities issued or issuable in respect of the Warrants or by way of any
stock dividend or stock split or in connection with any combination of shares,
merger, consolidation or similar transaction), on customary terms, in
piggyback underwritings and registrations and (ii) to effect, on customary
terms, one demand registration under the Securities Act for the public
offering and sale of the Securities issued to Investor under the Plan at any
time after the third anniversary of the Effective Date.
SECTION 12. Applicable Provisions of Law and Regulations. It is
understood and agreed that this Agreement shall not create any obligation of,
or restriction upon, the Company or Investor or the partners of Investor that
would violate applicable provisions of law or regulation relating to ownership
or control of a U.S. air carrier. At all times after the Effective Date, the
certificate of incorporation of the Company shall provide that, in the event
persons who are not U.S. citizens shall own (beneficially or of record) or
have voting control over shares of Common Stock, the voting rights of such
persons shall be subject to automatic suspension as required to ensure that
the Company is in compliance with applicable provisions of law or regulation
relating to ownership or control of a U.S. air carrier.
SECTION 13. Representations and Warranties of the Company. The
Company represents and warrants to Investor as follows:
(a) The Company has complied in all material respects with the terms
of all orders of the Bankruptcy Court in respect of the Investment, this
Agreement and the Procedures Agreement.
(b) The Company has delivered to Investor copies of the audited
balance sheets of the Company as of December 31, 1992 and the statements of
income, stockholders' equity and cash flows for the years then ended, together
with the notes thereto. Such financial statements, and when delivered to
Investor the financial statements of the Company referred to in Section 8(g)
will, present fairly, in accordance with generally accepted accounting
principles (applied on a consistent basis except as disclosed in the footnotes
thereto), the financial position and results of operations of the Company as
of the dates and for the periods therein set forth.
(c) When delivered to Investor, the unaudited financial statements of
the Company referred to in Section 15(b)(ii) will (i) present fairly, in
accordance with generally accepted accounting principles (applied on a
consistent basis except as disclosed therein and subject to normal year end
audit adjustments), the financial position and results of operations of the
Company as of the date and for the period therein set forth, it being
understood and agreed, however, that the foregoing representation relating to
conformity with generally accepted accounting principles is being made only to
the extent such principles are applicable to interim unaudited reports and
(ii) reflect a financial position and results of operations not materially
worse than those set forth in the pro forma financial statements contained in
Plan 9.
(d) The Projections and the Monthly Targets were prepared in good
faith on a reasonable basis, and when prepared represented the Company's best
judgment as to the matters set forth therein, taking into account all relevant
facts and circumstances known to the Company. Nothing has come to the
Company's attention since the dates on which the Projections and the Monthly
Targets, respectively, were prepared which causes the Company to believe that
any of the projections and other information contained therein were misleading
or inaccurate in any material respect as of such dates. It is specifically
understood and agreed that the delivery of the Projections and the Monthly
Targets shall not be regarded as a representation, warranty or guarantee that
the particular results reflected therein will in fact be achieved or are
likely to be achieved.
(e) No written statement, memorandum, certificate, schedule or other
written information provided (or to be provided) to Investor or any of its
representatives by or on behalf of the Company in connection with the
transactions contemplated hereby, when viewed together with all other written
statements and information provided to Investor and its representatives by or
on behalf of the Company, in light of the circumstances under which they were
made, (i) contains or will contain any materially misleading statement or (ii)
omits or will omit to state any material fact necessary to make the statements
therein not misleading.
(f) The board of directors of the Company has approved the Investment
and Investor's acquisition of Securities hereunder for purposes of, and in
accordance with the provisions and requirements of, Section 203(a)(1) of the
General Corporation Law of the State of Delaware and, as a consequence,
Investor will not be subject to the provisions of such Section with respect to
any business combination between Investor and the Company (as such term is
defined in said Section 203).
SECTION 14. Representations and Warranties of Investor.
Investor represents and warrants to the Company as follows:
(a) The general and limited partners of Investor (other than one such
partner which will elect to suspend the voting rights of its Securities as
contemplated by Section 4(b)) are U.S. citizens within the meaning of Section
101(16) of the Federal Aviation Act of 1958, as amended.
(b) Investor has, or has commitments for, sufficient funds to pay the
Purchase Price and otherwise perform its obligations under this Agreement.
(c) No written statement, memorandum, certificate, schedule or other
written information provided (or to be provided) to the Company or any of its
representatives by or on behalf of Investor in connection with the
transactions contemplated by the Alliance Agreements, when viewed together
with all other written statements and information provided to the Company and
its representatives by or on behalf of Investor, in light of the circumstances
under which they were made, (i) contains or will contain any materially
misleading statement or (ii) omits or will omit to state any material fact
necessary to make the statements therein not misleading.
SECTION 15. Covenants. (a) Investor covenants (i) to support,
subject to management's recommendation, increases in employee compensation
through 1995 at least equal to those set forth in Plan R 2 and (ii) after the
Effective Date, to cause the board of directors of the Company to consider
implementation of a broad based employee incentive compensation plan and a
management stock incentive plan.
(b) The Company covenants (i) to use commercially reasonable
efforts to cause the shelf registration statement referred to in Section 8(u)
to remain effective for three years following its effective date and (ii) as
soon as available, to deliver to Investor a copy of the unaudited balance
sheet of the Company as of the end of each fiscal quarter of the Company prior
to the Effective Date and the unaudited statements of income and cash flows
for the periods then ended.
SECTION 16. Certain Taxes. The Company shall bear and pay all
transfer, stamp or other similar taxes (if any are not exempted under Section
1146 of the Bankruptcy Code) imposed in connection with the issuance and sale
of the Securities.
SECTION 17. Administrative Expense. All amounts owed to
Investor or its assignees by the Company under this Agreement, the Related
Agreements, the Procedures Agreement and all orders of the Bankruptcy Court in
respect thereof shall be treated as an allowed administrative expense priority
claim under Section 507(a)(1) of the Bankruptcy Code.
SECTION 18. Incorporation by Reference. The provisions set
forth in the Procedures Agreement, including, but not limited to, the
provisions regarding confidentiality, liability indemnity and termination, are
hereby incorporated by reference and such provisions shall have the same force
and effect herein as if they were expressly set forth herein in full.
SECTION 19. Notices. All notices, requests and other
communications hereunder must be in writing and will be deemed to have been
duly given only if delivered personally or by facsimile transmission or mailed
(first class postage prepaid) or by prepaid express courier to the parties at
the following addresses or facsimile numbers:
If to the Company: America West Airlines, Inc. 4000 East Sky Harbor Boulevard
Phoenix, Arizona
85034 Attention: William A. Franke and
Martin J. Whalen Fax Number: (602) 693 5904
with a copy to: LeBoeuf, Lamb, Greene & MacRae
633 17th Street, Suite 2800 Denver, Colorado 80202
Attention: Carl A. Eklund Fax Number: (303) 297 0422
and a copy to: Andrews & Kurth L.L.P. 4200 Texas Commerce Tower Houston, Texas
77002
Attention: David G. Elkins Fax Number: (713) 220 4285
and a copy to: Murphy, Weir & Butler
101 California Street, 39th Floor
San Francisco, California 94111
Attention: Patrick A. Murphy
Fax Number: (415) 421 7879
and a copy to: Lord, Bissell and Brook 115 South LaSalle Street
Chicago, IL 60603
Attention: Benjamin Waisbren
Fax Number: (312) 443 0336
If to Investor: AmWest Partners, L.P. 201 Main Street, Suite 2420 Fort
Worth, Texas 76102 Attention: James G. Coulter Fax Number: (817) 871 4010
with a copy to: Arnold & Porter
1200 New Hampshire Ave., N.W. Washington, D.C. 20036
Attention: Richard P. Schifter
Fax Number: (202) 872 6720
and a copy to: Jones, Day, Reavis & Pogue
North Point 901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Lyle G. Ganske
Fax Number: (216) 586 7864
and a copy to: Goodwin, Procter &Hoar
Exchange Place
Boston, MA 02109
Attention: Laura Hodges Taylor, P.C.
Fax Number: (617) 523 1231
and a copy to: Murphy, Weir & Butler
101 California Street, 39th Floor
San Francisco, California 94111
Attention: Patrick A. Murphy
Fax Number: (415) 421 7879
and a copy to: Lord, Bissell and Brook 115 South LaSalle Street
Chicago, IL 60603
Attention: Benjamin Waisbren
Fax Number: (312) 443 0336
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number
as provided in this Section, be deemed given upon receipt, and (iii) if
delivered by mail or by express courier in the manner described above to the
address as provided in this Section, be deemed given upon receipt (in each
case regardless of whether such notice is received by any other person to whom
a copy of such notice, request or other communication is to be delivered
pursuant to this Section). Either party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other party hereto.
SECTION 20. Governing Law. Except to the extent inconsistent
with the Bankruptcy Code, this Agreement shall in all respects be governed by
and construed in accordance with the laws of the State of Arizona, without
reference to principles of conflicts or choice of law under which the law of
any other jurisdiction would apply.
SECTION 21. Amendment. This Agreement may only be amended,
waived, supplemented or modified by a written instrument signed by authorized
representatives of Investor and the Company. Investor may extend the time for
satisfaction of the conditions set forth in Section 8 (prior to or after the
relevant date) by notifying the Company in writing. The Company may extend
the time for satisfaction of the conditions set forth in Section 9 (prior to
or after the relevant date) by notifying Investor in writing.
SECTION 22. No Third Party Beneficiary. This Agreement and the
Procedures Agreement are made solely for the benefit of the Company and
Investor and their respective permitted assigns, and no other Person
(including, without limitation, employees, stockholders and creditors of the
Company) shall have any right, claim or cause of action under or by virtue of
this Agreement or the Procedures Agreement, except to the extent such Person
is entitled to protection as contemplated by Section 28(b) or to expense
reimbursement pursuant to the Procedures Agreement or may assert a claim for
indemnity pursuant to the Procedures Agreement.
SECTION 23. Assignment. Except as otherwise provided herein,
Investor may assign all or part of its rights under this Agreement to any of
its partners (each of whom may assign all or part to its Affiliates) or to any
fund or account managed or advised by Fidelity Management Trust Company or any
of its Affiliates and may assign any Securities (or the right to purchase any
Securities) to any lawfully qualified Person or Persons, and the Company may
assign this Agreement to any Person with which it may be merged or
consolidated or to whom substantially all of its assets may be transferred in
facilitation of the consummation of the Plan and the effectuation of the
issuance and sale of the Securities as contemplated hereby or by the Related
Agreements. None of such assignments shall relieve the Company or Investor of
any obligations hereunder, under the Procedures Agreement or under the Related
Agreements.
SECTION 24. Counterparts. This Agreement may be executed by the
parties hereto in counterparts and by telecopy, each of which shall be deemed
to constitute an original and all of which together shall constitute one and
the same instrument. With respect to signatures transmitted by telecopy, upon
request by either party to the other party, an original signature of such
other party shall promptly be substituted for its facsimile.
SECTION 25. Invalid Provisions. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under any present or
future laws, rules or regulations, and if the rights or obligations of
Investor and the Company under this Agreement will not be materially and
adversely affected thereby, (a) such provision will be fully severable, (b)
this Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (c) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom, and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible. If the rights and
obligations of Investor or the Company will be materially and adversely
affected by any such provision held to be illegal, invalid or unenforceable,
then unless such provision is waived in writing by the affected party in its
sole discretion, this Agreement shall be null and void.
SECTION 26. Tagalong Rights. On the Effective Date, Investor
shall enter into a written agreement for the benefit of all holders of Class B
Common (other than Investor and its Affiliates) whereby Investor shall agree,
for a period of three years after the Effective Date, not to sell, in a single
transaction or related series of transactions, shares of Common Stock
representing 51% or more of the combined voting power of all shares of Common
Stock then outstanding unless such holders shall have been given a reasonable
opportunity to participate therein on a pro rata basis and at the same price
per share and on the same economic terms and conditions applicable to
Investor; provided, however, that such obligation of Investor shall not apply
to any sale of shares of Common Stock made by Investor (i) to any Affiliate of
Investor, (ii) to any Affiliate of Investor's partners, (iii) pursuant to a
bankruptcy or insolvency proceeding, (iv) pursuant to judicial order, legal
process, execution or attachment, (v) in a widespread distribution registered
under the Securities Act of 1933, as amended ( Securities Act ) or (vi) in
compliance with the volume limitations of Rule 144 (or any successor to such
Rule) under the Securities Act.
SECTION 27. Stock Legend. All securities issued to Investor
pursuant to the Plan shall be conspicuously endorsed with an appropriate
legend to the effect that such securities may not be sold, transferred or
otherwise disposed of except in compliance with (i) Section 26 and (ii)
applicable securities laws.
SECTION 28. Directors' Liability and Indemnification. (a) Upon,
and at all times after, consummation of the Plan, the certificate of
incorporation of the Company shall contain provisions which (i) eliminate the
personal liability of the Company's former, present and future directors for
monetary damages resulting from breaches of their fiduciary duties to the
fullest extent permitted by applicable law and (ii) require the Company,
subject to appropriate procedures, to indemnify the Company's former, present
and future directors and executive officers to the fullest extent permitted by
applicable law. In addition, upon consummation of the Plan, the Company shall
enter into written agreements with each person who is a director or executive
officer of the Company on the date hereof providing for similar
indemnification of such person and providing that no recourse or liability
whatsoever with respect to this Agreement, the Procedures Agreement, the
Related Agreements, the Plan or the consummation of the transactions
contemplated hereby or thereby shall be had, directly or indirectly, by or in
the right of the Company against such person. Notwithstanding anything
contained herein to the contrary, the provisions of this Section 28(a) shall
not be applicable to any person who ceased being a director of the Company at
any time prior to March 1, 1994.
(b) Investor agrees, on behalf of itself and its partners, that
no recourse or liability whatsoever (except as provided by applicable law for
intentional fraud, bad faith or willful misconduct) shall be had, directly or
indirectly, against any person who is a director or executive officer of the
Company on the date hereof with respect to this Agreement, the Procedures
Agreement, the Related Agreements, the Plan or the consummation of the
transactions contemplated hereby or thereby, such recourse and liability, if
any, being expressly waived and released by Investor and its partners as a
condition of, and in consideration for, the execution and delivery of this
Agreement.
SECTION 29. Jurisdiction of Bankruptcy Court. The parties agree
that the Bankruptcy Court shall have and retain exclusive jurisdiction to
enforce and construe the provisions of this Agreement.
SECTION 30. Interpretation. In this Agreement, unless a contrary
intention appears, (i) the words herein , hereof and hereunder and other
words of similar import refer to this Agreement as a whole and not to any
particular Section or other subdivision and (ii) reference to any Section
means such Section hereof. The Section headings herein are for convenience
only and shall not affect the construction hereof. No provision of this
Agreement shall be interpreted or construed against either party solely
because such party or its legal representative drafted such provision.
SECTION 31. Termination. This Agreement shall terminate
concurrently with the termination of the Procedures Agreement.
SECTION 32. Entire Agreement. The Agreement supersedes any and
all other agreements (oral or written) between the parties in respect to the
subject matter hereof other than the Procedures Agreement.
AMWEST PARTNERS, L.P.
By: AmWest Genpar, Inc.,
its General Partner
By: /s/ James G. Coulter Title: President
Accepted and Agreed to
this 21th day of April, 1994.
AMERICA WEST AIRLINES, INC.
as Debtor and Debtor in Possession
By: /s/ William A. Franke
Title: Chairman
August 23, 1994
Fidelity Management Trust Company
82 Devonshire Street, MS C7A
Boston, Massachusetts 02109
Attention: Daniel J. Harmetz
RE: America West Airlines, Inc.
Gentlemen and Ladies:
Reference is made to the Subscription Agreement dated as of June 28,
1994 by and between AmWest Partners, L.P. and Belmont Fund, L.P., Fidelity
Copernicus Fund, L.P., Belmont Capital Partners II, L.P. (the "Subscription
Agreement"). This letter agreement shall be deemed to amend paragraphs (i)
through (v) of Section 1(a) and Section 8(b) of the Subscription Agreement.
Capitalized terms used herein and not otherwise defined are used herein as
defined in the Subscription Agreement.
Pursuant to Section 1(a) of the Subscription Agreement, the Partnership
hereby notifies the Investor that the Confirmation Date under the Plan
occurred on August 10, 1994. Pursuant to the Subscription Agreement, the
Investor is hereby notified of its obligation to purchase the following
securities of America West Airlines, Inc. and of the purchase price of such
securities (collectively, the "Securities"):
Purchase Price Shares
$21,341,990 2,548,496 Class B
133,488 Warrants
As set forth in the $100,000,000 Senior
Note Purchase Agreement Unsecured Notes due 2001
for such Notes
In addition, the Investor shall pay to America West Airlines, Inc.
$6,416,214 in respect of the Partnership's obligations under Section 1(a)(iv)
of the Subscription Agreement and shall receive in exchange therefor from
America West 721,815 shares of Class B Common in accordance with said Section
1(a)(iv) and Section 4(a)(2)(ii) of the Investment Agreement.
Notwithstanding anything to the contrary in the Subscription Agreement,
the Investor agrees to pay to the Partnership, within 15 days after request,
23.81% of the Expenses incurred by the Investor, the Partnership and its
partners which are not reimbursed by America West pursuant to Section 2 of the
Procedures Agreement; provided, under no circumstances will the Investor be
liable for payment of the Expenses of the partners or the Partnership incurred
in connection with the negotiation and execution of the Limited Partnership
Agreement of the Partnership.
The Effective Date for the purchase of the Securities [(other than the
Securities to be purchased under Section 1(a)(iv) of the Subscription
Agreement)] currently is scheduled for August 25, 1994. The Investor shall be
notified of the payment instructions for the payment of the purchase price of
its securities. The Investor shall inform the Partnership and America West of
the name, address and other particulars regarding the record holder to own the
securities in the event such information differs from the name and address of
the Investor as set forth in the Subscription Agreement.
Sincerely,
AMWEST PARTNERS, L.P.
By: AMWEST GENPAR, Inc.
a Texas corporation
By:
Title:
ACKNOWLEDGED AND AGREED:
BELMONT FUND, L.P.
By: ____________________
its General Partner
By: ____________________
Name:
Title:
BELMONT CAPITAL PARTNERS II, L.P.
By: ____________________
its General Partner
By: ____________________
Name:
Title:
FIDELITY COPERNICUS FUND, L.P.
By: ____________________
its General Partner
By: ____________________
Name:
Title:
SUBSCRIPTION AGREEMENT
AmWest Partners, L.P.
201 Main Street
Suite 2420
Fort Worth, Texas 76102
Attention: AmWest Genpar, Inc., General Partner
Gentlemen and Ladies:
Reference is made to that certain Third Revised Investment Agreement
dated April 21, 1994 and attached hereto as Exhibit A and incorporated herein
by reference, as the same may be amended from time to time (the "Investment
Agreement") by and between AmWest Partners, L.P. (the "Partnership"), a
limited partnership organized and existing under the laws of the State of
Texas, with AmWest Genpar, Inc., a corporation organized and existing under
the laws of the State of Texas, as its general partner (the "General
Partner"), and America West Airlines, Inc. ("America West"). Capitalized
terms used herein and not otherwise defined herein are used herein as defined
in the Investment Agreement.
Pursuant to and subject to the terms and conditions of the Investment
Agreement and the First Amended and Restated Plan of Reorganization dated June
13, 1994 (the "Plan"), which was filed in the Chapter 11 case of America West,
America West, or its successor as reorganized pursuant to Chapter 11 of the
U.S. Bankruptcy Code ("New America West"), has agreed to issue to the
Partnership, and the Partnership has agreed to purchase from America West,
certain Securities of New America West. In furtherance of its obligations
under the Investment Agreement, the Partnership has agreed to assign to
Belmont Fund, L.P., Fidelity Copernicus Fund, L.P., and Belmont Capital
Partners, L.P. (each, a "Fund"), or other funds or accounts managed or advised
by Fidelity Management Trust Company or its affiliates ("Fidelity")
(collectively, the "Investor"), certain of the Partnership's rights to
purchase from New America West and Investor has agreed to acquire from New
America West on the terms and conditions set forth herein, the Securities
specified herein.
In consideration of the premises and mutual covenants herein contained,
Investor and the Partnership hereby agree as follows:
1. Acquisition of Securities
(a) Pursuant to the Investment Agreement and the Plan, the
Partnership has agreed, subject to the terms and conditions set forth therein,
to purchase certain of the Securities from New America West for an aggregate
purchase price of $214,857,000, subject to adjustment as provided therein (the
"Purchase Price"). Investor has agreed and hereby agrees to accept an
assignment from the Partnership of certain of its rights under the Investment
Agreement and the Procedures Agreement, including the right to purchase such
Securities, and Investor has agreed to assume certain of its obligations in
respect thereof.
Upon the occurrence of the Confirmation Date, the General Partner shall
notify Investor of such event and of the Securities to be purchased by
Investor at the Effective Date. Upon the Effective Date, Investor shall,
against delivery of the certificates representing such Securities, purchase
the Securities of New America West set forth below:
(i) Investor shall, for a purchase price of $22,143,000, acquire
2,400,608 shares of Class B Common and 422,748 Warrants;
(ii) Investor shall, for a purchase price of not less than
$100,000,000 [and not more than $130,000,000, as determined by the
Company prior to the Effective Date], acquire, pursuant to a Note
Purchase Agreement reasonably satisfactory to Investor and under an
indenture reasonable satisfactory to Investor, a like principal
amount of Notes to be issued by New America West pursuant to the
Investment Agreement, and shall be paid a fee of 1% of the total
purchase price therefor by New America West for consummating such
purchase;
(iii) Investor shall, for an amount equal to 20.38% of the cost
of any shares of Class B Common, if any, which the Partnership is
required to purchase pursuant to clause (B) of the proviso to
Section 4(a)(2)(i) of the Investment Agreement, purchase 20.38% of
the shares of Class B Common purchased pursuant to said Section; and
(iv) Investor shall purchase the first $75,000,000 in value of the
shares of Class B Common, if any, required to be purchased by the
Partnership pursuant to Section 4(a)(2)(ii) of the Investment
Agreement; provided, that in no event shall Investor be required to
purchase more than the aggregate number of shares of Class B Common
required to be purchased pursuant to such Section; and
(v) Investor shall purchase from the Company, the Partnership or
Lehman Brothers, Inc. ("Lehman"), 20.38% of any shares of Class B
Common which the Partnership or Lehman has the right to and elects
to acquire pursuant to the Plan in respect of the 2,322,000 shares
of common stock of America West which are owned by Lehman as of the
date hereof, on such terms as provided in the Plan for such
acquisition.
(b) Investor acknowledges, and the General Partner agrees, that
the closing of the purchase of the Securities of New America West is subject
to the satisfaction of the conditions precedent as described in Section 8 of
the Investment Agreement. The Partnership will not waive any of such
conditions precedent without the prior written approval of Investor, which
approval will not be withheld unreasonably, and will not make modify or amend
the Investment Agreement or the Procedures Agreement in any material respect,
agree to provisions of the Plan, or enter into any other agreements with
America West or New America West prior to the Effective Date or earlier
termination of the Investment Agreement, without Investor's prior consent,
which consent will not be withheld unreasonably. This Subscription Agreement
will be returned promptly to Investor, together with all investment documents
theretofore delivered by Investor, upon the earlier of (i) the termination of
the Investment Agreement or (ii) December 31, 1994, if the Effective Date
shall not have occurred by such date.
2. Acceptance of Subscription
The General Partner, on behalf of the Partnership, shall accept this
Subscription Agreement by executing, and later delivering to Investor,
executed copies of this Subscription Agreement and the Acceptance of
Subscription attached hereto. This Subscription Agreement is delivered
irrevocably but shall terminate upon the earlier of (i) the termination of the
Investment Agreement or (ii) December 31, 1994, if the Effective Date shall
not have occurred by such date.
3. Representations and Warranties of each Fund.
In order to induce the General Partner and the Partnership to accept
this Subscription Agreement, each Fund severally but not jointly hereby repre-
sents and warrants as follows as to itself:
(a) Investment Intent. The Fund is acquiring the Securities for its
own account, for investment, and not with the view to a sale of such interest
in connection with any distribution thereof, except in compliance with the
Securities Act of 1933, as amended, and subject to the disposition of
Securities being at all times within such Fund's control, except as otherwise
expressly provided herein or in the Investment Agreement;
(b) Sophistication. The Fund, alone or with its professional
advisors, has the educational, financial, and business background and
knowledge so as to be capable of evaluating the merits and risks of an
investment in New America West, and has the capacity to protect its own
interests in making this investment;
(c) Registration and Transfer. The Fund understands that, pursuant
to the Investment Agreement and the Plan, New America West shall provide
registration rights with respect to the Securities under the Securities Act of
1933, as amended (the "Securities Act"). Nonetheless, the Fund understands
that there may be restrictions on the transferability of the Securities. The
Fund understands that prior to the Effective Date there will be no public
market for the Securities and that it is possible that no public market will
exist at any time thereafter;
(d) Advisors. The Fund has been afforded the opportunity to seek
and rely upon the advice of its own attorneys, accountants, or other
professional advisors in connection with an investment in New America West and
the execution of this Subscription Agreement;
(e) Valid Existence. The Fund has been duly organized and is
validly existing and in partnership good standing under the laws of its
jurisdiction of organization, with full power and authority to own its
property and conduct its business as currently conducted and to execute,
deliver and perform this Subscription Agreement;
(f) Binding Obligation. The execution and delivery of this
Subscription Agreement by the Fund and the Fund's performance hereof and the
transactions contemplated hereby have been duly authorized by the requisite
action on the part of the Fund, and no other authorization or consent is
required for the execution and performance hereof;
(g) No Conflict. The execution, delivery and performance by the
Fund of this Subscription Agreement does not violate, conflict with, or
constitute a default under the Fund's Articles of Incorporation, By-Laws,
partnership agreement, or any other corporate or partnership document or
resolution, any agreement or commitment to which it is a party, or with
respect to which any of its assets are bound, or, subject to obtaining the
Confirmation Order and the Regulatory Approvals contemplated by Section 8(b)
of the Investment Agreement, require any governmental consent or approval;
(h) Brokers. The Fund has not used or retained any broker, agent,
finder, syndicator or other intermediary with respect to its acquisition of
Securities or the events or transactions contemplated by this Subscription
Agreement;
(i) Financial Capacity. The Fund has the financial capacity to make
the investment required of it under this Subscription Agreement; and
(j) Citizenship. The Fund is, and shall at all times be, a "citizen
of the United States" as that term is defined in Section 101(6) of the Federal
Aviation Act of 1958, as amended (49 App. U.S.C. SS 1301(16)), or shall elect
to suspend its voting rights in respect of all shares of Class B Common owned
by it during any period in which the representation contained in this
subsection (j) shall be invalid.
The representations and warranties made pursuant to this Section 3 shall
survive the execution and delivery of this Agreement.
4. Other Business Ventures.
Each of the Partnership and Investor agrees that notwithstanding
anything to the contrary contained in or inferable from this Subscription
Agreement or any other statute or principle of law, neither Investor nor the
Partnership nor any of their shareholders, directors, management companies,
officers, employees, partners, agents, family members, or affiliates (each an
"Affiliate") shall be prohibited or restricted in any way from investing in or
conducting, either directly or indirectly, and may invest in and/or conduct,
either directly or indirectly, businesses of any nature whatsoever, including
the ownership and operation of businesses or properties similar to or in the
same geographical area as those held by the Partnership. Investor, the
Partnership or their Affiliates may, without owing any obligation to Investor,
the Partnership or any Affiliate, purchase and otherwise deal in securities of
any type of American West or New America West and each may participate in,
commit funds to, or otherwise become involved with any other entity which may
attempt to acquire control of any competitor of America West or New America
West; provided that prior to the Effective Date or earlier termination of the
Investment Agreement, neither Investor, the Partnership nor any of their
Affiliates shall, without the consent of the Partnership, on the one hand, and
Investor, on the other hand, commit funds to, or otherwise become involved
with any other entity which may attempt to acquire control of America West.
Any investment in or conduct of any such businesses by Investor, the
Partnership or any Affiliate shall not give rise to any claim for an
accounting by the others or any right to claim any interest therein or the
profits therefrom.
5. Indemnification
Investor hereby agrees to indemnify, defend, and hold harmless the
Partnership and its partners and all of their respective members, directors,
officers, employees, and agents (collectively, the "Indemnified Parties") from
and against its allocable portion (based on relative fault of Investor, on the
one hand, and the Indemnified Parties, on the other hand) of any and all loss,
damage or liability (including without limitation, any and all attorneys'
fees, costs, and other amounts reasonably incurred by any of them in
investigating, preparing or defending against any claim, litigation, or other
legal action threatened or initiated) which are found in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from or arisen out of (a) a breach by Investor in any material respect of any
representation, warranty or obligation of Investor contained in this
Subscription Agreement or (b) notwithstanding Section 2.06 of the Limited
Partnership Agreement of the Partnership, any action or inaction of Investor
or any of its affiliates giving rise to a breach by the Partnership of any of
its obligations under the Investment Agreement or the Procedures Agreement.
6. No Assignment or Transfer; Third Party Beneficiary
(a) Investor agrees not to transfer or assign this Subscription
Agreement or any of its rights, duties or obligations hereunder without the
prior written consent of the General Partner and America West, which consent
will not be withheld unreasonably, except that no such consent will be
required to be obtained for a transfer or assignment to one or more funds or
accounts managed or advised by Fidelity or any of its affiliates as to which
the representations, warranties and covenants contained herein are true and
accurate in all material respects as of the date of such transfer and the
Effective Date, and acknowledges that any attempted transfer or assignment in
violation of the foregoing shall be void.
(b) Investor acknowledges that America West is an express third party
beneficiary of the provisions of Section 1 of this agreement and may sue
Investor directly to enforce such obligations upon any breach by (i) Investor
of its obligations thereunder and (ii) the Partnership of any of its
obligations under the Investment Agreement or the Procedures Agreement, which
breach gives rise to a cause of action against the Partnership under the
applicable agreement; provided, that upon any such breach by the Partnership,
Investor shall only be liable for 20.38% of any damages payable in respect
thereof.
7. Representations, Warranties, and Covenants of the Partnership.
In order to induce Investor to execute this Subscription Agreement, the
Partnership hereby represents, warrants and covenants as follows:
(a) Valid Existence. The Partnership has been duly organized and is
validly existing and in good standing under the laws of its jurisdiction of
organization, with full power and authority to execute this Subscription
Agreement and the Investment Agreement;
(b) Binding Obligations. The execution and delivery of this
Subscription Agreement, the Investment Agreement and the Procedures Agreement
by the Partnership and its performance hereof and the transactions
contemplated hereby have been duly authorized by the requisite action on the
part of the Partnership and no other authorization or consent is required for
the execution and performance hereof;
(c) Deliveries. The Partnership will, promptly after its receipt
thereof, deliver to Investor (i) 20.38% of any additional payment received by
the Partnership from America West pursuant to Section 3 of the Procedures
Agreement, and (ii) copies of any and all documents and notices received by
the Partnership from America West or otherwise in respect of the transactions
contemplated by the Investment Agreement and the Procedures Agreement;
(d) Assignment of Rights. The Partnership hereby assigns to Investor
on a shared basis, subject to performance by Investor of its obligations and
duties hereunder, the rights of the Partnership under the Investment Agreement
and Procedures Agreement, including, without limitation, the right to sue to
enforce any breach thereof; provided, that Investor shall not, without the
prior consent of the Partnership, contact or otherwise deal directly with
America West prior to the Effective Date in connection with the operation of
such Agreements. The Partnership agrees that (i) Investor has the ability to
cause the Partnership to give any notices permitted to be given by it to
America West pursuant to the provisions of the Investment Agreement or the
Procedures Agreement and (ii) all matters which, pursuant to the provisions of
either Agreement, require the approval or consent of the Partnership may not
be approved or consented to unless Investor, in the reasonable exercise of its
own business judgment and any relevant internal, legal or other restrictions
or policies applicable to it, so approves or consents to such matter; and
(e) Public Announcements. The Partnership shall not, without the
prior consent of Fidelity, which consent will not be withheld unreasonably,
issue or consent to the issuance of any press release or other public
announcement which mentions any Fund or Fidelity or Investor or any affiliate
of any of them.
8. Expenses.
(a) Reimbursement of Expenses. Investor shall be entitled to a
reimbursement of its Expenses (as such term is defined in the Limited
Partnership Agreement of the Partnership) incurred in connection with the
transactions contemplated by this Subscription Agreement, the Investment
Agreement and the Procedures Agreement upon presentation to the Partnership
of appropriate documentation, setting forth in reasonable detail the amounts
for which reimbursement is sought and the basis on which the charges were
incurred.
(b) Contribution to Expenses. Investor agrees to pay to the
Partnership, within 15 days after request, 20.38% of the Expenses incurred by
Investor, the Partnership and its partners which are not reimbursed by America
West pursuant to Section 2 of the Procedures Agreement; provided, under no
circumstances will Investor be liable for payment of the Expenses of the
partners or the Partnership incurred in connection with the negotiation and
execution of the Limited Partnership Agreement of the Partnership.
9. Notices
All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage
prepaid) or by prepaid express courier to the parties at the following
addresses or facsimile numbers:
If to Investor: Fidelity Management Trust Company
82 Devonshire Street, MS F7E
Boston, Massachusetts 02109
Attn: Daniel J. Harmetz
Fax Number: (617) 227-2536
with a copy to:
Fidelity Management Trust Company
82 Devonshire Street, MS F7D
Boston, Massachusetts 02109
Attn: Wendy Schnipper Clayton, Esq.
Fax Number: (617) 570-7688
and a copy to:
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Attn: Laura Hodges Taylor, P.C.
Fax Number: (617) 523-1231
If to the Partnership: AmWest Partners, L.P.
201 Main Street, Suite 2420
Fort Worth, Texas 76102
Attention: James J. O'Brien
Fax Number: (817) 871-4010
with a copy to:
Arnold & Porter
1200 New Hampshire Ave., N.W.
Washington, D.C. 20036
Attn: Richard P. Schifter
Fax Number: (202) 872-6720
10. Governing Laws and Venue
This Agreement and the rights and obligations of Investor and the
Partnership hereunder shall be interpreted, construed, and enforced in
accordance with the laws of the State of Texas, without regard to its
conflicts of laws provisions.
11. Miscellaneous
(a) Rules of Construction. The general rule of construction for
interpreting a contract, which provides that the provisions of a contract
should be construed against the party preparing the contract, is waived by
Investor. Investor acknowledges that it was represented by separate legal
counsel in this matter who participated in the preparation of this
Subscription Agreement or it had the opportunity to retain counsel to
participate in the preparation of this Subscription Agreement but chose not to
do so.
(b) Entire Agreement. This Subscription Agreement, including all
exhibits to this Subscription Agreement and, if any, exhibits to such
exhibits, contains the entire agreement among the parties relative to the
matters contained in this Subscription Agreement.
(c) Waiver. No consent or waiver, express or implied, by Investor or
the Partnership to or for any breach or default by the other party in the
performance by such other party of its obligations under this Subscription
Agreement shall be deemed or construed to be a consent or waiver to or of any
other breach or default in the performance by such other party of the same or
any other obligations of such other party under this Subscription Agreement.
Failure on the part of any party to complain of any act or failure to act of
the other party or to declare the other party in default, regardless of how
long such failure continues, shall not constitute a waiver by such party of
its rights hereunder.
(d) Severability. If any provision of this Subscription Agreement or
the application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Subscription Agreement and
the application of such provisions to other persons or circumstances shall not
be affected thereby, and the intent of this Subscription Agreement shall be
enforced to the greatest extent permitted by law.
(e) Benefits and Assignment. Subject to the restrictions on transfers
and encumbrances set forth in this Subscription Agreement, this Subscription
Agreement shall inure to the benefit of and be binding upon the parties and
their respective legal representatives, successors, and assigns. Whenever, in
this Subscription Agreement, a reference to any party is made, such reference
shall be deemed to include a reference to the legal representatives,
successors, and assigns of such party.
(f) Gender, Etc. Unless the context clearly indicates otherwise, the
singular shall include the plural and vice versa. Whenever the masculine,
feminine, or neuter gender is used inappropriately in this Subscription
Agreement, this Subscription Agreement shall be read as if the appropriate
gender was used.
(g) Captions. Captions are included solely for convenience of
reference and if there is any conflict between captions and the text of this
Subscription Agreement, the text shall control.
(h) Execution in Counterparts. This Subscription Agreement may be
executed in multiple counterparts, each of which shall be deemed an original
for all purposes and all of which when taken together shall constitute a
single counterpart instrument. Executed signature pages to any counterpart
instrument may be detached and affixed to a single counterpart, which single
counterpart with multiple executed signature pages affixed thereto constitutes
the original counterpart instrument. All of these counterpart pages shall be
read as though one and they shall have the same force and effect as if all of
the parties had executed a single signature page.
(i) Limitation of Liability. The Partnership acknowledges and agrees
that this Agreement is not executed on behalf of or binding upon any of the
trustees, officers, directors, partners or shareholders of any of the Funds
individually, but is binding only upon the assets and property of the Funds.
With respect to all obligations of each Fund arising out of this Agreement,
the Partnership shall look for payment or satisfaction of any claim solely to
the assets and property of such Fund. The Partnership acknowledges and agrees
that the obligations of each of the Funds hereunder is several and not joint.
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement as of the ___ day of June, 1994.
INVESTOR:
BELMONT FUND, L.P., a Bermuda
Limited Partnership
By: Fidelity Management Trust
Company, pursuant to a power
of attorney for Fidelity
International Services
Limited, Managing General
Partner
By: _________________________
Judy K. Mencher
Associate General Counsel
Investor is a Bermuda limited partnership. The Partnership acknowledges and
agrees that this Agreement is not executed on behalf of or binding upon any of
the trustees, officers, directors, partners or shareholders of Investor
individually, but are binding only upon the assets and property of the
Investor. With respect to all obligations of the Investor arising out of this
Agreement, the Partnership shall look for payment or satisfaction of any claim
solely to the assets and property of the Investor.
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement as of the ___ day of June, 1994.
FIDELITY COPERNICUS FUND, L.P., a
Delaware Limited Partnership
By: Fidelity Copernicus Corp.,
its General Partner
By: _________________________
Judy K. Mencher
Associate General Counsel
Investor is a Delaware limited partnership. The Partnership acknowledges and
agrees that this Agreement is not executed on behalf of or binding upon any of
the trustees, officers, directors, partners or shareholders of Investor
individually, but are binding only upon the assets and property of the
Investor. With respect to all obligations of the Investor arising out of this
Agreement, the Partnership shall look for payment or satisfaction of any claim
solely to the assets and property of the Investor.
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement as of the ___ day of June, 1994.
BELMONT CAPITAL PARTNERS, L.P., a
Massachusetts Limited Partnership
By: Fidelity Capital Corp., its
General Partner
By: _________________________
Judy K. Mencher
Associate
General Counsel
Investor is a
Massachusetts limited partnership. The
Partnership acknowledges and agrees that
this Agreement is not executed on behalf
of or binding upon any of the trustees,
officers, directors, partners or
shareholders of Investor individually, but
are binding only upon the assets and
property of the Investor. With respect to
all obligations of the Investor arising
out of this Agreement, the Partnership
shall look for payment or satisfaction of
any claim solely to the assets and
property of the Investor.
ACCEPTANCE OF SUBSCRIPTION
The Subscription Agreement of the Investor indicated hereinbelow with
respect to the Securities of New America West agreed to be acquired by AmWest
Partners, L.P. is hereby accepted.
Dated: June ___, 1994
AMWEST PARTNERS, L.P.
By: AMWEST GENPAR, INC.,
a Texas corporation
By:
Title: ________________
Name of Investor: Belmont Fund, L.P.; Fidelity
Copernicus Fund, L.P.; Belmont Capital Partners, L.P.
Date of Subscription Agreement: June , 1994
