SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 31, 2000
MIDWAY AIRLINES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
000-23447 36-3915637
(Commission File Number) (IRS Employer Identification No.)
2801 Slater Road, Suite 200
Morrisville, North Carolina 27560
(Address of principal executive offices) (Zip Code)
(919) 595-6000
(Registrant's telephone number, including area code)
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Item 5. Other Events.
On March 31, 2000, the Company closed a $30 Million revolving loan (the
"Credit Facility") with Reedy Creek Investments, LLC (the "Lender"), an entity
which is wholly owned by James H. Goodnight, Ph.D. and John P. Sall. Loans made
under the Credit Facility must be repaid on or before March 31, 2002 and the
Company must make prepayments necessary to reduce the outstanding principal
balance of loans made under the Credit Facility to $10 Million upon the earlier
of September 30, 2000 or the date that the Company obtains the net proceeds from
a public equity offering. The maximum amount available under the Credit Facility
for borrowing after such date will be $10 Million. The Company's obligations
under the Credit Facility are secured by the Company's interest in certain
aircraft parts and tooling. At the time of the closing of the Credit Facility,
the Lender agreed to cause Messrs. Goodnight and Sall to purchase certain
amounts of shares to be offered by the Company in a shareholder rights offering
as more fully described in sections of the Company's Report on Form 10-K for the
year ended December 31, 1999 entitled "Control By Existing Shareholders" and
"Subsequent Events".
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Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(c) Exhibits
10.1* Credit Agreement dated as of March 31, 2000 between
Reedy Creek Investments, LLC and Midway Airlines
Corporation
10.2 Revolving Credit Note dated March 31, 2000 by Midway
Airlines Corporation in favor of Reedy Creek
Investments, LLC.
*Portions have been omitted pursuant to a request for confidential
treatment. The confidential portions have been separately filed with
the Securities and Exchange Commission.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MIDWAY AIRLINES CORPORATION
By: /s/ Jonathan S. Waller
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Dated: April 13, 2000 Jonathan S. Waller
Senior Vice President
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Exhibit 99.1
CREDIT AGREEMENT
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AGREEMENT dated as of March 31, 2000, by and among MIDWAY AIRLINES
CORPORATION, a Delaware corporation (the "Borrower") and REEDY CREEK
INVESTMENTS, LLC, a limited liability company formed under the laws of North
Carolina (the "Lender"). Certain capitalized terms used herein without
definition are defined in ARTICLE XI of this Agreement.
NOW THEREFORE, the parties hereto, intending to be legally bound, and
in consideration of the foregoing and the mutual covenants contained herein,
hereby agree (with reference to the foregoing Recitals) as follows:
I. GENERAL TERMS
SECTION 1.01. REVOLVING CREDIT FACILITIES.
(a) As of the date hereof, subject to the terms and conditions in this
Agreement, the Lender has established in favor of the Borrower revolving credit
facilities (the"Revolver") in the aggregate principal amount of Thirty Million
Dollars $30,000,000 (the "Commitment", which shall expire on March 31, 2002 (the
"Expiration Date"). During the Revolving Period and within the limits of the
aggregate Commitment, the Borrower may borrow, repay and reborrow under this
SECTION 1.01.
(b) Loans made under the Revolver are hereinafter sometimes referred to
collectively as the "Advances". The aggregate principal amount of Advances made
by the Lender as requested in any Request for Advances shall be (i) at least
$1,000,000 and, if more, a multiple of $100,000, (ii) such lesser amount as
equals the then unadvanced portion of the aggregate Commitment.
(c) Notwithstanding the foregoing, the Commitment shall be permanently
reduced to Ten Million Dollars ($10,000,000) upon the earlier of September 30,
2000 or prepayment from the net proceeds of a public equity offering.
(d) The borrowing under this SECTION 1.01 shall be evidenced by the
Borrower's Revolving Credit Note in the form attached hereto as SCHEDULE 1.01(d)
(together with any additional Revolving Credit Notes issued to any assignee(s)
of the Commitments under ARTICLE XIII or otherwise issued in substitution
therefor, the "Notes"). The Notes are hereby incorporated by reference herein
and made a part hereof.
SECTION 1.02 PAYMENT OF THE NOTES. The Borrower shall pay to the Lender
the outstanding principal amount under the Notes, together with all unpaid
interest, fees and expenses payable thereunder or under this Agreement or any
other Loan Document, without setoff, deduction or counterclaim, on the
Expiration Date.
SECTION 1.03. INTEREST ON THE NOTES.
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(a) INTEREST RATE. Subject to the terms and conditions set forth in
this SECTION 1.03, the interest rate for the outstanding principal balances from
time to time of the Notes, or any portion thereof, shall be the applicable LIBOR
Rate plus three percent (3%).
(b) INTEREST PAYMENT DATES. Interest on the Loans shall be payable in
arrears, without setoff, deduction or counterclaim, on the last day of the
Interest Period applicable to such Loan and, until and at maturity, whether by
reason of acceleration, prepayment, payment or otherwise.
(c) COMPUTATIONS. Interest on LIBOR Loans shall be computed on the
basis of the actual number of days elapsed over a 360-day year.
(d) EFFECT OF DEFAULTS, ETC.
(i) At all times during the existence of any Event of Default
arising under paragraph (b) or (c) of ARTICLE VIII of this Agreement,
the outstanding principal under the Notes and, to the extent permitted
by applicable law, overdue interest, fees or other amounts payable
hereunder or under the other Loan Documents shall bear interest at a
rate per annum equal to two percent (2.00%) above the interest rate or
rates then applicable to such LIBOR Loans (computed on the basis of the
actual number of days elapsed over a 360-day year).
(ii) Nothing in this SECTION 1.03(d) shall affect the rights of
the Lender to exercise any rights or remedies under the Loan Documents
or applicable law arising upon the occurrence of an Event of Default.
SECTION 1.04. REQUESTS FOR ADVANCES.
(a) REQUESTS FOR ADVANCES. Each request by the Borrower for Advances
under the Revolver (other than any Advances made concurrently herewith) shall be
made not later than 11:00 A.M. (New York City time) on the third Business Day
prior to the proposed Borrowing Date, by telephonic notice to the Lender,
confirmed no later than 11:00 A.M. (New York City time) on the next following
Business Day by a written Request for Advances, in the form of SCHEDULE 1.04(a)
(each, a "Request for Advances"), signed by a duly authorized representative of
the Borrower and indicating (i) the date of such Advances, and (ii) the use of
proceeds thereof, to the extent any such proceeds are not being used for working
capital purposes. Each request for Advances shall be irrevocable and binding on
the Borrower.
SECTION 1.05 LOAN DISBURSEMENT. The Advances shall be made not later
than 12:00 noon (New York City time), on the date specified for any Advances,
the Lender shall make available the Advances on such date, by depositing the
same in immediately available funds in the appropriate account or accounts of
the Borrower and by disbursing such funds as indicated in writing in the related
Request for Advances furnished prior to or, if applicable, on the date such
Advances are proposed to be made.
SECTION 1.06. PREPAYMENTS AND TERMINATION OR REDUCTION OF THE
COMMITMENT.
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(a) VOLUNTARY REDUCTIONS AND RELATED PREPAYMENTS. At any time prior to
the Expiration Date, upon at least three (3) Business Days' written notice to
the Lender (each, a "Prepayment Notice"), the Borrower may permanently terminate
or permanently reduce the Commitment or reduce the amount of Advances
outstanding thereunder without permanently terminating or permanently reducing
the Commitment, without penalty or premium, provided as follows:
(i) any such reduction shall be in an aggregate amount of not
less than $1,000,000 or, if greater, an integral multiple thereof;
(ii) simultaneously with each such reduction, the Borrower (A)
shall pay any then accrued unpaid Commitment Fee on the terminated or
reduced portion of the respective Commitment, (B) shall repay such
amount, if any, of the aggregate principal amount of the respective
Notes as shall be required to cause the outstanding principal balance
thereunder to be less than or equal to the aggregate Commitments, after
giving effect to such reduction, and (C) shall pay any indemnification
payments due in accordance with SECTION 1.10 in respect of LIBOR Loans
so prepaid.
Each Prepayment Notice shall specify the date fixed for such termination or
reduction, the aggregate principal amount thereof and the aggregate principal
amount of the applicable Notes, if any, required to be repaid hereunder on such
date.
(b) EQUITY ISSUANCE. The Borrower shall promptly prepay such amount of
the Notes as necessary to reduce the amount of Advances outstanding to
$10,000,000 from the net proceeds of a Public Offering Issuance which shall
occur no later than September 30, 2000.
(c) APPLICATION OF REDUCTIONS AND PREPAYMENTS. All prepayments of the
Notes under this SECTION 1.06 (A) shall be made without set-off, deduction or
counterclaim, and (B) unless otherwise specified in this SECTION 1.06, shall be
applied first, to overdue interest, fees and expenses hereunder, and second, to
pay principal of the Notes.
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SECTION 1.07. FEES.
(a) COMMITMENT FEE. The Borrower shall pay to the Lender, a
non-refundable fee (the "Commitment Fee") on the average daily unused portion of
the Commitment from the date hereof to and including the earlier of the
termination of the Commitment or the Expiration Date, at the rate of one half of
one percent (1/2%) per annum (computed on the basis of the actual number of days
elapsed over a 365 or 366-day year, as applicable), payable quarterly on each of
March 31, June 30, September 30 and December 31, without setoff, deduction or
counterclaim, with a final payment at the maturity of the Notes, whether by
payment, prepayment, acceleration or otherwise.
(b) FACILITY FEE. The Borrower shall pay to the Lender a non-refundable
facility fee as specified in that certain commitment letter dated as of March
29, 2000 (the "Commitment Letter").
SECTION 1.08. REQUIREMENTS OF LAW.
(a) In the event that any Regulatory Change shall:
(i) change the basis of taxation of any amounts payable to the
Lender under this Agreement or the Notes in respect of any Loans,
including without limitation LIBOR Loans (other than taxes imposed on
the net income of such Lender);
(ii) impose any other conditions affecting this Agreement in
respect of Loans.
and the result of any of the foregoing shall be to increase the Lender's costs
of making or maintaining any Loans, including without limitation LIBOR Loans or
any Commitment, or to reduce any amount receivable by the Lender hereunder in
respect of any its LIBOR Loans or any Commitment, in each case only to the
extent that such additional amounts are not included in the LIBOR Base Rate
applicable to such Loans, then the Borrower shall pay on demand to the Lender,
and from time to time as specified by the Lender, such additional amounts as the
Lender shall reasonably determine are sufficient to compensate such Lender for
the increased cost or reduced amount receivable.
(b) If the Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower of the event by
reason of which it has become so entitled. A certificate setting forth in
reasonable detail the computation of any additional amounts payable pursuant to
this Section submitted by the Lender to the Borrower shall be delivered to the
Borrower promptly after the incurrence of such additional amounts and shall be
presumed correct in the absence of manifest error. The covenants contained in
this Section shall survive the termination of this Agreement and the payment of
the outstanding Notes. No failure on the part of the Lender to demand
compensation under paragraph (a) or (b) above on any one occasion shall
constitute a waiver of its rights to demand compensation on any other occasion.
The protection of this Section shall be available to the Lender regardless of
any possible contention of the invalidity or inapplicability of any law,
regulation or other condition which shall give rise to any demand by the Lender
for compensation thereunder. In the event that any of the losses or payments for
which the Lender is compensated under this SECTION 1.08 are reimbursed or
otherwise restored to the
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Lender for any reason, including the rescission, nullification or retroactive
modification of any such Regulatory Change, the Lender shall reimburse the
Borrower accordingly as soon as reasonably practicable.
SECTION 1.09. TAXES.
(a) All payments made by the Borrower under this Agreement and the
Notes shall be made free and clear of, and without deduction or withholding for
or on account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority
(all such taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"); provided, however, that the term
"Taxes" shall not include net income taxes, franchise taxes (imposed in lieu of
net income taxes) and general intangibles taxes (such as those imposed by the
State of Florida) imposed on the Lender, as a result of a present or former
connection or nexus between the jurisdiction of the government or taxing
authority imposing such tax (or any political subdivision or taxing authority
thereof or therein) and the Lender other than that arising solely from the
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement, the Notes or any of the Security
Documents. If any Taxes are required to be withheld from any amounts payable to
the Lender hereunder or under the Notes, the amounts so payable to the Lender
shall be increased to the extent necessary to yield to the Lender (after payment
of all Taxes) interest or any such other amounts payable hereunder at the rates
or in the amounts specified in this Agreement and the Notes. Whenever any Taxes
are payable by the Borrower in respect of this Agreement or the Notes, as
promptly as possible thereafter the Borrower shall send to the Lender, a
certified copy of an original official receipt received by the Borrower showing
payment thereof. If the Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Lender the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Lender for any incremental taxes, interest or penalties that may become
payable by the Lender as a result of any such failure. If, after any payment of
Taxes by the Borrower under this Section, any part of any Tax paid by the Lender
is subsequently recovered by the Lender, the Lender shall reimburse the Borrower
to the extent of the amount so recovered. A certificate of an officer of the
Lender setting forth the amount of such recovery and the basis therefor shall,
in the absence of manifest error, be conclusive. The Lender shall use reasonable
efforts to notify the Borrower of (i) unpaid Taxes, if any, owed by the Borrower
which are subject to this SECTION 1.09 and (ii) the attempts by the Lender, if
any, to obtain abatements of any such Taxes and the receipt by the Lender of any
funds in connection therewith. The agreements in this subsection shall survive
the termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder.
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SECTION 1.10. INDEMNIFICATION. The Borrower shall pay to the Lender,
upon the request of the Lender delivered to the Borrower, such amount or amounts
as shall compensate the Lender for any loss, cost or expense incurred by the
Lender (as reasonably determined by the Lender) as a result of:
(a) any payment or prepayment of any LIBOR Loan held by the Lender on a
date other than the last day of the Interest Period for such LIBOR Loan
(including without limitation any such payment or prepayment required under
SECTION 1.04 or 1.06); or
(b) any failure by the Borrower to borrow or continue a LIBOR Loan on
the date for such borrowing specified in the relevant Request for Advances under
SECTION 1.04 or otherwise.
Such indemnification may include an amount equal to the excess, if any,
of (i) the amount of interest which would have accrued on the amount so prepaid,
or not so borrowed, or continued, for the period from the date of such
prepayment or of such failure to borrow, or continue to the last day of such
Interest Period (or, in the case of a failure to borrow, or continue, the
Interest Period that would have commenced on the date of such failure) in each
case at the applicable rate of interest for such Loans provided for herein
(excluding, however, the Applicable Margin included therein, if any) over (ii)
the amount of interest (as reasonably determined by the Lender) which would have
accrued to such Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market. This
covenant shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder. The determination by the Lender
of the amount of any such loss or expense, when set forth in a written notice
delivered to the Borrower, containing the Lender's calculation thereof in
reasonable detail, shall be presumed correct in the absence of manifest error.
SECTION 1.11. PAYMENTS UNDER THE NOTES. All payments and prepayments
made by the Borrower of principal of, and interest on, the Notes and other sums
and charges payable under this Agreement, including without limitation the
Commitment Fee and any payments under SECTIONS 1.08, 1.10 and 1.11, shall be
made in immediately available funds to the Lender as provided herein or in the
Commitment Letter, not later than 2:00 P.M. (New York City time), on the date on
which such payment shall become due. The failure by the Borrower to make any
such payment by such hour shall not constitute a default hereunder so long as
payment is received later that day, provided that any such payment made after
2:00 P.M. (New York City time), on such due date shall be deemed to have been
made on the next Business Day for the purpose of calculating interest on amounts
outstanding on the Notes. The Borrower shall, at the time of making each payment
under this Agreement or the Notes, specify to the Lender the Notes or amounts
payable by the Borrower hereunder to which such payment is to be applied (and in
the event that it fails to so specify, or if an Event of Default has occurred
and is continuing, the Lender may distribute such payments in such manner as the
Lender may direct or, absent such direction, as it determines to be appropriate.
Except as otherwise provided in the definition of "Interest Period" with respect
to LIBOR Loans, if any payment hereunder or under the Notes shall be due and
payable on a day which is not a Business Day, such payment shall be deemed due
on the next following Business Day and interest shall be payable at the
applicable rate specified herein through such extension period.
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SECTION 1.12. SET-OFF, ETC. The Borrower agrees that, in addition to
(and without limitation of) any right of set-off, bankers' lien or counterclaim
the Lender may otherwise have, the Lender shall be entitled, at its option, to
offset amounts owed to the Borrower against any principal of or interest on the
Notes held by the Lender or other fees or charges owed to the Lender hereunder
which are not paid when due (regardless of whether such balances are then due to
the Borrower), in which case it shall promptly notify the Borrower, provided
that such Lender's failure to give such notice shall not affect the validity
thereof.
SECTION 1.13. REPLACEMENT OF NOTES. Upon receipt of evidence reasonably
satisfactory to the Borrower of the loss, theft, destruction or mutilation of
any Note and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory to the Borrower, or in the
case of any such mutilation, upon the surrender of such Note for cancellation,
the Borrower will execute and deliver, in lieu of such lost, stolen, destroyed,
or mutilated Note, a new Note of like tenor.
II. SECURITY; USE OF PROCEEDS
SECTION 2.01. SECURITY FOR THE OBLIGATIONS; ETC.
(a) The Borrower's obligations hereunder and under the Notes shall be
secured at all times, by a first priority perfected security interest in and
lien upon certain presently owned and hereafter acquired tangible personal
property of the Borrower, subject only to any prior Liens expressly permitted
under this Agreement.
(b) SECURITY DOCUMENTS. All agreements and instruments described or
contemplated in this Section 2.01, together with any and all other agreements
and instruments heretofore or hereafter securing the Notes and the Borrower's
obligations hereunder or otherwise executed in connection with this Agreement,
are sometimes hereinafter referred to collectively as the "Security Documents"
and each individually as a "Security Document". The Borrower agrees to take such
action as the Lender may reasonably request from time to time in order to cause
the Lender to be secured at all times as described in this Section.
SECTION 2.02. USE OF PROCEEDS. Advances shall be used for working
capital and capital expenditure requirements, including but not limited to, the
funding of pre-delivery deposits due to aircraft manufacturers, capital
expenditures and general working capital items.
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III. CONDITIONS OF MAKING THE LOANS
SECTIONS 3.01. CONDITIONS TO THE FIRST ADVANCES. The obligations of the
Lender to enter into this Agreement and to make the first Advances to the
Borrower for working capital purposes on the Closing Date are subject to the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Borrower and its Affiliates set forth in this Agreement and in the Loan
Documents shall be true and correct in all material respects on and as of the
date hereof and on the Closing Date and the Borrower shall have performed all
obligations which were to have been performed by it hereunder prior to the
Borrowing Date of such Advances.
(b) LOAN DOCUMENTS AND ORGANIZATIONAL DOCUMENTS. On or before the
Closing Date, the Borrower shall have executed and/or delivered to the Lender
(or shall have caused to be executed and delivered to the Lender by the
appropriate Persons), the following:
(i) The Notes;
(ii) All of the Security Documents, including without limitation
all Uniform Commercial Code Financing Statements and Termination
Statements required by the Lender or its counsel in connection with the
Borrower's compliance with the provisions of SECTION 2.01;
(iii)Certified copies of the resolutions of the Board of
Directors of the Borrower, authorizing the execution and delivery of
the Loan Documents to which it is a party;
(iv) A copy of the Certificate or Articles of Incorporation of
the Borrower, with any amendments thereto, certified by the Secretary
or an Assistant Secretary of the Borrower;
(v) To the extent requested by the Lender, copies of all
Licenses, all other material governmental licenses, franchises and
permits, all material third party consents and all other material
leases, contracts, agreements, instruments and other documents
specified in SCHEDULES 4.04, 4.07, 4.08, 4.14, AND 4.15; and
(vi) Such other supporting documents and certificates as the
Lender may reasonably request from time to time.
(c) NO MATERIAL ADVERSE CHANGE. As of the date hereof and as of the
Closing Date, since December 31, 1999, no event or circumstance shall have
occurred which could reasonably be expected to have a Material Adverse Effect.
SECTION 3.03 ALL LOANS. The obligations of the Lender to make any
Advances are subject to the following conditions:
(a) All warranties and representations set forth in this Agreement
shall be true and correct in all material respects as of the date such Advances
are made, except to the extent they relate
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specifically to an earlier date or are affected by transactions occurring after
the date hereof and permitted hereunder.
(b) After giving effect to such Advances, no Default shall have
occurred and be continuing. Each telephonic or written request for such Loans
shall constitute a representation to such effect as of the date of such request
and as of the date of such borrowing.
(c) No event(s) shall have occurred, and no circumstance(s) shall
exist, which individually or in the aggregate with other such circumstances or
events, has had a Material Adverse Effect.
(d) The Lender shall have received a properly completed Request for
Advances.
IV. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants
to the Lender as follows:
SECTION 4.01. FINANCIAL STATEMENTS. The Borrower has heretofore
furnished to the Lender the audited balance sheets and related statements of
operations, stockholders' or members' equity and cash flow of the Borrower for
the fiscal year ended December 31, 1999 (the "Financial Statements"). The
Financial Statements have been prepared in accordance with GAAP. Since the
respective dates of the most recent financial statements of the Borrower
delivered to the Lender, there has been no material adverse change in the
assets, properties, business or condition (financial or otherwise) of the
Borrower and no dividends or distributions have been declared or paid by the
Borrower. The Borrower had no contingent obligations, liabilities for taxed or
unusual forward or long-term commitments except as specified in its financial
statements.
SECTION 4.02. ORGANIZATION, QUALIFICATION, ETC. The Borrower (a) is a
corporation duly organized validly existing and in good standing under the laws
of its state of organization, (b) has the power and authority to own its
properties and to carry on its business as now being conducted and as presently
contemplated, (c) has the power and authority to execute and deliver, and
perform its respective obligations under, this Agreement, the Notes and the
Security Documents and all other agreements and instruments contemplated hereby
and thereby, (d) is duly qualified to transact business in North Carolina and
Florida and in each other jurisdiction where the failure to be so qualified
would have a Material Adverse Effect, and (e) has no Subsidiaries.
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SECTION 4.03. AUTHORIZATION; COMPLIANCE; ETC. The execution and
delivery of, and performance by the Borrower of its obligations under, this
Agreement, the Notes, the Security Documents and the other agreements and
instruments relating thereto (all of the foregoing being hereinafter referred to
collectively as the "Transaction Documents") have been duly authorized by all
requisite corporate action and will not violate any provision of law, any order,
judgment or decree of any court of other agency of government, including without
limitation the FAA, the charter documents or bylaws of the Borrower or any
indenture, agreement or other instrument to which the Borrower is a party, or by
which the Borrower is bound, or result in a breach of, or constitute (with due
notice or lapse of time or both) a default under, or except as may be permitted
under this Agreement, result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the property or assets of
the Borrower pursuant to, any such indenture, agreement or instrument that would
have a Material Adverse Effect. Each of the Transaction Documents constitutes
the valid and binding obligation of the Borrower, enforceable against it in
accordance with its terms, subject, however to bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the rights and remedies of
creditors generally or the application of principles of equity, whether in any
action in law or proceeding in equity, and subject to the availability of the
remedy of specific performance or of any other equitable remedy or relief to
enforce any right under any such agreement.
SECTION 4.04. GOVERNMENTAL AND OTHER CONSENTS, ETC.
(a) Except for filings and recordings required under SECTION 2.01 and
the Security Documents and except as set forth in SECTION 4.04(b), the Borrower
is not required to obtain any consent, approval or authorization from, to file
any declaration or statement with or to give any notice to, any Governmental
Authority (including without limitation the FAA, or any other Person (including,
without limitation, any notices required under the applicable bulk sales law) in
connection with or as a condition to the execution, delivery or performance of
any of the Transaction Documents. Except as set forth in such SECTION 4.04(b),
all consents, approvals and authorizations described therein have been duly
granted and are in full force and effect on the date hereof and all filings
described therein have been properly and timely made.
(b) Notwithstanding the foregoing, (i) from time to time, the Borrower
may be required to obtain certain authorizations of or to make certain filings
with the FAA which are required in the ordinary course of business, (ii) copies
of certain documents, including without limitation certain Transaction
Documents, may be required to be filed with the FAA, (iii) the FAA must be
notified of the consummation of any assignments or transfers of control of FAA
authorizations, and (iv) prior to the exercise of certain rights or remedies
under the Loan Documents by the Lender, FAA consents and notifications with
respect to such exercise may be required to be timely obtained or made.
SECTION 4.05. LITIGATION. There is no action, suit or proceeding at law
or in equity or by or before any governmental instrumentality or other agency
(including without limitation the FAA), pending or, to the knowledge of the
Borrower, threatened (nor is any basis therefore known to the Borrower), as of
the date hereof (a) which questions the validity of any of the Transaction
Documents, or any action taken or to be taken pursuant hereto or thereto, in a
manner or to an extent which would or could reasonably be expected to have a
Material Adverse Effect, or (b) against the
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Borrower which, if adversely determined, either in any case or in the aggregate,
would have a Material Adverse Effect.
SECTION 4.06. COMPLIANCE WITH LAWS AND AGREEMENTS. The Borrower is not
in violation of any provision of its corporate charter or by-laws or of any
material indenture, agreement or instrument to which it is a party or by which
it is bound or, to the best of the Borrower's knowledge and belief, of any
provision of law or regulation, the violation of which could have a Material
Adverse Effect, or any order, judgment or decree of any court or other agency of
government (including without limitation the FAA) which could have a Material
Adverse Effect. The Borrower has filed material reports and other submissions
required to be filed with the FAA.
SECTION 4.07. LICENSES, ETC. The Borrower possesses all Licenses and
all copyrights, licenses, trademarks, service marks, trade names and other
contract rights, including agreements with public utilities, use, access or
rental agreements, utility easements, that are necessary for the operation of
the Borrower, except to the extent the absence thereof would not have a Material
Adverse Effect. Each of such Licenses, copyrights, licenses, patents,
trademarks, service marks, trade names and other rights and agreements is in
full force and effect (or will be as of the date this representation is
reconfirmed) and no material default has occurred and is continuing (or will
have occurred and be continuing, as of the date this representation is
reconfirmed) thereunder. None of the FAA Licenses is the subject of a pending
license renewal application and the Borrower has no reason to believe that any
of such FAA Licenses will be revoked or will not be renewed in the ordinary
course.
SECTION 4.08. TITLE TO PROPERTIES; CONDITION OF PROPERTIES. The
Borrower has good title to all of its properties and assets free and clear of
all mortgages, security interests, restrictions, liens and encumbrances of any
kind, including without limitation liens or encumbrances in respect of unpaid
taxes (collectively, "Liens"), except liens and encumbrances contemplated by and
permitted under this Agreement.
(b) The Borrower enjoys quiet possession under all leases to which it
is a party as lessee, and all of such leases are valid, subsisting and in full
force and effect. None of such leases contains any provision restricting the
incurrence of indebtedness by the lessee. The Borrower owns no real estate.
SECTION 4.09. SOLVENCY. The Borrower is Solvent. The Borrower is not
contemplating either the filing of a petition by it under any state or federal
bankruptcy or insolvency laws or the liquidating of all or a substantial portion
of its property, and the Borrower has no knowledge of any Person contemplating
the filing of any such petition against it.
SECTION 4.10. FULL DISCLOSURE. No statement of fact made by or on
behalf of any of the Borrower in this Agreement, the Security Documents or in
any certificate or schedule furnished to the Lender pursuant hereto or thereto
contains any untrue statement of a material fact.
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SECTION 4.11. MARGIN STOCK. The Borrower does not own or have any
present intention of acquiring any "margin stock" within the meaning of
Regulation U (12 CFR Part 221), of the Board of Governors of the Federal Reserve
System (herein called "Margin Stock").
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SECTION 4.12. TAX RETURNS. The Borrower has timely filed all federal,
state and local tax and information returns required to be filed, and has paid
or made adequate provision for the payment of all material federal, state and
local taxes, franchise fees, charges and assessments shown thereon.
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SECTION 4.13. PENSION PLANS, ETC. Neither the Borrower nor any member
of the Controlled Group has any material liability (i) under Section 412 of the
Code for failure to satisfy the minimum funding requirements for pension plans,
(ii) as the result of the termination of a defined benefit plan under Title IV
of ERISA, (iii) under Section 4201 of ERISA for withdrawal or partial withdrawal
from a multi-employer plan, or (iv) for participation in a prohibited
transaction with an employee benefit plan as described in Section 406 of ERISA
and Section 4975 of the Code.
SECTION 4.13. MATERIAL AGREEMENTS. The Borrower has filed in a timely
way all reports and exhibits hereto required to be filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934.
SECTION 4.15. BROKERS, ETC. The Borrower is not under any obligation to
pay any broker's fee, finder's fee or commission in connection with the Loans
contemplated by this Agreement.
SECTION 4.16. ENVIRONMENTAL COMPLIANCE.
(a) To the Borrower's knowledge, all real property leased or owned, by
the Borrower (the "Properties") and their existing and, to the Borrower's
knowledge, prior uses and activities thereon, including but not limited to, the
use, maintenance and operation of each of the Properties and all activities of
the Borrower in conduct of business related thereto comply and have at all times
complied with all Environmental Laws the violation of which could reasonably be
expected to have a Material Adverse Effect.
(b) The Borrower has not engaged, and to the Borrower's knowledge, no
previous owner, tenant, occupant or user of any of the Properties or any other
Person, has engaged in or permitted any operations or activities upon any of the
Properties for the purpose of or in any way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of a material amount of any Hazardous Materials in violation of any
Environmental Law that could reasonably be expected to have a Material Adverse
Effect.
(c) To the Borrower's knowledge, no Hazardous Material has been or is
currently located in, on, under or about any of the Properties in a manner which
violates any Environmental Law or which requires cleanup or corrective action of
any kind under any Environmental Law that in either case could reasonably be
expected to have a Material Adverse Effect.
(d) No notice of violation, lien, complaint, suit, order or other
notice or communication concerning any alleged violation of any Environmental
Law in, on, under or about any of the Properties has been received by the
Borrower or, to the best of the Borrower's knowledge, any prior owner or
occupant of any of the Properties that could reasonably be expected to have a
Material Adverse Effect.
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(e) The Borrower has all permits and licenses required under any
Environmental Law to be issued to them by any Governmental Authority for
activities on any of the Properties, except to the extent that the absence of
any such permit or license could not reasonably be expected to have a Material
Adverse Effect, and are in material compliance with the terms and conditions of
such permits and licenses except to the extent failure to comply therewith could
not reasonably be expected to have a Material Adverse Effect. To the Borrower's
knowledge, such permits or licenses are in full force and effect.
(f) No portion of any of the Properties has been listed, designated or
identified in the National Priorities List (NPL) or the CERCLA information
system (CERCLIS), both as published by the United States Environmental
Protection Agency, or any similar list of sites published by any Federal, state
or local authority proposed for or requiring cleanup, or remedial or corrective
action under any Environmental Law.
SECTION 4.17. INVESTMENT COMPANY ACT. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company," or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
SECTION 4.18. LABOR MATTERS. The Borrower is not experiencing any
strike, or, to the knowledge of Borrower, any labor dispute, slow down or work
stoppage due to labor disagreements; and to the knowledge of the Borrower, there
is no such strike, dispute, slow down or work stoppage threatened against the
Borrower, which could reasonably be expected to have a Material Adverse Effect.
V. [Intentionally omitted].
VI. AFFIRMATIVE COVENANTS. The Borrower hereby covenants and agrees to and
with the Lender that, so long as the Lender has any obligation to extend credit
to the Borrower hereunder, and for so long thereafter as there remains
outstanding any portion of any Obligation, whether now existing or hereafter
arising, the Borrower shall:
SECTION 6.01. PRESERVATION OF ASSETS; COMPLIANCE WITH LAWS, ETC.
(a) Do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its existence as a corporation all material
rights, licenses, permits and franchises (including all Licenses) and comply in
every material respect with all laws and regulations applicable to it and all
material agreements to which it is a party, the violation of which could
reasonably be expected to have a Material Adverse Effect;
(b) at all times maintain, preserve and protect all material trade
names and proprietary rights; and
(c) preserve all the remainder of its material property used or useful
in the conduct of its business and keep the same in good repair, working order
and condition (reasonable wear and tear
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and damage by fire or other casualty excepted), and from time to time, make or
cause to be made all needful and proper repairs, renewals, replacements,
betterments and improvements thereto, so that the business carried on in
connection therewith may be conducted at all times in the ordinary course in a
manner substantially consistent with past practices.
SECTION 6.02. INSURANCE. Keep all of its insurable properties now or
hereafter owned adequately insured at all times against loss or damage by fire
or other casualty to the extent customary with respect to like properties of
companies conducting similar businesses; maintain public liability, business
interruption, and workers' compensation insurance insuring such Borrower to the
extent customary (and as permitted under applicable law) with respect to
companies conducting similar businesses, all by financial sound and reputable
insurers and furnish to the Lender satisfactory evidence of the same and notify
the Lender of any material change in the insurance maintained on its properties
after the date hereof and furnish the Lender satisfactory evidence of any
change; maintain insurance with respect to its facilities and related equipment
in an amount equal to the full replacement cost thereof.
SECTION 6.03. TAXES, ETC. Pay and discharge or cause to be paid and
discharged all taxes, assessments and governmental charges or levies imposed
upon it or upon its income and profits or upon any of its property, real,
personal or mixed, or upon any party thereof, before the same shall become in
default, as well as all lawful claims for labor, materials or supplies or
otherwise, which, if unpaid, would become a lien or charge upon such properties
or any part thereof; provided that the Borrower shall not be required to pay and
discharge or cause to be paid and discharged any such tax, assessment, charge,
levy or claim so long as the validity thereof shall be contested in good faith
by appropriate proceedings and it shall have set aside on its books adequate
reserves with respect to any such tax, assessment, charge, levy or claim, so
contested; and provided, further that, in any event, payment of any such tax,
assessment, charge, levy or claim shall be made before any of its property shall
be seized or sold in satisfaction thereof.
SECTION 6.04. NOTICE OF PROCEEDINGS, DEFAULTS, ADVERSE CHANGE, ETC.
Promptly (and in any event within five (5) days after the discovery by the
Borrower thereof) give written notice to the Lender of (a) any proceedings
instituted or threatened against it by or in any federal, state or local court
or before any commission or other regulatory body, whether federal, state or
local, including without limitation the FAA, which could reasonably be expected
to have a Material Adverse Effect; (b) any material misrepresentation, breach of
warranty or covenant or other default under any material agreement; (c) any
notices of default received by the Borrower (together with copies thereof, if
requested by any Lender) with respect to (i) any alleged default under or
violation of any of its material licenses, permits or franchises or any other
material agreement to which it is a party, or (ii) any alleged default with
respect to, or acceleration or other action under any evidence of material
Indebtedness of the Borrower or any mortgage, indenture or other agreement
relating thereto; (d) (i) any notice of any violation or administrative or
judicial complaint or order filed or to be filed against the Borrower and/or any
real property owned or leased by its alleging any material violations of any
law, ordinance and/or regulation or requiring it to take any action in
connection with the release anc/or clean-up of any Hazardous Materials, or (ii)
any notice from any governmental body or other Person alleging that any company
is or may be liable for costs associated with a release or clean-up of any
Hazardous Materials or any damages resulting from such
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release; (e) any event of dissolution; (f) any change in the condition,
financial or otherwise, of the Borrower which could reasonably have a Material
Adverse Effect; or (g) the occurrence of any Default or the occurrence of any
event which, upon notice or lapse of time or both, would constitute such a
Default.
SECTION 6.05. FINANCIAL STATEMENTS REPORTS. Furnish to the Lender:
(a) Within one hundred twenty (120) days after the end of each fiscal
year, the consolidated and consolidating (or, if applicable, combined and
combining balance sheets and statements of income, stockholders' or members'
equity (as applicable) and (only in consolidated form) cash flows of the
Borrower and all of its Subsidiaries, together with supporting schedules in form
and substance reasonably satisfactory to the Lender, audited by independent
certified public accountants of national reputation (the "Accountants"), the
opinion to be unqualified, showing the financial condition of the Borrower and
all of its Subsidiaries at the close of such fiscal year and the results of
operations during such year; provided that so long as the Borrower is subject to
the reporting provisions of the Securities and Exchange Act of 1934, a copy of
Borrower's Annual Report on Form 10-K will satisfy this requirement.
(b) Within forty-five (45) days after the end of each quarter in each
fiscal year, commencing with the fiscal quarter ending March 31, 2000, the
consolidated (or, if applicable, combined) balance sheets and statements of
income, stockholders' or members' equity (as applicable) and cash flows of the
Borrower and all of its Subsidiaries, together with supporting schedules,
setting forth in each case in comparative form the corresponding figures from
the preceding fiscal period of the same duration, prepared by the Borrower in
accordance with GAAP (except for the absence of notes), such balance sheets to
be as of the close of such quarter, and such statements of income, stockholders'
or members' equity and cash flow to be for the quarter then ended and the period
from the beginning of the then current fiscal year to the end of such quarter
(in each case subject to normal audit and year-end adjustments); provided that
so long as the Borrower is subject to the reporting provisions of the Securities
and Exchange Act of 1934, a copy of any of Borrower's quarterly reports on Form
10-Q will satisfy this requirement.
(c) Concurrently with the delivery of any annual financial statements
required by SECTION 6.05(a) and any quarterly financial statements required by
SECTION 6.05(b), a report in the form of SCHEDULE 6.05 attached hereto (or
otherwise in a form satisfactory to the Lender) signed on behalf of the Borrower
by an Authorized Officer as to the fact that such Person has examined the
provisions of this Agreement and that no Event of Default nor any event which
upon notice or lapse of time, or both, would constitute such an Event of Default
has occurred and is continuing;
(d) Promptly, and in any event within five (5) days, after the Borrower
or any member of the Controlled Group (i) is notified by the Internal Revenue
Service of its liability for the tax imposed by Section 4971 of the Code, for
failure to make required contributions to a pension, or Section 4975 of the
Code, for engaging in a prohibited transaction, (ii) notifies the PBGC of the
termination of a defined benefit pension plan, if there are or may not be
sufficient assets to convert the plan's benefit liabilities as required by
Section 4041 of ERISA, (iii) is notified by the PBGC of the institution of
pension plan termination proceedings under Section 4042 of ERISA or that it has
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a material liability under Section 4063 of ERISA, or (iv) withdraws from a
multiemployer pension plan and is notified that it has withdrawal liability
under Section 4202 of ERISA which is material, copies of the notice or other
communication given or sent;
(e) As soon as reasonably possible after request therefor, such other
information regarding its operations, assets, business, affairs and financial
condition as the Lender may reasonably request.
SECTION 6.06. INSPECTION. Permit employees, agents and representatives
of the Lender to inspect, during normal business hours, its premises and its
books and records and to make abstracts or reproductions thereof. In connection
with any such inspections, the Lender will use reasonable efforts to avoid an
unreasonable disruption of the Borrower's businesses and will give reasonable
advance notice thereof (provided, however, that during the existence of a
Default, such notice will be provided only if circumstances reasonably warrant).
SECTION 6.07. ACCOUNTING SYSTEM. Prepare its financial statements in
accordance with generally accepted accounting principles and maintain a fiscal
year ending December 31.
SECTION 6.08. ADDITIONAL ASSURANCES. From time to time hereafter:
(a) execute and deliver or cause to be executed and delivered, such
additional instruments, certificates and documents, and take all such actions,
as the Lender shall reasonably request for the purpose of implementing or
effectuating the provisions of this Agreement and the other Loan Documents.
(b) upon the exercise by the Lender of any power, right, privilege or
remedy pursuant this Agreement or any other Loan Document which requires any
consent, approval, registration, qualification or authorization of any
Governmental Authority, execute and deliver all applications, certifications,
instruments and other documents and papers that the Lender may be so required to
obtain; and
(c) use reasonable efforts to obtain any consents form any Governmental
Authorities and other Persons necessary to create and perfect a valid and
enforceable first priority lien on the Collateral, so that, to the maximum
extent practicable, the lien of the Lender created therein pursuant to the
Security Documents will be a valid and enforceable first priority.
Nothing contained in this SECTION 6.08 shall constitute a waiver of any Event of
Default arising from the Borrower's failure to locate, deliver and/or file or
record any Security Document, any consent of any Governmental Authority or other
Person or any other document required under this Agreement, it being
acknowledged and agreed, however, that the Lender has assumed the Borrower's
obligations to file the Uniform Commercial Code financing statements required to
be executed, delivered and filed hereunder.
SECTION 6.09. COMPLIANCE WITH ENVIRONMENTAL LAWS.
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(a) Comply in all material respect with all Environmental Laws and not
generate store, handle, process, dispose of or otherwise use and not generate,
store, handle, process, dispose of or otherwise use Hazardous Materials in, on,
under or about the Property in a manner that could lead or result in imposition
on the Borrower or the Lender or any of the Properties of any material liability
or lien of any nature whatsoever under any Environmental Law.
(b) Notify the Lender promptly in the event of any spill or other
release of any Hazardous Material in, on, under or about any of the Properties
which is required to be reported to a Governmental Authority under any
Environmental Law, promptly forward to the Lender copies of any notices received
by the Borrower relating to any alleged violation of any Environmental Law and
pay when due any fine or assessment against the Lender, the Borrower or any of
the Properties relating to any Environmental Law or the Borrower, unless payment
of the same is being contested in good faith by appropriate proceedings and it
shall have set aside on its books adequate reserves with respect thereto.
(c) If at any time it is determinated that the operation or use of any
of the Properties violates any applicable Environmental Law or that there is any
Hazardous Material located in, on, under or about the Properties which under any
Environmental Law requires special handling in collection, treatment, storage or
disposal or any other form of cleanup or remedial or corrective action, and such
requirement has been violated then, within thirty (30) days after receipt of
written notice thereof from a Governmental Authority (or such other time period
as may be specified in the notice sent by such Governmental Authority) or from
the Lender, take, at its sole cost and expense, such actions as may be necessary
to comply in all material respects with any applicable Environmental Laws,
provided, however, that if such compliance cannot reasonably be completed within
such thirty (30) day period, the Borrower shall commence such necessary action
within such thirty (30) day period and shall thereafter diligently and
expeditiously proceed to comply in all material respects with any and all
applicable Environmental Laws. Nothing herein shall prohibit the Borrower from
asserting any good faith defenses against the government in any governmental
demands.
(d) If a lien is filed against any of the Properties by any
Governmental Authority resulting from the need to expend or the actual expending
of monies arising from an action or omission, whether intentional or
unintentional, of the Borrower or for which the Borrower is responsible,
resulting in the releasing, spilling, leaking, leaching, pumping, emitting,
pouring, emptying or dumping of any Hazardous Material in violation of an
Environmental Law, then, within thirty (30) days from the date that the Borrower
is first given written notice that such lien has been placed against the
Properties, either (i) pay the claim and remove the lien or (ii) furnish a cash
deposit, bond or such other security with respect thereto as is reasonably
satisfactory in all respects to the Lender and is sufficient to effect a
complete discharge of such lien on the Properties.
(e) Perform any and all Remedial Work necessary under all Environmental
Laws applicable (now or in the future) to the Borrower.
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VII. NEGATIVE COVENANTS. The Borrower covenants and agrees that, so long as
the Lender has any obligation to extend credit to the Borrower hereunder, and
for so long thereafter as there remains outstanding any portion of any
Obligation, whether now existing or arising hereafter, unless the Lender shall
otherwise consent in writing, the Borrower will not, directly or indirectly:
SECTION 7.01. INDEBTEDNESS. Incur, create, assume become or be liable,
directly, indirectly or contingently, in any manner with respect to, or permit
to exist, any Indebtedness or liability, except:
(a) Indebtedness of the Borrower to the Lender hereunder and under the
Notes;
(b) Indebtedness existing on the date hereof provided however, that the
terms of such indebtedness shall not be modified or amended in any material
respect, nor shall payment thereof be extended, without the prior written
consent of the Lender;
(c) Indebtedness in respect of endorsements of negotiable instruments
for collection in the ordinary course of business; and
(d) Indebtedness set forth in SCHEDULE 7.01, and, Indebtedness under
Capital Leases and purchase money Indebtedness relating to the purchase price of
aircraft and equipment to be used in the Borrower's businesses in the aggregate
principal amount of not more than $5,000,000 outstanding at any time.
SECTION 7.02. LIENS. Create, incur, assume, suffer or permit to exist
any mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever
on any of its assets or ownership interests, now or hereafter owned, other than:
(a) liens securing the payment of taxes, either not yet due or the
validity of which is being contested in good faith by appropriate proceedings,
and as to which it shall have set aside on its books adequate reserves;
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(b) deposits under workers' compensation, unemployment insurance and
social security laws, or to secure the performance of bids, tenders, contracts
(other than for the repayment of borrowed money) or leases, or to secure
statutory obligations or surety or appeal bonds or to secure indemnity,
performance or similar bonds arising in the ordinary course of business;
(c) liens existing on the date hereof or as contemplated on SCHEDULE
7.01.
(d) liens against the Borrower imposed by law, such as vendors',
carriers', lessors', warehouser's or mechanics' liens, incurred by it in good
faith in the ordinary course of business;
(e) liens arising out of a prejudgment attachment, a judgment or award
against it with respect to which it shall currently be prosecuting an appeal, a
stay of execution pending such appeal having been secured, except any such lien
arising in connection with a judgment, attachment or proceeding which gives rise
to an Event of Default under paragraph (k) or (l) of ARTICLE VIII;
(f) liens in favor of the Lender securing the Notes or the other
obligations of the Borrower to the Lender hereunder;
(g) liens against the Borrower arising under or securing Capital Leases
and liens or mortgages securing purchase money Indebtedness described in SECTION
7.01(d), provided that the obligation secured by any such lien shall not exceed
one hundred percent (100%) of the lesser of cost or fair market value as of the
time of the acquisition of the property covered thereby and that each such lien
or mortgage shall at all times be limited solely to the item or items of
property so acquired; and
(h) restrictions, easements and minor irregularities in title which do
not and will not interfere with the occupation, use and enjoyment by the
Borrower of such properties and assets in the normal course of its business as
presently conducted or materially impair the value of such properties and assets
for the purpose of such business.
SECTION 7.03 DISPOSITION OF ASSETS; ETC. Sell, lease, transfer or
otherwise dispose of its properties, assets, rights, licenses and franchises to
any Person (including without limitation dispositions in exchange for similar
assets and properties and commonly referred to as "asset swaps") (all of the
foregoing being referred to herein as a "Disposition"), except for Dispositions
made in the ordinary course of business (including the Disposition, without
replacement, of equipment which is obsolete or no longer needed by the Borrower
in the conduct of their businesses and the replacement of equipment with other
equipment of at least equal utility and value (provided that the Lender's lien
upon such newly acquired equipment shall have the same priority as the Lender's
lien upon the replaced equipment subject to any prior liens permitted by SECTION
7.02(g)).
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SECTION 7.04. FUNDAMENTAL CHANGES.
(a) (i) Form any subsidiary or otherwise change the capital structure
or organization of the Borrower, other than in connection with a Public Offering
Issuance, (ii) permit or suffer any amendment of its charter or other
aforementioned documents which could have a Material Adverse Effect; (iii)
dissolve, liquidate, or otherwise acquire all or any substantial portion of the
ownership interests or assets or properties of any corporation, other or other
entity or any other material assets, other than pursuant to purchases of
inventory and supplies in the ordinary course of business; (iv) repurchase any
shares of capital stock; or (vi) issue any additional shares of capital stock,
except for securities (A) in respect of which the issuing company has no
obligation to redeem or to pay cash distributions or dividends, and (B) the
issuance of which does not result in an Event of Default.
SECTION 7.05. SALE AND LEASEBACK. Enter into any arrangements, directly
or indirectly, with any Person whereby it shall sell or transfer any property,
real, personal or mixed, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property.
SECTION 7.06. INVESTMENTS. Except for Permitted Investments, purchase,
invest in or otherwise acquire or hold securities, including, without
limitation, capital stock and evidences of indebtedness of, or make loans or
advances to, or enter into any arrangement for the purpose of providing funds or
credit to, any other Person (each, as "Investment").
SECTION 7.07. CHANGE IN BUSINESS. Engage, directly or indirectly, in
any business other than the types of businesses in which it is currently engaged
and activities related thereto.
SECTION 7.08. ACCOUNTS RECEIVABLE. Sell, assign, discount or dispose in
any way of any accounts receivable, promissory notes or trade acceptances held
by the Borrower with or without recourse, except for collection (including
endorsements) in the ordinary course of business.
SECTION 7.09. AMENDMENT OF CERTAIN AGREEMENTS, ETC. (a) Amend, modify
or terminate any FAA License, if the effect thereof would be to increase
materially the obligations of the Borrower thereunder, or (b), in any event,
subject to applicable law, elect to terminate any License Agreement.
SECTION 7.10. ERISA. (a) Fail to make contributions to pension plans
required by Section 412 of the Code, (b) fail to make payments required by Title
IV of ERISA as the result of the termination of a single employer pension plan
or withdrawal or partial withdrawal from a multiemployer pension plan, or (c)
fail to correct a prohibited transaction with an employee benefit plan with
respect to which it is liable for the tax imposed by Section 4975 of the Code.
SECTION 7.11. MARGIN STOCK. Use or permit the use of any of the
proceeds of the Loans, directly or indirectly, for the purpose of purchasing or
carrying, or for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry, any Margin Stock or for any other
purpose which might constitute the transactions contemplated hereby a "purpose
credit" within the meaning of Regulation U (12 CFR Part 221) of the Board of
Governors of the Federal Reserve System, or cause any Loan, the application of
proceeds thereof or this Agreement
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to violate Regulation G, Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
or the Securities Exchange Act of 1934, as amended, or any rules or regulations
promulgated under such statutes.
SECTION 7.13. NEGATIVE PLEDGES, ETC. Enter into any agreement
(excluding this Agreement or any other Transaction Document) prohibiting (a) the
Borrower from amending or otherwise modifying this Agreement or any other
Transaction Document, or (b) the creation or assumption of any lien upon the
properties, revenues or assets of the Borrower, whether now owned or hereafter
acquired.
VIII. DEFAULTS. In each case of happening of any of the following events (each
of which is herein sometimes called an "Event of Default"):
(a) any representation or warranty made by or on behalf of the Borrower
in this Agreement or the Security Documents, or in any report, certificate,
financial statement or other instrument furnished in connection with this
Agreement, or the borrowing hereunder, shall prove to be false or misleading in
any material respect when made or reconfirmed and shall remain material at the
time in question and shall not be remedied within thirty (30) days after notice
thereof has been given to Borrower by Lender, unless such incorrectness is
curable and Borrower shall, after delivery of such notice, be diligently
proceeding to correct such failure and shall in fact correct such failure 135
days after the delivery of such notice;
(b) default in the payment or mandatory prepayment of any installment
of the principal of any Note or any payment of any installment of the principal
of any other indebtedness of the Borrower to the Lender when the same shall
become due and payable pursuant to SECTION 1.06(B), and otherwise within ten
(10) days following the time when the same shall become due and payable, whether
at the due date thereof or at a date fixed for prepayment or by acceleration or
otherwise;
(c) default in the payment of any installment of any interest on any
Note, or any premium or fee or any other indebtedness of the Borrower to the
Lender for more than ten (10) days after the date when the same shall become due
and payable, whether at the due date thereof or at a date fixed for prepayment
or by acceleration or otherwise;
(d) default in the due observance or performance by, or compliance
with, any Person other than the Lender of any covenant or agreement contained in
SECTIONS 6.02, 7.03, 7.04 and 7.07 of this Agreement;
(e) default in the due observance or performance of, or compliance
with, any other covenant, condition or agreement, on the part of any Person
other than the Lender to be observed or performed pursuant to the terms of this
Agreement or pursuant to the terms of any Security Document entered into with
the Lender which default is not referred to in paragraphs (a) through (d),
inclusive, of this ARTICLE VIII and which default shall continue unremedied for
thirty (30) days after the earlier to occur of (i) the Borrower's actual
discovery of such default, or (ii) written notice thereof from the Lender to the
Borrower, provided, however, that if any such default cannot be remedied, then
such default shall be deemed to be an Event of Default as of the date of the
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occurrence thereof; and provided that if the failure is curable and the Borrower
shall be diligently proceeding to correct such failure and shall in fact correct
such failure within 135 days after the earlier to occur of (i) and (ii) above,
the same shall not be deemed an Event of Default;
(f) any default with respect to any other evidence of Indebtedness of
the Borrower (other than to the Lender hereunder) for borrowed money, or default
under any agreement giving rise to monetary remedies, if the effect of such
default or exercise of remedies results in an acceleration of such Indebtedness
or obligation; provided, however, that the aggregate amount of such indebtedness
or obligation is in excess of $5,000,000;
(g) [Intentionally omitted].
(h) the Borrower shall lose, fail to keep in force, suffer the
termination, suspension or revocation of or terminate, forfeit or suffer a
material adverse amendment to any material FAA License held by it;
(i) the Borrower shall (i) discontinue its business, (ii) permit an
event of dissolution to occur, (iii) apply for or consent to the appointment of
a receiver, trustee, custodian or liquidator of it or any of its property, (iv)
admit in writing its inability to pay its debts as they mature, (v) make a
general assignment for the benefit of creditors, (vi) be adjudicated a bankrupt
or insolvent or be the subject of an order for relief under Title 11 of the
United States Code or (vii) file a voluntary petition in bankruptcy, or a
petition or an answer seeking reorganization or an arrangement with creditors or
to take advantage of any bankruptcy, reorganization, insolvency, readjustment of
debt, dissolution or liquidation law or statute, or an answer admitting the
material allegations of a petition filed against it in any proceeding under any
such law or corporate action shall be taken for the purpose of effecting any of
the foregoing;
(j) there shall be filed against the Borrower, an involuntary petition
seeking reorganization of such company or the appointment of a receiver,
trustee, custodian or liquidator of such company or a substantial part of its
assets, or an involuntary petition under any bankruptcy, reorganization or
insolvency law of any jurisdiction, whether now or hereafter in effect and such
involuntary petition shall not have been dismissed within ninety (90) days
thereof;
(k) final judgment for the payment of money which, when aggregated with
all other outstanding judgments against the Borrower exceeds $5,000,000
(exclusive of amounts covered by insurance or actually contributed in cash by
third party obligors with respect to such judgments) shall be rendered against
the Borrower, and the same shall remain undischarged (unless fully bonded upon
terms satisfactory to the Lender) for a period of thirty (30) consecutive days,
during which execution shall not be effectively stayed;
(l) the occurrence of any attachment of any property of the Borrower in
the hands or possession of the Lender, or the occurrence of any attachment of
any other property of the Borrower in an amount which, when aggregated with all
other attachments against the Borrower exceeds $5,000,000 and which shall not be
discharged within sixty (60) days of the date of such attachment; or
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(m) any material Security Document shall not be in full force and
effect in all material respects or shall not be enforceable in all material
respects in accordance with its terms, or any security interest(s) or lien(s)
granted pursuant thereto which is, or are in the aggregate, material shall fail
to be perfected, or any party thereto other than the Lender shall contest the
validity of any material lien(s) granted under, or shall disaffirm its
obligations under, any material Security Document;
then and upon every such Event of Default and at any time thereafter during the
continuance of such Event of Default, at the election of the Lender, the
Commitment shall terminate and the Notes and any and all other Indebtedness of
the Borrower to the Lender shall immediately become due and payable, both as to
principal and interest, without presentment, demand, prior notice, or protest,
all of which are hereby expressly waived, anything contained herein or in the
Notes or other evidence of such indebtedness to the contrary notwithstanding
(except in the case of an Event of Default under paragraph (j) or (k) of this
ARTICLE VIII which, under applicable law, would result in the automatic
acceleration of the Borrower's Indebtedness, in which event the Commitments
shall automatically terminate and such Indebtedness shall automatically become
due and payable).
IX. REMEDIES ON DEFAULT, ETC.
(a) GENERAL REMEDIES. In case any one or more Events of Default shall
occur and be continuing, the Lender may proceed to protect and enforce its
rights by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained in this
Agreement, any Security Document or the Notes, or for an injunction against a
violation of any of the terms hereof or thereof or in and of the exercise of any
power granted hereby or thereby or by law, all subject to the provisions of
ARTICLE XII. No right conferred upon the Lender hereby or by any Security
Document or the Notes shall be exclusive of any other right referred to herein
or therein or now or hereafter available at law, in equity, by statute or
otherwise.
(b) CONSENT TO RECEIVER. Without limiting the generality of the
foregoing or limiting in any way the rights of the Lender under the Security
Documents or otherwise under applicable law, at any time after the occurrence,
and during the continuance, of an Event of Default arising under paragraph (b)
or (c) of ARTICLE VIII, the Lender, shall be entitled to apply for and have a
receiver or receiver and manager appointed under state or Federal law of the
United States by a court of competent jurisdiction in any action taken by the
Lender to enforce its rights and remedies hereunder and under the Security
Documents in order to manage, protect, preserve, sell and otherwise dispose of
all or any portion of the Collateral and continue the operation of the
businesses of the Borrower, and to collect all revenues and profits thereof and
apply the same to the payment of all expenses and other charges of such
receivership, including the compensation of the receiver, and to the payment of
the Obligations as aforesaid until a sale or other disposition of such
Collateral shall be finally made and consummated.
XI. DEFINITIONS
As used herein the following terms have the following respective
meanings:
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ACCOUNTANTS. See SECTION 6.05.
ADVANCE(S). See SECTION 1.01(b).
AFFILIATE(S). With respect to any Person, any other Person that would
be considered to be an affiliate of the Borrower under Rule 144(a) of
the Rules and Regulations of the Securities and Exchange Commission, as
in effect on the date hereof, if such Borrower was issuing securities.
AUTHORIZED OFFICER. With respect to any certificate, agreement or other
document to be executed by or on behalf of any company president, chief
financial officer, vice president or treasurer of such Company, who
shall, in any event, be an officer duly authorized by all required
action of such company to execute and deliver such document.
BORROWER. See the PREAMBLE.
BORROWING DATE. With respect to any Advances requested hereunder, the
date such Advances are to be made.
BUSINESS DAY. Any day other than a Saturday, Sunday or legal holiday on
which banks in New York, New York, are open for the transaction of a
substantial part of their commercial banking business; and that is also
a day for trading by and between banks in U.S. Dollar deposits in the
London interbank market.
CAPITAL LEASE. Any lease of property (real, personal or mixed) which,
in accordance with GAAP and Statement No. 13 of the Financial
Accounting Standards Board, would be capitalized on the lessee's
balance sheet or for which the amount of the asset and liability
thereunder if not so capitalized should be disclosed in a note to such
balance sheet.
CAPITAL LEASE OBLIGATIONS. All obligations of the Borrower to pay rent
or other amounts under a lease of (or other agreement conveying the
right to use) property (real, personal or mixed) to the extent such
obligations are required to be classified and accounted for as a
capital lease on the Borrower's balance sheet under GAAP, and, for
purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
CERCLA. The Comprehensive Environmental Response, Compensation and
Liability Act of 1989 (42 USC 9601, et. seq.)
CLOSING DATE. The date as of which all of the conditions to the first
Advances have been satisfied.
CODE. The Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
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COLLATERAL. Collectively, any and all collateral referred to herein and
in the Security Documents.
COLLATERAL ACCOUNT. See SECTION 1(d) of each of the Security
Agreements.
COMMITMENT. See SECTION 1.01(a).
COMMITMENT FEE. See SECTION 1.07.
COMMITMENT LETTER. See SECTION 1.07.
CONTROLLED GROUP. All trades or businesses (whether or not
incorporated) under common control that, together with the Borrower,
are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 40001 of ERISA.
COPYRIGHT OFFICE. The United States Copyright and Trademark Office or
any other federal government agency which may hereafter perform its
functions.
DEFAULT. An Event of Default or event or condition that, but for the
requirement that time elapse or notice be given, or both, would
constitute an Event of Default.
DISPOSITION. See SECTION 7.03.
DOLLARS AND $. Lawful money of the United States of America.
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ENVIRONMENTAL LAWS. Any and all Federal, state, local and foreign laws,
rules or regulations, and any judicial or administrative orders or
decrees, relating to the regulation or protection of human health,
safety or the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes into the indoor or outdoor environment,
including, without limitation, ambient air, soil, surface water, ground
water, wetlands, land or subsurface strata, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals
or toxic or hazardous substances or wastes.
ERISA. The Employee Retirement Security Act of 1974, as amended.
EVENT OF DEFAULT. See ARTICLE VIII.
EXPIRATION DATE. See SECTION 1.01(A).
FAA. The Federal Aviation Administration or any other federal
governmental agency which may hereafter perform its functions.
FAA LICENSES. Any Licenses issued by the FAA, or assigned, to the
Borrower.
FINANCIAL STATEMENTS. See SECTION 4.01.
GAAP. Generally accepted accounting principles 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 such
other entity as may be approved by a significant segment of the
accounting profession, applied on a basis consistent with the
application of the same in prior fiscal periods, except as otherwise
required.
GOVERNMENTAL AUTHORITY. Any nation or government, any state or other
political subdivision thereof and any entity exercising any executive,
legislative, judicial, regulatory or administrative functions of, or
pertaining to, government.
HAZARDOUS MATERIALS. Any petroleum or petroleum products, flammable
materials, explosives, radioactive materials, asbestos, urea
formaldehyde foam insulation, and transformers or other equipment that
contain polychlorinated biphenyls, "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous wastes",
"restricted hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants", "pollutants" or words of similar import under any
Environmental Law and any other chemical or other material or
substance, the generation, storage, transportation, use, disposal,
release or location of which is now or hereafter prohibited, limited or
regulated under any Environmental Law.
INDEBTEDNESS OR INDEBTEDNESS. As applied to any Person, (a) all items
(except items of capital stock, capital or paid-in surplus or of
retained earnings) which, in
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accordance with GAAP, would be included in determining total
liabilities as shown on the liability side of a balance sheet of such
Person as at the date as of which Indebtedness is to be determined,
including Capital Lease Obligations, but excluding Indebtedness with
respect to trade obligations and other normal accruals in the ordinary
course of business which are not more than one hundred eighty (180)
days in arrears measured from the date of billing, (b) all indebtedness
secured by any mortgage, pledge, lien or conditional sale or other
title retention agreement to which any property or asset owned or held
by such Person is subject, whether or not the indebtedness secured
thereby shall have been assumed; and (c) all indebtedness of others
which such Person has directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of
business), discounted or sold with recourse or agreed (contingently or
otherwise) to purchase or repurchase or otherwise acquire, or in
respect of which such Person has agreed to supply or advance funds
(whether by way of loan, stock or equity purchase, capital
contribution, make well or otherwise) or otherwise to become directly
or indirectly liable.
INTEREST AND FEE EXPENSES. For any Person(s) and for any period, the
aggregate amount (determined, without duplication, in accordance with
GAAP) of (a) interest, fees, charges and other expenses accrued
(whether or not paid) during such period (including the interest
component of Capital Lease Obligations but excluding interest in
respect of overdue trade payables) by such Person(s) in respect of all
Indebtedness for borrowed money.
INTEREST PERIOD. With respect to each LIBOR Loan, the period commencing
on the date such Loan is made or the last day of the immediately
preceding Interest Period, as to LIBOR Loans being continued as such,
and ending one (1) month thereafter, provided that:
(i) any Interest Period (other than an Interest Period determined
pursuant to clause (iv) below) that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in the next calendar month, in which
case such Interest Period shall end on the immediately preceding
Business Day:
(ii) any Interest Period relating to a LIBOR Loan that begins on the
last Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period) shall, subject to clause (iv) below, end on the
last Business Day of a calendar month; and
(iii) any Interest Period related to a LIBOR Loan that would
otherwise end after the final maturity date of the Loans shall end on
such final maturity date.
INVESTMENT. See SECTION 7.06.
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ISSUER. See the definition of "Qualified Offering".
LENDER. See the PREAMBLE.
LIBOR BASE RATE. With respect to each Interest Period pertaining to any
LIBOR Loan, the rate per annum determined by the Lender to be the
arithmetic mean (rounded to the nearest 1/100th of 1%) of the offered
rates for deposits in Dollars with a term comparable to such Interest
Period that appears on the Telerate British Bankers Assoc. Interest
Settlement Rates Page (as defined below) at approximately 11:00 A.M.,
London time, on the second full Business Day preceding the first day of
such Interest Period; provided, however, that if there shall at any
time no longer exist a Telerate British Bankers Assoc. Interest
Settlement Rates Page, the term "LIBOR Base Rate" shall mean, with
respect to each Interest Period pertaining to any LIBOR Loan, the rate
per annum equal to the rate at which Wachovia Bank & Trust is offered
Dollar deposits at or about 10:00 A.M., New York City time, two
Business Days prior to the beginning of such Interest Period in the
London interbank deposit market where the eurodollar and foreign
currency and exchange operations in respect of its LIBOR Loans are then
being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable to
the amount of its LIBOR Loan to be outstanding during such Interest
Period. As used herein, the "Telerate British Bankers Assoc. Interest
Settlement Rates Page" means the display designated as Page 3750 on the
Telerate System Incorporated Service (or such other page as may replace
such page on such service for the purpose of displaying the rates at
which Dollar deposits are offered by leading banks in the London
interbank deposit market).
LIBOR LOANS. Loans bearing interest at a rate determined on the basis
of the LIBOR Rate.
LIBOR RATE. With respect to each Interest Period pertaining to a LIBOR
Loan, a rate per annum determined for such day in accordance with the
following formula (rounded upward, if necessary, to the nearest 1/16th
of 1%):
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LIBOR Base Rate
---------------
1.00 - LIBOR Reserve Requirements
LIBOR RESERVE REQUIREMENTS. For any date as of which a LIBOR Base Rate
is determined, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including without limitation basic, supplemental, marginal
and emergency reserves) under any regulations of the Board of Governors
of the Federal Reserve System (or other Governmental Authority having
jurisdiction with respect thereto) prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of
such Board) maintained by a member bank of the Federal Reserve System.
LICENSES. A license, authorization or permit to own or operate any
commercial airline granted by the FAA or any other Governmental
Authority, or assigned, to the Borrower.
LOAN DOCUMENTS. This Agreement, the Notes, the Security Documents and
all other agreements, instruments and certificates contemplated hereby
and thereby,
LOANS. The Advances.
MARGIN STOCK. See SECTION 4.11.
MATERIAL ADVERSE EFFECT. Any circumstance or event which, individually
or in the aggregate with other such circumstances or events, (a) has
had, or could reasonably be expected to have, an adverse effect on the
validity or enforceability of this Agreement or the other Loan
Documents in any material respect, (b) has had or, (with respect to
litigation or similar proceedings only) could reasonably be expected to
have, an adverse effect on the financial condition of the Borrower in
any material respect, other than any event or circumstances which are
generally applicable to general economic conditions, or (c) has
impaired the ability of the Borrower to fulfill its respective
obligations under this Agreement, the Notes or any other applicable
Loan Document.
NET SALE PROCEEDS. With respect to any Disposition, the aggregate
amount of all cash payments received by the Borrower, directly or
indirectly, in connection with such Disposition, whether at the time
thereof or after such Disposition under deferred payment arrangements
or investments entered into or received in connection with such
Disposition, MINUS the aggregate amount of any reasonable and customary
legal, accounting, regulatory, title and recording tax expenses,
transfer taxes, commissions and other fees and expenses paid at any
time by the Borrower in connection with such disposition, and MINUS any
cash income taxes payable by the Borrower, in connection with such
Disposition.
NOTES. See SECTION 1.01(d)
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OBLIGATIONS. The Loans and the other obligations of the Borrower under
this Agreement and the other Loan Documents, including without
limitation any and all future loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to the Lender,
evidenced by any note, mortgage or other instrument, whether arising by
reason of an extension of credit, loan, guarantee, indemnification or
in any other manner, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due,
now existing or hereafter arising and however acquired. The term
"Obligations" also includes, without limitation, all interest, charges,
expenses, fees (including attorneys' accountants', appraisers',
consultants' and other fees) and any other sums chargeable to the
Borrower under this Agreement or any other Loan Documents.
PENDING AND PARTIES. See SECTION 14.05(a).
PERMITTED INVESTMENTS. (a) Investments in property to be used by the
Borrower in the ordinary course of business; (b) current assets arising
from the sale of goods and services in the ordinary course of business;
(c) investments (of one year or less) in direct or guaranteed
obligations of the United States, or any agency thereof; (d)
investments of (of 90 days or less) in certificates of deposit of any
domestic commercial bank of recognized standing having capital, surplus
and undivided profits in excess of $100,000,000, membership in the
Federal Deposit Insurance Corporation ("FDIC") and senior debt rated
carrying one of the two highest ratings of Standard & Poor's Ratings
Service, A Division of McGraw Hill, Inc., or Moody's Investors Service,
Inc. (an "Approved Institution"); (e) investments (of 90 days or less)
in commercial paper given one of the two highest ratings by Standard
and Poor's Ratings Service, A Division of McGraw Hill, Inc., or by
Moody's Investors Service, Inc.; (f) investments redeemable at any time
without penalty in money market instruments placed through Approved
Institutions; (g) repurchase agreements fully collateralized by United
States government securities; (h) deposits fully insured by the FDIC;
and (i) short-term relocation and other personal loans to employees and
advances to employees in the ordinary course of business for the
payment of bona fide, properly documented, business expenses to be
incurred on behalf of the Borrower, provided that the aggregate
outstanding amount of all such loans and advances shall not exceed
$200,000 in the aggregate at any time.
PERSON OR PERSON. Any individual, corporation, partnership, joint
venture, trust, business unit, unincorporated organization, or other
organization, whether or not a legal entity, or any government or any
agency or political subdivision thereof.
PREPAYMENT NOTICE. See SECTION 1.06.
PUBLIC OFFERING ISSUANCE. As to any Person, any issuance to the public
of equity interests in such Person pursuant to a Registration Statement
under the Securities Act of 1933, as amended.
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REGULATION D. Regulation D of the Board of Governors of the Federal
Reserve System, as the same may be amended or supplemented from time to
time.
REGULATORY CHANGE. With respect to any Lender, any change after the
Closing Date in any law, rule or regulation (including without
limitation Regulation D) of the United States, any state or any other
nation or political subdivision thereof, including without limitation
the issuance of any final regulations or guidelines, or the adoption or
making after the Closing Date (or, if later, the date as of which such
Person became a Lender) of any interpretation, directive or request,
applying to such Lender under any such law, rule or regulation (whether
or not having the force of law and whether or not failure to comply
therewith would be unlawful) by any court or governmental or monetary
authority charged with the interpretation thereof.
REMEDIAL WORK. All activities required under any Environmental Law,
including, without limitation, cleanup design and implementation,
removal activities, investigation, field and laboratory testing and
analysis, monitoring and other remedial and response actions, taken or
to be taken, arising out of or in connection with Hazardous Materials,
including without limitation all activities included within the meaning
of the terms "removal," "remedial action" or "response," as defined in
42 U.S.C. Section 9601(23), (24) and (25).
REQUEST FOR ADVANCES. See SECTION 1.04.
REVOLVER. See SECTION 1.01.
ROUTINE COSTS. See SECTION 14.02.
SECURITY AGREEMENT. The Security Agreement dated as of or after the
Closing Date between the Borrower and the Lender, as amended from time
to time in accordance with their respective terms.
SECURITY DOCUMENT(S). See SECTION 2.01.
SOLVENT and SOLVENCY. With respect to any Person on a particular date,
the condition that on such date, (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of
such Person of its debts as they become absolute and matured, (c) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts
and liabilities mature, and (d) such Person is not engaged in business
or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an
unreasonably small amount of capital.
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SUBSIDIARY. (a) Any corporation, association, joint stock company,
business trust or other similar organization of which more than 50% of
the ordinary voting power for the election of a majority of the members
of the board of directors or other governing body of such entity is
held or controlled by the Borrower; (b) any other such organization the
management of which is directly or indirectly controlled by a Borrower
or a Subsidiary of the Borrower through the exercise of voting power or
otherwise; or (c) any joint venture, association, partnership or other
entity in which the Borrower has a 50% equity interest. As of the date
hereof the Borrower has no Subsidiaries.
TAXES. See SECTION 1.09.
THIRD PARTIES. See SECTION 14.02.
TRANSACTION COSTS. For any period, nonrecurring out-of-pocket expenses
(including attorneys' fees, investment banking fees and facility fees)
accrued by the Borrower to Persons who are not Affiliates of the
Borrower, during such period in connection with the closing of the
transactions under this Agreement and any other transactions occurring
after the Closing Date which are consented to by the Lender.
TRANSACTION DOCUMENTS. See SECTION 4.03.
XII. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS; ACTIONS BY THE LENDER.
(a) This Agreement (including the Schedules hereto) and the other Loan
Documents constitute the entire agreement of the parties herein and supersede
any and all prior agreements, written or oral, as to the matters contained
herein, and no modification or waiver of any provision hereof or of the Notes or
any other Loan Document, nor consent to the departure by the Borrower or any
other Person therefrom, shall be effective unless the same is in writing, and
then such waiver or consent shall be effective only in the specific instance,
and for the purpose, for which given.
(b) Any amendment or waiver effected in accordance with this ARTICLE
XII shall be binding upon each holder of any Note at the time outstanding, each
future holder of any Note and the Borrower. The Lender's failure to insist
(directly or through the Lender) upon the strict performance of any term,
condition or other provision of this Agreement, any Note, or any of the Security
Documents, or to exercise any right or remedy hereunder or thereunder, shall not
constitute a waiver by the Lender of any such term, condition or other provision
or default or Event of Default in connection therewith, nor shall a single or
partial exercise of any such right or remedy preclude any other or future
exercise, or the exercise of any other right or remedy; and any waiver of any
such term condition or other provision or of any such default or Event of
Default shall not affect or alter this Agreement, any Note or any of the
Security Documents, and each and every term, condition and other provision of
this Agreement, the Notes and the Security Documents shall, in such event,
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continue in full force and effect and shall be operative with respect to any
other then existing or subsequent default or Event of Default in connection
therewith.
XIII. BENEFIT OF AGREEMENT; ASSIGNMENTS.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the and Lender and their respective successors and assigns, and
all subsequent holders of any of the Notes or any portion hereof. The Lender may
assign its rights and interests under this Agreement, the Notes and the Security
Documents and/or delegate its obligations hereunder and thereunder, in whole or
in part. The Borrower may not assign any of its rights or delegate any of its
duties or obligations hereunder.
XIV. MISCELLANEOUS
SECTION 14.01. SURVIVAL. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto, shall survive the making by the Lender of the Loans and shall
continue in full force and effect so long as any Obligation is outstanding and
unpaid or the Lender has any obligation to advance funds to the Borrower
hereunder.
SECTION 14.02. FEES AND EXPENSES; INDEMNITY; ETC. The Borrower agrees
(a) to pay or reimburse the Lender for all its reasonable out-of-pocket costs
and expenses incurred in connection with the development, preparation,
negotiation, interpretation and execution of, and any amendment, supplement or
modification to, this Agreement, the Notes and any other Loan Documents and the
consummation and administration of the transactions contemplated hereby,
excluding ordinary and customary costs and expenses of the Lender, in its
administration of the Loan ("Routine Costs") but including without limitation
the reasonable fees and disbursements of (i) counsel to the Lender and (ii) such
agents of the Lender not regularly in its employ, accountants, other auditing
services, consultants and appraisers engaged by or on behalf of the Lender or by
the Borrower at the request of the Lender (collectively, "Third Parties"); (b)
to pay or reimburse the Lender for all its reasonable costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the Notes and any other Loan Documents, including, without
limitation, the reasonable fees and disbursements of (i) counsel to the Lender
and (ii) Third Parties; (c) following the occurrence of an Event of Default
hereunder, to pay or reimburse the Lender for the reasonable fees and
disbursements of counsel engaged for the preservation or enforcement of such
Lender's rights under this Agreement or any other Loan Documents relating to
such Event of Default; (d) to pay, indemnify, and hold the Lender harmless from,
any and all recording and filing fees and any and all liabilities with respect
to, or resulting from any delay in paying, stamp, excise and other taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the Notes and
any other Loan Documents, excluding Routine Costs; and (e) to pay, indemnify,
and hold the Lender (and their respective directors, officers, employees and
agents) harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with
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<PAGE>
respect to the execution, delivery, enforcement, performance and administration
of, or any transaction contemplated by, any Loan Document (other than Routine
Costs) or the use or proposed use of the proceeds of the Loans or the
refinancing or restructuring of the credit arrangement provided under this
Agreement in the nature of a "work-out" or any proceedings with respect to the
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation of the Borrower or any other party other than the Lender to any Loan
Document (all the foregoing in this clause (e3), collectively, the "indemnified
liabilities"), provided, that the Borrower shall have no obligation hereunder to
the Lender with respect to (i) indemnified liabilities arising from the gross
negligence or willful misconduct of the Lender of (ii) the expenses of counsel
and other advisors to the Lender incurred in connection with the execution,
delivery, performance or administration of the Loan Documents or the Loans, as
the case may be, other than as and to the extent required under clauses (a)
through (d) above. The agreements in this Section shall survive repayment of the
Notes and all other amounts payable hereunder.
SECTION 14.03. NOTICES.
(a) All notices, requests, demands and other communications provided
for hereunder (including without limitation Requests for Advances) shall be in
writing (including telecopied communication) and mailed or telecopied or
delivered to the applicable party at the addresses indicated below.
If to the Lender:
Reedy Creek Investments, LLC
P.O. Box 3557
Cary, NC 27519
Attn: Greyson Quarles
Telecopy No: 919-677-8506
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<PAGE>
If to the Borrower:
Midway Airlines Corporation
2801 Slater Road
Morrisville, NC 27560
Attn: Jonathan S. Waller, Esq.
Telecopy No: 919-595-1705
or, as to each party, at such other address as shall be designated by such
parties in a written notice to the other party complying as to delivery with the
terms of this Section. All such notices, requests, demands and other
communication shall be deemed given upon receipt by the party to whom such
notice is directed.
SECTION 14.04. GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK.
SECTION 14.05. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) THE BORROWER AND THE LENDER (HEREINAFTER, THE "PARTIES"), TO THE
EXTENT THAT EACH MAY LAWFULLY DO SO, HEREBY CONSENTS TO THE EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AS WELL AS TO THE
JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN FROM SUCH COURTS, FOR
THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF ANY OF ITS
OBLIGATIONS ARISING HEREUNDER OR UNDER THE NOTES OR THE SECURITY DOCUMENTS OR
WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY, AND EXPRESSLY WAIVES ANY
AND ALL OBJECTIONS IT MAY HAVE AS TO VENUE, INCLUDING, WITHOUT LIMITATION, THE
INCONVENIENCE OF SUCH FORUM, IN ANY OF SUCH COURTS; IN ADDITION, TO THE EXTENT
THAT IT MAY LAWFULLY DO SO, EACH OF THE PARTIES CONSENTS TO THE SERVICE OF
PROCESS BY PERSONAL SERVICE OR U.S. CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, ADDRESSED TO SUCH PARTY AT THE ADDRESS PROVIDED HEREIN. TO THE EXTENT
THAT SUCH PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OR
ANY COURT OF FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, SUCH PARTY HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
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<PAGE>
(b) WAIVER OF JURY TRIAL. EACH PARTY HEREBY VOLUNTARILY AND IRREVOCABLY
WAIVES TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT,
THE NOTES, THE SECURITY DOCUMENTS OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION
HEREWITH.
SECTION 14.06. SEVERABILITY. Any provision of this Agreement, the Notes
or any of the Security Documents which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
SECTION 14.07. SECTION HEADINGS, ETC. Any Article and Section headings
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.
SECTION 14.08. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute one and the same Agreement.
SECTION 14.09. KNOWLEDGE AND DISCOVERY. All references in this
Agreement to "knowledge" of, or "discovery" by, the Borrower shall be deemed to
include, without limitation, any such actual knowledge of, or discovery by, any
executive officer or the chief financial officer of the Borrower.
SECTION 14.10. AMENDMENT OF OTHER AGREEMENTS. All references in this
Agreement to other documents and agreements to which the Lender is not parties
(including without limitation the Project Documents) shall be deemed to refer to
such documents and agreements as presently constituted and, except for any
amendments and modifications not prohibited under SECTION 7.09, not as hereafter
amended or modified unless the Lender shall have expressly consented in writing
to such amendment(s) or modification(s).
SECTION 14.11. FAA APPROVALS. Notwithstanding anything herein or in any
of the Security Documents to the contrary, but without limiting or waiving in
any way the Borrower's obligations under SECTION 2.01, the Lender's rights
hereunder and under the Security Documents are subject to all applicable rules
and regulations of the FAA. The Lender will not take any action pursuant to this
Agreement or the Security Documents which would constitute or result in any
assignment or transfer control of any FAA License, whether de jure or de facto,
if such assignment or transfer of control would require under then existing law
(including the written rules and regulations promulgated by the FAA), the prior
approval of the FAA, without first obtaining such approval. The Borrower agrees
to take any action which the Lender may reasonably request in order to obtain
and enjoy the full rights and benefits granted to the Lender by this Agreement
and the Security Documents, including specifically, at the cost and expense of
the Borrower, the use of its best efforts to assist in obtaining approval of the
FAA for any action or transaction contemplated by this Agreement or any Security
Document which is then required by law, and specifically, without limitation,
upon request following an Event of Default, to prepare, sign and file (or cause
to be filed) with the FAA the assignor's, transferor's or controlling person's
portion of any application or applications for consent
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<PAGE>
to (i) the assignment of any FAA License or transfer or control thereof, (ii)
any sale or sales of property constituting any Collateral by or on behalf of the
Lender or (iii) any assumption by the Lender or the designees of voting rights
or management rights in property constituting any Collateral effected in
accordance with the terms of this Agreement.
SECTION 14.12. DISCLAIMER OF RELIANCE. The Borrower has not relied on
any oral representations concerning any of the terms or conditions of the Loans,
the Notes, this Agreement or any of the Security Documents in entering into the
same. The Borrower acknowledges and agrees that none of the officers of the
Lender has made any representations that are inconsistent with the terms and
provisions of this Agreement, the Notes and the Security Documents, and neither
the Borrower nor any of its Affiliates has relied on any oral promises or
representations in connection therewith.
SECTION 14.13. ENVIRONMENTAL INDEMNIFICATION. Without limiting the
generality of SECTION 14.02, in consideration of the execution and delivery of
this Agreement by the Lender and the making of the Loans, the Borrower hereby
indemnifies, exonerates and holds the Lender and each of their respective
officers, directors, employees and agents (collectively, the "Indemnified
Parties") free and harmless from and against any and all actions, causes of
action, suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonably attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of:
(a) any investigation, litigation or proceeding, including, without
limitation, the assertion or any lien, related to any environmental cleanup,
compliance action or release by the Borrower of any Hazardous Material or any
other matter affecting any of the Properties and relating to the protection of
the environment; or
(b) the presence on or under, or the actual or threatened discharge or
release from, any Property of any Hazardous Material whether or not such
Hazardous Material originates or emanates from such Property or is present or
threatening to affect such Property.
(c) personal injury, death or property damage arising under any
statutory or common law tort theory of liability, including without limitation
the maintenance of a nuisance; or
(d) any other environmental condition arising at or affecting any of
the Properties which is limited, prohibited or otherwise regulated by a federal,
state or local agency charged with the enforcement of Environmental Laws.
The foregoing indemnification shall not apply to any such Indemnified
Liabilities arising for the account of a particular Indemnified Party by reasons
of the relevant indemnified Party's negligence or misconduct, and if and to the
extent that the foregoing undertaking may be unenforceable for any reason, the
Borrower agrees to make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law. Notwithstanding anything to the contrary herein contained, the obligations
and liabilities under this Section shall
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<PAGE>
survive and continue in full force and effect and shall not be terminated,
discharged or released in whole or in part irrespective of whether all the
Obligations have been paid in full or the Commitment has been terminated and
irrespective of any foreclosure of any mortgage, deed of trust or collateral
assignment on any real property or acceptance by any Lender of a deed or
assignment in lieu of foreclosure.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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<PAGE>
IN WITNESS WHEREOF, the Lender and the Borrower have caused this
Agreement to be duly executed by their duly authorized representatives,
as a sealed instrument, all as of the day and year first above written.
BORROWER:
---------
MIDWAY AIRLINES CORPORATION
By /s/ J. S. Waller
----------------------
Jonathan S. Waller
Senior Vice President
General Counsel
LENDER:
-------
REEDY CREEK INVESTMENTS, LLC
By /s/ J. H. Goodnight
----------------------
James H. Goodnight
Member
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<PAGE>
SCHEDULE 1.01(D)
REVOLVING CREDIT NOTE
$30,000,000.00 March ____, 2000
FOR VALUE RECEIVED, the undersigned, MIDWAY AIRLINES CORPORATION (the
Maker"), hereby promises to pay to the order of Reedy Creek Investments, LLC,
having an address at P.O. Box 3557, Cary, NC 27519 (the "Lender"), the principal
sum of Thirty Million Dollars ($30,000,000.00) or, if less, the aggregate unpaid
principal amount of Loans hereunder made by the Lender to the Maker pursuant to
that certain Credit Agreement dated as of March 31, 2000, as the same may be
amended, restated, renewed, replaced, supplemented or otherwise modified from
time to time hereafter (the "Credit Agreement"), by and among the Maker and the
Lender, together with interest on any and all principal remaining unpaid
hereunder from the date hereof until payment in full, payable on the dates and
at the interest rate or rates specified in the Credit Agreement. Capitalized
terms used in this Note without definition have the meanings assigned to them in
the Credit Agreement.
The aggregate principal amount outstanding hereunder shall be payable
as provided in the Credit Agreement. This Note may be prepaid in accordance with
the terms and provisions of the Credit Agreement without penalty or premium
(other than certain indemnification payments under SECTION 1.10 of the Credit
Agreement). This Note is also subject to mandatory prepayment in certain
circumstances as provided in the Credit Agreement.
All principal and interest hereunder are payable in lawful money of the
United States of America to the Lender at its address specified in the Credit
Agreement in immediately available funds as provided in the Credit Agreement on
the date on which such payment shall become due.
The Maker, for itself and its legal representatives, successors and
assigns, to the extent it may lawfully do so, hereby expressly waives
presentment, demand, protest, notice of protest, presentment for the purpose of
accelerating maturity, diligence in collection, and the benefit of any exemption
or insolvency laws, and consents that the Lender may release or surrender,
exchange or substitute any personal property or other collateral security now
held or which may hereafter be held as security for the payment of this Note,
and may extend the time for payment or otherwise modify the terms of payment of
any part or the whole of the debt evidenced hereby to the extent provided in the
Credit Agreement without in any way affecting the liability of the Maker;
provided that such modifications do not increase the obligations hereunder.
<PAGE>
This Note is one of the "Notes" referred to in and is entitled to the
benefits of the Credit Agreement (including Schedules thereto) and all other
instruments and agreements evidencing and/or securing the indebtedness
hereunder, which Credit Agreement and other instruments and agreements are
hereby made part of this Note and are deemed incorporated herein in full. The
occurrence or existence of an Event of Default shall constitute a default under
this Note and shall, subject to the provisions of ARTICLE XII of the Credit
Agreement, entitle the Lender to accelerate the entire indebtedness hereunder
and to take such other action as may be provided for in the Credit Agreement or
any other instrument or agreement evidencing and/or securing this Note, all in
accordance with the terms of the Credit Agreement.
All agreements between or among the Maker and the Lender are hereby
expressly limited so that in no continency or event whatsoever, whether by
reason of acceleration of maturity of the indebtedness or otherwise, shall the
amount paid or agreed to be paid for the use or forbearance of the indebtedness
evidenced hereby exceed the maximum amount which the Lender is permitted to
receive under applicable law. If, from any circumstances whatsoever, fulfillment
of any provision hereof or of the Credit Agreement, at the time performance of
such provision shall be due, shall involve exceeding such amount, then the
obligation to be fulfilled shall automatically be reduced to the limit of such
validity and if, from any circumstances, the Lender should ever receive as
interest an amount which would exceed such maximum amount, such amount which
would be excessive interest shall be applied to the reduction of the principal
balance evidenced hereby and not to the payment of interest. As used herein the
term "applicable law" shall mean the law in effect as of the date hereof,
provided, however, that in the event there is a change in the law which results
in a higher permissible rate of interest, then this Note shall be governed by
such new law as of its effective date. This provision shall control every other
provision of all agreements between or among the Maker and the Lender.
This Note and all transactions hereunder and/or evidenced herein shall
be governed by, and construed and enforced in accordance with, the laws of the
State of New York.
If this Note shall not be paid when due and shall be placed by the
holder hereof in the hands of any attorney for collection, through legal
proceedings or otherwise, the Maker will pay reasonable attorneys' fees to the
holder hereof together with reasonable costs and expenses of collection,
including without limitation, any such attorneys' fees, costs and expenses
relating to any proceedings with respect to the bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution or liquidation of any of the Maker
or any party (other than the Lender) to any instrument or agreement securing
this Note.
2
<PAGE>
IN WITNESS WHEREOF, the Maker has caused this Note to be executed under
seal by its duly authorized representative as of the date first above written.
MIDWAY AIRLINES CORPORATION
By:
------------------------
Its:
--------------------
3
<PAGE>
SCHEDULE 1.04(A)
REQUEST FOR ADVANCES
Reedy Creek Investments, LLC
P.O. Box 3557
Cary, NC 27519
Re: Request for Advances under Credit Agreement dated
as of March 31, 2000 (the "Credit Agreement")
Ladies and Gentlemen:
This letter shall serve as the Borrowing Notice with respect to the
Advances to be made by the Lender in the principal amount of $_________________,
which Loans shall be LIBOR Loans with an Interest Period commencing
_____________ and ending _________. The Borrowing Date of the Advances should be
_______________________. Capitalized terms used herein shall have the meanings
assigned to them in the Credit Agreement.
The undersigned hereby certifies as follows:
1. The representations and warranties contained in the Credit Agreement
are or will be, true and correct in all material respects as of the Borrowing
Date with the same effect as if made at and as of such time, except as may have
been disclosed to the Lender by the Borrower and to which the Lender has
consented and to the extent that (a) such representations and warranties
expressly relate to an earlier specified date or (b) the facts upon which such
representations and warranties are based may in the ordinary course be changed
by transactions or events permitted or not prohibited under the Credit
Agreement.
2. After giving effect to such Advances (both as of the Borrowing Date
and, on a pro forma basis, the last day of the most recent fiscal quarter or
which financial statements have been delivered or are required to be delivered
to the Lender), no Default has occurred and is continuing.
3. No event has occurred, and no circumstance exists, which
individually or in the aggregate with other such circumstances or events, has
had, or could reasonably be expected to have, a Material Adverse Effect.
Very truly yours,
MIDWAY AIRLINES CORPORATION
By:
------------------------
Its:
--------------------
1
<PAGE>
Schedule 6.05
MIDWAY AIRLINES CORPORATION
COMPLIANCE REPORT
The undersigned _________________________, ____________________________
of Midway Airlines Corporation (the "Borrower"), HEREBY CERTIFIES that:
This Report is furnished pursuant to SECTION 6.05(A)(IV) of the Credit
Agreement dated as of January ____, 1997 by and between the Borrower and the
Lender party thereto, as amended, restated, renewed, replaced, supplemented or
otherwise modified from time to time (the "Credit Agreement"). Unless otherwise
defined herein, the terms used in this Report have the meanings assigned to them
in the Credit Agreement.
As required by SECTION 6.05 of the Credit Agreement, the financial
statements of the Borrower for the [year/quarter] ended _______________________,
_______ (the "Financial Statements"), prepared in accordance with generally
accepted accounting principles, consistently applied, accompany this Report. The
Financial Statements present fairly the financial position of the Borrower as at
the date thereof and its results of operations for the period covered thereby
[(subject only to normal recurring year-end adjustments)].
The activities of the Borrower during the periods covered by such
Financial Statements have been reviewed by the undersigned, as
[__________________] of the Borrower, or by employees or agents under my
immediate supervision. Based on such review, to the best knowledge and belief of
the undersigned, and as of the date of this Report, no Default has occurred.
WITNESS my hand this _____ day of _____________________, __________.
MIDWAY AIRLINES CORPORATION
By:
------------------------
,--------------------
<PAGE>
Schedule 7.01(d)
Permitted Indebtedness
1. Indebtedness relating to the purchase price of or secured by up to eight
(8) Canadair Regional Jet Aircraft in the aggregate principal amount of up
to *.
2. Indebtedness relating to the purchase price of or secured by up to fifteen
(15) Boeing 737-700 aircraft in the aggregate principal amount of up to *.
3. Indebtedness relating to the purchase price of or secured by up to four (4)
CF34-3B1 engines in the aggregate principal amount of up to *.
4. Indebtedness relating to the financing of or secured by certain Regional
Jet aircraft parts in the aggregate principal amount of up to *.
5. Indebtedness relating to the purchase price of or secured by up to four
CFM56-7B20 aircraft engines in the aggregate principal amount of up to *.
6. Indebtedness relating to the design, development and construction of an
aircraft hangar in the aggregate principal amount of up to *.
7. Indebtedness relating to the payment of pre-delivery deposit obligations
owed to The Boeing Company in the aggregate principal amount of up to *.
*Confidential treatment requested for omitted information. Omitted information
has been filed separately with the Commission.
EXHIBIT 99.2
REVOLVING CREDIT NOTE
$30,000,000.00 March 31, 2000
FOR VALUE RECEIVED, the undersigned, MIDWAY AIRLINES CORPORATION (the
Maker"), hereby promises to pay to the order of Reedy Creek Investments, LLC,
having an address at P.O. Box 3557, Cary, NC 27519 (the "Lender"), the principal
sum of Thirty Million Dollars ($30,000,000.00) or, if less, the aggregate unpaid
principal amount of Loans hereunder made by the Lender to the Maker pursuant to
that certain Credit Agreement dated as of March 31, 2000, as the same may be
amended, restated, renewed, replaced, supplemented or otherwise modified from
time to time hereafter (the "Credit Agreement"), by and among the Maker and the
Lender, together with interest on any and all principal remaining unpaid
hereunder from the date hereof until payment in full, payable on the dates and
at the interest rate or rates specified in the Credit Agreement. Capitalized
terms used in this Note without definition have the meanings assigned to them in
the Credit Agreement.
The aggregate principal amount outstanding hereunder shall be payable
as provided in the Credit Agreement. This Note may be prepaid in accordance with
the terms and provisions of the Credit Agreement without penalty or premium
(other than certain indemnification payments under SECTION 1.10 of the Credit
Agreement). This Note is also subject to mandatory prepayment in certain
circumstances as provided in the Credit Agreement.
All principal and interest hereunder are payable in lawful money of the
United States of America to the Lender at its address specified in the Credit
Agreement in immediately available funds as provided in the Credit Agreement on
the date on which such payment shall become due.
The Maker, for itself and its legal representatives, successors and
assigns, to the extent it may lawfully do so, hereby expressly waives
presentment, demand, protest, notice of protest, presentment for the purpose of
accelerating maturity, diligence in collection, and the benefit of any exemption
or insolvency laws, and consents that the Lender may release or surrender,
exchange or substitute any personal property or other collateral security now
held or which may hereafter be held as security for the payment of this Note,
and may extend the time for payment or otherwise modify the terms of payment of
any part or the whole of the debt evidenced hereby to the extent provided in the
Credit Agreement without in any way affecting the liability of the Maker;
provided that such modifications do not increase the obligations hereunder.
<PAGE>
This Note is one of the "Notes" referred to in and is entitled to the
benefits of the Credit Agreement (including Schedules thereto) and all other
instruments and agreements evidencing and/or securing the indebtedness
hereunder, which Credit Agreement and other instruments and agreements are
hereby made part of this Note and are deemed incorporated herein in full. The
occurrence or existence of an Event of Default shall constitute a default under
this Note and shall, subject to the provisions of ARTICLE XII of the Credit
Agreement, entitle the Lender to accelerate the entire indebtedness hereunder
and to take such other action as may be provided for in the Credit Agreement or
any other instrument or agreement evidencing and/or securing this Note, all in
accordance with the terms of the Credit Agreement.
All agreements between or among the Maker and the Lender are hereby
expressly limited so that in no continency or event whatsoever, whether by
reason of acceleration of maturity of the indebtedness or otherwise, shall the
amount paid or agreed to be paid for the use or forbearance of the indebtedness
evidenced hereby exceed the maximum amount which the Lender is permitted to
receive under applicable law. If, from any circumstances whatsoever, fulfillment
of any provision hereof or of the Credit Agreement, at the time performance of
such provision shall be due, shall involve exceeding such amount, then the
obligation to be fulfilled shall automatically be reduced to the limit of such
validity and if, from any circumstances, the Lender should ever receive as
interest an amount which would exceed such maximum amount, such amount which
would be excessive interest shall be applied to the reduction of the principal
balance evidenced hereby and not to the payment of interest. As used herein the
term "applicable law" shall mean the law in effect as of the date hereof,
provided, however, that in the event there is a change in the law which results
in a higher permissible rate of interest, then this Note shall be governed by
such new law as of its effective date. This provision shall control every other
provision of all agreements between or among the Maker and the Lender.
This Note and all transactions hereunder and/or evidenced herein shall
be governed by, and construed and enforced in accordance with, the laws of the
State of New York.
If this Note shall not be paid when due and shall be placed by the
holder hereof in the hands of any attorney for collection, through legal
proceedings or otherwise, the Maker will pay reasonable attorneys' fees to the
holder hereof together with reasonable costs and expenses of collection,
including without limitation, any such attorneys' fees, costs and expenses
relating to any proceedings with respect to the bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution or liquidation of any of the Maker
or any party (other than the Lender) to any instrument or agreement securing
this Note.
2
<PAGE>
IN WITNESS WHEREOF, the Maker has caused this Note to be executed under
seal by its duly authorized representative as of the date first above written.
MIDWAY AIRLINES CORPORATION
By: /s/ J. S. Waller
-----------------------
Jonathan S. Waller
Senior Vice President
General Counsel
3
