As filed with the Securities and Exchange Commission on January 25, 2000
Registration No. [ ]
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMTRAN, INC.
(Exact name of registrant as specified in its charter)
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Indiana 6719 35-1617970
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation of Industrial Classification Identification
organization) Code Number) Number)
7337 West Washington Street
Indianapolis, Indiana 46231
(317) 247-4000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
---------------------------
Mr. Kenneth K. Wolff
Chief Financial Officer
Amtran, Inc.
7337 West Washington Street
Indianapolis, Indiana 46231
(317) 247-4000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------------
Copy to:
William P. Rogers, Jr, Esq.
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
(212) 474-1000
---------------------------
Approximate date of commencement of proposed sale of the securities to
the public: As soon as practicable after the effective date of this
Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. __ .....
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. __ .....
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. __ .....
---------------------------
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of each class Amount to be Proposed maximum Proposed maximum aggregate Amount of
of securities to be registered registered offering price per unit offering price registration fee
<S> <C> <C> <C> <C>
10 1/2% Senior Notes due 2004 $75,000,000 100% $75,000,000 $19,800
</TABLE>
<PAGE>
PROSPECTUS
Amtran, Inc.
---------------------------
OFFER TO EXCHANGE
UP TO $75,000,000 PRINCIPAL AMOUNT OUTSTANDING
10 1/2% SENIOR NOTES DUE 2004
FOR
A LIKE PRINCIPAL AMOUNT OF REGISTERED
10 1/2% SENIOR NOTES DUE 2004
The Exchange Offer will expire at midnight, New York
City time on [ ], unless extended.
---------------------------
The terms of the new Exchange Notes are substantially the same as
those of the Outstanding Notes except for certain transfer restrictions and
registration rights that relate only to the Outstanding Notes. Also, if the
exchange offer is not consummated on or prior to [May 19, 2000], the interest
rate borne by the Outstanding Notes will increase by a certain amount until
the exchange offer is consummated. This offer will expire at [ ], New York
City time, on [ ], 2000, unless we extend it. The new Exchange Notes will not
trade on any established exchange. Amtran, Inc. currently has outstanding
$100,000,000 preferred amount of Exchange Notes that were issued under a
previous registration statement.
---------------------------
Please See "Risk Factors" beginning on page 11 for a description of
certain factors that you should consider in connection with the exchange
offer.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
---------------------------
The date of this prospectus is [ ].
<PAGE>
TABLE OF CONTENTS
Page
Where You Can Find More Information................................... 3
Incorporation of Certain Documents by
Reference.......................................................... 3
Disclosure Regarding Forward-Looking
Statements......................................................... 4
Prospectus Summary.................................................... 5
Summary Description of the Exchange Notes............................. 8
Risk Factors.......................................................... 11
The Exchange Offer.................................................... 22
Use of Proceeds....................................................... 29
Capitalization........................................................ 30
Selected Historical Financial Data.................................... 31
Description of Other Principal Indebtedness........................... 34
Description of the Notes.............................................. 35
Book-Entry; Delivery and Form......................................... 66
Certain United States Federal Income
Tax Considerations................................................. 67
Plan of Distribution.................................................. 69
Legal Matters......................................................... 70
Experts............................................................... 70
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WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934 and, therefore, must file periodic reports, proxy statements and
other information with the Commission. In addition, pursuant to the Indenture
and the First Supplemental Indenture covering the Notes, we have agreed to
file with the Commission the annual reports and the information, documents and
other reports otherwise required by Section 13 of the Exchange Act. All such
information is available to the public over the Internet at the SEC's web site
at http://www.sec.gov and may be inspected and copied at the public reference
facilities:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Judiciary Plaza Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, NY 10048 Suite 1400
Chicago, IL 60661-2511
Copies of these documents can also be obtained at prescribed rates by writing
to the Commission, Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549.
This prospectus constitutes a part of a registration statement on Form S-4
filed by Amtran, Inc. with the Commission under the Securities Act. As
permitted by the rules and regulations of the Commission, this prospectus does
not contain all of the information contained in the registration statement and
the exhibits and schedules thereto. Reference is hereby made to the
registration statement and its exhibits and schedules for further information
with respect to Amtran, Inc. and the securities offered through this exchange
offer. Statements contained in this prospectus concerning the provisions of
any documents filed as an exhibit to the registration statement or otherwise
filed with the Commission are not necessarily complete, and in each instance
reference is made to the copy of such document so filed. Each such statement
is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them into this prospectus, which means that:
o incorporated documents are considered part of this prospectus;
o we can disclose important business and financial information about us,
that is not included in or delivered with this prospectus, to you by
referring you to those other documents; and
We incorporate by reference into this prospectus the documents listed
below, as amended and supplemented, and all documents filed by us with the SEC
under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
after the date of this prospectus and prior to the date on which the exchange
offer made hereby is consummated:
o Our Annual Report on Form 10-K for the fiscal year ended December 31,
1998;
o Our Quarterly Report on Form 10-Q for the period ended March 31, 1999;
o Our Quarterly Report on Form 10-Q for the period ended June 30, 1999, as
amended;
o Our Quarterly Report on Form 10-Q for the period ended September 30,
1999; and
o Our Definitive Proxy Statement, dated April 9, 1999.
You can obtain any of the filings incorporated by reference into this
document through us or from the SEC through the SEC's web site or at the
addresses listed above. Documents incorporated by reference into this
prospectus, except for any exhibits to those documents that are not expressly
incorporated by reference into
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those documents, are available from us without charge by requesting them in
writing or by telephone at the following address and telephone number:
Amtran Inc.
7337 West Washington Street
Indianapolis, Indiana 46231
Attention: Kenneth K. Wolff, Chief Financial Officer
Telephone: (317) 247-4000
If you request any incorporated documents from us, we will mail them to you
by first-class mail, or by another equally prompt means, within one business
day after we receive your request. However, in order to obtain timely delivery
of these documents, you must make your request no later then five business
days before the expiration date of the exchange offer.
Unless the context requires otherwise, all references in this document to
"This Prospectus" include all documents incorporated by reference into this
prospectus.
FORWARD-LOOKING STATEMENTS
This prospectus includes and incorporates by reference forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements relate to analyses and other information which are
based on forecasts of future results and estimates of amounts not yet
determinable. These statements also relate to our future prospects,
developments and business strategies.
These forward-looking statements are indentifiable by their use of terms
and phrases such as "anticipate," "believe," "could," "estimate," "expect,"
"intend," "may," "plan," "predict," "project," "will" and similar terms and
phrases, including references to assumptions. These statements are contained
in sections entitled "Summary", "Risk Factors" and other sections of this
prospectus and in the documents incorporated by reference in this prospectus.
Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to be materially
different. Such factors include, but are not limited to, the following:
o economic conditions;
o labor costs;
o aviation fuel costs;
o competitive pressures on pricing;
o weather conditions;
o governmental legislation;
o consumer perceptions of our products;
o demand for air transportation in the markets in which we operate;
o other operational matters discussed in this offering memorandum; and
o other risks and uncertainties listed from time to time in reports we
periodically file with the SEC.
We do not undertake to update our forward-looking statements to reflect
future events or circumstances.
---------------------------
Amtran is an Indiana corporation which was organized in 1984. The Company's
executive offices are located at 7337 West Washington Street, Indianapolis,
Indiana 46231, and its telephone number is (317) 247- 4000. Amtran's common
stock is traded through the facilities of the Nasdaq Stock Market under the
symbol "AMTR."
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PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus
or incorporated by reference into this prospectus. This summary does not
contain all the information that is important to you. We encourage you to read
this entire prospectus including the "Risk Factors" section, and the documents
we incorporate by reference carefully. All references to "Company," "we" or
"our" in this prospectus refer to Amtran, Inc. and its subsidiaries
collectively, unless the context otherwise requires.
The Company
Amtran owns American Trans Air, Inc. ("ATA"), the eleventh largest
passenger airline in the U.S. (based on 1998 revenues) and a leading provider
of airline services in selected market segments. We are also the largest
commercial charter airline in the U.S. and the largest charter provider of
passenger airline services to the U.S. military, in each case based on
revenues. For the nine months ended September 30, 1999 our revenues consisted
of 55.6% scheduled service, 24.4% commercial charter service and 10.6%
military charter service, with the balance derived from related travel
services.
Scheduled Service
We provide scheduled service through ATA to selected destinations primarily
from gateways at Chicago-Midway and Indianapolis, and we also provide
transpacific services between the western U.S. and Hawaii. In the second and
third quarters of 1998, we added scheduled service between Chicago-Midway and
the Dallas-Ft. Worth, Denver, New York-LaGuardia and San Juan. We focus on
routes where we believe we can be a leading provider of non-stop jet service
and target leisure and value-oriented business travelers.
Commercial Charter Service
We are the largest commercial charter airline in the U.S. and provide
services throughout the world, primarily to U.S. and European tour operators.
We seek to maximize the profitability of these operations by leveraging our
leading market position, diverse aircraft fleet and worldwide operating
capability. Our management believes our commercial charter services are a
predictable source of revenues and operating profits. In part, this is because
our commercial charter contracts require tour operators to assume capacity,
yield and fuel price risk, and also because of our ability to re-deploy assets
into favorable markets. Our commercial charter services are marketed and
distributed through a network of domestic and international sales offices.
Military/Government Charter Service
We have provided passenger airline services to the U.S. military since 1983
and are currently the largest charter provider of these services. Our
management believes that because these operations are generally less seasonal
than leisure travel, they have tended to have a stabilizing impact on our
operating margins. The U.S. government awards one year contracts for its
military charter business and pre-negotiates contract prices for each type of
aircraft that a carrier makes available. We believe that our fleet of aircraft
is well suited to the needs of the military for long-range service.
SUMMARY OF TERMS OF THE EXCHANGE OFFER
In the exchange offer we will accept for exchange up to $75,000,000
aggregate principal amount of Outstanding Notes for an equal aggregate
principal amount of Exchange Notes. The Exchange Notes are our obligations
entitled to the benefits of the Indenture, as supplemented, relating to the
Outstanding Notes. The form and terms of the Exchange Notes are the same as
the form of the Outstanding Notes except that the Exchange Notes have been
registered under the Securities Act.
Background................... On December 21, 1999, we completed a
private placement of $75,000,000 aggregate
principal amount of our 10 1/2% Senior Notes
under an Indenture dated July 24, 1997 as
supplemented by the First Supplemental
Indenture, dated December 21, 1999. In
connection with that private placement, we
entered into a registration rights agreement in
which we agreed, among other things, to deliver
this prospectus to you and to complete an
exchange offer.
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Securities Offered........ Up to $75,000,000 aggregate principal amount of
10 1/2% Senior Exchange Notes due August 1, 2004,
which have been registered under the Securities
Act. The terms of the Exchange Notes are
substantially the same as the terms of the
Outstanding Notes except for certain transfer
restrictions and registration rights relating to
the Outstanding Notes and except that, if the
exchange offer is not consummated on or prior to
[May 19, 2000], the interest rate borne by the
Outstanding Notes will increase by a certain
amount until the exchange offer is consummated.
See "Description of the Notes--Registration
Rights for Outstanding Notes."
We currently have outstanding $100,000,000
aggregate principal amount of Exchange Notes that
we issued in 1997. The Exchange Notes offered by
this prospectus are part of the same series of
Exchange Notes that we issued in 1997.
The Exchange Offer........ We are offering to accept for exchange your
unregistered, old Outstanding Notes for our new
Exchange Notes that have been registered under
the Securities Act of 1933. As of the date
hereof, $75,000,000 in aggregate principal amount
of Outstanding Notes are outstanding. On or
promptly after the expiration date we will issue
the Exchange Notes to those of you who hold
Outstanding Notes and wish to tender them. The
issuance of the Exchange Notes is intended to
satisfy our obligation contained in the
registration rights agreement. For procedures on
tendering, see "The Exchange Offer" and
"Description of the Notes--Registration Rights
for Outstanding Notes."
Expiration of the Exchange Midnight, New York City time, on [ ], unless we
Offer..................... extended it. See "The Exchange Offer--Terms of the
Exchange Offer, Period for Tendering Outstanding
Notes."
Tenders; Withdrawal....... You may withdraw your tender of Outstanding Notes
at any time before the offer expires. If for any
reason any Outstanding Notes are not accepted for
exchange, they will be returned as soon as
practicable after the expiration or termination
of the exchange offer.
Conditions to the Exchange The exchange offer is subject to the condition
Offer..................... that it does not violate applicable law or any
applicable interpretation of the staff of the
Commission. There is no guarantee that any such
condition will not occur. You will have certain
rights against us under the registration rights
agreement if we fail to consummate the exchange
offer.
Federal Income Tax The exchange pursuant to the exchange offer should
Considerations............ not be a taxable event for federal income tax
purposes. See "Certain United States Federal
Income Tax Considerations."
Exchange Agent............ First Security Bank, N.A., the Trustee under the
Indenture, is serving as the Exchange Agent in
connection with the exchange offer.
Use of Proceeds........... We will not receive any cash proceeds from the
issuance of the Exchange Notes in connection with
the exchange offer. See "Use of Proceeds" for a
description of the use of proceeds from the
issuance of the Outstanding Notes.
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Consequences If You Do
Not Exchange Your Outstanding Notes that are not tendered in the
Outstanding Notes......... exchange offer or are not accepted for exchange
will continue to accrue interest, but will not
retain any rights under the registration rights
agreement and will bear legends restricting their
transfer. You will not be able to offer or sell the
Outstanding Notes unless:
o pursuant to an exemption from the requirements
of the Securities Act of 1933;
o the old notes are registered under the
Securities Act of 1933; or
o the transaction requires neither such an
exemption nor registration.
We do not currently anticipate that we will
register Outstanding Notes under the Securities
Act. See "Risk Factors--Consequences of Failure to
Exchange and Requirements for Transfer of Exchange
Notes."
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Summary Description of the Exchange Notes
The terms of the Exchange Notes are identical in all material
respects to the terms of the Outstanding Notes, except for certain transfer
restrictions and registration rights relating to the Outstanding Notes and
except that, if an exchange offer with respect to the Exchange Notes is not
consummated by May 19, 2000, 150 days after the Closing Date of the
December 21, 1999 private placement, the rate per annum at which the
Outstanding Notes bear interest will be increased temporarily. See
"Registration Rights for Outstanding Notes."
Holders of Outstanding Notes whose Outstanding Notes are accepted
for exchange will not receive any payment of interest on the Outstanding
Notes to be exchanged instead. Holders will receive a full semi-annual
interest payment on August 1, 2000, which is the next regularly scheduled
interest payment date on the Exchange Notes.
Securities Offered........ Up to $75,000,000 aggregate principal amount of 10
1/2% Senior Exchange Notes due August 1, 2004,
which have been registered under the Securities
Act, issued by the Company.
Interest.................. Interest on the Notes is payable semiannually in
cash on February 1 and August 1.
Optional Redemption On or after August 1, 2002, we may redeem some or
by the Company............ all of the Notes at the redemption prices listed
in the section entitled "Description of the
Notes--Optional Redemption." Prior to such date,
we may not redeem the Notes, except as described
in the following paragraph.
At any time prior to August 1, 2002, we may redeem
up to 35% of the aggregate principal amount of
the Notes with the proceeds of certain sales of
common stock at a redemption price equal to
110.50% of the principal amount thereof, plus
accrued interest, so long as at least 65% of the
aggregate amount of the Notes remains
outstanding after each such redemption.
Ranking................... The Exchange Notes will be unsecured and:
o will rank equally with all of our unsecured,
unsubordinated indebtedness existing or created
in the future; and
o will be effectively subordinated to all of our
obligations under secured indebtedness to the
extent of such security and will be senior to
all of our subordinated indebtedness created in
the future.
At September 30, 1999, on a pro forma basis after
giving effect to the December 21, 1999 private
placement, on a consolidated basis, we would
have had outstanding approximately $359.4
million of indebtedness, approximately $55.0
million of which would have been secured. See
"Description of the Notes--Ranking."
Guarantee................. All payments with respect to the Notes (including
principal and interest) are unconditionally
guaranteed on an unsecured unsubordinated basis,
jointly and severally, by each of the following
subsidiaries (the Guarantors):
o American Trans Air, Inc.;
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o Ambassadair Travel Club, Inc.;
o ATA Leisure Corp. (formerly ATA Vacations,
Inc.);
o Amber Travel, Inc.;
o American Trans Air Training Corporation;
o American Trans Air Execujet, Inc.;
o Amber Air Freight Corporation; and
o Chicago Express Airlines, Inc.
Such guarantees:
o will rank equally with all existing and future
unsecured unsubordinated indebtedness of the
Guarantors;
o will be effectively subordinated to secured
indebtedness of the Guarantors to the extent of
such security; and
o will be senior in right of payment to all future
subordinated indebtedness of the Guarantors.
At September 30, 1999, on a pro forma basis after
giving effect to the December 21, 1999 private
placement, the Guarantors (on a consolidated
basis excluding indebtedness owed to us and our
indebtedness) would have had approximately
$359.4 million of indebtedness outstanding
(other than the Guarantees), $55.0 million of
which would have been secured indebtedness.
Certain Covenants......... The Indenture, as supplemented, contains certain
covenants for your benefit, including, among other
things,
o covenants limiting the incurrence of
indebtedness;
o restricted payments;
o dividend and other payment restrictions
affecting restricted subsidiaries;
o the issuance and sale of capital stock of
restricted subsidiaries;
o the issuance of guarantees by restricted
subsidiaries;
o transactions with shareholders and affiliates;
o liens;
o sale-leaseback transactions;
o asset sales; and
o certain mergers and consolidations.
See "Description of the Notes--Covenants."
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Change of Control......... Upon a change of control you will have the right,
subject to certain conditions, to require us to
purchase your Notes at a purchase price equal to
101% of the principal amount plus accrued and
unpaid interest, if any, to the date of purchase.
There can be no assurance that we will have the
financial resources necessary to purchase the
Notes upon a change of control. See "Description
of the Notes--Repurchase of Notes upon a Change
of Control."
Registration Rights....... We are obligated to consummate this exchange offer
pursuant to an effective registration statement
or cause the Outstanding Notes to be registered
under the Securities Act pursuant to a shelf
registration statement. If such exchange offer
is not filed, has not been declared effective,
or is not consummated or such shelf registration
statement is not filed or declared effective
within the time periods specified in
"Description of the Notes--Registration Rights,"
you will be entitled to receive additional
interest on the Outstanding Notes until such
exchange offer is entered into or such shelf
registration statement is declared effective. If
you choose not to participate in the exchange
offer or shelf registration, you may thereafter
hold a less liquid security. See "Risk
Factors--Lack of Public Market for the Notes"
and "Description of the Notes--Registration
Rights for Outstanding Notes."
Book-Entry; Delivery The Exchange Notes will be represented by one or
and Form.................. more permanent global Exchange Notes in
definitive, fully registered form deposited with
a custodian for, and registered in the name of a
nominee of The Depository Trust Company. See
"Description of the Notes--Book- Entry; Delivery
and Form."
USE OF PROCEEDS
We will receive no cash proceeds from the exchange offer.
The exchange offer is intended to satisfy certain of our obligations
under the registration rights agreement. Your Outstanding Notes tendered in
exchange for Exchange Notes will be retired and canceled and cannot be
reissued. Accordingly, the issuance of the Exchange Notes will not result in
any increase or decrease in the indebtedness of the Company.
The net proceeds from the December 21, 1999 private placement were
approximately $73.0 million. These proceeds were used by the Company for
general corporate purposes, including to fund working capital requirements and
fleet acquisitions and improvements.
RISK FACTORS
For a description of certain factors that should be considered by
Holders who tender their Outstanding Notes in the exchange offer, see "Risk
Factors" beginning on page 12.
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RISK FACTORS
You should carefully consider the risks described below, as well as
other information included in this prospectus, when evaluating your
participation in the exchange offer. This list may not be exhaustive, and
these or other factors could adversely impact our ability to service our
indebtedness.
Risk Factors Relating to Amtran
Our high proportion of debt compared to our equity capital may
impair our flexibility.
We have a higher proportion of debt compared to our equity capital
than some of our principal competitors. We need substantial cash resources to
meet scheduled debt and lease payments and to finance day-to-day operations.
As a result, we may be less able than some of our competitors to withstand a
prolonged recession in the airline industry or respond to changing economic
and competitive conditions. We may be restricted in our ability to exploit new
business opportunities. In addition, our ability to obtain additional
financing in the future for working capital, capital expenditures,
acquisitions or other purposes may be impaired.
As of September 30, 1999, on a pro forma consolidated basis after
giving effect to the private placement, we had:
o $182.0 million of cash, cash equivalents and short-term
investments;
o $359.4 million of indebtedness outstanding (approximately $55.0
million of which was secured); and
o $148.8 million of shareholders' equity.
As a result, at that date, total consolidated debt was 70.7% of total
capitalization, which represents significant financial leverage, even in
the highly leveraged airline industry. In addition, ATA has substantial
obligations under operating leases for 25 aircraft, which are not recorded
as indebtedness and expects to lease additional aircraft in the future.
On a pro forma basis, after giving effect to the Original Offering
as if it had occurred at the beginning of the period, we would have had
interest expense of approximately:
o $20.7 million for the year ended December 31, 1998; and
o $21.3 million for the nine months ended September 30, 1999.
This would have resulted in an EBITDA to interest expense ratio
of approximately:
o 7.9 times for the year ended December 31, 1998; and
o 7.9 times for the nine months ended September 30, 1999.
Similarly, the ratio of EBITDAR to the sum of interest (net of
capitalized interest) plus aircraft rentals would have been:
o 2.9 for the year ended December 31, 1998; and
o 3.3 for the nine months ended September 30, 1999.
Our ability to satisfy our obligations will be dependent upon our future
performance, which is subject to general economic conditions and to
financial, business and other factors, including factors beyond our
control. Our operating results and cash flow could be adversely affected by
such factors as price competition, increases in fuel costs, a downturn in
general economic conditions and adverse regulatory changes.
The degree to which we are leveraged could have important
consequences to you, including the following:
(i) our ability to obtain additional financing in the future for
working capital, capital expenditures, acquisitions or other purposes may
be impaired;
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(ii) our degree of leverage and related debt service obligations, as
well as our obligations under operating leases for aircraft, may make us
more vulnerable than some of our competitors in a prolonged economic
downturn; and
(iii) our financial position may restrict our ability to exploit new
business opportunities and limit our flexibility to respond to changing
business conditions. Our competitive positions may also be affected by
the fact that we may be more highly leveraged than some of our
competitors.
We generally operate with a working capital deficit and we may
require additional financing to meet our obligations.
Although we, like most other airlines, generally operate with a
working capital deficit, we have met our obligations as they have become due.
In order to meet short-term cash needs, ATA maintains bank credit facilities.
At September 30, 1999, our current assets were $208.3 million, and our current
liabilities were $232.9 million.
In addition, we require significant levels of capital investment for
aircraft, engine and airframe maintenance and acquisition to maintain our
competitive position and to expand our operations. For the year ended December
31, 1999, we expect that:
o capital expenditures for scheduled maintenance will total
approximately $110.4 million;
o capital expenditures for acquisitions of additional aircraft
and renovations of both the Chicago-Midway terminal and hanger
and the Indianapolis maintenance and operations center will
total approximately $154.4 million; and
o additional capital expenditures will total approximately $11.5
million.
We also generally expect to refinance our long-term debt at or prior
to its maturity.
We may seek to supplement our current sources of financing with
other sources of long-term financing, including obtaining vendor financing,
entering into sale-leaseback transactions and making public and private debt
offerings. We may also seek additional equity financing. We cannot assure you
that any such financing would be available on satisfactory terms.
Our earnings have been volatile.
For the year ended December 31,1996, we incurred a net loss of $26.7
million. For the years ended December 31, 1997 and 1998, we had net income of
$1.6 million and $40.1 million, respectively. For the nine months ended
September 30, 1999, we had net income of $46.9 million. Although we recorded
net income in 1997 and 1998 and for the nine months ended September 30, 1999,
we cannot assure you that this profitability will continue in future years.
Moreover, because of the cyclicality of the airline industry, our results of
operations may continue to be volatile.
Among other things, our earnings are significantly affected by
changes in fuel costs. These costs have been escalating during the first nine
months of 1999. See "Risk Factors Relating to the Airline
Industry--Significant additional increases in the cost of aircraft fuel could
adversely impact our operating results."
We may pursue strategic alternatives that result in a change of
control, and we may not be able to satisfy all of
our obligations upon the occurrence of a chance of control.
We have previously considered possible business combinations with
air carriers and others, and it is possible that in the future we will
enter into a transaction that will result in a change of control of Amtran.
All borrowings outstanding under the bank credit facilities maintained by
ATA, which are guaranteed by Amtran, and all amounts due under the Exchange
10 1/2% senior notes due 2004 and the 9 5/8% senior notes due 2005 issued
by Amtran may be accelerated upon a change of control of Amtran. See
"--Risk Factors Relating to the Notes--Payment Upon a Change of Control."
We cannot assure you that we would be able to satisfy all of our
obligations under the bank credit facilities and the Exchange Notes upon
acceleration. The failure to satisfy our obligations would materially
adversely affect our business, operations and financial results.
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Our existing financing agreements and operating leases contain
restrictive covenants that may limit our flexibility.
Our existing debt financing agreements and our operating leases
relating to some of our aircraft contain restrictive covenants that impose
significant operating and financial restrictions on us. For example, the bank
credit facilities maintained by ATA and the indenture relating to the Exchange
Notes prohibit or restrict our ability to:
o incur additional indebtedness;
o create material liens on our assets;
o sell assets or engage in mergers or consolidations;
o redeem or repurchase outstanding debt;
o make specified investments;
o pay cash dividends; and
o engage in other significant transactions.
The indenture relating to our 9 5/8% senior notes due 2005 contains similar
restrictions. In addition, our financing agreements and our operating
leases require us to maintain compliance with specified financial ratios
and other financial and operating tests.
These restrictions and requirements may limit our financial and
operating flexibility. In addition, if we fail to comply with these
restrictions or to satisfy these requirements, our obligations under our debt
and operating leases may be accelerated. We cannot assure you that we would be
able to satisfy all of these obligations upon acceleration. The failure to
satisfy these obligations would materially adversely affect our business,
operations and financial results.
Compliance with Department of Transportation regulations could reduce our
liquidity.
Under current Department of Transportation regulations regarding
charter transportation originating in the U.S., all charter airline tickets
must generally be paid for in cash and all funds received from the sale of
charter seats and, in some cases, the costs of land arrangements, must be put
in escrow by the tour operator or protected by a surety bond satisfying
certain prescribed standards. Currently, we provide a third-party bond that is
unlimited in amount to satisfy our obligations under these regulations. Under
the terms of our bonding arrangements, the issuer of the bond has the right to
terminate the bond at any time on 30 days' notice. We provide a $1.5 million
letter of credit to secure our potential obligations to the issuer of the
bond. If the bond were to be materially limited or canceled, we, like all
other U.S. charter airlines, would be required to escrow funds to comply with
the Department of Transportation regulations. Compliance with these
regulations would reduce our liquidity and require us to fund higher levels of
working capital range up to $16.9 million based on 1998's peak pre-paid
bookings and up to $32.0 million based on peak pre-paid bookings for the first
nine months of 1999.
We may incur substantial losses in the event of an aircraft accident.
We may incur substantial losses in the event of an aircraft
accident. These losses may include the repair or replacement of a damaged
aircraft, and the consequent temporary or permanent loss of the aircraft from
service, as well as claims of injured passengers and other persons.
We are required by the Department of Transportation to carry
liability insurance on each of our aircraft. We maintain public liability
insurance in the amount of $1.5 billion. Although we believe our insurance
coverage is adequate, we cannot assure you that the amount of our insurance
coverage will not be changed or that we will not be forced to bear substantial
losses from accidents. Substantial claims resulting from an accident could
have a material adverse effect on our business, operations and financial
results and could seriously inhibit passenger acceptance of our services.
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Customers
Our customers may cancel or default on their contracts with us.
Customers who have contracted with us may cancel or default on their
contracts, and we may not be able to obtain other business to cover the
resulting loss in revenues. If customers with large contracts cancel or
default and we are not able to obtain other businesses, our financial position
could be materially adversely impacted.
Our largest customer during each of the last three years was the
U.S. military, which accounted for 11.2% of our total operating revenues in
1996, 16.8% of our total operating revenues in 1997 and 13.3% of our total
operating revenues in 1998. We expect that during 1999 the U.S. military will
continue to be our largest customer and will account for approximately 11.4%
of operating revenues.
In 1998, our five largest non-military customers accounted for
approximately 14.4% of total operating revenues, and our ten largest
non-military customers accounted for approximately 17.5% of total operating
revenues. No single non-military customer accounted for more than 10% of total
operating revenues during this period.
Effects of Seasonality of Business on the Company
Our airline business is significantly affected by seasonal
factors, and our results of operations for any one quarter are
not necessarily indicative of our annual results of operations.
Our airline businesses are significantly affected by seasonal
factors. Historically, we have experienced reduced demand during the fourth
quarter as demand for leisure airline services during this period is lower
relative to other times of the year. Our results of operations for any one
quarter are not necessarily indicative of our annual results of operations.
In 1998 and 1999, our results for the first three quarters were
significantly stronger than we have experienced in any comparable first three
quarters of any prior year. Also in 1998, we experienced our first profitable
fourth quarter since becoming a public company in 1993. We cannot assure you
that the level of profitability achieved in 1998 and for the nine months ended
September 30, l999 will be maintained in subsequent years.
Employee Relations
Many of our employees are represented by unions, and a
prolonged dispute with our employees could
have an adverse impact on our operations.
Our flight attendants are represented by the Association of Flight
Attendants and our cockpit crews are represented by the Air Line Pilots
Association. A prolonged dispute with our employees who are represented by
either of these unions, or any sizable number of our employees, could have an
adverse impact on our operations.
Our current collective bargaining agreement with the Association of
Flight Attendants became subject to amendment, but did not expire, in December
1998. Our current collective bargaining agreement with the Air Line Pilots
Association will be subject to amendment, but will not expire, in September
2000. We commenced negotiations with the Association of Flight Attendants in
the third quarter of 1998 to amend our existing collective bargaining
agreement, but we cannot assure you that there will not be work stoppages or
other disruptions.
Our flight dispatchers elected the Transport Workers Union to
represent them in October 1999. Due to the small number of our dispatchers,
the election is expected to have a minimal impact on our operations.
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Reliance on Travel Agents and Tour Operators for Ticket Sales
Our revenues could be adversely impacted by our relationship with
travel agents and tour operators.
Our revenues could be adversely impacted if travel agents and tour
operators elect to favor other airlines or to disfavor us. Our relationship
with travel agents and tour operators may be affected by:
o the size of override commissions offered by other airlines;
o changes in our arrangements with other distributors of airline
tickets; and
o the introduction of new methods of selling tickets.
In 1998, approximately 68% of our revenues were derived from tickets
sold by travel agents or tour operators, and, in 1997, approximately 71% of
our revenues were derived from tickets sold by travel agents or tour
operators. Although we will continue to strive to offer competitive products
to travel agencies and tour operators, we cannot assure you that we will be
able to maintain favorable relationships with these ticket sellers.
Risk Factors Relating to the Airline Industry
Because the airline industry is characterized by low gross
profit margins and high fixed costs, a minor shortfall
from expected revenue could have a significant impact on earnings.
The airline industry as a whole and scheduled service in particular
are characterized by low gross profit margins and high fixed costs. The costs
of operating each flight do not vary significantly with the number of
passengers carried and, therefore, a relatively small change in the number of
passengers or in fare pricing or traffic mix could, in the aggregate, have a
significant effect on operating and financial results. Accordingly, a minor
shortfall from expected revenue levels could have a significant impact on
earnings.
Our products and services face varying degrees of competition.
Competition for Scheduled Services. In scheduled service, we compete
against both the large U.S. scheduled service airlines and, from time to time,
against smaller regional or start-up airlines. Competition is generally based
on price, schedule, quality of service and convenience. All of the major U.S.
scheduled airlines are larger than we are, and most of them have greater
financial resources than we do. Where we seek to expand our service by adding
routes or frequency, competing airlines may respond with intense price
competition. In addition, when other airlines seek to establish a presence
over new routes, they may engage in significant price discounting. Because of
our size and financial resources relative to the major airlines, we are less
able to absorb losses from these activities than many of our competitors.
Competition for Commercial Charter Services. In commercial charger
service, we compete against both the major U.S. scheduled airlines and smaller
U.S. charter airlines, including Sun Country and Miami Air. We also compete
against several European and Mexican charter and scheduled airlines, some of
which are larger than we are and have substantially greater financial
resources than we do.
The scheduled carriers compete for leisure travel customers with our
commercial charter operations in a variety of ways, including by:
o wholesaling discounted seats on scheduled flights to tour
operators;
o promoting packaged tours to travel agents for sale to retail
customers; and
o selling discounted, excursion airfare-only products to the
public.
As a result, all charter airlines, including ATA, generally compete for
customers against the lowest revenue-generating seats of the scheduled
airlines. During periods of dramatic rate cuts by other scheduled airlines,
we are forced to respond competitively to these deeply discounted prices.
We also compete directly against other charter airlines. In the
U.S., these charter airlines are smaller in size than we are. In Europe,
several charter airlines are as large or larger than we are. As a result, in
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addition to their greater access to financial resources, these charter
airlines may have greater distribution capabilities, including, in some cases,
exclusive or preferential relationships with affiliated tour operators.
Competition for Military and other Government Charter Services. We
generally compete for military and other government charters with primarily
smaller U.S. airlines. The allocation of U.S. military air transportation
contracts is based upon the number and type of aircraft a carrier, alone or
through a teaming arrangement, makes available for use to the military. The
formation of competing teaming arrangements that have larger partners than
those in which we participate, an increase by other air carriers in their
commitment of aircraft to the military or the withdrawal of our current
partners or a change in the manner of awarding future contracts could
adversely affect our U.S. military charter business.
Significant additional increases in the cost of
aircraft fuel could adversely impact our operating results.
Fuel costs are a significant portion of our operating costs,
comprising approximately 16.3% of our operating costs in 1998 and
approximately 15.9% of our operating costs in the first nine months of 1999.
In the first nine months of 1999 our monthly average fuel cost has risen
approximately 45.2% and over the subsequent two months, fuel costs have risen
an additional 5.3%. If fuel prices continue to rise significantly, we would
expect to suffer a significant adverse impact on our operating results,
particularly for our scheduled service and our charter contracts that do not
contain fuel cost escalation provisions. In addition, substantial increases in
fuel costs and any resulting increase in air fares would likely cause a
reduction in leisure travel or the cancelation or renegotiation of previously
booked commitments from tour operators.
Fuel prices are affected by, among other factors, political and
economic influences that we cannot control. In the event of a fuel supply
shortage resulting from a disruption of oil imports or other events, higher
fuel prices or the curtailment of scheduled service could result.
We have worked to reduce some of the risks associated with a rise in
fuel costs. In 1998, approximately 45.0% of our total operating revenues were
derived from contracts that enable us to pass through increases in fuel costs,
including contracts with the U.S. military, and, in the first nine months of
1999, approximately 36.0% of our total operating revenues were derived from
these types of contracts. We are, however, exposed to increases in fuel costs
that occur with 14 days of flight time, to most increases associated with our
scheduled service and to increases affecting contracts that do not include
fuel cost escalation provisions.
The profitability of our operations is influenced by economic conditions
as demand for leisure travel diminishes during economic downturns.
The profitability of our operations is influenced by the condition
of the U.S. and European economies, including fluctuations in currency
exchange rates, that may impact the demand for leisure travel and our
competitive pricing position. The majority of our charter and scheduled
airline business, other than military, is leisure travel. Because leisure
travel is discretionary, we have historically tended to experience somewhat
weaker financial results during economic downturns and other events affecting
international leisure travel, such as the Persian Gulf War. Nevertheless, our
performance during these periods have been significantly better than that of
the U.S. airline industry as a whole.
The airline industry is heavily regulated, and changes in our
governmental authorizations or certificates, or changes in governmental
regulations, could adversely impact our business.
We are subject to a wide range of governmental regulation, including
regulation by the Department of Transportation and the Federal Aviation
Administration. A modification, suspension or revocation of any of our
Department of Transportation or Federal Aviation Administration authorizations
or certificates could adversely impact our business.
The Department of Transportation principally regulates economic
matters affecting air service, including:
o air carrier certification and fitness;
o insurance;
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o leasing arrangements;
o allocation of route rights and authorization of proposed
scheduled and charter operations;
o allocation of landing slots and departure slots;
o consumer protection; and
o competitive practices.
The Federal Aviation Administration primarily regulates flight operations,
especially matters affecting air safety, including airworthiness
requirements for each type of aircraft and pilot and crew certification.
Under the Airport Noise and Capacity Act of 1990 and related Federal
Aviation Administration regulations, our aircraft must comply with specified
Stage 3 noise restrictions by specified deadlines. The regulations required
that we achieve a 75% Stage 3 fleet by December 31, 1998, and will prohibit us
from operating any Stage 2 aircraft after December 31, 1999. As of December
31, 1998, 83.3% of our fleet met Stage 3 requirements. We expect to meet
future Stage 3 requirements through Boeing 727-200 hushkit modifications,
combined with additional future deliveries of Stage 3 aircraft. We believe we
are in compliance with all requirements necessary to maintain in good standing
our operating authority granted by the Department of Transportation and our
air carrier operating certificate issued by the Federal Aviation
Administration.
The Federal Aviation Administration has issued a series of
airworthiness directives under its aging aircraft program. These directives
are applicable to our Lockheed L-1011 and Boeing 727-200 aircraft. We do not
currently expect that the cost of compliance with these directives will be
material.
Changes in governmental regulation could also adversely impact our
business. In recent years, for example, the Federal Aviation Administration
has issued or proposed mandates relating to, among other things:
o collision avoidance systems;
o airborne windshear avoidance systems;
o noise abatement; and
o increased inspections and maintenance procedures.
We expect to incur expenses as we try to comply with changes in
Federal Aviation Administration regulations, particularly those relating to
noise and aging aircraft. The Federal Aviation Administration requires each
carrier to obtain an operating certificate and operations specifications
authorizing the carrier to fly to specific airports using specified equipment.
Several aspects of airline operations are subject to regulation or
oversight by federal agencies other than the Department of Transportation and
the Federal Aviation Administration. For example, the U.S. Postal Service has
jurisdiction over certain aspects of the transportation of mail and related
services that we provide through our cargo affiliate. Labor relations in the
air transportation industry are generally regulated under the Railway Labor
Act, which vests in the National Mediation Board regulatory powers with
respect to disputes between airlines and labor unions arising under collective
bargaining agreements.
We are also subject to the jurisdiction of the Federal
Communications Commission regarding the use of radio facilities. In addition,
we are subject to regulation on international flights by the Commerce
Department, the Customs Service, the Immigration and Naturalization Service
and the Animal and Plant Health Inspection Service of the Department of
Agriculture. Also, while our aircraft are in foreign countries, we must comply
with the requirements of similar authorities in those countries. We are also
subject to compliance with standards for aircraft exhaust emissions
promulgated by the Environmental Protection Agency and with regulations
adopted by various local authorities that operate the airports we serve
throughout our route network, including aircraft noise regulations and
curfews. The Commerce Department also regulates the export and re-export of
our U.S. manufactured aircraft and equipment. While we intend
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to maintain all appropriate government licenses and to comply with all
appropriate standards, we cannot assure you that we will be successful.
In addition to various federal regulations, local governments and
authorities in certain markets have adopted regulations governing various
aspects of aircraft operations, including noise abatement, curfews and use of
airport facilities. Many U.S. airports have adopted or are considering
adopting a passenger facility charge of up to $3.00 generally payable by each
passenger departing from the airport. This charge must be collected from
passengers by transporting air carriers and must be remitted to the applicable
airport authority. Airport operators must obtain approval of the Federal
Aviation Administration before they may implement a passenger facility charge.
The $3.00 maximum on passenger facility charges must be raised if Congress
enacts an amendment to the legislation authorizing these charges.
We are subject to biennial inspections by the Department of Defense
as a condition of retaining our eligibility to perform military charter
flights. The last such inspection was completed in September of 1999. As a
result of our military business, we have been required from time to time to
meet operational standards beyond those normally required by the Department of
Transportation, the Federal Aviation Administration and other government
agencies.
At our aircraft line maintenance facilities, we use materials that
are regulated as hazardous under federal, state and local laws. We are
required to maintain programs to protect the safety of our employees who use
these materials and to manage and dispose of any waste generated by the use of
these materials in compliance with these laws. More generally, we are also
subject at these facilities to federal, state and local regulations relating
to protection of the environment and to discharge of materials in the
environment. We do not expect that the costs associated with ongoing
compliance with any of these regulations will have a material impact upon our
capital expenditures, earnings, or competitive position. Additional laws and
regulations have been proposed from time to time that could significantly
increase the cost of airline operations by, for instance, imposing additional
requirements or restrictions or operations. In addition, laws and regulations
have been considered from time to time that would prohibit or restrict the
ownership and/or transfer of airline routes or takeoff and landing slots.
Based upon bilateral aviation agreements between the U.S. and other
nations, and, in the absence of such agreements, comity and reciprocity
principles, we, as a charter carrier, are generally not restricted as to the
frequency of our flights to and from most foreign destinations. However, these
agreements generally restrict us to the carriage of passengers and cargo on
flights which either originate in the U.S. and terminate in a single foreign
nation or which originate in a single foreign nation and terminate in the U.S.
Proposals for any additional charter service must generally be specifically
approved by the civil aeronautics authorities in the relevant countries.
Approval of these requests is typically based on considerations of comity and
reciprocity and cannot be guaranteed.
Risk Factors Relating to the Notes
Your Exchange Notes will be effectively subordinated to secured obligations
of our subsidiaries.
Claims of secured creditors of our subsidiaries have priority to
the extent of the security interests granted in the assets of those
subsidiaries over our claims and claims of the Holders of our indebtedness,
including your Exchange Notes. ATA is presently the borrower under a $100.0
million secured revolving credit facility, which provides for a $100.0
million (including up to $50.0 million for stand-by letters of credit)
revolving line of credit for general working capital purposes. Amounts owed
under our bank credit facility are secured by a first priority perfected
security interest in certain aircraft and related engines. Accordingly, the
lenders under our bank credit facility have priority over your claims and
claims of other Holders of the Exchange Notes with respect to, and to the
extent of, the pledged assets. Thus, the Exchange Notes are effectively
subordinated to such secured indebtedness, and to any other secured
indebtedness, of our subsidiaries.
In addition the Exchange Notes will be effectively subordinated to
the claims of creditors of any of our subsidiaries that are not Guarantors.
We may be unable to purchase your Notes upon a change of control.
Upon the occurrence of a change of control, you may require us to
repurchase all or a portion of your Exchange Notes at 101% of the principal
amount of the Notes, together with accrued and unpaid interest to
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the date of repurchase. If a change of control were to occur, we may not have
the financial resources to repay the Notes, our credit facilities and any
other indebtedness that would become payable upon the occurrence of such
change of control. The "Repurchase of Notes upon a Change of Control" covenant
requiring us to repurchase the Notes will, unless consents are obtained,
require us to repay all indebtedness then outstanding in the event of a change
of control. There can be no assurance that we will have sufficient funds
available at the time of any change of control to make any debt payment
(including repurchase of Notes) required by this covenant. See "Description of
the Notes-Repurchase of Notes upon a Change of Control" and "Description of
the New Credit Facility."
The Notes and the Note Guarantees are subject to fraudulent transfer laws.
Under federal or state fraudulent transfer laws, if a court were to
find, in a lawsuit by an unpaid creditor or a representative of creditors, a
trustee in bankruptcy or a debtor-in-possession, that we issued the Notes with
the intent to hinder, delay or defraud present or future creditors, or
received less than a reasonably equivalent value or fair consideration for any
such indebtedness, and at the time of such incurrence:
o were insolvent;
o were rendered insolvent by reason of such incurrence;
o were engaged or about to engage in a business or transaction
for which its remaining assets constituted unreasonably small
capital to carry on its business; or
o intended to incur, or believed or reasonably should have
believed that we would incur, debts beyond our ability to pay
as such debts matured,
such court could avoid our obligations to you under the Notes, subordinate
our obligations to you to all other indebtedness or take other action
detrimental to you. In that event, there can be no assurance that any
repayment of principal and accrued interest on the Notes could ever be
recovered by you. Any Guarantee may also be subject to challenge under
fraudulent transfer laws and, in any case, will be limited to amounts that
any such Guarantor can guarantee without violating such laws. See
"Description of the Notes-Guarantee."
There is no public market for the Notes
We are obligated to complete this exchange offer for the Notes or to
register the Notes under the Securities Act prior to May 19, 2000, 150 days
after the Closing Date of the December 21, 1999 private placement. However,
there can be no assurance that such exchange or registration will occur in the
required time period. The Securities and Exchange Commission (the
"Commission") has broad discretion to determine whether any registration
statement will be declared effective and may delay or deny effectiveness of
any such registration statement filed by us for a variety of reasons. Failure
to have the registration statement declared effective could adversely affect
the liquidity and price of the Notes. See "Description of the Notes" and
"Transfer Restrictions."
Exchange Offer Procedures
Issuance of the Exchange Notes to you in exchange for your
Outstanding Notes pursuant to the exchange offer will be made only after our
timely receipt of Outstanding Notes, a properly completed and duly executed
Letter of Transmittal or an Agent's Message (as defined herein) in lieu
thereof and all other required documents. Therefore, if you desire to tender
your Outstanding Notes in exchange for Exchange Notes you should allow
sufficient time to ensure timely delivery. We are not required to give
notification of defects or irregularities with respect to the tenders of
Outstanding Notes for exchange. Outstanding Notes that are not tendered or are
tendered but not accepted will, following the consummation of the exchange
offer, continue to be subject to the existing restrictions on transfer
thereof. See "The Exchange Offer."
Consequences of Failure to Exchange and Requirements
for Transfer of Exchange Notes
Holders of Outstanding Notes who do not exchange them for Exchange
Notes in the exchange offer will continue to be subject to the provisions in
the Indenture regarding transfer and exchange of the Outstanding Notes and the
restrictions on transfer of such Outstanding Notes as set forth in the legend
thereon as a consequence of the issuance of the Outstanding Notes pursuant to
exemptions from, or in
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transactions not subject to, the registration requirements of the
Securities Act and applicable state securities laws.
In general, the Outstanding Notes may not be offered or sold, unless
registered under the Securities Act, except pursuant to an exemption from, or
in a transaction not subject to, the Securities Act and applicable state
securities laws. We do not currently anticipate that we will register
Outstanding Notes under the Securities Act.
Based on interpretations by the staff of the Commission, as set
forth in no-action letters issued to third parties, we believe that Exchange
Notes issued in the exchange offer in exchange for Outstanding Notes may be
offered for resale, resold or otherwise transferred by Holders thereof (other
than any such Holder which is an "affiliate" of the Company within the meaning
of Rule 405 under the Securities Act) without compliance with the registration
and prospectus delivery provisions of the Securities Act, if Exchange Notes
are acquired in the ordinary course of the Holders' business and such Holders
have no arrangement with any person to participate in the distribution of such
Exchange Notes.
However, the Company does not intend to request the Commission to
consider, and the Commission has not considered, the exchange offer in the
context of a no-action letter and there can be no assurance that the staff of
the Commission would make a similar determination with respect to the exchange
offer as in such other circumstances.
Each Holder, other than a broker-dealer, must acknowledge that:
(i) the Exchange Notes received by such Holder will be acquired in
the ordinary course of its business;
(ii) at the time of the consummation of the exchange offer such
Holder will have not engaged in, and does not intend to engage in, a
distribution of Exchange Notes and has no arrangement or understanding to
participate in a distribution of Exchange Notes; and
(iii) such Holder is not an affiliate of the Company within the
meaning of Rule 405 of the Securities Act or if it is such an affiliate,
that it will comply with the registration and prospectus delivery
requirements of the Securities Act, to the extent applicable.
If any Holder is an affiliate of the Company, is engaged in or
intends to engage in or has any arrangement or understanding with respect to
the distribution of the Exchange Notes to be acquired pursuant to the exchange
offer, such Holder
(i) could not rely on the applicable interpretations of the staff of
the Commission; and
(ii) must comply with the registration and prospectus delivery
requirement of the Securities Act in connection with any resale
transaction.
Each broker-dealer that receives Exchange Notes for its own account
in the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
This prospectus, as it may be amended or supplemented from time to
time, may be used by a broker-dealer in connection with resales of Exchange
Notes received in exchange for Outstanding Notes, where such Outstanding Notes
were acquired by such broker-dealer as a result of market-making activities or
other trading activities. We have agreed that, for a period of 180 days after
the expiration date, it will make this prospectus available to any
broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
However, to comply with state securities laws, the Exchange Notes
may not be offered or sold in any state unless they have been registered or
qualified for sale in such state or an exemption from registration or
qualification is available and is complied with. The offer and sale of the
Exchange Notes to "qualified institutional buyers" (as such term is defined
under Rule 144A of the Securities Act) is generally exempt from registration
or qualification under state securities laws. The Company currently does not
intend to register or qualify the sale of the Exchange Notes in any state
where an exemption from registration or
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qualification is required and not available. See "The Exchange
Offer--Consequences of Failure to Exchange and Requirements for Transfer for
Exchange Notes."
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THE EXCHANGE OFFER
Terms of the Exchange Offer; Period for Tendering Outstanding Notes
Subject to the terms and conditions in this prospectus and in the
accompanying Letter of Transmittal, we will exchange unregistered Outstanding
Notes properly tendered on before the expiration date and not withdrawn for
registered Exchange Notes. The expiration date is midnight, New York City
time, on [ ] unless we extend it.
As of the date of this prospectus, $75,000,000 aggregate principal
amount of the Outstanding Notes is outstanding. This prospectus, together with
the Letter of Transmittal, is first being sent on or about [ ], to all Holders
of Outstanding Notes known to us. Our obligation to accept Outstanding Notes
for exchange is subject to certain conditions as set forth below under
"--Certain Conditions to the Exchange Offer."
We may, at any time or from time to time, extend the expiration
date, by giving oral or written notice of such extension in the manner
described below. During any such extension, all Outstanding Notes previously
tendered will remain subject to the exchange offer and we may accept them for
exchange. Any Outstanding Notes that we do not accept for exchange for any
reason will be returned to you without cost as promptly as practicable after
the expiration or termination of the exchange offer.
Outstanding Notes tendered in the exchange offer must be in
denominations of principal amounts of $1,000 and any integral multiples
thereof.
We expressly reserve the right to amend or terminate the exchange
offer. We also reserve the right to refuse for exchange any Outstanding Notes
not theretofore accepted for exchange, if any of the events specified below
under "--Certain Conditions to the Exchange Offer" occur. We will give oral or
written notice of any extension, amendment, non-acceptance or termination to
you as promptly as practicable any notice with respect to any extension will
be issued by means of press release or other public announcement no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled expiration date.
Procedures for Tendering Outstanding Notes
Certificates for such Outstanding Notes must be received by:
(i) the Exchange Agent along with the Letter of Transmittal; or
(ii) a timely confirmation of a book-entry transfer of the
Outstanding Notes, if such procedure is available, into the Exchange
Agent's account at The Depository Trust Company pursuant to the procedure
for book-entry transfer described below, must be received by the Exchange
Agent prior to the expiration date with the Letter of Transmittal or
Agent's Message in lieu of such Letter of Transmittal; or
(iii) the Holder must comply with the guaranteed delivery procedures
described below.
The term Agent's Message means a message, transmitted by the
Book-Entry Transfer Facility to and received by the Exchange Agent. It forms a
part of a Book-Entry Confirmation, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the tendering
participant, which states that the participant has received and agrees to be
bound by the Letter of Transmittal and that we may enforce the Letter of
Transmittal against such participant. THE METHOD OF DELIVERY OF THE
OUTSTANDING NOTES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS
IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS
RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT
REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE
TIMELY DELIVERY. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. NO LETTER OF
TRANSMITTAL OR OUTSTANDING NOTES SHOULD BE SENT TO US.
22
<PAGE>
Signatures on a Letter of Transmittal or a notice of withdrawal, as
the case may be, must be guaranteed by:
o a member firm of a registered national securities exchange or
of the National Association of Securities Dealers, Inc.;
o a commercial bank; or
o a trust company having an office or correspondent in the United
States (collectively, Eligible Institutions);
unless the Outstanding Notes tendered are tendered:
(i) by a registered Holder of the Outstanding Notes who has not
completed the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal; or
(ii) for the account of an Eligible Institution.
If Outstanding Notes are registered to a person who did not sign the
Letter of Transmittal, the Outstanding Notes surrendered for exchange must
be endorsed by, or be accompanied by a written transfer or exchange, duly
executed by the registered Holder with the signature guaranteed by an
Eligible Institution. All questions of satisfaction of the form of the
writing will be determined by us in our sole discretion.
If the Letter of Transmittal is signed by a person other than the
registered Holder of any Outstanding Notes listed therein, such Outstanding
Notes must be endorsed or accompanied by appropriate powers of attorney,
signed exactly as the name of the registered Holder appears on the Outstanding
Notes.
If the Letter of Transmittal or any Outstanding Notes or powers of
attorney are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and
unless waived by us, evidence satisfactory to us of their authority to so act
must be submitted with the Letter of Transmittal.
We will determine all questions as to the validity, form,
eligibility (including time of receipt), acceptance and withdrawal of the
tendered Outstanding Notes. Our determination will be final and binding. We
reserve the absolute right to reject any and all tenders of any particular
Outstanding Notes not properly tendered or to not accept any particular
Outstanding Notes our acceptance of which would, in our opinion or in the
opinion of our counsel, be unlawful. We also reserve the absolute right to
waive any defects or irregularities or conditions of the exchange offer as to
any particular Outstanding Notes either before or after the expiration date.
Our interpretation of the terms and conditions of the exchange offer
(including the instructions in the Letter of Transmittal) will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Outstanding Notes must be cured within a time
period we determine. Neither we, the Exchange Agent nor any other person is
under any duty to give notification of defects or irregularities with respect
to tenders of Outstanding Notes nor shall any of them incur any liability for
failure to give such notification. Any Outstanding Notes will not be
considered to have been properly tendered until such defects or irregularities
have been cured or waived. Any Outstanding Notes received by the Exchange
Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned without cost by
the Exchange Agent to the tendering Holders unless otherwise provided in the
Letter of Transmittal as soon as practicable following the expiration date.
In addition, we reserve the right in our sole discretion to:
(i) purchase or make offers for any Outstanding Notes that remain
outstanding subsequent to the expiration date, or, as set forth under
"--Certain Conditions to the Exchange Offer," to terminate the exchange
offer; and
(ii) to the extent permitted by applicable law, purchase Outstanding
Notes in the open market, in privately negotiated transactions or
otherwise. The terms of any such purchases or offers may differ from the
terms of the exchange offer.
23
<PAGE>
By tendering, each Holder of Outstanding Notes will represent to us, among
other things that:
o the Exchange Notes acquired pursuant to the exchange offer are
being obtained in the ordinary course of business of the person
receiving the Exchange Notes, whether or not that person is the
Holder;
o neither the Holder nor any other person has any arrangement or
understanding with any person to participate in the
distribution of the Exchange Notes; and
o such Holder is not engaged in, or intends to engage in, a
distribution of the Exchange Notes.
If any Holder or any such other person is an "affiliate," as defined
under Rule 405 of the Securities Act, of the Company, or is engaged in or
intends to engage in or has an arrangement or understanding with any person to
participate in a distribution of such Exchange Notes to be acquired in the
exchange offer, such Holder or any such other person:
(i) could not rely on the applicable interpretations of the staff of
the Commission; and
(ii) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale
transaction. Each broker-dealer that receives Exchange Notes for its own
account in exchange for Outstanding Notes, where such Outstanding Notes
were acquired by the broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange
Notes. See "Plan of Distribution."
Acceptance of Outstanding Notes for Exchange; Delivery of Exchange Notes
Upon satisfaction or waiver of the conditions to the exchange offer,
we will accept, promptly, all Outstanding Notes properly tendered and will
issue the Exchange Notes. See "--Certain Conditions to the Exchange Offer."
We are deemed to have accepted properly tendered Outstanding Notes
for exchange if or when we give oral or written notice of acceptance to the
Exchange Agent, with written confirmation of any oral notice to follow
promptly.
For each Outstanding Note accepted for exchange, Holders of that
Outstanding Note will receive an Exchange Note having a principal amount equal
to that of the surrendered Outstanding Note. Interest on the Outstanding Notes
will accrue from the most recent interest payment date or if no interest has
been paid, from December 21, 1999. Interest on the Outstanding Notes and the
Exchange Notes is payable semi-annually on February 1 and August 1. Holders of
Outstanding Notes whose Outstanding Notes are accepted for exchange will be
deemed to have waived the right to receive any payment in respect of accrued
and unpaid interest on the Outstanding Notes accrued from the most recent
interest payment date or if no interest has been paid, from December 21, 1999
to the date of the issuance of the Exchange Notes. The Exchange Notes will
entitle Holders to receive any interest payment that would have otherwise been
payable with respect to the Outstanding Notes. Consequently, Holders who
exchange their Outstanding Notes for Exchange Notes will receive the same
interest payment on August 1, 2000 (the first interest payment date with
respect to the Outstanding Notes and the Exchange Notes occurring after the
closing of the exchange offer) that they would have received had they not
accepted the exchange offer.
In all cases, issuance of Exchange Notes for Outstanding Notes that
are accepted for exchange will be made only after timely receipt by the
Exchange Agent of:
(i) certificates for such Outstanding Notes or a timely Book-Entry
Confirmation of such Outstanding Notes into the Exchange Agent's account
at the Book-Entry Transfer Facility;
(ii) a properly completed and duly executed Letter of Transmittal or
an Agent's Message in lieu thereof; and
(iii) all other required documents.
If any tendered Outstanding Notes are not accepted for any reason set forth
in the terms and conditions of the exchange offer or if Outstanding Notes
are submitted for a greater principal amount than the Holder
24
<PAGE>
desired to exchange, the unaccepted or non-exchanged Outstanding Notes will
be returned without expense to the tendering Holder (or, in the case of
Outstanding Notes tendered by book-entry transfer into the Exchange Agent's
account at the Book-Entry Transfer Facility pursuant to the book-entry
procedures described below, the non-exchanged Outstanding Notes will be
credited to an account maintained with such Book-Entry Transfer Facility)
as promptly as practicable after the expiration or termination of the
exchange offer.
Book-Entry Transfer
The Exchange Agent will make a request to establish an account with
respect to the Outstanding Notes at the Book-Entry Transfer Facility for
purposes of the exchange offer within two business days after the date of this
prospectus. Any financial institution that is a participant in the Book-Entry
Transfer Facility's systems may make book-entry delivery of Outstanding Notes
by causing the Book-Entry Transfer Facility to transfer the Outstanding Notes
into the Exchange Agent's account at the Book-Entry Transfer Facility in
accordance with the Book-Entry Transfer Facility's procedures for transfer.
However, although delivery of Outstanding Notes may be effected through
book-entry transfer at the Book-Entry Transfer Facility, the Letter of
Transmittal (or a facsimile thereof or an Agent's Message in lieu thereof),
with any required signature guarantees and any other required documents, must
still be transmitted to and received by the Exchange Agent at one of the
addresses set forth below, under "--Exchange Agent" on or prior to the
expiration date or the guaranteed delivery procedures described below must be
complied with.
Guaranteed Delivery Procedures
A Holder who wishes to tender its Outstanding Notes; and
(i) whose Outstanding Notes are not immediately available; or
(ii) who cannot deliver their Outstanding Notes, the Letter of
Transmittal, or any other required documents to the Exchange Agent prior
to the expiration date; or
(iii) who cannot complete the procedure for book-entry transfer on a
timely basis, may effect a tender if:
(a) the tender is made through an Eligible Institution; and
(b) before the expiration date, the Exchange Agent receives
from the Eligible Institution:
o a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail
or hand delivery) setting forth the name and address
of the Holder of the Outstanding Notes;
o the certificate number or numbers of such Outstanding
Notes and the principal amount of Outstanding Notes
tendered, stating that the tender is being made
thereby, and guaranteeing that the certificates for
all physically tendered Outstanding Notes, in proper
form for transfer, or a Book-Entry Confirmation, as
the case may be, together with a properly completed
and duly executed Letter of Transmittal (or a
facsimile thereof or an Agent's Message in lieu
thereof) with any required signature guarantees, and
all other documents required by the Letter of
Transmittal are received by the Exchange Agent within
three NYSE trading days after the date of execution
of the Notice of Guaranteed Delivery; and
o the certificates for all physically tendered
Outstanding Notes, in proper form for transfer, or a
Book-Entry Confirmation, as the case may be, together
with a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof or an Agent's
Message in lieu thereof), with any required signature
guarantees and any other documents required by the
Letter of Transmittal, that will be deposited by the
Eligible Institution with the Exchange Agent within
three New York Stock Exchange trading days after the
date of execution of the Notice of Guaranteed
Delivery.
25
<PAGE>
Withdrawal of Rights
Except as otherwise provided herein, tenders of Outstanding Notes may be
withdrawn at any time prior to midnight, New York City time, on the expiration
date.
To withdraw a tender of outstanding Notes, a written notice of
withdrawal must be received by the Exchange Agent at its address set forth
herein prior to midnight, New York City time, on the expiration date. Any
such notice of withdrawal must:
(i) specify the name of the person having tendered the Outstanding
Notes to be withdrawn (the Depositor);
(ii) include a statement that the Depositor is withdrawing its
election to have Outstanding Notes exchanged, and identify the
Outstanding Notes to be withdrawn (including the certificate number or
numbers and principal amount of such Outstanding Notes); and
(iii) where certificates for Outstanding Notes have been
transmitted, specify the name in which such Outstanding Notes are
registered, if different from that of the withdrawing Holder.
If certificates for Outstanding Notes have been delivered or otherwise
identified to the Exchange Agent, then, prior to the release of such
certificates the withdrawing Holder must also submit:
(i) the serial numbers of the particular certificates to be
withdrawn; and
(ii) signed notice of withdrawal with signatures guaranteed by an
Eligible Institution unless such Holder is an Eligible Institution.
If Outstanding Notes have been tendered pursuant to the procedure for
book-entry transfer described above, any notice of withdrawal must specify the
name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Outstanding Notes and otherwise comply with the
procedures of the facility.
We will determine all questions as to the validity, form and eligibility
(including time of receipt) for such withdrawal notices. Our determination
shall be final and binding on all parties.
Any Outstanding Notes so withdrawn will be considered not to have been
validly tendered for purposes of the exchange offer and no Exchange Notes will
be issued with respect thereto unless the Outstanding Notes so withdrawn are
validly retendered.
Any Outstanding Notes which have been tendered but which are not
accepted for exchange for any reason will be returned to the Holder without
cost (or, in the case of Outstanding Notes tendered by book-entry transfer
into the Exchange Agent's account at the Book-Entry Transfer Facility
pursuant to the book-entry transfer procedures described above, such
Outstanding Notes will be credited to an account maintained with such
Book-Entry Transfer Facility for the Outstanding Notes) as soon as
practicable after withdrawal, rejection of tender or termination of the
exchange offer. Properly withdrawn Outstanding Notes may be retendered by
following one of the procedures described above under "--Procedures for
Tendering Outstanding Notes" at any time prior to midnight, New York City
time, on the expiration date.
Certain Conditions to the Exchange Offer
The exchange offer is not subject to any conditions, other than that the
exchange offer does not violate applicable law or any applicable
interpretation of the staff of the Commission. We cannot assure you that any
such condition will not occur. Holders of Outstanding Notes will have certain
rights against us under the registration rights agreement should we fail to
consummate the exchange offer.
If we determine that we may terminate the exchange offer, as set forth
above, we may:
(i) refuse to accept any Outstanding Notes and return any
Outstanding Notes that have been tendered;
26
<PAGE>
(ii) extend the exchange offer and retain all Outstanding Notes
tendered prior to the expiration date, subject to the rights of such
Holders of tendered Outstanding Notes to withdraw their tendered
Outstanding Notes; or
(iii) waive a termination event with respect to the exchange offer
and accept all properly tendered Outstanding Notes that have not been
withdrawn. If such waiver constitutes a material change in the exchange
offer, we will disclose that change through a supplement to this
prospectus that will be distributed to each registered Holder of
Outstanding Notes. In addition, we will extend the exchange offer for a
period of five to ten business days, depending upon the significance of
the waiver and the manner of disclosure to the registered Holders of the
Outstanding Notes, if the exchange offer would otherwise expire during
such period.
Exchange Agent
First Security Bank, N.A., the Trustee under the Indenture, has been
appointed as Exchange Agent for the exchange offer. All executed Letters of
Transmittal and written notices of withdrawal should be directed to the
Exchange Agent at one of the addresses set forth below. Questions and requests
for assistance and requests for additional copies of this prospectus or of the
Letter of Transmittal should be directed to the Exchange Agent addressed as
follows:
<TABLE>
<CAPTION>
By Mail or Overnight Courier Facsimile Transmission Number
<S> <C> <C>
First Security Bank, N.A. (801) 246-5053 [ ]
Corporate Trust Services (For Eligible
79 South Main Street Institutions Only)
Salt Lake City, UT 84111
Attention: [Mr. Larry Montgomery] Confirm by Telephone
Personal and Confidential (801) 246-5822
(If by Mail, Registered or
Certified Mail Recommended)
</TABLE>
DELIVERY OF THE LETTER OF TRANSMITTAL OR OF WRITTEN NOTICES OF
WITHDRAWAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A
VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.
Fees and Expenses
We will not make any payments to brokers, dealers or other persons
soliciting acceptances of the exchange offer.
The estimated cash expenses to be incurred in connection with the
exchange offer will be paid by us and are estimated to be [$200,000].
Transfer Taxes
Holders who tender their Outstanding Notes for exchange will not be
obligated to pay any transfer taxes in connection with the exchange. However
Holders who instruct us to register Exchange Notes in the name of, or request
that Outstanding Notes not tendered or not accepted in the exchange offer be
returned to, a person other than the registered tendering Holder will be
responsible for the payment of any applicable transfer tax thereon.
Consequences of Exchanging Outstanding Notes
Holders of Outstanding Notes who do not exchange them for Exchange
Notes in the exchange offer will continue to be subject to the provisions in
the Indenture regarding their transfer and exchange. Any outstanding Notes not
exchanged will continue to accrue interest, but will not retain any rights
under the registration rights agreement and will bear the legend which sets
forth the restrictions on transfer to which they are subject as a consequence
of the issuance of the Outstanding Notes pursuant to exemptions from, or in
transactions not subject to, the registration requirements of the Securities
Act and applicable state securities laws.
27
<PAGE>
In general, the Outstanding Notes may not be offered or sold, unless
registered under the Securities Act, except pursuant to an exemption from, or
in a transaction not subject to, the Securities Act and applicable state
securities laws. We do not currently anticipate that we will register
Outstanding Notes under the Securities Act. See "Registration Rights for
Outstanding Notes."
Based on interpretations by the staff of the Commission, as set
forth in no-action letters issued to third parties, we believe that Exchange
Notes issued in the exchange offer in exchange for Outstanding Notes may be
offered for resale, resold or otherwise transferred by Holders thereof (other
than any such Holder which is an "affiliate" of the Company within the meaning
of Rule 405 under the Securities Act) without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that such
Exchange Notes are acquired in the ordinary course of such Holders' business
and such Holders have no arrangement with any person to participate in the
distribution of such Exchange Notes.
However, we do not intend to request the Commission to consider, and
the Commission has not considered, the exchange offer in the context of a
no-action letter and there can be no assurance that the staff of the
Commission would make a similar determination with respect to the exchange
offer as in such other circumstances. Each Holder, other than a broker-dealer,
must acknowledge that:
(i) the Exchange Notes received by such Holder will be acquired in
the ordinary course of its business;
(ii) at the time of the consummation of the exchange offer such
Holder will have not engaged in, and does not intend to engage in, a
distribution of Exchange Notes and has no arrangement or understanding to
participate in a distribution of Exchange Notes; and
(iii) such Holder is not an affiliate of the Company within the
meaning of Rule 405 of the Securities Act or if it is such an affiliate,
that it will comply with the registration and prospectus delivery
requirements of the Securities Act, to the extent applicable.
If any Holder is an affiliate of the Company, is engaged in or
intends to engage in or has any arrangement or understanding with respect to
the distribution of the Exchange Notes to be acquired pursuant to the exchange
offer, such Holder:
(i) could not rely on the applicable interpretations of the staff of
the Commission; and
(ii) must comply with the registration and prospectus delivery
requirement of the Securities Act in connection with any resale
transaction.
Each broker-dealer that receives Exchange Notes for its own account
in exchange for Outstanding Notes must acknowledge that such Outstanding Notes
were acquired by such broker-dealer as a result of market-making activities or
other trading activities and that it will deliver a prospectus in connection
with any resale of such Exchange Notes.
The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
This prospectus, as it may be amended or supplemented from time to
time, may be used by a broker-dealer in connection with resales of Exchange
Notes received in exchange for Outstanding Notes, where such Outstanding Notes
were acquired by such broker-dealer as a result of market-making activities or
other trading activities.
We have agreed that for a period of 180 days after the expiration
date, we will make this prospectus available to any broker-dealer for use in
connection with any such resale. See "Plan of Distribution."
In addition, to comply with state securities laws, the Exchange
Notes may not be offered or sold in any state unless they have been registered
or qualified for sale in such state or an exemption from registration or
qualification is available and is complied with.
The offer and sale of the Exchange Notes to "Qualified Institutional
Buyers" (as such term is defined under Rule 144A of the Securities Act) is
generally exempt from registration or qualification under state
28
<PAGE>
securities laws. We currently do not intend to register or qualify the sale
of the Exchange Notes in any state where an exemption from registration or
qualification is required and not available.
USE OF PROCEEDS
There will be no cash payable proceeds to us from the exchange
offer. The exchange offer is intended to satisfy certain of our obligations
under the registration rights agreement.
In consideration for issuing the Exchange Notes contemplated in this
prospectus, we will receive Outstanding Notes in like principal amount, the
form and terms of which are the same as the form and terms of the Exchange
Notes (which they replace), except as otherwise described herein. The
Outstanding Notes surrendered in exchange for Exchange Notes will be retired
and canceled and cannot be reissued. Accordingly, the issuance of the Exchange
Notes will not result in any increase or decrease in the indebtedness of the
Company.
The net proceeds of the private placement were approximately $73.0
million and were used by the Company to repay bank indebtedness and for
general corporate purposes, which may include the purchase of additional
aircraft and the refinancing of existing aircraft.
29
<PAGE>
CAPITALIZATION
The following table sets forth (i) our unaudited actual
consolidated capitalization and (ii) our unaudited consolidated
capitalization as adjusted after giving effect to the December 21, 1999
Offering, in each case as of September 30, 1999.
At September 30, 1999
Historical As Adjusted
(Unaudited)
(Dollars in thousands)
Cash(1)(2)................................ $ 109,151 $181,951
========= ========
Short-term debt (consisting of current
maturities of long-term debt)............. $ 1,476 $ 1,476
----------- -----------
Long-term debt
Secured bank debt, due 2003(1)......... 31,000 31,000
Tax-exempt mortgage bonds, due 2020.... 6,000 6,000
Tax-exempt mortgage bonds, due 2000.... 10,000 10,000
10 1/2% Senior Notes due 2004.......... 100,000 175,000
9 5/8% Senior Notes due 2005............ 125,000 125,000
8.3% Mortgage due 2014................. 7,955 7,955
Unsecured debt......................... 2,939 2,939
----------- -----------
Total long-term debt............... 282,894 357,894
----------- -----------
Total debt.................... 284,370 359,370
----------- -----------
Total shareholders'
equity............ 148,832 148,832
----------- -----------
Total capitalization.. $433,202 508,202
========= ========
- ----------
(1) At September 30, 1999, the Company had borrowed $31 million against its
credit facility, all of which was repaid October 1, 1999.
(2) On December 9, 1999, the Company issued $17 million in Special
Facility Revenue Bonds to finance the construction of certain
facilities at Chicago-Midway Airport.
30
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA
The following selected consolidated financial data is derived from
our audited consolidated financial statements. The selected consolidated
financial data for the nine months ended September 30, 1999 and 1998 is
derived from our unaudited consolidated financial statements. The unaudited
financial statements include all adjustments, consisting of normal recurring
accruals, that we consider necessary for the fair presentation of our
financial position and results of operations for these periods. Operating
results for the nine months ended September 30, 1999 are not necessarily
indicative of the results that may be expected for the year ending December
31, 1999. The data should be read in conjunction with the consolidated
financial statements, related notes and the information presented under the
heading "Management's Discussion and Analysis of Financial Condition and
Results of Operations" incorporated by reference herein.
<TABLE>
<CAPTION>
Year Ended December 31, Nine Months Ended
September 30,
1994 1995 1996 1997 1998 1998 1999
------ ------ ------ ------ ------ ------ -----
(Dollars in thousands, except ratios and per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Operating revenues:
Scheduled service............. $240,675 $361,967 $386,488 $371,762 $511,254 $384,456 $480,877
Charter....................... 295,890 307,091 310,569 359,177 344,482 277,763 302,731
Ground package................ 20,248 20,421 22,302 22,317 23,186 17,629 46,565
Other......................... 23,709 25,530 31,492 29,937 40,447 30,335 35,371
----------------------------------------------------------------------
Total operating revenues.... 580,522 715,009 750,851 783,193 919,369 710,183 865,544
--------- --------- --------- --------- --------- --------- ---------
Operating expenses:
Salaries, wages and benefits.. 113,789 141,072 163,990 172,499 211,304 155,795 187,309
Fuel and oil.................. 106,057 129,636 161,226 153,701 137,401 107,639 124,233
Handling, landing and navigation
fees........................ 60,872 74,400 70,122 69,383 74,640 57,503 70,929
Passenger service............. 29,804 34,831 32,745 32,812 34,031 26,871 30,283
Aircraft rentals.............. 48,155 55,738 65,427 54,441 53,128 39,249 43,402
Aircraft maintenance, materials
and repairs................. 46,092 55,423 55,175 51,465 53,655 41,641 42,432
Depreciation and amortization. 46,178 55,827 61,661 62,468 78,665 58,293 72,467
Other......................... 121,160 150,146 176,561 172,940 201,172 152,242 208,030
--------- --------- --------- --------- --------- --------- ---------
Total operating expenses.... 572,107 697,073 786,907 769,709 843,996 639,233 779,085
--------- --------- --------- --------- --------- --------- ---------
Operating income (loss)(1).... 8,415 17,936 (36,056) 13,484 75,373 70,950 86,459
--------- --------- --------- --------- --------- --------- ---------
Other income (expense):
Interest income............... 191 410 617 1,584 4,433 3,324 4,526
Interest (expense)............ (3,656) (4,163) (4,465) (9,454) (12,808) (9,671) (15,413)
Other......................... 929 470 323 413 212 165 1,882
--------- --------- --------- --------- --------- --------- ---------
Other income (expense), net. (2,536) (3,283) (3,525) (7,457) (8,163) (6,182) (9,005)
--------- --------- --------- --------- --------- --------- ---------
Income (loss) before income taxes 5,879 14,653 (39,581) 6,027 67,210 64,768 77,454
Income taxes (credits)........... 2,393 6,129 (12,907) 4,455 27,129 26,141 30,509
--------- --------- --------- --------- --------- --------- ---------
Net income (loss)................ $ 3,486 $ 8,524 $ (26,674) $ 1,572 $ 40,081 $ 38,627 $ 46,945
========= ======== ========== ========= ======== ========= =========
Net income (loss) per share-- $ 0.30 0.74 (2.31) 0.14 3.41 3.31 3.83
basic (2) ========= ======== ========== ========= ======== ========= =========
Net income (loss) per share-- 0.30 0.74 (2.31) 0.13 3.07 2.99 3.47
diluted(2).................... ========= ======== ========== ========= ======== ========= =========
(footnotes on next page)
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31, Nine Months Ended
September 30,
1994 1995 1996 1997 1998 1998 1999
------ ------ ------ ------ ------ ------ -----
(Unaudited)
(Dollars in thousands, except ratios and per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data (at end of period):
Cash............................. $ 61,752 $ 92,741 $ 73,382 $104,196 $172,936 $110,807 $109,151
Non-cash working capital
(deficiency)(3)............... (68,166) (80,639) (65,472) (100,731) (112,276) (115,171) (132,257)
Property and equipment, net...... 223,104 240,768 224,540 267,681 329,332 323,880 476,238
Total assets..................... 346,288 413,137 370,287 450,857 594,549 520,411 746,782
Short-term debt (including current
maturities)................... 8,447 3,606 30,271 8,975 1,476 6,477 1,476
Long-term debt................... 109,659 134,641 119,786 182,829 245,195 174,262 282,894
Total debt....................... 118,106 138,247 150,057 191,804 246,671 180,739 284,370
Shareholders' equity(4).......... 72,753 81,185 54,744 56,990 102,751 97,955 148,832
Other Financial Data:
EBITDAR(5)....................... $103,868 $130,381 $ 91,972 $132,390 $211,811 $171,982 $208,736
EBITDA(5)........................ 55,713 74,643 26,545 77,949 158,683 132,733 165,334
Net cash provided by operating
activities.................... 75,297 87,078 32,171 99,936 151,812 131,870 141,493
Net cash used in investing activitie (80,400) (44,032) (63,161) (76,055) (142,352) (115,640) (239,659)
Net cash provided by (used in)
financing activities.......... 21,831 (12,057) 11,631 6,933 59,280 (9,619) 34,381
Ratio of earnings to fixed charges(6) 1.32 1.60 -- 1.19 3.03 3.73 3.25
Deficiency of earnings available to -- -- $ 40,931 -- -- -- --
cover fixed charges(6)........
</TABLE>
(1) Amtran has reclassified gain (loss) on the sale of operating assets
for 1994-1995 from non-operating gain (loss) to operating income
(loss) to be consistent with the 1996-1999 presentations. Also, in
the third quarter of 1996, Amtran recorded a $4.7 million loss on
the disposal of leased assets associated with the reconfiguration of
its fleet.
(2) In 1997, Amtran adopted Financial Accounting Standards Board
Statement 128, "Earnings per Share," which established new standards
for the calculation and disclosure of earnings per share. All prior
period amounts disclosed in this five-year summary have been
restated to conform to the new standards under Statement 128.
(3) Non-cash working capital consists of total current assets (excluding
cash) less total current liabilities (excluding current maturities
of long-term debt).
(4) No dividends were paid in any of the periods presented.
(5) EBITDAR represents net income plus interest expense (net of
capitalized interest), income tax expense, depreciation,
amortization and aircraft rentals. EBITDA represents net income plus
interest expense (net of capitalized interest), income tax expense,
depreciation and amortization. EBITDAR and EBITDA are presented
because each is a widely accepted financial indicator of a company's
ability to incur and service debt. However, EBITDAR and EBITDA
should not be considered in isolation, as a substitute for net
income or cash flow data prepared in accordance with generally
accepted accounting principles or as a measure of a company's
profitability or liquidity.
(6) The "ratio of earnings to fixed charges" represents earnings divided
by fixed charges, as defined in the following paragraph. The
"deficiency" represents the amount of fixed charges in excess of
earnings.
For purposes of these computations, earnings consist of income
(loss) before income taxes, plus fixed charges, adjusted to exclude
the amount of any interest capitalized during the period. Fixed
charges include the total of: (i) interest, whether expensed or
capitalized; (ii) amortization of debt expense relating to any
indebtedness, whether expensed or capitalized; and (iii) such
portion of rental expense as can be demonstrated to be
representative of the interest factor.
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The following summarized financial data (unaudited) in this table
has been derived from the financial statements of ATA for each of the
respective periods presented. ATA is the principal subsidiary of Amtran. The
following financial data excludes the other subsidiaries of Amtran
(Ambassadair, ATA Leisure Corp., Amber Travel, Execujet and ATA Training
Academy) as ATA is the principal operating subsidiary of Amtran. Amtran
allocates certain expenses, such as income taxes, to the various subsidiaries
as if they were operating on a stand-alone basis.
<TABLE>
<CAPTION>
Year Ended December 31, Nine Months Ended
September 30,
1994 1995 1996 1997 1998 1998 1999
------ ------ ------ ------ ------ ------ -----
(Dollars in thousands) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Operating revenues:.............. $549,630 $682,106 $712,915 $744,153 $877,187 $678,892 $776,853
Depreciation and amortization.... 45,593 55,056 61,267 62,281 78,595 58,247 71,043
Operating income (loss)(1)....... 4,157 14,819 (40,674) 10,325 80,920 75,184 91,894
Interest expense, net............ 3,497 3,773 4,466 9,454 12,808 9,671 15,418
Income (loss) before income taxes 1,513 11,389 (44,416) 2,627 72,528 68,834 82,604
Net income (loss)................ (206) 6,006 (31,509) 69 43,329 42,694 52,096
At December 31, At September 30,
--------------- -----------------
1994 1995 1996 1997 1998 1998 1999
------ ------ ------ ------ ------ ------ -----
(Dollars in thousands) (Unaudited)
Balance Sheet Data (at end of period):
Working capital (deficiency)(2).. $(69,272) $(49,710) $(86,207) $(51,939)$ 10,768 $(54,933) $(43,474)
Property and equipment, net...... 210,791 239,864 224,232 267,556 328,661 323,303 472,143
Total assets..................... 345,710 409,354 369,086 466,923 593,489 515,582 748,505
Short-term debt (including current
maturities)................... 8,447 3,606 30,271 8,975 1,476 6,477 1,476
Long-term debt................... 109,659 134,641 119,786 182,829 245,195 174,262 282,894
Total debt....................... 118,106 138,247 150,057 191,804 246,671 180,739 284,370
Shareholder's equity(3).......... 24,366 30,372 (9,934) 6,762 50,091 49,456 102,186
</TABLE>
(1) ATA has reclassified gain (loss) on the sale of operating assets for
1994-1995 from non-operating gain (loss) to operating income (loss)
to be consistent with the 1996-1999 presentations. Also, in the
third quarter of 1996, ATA recorded a $4.7 million loss on the
disposal of leased assets associated with the reconfiguration of its
fleet.
(2) Working capital consists of total current assets less current
liabilities.
(3) No dividends were paid in any of the periods presented.
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<PAGE>
DESCRIPTION OF OTHER PRINCIPAL INDEBTEDNESS
Revolving Credit Facilities
We maintain revolving credit facilities to assist us in managing
our working capital and in meeting our short-term cash needs.
1998 Credit Facility. Under our 1998 credit facility, ATA is
designated as the borrower. The credit facility provides for maximum
borrowings of $50.0 million, including stand-by letters of credit in a maximum
amount of $25.0 million. All borrowings under the 1998 credit facility are
guaranteed by Amtran and all of its other operating subsidiaries and secured
by some of Amtran's L-1011 aircraft and engines, as well as specified
additional assets as may be required to provide a loan-to-value ratio not in
excess of 75%. The credit facility will mature, and all borrowings under the
credit facility will become due and payable, on April 1, 2001.
So long as no event of default is continuing, borrowings under the
1998 credit facility bear interest, at the option of ATA, at either:
o LIBOR plus 1.50% to 2.50%, depending upon specified financial
ratios; or
o the agent bank's prime rate.
In addition, ATA incurs a quarterly commitment fee ranging from 0.25% to
0.50% per annum on the average unused portion of the commitment, depending
upon specified ratios.
1999 Credit Facility. In December 1999, we revised our 1998 credit
facility to provide for maximum borrowings of $100.0 million, including
stand-by letters of credit in a maximum amount of $50.0 million. All
borrowings under the 1999 credit facility are guaranteed by Amtran and all of
its other operating subsidiaries and secured by some of Amtran's L-1011
aircraft and engines, as well as specified additional assets as may be
required to provide a loan-to-value ratio not in excess of 75%. The 1999
credit facility will mature, and all borrowings under the credit facility will
become due and payable, on January 2, 2003.
So long as no event of default is continuing, borrowings under the
1999 credit facility bear interest, at the option of ATA, at either:
o LIBOR plus 1.25% to 2.50%, depending upon specified financial
ratios; or
o the agent bank's prime rate.
In addition, ATA incurs a quarterly commitment fee ranging from 0.25% to
0.50% per annum on the average unused portion of the commitment, depending
upon specified ratios.
The credit facility contains covenants that, absent the prior
written consent of the lenders, limit the ability of ATA, Amtran and the other
guarantors to, among other things:
o incur debt;
o grant liens;
o make capital expenditures;
o pay dividends, distributions and other payments to
stockholders;
o engage in mergers and similar business combinations;
o dispose of assets; and
o prepay debt.
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<PAGE>
In addition, for a specified period, ATA must maintain a number of
specified ratios, including minimum net worth, cash flow to interest
expense after rentals and total adjusted liabilities to tangible net worth.
An event of default will occur if, among other things, a reduction
below 51% occurs in:
o Mr. Mikelsons' or his heirs' beneficial ownership of Amtran's
outstanding capital stock;
or
o Amtran's beneficial ownership of ATA's outstanding capital
stock.
9 5/8% Notes
In 1998, Amtran issued $125.0 million principal amount of 9 5/8%
senior notes due 2005. All of Amtran's obligations under the 9 5/8% notes are
guaranteed by all of its operating subsidiaries, including ATA.
Principal, Maturity and Interest. The 9 5/8% notes are limited in
aggregate principal amount to $125.0 million and will mature on December 15,
2005. Interest on the 9 5/8% notes accrues at 9 5/8% per annum and is payable
semiannually in cash on June 15 and December 15 of each year. Interest is
computed on the basis of a 360-day year comprised of twelve 30-day months.
Ranking. The 9 5/8% notes are unsecured obligations of Amtran, rank
pari passu in right of payment with all existing and future unsecured
unsubordinated obligations of Amtran and rank senior in right of payment to
all existing and future subordinated obligations of Amtran. The 9 5/8% notes
are also effectively subordinated to all existing and future secured
indebtedness of Amtran and the guarantors to the extent of the security.
Redemption. The 9 5/8% notes are redeemable, at Amtran's option, in
whole or in part, at any time on or after June 15, 2003, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest thereon to the applicable redemption date, if
redeemed during the 12-month period beginning on June 15 of the year indicated
below:
Year Percentage
- ---- ----------
2003...................................... 104.81%
2004...................................... 102.41%
In addition, at any time prior to June 15, 2001, Amtran may redeem
up to 35% of the original aggregate principal amount of the 9 5/8% notes with
the proceeds of one or more sales of common stock, at a redemption price equal
to 109.625% of their principal amount plus accrued and unpaid interest, so
long as at least $81.25 million of aggregate principal amount of 9 5/8% notes
remains outstanding immediately after the redemption.
Covenants. The indenture governing the 9 5/8% notes contains
covenants substantially identical to the covenants contained in the indenture
governing the 10 1/2% notes.
Events of Default. The indenture governing the 9 5/8% notes contains
events of default substantially similar to those contained in the indenture
governing the 10 1/2% notes.
DESCRIPTION OF THE NOTES
The Outstanding Notes were, and the Exchange Notes will be issued
under the Indenture, dated as of July 24, 1997, among the Company, as issuer,
American Trans Air, Inc., Ambassadair Travel Club, Inc., ATA Leisure Corp.
(formerly ATA Vacations, Inc.), Amber Travel, Inc., American Trans Air
Training Corporation, American Trans Air ExecuJet, Inc., Amber Air Freight
Corporation, and Chicago Express Airlines, Inc., as guarantors (collectively,
the Guarantors), and First Security Bank, N.A., as trustee (the Trustee), as
supplemented by the First Supplemental Indenture dated as of December 21, 1999
among the Company, the Guarantors and the Trustee (references in this
Description of Notes to the "Indenture" shall
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<PAGE>
mean the Indenture as so supplemented). The following summary of certain
provisions of the Indenture and the Exchange Notes does not purport to be
complete and is subject to, and is qualified in its entirety by reference
to, all the provisions of the Indenture, including the definitions of
certain terms therein and those terms made a part thereof by the Trust
Indenture Act of 1939, as amended (the Trust Indenture Act). A copy of the
Indenture and the Notes is available upon request from the Company.
Whenever particular defined terms of the Indenture not otherwise defined
herein are referred to, such defined terms are incorporated herein by
reference. For definitions of certain capitalized terms used in the
following summary, see "--Certain Definitions." For purposes of this
summary, unless the context indicates otherwise, the term "Notes" means the
Exchange Notes Holders will receive if they participate in this exchange
offer Notes.
General Aspects of the Exchange Notes
Amtran, Inc. currently has outstanding $100,000,000 principal amount
of Exchange Notes that was issued in 1997 under a previous registered
statement. The Exchange Notes offered by this prospectus are part of the same
series of Exchange Notes that were issued in 1997.
The Notes will be unsecured senior obligations of the Company, and
will mature on August 1, 2004. Each Note will initially bear interest at 10
1/2% per annum from the Closing Date, payable semiannually (to Holders of
record at the close of business on the January 15 or July 15 immediately
preceding the Interest Payment Date) on February 1 and August 1 of each year,
commencing February 1, 2000.
If we have not (i) consummated a registered exchange offer for the
New Notes, or (ii) filed or caused a shelf registration statement with respect
to resales of the Notes to be declared effective within the time period
specified below, Holders will be entitled to certain additional interest. See
"--Registration Rights for Outstanding Notes."
Principal of, premium, if any, and interest on the Notes will be
payable, and the Notes may be exchanged or transferred, at the office or
agency of the Company in the Borough of Manhattan, the City of New York;
provided that, at our option, payment of interest may be made by check mailed
to the Holders at their addresses as they appear in the Security Register.
The Notes will be issued only in fully registered form, without
coupons, in denominations of $1,000 of principal amount and any integral
multiple thereof. See "-Book-Entry; Delivery and Form." No service charge will
be made for any registration of transfer or exchange of Notes, but we may
require payment of a sum sufficient to cover any transfer tax or other similar
governmental charge payable in connection therewith.
Subject to the covenants described below under "Covenants" and
applicable law, we may issue additional Notes under the Indenture. The
Outstanding Notes, the Exchange Notes and any additional Notes subsequently
issued will be treated as a single class for all purposes under the Indenture.
Optional Redemption
If more than 98% of the outstanding principal amount of the Notes
are tendered pursuant to an Offer to Purchase, as required by the "Limitation
on Asset Sales" or "Repurchase of Notes upon a Change of Control" covenant, we
have the option to redeem the balance of the Notes, in whole or in part, at
any time or from time to time thereafter up to maturity. Holders must be given
between 30 to 60 days' prior notice mailed by first class mail to each
Holder's last address as it appears in the Security Register, and the
Redemption Price will equal to the price specified in the Offer to Purchase
plus accrued and unpaid interest, if any, to the Redemption Date (subject to
the right of Holders of record on the relevant Regular Record Date that is on
or prior to the Redemption Date to receive interest due on an Interest Payment
Date).
The Notes will also be redeemable, at our option, in whole or in
part, at any time or from time to time, on or after August 1, 2002 up to
maturity. Holders must be given between 30 to 60 days' prior notice mailed by
first class mail to each Holders' last address as it appears in the Security
Register, at the following Redemption Prices (expressed in percentages of
principal amount), plus accrued and unpaid interest, if any, to the Redemption
Date (subject to the right of Holders of record on the relevant Regular Record
Date that
36
<PAGE>
is on or prior to the Redemption Date to receive interest due on an
Interest Payment Date), if redeemed during the 12-month period commencing
August 1 of the years set forth below:
Redemption
Year Price
2002................................. 105.250%
2003................................. 102.625%
In addition, at any time prior to August 1, 2000, we may redeem up
to 35% of the principal amount of the Notes with the proceeds of one or more
sales of its Common Stock, at any time or from time to time in part, at a
Redemption Price (expressed as a percentage of principal amount) of 110.500%,
plus accrued and unpaid interest to the Redemption Date (subject to the rights
of Holders of record on the relevant Regular Record Date that is prior to the
Redemption Date to receive interest due on an Interest Payment Date); so long
as at least 65% of the aggregate principal amount of Notes remains outstanding
after each such redemption.
In the case of any partial redemption, selection of the Notes for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are
listed. If the Notes are not listed on a national securities exchange, the
redemption will be made by lot or by such other method as the Trustee in its
sole discretion shall deem to be fair and appropriate; so long as no Note of
$1,000 in principal amount or less shall be redeemed in part. If any Note is
to be redeemed in part only, the notice of redemption relating to such Note
must state the portion of the principal amount of the Note to be redeemed. A
new Note in principal amount equal to the unredeemed portion thereof will be
issued in the name of the Holder upon cancelation of the original Note.
Sinking Fund
There will be no sinking fund payments for the Notes.
Registration Rights for Outstanding Notes
The Company and the Guarantors have agreed for the benefit of the
Holders, that they will use their best efforts, at their cost,
(i) within 45 days after the Closing Date (the "Filing Date") of the
original offering, to file a registration statement (the exchange offer
registration statement) with respect to a registered offer (the exchange
offer) to exchange the Outstanding Notes for Exchange Notes with terms
identical to the Outstanding Notes (except that the Exchange Notes will not
bear legends restricting the transfer thereof); and
(ii) cause the exchange offer registration statement to be declared
effective within 150 days after the Closing Date.
Once the registration statement is declared effective, the Company and the
Guarantors will offer the Exchange Notes in return for surrender of the
Outstanding Notes. The offer will remain open for at least 20 business days
after the date notice of the exchange offer is mailed to Holders. For each
Outstanding Note surrendered to us under the exchange offer, the Holder
will receive an Exchange Note of equal principal amount. Interest on each
Exchange Note shall accrue from the last Interest Payment Date on which
interest was paid on the Outstanding Notes so surrendered or, if no
interest has been paid on such Outstanding Notes, from the Closing Date.
In the event that applicable interpretations of the staff of the
Commission do not permit the Company and the Guarantors to effect the exchange
offer, or under certain other circumstances, the Company and the Guarantors
shall, at their cost, use their best efforts to cause to become effective a
shelf registration statement (the "Shelf Registration Statement") with respect
to resales of the Notes and to keep such Shelf Registration Statement
effective until the expiration of the time period referred to in Rule 144(k)
under the Securities Act after the Closing Date, or such shorter period that
will terminate when all Outstanding Notes covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement. The
Company
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<PAGE>
and the Guarantors shall, in the event of such a shelf registration,
provide to each Holder copies of the prospectus, notify each Holder when
the Shelf Registration Statement for the Outstanding Notes has become
effective and take certain other actions as are required to permit resales
of the Outstanding Notes.
A Holder that sells its Outstanding Notes pursuant to the Shelf
Registration Statement generally will be required to be named as a selling
security Holder in the related prospectus and to deliver a prospectus to
purchasers, will be subject to certain of the civil liability provisions under
the Securities Act in connection with such sales and will be bound by the
provisions of the registration rights agreement that are applicable to such a
Holder (including certain indemnification obligations).
If we fail to comply with the above provisions or if the exchange
offer registration statement or the Shelf Registration Statement fails to
become effective, then additional interest shall become payable in respect of
the Outstanding Notes as follows:
(1) if:
(A) neither the exchange offer registration statement nor the
Shelf Registration Statement is filed with the Commission on or prior to 45 days
after the Closing Date; or
(B) notwithstanding that we have consummated or will consummate
an exchange offer, we are required to file a Shelf Registration Statement and
such Shelf Registration Statement is not filed on or prior to the date
required by the registration rights agreement, then commencing on the day
after either such required filing date, additional interest shall accrue on
the principal amount of the Outstanding Notes at a rate of 0.50% per annum for
the first 90 days immediately following each such filing date, such additional
interest rate increasing by an additional 0.50% per annum at the beginning of
each subsequent 90- day period; or
(2) if:
(A) neither the exchange offer registration statement nor a
Shelf Registration Statement is declared effective by the Commission on or
prior to 150 days after the Closing Date; or
(B) notwithstanding that we have consummated or will consummate
an exchange offer, we are required to file a Shelf Registration Statement and
such Shelf Registration Statement is not declared effective by the Commission
on or prior to the 60th day following the date such Shelf Registration
Statement was filed, then, commencing on the day after either such required
effective date, additional interest shall accrue on the principal amount of
the Outstanding Notes at a rate of 0.50% per annum for the first 90 days
immediately following such date, such additional interest rate increasing by
an additional 0.50% per annum at the beginning of each subsequent 90-day
period; or
(3) if:
(A) we have not exchanged exchange notes for all Outstanding
Notes validly tendered in accordance with the terms of the exchange offer on or
prior to the 30th day after the date on which the exchange offer registration
statement was declared effective; or
(B) if applicable, the Shelf Registration Statement has been
declared effective and such Shelf Registration Statement ceases to be
effective at any time prior to the second anniversary of its effective date
(other than after such time as all Outstanding Notes have been disposed of
thereunder),
then additional interest shall accrue on the principal amount of the
Outstanding Notes at a rate of 0.50% per annum for the first 90 days
commencing on:
(x) the 31st day after such effective date, in the case of
(A) above; or
(y) the day such Shelf Registration Statement ceases to be
effective, in the case of (B) above, such additional interest rate increasing
by an additional 0.50% per annum at the beginning of each subsequent 90-day
period; provided, however, that the additional interest rate on the notes may
not exceed in the aggregate 2.0% per annum; provided, further, however, that:
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<PAGE>
(a) upon the filing of the exchange offer registration
statement or a Shelf Registration Statement (in the case of clause (1) above);
(b) upon the effectiveness of the exchange offer
registration statement or a shelf registration (in the case of clause (2)
above); or
(c) upon the exchange of exchange notes for all Outstanding
Notes tendered (in the case of clause (3) (A) above), or upon the effectiveness
of the Shelf Registration Statement which had ceased to remain effective (in the
case of clause (3)(B) above), additional interest on the Outstanding Notes
as a result of such clause (or the relevant subclause thereof), as the case
may be, shall cease to accrue.
If the Company and the Guarantors effect the exchange offer, the
Company will be entitled to close the exchange offer 20 business days after
the commencement thereof, provided that it has accepted all Outstanding Notes
theretofore validly surrendered in accordance with the terms of the exchange
offer. Outstanding Notes not tendered in the exchange offer shall bear
interest at the rate set forth on the cover page of this Prospectus and be
subject to all of the terms and conditions specified in the Indenture and to
the transfer restrictions described in the Transfer Restrictions section of
the Offering Memorandum, dated December 16, 1999.
Guarantee
The Company's obligations under the Notes are fully and
unconditionally guaranteed on an unsecured, unsubordinated basis, jointly and
severally, by the Guarantors; so long as no Note Guarantee is enforceable
against any Guarantor in an amount in excess of the net worth of such
Guarantor at the time that determination of that net worth is, under
applicable law, relevant to the enforceability of such Note Guarantee. The net
worth will include any claim of the Guarantor against the Company for
reimbursement and any claim against any other Guarantor for contribution.
Each Note Guarantee, other than the Note Guarantee provided by ATA,
will provide by its terms that it will be automatically and unconditionally
released and discharged if any sale, exchange or transfer to any Person that
is not an Affiliate of the Company, of all of the Company's and each
Restricted Subsidiary's Capital Stock issued by, or all or substantially all
the assets of, the Guarantor (which sale, exchange or transfer is not
prohibited by the Indenture).
Ranking
The indebtedness evidenced by the Notes and the Note Guarantees will
rank equally in right of payment with all existing and future unsubordinated
indebtedness of the Company and the Guarantors, respectively, and senior in
right of payment to all existing and future subordinated indebtedness of the
Company and the Guarantors, respectively. The Notes and Note Guarantees will
also be effectively subordinated to all existing and future secured
indebtedness of the Company and the Guarantors, to the extent of such
security.
At September 30, 1999, after giving pro forma effect to the private
placement and the application of the net proceeds thereof, the Company (on a
consolidated basis) would have had outstanding approximately $359.4 million of
indebtedness (including the Notes), approximately $55.0 million of which would
have been secured. At September 30, 1999, after giving pro forma effect to the
Offering and the application of the net proceeds thereof, the Guarantors (on a
consolidated basis excluding indebtedness owed to the Company and indebtedness
of Amtran) would have had approximately $359.4 million of indebtedness
outstanding (other than the Note Guarantees, approximately $55.0 million of
which would have been secured indebtedness. See "Capitalization."
The Credit Agreement is secured by certain L-1011 aircraft and
related engines, including spares, and may be secured by other assets as
provided thereunder. See "Description of Other Indebtedness." The Notes will
be effectively subordinated to such indebtedness to the extent of such
security interests. See "Risk Factors--Effective Subordination of Notes to
Secured Obligations of Subsidiaries."
Certain Definitions
Set forth below is a summary of certain of the defined terms used
in the covenants and other provisions of the Indenture. Reference is made
to the Indenture for the full definition of all terms as well
39
<PAGE>
as any other capitalized term used herein for which no definition is provided.
"Acquired Indebtedness" means Indebtedness of a Person existing at
the time such Person becomes a Restricted Subsidiary or assumed in connection
with an Asset Acquisition by a Restricted Subsidiary and not Incurred in
connection with, or in anticipation of, such Person becoming a Restricted
Subsidiary or such Asset Acquisition; provided that Indebtedness of such
Person which is redeemed, defeased, retired or otherwise repaid at the time of
or immediately upon consummation of the transactions by which such Person
becomes a Restricted Subsidiary or such Asset Acquisition shall not be
Acquired Indebtedness.
"Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period determined in conformity with GAAP; provided that the
following items shall be excluded in computing Adjusted Consolidated Net
Income (without duplication):
(i) the net income of any Person that is not a Restricted
Subsidiary, except to the extent of the amount of dividends or other
distributions actually paid to the Company or any of its Restricted
Subsidiaries by such Person during such period;
(ii) solely for the purposes of calculating the amount of
Restricted Payments that may be made pursuant to clause (C) of the
first paragraph of the "Limitation on Restricted Payments" covenant
described below (and in such case, except to the extent includable
pursuant to clause (i) above), the net income (or loss) of any
Person accrued prior to the date it becomes a Restricted Subsidiary
or is merged into or consolidated with the Company or any of its
Restricted Subsidiaries or all or substantially all of the property
and assets of such Person are acquired by the Company or any of its
Restricted Subsidiaries;
(iii) the net income of any Restricted Subsidiary which is not
a Guarantor to the extent that the declaration or payment of
dividends or similar distributions by such Restricted Subsidiary of
such net income is not at the time permitted by the operation of the
terms of its charter or any agreement, instrument, judgment, decree,
order, statute, Rule or governmental regulation applicable to such
Restricted Subsidiary;
(iv) any gains or losses (on an after-tax basis) attributable
to Asset Sales;
(v) except for purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first
paragraph of the "Limitation on Restricted Payments" covenant
described below, any amount paid or accrued as dividends on
Preferred Stock of the Company or any Restricted Subsidiary owned by
Persons other than the Company and any of its Restricted
Subsidiaries; and
(vi) all extraordinary gains and extraordinary losses.
"Adjusted Consolidated Net Tangible Assets" means the total amount
of assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding writeups in connection
with accounting for acquisitions in conformity with GAAP), after deducting
therefrom
(i) all current liabilities of the Company and its Restricted
Subsidiaries (excluding intercompany items) and
(ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles,
all as set forth on the most recent quarterly or annual consolidated
balance sheet of the Company and its Restricted Subsidiaries,
prepared in conformity with GAAP and filed with the Commission or
provided to the Trustee pursuant to the "Commission Reports and
Reports to Holders" covenant.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled
by" and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct
40
<PAGE>
or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or
otherwise.
"Asset Acquisition" means
(i) an investment by the Company or any of its Restricted
Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged into or
consolidated with the Company or any of its Restricted Subsidiaries;
provided that such Person's primary business is related, ancillary
or complementary to the businesses of the Company and its Restricted
Subsidiaries on the date of such investment or
(ii) an acquisition by the Company or any of its Restricted
Subsidiaries of the property and assets of any Person other than the
Company or any of its Restricted Subsidiaries that constitute
substantially all of a division or line of business of such Person;
provided that the property and assets acquired are related,
ancillary or complementary to the businesses of the Company and its
Restricted Subsidiaries on the date of such acquisition.
"Asset Disposition" means the sale or other disposition by the
Company or any of its Restricted Subsidiaries (other than to the Company or
another Restricted Subsidiary) of
(i) all or substantially all of the Capital Stock of any
Restricted Subsidiary of the Company
or
(ii) all or substantially all of the assets that constitute a
division or line of business of the Company or any of its Restricted
Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition
(including by way of merger, consolidation or sale-leaseback transaction) in
one transaction or a series of related transactions by the Company or any of
its Restricted Subsidiaries to any Person other than the Company or any of its
Restricted Subsidiaries of
(i) all or any of the Capital Stock of any Restricted
Subsidiary (other than directors' qualifying shares),
(ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted
Subsidiaries or
(iii) any other property and assets of the Company or any of
its Restricted Subsidiaries outside the ordinary course of business
of the Company or such Restricted Subsidiary and, in each case, that
is not governed by the provisions of the Indenture applicable to
mergers, consolidations and sales of assets of the Company; provided
that "Asset Sale" shall not include
(a) sales or other dispositions of inventory, receivables
and other current assets,
(b) sales or other dispositions of assets for
consideration at least equal to the fair market value of the
assets sold or disposed of, to the extent that the
consideration received would satisfy clause (B) of the
"Limitation on Asset Sales" covenant or
(c) sales or other dispositions of assets in a single
transaction or series of related transactions having a fair
market value, as determined in good faith by the Board of
Directors, of $2 million or less.
"Average Life" means, at any date of determination with respect to
any debt security, the quotient obtained by dividing
(i) the sum of the products of (a) the number of years
from such date of determination to the dates of each successive
scheduled principal payment of such debt security and (b) the
amount of such principal payment by
(ii) the sum of all such principal payments.
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"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) in equity of such Person, whether outstanding on
the Closing Date or issued thereafter, including, without limitation, all
Common Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) of which the discounted present
value of the rental obligations of such Person as lessee, in conformity with
GAAP, is required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value
of the rental obligations under a Capitalized Lease.
"Change of Control" means such time as
(i) (x) a "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the
ultimate "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of more than 35% of the total voting power of the
Voting Stock of the Company on a fully diluted basis and such
ownership represents a greater percentage of the total voting
power of the Voting Stock of the Company, on a fully diluted
basis, than is held by the Existing Stockholders and their
Affiliates on such date and (y) immediately following the
occurrence of the events specified in subsection (x), there shall
have occurred any downgrading, or notice shall have been given of
any intended or potential downgrading, in the rating accorded any
of the Company's securities or
(ii) individuals who on the Closing Date constitute the
Board of Directors (together with any new directors whose election
by the Board of Directors or whose nomination by the Board of
Directors for election by the Company's stockholders was approved
by a vote of at least two-thirds of the members of the Board of
Directors then in office who either were members of the Board of
Directors on the Closing Date or whose election or nomination for
election was previously so approved) cease for any reason to
constitute a majority of the members of the Board of Directors
then in office.
"Closing Date" means the date on which the Outstanding Notes are
originally issued under the Indenture.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated
Net Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income,
(i) Consolidated Interest Expense,
(ii) income taxes (other than income taxes (either
positive or negative) attributable to extraordinary and
non-recurring gains or losses arising out of sales of assets),
(iii) depreciation expense,
(iv) amortization expense and
(v) all other non-cash items reducing Adjusted
Consolidated Net Income (other than items that will require
cash payments and for which an accrual or reserve is, or is
required by GAAP to be, made), less all non-cash items
increasing Adjusted Consolidated Net Income, all as determined
on a consolidated basis for the Company and its Restricted
Subsidiaries in conformity with GAAP; provided that, if any
Restricted Subsidiary is not a Wholly Owned Restricted
Subsidiary, Consolidated EBITDA shall be reduced (to the extent
not otherwise reduced in the calculation of Adjusted
Consolidated Net Income in accordance with GAAP) by an amount
equal to
(A) the amount of the Adjusted Consolidated Net
Income attributable to such Restricted Subsidiary
multiplied by
(B) the quotient of (1) the number of shares of
outstanding Common Stock of such Restricted Subsidiary not
owned on the last day of such period by the Company or any
of
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its Restricted Subsidiaries divided by (2) the total
number of shares of outstanding Common Stock of such
Restricted Subsidiary on the last day of such period.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including, without limitation
but without duplication, amortization of original issue discount on any
Indebtedness and the interest portion of any deferred purchase price payment
obligation, calculated in accordance with the effective interest method of
accounting; all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing; the net costs
associated with Interest Rate Agreements; and Indebtedness that is Guaranteed
or secured by the Company or any of its Restricted Subsidiaries) and the
interest component of rentals in respect of Capitalized Lease Obligations
paid, accrued or scheduled to be paid or to be accrued by the Company and its
Restricted Subsidiaries during such period; excluding, however,
(i) any amount of such interest of any Restricted Subsidiary if
the net income of such Restricted Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income pursuant to clause
(iii) of the definition thereof (but only in the same proportion as
the net income of such Restricted Subsidiary is excluded from the
calculation of Adjusted Consolidated Net Income pursuant to clause
(iii) of the definition thereof),
(ii) any premiums, fees and expenses (and any amortization
thereof) payable in connection with the offering of the Notes or the
Credit Agreement, all as determined on a consolidated basis (without
taking into account Unrestricted Subsidiaries) in conformity with
GAAP, and
(iii) any interest or other financing costs associated with
loans to students of the Company's training academy, unless such
costs are paid by the Company or any Restricted Subsidiary.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted
Subsidiaries (which shall be as of a date not more than 90 days prior to the
date of such computation, and which shall not take into account Unrestricted
Subsidiaries), less any amounts attributable to Disqualified Stock or any
equity security convertible into or exchangeable for Indebtedness, the cost of
treasury stock and the principal amount of any promissory notes receivable
from the sale of the Capital Stock of the Company or any of its Restricted
Subsidiaries, each item to be determined in conformity with GAAP (excluding
the effects of foreign currency exchange adjustments under Financial
Accounting Standards Board Statement of Financial Accounting Standards No.
52).
"Credit Agreement" means the credit agreement among ATA, NBD Bank,
N.A., as agent, the lenders named therein, the Company and the other
Guarantors, as guarantors, together with all other loan or credit agreements
entered into from time to time with one or more banks or other institutional
lenders and all instruments and documents executed or delivered pursuant
thereto, in each case as such agreements, instruments or documents may be
amended (including any amendment and restatement thereof), supplemented,
replaced or otherwise modified from time to time in one or more successive
transactions (including any such transaction that changes the amount
available, replaces the relevant agreement or changes one or more lenders).
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement.
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Disqualified Stock" means any class or series of Capital Stock of
any Person that by its terms or otherwise is
(i) required to be redeemed prior to the Stated Maturity of the
Notes,
(ii) redeemable at the option of the Holder of such class or
series of Capital Stock at any time prior to the Stated Maturity of
the Notes or (iii) convertible into or exchangeable for Capital
Stock referred to in clause (i) or (ii) above or Indebtedness having
a scheduled maturity prior to the Stated Maturity of the Notes:
provided that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving Holders thereof
the right to require such Person to repurchase
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or redeem such Capital Stock upon the occurrence of an "asset
sale" or "change of control" occurring prior to the Stated
maturity of the Notes shall not constitute Disqualified Stock if
the "asset sale" or "change of control" provisions applicable to
such Capital Stock are no more favorable to the Holders of such
Capital Stock than the provisions contained in "Limitation on
Asset Sales" and "Repurchase of Notes upon a Change of Control"
covenants described below and such Capital Stock specifically
provides that such Person will not repurchase or redeem any such
stock pursuant to such provision prior to the Company's repurchase
of such Notes as are required to be repurchased pursuant to the
"Limitation on Asset Sales" and "Repurchase of Notes upon a Change
of Control" covenants described below.
"Exchange Note" means the registered 10 1/2% Senior Notes due 2004
being offered in exchange for the unregistered 10 1/2% Senior Notes due 2004
pursuant to the Exchange Offer.
"Existing Stockholders" means J. George Mikelsons, his spouse, his
issue, any trust for any of the foregoing and any Affiliate of any of the
foregoing.
"Fair Market Value" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to
buy, as determined in good faith by the Board of Directors, whose
determination shall be conclusive if evidenced by a Board Resolution.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved
by a significant segment of the accounting profession. All ratios and
computations contained or referred to in the Indenture
(i) shall be computed in conformity with GAAP applied on a
consistent basis, except that calculations made for purposes of
determining compliance with the terms of the covenants and with
other provisions of the Indenture shall be made without giving
effect to (A) the amortization of any expenses incurred in
connection with the offering of the Notes and (B) except as
otherwise provided, the amortization of any amounts required or
permitted by Accounting Principles Board Opinion Nos. 16 and 17 and
(ii) shall, insofar as they involve the treatment for financial
reporting purposes of amounts incurred with engine overhauls,
reflect the accounting policy of the Company as in effect as of the
Closing Date.
"Guarantee" means, without duplication, any obligation, contingent
or otherwise, of any Person directly or indirectly guaranteeing any
Indebtedness of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person
(i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such other Person
(whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or
services (unless such purchase arrangements are on arm's-length
terms and are entered into in the ordinary course of business), to
take-or-pay, or to maintain financial statement conditions or
otherwise) or
(ii) entered into for purposes of assuring in any other manner
the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in
part); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding
meaning.
"Incur" means, with respect to any Indebtedness, to incur, create.
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Acquired Indebtedness: provided
that neither the accrual of interest nor the accretion of original issue
discount shall be considered an Incurrence of Indebtedness.
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"Indebtedness" means, with respect to any Person at any date of
determination (without duplication),
(i) all indebtedness of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments,
(iii) all obligations of such Person in respect of letters of
credit or other similar instruments (including reimbursement
obligations with respect thereto, but excluding obligations with
respect to letters of credit (including trade letters of credit)
securing obligations (other than obligations described in (i) or
(ii) above or (v), (vi) or (vii) below) entered into in the ordinary
course of business of such Person to the extent such letters of
credit are not drawn upon or, if drawn upon, to the extent such
drawing is reimbursed no later than the third Business day following
receipt by such Person of a demand for reimbursement),
(iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services, which purchase price
is due more than six months after the date of placing such property
in service or taking delivery and title thereto or the completion of
such services, except Trade Payables,
(v) all Capitalized Lease Obligations,
(vi) all Indebtedness of other Persons secured by a Lien on any
asset of such Person, whether or not such Indebtedness is assumed by
such Person; provided that the amount of such Indebtedness shall be
the lesser of (A) the fair market value of such asset at such date
of determination and (B) the amount of such Indebtedness,
(vii) all Indebtedness of other Persons Guaranteed by such
Person to the extent such Indebtedness is Guaranteed by such Person,
and
(viii) to the extent not otherwise included in this definition,
obligations under Currency Agreements and Interest Rate Agreements.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as
described above and, with respect to contingent obligations, the
maximum liability upon the occurrence of the contingency giving rise
to the obligation, provided (A) that the amount outstanding at any
time of any Indebtedness issued with original issue discount is the
face amount of such Indebtedness less the remaining unamortized
portion of the original issue discount of such Indebtedness at the
time of its issuance as determined in conformity with GAAP, (B) that
money borrowed and set aside at the time of the Incurrence of any
Indebtedness in order to prefund the payment of the interest on such
Indebtedness shall not be deemed to be "Indebtedness" and (C) that
Indebtedness shall not include any liability for federal, state,
local or other taxes.
"Interest Coverage Ratio" means, on any Transaction Date, the ratio
of (i) the aggregate amount of Consolidated EBITDA for the then most recent
four fiscal quarters prior to such Transaction Date for which reports have
been filed with the Commission (the "Four Quarter Period") to (ii) the
aggregate Consolidated Interest Expense during such Four Quarter Period. In
making the foregoing calculation,
(A) pro forma effect shall be given to any Indebtedness
Incurred or repaid during the period (the "Reference Period")
commencing on the first day of the Four Quarter Period and ending on
the Transaction Date (other than Indebtedness Incurred or repaid
under a revolving credit or similar arrangement to the extent of the
commitment thereunder (or under any predecessor revolving credit or
similar arrangement) in effect on the last day of such Four Quarter
Period unless any portion of such Indebtedness is projected, in the
reasonable judgment of the senior management of the Company, to
remain outstanding for a period in excess of 12 months from the date
of the Incurrence thereof), in each case as if such Indebtedness had
been Incurred or repaid on the first day of such Reference Period;
(B) Consolidated Interest Expense attributable to interest on
any Indebtedness (whether existing or being Incurred) computed on a
pro forma basis and bearing a floating interest rate shall be
computed as if the rate in effect on the Transaction Date (taking
into account any Interest Rate Agreement applicable to such
Indebtedness if such Interest Rate Agreement has a remaining term
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<PAGE>
in excess of 12 months or, if shorter, at least equal to the
remaining term of such Indebtedness) had been the applicable rate
for the entire period:
(C) pro forma effect shall be given to Asset Dispositions and
Asset Acquisitions (including giving pro forma effect to the
application of proceeds of any Asset Disposition) that occur during
such Reference Period as if they had occurred and such proceeds had
been applied on the first day of such Reference Period; and
(D) pro forma effect shall be given to asset dispositions and
asset acquisitions (including giving pro forma effect to the
application of proceeds of any asset disposition) that have been
made by any Person that has become a Restricted Subsidiary or has
been merged with or into the Company or any Restricted Subsidiary
during such Reference Period and that would have constituted Asset
Dispositions or Asset Acquisitions had such transactions occurred
when such Person was a Restricted Subsidiary as if such asset
dispositions or asset acquisitions were Asset Dispositions or Asset
Acquisitions that occurred on the first day of such Reference
Period; provided that to the extent that clause (C) or (D) of this
sentence requires that pro forma effect be given to an Asset
Acquisition or Asset Disposition, such pro forma calculation shall
be based upon the four full fiscal quarters immediately preceding
the Transaction Date of the Person, or division or line of business
of the Person, that is acquired or disposed for which financial
information is available.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate
collar agreement, interest rate hedge agreement, option or future contract or
other similar agreement or arrangement.
"Investment" in any Person means any direct or indirect advance,
loan or other extension of credit (including, without limitation, by way of
Guarantee or similar arrangement; but excluding advances to customers in the
ordinary course of business that are, in conformity with GAAP, recorded as
accounts receivable on the balance sheet of the Company or its Restricted
Subsidiaries) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
bonds, notes, debentures or other similar instruments issued by, such Person
and shall include (i) the designation of a Restricted Subsidiary as an
Unrestricted Subsidiary and (ii) the fair market value of the Capital Stock
(or any other Investment), held by the Company or any of its Restricted
Subsidiaries, of (or in) any Person that has ceased to be a Restricted
Subsidiary, including without limitation, by reason of any transaction
permitted by clause (iii) of the "Limitation on the Issuance and Sale of
Capital Stock of Restricted Subsidiaries" covenant; provided that the fair
market value of the Investment remaining in any Person that has ceased to be a
Restricted Subsidiary shall not exceed the aggregate amount of Investments
previously made in such Person valued at the time such Investments were made
less the net reduction of such Investments. For purposes of the definition of
"Unrestricted Subsidiary" and the "Limitation on Restricted Payments" covenant
described below, (i) "Investment" shall include the fair market value of the
assets (net of liabilities (other than liabilities to the Company or any of
its Restricted Subsidiaries)) of any Restricted Subsidiary at the time that
such Restricted Subsidiary is designated an Unrestricted Subsidiary, (ii) the
fair market value of the assets (net of liabilities (other than liabilities to
the Company or any of its Restricted Subsidiaries)) of any Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is designated a
Restricted Subsidiary shall be considered a reduction in outstanding
Investments and (iii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, without limitation, any conditional
sale or other title retention agreement or lease in the nature thereof or any
agreement to give any security interest).
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means,
(a) with respect to any Asset Sale, the proceeds of such Asset
Sale in the form of cash or cash equivalents, including payments in
respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received
in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to
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the Company or any Restricted Subsidiary) and proceeds from the
conversion of other property received when converted to cash or
cash equivalents, net of
(i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers)
related to such Asset Sale,
(ii) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale
without regard to the consolidated results of operations of the
Company and its Restricted Subsidiaries, taken as a whole,
(iii) payments made to repay Indebtedness or any other
obligation outstanding at the time of such Asset Sale that either
(A) is secured by a Lien on the property or assets sold or (B) is
required to be paid as a result of such sale and
(iv) appropriate amounts to be provided by the Company or any
Restricted Subsidiary as a reserve against any liabilities
associated with such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as
determined in conformity with GAAP and
(b) with respect to any issuance or sale of Capital Stock, the
proceeds of such issuance or sale in the form of cash or cash
equivalents, including payments in respect of deferred payment
obligations (to the extent corresponding to the principal, but not
interest, component thereof) when received in the form of cash or
cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any Restricted Subsidiary)
and proceeds from the conversion of other property received when
converted to cash or cash equivalents, net of attorney's fees,
accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees
incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.
"Note Guarantee" means any Guarantee of the Notes by a Guarantor.
"Offer to Purchase" means an offer to purchase Notes by the Company
from the Holders commenced by mailing a notice to the Trustee and each Holder
stating:
(i) the covenant pursuant to which the offer is being made and
that all Notes validly tendered will be accepted for payment on a
pro rata basis;
(ii) the purchase price and the date of purchase (which shall
be a Business day no earlier than 30 days nor later than 60 days
from the date such notice is mailed) (the "Payment Date");
(iii) that any Note not tendered will continue to accrue
interest pursuant to its terms;
(iv) that, unless the Company defaults in the payment of the
purchase price, any Note accepted for payment pursuant to the Offer
to Purchase shall cease to accrue interest on and after the Payment
Date;
(v) that Holders electing to have a Note purchased pursuant to
the Offer to Purchase will be required to surrender the Note,
together with the form entitled "Option of the Holder to Elect
Purchase" on the reverse side of the Note completed, to the Paying
Agent at the address specified in the notice prior to the close of
business on the Business Day immediately preceding the Payment Date;
(vi) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the close of business
on the third Business Day immediately preceding the Payment Date, a
telegram, facsimile transmission or letter setting forth the name of
such Holder, the principal amount of Notes delivered for purchase
and a statement that such Holder is withdrawing his election to have
such Notes purchased;
(vii) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered; provided that each
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Note purchased and each new Note issued shall be in a principal
amount of $1,000 or integral multiples thereof; and
(viii) if more than 98% of the outstanding principal amount of
the Notes is tendered pursuant to an Offer to Purchase, the Company
shall have the right to redeem the balance of the Notes at the
purchase price specified in such Offer to Purchase, plus (without
duplication) accrued and unpaid interest, if any, to the Redemption
Date on the principal amount of the Notes to be redeemed.
On the Payment Date, the Company shall
(i) accept for payment on a pro rata basis Notes or portions
thereof tendered pursuant to an Offer to Purchase;
(ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Notes or portions thereof so accepted; and
(iii) deliver, or cause to be delivered, to the Trustee all
Notes or portions thereof so accepted together with an Officers'
Certificate specifying the Notes or portions thereof accepted for
payment by the Company. The Paying Agent shall promptly mail to the
Holders of Notes so accepted payment in an amount equal to the
purchase price, and the Trustee shall promptly authenticate and mail
to such Holders a new Note equal in principal amount to any
unpurchased portion of the Note surrendered; provided that each Note
purchased and each new Note issued shall be in a principal amount of
$1,000 or integral multiples thereof. The Company will publicly
announce the results of an Offer to Purchase as soon as practicable
after the Payment Date. The Trustee shall act as the Paying Agent
for an Offer to Purchase. The Company will comply with Rule 14e-1
under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable,
in the event that the Company is required to repurchase Notes
pursuant to an Offer to Purchase.
"Outstanding Note" means the unregistered 10 1/2% Senior Notes due
2004 being accepted for exchange pursuant to the exchange offer.
"Permitted Investment" means
(i) an Investment in the Company or a Restricted Subsidiary or
a Person which will, upon the making of such Investment, become a
Restricted Subsidiary or be merged or consolidated with or into or
transfer or convey all or substantially all its assets to, the
Company or a Restricted Subsidiary; provided that such Person's
primary business is related, ancillary or complementary to the
businesses of the Company and its Restricted Subsidiaries on the
date of such Investment;
(ii) Temporary Cash Investments;
(iii) payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be
treated as expenses in accordance with GAAP;
(iv) stock, obligations or securities received in settlement or
satisfaction of judgments or claims;
(v) loans or advances to employees in the ordinary course of
business; and
(vi) the non-cash portion of the consideration received for any
Asset Sale.
"Permitted Liens" means
(i) Liens for taxes, assessments, governmental charges or
claims that are being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for
which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made;
(ii) statutory and common law Liens of landlords and carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen or other
similar Liens arising in the ordinary course of business and with
respect to amounts not yet delinquent or being contested in good
faith by appropriate legal
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proceedings promptly instituted and diligently conducted and for
which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security;
(iv) Liens incurred or deposits made to secure the performance
of tenders, bids, leases, statutory or regulatory obligations,
bankers' acceptances, surety and appeal bonds, government contracts,
performance and return-of-money bonds and other obligations of a
similar nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money);
(v) easements, rights-of-way, municipal and zoning ordinances
and similar charges, encumbrances, title defects or other
irregularities that do not materially interfere with the ordinary
course of business of the Company or any of its Restricted
Subsidiaries;
(vi) Liens (including extensions and renewals thereof) upon
real or personal property acquired after the Closing Date; provided
that (a) each such Lien is created solely for the purpose of
securing Indebtedness Incurred to finance the costs (including
transaction costs and the costs of improvement or construction) of
the item of property or assets subject thereto and such Lien is
created prior to, at the time of or within twelve months after, the
later of the acquisition, the completion of construction or the
commencement of full operation of such property or assets (b) the
principal amount of the Indebtedness secured by such Lien does not
exceed 100% of such costs and (c) any such Lien shall not extend to
or cover any property or assets other than such item of property or
assets and any improvements on such item;
(vii) Liens upon aircraft, engines and buyer-furnished
equipment attached thereto or incorporated therein other than as
permitted by the foregoing clause (vi); provided that, after giving
effect thereto and the Indebtedness secured thereby, the book value
of assets of the Company not subject to any Lien (other than Liens
described in clauses (i) through (v), (xiii) and (xvi) of the
definition of "Permitted Liens") shall be not less than $125
million;
(viii) leases or subleases granted to others that do not
materially interfere with the ordinary course of business of the
Company and its Restricted Subsidiaries, taken as a whole;
(ix) Liens encumbering property or assets under construction
arising from progress or partial payments by a customer of the
Company or its Restricted Subsidiaries relating to such property or
assets;
(x) any interest or title of a lessor in the property subject
to any Capitalized Lease or operating lease;
(xi) Liens arising from filing Uniform Commercial Code
financing statements regarding leases;
(xii) Liens on property of, or on shares of Capital Stock or
Indebtedness of, any Person existing at the time such Person
becomes, or becomes a part of, any Restricted Subsidiary; provided
that such Liens do not extend to or cover any property or assets of
the Company or any Restricted Subsidiary other than the property or
assets acquired;
(xiii) Liens with respect to the assets of a Restricted
Subsidiary granted by such Restricted Subsidiary to the Company or a
Wholly Owned Restricted Subsidiary to secure Indebtedness owing to
the Company or such other Restricted Subsidiary;
(xiv) Liens arising from the rendering of a final judgment or
order against the Company or any Restricted Subsidiary that does not
give rise to an Event of Default;
(xv) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property
relating to such letters of credit and the products and proceeds
thereof;
(xvi) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
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(xvii) Liens encumbering customary initial deposits and margin
deposits, and other Liens that are within the general parameters
customary in the industry and incurred in the ordinary course of
business, in each case, securing Indebtedness under Interest Rate
Agreements and Currency Agreements and forward contracts, options,
future contracts, futures options or similar agreements or
arrangements designed solely to protect the Company or any of its
Restricted Subsidiaries from fluctuations in interest rates,
currencies or the price of commodities;
(xviii) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered
into by the Company or any of its Restricted Subsidiaries in the
ordinary course of business in accordance with the past practices of
the Company and its Restricted Subsidiaries prior to the Closing
Date; and
(xix) Liens on or sales of receivables.
"Restricted Subsidiary" means any Subsidiary of the Company other
than an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Service and its successors.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries,
(i) for the most recent fiscal year of the Company, accounted
for more than 10% of the consolidated revenues of the Company and
its Restricted Subsidiaries or
(ii) as of the end of such fiscal year, was the owner of more
than 10% of the consolidated assets of the Company and its
Restricted Subsidiaries, all as set forth on the most recently
available consolidated financial statements of the Company for such
fiscal year.
"Stated Maturity" means,
(i) with respect to any debt security, the date specified in
such debt security as the fixed date on which the final installment
of principal of such debt security is due and payable and
(ii) with respect to any scheduled installment of principal of
or interest on any debt security, the date specified in such debt
security as the fixed date on which such installment is due and
payable.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting
power of the outstanding Voting Stock is owned, directly or indirectly, by
such Person and one or more other Subsidiaries of such Person.
"Temporary Cash Investment" means any of the following:
(i) direct obligations of the United States of America or any
agency thereof or obligations fully and unconditionally guaranteed
by the United States of America or any agency thereof,
(ii) time deposit accounts, certificates of deposit and money
market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company which is organized under
the laws of the United States of America, any state thereof or any
foreign country recognized by the United States of America, and
which bank or trust company has capital, surplus and undivided
profits aggregating in excess of $50 million (or the foreign
currency equivalent thereof) and has outstanding debt which is rated
"N' (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in
Rule 436 under the Securities Act) or any money-market fund
sponsored by a registered broker dealer or mutual fund distributor,
(iii) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications described
in clause (ii) above,
(iv) commercial paper, maturing not more than 90 days after the
date of acquisition issued by a corporation (other than an Affiliate
of the Company) organized and in existence under the laws
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of the United States of America, any state thereof or any foreign
country recognized by the United States of America with a rating at
the time as of which any investment therein is made of "P-1" (or
higher) according to Moody's or A-l (or higher) according to S&P,
and
(v) securities with maturities of six months or less from the
date of acquisition issued or fully and unconditionally guaranteed
by any state, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority
thereof, and rated at least "A" by S&P or Moody's.
"Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries
arising in the ordinary course of business in connection with the acquisition
of goods or services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date
such Indebtedness is to be Incurred and with respect to any Restricted
Payment, the date such Restricted Payment is to be made.
"Unrestricted Subsidiary" means
(i) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below; and
(ii) any Subsidiary of an Unrestricted Subsidiary. The Board of
Directors may designate any Restricted Subsidiary (including any
newly acquired or newly formed Subsidiary of the Company) to be an
Unrestricted Subsidiary unless such Subsidiary owns any Capital
Stock of, or owns or holds any Lien on any property of, the Company
or any Restricted Subsidiary; provided that:
(A) any Guarantee by the Company or any Restricted
Subsidiary of any Indebtedness of the Subsidiary being so
designated shall be deemed an "Incurrence" of such Indebtedness
and an "Investment" by the Company or such Restricted
Subsidiary (or both, if applicable) at the time of such
designation;
(B) either (I) the Subsidiary to be so designated has
total assets of $1,000 or less or (II) if such Subsidiary has
assets greater than $1,000, such designation would be permitted
under the "Limitation on Restricted Payments" covenant
described below; and
(C) if applicable, the Incurrence of Indebtedness and the
Investment referred to in clause (A) of this proviso would be
permitted under the "Limitation on Indebtedness" and
"Limitation on Restricted Payments" covenants described below.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that
(i) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such designation
and (ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately after such designation would, if Incurred at
such time, have been permitted to be Incurred (and shall be deemed
to have been Incurred) for all purposes of the Indenture. Any such
designation by the Board of Directors shall be evidenced to the
Trustee by promptly filing with the Trustee a copy of the Board
Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the
foregoing provisions.
"Voting Stock" means with respect to any Person, Capital Stock of
any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person
the ownership of all of the outstanding Capital Stock of such Subsidiary
(other than any director's qualifying shares or Investments by foreign
nationals mandated by applicable law) by such Person or one or more Wholly
Owned Subsidiaries of such Person.
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Covenants
Limitation on Indebtedness
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness (other than the Notes, the Note
Guarantees and Indebtedness existing on the Closing Date); provided that the
Company may Incur Indebtedness if, after giving effect to the Incurrence of
such Indebtedness and the receipt and application of the proceeds therefrom,
the Interest Coverage Ratio would be greater than 3:1.
Notwithstanding the foregoing, the Company and any Restricted
Subsidiary (except as specified below) may Incur each and all of the
following:
(i) Indebtedness of the Company or any Restricted Subsidiary
that is a Guarantor outstanding at any time under the Credit
Agreement; provided, that after giving effect to the Incurrence of
any such Indebtedness, the book value of assets of the Company not
subject to any Lien (other than Liens described in clauses (i)
through (v), (xiii) and (xvi) of the definition of "Permitted
Liens") shall not be less than $125 million;
(ii) Indebtedness owed (A) to the Company evidenced by an
unsubordinated promissory note or (B) to any of its Restricted
Subsidiaries; provided that any event which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of such Indebtedness (other than to the Company
or another Restricted Subsidiary) shall be deemed, in each case, to
constitute an Incurrence of such Indebtedness not permitted by this
clause (ii);
(iii) Indebtedness issued in exchange for, or the net proceeds
of which are used to refinance or refund, then outstanding
Indebtedness Incurred under clause (v) of this paragraph and any
refinancings thereof in an amount not to exceed the amount so
refinanced or refunded (plus premiums, accrued interest, fees and
expenses); provided that Indebtedness the proceeds of which are used
to refinance or refund the Notes or Indebtedness that is pari passu
with, or subordinated in right of payment to, the Notes or Note
Guarantees shall only be permitted under this clause (iii) if:
(A) in case the Notes are refinanced in part or the
Indebtedness to be refinanced is pari passu with the Notes
or Note Guarantees, such new Indebtedness, by its terms or
by the terms of any agreement or instrument pursuant to
which such new Indebtedness is outstanding, is expressly
made pari passu with, or subordinate in right of payment
to, the remaining Notes or Note Guarantees, as the case
may be;
(B) in case the Indebtedness to be refinanced is
subordinated in right of payment to the Notes or Note
Guarantees, as the case may be, such new Indebtedness, by
its terms or by the terms of any agreement or instrument
pursuant to which such new Indebtedness is issued or
remains outstanding, is expressly made subordinate in
right of payment to the Notes or the Note Guarantees, as
the case may be, at least to the extent that the
Indebtedness to be refinanced is subordinated to the Notes
or the Note Guarantees, as the case may be; and
(C) such new Indebtedness, determined as of the date of
Incurrence of such new Indebtedness, does not mature prior
to the Stated Maturity of the Indebtedness to be
refinanced or refunded, and the Average Life of such new
Indebtedness is at least equal to the remaining Average
Life of the Indebtedness to be refinanced or refunded;
and provided further that in no event may Indebtedness of the Company be
refinanced by means of any Indebtedness of any Restricted Subsidiary
pursuant to this clause (iii) (other than pursuant to an Offer to
Purchase);
(iv) Indebtedness:
(A) in respect of performance, surety or appeal bonds
provided in ordinary course of business;
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(B) under Currency Agreements and Interest Rate Agreements
provided that such agreements (a) are designed solely to protect the Company or
its Restricted Subsidiaries against fluctuations in foreign currency exchange
rates or interest rates and (b) do not increase the Indebtedness of the
obligor outstanding at any time other than as a result of fluctuations in
foreign currency exchange rates or interest rates or by reason of fees,
indemnities and compensation payable thereunder; and
(C) arising from agreements providing for indemnification,
adjustment of purchase price or similar obligations, or from Guarantees or
letters of credit, surety bonds or performance bonds securing any obligations
of the Company or any of its Restricted Subsidiaries pursuant to such
agreements,
in any case Incurred in connection with the disposition of any business,
assets or Restricted Subsidiary (other than Guarantees of Indebtedness
Incurred by any Person acquiring all or any portion of such business,
assets or Restricted Subsidiary for the purpose of financing such
acquisition), in a principal amount not to exceed the gross proceeds
actually received by the Company or any Restricted Subsidiary in connection
with such disposition;
(v) Indebtedness of the Company, to the extent the net proceeds
thereof are promptly (A) used to purchase Notes tendered in an Offer
to Purchase made as a result of a Change in Control or (B) deposited
to defease the Notes as described below under "Defeasance";
(vi) Guarantees of the Notes, Guarantees by the Company or
Restricted Subsidiaries of Indebtedness of ATA under the Credit
Agreement, and Guarantees of Indebtedness of the Company by any
Restricted Subsidiary provided the Guarantee of such Indebtedness is
permitted by and made in accordance with the "Limitation on Issuance
of Guarantees by Restricted Subsidiaries" covenant described below;
(vii) Indebtedness of the Company or any Restricted Subsidiary
Incurred to finance the cost of aircraft, engines and
buyer-furnished equipment attached thereto or incorporated therein;
provided, that such Indebtedness is created solely for the purpose
of financing the costs (including transaction costs and the costs of
improvement or construction) of property or assets and is incurred
prior to, at the time of or within 12 months after, the later of the
acquisition, the completion of construction or the commencement of
full operation of such property or assets, and (b) the principal
amount of such Indebtedness does not exceed 100% of such costs; and
(viii) Indebtedness of the Company (in addition to Indebtedness
permitted under clauses (i) through (vii) above in an aggregate
principal amount outstanding at any time not to exceed $10 million.
(b) Notwithstanding any other provision of this "Limitation on
Indebtedness" covenant, the maximum amount of Indebtedness that the Company or
a Restricted Subsidiary may Incur pursuant to this "Limitation on
Indebtedness" covenant shall not be deemed to be exceeded, with respect to any
outstanding Indebtedness due solely to the result of fluctuations in the
exchange rates of currencies.
(c) For purposes of determining any particular amount of
Indebtedness under this "Limitation on Indebtedness" covenant,
(i) Indebtedness Incurred under the Credit Agreement on or
prior to the Closing Date shall be treated as Incurred pursuant to
clause (i) of the second paragraph of this "Limitation on
Indebtedness" covenant;
(ii) Guarantees, Liens or obligations with respect to letters
of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included; and
(iii) any Liens granted pursuant to the equal and ratable
provisions referred to in the "Limitation on Liens" covenant
described below shall not be treated as Indebtedness.
For purposes of determining compliance with this "Limitation on
Indebtedness" covenant, in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described in the above
clauses (other than Indebtedness referred to in clause (1) of the preceding
sentence), the
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Company, in its sole discretion shall classify such item of Indebtedness
and only be required to include the amount and type of such Indebtedness in
one of such clauses.
Limitation on Restricted Payments
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on or
with respect to its Capital Stock (other than (x) dividends or
distributions payable solely in shares of its Capital Stock (other
than Disqualified Stock) or in options, warrants or other rights to
acquire shares of such Capital Stock and (y) pro rata dividends or
distributions on Common Stock of Restricted Subsidiaries held by
minority stockholders) held by Persons other than the Company or any
of its Restricted Subsidiaries;
(ii) purchase, redeem, retire or otherwise acquire for value
any shares of Capital Stock of (A) the Company or an Unrestricted
Subsidiary (including options, warrants or other rights to acquire
such shares of Capital Stock) held by any Person or (B) a Restricted
Subsidiary (including options, warrants or other rights to acquire
such shares of Capital Stock) held by any Affiliate of the Company
(other than a Wholly Owned Restricted Subsidiary) or any Holder (or
any Affiliate of such Holder) of 5% or more of the Capital Stock of
the Company;
(iii) make any voluntary or optional principal payment, or
voluntary or optional redemption, repurchase, defeasance, or other
acquisition or retirement for value, of Indebtedness of the Company
or any Guarantor that is subordinated in right of payment to the
Notes or to a Guarantor's Note Guarantee, as the case may be; or
(iv) make any Investment, other than a Permitted Investment, in
any Person (such other actions described in clauses (i) through (iv)
above being collectively payments or any "Restricted Payments") if,
at the time of, and after giving effect to, the proposed Restricted
Payment:
(A) a Default or Event of Default shall have occurred
and be continuing;
(B) the Company could not Incur at least $1.00 of
Indebtedness under the first paragraph of the "Limitation on Indebtedness"
covenant; or
(C) the aggregate amount of all Restricted Payments
(the amount, if other than in cash, to be determined in good faith by the Board
of Directors, whose determination shall be conclusive and evidenced by a Board
Resolution) made after the Closing Date shall exceed the sum of
(1) 50% of the aggregate amount of the Adjusted
Consolidated Net Income (or, if the Adjusted Consolidated
Net Income is a loss, minus 100% of the amount of such
loss) (determined by excluding income resulting from
transfers of assets by the Company or a Restricted
Subsidiary to an Unrestricted Subsidiary) accrued on a
cumulative basis during the period (taken as one
accounting period) beginning on the first day of the
fiscal quarter immediately following the Closing Date and
ending on the last day of the last fiscal quarter
preceding the Transaction Date for which reports have been
filed with the Commission or provided to the Trustee
pursuant to the "Commission Reports and Reports to
Holders" covenant; plus
(2) the aggregate Net Cash Proceeds received by the
Company after the Closing Date from the issuance and sale
permitted by the Indenture of its Capital Stock (other
than Disqualified Stock) to a Person who is not a
Subsidiary of the Company, including an issuance or sale
permitted by the Indenture of Indebtedness of the Company
for cash subsequent to the Closing Date upon the
conversion of such Indebtedness into Capital Stock (other
than Disqualified Stock) of the Company, or from the
issuance to a Person who is not a Subsidiary of the
Company of any options, warrants or other rights to
acquire Capital Stock of the Company (in each case,
exclusive of any Disqualified Stock or any options,
warrants or other rights that are redeemable at the option
of the Holder, or are required to be redeemed, prior to
the Stated Maturity of the Notes); plus
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(3) an amount equal to the net reduction in
Investments (other than reductions in Permitted
Investments) in any Person resulting from payments of
interest on Indebtedness, dividends, repayments of loans
or advances, or other transfers of assets, in each case to
the Company or any Restricted Subsidiary or from the Net
Cash Proceeds from the sale of any such Investment
(except, in each case, to the extent any such payment or
proceeds are included in the calculation of Adjusted
Consolidated Net Income), or from redesignations of
Unrestricted Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the definition of
"Investments"); not to exceed, in each case, the amount of
Investments previously made by the Company or any
Restricted Subsidiary in such Person or Unrestricted
Subsidiary; minus
(4) the sum of the amounts by which the Pro Forma
Consolidated Net Worth after giving effect to each
consolidation, merger and sale of assets effectuated
pursuant to clause (iii) under the "Consolidation, Merger
and Sale of Assets" covenant was less than the Base
Consolidated Net Worth immediately prior to such
consolidation, merger and sale of assets; plus
(5) $5 million.
The foregoing provision shall not be violated by reason of:
(i) the payment of any dividend within 60 days after the date
of declaration thereof if, at said date of declaration, such payment
would comply with the foregoing paragraph;
(ii) the redemption, repurchase, defeasance or other
acquisition or retirement for value of Indebtedness that is
subordinated in right of payment to the Notes including premium, if
any and accrued and unpaid interest, with the proceeds of, or in
exchange for, Indebtedness Incurred under clause (iii) of the second
paragraph of part (a) of the "Limitation on Indebtedness" covenant;
(iii) the repurchase, redemption or other acquisition of
Capital Stock of the Company or an Unrestricted Subsidiary (or
options, warrants or other rights to acquire such Capital Stock) in
exchange for, or out of the proceeds of a substantially concurrent
offering of, shares of Capital Stock (other than Disqualified Stock)
of the Company (or options, warrants or other rights to acquire such
Capital Stock);
(iv) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness of the Company or any Guarantor which is subordinated
in right of payment to the Notes or the Note Guarantees, as the case
may be, in exchange for, or out of the proceeds of, a substantially
concurrent offering of, shares of the Capital Stock (other than
Disqualified Stock) of the Company or any Guarantor (or options,
warrants or other rights to acquire such Capital Stock);
(v) payments or distributions, to dissenting stockholders
pursuant to applicable law, pursuant to or in connection with a
consolidation, merger or transfer of assets that complies with the
provisions of the Indenture applicable to mergers, consolidations
and transfers of all or substantially all of the property and assets
of the Company;
(vi) Investments acquired in exchange for Capital Stock (other
than Disqualified Stock) of the Company; provided that, except in
the case of clauses (i) and (iii), no Default or Event of Default
shall have occurred and be continuing or occur as a consequence of
the actions or payments set forth therein; or
(vii) the purchase or redemption of subordinated Indebtedness
pursuant to asset sale or change of control provisions contained in
the Indenture or other governing instrument relating thereto;
provided, however, that (a) no offer or purchase obligation may be
triggered in respect of such Indebtedness unless a corresponding
obligation also arises for the Notes and (b) in all events, no
repurchase or redemption of such Indebtedness may be consummated
unless and until the Company shall have satisfied all repurchase
obligations with respect to any required purchase offer made with
respect to the Notes.
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Each Restricted Payment permitted pursuant to the preceding
paragraph (other than the Restricted Payment referred to in clause (ii)
thereof, an exchange of Capital Stock for Capital Stock or Indebtedness
referred to in clause (iii) or (iv) thereof and an Investment referred to in
clause (vi) thereof), and the Net Cash Proceeds from any issuance of Capital
Stock referred to in clauses (iii) and (iv), shall be included in calculating
whether the conditions of clause (C) of the first paragraph of this
"Limitation on Restricted Payments" covenant have been met with respect to any
subsequent Restricted Payments. In the event the proceeds of an issuance of
Capital Stock of the Company are used for the redemption, repurchase or other
acquisition of the Notes, or Indebtedness that is pari passu with the Notes,
then the Net Cash Proceeds of such issuance shall be included in clause (C) of
the first paragraph of this "Limitation on Restricted Payments" covenant only
to the extent such proceeds are not used for such redemption, repurchase or
other acquisition of Indebtedness.
Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries
The Company will not, and will not permit any Restricted Subsidiary
to, create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any
Restricted Subsidiary that is not a Guarantor to:
(i) pay dividends or make any other distributions permitted by
applicable law on any Capital Stock of such Restricted Subsidiary
owned by the Company or any other Restricted Subsidiary;
(ii) pay any Indebtedness owed to the Company or any other
Restricted Subsidiary;
(iii) make loans or advances to the Company or any other
Restricted Subsidiary; or
(iv) transfer any of its property or assets to the Company or
any other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions:
(i) existing on the Closing Date in the Credit Agreement, the
Indenture or any other agreements in effect on the Closing Date, and
any extensions, refinancings, renewals or replacements of such
agreements; provided that the encumbrances and restrictions in any
such extensions, refinancings, renewals or replacements are no less
favorable in any material respect to the Holders than those
encumbrances or restrictions that are then in effect and that are
being extended, refinanced, renewed or replaced;
(ii) existing under or by reason of applicable law;
(iii) existing with respect to any Person or the property or
assets of such Person acquired by the Company or any Restricted
Subsidiary, existing at the time of such acquisition and not
incurred in contemplation thereof, which encumbrances or
restrictions are not applicable to any Person or the property or
assets of any Person other than such Person or the property or
assets of such Person so acquired;
(iv) in the case of clause (iv) of the first paragraph of this
"Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries" covenant, (A) that restrict in a customary
manner the subletting, assignment or transfer of any property or
asset that is a lease, license, conveyance or contract or similar
property or asset, (B) existing by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on,
any property or assets of the Company or any Restricted Subsidiary
not otherwise prohibited by the Indenture or (C) arising or agreed
to in the ordinary course of business, not relating to any
Indebtedness, and that do not, individually or in the aggregate,
detract from the value of property or assets of the Company or any
Restricted Subsidiary in any manner material to the Company or any
Restricted Subsidiary;
(v) with respect to a Restricted Subsidiary and imposed
pursuant to an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock of, or
property and assets of, such Restricted Subsidiary; or
(vi) contained in the terms of any Indebtedness or any
agreement pursuant to which such Indebtedness was issued if:
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(A) the encumbrance or restriction applies only
in the event of a payment default or a default with respect to a
financial covenant contained in such Indebtedness or agreement;
(B) the encumbrance or restriction is not
materially more disadvantageous to the Holders of the Notes than
is customary in comparable financings (as determined by the
Company); and
(C) the Company determines that any such
encumbrance or restriction will not materially affect the
Company's ability to make principal or interest payments on the
Notes. Nothing contained in this "Limitation on Dividend and Other
Payment Restrictions Affecting Restricted Subsidiaries" covenant
shall prevent the Company or any Restricted Subsidiary from:
(1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in the "Limitation on
Liens" covenant; or
(2) restricting the sale or other disposition of
property or assets of the Company or any of its Restricted
Subsidiaries that secure Indebtedness of the Company or
any of its Restricted Subsidiaries.
Limitation on the Issuance and Sale of Capital Stock of Restricted Subsidiaries
The Company will not sell, and will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell, any shares of Capital
Stock of a Restricted Subsidiary (including options, warrants or other rights
to purchase shares of such Capital Stock) except:
(i) to the Company or a Wholly Owned Restricted
Subsidiary;
(ii) issuances of director's qualifying shares or sales to
foreign nationals of shares of Capital Stock of foreign
Restricted Subsidiaries, to the extent required by applicable
law; or
(iii) if, immediately after giving effect to such issuance
or sale, such Restricted Subsidiary would no longer constitute
a Restricted Subsidiary and any Investment in such Person
remaining after giving effect to such issuance or sale would
have been permitted to be made under the "Limitation on
Restricted Payments" covenant if made on the date of such
issuance or sale.
Limitation on Issuances of Guarantees by Restricted Subsidiaries
The Company will not permit any Restricted Subsidiary that is not a
Guarantor, directly or indirectly, to Guarantee any Indebtedness of the
Company which is pari passu with or subordinate in right of payment to the
Notes ("Guaranteed Indebtedness"), unless:
(i) such Restricted Subsidiary simultaneously executes and
delivers a supplemental indenture to the Indenture providing
for a Guarantee (a "Subsidiary Guarantee") of payment of the
Notes by such Restricted Subsidiary; and
(ii) such Restricted Subsidiary waives and will not in any
manner whatsoever claim or take the benefit or advantage of,
any rights of reimbursement, indemnity or subrogation or any
other rights against the Company or any other Restricted
Subsidiary as a result of any payment by such Restricted
Subsidiary under its Subsidiary Guarantee; provided that this
paragraph shall not be applicable to any Guarantee of any
Restricted Subsidiary that existed at the time such Person
became a Restricted Subsidiary and was not Incurred in
connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary. If the Guaranteed Indebtedness is:
(A) pari passu with the Notes or the Note
Guarantees, then the Guarantee of such Guaranteed
Indebtedness shall be pari passu with, or subordinated
to, the Subsidiary Guarantee or
(B) subordinated to the Notes or the Note
Guarantees, then the Guarantee of such Guaranteed
Indebtedness shall be subordinated to the Subsidiary
Guarantee at least to the extent that the Guaranteed
Indebtedness is subordinated to the Notes or the Note
Guarantees, as the case may be.
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Notwithstanding the foregoing, any Subsidiary Guarantee by a
Restricted Subsidiary may provide by its terms that it shall be automatically
and unconditionally released and discharged upon
(i) any sale, exchange or transfer, to any Person not an
Affiliate of the Company, of all of the Company's and each
Restricted Subsidiary's Capital Stock in, or all or
substantially all the assets of, such Restricted Subsidiary
(which sale, exchange or transfer is not prohibited by the
Indenture) or
(ii) the release or discharge of the Guarantee which
resulted in the creation of such Subsidiary Guarantee, except a
discharge or release by or as a result of payment under such
Guarantee.
Limitation on Transactions with Shareholders and Affiliates
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with any Holder (or any
Affiliate of such Holder) of 5% or more of any class of Capital Stock of the
Company or with any Affiliate of the Company or any Restricted Subsidiary,
except upon fair and reasonable terms no less favorable to the Company or such
Restricted Subsidiary than could be obtained, at the time of such transaction
or, if such transaction is pursuant to a written agreement, at the time of the
execution of the agreement providing therefor, in a comparable arm's-length
transaction with a Person that is not such a Holder or an Affiliate.
The foregoing limitation does not limit, and shall not apply to:
(i) transactions (A) approved by a majority of the
disinterested members of the Board of Directors, or (B) for
which the Company or a Restricted Subsidiary delivers to the
Trustee a written opinion of a nationally recognized investment
banking firm stating that the transaction is fair to the
Company or such Restricted Subsidiary from a financial point of
view;
(ii) any transaction solely between the Company and any of
its Wholly Owned Restricted Subsidiaries or solely between
Wholly Owned Restricted Subsidiaries;
(iii) the payment of reasonable and customary regular
compensation (whether in cash or securities) and expense
reimbursements to directors of the Company who are not
employees of the Company;
(iv) any payments or other transactions pursuant to any
tax-sharing agreement between the Company and any other Person
with which the Company files a consolidated tax return or with
which the Company is part of a consolidated group for tax
purposes; or
(v) any Restricted Payments not prohibited by the
"Limitation on Restricted Payments" covenant. Notwithstanding
the foregoing, any transaction or series of related
transactions covered by the first paragraph of this "Limitation
on Transactions with Shareholders and Affiliates" covenant and
not covered by clauses (ii) through (v) of this paragraph;
(a) the aggregate amount of which exceeds $1 million in value, must
be approved or determined to be fair in the manner provided for in clause
(i)(A) or (B) above; and
(b) the aggregate amount of which exceeds $3 million in value, must
be determined to be fair in the manner provided for in clause (i)(B) above.
Limitation on Liens
The Company will not, and will not permit any Restricted Subsidiary
to, create, incur, assume or suffer to exist any Lien on any of its assets or
properties of any character, or any shares of Capital Stock or Indebtedness of
any Restricted Subsidiary, without making effective provision for all of the
Notes (or in the case of a Lien on assets or properties of a Guarantor, the
Note Guarantee of such Guarantor) and all other amounts due under the
Indenture to be directly secured equally and ratably with (or, if the
obligation or liability to be secured by such Lien is subordinated in right of
payment to the Notes or the Note Guarantee, prior to) the obligation or
liability secured by such Lien.
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The foregoing limitation does not apply to:
(i) Liens existing on the Closing Date, including Liens
securing obligations under the Credit Agreement;
(ii) Liens granted after the Closing Date on any assets or
Capital Stock of the Company or its Restricted Subsidiaries created
in favor of the Holders;
(iii) Liens with respect to the assets of a Restricted
Subsidiary granted by such Restricted Subsidiary to the Company or a
Wholly Owned Restricted Subsidiary to secure Indebtedness owing to
the Company or such other Restricted Subsidiary;
(iv) Liens securing Indebtedness which is Incurred to refinance
secured Indebtedness which is permitted to be Incurred under clause
(iii) of the second paragraph of the "Limitation on Indebtedness"
covenant; provided that such Liens do not extend to or cover any
property or assets of the Company or any Restricted Subsidiary other
than the property or assets securing the Indebtedness being
refinanced;
(v) Liens on any property or assets of a Restricted Subsidiary
securing Indebtedness of such Restricted Subsidiary permitted under
the "Limitation on Indebtedness" covenant; or
(vi) Permitted Liens.
Limitation on Sale-Leaseback Transactions
The Company will not, and will not permit any Restricted Subsidiary
to, enter into any sale-leaseback transaction involving any of its assets or
properties whether now owned or hereafter acquired, whereby the Company or a
Restricted Subsidiary sells or transfers such assets or properties and then or
thereafter leases such assets or properties or any part thereof or any other
assets or properties which the Company or such Restricted Subsidiary, as the
case may be, intends to use for substantially the same purpose or purposes as
the assets or properties sold or transferred.
The foregoing restriction does not apply to any sale-leaseback
transaction if:
(i) the lease is for a period, including renewal rights, of not
in excess of three years;
(ii) the lease secures or relates to industrial revenue or
pollution control bonds;
(iii) the transaction is solely between the Company and any
Wholly Owned Restricted Subsidiary or solely between Wholly Owned
Restricted Subsidiaries; or
(iv) the Company or such Restricted Subsidiary, within 12
months after the sale or transfer of any assets or properties is
completed, applies an amount not less than the net proceeds received
from such sale in accordance with clause (A) or (B) of the first
paragraph of the "Limitation on Asset Sales" covenant described
below.
Limitation on Asset Sales
The Company will not, and will not permit any Restricted Subsidiary
to, consummate any Asset Sale, unless:
(i) the consideration received by the Company or such
Restricted Subsidiary is at least equal to the fair market value of
the assets sold or disposed of; and
(ii) at least 75% of the consideration received (including the
fair market value, as determined in good faith by the Board of
Directors, of any non-cash consideration) consists of (w) cash, (x)
Temporary Cash Investments, (y) marketable securities which are
liquidated for cash within 90 days following the consummation of
such Asset Sale, and (z) the assumption of Indebtedness of the
Company or any Restricted Subsidiary (other than the Notes and the
Note Guarantees); provided, that:
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(1) such Indebtedness is not subordinate in right of
payment to the Notes and the Note Guarantees; and
(2) the Company or such Restricted Subsidiary is
irrevocably released and discharged from such Indebtedness.
In the event and to the extent that the Net Cash Proceeds received
by the Company or any of its Restricted Subsidiaries from one or more Asset
Sales occurring on or after the Closing Date in any period of 12 consecutive
months exceed 10% of Adjusted Consolidated Net Tangible Assets (determined as
of the date closest to the commencement of such 12-month period for which a
consolidated balance sheet of the Company and its Subsidiaries has been filed
with the Commission) then the Company shall or shall cause the relevant
Restricted Subsidiary to:
(i) within twelve months after the date Net Cash
Proceeds so received exceed 10% of Adjusted Consolidated Net
Tangible Assets:
(A) apply an amount equal to such excess Net
Cash Proceeds to permanently repay unsubordinated Indebtedness of
the Company, or any Restricted Subsidiary providing a Subsidiary
Guarantee pursuant to the "Limitation on Issuances of Guarantees
by Restricted Subsidiaries" covenant described above or
Indebtedness of any other Restricted Subsidiary, in each case
owing to a Person other than the Company or any of its Restricted
Subsidiaries; or
(B) invest an equal amount, or the amount not so
applied pursuant to clause (A) (or enter into a definitive
agreement committing to so invest within 12 months after the date
of such agreement), in property or assets (other than current
assets) of a nature or type or that are used in a business (or in
a company having property and assets of a nature or type, or
engaged in a business) similar or related to the nature or type of
the property and assets of, or the business of, the Company and
its Restricted Subsidiaries existing on the date of such
investment; and
(ii) apply (no later than the end of the 12-month period
referred to in clause (i)) such excess Net Cash Proceeds (to the
extent not applied pursuant to clause (i) as provided in the
following paragraph of this "Limitation on Asset Sales" covenant.
The amount of such excess Net Cash Proceeds required to be applied
(or to be committed to be applied) during such 12-month period as set forth in
clause (i) of the preceding sentence and not applied as so required by the end
of such period shall constitute "Excess Proceeds."
If, as of the first day of any calendar month, the aggregate amount
of Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to
this "Limitation on Asset Sales" covenant totals at least $10 million, the
Company must commence, not later than the fifteenth Business day of such
month, and consummate an Offer to Purchase from the Holders on a pro rata
basis an aggregate principal amount of Notes equal to the Excess Proceeds on
such date, at a purchase price equal to 100% of the principal amount of the
Notes, plus, in each case, accrued interest (if any) to the Payment Date.
In the event that more than 98% of the outstanding principal amount
of the Notes are tendered pursuant to such Offer to Purchase, the balance of
the Notes will be redeemable, at the Company's option, in whole or in part, at
any time or from time to time thereafter, at a Redemption Price equal to the
price specified in such Offer to Purchase plus accrued and unpaid interest, if
any, to the Redemption Date (subject to the right of Holders of record on the
relevant Regular Record Date that is on or prior to the Redemption Date to
receive interest due on an Interest Payment Date).
Repurchase of Notes upon a Change of Control
The Company must commence, within 30 days of the occurrence of a
Change of Control, and consummate an Offer to Purchase for all Notes then
outstanding, at a purchase price equal to 101% of the principal amount
thereof, plus accrued interest (if any) to the Payment Date. In the event that
more than 98% of the outstanding principal amount of the Notes are tendered
pursuant to such Offer to Purchase, the balance of the Notes will be
redeemable, at the Company's option, in whole or in part, at any time or from
time to time thereafter, at a Redemption Price equal to the price specified in
such Offer to Purchase plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
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Regular Record Date that is on or prior to the Redemption Date to receive
interest due on an Interest Payment Date).
There can be no assurance that the Company will have sufficient
funds available at the time of any Change of Control to make any debt payment
(including repurchases of Notes) required by the foregoing covenant (as well
as may be contained in other securities of the Company which might be
outstanding at the time). The above covenant requiring the Company to
repurchase the Notes will, unless consents are obtained, require the Company
to repay all indebtedness then outstanding which by its terms would prohibit
such Note repurchase.
Commission Reports and Reports to Holders
Whether or not the Company or any Guarantor is then required to file
reports with the Commission, the Company and each Guarantor shall file with
the Commission all such reports and other information as they would be
required to file with the Commission by Sections 13(a) or 15(d) under the
Exchange Act if they were subject thereto. The Company shall supply the
Trustee and each Holder or shall supply to the Trustee for forwarding to each
such Holder, without cost to such Holder, copies of such reports and other
information.
Events of Default
The following events will be defined as "Events of Default" in the
Indenture:
(a) default in the payment of principal of (or premium, if any,
on) any Note when the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise;
(b) default in the payment of interest on any Note when the
same becomes due and payable, and such default continues for a
period of 30 days;
(c) default in the performance or breach of the provisions of
the Indenture applicable to mergers, consolidations and transfers of
all or substantially all of the assets of the Company or a Guarantor
or the failure to make or consummate an Offer to Purchase in
accordance with the "Limitation on Asset Sales" or "Repurchase of
Notes upon a Change of Control" covenant;
(d) the Company or a Guarantor defaults in the performance of
or breaches any other covenant or agreement of the Company or a
Guarantor in the Indenture or under the Notes (other than a default
specified in clause (a), (b) or (c) above) and such default or
breach continues for a period of 30 consecutive days after written
notice by the Trustee or the Holders of 25% or more in aggregate
principal amount of the Notes;
(e) there occurs with respect to any issue or issues of
Indebtedness of the Company, any Guarantor or any Significant
Subsidiary having an outstanding principal amount of $10 million or
more in the aggregate for all such issues of all such Persons,
whether such Indebtedness now exists or shall hereafter be created,
(1) an event of default that has caused the Holder thereof to
declare such Indebtedness to be due and payable prior to its Stated
Maturity and such Indebtedness has not been discharged in full or
such acceleration has not been rescinded or annulled within 30 days
of such acceleration and/or (2) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such
defaulted payment shall not have been made, waived or extended
within 30 days of such payment default;
(f) any final judgment or order (not covered by insurance) for
the payment of money in excess of $10 million in the aggregate for
all such final judgments or orders against all such Persons
(treating any deductibles, self-insurance or retention as not so
covered) shall be rendered against the Company, any Guarantor or any
Significant Subsidiary and shall not be paid or discharged, and
there shall be any period of 30 consecutive days during which a stay
of enforcement of such final judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect;
(g) a court having jurisdiction in the premises enters a
decree or order for (A) relief in respect of the Company or any
Significant Subsidiary in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the
Company or any
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Significant Subsidiary or for all or substantially all of the
property and assets of the Company or any Significant Subsidiary
or (C) the winding up or liquidation of the affairs of the Company
or any Significant Subsidiary and, in each case, such decree or
order shall remain unstayed and in effect for a period of 30
consecutive days;
(h) the Company or any Significant Subsidiary (A) commences a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of
an order for relief in an involuntary case under any such law, (B)
consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or any Significant Subsidiary or for all or
substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) effects any general assignment for the
benefit of creditors or
(i) any Note Guarantee ceases to be in full force and effect
(except pursuant to its terms) or is declared null and void or any
Guarantor denies that it has any further liability under any Note
Guarantee, or gives notice to such effect.
If an Event of Default (other than an Event of Default specified in
clause (g) or (h) above that occurs with respect to the Company or any
Guarantor) occurs and is continuing under the Indenture, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes, then
outstanding, by written notice to the Company (and to the Trustee if such
notice is given by the Holders), may, and the Trustee at the request of such
Holders shall, declare the principal of, premium, if any, and accrued interest
on the Notes to be immediately due and payable.
Upon a declaration of acceleration, such principal of, premium, if
any, and accrued interest shall be immediately due and payable. In the event
of a declaration of acceleration because an Event of Default set forth in
clause (e) above has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled if the event of
default triggering such Event of Default pursuant to clause (e) shall be
remedied or cured by the Company, any Guarantor or the relevant Significant
Subsidiary or waived by the Holders of the relevant Indebtedness within 60
days after the declaration of acceleration with respect thereto. If an Event
of Default specified in clause (g) or (h) above occurs with respect to the
Company or any Significant Subsidiary, the principal of, premium, if any, and
accrued interest on the Notes then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part
of the Trustee or any Holder. The Holders of at least a majority in principal
amount of the outstanding Notes by written notice to the Company and to the
Trustee, may waive all past defaults and rescind and annul a declaration of
acceleration and its consequences if:
(i) all existing Events of Default, other than the nonpayment
of the principal of, premium, if any, and interest on the Notes that
have become due solely by such declaration of acceleration, have
been cured or waived and
(ii) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction. For information as to
the waiver of defaults, see "--Modification and Waiver."
The Holders of at least a majority in aggregate principal amount of
the outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or the Indenture, that may involve the
Trustee in personal liability, or that the Trustee determines in good faith
may be unduly prejudicial to the rights of Holders of Notes not joining in the
giving of such direction and may take any other action it deems proper that is
not inconsistent with any such direction received from Holders of Notes. A
Holder may not pursue any remedy with respect to the Indenture or the Notes
unless:
(i) the Holder gives the Trustee written notice of a continuing
Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount
of outstanding Notes make a written request to the Trustee to pursue
the remedy;
(iii) such Holder or Holders offer the Trustee indemnity
satisfactory to the Trustee against any costs, liability or expense;
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(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes do not give the
Trustee a direction that is inconsistent with the request. However,
such limitations do not apply to the right of any Holder of a Note
to receive payment of the principal of, premium, if any, or interest
on, such Note or to bring suit for the enforcement of any such
payment, on or after the due date expressed in the Notes, which
right shall not be impaired or affected without the consent of the
Holder.
The Indenture will require certain officers of the Company and each
Guarantor to deliver to the Trustee on or before a date not more than 90 days
after the end of each fiscal year, an Officers' Certificate stating whether or
not such officers know of any Default or Event of Default that occurred during
such fiscal year. The Company and each Guarantor will also be obligated to
notify the Trustee of any default or defaults in the performance of any
covenants or agreements under the Indenture.
Consolidation, Merger and Sale of Assets
Neither the Company nor any Guarantor will consolidate with, merge
with or into, or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its property and assets (as an entirety or substantially
an entirety in one transaction or a series of related transactions) to, any
Person or permit any Person to merge with or into the Company or any Guarantor
unless:
(i) the Company or the Guarantor shall be the continuing
Person, or the Person (if other than the Company or the Guarantor)
formed by such consolidation or into which the Company or the
Guarantor is merged or that acquired or leased such property and
assets of the Company or the Guarantor shall be a corporation
organized and validly existing under the laws of the United States
of America or any jurisdiction thereof and shall expressly assume,
by a supplemental indenture, executed and delivered to the Trustee,
all of the obligations of the Company or the Guarantor, as the case
may be, on all of the Notes or the Note Guarantees, as the case may
be, and under the Indenture;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a
pro forma basis, the Company or any Guarantor, as the case may be,
or any Person becoming the successor obligor of the Notes or the
Note Guarantees, as the case may be, shall have a Consolidated Net
Worth (a "Pro Forma Consolidated Net Worth") which is equal to or
greater than the Consolidated Net Worth of the Company or the
Guarantor, as the case may be, immediately prior to such transaction
(the "Base Consolidated Net Worth"), or if the Pro Forma
Consolidated Net Worth is less than the Base Consolidated Net Worth,
the amount by which the Pro Forma Consolidated Net Worth is less
than the Base Consolidated Net Worth shall, if considered as a
Restricted Payment, be permitted to be paid at the time under the
"Limitation on Restricted Payments" covenant;
(iv) immediately after giving effect to such transaction on a
pro forma basis the Company or any Guarantor, as the case may be, or
any Person becoming the successor obligor of the Notes or the Note
Guarantees, as the case may be, could Incur at least $1.00 of
Indebtedness under the first paragraph of the "Limitation on
Indebtedness" covenant; provided that this clause (iv) shall not
apply to a consolidation or merger with or into a Wholly Owned
Restricted Subsidiary with a positive net worth; and provided
further that, in connection with any such merger or consolidation,
no consideration (other than Capital Stock (other than Disqualified
Stock) in the surviving Person, the Company or any Guarantor) shall
be issued or distributed to the stockholders of the Company or the
Guarantor; and
(v) the Company delivers to the Trustee an Officers'
Certificate (attaching the arithmetic computations to demonstrate
compliance with clauses (iii) and (iv)) and Opinion of Counsel, in
each case stating that such consolidation, merger or transfer and
such supplemental indenture complies with this provision and that
all conditions precedent provided for herein relating to such
transaction have been complied with; provided, however, that
clauses (iii) and (iv) above do not apply if, in the good faith
determination of the Board of Directors of the Company, whose
determination shall be evidenced by a Board Resolution, the
principal purpose of such transaction is to change the state of
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incorporation of the Company or any Guarantor; and provided
further that any such transaction shall not have as one of its
purposes the evasion of the foregoing limitations.
Defeasance
Defeasance and Discharge. The Indenture provides that the Company
and each Guarantor will be deemed to have paid and will be discharged from any
and all obligations in respect of the Notes and the Note Guarantees on the
123rd day after the deposit referred to below, and the provisions of the
Indenture will no longer be in effect with respect to the Notes and the Note
Guarantees (except for, among other matters, certain obligations to register
the transfer or exchange of the Notes, to replace stolen, lost or mutilated
Notes, to maintain paying agencies and to hold monies for payment in trust)
if, among other things,
(A) the Company or the Guarantors have deposited with the
Trustee, in trust, money and/or U.S. Government Obligations that
through the payment of interest and principal in respect thereof
in accordance with their terms will provide money in an amount
sufficient to pay the principal of, premium, if any, and accrued
interest on the Notes on the Stated Maturity of such payments in
accordance with the terms of the Indenture and the Notes,
(B) the Company has delivered to the Trustee (i) either
(x) an Opinion of Counsel to the effect that Holders will not
recognize income, gain or loss for federal income tax purposes as
a result of the Company's exercise of its option under this
"Defeasance" provision and will be subject to federal income tax
on the same amount and in the same manner and at the same times as
would have been the case if such deposit, defeasance and discharge
had not occurred, which Opinion of Counsel must be based upon (and
accompanied by a copy of) a ruling of the Internal Revenue Service
to the same effect unless there has been a change in applicable
federal income tax law after the Closing Date such that a ruling
is no longer required or (y) a ruling directed to the Trustee
received from the Internal Revenue Service to the same effect as
the aforementioned Opinion of Counsel and (ii) an Opinion of
Counsel to the effect that the creation of the defeasance trust
does not violate the Investment Company Act of 1940,
(C) immediately after giving effect to such deposit on a
pro forma basis, no Event of Default, or event that after the
giving of notice or lapse of time or both would become an Event of
Default, shall have occurred and be continuing on the date of such
deposit or during the period ending on the 123rd day after the
date of such deposit, and such deposit shall not result in a
breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound; and
(D) if at such time the Notes are listed on a national
securities exchange, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that the Notes will not be
delisted as a result of such deposit, defeasance and discharge.
Defeasance of Certain Covenants and Certain Events of Default. The
Indenture further will provide that the provisions of the Indenture will no
longer be in effect with respect to clauses (iii) and (iv) under
"Consolidation, Merger and Sale of Assets" and all the covenants described
herein under "Covenants," clause (c) under "Events of Default" with respect to
such clauses (iii) and (iv) under "Consolidation, Merger and Sale of Assets,"
clause (d) with respect to such other covenants and clauses (e) and (f) under
"Events of Default" shall be deemed not to be Events of Default upon, among
other things, the deposit with the Trustee, in trust, of money and/or U.S.
Government Obligations that through the payment of interest and principal in
respect thereof in accordance with their terms will provide money in an amount
sufficient to pay the principal of, premium, if any, and accrued interest on
the Notes on the Stated Maturity of such payments in accordance with the terms
of the Indenture and the Notes, the satisfaction of the provisions described
in clauses (B)(ii), (C) and (D) of the preceding paragraph and the delivery by
the Company to the Trustee of an Opinion of Counsel to the effect that, among
other things, the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and defeasance of certain
covenants and Events of Default and will be subject to federal income tax on
the same amount and in the same manner and at the same times as would have
been the case if such deposit and defeasance had not occurred.
Defeasance and Certain Other Events of Default. In the event the
Company exercises its option to omit compliance with certain covenants and
provisions of the Indenture with respect to the Notes as described in the
immediately preceding paragraph and the Notes are declared due and payable
because of
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the occurrence of an Event of Default that remains applicable, the amount
of money and/or U.S. Government Obligations on deposit with the Trustee
will be sufficient to pay amounts due on the Notes at the time of their
Stated Maturity but may not be sufficient to pay amounts due on the Notes
at the time of the acceleration resulting from such Event of Default.
However, the Company will remain liable for such payments and the
Guarantors' Note Guarantees with respect to such payments will remain in
effect.
Modification and Waiver
Modifications and amendments of the Indenture may be made by the
Company, the Guarantors and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the outstanding Notes;
provided, however, that no such modification or amendment may, without the
consent of each Holder affected thereby,
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note,
(ii) reduce the principal amount of, or premium, if any, or
interest on, any Note,
(iii) change the place or currency of payment of principal of,
or premium, if any, or interest on, any Note,
(iv) impair the right to institute suit for the enforcement of
any payment on or after the Stated Maturity (or, in the case of a
redemption, on or after the Redemption Date) of any Note,
(v) reduce the above-stated percentage of outstanding Notes the
consent of whose Holders is necessary to modify or amend the
Indenture,
(vi) waive a default in the payment of principal of, premium,
if any, or interest on the Notes,
(vii) reduce the percentage or aggregate principal amount of
outstanding Notes the consent of whose Holders is necessary for
waiver of compliance with certain provisions of the Indenture or for
waiver of certain defaults, or
(viii) release any Guarantor from its Note Guarantee or
otherwise modify the term the Note Guarantees in a material respect
adverse to the Holders.
Modifications and amendments of the Indenture may be made by the
Company, the Guarantors and the Trustee without notice to or the consent of
any Holder
(i) to cure any ambiguity, defect or inconsistency,
(ii) to comply with the "Consolidation, Merger and Sale of
Assets" covenant,
(iii) to comply with any requirements of the Commission in
connection with the qualification of the Indenture under the Trust
Indenture Act,
(iv) to evidence and provide for the acceptance of appointment
by a successor Trustee,
(v) to provide for uncertificated Notes in addition to or in
place of certificated Notes,
(vi) to add one or more Subsidiary Guarantees on the terms
required by the Indenture,
(vii) to make any change that does not adversely affect the
rights of any Holder in any material respect.
No Personal Liability of Incorporators, Stockholders, Officers, Directors, or
Employees
The Indenture provides that no recourse for the payment of the
principal of, premium, if any or interest on any of the Notes or for any claim
based thereon or otherwise in respect thereof, and no recourse under or upon
any obligation, covenant or agreement of the Company or the Guarantors in the
Indenture, or in any of the Notes or because of the creation of any
Indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer, director, employee or controlling person of the Company
or the
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Guarantors or of any successor Person thereof. Each Holder, by accepting
the Notes, waives and releases all such liability.
Concerning the Trustee
The Indenture provides that, except during the continuance of a
Default, the Trustee will not be liable, except for the performance of such
duties as are specifically set forth in such Indenture. If an Event of Default
has occurred and is continuing, the Trustee will use the same degree of care
and skill in its exercise as a prudent person would exercise under the
circumstances in the conduct of such person's own affairs.
The Indenture and provisions of the Trust Indenture Act incorporated
by reference therein contain limitations on the rights of the Trustee, should
it become a creditor of the Company or a Guarantor, to obtain payment of
claims in certain cases or to realize on certain property received by it in
respect of any such claims, as security or otherwise. The Trustee is permitted
to engage in other transactions; provided, however, that if it acquires any
conflicting interest, it must eliminate such conflict or resign.
BOOK-ENTRY; DELIVERY AND FORM
Exchange Notes will be represented by one or more permanent global
Notes in definitive, fully registered form without interest coupons (each a
"Global Note") and will be deposited with the Trustee as custodian for, and
registered in the name of a nominee of, DTC.
Ownership of beneficial interests in a Global Exchange Note will be
limited to persons who have accounts with DTC ("participants") or persons who
hold interests through participants. Ownership of beneficial interests in a
Global Note will be shown on, and the transfer of that ownership will be
effected only through, records maintained by DTC or its nominee (with respect
to interests of participants) and the records of participants (with respect to
interests of persons other than participants). Beneficial Owners may hold
their interests in a Restricted Global Note directly through DTC if they are
participants in such system, or indirectly through organizations which are
participants in such system.
So long as DTC, or its nominee, is the registered owner or Holder of
a Global Note, DTC or such nominee, as the case may be, will be considered the
sole owner or Holder of the Notes represented by such Global Note for all
purposes under the Indenture and the Notes. No beneficial owner of an interest
in a Global Note will be able to transfer that interest except in accordance
with DTC's applicable procedures, in addition to those provided for under the
Indenture.
Payments of the principal of, and interest on, a Global Note will be
made to DTC or its nominee, as the case may be, as the registered owner
thereof. Neither the Company, the Trustee nor any Paying Agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Note or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Company expects that DTC or its nominee, upon receipt of any
payment of principal or interest in respect of a Global Note, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Note as
shown on the records of DTC or its nominee. The Company also expects that
payments by participants to owners of beneficial interests in such Global Note
held through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers registered in the names of nominees for such customers. Such
payments will be the responsibility of such participants.
Transfers between participants in DTC will be effected in the
ordinary way in accordance with DTC rules and will be settled in same-day
funds.
The Company expects that DTC will take any action permitted to be
taken by a Holder of Notes (including the presentation of Notes for exchange
as described below) only at the direction of one or more participants to whose
account the DTC interests in a Global Note is credited and only in respect of
such portion of the aggregate principal amount of Notes as to which such
participant or participants has or have given such direction. However, if
there is an Event of Default under the Notes, DTC will exchange the
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applicable Global Note for Certificated Notes, which it will distribute to
its participants and which may be legended as set forth under the heading
"Transfer Restrictions."
The Company understands that: DTC is a limited purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the Uniform Commercial
Code and a "Clearing Agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC was created to hold securities for its
participants and facilitate the clearance and settlement of securities
transactions between participants through electronic book-entry changes in
accounts of its participants, thereby eliminating the need for physical
movement of certificates and certain other organizations. Indirect access to
the DTC system is available to others such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly ("indirect participants").
Although DTC is expected to follow the foregoing procedures in order
to facilitate transfers of interests in a Global Note among participants of
DTC, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. Neither the
Company nor the Trustee will have any responsibility for the performance by
DTC or its respective participants or indirect participants of its obligations
under the rules and procedures governing its operations.
If DTC is at any time unwilling or unable to continue as a
depositary for the Global Notes and a successor depositary is not appointed by
the Company within 90 days, the Company will issue Certificated Notes.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of the principal U.S.
federal income tax consequences of the purchase, ownership and disposition
of the Notes to initial purchasers of Outstanding Notes who are U.S.
Holders (as defined below) and the principal U.S. federal income and estate
tax consequences of the purchase, ownership, exchange and disposition of
the Notes to initial purchasers of Outstanding Notes who are Foreign
Holders (as defined below).
This discussion is based on currently existing provisions of the
Code, existing, temporary and proposed Treasury regulations promulgated
thereunder, and administrative and judicial interpretations thereof, all as in
effect or proposed on the date hereof and all of which are subject to change,
possibly with retroactive effect, or different interpretations. This
discussion does not address the tax consequences to subsequent purchasers of
Outstanding Notes and is limited to purchasers who hold the Notes as capital
assets, within the meaning of Section 1221 of the Code.
This discussion also does not address the tax consequences to
Foreign Holders that are subject to U.S. federal income tax on a net basis on
income realized with respect to a Note because such income is effectively
connected with the conduct of a U.S. trade or business. Such Foreign Holders
are generally taxed in a similar manner to U.S. Holders, but certain special
rules do apply. Moreover, this discussion is for general information only and
does not address all of the tax consequences that may be relevant to
particular initial purchasers in light of their personal circumstances or to
certain types of initial purchasers (such as certain financial institutions,
insurance companies, tax-exempt entities, dealers in securities or persons who
have hedged the risk of owning a Note).
PROSPECTIVE HOLDERS OF EXCHANGE NOTES ARE URGED TO CONSULT THEIR OWN
TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE EXCHANGE
OFFER AND THE OWNERSHIP AND DISPOSITION OF THE EXCHANGE NOTES, INCLUDING THE
APPLICABILITY OF ANY FEDERAL TAX LAWS OR ANY STATE, LOCAL OR FOREIGN TAX LAWS,
AND ANY CHANGES (OR PROPOSED CHANGES) IN APPLICABLE TAX LAWS OR
INTERPRETATIONS THEREOF.
U.S. Federal Income Taxation of U.S. Holders
As used herein, the term "U.S. Holder" means a Holder of a Note that
is, for U.S. federal income tax purposes, (a) a citizen or resident of the
U.S., (b) a corporation, partnership or other entity created or organized in
or under the laws of the U.S. or any political subdivision thereof, (c) an
estate the income of
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which is subject to U.S. federal income taxation regardless of source, or
(d) a trust subject to the primary supervision of a court within the U.S.
and the control of a U.S. fiduciary, as described in the Code.
If a partnership holds a Note, the tax treatment of a partner will
generally depend upon the status of the partner and upon the activities of the
partnership. If you are a partner of a partnership holding a Note, we suggest
that you consult your tax advisor.
Payment of Interest on Notes. Interest paid or payable on a Note
will be taxable to a U.S. Holder as ordinary interest income, generally at the
time it is received or accrued, in accordance with such Holder's regular
method of accounting for U.S. federal income tax purposes.
Failure of the Company to file or cause to be declared effective an
exchange offer registration statement or Shelf Registration Statement or to
consummate the exchange offer as described under "Description of the
Notes--Registration Rights" will cause additional interest to accrue on the
Notes in the manner described therein. Such additional interest may be treated
as original issue discount, includible by a Holder in income as such interest
accrues, in advance of receipt of any cash payment thereof. The Notes will not
be issued with original issue discount.
Sale, Exchange or Retirement of the Notes. Upon the sale, exchange,
redemption, retirement at maturity or other disposition of a Note, a U.S.
Holder generally will recognize taxable gain or loss equal to the difference
between the sum of cash plus the fair market value of all other property
received on such disposition (except to the extent such cash or property is
attributable to accrued but unpaid interest, which will be taxable as ordinary
income) and such U.S. Holder's adjusted tax basis in the Note. A U.S. Holder's
adjusted tax basis in a Note generally will equal the cost of the Note to such
U.S. Holder, less any principal payments received by such U.S. Holder.
Gain or loss recognized on the disposition of a Note generally will
be capital gain or loss and will be long-term capital gain or loss if, at the
time of such disposition, the U.S. Holder's holding period for the Note is
more than one year.
The exchange of a Note by a U.S. Holder for an Exchange Note should
not constitute a taxable exchange and a U.S. Holder will have the same tax
basis and holding period in the Exchange Notes as the Notes. Any increase in
the interest rate of the Notes resulting from an exchange offer not being
consummated, or a Shelf Registration Statement not being declared effective,
would not be treated as a taxable exchange.
Backup Withholding and Information Reporting. Backup withholding and
information reporting requirements may apply to certain payments of principal,
premium, if any, and interest on a Note, and to proceeds of the sale or
redemption of a Note before maturity. The Company, its agent, a broker, the
Trustee or any paying agent, as the case may be, will be required to withhold
from any payment that is subject to backup withholding a tax equal to 31% of
such payment if a U.S. Holder fails to furnish his taxpayer identification
number (social security or employer identification number), certify that such
number is correct, certify that such Holder is not subject to backup
withholding or otherwise comply with the applicable requirements of the backup
withholding rules. Certain U.S. Holders, including all corporations, are not
subject to backup withholding and information reporting requirements. Any
amounts withheld under the backup withholding rules from a payment to a U.S.
Holder will be allowed as a credit against such U.S. Holder's U.S. federal
income tax and may entitle the Holder to a refund, provided that the required
information is furnished to the Internal Revenue Service ("IRS").
U.S. Federal Income Taxation of Foreign Holders
As used herein, the term "Foreign Holder" means a Holder of a Note
that is, for U.S. federal income tax purposes, (a) a nonresident alien
individual, (b) a corporation organized or created under non-U.S. law, (c) an
estate that is not taxable in the U.S. on its worldwide income, or (d) a trust
that is either not subject to primary supervision over its administration by a
U.S. court or not subject to the control of a U.S. person with respect to
substantial trust decisions.
Payment of Interest on Notes. In general, payments of interest
received by a Foreign Holder will not be subject to U.S. withholding tax if
(a) the Foreign Holder does not actually or constructively own 10% or more of
the total combined voting power of all classes of stock of the Company
entitled to vote, (b) the Foreign Holder is not a controlled foreign
corporation that is related to the Company actually or
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constructively through stock ownership, (c) the Foreign Holder is not a
bank receiving interest described in Section 881(c)(3)(A) of the Code, and
(d) either (i)(I) the beneficial owner of the Note, under penalties of
perjury, provides the Company or its agents with such beneficial owner's
name and address and certifies on IRS Form W-8 (or a suitable substitute
form) that it is not a U.S. Holder or (II) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "financial
institution") holds the Note and provides a statement to the Company or its
agent under penalties of perjury in which it certifies that such an IRS
Form W-8 (or a suitable substitute) has been received by it from the
beneficial owner of the Notes or qualifying intermediary and furnishes the
Company or its agent a copy thereof or (ii) the Foreign Holder is entitled
to the benefits of an income tax treaty under which interest on the Notes
is exempt from U.S. withholding tax and the Foreign Holder or such Foreign
Holder's agent provides a properly executed IRS Form 1001 (or a suitable
substitute) claiming the exemption. Payments of interest not exempt from
U.S. federal withholding tax as described above will be subject to such
withholding tax at the rate of 30% (subject to reduction under an
applicable income tax treaty).
Sale, Exchange or Retirement of the Notes. A Foreign Holder
generally will not be subject to U.S. federal income tax (and generally no tax
will be withheld) with respect to gain realized on the sale, exchange,
redemption, retirement at maturity or other disposition of a Note unless (a)
the Foreign Holder is an individual who is present in the U.S. for a period or
periods aggregating 183 or more days in the taxable year of the disposition
and, generally, either has a "tax home" or an "office or other place of
business" in the U.S. or (b) the Foreign Holder is subject to tax pursuant to
the provisions of U.S. federal income tax law applicable to certain
expatriates.
We suggest that you consult your tax advisor about the specific
methods for satisfying these requirements. These procedures will change on
January 1, 2001. In addition, a claim for exemption will not be valid if the
person receiving the applicable form has actual knowledge that the statements
on the form are false.
Backup Withholding and Information Reporting. Backup withholding and
information reporting requirements do not apply to payments of interest made
by the Company or a paying agent to Foreign Holders if the certification
described above under "--U.S. Federal Income Taxation of Foreign
Holders--Payment of Interest on Notes" is received, provided that the payor
does not have actual knowledge that the Holder is a U.S. Holder. If any
payments of principal and interest are made to the beneficial owner of a Note
by or through the foreign office of a foreign custodian, foreign nominee or
other foreign agent of such beneficial owner, or if the foreign office of a
foreign "broker" (as defined in applicable Treasury regulations) pays the
proceeds of the sale of a Note or a coupon to the seller thereof, backup
withholding and information reporting will not apply. Information reporting
requirements (but not backup withholding) will apply, however, to a payment by
a foreign office of a broker that is a U.S. person, that derives 50% or more
of its gross income for certain periods from the conduct of a trade or
business in the U.S., or that is a "controlled foreign corporation"
(generally, a foreign corporation controlled by certain U.S. shareholders)
with respect to the United States unless the broker has documentary evidence
in its records that the Holder is a Foreign Holder and certain other
conditions are met or the Holder otherwise establishes an exemption. Payment
by a U.S. office of a broker is subject to both backup withholding at a rate
of 31% and information reporting unless the Holder certifies under penalties
of perjury that the Holder is a Foreign Holder or otherwise establishes an
exemption.
Federal Estate Taxes. Subject to applicable estate tax treaty
provisions, Notes held at the time of death (or Notes transferred before death
but subject to certain retained rights or powers) by an individual who at the
time of death is a Foreign Holder will not be included in such Foreign
Holder's gross estate for U.S. federal estate tax purposes provided that the
individual does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of the Company entitled to vote
or hold the Notes in connection with a U.S. trade or business.
PLAN OF DISTRIBUTION
A broker-dealer that is the Holder of Outstanding Notes that were
acquired for the account of such broker-dealer as a result of market-making or
other trading activities (other than Outstanding Notes acquired directly from
the Company or any affiliate of the Company) may exchange such Outstanding
Notes for Exchange Notes pursuant to the exchange offer; provided, however,
that each broker-dealer that receives Exchange Notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
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prospectus in connection with any resale of such Exchange Notes. This
prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Notes
received in exchange for Outstanding Notes where such Outstanding Notes
were acquired as a result of market-making activities or other trading
activities. The Company has agreed that for a period of 180 days after the
expiration date, it will make this prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resales.
The Company will not receive any proceeds from any sale of Exchange
Notes by broker-dealers or any other Holder of Exchange Notes. Exchange Notes
received by broker-dealers for their own account pursuant to the exchange
offer may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Notes or a combination of such methods of resale, at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Notes. Any
broker-dealer that resells Exchange Notes that were received by it for its own
account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Notes and any commissions or concessions received by
any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
For a period of 180 days after the expiration date the Company will
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such
documents in the Letter of Transmittal. The Company has agreed to pay all
expenses incident to the exchange offer other than commissions or concessions
of any brokers or dealers and will indemnify the Holders of the Notes
(including any broker-dealers) against certain liabilities, including
liabilities under the Securities Act.
LEGAL MATTERS
Certain legal matters in connection with the Offering are being
passed upon for the Company by Cravath, Swaine & Moore, New York, New York.
William P. Rogers, Jr., a partner at Cravath, Swaine & Moore, is a director of
the Company, and beneficially owns 5,000 shares of common stock of the Company
and options to purchase 4,000 shares of such common stock.
EXPERTS
The consolidated financial statements of Amtran, Inc. and
subsidiaries incorporated by reference in Amtran, Inc.'s Annual Report
(Form 10-K) for the year ended December 31, 1998, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference in reliance
upon such reports given on the authority of such firm as experts in
accounting and auditing.
WHERE TO FIND MORE INFORMATION
The Company is subject to the informational requirements of the
Exchange Act and in accordance therewith files reports, proxy statements and
other information with the Commission. Such reports, proxy statements and
other information filed by the Company with the Commission can be inspected
and copied at the public reference facilities maintained by the Commission and
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549,
and at the Commission's regional offices at Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and at 7 World Trade
Center, Suite 1300, New York, New York 10048. The Commission maintains a World
Wide Web site on the Internet at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding registrants,
including the Company, that file electronically with the Commission. Copies of
such material can also be obtained at prescribed rates upon request from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549.
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No dealer, salesperson or other person has been authorized to give any
information or to make any representations in connection with the offer
contained herein other than those contained in this prospectus, and, if
given or made, such information or representation must not be relied upon
as having been authorized by the Company. This prospectus does not
constitute an offer to sell or the solicitation of an offer to buy to any
person in any jurisdiction in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to any person to whom it is unlawful to make such
offer or solicitation. Neither the delivery of this prospectus nor any sale
made hereunder shall under any circumstances create an implication that
there has been no change in the affairs of the Company since the date
hereof or that the information contained herein is correct as of any time
subsequent to the date hereof.
------------------
$75,000,000
$75,000,000
Amtran, Inc.
10 1/2% Senior Exchange
Notes due 2004
------------------
PROSPECTUS
------------------
[January ],
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Part II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Information relating to indemnification of directors and officers is
incorporated by reference herein from Item 14 of the Company's Registration
Statement on Form S-1 (No. 33-59630).
Item 21. Exhibits.
Exhibit
Number+ Description
*3.1-- Restated Articles of Incorporation of the Company.
*3.2-- By-laws of the Company.
4.1-- Indenture, dated as of July 24, 1997, and First Supplemental
Indenture, dated as of December 21, 1999 between the Company,
the Guarantors and First Security Bank, NA., as trustee.
4.2-- Form of 10 1/2% Senior Exchange Note due 2004 (included in
Exhibit 4.1). 4.3-- Purchase Agreement, dated December 16, 1999,
between the Company, the Guarantors and Deutsche Bank Securities Inc.
4.3-- Purchase Agreement, dated December 16, 1999, between the Company, the
Guarantors' and Deutsche Bank Securities Inc.
4.4-- Registration Rights Agreement, dated December 21, 1999, between
the Company, the Guarantors and Deutsche Bank Securities Inc.
5.1-- Opinion of Brian T. Hunt, General Counsel of the Company. 5.2--
Opinion of Cravath, Swaine & Moore.
5.2-- Opinion of Cravath, Swaine & Moore.
10.1-- Credit Agreement, dated July 24,1997, among ATA, the Company,
NBD Bank, N.A., as agent, and the banks party thereto.
10.2-- Guarantee Agreement, dated July 24, 1997, among the Company,
Ambassadair Travel Club, Inc., ATA Leisure Corp. (formerly ATA
Vacations, Inc.), Amber Travel, Inc., American Trans Air
Training Corporation, American Trans Air ExecuJet, Inc., Amber
Air Freight Corporation, Chicago Express Airlines, Inc. and the
lenders party thereto.
10.3-- Security Agreement, dated July 24, 1997, between ATA and NBD
Bank, N.A. as agent. ** 11.1-- Statement re computation of per share
earnings.
**12.1-- Statements re computation of ratios.
23.1-- Consent of Ernst & Young LLP.
23.2-- Consent of Brian T. Hunt, General Counsel of the Company
(included in Exhibit 5.1). 23.3-- Consent of Cravath, Swaine & Moore
(included in Exhibit 5.2).
23.3-- Consent of Cravath, Swaine & Moore (included in Exhibit 5.2)
24.1-- Powers of Attorney (contained on signature page).
**25.1-- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of First Security Bank, N.A. on Form T-1.
99.1-- Form of Letter of Transmittal.
99.2-- Form of Notice of Guaranteed Delivery.
99.3-- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
99.4-- Form of Letter to Clients.
- ----------
+ Unless otherwise indicated, the exhibits have been previously
filed as part of this Registration Statement.
* Previously filed as an exhibit to the Company's Registration Statement on
Form S-1 (File No. 33-59630), and incorporated herein by reference.
** To be filed by Amendment.
Item 22. Undertakings.
(a) The undersigned registrant hereby undertakes to deliver or cause
to be delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in the prospectus,
to deliver, or cause to be delivered to each person to whom the prospectus is
sent or given,
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the latest quarterly report that is specifically incorporated by reference
in the prospectus to provide such interim financial information.
(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
(c) The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the
prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form, within one
business day of receipt of such request, and to send the incorporated
document by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date
of the registration statement through the date of responding to the
request.
(d) The undersigned registrant hereby undertakes to supply by means of
a post-effective amendment all information concerning a transaction, and
the company being acquired involved therein, that was not the subject of
and included in the registration statement when it became effective.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Indianapolis, State of Indiana, on this 21st day of January, 2000.
AMTRAN, INC.
By /s/ J. George Mikelsons
--------------------------------
J. George Mikelsons
Chairman of the Board of Directors
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Titles Dates
/s/ J. George Mikelsons Chairman of the Board January 21, 2000
------------------------ of Directors
(J. George Mikelsons)
/s/ John P. Tague President and Chief January 21, 2000
------------------------ Executive officer and
(John P. Tague) Director (Principal
Executive Officer)
/s/ James W. Hlavacek Executive Vice President January 21, 2000
------------------------ and Chief Operating Officer
(James W. Hlavacek) and Director
/s/ Kenneth K. Wolff Executive Vice President January 21, 2000
------------------------ and Chief Financial Officer
(Kenneth K. Wolff) and Director (Principal Financial
and Accounting Officer)
Director January 21, 2000
------------------------
(Robert A. Abel)
/s/ William P. Rogers, Jr. Director January 21, 2000
------------------------
(William P. Rogers, Jr.)
/s/ Andrejs P. Stipnieks Director January 21, 2000
------------------------
(Andrejs P. Stipnieks)
74
Exhibit 4.1
INDENTURE, dated as of July 24, 1997, among AMTRAN, INC., an Indiana
corporation, as issuer (the "Company"), American Trans Air, Inc., Ambassadair
Travel Club, Inc., ATA Vacations, Inc., Amber Travel, Inc., American Trans Air
Training Corporation, American Trans Air Execujet, Inc. and Amber Air Freight
Corporation (each, an Indiana corporation), as guarantors (together, the
"Guarantors"), and First Security Bank, N.A., a national banking association, as
trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of up to $100,000,000 aggregate principal
amount of the Company's 10 1/2% Senior Notes due 2004 (the "Notes"), issuable as
provided in this Indenture. Pursuant to the terms of the Placement Agreement
dated July 17, 1997 (the "Placement Agreement"), among the Company, the
Guarantors and Morgan Stanley & Co. Incorporated and Salomon Brothers Inc, as
the placement agents (the "Placement Agents"), the Company has agreed to issue
and sell, and the Placement Agents have agreed to purchase, the Notes. All
things necessary to make this Indenture a valid agreement of the Company and
each Guarantor, in accordance with its terms, have been done, and the Company
and each Guarantor have done all things necessary to make the Notes, when duly
executed and issued by the Company and authenticated and delivered by the
Trustee hereunder, the valid obligations of the Company as hereinafter provided.
This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act of 1939, as amended, that are required to be a part
of and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection with
an Asset Acquisition by a Restricted Subsidiary and not Incurred in connection
with, or in anticipation of, such Person becoming a Restricted Subsidiary or
such Asset Acquisition; provided that Indebtedness of such Person which is
redeemed, defeased, retired or otherwise repaid at the time of or immediately
upon consummation of the transactions by which such Person becomes a Restricted
Subsidiary or such Asset Acquisition shall not be Acquired Indebtedness.
"Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period determined in conformity with GAAP; provided that the following
items shall be excluded in computing Adjusted Consolidated Net Income (without
duplication): (i) the net income of any Person that is not a Restricted
Subsidiary, except to the extent of the amount of dividends or other
distributions actually
<PAGE>
paid to the Company or any of its Restricted Subsidiaries by such
Person during such period; (ii) solely for the purposes of calculating the
amount of Restricted Payments that may be made pursuant to clause (C) of the
first paragraph of Section 4.04 (and in such case, except to the extent
includable pursuant to clause (i) above), the net income (or loss) of any Person
accrued prior to the date it becomes a Restricted Subsidiary or is merged into
or consolidated with the Company or any of its Restricted Subsidiaries or all or
substantially all of the property and assets of such Person are acquired by the
Company or any of its Restricted Subsidiaries; (iii) the net income of any
Restricted Subsidiary which is not a Guarantor to the extent that the
declaration or payment of dividends or similar distributions by such Restricted
Subsidiary of such net income is not at the time permitted by the operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Restricted
Subsidiary; (iv) any gains or losses (on an after-tax basis) attributable to
Asset Sales; (v) except for purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
Section 4.04, any amount paid or accrued as dividends on Preferred Stock of the
Company or any Restricted Subsidiary owned by Persons other than the Company and
any of its Restricted Subsidiaries; and (vi) all extraordinary gains and
extraordinary losses.
"Adjusted Consolidated Net Tangible Assets" means the total amount of
assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding write-ups in connection
with accounting for acquisitions in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its Restricted
Subsidiaries (excluding intercompany items) and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent quarterly or annual
consolidated balance sheet of the Company and its Restricted Subsidiaries,
prepared in conformity with GAAP and filed with the Commission or provided to
the Trustee pursuant to Section 4.17.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Paying Agent, authenticating agent or
co-Registrar. "Agent Members" has the meaning provided in Section 2.07(a).
"Asset Acquisition" means (i) an investment by the Company or any of
its Restricted Subsidiaries in any other Person pursuant to which such Person
shall become a Restricted Subsidiary or shall be merged into or consolidated
with the Company or any of its Restricted Subsidiaries; provided that such
Person's primary business is related, ancillary or complementary to the
businesses of the Company and its Restricted Subsidiaries on the date of such
investment or (ii) an acquisition by the Company or any of its Restricted
Subsidiaries of the property and assets of any Person other than the Company or
any of its Restricted Subsidiaries that constitute substantially all of a
division or line of business of such Person; provided that the property and
assets acquired are related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such acquisition.
"Asset Disposition" means the sale or other disposition by the
Company or any of its Restricted Subsidiaries (other than to the Company or
another Restricted Subsidiary) of (i) all or substantially all of the
Capital Stock of any Restricted Subsidiary of the Company or (ii) all or
<PAGE>
substantially all of the assets that constitute a division or line of business
of the Company or any of its Restricted Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition (including
by way of merger, consolidation or sale-leaseback transaction) in one
transaction or a series of related transactions by the Company or any of its
Restricted Subsidiaries to any Person other than the Company or any of its
Restricted Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary (other than directors' qualifying shares), (ii) all or substantially
all of the property and assets of an operating unit or business of the Company
or any of its Restricted Subsidiaries or (iii) any other property and assets of
the Company or any of its Restricted Subsidiaries outside the ordinary course of
business of the Company or such Restricted Subsidiary and, in each case, that is
not governed by Article Five; provided that "Asset Sale" shall not include (a)
sales or other dispositions of inventory, receivables and other current assets,
(b) sales or other dispositions of assets for consideration at least equal to
the fair market value of the assets sold or disposed of, to the extent that the
consideration received would satisfy clause (B) of Section 4.11 or (c) sales or
other dispositions of assets in a single transaction or series of related
transactions having a fair market value, as determined in good faith by the
Board of Directors, of $2 million or less.
"ATA" means American Trans Air, Inc.
"Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Board of Directors" means the Board of Directors of the Company or
any committee of such Board of Directors duly authorized to act under this
Indenture.
"Board Resolution" means a copy of a resolution, certified by the
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification, and delivered
to the Trustee.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the Corporate
Trust Office of the Trustee, are authorized by law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
oting or non-voting) in equity of such Person, whether outstanding on the
Closing Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of
the rental obligations under a Capitalized Lease.
"Change of Control" means such time as (i) (x) a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes
the ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than 35% of the total voting
<PAGE>
power of the Voting Stock of the Company on a fully diluted basis and such
ownership represents a greater percentage of the total voting power of the
Voting Stock of the Company, on a fully diluted basis, than is held by the
Existing Stockholders and their Affiliates on such date and (y) immediately
following the occurrence of the events specified in subsection (x), there shall
have occurred any downgrading, or notice shall have been given of any intended
or potential downgrading, in the rating accorded any of the Company's securities
or (ii) individuals who on the Closing Date constitute the Board of Directors
(together with any new directors whose election by the Board of Directors or
whose nomination by the Board of Directors for election by the Company's
stockholders was approved by a vote of at least two-thirds of the members of the
Board of Directors then in office who either were members of the Board of
Directors on the Closing Date or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
members of the Board of Directors then in office.
"Closing Date" means the date on which the Notes are originally issued
under this Indenture.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the TIA, then the body performing
such duties at such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's equity, other than Preferred Stock of
such Person, whether now outstanding or issued after the Closing Date, including
without limitation, all series and classes of such common stock.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to Article Five of this Indenture and,
thereafter, means the successor.
"Company Order" means a written request or order signed in the name of
the Company (i) by its Chairman, a Vice Chairman, its President or a Vice
President and (ii) by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary and delivered to the Trustee; provided, however, that such
written request or order may be signed by any two of the Persons listed in
clause (i) above in lieu of being signed by one of such Persons listed in such
clause (i) and one of the officers listed in clause (ii) above.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income, (i) Consolidated Interest
Expense, (ii) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or losses
arising out of sales of assets), (iii) depreciation expense, (iv) amortization
expense and (v) all other non-cash items reducing Adjusted Consolidated Net
Income (other than items that will require cash payments and for which an
accrual or reserve is, or is required by GAAP to be, made), less all non-cash
items increasing Adjusted Consolidated Net Income, all as determined on a
consolidated basis for the Company and its Restricted Subsidiaries in conformity
with GAAP; provided that, if any Restricted Subsidiary is not a Wholly Owned
Restricted Subsidiary, Consolidated EBITDA shall be reduced (to the extent not
otherwise reduced in the calculation of Adjusted Consolidated Net Income in
accordance with GAAP) by an amount equal to (A) the amount of the Adjusted
Consolidated Net Income attributable to such Restricted Subsidiary multiplied by
(B) the quotient of (1) the number of shares of outstanding Common Stock of such
Restricted Subsidiary not owned on the last day of such period by the Company or
any of its Restricted Subsidiaries divided by (2)
<PAGE>
the total number of shares of outstanding Common Stock of such Restricted
Subsidiary on the last day of such period.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including, without limitation but
without duplication, amortization of original issue discount on any Indebtedness
and the interest portion of any deferred purchase price payment obligation,
calculated in accordance with the effective interest method of accounting; all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing; the net costs associated with
Interest Rate Agreements; and Indebtedness that is Guaranteed or secured by the
Company or any of its Restricted Subsidiaries) and the interest component of
rentals in respect of Capitalized Lease Obligations paid, accrued or scheduled
to be paid or to be accrued by the Company and its Restricted Subsidiaries
during such period; excluding, however, (i) any amount of such interest of any
Restricted Subsidiary if the net income of such Restricted Subsidiary is
excluded in the calculation of Adjusted Consolidated Net Income pursuant to
clause (iii) of the definition thereof (but only in the same proportion as the
net income of such Restricted Subsidiary is excluded from the calculation of
Adjusted Consolidated Net Income pursuant to clause (iii) of the definition
thereof), (ii) any premiums, fees and expenses (and any amortization thereof)
payable in connection with the offering of the Notes or the Credit Agreement,
all as determined on a consolidated basis (without taking into account
Unrestricted Subsidiaries) in conformity with GAAP, and (iii) any interest or
other financing costs associated with loans to students of the Company's
training academy, unless such costs are paid by the Company or any Restricted
Subsidiary.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted Subsidiaries
(which shall be as of a date not more than 90 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
less any amounts attributable to Disqualified Stock or any equity security
convertible into or exchangeable for Indebtedness, the cost of treasury stock
and the principal amount of any promissory notes receivable from the sale of the
Capital Stock of the Company or any of its Restricted Subsidiaries, each item to
be determined in conformity with GAAP (excluding the effects of foreign currency
exchange adjustments under Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 52).
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 79 South Main Street, Salt Lake City, Utah, 84111, Attention:
Corporate Trust Services.
"Credit Agreement" means the credit agreement among ATA, NBD Bank,
N.A., as agent, the lenders named therein, the Company and the other Guarantors,
as guarantors, together with all other loan or credit agreements entered into
from time to time with one or more banks or other institutional lenders and all
instruments and documents executed or delivered pursuant thereto, in each case
as such agreements, instruments or documents may be amended (including any
amendment and restatement thereof), supplemented, replaced or otherwise modified
from time to time in one or more successive transactions (including any such
transaction that changes the amount available, replaces the relevant agreement
or changes one or more lenders).
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
<PAGE>
"Depositary" means The Depository Trust Company, its nominees, and
their respective successors, until a successor Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Depositary" shall mean or include each Person who is then a Depositary
hereunder.
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Notes or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Notes; provided that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the Stated Maturity of the Notes shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are no more favorable to the holders of such
Capital Stock than the provisions contained in Section 4.11 and Section 4.12 and
such Capital Stock specifically provides that such Person will not repurchase or
redeem any such stock pursuant to such provision prior to the Company's
repurchase of such Notes as are required to be repurchased pursuant to Section
4.11 and Section 4.12.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means any securities of the Company containing terms
identical to the Notes (except that such Exchange Notes shall be registered
under the Securities Act) that are issued and exchanged for the Notes pursuant
to the Registration Rights Agreement and this Indenture.
"Existing Stockholders" means J. George Mikelsons, his spouse, his
issue, any trust for any of the foregoing and any Affiliate of any of the
foregoing.
"fair market value" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined in good faith by the Board of Directors, whose determination shall
be conclusive if evidenced by a Board Resolution.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations contained or referred
to herein (i) shall be computed in conformity with GAAP applied on a consistent
basis, except that calculations made for purposes of determining compliance with
the terms of this Indenture shall be made without giving effect to (A) the
amortization of any expenses incurred in connection with the offering of the
Notes and (B) except as otherwise provided, the amortization of any amounts
required or permitted by Accounting Principles Board Opinion Nos. 16 and 17 and
(ii) shall, insofar as they involve the treatment for financial reporting
purposes of amounts incurred with engine overhauls, reflect the accounting
policy of the Company as in effect as of the Closing Date.
<PAGE>
"Global Notes" has the meaning provided in Section 2.01.
"Guarantee" means, without duplication, any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services (unless such purchase arrangements are on arm's-length
terms and are entered into in the ordinary course of business), to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of such Indebtedness of
the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Guaranteed Indebtedness" has the meaning provided in Section 4.07.
"Guarantors" means American Trans Air, Inc., Ambassadair Travel Club,
Inc., ATA Vacations, Inc., Amber Travel, Inc., American Trans Air Training
Corporation, American Trans Air Execujet, Inc. and Amber Air Freight Corporation
(each, an Indiana corporation), until a successor replaces any Guarantor
pursuant to Article Five of this Indenture and thereafter means the successor of
such Guarantor.
"Holder" or "Noteholder" means the registered holder of any Note.
"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Acquired Indebtedness; provided that
neither the accrual of interest nor the accretion of original issue discount
shall be considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto, but excluding obligations with
respect to letters of credit (including trade letters of credit) securing
obligations (other than obligations described in (i) or (ii) above or (v), (vi)
or (vii) below) entered into in the ordinary course of business of such Person
to the extent such letters of credit are not drawn upon or, if drawn upon, to
the extent such drawing is reimbursed no later than the third Business Day
following receipt by such Person of a demand for reimbursement), (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than six months after the
date of placing such property in service or taking delivery and title thereto or
the completion of such services, except Trade Payables, (v) all Capitalized
Lease Obligations, (vi) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided that the amount of such Indebtedness shall be the lesser of (A)
the fair market value of such asset at such date of determination and (B) the
amount of such Indebtedness, (vii) all Indebtedness of other Persons Guaranteed
by such Person to the extent such Indebtedness is Guaranteed by such Person and
(viii) to the extent not otherwise included in this definition, obligations
under Currency Agreements and Interest Rate Agreements. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and, with respect to
contingent obligations, the maximum liability upon the occurrence of the
contingency
<PAGE>
giving rise to the obligation, provided (A) that the amount outstanding at any
time of any Indebtedness issued with original issue discount is the face amount
of such Indebtedness less the remaining unamortized portion of the original
issue discount of such Indebtedness at the time of its issuance as determined in
conformity with GAAP, (B) that money borrowed and set aside at the time of the
Incurrence of any Indebtedness in order to prefund the payment of the interest
on such Indebtedness shall not be deemed to be "Indebtedness" and (C) that
Indebtedness shall not include any liability for federal, state, local or other
taxes.
"Indenture" means this Indenture as originally executed or as it may
be amended or supplemented from time to time by one or more indentures
supplemental to this Indenture entered into pursuant to the applicable
provisions of this Indenture.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Coverage Ratio" means, on any Transaction Date, the ratio of
(i) the aggregate amount of Consolidated EBITDA for the then most recent four
fiscal quarters prior to such Transaction Date for which reports have been filed
with the Commission (the "Four Quarter Period") to (ii) the aggregate
Consolidated Interest Expense during such Four Quarter Period. In making the
foregoing calculation, (A) pro forma effect shall be given to any Indebtedness
Incurred or repaid during the period (the "Reference Period") commencing on the
first day of the Four Quarter Period and ending on the Transaction Date (other
than Indebtedness Incurred or repaid under a revolving credit or similar
arrangement to the extent of the commitment thereunder (or under any predecessor
revolving credit or similar arrangement) in effect on the last day of such Four
Quarter Period unless any portion of such Indebtedness is projected, in the
reasonable judgment of the senior management of the Company, to remain
outstanding for a period in excess of 12 months from the date of the Incurrence
thereof), in each case as if such Indebtedness had been Incurred or repaid on
the first day of such Reference Period; (B) Consolidated Interest Expense
attributable to interest on any Indebtedness (whether existing or being
Incurred) computed on a pro forma basis and bearing a floating interest rate
shall be computed as if the rate in effect on the Transaction Date (taking into
account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term in excess of 12 months or, if
shorter, at least equal to the remaining term of such Indebtedness) had been the
applicable rate for the entire period; (C) pro forma effect shall be given to
Asset Dispositions and Asset Acquisitions (including giving pro forma effect to
the application of proceeds of any Asset Disposition) that occur during such
Reference Period as if they had occurred and such proceeds had been applied on
the first day of such Reference Period; and (D) pro forma effect shall be given
to asset dispositions and asset acquisitions (including giving pro forma effect
to the application of proceeds of any asset disposition) that have been made by
any Person that has become a Restricted Subsidiary or has been merged with or
into the Company or any Restricted Subsidiary during such Reference Period and
that would have constituted Asset Dispositions or Asset Acquisitions had such
transactions occurred when such Person was a Restricted Subsidiary as if such
asset dispositions or asset acquisitions were Asset Dispositions or Asset
Acquisitions that occurred on the first day of such Reference Period; provided
that to the extent that clause (C) or (D) of this sentence requires that pro
forma effect be given to an Asset Acquisition or Asset Disposition, such pro
forma calculation shall be based upon the four full fiscal quarters immediately
preceding the Transaction Date of the Person, or division or line of business of
the Person, that is acquired or disposed for which financial information is
available.
"Interest Payment Date" means each semiannual interest payment date on
February 1 and August 1 of each year, commencing February 1, 1998.
<PAGE>
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement, option or future contract or other
similar agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan
or other extension of credit (including, without limitation, by way of Guarantee
or similar arrangement; but excluding advances to customers in the ordinary
course of business that are, in conformity with GAAP, recorded as accounts
receivable on the balance sheet of the Company or its Restricted Subsidiaries)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, bonds, notes,
debentures or other similar instruments issued by, such Person and shall include
(i) the designation of a Restricted Subsidiary as an Unrestricted Subsidiary and
(ii) the fair market value of the Capital Stock (or any other Investment), held
by the Company or any of its Restricted Subsidiaries, of (or in) any Person that
has ceased to be a Restricted Subsidiary, including without limitation, by
reason of any transaction permitted by clause (iii) of Section 4.06; provided
that the fair market value of the Investment remaining in any Person that has
ceased to be a Restricted Subsidiary shall not exceed the aggregate amount of
Investments previously made in such Person valued at the time such Investments
were made less the net reduction of such Investments. For purposes of the
definition of "Unrestricted Subsidiary" and Section 4.04, (i) "Investment" shall
include the fair market value of the assets (net of liabilities (other than
liabilities to the Company or any of its Restricted Subsidiaries)) of any
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
an Unrestricted Subsidiary, (ii) the fair market value of the assets (net of
liabilities (other than liabilities to the Company or any of its Restricted
Subsidiaries)) of any Unrestricted Subsidiary at the time that such Unrestricted
Subsidiary is designated a Restricted Subsidiary shall be considered a reduction
in outstanding Investments and (iii) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, without limitation, any conditional sale
or other title retention agreement or lease in the nature thereof or any
agreement to give any security interest).
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any Restricted Subsidiary) and proceeds
from the conversion of other property received when converted to cash or cash
equivalents, net of (i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale without regard
to the consolidated results of operations of the Company and its Restricted
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness or any
other obligation outstanding at the time of such Asset Sale that either (A) is
secured by a Lien on the property or assets sold or (B) is required to be paid
as a result of such sale and (iv) appropriate amounts to be provided by the
Company or any Restricted Subsidiary as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP and (b) with respect
to any issuance or sale of Capital Stock,
<PAGE>
the proceeds of such issuance or sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Company or any Restricted
Subsidiary) and proceeds from the conversion of other property received when
converted to cash or cash equivalents, net of attorney's fees, accountants'
fees, underwriters' or placement agents' fees, discounts or commissions and
brokerage, consultant and other fees incurred in connection with such issuance
or sale and net of taxes paid or payable as a result thereof.
"Non-U.S. Person" means a person who is not a "U.S. person" (as
defined in Regulation S).
"Note Guarantee" means any Guarantee of the Notes by a Guarantor as
set forth in Article Ten.
"Note Register" has the meaning provided in Section 2.04.
"Notes" means any of the securities, as defined in the first paragraph
of the recitals hereof, that are authenticated and delivered under this
Indenture. For all purposes of this Indenture, the term "Notes" shall include
the Notes initially issued on the Closing Date, any Exchange Notes to be issued
and exchanged for any Notes pursuant to the Registration Rights Agreement and
this Indenture and any other Notes issued after the Closing Date under this
Indenture. For purposes of this Indenture, all Notes shall vote together as one
series of Notes under this Indenture.
"Offer to Purchase" means an offer to purchase Notes by the Company
from the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that all
Notes validly tendered will be accepted for payment on a pro rata basis; (ii)
the purchase price and the date of purchase (which shall be a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is mailed)
(the "Payment Date"); (iii) that any Note not tendered will continue to accrue
interest pursuant to its terms; (iv) that, unless the Company defaults in the
payment of the purchase price, any Note accepted for payment pursuant to the
Offer to Purchase shall cease to accrue interest on and after the Payment Date;
(v) that Holders electing to have a Note purchased pursuant to the Offer to
Purchase will be required to surrender the Note, together with the form entitled
"Option of the Holder to Elect Purchase" on the reverse side of the Note
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the Business Day immediately preceding the Payment
Date; (vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Payment Date, a telegram, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Notes delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased; (vii) that Holders whose
Notes are being purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered; provided
that each Note purchased and each new Note issued shall be in a principal amount
of $1,000 or integral multiples thereof; and (viii) if more than 98% of the
outstanding principal amount of the Notes is tendered pursuant to an Offer to
Purchase, the Company shall have the right to redeem the balance of the Notes at
the purchase price specified in such Offer to Purchase, plus (without
duplication) accrued and unpaid interest, if any, to the Redemption Date on the
principal amount of the Notes to be redeemed. On the Payment Date, the Company
shall (i) accept for payment on a pro rata basis Notes or portions thereof
tendered pursuant to an Offer to Purchase; (ii) deposit with the Paying Agent
money sufficient to pay the purchase price of all Notes or portions thereof so
accepted; and (iii) deliver, or cause to be delivered, to the Trustee all Notes
or portions thereof so accepted together with an Officers' Certificate
specifying the Notes or portions thereof
<PAGE>
accepted for payment by the Company. The Paying Agent shall promptly mail to the
Holders of Notes so accepted payment in an amount equal to the purchase price,
and the Trustee shall promptly authenticate and mail to such Holders a new Note
equal in principal amount to any unpurchased portion of the Note surrendered;
provided that each Note purchased and each new Note issued shall be in a
principal amount of $1,000 or integral multiples thereof. The Company will
publicly announce the results of an Offer to Purchase as soon as practicable
after the Payment Date. The Trustee shall act as the Paying Agent for an Offer
to Purchase. The Company will comply with Rule 14e-1 under the Exchange Act and
any other securities laws and regulations thereunder to the extent such laws and
regulations are applicable, in the event that the Company is required to
repurchase Notes pursuant to an Offer to Purchase.
"Officer" means with respect to the Company or any Guarantor, the
Chairman of the Board, the President, any Vice President, the Chief Financial
Officer, the Treasurer or any Assistant Treasurer, or the Secretary or any
Assistant Secretary.
"Officers' Certificate" means a certificate signed by two Officers.
Each Officers' Certificate (other than certificates provided pursuant to TIA
Section 314(a)(4)) shall include the statements provided for in TIA Section
314(e).
"Offshore Global Note" has the meaning provided the Section 2.01.
"Offshore Physical Note" has the meaning provided the Section 2.01.
"Opinion of Counsel" means a written opinion signed by legal counsel
who may be an employee of or counsel to the Company or any Guarantor. Each such
Opinion of Counsel shall include the statements provided for in TIA Section
314(e). Opinions of Counsel required to be delivered may have qualifications
customary for opinions of the type required.
"Paying Agent" has the meaning provided in Section 2.04, except that,
for the purposes of Article Eight, the Paying Agent shall not be the Company or
a Subsidiary of the Company or an Affiliate of any of them. The term "Paying
Agent" includes any additional Paying Agent.
"Permitted Investment" means (i) an Investment in the Company or a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with or
into or transfer or convey all or substantially all its assets to, the Company
or a Restricted Subsidiary; provided that such person's primary business is
related, ancillary or complementary to the businesses of the Company and its
Restricted Subsidiaries on the date of such Investment; (ii) Temporary Cash
Investments; (iii) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
in accordance with GAAP; (iv) stock, obligations or securities received in
settlement or satisfaction of judgments or claims; (v) loans or advances to
employees in the ordinary course of business; and (vi) the non-cash portion of
the consideration received for any Asset Sale.
"Permitted Liens" means (i) Liens for taxes, assessments, governmental
charges or claims that are being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; (ii) statutory and common law Liens of landlords and
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other
similar Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in
<PAGE>
conformity with GAAP shall have been made; (iii) Liens incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security; (iv)
Liens incurred or deposits made to secure the performance of tenders, bids,
leases, statutory or regulatory obligations, bankers' acceptances, surety and
appeal bonds, government contracts, performance and return-of-money bonds and
other obligations of a similar nature incurred in the ordinary course of
business (exclusive of obligations for the payment of borrowed money); (v)
easements, rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
interfere with the ordinary course of business of the Company or any of its
Restricted Subsidiaries; (vi) Liens (including extensions and renewals thereof)
upon real or personal property acquired after the Closing Date; provided that
(a) each such Lien is created solely for the purpose of securing Indebtedness
Incurred to finance the costs (including transaction costs and the costs of
improvement or construction) of the item of property or assets subject thereto
and such Lien is created prior to, at the time of or within twelve months after,
the later of the acquisition, the completion of construction or the commencement
of full operation of such property or assets (b) the principal amount of the
Indebtedness secured by such Lien does not exceed 100% of such costs and (c) any
such Lien shall not extend to or cover any property or assets other than such
item of property or assets and any improvements on such item; (vii) Liens upon
aircraft, engines and buyer-furnished equipment attached thereto or incorporated
therein other than as permitted by the foregoing clause (vi); provided that,
after giving effect thereto and the Indebtedness secured thereby, the book value
of assets of the Company not subject to any Lien (other than Liens described in
clauses (i) through (v), (xiii) and (xvi) of the definition of "Permitted
Liens") shall be not less than $125 million; (viii) leases or subleases granted
to others that do not materially interfere with the ordinary course of business
of the Company and its Restricted Subsidiaries, taken as a whole; (ix) Liens
encumbering property or assets under construction arising from progress or
partial payments by a customer of the Company or its Restricted Subsidiaries
relating to such property or assets; (x) any interest or title of a lessor in
the property subject to any Capitalized Lease or operating lease; (xi) Liens
arising from filing Uniform Commercial Code financing statements regarding
leases; (xii) Liens on property of, or on shares of Capital Stock or
Indebtedness of, any Person existing at the time such Person becomes, or becomes
a part of, any Restricted Subsidiary; provided that such Liens do not extend to
or cover any property or assets of the Company or any Restricted Subsidiary
other than the property or assets acquired; (xiii) Liens with respect to the
assets of a Restricted Subsidiary granted by such Restricted Subsidiary to the
Company or a Wholly Owned Restricted Subsidiary to secure Indebtedness owing to
the Company or such other Restricted Subsidiary; (xiv) Liens arising from the
rendering of a final judgment or order against the Company or any Restricted
Subsidiary that does not give rise to an Event of Default; (xv) Liens securing
reimbursement obligations with respect to letters of credit that encumber
documents and other property relating to such letters of credit and the products
and proceeds thereof; (xvi) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in connection
with the importation of goods; (xvii) Liens encumbering customary initial
deposits and margin deposits, and other Liens that are within the general
parameters customary in the industry and incurred in the ordinary course of
business, in each case, securing Indebtedness under Interest Rate Agreements and
Currency Agreements and forward contracts, options, future contracts, futures
options or similar agreements or arrangements designed solely to protect the
Company or any of its Restricted Subsidiaries from fluctuations in interest
rates, currencies or the price of commodities; (xviii) Liens arising out of
conditional sale, title retention, consignment or similar arrangements for the
sale of goods entered into by the Company or any of its Restricted Subsidiaries
in the ordinary course of business in accordance with the past practices of the
Company and its Restricted Subsidiaries prior to the Closing Date; and (xix)
Liens on or sales of receivables.
<PAGE>
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Physical Notes" has the meaning provided in Section 2.01.
"principal" of a debt security, including the Notes, means the
principal amount due on the Stated Maturity as shown on such debt security.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.02.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redemption Date", when used with respect to any Note to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which such Note is to be redeemed pursuant to this Indenture.
"Registrar" has the meaning provided in Section 2.04.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of July 24, 1997, among the Company, the Guarantors and
Morgan Stanley & Co. Incorporated and Salomon Brothers Inc.
"Registration Statement" means the Registration Statement as defined
and described in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the January 15 or July 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice chairman of the board of directors, the chairman or any
vice chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers (including any officer within the Corporate
Trust and Agency Group (or any successor group) of the Trustee) and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of his or her knowledge of and familiarity with
the particular subject.
"Restricted Payments" has the meaning provided in Section 4.04.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
<PAGE>
"S&P" means Standard & Poor's Ratings Service and its successors.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" has the meaning provided in the
Registration Rights Agreement.
"Significant Subsidiary" means, at any date of determination,
any Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
"Specified Date" means any Redemption Date, any Payment Date for an
Offer to Purchase pursuant to Section 4.11 or Section 4.12 or any date on which
the Notes are due and payable after an Event of Default.
"Stated Maturity" means, (i) with respect to any debt security, the
date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.
"Subsidiary Guarantee" has the meaning provided in Section 4.07.
"Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof, (ii) time deposit accounts, certificates of deposit and money
market deposits maturing within 180 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country recognized by
the United States of America, and which bank or trust company has capital,
surplus and undivided profits aggregating in excess of $50 million (or the
foreign currency equivalent thereof) and has outstanding debt which is rated "A"
(or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money-market fund sponsored by a registered broker dealer
or mutual fund distributor, (iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications described in clause
(ii) above, (iv) commercial paper, maturing not more than 90 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America, any
state thereof or any foreign country recognized by the United States of America
with a rating at the time as of which any investment therein is made of "P-1"
(or higher) according to Moody's or "A-1" (or higher) according to S&P, and (v)
securities with maturities of six months or less from the date of acquisition
issued or fully and unconditionally guaranteed by any state, commonwealth or
territory of the United States of America, or by any political subdivision or
taxing authority thereof, and rated at least "A" by S&P or Moody's.
<PAGE>
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended (15 U.S. Code ss.ss. 77aaa-77bbb), as in effect on the date this
Indenture was executed, except as provided in Section 9.06.
"Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries arising
in the ordinary course of business in connection with the acquisition of goods
or services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article Seven of this Indenture and thereafter means such successor.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of
1978, as amended and as codified in Title 11 of the United States Code, as
amended from time to time hereafter, or any successor federal bankruptcy law.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below; and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, the Company or
any Restricted Subsidiary; provided that (A) any Guarantee by the Company or any
Restricted Subsidiary of any Indebtedness of the Subsidiary being so designated
shall be deemed an "Incurrence" of such Indebtedness and an "Investment" by the
Company or such Restricted Subsidiary (or both, if applicable) at the time of
such designation; (B) either (I) the Subsidiary to be so designated has total
assets of $1,000 or less or (II) if such Subsidiary has assets greater than
$1,000, such designation would be permitted under Section 4.04 and (C) if
applicable, the Incurrence of Indebtedness and the Investment referred to in
clause (A) of this proviso would be permitted under Section 4.03 and Section
4.04. The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that (i) no Default or Event of Default shall
have occurred and be continuing at the time of or after giving effect to such
designation and (ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately after such designation would, if Incurred at such time,
have been permitted to be Incurred (and shall be deemed to have been Incurred)
for all purposes of the Indenture. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Global Notes" has the meaning provided in Section 2.01.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof at any time prior
to the Stated Maturity of the Notes,
<PAGE>
and shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt;
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of interest on or principal of the
U.S. Government Obligation evidenced by such depository receipt.
"U.S. Physical Notes" has the meaning provided in Section 2.01.
"Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person,
the ownership of all of the outstanding Capital Stock of such Subsidiary (other
than any director's qualifying shares or Investments by foreign nationals
mandated by applicable law) by such Person or one or more Wholly Owned
Subsidiaries of such Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder or a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company, the
Guarantors or any other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the plural
include the singular;
<PAGE>
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision;
(vii) all ratios and computations based on GAAP contained in this
Indenture shall be computed in accordance with the definition of GAAP set
forth in Section 1.01; and
(viii) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating. The Notes and the Trustee's certificate
of authentication shall be substantially in the form annexed hereto as Exhibit
A. The Notes may have notations, legends or endorsements required by law, stock
exchange agreements to which the Company is subject or usage. The Company shall
approve the form of the Notes and any notation, legend or endorsement on the
Notes. Each Note shall be dated the date of its authentication.
The terms and provisions contained in the form of the Notes annexed
hereto as Exhibit A shall constitute, and are hereby expressly made, a part of
this Indenture. To the extent applicable, the Company, the Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A (the "U.S. Global Notes"),
deposited with the Trustee, as custodian for the Depositary, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the U.S. Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more permanent
global Notes in registered form substantially in the form set forth in Exhibit A
(the "Offshore Global Notes") deposited with the Trustee, as custodian for the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Offshore Global
Notes may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
Notes offered and sold in reliance on Regulation D under the
Securities Act shall be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A (the "U.S.
Physical Notes"). Notes issued pursuant to Section 2.07 in exchange for
interests in the Offshore Global Notes shall be in the form of permanent
certificated Notes in registered form substantially in the form set forth in
Exhibit A (the "Offshore Physical Notes").
The Offshore Physical Notes and U.S. Physical Notes are sometimes
collectively herein referred to as the "Physical Notes". The U.S. Global Note
and the Offshore Global Note are sometimes referred to herein as the "Global
Notes."
<PAGE>
The definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the Officers executing such Notes, as evidenced
by their execution of such Notes.
SECTION 2.02. Restrictive Legends. Unless and until a Note is
exchanged for an Exchange Note in connection with an effective Registration
Statement pursuant to the Registration Rights Agreement, (i) each U.S. Global
Note and each U.S. Physical Note shall bear the legend, set forth below on the
face thereof and (ii) each Offshore Physical Note and each Offshore Global Note
shall bear the legend set forth below on the face thereof until at least the
41st day after the Closing Date and receipt by the Company and the Trustee of a
certificate substantially in the form of Exhibit B hereto.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THE NOTES, RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES AT THE TIME OF TRANSFER OF LESS THAN $100,000, AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN
TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTES, THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS NOTE TO THE TRUSTEE. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR
TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER
<PAGE>
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING
RESTRICTIONS.
Each Global Note, whether or not an Exchange Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.08 OF THE INDENTURE.
SECTION 2.03. Execution, Authentication and Denominations. Subject to
Article Four, the aggregate principal amount of Notes which may be authenticated
and delivered under this Indenture is unlimited. The Notes shall be executed by
two Officers of the Company, by facsimile or manual signature, in the name and
on behalf of the Company.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee or authenticating agent authenticates the Note, the Note
shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
At any time and from time to time after the execution of this
Indenture, the Trustee or an authenticating agent shall upon receipt of a
Company Order authenticate for original issue Notes in the aggregate principal
amount specified in such Company Order; provided that the Trustee shall be
entitled to receive an Officers' Certificate and an Opinion of Counsel of the
Company that it may reasonably request in connection with such authentication of
Notes. Such Company Order
<PAGE>
shall specify the amount of Notes to be authenticated, the date on which the
original issue of Notes is to be authenticated and the aggregate principal
amount of Notes then authorized and in case of an issuance of Notes pursuant to
Section 2.15, shall certify that such issuance is in compliance with Article
Four.
The Trustee may appoint an authenticating agent to authenticate Notes.
If the appointment of such authenticating agent is not at the discretion and for
the convenience of the Trustee, then such authenticating agent shall be
compensated by the Company. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such authenticating
agent. An authenticating agent has the same rights as an Agent to deal with the
Company or an Affiliate of the Company.
The Notes shall be issuable only in registered form without coupons
and only in denominations of $1,000 in principal amount and any integral
multiple thereof.
SECTION 2.04. Registrar and Paying Agent. The Company shall maintain
an office or agency where Notes may be presented for registration of transfer or
for exchange (the "Registrar"), an office or agency where Notes may be presented
for payment (the "Paying Agent") and an office or agency where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served, which shall be in the Borough of Manhattan and the City of New York. The
Company shall cause the Registrar to keep a register of the Notes and of their
transfer and exchange (the "Note Register"). The Note Register shall be in
written form or any other form capable of being converted into written form
within a reasonable time. The Company may have one or more co-Registrars and one
or more additional Paying Agents.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the terms of the
TIA. The agreement shall implement the provisions of this Indenture that relate
to such Agent. The Company shall give prompt written notice to the Trustee of
the name and address of any such Agent and any change in the address of such
Agent. If the Company fails to maintain a Registrar, Paying Agent and/or agent
for service of notices and demands, the Trustee shall act as such Registrar,
Paying Agent and/or agent for service of notices and demands. The Company may
remove any Agent upon written notice to such Agent and the Trustee; provided
that no such removal shall become effective until (i) the acceptance of an
appointment by a successor Agent to such Agent as evidenced by an appropriate
agency agreement entered into by the Company and such successor Agent and
delivered to the Trustee or (ii) notification to the Trustee that the Trustee
shall serve as such Agent until the appointment of a successor Agent in
accordance with clause (i) of this proviso. The Company, any Subsidiary of the
Company, or any Affiliate of any of them may act as Paying Agent, Registrar or
co-Registrar, and/or agent for service of notice and demands.
The Company initially appoints the Trustee as Registrar, Paying Agent,
authenticating agent and agent for service of notice and demands. If, at any
time, the Trustee is not the Registrar, the Company shall furnish, or cause to
be furnished, to the Trustee at least seven Business Days before each Interest
Payment Date and at such other times as the Trustee may reasonably request, the
names and addresses of the Holders as they appear in the Note Register. At the
option of the Company, payment of interest may be made by check mailed to the
address of the Holders as such address appears in the Note Register.
SECTION 2.05. Paying Agent to Hold Money in Trust. Not later than each
due date of the principal, premium, if any, and interest on any Notes, the
Company shall deposit with the Paying Agent money in immediately available funds
sufficient to pay such principal, premium, if
<PAGE>
any, and interest so becoming due. The Company shall require each Paying Agent
other than the Trustee to agree in writing that such Paying Agent shall hold in
trust for the benefit of the Holders or the Trustee all money held by the Paying
Agent for the payment of principal of, premium, if any, and interest on the
Notes (whether such money has been paid to it by the Company or any other
obligor on the Notes), and such Paying Agent shall promptly notify the Trustee
of any default by the Company (or any other obligor on the Notes) in making any
such payment. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee and account for any funds disbursed, and the
Trustee may at any time during the continuance of any payment default, upon
written request to a Paying Agent, require such Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed. Upon doing so,
the Paying Agent shall have no further liability for the money so paid over to
the Trustee. If the Company or any Subsidiary of the Company or any Affiliate of
any of them acts as Paying Agent, it will, on or before each due date of any
principal of, premium, if any, or interest on the Notes, segregate and hold in a
separate trust fund for the benefit of the Holders a sum of money sufficient to
pay such principal, premium, if any, or interest so becoming due until such sum
of money shall be paid to such Holders or otherwise disposed of as provided in
this Indenture, and will promptly notify the Trustee of its action or failure to
act.
SECTION 2.06. Transfer and Exchange. The Notes are issuable only in
registered form. A Holder may transfer a Note by written application to the
Registrar stating the name of the proposed transferee and otherwise complying
with the terms of this Indenture. No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Registrar in the Note
Register. Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Guarantors, the Trustee, and any agent of the Company,
the Guarantors or the Trustee shall treat the person in whose name the Note is
registered as the owner thereof for all purposes whether or not the Note shall
be overdue, and neither the Company, the Trustee, nor any such agent shall be
affected by notice to the contrary. Furthermore, any Holder of a Global Note
shall, by acceptance of such Global Note, agree that transfers of beneficial
interests in such Global Note may be effected only through a book entry system
maintained by the Registrar for such Global Note (or its agent) and that
ownership of a beneficial interest in the Note shall be required to be reflected
in a book entry. When Notes are presented to the Registrar or a co-Registrar
with a request to register the transfer or to exchange them for an equal
principal amount of Notes of other authorized denominations (including an
exchange of Notes for Exchange Notes), the Registrar shall register the transfer
or make the exchange as requested if its requirements for such transactions are
met; provided, that no exchanges of Notes for Exchange Notes shall occur until a
Registration Statement shall have been declared effective by the Commission
(confirmed in an Officers' Certificate delivered to the Trustee) and that any
Notes that are exchanged for Exchange Notes shall be cancelled by the Trustee.
To permit registrations of transfers and exchanges, the Company shall execute
and the Trustee shall authenticate Notes at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange or redemption
of the Notes, but the Company may require payment of a sum sufficient to cover
any transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or other similar governmental charge payable
upon exchanges pursuant to Section 2.11, 3.08 or 9.04).
The Registrar shall not be required (i) to issue, register the
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Notes selected for redemption under Section 3.03 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
<PAGE>
SECTION 2.07. Book-Entry Provisions for Global Notes. (a) The U.S.
Global Notes and Offshore Global Notes initially shall (i) be registered in the
name of the Depositary for such Global Notes or the nominee of such Depositary,
(ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear
legends as set forth in Section 2.02.
Members of, or participants in, the Depositary (the "Agent Members")
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Note, and the Depositary may be treated by the Company, the Guarantors,
the Trustee and any agent of the Company, the Guarantors or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Guarantors, the
Trustee or any agent of the Company, the Guarantors or the Trustee, from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder of any Note.
(b) Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in a Global Note may
be transferred in accordance with the rules and procedures of the Depositary and
the provisions of Section 2.08. In addition, U.S. Physical Notes and Offshore
Physical Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in the U.S. Global Notes or the Offshore Global
Notes, respectively, if (i) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for the U.S. Global Notes or the
Offshore Global Notes, as the case may be, and a successor depositary is not
appointed by the Company within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing and the Registrar has received a request
to the foregoing effect from the Depositary.
(c) Any beneficial interest in one of the Global Notes that is
transferred to a person who takes delivery in the form of an interest in the
other Global Note will, upon transfer, cease to be an interest in such Global
Note and become an interest in the other Global Note and, accordingly, will
thereafter be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(d) In connection with any transfer of a portion of the beneficial
interests in a U.S. Global Note or Offshore Global Note to beneficial owners
pursuant to paragraph (b) of this Section, the Registrar shall reflect on its
books and records the date and a decrease in the principal amount of the U.S.
Global Notes or Offshore Global Notes in an amount equal to the principal amount
of the beneficial interest in such Global Notes to be transferred, and the
Company shall execute, and the Trustee shall authenticate and deliver, one or
more U.S. Physical Notes or Offshore Physical Notes, as the case may be, of like
tenor and amount.
(e) In connection with the transfer of the entire U.S. Global Note or
Offshore Global Note to beneficial owners pursuant to paragraph (b) of this
Section, the U.S. Global Note or Offshore Global Note, as the case may be, shall
be deemed to be surrendered to the Trustee for cancellation, and the Company
shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depositary in exchange for its beneficial
interest in the U.S. Global Note or Offshore Global Note, as the case may be, an
equal aggregate principal amount of U.S. Physical Notes or Offshore Physical
Notes, as the case may be, of authorized denominations.
(f) Any U.S. Physical Note delivered in exchange for an interest in
the U.S. Global Note pursuant to paragraph (b), (d) or (e) of this Section
shall, except as otherwise provided
<PAGE>
by paragraph (e) of Section 2.08, bear the legend regarding transfer
restrictions applicable to the U.S. Physical Note set forth in Section 2.02.
(g) Any Offshore Physical Note delivered in exchange for an interest
in the Offshore Global Note pursuant to paragraph (b), (d) or (e) of this
Section shall, except as otherwise provided by paragraph (e) of Section 2.08,
bear the legend regarding transfer restrictions applicable to the Offshore
Physical Note set forth in Section 2.02.
(h) The registered holder of a Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
(i) Beneficial owners of interests in a U.S. Global Note may receive
U.S. Physical Notes (which shall bear the Private Placement Legend if required
by Section 2.02) in accordance with the procedures of the Depositary. In
connection with the execution, authentication and delivery of such U.S. Physical
Notes, the Registrar shall reflect on its books and records a decrease in the
principal amount of the relevant U.S. Global Note equal to the principal amount
of such U.S. Physical Notes and the Company shall execute and the Trustee shall
authenticate and deliver one or more U.S. Physical Notes having an equal
aggregate principal amount.
SECTION 2.08. Special Transfer Provisions. Unless and until a Note is
exchanged for an Exchange Note in connection with an effective Registration
Statement pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Note to any Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Note, whether or
not such Note bears the Private Placement Legend, if (x) the requested
transfer is after the time period referred to in Rule 144(k) under the
Securities Act as in effect with respect to such transfer or (y) the
proposed transferee has delivered to the Registrar (A) a certificate
substantially in the form of Exhibit C hereto and (B) if the aggregate
principal amount of the Notes being transferred is less than $100,000 at
the time of such transfer, an opinion of counsel acceptable to the Company
that such transfer is in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Note, upon receipt by the Registrar
of (x) the documents, if any, required by paragraph (i) and (y)
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the U.S. Global Note in an amount
equal to the principal amount of the beneficial interest in the U.S. Global
Note to be transferred, and the Company shall execute, and the Trustee
shall authenticate and deliver, one or more U.S. Physical Notes of like
tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a U.S. Physical Note, an
interest in a U.S. Global Note or an interest in an Offshore Global Note prior
to the removal of the Private Placement Legend to a QIB (excluding Non-U.S.
Persons):
(i) If the Note to be transferred consists of (x) either (A) an
interest in a Offshore Global Note prior to the removal of the Private
Placement Legend or (B) U.S. Physical
<PAGE>
Notes, the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided
for on the form of Note stating, or has otherwise advised the Company
and the Registrar in writing, that the sale has been made in compliance
with the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Note stating, or has
otherwise advised the Company and the Registrar in writing, that it is
purchasing the Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A or (y) an interest in the U.S.
Global Notes, the transfer of such interest may be effected only
through the book entry system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and the Note to be
transferred consists of U.S. Physical Notes, upon receipt by the Registrar
of the documents referred to in clause (i) and instructions given in
accordance with the Depositary's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an increase
in the principal amount of the U.S. Global Notes in an amount equal to the
principal amount of the U.S. Physical Notes, to be transferred, and the
Trustee shall cancel the U.S. Physical Notes so transferred.
(c) Transfers of Interests in the Offshore Global Note or Offshore
Physical Notes. The following provisions shall apply with respect to any
transfer of interests in the Offshore Global Notes or Offshore Physical Notes:
(i) prior to the removal of the Private Placement Legend from a
Offshore Global Note or Offshore Physical Note pursuant to Section 2.02,
the Registrar shall refuse to register such transfer unless such transfer
complies with Section 2.08(b) or Section 2.08(d), as the case may be; and
(ii) after such removal, the Registrar shall register the transfer of
any such Note without requiring any additional certification.
(d) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any transfer of a Note to a Non-U.S.
Person:
(i) The Registrar shall register any proposed transfer to any Non-U.S.
Person if the Note to be transferred is a U.S. Physical Note or an interest
in the U.S. Global Note only upon receipt of a certificate substantially in
the form of Exhibit D from the proposed transferor.
(ii) (a) If the proposed Transferor is an Agent Member holding a
beneficial interest in a U.S. Global Note, upon receipt by the Registrar of
(x) the documents required by paragraph (i) and (y) instructions in
accordance with the Depositary's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and a decrease in
the principal amount of such U.S. Global Note in an amount equal to the
principal amount of the beneficial interest in the U.S. Global Note to be
transferred, and (b) if the proposed transferee is an Agent Member, upon
receipt by the Registrar of instructions given in accordance with the
Depositary's and the Registrar's procedures, the Registrar shall reflect on
its books and records the date and an increase in the principal amount of
the Offshore Global Note in an
<PAGE>
amount equal to the principal amount of the U.S. Physical Notes or the U.S.
Global Note, as the case may be, to be transferred, and the Trustee shall
cancel the Physical Note, if any, so transferred or decrease the amount of
the U.S. Global Note.
(e) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless either (i) the circumstances contemplated by paragraphs (a)(i)(x) or
(c)(ii) of this Section 2.08 exist or (ii) there is delivered to the Registrar
an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to
the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(f) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture. The Registrar shall not register a transfer of any Note unless such
transfer complies with the restrictions on transfer of such Note set forth in
this Indenture. In connection with any transfer of Notes, each Holder agrees by
its acceptance of the Notes to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may conclusively rely on a determination made by the Company with
respect to) the sufficiency of any such certifications, legal opinions or other
information.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.07 or this Section 2.08.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
SECTION 2.09. Replacement Notes. If a mutilated Note is surrendered to
the Trustee or if the Holder claims that the Note has been lost, destroyed or
wrongfully taken, then, in the absence of notice to the Company or the Trustee
that such Note has been acquired by a bona fide purchaser, the Company shall
issue and the Trustee shall authenticate a replacement Note of like tenor and
principal amount; provided that the requirements of this Section 2.09 are met.
If required by the Trustee or the Company, an indemnity bond must be furnished
that is sufficient in the judgment of both the Trustee and the Company to
protect the Company, the Trustee or any Agent from any loss that any of them may
suffer if a Note is replaced. The Company may charge such Holder for the
expenses of the Company and the Trustee in replacing a Note. In case any such
mutilated, lost, destroyed or wrongfully taken Note has become or is about to
become due and payable, the Company in its discretion may pay such Note instead
of issuing a new Note in replacement thereof.
Every replacement Note is an additional obligation of the Company and
shall be entitled to the benefits of this Indenture.
The provisions of this Section 2.09 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies against the Company and the
Trustee with respect to the replacement or payment of mutilated, destroyed, lost
or wrongfully taken Notes.
<PAGE>
SECTION 2.10. Outstanding Notes. Notes outstanding at any time are all
Notes that have been authenticated by the Trustee except for those cancelled by
it, those delivered to it for cancellation and those described in this Section
2.10 as not outstanding.
If a Note is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to each of them that the replaced Note is held by a bona fide
purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on a Redemption Date or the Stated Maturity of the Notes money
sufficient to pay Notes payable on that date, then on and after that date such
Notes cease to be outstanding and interest on them shall cease to accrue.
Notes, or portions thereof, for the payment or redemption of which
moneys or U.S. Government Obligations (as provided for in Article Eight) in the
necessary amount shall have been deposited in trust with the Trustee or with any
Paying Agent (other than the Company) or shall have been set aside, segregated
and held in trust by the Company for the Holders of such Notes (if the Company
shall act as its own Paying Agent), on and after that time shall cease to be
outstanding and, in the case of redemption, interest on such Notes shall cease
to accrue, provided that if such Notes, or portions thereof, are to be redeemed
prior to the maturity thereof, notice of such redemption shall have been given
as herein provided, or provision satisfactory to the Trustee shall have been
made for giving such notice.
A Note does not cease to be outstanding because the Company or one of
its Affiliates holds such Note, provided, however, that, in determining whether
the Holders of the requisite principal amount of the outstanding Notes have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Notes owned by the Company or any other obligor upon the Notes or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which the Trustee has actual
knowledge to be so owned shall be so disregarded. Notes so owned which have been
pledged in good faith may be regarded as outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Notes and that the pledgee is not the Company or any other obligor upon the
Notes or any Affiliate of the Company or of such other obligor.
SECTION 2.11. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and execute and the Trustee shall authenticate
temporary Notes. Temporary Notes shall be substantially in the form of
definitive Notes but may have insertions, substitutions, omissions and other
variations determined to be appropriate by the Officers executing the temporary
Notes, as evidenced by their execution of such temporary Notes. If temporary
Notes are issued, the Company will cause definitive Notes to be prepared without
unreasonable delay. After the preparation of definitive Notes, the temporary
Notes shall be exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of the Company designated for such purpose
pursuant to Section 4.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Notes of authorized denominations. Until so exchanged, the
temporary Notes shall be entitled to the same benefits under this Indenture as
definitive Notes.
SECTION 2.12. Cancellation. The Company at any time may deliver, or
cause to be delivered, Notes to the Trustee for cancellation. The Registrar and
the Paying Agent shall
<PAGE>
forward to the Trustee any Notes surrendered to them for transfer, exchange or
payment. The Trustee (and no one else) shall cancel all Notes surrendered for
transfer, exchange, payment, replacement or cancellation and shall destroy them
in accordance with its normal procedure.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP," "CINS" and "ISIN" numbers (if then generally in use), and the Trustee
shall use CUSIP, CINS or ISIN numbers, as the case may be, in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of such
CUSIP, CINS or ISIN numbers either as printed on the Notes or as contained in
any notice of redemption or exchange and that reliance may be placed only on the
other identification numbers printed on the Notes; and provided further that
failure to use CUSIP, CINS or ISIN numbers in any notice of redemption or
exchange shall not affect the validity or sufficiency of such notice. The
Company shall promptly notify the Trustee of any change in CUSIP numbers.
SECTION 2.14. Defaulted Interest. If the Company defaults in a payment
of interest on the Notes, it shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay the defaulted interest,
plus (to the extent lawful) any interest payable on the defaulted interest, to
the Persons who are Holders on a subsequent special record date. A special
record date, as used in this Section 2.14 with respect to the payment of any
defaulted interest, shall mean the 15th day next preceding the date fixed by the
Company for the payment of defaulted interest, whether or not such day is a
Business Day. At least 15 days before the subsequent special record date, the
Company shall mail to each Holder and to the Trustee a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest to be paid.
SECTION 2.15. Issuance of Additional Notes. The Company may, subject
to Article Four of this Indenture, issue additional Notes under this Indenture.
The Notes issued on the Closing Date and any additional Notes subsequently
issued shall be treated as a single class for all purposes under this Indenture.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption. (a) The Notes will also be
redeemable, at the Company's option, in whole or in part, at any time or from
time to time, on or after August 1, 2002 and prior to maturity, upon not less
than 30 nor more than 60 days' prior notice mailed by first class mail to each
Holders' last address as it appears in the Note Register, at the following
Redemption Prices (expressed in percentages of principal amount), plus accrued
and unpaid interest, if any, to the Redemption Date (subject to the right of
Holders of record on the relevant Regular Record Date that is on or prior to the
Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing August 1 of the years set forth
below:
Redemption
Year
Price
2002 ................... 105.250%
2003 ................... 102.625%
<PAGE>
(b) In addition, at any time prior to August 1, 2000, the Company may
redeem up to 35% of the principal amount of the Notes with the proceeds of one
or more sales of its Common Stock, at any time or from time to time in part, at
a Redemption Price (expressed as a percentage of principal amount) of 110.50%,
plus accrued and unpaid interest to the Redemption Date (subject to the rights
of Holders of record on the relevant Regular Record Date that is prior to the
Redemption Date to receive interest due on an Interest Payment Date); provided
that at least $65 million aggregate principal amount of Notes remains
outstanding after each such redemption.
(c) In the event that more than 98% of the outstanding principal
amount of the Notes are tendered pursuant to an Offer to Purchase, as required
by Section 4.11 or Section 4.12, the balance of the Notes will be redeemable, at
the Company's option, in whole or in part, at any time or from time to time
thereafter and prior to maturity, upon not less than 30 nor more than 60 days'
prior notice mailed by first class mail to each Holder's last address as it
appears in the Note Register, at a Redemption Price equal to the price specified
in such Offer to Purchase plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date that is on or prior to the Redemption Date to receive
interest due on an Interest Payment Date).
SECTION 3.02. Notices to Trustee. If the Company elects to redeem
Notes pursuant to Section 3.01(a), (b) or (c), it shall notify the Trustee in
writing of the Redemption Date, the principal amount at Stated Maturity of Notes
to be redeemed and the clause of this Indenture pursuant to which the redemption
shall occur.
The Company shall give each notice provided for in this Section 3.02
in an Officers' Certificate at least 45 days before the Redemption Date (unless
a shorter period shall be satisfactory to the Trustee).
SECTION 3.03. Selection of Notes to Be Redeemed. If less than all of
the Notes are to be redeemed at any time, the Trustee will select the Notes, or
portions thereof, for redemption in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are listed
or, if the Notes are not listed on a national securities exchange, by lot or by
such other method as the Trustee in its sole discretion shall deem to be fair
and appropriate; provided that no Note of $1,000 in principal amount or less
shall be redeemed in part. If any Note is to be redeemed in part only, the
notice of redemption relating to such Note shall state the portion of the
principal amount thereof to be redeemed. A new Note in principal amount equal to
the unredeemed portion thereof will be issued in the name of the Holder thereof
upon cancellation of the original Note.
The Trustee shall make the selection from the Notes outstanding and
not previously called for redemption. Notes in denominations of $1,000 in
principal amount at Stated Maturity may only be redeemed in whole. The Trustee
may select for redemption portions (equal to $1,000 in principal amount at
Stated Maturity or any integral multiple thereof) of Notes that have
denominations larger than $1,000 in principal amount at Stated Maturity.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall notify the
Company and the Registrar promptly in writing of the Notes or portions of Notes
to be called for redemption.
SECTION 3.04. Notice of Redemption. With respect to any redemption of
Notes pursuant to Section 3.01(a), (b) or (c), at least 30 days but not more
than 60 days before a Redemption Date the Company shall mail or cause to be
mailed, a notice of redemption by first class mail (pursuant to the requirements
of Section 11.02) to each Holder whose Notes are to be redeemed.
<PAGE>
The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the
Paying Agent in order to collect the Redemption Price;
(v) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders is to
receive payment of the Redemption Price plus accrued and unpaid interest to
the Redemption Date upon surrender of the Notes to the Paying Agent;
(vi) that, if any Note is being redeemed in part, the portion of the
principal amount (equal to $1,000 in principal amount at Stated Maturity or
any integral multiple thereof) of such Note to be redeemed and that, on and
after the Redemption Date, upon surrender of such Note, a new Note or Notes
in principal amount equal to the unredeemed portion thereof will be
reissued;
(vii) that, if any Note contains a CUSIP, CINS or ISIN number as
provided in Section 2.13, no representation is being made as to the
correctness of the CUSIP, CINS or ISIN number either as printed on the
Notes or as contained in the notice of redemption and that reliance may be
placed only on the other identification numbers printed on the Notes; and
(viii) the aggregate principal amount at Stated Maturity of Notes
being redeemed.
At the Company's request (which request may be revoked by the Company
at any time prior to the time at which the Trustee shall have given such notice
to the Holders), made in writing to the Trustee, at least 45 days (or such
shorter period as shall be satisfactory to the Trustee) before a Redemption
Date, the Trustee shall give the notice of redemption in the name and at the
expense of the Company. If, however, the Company gives such notice to the
Holders, the Company shall concurrently deliver to the Trustee an Officers'
Certificate stating that such notice has been given.
SECTION 3.05. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption become due and payable on the
Redemption Date and at the Redemption Price. Upon surrender of any Notes to the
Paying Agent, such Notes shall be paid at the Redemption Price, plus accrued and
unpaid interest to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed, whether
or not the Holder receives the notice. In any event, failure to give such
notice, or any defect therein, shall not affect the validity of the proceedings
for the redemption of Notes held by Holders to whom such notice was properly
given.
SECTION 3.06. Deposit of Redemption Price. On or prior to 10:00 a.m.
New York City time on any Redemption Date, the Company shall deposit with the
Paying Agent (or, if the Company is acting as its own Paying Agent, shall
segregate and hold in trust as provided in Section
<PAGE>
2.05) money in immediately available funds sufficient to pay the Redemption
Price of and accrued and unpaid interest on all Notes to be redeemed on that
date other than Notes or portions thereof called for redemption on that date
that have been delivered by the Company to the Trustee for cancellation.
SECTION 3.07. Payment of Notes Called for Redemption. If notice of
redemption has been given in the manner provided above, the Notes or portion of
Notes specified in such notice to be redeemed shall become due and payable on
the Redemption Date at the Redemption Price stated therein, together with
accrued and unpaid interest to such Redemption Date, and on and after such date
(unless the Company shall default in the payment of such Notes at the Redemption
Price and accrued and unpaid interest to the Redemption Date, in which case the
principal, until paid, shall bear interest from the Redemption Date at the rate
prescribed in the Notes), such Notes shall cease to accrue interest. Upon
surrender of any Note for redemption in accordance with a notice of redemption,
such Note shall be paid and redeemed by the Company at the Redemption Price,
together with accrued and unpaid interest to the Redemption Date; provided that
installments of interest whose record date is prior to the Redemption Date shall
be payable to the Holders registered as such at the close of business such
record date, if any.
SECTION 3.08. Notes Redeemed in Part. Upon surrender of any Note that
is redeemed in part, the Company shall at its expense issue and execute and the
Trustee shall authenticate and deliver for the Holder a new Note equal in
principal amount to the unredeemed portion of such surrendered Note.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes. The Company shall pay the principal
of, premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal, premium,
if any, or interest shall be considered paid on the date due if the Trustee or
Paying Agent (other than the Company, a Subsidiary of the Company, or any
Affiliate of any of them) holds as of 10:00 A.M. New York City time on the due
date money deposited by the Company in immediately available funds and
designated for and sufficient to pay the installment. If the Company or any
Subsidiary of the Company or any Affiliate of any of them, acts as Paying Agent,
an installment of principal, premium, if any, or interest shall be considered
paid on the due date if the entity acting as Paying Agent complies with the last
sentence of Section 2.05. As provided in Section 6.09, upon any bankruptcy or
reorganization procedure relative to the Company, the Trustee shall serve as the
Paying Agent and conversion agent, if any, for the Notes.
The Company shall pay interest on overdue principal, premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
rate per annum specified in the Notes.
SECTION 4.02. Maintenance of Office or Agency. The Company will
maintain an office or agency where Notes may be surrendered for registration of
transfer or exchange or for presentation for payment and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 11.02.
<PAGE>
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby initially designates the [ ] of the Trustee as such
office of the Company in accordance with Section 2.04.
SECTION 4.03. Limitation on Indebtedness. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness (other than the Notes, the Note Guarantees and Indebtedness
existing on the Closing Date); provided that the Company may Incur Indebtedness
if, after giving effect to the Incurrence of such Indebtedness and the receipt
and application of the proceeds therefrom, the Interest Coverage Ratio would be
greater than 3:1.
Notwithstanding the foregoing, the Company and any Restricted
Subsidiary (except as specified below) may Incur each and all of the following:
(i) Indebtedness of the Company or any Restricted Subsidiary that is a Guarantor
outstanding at any time under the Credit Agreement; provided, that after giving
effect to the Incurrence of any such Indebtedness, the book value of assets of
the Company not subject to any Lien (other than Liens described in clauses (i)
through (v), (xiii) and (xvi) of the definition of "Permitted Liens") shall not
be less than $125 million; (ii) Indebtedness owed (A) to the Company evidenced
by an unsubordinated promissory note or (B) to any of its Restricted
Subsidiaries; provided that any event which results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of
such Indebtedness (other than to the Company or another Restricted Subsidiary)
shall be deemed, in each case, to constitute an Incurrence of such Indebtedness
not permitted by this clause (ii); (iii) Indebtedness issued in exchange for, or
the net proceeds of which are used to refinance or refund, then outstanding
Indebtedness Incurred under clause (v) of this paragraph and any refinancings
thereof in an amount not to exceed the amount so refinanced or refunded (plus
premiums, accrued interest, fees and expenses); provided that Indebtedness the
proceeds of which are used to refinance or refund the Notes or Indebtedness that
is pari passu with, or subordinated in right of payment to, the Notes or Note
Guarantees shall only be permitted under this clause (iii) if (A) in case the
Notes are refinanced in part or the Indebtedness to be refinanced is pari passu
with the Notes or Note Guarantees, such new Indebtedness, by its terms or by the
terms of any agreement or instrument pursuant to which such new Indebtedness is
outstanding, is expressly made pari passu with, or subordinate in right of
payment to, the remaining Notes or Note Guarantees, as the case may be, (B) in
case the Indebtedness to be refinanced is subordinated in right of payment to
the Notes or Note Guarantees, as the case may be, such new Indebtedness, by its
terms or by the terms of any agreement or instrument pursuant to which such new
Indebtedness is issued or remains outstanding, is expressly made subordinate in
right of payment to the Notes or the Note Guarantees, as the case may be, at
least to the extent that the Indebtedness to be refinanced is subordinated to
the Notes or the Note Guarantees, as the case may be, and (C) such new
Indebtedness, determined as of the date of Incurrence of such new Indebtedness,
does not mature prior to the Stated Maturity of the Indebtedness to be
refinanced or refunded, and the Average Life of such new Indebtedness is at
least equal to the remaining Average Life of the Indebtedness to be refinanced
or refunded; and provided further that in no event may Indebtedness of the
Company be refinanced by means of any Indebtedness of any Restricted Subsidiary
pursuant to this clause (iii) (other than pursuant to an Offer to Purchase);
(iv) Indebtedness (A) in respect of performance, surety or appeal bonds provided
in the ordinary course of business, (B) under Currency Agreements and Interest
Rate Agreements; provided that such agreements (a) are designed solely to
protect the Company or its Restricted Subsidiaries against fluctuations in
foreign currency exchange rates or interest rates and (b) do not increase the
Indebtedness of the obligor outstanding at any time other than as a result of
fluctuations
<PAGE>
in foreign currency exchange rates or interest rates or by reason of fees,
indemnities and compensation payable thereunder; and (C) arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from Guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Company or any of its
Restricted Subsidiaries pursuant to such agreements, in any case Incurred in
connection with the disposition of any business, assets or Restricted Subsidiary
(other than Guarantees of Indebtedness Incurred by any Person acquiring all or
any portion of such business, assets or Restricted Subsidiary for the purpose of
financing such acquisition), in a principal amount not to exceed the gross
proceeds actually received by the Company or any Restricted Subsidiary in
connection with such disposition; (v) Indebtedness of the Company, to the extent
the net proceeds thereof are promptly (A) used to purchase Notes tendered in an
Offer to Purchase made as a result of a Change in Control or (B) deposited to
defease the Notes as described below under "Defeasance"; (vi) Guarantees of the
Notes, Guarantees by the Company or Restricted Subsidiaries of Indebtedness of
ATA under the Credit Agreement, and Guarantees of Indebtedness of the Company by
any Restricted Subsidiary provided the Guarantee of such Indebtedness is
permitted by and made in accordance with Section 4.07; (vii) Indebtedness of the
Company or any Restricted Subsidiary Incurred to finance the cost of aircraft,
engines and buyer-furnished equipment attached thereto or incorporated therein;
provided, that such Indebtedness is created solely for the purpose of financing
the costs (including transaction costs and the costs of improvement or
construction) of property or assets and is incurred prior to, at the time of or
within 12 months after, the later of the acquisition, the completion of
construction or the commencement of full operation of such property or assets,
and (b) the principal amount of such Indebtedness does not exceed 100% of such
costs; and (viii) Indebtedness of the Company (in addition to Indebtedness
permitted under clauses (i) through (vii) above) in an aggregate principal
amount outstanding at any time not to exceed $10 million.
(b) Notwithstanding any other provision of this Section 4.03,
the maximum amount of Indebtedness that the Company or a Restricted Subsidiary
may Incur pursuant to this Section 4.03 shall not be deemed to be exceeded, with
respect to any outstanding Indebtedness due solely to the result of fluctuations
in the exchange rates of currencies.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 4.03, (1) Indebtedness Incurred under the Credit Agreement on
or prior to the Closing Date shall be treated as Incurred pursuant to clause (i)
of the second paragraph of this Section 4.03, (2) Guarantees, Liens or
obligations with respect to letters of credit supporting Indebtedness otherwise
included in the determination of such particular amount shall not be included
and (3) any Liens granted pursuant to the equal and ratable provisions referred
to in Section 4.09 shall not be treated as Indebtedness. For purposes of
determining compliance with this Section 4.03, in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described in the above clauses (other than Indebtedness referred to in clause
(1) of the preceding sentence), the Company, in its sole discretion, shall
classify such item of Indebtedness and only be required to include the amount
and type of such Indebtedness in one of such clauses.
SECTION 4.04. Limitation on Restricted Payments. The Company will not,
and will not permit any Restricted Subsidiary to, directly or indirectly, (i)
declare or pay any dividend or make any distribution on or with respect to its
Capital Stock (other than (x) dividends or distributions payable solely in
shares of its Capital Stock (other than Disqualified Stock) or in options,
warrants or other rights to acquire shares of such Capital Stock and (y) pro
rata dividends or distributions on Common Stock of Restricted Subsidiaries held
by minority stockholders) held by Persons other than the Company or any of its
Restricted Subsidiaries, (ii) purchase, redeem, retire or otherwise acquire for
value any shares of Capital Stock of (A) the Company or an Unrestricted
Subsidiary (including options, warrants or other rights to acquire such shares
of Capital Stock) held by any Person or (B) a Restricted Subsidiary (including
options, warrants or other rights to acquire
<PAGE>
such shares of Capital Stock) held by any Affiliate of the Company (other than a
Wholly Owned Restricted Subsidiary) or any holder (or any Affiliate of such
holder) of 5% or more of the Capital Stock of the Company, (iii) make any
voluntary or optional principal payment, or voluntary or optional redemption,
repurchase, defeasance, or other acquisition or retirement for value, of
Indebtedness of the Company or any Guarantor that is subordinated in right of
payment to the Notes or to a Guarantor's Note Guarantee, as the case may be, or
(iv) make any Investment, other than a Permitted Investment, in any Person (such
payments or any other actions described in clauses (i) through (iv) above being
collectively "Restricted Payments") if, at the time of, and after giving effect
to, the proposed Restricted Payment: (A) a Default or Event of Default shall
have occurred and be continuing, (B) the Company could not Incur at least $1.00
of Indebtedness under the first paragraph of Section 4.03 or (C) the aggregate
amount of all Restricted Payments (the amount, if other than in cash, to be
determined in good faith by the Board of Directors, whose determination shall be
conclusive and evidenced by a Board Resolution) made after the Closing Date
shall exceed the sum of (1) 50% of the aggregate amount of the Adjusted
Consolidated Net Income (or, if the Adjusted Consolidated Net Income is a loss,
minus 100% of the amount of such loss) (determined by excluding income resulting
from transfers of assets by the Company or a Restricted Subsidiary to an
Unrestricted Subsidiary) accrued on a cumulative basis during the period (taken
as one accounting period) beginning on the first day of the fiscal quarter
immediately following the Closing Date and ending on the last day of the last
fiscal quarter preceding the Transaction Date for which reports have been filed
with the Commission or provided to the Trustee pursuant to Section 4.17, plus
(2) the aggregate Net Cash Proceeds received by the Company after the Closing
Date from the issuance and sale permitted by the Indenture of its Capital Stock
(other than Disqualified Stock) to a Person who is not a Subsidiary of the
Company, including an issuance or sale permitted by the Indenture of
Indebtedness of the Company for cash subsequent to the Closing Date upon the
conversion of such Indebtedness into Capital Stock (other than Disqualified
Stock) of the Company, or from the issuance to a Person who is not a Subsidiary
of the Company of any options, warrants or other rights to acquire Capital Stock
of the Company (in each case, exclusive of any Disqualified Stock or any
options, warrants or other rights that are redeemable at the option of the
holder, or are required to be redeemed, prior to the Stated Maturity of the
Notes), plus (3) an amount equal to the net reduction in Investments (other than
reductions in Permitted Investments) in any Person resulting from payments of
interest on Indebtedness, dividends, repayments of loans or advances, or other
transfers of assets, in each case to the Company or any Restricted Subsidiary or
from the Net Cash Proceeds from the sale of any such Investment (except, in each
case, to the extent any such payment or proceeds are included in the calculation
of Adjusted Consolidated Net Income), or from redesignations of Unrestricted
Subsidiaries as Restricted Subsidiaries (valued in each case as provided in the
definition of "Investments"), not to exceed, in each case, the amount of
Investments previously made by the Company or any Restricted Subsidiary in such
Person or Unrestricted Subsidiary, minus (4) the sum of the amounts by which the
Pro Forma Consolidated Net Worth after giving effect to each consolidation,
merger and sale of assets effectuated pursuant to clause (iii) under Section
5.01 was less than the Base Consolidated Net Worth immediately prior to such
consolidation, merger and sale of assets, plus (5) $5 million.
The foregoing provision shall not be violated by reason of: (i) the
payment of any dividend within 60 days after the date of declaration thereof if,
at said date of declaration, such payment would comply with the foregoing
paragraph; (ii) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of payment to
the Notes including premium, if any, and accrued and unpaid interest, with the
proceeds of, or in exchange for, Indebtedness Incurred under clause (iii) of the
second paragraph of part (a) of Section 4.03; (iii) the repurchase, redemption
or other acquisition of Capital Stock of the Company or an Unrestricted
Subsidiary (or options, warrants or other rights to acquire such Capital Stock)
in exchange for, or out of the proceeds of a substantially concurrent offering
of, shares of Capital Stock (other than Disqualified Stock) of the Company (or
options, warrants or other rights to acquire such
<PAGE>
Capital Stock); (iv) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness of the Company or any Guarantor which is subordinated in right of
payment to the Notes or the Note Guarantees, as the case may be, in exchange
for, or out of the proceeds of, a substantially concurrent offering of, shares
of the Capital Stock (other than Disqualified Stock) of the Company or any
Guarantor (or options, warrants or other rights to acquire such Capital Stock);
(v) payments or distributions, to dissenting stockholders pursuant to applicable
law, pursuant to or in connection with a consolidation, merger or transfer of
assets that complies with the provisions of the Indenture applicable to mergers,
consolidations and transfers of all or substantially all of the property and
assets of the Company; (vi) Investments acquired in exchange for Capital Stock
(other than Disqualified Stock) of the Company; provided that, except in the
case of clauses (i) and (iii), no Default or Event of Default shall have
occurred and be continuing or occur as a consequence of the actions or payments
set forth therein; or (vii) the purchase or redemption of subordinated
Indebtedness pursuant to asset sale or change of control provisions contained in
the Indenture or other governing instrument relating thereto; provided, however,
that (a) no offer or purchase obligation may be triggered in respect of such
Indebtedness unless a corresponding obligation also arises for the Notes and (b)
in all events, no repurchase or redemption of such Indebtedness may be
consummated unless and until the Company shall have satisfied all repurchase
obligations with respect to any required purchase offer made with respect to the
Notes.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof, an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (iii) or (iv) thereof and an Investment referred to in clause (vi)
thereof), and the Net Cash Proceeds from any issuance of Capital Stock referred
to in clauses (iii) and (iv), shall be included in calculating whether the
conditions of clause (C) of the first paragraph of this Section 4.04 have been
met with respect to any subsequent Restricted Payments. In the event the
proceeds of an issuance of Capital Stock of the Company are used for the
redemption, repurchase or other acquisition of the Notes, or Indebtedness that
is pari passu with the Notes, then the Net Cash Proceeds of such issuance shall
be included in clause (C) of the first paragraph of this Section 4.04 only to
the extent such proceeds are not used for such redemption, repurchase or other
acquisition of Indebtedness.
SECTION 4.05. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary that is not a Guarantor to (i) pay dividends or
make any other distributions permitted by applicable law on any Capital Stock of
such Restricted Subsidiary owned by the Company or any other Restricted
Subsidiary, (ii) pay any Indebtedness owed to the Company or any other
Restricted Subsidiary, (iii) make loans or advances to the Company or any other
Restricted Subsidiary or (iv) transfer any of its property or assets to the
Company or any other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions: (i) existing on the Closing Date in the Credit Agreement, the
Indenture or any other agreements in effect on the Closing Date, and any
extensions, refinancings, renewals or replacements of such agreements; provided
that the encumbrances and restrictions in any such extensions, refinancings,
renewals or replacements are no less favorable in any material respect to the
Holders than those encumbrances or restrictions that are then in effect and that
are being extended, refinanced, renewed or replaced; (ii) existing under or by
reason of applicable law; (iii) existing with respect to any Person or the
property or assets of such Person acquired by the Company or any Restricted
Subsidiary, existing at the time of such acquisition and not incurred in
contemplation thereof, which encumbrances or restrictions are not applicable to
any Person or the property or assets of any Person other than such
<PAGE>
Person or the property or assets of such Person so acquired; (iv) in the case of
clause (iv) of the first paragraph of this Section 4.05, (A) that restrict in a
customary manner the subletting, assignment or transfer of any property or asset
that is a lease, license, conveyance or contract or similar property or asset,
(B) existing by virtue of any transfer of, agreement to transfer, option or
right with respect to, or Lien on, any property or assets of the Company or any
Restricted Subsidiary not otherwise prohibited by the Indenture or (C) arising
or agreed to in the ordinary course of business, not relating to any
Indebtedness, and that do not, individually or in the aggregate, detract from
the value of property or assets of the Company or any Restricted Subsidiary in
any manner material to the Company or any Restricted Subsidiary; (v) with
respect to a Restricted Subsidiary and imposed pursuant to an agreement that has
been entered into for the sale or disposition of all or substantially all of the
Capital Stock of, or property and assets of, such Restricted Subsidiary; or (vi)
contained in the terms of any Indebtedness or any agreement pursuant to which
such Indebtedness was issued if (A) the encumbrance or restriction applies only
in the event of a payment default or a default with respect to a financial
covenant contained in such Indebtedness or agreement, (B) the encumbrance or
restriction is not materially more disadvantageous to the Holders of the Notes
than is customary in comparable financings (as determined by the Company) and
(C) the Company determines that any such encumbrance or restriction will not
materially affect the Company's ability to make principal or interest payments
on the Notes. Nothing contained in this Section 4.05 shall prevent the Company
or any Restricted Subsidiary from (1) creating, incurring, assuming or suffering
to exist any Liens otherwise permitted in Section 4.09 or (2) restricting the
sale or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
SECTION 4.06. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries. The Company will not sell, and will not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell, any shares of
Capital Stock of a Restricted Subsidiary (including options, warrants or other
rights to purchase shares of such Capital Stock) except (i) to the Company or a
Wholly Owned Restricted Subsidiary; (ii) issuances of director's qualifying
shares or sales to foreign nationals of shares of Capital Stock of foreign
Restricted Subsidiaries, to the extent required by applicable law; or (iii) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary and any Investment
in such Person remaining after giving effect to such issuance or sale would have
been permitted to be made under Section 4.04 if made on the date of such
issuance or sale.
SECTION 4.07. Limitation on Issuances of Guarantees by Restricted
Subsidiaries. The Company will not permit any Restricted Subsidiary that is not
a Guarantor, directly or indirectly, to Guarantee any Indebtedness of the
Company which is pari passu with or subordinate in right of payment to the Notes
("Guaranteed Indebtedness"), unless (i) such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture to the Indenture
providing for a Guarantee (a "Subsidiary Guarantee") of payment of the Notes by
such Restricted Subsidiary and (ii) such Restricted Subsidiary waives and will
not in any manner whatsoever claim or take the benefit or advantage of, any
rights of reimbursement, indemnity or subrogation or any other rights against
the Company or any other Restricted Subsidiary as a result of any payment by
such Restricted Subsidiary under its Subsidiary Guarantee; provided that this
paragraph shall not be applicable to any Guarantee of any Restricted Subsidiary
that existed at the time such Person became a Restricted Subsidiary and was not
Incurred in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary. If the Guaranteed Indebtedness is (A) pari passu with the
Notes or the Note Guarantees, then the Guarantee of such Guaranteed Indebtedness
shall be pari passu with, or subordinated to, the Subsidiary Guarantee or (B)
subordinated to the Notes or the Note Guarantees, then the Guarantee of such
Guaranteed Indebtedness shall be subordinated to the Subsidiary Guarantee at
least to the extent that the Guaranteed Indebtedness is subordinated to the
Notes or the Note Guarantees, as the case may be.
<PAGE>
Notwithstanding the foregoing, any Subsidiary Guarantee by a
Restricted Subsidiary may provide by its terms that it shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person not an Affiliate of the Company, of all of the Company's
and each Restricted Subsidiary's Capital Stock in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by the Indenture) or (ii) the release or discharge of the
Guarantee which resulted in the creation of such Subsidiary Guarantee, except a
discharge or release by or as a result of payment under such Guarantee.
SECTION 4.08. Limitation on Transactions with Shareholders and
Affiliates. The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with any holder (or any
Affiliate of such holder) of 5% or more of any class of Capital Stock of the
Company or with any Affiliate of the Company or any Restricted Subsidiary,
except upon fair and reasonable terms no less favorable to the Company or such
Restricted Subsidiary than could be obtained, at the time of such transaction
or, if such transaction is pursuant to a written agreement, at the time of the
execution of the agreement providing therefor, in a comparable arm's-length
transaction with a Person that is not such a holder or an Affiliate.
The foregoing limitation does not limit, and shall not apply to (i)
transactions (A) approved by a majority of the disinterested members of the
Board of Directors, or (B) for which the Company or a Restricted Subsidiary
delivers to the Trustee a written opinion of a nationally recognized investment
banking firm stating that the transaction is fair to the Company or such
Restricted Subsidiary from a financial point of view; (ii) any transaction
solely between the Company and any of its Wholly Owned Restricted Subsidiaries
or solely between Wholly Owned Restricted Subsidiaries; (iii) the payment of
reasonable and customary regular compensation (whether in cash or securities)
and expense reimbursements to directors of the Company who are not employees of
the Company; (iv) any payments or other transactions pursuant to any tax-sharing
agreement between the Company and any other Person with which the Company files
a consolidated tax return or with which the Company is part of a consolidated
group for tax purposes; or (v) any Restricted Payments not prohibited by Section
4.04. Notwithstanding the foregoing, any transaction or series of related
transactions covered by the first paragraph of this Section 4.08 and not covered
by clauses (ii) through (v) of this paragraph, (a) the aggregate amount of which
exceeds $1 million in value, must be approved or determined to be fair in the
manner provided for in clause (i)(A) or (B) above and (b) the aggregate amount
of which exceeds $3 million in value, must be determined to be fair in the
manner provided for in clause (i)(B) above.
SECTION 4.09. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, create, incur, assume or suffer to exist
any Lien on any of its assets or properties of any character, or any shares of
Capital Stock or Indebtedness of any Restricted Subsidiary, without making
effective provision for all of the Notes (or in the case of a Lien on assets or
properties of a Guarantor, the Note Guarantee of such Guarantor) and all other
amounts due under the Indenture to be directly secured equally and ratably with
(or, if the obligation or liability to be secured by such Lien is subordinated
in right of payment to the Notes or the Note Guarantee, prior to) the obligation
or liability secured by such Lien. The foregoing limitation does not apply to
(i) Liens existing on the Closing Date, including Liens securing obligations
under the Credit Agreement; (ii) Liens granted after the Closing Date on any
assets or Capital Stock of the Company or its Restricted Subsidiaries created in
favor of the Holders; (iii) Liens with respect to the assets of a Restricted
Subsidiary granted by such Restricted Subsidiary to the Company or a Wholly
Owned Restricted Subsidiary to secure Indebtedness owing to the Company or such
other Restricted Subsidiary; (iv) Liens securing Indebtedness which is Incurred
to refinance secured Indebtedness which is permitted to be Incurred under clause
(iii) of the second paragraph of Section 4.03; provided
<PAGE>
that such Liens do not extend to or cover any property or assets of the Company
or any Restricted Subsidiary other than the property or assets securing the
Indebtedness being refinanced; (v) Liens on any property or assets of a
Restricted Subsidiary securing Indebtedness of such Restricted Subsidiary
permitted under Section 4.03; or (vi) Permitted Liens.
SECTION 4.10. Limitation on Sale-Leaseback Transactions. The Company
will not, and will not permit any Restricted Subsidiary to, enter into any
sale-leaseback transaction involving any of its assets or properties whether now
owned or hereafter acquired, whereby the Company or a Restricted Subsidiary
sells or transfers such assets or properties and then or thereafter leases such
assets or properties or any part thereof or any other assets or properties which
the Company or such Restricted Subsidiary, as the case may be, intends to use
for substantially the same purpose or purposes as the assets or properties sold
or transferred.
The foregoing restriction does not apply to any sale-leaseback
transaction if (i) the lease is for a period, including renewal rights, of not
in excess of three years; (ii) the lease secures or relates to industrial
revenue or pollution control bonds; (iii) the transaction is solely between the
Company and any Wholly Owned Restricted Subsidiary or solely between Wholly
Owned Restricted Subsidiaries; or (iv) the Company or such Restricted
Subsidiary, within 12 months after the sale or transfer of any assets or
properties is completed, applies an amount not less than the net proceeds
received from such sale in accordance with clause (A) or (B) of the first
paragraph of Section 4.11.
SECTION 4.11. Limitation on Asset Sales. The Company will not, and
will not permit any Restricted Subsidiary to, consummate any Asset Sale, unless
(i) the consideration received by the Company or such Restricted Subsidiary is
at least equal to the fair market value of the assets sold or disposed of and
(ii) at least 75% of the consideration received (including the fair market
value, as determined in good faith by the Board of Directors, of any non-cash
consideration) consists of (w) cash, (x) Temporary Cash Investments, (y)
marketable securities which are liquidated for cash within 90 days following the
consummation of such Asset Sale, and (z) the assumption of Indebtedness of the
Company or any Restricted Subsidiary (other than the Notes and the Note
Guarantees); provided that (1) such Indebtedness is not subordinate in right of
payment to the Notes and the Note Guarantees and (2) the Company or such
Restricted Subsidiary is irrevocably released and discharged from such
Indebtedness. In the event and to the extent that the Net Cash Proceeds received
by the Company or any of its Restricted Subsidiaries from one or more Asset
Sales occurring on or after the Closing Date in any period of 12 consecutive
months exceed 10% of Adjusted Consolidated Net Tangible Assets (determined as of
the date closest to the commencement of such 12-month period for which a
consolidated balance sheet of the Company and its Subsidiaries has been filed
with the Commission), then the Company shall or shall cause the relevant
Restricted Subsidiary to (i) within twelve months after the date Net Cash
Proceeds so received exceed 10% of Adjusted Consolidated Net Tangible Assets (A)
apply an amount equal to such excess Net Cash Proceeds to permanently repay
unsubordinated Indebtedness of the Company, or any Restricted Subsidiary
providing a Subsidiary Guarantee pursuant to Section 4.07 described above or
Indebtedness of any other Restricted Subsidiary, in each case owing to a Person
other than the Company or any of its Restricted Subsidiaries or (B) invest an
equal amount, or the amount not so applied pursuant to clause (A) (or enter into
a definitive agreement committing to so invest within 12 months after the date
of such agreement), in property or assets (other than current assets) of a
nature or type or that are used in a business (or in a company having property
and assets of a nature or type, or engaged in a business) similar or related to
the nature or type of the property and assets of, or the business of, the
Company and its Restricted Subsidiaries existing on the date of such investment
and (ii) apply (no later than the end of the 12-month period referred to in
clause (i)) such excess Net Cash Proceeds (to the extent not applied pursuant to
clause (i)) as provided in the following paragraph of this Section 4.11. The
amount of such excess Net Cash Proceeds required to be applied (or to be
committed to be applied) during such 12-month period as set forth in clause
<PAGE>
(i) of the preceding sentence and not applied as so required by the end of such
period shall constitute "Excess Proceeds."
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.11 totals at least $10 million, the Company must commence, not later
than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders on a pro rata basis an aggregate principal amount of
Notes equal to the Excess Proceeds on such date, at a purchase price equal to
100% of the principal amount of the Notes, plus, in each case, accrued interest
(if any) to the Payment Date. In the event that more than 98% of the outstanding
principal amount of the Notes are tendered pursuant to such Offer to Purchase,
the balance of the Notes will be redeemable, at the Company's option, in whole
or in part, at any time or from time to time thereafter, at a Redemption Price
equal to the price specified in such Offer to Purchase plus accrued and unpaid
interest, if any, to the Redemption Date (subject to the right of Holders of
record on the relevant Regular Record Date that is on or prior to the Redemption
Date to receive interest due on an Interest Payment Date).
SECTION 4.12. Repurchase of Notes upon a Change of Control. The
Company must commence, within 30 days of the occurrence of a Change of Control,
and consummate an Offer to Purchase for all Notes then outstanding, at a
purchase price equal to 101% of the principal amount thereof, plus accrued
interest (if any) to the Payment Date. In the event that more than 98% of the
outstanding principal amount of the Notes are tendered pursuant to such Offer to
Purchase, the balance of the Notes will be redeemable, at the Company's option,
in whole or in part, at any time or from time to time thereafter, at a
Redemption Price equal to the price specified in such Offer to Purchase plus
accrued and unpaid interest, if any, to the Redemption Date (subject to the
right of Holders of record on the relevant Regular Record Date that is on or
prior to the Redemption Date to receive interest due on an Interest Payment
Date).
SECTION 4.13. Existence. Subject to Articles Four and Five of this
Indenture, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and the existence of
each of its Restricted Subsidiaries in accordance with the respective
organizational documents of the Company and each such Restricted Subsidiary and
the rights (whether pursuant to charter, partnership certificate, agreement,
statute or otherwise), licenses and franchises of the Company and each such
Restricted Subsidiary; provided that the Company shall not be required to
preserve any such right, license or franchise, or the existence of any
Restricted Subsidiary, if the maintenance or preservation thereof is no longer
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries taken as a whole.
SECTION 4.14. Payment of Taxes and Other Claims. The Company will pay
or discharge and shall cause each of its Restricted Subsidiaries to pay or
discharge, or cause to be paid or discharged, before the same shall become
delinquent (i) all material taxes, assessments and governmental charges levied
or imposed upon (a) the Company or any such Restricted Subsidiary, (b) the
income or profits of any such Subsidiary which is a corporation or (c) the
property of the Company or any such Restricted Subsidiary and (ii) all material
lawful claims for labor, materials and supplies that, if unpaid, might by law
become a lien upon the property of the Company or any such Restricted
Subsidiary; provided that the Company shall not be required to pay or discharge,
or cause to be paid or discharged, any such tax, assessment, charge or claim the
amount, applicability or validity of which is being contested in good faith by
appropriate proceedings and for which adequate reserves have been established.
SECTION 4.15. Maintenance of Properties and Insurance. The Company
will cause all properties used or useful in the conduct of its business or the
business of any Restricted Subsidiary and material to the Company and its
Restricted Subsidiaries taken as a whole, to be
<PAGE>
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided that nothing in this Section 4.15 shall prevent the Company or any such
Restricted Subsidiary from discontinuing the use, operation or maintenance of
any of such properties or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Company or of such Restricted Subsidiary
having managerial responsibility for any such property, desirable in the conduct
of the business of the Company or such Restricted Subsidiary.
The Company will provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by corporations
similarly situated and owning like properties, with reputable insurers or with
the government of the United States of America, or an agency or instrumentality
thereof, in such amounts, with such deductibles and by such methods as the
Company in good faith shall determine to be reasonable and appropriate in the
circumstances.
SECTION 4.16. Compliance Certificates. (a) Each of the Company and
each Guarantor shall deliver to the Trustee, within 90 days after the end of the
Company's and each Guarantor's fiscal year, an Officers' Certificate signed by
the Chief Financial Officer of the Company or the Guarantor, as applicable, and
another senior executive Officer of the Company or the Guarantor, as applicable,
stating whether or not the signers know of any Default or Event of Default that
occurred during such fiscal year. If any of the signers of the Officers'
Certificate have knowledge of such a Default or Event of Default, the
certificate shall describe any such Default or Event of Default and its status.
(b) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.17. Commission Reports and Reports to Holders. The Company
shall file with the Commission the annual, quarterly and other reports and other
information required by Section 13(a) or 15(d) of the Exchange Act, regardless
of whether such sections of the Exchange Act are applicable to the Company, and
shall mail or cause to be mailed copies of such reports to Holders and the
Trustee within 15 days after the date it would have been required to file such
reports with the Commission had it been subject to such sections; provided,
however, that the copies of such reports mailed to Holders may omit exhibits,
which the Company will supply to any Holder at such Holder's request. The
Company also shall comply with the other provisions of TIA Section 314(a).
SECTION 4.18. Waiver of Stay, Extension or Usury Laws. The Company and
each of the Guarantors covenant (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury law
or other law that would prohibit or forgive the Company or any Guarantor from
paying all or any portion of the principal of, premium, if any, or interest on
the Notes as contemplated herein, wherever enacted, now or at any time hereafter
in force, or that may affect the covenants or the performance of this Indenture;
and (to the extent that it may lawfully do so) the Company and each of the
Guarantors hereby expressly waive all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
<PAGE>
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc. Neither the Company nor any
Guarantor will consolidate with, merge with or into, or sell, convey, transfer,
lease or otherwise dispose of all or substantially all of its property and
assets (as an entirety or substantially an entirety in one transaction or a
series of related transactions) to, any Person or permit any Person to merge
with or into the Company or any Guarantor unless:
(i) the Company or the Guarantor, as the case may be, shall be the
continuing Person, or the Person (if other than the Company or the
Guarantor) formed by such consolidation or into which the Company or the
Guarantor, as the case may be, is merged or that acquired or leased such
property and assets of the Company or the Guarantor, as the case may be,
shall be a corporation organized and validly existing under the laws of the
United States of America or any jurisdiction thereof and shall expressly
assume, by a supplemental indenture, executed and delivered to the Trustee,
all of the obligations of the Company or the Guarantor, as the case may be,
on all of the Notes or the Note Guarantees, as the case may be, and under
the Indenture;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a pro
forma basis, the Company or any Guarantor, as the case may be, or any
Person becoming the successor obligor of the Notes or the Note Guarantees,
as the case may be, shall have a Consolidated Net Worth (a "Pro Forma
Consolidated Net Worth") which is equal to or greater than the Consolidated
Net Worth of the Company or the Guarantor, as the case may be, immediately
prior to such transaction (the "Base Consolidated Net Worth"), or if the
Pro Forma Consolidated Net Worth is less than the Base Consolidated Net
Worth, the amount by which the Pro Forma Consolidated Net Worth is less
than the Base Consolidated Net Worth shall, if considered as a Restricted
Payment, be permitted to be paid at the time under Section 4.04;
(iv) immediately after giving effect to such transaction on a pro
forma basis the Company or any Guarantor, as the case may be, or any Person
becoming the successor obligor of the Notes or the Note Guarantees, as the
case may be, could Incur at least $1.00 of Indebtedness under the first
paragraph of Section 4.03; provided that this clause (iv) shall not apply
to a consolidation or merger with or into a Wholly Owned Restricted
Subsidiary with a positive net worth; and provided further that, in
connection with any such merger or consolidation, no consideration (other
than Capital Stock (other than Disqualified Stock) in the surviving Person,
the Company or any Guarantor) shall be issued or distributed to the
stockholders of the Company or the Guarantor; and
(v) the Company delivers to the Trustee an Officers' Certificate
(attaching the arithmetic computations to demonstrate compliance with
clauses (iii) and (iv)) and Opinion of Counsel, in each case stating that
such consolidation, merger or transfer and such supplemental indenture
complies with this provision and that all conditions precedent provided for
herein relating to such transaction have been complied with;
provided, however, that clauses (iii) and (iv) above do not apply if, in the
good faith determination of the Board of Directors of the Company, whose
determination shall be evidenced by a Board Resolution, the principal purpose of
such transaction is to change the state of incorporation of the
<PAGE>
Company or any Guarantor; and provided further that any such transaction shall
not have as one of its purposes the evasion of the foregoing limitations.
SECTION 5.02. Successor Substituted. Upon any consolidation or merger,
or any sale, conveyance, transfer or other disposition of all or substantially
all of the property and assets of the Company or any Guarantor in accordance
with Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company or any Guarantor is merged or to which
such sale, conveyance, transfer or other disposition is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
or any Guarantor, as the case may be, under this Indenture with the same effect
as if such successor Person had been named as the Company or any Guarantor, as
the case may be, herein; provided, however, that in the case of a lease, the
Company or any Guarantor, as the case may be, shall not be released from the
obligation to pay the principal of and interest on the Notes.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. An "Event of Default" shall occur
with respect to the Notes if:
(a) the Company or any Guarantor, as the case may be, defaults in the
payment of principal of (or premium, if any, on) any Note when the same
becomes due and payable at Stated Maturity, upon acceleration, redemption
or otherwise;
(b) the Company or any Guarantor, as the case may be, defaults in the
payment of interest on any Note when the same becomes due and payable, and
such default continues for a period of 30 days;
(c) the Company or any Guarantor, as the case may be, defaults in the
performance or breaches the provisions of Article Five or fails to make or
consummate an Offer to Purchase in accordance with Section 4.11 or Section
4.12 of this Indenture;
(d) the Company or any Guarantor, as the case may be, defaults in the
performance of or breaches any other covenant or agreement of the Company
or a Guarantor in this Indenture or under the Notes (other than a default
specified in clause (a), (b) or (c) above) and such default or breach
continues for a period of 30 consecutive days after written notice by the
Trustee or the Holders of 25% or more in aggregate principal amount of the
Notes;
(e) there occurs with respect to any issue or issues of Indebtedness
of the Company, any Guarantor or any Significant Subsidiary having an
outstanding principal amount of $10 million or more in the aggregate for
all such issues of all such Persons, whether such Indebtedness now exists
or shall hereafter be created, (I) an event of default that has caused the
holder thereof to declare such Indebtedness to be due and payable prior to
its Stated Maturity and such Indebtedness has not been discharged in full
or such acceleration has not been rescinded or annulled within 30 days of
such acceleration and/or (II) the failure to make a principal payment at
the final (but not any interim) fixed maturity and such defaulted payment
shall not have been made, waived or extended within 30 days of such payment
default;
<PAGE>
(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $10 million in the aggregate for all such
final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company, any Guarantor or any Significant Subsidiary
and shall not be paid or discharged, and there shall be any period of 30
consecutive days during which a stay of enforcement of such final judgment
or order, by reason of a pending appeal or otherwise, shall not be in
effect;
(g) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, (B) appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Company or any Significant Subsidiary or for all or
substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary and, in each case, such decree
or order shall remain unstayed and in effect for a period of 30 consecutive
days;
(h) the Company or any Significant Subsidiary (A) commences a
voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) effects any
general assignment for the benefit of creditors; or
(i) any Note Guarantee ceases to be in full force and effect (except
pursuant to its terms) or is declared null and void or any Guarantor denies
that it has any further liability under any Note Guarantee, or gives notice
to such effect.
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in clause (g) or (h) of Section 6.01 that occurs with
respect to the Company or any Guarantor) occurs and is continuing under this
Indenture, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes, then outstanding, by written notice to the Company (and to
the Trustee if such notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the principal of, premium, if any, and
accrued interest on the Notes to be immediately due and payable. Upon a
declaration of acceleration, such principal of, premium, if any, and accrued
interest shall be immediately due and payable. In the event of a declaration of
acceleration because an Event of Default set forth in clause (e) of Section 6.01
has occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to clause (e) shall be remedied or cured by the
Company, any Guarantor or the relevant Significant Subsidiary or waived by the
holders of the relevant Indebtedness within 60 days after the declaration of
acceleration with respect thereto. If an Event of Default specified in clause
(g) or (h) of Section 6.01 occurs with respect to the Company or any Significant
Subsidiary, the principal of, premium, if any, and accrued interest on the Notes
then outstanding shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration, but before a
judgment or decree for the payment of the money due has been obtained by the
Trustee, the Holders of at least a majority in principal amount of the
outstanding Notes by written notice to the Company and to the Trustee, may waive
all past defaults and rescind and annul a declaration of acceleration and its
consequences if (i) all existing Events of Default, other than the nonpayment of
the principal of, premium, if any,
<PAGE>
and interest on the Notes that have become due solely by such declaration of
acceleration, have been cured or waived and (ii) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of, premium, if any, or interest
on the Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding.
SECTION 6.04. Waiver of Past Defaults. Subject to Sections 6.02, 6.07
and 9.02, the Holders of at least a majority in aggregate principal amount of
the outstanding Notes, by notice to the Trustee, may waive an existing Default
or Event of Default and its consequences, except a Default in the payment of
principal of, premium, if any, or interest on any Note as specified in clause
(a) or (b) of Section 6.01 (including in connection with an Offer to Purchase)
or in respect of a covenant or provision of this Indenture which cannot be
modified or amended without the consent of the Holder of each outstanding Note
affected. Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 6.05. Control by Majority. The Holders of at least a majority
in aggregate principal amount of the outstanding Notes, by notice to the
Trustee, may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee; provided that the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that may involve the
Trustee in personal liability, or that the Trustee determines in good faith may
be unduly prejudicial to the rights of Holders not joining in the giving of such
direction; and provided further that the Trustee may take any other action it
deems proper that is not inconsistent with any directions received from Holders
of Notes pursuant to this Section 6.05.
SECTION 6.06. Limitation on Suits. A Holder may not institute any
proceeding, judicial or otherwise, with respect to this Indenture or the Notes,
or for the appointment of a receiver or trustee, or pursue any other remedy
hereunder, unless:
(i) such Holder has previously given the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Notes shall have made a written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee indemnity
satisfactory to the Trustee against any costs, liability or expense
incurred in compliance with such request;
(iv) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
<PAGE>
(v) during such 60-day period, the Holders of a majority in aggregate
principal amount of the outstanding Notes have not given the Trustee a
direction that is inconsistent with such written request.
For purposes of Section 6.05 of this Indenture and this Section 6.06,
the Trustee shall comply with TIA Section 316(a) in making any determination of
whether the Holders of the required aggregate principal amount of outstanding
Notes have concurred in any request or direction of the Trustee to pursue any
remedy available to the Trustee or the Holders with respect to this Indenture or
the Notes or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder of a Note to
receive payment of the principal amount of, premium, if any, or interest on such
Holder's Note on or after the respective due dates expressed on such Note
(including in a notice with respect to an Offer to Purchase), or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default in
payment of principal, premium or interest specified in clause (a) or (b) of
Section 6.01 occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Company or any other
obligor of the Notes for the whole amount of principal, premium, if any, and
accrued interest remaining unpaid, together with interest on overdue principal,
premium, if any, and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate specified
in the Notes, and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.06) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor of the Notes), its creditors or its property
and shall be entitled and empowered to collect and receive any monies,
securities or other property payable or deliverable upon conversion or exchange
of the Notes or upon any such claims and to distribute the same, and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 7.06. Nothing herein contained shall be
deemed to empower the Trustee to authorize or consent to, or accept or adopt on
behalf of any Holder, any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money pursuant
to this Article Six, it shall pay out the money in the following order:
<PAGE>
First: to the Trustee for amounts due under Section 7.06, including
payment of all compensation, expense and liabilities incurred, and all
advances made, by the Trustee and the costs and expenses of collection;
Second: to Holders for amounts then due and unpaid for principal
amount of, premium, if any, and interest on the Notes in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Notes for principal, premium, if any, and interest,
respectively; and
Third: to the Company or any other obligors of the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Holders pursuant to this Section
6.10.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 of this Indenture, or a
suit by Holders of more than 10% in principal amount of the outstanding Notes.
SECTION 6.12. Restoration of Rights and Remedies. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then,
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Company, Trustee and the Holders shall continue as though no
such proceeding had been instituted.
SECTION 6.13. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes in Section 2.09, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 6.14. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article Six or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
<PAGE>
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Rights and Duties of Trustee. (i) Except during the
continuance of an Event of Default,
(a) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(b) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth and correctness of the statements and
certificates or opinions furnished to it and conforming to the requirements
of this Indenture; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(ii) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(iii) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(a) this Subsection shall not be construed to limit the effect of
Subsection (i) of this Section;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the outstanding Notes,
relating to the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture with respect to the
Notes.
(iv) Subject to TIA Sections 315(a) through (d):
(a) the Trustee may rely upon any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document;
(b) before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, which shall conform to
Section 11.04. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such certificate or opinion;
(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders, unless such
<PAGE>
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction;
(d) the Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within its
rights or powers; provided that the Trustee's conduct does not constitute
negligence or bad faith;
(e) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it;
(f) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed), may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(g) the Trustee may consult with counsel and the advice of such
counsel or any opinion of counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(h) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company
or any Guarantor, personally or by agent or attorney;
(i) the Trustee may execute any of the trusts or powers hereunder
either directly or by or through agents or attorneys and the Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
(j) the Trustee may conclusively rely as to the identity and addresses
of Holders and other matters contained therein on the register of the Notes
maintained by the Registrar pursuant to Section 2.04 hereof and shall not
be affected by notice to the contrary; and
(k) unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient
if signed by an Officer of the Company.
SECTION 7.02. Individual Rights of Trustee. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company, the Guarantors or their Affiliates with the
same rights it would have if it were not the Trustee. Any Agent may do the same
with like rights. However, the Trustee must comply with Sections 7.09 and 7.11.
SECTION 7.03. Trustee's Disclaimer. The Trustee (i) shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, (ii) shall
<PAGE>
not be accountable for the Company's use of the proceeds from the Notes (iii)
shall not be responsible for the use or application of any money received by any
Paying Agent other than the Trustee, and (iv) shall not be responsible for any
statement in the Notes other than its certificate of authentication.
SECTION 7.04. Notice of Default. If any Default or any Event of
Default occurs and is continuing and if such Default or Event of Default is
known to a Responsible Officer of the Trustee, the Trustee shall mail to each
Holder in the manner and to the extent provided in TIA Section 313(c) notice of
the Default or Event of Default within 45 days after it occurs, unless such
Default or Event of Default has been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of, premium, if
any, or interest on any Note, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interest of the
Holders.
The Trustee shall not be deemed to have knowledge of any Default or
Event of Default except (i) a default described in Section 6.01(a) or (b) so
long as the Trustee is the Paying Agent or (ii) any Default or Event of Default
of which the Trustee shall have received written notification or a Responsible
Officer charged with the administration of this Indenture shall have obtained
actual knowledge, and such notification shall not be deemed to include receipt
of information obtained in any report or other reports and documents furnished
under Section 4.16 of this Indenture which reports and documents the Trustee
shall have no duty to examine.
SECTION 7.05. Reports by Trustee to Holders. Within 60 days after each
May 15, beginning with May 15, 1998, the Trustee shall mail to each Holder as
provided in TIA Section 313(c) a brief report dated as of such May 15, if
required by TIA Section 313(a).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Notes are listed
on any stock exchange or of any delisting thereof.
SECTION 7.06. Compensation and Indemnity. The Company and the
Guarantors, jointly and severally, shall pay to the Trustee such compensation as
shall be agreed upon in writing for its services hereunder. The compensation of
the Trustee shall not be limited by any law on compensation of a trustee of an
express trust. The Company and the Guarantors, jointly and severally, shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
expenses and advances incurred or made by it in addition to compensation for its
services. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
The Company and the Guarantors, jointly and severally, shall indemnify
the Trustee for, and hold it harmless against, any loss or liability or expense
incurred by it without negligence or bad faith on its part in connection with
the acceptance or administration of this Indenture and its duties under this
Indenture and the Notes, including the costs and expenses of defending itself
against any claim or liability and of complying with any process served upon it
or any of its officers in connection with the exercise or performance of any of
its powers or duties under this Indenture and the Notes. The Trustee shall
notify the Company promptly of any claim asserted against the Trustee for which
it may seek indemnity. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay reasonable fees and expenses of such counsel. The Company need not pay
for any settlements made without its consent; provided that such consent shall
not be unreasonably withheld. The Company
<PAGE>
need not reimburse any expense or indemnity against any loss or liability
incurred by the Trustee through negligence or bad faith.
The Trustee shall have a claim prior to the Notes on all money or
property held or collected by the Trustee, in its capacity as Trustee, for any
amount owing it pursuant to this Section 7.06, except money or property held in
trust to pay principal of, premium, if any, and interest on particular Notes.
If the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in clause (g) or (h) of Section
6.01, the expenses and the compensation for the services (including the
reasonable fees and expenses of its agents and counsel) will be intended to
constitute expenses of administration under Title 11 of the United States
Bankruptcy Code or any applicable federal or state law for the relief of
debtors.
To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under this Section 7.06 out of the estate in any such
proceeding, shall be denied for any reason, other than solely because of the
misconduct of the Trustee or its Agents, payment of the same shall be secured by
a Lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties that the Holders may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise.
The provisions of this Section 7.06 shall survive the termination of
this Indenture.
The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
SECTION 7.07. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.07.
The Trustee may resign by so notifying the Company in writing at least
30 days prior to the date of the proposed resignation. The Holders of a majority
in principal amount of the outstanding Notes may remove the Trustee by so
notifying the Trustee in writing and may appoint a successor Trustee with the
consent of the Company. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.09;
(ii) the Trustee is adjudged a bankrupt or an insolvent;
(iii) a receiver or other public officer takes charge of the Trustee
or its property; or
(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of the outstanding Notes may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If the successor Trustee does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in principal
<PAGE>
amount of the outstanding Notes may petition any court of competent jurisdiction
for the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after the
delivery of such written acceptance, subject to the lien provided in Section
7.06, (i) the retiring Trustee shall transfer all property held by it as Trustee
to the successor Trustee, (ii) the resignation or removal of the retiring
Trustee shall become effective and (iii) the successor Trustee shall have all
the rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Holder.
If the Trustee fails to comply with Section 7.09, any Holder who
satisfies the requirements of TIA Section 310(b) may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect provided in this Section.
Notwithstanding replacement of the Trustee pursuant to this Section
7.07, the Company's obligation under Section 7.06 shall continue for the benefit
of the retiring Trustee.
SECTION 7.08. Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
SECTION 7.09. Eligibility; Disqualification. Any Trustee serving
hereunder shall be a bank or trust company, within or without the state, which
is authorized by law to perform all of the duties imposed upon it hereby and
which either (i) has a reported capital and surplus aggregating at least $25
million or (ii) is a wholly owned subsidiary of a bank, a trust company or a
bank holding company having a reported capital and surplus aggregating at least
$25 million, and shall at all times satisfy the requirements of TIA Section
310(a)(i). The Trustee shall comply with TIA Section 310(b); provided, however,
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities or certificates of interest
or participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.10. Money Held in Trust. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law and except for money held in trust
under Article Eight of this Indenture.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
<PAGE>
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations. Except as
otherwise provided in this Section 8.01, the Company and the Guarantors may
terminate their obligations under the Notes and this Indenture if:
(i) all Notes previously authenticated and delivered (other than
destroyed, lost or stolen Notes that have been replaced or Notes that are
paid pursuant to Section 4.01 or Notes for whose payment money or
securities have theretofore been held in trust and thereafter repaid to the
Company, as provided in Section 8.05) have been delivered to the Trustee
for cancellation and the Company has paid all sums payable by it hereunder;
or
(ii) (A) the Notes have become due and payable, mature within one year
or all of them are to be called for redemption within one year under
arrangements satisfactory to the Trustee for giving the notice of
redemption, (B) the Company or any Guarantor irrevocably deposits in trust
with the Trustee during such one-year period, under the terms of an
irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds solely for the benefit of the Holders for that
purpose, money or U.S. Government Obligations sufficient (in the opinion of
a nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee), without
consideration of any reinvestment of any interest thereon, to pay, through
the payment of principal and interest in accordance with their terms not
later than one day prior to the relevant due date, principal, premium, if,
any, and interest on the Notes to maturity or redemption, as the case may
be, and to pay all other sums payable by it hereunder, (C) no Default or
Event of Default with respect to the Notes shall have occurred and be
continuing on the date of such deposit, (D) such deposit will not result in
a breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Company or any Guarantor is
a party or by which it is bound and (E) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, in each case
stating that all conditions precedent provided for herein relating to the
satisfaction and discharge of this Indenture have been complied with.
With respect to the foregoing clause (i), the Company's obligations
under Section 7.06 shall survive. With respect to the foregoing clause (ii), the
Company's and the Guarantors' obligations in Sections 2.03, 2.04, 2.05, 2.06,
2.09, 2.14, 4.01, 4.02, 7.06, 7.07, 8.04, 8.05 and 8.06 and Article Ten shall
survive until the Notes and the Note Guarantees are no longer outstanding.
Thereafter, only the Company's and the Guarantors' obligations in Sections 7.06,
8.04, 8.05 and 8.06 shall survive. After any such irrevocable deposit, the
Trustee upon request shall acknowledge in writing the discharge of the Company's
and the Guarantors' obligations under the Notes, the Note Guarantees and this
Indenture except for those surviving obligations specified above.
SECTION 8.02. Defeasance and Discharge of Indenture. The Company and
each Guarantor will be deemed to have paid and will be discharged from any and
all obligations in respect of the Notes and the Note Guarantees on the 123rd day
after the date of the deposit referred to in clause (A) of this Section 8.02,
and the provisions of this Indenture will no longer be in effect with respect to
the Notes and the Note Guarantees, and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same, except as to
(i) rights of registration of transfer and exchange, (ii) substitution of
apparently mutilated, defaced, destroyed, lost or stolen Notes, (iii) rights of
Holders to receive payments of principal thereof and interest thereon, (iv) the
Company's obligations under Section 4.02, (v) the rights, obligations and
immunities of the Trustee hereunder and (vi) the rights of the Holders as
beneficiaries of this Indenture with respect to the property so
<PAGE>
deposited with the Trustee payable to all or any of them; provided that the
following conditions shall have been satisfied:
(A) the Company or the Guarantors have deposited with the Trustee, in
trust, money and/or U.S. Government Obligations that through the payment of
interest and principal in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment
referred to in this clause (A), money in an amount sufficient in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee to
pay the principal of, premium, if any, and accrued interest on the Notes on
the Stated Maturity of such payments in accordance with the terms of the
Indenture and the Notes and shall have irrevocably instructed the Trustee
to apply such money to the payment of such principal, premium and interest;
(B) the Company has delivered to the Trustee (i) either (x) an Opinion
of Counsel to the effect that Holders will not recognize income, gain or
loss for federal income tax purposes as a result of the Company's or any
Guarantor's exercise of its option under this Section 8.02 provision and
will be subject to federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred, which Opinion of Counsel must be
based upon (and accompanied by a copy of) a ruling of the Internal Revenue
Service to the same effect unless there has been a change in applicable
federal income tax law after the date of this Indenture such that a ruling
is no longer required or (y) a ruling directed to the Trustee received from
the Internal Revenue Service to the same effect as the aforementioned
Opinion of Counsel and (ii) an Opinion of Counsel to the effect that the
creation of the defeasance trust does not violate the Investment Company
Act of 1940;
(C) immediately after giving effect to such deposit on a pro forma
basis, no Event of Default, or event that after the giving of notice or
lapse of time or both would become an Event of Default, shall have occurred
and be continuing on the date of such deposit or during the period ending
on the 123rd day after the date of such deposit, and such deposit shall not
result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
is bound;
(D) if at such time the Notes are listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel to
the effect that the Notes will not be delisted as a result of such deposit,
defeasance and discharge; and
(E) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated by
this Section 8.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day (or one
year) period referred to in clause (B)(ii) of this Section 8.02, none of the
Company's or Guarantors' obligations under this Indenture shall be discharged.
Subsequent to the end of such 123-day (or one year) period with respect to this
Section 8.02, the Company's and each Guarantor's obligations in Sections 2.03,
2.04, 2.05, 2.06, 2.09, 2.14, 4.01, 4.02, 7.06, 7.07, 8.04, 8.05 and 8.06 shall
survive until the Notes are no longer outstanding. Thereafter, only the
Company's and the Guarantors' obligations in Sections 7.06, 8.05 and 8.06 shall
survive. If and when a ruling from the Internal Revenue Service or an Opinion of
Counsel referred to in clause (B)(i) of this Section 8.02 is able to be provided
specifically without regard to, and not in reliance upon, the continuance of the
Company's
<PAGE>
obligations under Section 4.01 and the Guarantors' obligations under Article
Ten, then the Company's obligations under such Section 4.01 and the Guarantors'
obligations under Article Ten shall cease upon delivery to the Trustee of such
ruling or Opinion of Counsel and compliance with the other conditions precedent
provided for herein relating to the defeasance contemplated by this Section
8.02.
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's and each Guarantor's
obligations under the Notes and the Note Guarantees, respectively, and this
Indenture except for those surviving obligations in the immediately preceding
paragraph.
SECTION 8.03. Defeasance of Certain Obligations. The Company (and the
Guarantors) may omit to comply with any term, provision or condition set forth
in clauses (iii) and (iv) of Section 5.01 and Sections 4.03 through 4.16, and
clause (c) of Section 6.01, with respect to such clauses (iii) and (iv) of
Section 5.01, and clause (d) of Section 6.01, with respect to Sections 4.03
through 4.16, and clauses (e) and (f) of Section 6.01 shall be deemed not to be
Events of Default, in each case with respect to the outstanding Notes if:
(i) the Company has deposited with the Trustee in trust, money and/or
U.S. Government Obligations that, through the payment of interest and
principal in respect thereof in accordance with their terms, will provide,
not later than one day before the due date of any payment referred to in
this clause (i), money in an amount sufficient in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee to pay the principal
of, premium, if any, and accrued interest on the Notes on the Stated
Maturity of such payments in accordance with the terms of this Indenture
and the Notes and shall have irrevocably instructed the Trustee to apply
such money to the payment of such principal, premium and interest;
(ii) immediately after giving effect to such deposit on a pro forma
basis, no Event of Default, or event that after the giving of notice or
lapse of time or both would become an Event of Default, shall have occurred
and be continuing on the date of such deposit or during the period ending
on the 123rd day after the date of such deposit, and such deposit shall not
result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which the Company, any of its Subsidiaries
or any Guarantor is a party or by which the Company, the Guarantors, any of
its Subsidiaries or any Guarantor is bound;
(iii) the Company has delivered to the Trustee an Opinion of Counsel
to the effect that (A) the creation of the defeasance trust does not
violate the Investment Company Act of 1940 and (B) the Holders will not
recognize income, gain or loss for federal income tax purposes as a result
of such deposit and defeasance of certain obligations and will be subject
to federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit and defeasance had
not occurred;
(iv) at such time the Notes are listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel to
the effect that the Notes will not be delisted as a result of such deposit,
defeasance and discharge; and
(v) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated by
this Section 8.03 have been complied with.
<PAGE>
SECTION 8.04. Application of Trust Money. Subject to Sections
8.05 and 8.06, the Trustee or Paying Agent shall hold in trust money or U.S.
Government Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03,
as the case may be, and shall apply the deposited money and the money from U.S.
Government Obligations in accordance with the Notes and this Indenture to the
payment of principal of, premium, if any, and interest on the Notes; but such
money need not be segregated from other funds except to the extent required by
law.
SECTION 8.05. Repayment to Company. Subject to Sections 7.06, 8.01,
8.02 and 8.03, the Trustee and the Paying Agent shall promptly pay to the
Company upon request set forth in an Officers' Certificate any excess money held
by them at any time and thereupon shall be relieved from all liability with
respect to such money. The Trustee and the Paying Agent shall pay to the Company
upon written request any money held by them for the payment of principal,
premium, if any, or interest that remains unclaimed for two years; provided that
the Trustee or such Paying Agent before being required to make any payment may
cause to be published at the expense of the Company once in a newspaper of
general circulation in the City of New York or mail to each Holder entitled to
such money at such Holder's address (as set forth in the Note Register) notice
that such money remains unclaimed and that after a date specified therein (which
shall be at least 30 days from the date of such publication or mailing) any
unclaimed balance of such money then remaining will be repaid to the Company.
After payment to the Company, Holders entitled to such money must look to the
Company for payment as general creditors unless an applicable law designates
another Person, and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with Section
8.01, 8.02 or 8.03, as the case may be, by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
and the Guarantors' obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
8.01, 8.02 or 8.03, as the case may be, until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with Section 8.01, 8.02 or 8.03, as the case may be; provided that,
if the Company or the Guarantors have made any payment of principal of, premium,
if any, or interest on any Notes because of the reinstatement of its
obligations, the Company or the Guarantors, as the case may be, shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or U.S. Government Obligations held by the Trustee or Paying
Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. The Company and the
Guarantors, when authorized by a resolution of their Board of Directors, and the
Trustee may amend or supplement this Indenture or the Notes without notice to or
the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Article Five;
(3) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the TIA;
<PAGE>
(4) to evidence and provide for the acceptance of appointment
hereunder of a
successor Trustee;
(5) to provide for uncertificated Notes in addition to or in place of
certificated
Notes;
(6) to add one or more Subsidiary Guarantees on the terms required by
this
Indenture; or
(7) to make any change that does not adversely affect the rights of
any Holder in any material respect.
SECTION 9.02. With Consent of Holders. Subject to Sections 6.04 and
6.07 and without prior notice to the Holders, the Company and the Guarantors,
when authorized by their respective Boards of Directors (as evidenced by a Board
Resolution), and the Trustee may amend this Indenture and the Notes with the
written consent of the Holders of not less than a majority in principal amount
of the Notes then outstanding, and the Holders of not less than a majority in
principal amount of the Notes then outstanding by written notice to the Trustee
may waive future compliance by the Company or the Guarantors with any provision
of this Indenture or the Notes.
Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not:
(i) change the Stated Maturity of the principal of, or any installment
of interest on, any Note;
(ii) reduce the principal of, or premium, if any, or interest on, any
Note;
(iii) change the place or currency of payment of principal of, or
premium, if any, or interest on, any Note;
(iv) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity (or, in the case of a redemption,
on or after the Redemption Date) of any Note;
(v) reduce the above-stated percentage of outstanding Notes the
consent of whose Holders is necessary to modify or amend this Indenture;
(vi) waive a default in the payment of principal of, premium, if any,
or interest on the Notes;
(vii) reduce the percentage or aggregate principal amount of
outstanding Notes the consent of whose Holders is necessary for waiver of
compliance with certain provisions of this Indenture or for waiver of
certain defaults;
(viii) release any Guarantor from its Note Guarantee or otherwise
modify the terms of the Note Guarantees in a material respect adverse to
the Holders; or
(ix) modify any of the provisions of this Section 9.02, except to
increase any such percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the
Holder of each outstanding Note affected thereby.
<PAGE>
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. The Company will
mail supplemental indentures to Holders upon request. Any failure of the Company
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture or waiver.
SECTION 9.03. Revocation and Effect of Consent. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing consent by
the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the Note of the consenting Holder, even if notation
of the consent is not made on any Note. However, any such Holder or subsequent
Holder may revoke the consent as to its Note or portion of its Note. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
principal amount of the outstanding Notes.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those persons who were
Holders at such record date (or their duly designated proxies) and only those
persons shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it is of the type described in any of clauses (i)
through (v) of Section 9.02. In case of an amendment or waiver of the type
described in clauses (i) through (v) of Section 9.02, the amendment or waiver
shall bind each Holder who has consented to it and every subsequent Holder of a
Note that evidences the same indebtedness as the Note of the consenting Holder.
SECTION 9.04. Notation on or Exchange of Notes. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Note about the changed terms and return it to the Holder and the
Trustee may place an appropriate notation on any Note thereafter authenticated.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Note shall issue and the Trustee shall authenticate a new Note
that reflects the changed terms. Failure to make the appropriate notation or
issue a new Note shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 9.05. Trustee to Sign Amendments, Etc. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture. Subject to the preceding sentence, the Trustee shall sign such
amendment, supplement or waiver if the same does not adversely affect the rights
of the Trustee. The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
<PAGE>
SECTION 9.06. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article Nine shall conform to the
requirements of the TIA as then in effect.
ARTICLE TEN
GUARANTEE OF NOTES
SECTION 10.01. Note Guarantee. Subject to the provisions of this
Article Ten, each of the Guarantors, as primary obligors and not merely as
sureties, hereby fully, unconditionally and irrevocably guarantees on a senior
basis to each Holder and to the Trustee on behalf of the Holders: (i) the due
and punctual payment of the principal of, premium, if any, on and interest on
each Note, when and as the same shall become due and payable, whether, by
acceleration, required repurchase (including by reason of Change of Control),
call for redemption or otherwise, the due and punctual payment of interest on
the overdue principal of and interest, if any, on the Notes, to the extent
lawful (in each case including interest accruing on or after filing of any
petition in bankruptcy or reorganization relating to the Company or any
Guarantor, whether or not a claim for post filing interest is allowed in such
proceeding), and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee, all in accordance with the terms of
such Note and this Indenture and (ii) in the case of any extension of time of
payment or renewal of any Note or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, at Stated Maturity, by acceleration, required
repurchase (including by reason of Change of Control), call for redemption or
otherwise. Each of the Guarantors hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of merger or bankruptcy
of the Company, any right to require a proceeding first against the Company, the
benefit of discussion, protest or notice with respect to any such Note or the
debt evidenced thereby and all demands whatsoever, and covenants that this Note
Guarantee will not be discharged as to any such Note except by payment in full
of the principal thereof and interest thereon and as provided in Section 8.01
and Section 8.02 (subject to Section 8.06). The obligations of the Guarantors
hereunder shall not be affected by any failure or delay of the Trustee to
exercise any right or remedy under this Indenture, the Notes or this Note
Guarantee. The maturity of the obligations guaranteed hereby may be accelerated
as provided in Article Six for the purposes of this Article Ten. In the event of
any declaration of acceleration of such obligations as provided in Article Six,
such obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Article Ten. In addition,
without limiting the foregoing provisions, upon the effectiveness of an
acceleration under Article Six, the Trustee shall promptly make a demand for
payment on the Notes under the Note Guarantee provided for in this Article Ten.
The Note Guarantee shall remain in full force and effect and continue
to be effective should any petition be filed by or against the Company for
liquidation or reorganization, should the Company become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant portion of the Company's assets, and if the
Trustee or the Holder of any Note is required by any court or otherwise to
return to the Company or any Guarantor, or any custodian, receiver, liquidator,
trustee, sequestrator or other similar official acting in relation to the
Company or the Guarantors, any amount paid to the Trustee or such Holder in
respect of a Note, this Note Guarantee, to the extent theretofore discharged,
shall continue to be effective or be reinstated in full force and effect, as the
case may be, all as though such payment has not been made. Each of the
Guarantors further agrees, to the fullest extent that it may lawfully do so,
that, as between the Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand, the maturity of the obligations guaranteed hereby
may be accelerated as provided in Article Six hereof for the purposes of this
Note Guarantee, notwithstanding any stay, injunction or other prohibition extant
under any applicable bankruptcy law preventing such acceleration in respect of
the obligations Guaranteed hereby.
<PAGE>
Each of the Guarantors hereby irrevocably waives any claim or other
rights which it may now or hereafter acquire against the Company that arise from
the existence, payment, performance or enforcement of its obligations under this
Note Guarantee and this Indenture, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, any
right to participate in any claim or remedy of the Holders against the Company
or any collateral which any such Holder or the Trustee on behalf of such Holder
hereafter acquires, whether or not such claim, remedy or right arises in equity,
or under contract, statute or common law, including, without limitation, the
right to take or receive from the Company, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim or other rights until such time as the Notes and all of
the Company's other obligations being guaranteed hereby shall have been
indefeasibly paid in full. If any amount shall be paid to the Guarantors in
violation of the preceding sentence and the principal of, premium, if any, and
accrued interest on the Notes shall not have been paid in full, such amount
shall be deemed to have been paid to the Guarantors for the benefit of, and held
in trust for the benefit of, the Holders, and shall forthwith be paid to the
Trustee for the benefit of the Holders to be credited and applied upon the
principal of, premium, if any, and accrued interest on the Notes. Each of the
Guarantors acknowledges that it will receive direct and indirect benefits from
the issuance of the Notes pursuant to this Indenture and that the waivers set
forth in this Section 10.01 are knowingly made in contemplation of such
benefits.
The Note Guarantee set forth in this Section 10.01 shall not be valid
or become obligatory for any purpose with respect to a Note until the
certificate of authentication on such Note shall have been signed by or on
behalf of the Trustee.
SECTION 10.02. Obligations Unconditional. Subject to Section 10.05,
nothing contained in this Article Ten or elsewhere in this Indenture or in the
Notes is intended to or shall impair, as among any Guarantor and the Holders,
the obligation of such Guarantor, which is absolute, unconditional and
irrevocable, upon failure by the Company, to pay to the Holders the principal
of, premium, if any, and interest on the Notes as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders and creditors of such Guarantor, nor
shall anything herein or therein prevent the Holder of any Note or the Trustee
on their behalf from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture.
Without limiting the foregoing, nothing contained in this Article Ten
will restrict the right of the Trustee or the Holders to take any action to
declare the Note Guarantee to be due and payable prior to the Stated Maturity of
the Notes pursuant to Section 6.02 or to pursue any rights or remedies
hereunder.
SECTION 10.03. Notice to Trustee. The Guarantors shall give prompt
written notice to the Trustee of any fact known to the Guarantors which would
prohibit the making of any payment to or by the Trustee in respect of the Note
Guarantee pursuant to the provisions of this Article Ten.
SECTION 10.04. This Article Not to Prevent Events of Default. The
failure to make a payment on account of principal of, premium, if any, or
interest on the Notes by reason of any provision of this Article Ten will not be
construed as preventing the occurrence of an Event of Default.
SECTION 10.05. Net Worth Limitation. Notwithstanding any other
provision of this Indenture or the Notes, the Note Guarantee shall not be
enforceable against any Guarantor in an amount in excess of the net worth of
such Guarantor at the time that determination of such net worth is, under
applicable law, relevant to the enforceability of the Note Guarantee. Such net
worth shall
<PAGE>
include any claim of any Guarantor against the Company for reimbursement and any
claim against any grantor of a Subsidiary Guarantee for contribution.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act of 1939. This Indenture is subject
to the provisions of the TIA that are required to be a part of this Indenture
and shall, to the extent applicable, be governed by such provisions.
SECTION 11.02. Notices. Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery addressed as
follows:
if to the Company:
Amtran, Inc.
7337 West Washington Street
Indianapolis, IN 46231
Telecopier No.: (317) 240-7091
Attention: Kenneth K. Wolff, Chief Financial Officer
if to the Trustee:
First Security Bank, N.A.
79 South Main Street
Salt Lake City, Utah 84111
Telecopier No.: (801) 246-5053
Attention: Corporate Trust Services
The Company, the Guarantors or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: (i) at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail (certified or registered, return receipt requested) to its address shown on
the register kept by the Registrar and shall be sufficiently given to such
Holder if so mailed or delivered within the time presented. Any notice or
communication shall also be so mailed to any Person described in TIA Section
313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. Except for a
notice to the Trustee, which is deemed given only when received, and except as
otherwise provided in this Indenture, if a notice or communication is mailed in
the manner provided in this Section 11.02, it is duly given, whether or not the
addressee receives it.
<PAGE>
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 11.03. Certificate and Opinion As to Conditions Precedent.
Upon any request or application by the Company or the Guarantors to the Trustee
to take any action under this Indenture, the Company or the Guarantors shall
furnish to the Trustee:
(i) an Officers' Certificate reasonably satisfactory to the Trustee
stating that, in the opinion of the signers, all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have
been complied with; and
(ii) an Opinion of Counsel reasonably satisfactory to the Trustee
stating that, in the opinion of such Counsel, all such conditions precedent
have been complied with.
SECTION 11.04. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(i) a statement that the person making such certificate or opinion has
read such covenant or condition;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statement or opinion contained in such
certificate or opinion is based;
(iii) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(iv) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with, and such other opinions
as the Trustee may reasonably request; provided, however, that, with
respect to matters of fact, an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
SECTION 11.05. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and conclusive in favor of the Trustee and the Company, if made
in the manner provided in this Section.
(b) The ownership of Notes shall be proved by the Note Register.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind every future Holder
of the same Note or the Holder of every Note issued upon the transfer thereof or
in exchange therefor or in lieu thereof, in respect of anything done, suffered
or omitted to be done by the Trustee, any Paying Agent or the Company in
reliance thereon, whether or not notation of such action is made upon such Note.
<PAGE>
(d) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent or waiver or other act, the Company
may, at its option, by or pursuant to a Board Resolution, fix in advance a
record date for the determination of such Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other act, but the
Company shall have no obligation to do so. Notwithstanding Trust Indenture Act
Section 316(c), any such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not more than 30 days
prior to the first solicitation of Holders generally in connection therewith and
no later than the date such solicitation is completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for purposes of determining
whether Holders of the requisite proportion of Notes then outstanding have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other act, and for this purpose the Notes
then outstanding shall be computed as of such record date; provided that no such
request, demand, authorization, direction, notice, consent, waiver or other act
by the Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.
SECTION 11.06. Rules by Trustee, Paying Agent or Registrar. The
Trustee may make reasonable rules for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 11.07. Payment Date Other Than a Business Day. If an Interest
Payment Date, Redemption Date, Payment Date for an Offer to Purchase, Stated
Maturity or date of maturity of any Note shall not be a Business Day at any
place of payment, then payment of principal of, premium, if any, or interest on
such Note, as the case may be, need not be made on such date, but may be made on
the next succeeding Business Day at such place of payment with the same force
and effect as if made on the Interest Payment Date, Payment Date for an Offer to
Purchase, or Redemption Date, or at the Stated Maturity or date of maturity of
such Note; provided that no interest shall accrue for the period from and after
such Interest Payment Date, Payment Date for an Offer to Purchase, Redemption
Date, Stated Maturity or date of maturity, as the case may be.
SECTION 11.08. Governing Law. This Indenture and the Notes shall be
governed by and construed in accordance with the internal laws of the State of
New York. The Trustee, the Company, each of the Guarantors and the Holders agree
to submit to the jurisdiction of the courts of the State of New York in any
action or proceeding arising out of or relating to this Indenture or the Notes.
SECTION 11.09. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company, the Guarantors or any Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. No Recourse Against Others. No recourse for the payment
of the principal of, premium, if any, or interest on any of the Notes, or for
any claim based thereon or otherwise in respect thereof, and no recourse under
or upon any obligation, covenant or agreement of the Company or the Guarantors
contained in this Indenture, any Guarantee or in any of the Notes, or because of
the creation of any Indebtedness represented thereby, shall be had against any
incorporator or against any past, present or future partner, shareholder, other
equityholder, officer, director, employee or controlling person, as such, of the
Company or of any successor Person, either directly or through the Company or
the Guarantors or any successor Person, whether by virtue of
<PAGE>
any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Notes.
SECTION 11.11. Successors. All agreements of the Company and the
Guarantors in this Indenture and the Notes shall bind its successors. All
agreements of the Trustee in this Indenture shall bind its successor.
SECTION 11.12. Duplicate Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
SECTION 11.13. Separability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.14. Table of Contents, Headings, Etc. The Table of
Contents, Cross- Reference Table and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms and provisions hereof.
ARTICLE TWELVE
MEETINGS OF HOLDERS
SECTION 12.01. Purposes for Which Meetings May Be Called. A
meeting of Holders may be called at any time and from time to time pursuant to
the provisions of this Article Twelve for any of the following purposes:
(a) to give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to waive or to consent to the waiving of
any Default or Event of Default hereunder and its consequences, or to take
any other action authorized to be taken by Holders pursuant to any of the
provisions of Article Six;
(b) to remove the Trustee or appoint a successor Trustee pursuant to
the provisions of Article Seven;
(c) to consent to an amendment, supplement or waiver pursuant to the
provisions of Section 9.02; or
(d) to take any other action authorized to be taken by or on behalf of
the Holders of any specified aggregate principal amount of the Notes under
any other provision of this Indenture, or authorized or permitted by law.
SECTION 12.02. Manner of Calling Meetings. The Trustee may at any time
call a meeting of Holders to take any action specified in Section 12.01, to be
held at such time and at such place in The City of New York, New York or
elsewhere as the Trustee will determine. Notice of every meeting of Holders,
setting forth the time and place of such meeting and in general terms the action
proposed to be taken at such meeting, will be mailed by the Trustee, first-class
postage prepaid, to the Company and to the Holders at their last addresses as
they will appear on the
<PAGE>
registration books of the Registrar not less than 10 nor more than 60 days prior
to the date fixed for a meeting.
Any meeting of Holders will be valid without notice if the Holders of
all outstanding Notes are present in Person or by proxy, or if notice is waived
before or after the meeting by the Holders of all outstanding Notes, and if the
Company and the Trustee are either present by duly authorized representatives or
have, before or after the meeting, waived notice.
SECTION 12.03. Call of Meetings by the Company or Holders. In case at
any time the Company, pursuant to a Board Resolution, or the Holders of not less
than 10% in aggregate principal amount of the outstanding Notes will have
requested the Trustee to call a meeting of Holders to take any action specified
in Section 12.01, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee will not have mailed
the notice of such meeting within 20 days after receipt of such request, then
the Company or the Holders of Notes in the amount above specified may determine
the time and place in The City of New York, New York or elsewhere for such
meeting and may call such meeting for the purpose of taking such action, by
mailing or causing to be mailed notice thereof as provided in Section 12.02, or
by causing notice thereof to be published at least once in each of two
successive calendar weeks (on any Business Day during such week) in a newspaper
or newspapers printed in the English language, customarily published at least
five days a week of a general circulation in The City of New York, State of New
York, the first such publication to be not less than 10 nor more than 60 days
prior to the date fixed for the meeting.
SECTION 12.04. Who May Attend and Vote at Meetings. To be entitled to
vote at any meeting of Holders, a Person will (i) be a registered Holder of one
or more Notes, or (ii) be a Person appointed by an instrument in writing as
proxy for the registered Holder or Holders of Notes. The only Persons who will
be entitled to be present or to speak at any meeting of Holders will be the
Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and their counsel.
SECTION 12.05. Quorum; Action. The Persons entitled to vote a majority
in principal amount of the outstanding Notes shall constitute a quorum. In the
absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of Holders of Notes, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 12.02, except that such
notice need be given only once and not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage of the principal amount
of the outstanding Notes which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned
for a lack of a quorum, the Persons entitled to vote 25% in principal amount of
the outstanding Notes at the time shall constitute a quorum for the taking of
any action set forth in the notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid, any action or matter, except as otherwise
specified herein, shall be effectively passed and decided if passed or decided
by the Persons entitled to vote not less than a majority in principal amount of
outstanding Notes represented and voting at such meeting.
<PAGE>
Any action or matter passed or decision taken at any meeting
of Holders of Notes duly held in accordance with this Section 12.05 shall be
binding on all the Holders of Notes, whether or not present or represented at
the meeting.
SECTION 12.06. Regulations May Be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment. Notwithstanding any other provision of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any action by or any meeting of Holders, in regard to proof of the
holding of Notes and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, and submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it will think appropriate. Such
regulations may fix a record date and time for determining the Holders of record
of Notes entitled to vote at such meeting, in which case those and only those
Persons who are Holders of Notes at the record date and time so fixed, or their
proxies, will be entitled to vote at such meeting whether or not they will be
such Holders at the time of the meeting.
The Trustee will, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting will have been called by
the Company or by Holders as provided in Section 12.03, in which case the
Company or the Holders calling the meeting, as the case may be, will in like
manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting will be elected by vote of the Holders of a majority in
principal amount of the Notes represented at the meeting and entitled to vote.
At any meeting each Holder or proxy will, subject to the
provisions of Section 12.04 hereof, be entitled to one vote for each $1,000
principal amount of Notes held or represented by him or her; provided, however,
that no vote will be cast or counted at any meeting in respect of any Notes
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman may adjourn any such meeting if he is unable to
determine whether any Holder or proxy will be entitled to vote at such meeting.
The chairman of the meeting will have no right to vote other than by virtue of
Notes held by him or instruments in writing as aforesaid duly designating him as
the proxy to vote on behalf of other Holders. Any meeting of Holders duly called
pursuant to the provisions of Section 12.02 or Section 12.03 may be adjourned
from time to time by vote of the Holders of a majority in aggregate principal
amount of the Notes represented at the meeting and entitled to vote, and the
meeting may be held as so adjourned without further notice.
SECTION 12.07. Voting at the Meeting and Record to Be Kept.
The vote upon any resolution submitted to any meeting of Holders will be by
written ballots on which will be subscribed the signatures of the Holders of
Notes or/of their representatives by proxy and the principal amount of the Notes
voted by the ballot. The permanent chairman of the meeting will appoint two
inspectors of votes, who will count all votes cast at the meeting for or against
any resolution and will make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting. A record
in duplicate of the proceedings of each meeting of Holders will be prepared by
the secretary of the meeting and there will be attached to such record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more Persons having knowledge of the facts, setting
forth a copy of the notice of the meeting and showing that such notice was
mailed as provided in Section 12.02. The record will be signed and verified by
the affidavits of the permanent chairman and the secretary of the meeting and
one of the duplicates will be delivered to the Company and the other to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting.
Any record so signed and verified will be conclusive evidence of the
matters therein
stated.
<PAGE>
SECTION 12.08. Exercise of Rights of Trustee or Holders May
Not Be Hindered or Delayed by Call of Meeting. Nothing contained in this Article
Twelve will be deemed or construed to authorize or permit, by reason of any call
of a meeting of Holders or any rights expressly or impliedly conferred hereunder
to make such call, any hindrance or delay in the exercise of any right or rights
conferred upon or reserved to the Trustee or to the Holders under any of the
provisions of this Indenture or of the Notes.
SECTION 12.09. Procedures Not Exclusive. The procedures set forth in
this Article Twelve are not exclusive and the rights and obligations of the
Company, the Trustee and the Holders under other Articles of this Indenture
(including, without limitation, Articles Six, Seven, Eight and Nine) will in no
way be limited by the provisions of this Article Twelve.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
AMTRAN, INC.,
as Issuer
By: /s/ Kenneth K. Wolff
---------------------------------
Name:
Title:
AMERICAN TRANS AIR, INC.,
as Guarantor
By: /s/ Kenneth K. Wolff
---------------------------------
Name:
Title:
AMBASSADAIR TRAVEL CLUB, INC.,
as Guarantor
By: /s/ Kenneth K. Wolff
---------------------------------
Name:
Title:
ATA VACATIONS, INC.,
as Guarantor
By: /s/ Kenneth K. Wolff
---------------------------------
Name:
Title:
AMBER TRAVEL, INC.,
as Guarantor
By: /s/ Kenneth K. Wolff
---------------------------------
<PAGE>
Name:
Title:
AMERICAN TRANS AIR TRAINING
CORPORATION,
as Guarantor
By: /s/ Kenneth K. Wolf
---------------------------------
Name:
Title:
AMERICAN TRANS AIR
EXECUJET, INC.,
as Guarantor
By: /s/ Kenneth K. Wolff
---------------------------------
Name:
Title:
AMBER AIR FREIGHT CORPORATION,
as Guarantor
By: /s/ Kenneth K. Wolff
--------------------------------
Name:
Title:
<PAGE>
FIRST SECURITY BANK, N.A.,
as Trustee
By: /s/ Greg A. Hawley
---------------------------------
Name:
Title:
<PAGE>
Exhibit 4.2
EXHIBIT A
---------
GLOBAL NOTE
[FACE OF NOTE]
AMTRAN, INC.
10 1/2% Senior Notes due 2004
[CUSIP] [CINS] 03234G AE 6
-----------
No. $_________
AMTRAN INC., an Indiana corporation (the "Company", which term
includes any successor under the Indenture hereinafter referred to), for value
received, promises to pay to _____________, or its registered assigns, the
principal sum of ____________ ($____) on August 1, 2004.
Interest Payment Dates: February 1 and August 1, commencing
August 1, 2000.
Regular Record Dates: January 15 and July 15.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Date: December 21, 1999 AMTRAN, INC.
By: /s/ John P. Tague
---------------------------------
Name: John P. Tague
Title: President & CEO
By: Kenneth K. Wolff
---------------------------------
Name: Kenneth K. Wolff
Title: Executive V.P. & CFO
<PAGE>
(Trustee's Certificate of Authentication)
This is one of the 10 1/2% Senior Notes due 2004 described in the
within-mentioned Indenture.
FIRST SECURITY BANK, N.A.,
as Trustee
By: /s/ Greg A. Hawley
---------------------------------
Authorized Signatory
<PAGE>
[REVERSE SIDE OF NOTE]
AMTRAN, INC.
10 1/2% Senior Note due 2004
1. Principal and Interest.
The Company will pay the principal of this Note on August 1, 2004.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate per annum
shown above.
Interest will be payable semiannually (to the holders of record of the
Notes at the close of business on the January 15 or July 15 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
February 1, 1998.
If (i) the Shelf Registration Statement or Exchange Offer Registration
Statement, as applicable under the Registration Agreement, is not filed with the
Commission on or prior to 45 days after the Closing Date, (ii) the Exchange
Offer Registration Statement or the Shelf Registration Statement, as the case
may be, is not declared effective within 150 days after the Closing Date, (iii)
the Registered Exchange Offer is not consummated on or prior to the 30th day
after the date on which the Exchange Offer Registration Statement was declared
effective, or (iv) the Shelf Registration Statement is filed and declared
effective but shall thereafter cease to be effective at any time prior to the
second anniversary of its effective date (other than after such time as all
Notes have been disposed of) in accordance with the terms of the Registration
Rights Agreement dated as of July 24, 1997 among the Company, the Guarantors (as
defined therein) and Deutsche Bank Alex. Brown, then additional interest
("Additional Interest") shall accrue on the principal amount of the Notes, (A)
in the case of (i) above, commencing on the day after either such required
filing date, at a rate of .50% per annum for the first 90 days immediately
following each such filing date, such Additional Interest increasing by an
additional 0.50% per annum at the beginning of each subsequent 90-day period;
(B) in the case of (ii) above, commencing on the day after either such required
effective date, at a rate of .50% per annum for the first 90 days immediately
following each such filing date, such Additional Interest increasing by an
additional 0.50% per annum at the beginning of each subsequent 90-day period;
(C) in the case of (iii) above, commencing on the 31st day after sucheffective
date, at a rate of .50% per annum for the first 90 days immediately following
each such filing date, such Additional Interest increasing by an additional
0.50% per annum at the beginning of each subsequent 90-day period; or (D) in the
case of (iv) above, commencing on the day after such Shelf Registration
Statement ceases to eb effective, at a rate of .50% per annum for the first 90
days immediately following each such filing date, such Additional Interest
increasing by an additional 0.50% per annum at the beginning of each subsequent
90-day period; provided, however, that the Additional Interest rate on the Notes
may not exceed in the aggregate 2.0%. The Holder of this Note is entitled to the
benefits of such Registration Rights Agreement.
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from July 24, 1997;
provided that, if there is no existing default in the payment of interest and
this Note is authenticated between a Regular Record Date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such Interest Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
<PAGE>
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
a rate borne by the Notes.
2. Method of Payment.
The Company will pay interest (except defaulted interest) on the
principal amount of the Notes as provided above on each February 1 and August 1
to the persons who are Holders (as reflected in the Note Register at the close
of business on the January 15 and July 15 immediately preceding the Interest
Payment Date), in each case, even if the Note is cancelled on registration of
transfer, registration of exchange, redemption or repurchase after such record
date; provided that, with respect to the payment of principal, the Company will
make payment to the Holder that surrenders this Note to a Paying Agent on or
after August 1, 2004.
The Company will pay principal, premium, if any, and as provided
above, interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts. However, the Company, at
its option, may pay principal, premium, if any, and interest by its check
payable in such money. It may mail an interest check to a Holder's registered
address (as reflected in the Note Register). If a payment date is a date other
than a Business Day at a place of payment, payment may be made at that place on
the next succeeding day that is a Business Day and no interest shall accrue for
the intervening period.
3. Paying Agent and Registrar.
Initially, the Trustee will act as authenticating agent, Paying Agent
and Registrar. The Company may change any authenticating agent, Paying Agent or
Registrar without notice. The Company, any Subsidiary or any Affiliate of any of
them may act as Paying Agent, Registrar or co- Registrar.
4. Indenture; Limitations.
The Company issued the Notes under an Indenture dated as of July 24,
1997 (the "Indenture"), between the Company, the Guarantors and First Security
Bank, N.A., as trustee (the "Trustee"). Capitalized terms herein are used as
defined in the Indenture unless otherwise indicated. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act. The Notes are subject to all such terms,
and Holders are referred to the Indenture and the Trust Indenture Act for a
statement of all such terms. To the extent permitted by applicable law, in the
event of any inconsistency between the terms of this Note and the terms of the
Indenture, the terms of the Indenture shall control.
The Notes are unsecured senior obligations of the Company. The Company
may, subject to Article Four of the Indenture, issue additional Notes under the
Indenture.
5. Redemption.
The Notes will be redeemable, at the Company's option, in whole or in
part, at any time or from time to time, on or after August 1, 2002 and prior to
maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first class mail to each Holders' last address as it appears in the Note
Register, at the following Redemption Prices (expressed in percentages of
principal amount), plus accrued and unpaid interest, if any, to the Redemption
Date (subject to the right of
<PAGE>
Holders of record on the relevant Regular Record Date that is on or prior to the
Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing August 1 of the years set forth
below:
Redemption
Year
----
Price
-----
2002 ....................... 105.250%
2003 ....................... 102.625%
In addition, at any time prior to August 1, 2000, the Company may
redeem up to 35% of the principal amount of the Notes with the proceeds of one
or more sales of its Common Stock, at any time or from time to time in part, at
a Redemption Price (expressed as a percentage of principal amount) of 110.50%,
plus accrued and unpaid interest to the Redemption Date (subject to the rights
of Holders of record on the relevant Regular Record Date that is prior to the
Redemption Date to receive interest due on an Interest Payment Date); provided
that at least $65 million aggregate principal amount of Notes remains
outstanding after each such redemption.
In the event that more than 98% of the outstanding principal amount of
the Notes are tendered pursuant to an Offer to Purchase, as required by Section
4.11 or Section 4.12, the balance of the Notes will be redeemable, at the
Company's option, in whole or in part, at any time or from time to time
thereafter and prior to maturity, upon not less than 30 nor more than 60 days'
prior notice mailed by first class mail to each Holder's last address as it
appears in the Note Register, at a Redemption Price equal to the price specified
in such Offer to Purchase plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date that is on or prior to the Redemption Date to receive
interest due on an Interest Payment Date).
Notice of any optional redemption will be mailed at least 30 days but
not more than 60 days before the Redemption Date to each Holder of Notes to be
redeemed at his last address as it appears in the Note Register. Notes in
denominations larger than $1,000 may be redeemed in part. On and after the
Redemption Date, interest ceases to accrue on Notes or portions of Notes called
for redemption, unless the Company defaults in the payment of the Redemption
Price.
6. Repurchase upon a Change of Control.
Upon the occurrence of any Change of Control, each Holder shall have
the right to require the repurchase of its Notes by the Company in cash pursuant
to the offer described in the Indenture at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the
Payment Date (the "Change of Control Payment").
A notice of such Change of Control will be mailed within 30 days after
any Change of Control occurs to each Holder at his last address as it appears in
the Note Register. Notes in denominations larger than $1,000 may be sold to the
Company in part. On and after the Payment Date, interest ceases to accrue on
Notes or portions of Notes surrendered for purchase by the Company, unless the
Company defaults in the payment of the Change of Control Payment.
<PAGE>
7. Denominations; Transfer; Exchange.
The Notes are in registered form without coupons in denominations of
$1,000 of principal amount and multiples of $1,000 in excess thereof. A Holder
may register the transfer or exchange of Notes in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
or exchange of any Notes selected for redemption. Also, it need not register the
transfer or exchange of any Notes for a period of 15 days before the day of the
mailing of a notice of redemption of Notes selected for redemption.
8. Persons Deemed Owners.
A Holder shall be treated as the owner of a Note for all purposes.
9. Unclaimed Money.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company at its written request. After that, Holders entitled
to the money must look to the Company for payment, unless an abandoned property
law designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
If the Company deposits with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Company and the Guarantors will be discharged from the Indenture and the Notes,
except in certain circumstances for certain sections thereof, and (b) to the
Stated Maturity, the Company and the Guarantors will be discharged from certain
covenants set forth in the Indenture.
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding, and any existing default or
compliance with any provision may be waived with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding. Without
notice to or the consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency and make any change that does not adversely
affect the rights of any Holder.
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries, among other things, to Incur additional
Indebtedness, make Restricted Payments, use the proceeds from Asset Sales,
suffer to exist restrictions on the ability of Restricted
<PAGE>
Subsidiaries to make certain payments to the Company, issue Capital Stock of
Restricted Subsidiaries, engage in transactions with Affiliates, suffer to exist
or incur Liens, engage in certain sale-leaseback transactions, Guarantee
Indebtedness of the Company or merge, consolidate or transfer substantially all
of its assets. Within 90 days after the end of each fiscal year, the Company
shall deliver to the Trustee an Officers' Certificate stating whether or not the
signers know of any Default or Event of Default under such restrictive
covenants.
13. Successor Persons.
When a successor person or other entity assumes all the obligations of
its predecessor under the Notes and the Indenture, the predecessor person will
be released from those obligations.
14. Defaults and Remedies.
The following events constitute "Events of Default" with respect to
the Notes under the Indenture: (a) the Company or any Guarantor, as the case may
be, defaults in the payment of principal of (or premium, if any, on) any Note
when the same becomes due and payable at Stated Maturity, upon acceleration,
redemption or otherwise; (b) the Company or any Guarantor, as the case may be,
defaults in the payment of interest on any Note when the same becomes due and
payable, and such default continues for a period of 30 days; (c) the Company or
any Guarantor, as the case may be, defaults in the performance or breaches
Article Five or fails to make or consummate an Offer to Purchase in accordance
with Section 4.11 or Section 4.12 of the Indenture; (d) the Company or a
Guarantor defaults in the performance of or breaches any other covenant or
agreement of the Company or a Guarantor in this Indenture or under the Notes
(other than a default specified in clause (a), (b) or (c) above) and such
default or breach continues for a period of 30 consecutive days after written
notice by the Trustee or the Holders of 25% or more in aggregate principal
amount of the Notes; (e) there occurs with respect to any issue or issues of
Indebtedness of the Company, any Guarantor or any Significant Subsidiary having
an outstanding principal amount of $10 million or more in the aggregate for all
such issues of all such Persons, whether such Indebtedness now exists or shall
hereafter be created, (I) an event of default that has caused the holder thereof
to declare such Indebtedness to be due and payable prior to its Stated Maturity
and such Indebtedness has not been discharged in full or such acceleration has
not been rescinded or annulled within 30 days of such acceleration and/or (II)
the failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or extended
within 30 days of such payment default; (f) any final judgment or order (not
covered by insurance) for the payment of money in excess of $10 million in the
aggregate for all such final judgments or orders against all such Persons
(treating any deductibles, self-insurance or retention as not so covered) shall
be rendered against the Company, any Guarantor or any Significant Subsidiary and
shall not be paid or discharged, and there shall be any period of 30 consecutive
days during which a stay of enforcement of such final judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; (g) a court
having jurisdiction in the premises enters a decree or order for (A) relief in
respect of the Company or any Significant Subsidiary in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a period
of 30 consecutive days; (h) the Company or any Significant Subsidiary (A)
commences a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law,
<PAGE>
(B) consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Company or any Significant Subsidiary or for all or substantially all of the
property and assets of the Company or any Significant Subsidiary or (C) effects
any general assignment for the benefit of creditors; or (i) any Note Guarantee
ceases to be in full force and effect (except pursuant to its terms) or is
declared null and void or any Guarantor denies that it has any further liability
under any Note Guarantee, or gives notice to such effect.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes may declare all the Notes to be due and payable. If a
bankruptcy or insolvency default with respect to the Company occurs and is
continuing, the Notes automatically become due and payable. Holders may not
enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Holders of at least a
majority in principal amount of the Notes then outstanding may direct the
Trustee in its exercise of any trust or power.
15. Note Guarantee.
The Company's obligations under the Notes are fully, unconditionally
and irrevocably guaranteed by each Guarantor.
16. Trustee Dealings with the Company or the Guarantors.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from and perform services for the
Guarantors or the Company or their Affiliates and may otherwise deal with the
Guarantors or the Company or their Affiliates as if it were not the Trustee.
17. No Recourse Against Others.
No incorporator or any past, present or future partner, shareholder,
other equity holder, officer, director, employee or controlling person as such,
of the Company or the Guarantors or of any successor Person shall have any
liability for any obligations of the Company or the Guarantors under the Notes
or the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder by accepting a Note expressly waives
and releases all such liability. The waiver and release are a condition of, and
part of the consideration for the issuance of the Notes.
18. Authentication.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
19. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint
<PAGE>
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to Amtran, Inc.,
7337 West Washington Street, Indianapolis, Indiana 46231, Attention: Chief
Financial Officer.
20. Defeasance
The Indenture contains provisions for defeasance, at any time, of the
Indebtedness represented by this Note or the covenants governing the
Indebtedness represented by this Note, upon compliance by the Company with
certain conditions set forth in the Indenture.
21. Holders' Compliance with Registration Rights Agreement
Each Holder of a Note, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including, without
limitation, the obligations of the Holders with respect to a registration and
the indemnification of the Company and each of the Guarantors to the extent
provided therein.
22. Governing Law
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
<PAGE>
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
- -------------------------------------------------------------------------------
Please print or typewrite name and address including zip code of assignee
- -------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ----------------------- attorney to transfer said Note on the books
of the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN EXCHANGE NOTES,
UNLEGENDED OFFSHORE GLOBAL NOTES AND
UNLEGENDED OFFSHORE PHYSICAL NOTES]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date the shelf registration statement is
declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act of 1933 provided by Rule
144A thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
<PAGE>
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.08 of the Indenture shall have
been satisfied.
Date: -------------------- -----------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within- mentioned instrument in
every particular, without alteration
or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933 and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: ------------------
----------------------------------------------
NOTICE: To be executed by an executive officer
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 4.11 or Section 4.12 of the Indenture, check the Box: |_|
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.11 or Section 4.12 of the Indenture, state the amount:
$___________________.
Date: _______________________
Your Signature: _______________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:1 ______________________________
- --------
1 The Holder's signature must be guaranteed by a member firm of a
registered national securities exchange or of the National Association
of Securities Dealers, Inc., a commercial bank or trust company having
an office or correspondent in the United States or an "eligible
guarantor institution" as defined by Rule 17Ad-15 under the Exchange
Act.
<PAGE>
EXHIBIT B
Form of Certificate
-------------------
____________, ___
First Security Bank, N.A.
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Services
Re: Amtran Inc. (the "Company") 10 1/2% Senior Notes due 2004 (the "Notes")
- ----------------------------------------------------------------------------
Dear Sirs:
This letter relates to U.S. $ principal amount of Notes represented by
a Note (the "Legended Note") which bears a legend outlining restrictions upon
transfer of such Legended Note. Pursuant to Section 2.02 of the Indenture dated
as of July 24, 1997 (the "Indenture") relating to the Notes, we hereby certify
that we are (or we will hold such securities on behalf of) a person outside the
United States to whom the Notes could be transferred in accordance with Rule 904
of Regulation S promulgated under the U.S. Securities Act of 1933. Accordingly,
you are hereby requested to exchange the legended certificate for an unlegended
certificate representing an identical principal amount of Notes, all in the
manner provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By: _________________________________
Authorized Signature
<PAGE>
EXHIBIT C
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
_________________, ___
First Security Bank, N.A.
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Services
Re: Amtran, Inc. (the "Company") 10 1/2% Senior Notes due 2004 (the "Notes")
- -----------------------------------------------------------------------------
Dear Sirs:
In connection with our proposed purchase of $_______________ aggregate
principal amount of the Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture dated as of
July [ ], 1997 (the "Indenture"), relating to the Notes, and the undersigned
agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes
except in compliance with, such restrictions and conditions and the Securities
Act of 1933 (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf
and on behalf of any accounts for which we are acting as hereinafter stated,
that if we should sell any Notes, we will do so only (A) to the Company or any
subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to
a "qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter, (D) outside
the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the exemption from registration provided by Rule
144 under the Securities Act, or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing any of the Notes from us a notice advising such purchaser that
resales of the Notes are restricted as stated herein.
3. We understand that, on any proposed resale of any Notes, we will be
required to furnish to you and the Company such certifications, legal opinions
and other information as you and the Company may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions. We further
understand that the Notes purchased by us will bear a legend to the foregoing
effect.
<PAGE>
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By: _______________________________
Authorized Signature
<PAGE>
EXHIBIT D
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
_________________, __
First Security Bank, N.A.
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Services
Re: Amtran, Inc. (the "Company") 10 1/2% Senior Notes due 2004 (the "Notes")
- -----------------------------------------------------------------------------
Dear Sirs:
In connection with our proposed sale of U.S.$ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the Securities Act of 1933 and,
accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative
<PAGE>
or legal proceedings or official inquiry with respect to the matters covered
hereby. Terms used in this certificate have the meanings set forth in Regulation
S.
Very truly yours,
[Name of Transferor]
By: ______________________________
Authorized Signature
<PAGE>
====================================
AMTRAN, INC.,
as Issuer
and
THE GUARANTORS NAMED HEREIN,
as Guarantors
and
FIRST SECURITY BANK, N.A.,
as Trustee
____________________
Indenture
Dated as of July 24, 1997
____________________
10 1/2% Senior Notes due 2004
====================================
<PAGE>
CROSS-REFERENCE TABLE
TIA Sections
- ------------
Indenture Sections
------------------
ss. 310(a)(1)............................. 7.09
(a)(2) ............................ 7.09
(b)................................ 7.02; 7.07
ss. 311(a)................................ 7.02
(b)................................ 7.02
ss. 312(a)................................ 2.03
ss. 313(a)................................ 7.05
(c)................................ 7.04; 7.05; 11.02
(d)................................ 7.05
ss. 314(a)................................ 4.17; 7.04; 11.02
(a)(4)............................. 4.16; 11.02
(c)(1)............................. 11.03
(c)(2)............................. 11.03
(e)................................ 4.16; 11.04
ss. 315(a)................................ 7.01
(b)................................ 7.04; 11.02
(c)................................ 7.01
(d)................................ 7.01
(e)................................ 6.11
ss. 316(a)(1)(A).......................... 6.05
(a)(1)(B).......................... 6.04
(b)................................ 6.07
(c)................................ 9.03
ss. 317(a)(1)............................. 6.08
(a)(2)............................. 6.09
(b)................................ 2.04
ss. 318(a)................................ 11.01
(c)................................ 11.01
Note: The Cross-Reference Table shall not for any purpose be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS*
Page
RECITALS OF THE COMPANY...................................................... 1
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions................................................... 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act............. 20
SECTION 1.03. Rules of Construction......................................... 21
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating............................................... 22
SECTION 2.02. Restrictive Legends........................................... 23
SECTION 2.03. Execution, Authentication and Denominations................... 25
SECTION 2.04. Registrar and Paying Agent.................................... 25
SECTION 2.05. Paying Agent to Hold Money in Trust........................... 26
SECTION 2.06. Transfer and Exchange......................................... 27
SECTION 2.07. Book-Entry Provisions for Global Notes........................ 28
SECTION 2.08. Special Transfer Provisions................................... 29
SECTION 2.09. Replacement Notes............................................. 32
SECTION 2.10. Outstanding Notes............................................. 33
SECTION 2.11. Temporary Notes............................................... 34
SECTION 2.12. Cancellation.................................................. 34
SECTION 2.13. CUSIP Numbers................................................. 34
SECTION 2.14. Defaulted Interest............................................ 34
SECTION 2.15. Issuance of Additional Notes.................................. 35
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption........................................... 35
SECTION 3.02. Notices to Trustee............................................ 36
SECTION 3.03. Selection of Notes to Be Redeemed............................. 36
SECTION 3.04. Notice of Redemption.......................................... 36
SECTION 3.05. Effect of Notice of Redemption................................ 37
SECTION 3.06. Deposit of Redemption Price................................... 38
SECTION 3.07. Payment of Notes Called for Redemption........................ 38
SECTION 3.08. Notes Redeemed in Part........................................ 38
ARTICLE FOUR
COVENANTS
____________________________
* Note: The Table of Contents shall not for any purposes be deemed to
be a part of the Indenture.
<PAGE>
Page
SECTION 4.01. Payment of Notes.............................................. 38
SECTION 4.02. Maintenance of Office or Agency............................... 39
SECTION 4.03. Limitation on Indebtedness.................................... 39
SECTION 4.04. Limitation on Restricted Payments............................. 41
SECTION 4.05. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries............................. 44
SECTION 4.06. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries....................................... 45
SECTION 4.07. Limitation on Issuances of Guarantees by Restricted
Subsidiaries.................................................. 45
SECTION 4.08. Limitation on Transactions with Shareholders and Affiliates... 46
SECTION 4.09. Limitation on Liens........................................... 46
SECTION 4.10. Limitation on Sale-Leaseback Transactions..................... 47
SECTION 4.11. Limitation on Asset Sales..................................... 47
SECTION 4.12. Repurchase of Notes upon a Change of Control.................. 49
SECTION 4.13. Existence..................................................... 49
SECTION 4.14. Payment of Taxes and Other Claims............................. 49
SECTION 4.15. Maintenance of Properties and Insurance....................... 49
SECTION 4.16. Compliance Certificates....................................... 50
SECTION 4.17. Commission Reports and Reports to Holders..................... 50
SECTION 4.18. Waiver of Stay, Extension or Usury Laws....................... 50
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc................................... 51
SECTION 5.02. Successor Substituted......................................... 52
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default............................................. 52
SECTION 6.02. Acceleration.................................................. 54
SECTION 6.03. Other Remedies................................................ 55
SECTION 6.04. Waiver of Past Defaults....................................... 55
SECTION 6.05. Control by Majority........................................... 55
SECTION 6.06. Limitation on Suits........................................... 55
SECTION 6.07. Rights of Holders to Receive Payment.......................... 56
SECTION 6.08. Collection Suit by Trustee.................................... 56
SECTION 6.09. Trustee May File Proofs of Claim.............................. 56
SECTION 6.10. Priorities.................................................... 57
SECTION 6.11. Undertaking for Costs......................................... 57
SECTION 6.12. Restoration of Rights and Remedies............................ 58
SECTION 6.13. Rights and Remedies Cumulative................................ 58
SECTION 6.14. Delay or Omission Not Waiver.................................. 58
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Rights and Duties of Trustee.................................. 58
SECTION 7.02. Individual Rights of Trustee.................................. 61
SECTION 7.03. Trustee's Disclaimer.......................................... 61
<PAGE>
Page
SECTION 7.04. Notice of Default............................................ 61
SECTION 7.05. Reports by Trustee to Holders................................ 62
SECTION 7.06. Compensation and Indemnity................................... 62
SECTION 7.07. Replacement of Trustee....................................... 63
SECTION 7.08. Successor Trustee by Merger, Etc............................. 64
SECTION 7.09. Eligibility; Disqualification................................ 64
SECTION 7.10. Money Held in Trust.......................................... 64
SECTION 7.11. Preferential Collection of Claims Against Company............ 64
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations.......................... 65
SECTION 8.02. Defeasance and Discharge of Indenture......................... 66
SECTION 8.03. Defeasance of Certain Obligations............................. 68
SECTION 8.04. Application of Trust Money.................................... 69
SECTION 8.05. Repayment to Company.......................................... 69
SECTION 8.06. Reinstatement................................................. 70
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders................................... 70
SECTION 9.02. With Consent of Holders...................................... 71
SECTION 9.03. Revocation and Effect of Consent............................. 72
SECTION 9.04. Notation on or Exchange of Notes............................. 72
SECTION 9.05. Trustee to Sign Amendments, Etc.............................. 73
SECTION 9.06. Conformity with Trust Indenture Act.......................... 73
ARTICLE TEN
GUARANTEE OF NOTES
SECTION 10.01. Note Guarantee............................................... 73
SECTION 10.02. Obligations Unconditional.................................... 75
SECTION 10.03. Notice to Trustee............................................ 75
SECTION 10.04. This Article Not to Prevent Events of Default................ 75
SECTION 10.05. Net Worth Limitation......................................... 75
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act of 1939.................................. 76
SECTION 11.02. Notices...................................................... 76
SECTION 11.03. Certificate and Opinion As to Conditions Precedent........... 77
SECTION 11.04. Statements Required in Certificate or Opinion................ 77
SECTION 11.05. Acts of Holders.............................................. 78
SECTION 11.06. Rules by Trustee, Paying Agent or Registrar.................. 79
SECTION 11.07. Payment Date Other Than a Business Day....................... 79
SECTION 11.08. Governing Law................................................ 79
SECTION 11.09. No Adverse Interpretation of Other Agreements................ 79
SECTION 11.10. No Recourse Against Others................................... 79
SECTION 11.11. Successors................................................... 80
<PAGE>
Page
SECTION 11.12. Duplicate Originals......................................... 80
SECTION 11.13. Separability................................................ 80
SECTION 11.14. Table of Contents, Headings, Etc............................ 80
ARTICLE TWELVE
MEETINGS OF HOLDERS
SECTION 12.01. Purposes for Which Meetings May Be Called.................... 80
SECTION 12.02. Manner of Calling Meetings................................... 81
SECTION 12.03. Call of Meetings by the Company or Holders................... 81
SECTION 12.04. Who May Attend and Vote at Meetings.......................... 81
SECTION 12.05. Quorum; Action............................................... 81
SECTION 12.06. Regulations May Be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment.......................... 82
SECTION 12.07. Voting at the Meeting and Record to Be Kept.................. 83
SECTION 12.08. Exercise of Rights of Trustee or Holders May Not Be
Hindered or Delayed by Call of Meeting....................... 83
SECTION 12.09. Procedures Not Exclusive..................................... 84
SIGNATURES
EXHIBIT A Form of Note
EXHIBIT B Form of Certificate
EXHIBIT C Form of Certificate to Be Delivered in Connection with Transfers to
Non-QIB Accredited Investors
EXHIBIT D Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S
Exhibit 4.1
FIRST SUPPLEMENTAL INDENTURE (this "First
Supplemental Indenture") dated as of December 21, 1999,
among AMTRAN, INC., an Indiana corporation, as issuer (the
"Company"), American Trans Air, Inc., Ambassadair Travel
Club, Inc., ATA Leisure Corp. (formerly known as ATA
Vacations, Inc.), Amber Travel, Inc., American Trans Air
Training Corporation, American Trans Air Execujet, Inc.,
Amber Air Freight Corporation (each, an Indiana
corporation) (the "Original Guarantors") and Chicago
Express Airlines, Inc., (a Georgia Corporation), ("Chicago
Express" and together with the Original Guarantors, the
"Guarantors"), as guarantors and First Security Bank,
N.A., a national banking association, as trustee (the
"Trustee").
WHEREAS each of the Company, the Original Guarantors and the Trustee
have heretofore executed and delivered to the Trustee an Indenture (the
"Indenture"), dated as of July 24, 1997, providing for the issuance of the
Company's 10 1/2% Senior Notes due 2004 (the "Notes", which term shall include
any additional notes (the "Additional Notes") issued under the Indenture as
supplemented hereby on or after the date hereof;
WHEREAS Section 2.03 of the Indenture provides that subject to
Article Four the aggregate principal amount of Notes which may be
authenticated and delivered under the Indenture is unlimited;
WHEREAS Section 2.15 of the Indenture permits the Company, subject
to certain conditions, to issue Additional Notes under the Indenture which,
together with the Notes issued heretofore, shall be treated as a single class
for all purposes under the Indenture;
WHEREAS Section 9.01(1) of the Indenture provides that without
notice to or the consent of any Holders, the Company and the Guarantors, when
authorized by a resolution of their Board of Directors, and the Trustee may
amend or supplement the Indenture to cure any ambiguity, defect or
inconsistency and Section 9.01(7) of the Indenture provides that without
notice to or the consent of any Holders, the Company and the Guarantors, when
authorized by a resolution of their Board of Directors, and the Trustee may
amend or supplement the Indenture to make any change that does not
<PAGE>
2
adversely affect the rights of any Holder in any material
respect;
WHEREAS the purpose of this First Supplemental Indenture is (i) to
make conforming adjustments to the Indenture with respect to the issuance of
Additional Notes as contemplated by Section 2.15 of the Indenture and (ii) to
cause Chicago Express Airlines, Inc. to provide a Subsidiary Guarantee of the
Notes containing the same provisions as those contemplated by Section 4.07 of
the Indenture; and
WHEREAS the Company has requested that the Trustee execute and
deliver this First Supplemental Indenture and all requirements necessary to
make this First Supplemental Indenture a valid instrument in accordance with
its terms, and the execution and delivery of this First Supplemental Indenture
have been duly authorized in all respects.
NOW THEREFORE, the Company, the Guarantors and the Trustee hereby
agree that the following Sections of this First Supplemental Indenture
supplement and amend the Indenture with respect to the issuance of Additional
Notes proposed to be issued thereunder on or after the date of this First
Supplemental Indenture:
SECTION 1. Definitions. (a) Capitalized terms used herein and not
defined herein have the meanings ascribed to such terms in the Indenture.
(b) Solely for purposes of this First Supplemental Indenture and any
Additional Notes originally issued under the Indenture on or after the date of
this First Supplemental Indenture, the following terms shall have the
indicated meanings (such meanings shall apply equally to both the singular and
plural forms of the respective terms):
"Closing Date", solely for the purposes of Section 2.03 with respect
to Additional Notes, means the date on which any Additional Notes are
originally issued under the Indenture on or after the date of this First
Supplemental Indenture.
"Exchange Notes" means any securities of the Company containing
terms identical to the Notes (except that such Exchange Notes shall be
registered under the Securities Act) that are issued and exchanged for the
Notes pursuant to a Registration Rights Agreement and the Indenture.
"Guarantors" means American Trans Air, Inc., Ambassadair Travel
Club, Inc., ATA Leisure Corp. (formerly
<PAGE>
3
known as ATA Vacations, Inc.), Amber Travel, Inc., American Trans Air Training
Corporation, American Trans Air Execujet, Inc. and Amber Air Freight
Corporation (each, an Indiana corporation) and Chicago Express, until a
successor replaces any Guarantor pursuant to Article Five of the Indenture and
thereafter means the successor of such Guarantor, and any Restricted
Subsidiary that executes a Subsidiary Guarantee.
"Registration Rights Agreement" means a registration rights
agreement, among the Company, the Guarantors and one or more investment banks
that act as initial purchasers in the distribution of Notes, including the
Registration Rights Agreement dated as of December 21, 1999 between the
Company, the Guarantors and Deutsche Bank Securities Inc.
"Registration Statement" means a Registration Statement as defined
and described in a Registration Rights Agreement.
"Shelf Registration Statement" has the meaning provided in a
Registration Rights Agreement.
SECTION 2. Payment of Interest. Whenever Additional Notes are issued
that will constitute restricted securities under the Securities Act of 1933,
interest on such Additional Notes will accrue from the date of original issue
of such Additional Notes. Certificates representing such Additional Notes may
bear a legend to the foregoing effect.
SECTION 3. Subsidiary Guarantee. (a) Pursuant to Section 4.07,
Chicago Express, a Restricted Subsidiary of the Company, hereby provides a
Subsidiary Guarantee of payment of the Notes as set forth below.
(b) Subject to the provisions of this Section 3, Chicago Express, as
primary obligor and not merely as surety, hereby fully, unconditionally and
irrevocably guarantees on a senior basis to each Holder and to the Trustee on
behalf of the Holders (a "Subsidiary Guarantee"): (i) the due and punctual
payment of the principal of, premium, if any, on and interest on each Note,
when and as the same shall become due and payable, whether, by acceleration,
required repurchase (including by reason of Change of Control), call for
redemption or otherwise, the due and punctual payment of interest on the
overdue principal of and interest, if any, on the Notes, to the extent lawful
(in each case including interest accruing on or after filing of any petition
in bankruptcy or reorganization relating to the Company or any Guarantor,
<PAGE>
4
whether or not a claim for post filing interest is allowed in such
proceeding), and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee, all in accordance with the terms of
such Note and the Indenture and (ii) in the case of any extension of time of
payment or renewal of any Note or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, at Stated Maturity, by acceleration,
required repurchase (including by reason of Change of Control), call for
redemption or otherwise. Chicago Express hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of merger or
bankruptcy of the Company, any right to require a proceeding first against the
Company, the benefit of discussion, protest or notice with respect to any such
Note or the debt evidenced thereby and all demands whatsoever, and covenants
that this Subsidiary Guarantee will not be discharged as to any such Note
except by payment in full of the principal thereof and interest thereon and as
provided in Section 8.01 and Section 8.02 (subject to Section 8.06) of the
Indenture. The obligations of Chicago Express hereunder shall not be affected
by any failure or delay of the Trustee to exercise any right or remedy under
this First Supplemental Indenture, the Indenture, the Notes or this Subsidiary
Guarantee. The maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six of the Indenture for the purposes of
this Section 3. In the event of any declaration of acceleration of such
obligations as provided in Article Six of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Section 3. In addition, without limiting
the foregoing provisions, upon the effectiveness of an acceleration under
Article Six of the Indenture, the Trustee shall promptly make a demand for
payment on the Notes under the Subsidiary Guarantee provided for in this
Section 3.
The Subsidiary Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against the
Company for liquidation or reorganization, should the Company become insolvent
or make an assignment for the benefit of creditors or should a receiver or
trustee be appointed for all or any significant portion of the Company's
assets, and if the Trustee or the Holder of any Note is required by any court
or otherwise to return to the Company or any Guarantor, or any custodian,
receiver, liquidator, trustee, sequestrator or other similar official acting
in relation to the Company or the Guarantors, any amount paid to the Trustee
or such Holder in respect of a Note, this Subsidiary Guarantee, to the extent
<PAGE>
5
theretofore discharged, shall continue to be effective or be reinstated in
full force and effect, as the case may be, all as though such payment has not
been made. Chicago Express further agrees, to the fullest extent that it may
lawfully do so, that, as between the Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article Six of the
Indenture for the purposes of this Subsidiary Guarantee, notwithstanding any
stay, injunction or other prohibition extant under any applicable bankruptcy
law preventing such acceleration in respect of the obligations Guaranteed
hereby.
Chicago Express hereby irrevocably waives any claim or other rights
which it may now or hereafter acquire against the Company that arise from the
existence, payment, performance or enforcement of its obligations under this
Subsidiary Guarantee and the Indenture, including, without limitation, any
right of subrogation, reimbursement, exoneration, contribution,
indemnification, any right to participate in any claim or remedy of the
Holders against the Company or any collateral which any such Holder or the
Trustee on behalf of such Holder hereafter acquires, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim or other rights
until such time as the Notes and all of the Company's other obligations being
guaranteed hereby shall have been indefeasibly paid in full. If any amount
shall be paid to the Guarantors in violation of the preceding sentence and the
principal of, premium, if any, and accrued interest on the Notes shall not
have been paid in full, such amount shall be deemed to have been paid to the
Guarantors for the benefit of, and held in trust for the benefit of, the
Holders, and shall forthwith be paid to the Trustee for the benefit of the
Holders to be credited and applied upon the principal of, premium, if any, and
accrued interest on the Notes. Each of the Guarantors acknowledges that it
will receive direct and indirect benefits from the issuance of the Notes
pursuant to the Indenture and that the waivers set forth in this Section 3 are
knowingly made in contemplation of such benefits.
The Subsidiary Guarantee set forth in this Section 3 shall not be
valid or become obligatory for any purpose with respect to a Note until the
certificate of authentication on such Note shall have been signed by or on
behalf of the Trustee.
<PAGE>
6
(c) Subject to Section 3(f), nothing contained in this Section 3 or
elsewhere in the Indenture or in the Notes is intended to or shall impair, as
among any Guarantor and the Holders, the obligation of such Guarantor, which
is absolute, unconditional and irrevocable, upon failure by the Company, to
pay to the Holders the principal of, premium, if any, and interest on the
Notes as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of such Guarantor, nor shall anything herein or therein
prevent the Holder of any Note or the Trustee on their behalf from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture.
Without limiting the foregoing, nothing contained in this Section 3
will restrict the right of the Trustee or the Holders to take any action to
declare the Subsidiary Guarantee to be due and payable prior to the Stated
Maturity of the Notes pursuant to Section 6.02 of the Indenture or to pursue
any rights or remedies hereunder.
(d) Chicago Express shall give prompt written notice to the Trustee
of any fact known to it which would prohibit the making of any payment to or
by the Trustee in respect of the Subsidiary Guarantee pursuant to the
provisions of this Section 3.
(e) The failure to make a payment on account of principal of,
premium, if any, or interest on the Notes by reason of any provision of this
Section 3 will not be construed as preventing the occurrence of an Event of
Default.
(f) Notwithstanding any other provision of the Indenture or the
Notes, the Subsidiary Guarantee shall not be enforceable against Chicago
Express in an amount in excess of the net worth of Chicago Express at the time
that determination of such net worth is, under applicable law, relevant to the
enforceability of the Subsidiary Guarantee. Such net worth shall include any
claim of any Subsidy against the Company for reimbursement and any claim
against any grantor of a Subsidiary Guarantee or Note Guarantee for
contribution.
(g) Notwithstanding any other provision of the Indenture or the
Notes, this Subsidiary Guarantee shall be automatically and unconditionally
released and discharged upon (i) any sale, exchange or transfer, to any Person
not an Affiliate of the Company, of all of the Company's and each Restricted
Subsidiary's Capital Stock in, or all or
<PAGE>
7
substantially all the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not prohibited by the Indenture) or (ii) the release
or discharge of the Guarantee which resulted in the creation of this
Subsidiary Guarantee, except a discharge or release by or as a result of
payment under such Guarantee.
SECTION 4. Additional Interest; Legends. Unless and until a Note is exchanged
for an Exchange Note pursuant to a Registration Rights Agreement, each Note
shall bear the legend set forth below on the face thereof.
IF (I) THE SHELF REGISTRATION STATEMENT OR EXCHANGE OFFER
REGISTRATION STATEMENT, AS APPLICABLE UNDER THE REGISTRATION RIGHTS AGREEMENT,
IS NOT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OR PRIOR TO 45
DAYS AFTER THE CLOSING DATE, (II) THE EXCHANGE OFFER REGISTRATION STATEMENT OR
THE SHELF REGISTRATION STATEMENT, AS THE CASE MAY BE, IS NOT DECLARED
EFFECTIVE WITHIN 150 DAYS AFTER THE CLOSING DATE, (III) THE REGISTERED
EXCHANGE OFFER IS NOT CONSUMMATED ON OR PRIOR TO THE 30TH DAY AFTER THE DATE
ON WHICH THE EXCHANGE OFFER REGISTRATION STATEMENT WAS DECLARED EFFECTIVE, OR
(IV) THE SHELF REGISTRATION STATEMENT IS FILED AND DECLARED EFFECTIVE BUT
SHALL THEREAFTER CEASE TO BE EFFECTIVE AT ANY TIME PRIOR TO THE SECOND
ANNIVERSARY OF ITS EFFECTIVE DATE (OTHER THAN AFTER SUCH TIME AS ALL NOTES
HAVE BEEN DISPOSED OF)IN ACCORDANCE WITH THE TERMS OF THE REGISTRATION RIGHTS
AGREEMENT, THEN ADDITIONAL INTEREST ("ADDITIONAL INTEREST") SHALL ACCRUE ON
THE PRINCIPAL AMOUNT OF THIS NOTE, (A) IN THE CASE OF (I) ABOVE, COMMENCING ON
THE DAY AFTER EITHER SUCH REQUIRED FILING DATE, AT A RATE OF .50% PER ANNUM
FOR THE FIRST 90 DAYS IMMEDIATELY FOLLOWING EACH SUCH FILING DATE, SUCH
ADDITIONAL INTEREST INCREASING BY AN ADDITIONAL 0.50% PER ANNUM AT THE
BEGINNING OF EACH SUBSEQUENT 90-DAY PERIOD; (B) IN THE CASE OF (II) ABOVE,
COMMENCING ON THE DAY AFTER EITHER SUCH REQUIRED EFFECTIVE DATE, AT A RATE OF
.50% PER ANNUM FOR THE FIRST 90 DAYS IMMEDIATELY FOLLOWING EACH SUCH FILING
DATE, SUCH ADDITIONAL INTEREST INCREASING BY AN ADDITIONAL 0.50% PER ANNUM AT
THE BEGINNING OF EACH SUBSEQUENT 90-DAY PERIOD; (C) IN THE CASE OF (III)
ABOVE, COMMENCING ON THE 31ST DAY AFTER SUCH EFFECTIVE DATE, AT A RATE OF .50%
PER ANNUM FOR THE FIRST 90 DAYS IMMEDIATELY FOLLOWING EACH SUCH FILING DATE,
SUCH ADDITIONAL INTEREST INCREASING BY AN ADDITIONAL 0.50% PER ANNUM AT THE
BEGINNING OF EACH SUBSEQUENT 90-DAY PERIOD; OR (D) IN THE CASE OF (IV) ABOVE,
COMMENCING ON THE DAY AFTER SUCH SHELF REGISTRATION STATEMENT CEASES TO BE
EFFECTIVE, AT A RATE OF .50% PER ANNUM FOR THE FIRST 90 DAYS IMMEDIATELY
FOLLOWING EACH SUCH FILING DATE, SUCH ADDITIONAL INTEREST INCREASING BY AN
ADDITIONAL 0.50% PER ANNUM AT THE BEGINNING OF EACH SUBSEQUENT 90-DAY PERIOD;
PROVIDED, HOWEVER, THAT
<PAGE>
8
THE ADDITIONAL INTEREST RATE ON THE NOTES MAY NOT EXCEED IN THE AGGREGATE
2.0%; PROVIDED FURTHER, HOWEVER, THAT ANY AND ALL AMOUNTS OF ADDITIONAL
INTEREST PAID IN ACCORDANCE WITH SECTION 1 OF THIS NOTE SHALL BE CREDITED
AGAINST THE ADDITIONAL INTEREST SET FORTH ABOVE.
SECTION 5. This First Supplemental Indenture. This First
Supplemental Indenture shall be construed as supplemental to the Indenture and
shall form a part of it, and the Indenture is hereby incorporated by reference
herein and each is hereby ratified, approved and confirmed.
SECTION 6. GOVERNING LAW. THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. Counterparts. This First Supplemental Indenture may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute but one
instrument.
SECTION 8. Headings. The headings of this First Supplemental
Indenture are for reference only and shall not limit or otherwise affect the
meaning hereof.
SECTION 9. Trustee Not Responsible for Recitals. The recitals herein
contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee shall not
be responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this First Supplemental Indenture.
SECTION 10. Separability. In case any one or more of the provisions
contained in this First Supplemental Indenture shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
First Supplemental Indenture, but this First Supplemental Indenture shall be
construed as if such invalid or illegal or unenforceable provision had never
been contained herein.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed by their respective authorized
officers as of the date first written above.
<PAGE>
9
AMTRAN, INC.,
as Issuer,
by: /s/ Kenneth K. Wolff
---------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
AMERICAN TRANS AIR, INC.,
as Guarantor,
by: /s/ Kenneth K. Wolff
---------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
AMBASSADAIR TRAVEL CLUB, INC.,
as Guarantor,
by: /s/ Kenneth K. Wolff
---------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
ATA LEISURE CORP. (formerly known
as ATA VACATIONS, INC.),
as Guarantor,
by: /s/ Kenneth K. Wolff
---------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
AMBER TRAVEL, INC.,
as Guarantor
by: /s/ Kenneth K. Wolff
---------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
<PAGE>
10
AMERICAN TRANS AIR TRAINING
CORPORATION,
as Guarantor,
by: /s/ Kenneth K. Wolff
---------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
AMERICAN TRANS AIR EXECUJET, INC.,
as Guarantor,
by: /s/ Kenneth K. Wolff
---------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
AMBER AIR FREIGHT CORPORATION,
as Guarantor,
by: /s/ Kenneth K. Wolff
--------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
CHICAGO EXPRESS AIRLINES, INC.,
as Guarantor,
by: /s/ Stephen Cooper
---------------------------
Name: Stephen Cooper
Title: Acting President
<PAGE>
11
FIRST SECURITY BANK, N.A.,
as Trustee,
by /s/ Greg A. Hawley
-----------------------------
Name: Greg A. Hawley
Title: Vice President
Exhibit 4.3
EXECUTION COPY
PURCHASE AGREEMENT
December 16, 1999
Deutsche Bank Securities Inc.
31 West 52nd Street
New York, New York 10019-6160
Dear Sirs:
Amtran, Inc., an Indiana corporation (the "Company"), proposes to
issue and sell to Deutsche Bank Securities Inc. (the "Initial Purchaser")
$75,000,000 aggregate principal amount of its 10.5% Senior Notes due 2004 (the
"Securities") to be issued pursuant to the provisions of an Indenture dated as
of July 24, 1997 (the "Original Indenture") among the Company, as issuer,
American Trans Air, Inc. ("ATA"), Ambassadair Travel Club, Inc., ATA Leisure
Corp. (formerly known as ATA Vacations, Inc.), Amber Travel, Inc., American
Trans Air Training Corporation, American Trans Air Execujet, Inc., Amber Air
Freight Corporation (each, an Indiana corporation) and Chicago Express
Airlines, Inc., a Georgia corporation, as guarantors (together, the
"Guarantors"), and First Security Bank, N.A., as trustee (the "Trustee") as
supplemented by a supplemental indenture dated as of December 21, 1999 (the
"First Supplemental Indenture" and together with the Original Indenture, the
"Indenture") among the Company, the Guarantors and the Trustee. Pursuant to
the terms of the Indenture the Guarantors will guarantee (each, a "Guarantee")
on a joint and several basis the obligations of the Company under the
Securities and the Indenture.
The Securities will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), to "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act) in
compliance with the exemption from registration provided by Rule 144A under
the Securities Act ("Rule 144A") and in offshore transactions in reliance on
Regulation S under the Securities Act ("Regulation S").
The Initial Purchaser and its direct and indirect transferees will
be entitled to the benefits of a registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date (as defined
below) and to be substantially in the form attached hereto as Exhibit A.
In connection with the sale of the Securities, the Company will
prepare a private placement memorandum (the "Memorandum") setting forth or
including a description of the terms of the Securities, the terms of the
offering and a description of the Company and its business. Any reference
herein to the Memorandum shall be deemed to refer to and include the documents
incorporated by reference therein which were filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") on or before the date of
the Memorandum; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Memorandum shall be deemed to refer to and
include the filing of any document under the Exchange Act after the date of
the Memorandum, deemed to be incorporated therein by reference.
<PAGE>
2
1. Representations and Warranties. Each of the Guarantors and the
Company represents and warrants to, and agrees with, the Initial Purchaser
that as of the date hereof:
(a) The Memorandum, in the form used by the Initial Purchaser to
confirm sales and on the Closing Date (as defined below), will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this Section 1(a) do not apply to statements or omissions in the
Memorandum based upon information relating to the Initial Purchaser furnished
to the Company or any Guarantor in writing by the Initial Purchaser expressly
for use therein.
(b) None of the Guarantors, the Company nor any affiliate (as
defined in Rule 501(b) of Regulation D under the Securities Act, an
"Affiliate") of the Guarantors or the Company has directly, or through any
agent, (i) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Securities Act)
which is or will be integrated with the sale of the Securities in a manner
that would require the registration under the Securities Act of the Securities
or (ii) engaged in any form of general solicitation or general advertising in
connection with the offering of the Securities (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act except that
no representation is made as to the activities of the Initial Purchaser.
(c) None of the Guarantors, the Company, their Affiliates nor any
person acting on its or their behalf (other than the Initial Purchaser) has
engaged in any directed selling efforts (as that term is defined in Regulation
S) with respect to the Securities and each of the Guarantors, the Company and
its Affiliates and any person acting on its or their behalf (other than the
Initial Purchaser) have complied with the offering restrictions requirement of
Regulation S.
(d) The Company is subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended.
(e) Assuming the accuracy of the representations and warranties of
the Initial Purchaser in Section 6 and the compliance by the Initial Purchaser
with its agreements in Section 6, it is not necessary in connection with the
offer, sale and delivery of the Securities and the Guarantees to the Initial
Purchaser in the manner contemplated by this Agreement to register the
Securities or Guarantees under the Securities Act, except as provided in the
Registration Rights Agreement. The Original Indenture is duly qualified under
the Trust Indenture Act of 1939, as amended.
(f) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(g) Neither the Company nor any of the Guarantors is required to
register as an "investment company" and, after giving effect to the offer,
issuance and delivery of the Securities to the Initial Purchaser in accordance
with the terms of this Agreement and the application of the proceeds thereof
as described in the Memorandum, neither the Company nor any of the Guarantors
will be required to register as an
<PAGE>
3
"investment company" under the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(h) The accountants that examined and issued an auditors report with
respect to the consolidated financial statements of the Company and its
consolidated subsidiaries included in the Memorandum are independent public
accountants within the meaning of the Securities Act and the regulations
thereunder.
(i) This Agreement has been duly authorized, executed and delivered
by each of the Guarantors and the Company.
(j) The consolidated financial statements included in the Memorandum
present fairly the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the consolidated
results of operations and cash flows or changes in financial position of the
Company and its consolidated subsidiaries for the periods specified. Such
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved. The financial statement schedules, if any, included in the
Memorandum present fairly the information required to be stated therein.
(k) Each of the Guarantors and the Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated with power and authority (corporate
and other) under such laws to own, lease and operate its properties and
conduct its business as described in the Memorandum and to perform its
obligations under this Agreement, the Registration Rights Agreement, the
Indenture, the Securities (in the case of the Company) and the Guarantees (in
the case of the Guarantors); and each of the Guarantors and the Company is
duly qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property of a
nature, or transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be in good
standing would not have a material adverse effect on the condition (financial
or other), business, prospects or results of operations of the Company and the
Guarantors, taken as a whole (a "Material Adverse Effect").
(l) The Securities have been duly authorized and, when executed,
authenticated and delivered to and paid for by the Initial Purchaser in
accordance with the terms of this Agreement, will be (x) valid and binding
obligations of the Company enforceable in accordance with their terms, except
as (A) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (B) rights of
acceleration, if applicable, and the availability of equitable remedies may be
limited by equitable principles of general applicability, and (y) be entitled
to the benefits of the Indenture and the Registration Rights Agreement.
(m) The Guarantees have been duly authorized by each of the
Guarantors and, upon execution and delivery of the First Supplemental
Indenture by each of the Guarantors and the Company, will be (x) valid and
binding obligations of the each of the Guarantors enforceable in accordance
with their terms, except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally
and (B) rights of acceleration, if applicable, and the availability of
equitable remedies may be limited by equitable principles of general
<PAGE>
4
applicability, and (y) be entitled to the benefits of the Indenture and the
Registration Rights Agreement.
(n) Each of the Original Indenture, the First Supplemental Indenture
and the Registration Rights Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company and each of
the Guarantors, enforceable in accordance with their terms, except as the
enforceability thereof, except as (A) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws relating to or affecting
creditors' rights generally, (B) rights of acceleration, if applicable, and
the availability of equitable remedies may be limited by equitable principles
of general applicability and (C) the rights to indemnification or contribution
may be limited by applicable law and public policy.
(o) ATA is an air carrier operating under a certificate issued by
the Secretary of Transportation pursuant to Chapter 447 of Title 49, United
States Code, for aircraft capable of carrying 10 or more individuals or 6,000
pounds or more of cargo, and American Trans Air ExecuJet, Inc. ("ExecuJet") is
an "air taxi," and the Company, ATA and ExecuJet and (and after consummation
of the transactions contemplated herein will be) "citizens of the United
States," in each case within the meaning of the Federal Aviation Act of 1958,
as amended. All of the outstanding shares of capital stock of each of the
Guarantors have been duly authorized and validly issued and are fully paid and
non-assessable and are owned by the Company, free and clear of any pledge,
lien, security interest, charge, claim, equity or encumbrance of any kind.
(p) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Guarantors and the Company taken as a whole, from that set forth in the
Memorandum.
(q) Except as described in the Memorandum, none of the Guarantors or
the Company is in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument to
which it is a party or by which they may be bound or to which any of their
properties may be subject, except for such defaults that would not have a
Material Adverse Effect.
(r) The execution and delivery by each of the Guarantors and the
Company of this Agreement, the Registration Rights Agreement, the First
Supplemental Indenture, the Securities (in the case of the Company) and the
Guarantees (in the case of the Guarantors) (collectively, with the Original
Indenture, the "Operative Documents"), the consummation by each of the
Guarantors and the Company of the transactions contemplated in this Agreement
and the Operative Documents and compliance by each of the Guarantors and the
Company with the terms of this Agreement and the Operative Documents will not
contravene (i) any provision of applicable law or the articles of
incorporation or by-laws of the Guarantors or the Company, as the case may be,
(ii) any agreement or other instrument (including the Original Indenture)
binding upon the Guarantors or the Company or (iii) any judgment, order or
decree of any governmental body, agency or court having jurisdiction over the
Guarantors or the Company other than, in the case of clauses (ii) and (iii)
above, such contraventions that would not individually or in the aggregate
have a Material Adverse Effect, and no consent, approval, authorization or
order of, or qualification with, any governmental body or
<PAGE>
5
agency is required for the valid authorization, execution, delivery and
performance by each of the Guarantors and the Company of this Agreement or the
consummation by the Guarantors or the Company of the transactions contemplated
by this Agreement and the Operative Documents, except such as may be required
by the securities or Blue Sky laws of the various states in connection with
the offer and sale of the Securities and the Guarantees.
(s) There are no legal or governmental proceedings pending or
threatened to which the Company or any of the Guarantors is a party, or to
which any of the properties of the Company or any of the Guarantors is
subject, other than proceedings accurately described in all material respects
in the Memorandum and proceedings that would not have a Material Adverse
Effect, or a material adverse effect on the power or ability of any of the
Guarantors or the Company to perform their respective obligations under this
Agreement or any of the Operative Documents, or to consummate the transactions
contemplated by the Memorandum.
(t) The Company and each of the Guarantors possess adequate
certificates, authorities and permits issued by appropriate governmental
agencies or bodies necessary to conduct, in all material respects, the
business now operated by them and have not received any notice of proceedings
relating to the revocation or modification of any such certificate, authority
or permit that reasonably would be likely to, individually or in the
aggregate, have a Material Adverse Effect.
(u) Except as disclosed in the Memorandum, no labor dispute with the
employees of the Company or any of the Guarantors exists or to the knowledge
of the Company or any of the Guarantors is imminent that might have a Material
Adverse Effect.
(v) Except as disclosed in the Memorandum, the Company and each of
the Guarantors (i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (ii) have received
all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or approvals would
not, singly or in the aggregate, have a Material Adverse Effect.
(w) Except as disclosed in the Memorandum, each of the Guarantors
and the Company have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens,
encumbrances and defects except where the failure to have such title would not
have a Material Adverse Effect; and except as disclosed in the Memorandum,
each of the Guarantors and the Company hold any leased real or personal
property under valid and enforceable leases with no exceptions that would have
a Material Adverse Effect.
(x) The Company and its subsidiaries have implemented a
comprehensive, detailed program to analyze and address the risk that the
computer hardware and software used by them may be unable to recognize and
properly execute
<PAGE>
6
date-sensitive functions involving certain dates prior to and any dates after
December 31, 1999 (the "Year 2000 Problem"), and has determined that such risk
will be remedied on a timely basis without material expense and will not have
a Material Adverse Effect; and the Company believes, after due inquiry, that
each supplier, vendor, customer or financial service organization used or
serviced by the Company and its subsidiaries has remedied or will remedy on a
timely basis the Year 2000 Problem, except to the extent that a failure to
remedy by any such supplier, vendor, customer or financial service
organization would not have a Material Adverse Effect.
The representations and warranties contained in this Agreement shall
be true and correct as of the date of this Agreement and as of the Closing
Date.
2. Offering. The Initial Purchaser has advised the Company and the
Guarantors that it will make an offering of the Securities received and paid
for by the Initial Purchaser hereunder on the terms set forth in the
Memorandum as soon as practicable after this Agreement is entered into as in
the Initial Purchaser's judgment is advisable.
3. Issuance and Delivery.
(a) The Company hereby agrees to sell to the Initial Purchaser, and
the Initial Purchaser, upon the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, agrees to
purchase from the Company, $75,000,000 in aggregate principal amount of
Securities at a purchase price of 100% of the principal amount thereof.
(b) Payment for the Securities shall be made against delivery of the
Securities at a closing (the "Closing") to be held at the office of Cleary,
Gottlieb, Steen & Hamilton at One Liberty Plaza, New York, New York 10006 at
10:00 A.M., local time, on December 21, 1999, or at such other time on the
same or such other date, not later than December 24, 1999, as shall be agreed
upon by the Company and the Initial Purchaser. The time and date of such
payment are herein referred to as the Closing Date. Delivery of the Securities
shall be made to the Initial Purchaser's account at The Depository Trust
Company against payment by the Initial Purchaser of the purchase price thereof
by wire transfer in immediately available funds.
(c) Certificates for the Securities shall be in global or definitive
form and registered in such names and in such denominations as the Initial
Purchaser shall request in writing not less than two full business days prior
to the Closing Date. The certificates evidencing the Securities shall be
delivered to the Initial Purchaser on the Closing Date for its account, with
any transfer taxes payable in connection with the transfer of the Securities
to the Initial Purchaser duly paid, against payment of the purchase price
therefor.
<PAGE>
7
4. Conditions to Closing. The obligations of the Initial Purchaser
under this Agreement to purchase the Securities will be subject to the
following conditions:
(a) Subsequent to the date of this Agreement and prior to the
Closing Date,
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any securities of any of the
Guarantors or the Company by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations, of the Company and the
Guarantors, taken as a whole, from that set forth in the Memorandum that,
in the Initial Purchaser's judgment, is material and adverse and that
makes it, in the Initial Purchaser's judgment, impracticable to market
the Securities on the terms and in the manner contemplated in the
Memorandum.
(b) The Initial Purchaser shall have received on the Closing Date
(i) a certificate, dated the Closing Date and signed by an executive officer
of the Company and (ii) a certificate, dated the Closing Date and signed by an
executive officer of each Guarantor, in each case, to the effect set forth in
clause (a)(i) above and to the effect that the representations and warranties
of the Company and the Guarantors contained in this Agreement are true and
correct as of the Closing Date and that the Company and each of the Guarantors
have complied with all of the agreements and satisfied all of the condit ions
on their part to be performed or satisfied on or before the Closing Date. The
officers signing and delivering such certificates may rely upon the best of
their knowledge as to proceedings threatened.
(c) The Initial Purchaser shall have received on the Closing Date an
opinion of Cravath, Swaine & Moore, independent counsel for the Company, dated
the Closing Date, to the effect set forth in Exhibit B.
(d) The Initial Purchaser shall have received on the Closing Date an
opinion of the General Counsel of the Guarantor(s) and the Company, dated the
Closing Date, to the effect set forth in Exhibit C.
(e) The Initial Purchaser shall have received on the Closing Date an
opinion of Cleary, Gottlieb, Steen & Hamilton, counsel for it, dated the
Closing Date, in form and substance satisfactory to the Initial Purchaser.
(f) The Initial Purchaser shall have received on each of the date
hereof and the Closing Date a letter, dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to it, from the
Guarantors' and the Company's independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Memorandum;
<PAGE>
8
provided that the letter delivered on the Closing Date shall use a "cut-off
date" not earlier than this Agreement.
(g) Each of the Guarantors and the Company shall have furnished to
the Initial Purchaser and to counsel for the Initial Purchaser, in form and
substance satisfactory to it and to them, such other documents, certificates
and opinions as such counsel may reasonably request in order to pass upon the
matters referred to in Section 4(e) and in order to evidence the accuracy and
completeness of any of the representations, warranties or statements, the
performance of any covenant by any of the Guarantors or the Company
theretofore to be performed, or the compliance with any of the conditions
herein contained.
5. Covenants of the Company. In further consideration of the
agreements of the Initial Purchaser contained in this Agreement, the Company
and each of the Guarantors covenant as follows:
(a) To furnish to the Initial Purchaser, without charge, during the
period mentioned in paragraph (c) below, as many copies of the Memorandum and
any supplements and amendments thereto as it may reasonably request and to
deliver such copies to the Initial Purchaser by 8:00 a.m. (New York time) on
the second business day following the execution of this Agreement.
(b) Before amending or supplementing the Memorandum, to furnish to
the Initial Purchaser a copy of each such proposed amendment or supplement and
not to use any such proposed amendment or supplement to which the Initial
Purchaser reasonably objects.
(c) If, during such period after the date hereof and prior to the
date on which all of the Securities shall have been sold by the Initial
Purchaser, any event shall occur or condition exist as a result of which it is
necessary in the Initial Purchaser's judgment to amend or supplement the
Memorandum in order to make the statements therein, in the light of the
circumstances when the Memorandum is delivered to a purchaser, not misleading,
or if, with the opinion of counsel to the Initial Purchaser it is necessary to
amend or supplement the Memorandum to comply with applicable law, forthwith to
prepare and furnish, at its own expense, to the Initial Purchaser, either
amendments or supplements to the Memorandum so that the statements in the
Memorandum as so amended or supplemented will not, in the light of the
circumstances when the Memorandum is delivered to a purchaser, be misleading
or so that the Memorandum, as so amended or supplemented, will comply with
applicable law.
(d) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, at any time
when the Company is not subject to Section 13 or 15(d) of the Exchange Act,
each of the Guarantors and the Company will provide to any holder of such
restricted securities, or to any prospective purchaser of such restricted
securities designated by a holder, upon the request of such holder or
prospective purchaser, any information required to be delivered to holders and
prospective purchasers of the Securities pursuant to Rule 144A(d)(4) under the
Securities Act.
<PAGE>
9
(e) To endeavor to qualify the Securities and the Guarantees for
offer and sale under the applicable securities or Blue Sky laws of such
jurisdictions as the Initial Purchaser shall reasonably request.
(f) For a period of five years after the Closing Date, the
Guarantors and the Company will make available to the Initial Purchaser copies
of all annual reports, quarterly reports and current reports filed by the
Company with the Securities and Exchange Commission (the "Commission") on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated by
the Commission, and such other documents, reports and information as shall be
furnished by the Company to the holders of the Securities or the Guarantors to
their security holders generally; provided that at such time the Company has
securities registered under Section 12(b) or 12(g) of the Exchange Act.
(g) During the period of two years after the Closing Date, each of
the Guarantors and the Company will, upon request, furnish to the Initial
Purchaser and any holder of the Securities a copy of the restrictions on
transfer applicable to the Securities.
(h) During the period of two years after the Closing Date, none of
the Guarantors or the Company will, and none of the Guarantors or the Company
will permit any of their affiliates (as defined in Rule 144 under the
Securities Act) to, resell any of the Securities that have been reacquired by
any of them.
(i) During the period of two years after the Closing Date, none of
the Guarantors or the Company will be or become an open-end investment
company, unit investment trust or face-amount certificate company that is or
is required to be registered under Section 8 of the Investment Company Act, or
a closed-end investment company required to be registered, but not registered,
under the Investment Company Act.
(j) The Company shall bear and pay all costs and expenses incurred
incident to the performance of its obligations under this Agreement, whether
or not the transactions contemplated herein are consummated or this Agreement
is terminated pursuant to Section 8 hereof, including: (i) the fees and
expenses of preparation, issuance and delivery of this Agreement to the
Initial Purchaser; (ii) the fees and expenses of its counsel, accountants and
any other experts or advisors retained by the Company; (iii) the fees and
expenses incurred in connection with the preparation of the Memorandum and all
amendments and supplements thereto; (iv) the fees and expenses of the printing
and distribution of the Memorandum and the printing and production of all
other documents connected with the offering of the Securities (including this
Agreement and any other related agreements); (v) expenses related to the
qualification of the Securities under the state securities or Blue Sky laws,
including filing fees and the fees and disbursements of counsel for the
Initial Purchaser in connection therewith and in connection with the
preparation of any Blue Sky memoranda; (vi) the expenses arising from having
the Securities designated as eligible for trading in the PORTAL market; (vii)
the expenses associated with the preparation, issuance and delivery to the
Initial Purchaser of the Securities; (viii) the fees and expenses of the
Trustee and (ix) the expenses of the "roadshow" and any other meetings with
prospective investors in the Securities.
(k) In connection with the offering, until the Initial Purchaser
shall have notified the Guarantors and the Company of the completion of the
resale of the Securities, neither the Company, any Guarantor nor any of their
affiliates has bid for or purchased or will bid for or
<PAGE>
10
purchase, either alone or with one or more other persons, for any account in
which they or any of their affiliates have a beneficial interest in any
Securities, and neither they nor any of their affiliates will make bids or
purchases for the purpose of creating actual, or apparent, active trading in,
or of raising the price of, the Securities, in either case in violation of
Regulation M under the Exchange Act.
(l) Between the date of this Agreement and the Closing Date, none of
the Guarantors or the Company will without the Initial Purchaser's prior
written consent offer, sell, or enter into any agreement to sell, any public
debt securities registered under the Securities Act or any debt securities
which may be resold in a transaction exempt from the registration requirements
of the Securities Act in reliance on Rule 144A thereunder and which are
marketed through the use of a disclosure document containing substantially the
same information as a prospectus for similar debt securities registered under
the Securities Act (other than the Securities).
(m) Not to solicit any offer to buy or offer or sell the Securities
by means of any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(n) If requested by the Initial Purchaser, to use its reasonable
efforts to permit the Securities to be designated PORTAL securities in
accordance with the rules and regulations adopted by the National Association
of Securities Dealers, Inc. relating to trading in the PORTAL Market.
(o) None of the Company, the Guarantors, their Affiliates or any
person acting on its or their behalf (other than the Initial Purchaser) will
engage in any directed selling efforts (as that term is defined in Regulation
S) with respect to the Securities, and the Company, each of the Guarantors and
their Affiliates and each person acting on its or their behalf (other than the
Initial Purchaser) will comply with the offering restrictions of Regulation S.
(p) Neither the Company, any Guarantor nor any Affiliate will sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as defined in the Securities Act) which could be integrated with
the sale of the Securities in a manner which would require the registration
under the Securities Act.
6. Offering of Securities; Restrictions on Transfer.
(a) The Initial Purchaser represents and warrants that it is a
qualified institutional buyer as defined in Rule 144A under the Securities Act
(a "QIB"). The Initial Purchaser agrees with the Company that (i) it has not
and will not solicit offers for, and has not offered or sold and will not
offer or sell, such Securities by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act and (ii) it has and will solicit offers for such
Securities only from, and has offered and will offer such Securities only to,
persons that it reasonably believes to be (A) in the case of offers inside the
United States, QIBs and (B) in the case of offers outside the United States,
to persons other than U.S. persons ("foreign purchasers," which term shall
include dealers or other professional fiduciaries in the United States acting
on a discretionary basis for foreign beneficial owners (other
<PAGE>
11
than an estate or trust)) that, in each case, in purchasing such Securities
are deemed to have represented and agreed as provided in the Memorandum under
the caption "Transfer Restrictions."
(b) The Initial Purchaser represents, warrants, and agrees with
respect to offers and sales outside the United States that:
(i) it understands that no action has been or will be taken in any
jurisdiction by any Guarantor or the Company that would permit a public
offering of the Securities, or possession or distribution of the
Memorandum or any other offering or publicity material relating to the
Securities, in any country or jurisdiction where action for that purpose
is required;
(ii) such Initial Purchaser will comply with all applicable laws and
regulations in each jurisdiction in which it acquires, offers, sells or
delivers Securities or has in its possession or distributes the
Memorandum or any such other material, in all cases at its own expense;
(iii) the Securities have not been and will not be registered under
the Securities Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S or pursuant to an exemption from the
registration requirements of the Securities Act;
(iv) the Initial Purchaser has offered the Securities and will offer
and sell the Securities (A) as part of their distribution at any time and
(B) otherwise until 40 days after the later of the commencement of the
offering of the Securities and the Closing Date, only in accordance with
Rule 903 of Regulation S or another exemption from the registration
requirements of the Securities Act. Accordingly, neither the Initial
Purchaser, its Affiliates nor any persons acting on its or their behalf
have engaged or will engage in any directed selling efforts (within the
meaning of Regulation S) with respect to the Securities, and the Initial
Purchaser, its Affiliates and any such persons have complied and will
comply with the offering restrictions requirements of Regulation S;
(v) the Initial Purchaser represents that it has (i) not offered or
sold, and will not offer or sell, in the United Kingdom, by means of any
document, any Securities other than to persons whose ordinary business it
is to buy or sell shares or debentures, whether as principal or as agent
(except in circumstances which do not constitute an offer to the public
within the meaning of the Companies Act 1989 of Great Britain); (ii)
complied and will comply with all applicable provisions of the Financial
Services Act 1986 of the United Kingdom with respect to anything done by
it in relation to the Securities in, from or otherwise involving the
United Kingdom; and (iii) only issued or passed on and will only issue or
pass on in the United Kingdom any document received by it in connection
with the issue of the Securities to a person who is of a kind described
in Article 9(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom the
document may otherwise lawfully be issued or passed on;
<PAGE>
12
(vi) the Initial Purchaser understands that the Securities have not
been and will not be registered under the Securities and Exchange Law of
Japan, and represents that it has not offered or sold, and agrees that it
will not offer or sell, any Securities, directly or indirectly in Japan
or to any resident of Japan except (A) pursuant to an exemption from the
registration requirements of the Securities and Exchange Law of Japan and
(B) in compliance with any other applicable requirements of Japanese law;
and
(vii) the Initial Purchaser agrees that, at or prior to confirmation
of sales of the Securities, it will have sent to each distributor, dealer
or person receiving a selling concession, fee or other remuneration that
purchases Securities from it during the restricted period a confirmation
or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the
commencement of the offering and the closing date, except in either
case in accordance with Regulation S (or Rule 144A if available)
under the Securities Act. Terms used above have the meanings given
to them by Regulation S."
Terms used in this Section 6 have the meaning given to them by Regulation S of
the Securities Act.
7. Indemnification and Contribution.
(a) Each of the Company and each Guarantor, jointly and severally,
agrees to indemnify and hold harmless the Initial Purchaser, and each person,
if any, who controls the Initial Purchaser within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, or is
under common control with, or is controlled by, the Initial Purchaser, from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred by the
Initial Purchaser or any such controlling of affiliated person in connection
with defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Memorandum (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in light of the circumstances under which they were made not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Initial Purchaser furnished to
any Guarantor or the Company in writing by the Initial Purchaser expressly for
use therein.
(b) The Initial Purchaser agrees to indemnify and hold harmless each
Guarantor and the Company, their directors, their officers and each person, if
any, who controls the Company or any Guarantor within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from each Guarantor and the Company to the
Initial Purchaser, but only with reference to information relating to the
Initial Purchaser furnished to any Guarantor or
<PAGE>
13
the Company in writing by the Initial Purchaser expressly for use in the
Memorandum or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and expenses
shall be reimbursed as they are incurred. Such firm shall be designated in
writing by the Initial Purchaser, in the case of parties indemnified pursuant
to paragraph (a) above, and by the Guarantors and the Company in the case of
parties indemnified pursuant to paragraph (b) above. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses f counsel as contemplated by the
second and third sentences of this paragraph, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a)
or (b) of this Section 7 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Guarantors and the Company, on the one hand, and the
Initial Purchaser, on the other hand, from the offering of such Securities or
(ii) if the allocation
<PAGE>
14
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Guarantors
and the Company on the one hand and the Initial Purchaser on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Guarantors and the
Company on the one hand and the Initial Purchaser on the other hand in
connection with the offering of such Securities shall be deemed to be in the
same respective proportions as the net proceeds from the offering of such
Securities (before deducting expenses) received by the Guarantors and the
Company and the total discounts and commissions received by the Initial
Purchaser in respect thereof bear to the aggregate offering price of such
Securities. The relative fault of the Guarantors and the Company on the one
hand and of the Initial Purchaser on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by any Guarantor or the Company
or by the Initial Purcaser and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.
(e) The Guarantors, the Company and the Initial Purchaser agree that
it would not be just or equitable if contribution pursuant to this Section 7
were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in paragraph
(d) above shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, the Initial Purchaser shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Securities resold by it in the initial placement of
such Securities were offered to investors exceeds the amount of any damages
that the Initial Purchaser has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations and warranties of the Guarantors and the
Company contained in this Agreement shall remain operative and in full force
and effect regardless of (i) termination of this Agreement, (ii) any
investigation made by or on behalf of the Initial Purchaser or any person
controlling the Initial Purchaser or by or on behalf of any Guarantor or the
Company, their officers or directors or any person controlling any Guarantor
or the Company and (iii) acceptance of and payment for any of the Securities.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
8. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Initial Purchaser, by notice given by it to the
Company, if (a) after the execution and delivery of this Agreement and prior
to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case
<PAGE>
15
may be, the New York Stock Exchange, the American Stock Exchange, or the
National Association of Securities Dealers, Inc., (ii) trading of any
securities of any Guarantor or the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or
any calamity or crisis that, in the Initial Purchaser's judgment, is material
and adverse and (b) in the case of any of the events specified in clauses
(a)(i) through (iv), such event singly or together with any other such event
makes it, in the Initial Purchaser's judgment, impracticable to market the
Securities on the terms and in the manner contemplated in the Memorandum.
9. Miscellaneous.
(a) This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
(b) If this Agreement shall be terminated by the Initial Purchaser
because of any failure or refusal on the part of any Guarantor or the Company
to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason any Guarantor or the Company shall be unable
to perform its obligations under this Agreement, or because of any termination
pursuant to Section 8 hereof (other than by reason of a default by the Initial
Purchaser), the Guarantors and the Company will reimburse the Initial
Purchaser for all out-of-pocket expenses (including the reasonable fees and
disbursements of their counsel) reasonably incurred by the Initial Purchaser
in connection with this Agreement or the offering contemplated hereunder.
(c) All notices and other communications under this Agreement shall
be in writing, and, if sent the Initial Purchaser, be mailed, delivered or
sent by facsimile transmission to:
Deutsche Bank Securities Inc.
130 Liberty Street
New York, New York 10006
Attention: Khawer Ali
Facsimile Number: (212) 669-1520
or, if sent to the Company or the Guarantors, will be mailed, delivered or
sent by facsimile transmission to the Company at:
with a copy to:
Amtran, Inc. Cravath, Swaine & Moore
7337 West Washington Street Worldwide Plaza, 825 Eighth Avenue
Indianapolis, IN 46231 New York, NY 10019
Attention: Brian T. Hunt, Esq. Attention: William P. Rodgers, Jr., Esq.
Facsimile Number: (317) 240-7091 Facsimile Number: (212) 474-3700
<PAGE>
16
(d) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York.
(e) The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
<PAGE>
17
Please confirm your agreement to the foregoing by signing in the
space provided below for that purpose and returning to us a copy hereof,
whereupon this Agreement shall constitute a binding agreement between us.
Very truly yours,
AMTRAN, INC.
By: /s/ Kenneth K. Wolff
-------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
AMERICAN TRANS AIR, INC.
By: /s/ Kenneth K. Wolff
-------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
By: /s/ Kenneth K. Wolff
-------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
ATA LEISURE CORP. (formerly
ATA Vacations, Inc.)
By: /s/ Kenneth K. Wolff
-------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
AMBER TRAVEL, INC.
By: /s/ Kenneth K. Wolff
-------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
<PAGE>
18
CHICAGO EXPRESS AIRLINES, INC.
By: /s/ Stephen Cooper
-------------------------
Name: Stephen Cooper
Title: Acting President
AMERICAN TRANS AIR TRAINING
CORPORATION
By: /s/ Kenneth K. Wolff
-------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
AMERICAN TRANS AIR EXECUJET,
INC.
By: /s/ Kenneth K. Wolff
-------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
AMBER AIR FREIGHT CORPORATION
By: /s/ Kenneth K. Wolff
-------------------------
Name: Kenneth K. Wolff
Title: Executive Vice
President & CFO
Accepted as of the date first above written:
DEUTSCHE BANK SECURITIES INC.
By: /s/ Khawer Ali
---------------------------------
Name: Khawer Ali
Title: Director
By: /s/ John Perra
----------------------------------
Name: John Perra
Title: Associate
<PAGE>
EXHIBIT A
Form of Registration Rights Agreement
<PAGE>
EXHIBIT B
Form of Opinion of
Cravath, Swaine & Moore
(i) No authorization, approval or other action by, and no
notice to, consent of, order of, or filing with, any United States
Federal, New York or, to the extent required under the General
Corporation Law of the State of Delaware, governmental authority or
regulatory body is required for the consummation of the transactions
contemplated by the Purchase Agreement, except such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the Initial
Purchaser;
(ii) (A) The statements in the Memorandum under the caption
"Description of the Notes," insofar as such statements purport to
summarize provisions of the Securities, fairly summarize such
provisions, and (B) the statements in the Memorandum under the
caption "Certain United States Federal Income Tax Consequences,"
insofar as they purport to describe the material tax consequences of
an investment in the Securities, fairly summarize the matters
therein described;
(iii) Assuming (i) the accuracy of the representations and
warranties of the Company, each of the Guarantors and the Initial
Purchaser set forth in the Purchase Agreement, (ii) the due
performance by the Company, each of the Guarantors and the Initial
Purchaser, of the covenants and agreements set forth in the Purchase
Agreement, (iii) the Initial Purchaser's compliance with the
offering and transfer procedures and restrictions described in the
Memorandum and (iv) the accuracy of the representations and
warranties made in accordance with the Purchase Agreement and the
Memorandum by purchasers to whom the Initial Purchaser initially
resells the Securities, the offer, sale and delivery of the
Securities to the Initial Purchaser in the manner contemplated by
the Purchase Agreement and the Memorandum and the initial resale of
the Securities by the Initial Purchaser in the manner contemplated
in the Memorandum and the Purchase Agreement, do not require
registration under the Securities Act of 1933, as amended, it being
understood that no opinion is expressed as to any subsequent resale
of any Securities;
(iv) Neither the Company nor any of the Guarantors is required
to register as an "investment company" and, after giving effect to
the offer, issuance and delivery of the Securities in accordance
with the terms of the Purchase Agreement and the application of the
proceeds thereof as described in the Memorandum, neither the Company
nor any of the Guarantors will be required to register as an
"investment Company" under the Investment Company Act of 1940, as
amended;
(v) Each of the Original Indenture, the First Supplemental
Indenture and the Registration Rights Agreement constitute legal,
valid and binding obligations of the Company and each Guarantor,
enforceable against the Company and each Guarantor in accordance
with their terms (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar
laws affecting creditors'
<PAGE>
2
rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless
of whether such enforceability is considered in a proceeding in
equity or at law);
(vi) The Securities when executed, issued and authenticated in
accordance with the provisions of the Indenture and delivered to the
Initial Purchaser against payment therefor in accordance with the
provisions of the Purchase Agreement, will be legal, valid and
binding obligations of the Company, enforceable against the Company
in accordance with their terms and entitled to the benefits of the
Indenture (subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to
general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether such enforceability is considered in
a proceeding in equity or at law); in expressing the opinion set
forth in this paragraph (vi), such counsel may assume, with the
consent of the Initial Purchaser, that the form of the Securities
will conform to that included in the Indenture; and
(vii) Upon execution and delivery of the First Supplemental
Indenture by the Guarantors and the Company, the Guarantees will be
legal, valid and binding obligations of each of the Guarantors,
enforceable against each of the Guarantors in accordance with their
terms and entitled to the benefits of the Indenture (subject to
applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of
equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether
such enforceability is considered in a proceeding in equity or at
law);
and to such further effect with respect to other legal matters relating to the
Purchase Agreement and the sale of the Securities thereunder as counsel for
the Initial Purchaser may reasonably request.
Such opinion shall also state that, in connection with the
preparation of the Memorandum, such counsel has participated in conferences
with certain officers of, and with the accountants and counsel for, the
Guarantors and the Company concerning the preparation of the Memorandum. Such
opinion may state that although such counsel has made certain inquiries and
investigations in connection with the preparation of the Memorandum, the
limitations inherent in the role of outside counsel are such that such counsel
does not assume responsibility for the accuracy or completeness of the
statements made in the Memorandum, except insofar as the statements relate to
such counsel and except to the extent set forth in paragraph (ii) of such
counsel's opinion dated the date hereof. Subject to the foregoing, such
opinion shall state that such counsel advises the Initial Purchaser that their
work in connection with this matter did not disclose any information that gave
such counsel reason to believe that the Memorandum (except the financial
statements and other information of a statistical, accounting or financial
nature included or incorporated by reference therein, as to which such counsel
does not express any view) as of its date or the date hereof, included or
includes an
<PAGE>
3
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
<PAGE>
EXHIBIT C
Form of Opinion of the General Counsel
of the Guarantors and the Company
(i) Each of the Guarantors and the Company is a corporation
duly incorporated, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated, with corporate
power and authority under such laws to own, lease and operate its
properties and conduct its business as described in the Memorandum
and to perform its obligations under the Purchase Agreement, the
Registration Rights Agreement, the Securities (with respect to the
Company), the Guarantees (with respect to the Guarantors), and the
Indenture;
(ii) Each of the Guarantors and the Company are duly qualified
to transact business as a foreign corporation and are in good
standing in each other jurisdiction in which they own or lease
property of a nature, or transact business of a type, that would
make such qualification necessary, except to the extent that the
failure to so qualify or be in good standing would not have a
Material Adverse Effect;
(iii) ATA is a "citizen of the United States" (as defined in
Section 40102(a)(15) of Title 49 of the United States Code) and is
an air carrier operating under a certificate issued by the Secretary
of Transportation pursuant to Chapter 447 of Title 49, United States
Code, for aircraft capable of carrying 10 or more individuals or
6,000 pounds or more of cargo; there is in force with respect to ATA
an air carrier operating certificate issued pursuant to Part 121 of
the regulations under the Federal Aviation Act; all of the
outstanding shares of capital stock of each of the Guarantors have
been duly authorized and validly issued and are fully paid and
non-assessable and are owned by the Company, free and clear of any
pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind;
(iv) No consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for
the valid authorization, issuance and delivery of the Securities,
the valid authorization, execution, delivery and performance by each
of the Guarantors and the Company of the Purchase Agreement and the
Operative Documents, or the consummation by each of the Guarantors
and the Company of the transactions contemplated by the Purchase
Agreement and the Operative Documents, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Securities;
(v) The execution and delivery by each of the Guarantors and
the Company of the Purchase Agreement and the Operative Documents,
the issuance and sale of the Securities, the consummation by each of
the Guarantors and the Company of the transactions contemplated in
the Purchase Agreement and the Operative Documents, and compliance
by each of the Guarantors and the Company with the terms thereof
will not contravene (i) any provision of applicable law, (ii) the
certificate of incorporation or by-laws of any Guarantor and the
Company, (iii) to such counsel's knowledge, any agreement or other
instrument binding upon any Guarantor or any of its subsidiaries
that is material to such Guarantor and the Company, taken as a
whole, or (iv) to such counsel's
<PAGE>
2
knowledge, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over, any Guarantor or the
Company;
(vi) Each of the Registration Rights Agreement, the First
Supplemental Indenture and the Indenture has been duly authorized,
executed and delivered by each of the Guarantors and the Company;
(vii) The Purchase Agreement has been duly authorized, executed
and delivered by each of the Guarantors and the Company; and the
sale of the Securities by the Company pursuant to the Purchase
Agreement has been duly authorized;
(viii) There are no legal or governmental proceedings pending
or threatened to which any Guarantor or the Company is a party, or
to which any of the properties of any Guarantor or the Company is
subject, other than proceedings accurately described in all material
respects in the Memorandum and proceedings that would not have a
Material Adverse Effect, or a material adverse effect on the power
or ability of any Guarantor or the Company to perform its
obligations under this Agreement or the Operative Documents, or to
consummate the transactions contemplated by the Memorandum.
(ix) ATA is an "air carrier", ExecuJet is an "air taxi", and
each of them is (and after consummation of the transactions
contemplated herein will be) a "citizen of the United States", in
each case within the Federal Aviation Act of 1958, as amended,
provided that at least 75 percent of the voting interest continues
to be owned or controlled by persons who are citizens of the United
States;
(x) ATA is an air carrier operating under the Certificates of
Public Convenience and Necessity issued by the Department of
Transportation ("DOT") and its predecessor agency the Civil
Aeronautics Board pursuant to ss.401 of the Federal Aviation Act of
1958, as amended, and an Operating Certificate and Operations
Specifications issued by the Federal Aviation Administration ("FAA")
pursuant to 14 C.F.R. Part 121, and ExecuJet is an air taxi holding
a valid registration under Part 298 of the DOT regulations, and an
Operating Certificate and Operations Specifications issued by the
FAA pursuant to 14 C.F.R. Part 135, which licenses, certificates and
permits are necessary for ATA to conduct its business as an air
carrier, and for ExecuJet to conduct its business as an air taxi,
and to the best knowledge of such counsel, no such license,
certificate or permit is the subject of any "show cause" or other
order of, or any proceeding before, or any investigation by, DOT or
FAA (other than proceedings for the renewal of temporary rights), in
which the opinion of such counsel might reasonably result in a final
order impairing the validity of such licenses, certificates and
permits;
(xi) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding by or before any U.S. court
or U.S. government agency involving (A) ATA's DOT Certificates of
Public Convenience and Necessity, ExecuJet's DOT registration, or
either of their FAA Operating Certificates or FAA Operating
Specifications, or (B) the Federal Aviation Act of 1958, as amended,
and the regulations promulgated thereunder ("Aviation Law") which is
of a character expected to impact ATA's ability to
<PAGE>
3
continue to do business as an air carrier or ExecuJet's ability to
continue to do business as an air taxi and which would be required
to be disclosed in the Registration Statement which is not
adequately disclosed in the Prospectus;
(xii) to the best knowledge of such counsel, no consent,
approval, authorization, filing with, or order of any court or
governmental agency or body under Aviation Law is required for
consummation of the transactions contemplated herein.
In addition, counsel shall state that such counsel or lawyers on his
staff have participated in the preparation of the Memorandum and nothing has
come to such counsel's attention that leads him to believe that the Memorandum
as of the date of the Purchase Agreement or at the Closing Date contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein in the light
of the circumstances under which they were made not misleading, except that
such counsel need express no opinion with respect to the financial statements,
schedules and other financial data included in the Memorandum.
Exhibit 4.4
EXECUTION COPY
_____________________________________________________________________
REGISTRATION RIGHTS AGREEMENT
Dated December 21, 1999
among
AMTRAN, INC.
AMERICAN TRANS AIR, INC.
AMBASSADAIR TRAVEL CLUB, INC.
ATA LEISURE CORP. (formerly, ATA VACATIONS, INC.)
AMBER TRAVEL, INC.
AMERICAN TRANS AIR TRAINING CORPORATION
AMERICAN TRANS AIR EXECUJET, INC.
AMBER AIR FREIGHT CORPORATION
CHICAGO EXPRESS AIRLINES, INC.
and
DEUTSCHE BANK SECURITIES INC.
_____________________________________________________________________
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into December 21, 1999, among Amtran, Inc., an Indiana corporation
(the "Company"), American Trans Air, Inc. ("ATA"), Ambassadair Travel Club,
Inc. ("Ambassadair"), ATA Leisure Corp. (formerly, ATA Vacations, Inc.)
("Leisure"), Amber Travel, Inc. ("Amber Travel"), American Trans Air Training
Corporation ("Training"), American Trans Air Execujet, Inc. ("Execujet"),
Amber Air Freight Corporation ("Amber Freight") and Chicago Express Airlines,
Inc. ("Express" and together with ATA, Ambassadair, Leisure, Amber Travel,
Training, Amber Freight and Execujet, the "Subsidiary Guarantors") and
DEUTSCHE BANK SECURITIES INC. (the "Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement dated
December 16, 1999, among the Company, the Subsidiary Guarantors and the
Initial Purchaser (the "Purchase Agreement"), which provides for the sale by
the Company to the Initial Purchaser of an aggregate of 75,000,000 principal
amount of the Company's 10 1/2% Senior Notes due 2004 (the "Securities"). In
order to induce the Initial Purchaser to enter into the Purchase Agreement,
the Company and the Subsidiary Guarantors have agreed to provide to the
Initial Purchaser and its direct and indirect transferees the registration
rights set forth in this Agreement. The execution of this Agreement is a
condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from
time to time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Additional Interest" shall have the meaning set forth in Section
2(e) hereof.
"Closing Date" shall mean the Closing Date as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"Exchange Offer" shall mean the exchange offer by the Company of
Exchange Securities for Registrable Securities pursuant to Section 2(a)
hereof.
"Exchange Offer Registration" shall mean a registration under the
1933 Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Securities" shall mean interests in the global notes
issued by the Company in, or interests in global notes issued by the Company
bearing the same CUSIP number as the global notes issued in, the registered
exchange offer for the Company's 10 1/2% Senior Notes due 2004 originally
issued on July 24, 1997 and which are jointly and severally guaranteed
1
<PAGE>
by the Subsidiary Guarantors under the Indenture containing terms identical to
the Securities (except that (i) interest thereon shall accrue from the last
date on which interest was paid on the Securities or, if no such interest has
been paid, from December 21, 1999 and (ii) the Exchange Securities will not
bear legends restricting the transfer thereof or contain terms with respect to
transfer restrictions) and to be offered to Holders of Securities in exchange
for Securities pursuant to the Exchange Offer.
"Holder" shall mean the Initial Purchaser, for so long as it owns
any Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture; provided that for purposes of Sections 4 and 5 of this
Agreement, the term "Holder" shall include Participating Broker-Dealers (as
defined in Section 4(a)).
"Indenture" shall mean the Indenture relating to the Securities
dated as of July 24, 1997, and as supplemented as of December 21, 1999,
between the Company, the Subsidiary Guarantors and First Security Bank, N.A.,
as trustee, and as the same may be amended from time to time in accordance
with the terms thereof.
"Initial Purchaser" shall have the meaning set forth in the
preamble.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities; provided
that whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by
the Company or any of its affiliates (as such term is defined in Rule 405
under the 1933 Act) (other than the Initial Purchaser or subsequent holders of
Registrable Securities if such subsequent holders are deemed to be such
affiliates solely by reason of their holding of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage or amount.
"Person" shall mean an individual, partnership, corporation, trust
or unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to such prospectus, and in each case
including all material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble.
"Registrable Securities" shall mean the Securities and the
guarantees thereof by the Subsidiary Guarantors; provided, however, that the
Securities and the guarantees thereof shall cease to be Registrable Securities
(i) when a Registration Statement with respect to such Securities and the
guarantees thereof shall have been declared effective under the 1933 Act and
such Securities and the guarantees thereof shall have been disposed of
pursuant to such Registration Statement, (ii) when such Securities and the
guarantees thereof have been sold to the public pursuant to Rule 144(k) (or
any similar provision then in force, but not Rule 144A) under the 1933 Act or
(iii) when such Securities and the guarantees thereof shall have ceased to be
outstanding.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company and the Subsidiary Guarantors with
this Agreement, including without limitation: (i) all SEC, stock exchange or
National Association of Securities Dealers, Inc. registration and filing fees,
(ii) all fees and expenses incurred in connection with compliance with state
securities or blue sky laws (including reasonable fees and disbursements of
counsel for any underwriters or Holders in connection with blue sky
qualification of any of the Exchange
2
<PAGE>
Securities or Registrable Securities), (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales agreements
and other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, (v) all fees and disbursements
relating to the qualification of the Indenture under applicable securities
laws, (vi) the fees and disbursements of the Trustee and its counsel, (vii)
the fees and disbursements of counsel for the Company and the Subsidiary
Guarantors and, in the case of a Shelf Registration Statement, the fees and
disbursements of one counsel for the Holders (which counsel shall be selected
by the Majority Holders and which counsel may also be counsel for the Initial
Purchaser) and (viii) the fees and disbursements of the independent public
accountants of the Company and the Subsidiary Guarantors, including the
expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, but excluding fees and expenses
of counsel to the underwriters (other than fees and expenses set forth in
clause (ii) above) or the Holders and underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition of Registrable
Securities by a Holder.
"Registration Statement" shall mean any registration statement of
the Company and the Subsidiary Guarantors that covers any of the Exchange
Securities or Registrable Securities pursuant to the provisions of this
Agreement and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company and the Subsidiary Guarantors pursuant to the
provisions of Section 2(b) of this Agreement which covers all of the
Registrable Securities (but no other securities unless approved by the Holders
whose Registrable Securities are covered by such Shelf Registration Statement)
on an appropriate form under Rule 415 under the 1933 Act, or any similar rule
that may be adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Trustee" shall mean the trustee with respect to the Securities
under the Indenture.
"Underwritten Registration" or "Underwritten Offering" shall mean a
registration in which Registrable Securities are sold to an Underwriter (as
hereinafter defined) for reoffering to the public.
2. Registration Under the 1933 Act.
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the Staff of the SEC, the Company and the Subsidiary
Guarantors shall use their best efforts, at their cost, to cause to be filed
within 45 days after the Closing Date, and have the SEC declare effective
within 150 days after the Closing Date an Exchange Offer Registration
Statement covering the offer by the Company and the Subsidiary Guarantors to
the Holders to exchange all of the Registrable Securities for Exchange
Securities and to have such Registration Statement remain effective until the
closing of the Exchange Offer. The Company and the Subsidiary Guarantors shall
commence the Exchange Offer promptly after the Exchange Offer Registration
Statement has been declared effective by the SEC and use their best efforts to
have the Exchange Offer consummated not later than 30 days after such
effective date. The Company and the Subsidiary Guarantors shall commence the
Exchange Offer by mailing the related
3
<PAGE>
exchange offer Prospectus and accompanying documents to each Holder stating,
in addition to such other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Registration Rights Agreement and that all Registrable Securities
validly tendered will be accepted for exchange;
(ii) the dates of acceptance for exchange (which shall be a
period of at least 20 Business Days from the date such notice is
mailed) (the "Exchange Dates");
(iii) that any Registrable Security not tendered will remain
outstanding and continue to accrue interest, but will not retain any
rights under this Registration Rights Agreement;
(iv) that Holders electing to have a Registrable Security
exchanged pursuant to the Exchange Offer will be required to
surrender such Registrable Security, together with the enclosed
letters of transmittal, to the institution and at the address
(located in the Borough of Manhattan, The City of New York)
specified in the notice prior to the close of business on the last
Exchange Date; and
(v) that Holders will be entitled to withdraw their election,
not later than the close of business on the last Exchange Date, by
sending to the institution and at the address (located in the
Borough of Manhattan, The City of New York) specified in the notice
a telegram, telex, facsimile transmission or letter setting forth
the name of such Holder, the principal amount of Registrable
Securities delivered for exchange and a statement that such Holder
is withdrawing his election to have such Securities exchanged.
As soon as practicable after the last Exchange Date, the
Company shall:
(i) accept for exchange Registrable Securities or portions
thereof tendered and not validly withdrawn pursuant to the Exchange
Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities or portions thereof so
accepted for exchange by the Company and issue, and cause the
Trustee to promptly authenticate and mail to each Holder, an
Exchange Security equal in principal amount to the principal amount
of the Registrable Securities surrendered by such Holder.
The Company and the Subsidiary Guarantors shall use their best
efforts, at their cost, to complete the Exchange Offer as provided above and
shall comply with the applicable requirements of the 1933 Act, the 1934 Act
and other applicable laws and regulations in connection with the Exchange
Offer. The Exchange Offer shall not be subject to any conditions, other than
that the Exchange Offer does not violate applicable law or any applicable
interpretation of the Staff of the SEC. The Company shall inform the Initial
Purchaser of the names and addresses of the Holders to whom the Exchange Offer
is made, and the Initial Purchaser shall have the right, subject to applicable
law, to contact such Holders and otherwise facilitate the tender of
Registrable Securities in the Exchange Offer.
(b) In the event that (i) the Company and the Subsidiary Guarantors
determine that the Exchange Offer Registration provided for in Section 2(a)
above is not available or may not be consummated as soon as practicable after
the last Exchange Date because it would violate applicable law or the
applicable interpretations of the Staff of the SEC, (ii) the Exchange Offer is
not for any other reason consummated by June 21, 2000 or (iii) the Exchange
Offer has been completed and in the opinion of counsel for the Initial
Purchaser a Registration Statement must be filed and a Prospectus must be
delivered by the Initial Purchaser in connection with any offering or sale of
Registrable Securities, the Company and the Subsidiary Guarantors shall use
4
<PAGE>
their best efforts, at their cost, to cause to be filed as soon as practicable
after such determination, date or notice of such opinion of counsel is given
to the Company, as the case may be, a Shelf Registration Statement providing
for the sale by the Holders of all of the Registrable Securities and to have
such Shelf Registration Statement declared effective by the SEC within 60 days
after the date such Shelf Registration Statement was filed. The Company and
the Subsidiary Guarantors agree to use their best efforts to keep the Shelf
Registration Statement continuously effective until the second anniversary of
its effective date or such shorter period that will terminate when all of the
Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement. Notwithstanding the
foregoing, during any consecutive 365- day period, the Company will have the
ability to suspend the availability of the Shelf Registration Statement for up
to two periods of up to 30 consecutive days each (except that none of such
periods may occur during the 60-day period immediately prior to the maturity
of the Securities) if the Company's Board of Directors determines in good
faith that there is a valid purpose for the suspension. The Company and the
Subsidiary Guarantors further agree to supplement or amend the Shelf
Registration Statement if required by the rules, regulations or instructions
applicable to the registration form used by the Company and the Subsidiary
Guarantors for such Shelf Registration Statement or by the 1933 Act or by any
other rules and regulations thereunder for shelf registration or if reasonably
requested by a Holder with respect to information relating to such Holder, and
to use their best efforts to cause any such amendment to become effective and
such Shelf Registration Statement to become usable as soon as thereafter
practicable. The Company and the Subsidiary Guarantors agree to furnish to the
Holders of Registrable Securities copies of any such supplement or amendment
promptly after its being used or filed with the SEC.
(c) The Company and the Subsidiary Guarantors shall pay all
Registration Expenses in connection with the registration pursuant to Section
2(a) or Section 2(b). Each Holder shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such Holder's Registrable Securities pursuant to the Shelf Registration
Statement.
(d) An Exchange Offer Registration Statement pursuant to Section
2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof
will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that, if, after it has been declared
effective, the offering of Registrable Securities pursuant to a Shelf
Registration Statement is interfered with by any stop order, injunction or
other order or requirement of the SEC or any other governmental agency or
court, such Registration Statement will be deemed not to have become effective
during the period of such interference until the offering of Registrable
Securities pursuant to such Registration Statement may legally resume.
(e) If the Company and the Subsidiary Guarantors fail to comply with
the provisions of this Section 2 or if the Exchange Offer Registration
Statement or the Shelf Registration Statement fails to become effective, then
additional interest (the "Additional Interest") shall become payable in
respect of the Securities as follows:
(i) if (A) neither the Exchange Offer Registration Statement nor the
Shelf Registration Statement is filed with the SEC on or prior to 45 days
after the Closing Date or (B) notwithstanding that the Company and the
Subsidiary Guarantors have consummated or will consummate an Exchange
Offer, the Company and the Subsidiary Guarantors are required to file a
Shelf Registration Statement and such Shelf Registration Statement is not
filed on or prior to the date required hereby, then commencing on the day
after either such required filing date, Additional Interest payable in
respect of the Securities shall accrue on the principal amount of the
Securities at a rate of 0.5% per annum for the first 90 days immediately
following each such filing date, such Additional Interest rate increasing
by an additional 0.5% per annum at the beginning of each subsequent
90-day period; or
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(ii) if (A) neither the Exchange Offer Registration Statement nor a
Shelf Registration Statement is declared effective by the SEC on or prior
to 150 days after the Closing Date or (B) notwithstanding that the
Company and the Subsidiary Guarantors have consummated or will consummate
an Exchange Offer, the Company and the Subsidiary Guarantors are required
to file a Shelf Registration Statement and such Shelf Registration
Statement is not declared effective by the SEC on or prior to the 60th
day following the date such Shelf Registration Statement was filed, then,
commencing on the day after either such required effective date,
Additional Interest payable in respect of the Securities shall accrue on
the principal amount of the Securities at a rate of 0.5% per annum for
the first 90 days immediately following such date, such Additional
Interest rate increasing by an additional 0.5% per annum at the beginning
of each subsequent 90-day period; or
(iii) if (A) the Company and the Subsidiary Guarantors have not
exchanged Exchange Securities for all Registrable Securities validly
tendered in accordance with the terms of the Exchange Offer on or prior
to the 30th day after the date on which the Exchange Offer Registration
Statement was declared effective or (B) if applicable, the Shelf
Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time prior to the
second anniversary of its effective date (other than after such time as
all the Registrable Securities have been disposed of thereunder), then
Additional Interest payable in respect of the Securities shall accrue on
the principal amount of the Securities at a rate of 0.5% per annum for
the first 90 days commencing on (x) the 31st day after such effective
date, in the case of (A) above, or (y) the day such Shelf Registration
Statement ceases to be effective, in the case of (B) above, such
Additional Interest rate increasing by an additional 0.5% per annum at
the beginning of each subsequent 90-day period; provided, however, that
the Additional Interest rate on the notes may not exceed in the aggregate
2.0% per annum; provided, further, however, that (a) upon the filing of
the Exchange Offer Registration Statement or a Shelf Registration
Statement (in the case of clause (i) above), (b) upon the effectiveness
of the Exchange Offer Registration Statement or a Shelf Registration
Statement (in the case of clause (ii) above), or (c) upon the exchange of
Exchange Securities for all Registrable Securities tendered (in the case
of clause (iii)(A) above), or upon the effectiveness of the Shelf
Registration Statement which had ceased to remain effective (in the case
of clause (iii)(B) above), Additional Interest on the Securities as a
result of such clause (or the relevant subclause thereof), as the case
may be, shall cease to accrue.
(f) Without limiting the remedies available to the Initial Purchaser
and the Holders, the Company and the Subsidiary Guarantors acknowledge that
any failure by the Company and the Subsidiary Guarantors to comply with their
obligations under Section 2(a) and Section 2(b) hereof may result in material
irreparable injury to the Initial Purchaser or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the
Initial Purchaser or any Holder may obtain such relief as may be required to
specifically enforce the Company's and the Subsidiary Guarantors' obligations
under Section 2(a) and Section 2(b) hereof.
3. Registration Procedures.
In connection with the obligations of the Company and the Subsidiary
Guarantors with respect to the Registration Statements pursuant to Section
2(a) and Section 2(b) hereof, the Company and the Subsidiary Guarantors shall
within the time periods provided for in Section 2(a) and Section 2(b) hereof,
or if no such time frame is provided for thereby, shall as expeditiously as
possible:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the 1933 Act, which form (x) shall be selected by
the Company and the Subsidiary Guarantors and (y) shall, in the case of a
Shelf Registration, be available for
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the sale of the Registrable Securities by the selling Holders thereof and
(z) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith, and use its best efforts to
cause such Registration Statement to become effective and remain
effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep
such Registration Statement effective for the applicable period and cause
each Prospectus to be supplemented by any required prospectus supplement
and, as so supplemented, to be filed pursuant to Rule 424 under the 1933
Act; to keep each Prospectus current during the period described under
Section 4(3) and Rule 174 under the 1933 Act that is applicable to
transactions by brokers or dealers with respect to the Registrable
Securities or Exchange Securities;
(c) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, to counsel for the Initial Purchaser, to counsel
for the Holders and to each Underwriter of an Underwritten Offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or Underwriter
may reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Securities; and the Company and each of
the Subsidiary Guarantors consent to the use of such Prospectus and any
amendment or supplement thereto in accordance with applicable law by each
of the selling holders of Registrable Securities and any such
Underwriters in connection with the offering and sale of the Registrable
Securities covered by and in the manner described in such Prospectus or
any amendment or supplement thereto in accordance with applicable law;
(d) use its best efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of
such jurisdictions within the United States as any Holder of Registrable
Securities covered by a Registration Statement shall reasonably request
in writing by the time the applicable Registration Statement is declared
effective by the SEC, to cooperate with such Holders in connection with
any filings required to be made with the National Association of
Securities Dealers, Inc. and do any and all other acts and things which
may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that neither the
Company nor any Subsidiary Guarantor shall be required to (i) qualify as
a foreign corporation or as a dealer in securities in any jurisdiction
where it would not otherwise be required to qualify but for this Section
3(d), (ii) file any general consent to service of process or (iii)
subject itself to taxation in any such jurisdiction if it is not so
subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Securities, counsel for the Holders and counsel for the
Initial Purchaser promptly and, if requested by any such Holder or
counsel, confirm such advice in writing (i) when a Registration Statement
has become effective and when any post-effective amendment thereto has
been filed and becomes effective, (ii) of any request by the SEC or any
state securities authority for amendments and supplements to a
Registration Statement and Prospectus or for additional information after
the Registration Statement has become effective, (iii) of the issuance by
the SEC or any state securities authority of any stop order suspending
the effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iv) if, between the effective date of a
Registration Statement and the closing of any sale of Registrable
Securities covered thereby, the representations and warranties of the
Company and each Subsidiary Guarantor contained in any underwriting
agreement, securities sales agreement or other similar agreement, if any,
relating to the offering cease to be true and correct in all material
respects or if the
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Company or any Subsidiary Guarantor receives any notification with
respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, (v) of the happening of any event during the
period a Shelf Registration Statement is effective which makes any
statement made in such Registration Statement or the related Prospectus
untrue in any material respect or which requires the making of any
changes in such Registration Statement or Prospectus in order to make the
statements therein not misleading and (vi) of any determination by the
Company or any Subsidiary Guarantor that a post-effective amendment to a
Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment and provide immediate notice to each Holder of
the withdrawal of any such order;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, without charge, at least one conformed copy of
each Registration Statement and any post-effective amendment thereto
(without documents incorporated therein by reference or exhibits thereto,
unless requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be
sold and not bearing any restrictive legends and enable such Registrable
Securities to be in such denominations (consistent with the provisions of
the Indenture) and registered in such names as the selling Holders may
reasonably request at least two business days prior to the closing of any
sale of Registrable Securities;
(i) in the case of a Shelf Registration, upon the occurrence of any
event contemplated by Section 3(e)(v) hereof, use its best efforts to
prepare and file with the SEC a supplement or post-effective amendment to
a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The Company and each of the Subsidiary Guarantors
agree to notify the Holders to suspend use of the Prospectus as promptly
as practicable after the occurrence of such an event, and the Holders
hereby agree to suspend use of the Prospectus until the Company has
amended or supplemented the Prospectus to correct such misstatement or
omission;
(j) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus
after initial filing of a Registration Statement, provide copies of such
document to the Initial Purchaser and its counsel (and, in the case of a
Shelf Registration Statement, the Holders and their counsel) and make
such of the representatives of the Company and the Subsidiary Guarantors
as shall be reasonably requested by the Initial Purchaser or its counsel
(and, in the case of a Shelf Registration Statement, the Holders or their
counsel) available for discussion of such document, and shall not at any
time file or make any amendment to the Registration Statement, any
Prospectus or any amendment of or supplement to a Registration Statement
or a Prospectus or any document which is to be incorporated by reference
into a Registration Statement or a Prospectus, of which the Initial
Purchaser and its counsel (and, in
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<PAGE>
the case of a Shelf Registration Statement, the Holders and their
counsel) shall not have previously been advised and furnished a copy or
to which the Initial Purchaser or its counsel (and, in the case of a
Shelf Registration Statement, the Holders or their counsel) shall
reasonably object;
(k) in the case of a Shelf Registration, obtain a CUSIP number for
all Registrable Securities not later than the effective date of the Shelf
Registration Statement;
(l) cause the Indenture to be qualified under the Trust Indenture
Act of 1939, as amended (the "TIA"), in connection with the registration
of the Exchange Securities or Registrable Securities, as the case may be,
cooperate with the Trustee and the Holders to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and execute, and use its best
efforts to cause the Trustee to execute, all documents as may be required
to effect such changes and all other forms and documents required to be
filed with the SEC to enable the Indenture to be so qualified in a timely
manner;
(m) in the case of a Shelf Registration, make available for
inspection by a representative of the Holders of the Registrable
Securities, any Underwriter participating in any disposition pursuant to
such Shelf Registration Statement, and attorneys and accountants
designated by the Holders, at reasonable times and in a reasonable
manner, all financial and other records, pertinent documents and
properties of the Company and the Subsidiary Guarantors, and cause the
respective officers, directors and employees of the Company and the
Subsidiary Guarantors to supply all information reasonably requested by
any such representative, Underwriter, attorney or accountant in
connection with a Shelf Registration Statement;
(n) in the case of a Shelf Registration, use their best efforts to
cause all Registrable Securities to be listed on any securities exchange
or any automated quotation system on which similar securities issued by
the Company or any of the Subsidiary Guarantors are then listed if
requested by the Majority Holders, to the extent such Registrable
Securities satisfy applicable listing requirements; provided, however,
that the Company's and the Guarantors' obligations pursuant to this
Section 3(n) shall terminate upon (i) the approval for listing of the
Notes by the Luxembourg Stock Exchange, the London Stock Exchange or any
other securities exchange or automated quotation system designated by the
Majority Holders or (ii) the rejection by any such exchange of the Notes
for such listing, if it is established that such rejection is due to
actions or omissions of the Initial Purchaser or any of the Holders;
(o) use their best efforts to cause the Exchange Securities or
Registrable Securities, as the case may be, to be rated by two nationally
recognized statistical rating organizations (as such term is defined in
Rule 436(g)(2) under the 1933 Act);
(p) if reasonably requested by any Holder of Registrable Securities
covered by a Registration Statement, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment such information with
respect to such Holder as such Holder reasonably requests to be included
therein and (ii) make all required filings of such Prospectus supplement
or such post-effective amendment as soon as the Company has received
notification of the matters to be incorporated in such filing; and
(q) in the case of a Shelf Registration, enter into such customary
agreements and take all such other actions in connection therewith
(including those requested by the Holders of a majority of the
Registrable Securities being sold) in order to expedite or facilitate the
disposition of such Registrable Securities including, but not limited to,
an Underwritten Offering and in such connection, (i) to the extent
possible, make such representations and warranties to the Holders and any
Underwriters of such Registrable Securities with respect to the business
of the Company and the Subsidiary Guarantors and their respective
subsidiaries, the Registration Statement, Prospectus and documents
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<PAGE>
incorporated by reference or deemed incorporated by reference, if any, in
each case, in form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings and confirm the same if
and when requested, (ii) obtain opinions of counsel to the Company and
the Subsidiary Guarantors (which counsel and opinions, in form, scope and
substance, shall be reasonably satisfactory to the Holders and such
Underwriters and their respective counsel) addressed to each selling
Holder and Underwriter of Registrable Securities, covering the matters
customarily covered in opinions requested in underwritten offerings,
(iii) obtain "cold comfort" letters from the independent certified public
accountants of the Company and the Subsidiary Guarantors (and, if
necessary, any other certified public accountant of any subsidiary of the
Company, or of any business acquired by the Company or any of the
Subsidiary Guarantors for which financial statements and financial data
are required to be included in the Registration Statement) addressed to
each selling Holder and Underwriter of Registrable Securities, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings, and (iv) deliver such documents and certificates
as may be reasonably requested by the Holders of a majority in principal
amount of the Registrable Securities being sold or by the Underwriters,
and which are customarily delivered in underwritten offerings, to
evidence the continued validity of the representations and warranties of
the Company and the Subsidiary Guarantors made pursuant to clause (i)
above and to evidence compliance with any customary conditions contained
in an underwriting agreement.
In the case of a Shelf Registration Statement, the Company and the
Subsidiary Guarantors may require each Holder of Registrable Securities to
furnish to the Company and the Subsidiary Guarantors such information
regarding the Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company and the Subsidiary Guarantors may from
time to time reasonably request in writing.
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Company and the Subsidiary
Guarantors of the happening of any event of the kind described in Section
3(e)(v) hereof, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to a Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(i) hereof, and, if so directed by the Company, such
Holder will deliver to the Company (at its expense) all copies in its
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. If the Company shall give any such notice to suspend
the disposition of Registrable Securities pursuant to a Registration
Statement, the Company shall extend the period during which the Registration
Statement shall be maintained effective pursuant to this Agreement by the
number of days during the period from and including the date of the giving of
such notice to and including the date when the Holders shall have received
copies of the supplemented or amended Prospectus necessary to resume such
dispositions. The Company may give any such notice only twice during any 365
day period and any such suspensions may not exceed 30 days for each suspension
and there may not be more than two suspensions in effect during any 365 day
period.
The Holders of Registrable Securities covered by a Shelf
Registration Statement who desire to do so may sell such Registrable
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers (the
"Underwriters") that will administer the offering will be selected by the
Majority Holders of the Registrable Securities included in such offering.
4. Participation of Broker-Dealers in Exchange
Offer.
(a) The Staff of the SEC has taken the position that any
broker-dealer that receives Exchange Securities for its own account in the
Exchange Offer in exchange for Securities that were acquired by such
broker-dealer as a result of market-making or other trading activities (a
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<PAGE>
"Participating Broker-Dealer"), may be deemed to be an "underwriter" within
the meaning of the 1933 Act and must deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of such Exchange
Securities.
The Company and the Subsidiary Guarantors understand that it is the
Staff's position that if the Prospectus contained in the Exchange Offer
Registration Statement includes a plan of distribution containing a statement
to the above effect and the means by which Participating Broker-Dealers may
resell the Exchange Securities, without naming the Participating
Broker-Dealers or specifying the amount of Exchange Securities owned by them,
such Prospectus may be delivered by Participating Broker-Dealers to satisfy
their prospectus delivery obligation under the 1933 Act in connection with
resales of Exchange Securities for their own accounts, so long as the
Prospectus otherwise meets the requirements of the 1933 Act.
(b) In light of the above, notwithstanding the other provisions of
this Agreement, the Company and the Subsidiary Guarantors agree that the
provisions of this Agreement as they relate to a Shelf Registration shall also
apply to an Exchange Offer Registration to the extent, and with such
reasonable modifications thereto as may be, reasonably requested by the
Initial Purchaser or by one or more Participating Broker-Dealers, in each case
as provided in clause (ii) below, in order to expedite or facilitate the
disposition of any Exchange Securities by Participating Broker-Dealers
consistent with the positions of the Staff recited in Section 4(a) above;
provided that:
(i) the Company and the Subsidiary Guarantors shall not be required
to amend or supplement the Prospectus contained in the Exchange Offer
Registration Statement, as would otherwise be contemplated by Section
3(i), for a period exceeding 180 days after the last Exchange Date (as
such period may be extended pursuant to the penultimate paragraph of
Section 3 of this Agreement) and Participating Broker-Dealers shall not
be authorized by the Company or the Subsidiary Guarantors to deliver and
shall not deliver such Prospectus after such period in connection with
the resales contemplated by this Section 4; and
(ii) the application of the Shelf Registration procedures set forth
in Section 3 of this Agreement to an Exchange Offer Registration, to the
extent not required by the positions of the Staff of the SEC or the 1933
Act and the rules and regulations thereunder, will be in conformity with
the reasonable request to the Company and the Subsidiary Guarantors by
the Initial Purchaser or with the reasonable request in writing to the
Company and the Subsidiary Guarantors by one or more broker-dealers who
certify to the Initial Purchaser, the Company and the Subsidiary
Guarantors in writing that they anticipate that they will be
Participating Broker-Dealers; and provided further that, in connection
with such application of the Shelf Registration procedures set forth in
Section 3 to an Exchange Offer Registration, the Company and the
Subsidiary Guarantors shall be obligated (x) to deal only with one entity
representing the Participating Broker-Dealers, which shall be the Initial
Purchaser unless it elects not to act as such representative, (y) to pay
the fees and expenses of only one counsel representing the Participating
Broker-Dealers, which shall be counsel to the Initial Purchaser unless
such counsel elects not to so act and (z) to cause to be delivered only
one, if any, "cold comfort" letter with respect to the Prospectus in the
form existing on the last Exchange Date and with respect to each
subsequent amendment or supplement, if any, effected during the period
specified in clause (i) above.
(c) The Initial Purchaser shall have no liability to the Company,
any Subsidiary Guarantor or any Holder with respect to any request that they
may make pursuant to Section 4(b) above.
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5. Indemnification and Contribution.
(a) The Company and each of the Subsidiary Guarantors, jointly and
severally, agree to indemnify and hold harmless the Initial Purchaser, each
Holder and each person, if any, who controls the Initial Purchaser or any
Holder within the meaning of either Section 15 of the 1933 Act or Section 20
of the 1934 Act, or is under common control with, or is controlled by, the
Initial Purchaser or any Holder, from and against all losses, claims, damages
and liabilities (including, without limitation, any legal or other expenses
reasonably incurred by the Initial Purchaser, any Holder or any such
controlling or affiliated person in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment thereto) pursuant to which Exchange Securities or Registrable
Securities were registered under the 1933 Act, including all documents
incorporated therein by reference, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or caused by any
untrue statement or alleged untrue statement of a material fact contained in
any Prospectus (as amended or supplemented if the Company and the Subsidiary
Guarantors shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
necessary to make the statements therein in light of the circumstances under
which they were made not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to the
Initial Purchaser or any Holder furnished to the Company and the Subsidiary
Guarantors in writing by the Initial Purchaser or any selling Holder expressly
for use therein; provided, however, that the foregoing indemnity agreement
with respect to any preliminary prospectus contained in any such Registration
Statement shall not inure to the benefit of any Holder from whom the person
asserting any such losses, claims, damages or liabilities purchased
Securities, or any person controlling such Holder if a copy of the Prospectus
(as then aended or supplemented if any Guarantor or the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or
on behalf of such Holder to such person, at or prior to the written
confirmation of the sale of the Securities to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities, unless such failure was
the result of noncompliance by any Guarantor or the Company with Section 3(j)
hereof. In connection with any Underwritten Offering permitted by Section 3,
each of the Company and each of the Subsidiary Guarantors will also indemnify
the Underwriters, if any, selling brokers, dealers and similar securities
industry professionals participating in the distribution, their officers and
directors and each Person who controls such Persons (within the meaning of the
Securities Act and the Exchange Act) to the same extent as provided above with
respect to the indemnification of the Holders, if requested in connection with
any Registration Statement.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Subsidiary Guarantors, the Initial Purchaser
and the other selling Holders, and each of their respective directors,
officers who sign the Registration Statement and each Person, if any, who
controls the Company, the Subsidiary Guarantors, the Initial Purchaser and any
other selling Holder within the meaning of either Section 15 of the 1933 Act
or Section 20 of the 1934 Act to the same extent as the foregoing indemnity
from the Company and each Subsidiary Guarantor to the Initial Purchaser and
the Holders, but only with reference to information relating to such Holder
furnished to the Company and the Subsidiary Guarantors in writing by such
Holder expressly for use in any Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto).
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or paragraph (b)
above, such person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably
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<PAGE>
satisfactory to the indemnified party to represent the indemnified party and
any others the indemnifying party may designate in such proceeding and shall
pay the fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel
or (ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. It is understood that
the indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (a) the fees and expenses
of more than one separate firm (in addition to any local counsel) for the
Initial Purchaser and all persons, if any, who control the Initial Purchaser
within the meaning of either Section 15 of the 1933 Act or Section 20 of the
1934 Act, and (b) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company and the Subsidiary Guarantors,
their directors, their officers who sign the Registration Statement and each
person, if any, who controls the Company or any of the Subsidiary Guarantors
within the meaning of either such Section and (c) the fees and expenses of
more than one separate firm (in addition to any local counsel) for all Holders
and all persons, if any, who control any Holders within the meaning of either
such Section, and that all such fees and expenses shall be reimbursed as they
are incurred. In such case involving the Initial Purchaser and persons who
control the Initial Purchaser, such firm shall be designated in writing by the
Initial Purchaser. In such case involving the Holders and such persons who
control Holders, such firm shall be designated in writing by the Majority
Holders. In all other cases, such firm shall be designated by the Company and
the Subsidiary Guarantors. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but, if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party for such fees and
expenses of counsel in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which such indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(d) If the indemnification provided for in paragraph (a) or
paragraph (b) of this Section 4 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of the
Company, the Subsidiary Guarantors and the Holders shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the Subsidiary
Guarantors or by the Holders and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Holders' respective obligations to contribute pursuant to this
Section 5(d) are several in proportion to the respective number of Registrable
Securities of such Holder that were registered pursuant to a Registration
Statement.
13
<PAGE>
(e) The Company, each Subsidiary Guarantor and each Holder agree
that it would not be just or equitable if contribution pursuant to this
Section 5 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in paragraph (d) above. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 5, no Holder
shall be required to indemnify or contribute any amount in excess of the
amount by which the total price at which Registrable Securities were sold by
such Holder exceeds the amount of any damages that such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 5 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Section
5 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Initial Purchaser, any Holder or any person controlling the Initial
Purchaser or any Holder, or by or on behalf of the Company or any Subsidiary
Guarantor, its officers or directors or any person controlling the Company or
any Subsidiary Guarantor, (iii) acceptance of any of the Exchange Securities
and (iv) any sale of Registrable Securities pursuant to a Shelf Registration
Statement.
6. Miscellaneous.
(a) No Inconsistent Agreements. Neither the Company nor any
Subsidiary Guarantor has entered into, and on or after the date of this
Agreement will not enter into, any agreement which is inconsistent with the
rights granted to the Holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company's or the Subsidiary
Guarantors' other issued and outstanding securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company and the Subsidiary Guarantors have
obtained the written consent of Holders of at least a majority in aggregate
principal amount of the outstanding Registrable Securities affected by such
amendment, modification, supplement, waiver or consent; provided, however,
that no amendment, modification, supplement, waiver or consents to any
departure from the provisions of Section 5 hereof shall be effective as
against any Holder of Registrable Securities unless consented to in writing by
such Holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder
to the Company by means of a notice given in accordance with the provisions of
this Section 6(c), which address initially is, with respect to the Initial
Purchaser, the address set forth in the Purchase Agreement; and (ii) if to the
Company and the Subsidiary Guarantors, initially at the Company's and
Subsidiary Guarantors' addresses set forth in the Purchase Agreement and
thereafter at such other addresses, notice of which is given in accordance
with the provisions of this Section 6(c).
14
<PAGE>
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied;
and on the next business day if timely delivered to an air courier
guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications shall
be concurrently delivered by the person giving the same to the Trustee, at the
address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Purchase Agreement. If any
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such person shall be entitled to receive the benefits hereof.
The Initial Purchaser (in its capacity as Initial Purchaser) shall have no
liability or obligation to the Company or any Subsidiary Guarantor with
respect to any failure by a Holder to comply with, or any breach by any Holder
of, any of the obligations of such Holder under this Agreement.
(e) Purchases and Sales of Notes. The Company and each Subsidiary
Guarantor shall not, and shall use their best efforts to cause their
affiliates (as defined in Rule 405 under the 1933 Act) not to, purchase and
then resell or otherwise transfer any Securities.
(f) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder among the Company, the
Subsidiary Guarantors, and the Initial Purchaser, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights or the rights of Holders
hereunder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
15
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
AMTRAN, INC.
By Kenneth K. Wolff
---------------------------------
Name: Kenneth K. Wolff
Title: Executive Vice President &
CFO
AMERICAN TRANS AIR, INC.
By Kenneth K. Wolff
---------------------------------
Name: Kenneth K. Wolff
Title: Executive Vice President &
CFO
AMBASSADAIR TRAVEL CLUB, INC.
By Kenneth K. Wolff
---------------------------------
Name: Kenneth K. Wolff
Title: Executive Vice President &
CFO
ATA LEISURE CORP. (formerly
ATA VACATIONS, INC.)
By Kenneth K. Wolff
---------------------------------
Name: Kenneth K. Wolff
Title: Executive Vice President &
CFO
AMBER TRAVEL, INC.
By Kenneth K. Wolff
---------------------------------
Name: Kenneth K. Wolff
Title: Executive Vice President &
CFO
16
<PAGE>
AMERICAN TRANS AIR TRAINING
CORPORATION
By Kenneth K. Wolff
---------------------------------
Name: Kenneth K. Wolff
Title: Executive Vice President &
CFO
AMERICAN TRANS AIR EXECUJET,
INC.
By Kenneth K. Wolff
---------------------------------
Name: Kenneth K. Wolff
Title: Executive Vice President &
CFO
AMBER AIR FREIGHT CORPORATION
By Kenneth K. Wolff
---------------------------------
Name: Kenneth K. Wolff
Title: Executive Vice President &
CFO
CHICAGO EXPRESS AIRLINES, INC.
By Stephen Cooper
---------------------------------
Name: Steven Cooper
Title: Acting President
Confirmed and accepted as of
the date first above written:
DEUTSCHE BANK SECURITIES INC.
By /s/ Khawer Ali
-----------------------------------
Name: Khawer Ali
Title: Director
By /s/ John Perra
-----------------------------------
Name: John Perra
Title: Associate
17
EXHIBIT 5.1
[AMTRAN, INC. LETTERHEAD]
January 25, 2000
Amtran, Inc.
7337 West Washington Street
Indianapolis, IN 46231
RE: Amtran, Inc. Registration Statement on Form S-4
-----------------------------------------------
Dear Sirs:
I am the General Counsel of Amtran, Inc., an Indiana corporation
(the "Company"), and am rendering this opinion in connection with the
Registration Statement on Form S-4 (the "Registration Statement") of the
Company, with respect to $75,000,000 aggregate principal amount of 10- 1/2%
Senior Exchange Notes due 2004 (the "Exchange Notes") of the Company. The
Exchange Notes are being issued in exchange for $75,000,000 aggregate
principal amount of the Company's 10-1/2% Senior Notes due 2004 (the
"Outstanding Notes"), pursuant to an exchange offer (the "Exchange Offer").
The Outstanding Notes were originally issued in a transaction exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act").
I have examined (i) the Indenture, dated July 24, 1997, as
supplemented by the First Supplemental Indenture, dated December 21, 1999
(the "Indenture") among the Company, as issuer, American Trans Air, Inc.,
Ambassadair Travel Club, Inc., ATA Leisure Corp. (formerly ATA Vacations,
Inc.), Amber Travel, Inc., American Trans Air Training Corporation,
American Trans Air ExecuJet, Inc., Amber Air Freight Corporation and
Chicago Express Airlines, Inc. as guarantors (the "Guarantors"), and First
Security Bank, N.A., as trustee (the "Trustee"), pursuant to which the
Exchange Notes will be issued; and (ii) such other documents and made such
other investigations as I have deemed necessary or advisable for purposes
of this opinion. Based thereon, I am of the opinion that:
1. The Company is a corporation duly organized and validly existing
under the laws of the State of Indiana.
2. Each of the Guarantors is a corporation duly organized and
validly existing under the laws of the State of Indiana, except
for Chicago Express Airlines, Inc., which is duly organized and
validly existing under the laws of the state of Illinois.
<PAGE>
2
3. The Indenture has been duly authorized, executed and delivered by
each of the Company, the Guarantors and the Trustee.
4. The Guarantees (as defined in the Indenture) have been duly
authorized and issued by the Guarantors.
5. At the time the Exchange Offer is consummated, the Exchange Notes
will have been duly authorized, executed, authenticated by each of
the Company, the Guarantors and the Trustee, and delivered in
exchange for the Outstanding Notes pursuant to the Exchange Offer.
I am admitted to practice in the State of Indiana, and I express no
opinion as to matters governed by any laws other than the laws of the State of
Indiana and the Federal laws of the United States of America.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. I also consent to the use of my name under the caption
"Legal Opinions" in the Prospectus contained in the Registration Statement.
Very truly yours,
/s/ Brian T. Hunt
------------------
Brian T. Hunt
EXHIBIT 5.2
[Letterhead of]
CRAVATH, SWAINE & MOORE
January 25, 2000
AMTRAN, INC.
$75,000,000
10-1/2% SENIOR EXCHANGE NOTES DUE 2004
Ladies and Gentlemen:
We have acted as counsel for Amtran, Inc., an Indiana corporation
(the "Company"), in connection with the registration under the Securities
Act of, of 1933, as amended (the "Securities Act"), of $75,000,000
aggregate principal amount of the Company's 10-1/2% Senior Exchange Notes
due 2004 (the "Exchange Notes"), to be issued under an Indenture dated as
July 24, 1997 as supplemented by the First Supplemental Indenture, dated
December 21, 1999 (the "Indenture"), among the Company, as issuer, American
Trans Air, Inc., Ambassadair Travel Club, Inc., ATA Leisure Corp. (formerly
ATA Vacations, Inc.), Amber Travel, Inc., American Trans Air Training
Corporation, American Trans Air Execujet, Inc., Amber Air Freight
Corporation, and Chicago Express Airlines, Inc., as guarantors (the
"Guarantors"), and First Security Bank, N.A., as trustee (the "Trustee"),
in exchange for $75,000,000 aggregate principal amount of 10-1/2% Senior
Notes due 2004 (the "Outstanding Notes"), pursuant to an exchange offer
(the "Exchange Offer"). The Outstanding Notes were originally issued in a
transaction exempt from the registration requirements of the Securities
Act.
In that connection, we have examined originals, or copies certified
or otherwise identified to our satisfaction, of such documents, corporate
records and other instruments as we have deemed necessary or appropriate for
the purposes of this opinion, including the Indenture.
Based on the foregoing, we are of opinion as follows:
1. Assuming that the Indenture has been duly authorized, executed
and delivered by each of the Company, the Guarantors and the Trustee, the
Indenture constitutes a
<PAGE>
2
legal, valid and binding obligation of the Company and the Guarantors,
enforceable against the Company and the Guarantors in accordance with its
terms (subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether such
enforceability is considered in a proceeding in equity or at law).
2. Assuming that the Exchange Notes have been duly authorized by the
Company, the Notes, when executed and authenticated in accordance with the
provisions of the Indenture and delivered in exchange for the Outstanding
Notes pursuant to the Exchange Offer, will constitute legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms and entitled to the benefits of the Indenture (subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other laws affecting creditors' rights generally from time to time
in effect and to general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing,
regardless of whether such enforceability is considered in a proceeding in
equity or at law); in expressing the opinion set forth in this paragraph 2, we
have assumed, that the form of the Notes will conform to those included in the
Indenture.
3. Assuming that the Guarantees (as defined in the Indenture) have
been duly authorized by the Guarantors, and assuming the due execution and
delivery of the Indenture in accordance with its terms by the Guarantors and
the Company, the Guarantees will be legal, valid and binding obligations of
each of the Guarantors, enforceable against the Guarantors in accordance with
their terms and entitled to the benefits of the Indenture (subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other laws affecting creditors' rights generally from time to time
in effect and to general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing,
regardless of whether such enforceability is considered in a proceeding in
equity or at law).
We are admitted to practice in the State of New York, and we express
no opinion as to matters governed by any laws other than the laws of the State
of New York and the Federal laws of the United States of America. In
particular, we do not purport to pass on any matter governed by the laws of
the State of Indiana.
<PAGE>
3
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the use of our name under the
caption "Legal Opinions" in the Prospectus contained in the Registration
Statement.
Very truly yours,
/s/ Cravath, Swaine & Moore
---------------------------
Cravath, Swaine & Moore
Amtran, Inc.
7337 West Washington Street
Indianapolis, IN 46231
Exhibit 10.1
Execution Copy
==============================================================================
CREDIT AGREEMENT
dated as of July 24, 1997
among
AMERICAN TRANS AIR, INC.
AMTRAN, INC.
THE BANKS PARTY THERETO
and
NBD BANK, N.A., as Agent
==============================================================================
<PAGE>
CREDIT AGREEMENT
This Credit Agreement is entered into as of July 24, 1997 among
AMERICAN TRANS AIR, INC., an Indiana corporation ("Borrower"), AMTRAN, INC.,
an Indiana corporation ("Amtran"), each of the lenders listed on the signature
pages hereof or otherwise becoming a party hereto from time to time
(collectively the "Banks" and individually as a "Bank"), NBD BANK, N.A.
("NBD"), a national banking association, as agent for the Banks (in such
capacity, together with its successors in such capacity, the "Agent").
RECITALS
A. The Borrower, Amtran, the Banks and other lenders and co-agent
party thereto and NBD Bank, N.A., as agent, entered into a Second Amended and
Restated Credit Agreement dated as of December 7, 1994 (as amended, the "Prior
Credit Agreement"), which Prior Credit Agreement amended and restated previous
credit agreements.
B. The parties desire to amend and restate the Prior Credit
Agreement as herein provided, and the parties are willing to so amend and
restate the Prior Credit Agreement in its entirety as herein provided.
AGREEMENT
In consideration of the premises and of the mutual agreements herein
contained, the Prior Credit Agreement is hereby amended and restated in its
entirety as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Definitions. In addition to the terms defined elsewhere
in this Agreement, the following terms have the meanings indicated for
purposes of this Agreement:
"Adjustment Date" shall mean the first day of each February and
October, commencing October 1, 1997.
"Adjusted Net Profit" shall mean, for any period, the
consolidated net income (after taxes), but excluding any gains or losses (net
of related tax benefits) from any sale of assets in excess of $250,000 for any
single transaction and $1,000,000 in the aggregate for multiple transactions
or any other extraordinary gain (or loss) items and their related tax
benefits, of Amtran and its Affiliates for such period, on a consolidated
basis, determined in accordance with GAAP.
"Advance" means a loan by the Banks to Borrower pursuant to
this Agreement.
<PAGE>
"Affiliate" means, (i) with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control of such Person and (ii) which other Person in
accordance with generally accepted accounting principles is to be included in
the consolidated financial statements of Amtran. A Person shall be deemed to
control a corporation if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by contract
or otherwise. Notwithstanding anything in this definition to the contrary,
neither J. George Mikelsons nor any member of the board of directors of any
Person that is a corporation shall be deemed a Person as used in this
Agreement.
"Aviation Property" shall mean:
(i) each of the Lockheed Model L-1011 aircraft
identified on Schedule 1 attached to this Agreement (the "L-1011
Aircraft"), together with all appliances, parts, instruments,
appurtenances, accessories and equipment (including, without
limitation, communications and radar equipment) owned by Borrower
now or hereafter incorporated or installed in or attached to any of
the L-1011 Aircraft, and all substitutions, replacements and
renewals of any and all thereof owned by Borrower and all other
property owned by Borrower which shall hereafter become physically
incorporated or installed in or attached to any of the L-1011
Aircraft, whether any of the foregoing is now owned by Borrower or
hereafter acquired by it;
(ii) each of the aircraft engines identified on
Schedule 2 attached to this Agreement (the "L-1011 Engines") and any
aircraft engine described in any supplemental security agreement
which shall be hereafter delivered to the Banks pursuant to the
provisions of the Security Agreement covering any of the Aviation
Property, together with all appliances, parts, instruments,
appurtenances, accessories and equipment owned by Borrower now or
hereafter incorporated, installed in or attached to any of such
engines or L-1011 Engines, and all substitutions, replacements and
renewals of any and all thereof owned by Borrower and all other
property owned by Borrower which shall hereafter become physically
incorporated or installed in or attached to any of such engines or
L-1011 Engines, whether any of the foregoing is now owned by
Borrower or hereafter acquired by it;
(iii) all proceeds of any of and all the properties
described in (i) and (ii) above, including, without limitation, all
warranty and tort claims and all insurance proceeds (and Borrower's
right to receive any such proceeds) from any loss or damage to any
of such properties and all other assets subject to or otherwise
described as collateral in the Security Agreements at any time,
provided, however that notwithstanding anything contained in (i) and
(ii) above, Aviation Property shall not include any appliances,
parts, instruments, appurtenances, accessories, and equipment
(including without limitation, communication and radar equipment)
removed from Aviation Property and for which a comparable
substitution, replacement or renewal has been made.
Notwithstanding the foregoing, L-1011 Aircraft and L-1011 Engines shall also
include any Lockheed Model L-1011 aircraft and the related engines,
respectively, acquired by the Borrower after the Closing Date, provided that
(A) appraisals for such aircraft and engines acceptable to the Agent are
received by the Agent, (B) such aircraft and engines and related assets become
subject to the Security Agreement and the Borrower delivers all agreements,
opinions and documents requested by the Agent in connection therewith, all in
form and substance satisfactory to the Agent, and (C) such aircraft and
engines are otherwise acceptable to the Agent.
<PAGE>
"Avmark" shall mean Avmark, Inc., or its successors as may be
acceptable to the Agent.
"Banking Day" means a day on which banks are open for
substantially all of their banking functions in Indiana other than Saturdays,
Sundays or legal holidays.
"Borrowing Base" means, as of any date as of which the amount
thereof is to be determined, an amount equal to 75% of the value (as
determined pursuant to Section 2.01(c)) of the L-1011 Aircraft and the L-1011
Engines constituting Aviation Property subject to the Security Agreement.
"Capital Expenditures" means, for any period, the aggregate of
all expenditures for plant, property and equipment and other capital
expenditures as determined under GAAP made by Amtran or any of its Affiliates,
as applied on an accrual basis, for such period.
"Capital Lease" means any lease which, in accordance with GAAP,
is or should be capitalized.
"Capital Lease Payments" means, for any period, the aggregate
payments due during such period on any Capital Lease of Amtran or any of its
Affiliates.
"Cash Equivalents" means, for any period, with respect to the
covenant contained in Section 6.11 hereof, the sum, as of the last day of such
period, of (i) the amount of cash in a deposit account at any Bank and
certificates of deposit of any Bank owned by Borrower and/or Amtran, provided
that each such certificate of deposit has a maturity date not later than one
(1) year by Borrower and/or Amtran, and provided, further, that any such cash
or certificate of deposit is not subject to any Lien (except any Lien in favor
of the Banks) or other restriction, such as any cash held in escrow to secure
any air traffic liability, plus (ii) the fair market value of securities owned
by Borrower and/or Amtran with maturities of one (1) year or less from the
date of acquisition and which are issued or fully guaranteed or insured by the
United States Government or any agency thereof, plus (iii) commercial paper of
any United States issuer rated at least investment grade by Standard & Poor's
Corporation and Moody's Investors Services, Inc. (i.e., rated at least BBB- by
Standard & Poor's Corporation or at least Baa3 by Moody's Investors Service,
Inc.) and in each case maturing within six (6) months after the date of
acquisition, plus (iv) repurchase agreements reasonably acceptable to the
Agent and with a term of less than thirty (30) days, plus (v) the net cash
surrender value of any life insurance policies for which the Borrower is sole
beneficiary after deduction for any loans owing by the Borrower and/or Amtran
or any other party, prepaid premiums or other amounts with respect thereto,
minus all Letter of Credit Advances including without limitation those which
are cash collateralized pursuant to Section 3.04 hereof.
"Cash Flow" means, as of any date as of which the amount
thereof is to be determined, the difference of (i) the sum of: (A) Adjusted
Net Profit for the twelve month period immediately preceding such date of
determination; (B) Non-Cash Expenses for the twelve month period immediately
preceding such date of determination; (C) Interest Expense for the twelve
month period immediately preceding such date of determination; (D) Projected
Lease Payments as of such date of determination; and (E) the amount of income
taxes paid by Amtran and its Affiliates for the twelve month period
immediately preceding such date of determination; and (ii) Dividends paid or
payable for the twelve month period immediately preceding such date of
determination. In calculating Cash Flow hereunder, any lease and/or rental
obligations constituting either deposits or reserves on aircraft engines
and/or aircraft frames which would be viewed as Projected Lease Payments shall
not be included.
<PAGE>
"Cash Flow Coverage Ratio" means the ratio of Cash Flow to the
sum of (a) Interest Expense plus (b) Projected Lease Payments.
"Closing Date" means the date of execution of this Agreement by
all parties hereto, which shall be the effective date of this Agreement.
"Commitment" shall mean, with respect to each Bank, the
commitment of each such Bank to make Advances and to participate in Letter of
Credit Advances made through the Agent, in amounts not exceeding an aggregate
principal amount outstanding at any time equal to the respective commitment
amounts for each such Bank set forth next to the name of each such Bank on the
signature pages hereof or otherwise established pursuant to an Assignment and
Acceptance under Section 10.03, as such amounts may be reduced and/or
otherwise adjusted from time to time pursuant hereto. As of the Closing Date,
the aggregate Commitments equal $50,000,000.
"Consolidated" or "consolidated" shall mean, when used with
reference to any financial term of this Agreement, the aggregate for two or
more Persons of the amounts signified by such term for all such Persons
determined on a consolidated basis in accordance with GAAP.
"Default" means an event which with notice or lapse of time or
both, would become an Event of Default.
"Disposition" shall mean the sale or other transfer to any
Person by Borrower of any of the Aviation Property.
"Dividends" of any Person shall mean any dividend, payment or
other distribution in respect of any class of its capital stock or any
dividend, payment or other distribution in connection with the redemption,
purchase, retirement or other acquisition, directly or indirectly, of any of
its capital stock. As used in this Agreement, capital stock shall include all
capital stock and any securities exchangeable for or convertible into capital
stock and any warrants, rights or other options to purchase or otherwise
acquire capital stock or such securities or any other form of equity
securities or any other form or ownership interest.
"Dollars" and "$" means the lawful money of the United States
of America.
"ERISA" means the Employee Retirement Income Security Act of
1974 and all the rules and regulations promulgated pursuant thereto, as
amended from time to time.
"Eurodollar Business Day" means, with respect to any Eurodollar
Rate Advance, a day which is both a Banking Day and a day on which dealings in
Dollar deposits are carried out in the London interbank market.
"Eurodollar Interest Period" means, with respect to any
Eurodollar Rate Advance, the period commencing on the day such Eurodollar Rate
Advance is made or converted to a Eurodollar Rate Advance and ending on the
date one, two, three or six months thereafter, as the Borrower may elect under
Section 2.02(b) or 2.13, and each subsequent period commencing on the last day
of the immediately preceding Eurodollar Interest Period and ending on the date
one, two, three or six months thereafter, as the Borrower may elect under
Section 2.02 provided, however, that (a) any Eurodollar Interest Period which
commences on the last Eurodollar Business Day of a calendar month
<PAGE>
(or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Eurodollar
Business Day of the appropriate subsequent calendar month, (b) each Eurodollar
Interest Period which would otherwise end on a day which is not a Eurodollar
Business Day shall end on the next succeeding Eurodollar Business Day or, if
such next succeeding Eurodollar Business Day falls in the next succeeding
calendar month, on the next preceding Eurodollar Business Day, and (c) no
Eurodollar Interest Period which would end after the Termination Date shall be
permitted.
"Eurodollar Rate" means, with respect to any Eurodollar Rate
Advance and the related Eurodollar Interest Period, the per annum rate that is
equal to the sum of:
(a) the Margin, plus
(b) the rate per annum obtained by dividing (i) the per annum
rate of interest at which deposits in Dollars for such Eurodollar Interest
Period and in an aggregate amount comparable to the amount of such Eurodollar
Rate Advance to be made by the Administrative Agent in its capacity as a Bank
hereunder are offered to the Administrative Agent by other prime banks in the
London interbank market at approximately 11:00 a.m. London time on the second
Eurodollar Business Day prior to the first day of such Eurodollar Interest
Period by (ii) an amount equal to one minus the stated maximum rate (expressed
as a decimal) of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves) that is
specified on the first day of such Eurodollar Interest Period by the Board of
Governors of the Federal Reserve System (or any successor agency thereto) for
determining the maximum reserve requirement with respect to eurocurrency
funding (currently referred to as "Eurocurrency liabilities" in Regulation D
of such Board) maintained by a member bank of such System;
all as conclusively determined by the Agent, such sum to be rounded up, if
necessary, to the nearest whole multiple of one one-hundredth of one percent
(1/100 of 1%).
"Eurodollar Rate Advance" means any Advance which bears
interest at the Eurodollar Rate.
"Event of Default" means any event set forth in Sections 8.01
to 8.10, inclusive, hereof.
"Federal Funds Rate" means, for any day, the average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published by the Federal
Reserve Bank of New York for such day, or, if such rate is not so published
for any day, the average of the quotations for such rates received by the
Agent from three federal funds brokers of recognized standing selected by the
Agent in its discretion from time to time as the opening federal funds rate
paid or payable by the Agent in its regional federal funds market for
overnight borrowings from other banks;
"Funded Indebtedness" of any person shall mean, as of any date,
the sum of all Indebtedness of such person for borrowed money which by its
terms has a final maturity, duration or payment date more than one year from
such date (including any such Indebtedness having a final maturity, duration
or payment date within one year from such date which, pursuant to the terms of
a revolving credit or similar agreement or otherwise, may be renewed or
extended for more than one year from such date, whether or not theretofore
renewed or extended), provided, however, that Funded
<PAGE>
Indebtedness shall not include (i) Indebtedness of such person which is
subordinated to the Obligations pursuant to a Subordination Agreement
satisfactory in form and substance to the Agent, or (ii) any payment in
respect of Funded Indebtedness (whether installments, serial maturity or
sinking fund payments or otherwise) due within one year from such date.
"GAAP" means generally accepted accounting principles applied
on a basis consistent with that reflected in the financial statements referred
to in Section 5.13.
"Guarantors" shall mean, collectively Amtran and each present
and future subsidiary of Amtran or the Borrower, other than Amber Holdings,
Inc., or any other person executing a Guaranty at any time.
"Guaranty" shall mean any guaranty of any of the Obligations
executed by Amtran and its Affiliates, or any of them, at any time, as amended
or modified from time to time.
"Hazardous Material" means and includes any hazardous, toxic or
dangerous waste, substance or material defined as such in or for the purpose
of the Comprehensive Environmental Response, Compensation and Liability Act,
any so-called "Superfund" or "Superlien" law, or any other federal, state or
local statute, law, ordinance, code, rule, regulation, order, decree or other
requirement of any governmental authority regulating, relating to, or imposing
liability or standards of conduct concerning any hazardous, toxic or dangerous
waste or material, as now or at any time hereafter may be in effect.
"Hedging Agreement" means any agreement, or arrangement entered
into by the Borrower and any Bank providing for payments protecting the
Borrower against fluctuations of interest rates, including interest rate
swaps, interest rates caps or similar agreements.
"Indebtedness" of any Person means: (i) all obligations of such
Person (including without limitation all fees, costs or unpaid accrued
interest) for or with respect to borrowed money or for the deferred purchase
price of property or services (other than accounts payable in the ordinary
course of business); (ii) all obligations of such Person created or arising
under any conditional sale or other title retention agreement with respect to
any property acquired by such Person and all obligations created or arising
under such agreement even though the rights and remedies of the seller or
lender thereunder are limited to repossession or sale of such property in the
event of default; (iii) all obligations of such Person under Capital Leases;
(iv) all guarantees and other obligations (contingent or otherwise) of such
Person to assure a creditor against loss (including, without limitation,
letters of responsibility or comfort letters, arrangements to purchase or
repurchase property or obligations, pay for property, goods or services
whether or not delivered or rendered, maintain working capital, equity capital
or other financial statement condition of, or lend or contribute to or invest
in, any such Person) in respect of obligations of any other Person; (v) all
endorsements of such Person (other than in the case of instruments, for
deposit or collection in the ordinary course of business); (vi) all
obligations of such Person for extensions of credit to or on behalf of such
Person, whether or not representing obligations for borrowed money, including,
without limitation, all reimbursement obligations of such Person in respect of
letters of credit, or similar obligations and all obligations pursuant to any
interest rate or currency swaps, rate caps or similar transactions; (vii) all
accrued, non-contingent liabilities of such Person in respect of unfunded
vested liabilities under any Plan of such Person or of any member of a
controlled group of which such Person is a member; and (viii) all obligations
or indebtedness described in clauses (i) through (vii) secured by a Lien on
any property owned by such Person, whether or not such Person has assumed or
become liable for the payment thereof.
<PAGE>
"Independent Public Accountant" means Ernst & Young or other
public accounting firm of national reputation selected by Borrower and
acceptable to the Required Banks.
"Interest Expense" shall mean, for any period, the aggregate
gross interest expense paid or payable by Amtran and its Affiliates for such
period.
"Interest Payment Date" means (a) with respect to any
Eurodollar Rate Advance, the last day of each Eurodollar Rate Interest Period
with respect to such Eurodollar Rate Advance and, in the case of any
Eurodollar Interest Period exceeding three months, those days that occur
during such Eurodollar Interest Period at intervals of three months after the
first day of such Eurodollar Interest Period, and (b) in all other cases, the
first Banking Day of each month occurring after the date hereof, commencing
with the first such Banking Day occurring after the date of this Agreement.
"Investment" means: (i) any loan, advance, guarantee, extension
of credit (other than in the ordinary course of business to trade customers)
or contribution of capital by Amtran or any of its Affiliates to any Person or
the purchase of any Person's notes, stock, bonds or other securities, (ii)
advances by Amtran or any of its Affiliates to employees of a Person other
than in the ordinary course of business for the purpose of defraying travel,
relocation or business expenses and (iii) any contribution of capital or
property or services contributed or committed to be contributed by Amtran or
any of its Affiliates in connection with the purchase of debt or equity or
other ownership interests of any Person.
"Letter of Credit" shall mean a standby letter of credit having
a stated expiry date not later than the earlier of (i) one year after the date
of issuance thereof, and (ii) the Termination Date, issued by the Agent on
behalf of the Banks for the account of Borrower under an application and
related documentation acceptable to the Agent requiring, among other things,
immediate reimbursement by Borrower to the Agent in respect of all drafts or
other demand for payment honored thereunder and all expenses paid or incurred
by the Agent relative thereto. For purposes of this Agreement, the aggregate
outstanding principal amount of any unexpired or outstanding Letter of Credit
or Letter of Credit Advance shall be deemed the face amount of such Letter of
Credit.
"Letter of Credit Advance" shall mean any issuance of a Letter
of Credit hereunder by the Agent in which each Bank shall acquire a pro rata
risk participation pursuant to Section 2.11.
"Letter of Credit Documents" shall have the meaning ascribed
thereto in Section 2.12.
"Leverage Ratio" means, as of any date as of which the amount
thereof is to be determined, the ratio of Total Adjusted Liabilities to
Tangible Net Worth.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to provide
any of the foregoing), any conditional sale or other title retention agreement
or any lease in the nature thereof, or any filing or agreement to file a
financing statement as debtor on any property leased to any Person under a
lease which is not in the nature of a conditional sale or title retention
agreement.
<PAGE>
"Loan Documents" means, collectively, this Agreement,the Notes,
the Security Agreement, the Guaranty, the Letter of Credit Documents, Hedging
Agreements and any other documents evidencing, guaranteeing or securing the
Obligations.
"Margin" shall mean the applicable percentage per annum, based
on the Cash Flow Coverage Ratio and Leverage Ratio of the Borrower, as
determined by reference to the following table:
<PAGE>
Margin
- -----------------------------------------------------------------------------
Letter of Non-Use
Eurodollar Credit Fee Fee Payable
Financial Prime Rate Rate Payable Under Under
Ratios Advances Advances Section 2.06(c) Section 2.06(b)
- -----------------------------------------------------------------------------
If the (a) Cash Flow 0.0% 1.50% 1.125% 0.25%
Coverage Ratio is
greater than or equal
to 2.05 to 1.00 and (b)
Leverage Ratio is less
than 4.0 to 1.0
- -----------------------------------------------------------------------------
If the (a) Cash Flow 0.0% 1.75% 1.25% 0.30%
Coverage Ratio is less
than 2.05 to 1.00 and
greater than or equal
to 1.80 to 1.00 and (b)
Leverage Ratio is less
than 4.0 to 1.0
- -----------------------------------------------------------------------------
If the (a) Cash Flow 0.0% 2.00% 1.375% 0.35%
Coverage Ratio is less
than 1.80 to 1.00 and
greater than or equal
to 1.65 to 1.00 and (b)
Leverage Ratio is less
than 4.0 to 1.0
- -----------------------------------------------------------------------------
If the Leverage Ratio 0.25% 2.25% 1.50% 0.40%
is equal to or greater
than 4.0 to 1.0 but
less than or equal to
4.5 to 1.0
- -----------------------------------------------------------------------------
If the Leverage Ratio 0.375% 2.375% 1.625% 0.45%
is greater than 4.5 to
1.0 but less than 5.0
to 1.0
- -----------------------------------------------------------------------------
If the Leverage Ratio 0.50% 2.50% 1.75% 0.50%
is equal to or greater
than 5.0 to 1.0
- -----------------------------------------------------------------------------
For purposes of determining the Margin, the Cash Flow Coverage Ratio
and Leverage Ratio shall be determined on the last day of each fiscal quarter,
for the fiscal quarter then ending, and the Margin shall be adjusted on the
first day of the second fiscal quarter following each such fiscal quarter
based on the Cash Flow Coverage Ratio and Leverage Ratio for such fiscal
quarter, which Margin shall
<PAGE>
remain in effect until the first day of the following fiscal quarter.
Notwithstanding the above, upon and during the continuance of any Event of
Default the Margin for each category shall be based upon the highest margin
possible in each category, regardless of the Cash Flow Coverage Ratio or
Leverage Ratio, upon and during the continuance of any Event of Default.
"Margin Stock" has the meaning ascribed to it in Regulation U
of the Board of Governors of the Federal Reserve System.
"Net Profit" shall mean, for any period, the consolidated net
income (after taxes) of Amtran and its Affiliates for such period, on a
consolidated basis, determined in accordance with GAAP.
"Net Worth" means consolidated total assets of Amtran and its
Affiliates less the consolidated total liabilities and reserves of Amtran and
its Affiliates, computed on a consolidated basis in accordance with GAAP.
"Non-Cash Expenses" shall mean, for any period, the sum of the
amount of depreciation and amortization expense during such period of Amtran
and its Affiliates, on a consolidated basis, to the extent deducted from
Adjusted Net Profit, all as determined in accordance with GAAP.
"Note" means any note executed by Borrower in the form of
Exhibit A hereto, as amended, supplemented or modified from time to time and
together with any promissory note or notes issued in exchange or replacement
therefor and "Notes" shall mean all of such notes.
"Obligations" means all present and future obligations,
indebtedness and liabilities of Borrower or Amtran under the Loan Documents.
"Operating Lease Payments" shall mean, for any period, the
aggregate payments due during such period on all operating leases of Amtran or
any of its Affiliates which individually originally have (or had) aggregate
payments paid or payable, from the original commencement of such lease until
its expiry, in excess of Two Hundred Fifty Thousand and 00/100 Dollars
($250,000.00).
"Overdue Rate" means (a) in respect of principal of Prime Rate
Advances a rate per annum that is equal to the sum of two percent (2%) per
annum plus the Prime Rate plus the Margin (b) in respect of principal of
Eurodollar Rate Advances, a rate per annum that is equal to the sum of two
percent (2%) per annum plus the per annum rate in effect thereon until the end
of the then current Eurodollar Interest Period for such Eurodollar Rate
Advance and, thereafter, a rate per annum that is equal to the sum of two
percent (2%) per annum plus the Prime Rate plus the Margin, and (c) in respect
of all other amounts payable by the Borrower hereunder (other than interest),
a per annum rate that is equal to the sum of two percent (2%) per annum plus
the Prime Rate plus the Margin.
"PBGC" means the Pension Benefit Guaranty Corporation created
under Section 4002(a) of ERISA or any successor thereto.
"Permitted Liens" means:
(i) Liens for taxes not yet due or which are being
actively contested in good faith by appropriate proceedings (in a
manner sufficient to prevent enforcement
<PAGE>
of the matter under contest) and as to which adequate reserves have
been set aside in amounts determined in accordance with GAAP;
(ii) Other Liens incidental to the conduct of the business
of Amtran and its Affiliates or the ownership of their respective
properties and assets which were not incurred in connection with the
incurring of Indebtedness, and which do not detract from the value
of such property or assets or impair the use thereof in the
operation of Amtran's and its Affiliates' business including,
without limitation, Liens imposed by mechanics, laborers or
materialmen but only to the extent that such Liens are being
contested in good faith by the Borrower and the resolution thereof
is being diligently pursued by Borrower;
(iii) Liens on property or assets of an Affiliate to
secure obligations of such Affiliate to Borrower or another
Affiliate;
(iv) Liens existing on the Closing Date and approved in
writing by the Banks but no extension, modification or renewal of
any such Lien shall be permitted;
(v) Liens created pursuant to the Security Agreement and
Liens expressly permitted by the Security Agreement; (vi) Purchase
money mortgages for equipment, inventory, spare parts and appliances
used in the Borrower's ordinary course of business provided that any
such purchase will not result in a violation of Section 7.01 of this
Agreement;
(vi) Purchase money mortgages for equipment, inventory,
spare parts and applicances used in the Borrower's ordinary course
of business provided that any such purchase will not result in a
violation of Section 7.01 of this Agremeent.
(vii) Liens to Rolls Royce plc pursuant to a Security
Agreement dated as of May 20, 1993, as amended and restated as of
November 1, 1994, on certain spare parts and certain RB211 engines
bearing the following manufacturer serial numbers: 10388, 10426,
10502, 10519 and 10528;
(viii) Liens to First of America Bank-Indiana pursuant to
a Security Agreement dated May 31, 1989 as amended on September 30,
1991; and
(ix) Notwithstanding anything contained herein to the
contrary, Liens on Borrower's accounts, general intangibles or
inventory shall not be Permitted Liens except as set forth in
clauses (i) and (ii) above and Liens on any of the Aviation Property
shall not be Permitted Liens.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
governmental or political subdivision or an agent or instrumentality thereof.
"Plan" means any defined benefit plan maintained or contributed
to by Amtran or any of its Affiliates or by any trade or business (whether or
not incorporated) under common control with Amtran or any of its Affiliates as
defined in Section 4001(b) of ERISA and insured by the PBGC under Title IV of
ERISA.
"Prime Rate" means the per annum rate that is equal to the
greater of (i) the per annum rate of interest announced from time to time by
NBD as its "prime rate", which rate may not
<PAGE>
necessarily be the lowest rate charged by NBD to any of its customers, or (ii)
the Federal Funds Rate plus one-half percent (1/2%) per annum. The Prime Rate
shall change simultaneously with any change in such "prime rate" or such
Federal Funds Rate, if applicable.
"Prime Rate Advance" means a loan made by the Banks to Borrower
under Section 2.01 and bearing interest at a rate equal to the Prime Rate plus
the Margin.
"Projected Lease Payments" means, as of any date as of which
the amount thereof is to be determined, the aggregate amount of all payments
to be paid in the future by the Borrower, Amtran or any of their Subsidiaries
under any operating or capital lease; provided, however, that such payments
under any such capital or operating lease shall only be included in this
definition of Projected Lease Payments only for the period of time commencing
on such date of determination of Projected Lease Payments and ending twelve
months after such date, and all such payments under any such capital or
operating lease after such one year period shall not be included in this
definition of Projected Lease Payments.
"Reportable Events" shall be as defined in ERISA.
"Required Banks" shall mean at any time while no Revolving
Credit Loans are outstanding, any combination of Banks having more than 60% of
the aggregate amount of the Commitments, and, at any time while Revolving
Credit Loans are outstanding, any combination of Banks holding more than 60%
of the outstanding aggregate principal amount of Revolving Credit Loans and
Letter of Credit Advances.
"Revolving Credit Loans" means the borrowing under Section 2.01
of this Agreement, which are on a revolving basis under the terms of this
Agreement.
"Security Agreement" means, collectively, the Security
Agreement and Chattel Mortgage dated the Closing Date and all other present
and future security agreements and other related documents, each in form and
substance acceptable to the Agent, pursuant to which the Banks are granted the
security interests described in Section 3.01, and any other present or future
collateral securing the Obligations, as the same are now or hereafter renewed,
extended, amended, modified, supplemented or restated.
"Senior Unsecured Debt Documents" means the Senior Unsecured
Indenture, the Senior Unsecured Notes and all of their agreements, documents
and instruments executed in connection therewith, as amended from time to time
in compliance with the terms of this Agreement.
"Senior Unsecured Indenture" means the Indenture dated the
Closing between the Borrower and , as trustee, as amended from time
to time in compliance with the terms of this Agreement.
"Senior Unsecured Notes" shall mean the % Senior Notes due
, 2004 in the aggregate principal amount of $100,000,000, as amended
from time to time in compliance with the terms of this Agreement.
"Tangible Net Worth" means Net Worth, less:
<PAGE>
(i) goodwill (including the unallocated excess purchase
cost of assets acquired in a transaction accounted for as a purchase
over the aggregate fair market value thereof on the date of
acquisition), patents, trademarks, trade names, copyrights,
franchises, deferred charges, (including unamortized debt discount
and expense, deferred research and development expenses and
organizational costs), treasury stock and all other items that would
be treated as intangible assets under GAAP, except that in excluding
intangible assets, the excluded assets shall not include deferred
pre-operating costs of Borrower which do not exceed One Million and
00/100 Dollars ($1,000,000.00) in the aggregate;
(ii) any Investments of Amtran or any of its Affiliates or
any extensions of credit to stockholders, officers, directors, or
employees of Amtran or any of its Affiliates greater than Ten
Thousand and 00/100 Dollars ($10,000.00) to any one individual or
greater than one Hundred Thousand and 00/100 ($100,000.00) in the
aggregate; and
(iii) any write-up of assets of Amtran or any of its
Affiliates after the Closing Date other than a write-up of assets of
an Affiliate of Amtran in connection with the acquisition of such
Affiliate and in accordance with GAAP.
"Termination Date" means:
(a) the earlier to occur of
(i) April 1, 2001, or such extended date as may be
established in accordance with Section 2.18, or
(ii) the date on which the Commitments are terminated, the
Revolving Credit Loans accelerated or both pursuant
to Article VIII.
"Total Adjusted Liabilities" shall mean, without duplication,
(A) the sum of (i) Funded Indebtedness of Amtran and its Affiliates, (ii) any
payment in respect of Funded Indebtedness of Amtran and its Affiliates due
within one year from any date of determination, (iii) the total accrued
Interest Expenses, and (iv) three and one-half (3 1/2) times Amtran's and its
Affiliates' projected capital and operating lease rental expenses for the
immediately succeeding twelve month period less (B) the total amount of all
Cash Equivalents.
1.02 Rules of Construction. All accounting terms used herein and not
expressly defined in this Agreement shall (unless otherwise expressly
indicated) have the respective meanings given to them in accordance with GAAP.
All financial computations made under this Agreement for the purpose of
determining compliance with the financial requirements of this Agreement shall
be made, and all financial information required under this agreement shall be
prepared, in accordance with GAAP, as in effect on the Closing Date,
consistently applied. All computations made under this Agreement for the
purpose of determining compliance with the financial covenants herein shall be
made on a consolidated basis. All defined terms used herein shall include both
the singular and the plural forms thereof and shall be construed accordingly.
<PAGE>
ARTICLE II.
THE CREDIT
2.01 Revolving Credit Loans.
(a) Each Bank severally agrees, subject to the terms and
conditions of this Agreement, to make available to the Borrower, for the
purposes set forth in Section 6.01, Revolving Credit Loans and to participate
in Letter of Credit Advances to the Borrower which in an aggregate amount do
not exceed the Commitment of each Bank, provided, however, that the sum of the
aggregate amount of the Revolving Credit Loans and the maximum amount
available to be drawn on all outstanding Letters of Credit shall not exceed
the lesser of the Borrowing Base (as the Borrowing Base is reduced pursuant to
Section 2.05 or otherwise) or the Commitments; provided, however, that the
aggregate amount of Letter of Credit Advances (including, without limitation,
the Letter of Credit Advances cash collateralized pursuant to Section 3.04
hereof) outstanding at any time shall not exceed Twenty-Five Million and
00/100 Dollars ($25,000,000). Notwithstanding anything herein to the contrary,
the Borrower may not obtain any Advance or Letter of Credit Advance on the
last day of any calendar quarter.
(b) Advances made pursuant to this Section 2.01 shall
constitute revolving credit, subject to the provisions of Section 2.10 hereof,
and prior to the Termination Date Borrower may borrow, repay and reborrow
Revolving Credit Loans.
(c) For the purpose of this Agreement, the value of Aviation
Property shall be based on the Appraisal Report of Aviation Property by Avmark
dated November 15, 1994. Such value shall be adjusted on a semi-annual basis
on each Adjustment Date based on Avmark's most recently published values of
L-1011-50 aircraft by the same percentage change in the base values of such
L-1011-50 aircraft which have occurred since the Avmark publication of
November 15, 1994 through January, 1997. Within 120 days after the Closing
Date, the Agent will be having an appraisal of the Aviation Property by an
independent third party appraiser acceptable to the Required Banks and at the
expense of the Borrower, and the value of the Aviation Property shall be
adjusted as determined by the Agent based on the results of such appraisals.
Upon the acquisition of any aircraft or engines by the Borrower which are to
be subject to the Security Agreement and part of the Aviation Property, the
Agent may require an appraisal of such new Aviation Property by an independent
third party appraiser acceptable to the Required Banks and at the expense of
the Borrower, and the value of such new Aviation Property for the Borrowing
Base shall be based on the results of such appraisals. Additionally, if
required by the Required Banks, 90 days after each Adjustment Date the
Required Banks may request an appraisal of the Aviation Property by an
independent third party appraiser acceptable to the Required Banks and at the
expense of the Borrower and the value of the Aviation Property shall also be
adjusted based on the results of such appraisals. In the event that the
aggregate Commitments become greater than the Borrowing Base determined by the
method described in the first sentence of this clause (c) and the Required
Banks have not requested an appraisal pursuant to the immediately preceding
sentence, Borrower may, at its own expense, have the Aviation Property
physically appraised by Avmark, or any other independent third party appraiser
acceptable to the Required Banks, within the thirty (30) day period following
an Adjustment Date to establish the value of Aviation Property and the value
of the Aviation Property shall be based on the results of such appraisals. If
acceptable to the Required Banks in their sole discretion, an appraisal report
from an independent third party appraiser other than Avmark may be substituted
for the appraisal report of Avmark for purposes of this Section 2.01(c).
(d) In the event Avmark fails or ceases to publish valuation
reports, the Agent shall establish a procedure to determine the value of the
Aviation Property for purposes of Section
<PAGE>
2.01(c). Such procedure shall be acceptable to the Required Banks and based
upon a recognized independent third-party valuation source, and shall also be
established in consultation with the Borrower, but without the approval of the
Borrower.
(e) The Borrower shall have the right to terminate or reduce
the Commitments at any time and from time to time provided that (i) the
Borrower shall give three (3) Banking Days prior written notice of such
termination or reduction to the Agent specifying the amount and effective date
thereof, (ii) each partial reduction of the Commitments shall be in a minimum
amount of $5,000,000 and in an integral multiple of $1,000,000 and shall
reduce the Commitments of all of the Banks proportionately and in accordance
with the respective Commitment amounts for each Bank, (iii) no such
termination or reduction shall be permitted with respect any portion of the
Commitments as to which a request for an Advance or Letter of Credit Advance
is pending and (iv) the Commitments cannot be terminated if any Advance or
Letter of Credit Advance is then outstanding and may not be reduced below the
principal amount of the Advances and Letter of Credit Advances. The
Commitments or any portion thereof terminated or reduced may not be
reinstated.
2.02 Requests for Advance.
(a) Subject to the terms and conditions of this Agreement,
Advances shall be made available to Borrower prior to the Termination Date,
provided that the Agent receives, at the time and in accordance with the terms
of this Section 2.02, a request ("Request") specifying the amount thereof. All
Advances shall be made on a pro rata basis in accordance with each Bank's
Commitment.
(b) The Borrower shall give the Agent notice of its Request not
later than (i) 11:30 a.m. Indianapolis time (A) three Eurodollar Business Days
prior to the date such Advance is requested to be made if such Advance is to
be made as a Eurodollar Rate Advance, and (B) one day prior to the date such
Advance is requested to be made if such Advance is to be made as a Prime Rate
Advance, which notice shall specify whether a Eurodollar Rate Advance or a
Prime Rate Advance is requested and, in the case of each requested Eurodollar
Rate Advance, the Eurodollar Interest Period to be initially applicable to
such Advance. The Agent, on the same day such Request is received, shall
provide notice of such Request to each Bank.
(c) Not later than 1:00 p.m. Indianapolis time, on the date of
the Advance, each Bank shall make available the amount of its pro rata share
of each Advance to be made on such date, in immediately available funds to the
Agent at its office specified herein.
(d) The Agent will thereupon advance to Borrower the amount so
requested unless the Banks shall determine that any condition precedent
applicable to the Advance set forth in Section 4.01 or 4.02 shall not be
fulfilled as of the date of such Advance and the Agent has so notified
Borrower. All Advances will be made to Borrower by a credit to Borrower's
account with the Agent.
(e) All notices (including Requests for Advances), made by
Borrower to the Agent and received by the Agent after 11:30 a.m., Indianapolis
time, (or such other time as is specified in any section hereof) on a Banking
Day shall be deemed received on the next succeeding Banking Day.
(f) Each Prime Rate Advance shall be in an aggregate amount of
One Million and 00/100 Dollars ($1,000,000) and each Eurodollar Rate Advance
shall be in an aggregate amount of Five Million and 00/100 Dollars
($5,000,000) and, with respect to both types of Advances, Advances in excess
of such amounts shall be in integral multiples of One Million and 00/100
Dollars
<PAGE>
($1,000,000); provided, however, that in the event that the amount available
to be borrowed is less than One Million and 00/100 Dollars ($1,000,000) in the
case of Prime Rate Advances or Five Million and 00/100 Dollars ($5,000,000) in
the case of Eurodollar Rate Advances, then the Advance shall be permitted in
such lesser amount.
(g) The failure of any Bank to make its pro rata portion of any
Advance available to the Agent shall not relieve any other Bank of its
obligations to make available its pro rata portion of such Advance on the date
such Advance is requested to be made, but no Bank shall be responsible for
failure of any other Bank to make such pro rata portion available to the Agent
on the date of any such Advance.
2.03 Evidence of Credit Extensions.
(a) The Revolving Credit Loans shall be evidenced by a Note
executed by Borrower payable to the order of each Bank in the amount of each
Bank's respective Commitment as set forth on the signature pages hereof dated
the Closing Date, and providing for the payment of principal and interest in
accordance with this Agreement. Each Bank shall record Advances, principal
payments thereof and whether the Advance is a Prime Rate Advance or a
Eurodollar Rate Advance on such Bank's records, and such Bank's record thereof
shall constitute prima facie evidence of the information so recorded. Any
statement of a Bank to Borrower setting forth Borrower's account with such
Bank regarding its share of Advances and payments shall be considered true and
correct and binding on Borrower unless such Bank is notified in writing by
Borrower of any discrepancy or exception within fifteen (15) days from the
mailing by such Bank to Borrower of any such monthly statement.
Notwithstanding the foregoing, the failure to make, or an error in making, a
notation with respect to any Advance shall not limit or otherwise affect the
obligation of Borrower hereunder or under the Notes.
2.04 Interest.
(a) Notwithstanding anything herein to the contrary, the
outstanding principal amount of the Revolving Credit Loans, other than during
the continuance of an Event of Default, shall bear interest at the following
rates per annum:
(i) During such periods that any Advance is a
Prime Rate Advance, the Prime Rate plus the Margin.
(ii) During such periods that any Advance is a
Eurodollar Rate Advance, the Eurodollar Rate applicable to such
Advance for each related Eurodollar Interest Period.
(b) Borrower shall pay interest on the principal amount of the
Revolving Credit Loans on each Interest Payment Date and at maturity (whether
at stated maturity, by acceleration or otherwise).
(c) Notwithstanding the foregoing paragraph (a), Borrower shall
pay interest on demand by the Agent at the Overdue Rate on the outstanding
principal amount of any Advance and any other amount payable by the Borrower
hereunder (other than interest) at any time on or after an Event of Default,
if required in writing by the Required Banks.
2.05 Periodic Mandatory Reductions of Borrowing Base.
<PAGE>
The Borrowing Base shall automatically be reduced as follows:
(a) In the event of any Disposition of any Aviation Property,
the Borrowing Base shall be reduced by an amount equal to one hundred percent
(100%) of the appraised value, as of the most recent Adjustment Date, of such
disposed Aviation Property, and the Borrower shall prepay the Revolving Credit
Loans, or cash collateralize the Letter of Credit Advances if all of the
Revolving Credit Loans are or will be paid in full, by an amount equal to the
proceeds of such Disposition.
(b) Upon any loss or damage to any Aviation Property which
cannot or is not repaired in accordance with the terms of Section 2.09(e), the
Borrowing Base shall be reduced by an amount equal to such loss or damage, but
not in excess of the amount required under Section 2.05(a) upon Disposition of
such Aviation Property, and the Borrower shall prepay the Revolving Credit
Loans, or cash collateralize the Letter of Credit Advances if all of the
Revolving Credit Loans are or will be paid in full, by an amount equal to the
greater of the insurance proceeds of such loss or damage or the value of such
Aviation Property.
2.06 Fees.
(a) Borrower shall pay to the Agent and First Chicago Capital
Markets, Inc. (the "Arranger") for the benefit of the Agent and the Arranger
fees in amounts and at such times and for such periods as agreed to between
the Agent, the Arranger and Borrower.
(b) The Borrower shall pay to the Agent for the benefit of each
Bank, a non-use fee equal to the Margin of the difference between each Bank's
daily average Commitment during each fiscal quarter of the Borrower and such
Bank's share of the daily average outstanding Advances during such fiscal
quarter of the Borrower. Such fee shall be in addition to all other charges
and shall be paid on the fifteenth (15th) Banking Day following the end of
each fiscal quarter of Borrower. For purposes of calculating the non-use fee,
outstanding Letters of Credit shall not be deemed to be included in any Bank's
share of outstanding Advances.
(c) On or before the date of issuance of any Letter of Credit,
Borrower agrees (i) to pay to the Agent for the benefit of the Banks a fee
computed at the Margin of the maximum amount available to be drawn from time
to time under such Letter of Credit for the period from and including the date
of issuance of such Letter of Credit to and including the stated expiry date
of such Letter of Credit and (ii) to pay the Agent for its own account a fee
computed at the rate of one-eighth percent (1/8%) per annum of the maximum
amount available to be drawn from time to time under such Letter of Credit for
the period from and including the date of issuance of such Letter of Credit to
and including the stated expiry date of such Letter of Credit; provided,
however, that with respect to any Letter of Credit the face value of which
exceeds $250,000, such fee shall be payable initially, on or before the date
of issuance of such Letter of Credit for the period commencing with such date
of issuance through and including the last Banking Day of the first calendar
quarter occurring after the issuance thereof and thereafter, such fee shall be
payable on the last Banking day of each March, June, September and December
during the term of such Letter of Credit. Such fees are nonrefundable and
Borrower shall not be entitled to any rebate of any portion thereof if such
Letter of Credit does not remain outstanding through its stated expiry date or
for any other reason. The Borrower further agrees to pay to the Agent for its
own account, on demand, such other customary administrative fees, charges and
expenses of the Agent in respect of the issuance, negotiation, acceptance,
amendment, transfer and payment of such Letter of Credit or otherwise payable
pursuant to the application and related documentation under which such Letter
of Credit is issued.
<PAGE>
2.07 Computations of Interest and Fees.
All computations of interest and fees under this Agreement
shall be made on the basis of a year of three hundred sixty (360) days and
calculated for the actual days elapsed. Interest shall accrue on any principal
balance outstanding from and including the date of an Advance to but excluding
the date on which such principal balance is repaid.
2.08 Method of Payment.
(a) Each payment of principal, interest and other sums due
under this Agreement shall be made to the Banks without set-off or
counterclaim in immediately available funds on a Banking Day not later than
11:30 a.m., Indianapolis time. All sum received after such time shall be
deemed received on the next Banking Day. Any payment due on a day that is not
a Banking Day shall be made on the next Banking Day.
(b) Borrower agrees that the Agent may debit any account of
Borrower maintained at the Agent for payments due under this Agreement and the
Agent may credit the any such account with the amount of any Advance.
2.09 Principal Payments and Prepayments.
(a) Unless earlier payment is required under this Agreement the
Borrower shall pay to the Banks on the Termination Date the entire outstanding
amount of the Revolving Credit Loans.
(b) Borrower may prepay all or any portion of the Revolving
Credit Loans provided that Borrower provides the Banks with one Banking Day
prior notice thereof and, further provided, that (i) Borrower may not prepay
any portion of any Revolving Credit Loan as to which an election for a
continuation of or a conversion to a Eurodollar Rate Advance is pending
pursuant to Section 2.13, and (ii) unless earlier payment is required under
this Agreement, any Eurodollar Rate Advance may only be prepaid on the last
day of the then current Eurodollar Interest Period with respect to such
Eurodollar Rate Advance.
(c) Any prepayment shall be in the amount of One Million and
00/100 Dollars ($1,000,000), any integral multiples thereof or the outstanding
balance if less than One Million and 00/100 Dollars.
(d) Borrower shall immediately prepay, without notice or
demand, any portion of the outstanding principal balance of the Revolving
Credit Loans, or cash collateralize Letter of Credit Advances if all of the
Revolving Credit Loans are or will be paid in full, by an amount which equals
the amount by which: (i) the sum of the aggregate outstanding principal
balance of the Revolving Credit Loans and the Letter of Credit Advances
exceeds (ii) the lesser of (A) the aggregate amount of the Commitments or (B)
the Borrowing Base.
(e) If no Event of Default or Default has occurred and is
continuing and if the loss or damage to any Aviation Property is not total or
constructively total and can be repaired within two months from the date of
loss or damage with the proceeds of any casualty insurance policy applicable
to such Aviation Property, then any insurance proceeds recovered by the
Borrower on account of any loss or
<PAGE>
damage to any Aviation Property may be applied by the Borrower solely to the
payment of the cost of any repairs to the Aviation Property, as further
described in the Security Agreement. If the foregoing conditions to repair any
loss or damage to any Aviation Property cannot be satisfied or if any Event of
Default or Default has occurred and is continuing, then upon the payment by
any insurer of any casualty insurance policy applicable to the Aviation
Property of proceeds under any such policy with respect to any Aviation
Property, Borrower shall immediately prepay the Revolving Credit Loans by the
amount of any such proceeds up to an amount equal to one hundred percent
(100%) of the appraised value, as of the most recent Adjustment Date, of the
Aviation Property to which the proceeds relate, for any such proceeds paid
with respect to each L-1011 Aircraft and other Aviation Property, and if such
proceeds exceed the Revolving Credit Loans, the Borrower shall provide cash
collateral for any outstanding Letter of Credit in the amount of such excess.
2.10 Reborrowing of Prepaid Principal.
(a) Subject to the terms and conditions hereof, Borrower may
reborrow any portion of the prepaid principal as an Advance provided the sum
of all amounts so reborrowed plus the outstanding principal balance of the
Revolving Credit Loans and of the Letter of Credit Advances does not exceed
the lesser of the Commitments or the Borrowing Base.
2.11 Letters of Credit.
(a) Borrower may, from time to time hereafter request the Agent
to issue Letter(s) of Credit in an aggregate principal amount not to exceed
Twenty Five Million and 00/100 Dollars ($25,000,000.00). The Borrower shall
give the Agent notice of its request for a Letter of Credit Advance in writing
not later than 11:30 a.m. Indianapolis time three (3) Banking Days prior to
the date any Letter of Credit Advance is requested to be made and provide such
information as may be necessary for the issuance thereof by the Agent. The
Agent, not later than the Banking Day next succeeding the day such notice is
given, shall provide notice to each Bank of such requested Letter of Credit
Advance and the amount of risk participation therein by such Bank. Subject to
the terms and conditions of this Agreement, the Agent shall, on the date any
Letter of Credit Advance is requested to be made, issue the related Letter of
Credit on behalf of the Banks for the account of the Borrower. Notwithstanding
anything herein to the contrary, the Agent may decline to issue any requested
Letter of Credit on the basis that the beneficiary, the purpose of issuance or
the terms of the conditions of drawing are unacceptable to it in its
reasonable discretion. Upon such issuance by the Agent, each Bank shall
automatically acquire a pro rata risk participation interest in such Letter of
Credit Advance based on its respective Commitment. If the Agent shall honor a
draft or other demand for payment presented or made under any Letter of
Credit, the Agent shall provide notice thereof to each Bank on the date such
draft or demand is honored unless Borrower shall have satisfied its
reimbursement obligation under Section 2.12 by payment to the Agent on such
date. Each Bank, on such date, shall make its pro rata share of the amount
paid by the Agent available in immediately available funds at the principal
office of the Agent for the account of the Agent. If and to the extent such
Bank shall not have made such pro rata portion available to the Agent, such
Bank and Borrower severally agree to pay to the Agent forthwith on demand such
amount together with interest thereon, for each day from the date such amount
was paid by the Agent until such amount is so made available to the Agent at a
per annum rate equal to the interest rate applicable during such period to the
related Advance disbursed under Section 2.12 in respect of the reimbursement
obligation of Borrower. If such Bank shall pay such amount to the Agent
together with such interest, such amount so paid shall constitute a Prime Rate
Advance by such Bank in respect of the reimbursement obligation of the
Borrower under Section 2.12 for purposes of this Agreement. The failure of any
Bank to make its pro rata portion of any such amount paid by the Agent
available to the
<PAGE>
Agent shall not relieve any other Bank of its obligation to make available its
pro rata portion of such amount, but no Bank shall be responsible for failure
of any other Bank to make such pro rata portion available to the Agent.
2.12 Letter of Credit Reimbursement Payments.
(a) Borrower agrees to pay to the Agent, on the day on which
the Agent shall honor a draft or other demand for payment presented or made
under any Letter of Credit, an amount equal to the amount paid by the Agent in
respect of such draft or other demand under such Letter of Credit and all
expenses paid or incurred by the Agent relative thereto. Unless Borrower shall
have made such payment to the Agent on such day, upon each such payment by the
Agent, the Agent shall be deemed to have disbursed to Borrower, and Borrower
shall be deemed to have elected to satisfy its reimbursement obligation by a
Prime Rate Advance for the account of the Agent in an amount equal to the
amount so paid by the Agent in respect of such draft or other demand under
such Letter of Credit. Such Advance shall be disbursed notwithstanding any
failure to satisfy any conditions for disbursement of any Advance set forth in
Article IV hereof and, to the extent of the Advance so disbursed, the
reimbursement obligation of Borrower under this Section 2.12 shall be deemed
satisfied.
(b) The reimbursement obligation of Borrower under this Section
2.12 shall be absolute, unconditional and irrevocable and shall remain in full
force and effect until all obligations of Borrower to the Banks and the Agent
hereunder shall have been satisfied, and such obligations of Borrower shall
not be affected, modified or impaired upon the happening of any event,
including without limitation, any of the following, whether or not with notice
to, or the consent of, Borrower:
(i) Any lack of validity or enforceability of any Letter
of Credit or any documentation relating to any Letter of Credit or
to any transaction related in any way to such Letter of Credit (the
"Letter of Credit Documents");
(ii) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any
interest in collateral or security, with respect to any of the
Letter of Credit Documents:
(iii) The existence of any claim, setoff, defense or other
right which Borrower may have at any time against any beneficiary or
any transferee of any Letter of Credit (or any persons or entities
for whom any such beneficiary or any such transferee may be acting),
the Agent or any Bank or any other person or entity, whether in
connection with any of the Letter of Credit Documents, the
transactions contemplated herein or therein or any unrelated
transactions;
(iv) Any draft or other statement or document presented
under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect by reason of any statement therein
being untrue or inaccurate in any respect;
(v) Payment by the Agent to the beneficiary under any
Letter of Credit against presentation of any documents which do not
comply with the terms of the Letter of Credit, including failure of
any documents to bear any reference or adequate reference to such
Letter of Credit;
<PAGE>
(vi) Any failure, omission, delay or lack on the part of
the Agent or any party to any of the Letter of Credit Documents to
enforce, assert or exercise any right, power or remedy conferred
upon the Agent, any Bank or any such party under this Agreement or
any of the Letter of Credit Documents, or any other acts or
omissions on the part of the Agent or any such party;
(vii) Any other event or circumstance that would, in the
absence of this clause, result in the release or discharge by
operation of law or otherwise of Borrower from the performance or
observance of any obligation, covenant or agreement contained in
this Section 2.12.
(c) No setoff, counterclaim, reduction or diminution of any
obligation or any defense of any kind or nature which Borrower has or may have
against the beneficiary of any Letter of Credit shall be available hereunder
to Borrower against the Agent or any Bank.
2.13 Subsequent Elections as to Advances. The Borrower may elect (a)
to continue a Eurodollar Rate Advance as a Eurodollar Rate Advance or (b) may
elect to convert a Eurodollar Rate Advance, or a portion thereof, to a Prime
Rate Advance or (c) elect to convert a Prime Rate Advance, or a portion
thereof, to a Eurodollar Rate Advance, in each case by giving notice thereof
to the Agent not later than 11:30 a.m. Indianapolis time three Eurodollar
Business Days prior to the date any such continuation of or conversion to a
Eurodollar Rate Advance is to be effective and not later than 11:30 a.m.
Indianapolis time on the day prior to the day such continuation of or
conversion to a Prime Rate Advance is to be effective, provided that an
outstanding Eurodollar Rate Advance may only be converted on the last day of
the then current Eurodollar Interest Period with respect to such Advance, and
provided, further, if a continuation of an Advance as, or a conversion of an
Advance to, a Eurodollar Rate Advance is requested, such notice shall also
specify the Eurodollar Interest Period to be applicable thereto upon such
continuation or conversion. The Agent, on the same day such notice is given,
shall provide notice of such election to the Banks. If the Borrower shall not
timely deliver such a notice with respect to any outstanding Eurodollar Rate
Advance, the Borrower shall be deemed to have elected to convert such
Eurodollar Rate Advance to a Prime Rate Advance on the last day of the then
current Eurodollar Interest Period with respect to such Advance.
2.14 Limitations of Requests and Elections. (a) Notwithstanding any
other provision of this Agreement to the contrary, if, upon receiving a
request for a Eurodollar Rate Advance pursuant to Section 2.02 or a request
for a continuation of a Eurodollar Rate Advance as a Eurodollar Rate Advance,
or a request for a conversion of a Prime Rate Advance to a Eurodollar Rate
Advance pursuant to Section 2.13, (i) deposits in Dollars for periods
comparable to the Eurodollar Interest Period elected by the Borrower are not
available to any Bank in the relevant interbank or secondary market, or (ii)
will not adequately and fairly reflect the cost to any Bank of making, funding
or maintaining the Eurodollar Rate Advance or (iii) by reason of national or
international financial, political or economic conditions or by reason of any
applicable law, treaty, rule or regulation (whether domestic or foreign) now
or hereafter in effect, or the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Bank with any guideline, request or directive of
such authority (whether or not having the force of law), including without
limitation exchange controls, it is impracticable, unlawful or impossible for
any Bank (A) to make or fund the relevant Eurodollar Rate Loan or (B) to
continue such Eurodollar Rate Advance as a Eurodollar Rate Advance, or (C) to
convert an Advance to such a Eurodollar Rate Advance, then the Borrower shall
not be entitled, so long as such circumstances continue, to request a
Eurodollar Rate Advance to Section 2.02 or a continuation of or conversion to
a Eurodollar Rate Advance pursuant to Section 2.13. In the
<PAGE>
event that such circumstances no longer exist, the Banks shall again consider
requests for Eurodollar Rate Advances pursuant to Section 2.02, and requests
for continuations of and conversions to Eurodollar Rate Advances pursuant to
Section 2.13.
(b) Not more than seven Eurodollar Rate Advances may be
outstanding at any one time.
2.15 Additional Costs. (a) In the event that any applicable law,
treaty or other international agreements, rule or regulation (whether domestic
or foreign) now or hereafter in effect and whether or not presently applicable
to any Bank or the Agent, or any interpretation or administration thereof by
any governmental authority charged with the interpretation or administration
thereof, or compliance by any Bank or the Agent with any guideline, request or
directive of any such authority (whether or not having the force of law),
shall (i) affect the basis of taxation of payments to any Bank or the Agent of
any amounts payable by the Borrower under this Agreement (other than taxes
imposed on the overall net income of the Bank or the Agent, by the
jurisdiction, or by any political subdivision or taxing authority of any such
jurisdiction, in which any Bank or the Agent, as the case may be, has its
principal office), or (ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by any Bank or the Agent, or
(iii) shall impose any other condition with respect to this Agreement, or any
of the Commitments, the Notes or the Advances, and the result of any of the
foregoing is to increase the cost to any Bank or the Agent, as the case may
be, of making, funding or maintaining any Eurodollar Rate Advance or to reduce
the amount of any sum receivable by any Bank or the Agent, as the case may be,
thereon, then the Borrower shall pay to such Bank or the Agent, as the case
may be, from time to time, upon request by such Bank (with a copy of such
request to be provided to the Agent) or the Agent, additional amounts
sufficient to compensate such Bank or the Agent, as the case may be, for such
increased cost or reduced sum receivable to the extent, in the case of any
Eurodollar Rate Advance, such Bank or the Agent is not compensated therefor in
the computation of the interest rate applicable to such Eurodollar Rate
Advance. A statement as to the amount of such increased cost or reduced sum
receivable, prepared in good faith and in reasonable detail by such Bank or
the Agent, as the case may be, and submitted by such Bank or the Agent, as the
case may be, to the Borrower, shall be conclusive and binding for all purposes
absent manifest error in computation.
(b) In the event that any applicable law, treaty or other
international agreement, rule or regulation (whether domestic or foreign) now
or hereafter in effect and whether or not presently applicable to any Bank or
the Agent, or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by any Bank or the Agent with any guideline, request or directive
of any such authority (whether or not having the force of law), including any
risk-based capital guidelines, affects or would affect the amount of capital
required or expected to be maintained by such Bank or the Agent (or any
corporation controlling such Bank or the Agent) and such Bank or the Agent, as
the case may be, determines that the amount of such capital is increased by or
based upon the existence of such Bank's or Agent's Loans or obligations
hereunder and such increase has the effect of reducing the rate of return on
such Bank's or Agent's (or such controlling corporation's) capital as a
consequence of such obligations hereunder to a level below that which such
Bank or Agent (or such controlling corporation) could have achieved but for
such circumstances (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Bank or Agent to be material,
then the Borrower shall pay to such Bank or Agent, as the case may be, from
time to time, upon request by such Bank (with a copy of such request to be
provided to Agent) or Agent, additional amounts sufficient to compensate such
Bank or Agent (or such controlling corporation) for any increase in the amount
of capital and reduced rate of return which such Bank or Agent reasonably
determines to be allocable to the existence of such Bank's or Agent's
obligations
<PAGE>
hereunder. A statement as to the amount of such compensation, prepared in good
faith and in reasonable detail by such Bank or Agent, as the case may be, and
submitted by such Bank or Agent to the Borrower, shall be conclusive and
binding for all purposes absent manifest error in computation.
2.16 Illegality and Impossibility. In the event that any applicable
law, treaty or other international agreement, rule or regulation (whether
domestic or foreign) now or hereafter in effect and whether or not presently
applicable to any Bank, or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Bank with any guideline, request or directive of
such authority (whether or not having the force of law), including without
limitation exchange controls, shall make it unlawful or impossible for any
Bank to maintain any Eurodollar Rate Advance under this Agreement, the
Borrower shall upon receipt of notice thereof from such Bank, repay in full
the then outstanding principal amount of each Eurodollar Rate Advance so
affected, together with all accrued interest thereon to the date of payment
and all amounts owing to such Bank under Section 2.17, (a) on the last day of
the then current Eurodollar Interest Period applicable to such Eurodollar Rate
Advance if such Bank may lawfully continue to maintain such Eurodollar Rate
Advance to such day, or (b) immediately if such Bank may not continue to
maintain such Eurodollar Rate Advance to such day.
2.17 Indemnification. If the Borrower makes any payment of principal
with respect to any Eurodollar Rate Advance on any other date than the last
day of an Eurodollar Interest Period applicable thereto (whether pursuant to
Sections 2.05(b), Section 2.16, Article VIII or otherwise), or if the Borrower
fails to borrow any Eurodollar Rate Advance after notice has been given to the
Banks in accordance with Section 2.02, or if the Borrower fails to make any
payment of principal or interest in respect of a Eurodollar Rate Advance when
due, the Borrower shall reimburse each Bank on demand for any resulting loss
or expense incurred by each such Bank, including without limitation any loss
incurred in obtaining, liquidating or employing deposits from third parties,
whether or not such Bank shall have funded or committed to fund such
Eurodollar Rate Advance. A statement as to the amount of such loss or expense,
prepared in good faith and in reasonable detail by such Bank and submitted by
such Bank to the Borrower, shall be conclusive and binding for all purposes
absent manifest error in computation. Calculation of all amounts payable to
such Bank under this Section 2.17 shall be made as though such Bank shall have
actually funded or committed to fund the relevant Eurodollar Rate Advance
through the purchase of an underlying deposit in an amount equal to the amount
of such Eurodollar Rate Advance in the relevant market and having a maturity
comparable to the related Eurodollar Interest Period and, through the transfer
of such deposit to a domestic office of such Bank in the United States;
provided, however, that such Bank may fund any Eurodollar Rate Advance in any
manner it sees fit and the foregoing assumption shall be utilized only for the
purpose of calculation of amounts payable under this Section 2.17.
2.18 Extension of Termination Date. The Termination Date and the
obligation, pursuant to Section 2.09(a) to make mandatory repayment of the
outstanding principal amount of the Loans on the Termination Date shall be
subject to an annual extension, as set forth in this Section 2.18.
(a) Request for Extension of Termination Date. Notwithstanding
anything contained in this Agreement to the contrary, not later than December
1, 2000 and each December 1 thereafter, the Borrower may, by delivery of a
duly completed Extension Request to the Agent in the form of Exhibit B hereto,
irrevocably request that each Bank extend, for a single one year period, the
Termination Date relating to such Bank's Commitment.
<PAGE>
(b) Consent to Extension of Termination Date. (i) The Agent
shall, promptly, but not later than 5 days after receipt of any such Extension
Request, pursuant to subsection (a) above, notify each Bank by providing them
a copy of the Extension Request.
(ii) Each Bank shall, within 30 days of receipt of
the Extension Request, notify the Agent whether it consents to the
request of the Borrower set forth in such Extension Request, such
consent to be in the sole discretion of such Bank. Each Bank hereby
acknowledges and agrees that its consent to the Borrower' request to
extend the Termination Date shall also be deemed to be a consent by
such Bank to an extension of its obligations to participate,
pursuant to Section 2.01, in the Letter of Credit Advances. If any
Bank does not so notify the Agent of its decision within such 30 day
period, such Bank shall be deemed not to have consented to such
requests of the Borrower.
(iii) The Agent shall promptly notify the
Borrower whether the Banks have consented to such request. If the
Agent does not so notify the Borrower by April 1, 1998, and each
April 1 thereafter, the Agent shall be deemed to have notified the
Borrower that the Banks have not consented to the Borrower' request.
(iv) Each Bank that elects not to extend the
Termination Date or fails to so notify the Agent of such consent (a
"Non-Consenting Bank") hereby agrees that if any other Bank or
financial institution acceptable to the Borrower and the Agent
offers to purchase such Non-Consenting Bank's Commitment for a
purchase price equal to the sum of all amounts then owing with
respect to the Loans and all other amounts accrued for the account
of such Non-Consenting Bank, such Non-Consenting Bank will promptly
assign, sell and transfer all of its right, title, interest and
obligations with respect to the foregoing to such other Bank or
financial institution pursuant to and on the terms specified in the
form of Assignment and Acceptance attached hereto as Exhibit C.
(v) The pro rata share of the remaining Banks
which have consented to an extension of their Commitment hereunder
shall be adjusted accordingly by the Agent, based on such Banks' pro
rata share of the remaining Commitments as it may be adjusted
pursuant to clause 2.18 (b)(iv) above or otherwise.
(vi) In the event that the Advances of any
Non-Consenting Bank are not purchased pursuant to clause (iv) above,
then all of the Banks shall be deemed not to have consented to the
Borrower request and on the Termination Date the outstanding
Advances shall be due and payable.
2.19 Substitution of Bank. If (a) the obligation of any Bank to make
Eurodollar Rate Advances has been suspended pursuant to Section 2.16 when all
Banks have not suspended such obligation or (b) any Bank has demanded
compensation under Section 2.15 when all Banks have not demanded such
compensation, the Borrowers shall have the right to seek a satisfactory
substitute bank (which may be one or more of the other Banks) to purchase the
Note(s) and assume the Commitment(s), if any, of such Bank, with the consent
of the Agent, provided that all amounts owing to such Bank have been paid in
full and such substitution shall be made pursuant to an Assignment and
Acceptance in the form attached hereto as Exhibit C.
<PAGE>
ARTICLE III.
SECURITY INTEREST
3.01 Security for Borrowing. (a) As security for the Obligations,
Borrower shall execute and deliver to the Banks and the Agent the Security
Agreement and Chattel Mortgage dated the Closing Date and in form and
substance acceptable to the Agent, as amended or modified from time to time
and together with any other security agreement or other agreement executed in
replacement therefor, granting a first priority, enforceable and perfected
lien and security interest in the Aviation Property and all other assets
described in such Security Agreement and Chattel Mortgage. The Borrower may
also execute and deliver to the Banks and Agent such other Security Agreements
and other agreements and documents, each in form and substance acceptable to
the Agent, granting liens and security interests on other assets of the
Borrower at any time.
(b) In addition, the Borrower agrees to execute and deliver
such amendments, modifications and/or additional Security Agreements and other
documents and agreements as the Agent may request in order to reaffirm and/or
perfect the security interests intended to be granted by Borrower pursuant to
such Security Agreements and other documents and agreements, or otherwise to
grant a lien and security interest in additional collateral granted pursuant
to this Agreement.
3.02 Release upon Prepayment. Upon prepayment of the Revolving
Credit Loans in accordance with Section 2.05 from any sale or other transfer
of any Aviation Property, the security interest in such Aviation Property
shall be released and the Borrowing Base shall be reduced, in addition to
other required reductions hereunder, by the amount of such proceeds.
3.03 Guaranty of Amtran and Affiliates. Amtran and all of its
Subsidiaries will unconditionally guarantee all of the Obligations, and
execute the Guaranty. Any future Subsidiaries of Amtran or the Borrower shall
also unconditionally guarantee all the Obligations, and Amtran and the
Borrower shall cause any such Subsidiary formed or acquired after the date of
this Agreement to execute a Guaranty and deliver such other documents and
opinions requested by the Agent in connection therewith.
3.04 Cash Collateral. The Borrower may (and shall if required under
Article VIII and also shall on the Termination Date) provide the Agent with
cash collateral (the "Cash Collateral") in a deposit or an investment in
United States government securities with the Agent which is acceptable to the
Agent and which is in the name of the Borrower but under the sole and
exclusive dominion and control of the Agent and with respect to which the
Borrower has no authority to withdraw from, to draw upon, or otherwise
exercise any authority of any kind, to cover the contingent reimbursement and
other obligations of the Borrower pursuant to any Letter of Credit. The
Borrower hereby grants a security interest in the Cash Collateral to the
Agent, for the benefit of itself and the Banks, to secure the same obligations
as secured by the Security Agreement. If there is any draw, or other liability
of the Agent or any Bank under any Letter of Credit, the Agent shall apply the
Cash Collateral in reimbursement of any such draw or other liability. The
Borrower agrees to execute all agreements, documents and instruments requested
by the Agent to further evidence the security interest granted in the Cash
Collateral pursuant to this Section 3.04.
<PAGE>
ARTICLE IV.
CONDITIONS PRECEDENT
4.01 Conditions Precedent to Closing. In addition to the
requirements set forth in Section 4.02, the obligation of the Banks to make
the initial Revolving Credit Loans and of the Agent to issue the first Letter
of Credit is subject to the condition precedent that the following shall have
been delivered to the Agent in form and substance satisfactory to the Agent
and its counsel:
(a) Borrower's Incorporation Papers. A copy of the certificate
of incorporation and by-laws, including all amendments thereto, of Borrower,
certified by the Secretary or an Assistant Secretary as being in full force
and effect on the Closing Date.
(b) Borrower's Corporate Resolutions. Copies of resolutions
passed by the Board of Directors of Borrower, certified by the Secretary or an
Assistant Secretary of Borrower as being in full force and effect on the
Closing Date, authorizing the borrowings provided for herein and the
execution, delivery and performance of this Agreement, the Notes, and any
other Loan Document, instrument or agreement required of Borrower hereunder.
(c) Incumbency Certificates. Certificates, signed by the
Secretary or an Assistant Secretary of Borrower, dated the Closing Date, as to
the incumbency, and containing the specimen signatures, of the Persons
authorized to execute and deliver this Agreement, the Notes, and any other
instrument or agreement required hereunder.
(d) Loan Documents. This Agreement, the Security Agreement and
the Notes, payable to the order of the Banks in the aggregate amount of the
Commitments each dated the Closing Date, the Security Agreement and the
Guaranty, each executed in connection with the Prior Credit Agreement, and any
modifications to Security Agreement and the Financing Statements and duly
executed by Borrower as required by the Agent.
(e) Certificates of Good Standing/Existence. Existence and/or
good standing certificates for Borrower in the state of its incorporation,
duly certified by the Secretary of State or other appropriate official of each
state as of a maximum of five (5) days before the Closing Date.
(f) Other Documents. Such other documents or evidence as the
Agent may reasonably request to consummate the transactions contemplated
hereby and by the other Loan Documents, the taking of all necessary actions in
any proceedings in connection herewith or therewith and compliance with the
conditions set forth in this Agreement or any other Loan Document.
(g) Opinion of Counsel. An opinion of counsel for Borrower
(which may be in-house counsel), in form and substance satisfactory to the
Agent.
(h) Opinion of Special Counsel. An opinion of special counsel
on the enforceability, perfection and priority of the security interests of
the Banks in the Aviation Property and a review by such special counsel of the
Loan Documents.
(i) Guarantors' Incorporation Papers. A copy of the certificate
of incorporation and by-laws, including all amendments thereto, of each
Guarantor (or certifying as to the certificate of incorporation and by-laws
previously delivered, certified by a Secretary or an Assistant Secretary as
being in full force and effect on the Closing Date.
<PAGE>
(j) Guarantors' Corporate Resolutions. Copies of resolutions
passed by the Board of Directors of each Guarantor, certified by a Secretary
or an Assistant Secretary of each Guarantor as being in full force and effect
on the Closing Date, authorizing the execution, delivery and performance of
the Guaranty and any other Loan Document, instrument or agreement required of
any Guarantor hereunder.
(k) Incumbency Certificates. Certificates, signed by a
Secretary or an Assistant Secretary of each Guarantor, dated the Closing Date,
as to the incumbency, and containing the specimen signatures, of the Persons
authorized to execute and deliver the Guaranty and any other instrument or
agreement required hereunder.
(l) Certificates of Good Standing/Existence. Existence and/or
good standing certificates for each Guarantor in the state of its
incorporation, duly certified by the Secretary of State or other appropriate
official of each such state.
(m) Senior Unsecured Notes. Evidence satisfactory to the Agent
that the Borrower has received proceeds from the issuance of the Senior
Unsecured Notes in an amount equal to or greater than $ , in
accordance with the Senior Unsecured Debt Documents, all Senior Unsecured Debt
Documents shall have been delivered to the Agent and shall be in form and
substance satisfactory to the Agent and all transactions contemplated pursuant
to the Senior Unsecured Debt Documents shall have been completed.
(n) Payment of Indebtedness. The Agent shall have received such
payoff letters and assignments from lenders that were parties to the Prior
Credit Agreement but which are not parties to this Agreement, and evidence
satisfactory to the Agent that all indebtedness, obligations and liabilities
owing pursuant to the Prior Credit Agreement or described on Schedule 4.01(n)
are being paid in full on the Closing Date.
(m) Other Documents. Such other documents and agreements as the
Agent shall reasonably request.
4.02 Conditions Precedent to Each Borrowing. The obligation of the
Banks to make any Advance hereunder and the obligation of the Agent to issue
any Letter of Credit hereunder are subject to the following conditions
precedent:
(a) The representations and warranties contained in Article V
hereof and in the Security Agreement and the Guaranty shall be true and
correct on and as of the date of such Advance or Letter of Credit Advance, as
the case may be, is made (both before and after such Advance or Letter of
Credit Advance is made) as if such representations and warranties were made on
and as of such date.
(b) No Default or Event of Default shall exist or shall have
occurred and be continuing on the date such Advance or Letter of Credit
Advance is made (whether before or after such Advance or Letter of Credit
Advance is made).
(c) In the case of any Letter of Credit Advance, Borrower shall
deliver to the Agent an application for the related Letter of Credit and other
related documentation requested by and acceptable to the Agent appropriately
completed and duly executed on behalf of Borrower.
<PAGE>
(d) All fees, expenses and other amounts due and payable to or
for the benefit of the Banks and the Agent under this Agreement or any other
Loan Document shall have been paid.
The Borrower shall be deemed to have made a representation and warranty to the
Agent and the Banks at the time of the making of, and the continuation and
conversion of, each Advance and Letter of Credit Advance to the effects set
forth in clauses (a) and (b) of this Section 4.02, and the Borrower shall
deliver such notices and other certificates, documents and opinions in
connection with any request for an Advance or Letter of Credit Advance as
required by the Agent.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Banks on the date hereof and
shall be deemed to have made such representations and warranties to the Banks
on the date of any Advance or Letter of Credit Advance hereunder that:
5.01 Corporate Existence. Each of Amtran and Borrower is a
corporation duly organized and existing under the laws of the state of its
incorporation, and is duly qualified as a foreign corporation and is properly
licensed and in good standing in each jurisdiction where the failure to
qualify or be licensed would have a material adverse effect on its business,
properties or conditions (financial or otherwise).
5.02 Affiliates' Existence. Schedule 5.02 attached hereto contains a
list of all of Amtran's Affiliates as of the Closing Date, showing, as to
each, its jurisdiction of incorporation and principal place of business.
Borrower will notify the Agent of each Person which becomes an Affiliate after
the Closing Date within 45 days of the date such Person becomes an Affiliate.
Each such Affiliate, other than Borrower, together with Amtran, are all of the
Affiliates of Borrower. All of the outstanding shares of stock of each of the
Affiliates have been validly issued, are fully paid and non-assessable and
except for directors' qualifying shares are owned by Amtran or another
Affiliate of Amtran free and clear of all Liens. Each Affiliate is duly
organized and existing under the laws of the jurisdiction of its
incorporation, and is properly licensed and in good standing in each
jurisdiction in which the failure to quality or be licensed would have a
material adverse effect on the business, properties or financial condition of
Amtran or of such Affiliate. Amber Holdings, Inc. does not own, or have any
rights with respect to, any assets.
5.03 Corporate Powers. The execution, delivery and performance of
this Agreement, the Notes and the Security Agreement and any instrument or
agreement required to be delivered by Borrower hereunder are within Borrower's
corporate power have been duly authorized by all requisite corporate action,
and are not in conflict with the terms of any charter, by-law or other
organization papers of Borrower, or any instrument or agreement to which
Borrower is a party or by which Borrower is bound or affected.
5.04 Power of Officers. The officers of Borrower executing this
Agreement, the Notes, the Security Agreement, and any certificate, instrument
or agreement required to be delivered by Borrower hereunder or thereunder have
been duly elected or appointed and were fully authorized to execute the same
at the time such agreement, certificate or instrument was executed.
<PAGE>
5.05 Government and Other Approvals. No approval, consent, exemption
or other action by, or notice to or filing with, any governmental authority is
necessary in connection with the execution, delivery or performance of the
Loan Documents.
5.06 Compliance with Laws: Environmental Matters. There is no law,
rule or regulation, nor is there any judgement, decree or order of any court
of governmental authority binding on Borrower which would be contravened by
the execution, delivery or performance of the Loan Documents. Borrower is in
compliance with all laws and regulations, including all requirements of
applicable federal, state and local aviation, environmental, health and safety
statutes and regulations and is not the subject of any federal, state or local
investigation evaluating whether any remedial action is needed to respond to a
release on any Hazardous Material and to the best of Borrower's knowledge,
neither the Borrower nor any other Person, has ever caused or permitted any
Hazardous Material to be disposed of on or under any property of Borrower and
no such property has been used as a dump or disposal site for any Hazardous
Material.
5.07 Enforceability of Agreement. This Agreement is the legal, valid
and binding agreement of Borrower, and the Notes when executed and delivered
will be, the legal, valid and binding agreements of Borrower, enforceable
against Borrower in accordance with their respective terms, and the Security
Agreement and any other exhibit, instrument or agreement required hereunder,
when executed and delivered, will be similarly legal, valid, binding and
enforceable in accordance with its terms.
5.08 Title to and Condition of Property. The Borrower has good and
marketable title to its properties and assets free and clear of Liens except
for Permitted Liens. The execution, delivery and performance of this
Agreement, the Notes or any other instrument or agreement required to be
delivered by Borrower hereunder will not result in the creation of any Lien
except as provided for herein. All of the facilities and properties of
Borrower are in good operating condition and repair except for facilities and
properties (i) which are obsolete or otherwise not required for the conduct of
its business, or (ii) which are being repaired in the ordinary course
business.
5.09 Litigation. There are no suits, proceedings, claims or disputes
pending or, to the actual knowledge of Borrower, threatened against or
affecting Amtran or any of its Affiliates or their properties which is
material in nature, including but not limited to litigation claiming damages
in excess of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00), the
adverse determination of which individually or in the aggregate might
materially adversely affect the business, properties or condition (financial
or otherwise) of Borrower or impair Borrower's ability to perform its
obligations hereunder, under any other Loan Document or under any instrument
or agreement required hereby, except as otherwise disclosed on Schedule 5.09
attached hereto.
5.10 Events of Default, Etc. No Default or Event of Default has
occurred and is continuing or would result from the execution or performance
of any Loan Document or the incurring of the Obligations by Borrower. Borrower
is not in default under (i) any charter instrument or by-law, or under any
loan agreement, indenture or other agreement or instrument with respect to any
Indebtedness of the Borrower or any Guarantor, including without limitation
the Senior Unsecured Debt Documents, or (ii) any other material agreement or
instrument to which it is a party or by which it or its properties are bound,
and the making of any Revolving Credit Loan or Letter of Credit Advance will
not cause any such default. No "Event of Default" as defined in the Senior
Unsecured Debt Documents or other default under the Senior Unsecured Debt
Documents or any other event or circumstance which, with notice or lapse of
time or both, could become such an "Event of Default" under the Senior
Unsecured Debt Documents or other event which could entitle the holders of the
Senior Unsecured Notes to cause the
<PAGE>
Senior Unsecured Notes to be accelerated or prepaid or defeased has occurred
and is continuing or will result from the making of any Advance or Letter of
Credit Advance or the granting of any lien or security interest by the
Borrower or any of the Guarantors pursuant to any Security Agreement. Without
limiting the foregoing, each Advance and Letter of Credit Advance is made in
full compliance with all of the terms and provisions of the Senior Unsecured
Debt Documents, including without limitation the requirement that the book
value of the assets of Amtran not subject to any Lien (other than liens
described in clauses (i) through (iv), (xiii) and (xvi) of the definition of
"Permitted Liens" contained in the Senior Unsecured Indenture) shall not be
less than $125,000,000. All representations and warranties contained in the
Senior Unsecured Debt Documents are true and correct.
5.11 Investment Company Act of 1940. Borrower is not, and will by
such acts as may be necessary continue not to be, an investment company within
the meaning of the Investment Borrower Act of 1940.
5.12 Regulation U. The proceeds of the Advances and the Letter of
Credit Advances will not be used, directly or indirectly, to purchase or carry
any Margin Stock or to extend credit to others for the purpose of purchasing
or carrying any Margin Stock. After applying the proceeds of each Advance and
Letter of Credit Advance, Margin Stock will not constitute more than
twenty-five percent (25%) of the value of the assets (either of the Borrower
alone or of the Borrower and any of its Affiliates on a consolidated basis)
that are subject to any provisions of this Agreement or the Security Agreement
that may cause the Advances or any Letter of Credit Advance to be deemed
secured, directly or indirectly, by Margin Stock.
5.13 Financial Information.
(a) The consolidated balance sheets of Amtran and its
Affiliates which present the Consolidated financial condition of Amtran and
its Affiliates dated as of December 31, 1996 (complete and accurate copies of
which have been delivered by Borrower to the Agent for the benefit of the
Banks) and all other information and data furnished by Borrower to the Agent
for the benefit of the Banks are materially complete and correct, and such
financial statements have been prepared in accordance with GAAP, consistently
applied, and fairly present the consolidated financial condition and results
of operations of Amtran and its Affiliates as of such dates and the results of
operations for the respective periods then ended. Neither Amtran nor any
Affiliate has any undisclosed contingent obligations, unbooked liabilities for
taxes or other outstanding financial obligations as at December 31, 1996.
(b) Since December 31, 1996, there has not been and Borrower
does not know or have reason to know of any development or threatened
development (other than general economic conditions) of a nature which may
cause any material adverse change in the financial condition or operations of
Amtran and its Affiliates sufficient to impair Borrower's ability to repay the
Revolving Credit Loans and otherwise perform the Obligations in accordance
with the terms of this Agreement.
5.14 ERISA. No fact or circumstance, including but not limited to
any Reportable Event, exists in connection with any Plan of Amtran or any of
its Affiliates which would constitute grounds for the termination of any such
Plan by the PBGC or for the appointment by the appropriate United States
District Court of a trustee to administer any such Plan and which would result
in the termination of a Plan and the incurrence of material liability by
Amtran or its Affiliates to the Plan, the PBGC, participants, beneficiaries or
a trustee under ERISA. For the purposes of this representation and
<PAGE>
warranty Amtran or such Affiliate, if not the Plan administrator, shall be
deemed to have knowledge of all facts attributable to the Plan administrator
designated pursuant to ERISA.
5.15 Condition of Aviation Property. None of the Aviation Property
has been lost, stolen, seized, confiscated, damaged or destroyed or has
suffered any other material and unrepaired casualty or harm. All of the
Aviation Property is in good operating condition and repair, ordinary wear and
tear excepted, and has received all maintenance required to have been
completed to date by applicable governmental regulations.
5.16 Certification. Borrower is, and at all times will be a "citizen
of the United States" as defined in Section 40102(a)(15) of 49 U.S.C., an air
carrier as to which the provisions of Section 1110 of the United States
Bankruptcy Code apply, and an air carrier certificated under Sections 41102(a)
and 44705 of 49 U.S.C, and the Borrower has all other certifications required
by applicable law or regulation for the Aviation Property.
5.17 Liens on Aviation Property. There are no Liens on any of the
Aviation Property other than those in favor of the Agent for the benefit of
itself and the Banks securing the Obligations. The Security Agreement grants
to the Agent, for the benefit of itself and the Banks, a first priority,
enforceable and perfected lien and security interest in the Aviation Property
and other collateral described therein, which liens and security interests
secure the Obligations.
5.18 Valid Issuance of Senior Unsecured Notes. Borrower has the
corporate power and authority to issue the Senior Unsecured Notes. The Senior
Unsecured Notes are legally valid and binding obligations of Borrower,
enforceable against Borrower in accordance with their respective terms. The
Senior Unsecured Notes, when issued and sold in accordance with the terms of
the Indenture, will either have been registered or qualify under applicable
federal and state securities laws or be exempt therefrom.
ARTICLE VI.
AFFIRMATIVE COVENANTS
The Borrower and Amtran covenants and agrees that so long as
the Commitments shall remain available and until all Obligations have been
paid in full it will:
6.01 Use of Proceeds. Use the proceeds of the Revolving Credit Loans
for Borrower's ongoing working capital and general corporate purposes.
6.02 Notices. Promptly give written notice to the Agent of:
(a) all litigation which is material in nature, including but
not limited to all litigation claiming damages affecting Borrower or any of
its Affiliates where the amount claimed in any one instance or in the
aggregate for all such litigation is Five Hundred Thousand Dollars ($500,000)
or more in excess of insurance coverage or where the insurance carrier has
denied or failed to accept its responsibility as to an amount claimed of Five
Hundred Thousand Dollars ($500,000) or more;
(b) any Reportable Event under Section 4043(b)(5), (6), or (9)
of ERISA with respect to any Plan, any decision to terminate or withdraw from
a Plan, any finding made with respect to a Plan under Section 4401(c) or (3)
of ERISA, the commencement of any proceeding with
<PAGE>
respect to a Plan under section 4042 ERISA, or any material increase in the
actuarial present value of unfunded vested benefits under all plans over the
preceding year;
(c) any strikes, work-stoppages, slow-downs or other labor
disputes or grievances involving Borrower or an Affiliate which could have
material adverse effect on the operations or financial condition of Borrower
and its Affiliates, taken as a whole;
(d) the acquisition of any Affiliate by Borrower together with
financial statements of such Affiliate before giving effect to the
acquisition;
(e) any Default or Event of Default, specifying the nature and
the period of existence thereof and what action Borrower has or proposes to
take with respect thereto; and
(f) any other event which, in Borrower's reasonable judgment,
might have a material adverse effect on the business, properties, operations,
prospects of condition (financial or otherwise) of Borrower.
6.03 Financial Statements, Reports, Etc. Deliver to the Agent:
(a) As soon as available but not later than forty-five (45)
days after the close of each fiscal quarter of Amtran the consolidated and
consolidating balance sheets of Amtran and its Affiliates as of the close of
such quarter, and Amtran and its Affiliates' consolidated and consolidating
statements, statements of income and cash flow of such fiscal quarter and that
portion of the fiscal year of Amtran ending with such quarter, all prepared in
accordance with GAAP, consistently applied, certified by the Vice
President-Controller or Chief Financial Officer of Borrower as being complete
and correct and fairly presenting the consolidated and consolidating financial
condition of Amtran and its Affiliates and results of operations as of the end
of such quarter and for that portion of the fiscal year of Amtran ending with
such quarter, accompanied by a statement from the vice president and treasurer
of Borrower stating that as of the end of such quarter no Default or Event of
Default existed or, if such did exist, a statement describing such Default or
Event of Default and the action Borrower is taking or proposes to take with
respect thereto;
(b) as soon as available but not later than one hundred twenty
(120) days after the close of each fiscal year of Amtran, Amtran and its
Affiliates' consolidated and consolidating balance sheets as of the close of
such year, and consolidated and consolidating statements, statements of income
and retained earnings and cash flow for such year, prepared in accordance with
GAAP, consistently applied, together with the notes thereon and the report of
the Independent Public Accountant thereof, audited and reported on by an
Independent Public Accountant. Such Independent Public Accountant's report
shall state that the consolidated statements present fairly the financial
position of Amtran and its Affiliates in accordance with GAAP, and shall be
free from exceptions, reservations or qualifications as a result of which such
Independent Public Accountant is unable to conclude that the financial
statements fairly present or adequately disclose the financial condition of
Amtran and its Affiliates and shall not be limited because of restricted or
limited access by such Independent Public Accountant to any material portion
of Amtran's or any of its Affiliates' records and shall be accompanied by a
statement from such Independent Public Accountant that during the examination
no Default or Event of Default came to their attention. Such report shall also
be accompanied by a certificate from the vice president and treasurer of
Borrower stating that as of the end of such year no Default or Event of
Default existed or, if such did exist, a statement describing such Default or
Event of Default and the action Borrower has taken or proposes to take with
respect thereto;
<PAGE>
(c) at the time Borrower furnishes each set of financial
statements required by paragraph (a) above, a certificate of the senior
financial officer of Borrower (i) to the effect that no Default has occurred
and is continuing (or, if any Default has occurred and is continuing
describing the same in reasonable detail), (ii) setting forth the computations
necessary to determine whether Borrower is in compliance with Section 6.09,
6.10 and 6.11 hereof and (iii) setting forth the value of the Aviation
Property as set forth on the most recent Appraisal Report of Aviation Property
by Avmark;
(d) promptly upon receipt thereof, any management letters
provided to Borrower by the Independent Public Accountant containing any
reference to any material inadequacy, defect, problem, qualification or other
lack of satisfactory accounting controls utilized by Borrower or any of its
Affiliates;
(e) Promptly after sending or filing thereof, copies of all
reports, proxy statements and financial statements which Amtran and its
Affiliates sends to any securities exchange or to the Securities and
Exchange Commission or any successor agency thereof; and
(f) as soon as available but not later than twenty-five (25) days
after the end of each month, the quarterly cash forecast, as most recently
updated and in form and substance satisfactory to the Agent, of Amtran and
its Affiliates;
(g) as soon as available but not later than forty-five (45)
days after the close of each fiscal quarter of Amtran, a quarterly line of
business report, profit and loss report, including a comparison of plan vs.
actual results for Amtran and its Affiliates in form and substance
satisfactory to the Agent; and
(h) such other statements or reports as the Agent may
reasonably request in form and detail satisfactory to the Agent.
6.04 Existence, Etc. Maintain and preserve, and cause Amtran and its
other Affiliates to maintain and preserve, its existence and all rights
privileges and franchises now enjoyed and necessary for the operation of its
business and keep all its properties in good working order and condition,
normal wear and tear for property of that age excepted, except properties
Borrower or an Affiliate reasonably determine to be surplus, obsolete or
otherwise not necessary or useful in the conduct of its business; provided,
that, Affiliates of Amtran (other than the Borrower) shall not be required to
comply with this Section 6.04 so long as there is no default under Section
7.04 hereof.
6.05 Payment of Obligations. Pay all taxes, assessments,
governmental charges and other obligations when due, except such as may be
contested in good faith or as to which a bona fide dispute may exist, and for
which adequate reserve have been established in an amount determined in
accordance with GAAP.
6.06 Compliance with Laws. At all times comply, and cause Amtran and
its other Affiliates to at all times comply, in all material respects with all
laws, rules, regulations, orders and directions of any governmental authority
having jurisdiction over its business.
6.07 Insurance. Maintain and pay, and cause Amtran and its other
Affiliates to maintain and pay, all premiums with regard to insurance
(including without limitation, liability and
<PAGE>
casualty insurance) with responsible insurance companies against such risks,
on such properties and in at least such amounts as is customarily maintained
by similar businesses in the exercise of reasonable business judgment; at the
request of the Agent deliver to the Agent a list, in reasonable detail, of the
insurance policies then in effect, stating the names of the insurance
companies, the amounts and rates of insurance, the dates of the expiration
thereof and the properties and risks covered thereby.
6.08 Adequate Books. Maintain, and cause Amtran and its other
Affiliates to maintain, adequate books, accounts and records in order to
provide financial statements in accordance with GAAP and maintain a fiscal
year on a calendar year basis, and, if requested by any Bank, permit employees
or representatives of such Bank at any reasonable time and upon reasonable
notice to inspect and audit its properties, to examine or audit such books,
accounts and respective affairs, finances and accounts with Borrower's
respective Independent Public Accountants (and by these provisions Borrower
authorizes such accountants to discuss with any Bank, the finances and affairs
of Borrower).
6.09 Tangible Net Worth. Maintain Tangible Net Worth, determined in
accordance with GAAP, of not less than the sum of (a) $50,000,000 plus (b)
fifty percent (50%) of the Net Profits, such fifty percent (50%) of Net
Profits to be added effective as of the end of each fiscal quarter of Amtran
in an amount equal to such fifty percent (50%) of Net Profit for such fiscal
quarter, commencing with the fiscal quarter of Amtran ending March 31, 1997;
provided, however, that if Net Profit is negative for any fiscal quarter, such
negative Net profit may be subtracted only from the amount of such fifty
percent (50%) of net Profit that has been added, if any, pursuant to clause
(b) above for a fiscal quarter occurring in the same fiscal year as such
fiscal quarter for which Net Profit was negative, and shall not be subtracted
from any other amount required to be maintained by this Section 6.09:
provided, further, that the amount of such negative Net Profit subtracted
shall be in an amount equal to fifty percent (50%) of such negative Net
Profit.
6.10 Cash Flow Coverage Ratio. Maintain a Cash Flow Coverage Ratio
as of the last day of each fiscal quarter of Amtran, as calculated for the
fiscal quarter then ended plus the three immediately preceding fiscal
quarters, of not less than 1.65 to 1.0 at any time after the date hereof;
provided, however, notwithstanding the actual Adjusted Net Profit for the
fiscal quarters ending September 30, 1996 and December 31, 1996, the Cash Flow
Coverage Ratio for such two quarters shall be calculated as if the Adjusted
Net Profit for such two quarters was $-0-.
6.11 Total Adjusted Liabilities/Tangible Net Worth Ratio. Maintain a
ratio of the Total Adjusted Liabilities to Tangible Net Worth of not more than
(a) 6.0 to 1.0 as of the last day of each fiscal quarter ending on or before
December 31, 1997, (b) 5.25 to 1.0 as of the last day of each fiscal quarter
ending after December 31, 1997 but on or before December 31, 1998 and (c) 4.5
to 1.0 as of the last day of each fiscal quarter thereafter.
6.12 ERISA. Make prompt payment of contributions required to meet
the minimum funding standards set forth in ERISA except (a) to the extent
waived or deferred by the PBGC and (b) unfunded contributions required to be
paid by Affiliates of Borrower acquired after the date hereof, which unfunded
contributions existed at the time of the acquisition of such Affiliates and do
not in the aggregate, together with unfunded contributions of all other
Affiliates of Borrower, exceed $3,000,000 at any time, so long as no criminal
or material civil penalty is incurred in connection therewith.
6.13 Hazardous Materials. (a) Comply with all laws, regulations and
orders with respect to the discharge and removal of any Hazardous Material,
(b) not release or dispose of any Hazardous Material on or under any of the
properties of Borrower or its Affiliates, (c) indemnify and hold the Banks and
their officers, employees and consultants harmless from and against all
losses, costs,
<PAGE>
damages and expenses (including reasonable attorneys' fees and expenses) any
such Person may sustain in connection with the use, disposal or release of any
Hazardous Material by Borrower or any of its Affiliates or in connection with
the existence of any Hazardous Material on or under any of the properties of
Borrower or any of its Affiliates.
6.14 Additional Covenants. If, at any time, Amtran or the Borrower
shall enter into or be a party to any instrument or agreement with respect to
any Indebtedness, including all such instruments or agreements in existence as
of the date hereof and all such instruments or agreements entered into after
the date hereof, relating to or amending any terms or conditions applicable to
any of such Indebtedness which includes covenants, terms, conditions or
defaults not substantially provided for in this Agreement or more favorable to
the lender or lenders thereunder than those provided for in this Agreement,
then the Borrower shall promptly so advise the Agent and the Banks. Thereupon,
if the Agent shall request, the Borrower, Amtran, the Agent and the Banks
shall enter into an amendment to this Agreement or an additional agreement (as
the Agent may request), providing for substantially the same covenants, terms,
conditions and defaults as those provided for in such instrument or agreement
to the extent required and as may be selected by the Agent. In addition to the
foregoing, any covenants, terms, conditions or defaults in the Senior
Unsecured Debt Documents not substantially provided for in this Agreement or
more favorable to the holders of the Indebtedness issued in connection
therewith are hereby incorporated by reference into this Agreement to the same
extent as if set forth fully herein, and no subsequent amendment, waiver,
termination or modification thereof shall effect any such covenants, terms,
conditions or defaults as incorporated herein.
ARTICLE VII.
NEGATIVE COVENANTS
The Borrower and Amtran covenant and agree that, so long as the
Commitments shall remain available and until the full and final payment of all
Obligations, it will not and will not permit any Affiliate to, except with the
prior written consent of the Required Banks:
7.01 Indebtedness. Except for Indebtedness under this Agreement,
create, incur, assume or in any manner become liable in respect of, or suffer
to exist, any Indebtedness which would result in a violation by the Borrower
and its Affiliates of any of Sections 6.09, 6.10, 6.11 and 7.07.
7.02 Liens. (a) Create, assume or suffer to exist any Lien on any of
its or its Affiliates' properties whether now owned or hereafter acquired,
except (i) Permitted Liens, (ii) Liens other than Permitted Liens securing an
amount not exceeding an amount equal to 15% of the Tangible Net Worth in the
aggregate; provided, however, that (A) no Liens shall be permitted on Aviation
Property (other than that in favor of the Agent for the benefit of itself and
the Banks securing the Obligations) and (B) such Liens permitted under this
clause (ii) shall not be permitted if after giving effect to any such Lien the
book value of the assets of Amtran not subject to any Lien (other than liens
described in clauses (i) through (iv), (xiii) and (xvi) of the definition of
"Permitted Liens" contained in the Senior Unsecured Indenture) would be less
than $150,000,000, (iii) Liens on the assets described on Schedule 7.02(a)
attached hereto, but no increase in the amount secured by such Liens shall be
permitted, and (iv) Liens solely in favor of the Agent for the benefit of
itself and the Banks, (b) enter into any agreement with any Person (other than
that of the Banks pursuant to this Agreement) which restricts the right of
Borrower or any of its Affiliates to create, assume or suffer Liens on any of
its assets other than the existing agreements described on Schedule 7.02(b)
hereof, without an amendment or modification thereof, or (c) assign, sell or
transfer any Permitted Lien to any other Person.
<PAGE>
7.03 Change in Business. Engage in any business activities or
operation substantially different from and unrelated to present business
activities and operations conducted by Borrower on the Closing Date.
7.04 Mergers, Sales of Assets, Etc. Liquidate, dissolve, or enter
into any consolidation, merger, partnership, joint venture or any other
combination which results in the sale, lease, assignment or other disposition
of any assets or sell, lease, assign, transfer or otherwise dispose of any
assets, whether now owned or hereafter acquired, in a single transaction or in
a series of transactions or enter into any sale and leaseback transactions,
other than
(a) any of the foregoing which individually does not result in
the sale, lease, assignment, transfer or other disposition of any assets with
a fair market value in excess of $1,000,000, provided that all of the
foregoing shall not in the aggregate, on an annual basis, result in the sale,
lease, assignment, transfer of the disposition of any assets with a fair
market value in excess of $2,000,000;
(b) the sale of equipment and inventory in the ordinary course
of business;
(c) the sale or other disposition of property no longer used or
useful in the conduct of its business;
(d) any merger in which Borrower is the legal surviving
corporation if there is no Default or Event of Default after the consummation
thereof;
(e) the merger or consolidation of any Affiliate (other than
Borrower or Amtran) into any other Affiliate (other than Borrower or Amtran)
or the transfer of the business or assets of any Affiliate (other than
Borrower or Amtran) to Borrower or to any other Affiliate.
(f) The sale and leaseback transactions described on Schedule
7.04 hereto.
Notwithstanding the foregoing, without the prior written consent of the
Required Banks, the Borrower may not sell, lease, (other than leases which are
permitted by, and subject to, the Security Agreement), assign, transfer or
otherwise dispose of any Aviation Property.
7.05 Advances to Officers, Employees and Others.
Make any loans or advances and/or extensions of credit to (i) any of
its officers and/or directors and shareholders in excess of One Million and
00/100 ($1,000,000.00) in the aggregate so long as any Obligations are
outstanding or the Commitments are outstanding or (ii) to its employees in
excess of Five Hundred Thousand and 00/100 Dollars ($500,000.00), provided
that in all of the foregoing cases Tangible Net Worth is reduced by the amount
of such extensions of credit.
7.06 Investments in Affiliates.
Make any Investment in any Person or J. George Mikelsons or any
member of the board of directors of any Person that is a corporation if the
aggregate outstanding amount of all Investments, including the Investment to
be made, is in excess of ten percent (10%) of Tangible Net Worth.
7.07 Capital Expenditures.
<PAGE>
(a) Make or incur obligations for Capital Expenditures
(excluding expenditures incurred for the improvement or maintenance of
aircraft owned by the Borrower in the form of engine overhauls and upgrades,
capitalized repairs, additions and modifications, and the acquisition of parts
and equipment directly related thereto) in excess of $10,000,000 in any
calendar year; or
(b) Purchase or lease additional aircraft or aircraft engines
or parts if the effect of such acquisition causes a default under any
provision of this Agreement.
7.08 Dividends. Pay or declare any Dividends in any fiscal year in
excess of twenty percent (20%) of cumulative Net Profit (with deduction for
any negative Net Profit) subsequent to the Closing Date; provided, however,
that no such Dividend may be paid or declared unless, both before and after
giving effect to such proposed Dividend (a) no Default or Event of Default has
occurred and is continuing, (b) all representations and warranties contained
in Article V hereof and in the Security Agreements and in the Guaranty shall
be true and correct on and as of the date of such Dividend as if such
representations and warranties were made on and as of such date, and (c) the
Borrower is able to borrow additional Revolving Credit Loans of at least
$10,000,000.
7.09 Limitation on More Restrictive Covenants. The Borrower shall
not enter into any new debt agreement that would contain, nor enter into any
amendment, supplement or other modification to any indenture, instrument or
other agreement concerning any of its Indebtedness or any refinancing thereof,
if such indenture, instrument or other agreement at the time entered into or
after giving effect to any such amendment, supplement or other modification
thereto, would contain any covenant or event of default that is more
restrictive on the Borrower than those set forth in this Agreement.
7.10 Payments and Modification of Debt. Make any optional payment,
defeasance (whether a covenant defeasance, legal defeasance or other
defeasance), prepayment or redemption, directly or indirectly, of any of the
Indebtedness outstanding pursuant to the Senior Unsecured Debt Documents or
other Indebtedness or amend or modify, or consent or agree to any amendment or
modification of, any Senior Unsecured Debt Document, or enter into any
agreement or arrangement providing for any defeasance of any kind of any of
the Indebtedness outstanding pursuant to the Senior Unsecured Debt Documents;
provided, however, that the Borrower may redeem up to, but not in excess of,
an aggregate principal amount of the Senior Unsecured Notes of $10,000,000,
provided that both before and after giving effect to such redemption (a) no
Default or Event of Default has occurred and is continuing, (b) all
representations and warranties contained in Article V hereof and in the
Security Agreements and in the Guaranty shall be true and correct on and as of
the date of such redemption as if such representations and warranties were
made on and as of such date, (c) the Borrower is able to borrow additional
Revolving Credit Loans of at least $10,000,000 and (d) the book value of the
assets of Amtran not subject to any Lien (other than liens described in
clauses (i) through (iv), (xiii) and (xvi) of the definition of "Permitted
Liens" contained in the Senior Unsecured Indenture) shall not be less than
$150,000,000
7.11 Amber Holdings, Inc. Permit Amber Holdings, Inc. to own, or
otherwise have any rights with respect to, any assets.
<PAGE>
ARTICLE VIII.
EVENTS OF DEFAULT
Regardless of the terms of the Notes issued hereunder, upon the
occurrence and continuation of any of the following events, the Agent may and,
upon being directed to do so by the Required Banks, shall, terminate the
Commitments, declare all outstanding principal and accrued and unpaid interest
and all other sums outstanding under or in respect of this Agreement to be
immediately due and payable, and/or demand immediate delivery of Cash
Collateral, and Borrower agrees to deliver such Cash Collateral upon demand,
in an amount equal to the maximum amount that may be available to be drawn at
any time prior to the stated expiry of all outstanding Letters of Credit, or
any one or more of the foregoing, without notice of default, presentment or
demand for payment, protest or notice of nonpayment or dishonor, or other
notices or demands of any kind or character, except as hereinafter specified,
provided, however, that the occurrence of any of the events set forth in
Sections 8.04 or 8.05 shall automatically terminate the Banks' Commitments and
automatically accelerate the amounts due hereunder, including such Cash
Collateral, and under the Notes, without notice of default, presentment or
demand for payment, protest or notice of nonpayment or dishonor, or other
notice or demands for payment of any kind or character.
8.01 Nonpayment. Borrower shall fail to pay when due any installment
of principal or of interest or any other sum due under this Agreement in
accordance with the terms hereof or of any Note issued under this Agreement
and such failure continues for five (5) days.
8.02 Representation or Warranty. Any written representation or
warranty herein or in any of the Loan Documents or any other agreement,
instrument or certificate executed pursuant hereto shall prove to have been
false or misleading in any material respect when made or when deemed to have
been made.
8.03 Other Defaults. (i) Borrower or Amtran shall fail duly or
promptly to perform or observe the covenants contained in Sections 6.09, 6.10
and 6.11 hereof or any of the other covenants, agreements or conditions
contained in any Loan Document and such default in such other covenants,
agreements or conditions shall continue unremedied for a period of thirty (30)
days after written notice thereof is delivered to Borrower from the Agent, or
(ii) any Default or Event of Default (however designated) shall have occurred
under any of the other Loan Documents and shall not have been cured within the
applicable grace or cure period, if any.
8.04 Voluntary Bankruptcy. The Borrower or Amtran or any of Amtran's
other Affiliates shall generally fail to pay or admit in writing its inability
to pay its debts as they come due, or shall file any petition or action for
relief as to itself under any bankruptcy, reorganization, insolvency or
moratorium law, or any other similar law or laws for the relief of, or
relating to, debtors, or shall apply for or consent to a receiver, trustee or
custodian for it or a substantial portion of its property, or shall make a
general assignment for the benefit of creditors.
8.05 Involuntary Bankruptcy. An involuntary petition shall be filed
under any bankruptcy or similar statute against Borrower or Amtran or any of
Amtran's other Affiliates or a custodian, receiver, trustee, assignee for the
benefit of creditors (or other similar official) shall be appointed to take
possession, custody or control of the properties of Borrower or Amtran or any
of Amtran's other Affiliates unless such petition or appointment is set aside
or withdrawn or ceases to be in effect within sixty (60) days from the date of
said filing or appointment.
<PAGE>
8.06 Cross Default. Any material breach or default shall have
occurred (after giving effect to any applicable cure period or waiver) under
any other agreement or agreements relating to Indebtedness under which
Borrower or any of its Affiliates may be obligated in an aggregate amount in
excess of $5,000,000 as borrower, guarantor or lessee if such default consists
of (i) the failure by Borrower to pay an Indebtedness when due or the failure
of the Borrower or any of its Affiliates to perform or observe any other term,
covenant or agreement with respect to any such Indebtedness and following any
applicable cure period, permits the holder or any trustee thereof to cause the
acceleration of such Indebtedness (including without limitation permitting the
holder or any trustee thereof to require any mandatory prepayment or
defeasance of such Indebtedness) or the termination of any commitment to lend
or permits a lessor to terminate the applicable lease, including without
limitation any "Event of Default" under any of the Senior Unsecured Debt
Documents or the occurrence of any event or condition which would permit the
holders of the Senior Unsecured Notes to cause the prepayment or defeasance of
the Senior Unsecured Notes, in whole or in part, or (ii) the failure by
Borrower to pay an Indebtedness at the maturity thereof (whether at stated
maturity or otherwise).
8.07 ERISA. Any Plan of Borrower shall be terminated within the
meaning of Title IV of ERISA except as permitted by section 4044(d) of ERISA,
or a trustee shall be appointed by the appropriate United States District
Court to administer any Plan of Borrower, or the PBGC shall institute
proceedings to terminate any Plan.
8.08 Aviation Property. Any of the Aviation Property shall be
condemned, confiscated, seized, or otherwise expropriated, or the management
thereof assumed, by any government or any officer or instrumentality thereof
and shall be retained for any period of thirty (30) consecutive calendar days,
unless within such thirty (30) day period the Agent shall receive assurances,
satisfactory in all respects to the Agent, that Borrower will be compensated
therefore in amount, time and manner satisfactory in all respects to the Agent
or, after giving effect to any event described herein and the deletion of such
affected Aviation Property from the Borrowing Base and any payments made on
the Advances in connection therewith, the aggregate Advances and Letter of
Credit Advances would not exceed the Borrowing Base.
8.09 Ownership. J. George Mikelsons or his heirs shall own
beneficially and of record, free and clear of all Liens, less than fifty-one
percent (51%) of the outstanding capital stock or other ownership interest of
each class having ordinary voting power or analogous rights for the election
of a majority of directors and any other control of management of Amtran, or
Amtran shall own, beneficially and of record, free and clear of all Liens,
less than fifty-one percent (51%) of the outstanding capital stock or other
ownership interest of each class having ordinary voting power or analogous
rights for the election of a majority of directors and any other control of
management of the Borrower or any "Change of Control" as defined in the Senior
Unsecured Debt Documents.
8.10 Judgments. One or more judgments or orders for the payment of
money in an aggregate amount of $1,000,000 shall be rendered against Amtran or
any of its Affiliates, or any other judgment or order (whether or not for the
payment of money) shall be rendered against or shall affect Amtran or any of
its Affiliates which causes or could cause a material adverse change in the
business, properties, operations or condition, financial or otherwise, of
Amtran or any of its Affiliates or which does or could have a material adverse
effect on the legality, validity or enforceability of this Agreement, the
Notes, the Guaranty or the Security Agreement, and either (i) such judgment or
order shall have remained unsatisfied and Amtran or such Affiliate shall not
have taken action necessary to stay enforcement thereof by reason of pending
appeal or otherwise, prior to the expiration of the applicable period of
limitations for taking such action or, if such action shall have been taken, a
final order denying
<PAGE>
such stay shall have been rendered, or (ii) enforcement proceedings shall have
been commenced by any creditor upon any such judgment or order.
ARTICLE IX.
RELATIONSHIP OF THE BANKS/AND THE AGENT
9.01 Appointment and Authorization. Each Bank hereby irrevocably
authorizes the Agent to take such action as agent on its behalf and to
exercise such rights, powers and discretions as are specifically delegated in
this Agreement, the Notes and the Security Documents as are delegated to the
Agent by the terms hereof or thereof, together with all rights, powers and
discretions as are reasonably incidental thereto. The Agent agrees to notify
the Banks of each reduction in the Commitments, specifying the amount of such
reduction and the payments, if any, required by the Borrower due to such
reduction, and agrees to forward to the Banks the financial statements
received by the Agent pursuant to Section 6.03 hereof and such other financial
information received by the Agent as reasonably requested by the Banks. The
Agent may perform any of its respective functions and duties under this
Agreement by or through agents or its directors, officers of employees. In
performing its functions and duties under this Agreement, the Agent shall not
be deemed to have a fiduciary relationship in respect of, or other
responsibility to (other than responsibilities expressly stated herein), any
Bank or to have assumed any relationship of agency or trust with or for
Borrower.
9.02 Pro Rata Sharing. All payments or collections of principal and
interest on the Revolving Credit Loans shall be shared by the Banks on a pro
rata basis based upon the share of outstanding Indebtedness of the Borrower to
each Bank at the time of such payment or collection. On the day the Agent
receives any payments hereunder, the Agent shall remit to the Banks their pro
rata share of such payments in immediately available funds.
9.03 Sharing of Setoff. Any Bank which shall receive payment of or
on account of all or part of its share of the Obligations by voluntary payment
by Borrower or through the exercise of any right of setoff, counterclaim,
banker's lien, secured claim under any bankruptcy statute or otherwise in a
greater proportion than the proportionate amount of the Obligations due it
under this Agreement shall be deemed to have purchased immediately prior to
such payment participations in the portions of the Obligations held by the
other Banks so that all recoveries of the Obligations shall be shared by Banks
in accordance with their pro rata interests in the Obligations existing on the
date immediately prior to such recovery. If all or any portion of such excess
payment is thereafter recovered from such Bank, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest (except to the extent of such Bank is required to pay
interest). All sums received by a Bank through the exercise of any right of
setoff, counterclaim, banker's lien, secured claim under any bankruptcy
statute or otherwise shall be deemed to be first applied to such Bank's
portion of the indebtedness under this Agreement until payment thereof in full
and any balance remaining thereafter shall be deemed applied to any other
Indebtedness of the Borrower to such Bank.
9.04 Approvals. Except as provided in this Section 9.04, upon any
occasion requiring or permitting an approval, consent, waiver, election or
other action on the part of the Banks, action shall be taken by the Agent for
and on behalf or for the benefit of all Banks upon the direction of the
Required Banks, and any such action shall be binding on all Banks. No
amendment, modification, consent or waiver shall be effective which:
(a) increases the Commitment of any Bank,
<PAGE>
(b) reduces the amount of interest, principal or fees owing
hereunder or reduces the interest rate or fees payable by Borrower,
(c) extends the fixed date on which any sum is due hereunder,
or extends the Termination Date,
(d) waives a Default arising from a failure to pay principal of
or interest on an Advance within the applicable grace period,
(e) changes the provisions of this Section 9.04,
(f) releases or substitutes all or substantially all of the
collateral, other than substitutions of collateral where the collateral to
be added is of approximately equal or greater value than the collateral
being released,
(g) modifies the definition of "Required Banks",
(h) releases any material Guarantor from the Guaranty, or
(i) waives any violation of the advance rate on Aviation
Property or changes such advance rate.
unless all Banks agree in writing thereto; provided, however, that any
amendment, modification, consent or waiver which affects the rights, duties or
obligations of the Agent shall not be effective unless consented to in writing
by the Agent.
9.05 Exculpation. The Agent shall not be liable or answerable for
anything whatsoever in connection with this Agreement or any instrument or
agreement required hereunder, including responsibility with respect to the
execution, construction or enforcement of this Agreement or any such
instrument or agreement, except for its own respective willful misconduct or
gross negligence, and the Agent shall not have any duties or obligations other
than as provided herein and therein. The Agent shall be entitled to rely on
any opinion of counsel (including counsel for Borrower) in relation to this
Agreement and any instrument or agreement required hereunder, and upon
statements and communications received from Borrower, or from any other
person, believed by it to be authentic, and shall not be liable for any action
taken or omitted in good faith on such reliance.
9.06 Indemnification.
Each Bank agrees to indemnify the Agent to the extent not reimbursed
by Borrower, ratably according to its proportionate interest in the Revolving
Credit Loans (or, if there are no outstandings hereunder, in the Commitments),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or
any instrument or agreement required hereunder or any action taken or omitted
by the Agent in such role under this Agreement or any such instrument or
agreement; provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
resulting from the Agent's willful misconduct or gross negligence.
<PAGE>
9.07 The Agent as Bank. The Agent shall have the same rights and
powers hereunder as any other Bank and may exercise the same as though it were
not the Agent; and the Term "Banks" shall include the Agent in its individual
capacity.
9.08 Notices of Transfer. The Agent and Borrower may deem and treat
a Bank which is a party to this Agreement as the owner of such Bank's Note for
all purposes hereof unless and until a written notice of the assignment or
transfer, thereof (if any is permitted) executed by such Bank shall have been
received by the Agent and Borrower.
9.09 Credit Decision. Each Bank represents that it has made and
agrees that it shall continue to make its own independent investigation of the
financial condition and affairs of Borrower and its own appraisal of the
creditworthiness of the Borrower in connection with the making of the
continuance of its Commitments and the Advances. The Agent has no any duty or
responsibility, either initially or on a continuing basis, to provide any Bank
with any credit or other information (other than obtained pursuant to this
Agreement) with respect thereto, whether coming into its possession before the
date hereof or at any time thereafter unless furnished respectively to the
Agent by Borrower for delivery to the Banks. The Agent shall provide the Banks
with copies of all notices required by the Agreement provided to Agent
respectively by or to Borrower.
9.10 Resignation of the Agent. The Agent may resign at any time by
giving written notice to the Banks and Borrower. Upon any such resignation,
the Required Banks with the prior written consent of Borrower which shall not
be unreasonably withheld, shall have the right to appoint a successor from
among the Banks. If no successor shall have accepted such appointment within
forty-five (45) days after the retiring Agent's giving of notice of
resignation, the retiring Agent may, on behalf of the Banks, appoint a
successor thereto with the prior written consent of Borrower, which shall not
be unreasonably withheld, and such successor Agent shall be a bank or trust
company organized under the laws of the United States or any state thereof.
Upon the acceptance by such successor of its appointment hereunder, such
successor shall succeed to and become vested with all the rights and
obligations of the retiring Agent, and the retiring Agent shall be discharged
from its obligations under this Agreement except with respect to any liability
with respect to a breach of any obligation hereunder prior to such
resignation. The provisions of this Section 9.11 shall inure to the benefit of
the retiring Agent as to any actions taken or omitted to be taken by it while
it held such position under this Agreement.
ARTICLE X.
MISCELLANEOUS
10.01 Notices. Any communications between the parties hereto or
notices or requests provided herein to be given may be given by mailing the
same, first class postage prepaid, or by telex or electronic transmission to
each party at its address set forth on the signature pages thereto (with a
copy to each address indicated for notices), or to such other address as any
party may in writing hereafter indicate to Borrower and the Banks. Notices
shall be effective on the date sent by electronic transmission and telex and
three (3) Banking Days after the date sent by U.S. mail.
10.02 Successors and Assigns. This Agreement shall bind and inure to
the benefit of the parties hereto and their respective permitted successors
and assigns; provided, however, that Borrower shall not assign this Agreement
or any of its rights hereunder without the prior written consent of the Banks.
<PAGE>
10.03 Participations and Assignments. (a) This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that the Borrower may not, without
the prior consent of the Banks, assign its rights or obligations hereunder or
under any other Loan Document and the Banks shall not be obligated to make any
Loan hereunder to any entity other than the Borrower.
(b) Any Bank may sell to any bank, financial institution or
institutions or other entity, and such bank, financial institution or
institutions or other entity may further sell, a participation interest
(undivided or divided) in, the Loans and such Bank's rights and benefits under
this Agreement, the Notes and the Guaranties, and to the extent of that
participation interest such participant or participants shall have the same
rights and benefits against the Borrower under Section 2.15 and 2.17 as it or
they would have had if such participant or participants were the Bank making
the Loans to the Borrower hereunder, provided, however, that (i) such Bank's
obligations under this Agreement shall remain unmodified and fully effective
and enforceable against such Bank, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Bank shall remain the holder of its Notes for all
purposes of this Agreement, (iv) the Borrower, the Agent and the other Banks
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement, and (v) such Bank
shall not grant to its participant any rights to consent or withhold consent
to any action taken by such Bank or the Agent under this Agreement other than
action requiring the consent of all of the Banks hereunder.
(c) Each Bank may, with the prior consent of the Agent, assign
to one or more banks or other entities all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Loans owing to it and the Note or Notes held by
it); provided, however, that (i) each such assignment shall be of a uniform,
and not a varying, percentage of all rights and obligations, (ii) except in
the case of an assignment of all of a Bank's rights and obligations under this
Agreement, (A) the amount of the Commitment of the assigning Bank being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event
be less than $5,000,000, and in integral multiples of $1,000,000 thereafter,
or such lesser amount as the Agent may consent to and (B) after giving effect
to each such assignment, the amount of the Commitment of the assigning Bank
shall in no event be less than $5,000,000, (iii) the parties to each such
assignment shall execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance in the form of Exhibit
C hereto (an "Assignment and Acceptance"), together with any Note or Notes
subject to such assignment and, a processing and recordation fee of $3,000,
and (iv) any Bank may without the consent of the Borrower or the Agent, assign
to any Affiliate of such Bank that is a bank or financial institution all of
its rights and obligations under this Agreement. Upon such execution,
delivery, acceptance and recording, from and after the effective date
specified in such Assignment and Acceptance, (x) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of a Bank hereunder and (y) the Bank assignor
thereunder shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the remaining portion of
an assigning Bank's rights and obligations under this Agreement, such Bank
shall cease to be a party hereto).
(d) The Agent shall maintain at its address designated on the
signature pages hereof a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and
addresses of the Banks and the Commitment of, and principal amount of the
Loans owing to, each Bank from time to time (the "Register"). The entries in
the Register shall be
<PAGE>
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Bank and an assignee, together with any Note or Notes subject
to such assignment, the Agent shall, if such Assignment and Acceptance has
been completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. Within ten Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes a new Note to the order of
such assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Bank has retained a
Commitment hereunder, a new Note to the order of the assigning Bank in an
amount equal to the Commitment retained by it hereunder. Such new Note or
Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit C hereto.
(f) The Banks may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
10.03, disclose to the assignee or participant or proposed assignee or
participant any public information relating to the Borrower and, provided that
such proposed assignee or participant executes a confidentiality letter, any
other information relating to the Borrower.
10.04 Delays and Waivers. No delay or omission by the Banks to
exercise any right under this Agreement shall impair any such right, nor shall
it be construed to be a waiver thereof. No waiver of any single breach or
default under this Agreement shall be deemed a waiver of any other breach or
default. Any waiver, modification, amendment, consent or approval relating to
this Agreement or the Notes, must be in writing to be effective and must be
signed by or on behalf of the Banks.
10.05 Costs and Expenses. (a) The Borrower agrees to pay on demand
to the Banks all costs and expenses incurred by the Banks including, without
limitation, reasonable attorneys' and consultants' fees (i) in connection with
the enforcement of this Agreement or any instrument or agreement required
hereunder or in connection with any proposed refinancing or restructuring of
the credit provided in this Agreement in the nature of a "work-out" and (ii)
for all stamp, registration and other duties and imposts to which this
Agreement and any instrument or agreement required hereunder may be subject.
The Borrower agrees to pay or to reimburse the Agent upon demand for
reasonable attorneys' fees and other expenses incurred in connection with the
preparation, drafting and negotiation of this Agreement, the Notes, and the
Loan Documents, any amendments, consents, or waivers hereto or thereto. The
Borrower shall indemnify the Banks against any and all liabilities and
penalties resulting from any delay in payment, or failure to pay, any such
duties and imposts upon written notice from the Banks that such amounts have
been assessed.
(b) Borrower agrees to indemnify the Agent and each Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee at any time
in connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a
<PAGE>
party thereto) brought or threatened relating to or arising out of the Loan
Documents, any actual or proposed use of proceeds of the Loans or the Letter
of Credit Advances, any transactions relating to any of the foregoing, any act
or omission of Borrower or any Guarantor or any environmental liability of
Borrower or any Guarantor; provided that no Indemnitee shall have the right to
be indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
10.06 Entire Agreement. This Agreement and any agreement, document
or instrument attached hereto or referred to herein integrate all the terms
and conditions mentioned herein or incidental hereto, and supersede all oral
negotiations and prior writings in respect to the subject matter hereof. In
the event of any conflict between the terms, conditions and provisions of this
Agreement and any such agreement, document or instrument, the terms,
conditions and provisions of this Agreement shall prevail.
10.07 Prior Agreement. Upon the execution of this Agreement, the
Commitments of the banks pursuant to the Prior Agreement shall terminate and
be deemed superseded by the Commitments under this Agreement, and this
Agreement is an amendment and restatement of the Prior Credit Agreement,
without novation thereof. The Borrower and Amtran acknowledge they have no
setoff, defense, claim or other dispute in connection with any of the
indebtedness or other liabilities owing pursuant to the Prior Agreement or
otherwise in connection with the Prior Agreement. Any Indebtedness outstanding
under the Prior Agreement after the Closing Date shall be deemed Indebtedness
outstanding under this Agreement. All liens and security interests granted
with respect to the Aviation Property in connection with the Prior Credit
Agreement shall continue in full force and effect and secure the Obligations
and other indebtedness and liabilities described in the Security Agreement,
and all filings with the FAA and all UCC financing statements filed shall
continue in full force and effect.
10.08 Governing Law. This Agreement is a contract made under, and
shall be governed by and construed in accordance with, the laws of the State
of Michigan applicable to contracts made and to be performed entirely within
such State and without giving effect to the choice of law principles of such
State.
10.09 Section Headings. Section headings are for reference only, and
shall not affect the interpretation or meanings of any provision of this
Agreement.
10.10 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
10.11 Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, all of which taken together will constitute one
agreement, and any one of the parties hereto may execute this Agreement by
signing any such counterpart.
10.12 Waiver of Jury Trial. The Agent, the Banks, Amtran and the
Borrower, after consulting or having had the opportunity to consult with
counsel, each knowingly, voluntarily and intentionally waive any right any of
them may have to a trial by jury in any litigation based upon or arising out
of this Agreement or any related instrument or agreement or any of the
transactions contemplated by this Agreement or any course of conduct, dealing,
statements (whether oral or written)
<PAGE>
or actions of any of them. Neither the Agent, the Banks, Amtran nor the
Borrower shall seek to consolidate, by counterclaim or otherwise, any such
action in which a jury trial has been waived with any other action in which a
jury trial cannot be or has not been waived. These provisions shall not be
deemed to have been modified in any respect or relinquished by the Agent, the
Agent, the Banks, Amtran or the Borrower except by a written instrument
executed by all of them.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
by their duly authorized officers as of the date and year first above written.
AMERICAN TRANS AIR, INC.
By: /s/ Kenneth K. Wolff
--------------------------------------
Its: Executive Vice President and
Chief Financial Officer
Address: 7337 West Washington St.
Indianapolis, Indiana 46251
Attention: Executive Vice
President and Chief
Financial Officer
Telephone: (317) 247-4000
Telecopy: (317) 240-7091
AMTRAN, INC.
By: /s/ Kenneth K. Wolff
--------------------------------------
Its: Executive Vice President and
Chief Financial Officer
Address: 7337 West Washington St.
Indianapolis, Indiana 46251
Attention: Executive Vice
President and Chief
Financial Officer
Telephone: (317) 247-4000
Telecopy: (317) 240-7091
<PAGE>
NBD BANK, N.A., as a Bank and as Agent
By: /s/ Scott C. Morrison
--------------------------------------
Its: Vice President
----------------------------------
Address: One Indiana Square, Ste. 302
Indianapolis, Indiana 46266
Commitment: $12,500,000 Attention: Scott C. Morrison
Percentage: 25% Telephone: (317) 266-7351
Telecopy: (317) 266-6042
FORT WAYNE NATIONAL BANK
By:
--------------------------------------
Its:
----------------------------------
Address: 110 W. Berry St., P.O. Box 110
Fort Wayne, Indiana 46801
Commitment: $10,000,000 Attention: Camalyn Marsh
Percentage: 20% Telephone: (219) 426-0555
Telecopy: (219) 461-6240
<PAGE>
NBD BANK, N.A., as a Bank and as Agent
By:
--------------------------------------
Its:
----------------------------------
Address: One Indiana Square, Ste. 302
Indianapolis, Indiana 46266
Commitment: $12,500,000 Attention: Scott C. Morrison
Percentage: 25% Telephone: (317) 266-7351
Telecopy: (317) 266-6042
FORT WAYNE NATIONAL BANK
By: /s/ Camalyn M. Marsh
--------------------------------------
Camalyn M. Marsh
Its: Vice President
----------------------------------
Address: 110 W. Berry St., P.O. Box 110
Fort Wayne, Indiana 46801
Commitment: $10,000,000 Attention: Camalyn Marsh
Percentage: 20% Telephone: (219) 426-0555
Telecopy: (219) 461-6240
<PAGE>
NATIONAL BANK OF CANADA
By: /s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
--------------------------------------
Its: AVP VP
----------------------------------
Address: 125 W. 55th Street, 23rd Floor
New York, New York 10019
Commitment: $10,000,000 Attention: Joseph Triscoli
Percentage: 20% Telephone: (212) 632-8553
Telecopy: (212) 632-8545
FIRST OF AMERICA BANK - INDIANA
By:
--------------------------------------
Its:
----------------------------------
Address: 101 W. Ohio St., Ste. 1400
Indianapolis, Indiana 46204
Commitment: $10,000,000 Attention: Chuck Mason
Percentage: 20% Telephone: (317) 767-6043
Telecopy: (317) 767-6026
NATIONAL CITY BANK, INDIANA
By:
--------------------------------------
Its:
----------------------------------
Address: 101 W. Washington St. 200 East
Indianapolis, Indiana 46255
Commitment: $7,500,000 Attention: Jim Wark
Percentage: 15% Telephone: (317) 267-7066
Telecopy: (317) 267-8899
<PAGE>
NATIONAL BANK OF CANADA
By:
--------------------------------------
Its:
----------------------------------
Address: 125 W. 55th Street, 23rd Floor
New York, New York 10019
Commitment: $10,000,000 Attention: Joseph Triscoli
Percentage: 20% Telephone: (212) 632-8553
Telecopy: (212) 632-8545
FIRST OF AMERICA BANK - INDIANA
By: /s/ [ILLEGIBLE]
--------------------------------------
Its: Vice President
----------------------------------
Address: 101 W. Ohio St., Ste. 1400
Indianapolis, Indiana 46204
Commitment: $10,000,000 Attention: Chuck Mason
Percentage: 20% Telephone: (317) 767-6043
Telecopy: (317) 767-6026
NATIONAL CITY BANK, INDIANA
By:
--------------------------------------
Its:
----------------------------------
Address: 101 W. Washington St. 200 East
Indianapolis, Indiana 46255
Commitment $7,500,000 Attention: Jim Wark
Percentage: 15% Telephone: (317) 267-7066
Telecopy: (317) 267-8899
<PAGE>
NATIONAL BANK OF CANADA
By:
--------------------------------------
Its:
----------------------------------
Address: 125 W. 55th Street, 23rd Floor
New York, New York 10019
Commitment: $10,000,000 Attention: Joseph Triscoli
Percentage: 20% Telephone: (212) 632-8553
Telecopy: (212) 632-8545
FIRST OF AMERICA BANK - INDIANA
By: /s/ [ILLEGIBLE] [ILLEGIBLE]
--------------------------------------
Its: AVP V.P.
----------------------------------
Address: 101 W. Ohio St., Ste. 1400
Indianapolis, Indiana 46204
Commitment: $10,000,000 Attention: Chuck Mason
Percentage: 20% Telephone: (317) 767-6043
Telecopy: (317) 767-6026
NATIONAL CITY BANK, INDIANA
By:
--------------------------------------
Its:
----------------------------------
Address: 101 W. Washington St. 200 East
Indianapolis, Indiana 46255
Commitment: $7,500,000 Attention: Jim Wark
Percentage: 15% Telephone: (317) 267-7066
Telecopy: (317) 267-8899
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$ July , 1997 FOR VALUE RECEIVED, AMERICAN TRANS AIR, INC., an
Indiana corporation (the "Borrower"), hereby unconditionally promises to pay
to the order of , a (the "Bank"), at the
principal banking office of NBD Bank, N.A., a national banking association, in
lawful money of the United States of America and in immediately available
funds, the principal sum of Million Dollars ($ ,000,000), or such
lesser amount as is recorded on the schedule attached hereto, or in the books
and records of the Bank, on the Termination Date; and to pay interest on the
unpaid principal balance hereof from time to time outstanding, in like money
and funds, for the period from the date hereof until the Advances evidenced
hereby shall be paid in full, at the rates per annum and on the dates provided
in the Credit Agreement referred to below.
The Bank is hereby authorized by the Borrower to record on the
schedule attached to this Note, or on its books and records, the date, amount
and type of each Advance, the amount of each payment or prepayment of
principal thereon and the other information provided for on such schedule,
which schedule or such books and records, as the case may be, shall constitute
prima facie evidence of the information so recorded, provided, however, that
any failure by the Bank to record any such information shall not relieve the
Borrower of its obligation to repay the outstanding principal amount of such
Advances, all accrued interest thereon and any amount payable with respect
thereto in accordance with the terms of this Note and the Credit Agreement.
The Borrower and each endorser or guarantor hereof waives demand,
presentment, protest, diligence, notice of dishonor and any other formality in
connection with this Note. Should the indebtedness evidenced by this Note or
any part thereof be collected in any proceeding or be placed in the hands of
attorneys for collection, the Borrower agrees to pay, in addition to the
principal, interest and other sums due and payable hereon, all costs of
collecting this Note; including attorneys' fees and expenses.
This Note evidences one or more Advances made under a Credit
Agreement, dated as of the date hereof (the "Credit Agreement"), by and among
the Borrower, the banks (including the Bank) named therein and NBD Bank, N.A.,
as agent, to which reference is hereby made for a statement of the
circumstances under which this Note is subject to prepayment and under which
its due date may be accelerated and for a description of the collateral and
security securing this Note.
This Note is issued in exchange and substitution for certain
promissory notes previously issued by the Borrower and evidences the same
liabilities and obligations under such promissory notes and shall not be
deemed a novation or satisfaction thereof. Capitalized terms used but not
defined in this Note shall have the respective meanings assigned to them in
the Credit Agreement.
PROMISSORY NOTE
<PAGE>
This Note is made under, and shall be governed by and construed in
accordance with, the laws of the State of Michigan applicable to contracts
made and to be performed entirely within such State and without giving effect
to choice of law principles of such State.
AMERICAN TRANS AIR, INC.
By:
--------------------------------
Its:
-------------------------------
PROMISSORY NOTE
<PAGE>
Schedule to Note, dated
, 1997, made by American Trans Air, Inc.
in favor of
Principal
Trans- Principal Amount Principal
action Amount of Interest Paid or Balance Notation
Date Loan Rate Prepaid Outstanding Made by
- ----- --------- -------- --------- ----------- --------
PROMISSORY NOTE
<PAGE>
EXHIBIT B
EXTENSION REQUEST
NBD Bank, N.A., as Agent , One Indiana Square
Indianapolis, Indiana 46266
Attention: Scott C. Morrison
This Extension Request is delivered to you in connection with
Section 2.18 of the Credit Agreement, dated as of ___________, 1997 (together
with all amendments and other modifications, if any, from time to time
hereafter made thereto, the "Credit Agreement"), among American Trans Air,
Inc., Amtran, Inc., (collectively, the "Borrower"), the banks that are parties
thereto and NBD Bank, N.A., as agent. Unless otherwise defined, terms used
herein have the meanings provided in the Credit Agreement.
The Borrower hereby requests that the Termination Date be extended
from April 1, 199_ to
- --------------, ------.
IN WITNESS WHEREOF, the Borrower has caused this Extension Request
to be executed and delivered by thereof duly authorized officer this ___ day
of , 19 .
AMERICAN TRANS AIR, INC.
By:
-------------------------------
Its:
-----------------------------
AMTRAN, INC.
By:
-------------------------------
Its:
-----------------------------
<PAGE>
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of , 1997 (the
"Credit Agreement") among AMERICAN TRANS AIR, INC., (the "Borrower"), AMTRAN,
INC. ("Amtran"), the banks party thereto (the "Banks"), NBD BANK, N.A., as
agent for the Banks (the "Agent"). Terms defined in the Credit Agreement are
used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns (without recourse) to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement as of the date hereof equal to the amounts specified on Schedule 1
of all outstanding rights and obligations under the Credit Agreement. After
giving effect to such sale and assignment, the Assignee's Commitment and the
amounts of the Advances owing to the Assignee will be as set forth on Schedule
1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit
Agreement or the execution, legality, validity, perfection, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any Guarantor or the performance or
observance by the Borrower or any Guarantor of any of their obligations under
the Credit Agreement or any other instrument or document furnished pursuant
thereto; and (iv) attaches the Note held by the Assignor and requests that the
Agent exchange such Note for a new Note payable to the order of the Assignee
in an amount equal to the Commitment assumed by the Assignee pursuant hereto
and the Assignor in an amount equal to the Commitment retained by the Assignor
under the Credit Agreement, respectively, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 5.13 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Credit Agreement as are delegated to the Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental thereto;
(iv) agrees that it will perform in accordance with their terms of all of the
obligations that by the terms of the Credit Agreement are required to be
performed by it as a Bank; and (v) if the Assignee is organized under the laws
of a jurisdiction outside the United States, attaches the forms prescribed by
the Internal Revenue Service of the United States certifying as to the
Assignee's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to
<PAGE>
the Assignee under the Credit Agreement and the Note or such other documents
as are necessary to indicate that all such payments are subject to such taxes
at a rate reduced by an applicable tax treaty.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1.
5. Upon consent hereto by the Borrower and the Agent and such
acceptance and recording by the Agent, as of the Effective Date, (i) the
Assignee shall be a party to the Credit Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a Bank
thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after
the Effective Date, the Agent shall make all payments under the Credit
Agreement and the Note in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and commitment fees
with respect thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit Agreement and the
Notes for periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Michigan.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
facsimile shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance.
ASSIGNMENT AND ACCEPTANCE
<PAGE>
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
[ASSIGNOR]
By:
-------------------------------
Its:
-----------------------------
[ASSIGNEE]
By:
-------------------------------
Its:
-----------------------------
<PAGE>
SCHEDULE 1
L-1011 Aircraft
The following aircraft:
Manufacturer U.S.
Manufacturer Model Serial No. Registry No.
- ------------ ----- ---------- ------------
Lockheed L-1011-385-1 193C-1052 N185AT
Lockheed L-1011-385-1 193C-1057 N192AT
Lockheed L-1011-385-1 193C-1071 N193AT
Lockheed L-1011-385-1 193C-1074 N186AT
Lockheed L-1011-385-1 193C-1081 N189AT
Lockheed L-1011-385-1 193C-1084 N191AT
Lockheed L-1011-50 193C-1077 N187AT
Lockheed L-1011-385-1 193C-1041 N197AT
Lockheed L-1011-385-1 193C-1086 N190AT
Lockheed L-1011-385-1 193B-1076 N196AT
Lockheed L-1011-385-1 193P 1082 N197AT
Lockheed L-1011-385-1 193C-1078 N188AT
<PAGE>
SCHEDULE 2
L-1011 Engines
The following engines, each of said engines being 750 or more rated takeoff
horsepower or its equivalent:
Manufacturer
Manufacturer Model Serial No.
- ------------ ----- ----------
Rolls Royce RB211-22B-02 10353
Rolls Royce RB211-22B-02 10279
Rolls Royce RB211-22B-02 10259
Rolls Royce RB211-22B-02 10254
Rolls Royce RB211-22B-02 10238
Rolls Royce RB211-22B-02 10383
Rolls Royce RB211-22B-02 10354
Rolls Royce RB211-22B-02 10341
Rolls Royce RB211-22B-02 10362
Rolls Royce RB211-22B-02 10236
Rolls Royce RB211-22B-02 10255
Rolls Royce RB211-22B-02 10347
Rolls Royce RB211-22B-02 10251
Rolls Royce RB211-22B-02 10208
Rolls Royce RB211-22B-02 10286
Rolls Royce RB211-22B-02 10331
Rolls Royce RB211-22B-02 10260
Rolls Royce RB211-22B-02 10258
Rolls Royce RB211-22B 10219
Rolls Royce RB211-22B 10274
Rolls Royce RB211-22B 10323
Rolls Royce RB211-22B 10319
Rolls Royce RB211-22B 10357
Rolls Royce RB211-22B 10561
Rolls Royce RB211-22B-02 10311
Rolls Royce RB211-22B-02 10273
Rolls Royce RB211-22B-02 10358
Rolls Royce RB211-22B 10348
Rolls Royce RB211-22B 10349
Rolls Royce RB211-22B 10351
Rolls Royce RB211-22B 10503
Rolls Royce RB211-22B 10300
Rolls Royce RB211-22B 10466
Rolls Royce RB211-22B 10335
Rolls Royce RB211-22B 10235
Rolls Royce RB211-22B 10394
<PAGE>
Schedule 4.01(n)
All indebtedness, obligations and liabilities currently outstanding
under the Prior Credit Agreement.
<PAGE>
SCHEDULE 5.02
AMTRAN, INC. AFFILIATES
Date
Incorporated
------------
American Trans Air, Inc. 9/24/73
Ambassadair Travel Club, Inc. 7/29/82
ATA Vacations, Inc. (formerly Amber Tours, Inc.) 3/25/87
Amber Travel, Inc. 3/27/89
American Trans Air Training Corporation 9/8/88
American Trans Air ExecuJet, Inc. 4/21/89
Amber Air Freight Corporation 6/3/91
Amber Holdings, Inc. 7/26/95
<PAGE>
SCHEDULE 5.09
NONE
<PAGE>
SCHEDULE 7.02(a)
EXCLUDED LIENS INCLUDE:
1. Midway Hangar leased from Chicago Airport Authority
2. Word System leased from Nichol Financial Service
3. GDAS Aircraft scheduling system leased from General Dimensions
Corp.
4. Pre-delivery payments made pursuant to aircraft and engine
Purchase Agreements
5. Monthly credits available under 1994 Boeing Purchase Agreement
and 1994 Rolls-Royce Purchase Agreement
6. An existing lien on a Boeing 727 aircraft and related engines
to NBD Bank, N.A., provided that the indebtedness secured
thereby shall be paid in full on July 24, 1997 and such liens
subsequently discharged.
No increase in the amount secured by any of the above Liens shall be
permitted.
<PAGE>
Schedule 7.02(b)
1. Senior Unsecured Indenture.
<PAGE>
SCHEDULE 7.04
PERMITTED SALE LEASEBACK TRANSACTIONS:
1. A sale leaseback of an existing Boeing 727 aircraft, provided
that the proceeds thereof are used to pay in full any existing
Lien on such aircraft and no Event of Default or Default exists
or would be caused thereby under the Credit Agreement.
2. Any other sale leaseback of any aircraft acquired after the
Closing Date of the Credit Agreement provided that each of the
following conditions is satisfied: (a) such sale leaseback is
completed within 12 months after the date of the acquisition of
such aircraft, (b) no Default or Event of Default exists under
the Credit Agreement or would be caused thereby and (c) after
giving effect to such sale leaseback, the book value of the
assets of Amtran not subject to any Lien (other than liens
described in clauses (i) through (iv), (xiii) and (xvi) of the
definition of "Permitted Liens" contained in the Senior
Unsecured Indenture) would not be less than $150,000,000.
Exhibit 10.2
GUARANTY AGREEMENT
PARTIES
THIS GUARANTY AGREEMENT, dated as of July 24, 1997 (this "Guaranty"), is
made by Amtran, Inc., Ambassadair Travel Club, Inc., ATA Vacations, Inc.
(formerly Amber Tours, Inc.), Amber Travel, Inc., American Trans Air Training
Corporation, American Trans Air ExecuJet, Inc. and Amber Air Freight
Corporation (collectively, the "Guarantors") in favor of each of the Lenders
as defined below.
RECITALS
A. AMERICAN TRANS AIR, INC., an Indiana corporation (the "Borrower"),
AMTRAN, INC., the banks party thereto (such banks, together with any other
banks or other Banks now or hereafter parties to the Credit Agreement as
defined below, collectively referred to as the "Banks") and NBD Bank, N.A., as
agent for the Banks (in such capacity, together with any successor agent, the
"Agent") have executed a Credit Agreement dated as of the date hereof (as
amended or modified from time to time, and together with any agreement
executed in replacement therefor or otherwise refinancing such credit
agreement, the "Credit Agreement"), and the Borrower has issued its promissory
notes pursuant to the Credit Agreement (as amended or modified from time to
time and together with any promissory note or notes issued in exchange or
replacement therefor or otherwise issued pursuant to the Credit Agreement, the
"Notes", and the Credit Agreement, the Notes and all other agreements and
instruments among the Borrower, the Agent and the Banks, or any of them,
executed in connection therewith, whether now or hereafter executed, and any
supplements or modifications thereof and any agreements or instruments issued
in exchange or replacement therefor, collectively referred to as the
"Agreements").
B. Pursuant to the terms of the Agreements the Banks have agreed to make
certain extensions of credit to the Borrower.
C. Each Guarantor is an affiliate of the Borrower, the Borrower and the
Guarantors are engaged in related businesses, and the Guarantors have derived
or will derive substantial direct and indirect benefit from the making of the
extensions of credit by the Banks.
D. The obligation of the Banks to make or continue to make certain
extensions of credit under the Credit Agreement are conditioned upon, among
other things, the execution and delivery by the Guarantors of this Guaranty,
and the extensions of credit under the Credit Agreement were made in reliance
upon the issuance of this Guaranty.
AGREEMENT
In consideration of the premises and to induce the Banks to make loans,
extend credit or make other financial accommodations, and to continue to keep
such credit and other financial accommodations available to the Borrower, each
Guarantor hereby agrees with and for the benefit of the Banks as follows:
<PAGE>
1. Defined Terms. As used in this Guaranty, terms defined in the first
paragraph of this Guaranty and in the recital paragraphs are used herein as
defined therein, and the following terms shall have the following meanings:
"Cumulative Guarantors" shall mean the Guarantors and all other
future guarantors of the Liabilities.
"Lenders" shall mean the Lenders and the Agent and their successors
and assigns.
"Liabilities" shall mean all indebtedness, obligations and
liabilities of the Borrower to any of the Lenders in connection with or
pursuant to the Agreements, including without limitation, all principal,
interest (including but without limitation interest which, but for the filing
of a bankruptcy petition, would have accrued on the principal amount of the
Liabilities), charges, fees and all costs and expenses, including without
limitation reasonable fees and expenses of counsel, in each case whether now
existing or hereafter arising, direct or indirect (including without
limitation any participation interest acquired by any Lender in such
indebtedness, obligations and liabilities of the Borrower to any other
person), absolute or contingent, joint and/or several, secured or unsecured,
arising by operation of law or otherwise.
All other capitalized terms used but not defined herein shall have
the meanings ascribed thereto in the Credit Agreement.
2. Guarantee. (a) Each Guarantor hereby guarantees to the Lenders,
irrevocably, absolutely and unconditionally, as primary obligor and not as
surety only, the prompt and complete payment of the Liabilities.
(b) All payments to be made under this Guaranty (except pursuant to
paragraph (c) below) shall be made to each Lender pro rata in accordance with
the unpaid amount of Liabilities held by each Lender at the time of such
payment.
(c) The Guarantors agree to make prompt payment, on demand, of any
and all reasonable costs and expenses incurred by any Lender in connection
with enforcing the obligations of any of the Guarantors hereunder including
without limitation the reasonable fees and disbursements of counsel.
3. Consents to Renewals, Modifications and other Actions and Events. This
Guaranty and all of the obligations of the Guarantors hereunder shall remain
in full force and effect without regard to and shall not be released, affected
or impaired by: (a) any amendment, assignment, transfer, modification of or
addition or supplement to the Liabilities or any Agreement; (b) any extension,
indulgence, increase in the Liabilities or other action or inaction in respect
of any of the Agreements or otherwise with respect to the Liabilities, or any
acceptance of security for, or other guaranties of, any of the Liabilities or
Agreements, or any surrender, release, exchange, impairment or alteration of
any such security or guaranties including without limitation the failing to
perfect a security interest in any such security or abstaining from taking
advantage of or realizing upon any other guaranties or upon any security
interest in any such security; (c) any default by the Borrower under, or any
lack of due execution, invalidity or unenforceability of, or any
GUARANTY AGREEMENT
-2-
<PAGE>
irregularity or other defect in, any of the Agreements; (d) any waiver by any
Lender or any other person of any required performance or otherwise of any
condition precedent or waiver of any requirement imposed by any of the
Agreements, any other guaranties or otherwise with respect to the Liabilities;
(e) any exercise or non-exercise of any right, remedy, power or privilege in
respect of this Guaranty, any other guaranty or any of the Agreements; (f) any
sale, lease, transfer or other disposition of the assets of the Borrower or
any consolidation or merger of the Borrower with or into any other person,
corporation, or entity, or any transfer or other disposition of any shares of
capital stock of the Borrower; (g) any bankruptcy, insolvency, reorganization
or similar proceedings involving or affecting the Borrower or any other
guarantor of the Liabilities; (h) the release or discharge of the Borrower
from the performance or observance of any agreement, covenant, term or
condition under any of the Liabilities or contained in any of the Agreements,
of any Cumulative Guarantor or of this Guaranty, by operation of law or
otherwise; or (i) any other cause whether similar or dissimilar to the
foregoing which, in the absence of this provision, would release, affect or
impair the obligations, covenants, agreements and duties of any Guarantor
hereunder, including without limitation any act or omission by any Lender or
any other any person which increases the scope of any Guarantor's risk; and in
each case described in this paragraph whether or not any Guarantor shall have
notice or knowledge of any of the foregoing, each of which is specifically
waived by each Guarantor. Each Guarantor warrants to the Lenders that it has
adequate means to obtain from the Borrower on a continuing basis information
concerning the financial condition and other matters with respect to the
Borrower and that it is not relying on any Lender to provide such information
either now or in the future.
4. Waivers, Etc. Each Guarantor unconditionally waives: (a) notice of any
of the matters referred to in Paragraph 3 above; (b) all notices which may be
required by statute, rule of law or otherwise to preserve any rights of any
Lender, including, without limitation, notice to the Guarantors of default,
presentment to and demand of payment or performance from the Borrower and
protest for non-payment or dishonor; (c) any right to the exercise by any
Lender of any right, remedy, power or privilege in connection with any of the
Agreements; (d) any requirement of diligence or marshaling on the part of any
Lender; (e) any requirement that any Lender, in the event of any default by
the Borrower, first make demand upon or seek to enforce remedies against, the
Borrower or any other Cumulative Guarantor before demanding payment under or
seeking to enforce this Guaranty; (f) any right to notice of the disposition
of any security which any Lender may hold from the Borrower or otherwise and
any right to object to the commercial reasonableness of the disposition of any
such security; and (g) all errors and omissions in connection with any
Lender's administration of any of the Liabilities, any of the Agreements or
any other Cumulative Guarantor, or any other act or omission of any Lender
which changes the scope of such Guarantor's risk. The obligations of each
Guarantor hereunder shall be complete and binding forthwith upon the execution
of this Guaranty by it and subject to no condition whatsoever, precedent or
otherwise, and notice of acceptance hereof or action in reliance hereon shall
not be required.
5. Nature of Guaranty; Payments. This Guaranty is an absolute,
unconditional, irrevocable and continuing guaranty of payment and not a
guaranty of collection, and is wholly independent of and in addition to other
rights and remedies of any Lender with respect to the Borrower, any
collateral, any Cumulative Guarantor or otherwise, and it is not contingent
upon the pursuit by any Lender of any such rights and remedies, such pursuit
being hereby waived by each Guarantor. The obligations of each Guarantor
hereunder shall be continuing and shall continue (irrespective of any statute
of limitations otherwise applicable) and cover and include all the Liabilities
of the Borrower accruing or in the process of
GUARANTY AGREEMENT
-3-
<PAGE>
accruing to the Lenders before the Lenders deliver to the Guarantors a release
of this Guaranty, which is in writing, refers specifically to this Guaranty,
and is signed by a President, a Senior Vice President, or a Vice President of
each Lender. Nothing shall discharge or satisfy the liability of any Guarantor
hereunder except the full and irrevocable payment and performance of all of
the Liabilities and the expiration or termination of all the Agreements. All
payments to be made by the Guarantors hereunder shall be made without set-offs
or counterclaim, and each Guarantor hereby waives the assertion of any such
set-offs or counterclaims in any proceeding to enforce its obligations
hereunder. All payments to be made by each Guarantor hereunder shall also be
made without deduction or withholding for, or on account of, any present or
future taxes or other similar charges of whatsoever nature, provided that if
any Guarantor is nevertheless required by law to make any deduction or
withholding, such Guarantor shall pay to the Lenders such additional amounts
as may be necessary to ensure that the Lenders shall receive a net sum equal
to the sum which it would have received had no such deduction or withholding
been made. Each Guarantor agrees that, if at any time all or any part of any
payment previously applied by any Lender to any of the Liabilities must be
returned by such Lender for any reason, whether by court order, administrative
order, or settlement and whether as a "voidable preference", "fraudulent
conveyance" or otherwise, each Guarantor remains liable for the full amount
returned as if such amount had never been received by such Lender,
notwithstanding any termination of this Guaranty or any cancellation of any of
the Agreements and the Liabilities and all obligations of each Guarantor
hereunder shall be reinstated in such case.
6. Evidence of Liabilities. Each Lender's books and records showing the
Liabilities shall be admissible in any action or proceeding, shall be binding
upon each Guarantor for the purpose of establishing the Liabilities due from
the Borrower and shall constitute prima facie proof, absent manifest error, of
the Liabilities of the Borrower to such Lender, as well as the obligations of
each Guarantor to such Lender.
7. Subordination, Subrogation, Contribution, Etc. Each Guarantor agrees
that all present and future indebtedness, obligations and liabilities of the
Borrower to such Guarantor shall be fully subordinate and junior in right and
priority of payment to any indebtedness of the Borrower to the Lenders, and,
notwithstanding anything in this Guaranty or under any other guaranty or other
agreement to the contrary, each Guarantor hereby irrevocably waives all rights
of subrogation, contribution, reimbursement or indemnity whatsoever and all
rights of recourse to security for the debts and obligations of the Borrower,
whether arising under this Guaranty, under any other guaranty or agreement, by
operation of law or otherwise.
8. Assignment by Lenders. Each Lender shall have the right to assign and
transfer this Guaranty to any assignee of any portion of the Liabilities. Each
Lender's successors and assigns hereunder shall have the right to rely upon
and enforce this Guaranty.
9. Joint and Several Obligations. The obligations of the Guarantors
hereunder and all other Cumulative Guarantors shall be joint and several and
each Guarantor shall be liable for all of the Liabilities to the extent
provided herein regardless of any other Cumulative Guarantors, and each Lender
shall have the right, in its sole discretion to pursue its remedies against
any Guarantor without the need to pursue its remedies against any other
Cumulative Guarantor, whether now or hereafter in existence, or against any
one or more Cumulative Guarantors separately or against any two or more
jointly, or against some separately and some jointly.
GUARANTY AGREEMENT
-4-
<PAGE>
10. Representations and Warranties. Each Guarantor hereby represents and
warrants to the Lenders that:
(a) the execution, delivery and performance by the Guarantor of this
Guaranty are within its corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or filing
with, any governmental body, agency or official, and do not contravene or
constitute a default under, any provision of applicable law or regulation or
of the articles of incorporation or other charter documents or bylaws of such
Guarantor, or of any agreement, judgment, injunction, order, decree or other
instrument binding upon such Guarantor, or result in the creation or
imposition of any lien, security interest or other charge or encumbrance on
any asset of such Guarantor;
(b) this Guaranty constitutes a legal, valid and binding agreement
of each Guarantor, enforceable against the Guarantor in accordance with its
terms;
(c) as of the date hereof, each of the following is true and correct
for each of Amtran, Inc, Ambassadair Travel Club, Inc., ATA Vacations, Inc,
Amber Travel, Inc. and Amber Air Freight Corporation: (i) the fair saleable
value and the fair valuation of such Guarantor's property is greater than the
total amount of its liabilities (including contingent liabilities) and greater
than the amount that would be required to pay its probable aggregate liability
on its existing debts as they become absolute and matured, (ii) each
Guarantor's capital is not unreasonably small in relation to its current
and/or contemplated business or other undertaken transactions, and (iii) each
Guarantor does not intend to incur, or believe that it will incur, debt beyond
its ability to pay such debts as they become due; and
(d) the Borrower, the Guarantors and the other affiliates of the
Borrower are engaged as an integrated group in the business of providing air
travel and related services; that the integrated operation requires financing
on such a basis that credit supplied to the Borrower can be made available
from time to time to various subsidiaries of the Borrower, as required for the
continued successful operation of the integrated group as a whole; and that
each Guarantor has requested the Lenders to continue to lend and to make
credit available to the Borrower for the purpose of financing the integrated
operations of the Borrower and its subsidiaries, including each Guarantor,
with each Guarantor expecting to derive benefit, direct or indirectly, from
the loans and other credit extended by the Lenders to the Borrower, both in
such Guarantor's separate capacity and as a member of the integrated group,
inasmuch as the successful operation and condition of each Guarantor is
dependent upon the continued successful performance of the functions of the
integrated group as a whole. Each of the Guarantors hereby determines and
agrees that the execution, delivery and performance of this Guaranty are
necessary and convenient to the conduct, promotion or attainment of the
business of such Guarantor and in furtherance of the corporate purposes of
such Guarantor.
11. Binding on Successors and Assigns. This Guaranty shall be the valid,
binding and enforceable obligation of the Guarantors and their successors and
assigns.
GUARANTY AGREEMENT
-5-
<PAGE>
12. Indemnity. As a separate, additional and continuing obligation, each
Guarantor unconditionally and irrevocably undertakes and agrees with each
Lender that, should the Liabilities not be recoverable from any Guarantor as
guarantor under this Guaranty for any reason whatsoever (including, without
limitation, by reason of any provision of any of the Liabilities or the
Agreements being or becoming void, unenforceable, or otherwise invalid under
any applicable law) then, notwithstanding any knowledge thereof by any Lender
at any time, each Guarantor as original and independent obligor, upon demand
by the Lenders, will make payment to the Lenders of the Liabilities by way of
a full indemnity.
13. Cumulative Rights and Remedies, Etc. The obligations of each
Guarantor under this Guaranty are continuing obligations and a new cause of
action shall arise in respect of each default hereunder. No course of dealing
on the part of any Lender, nor any delay or failure on the part of any Lender
in exercising any right, power or privilege hereunder, shall operate as a
waiver of such right, power, or privilege or otherwise prejudice the Lenders'
rights and remedies hereunder; nor shall any single or partial exercise
thereof preclude any further exercise thereof or the exercise of any other
right, power or privilege. No right or remedy conferred upon or reserved to
any Lender under this Guaranty is intended to be exclusive of any other right
or remedy, and every right and remedy shall be cumulative and in addition to
every other right or remedy given hereunder or now or hereafter existing under
any applicable law. Every right and remedy given by this Guaranty or by
applicable law to the Lenders may be exercised from time to time and as often
as may be deemed expedient by any Lender.
14. Severability. If any one or more provisions of this Guaranty should
be invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not in
any way be affected, impaired, prejudiced or disturbed thereby, and any
provision hereunder found partially unenforceable shall be interpreted to be
enforceable to the fullest extent possible. If at any time all or any portion
of the obligation of any Guarantor under this Guaranty would otherwise be
determined by a court of competent jurisdiction to be invalid, unenforceable
or avoidable under Section 548 of the federal Bankruptcy Code or under any
fraudulent conveyance or transfer laws or similar applicable law of any
jurisdiction, then notwithstanding any other provisions of this Guaranty to
the contrary such obligation or portion thereof of such Guarantor under this
Guaranty shall be limited to the greatest of (i) the value of any quantified
economic benefits accruing to such Guarantor as a result of this Guaranty,
(ii) an amount equal to 95% of the excess on the date the relevant Liabilities
were incurred of the present fair saleable value of the assets of such
Guarantor over the amount of all liabilities of such Guarantor, contingent or
otherwise, and (iii) the maximum amount of which this Guaranty is determined
to be enforceable.
15. Merger; Amendments. This Guaranty is intended as a final expression
of the subject matter hereof and is also intended as a complete and exclusive
statement of the terms hereof. Each Guarantor's liability hereunder is
independent of and in addition to its liability under any other guaranty
previously of subsequently executed. No course of dealing, course of
performance or trade usage, and no parole evidence of any nature, shall be
used to supplement or modify any terms hereof, nor are there any conditions to
the full effectiveness of this Guaranty. None of the terms and provisions of
this Guaranty may be waived, altered, modified or amended in any way except by
an instrument in writing executed by duly authorized officers of each Lender
and the Guarantors.
GUARANTY AGREEMENT
-6-
<PAGE>
16. Consent to Jurisdiction. Notwithstanding the place where any
Liability originates or arises, or is to be repaid, any suit, action or
proceeding arising out of or relating to this Guaranty, any of the Agreements,
or any borrowing made in connection with any of the Agreements, may be
instituted in any court of the United States of America or the State of
Michigan, sitting in the City of Detroit, State of Michigan, or in any court
of the United States of America or the State of Indiana, sitting in the City
of Indianapolis, State of Indiana, and each Guarantor hereby irrevocably
waives any objection which it may have or hereafter have to the laying of the
venue of any such suit, action or proceeding and any claim that any such suit,
action or proceeding has been brought in an inconvenient forum; and each
Guarantor hereby irrevocably submits his person and property to the
jurisdiction of any such court in any such suit, action or proceeding. Each
Guarantor hereby consents to the service of process in any suit, action or
proceeding of the nature referred to in this Paragraph by the mailing of a
copy thereof by registered or certified mail, postage prepaid, or personally
delivering a copy thereof to such Guarantor, at the address set forth under
its signature below, or at such other address as such Guarantor may hereafter
specify to the Lenders in writing. Nothing in this Paragraph shall affect the
right of any Lender to serve process in any other manner permitted by law or
limit the right of the Lenders to bring proceedings against any Guarantor or
any of its property in the courts of any other jurisdiction in which it is
subject to service of process. To the extent that any Guarantor now or
hereafter may be entitled, in any jurisdiction in which proceedings may at any
time be commenced with respect to this Guaranty or the transactions
contemplated hereby, to claim itself or its revenues, assets or properties any
immunity (including, without limitation, immunity from service of process,
jurisdiction, suit, judgment, counterclaim, enforcement of or execution on a
judgment, attachment prior to the judgment, attachment in aid of execution of
a judgment or other legal process), and to the extent that in any such
jurisdiction there may be attributed any such immunity (whether or not
claimed), such Guarantor hereby irrevocably undertakes not to claim and hereby
irrevocably waives any such immunity to the fullest extent permitted by law.
Each Guarantor irrevocably and generally consents in respect of any
proceedings to the giving of any relief or the issue of any process in
connection with those proceedings including, without limitation, the making,
enforcement or execution against any assets whatsoever of any order or
judgment which may be made or given in those proceedings.
17. Governing Law; Headings. This Guaranty shall be governed by and
construed in accordance with the laws of the State of Michigan without giving
effect to the choice of law principles of such state. The headings of the
various paragraphs hereof are for the convenience of reference only and shall
in no way modify any of the terms or provisions hereof.
18. Notices. Any notice, demand, consent or request given or made to each
Guarantor by any Lender shall be deemed to have been duly given or made if
sent in writing (including telecommunications) to such Guarantor to the
address or telex or telecopy number set forth below the name of such Guarantor
on the signature page hereof, or at such other address or telex or telecopy
number as such Guarantor may hereafter specify to the Lenders in writing. All
notices or other communications sent by means of telecopy, telex or other wire
transmission shall be made with request for assurance of receipt in a manner
typical with respect to communications of that type. Written notices or other
communications shall be deemed delivered upon receipt if delivered by hand or
by telecopy, three business days after mailing if mailed, or one business day
after deposit with an overnight courier service if delivered by overnight
courier. Notices or other communications delivered by hand shall be deemed
delivered upon receipt.
GUARANTY AGREEMENT
-7-
<PAGE>
19. WAIVER OF JURY TRIAL. THE LENDERS, IN ACCEPTING THIS GUARANTY, AND
THE GUARANTORS, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF
THIS GUARANTY OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS GUARANTY OR ANY COURSE OF CONDUCT, DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY OF THEM. NEITHER THE
LENDERS NOR THE GUARANTORS SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR
OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE
PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY ANY OF THE LENDERS OR THE GUARANTORS EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY ALL OF THEM. THIS GUARANTY IS FREELY AND VOLUNTARILY
GIVEN TO THE LENDERS BY THE GUARANTORS WITHOUT ANY DURESS OR COERCION, AND
AFTER EACH GUARANTOR HAS EITHER CONSULTED WITH COUNSEL OR BEEN GIVEN AN
OPPORTUNITY TO DO SO. EACH GUARANTOR HAS CAREFULLY AND COMPLETELY READ ALL OF
THE TERMS AND PROVISIONS OF THIS GUARANTY AND OF EACH AGREEMENT.
EXECUTED and effective as of the 24 day of July, 1997.
AMTRAN, INC.
By: /s/ Kenneth K. Wolff
---------------------------------
Its: Kenneth K. Wolff
Executive Vice President & CFO
-------------------------------
AMBASSADAIR TRAVEL CLUB, INC.
By: /s/ Kenneth K. Wolff
---------------------------------
Its: Kenneth K. Wolff
Executive Vice President & CFO
-------------------------------
ATA VACATIONS, INC.
(formerly Amber Tours, Inc.)
By: /s/ Kenneth K. Wolff
---------------------------------
Its: Kenneth K. Wolff
Executive Vice President & CFO
-------------------------------
GUARANTY AGREEMENT
-8-
<PAGE>
AMBER TRAVEL, INC.
By: /s/ Kenneth K. Wolff
---------------------------------
Its: Kenneth K. Wolff
Executive Vice President & CFO
-------------------------------
AMERICAN TRANS AIR
TRAINING CORPORATION.
By: /s/ Kenneth K. Wolff
---------------------------------
Its: Kenneth K. Wolff
Executive Vice President & CFO
-------------------------------
AMERICAN TRANS AIR
EXECUJET, INC.
By: /s/ Kenneth K. Wolff
---------------------------------
Its: Kenneth K. Wolff
Executive Vice President & CFO
-------------------------------
AMBER AIR FREIGHT CORPORATION,
By: /s/ Kenneth K. Wolff
---------------------------------
Its: Kenneth K. Wolff
Executive Vice President & CFO
-------------------------------
Address for each Guarantor:
7337 Washington Street
Indianapolis, Indiana 46231
Telecopy No.: (317) 240-7091
GUARANTY AGREEMENT
-9-
Exhibit 10.3
Execution Copy
SECURITY AGREEMENT AND CHATTEL MORTGAGE
(Aircraft and Engines)
THIS SECURITY AGREEMENT AND CHATTEL MORTGAGE executed as of July 24, 1997
(this "Mortgage"), by AMERICAN TRANS AIR, INC., an Indiana corporation (the
"Mortgagor"), having its chief place of business at 7337 West Washington
Street, Indianapolis, Indiana 46231, in favor of NBD Bank, N.A. a national
banking association having its principal banking offices at One Indiana
Square, Indianapolis, Indiana 46266, as Agent, and as the assignee of NBD Bank
(in such capacity, the "Mortgagee") for the banks party from time to time to
the Credit Agreement described below (herein individually called a "Bank" and
collectively called the "Banks");
W I T N E S S E T H :
WHEREAS, the Mortgagor is an air carrier certificated under Sections
41102 and 44705 of Title 49 of the United States Code, and holds air carrier
operating certificates;
WHEREAS, the Mortgagor has heretofore executed and delivered an Amended
and Restated Security Agreement and Chattel Mortgage executed as of March 28,
1996 (hereinafter called the "Existing Mortgage"), and the Existing Mortgage
was duly recorded by the Federal Aviation Administration of the Oklahoma City,
Oklahoma, on May 28, 1996 as conveyance No. PP006297 pursuant to Section 44017
of Title 49 of the United States Code, as amended by the supplements described
on Schedule II hereto, and this Mortgage amends and restates the Existing
Mortgage in its entirety;
WHEREAS, the Mortgagor has executed a Credit Agreement dated as of the
date hereof (as amended or modified from time to time, the "Credit Agreement")
with the Mortgagee, as Agent, Amtran, Inc., an Indiana corporation ("Amtran"),
as a Guarantor, and the Banks, which replaces the credit agreement referenced
in the Existing Mortgage;
WHEREAS, it is a requirement under the Credit Agreement that the
Mortgagor enter into this Mortgage for the benefit of the Mortgagee and the
Banks to secure the payment and performance of the following covenants,
indebtedness, liabilities, and obligations of the Mortgagor (being herein
collectively called the "Obligation"):
All present and future indebtedness, obligations, and liabilities, and
all renewals and extensions thereof, now or hereafter owed to Mortgagee and
the Banks, or any of them, by Mortgagor, arising from, by virtue of, evidenced
by, or pursuant to the Credit Agreement, or the promissory notes issued
pursuant thereto at any time ("Notes"), and any and all other indebtedness,
obligations and liabilities arising from this Mortgage or any and all other
instruments, agreements, guaranties, and documents ever delivered to Mortgagee
or any Bank pursuant to the Credit Agreement at any time, including without
limitation reimbursement obligations of the Mortgagor in connection with any
letter of credit issued or to be issued by Mortgagee and any obligations to
cash collateralize outstanding letters of credit and all other present and
future indebtedness, obligations and liabilities under or pursuant to any
other Loan Documents (as any of the foregoing may hereafter at any time and
from time to time may be renewed, extended, amended, supplemented, or
restated), and any and all renewals, extensions, or restatements of, or
amendments or supplements to, all or any part of the foregoing, together with
all interest accruing thereon (including
<PAGE>
without limitation any interest accruing subsequent to any petition filed by
or against the Mortgagor or any Guarantor under the U.S. Bankruptcy Code) and
all costs, expenses, and attorneys' fees incurred in the enforcement or
collection of the indebtedness, obligations, and liabilities described in this
paragraph, whether such are direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several.
NOW, THEREFORE, to secure the due and punctual payment and performance of
the Obligation, the Mortgagor hereby mortgages to the Mortgagee, for the
benefit of itself, the Administrative Agent and the Banks, and grants to the
Mortgagee, for the benefit of itself, the Administrative Agent and the Banks,
a security interest in the property described below (all property so subject
to the lien and security interest of this Mortgage at any time being herein
referred to as the "Mortgaged Aviation Property"):
(a) The aircraft described in Schedule I hereto (each such aircraft,
while it shall be subject to the lien and security interest of this Mortgage,
being herein referred to as the "Mortgaged Airplane" and all of such aircraft
so subject collectively being herein referred to as the "Mortgaged
Airplanes"), together with (and the terms "Mortgaged Airplane" and "Mortgaged
Airplanes" shall include) all appliances, parts, instruments, appurtenances,
accessories and equipment (including, without limitation, communication and
radar equipment) owned by the Mortgagor now or hereafter incorporated or
installed in or attached to any of such aircraft, and all substitutions,
replacements and renewals of any and all thereof owned by the Mortgagor and
all other property owned by the Mortgagor which shall hereafter become
physically incorporated or installed in or attached to such aircraft, whether
any of the foregoing is now owned by the Mortgagor or hereafter acquired by
it, exclusive of aircraft engines (except that the Mortgaged Engines (as
defined below) shall be subject to such lien and security interest pursuant to
clause (b) below);
(b) All aircraft engines described in Schedule I hereto or described in
any Supplemental Chattel Mortgage substantially in the form of Annex 1 hereto
which shall be hereafter delivered to Mortgagee pursuant to the provisions of
Section 7 (any such engine, while it shall be subject to the lien and security
interest of this Mortgage, being herein referred to as a "Mortgaged Engine"
and all such engines so subject collectively being herein referred to as the
"Mortgaged Engines") together with (and the terms "Mortgaged Engine" or
"Mortgaged Engines" shall include) all appliances, parts, instruments,
appurtenances, accessories and equipment owned by the Mortgagor now or
hereafter incorporated or installed in or attached to such engine or engines,
and all substitutions, replacements and renewals of any and all thereof owned
by the Mortgagor and all other property owned by the Mortgagor which shall
hereafter become physically incorporated or installed in or attached to such
engine or engines, whether any of the foregoing is now owned by the Mortgagor
or hereafter acquired by it, exclusive of the Mortgaged Airplanes (as defined
above);
(c) All books, records and documents of Mortgagor relating to the
Mortgaged Aviation Property, its operation, maintenance or repair, including
without limitation, all log book(s) for the Mortgaged Airplanes and all
maintenance records, maintenance manuals, flight manuals, operating manuals
and minimum equipment lists for the Mortgaged Airplanes or Mortgaged Engines,
whether now owned or hereafter acquired; and
(d) All proceeds of any of and all the properties described in paragraphs
(a) and (b) and (c) above, including, without limitation, all rents, leases
and profits and all insurance proceeds (and the Mortgagor's right to receive
such insurance proceeds) with respect to any of the Mortgaged Airplane or any
Mortgaged Engine and other proceeds of any kind resulting from any Event of
Loss (as hereinafter defined)
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with respect to any Mortgaged Airplane or Mortgaged Engine or otherwise
arising with respect to any Mortgaged Airplane or Mortgaged Engine;
subject, however, to the provisions of Section 6 and 17 hereof.
Mortgagor further covenants to Mortgagee and agrees with the Mortgagee as
follows:
SECTION 1. Certain Representatives, Warranties and Covenants. The
Mortgagor hereby represents and warrants and hereby covenants as follows:
(a) From and after the Closing Date (as defined in the Credit Agreement)
the Mortgagor will have, and at all times thereafter will have, good title to
the Mortgaged Airplanes and the Mortgaged Engines free and clear of all
mortgages, deeds of trust, liens, security interests and other charges or
encumbrances except for those created or permitted by this Mortgage or by the
terms of the Credit Agreement and has, and at all times will have, full power
and authority to mortgage and grant a lien and security interest in, and
assign, the Mortgaged Aviation Property in the manner aforesaid.
(b) The Mortgagor is, and at all times will be, (i) a "Citizen of the
United States" as defined in Section 40102(a)(15) of 49 U.S.C., (ii) an air
carrier as to which the provisions of Section 1110 of the United States
Bankruptcy Code apply, and (iii) an air carrier certificated under Sections
41102(a) and 44705 of 49 U.S.C.
(c) Each of the Mortgaged Airplanes is registered with the Federal
Aviation Administration in the name of the Mortgagor and Mortgagor will take
all necessary action to cause such registration to remain in effect. An
airworthiness certificate has been duly issued under the Act for each of the
Mortgaged Airplanes and all of such airworthiness certificates are in full
force and effect.
(d) The Mortgaged Airplanes and Mortgaged Engines are in such condition
as to comply with the requirements of Section 4; and the insurance required by
Section 9 is in full force and effect.
(e) The chief place of business and chief executive office (as such terms
are used in Article 9 of the Uniform Commercial Code) of the Mortgagor is
located at 7337 West Washington Street, Indianapolis, Indiana 46231.
SECTION 2. Inspection. The Mortgagor will permit any authorized
representatives of the Mortgagee to inspect the Mortgaged Aviation Property or
any part thereof, and reasonably to examine, copy or make extracts from, any
and all books, records and documents in the possession of the Mortgagor
relating to the Mortgaged Aviation Property or any part thereof and
performance of this Mortgage, all at such reasonable times and as often as may
reasonably be requested. Mortgagee shall have no duty to make any such
inspection or examination and Mortgagee shall not incur any liability or
obligation by reason of not making any such inspection or examination.
SECTION 3. Liens, Encumbrances and Claims. The Mortgagor will not
directly or indirectly create, incur, assume or suffer to exist any lien,
security interest, charge or encumbrance on or with respect to any part or all
of the Mortgaged Aviation Property, title thereto or any interest therein,
except any of the following (herein referred to collectively as "Permitted
Encumbrances"): (a) the lien and security interest of this Mortgage, (b)
transfers of possession and other acts permitted by Section 5, and (c)
Permitted Liens as
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defined in the Credit Agreement.
SECTION 4. Maintenance and Operation. Mortgagor shall bear all risk of
loss of or damage to the Mortgaged Aviation Property. The Mortgagor, at its
own cost and expense, shall service, repair and maintain each Mortgaged
Airplane and each Mortgaged Engine and shall install replacement equipment and
parts on each Mortgaged Airplane and each Mortgaged Engine so as to keep each
Mortgaged Airplane and each Mortgaged Engine in such operating condition as
may be required to permit each such Mortgaged Airplane and Mortgaged Engine to
be utilized in commercial charter operations and scheduled airline service
world-wide and shall maintain all records, logs and other materials that may
be required to permit each Mortgaged Airplane and each Mortgaged Engine to be
so utilized. Mortgagor will comply and will cause compliance with all laws,
regulations or orders of governmental authority having jurisdiction over
Mortgagor or the Mortgaged Aviation Property, including all applicable
operational and maintenance requirements of the Federal Aviation
Administration, and will at all times maintain in effect appropriate United
States FAA Certificates of Airworthiness for each of the Mortgaged Airplanes.
The Mortgagor agrees that the Mortgaged Airplanes and Mortgaged Engines will
not be maintained, used or operated in violation of any law or any rule,
regulation or order of any government or governmental authority having
jurisdiction (domestic or foreign), or in violation of any airworthiness
certificate, license or registration relating to the Mortgaged Airplanes or
Mortgaged Engines issued by any such authority, and in the event that such
laws, rules, regulations or orders require alteration of any Mortgaged
Airplane or any Mortgaged Engine, the Mortgagor, at its own cost and expense,
will conform thereto or obtain conformance therewith and will maintain the
same in proper operating condition under such laws, rules, regulations and
orders; provided, however, that the Mortgagor may, in good faith, contest the
validity or application of any such law, rule, regulation or order in any
reasonable manner that does not materially adversely affect the interests of
Mortgagee under this Mortgage. Without the prior written consent of Mortgagee,
Mortgagor shall not fly any Mortgaged Airplane or any Mortgaged Engine or
suffer any thereof to be flown or located to, from or within (a) any area
excluded from coverage by any insurance policy required hereunder to be
maintained in effect with respect to each of the Mortgaged Airplanes or any
Mortgaged Engine or (b) any area of hostilities recognized or designated by
the United States Government or an insurance carrier then insuring aircraft in
Borrower's fleet, unless fully covered by war-risk hull insurance or unless
such Mortgaged Airplane or such Mortgaged Engine is operated or used under
contract or lease with the Government of the United States of America under
which contract that Government shall assume all liability for any damage,
loss, destruction or failure to return possession of such Mortgaged Airplane
or such Mortgaged Engine at the end of the term of such contract.
SECTION 5. Sale, Assignment, Lease, etc. Except as otherwise provided in
the Credit Agreement, the Mortgagor will not, without the prior written
consent of Mortgagee, sell, assign, lease or otherwise dispose of or
relinquish possession of any of the Mortgaged Aviation Property, except that,
unless a Default Event (as hereinafter defined) shall have occurred and be
continuing, the Mortgagor may, in the ordinary course of business: (i)
transfer possession of any Mortgaged Airplane or any Mortgaged Engine to the
United States Government pursuant to a contract or lease meeting the
requirements of the clause (b) of the proviso to the second sentence of
Section 4, a copy of which shall be furnished to the Mortgagee; (ii) transfer
possession of any Mortgaged Airplane or any Mortgaged Engine to the
manufacturer thereof or any other organization for testing, repairs,
servicing, maintenance, overhaul, alterations or modifications; (iii) enter
into any lease of any Mortgaged Engine provided that any such lease does not
have a term in excess of ninety (90) days; and (iv) enter into any "wet lease"
or other similar arrangement under which the Mortgagor maintains operational
control of the Mortgaged Aviation Property and which do not have a term in
excess of six (6) months; provided, however, that, in connection with any of
the foregoing, neither any
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Mortgaged Airplane nor any Mortgaged Engine shall be or become subject to any
pooling, interchange or exchange agreement or arrangement without the prior
written approval of the Mortgagee.
SECTION 6. Release of Mortgaged Aviation Property. The property subject
to this Mortgage shall be automatically released from the lien and security
interest of this Mortgage and the Mortgagee shall release such property upon
irrevocable payment and performance in full of the Obligation and the
expiration or termination of the Commitments (as defined in the Credit
Agreement). Portions of the property subject to this Mortgage shall also be
released under the terms and conditions specified in Section 3.02 of the
Credit Agreement.
SECTION 7. Subsequently Mortgaged Engines. If an Event of Loss shall
occur with respect to a Mortgaged Engine, but not to a Mortgaged Airplane, the
Mortgagor shall give Mortgagee prompt written notice thereof and shall, within
30 days after the occurrence of such Event of Loss, duly convey to Mortgagee,
for the benefit of itself, the Administrative Agent and the Banks, a lien and
security interest in another equivalent engine of the same model and
manufacturer owned or acquired by the Mortgagor (and not already subject to a
security interest securing the Obligation), free and clear of all security
interests, liens, charges and other encumbrances (except Permitted
Encumbrances) and having a value and utility reasonably equivalent to, and
being in as good operating condition as, and having performance and durability
characteristics reasonably equivalent to, the Mortgaged Engine with respect to
which such Event of Loss occurred if such Mortgaged Engine were in the
condition and repair as required by the terms hereof immediately prior to the
occurrence of such Event of Loss (any such engine so substituted hereunder
being herein called a "Replacement Engine").
In connection with any substitutions hereunder, the Mortgagor shall
deliver to Mortgagee the following:
(A) a Supplemental Chattel Mortgage substantially in the form of
Annex 1 hereto duly executed by the Mortgagor appropriately describing the
Replacement Engine or Engines to be subjected to the lien and security
interest of this Mortgage;
(B) a certificated signed by the President and by the Treasurer of
the Mortgagor (an "Officers' Certificate"), dated the date of execution of
such Supplemental Chattel Mortgage, stating:
(1) that the Mortgagor is the owner of the Replacement Engines
described in such Supplemental Chattel Mortgage, free and clear
of all security interests, liens, charges and other
encumbrances except Permitted Encumbrances and that legal and
beneficial title thereto is vested in the Mortgagor;
(2) that such Supplemental Chattel Mortgage has been duly
authorized, executed and delivered by the Mortgagor;
(C) an opinion or opinions of counsel for the Mortgagor acceptable
to Mortgagee, as to matters set forth in subparagraph (2)(x) below, and of
Crowe & Dunlevy, P.C., or other counsel acceptable to Mortgagee, as to the
other matters set forth below, each such opinion to be dated the date of
execution of such Supplemental Chattel Mortgage, stating, as the case may be:
(D) that the Replacement Engine or Engines described in such
Supplemental Chattel
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Mortgage are free and clear of all recorded security interests, liens, charges
and other encumbrances, except Permitted Encumbrances;
(i) that such Supplemental Chattel Mortgage (x) has been duly
authorized, executed and delivered by the Mortgagor and is enforceable against
the Mortgagor and (y) creates a valid first security interest in and to the
Replacement Engine or Engines described in such Supplemental Chattel Mortgage,
subject to Permitted Encumbrances, enforceable, wherever such Replacement
Engine or Engines are located within the United States, against all third
parties and securing all obligations purported to be secured thereby, and such
security interest is fully perfected; and
(1) that such Supplemental Chattel Mortgage has been duly filed for
recordation in accordance with the provisions of the Act; it being understood
that in rendering the foregoing opinions, counsel for matters set forth in
subparagraph (2)(x) above may state that they do not give any opinion as to
the laws of any jurisdictions other than the United States of America and the
State of Indiana and that their opinions are subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law), and Crowe & Dunlevy, P.C., or such other
counsel for other matters may state that their opinions are subject to the
limitations, assumptions and exceptions set forth in the opinion of Crowe &
Dunlevy, P.C., delivered in connection with the filing of this Mortgage; and
(2) such evidence of title of the Mortgagor to such Replacement
Engine or Engines, of the value thereof and compliance with the insurance
provisions of Section 9 with respect thereto, as Mortgagee may reasonably
request.
SECTION 8. Replacement of Parts; Alterations, Modification and
Additions. (a) The Mortgagor, at its own cost and expense, will promptly
replace all appliances, parts, instruments, appurtenances, accessories and
other equipment of whatever nature (collectively, the "Parts"), which may from
time to time be incorporated or installed in or attached to any Mortgaged
Airplane or any Mortgaged Engine and which may from time to time become worn
out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or
permanently rendered unfit for use for any reason whatever. In addition, in
the ordinary course of maintenance, service, repair or testing, the Mortgagor
may remove any Parts, whether or not worn out, lost, stolen, destroyed,
seized, confiscated, damaged beyond repair or permanently rendered unfit for
use; provided, however, that, except as otherwise provided in paragraph (b)
below, the Mortgagor shall replace such Parts as promptly as practicable. All
replacement Parts shall be free and clear of all security interests, liens,
charges and other encumbrances (except Permitted Encumbrances) and shall be in
as good operating condition as, and shall have a value and utility reasonably
equivalent to, the value and utility of Parts replaced.
Except as provided in paragraph (b) below, all Parts owned by the
Mortgagor at any time removed from any Mortgaged Airplane or any Mortgaged
Engine shall remain subject to the lien and security interest of this
Mortgage, no matter where located, until such time as such Parts shall be
replaced by Parts which have been incorporated or installed in or attached to
such Mortgaged Airplane or such Mortgaged Engine and which meet the
requirements for replacement Parts specified above. Immediately upon any
replacement Part owned by the Mortgagor becoming incorporated or installed in
or attached to such Mortgaged Airplane or any Mortgaged Engine as above
provided, without further act, such replacement Part shall become subject to
the lien and security interest of this Mortgage.
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(b) The Mortgagor, at its own cost and expense, may from time to
time make such alterations and modifications in and additions to any Mortgaged
Airplane or any Mortgaged Engine as the Mortgagor may deem desirable in the
proper conduct of its business; provided, however, that no such alteration,
modification or addition shall diminish the value, utility, condition or
airworthiness of any Mortgaged Airplane or any Mortgaged Engine below the
value, utility, condition or airworthiness thereof immediately prior to such
alteration, modification or addition. All Parts owned by the Mortgagor
incorporated or installed in or attached to or added to any Mortgaged Airplane
or any Mortgaged Engine as the result of such alteration, modification or
addition shall, without further act, become subject to the lien and security
interest of this Mortgage.
SECTION 9. Insurance, Events of Loss, Etc. (a) The Mortgagor will at
all times carry and maintain in effect, or cause to be carried and maintained
in effect, on the Mortgaged Aviation Property, at its own cost and expense,
(i) third party and passenger liability insurance in an amount not less than
the greater of (x) $150,000,000.00 per occurrence and (y) the amount of such
insurance applicable to any other aircraft of the same model and manufacturer
as the aircraft described on Schedule I hereto which is operated by the
Mortgagor either as owner or as original primary lessee (and not as sublessee
or assignee of another primary lessee) on which the Mortgagor carries
insurance; (ii) property damage liability insurance; (iii) aircraft all-risk
hull insurance for each Mortgaged Airplane and the Mortgaged Engines and Parts
belonging to, installed in or appurtenant to each Mortgaged Airplane (which
all-risk hull insurance shall include coverage of Mortgaged Engines and Parts
while temporarily removed from the Mortgaged Airplanes and not replaced by
similar components) in an amount not less than 100% of the replacement cost
thereof (or such other amount as the Mortgagee may approve); (iv) all-risk of
physical loss or damage insurance on Mortgaged Engines and Parts while removed
from the Mortgaged Airplane; (v) war-risk insurance (when available from the
United States or an agency thereof or a commercial carrier and required by
Section 4); and (vi) baggage and cargo liability insurance; in each case in
such amounts (except where amounts are specified above) and in such form,
including without limitation the form of the loss payable clause and the
designation of named insureds, and with such insurance companies, underwriters
or funds of recognized responsibility as shall be reasonably satisfactory to
Mortgagee and as shall be declared from time to time by independent aircraft
insurance brokers (who may be the brokers regularly employed by the
Mortgagor), appointed by the Mortgagor and reasonably acceptable to Mortgagee,
to be necessary or advisable (in view of the insurance usually carried by
corporations engaged in the same or a similar business as the Mortgagor,
similarly situated with the Mortgagor and owning similar aircraft and engines)
for the protection of the interests of Mortgagee. All insurance required
hereunder shall provide for payment in the United States in U.S. Dollars. All
third party and passenger liability and property damage liability insurance
shall insure against liability which Mortgagee or the Mortgagor might incur by
reason of the ownership or operation of any of the Mortgaged Airplanes in or
over any area (including the high seas) in which any of the Mortgaged
Airplanes is operated or located, shall be of the type usually carried by
corporations engaged in the same or a similar business, similarly situated
with the Mortgagor, and owning similar aircraft and engines and shall cover
risks of the kind customarily insured against by such corporations and, in the
case of property damage liability insurance, shall be in amounts that are not
less than property damage liability insurance applicable to the other aircraft
in the Mortgagor's fleet on which the Mortgagor carries such insurance.
(b) All liability policies shall name Mortgagee as an additional
insured as its interests may appear. All other policies required hereby
covering loss or damage to the Mortgaged Aviation Property shall name
Mortgagee as an additional insured as its interests may appear and as a lender
loss payee and shall provide that any payment thereunder for any loss or
damage shall be paid to Mortgagee, except as permitted under the Credit
Agreement; provided, however, if no Default Event has occurred and is
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continuing and the Mortgagor is otherwise entitled to receive a payment
thereunder, proceeds under such policies which are received by the Mortgagee
may be disbursed by the Mortgagee to the Mortgagor upon the written request of
the Mortgagor subject to and provided that each of the following conditions is
satisfied in form and substance satisfactory to the Mortgagee: (i) all such
proceeds shall be applied to repair in full any such loss or damage, (ii) the
Mortgagee shall have determined in its sole discretion that such repairs are
feasible and economically prudent, (iii) there are sufficient proceeds on
deposit with the Mortgagee to completely repair any such loss or damage, or
the Mortgagor shall deposit funds with the Mortgagee in the amount of any
deficiency, (iv) all disbursements of such proceeds shall be paid by the
Mortgagee from time to time as works progresses based upon disbursement
procedures acceptable to the Mortgagee, (v) the repairs can be completed
within sixty (60) days from the date of such loss or damage or such other time
agreed to in writing between Mortgagor and Mortgagee, (vi) the Mortgagor shall
pay or reimburse the Mortgagee for all of its reasonable costs and expenses
incurred in connection with the disbursement of such proceeds, and (vii) upon
completion of the repairs, the Mortgagee's collateral would not be impaired or
value reduced in any way from the value thereof prior to the loss or damage,
as determined by the Mortgagee. All policies shall insure the interests of
Mortgagee regardless of any breach or violation by the Mortgagor of
warranties, declarations or conditions contained in such policies or any
action or inaction of the Mortgagee or others; each such policy shall be
primary without right of contribution from any other insurance which is
carried by the Mortgagor and shall expressly provide that all provisions
thereof, except the limits of liability, shall operate in the same manner as
if there were a separate policy covering each insured; each such policy shall
waive any right of subrogation of the insurers against Mortgagee; each such
policy shall waive any right of the insurers to any set-off or counterclaim or
any other deduction, whether by attachment or otherwise, in respect of any
liability of Mortgagee; and each such policy shall provide that, if any
premium or installment is not paid when due, or if such insurance is canceled
or terminated for any reason whatsoever, or if the scope of coverage or the
limits of liability are reduced or any other material adverse change is made
in or to the rights of Mortgagee, the insurers will promptly notify Mortgagee
in writing and any such cancellation, termination or change shall not be
effective as to the Mortgagee for 30 days (seven days in the case of war-risk
policies) after receipt of such notice, and that appropriate certification
shall be made to Mortgagee by each insurer with respect thereto.
(c) Any insurance proceeds received as the result of any property
damage loss not constituting an Event of Loss with respect to any Mortgaged
Airplane or any Mortgaged Engine shall be applied in payment for any repair or
replacement required by the terms of Section 7 or 8 if not already paid for by
the Mortgagor, and any balance remaining after any such repair or replacement
(or if already paid for by Mortgagor, all such insurance proceeds), shall be
retained by, or immediately paid over to, the Mortgagor; provided, however,
that no Default Event shall have occurred and be continuing; and provided
further, however, that Mortgagee shall have received from the Mortgagor prior
to the making of any such payment the Mortgagor a certificate signed by the
President of the Mortgagor certifying that the property so damaged has been
repaired in full, that the costs of such repair (which costs shall be
specified in such certificate) have been paid in full, and that no Default
Event shall have occurred and be continuing. If such repairs are made pursuant
to contracts requiring advance or progress payments, such insurance requiring
advance or progress payments, such insurance proceeds shall be paid over to
the Mortgagor from time to time upon appropriate certification by the
Mortgagor.
(d) On or before the date of this Mortgage and thereafter at least
once during each calendar year commencing with 1998, the Mortgagor will cause
its insurance broker(s) to furnish the Mortgagee a detailed report signed by
such broker(s) showing the insurance then carried and maintained on the
Mortgaged Airplanes and Mortgaged Engines and stating the opinion of such
broker(s) that the
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insurance then carried and maintained on the Mortgaged Airplanes and Mortgaged
Engines complies with the terms thereof. The Mortgagor will cause such
broker(s) to agree to advise the Mortgagee in writing promptly of any default
in the payment of any premium and of any other act or omission on the part of
the Mortgagor of which it shall have knowledge that might invalidate or render
unenforceable, in whole or in part, any such insurance. The Mortgagor will
promptly deliver to the Mortgagee, if requested by the Mortgagee, copies of
certificates of insurance evidencing all such insurance.
(e) For purposes of this Mortgage the term "Event of Loss" shall
mean any of the following events with respect to any Mortgaged Airplane or any
Mortgaged Engine: (i) the actual total loss of such Mortgaged Airplane or such
Mortgaged Engine, (ii) the Mortgaged Airplane or such Mortgaged Engine shall
become lost, stolen (and not returned within 30 days), destroyed, damaged
beyond repair or permanently rendered unfit for use for any reason whatsoever,
(iii) any damage to such Mortgaged Airplane or such Mortgaged Engine that
shall result in an insurance settlement with respect thereto on the basis of a
total loss, or (iv) the condemnation, confiscation or seizure of, or
requisition of title to or use (other than use by the United States
Government) of, such Mortgaged Airplane or such Mortgaged Engine continuing to
the earlier of the expiration of 60 days thereafter or the receipt of
insurance or other proceeds with respect thereto.
SECTION 10. Indemnification and Expenses. The Mortgagor does hereby
assume liability for, and does hereby agree to indemnify, protect, save and
keep harmless the Mortgagee, the Administrative Agent and the Banks and their
successors, assigns, representatives, officers, directors, agents and servants
(the "Indemnitees") from and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, suits, costs, expenses and
disbursements, including legal expenses, of whatsoever kind and nature imposed
on, incurred by or asserted against any of the Indemnitees (whether or not
also indemnified against by any other person) in any way relating to or
arising out of this Mortgage, the Credit Agreement, the Note or the ownership,
lease, service, control, repair, overhaul, testing, inspection, possession,
management, use, operation, condition, sale or other disposition of any
Mortgaged Aviation Property; provided, however, that the Mortgagor shall not
be required to indemnify anyone for the willful misconduct or gross negligence
of any of the Indemnitees. The indemnities contained in this Section shall
continue in full force and effect notwithstanding the termination of this
Mortgage with respect to claims arising or liabilities incurred prior to such
termination.
SECTION 11. Default Events; Remedies. (a) The following events shall
constitute "Default Events" (whether any such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body) and each such
Default Event shall be deemed to exist and continue so long as, but only as
long as, it shall not have been remedied:
(i) the occurrence of any "Event of Default", as that term is
defined in the Credit Agreement; or
(ii) the Mortgagor shall fail to carry and maintain insurance
on or with respect to the Mortgaged Airplanes and/or Mortgaged Engines in
accordance with the provisions of Section 9; or
(iii) the Mortgagor shall voluntarily create, incur or assume
any lien, security interest, charge or encumbrance on or with respect to any
part of or all the Mortgaged Aviation Property in violation of Section 3; or
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(iv) the Mortgagor shall fail to maintain the registration of
any of the Mortgaged Airplanes under the Act (and the regulations thereunder);
or
(v) the Mortgagor shall sell, assign, lease or otherwise
dispose of or relinquish possession of any of the Mortgaged Aviation Property
in violation of Section 5; or
(vi) the Mortgagor shall fail to perform or observe any other
covenant or agreement to be performed or observed by it hereunder and such
failure shall continue unremedied for a period of thirty (30) days after
written notice thereof by Mortgagee; or
(vii) any material representation or warranty made by the
Mortgagor herein or any document or certificate furnished by the Mortgagor to
Mortgagee in connection herewith shall at any time prove to have been
incorrect in any material respect when made; or
(viii) this Mortgage shall at any time for any reason cease to
be in full force and effect or shall be declared to be null and void other
than solely by reason of the gross negligence or willful misconduct of the
Mortgagee.
(b) If any Default Event shall occur and be continuing, then, in any
such event, Mortgagee may forthwith to the extent permitted by applicable law:
(i) apply to a court of competent jurisdiction to obtain specific performance
or observance by the Mortgagor of any covenant, agreement or undertaking on
the part of the Mortgagor hereunder that the Mortgagor shall have failed to
observe or perform or to obtain aid in the execution of any power granted
herein, and/or (ii) proceed to foreclose upon and against the lien and
security interest created by this Mortgage according to the laws of the
applicable jurisdiction by doing any one or more or all of the acts described
in paragraph (c) below and/or the following acts, as the Mortgagee in its sole
and complete discretion may then elect:
(A) exercise all the rights and remedies upon default, in
foreclosure and otherwise, available to a mortgagee or secured party under the
provisions of applicable law;
(B) institute legal proceedings to foreclose upon and against
the lien and security interest granted by this Mortgage, to recover judgments
for the Obligation then due and owing and secured hereby, and to collect the
same out of any of or all the Mortgaged Aviation Property or the proceeds of
any sale thereof;
(C) institute legal proceedings for the sale, under the
judgment or decree of any court of competent jurisdiction, of any of or all
the Mortgaged Aviation Property;
(D) without regard to the adequacy of the security for the
Obligation by virtue of this Mortgage or any other collateral or to the
solvency of the Mortgagor, institute legal proceedings for the appointment of
a receiver or receivers with respect to any of or all the Mortgaged Aviation
Property pending foreclosure hereunder or for the sale of any of or all the
Mortgaged Aviation Property under the order of a court of competent
jurisdiction or under other legal process; or
(E) personally or by agents or attorneys, enter upon any
premises where the Mortgaged Aviation Property or any part thereof may then be
located, and take possession of all or any part
10
<PAGE>
thereof, and hold, store and keep idle, or lease, operate or otherwise use or
permit the use of, the Mortgaged Aviation Property or any part thereof, for
such time and upon such terms as the Mortgagee may in its sole and complete
discretion deem to be in its best interest, and demand, collect, and retain
all rent, earnings, and other sums due and to become due in respect of the
same from any party whomsoever, accounting only for net earnings, if any,
arising from such use and charging against all receipts from the use of the
same or from the sale thereof, by court proceedings or pursuant to paragraph
(c) below, all other costs, expenses, charges, damages and other losses
resulting from such use.
At any sale pursuant to this Section 11, whether under the power of
sale or by virtue of judicial proceedings, it shall not be necessary for
Mortgagee or a public officer under order of a court to have present physical
or constructive possession of the Mortgaged Aviation Property to be sold. Upon
any sale hereunder of any of or all the Mortgaged Aviation Property or any
interest therein, the receipt of the officer making such sale under judicial
proceedings or of Mortgagee shall be sufficient discharge to the purchaser for
the purchase money, and such purchaser shall not be obligated to see to the
application thereof. Any sale hereunder of any of or all the Mortgaged
Aviation Property or any interest therein shall, to the extent permitted by
applicable law, be a perpetual bar against the Mortgagor with respect to such
Mortgaged Aviation Property or interest therein, as the case may be.
(c) If Mortgagee should elect to foreclose upon and against the lien
and security interest created in and by this Mortgage, the Mortgagor shall,
upon demand of Mortgagee, deliver to Mortgagee all or any part of the
Mortgaged Aviation Property at such time or times and place or places as
Mortgagee may specify; and Mortgagee is hereby authorized and empowered to the
extent permitted by law, with or without the aid of process of law, to enter
upon any premises where the Mortgaged Aviation Property or any part thereof
may be located and take possession of and remove the same. Mortgagee may
thereafter sell, lease and dispose of, or cause to be sold, leased or disposed
of, all or any part of the Mortgaged Aviation Property at one or more public
or private sales, leasings or other dispositions, at such places and times and
on such terms and conditions as the Mortgagee may deem fit. Mortgagee agrees
to give the Mortgagor at least ten days' written notice of the date fixed for
any public sale, or the date on or after which will occur the execution of any
contract for any private sale, or any of the Mortgaged Aviation Property.
SECTION 12. Application of Proceeds. If a Default Event shall occur
and be continuing, the proceeds of any sale, lease or other disposition of all
or any part of the Mortgaged Aviation Property under this Mortgage and all
other sums realized by Mortgagee pursuant to this Mortgage or any proceedings
hereunder shall be applied in the following order of priority:
First: To the payment of the costs and expenses of such sale, lease,
disposition or the realization, including reasonable compensation to the
Mortgagee's agents and counsel, and all expenses, liabilities and advances
made or incurred by Mortgagee in connection therewith, including without
limitation, taxes upon or with respect to the sale, lease, disposition or
realization and the payment of taxes and liens, if any, prior to the lien and
security interest of this Mortgage (except any taxes or liens to which the
respective sale, lease, disposition or realization shall have been subject)
and to the payment of expenses and the reimbursements of payments incurred or
made by Mortgagee pursuant to Section 15;
Second: To the payment of the remainder of the Obligation.
Third: Upon payment in full of the Obligation, the balance, if any,
to the
11
<PAGE>
Mortgagor or to such other person(s) as may lawfully be entitled to the
remainder or as any court of competent jurisdiction may direct.
SECTION 13. Mortgagee as Attorney. The Mortgagor hereby irrevocably
and severally appoints Mortgagee the true and lawful attorney of the Mortgagor
(with full power of substitution) in the name, place and stead of, and at the
expense of, the Mortgagor in connection with the enforcement of the rights and
remedies provided for in Sections 11 and 12: (a) to give any necessary
receipts or acquittances for amounts collected or received thereunder, (b) to
make all necessary transfer of all or any part of the Mortgaged Aviation
Property in connection with any sale, lease or other disposition made pursuant
hereto and (c) to execute and deliver for value all necessary or appropriate
bills of sale, assignments and other instruments in connection with any such
sale, lease or other disposition, the Mortgagor hereby ratifying and
confirming all that its said attorney (or any substitute) shall lawfully do
hereunder and pursuant hereto. Nevertheless, if so requested by Mortgagee or a
purchaser or lessor, the Mortgagor shall ratify and confirm any such sale,
lease or other disposition by executing and delivering to Mortgagee or such
purchaser or lessor all proper bills of sale, assignments, releases, leases
and other instruments as may be designated in any such request.
SECTION 14. Remedies Cumulative; Fees and Expenses. (a) No failure
or delay on the part of Mortgagee in exercising, and no course of dealing with
respect to, any right, power or remedy under this Mortgage, and no notice or
demand that may be given to or made upon the Mortgagor with respect to any
such right, power or remedy, shall constitute a waiver thereof or limit or
impair the rights of Mortgagee to take any other or similar action or to
exercise any other right, power or remedy granted in this Mortgage or
otherwise available to Mortgagee; nor shall any single or partial exercise of
any right, power or remedy under this Mortgage include any other or further
exercise thereof or the exercise of any other right, power or remedy granted
in this Mortgage or otherwise available to Mortgagee or prejudice its rights
against the Mortgagor in any respect. Each and every remedy of the Mortgagee
shall be cumulative and shall not be exclusive or any other remedies provided
now or hereafter at law, in equity or otherwise.
(b) The Mortgagor shall reimburse Mortgagee for all counsel
fees and other expenses paid or incurred by Mortgagee in exercising any
rights, powers or remedies granted hereby.
(c) Mortgagor agrees, to the extent now or hereafter permitted
by applicable law, that neither it nor anyone claiming through or under it
will set up, claim or seek to take advantage of any valuation, appraisement,
stay, extension or redemption law now or hereafter in force in any locality
where any property subject to the lien and security interest of this Mortgage
may be located, in order to prevent, hinder or delay the enforcement or
foreclosure of this Mortgage, or the sale of the Mortgaged Aviation Property
(or any part thereof), or the purchaser's rights to absolute possession
thereof immediately after such sale. Mortgagor, for itself and all who may at
any time claim through or under it, hereby waives, to the full extent now or
hereafter permitted by applicable law, the benefit of all such laws, and any
and all right to have any of the Mortgaged Aviation Property marshalled upon
any such sale.
SECTION 15. Mortgagee's Right to Perform for the Mortgagor. If the
Mortgagor shall fail to make any payment required to be made by it hereunder
or shall fail to perform or comply with any of its agreements contained
herein, Mortgagee may (but shall not be obligated to), upon ten (10) days'
prior written notice to the Mortgagor, make such payment or perform or comply
with such agreement (including, without limitation, the agreement of the
Mortgagor to maintain insurance pursuant to Section 9), and the amount of such
payment and the amount of the reasonable expenses of Mortgagee incurred in
connection
12
<PAGE>
with such payment or the performance of or compliance with such agreement, as
the case may be, together with interest thereon at the highest post-maturity
per annum rate of interest provided for in the Note, shall be payable by the
Mortgagor to Mortgagee on demand and shall constitute additional indebtedness
secured by the lien and security interest of this Mortgage.
SECTION 16. Further Assurances. The Mortgagor shall, at its own cost
and expense (except as otherwise stated below): (i) as soon as practicable
after the date hereof, cause each of the Mortgaged Airplanes and (if not
prevented by applicable law or regulations or governmental authority, and if
it will not adversely affect the proper use thereof) each Mortgaged Engine
included in the Mortgaged Aviation Property to be legibly marked (in a
reasonably prominent location) with such a plate, disk or other marking of
customary size, and bearing such a legend, as shall in the opinion of
Mortgagee be appropriate or desirable to evidence the fact that it is subject
to the lien and security interest created by this Mortgage (and until such
Mortgaged Airplane or such Mortgaged Engine shall be released from the lien
and security interest of this Mortgage, the Mortgagor shall not remove or
deface, or permit to be removed or defaced, any such plate, disk or other
marking or the identifying manufacturer's serial number, and, in the event of
such removal or defacement, shall promptly cause such plate, disk or other
marking or serial number to be promptly replaced) and (ii) cause this
Mortgage, and any and all additional instruments which shall be executed
pursuant to the terms hereof, to be kept, filed and recorded, at all times, in
such places in the United States and such places outside the United States to
which any of the Mortgaged Airplanes shall be operated as shall be required in
order to perfect and preserve the rights of Mortgagee hereunder and furnish to
Mortgagee an opinion or opinions of counsel or other evidence satisfactory to
Mortgagee of each such filing or recordation, and, without limitation of any
of the foregoing, at the request of Mortgagee, promptly correct any defect,
error or omission that may at any time hereafter be discovered in the contents
of this Mortgage or in the execution, acknowledgment or delivery hereof, and
will execute, acknowledge and deliver to Mortgagee such further documents and
assurances and take such further action as Mortgagee may from time to time
reasonably request in order to more effectively carry out the intent and
purpose of this Mortgage and to establish and protect the rights and remedies
created or intended to be created in favor of the Mortgagee hereunder without
limiting anything set forth above, the Mortgagor shall promptly file and
record such financing statements, continuation statements and other
instruments or documents with respect to the lien and security interest
created hereby as Mortgagee may reasonably deem necessary or appropriate fully
to perfect the lien and security interest, or fully to protect its interests,
hereunder. Where allowed by applicable law, Mortgagor hereby authorizes
Mortgagee to file financing statements and continuation statements signed only
by the Mortgagee.
SECTION 17. Termination. Unless otherwise provided herein, this
Mortgage and the lien and security interest granted by this Mortgage shall
terminate at the date when the Obligation shall have been irrevocably fully
paid and performed and the Commitments (as defined in the Credit Agreement)
shall have expired or been terminated. Upon termination of this Mortgage, as
aforesaid, the Mortgagee shall execute and deliver to the Mortgagor at the
Mortgagor's expenses, such instruments of release and termination as shall be
appropriate in the premises.
SECTION 18. Miscellaneous. Any provision of this Mortgage which
shall be prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction. To the
extent permitted by applicable law, the Mortgagor hereby waives any provision
of law that renders any provision hereof prohibited or unenforceable in any
respect. No term
13
<PAGE>
or provision of this Mortgage may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the Mortgagor and
Mortgagee. All the terms, provisions, conditions and covenants herein
contained shall be binding upon and shall inure to the benefit of the
Mortgagor, the Mortgagee and their respective successors and assigns. The
captions in this Mortgage are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
SECTION 19. Governing Law. This Mortgage shall be construed and
enforced in accordance with, and governed by the laws of the State of Indiana,
except to the extent that the law of some other jurisdiction may be
mandatorily applicable to the proceedings taken for the enforcement of the
rights of Mortgagee hereunder; provided, however, that any remedies herein
provided that are valid under the laws of the jurisdiction where proceedings
for the enforcement hereof shall be taken shall not be affected by any
invalidity thereof under the laws of the State of Indiana.
SECTION 20. Execution and Delivery. This Mortgage may be executed in
any number of counterparts, and each such counterpart shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Security Agreement And Chattel Mortgage to be duly executed, as of
the day and year first above written.
AMERICAN TRANS AIR, INC.
By: /s/ Kenneth R. Wolff
------------------------------------
Executive Vice President and
Chief Financial Officer
NBD BANK, N.A., as Mortgagee
By:
-------------------------------------
Its:
-------------------------------
Dated:
14
<PAGE>
or provision of this Mortgage may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the Mortgagor and
Mortgagee. All the terms, provisions, conditions and covenants herein
contained shall be binding upon and shall inure to the benefit of the
Mortgagor, the Mortgagee and their respective successors and assigns. The
captions in this Mortgage are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
SECTION 19. Governing Law. This Mortgage shall be construed and
enforced in accordance with, and governed by the laws of the State of Indiana,
except to the extent that the law of some other jurisdiction may be
mandatorily applicable to the proceedings taken for the enforcement of the
rights of Mortgagee hereunder; provided, however, that any remedies herein
provided that are valid under the laws of the jurisdiction where proceedings
for the enforcement hereof shall be taken shall not be affected by any
invalidity thereof under the laws of the State of Indiana.
SECTION 20. Execution and Delivery. This Mortgage may be executed in
any number of counterparts, and each such counterpart shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Security Agreement And Chattel Mortgage to be duly executed, as of
the day and year first above written.
AMERICAN TRANS AIR, INC.
By:
------------------------------------
Executive Vice President and
Chief Financial Officer
NBD BANK, N.A., as Mortgagee
By: /s/ Scott C. Morrison
-------------------------------------
Its: Vice President
-------------------------------
Dated:
14
<PAGE>
ANNEX 1
to Security Agreement
and Chattel Mortgage
[FORM OF SUPPLEMENTAL CHATTEL MORTGAGE]
SUPPLEMENTAL CHATTEL MORTGAGE NO.__________
SUPPLEMENTAL CHATTEL MORTGAGE dated as of __________, 19__, between
AMERICA TRANS AIR, INC., an Indiana corporation (hereinafter called the
"Mortgagor"), having its chief place of business at 7337 West Washington
Street, Indianapolis, Indiana 46231, as mortgagor, and NBD BANK, N.A., a
national banking association having its principal banking offices at One
Indiana Square, Indianapolis, Indiana ("Mortgagee"), as Mortgagee under the
Mortgage described below;
WHEREAS the Mortgagor has heretofore executed and delivered to the
Mortgagee a Security Agreement and Chattel Mortgage dated July __, 1997
(hereinafter called the "Mortgage"), covering the property of the Mortgagor
therein described, to secure the due and punctual payment and performance of
the Obligation (as defined in the Mortgage);
WHEREAS the Mortgage was duly recorded with the Federal Aviation
Administration at Oklahoma City, Oklahoma, on _____________, 19____, as
Conveyance No. _____________ pursuant to the Federal Aviation Act of 1958, as
amended;
WHEREAS the Mortgagor is the legal and beneficial owner of each of
the "Engines" (as hereinafter defined), free and clear of all liens and
encumbrances except Permitted Encumbrances, and desires to execute and deliver
this Supplemental Chattel Mortgage for the purpose of specifically subjecting
said property to the lien of the Mortgage;
WHEREAS the Mortgagor is an air carrier certificated under Section
401 of the Federal Aviation Act of 1958, as amended, and holds air carrier
operating certificates; and
WHEREAS all things necessary to make this Supplemental Chattel
Mortgage valid, binding and legal obligation of the Mortgagor, including all
proper corporate action on the part of the Mortgagor, have been done and
performed and have happened;
NOW, THEREFORE, THIS SUPPLEMENTAL CHATTEL MORTGAGE WITNESSETH, that,
to secure the due and punctual payment and performance of the Obligation and
to secure performance of all obligations and covenants of the Mortgagor under
the Mortgage, as supplemented hereby, the Mortgagor hereby mortgages to the
Mortgagee, for the benefit of itself, the Administrative Agent and the Banks
(as defined in the Mortgage), and grants to the Mortgagee, a security interest
in the following engine(s) (the "Engines"):
15
<PAGE>
Manufacturer's
Manufacturer Model Serial Number
- ------------ ----- -------------
TO HAVE AND TO HOLD all and singular the Engines unto the Mortgagee,
for the benefit of itself, the Administrative Agent and the Banks (as defined
in the Mortgage), and its successors and assigns, for the uses and purposes
and subject to the terms, provisions, agreements and covenants set forth in
the Mortgage.
This Supplemental Chattel Mortgage is intended to be delivered in
the State of Indiana and shall be governed by the laws of that State.
This Supplemental Chattel Mortgage shall be construed as
supplemental to the Mortgage and shall form a part thereof, and the Mortgage
is hereby incorporated by reference herein and is hereby ratified, approved
and confirmed.
This Supplemental Chattel Mortgage may be executed in any number of
counterparts, each of such counterparts shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute but one and
the same Supplemental Chattel Mortgage.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Chattel Mortgage to be duly executed, as of the day and year first above
written.
AMERICAN TRANS AIR, INC.,
By:
---------------------------------
Title:
("Mortgagor")
[Add Appropriate Acknowledgements]
16
<PAGE>
SCHEDULE 1 TO SECURITY AGREEMENT AND CHATTEL MORTGAGE
The Aircraft
The following aircraft:
Manufacturer U.S.
Manufacturer Model Serial No. Registry No.
- ------------ ----- ---------- ------------
Lockheed L-1011-385-1 193C-1052 N185AT
Lockheed L-1011-385-1 193C-1057 N192AT
Lockheed L-1011-385-1 193C-1071 N193AT
Lockheed L-1011-385-1 193C-1074 N186AT
Lockheed L-1011-385-1 193C-1081 N189AT
Lockheed L-1011-385-1 193C-1084 N191AT
Lockheed L-1011-50 193C-1077 N187AT
Lockheed L-1011-385-1 193C-1041 N195AT
Lockheed L-1011-385-1 193C-1086 N190AT
Lockheed L-1011-385-1 193B-1076 N196AT
Lockheed L-1011-385-1 193P 1082 N197AT
Lockheed L-1011-385-1 193C-1078 N188AT
17
<PAGE>
SCHEDULE 1 (Cont'd)
The Engines
The following engines, each of said engines being 750 or more rated takeoff
horsepower or its equivalent:
Manufacturer
Manufacturer Model Serial No.
- ------------ ----- ----------
Rolls Royce RB211-22B-02 10353
Rolls Royce RB211-22B-02 10279
Rolls Royce RB211-22B-02 10259
Rolls Royce RB211-22B-02 10254
Rolls Royce RB211-22B-02 10238
Rolls Royce RB211-22B-02 10383
Rolls Royce RB211-22B-02 10354
Rolls Royce RB211-22B-02 10341
Rolls Royce RB211-22B-02 10362
Rolls Royce RB211-22B-02 10236
Rolls Royce RB211-22B-02 10255
Rolls Royce RB211-22B-02 10347
Rolls Royce RB211-22B-02 10251
Rolls Royce RB211-22B-02 10208
Rolls Royce RB211-22B-02 10286
Rolls Royce RB211-22B-02 10331
Rolls Royce RB211-22B-02 10260
Rolls Royce RB211-22B-02 10258
Rolls Royce RB211-22B 10219
Rolls Royce RB211-22B 10274
Rolls Royce RB211-22B 10323
Rolls Royce RB211-22B 10319
Rolls Royce RB211-22B 10357
Rolls Royce RB211-22B 10561
Rolls Royce RB211-22B-02 10311
Rolls Royce RB211-22B-02 10273
Rolls Royce RB211-22B-02 10358
Rolls Royce RB211-22B 10348
Rolls Royce RB211-22B 10349
Rolls Royce RB211-22B 10351
Rolls Royce RB211-22B 10503
Rolls Royce RB211-22B 10300
Rolls Royce RB211-22B 10466
Rolls Royce RB211-22B 10335
Rolls Royce RB211-22B 10235
Rolls Royce RB211-22B 10394
18
<PAGE>
SCHEDULE II
Recording
Document Date Date Conveyance No.
- -------- ---- ---- --------------
1st Supplement 9/24/96 11/5/96 HH013243
2nd Supplement 11/12/96 12/30/96 Z00193
3rd Supplement 12/30/96 2/13/97 DD011948
Exhibit 23.1
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated January 26, 1999, in the Registration Statement (Form
S-4 No. ________) and related Prospectus of Amtran, Inc. for the registration
of $75,000,000 10 1/2% Senior Notes.
/s/ Ernst & Young
------------------------------
ERNST & YOUNG
Indianapolis, Indiana
January 24, 2000
EXHIBIT 99.1
LETTER OF TRANSMITTAL
AMTRAN, INC.
Offer for all Outstanding
10 1/2% Senior Notes due 2004
in Exchange for
10 1/2% Senior Exchange Notes due 2004
Pursuant to the Prospectus, dated , 2000
THE EXCHANGE OFFER WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON , 2000,
UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO
MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE.
<TABLE>
<CAPTION>
Delivery To: First Security Bank, N.A., Exchange Agent
By Mail or Overnight Facsimile Transmission
Courier Number
<S> <C> <C>
First Security Bank, N.A. (801) 246-5053 [ ]
Corporate Trust Services (For Eligible
79 South Main Street Institutions Only)
Salt Lake City, UT 84111
Attention: Mr. Larry Montgomery Confirm by Telephone
Personal and Confidential
(801) 246-5822
(If by Mail, Registered or
Certified Mail Recommended)
</TABLE>
Delivery of this instrument to an address other than as set forth above, or
transmission of instruction via facsimile other than as set forth above, will
not constitute a valid delivery.
The undersigned acknowledges that he or she has received and reviewed the
Prospectus, dated , 2000 (the "Prospectus"), of Amtran, Inc., an Indiana
corporation (the "Company"), and this Letter of Transmittal (the "Letter"),
which together constitute the Company's offer (the "Exchange Offer") to
exchange an aggregate principal amount of up to $75,000,000 of its 10 1/2%
Senior Exchange Notes due 2004 (the "Exchange Notes"), for a like principal
amount of its issued and outstanding 10 1/2% Senior Notes due 2004 (the
"Outstanding Notes") with the holders thereof.
For each Outstanding Note accepted for exchange, the holder of such
Outstanding Note will receive an Exchange Note having a principal amount equal
to that of the surrendered Outstanding Note. The Exchange Notes will bear
interest from the most recent interest payment date or if no interest has been
paid, from December 21, 1999, payable semiannually on February 1 and August 1
of each year commencing on August 1, 2000, at the rate of 10 1/2% per annum.
Holders of Outstanding Notes whose Outstanding Notes are accepted for exchange
will be deemed to have waived the right to receive any payment in respect of
interest on the Outstanding Notes accrued from July 24, 1997 until the date of
the issuance of the Exchange Notes. Consequently, holders who tender their
Outstanding Notes for Exchange Notes will receive the same interest payment on
August 1, 2000 (the first interest payment date with respect to the
Outstanding Notes and the Exchange Notes) that they would have received had
they not accepted the Exchange Offer.
This Letter is to be completed by a holder of Outstanding Notes either if
certificates are to be forwarded herewith or if a tender of certificates for
Outstanding Notes, if available, is to be made by book-entry transfer to the
account maintained by the Exchange Agent at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in "The
Exchange Offer--Book-Entry Transfer" section of the Prospectus and an Agent's
Message is not delivered. Tenders by book-entry transfer may also be made by
delivering an Agent's Message in lieu of this Letter. The term "Agent's
Message" means a message, transmitted by the Book-Entry Transfer Facility to
and received by the Exchange Agent and forming a part of a Book-Entry
Confirmation (as defined below), which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the tendering
participant, which acknowledgment states that such participant has received
and agrees to be bound by, and makes the representations and warranties
contained in, this Letter and that the Company may enforce this Letter against
such participant. Holders of Outstanding Notes whose certificates are not
immediately available, or who are unable to deliver their certificates or
confirmation of the book-entry tender of their Outstanding Notes into the
Exchange Agent's account at the Book-Entry Transfer Facility (the "Book-Entry
Confirmation") and all other documents required by this Letter to the Exchange
Agent on or prior to the Expiration Date, must tender their Outstanding Notes
according to the guaranteed delivery procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures" section of the Prospectus. See
Instruction 1. Delivery of documents to the Book-Entry Transfer Facility does
not constitute delivery to the Exchange Agent.
<PAGE>
2
The undersigned has completed the appropriate boxes below and signed this
Letter to indicate the action the undersigned desires to take with respect to
the Exchange Offer.
<PAGE>
3
List below the Outstanding Notes to which this Letter relates. If the space
provided below is inadequate, the certificate numbers and principal amount of
Outstanding Notes should be listed on a separate signed schedule affixed
hereto.
<TABLE>
<CAPTION>
____________________________________________________________________________________________________
DESCRIPTION OF OUTSTANDING NOTES
____________________________________________________________________________________________________
1 2 3
<S> <C> <C> <C>
____________________________________________________________________________________________________
Aggregate
Principal
Amount of Principal
Name(s) and Address(es) of Registered Holder(s) Certificate Outstanding Amount
(Please fill in, if blank) Number(s)* Note(s) Tendered
____________________________________________________________________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
Total
____________________________________________________________________________________________________
* Need not be completed if Outstanding Notes are being tendered by book-entry transfer.
** Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL
of the Outstanding Notes represented by the Outstanding Notes indicated in column 2.
See Instruction 2. Outstanding Notes tendered hereby must be in denominations of
principal amount of US$1,000 and any integral multiple thereof. See Instruction 1.
</TABLE>
__ CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT
WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution_____________________________________________
Account Number_____________ Transaction Code Name________________________
By crediting the Outstanding Notes to the Exchange Agent's account at the
Book-Entry Transfer Facility's Automated Tender Offer Program ("ATOP") and by
complying with applicable ATOP procedures with respect to the Exchange Offer,
including transmitting to the Exchange Agent a computer-generated message (an
"Agent's Message") in which the holder of the Outstanding Notes acknowledges
and agrees to be bound by the terms of, and makes the representations and
warranties contained in, this Letter, the participant in the Book-Entry
Transfer Facility confirms on behalf of itself and the beneficial owners of
such Outstanding Notes all provisions of this Letter (including all
representations and warranties) applicable to it and such beneficial owner as
fully as if it had completed the information required herein and executed and
transmitted this Letter to the Exchange Agent.
__ CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)___________________________________________
Window Ticket Number (if any)_____________________________________________
Date of Execution of Notice of Guaranteed Delivery________________________
Name of Institution which guaranteed delivery_____________________________
If Delivered by Book-Entry Transfer, Complete the Following::
Account Number________________ Transaction Code Name_____________________
__ CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: ____________________________________________________________________
Address: ____________________________________________________________________
____________________________________________________________________
<PAGE>
4
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 3 and 4)
To be completed ONLY if certificates for Outstanding Notes not exchanged
and/or Exchange Notes are to be issued in the name of and sent to someone other
than the person or persons whose signature(s) appear(s) on this Letter above, or
if Outstanding Notes delivered by book-entry transfer which are not accepted for
exchange are to be returneed by credit to an account maintained at the
Book-Entry Transfer Facility other than the account indicated above.
Issue: Exchange Notes and/or Outstanding Notes to:
Name(s)_________________________________________________________
(Please Type or Print)
________________________________________________________________
(Please Type or Print)
Address_________________________________________________________
________________________________________________________________
(Zip Code)
(Complete Substitute Form W-9)
__ Credit unexchanged Outstanding Notes delivered by book-entry transfer
to the Book-Entry Transfer Facility account set forth below.
________________________________________________________________
(Book-Entry Transfer Facility)
Account Number, if applicable)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 3 and 4)
To be completed ONLY if certificates for Outstanding Notes not exchanged
and/or Exchange Notes are to be sent to someone other than the person or
persons whose signature(s) appear(s) on this letter above or to such person
or persons at an address other than shown in the box entitled "Description of
Outstanding Notes" on this Letter above.
Mail: Exchange Notes and/or Outstanding Notes to:
Name(s)_________________________________________________________
(Please Type or Print)
________________________________________________________________
(Please Type or Print)
Address_________________________________________________________
________________________________________________________________
(Zip Code)
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTIFICATES
FOR OUTSTANDING NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED
DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE
EXCHANGE AGENT PRIOR TO MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
<PAGE>
5
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(Complete Accompanying Substitute Form W-9 on reverse side)
Dated: , 2000
x _________________________________ ___________________________, 2000
x _________________________________ ___________________________, 2000
Signature(s) of Owner Date
Area Code and Telephone Number________________________________
If a holder is tendering any Outstanding Notes, this Letter must be signed
by the registered holder(s) as the name(s) appear(s) on the certificate(s) for
the Outstanding Notes or by any person(s) authorized to become registered
holder(s) by endorsements and documents transmitted herewith. If signature is
by a trustee, executor, administrator, guardian, officer or other person
acting in a fiduciary or representative capacity, please set forth full title.
See Instruction 3.
Name(s):__________________________________________________________________
_________________________________________________________________
(Please Type or Print)
Capacity:_________________________________________________________________
Address:__________________________________________________________________
_______________________________________________________________
(Including Zip Code)
SIGNATURE OF GUARANTEE
(If required by Instruction 3)
Signature(s) Guaranteed by
an Eligible Institution:_____________________________________________________
(Authorized Signature)
_____________________________________________________________________________
(Title)
_____________________________________________________________________________
(Name and Firm)
Dated:_________________________________________________________________, 2000
<PAGE>
6
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the aggregate principal amount of
Outstanding Notes indicated above. Subject to, and effective upon, the
acceptance for exchange of the Outstanding Notes tendered hereby, the
undersigned hereby sells, assigns and transfers to, or upon the order of, the
Company all rights, title and interest in and to such Outstanding Notes as are
being tendered hereby.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Outstanding
Notes tendered hereby and that the Company will acquire good and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim when the same are accepted
by the Company. The undersigned hereby further represents that any Exchange
Notes acquired in exchange for Outstanding Notes tendered hereby will have
been acquired in the ordinary course of business of the person receiving such
Exchange Notes, whether or not such person is the undersigned, that neither
the holder of such Outstanding Notes nor any such other person has an
arrangement or understanding with any person to participate in the
distribution of such Exchange Notes and that neither the holder of such
Outstanding Notes nor any such other person is an "affiliate," as defined in
Rule 405 under the Securities Act of 1933, as amended (the "Securities Act"),
of the Company.
The undersigned also acknowledges that this Exchange Offer is being made
in reliance on an interpretation by the staff of the Securities and Exchange
Commission (the "Commission") that the Exchange Notes issued in exchange for
the Outstanding Notes pursuant to the Exchange Offer may be offered for
resale, resold and otherwise transferred by holders thereof (other than any
such holder that is an "affiliate" of the Company within the meaning of Rule
405 under the Securities Act), without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such
Exchange Notes are acquired in the ordinary course of such holders' business
and such holders have no arrangements with any person to participate in the
distribution of such Exchange Notes. If the undersigned is not a
broker-dealer, the undersigned represents that it is not engaged in, and does
not intend to engage in, a distribution of Exchange Notes. If the undersigned
is a broker-dealer that will receive Exchange Notes for its own account in
exchange for Outstanding Notes, it represents that the Outstanding Notes to be
exchanged for the Exchange Notes were acquired by it as a result of
market-making activities or other trading activities and acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange
Notes; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete the
sale, assignment and transfer of the Outstanding Notes tendered hereby. All
authority conferred or agreed to be conferred in this Letter and every
obligation of the undersigned hereunder shall be binding upon the successors,
assigns, heirs, executors, administrators, trustees in bankruptcy and legal
representatives of the undersigned and shall not be affected by, and shall
survive, the death or incapacity of the undersigned. This tender may be
withdrawn only in accordance with the procedures set forth in "The Exchange
Offer--Withdrawal Rights" section of the Prospectus.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the Exchange Notes (and, if applicable,
substitute certificates representing Outstanding Notes for any Outstanding
Notes not exchanged) in the name of the undersigned or, in the case of a
book-entry delivery of Outstanding Notes, please credit the account indicated
above maintained at the Book-Entry Transfer Facility. Similarly, unless
otherwise indicated under the box entitled "Special Delivery Instructions"
below, please send the Exchange Notes (and, if applicable, substitute
certificates representing Outstanding Notes for any Outstanding Notes not
exchanged) to the undersigned at the address shown above in the box entitled
"Description of Outstanding Notes."
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF
OUTSTANDING NOTES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE
TENDERED THE OUTSTANDING NOTES AS SET FORTH IN SUCH BOX ABOVE.
<PAGE>
7
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer
for the 10 1/2% Senior Exchange Notes due 2004
in exchange for the 10 1/2% Senior Notes due 2004 of Amtran, Inc.
1. Delivery of this Letter and Notes; Guaranteed Delivery Procedures.
This letter is to be completed by noteholders either if certificates are
to be forwarded herewith or if tenders are to be made pursuant to the
procedures for delivery by book-entry transfer set forth in "The Exchange
Offer--Book-Entry Transfer" section of the Prospectus and an Agent's Message
is not delivered. Tenders by book-entry transfer may also be made by
delivering an Agent's Message in lieu of this Letter of Transmittal. The term
"Agent's Message" means a message, transmitted by the Book-Entry Transfer
Facility to and received by the Exchange Agent and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility
has received an express acknowledgment from the tendering participant, which
acknowledgment states that such participant has received and agrees to be
bound by, and makes the representations and warranties contained in, the
Letter of Transmittal and that the Company may enforce the Letter of
Transmittal against such participant. Certificates for all physically tendered
Outstanding Notes, or Book-Entry Confirmation, as the case may be, as well as
a properly completed and duly executed Letter (or manually signed facsimile
hereof or an Agent's Message in lieu thereof) and any other documents required
by this Letter, must be received by the Exchange Agent at the address set
forth herein or prior to the Expiration Date, or the tendering holder must
comply with the guaranteed delivery procedures set forth below. Outstanding
Notes tendered hereby must be in denominations of principal amount of $1,000
and any integral multiple thereof.
Noteholders whose certificates for Outstanding Notes are not immediately
available or who cannot deliver their certificates and all other required
documents to the Exchange Agent on or prior to the Expiration Date, or who
cannot complete the procedure for book-entry transfer on a timely basis, may
tender their Outstanding Notes pursuant to the guaranteed delivery procedures
set forth in "The Exchange Offer--Guaranteed Delivery Procedures" section of
the Prospectus. Pursuant to such procedures, (i) such tender must be made
through an Eligible institution, (ii) prior to Midnight, New York City time,
on the Expiration Date, the Exchange Agent must receive from such Eligible
Institution a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Company (by facsimile
transmission, mail or hand delivery), setting forth the name and address of
the holder of Outstanding Notes, the certificate number of numbers of such
Outstanding Notes and the principal amount of Outstanding Notes tendered,
stating that the tender is being made thereby and guaranteeing that within
three New York Stock Exchange ("NYSE") trading days after the date of
execution of the Notice of Guaranteed Delivery, the certificates for all
physically tendered Outstanding Notes, in proper form for transfer, or a
Book-Entry Confirmation, as the case may be, together with a properly
completed and duly executed Letter (or a facsimile thereof or an Agent's
Message in lieu thereof), with any required signature guarantees and any other
documents required by the Letter will be deposited by the Eligible Institution
with the Exchange Agent, and (iii) the certificates for all physically
tendered Outstanding Notes, in proper form for transfer, or Book-Entry
Confirmation, as the case may be, together with a properly completed and duly
executed Letter (or a facsimile thereof or an Agent's Message in lieu thereof)
with any required signature guarantees and all other documents required by
this Letter, are received by the Exchange Agent within three NYSE trading days
after the date of execution of the Notice of Guaranteed Delivery.
The method of delivery of this Letter, the Outstanding Notes and all
other required documents is at the election and risk of the tendering holders,
but the delivery will be deemed made only when actually received or confirmed
by the Exchange Agent. If Outstanding Notes are sent by mail, it is suggested
that the mailing be made sufficiently in advance of the Expiration Date to
permit delivery to the Exchange Agent prior to midnight, New York City time,
on the Expiration Date.
See "The Exchange Offer" section of the Prospectus.
2. Partial Tenders (not applicable to noteholders who tender by book-entry
transfer).
If less than all of the Outstanding Notes evidenced by a submitted
certificate are to be tendered, the tendering holder(s) should fill in the
aggregate principal amount of Outstanding Notes to be tendered in the box
above entitled "Description of Outstanding Notes--Principal Amount Tendered."
A reissued certificate representing the balance of nontendered Outstanding
Notes will be sent to such tendering holder, unless otherwise provided in the
appropriate box on this Letter, promptly after the Expiration Date. All of the
Outstanding Notes delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated.
3. Signatures on this Letter; Bond Powers and Endorsements; Guarantee of
Signatures.
If this Letter is signed by the registered holder of the Outstanding
Notes tendered hereby, the signature must correspond exactly with the name as
written on the face of the certificate without any change whatsoever.
<PAGE>
8
If any tendered Outstanding Notes are owned of record by two or more
joint owners, all of such owners must sign this Letter.
If any tendered Outstanding Notes are registered in different names on
several certificates, it will be necessary to complete, sign and submit as
many separate copies of this Letter as there are different registrations of
certificates.
When this Letter is signed by the registered holder or holders of the
Outstanding Notes specified herein and tendered hereby, no endorsements of
certificates or separate bond powers are required. If, however, the Exchange
Notes are to be issued, or any untendered Outstanding Notes are to be
reissued, to a person other than the registered holder, then endorsements of
any certificates transmitted hereby or separate bond powers are required.
Signatures on such certificate(s) must be guaranteed by an Eligible
Institution.
If this Letter is signed by a person other than the registered holder or
holders of any certificate(s) specified herein, such certificate(s) must be
endorsed or accompanied by appropriate bond powers, in either case signed
exactly as the name or names of the registered holder or holders appear(s) on
the certificate(s) and signatures on such certificate(s) must be guaranteed by
an Eligible Institution.
If this Letter or any certificates or bond powers are signed by trustees,
executors, administration, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
person should so indicate when signing, and, unless waived by the Company,
proper evidence satisfactory to the Company of their authority to so act must
be submitted.
Endorsements on certificates for Outstanding Notes or signatures on bond
powers required by this Instruction 3 must be guaranteed by a firm which is a
member of a registered national securities exchange or a member of the
National Association of Securities Dealers, Inc. or by a commercial bank or
trust company having an officer or correspondent in the United States (an
"Eligible Institution").
Signatures on this Letter need not be guaranteed by an Eligible
Institution, provided the Outstanding Notes are tendered: (i) by a registered
holder of Outstanding Notes (which term, for purposes of the Exchange Offer,
includes any participant in the Book-Entry Transfer Facility system whose name
appears on a security position listing as the holder of such Outstanding
Notes) who has not completed the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" on this Letter, or (ii) for the account of
an Eligible Institution.
4. Special Issuance and Delivery Instructions.
Tendering holders of Outstanding Notes should indicate in the applicable
box the name and address to which Exchange Notes issued pursuant to the
Exchange Offer and/or substitute certificates evidencing Outstanding Notes not
exchanged are to be issued or sent, if different from the name or address of
the person signing this Letter. In the case of issuance in a different name,
the employer identification or social security number of the person named must
also be indicated. Noteholders tendering Outstanding Notes by book-entry
transfer may request that Outstanding Notes not exchanged be credited to such
account maintained at the Book-Entry Transfer Facility as such noteholder may
designate hereon. If no such instructions are given, such Outstanding Notes
not exchanged will be returned to the name or address of the person signing
this Letter.
5. Tax Identification Number.
U.S. Federal income tax law generally requires that a tendering holder
whose Outstanding Notes are accepted for exchange must provide the Company (as
payor) with such holder's correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9 below, which in the case of a tendering holder who is an
individual, is his or her social security number. If the Company is not
provided with the current TIN or an adequate basis for an exemption, such
tendering holder may be subject to a $50 penalty imposed by the Internal
Revenue Service. In addition, delivery to such tendering holder of Exchange
Notes may be subject to backup withholding in an amount equal to 31% of all
reportable payments made after the exchange. If withholding results in an
overpayment of taxes, a refund may be obtained.
Exempt holders of Outstanding Notes (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. See the enclosed Guidelines of
Certification of Taxpayer Identification Number on Substitute Form W-9 (the
"W-9 Guidelines") for additional instructions.
To prevent backup withholding, each tendering holder of Outstanding Notes
must provide its correct TIN by completing the Substitute Form W-9 set forth
below, certifying that the TIN provided is correct (or that such holder is
awaiting a TIN) and that (i) the holder is exempt from backup withholding, or
(ii) the holder has not been notified by
<PAGE>
9
the Internal Revenue Service that such holder is subject to backup withholding
as a result of a failure to report all interest or dividends or (iii) the
Internal Revenue Service has notified the holder that such holder is no longer
subject to backup withholding. If the tendering holder of Outstanding Notes is
a nonresident alien or foreign entity not subject to backup withholding, such
holder must give the Company a completed Form W-8, Certificate of Foreign
Status. These forms may be obtained from the Exchange Agent. If the
Outstanding Notes are in more than one name or are not in the name of the
actual owner, such holder should consult the W-9 Guidelines for information on
which TIN to report. If such holder does not have a TIN, such holder should
consult the W-9 Guidelines for information on which TIN to report. If such
holder does not have a TIN, such holder should consult the W-9 Guidelines for
instructions on applying for a TIN, check the box in Part 2 of the Substitute
Form W-9 and write "applied for" in lieu of its TIN. Note: Checking this box
and writing "applied for" on the form means that such holder has already
applied for a TIN or that such holder intends to apply for one in the near
future. If such holder does not provide its TIN to the Company within 60 days,
backup withholding will begin and continue until such holder furnishes its TIN
to the Company.
6. Transfer Taxes.
The Company will pay all transfer taxes, if any, applicable to the
transfer of Outstanding Notes to it or its order pursuant to the Exchange
Offer. If however, Exchange Notes and/or substitute Outstanding Notes not
exchanged are to be delivered to, or are to be registered or issued in the
name of, any person other than the registered holder of the Outstanding Notes
tendered hereby, or if tendered Outstanding Notes are registered in the name
of any person other than the person signing this Letter, or if a transfer tax
is imposed for any reason other than the transfer of Outstanding Notes to the
Company or its order pursuant to the Exchange Offer, the amount of any such
transfer taxes (whether imposed on the registered holder or any other persons)
will be payable by the tendering holder. If satisfactory evidence of payment
of such taxes or exemption therefrom is not submitted herewith, the amount of
such transfer taxes will be billed directly to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Outstanding Notes specified in this
Letter.
7. Waiver of Conditions.
The Company reserves the absolute right to waive satisfaction of any or
all conditions enumerated in the Prospectus.
8. No Conditional Tenders.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Outstanding Notes, by execution of this
Letter or an Agent's Message in lieu thereof, shall waive any right to receive
notice of the acceptance of their Outstanding Notes for exchange.
9. Mutilated, Lost, Stolen or Destroyed Outstanding Notes.
Any holder whose Outstanding Notes have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.
10. Requests for Assistance or Additional Copies.
Questions relating to the procedure for tendering, as well as requests
for additional copies of the Prospectus and this Letter, may be directed to
the Exchange Agent, at the address and telephone number indicated above.
<PAGE>
10
TO BE COMPLETED BY ALL TENDERING HOLDERS
(See Instruction 5)
PAYOR'S NAME: [ ]
SUBSTITUTE PART 1 - PLEASE PROVIDE TIN:__________________
Form W-9 THE TAXPAYER IDENTIFICATION Social Security
Department of the Treasury NUMBER ("TIN") OF THE Number of Employer
Internal Revenue Service PERSON SUBMITTING THIS Identification
LETTER OF TRANSMITTAL IN Number
Payor's Request for THE BOX AT RIGHT AND
Taxpayer CERTIFY BY SIGNING AND
Identification Number DATING BELOW
("TIN") and
Certification
PART 2 - TIN Applied For __
CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I
CERTIFY THAT:
(1) the number shown on this form is my correct
Taxpayer Identification Number (or I am
waiting for a number to be issued to me).
(2) I am not subject to backup withholding either
because: (a) I am exempt from backup
withholding, or (b) I have not been notified
by the Internal Revenue Service (the "IRS")
that I am subject to backup withholding as a
result of a failure to report all interest or
dividends, or (c) the IRS has notified me
that I am no longer subject to backup
withholding, and
(3) any other information provided on this form
is true and correct.
SIGNATURE___________________ DATE_______________
You must cross out item (2) of the above certification if you have been notified
by the IRS that you are subject to backup withholding because of underreporting
of interest or dividends on your tax return and you have not been notified by
the IRS that you are no longer subject to backup withholding.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 2 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of the exchange, 31 percent of all reportable payments made to me
thereafter will be withheld until I provide a number.
_______________________________ _______________________________
Signature Date
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY FOR
AMTRAN, INC.
This form or one substantially equivalent hereto must be used to
accept the Exchange Offer of Amtran, Inc. (the "Company") made pursuant to the
Prospectus, dated [ ], 2000 (the "Prospectus"), if certificates for
Outstanding Notes of the Company are not immediately available or if the
procedure for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Company prior to
midnight, New York City time, on the Expiration Date of the Exchange Offer.
Such form may be delivered or transmitted by facsimile transmission, mail or
hand delivery to First Security Bank, N. A. (the "Exchange Agent") as set
forth below. Capitalized terms not defined herein in the Prospectus.
<TABLE>
<CAPTION>
Delivery To: First Security Bank, N.A., Exchange Agent
<S> <C> <C>
By Mail or Overnight Courier Facsimile Transmission Number By Hand
First Security Bank, N.A. (801) 246-5053 First Security Bank, N.A.
Corporate Trust Services (For Eligible Corporate Trust Services
79 South Main Street Institutions Only) Attention: Mr. Larry Montgomery
Salt Lake City, UT 84111 Personal and Confidential
Attention: Mr. Larry Montgomery Confirm by Telephone c/o IBJ Schroder Bank
Personal and Confidential (801) 246-5822 & Trust Company
One State Street Plaza
(If by Mail, Registered or New York, NY 10004
Certified Mail Recommended) Attention: Securities Window
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE,
OR TRANSMISSION OF INSTRUCTION VIA FACSIMILE OTHER THAN AS SET
FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Outstanding Notes set forth below, pursuant to
the guaranteed delivery procedure described in "The Exchange Offer-Guaranteed
Delivery Procedures" section of the Prospectus.
Principal Amount of Outstanding Notes
Tendered:*
$_____________________________________ If Outstanding Notes will be delivered
Certificate Nos. (if available) by book-entry transfer to The Depository
Trust Company provide account number.
______________________________________
Total Principal Amount Represented by
Outstanding Notes Certificate(s):
Account Number ________________________
$_____________________________________
_____________________________
* Must be in denominations of principal amount of $1,000 and any integral
multiple thereof.
<PAGE>
PLEASE SIGN HERE
x__________________________________________________ ___________________
Signature(s) of Owner(s) or Authorized Signatory Date
Area Code and Telephone Number:________________________________________________
Must be signed by the holder(s) of Outstanding Notes as their
name(s) appear(s) on certificates for Outstanding Notes or on a security
position listing, or by person(s) authorized to become registered holder(s) by
endorsement and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title
below.
Please print name(s) and address(es)
Name(s): __________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Capacity:
Address(es) __________________________________________________________________
__________________________________________________________________
__________________________________________________________________
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a financial institution (including most banks,
savings and loan associations and brokerage houses) that is a participant in
the Securities Transfer Agents Medallion Program, the New York Stock exchange
Medallion Signature Program or the Stock Exchanges Medallion Program, hereby
guarantees that the certificates representing the principal amount of
Outstanding Notes tendered hereby in proper form for transfer or timely
confirmation of the book-entry transfer of such Outstanding Notes into the
Exchange Agent's account at The Depository Trust Company pursuant to the
procedures set forth "The Exchange Offer-Guaranteed Delivery Procedures"
section of the Prospectus, together with one or more properly completed and
duly executed Letters of Transmittal (or facsimile thereof or Agent's Message
in lieu thereof) and any required signature guarantee and any other documents
required by the Letter of Transmittal, will be received by the Exchange Agent
at the address set forth above, no later than three New York Stock Exchange
trading days after the Expiration Date.
_____________________________________ _________________________________
Name of Firm Authorized Signature
_____________________________________ _________________________________
Address Title
____________________________________ Name:____________________________
Zip Code (Please Type or Print)
Area Code and Tel. No.______________ Date:____________________________
NOTE: DO NOT SEND CERTIFICATES FOR OUTSTANDING NOTES WITH THIS FORM.
CERTIFICATES FOR OUTSTANDING NOTES SHOULD BE SENT ONLY WITH A COPY OF
YOUR EXECUTED LETTER OF TRANSMITTAL.
Exhibit 99.3
AMTRAN, INC.
Offer for all Outstanding
10 1/2% Senior Notes due 2004
in Exchange for
10 1/2% Senior Exchange Notes due 2004
To: Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Amtran, Inc. (the "Company) is offering, upon and subject to the
terms and conditions set forth in the Prospectus, dated [ ],
2000 (the "Prospectus"), and the enclosed Letter of Transmittal (the
"Letter of Transmittal"), to exchange (the "Exchange Offer") its 10 1/2%
Senior Exchange Notes due 2004, for its outstanding 10 1/2% Senior Notes due
2004 (the "Outstanding Notes"). The Exchange Offer is being made in order
to satisfy certain obligations of the Company contained in the Registration
Rights Agreement dated December 21, 1999, by and among the Company and the
other signatories thereto.
We are requesting that you contact your clients for whom you hold
Outstanding Notes regarding the Exchange Offer. For your information and
for forwarding to your clients for whom you hold Outstanding Notes
registered in your name or in the name of your nominee, or who hold
Outstanding Notes registered in their own names, we are enclosing the
following documents:
1. Prospectus dated [ ], 2000;
2. The Letter of Transmittal for your use and for the information
of your clients;
3. A Notice of Guaranteed Delivery to be used to accept the
Exchange Offer if certificates for Outstanding Notes are not immediately
available or time will not permit all required documents to reach the
Exchange Agent prior to the Expiration Date (as defined below) or if the
procedure for book-entry transfer cannot be completed on a timely basis;
<PAGE>
4. A form of letter which may be sent to your clients for whose
accounts you hold Outstanding Notes registered in your name or the name of
your nominee, with space provided for obtaining such clients' instructions
with regard to the Exchange Offer;
5. Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9; and
6. Return envelopes addressed to First Security Bank, N.A., the
Exchange Agent for the Outstanding Notes.
Your prompt action is requested, The Exchange Offer will expire
at midnight, New York City time, on [ ], 2000 unless extended by
the Company (the "Expiration Date"). Outstanding Notes tendered pursuant to
the Exchange Offer may be withdrawn at any time before the Expiration Date.
To participate in the Exchange Offer, a duly executed and
properly completed Letter of Transmittal (or facsimile thereof or an
Agent's Message in lieu thereof), with any required signature guarantees
and any other required documents, should be sent to the Exchange Agent and
certificates representing the Outstanding Notes should be delivered to the
Exchange Agent, all in accordance with the instructions set forth in the
Letter of Transmittal and the Prospectus.
If holders of Outstanding Notes wish to tender, but it is
impracticable for them to forward their certificates for Outstanding Notes
prior to the expiration of the Exchange Offer or to comply with the
book-entry transfer procedures on a timely basis, a tender may be effected
by following the guaranteed delivery procedures described in the Prospectus
under "The Exchange Offer--Guaranteed Delivery Procedures".
The Company will, upon request, reimburse brokers, dealers,
commercial banks and trust companies for reasonable and necessary costs and
expenses incurred by them in forwarding the Prospectus and the related
documents to the beneficial owners of Outstanding Notes held by them as
nominee or in a fiduciary capacity. The Company will pay or cause to be
paid all stock transfer taxes applicable to the exchange of Outstanding
Notes pursuant to the Exchange Offer, except as set forth in Instruction 6
of the Letter of Transmittal.
<PAGE>
Any inquiries you may have with respect to the Exchange Offer, or
requests for additional copies of the enclosed materials, should be
directed to First Security Bank, N.A., the Exchange Agent for the
Outstanding Notes, at its address and telephone number set forth on the
front of the Letter of Transmittal.
Very truly yours,
AMTRAN, INC.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE
YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON
BEHALF OF EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR
STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Exhibit 99.4
AMTRAN, INC.
Offer for all Outstanding
10 1/2% Senior Notes due 2004
in Exchange for
10 1/2% Senior Exchange Notes due 2004
To Our Clients:
Enclosed for your consideration is a Prospectus, dated [ ], 2000
(the "Prospectus"), and the related Letter of Transmittal (the "Letter of
Transmittal"), relating to the Offer (the "Exchange Offer") of Amtran, Inc.
(the "Company") to exchange its 10 1/2% Senior Exchange Notes due 2004 (the
"Exchange Notes") for its outstanding 10 1/2% Senior Notes due 2004 (the
"Outstanding Notes"), upon the terms and subject t the conditions described in
the Prospectus and the Letter of Transmittal. The Exchange Offer is being made
in order to satisfy certain obligations of the Company contained in the
Registration Rights Agreement dated December 21, 1999, by and among the
Company and the other signatories thereto.
This material is being forwarded to you as the beneficial owner of
the Outstanding Notes carried by us in your account but not registered in your
name. A tender of such Outstanding Notes may only be made by us as the holder
of record and pursuant to your instructions.
Accordingly, we request instructions as to whether you wish us to
tender on your behalf the Outstanding Notes held by us for your account,
pursuant to the terms and conditions set forth in the enclosed Prospectus and
Letter of Transmittal.
Your instructions should be forwarded to us as promptly as possible
in order to permit us to tender the Outstanding Notes on your behalf in
accordance with the provisions of the Exchange Offer. The Exchange Offer will
expire at midnight, New York City time, on [ ], 2000 unless extended by the
Company. Any Outstanding Notes tendered pursuant to the Exchange Offer may be
withdrawn at any time before the expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Outstanding Notes.
2. The Exchange Offer is subject to certain conditions set
forth in the Prospectus in the section captioned "The Exchange
Offer-Certain Conditions to the Exchange Offer".
3. Any transfer taxes incident to the transfer of
Outstanding Notes from the holder to the Company will be paid by the
Company, except as otherwise provided in the Instructions in the
Letter of Transmittal.
4. The Exchange Offer expires at midnight, New York City
time, on [ ], 2000, unless extended by the Company.
If you wish to have us tender your Outstanding Notes, please so
instruct us by completing, executing and returning to us the
instruction form on the back of this letter. The Letter of
Transmittal is furnished to you for information only and may not be
used directly by you to tender Outstanding Notes.
<PAGE>
2
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the
enclosed material referred to therein relating to the Exchange Offer made by
Amtran, Inc. with respect to its Outstanding Notes.
This will instruct you to tender the Outstanding Notes held by you
for the account of the undersigned, upon and subject to the terms and
conditions set forth in the Prospectus and the related Letter of Transmittal.
Please tender the Outstanding Notes held by you for my account as
indicated below:
Aggregate Principal Amount of
Outstanding Notes
10 1/2% Senior Notes due 2004_____________ _____________________________
__ Please do not tender any Outstanding
Notes held by you for my account.
Date:_________________________, 2000 _____________________________
_____________________________
Signature(s)
_____________________________
_____________________________
_____________________________
Please print name(s) here
_____________________________
_____________________________
Address(es)
_____________________________
Area Code and Telephone Number
_____________________________
Tax Identification or Social
Security Note(s).
Note of the Outstanding Notes held by us for your account will be
tendered unless we receive written instructions from you to do so. Unless a
specific contrary instruction is given in the space provided, your
signature(s) hereon shall constitute an instruction to us to tender all the
Outstanding Notes held by us for your account.
