SECTION 5.7.        Environmental Matters.

 

Each Borrower Group Member shall and shall cause each Person within its control to: (a) conduct its operations and keep and maintain its Real Estate in compliance with all Environmental Laws and Environmental Permits other than noncompliance that could not reasonably be expected to have a Material Adverse Effect; (b) implement any and all investigation, remediation, removal and response actions that are necessary to comply in all material respects with Environmental Laws and Environmental Permits pertaining to the presence, generation, treatment, storage, use, disposal, transportation or Release of any Hazardous Material on, at, in, under, above, to, from or about any of its Real Estate; (c) notify the Administrative Agent promptly after such Borrower Group Member becomes aware of any violation of Environmental Laws or Environmental Permits or any Release on, at, in, under, above, to, from or about any Real Estate that is reasonably likely to result in the Borrower incurring Environmental Liabilities in excess of [*] individually or [*] in the aggregate in a Fiscal Year; and (d) promptly forward to the Administrative Agent a copy of any order, notice, request for information or any communication or report received by such Borrower Group Member in connection with any such violation or Release or any other matter relating to any Environmental Laws or Environmental Permits that could reasonably be expected to result in  any Borrower Group Member incurring Environmental Liabilities in excess of [*] individually or [*] in the aggregate in a Fiscal Year.

 

SECTION 5.8.        Further Assurances.

 

Subject to Section 5.9(b), the Parent Guarantor and each Borrower Group Member agrees that it shall, at its expense and upon the reasonable request of the Administrative Agent, duly execute and deliver, or cause to be duly executed and delivered, to the Administrative Agent such further instruments and do and cause to be done such further acts as may be necessary or reasonably requested by the Administrative Agent to carry out more effectively the provisions and purposes of this Agreement and each Loan Document.

 

SECTION 5.9.        Additional Collateral Documents.

 

(a)           To the extent not delivered to the Administrative Agent on or before the Closing Date (including in respect of after-acquired property), each Borrower Group Member agrees to do promptly each of the following, unless otherwise agreed by the Administrative Agent:

 

(i)             deliver to the Administrative Agent such duly executed supplements and amendments to any of the Collateral Documents, in each case in form and substance reasonably satisfactory to the Administrative Agent and as the Administrative Agent reasonably deems necessary in order to effectively grant to the Administrative Agent for the benefit of the Lenders, a valid, first-priority, perfected and enforceable security interest in all assets, personal property or property interests that constitute Collateral;

 

(ii)            deliver to the Administrative Agent all certificates, instruments and other documents representing all Collateral required to be pledged and delivered under the Collateral Documents;

 

(iii)           take such other actions as the Administrative Agent reasonably deems necessary to create, maintain, perfect or protect the security interest required to be granted pursuant to clause (i) above, including the filing of financing statements or other recordations in such jurisdictions as may be required by the Collateral Documents, the Code, the DOT, the FAA or applicable law, or as may be reasonably requested by the Administrative Agent; and

 

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(iv)          if requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above in connection with Collateral acquired or subjected to the Lien of the Guarantee and Collateral Agreement after the date hereof, which opinions shall be in form and substance consistent with those delivered on the Closing Date and from counsel reasonably satisfactory to the Administrative Agent.

 

(b)           Notwithstanding the foregoing, (i) the Administrative Agent shall not take any security interest in or require any actions to be taken with respect to any property to the extent that the granting of such a security interest would constitute a breach or violation of a valid and effective restriction in place as of the date hereof in favor of a third party (including, without limitation, mandatory consent rights; and the parties agree that the Administrative Agent shall not require any action to be taken with respect to such consent rights), that would result in the termination of any Borrower Group Member’s interest in such property or give rise to any indemnification obligations or any right to terminate or commence the exercise of remedies under such restrictions, and (ii) Liens required to be granted and actions required to be taken pursuant to this Section 5.9 shall all be subject to exceptions and limitations (including Liens permitted pursuant to Section 6.7) consistent with those set forth herein and in the Collateral Documents. Nothing in this Section 5.9(b) shall obligate the Administrative Agent or any Lender to release its Lien on any Collateral.

 

SECTION 5.10.      Access.

 

Each Borrower Group Member shall provide the Administrative Agent access to its properties and to the Collateral in accordance with Section 1.9.

 

SECTION 5.11.      Slot Utilization.

 

Subject to transfers, exchanges and other dispositions permitted by this Agreement, each Borrower Group Member will utilize (or arrange for utilization by leasing or exchanging Slots with other air carriers) the Slots in a manner consistent in all material respects with applicable regulations, rules, laws and contracts in order to preserve its right to hold and operate the Slots, taking into account any waivers or other relief granted to such Borrower Group Member by the FAA, any other applicable Governmental Authority or any Airport Authority, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.12.      ERISA/Labor Matters.

 

A Loan Party shall furnish the Administrative Agent (with sufficient copies for each of Lenders) each of the following:

 

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(a)           promptly and in any event within [*] Business Days after any Borrower Group Member or any ERISA Affiliate knows that a request for a minimum funding waiver under Section 412 of the Code has been filed with respect to any Multiemployer Plan, a written statement of an officer of such Borrower Group Member or ERISA Affiliate describing such waiver request and the action, if any, such Borrower Group Member and any ERISA Affiliate propose to take with respect thereto and a copy of any notice filed with the PBGC or the IRS pertaining thereto;

 

(b)           promptly and in any event within [*] Business Days after any Borrower Group Member or any ERISA Affiliate receives any adverse communication from a Governmental Authority (including a non-US Governmental Authority) that could result in a material increase to or accelerate the payment of any material liability with respect to a Pension Plan, a copy of such notice;

 

(c)           promptly and in any event within [*] Business Days after any Borrower Group Member (i) commences or terminates negotiations with any collective bargaining agent for the purpose of materially changing any collective bargaining agreement; (ii) reaches an agreement with any collective bargaining agent prior to ratification for the purpose of materially changing any collective bargaining agreement; (iii) ratifies any agreement reached with a collective bargaining agent for the purpose of materially changing any collective bargaining agreement; or (iv) becomes subject to a “cooling off period” under the auspices of the National Mediation Board, notification of the commencement or termination of such negotiations, a copy of such agreement or notice of such ratification or “cooling off period,” as the case may be;

 

(d)           promptly and in any event within [*] Business Days after any Borrower Group Member or any ERISA Affiliate knows that any ERISA Event has occurred, a statement describing such ERISA Event and the action, if any, that such Borrower Group Member or ERISA Affiliate has taken and proposes to take with respect thereto and, on the date any records, documents or other information must be furnished to the PBGC or other applicable Governmental Authority with respect to such ERISA Event, a copy of such records, documents and information;

 

(e)           promptly and in any event within [*] Business Days following receipt thereof, copies of any documents described in Sections 101(k) or 101(l) of ERISA that any Borrower Group Member or any ERISA Affiliate may request with respect to any Multiemployer Plan; provided, that if the Borrower Group Members or any of their ERISA Affiliates have not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, then, upon reasonable request of the Administrative Agent, the Borrower Group Member and/or their ERISA Affiliates shall promptly make a request for such documents or notices from such administrator or sponsor and the Borrower shall provide copies of such documents and notices to the Administrative Agent promptly after receipt thereof, and further provided, that the rights granted to the Administrative Agent in this section shall be exercised not more than once during a 12-month period; and

 

(f)           promptly and in any event within [*] Business Days after receipt thereof by any Borrower Group Member or ERISA Affiliate from a sponsor of a Multiemployer Plan, copies of each notice concerning (i)(A) the imposition of Withdrawal Liability by such Multiemployer Plan or (B) the Reorganization, Insolvency or termination, within the meaning of Title IV of ERISA, of any such Multiemployer Plan or the determination that such Multiemployer Plan is in “endangered status” or “critical status” within the meaning of Section 432 of the IRC, and (ii) the amount of liability incurred or that may be incurred by the Borrower or any ERISA Affiliate in connection with any event described in clause (i).

 

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SECTION 5.13.      Maintenance of Liens and Collateral.

 

 Each Borrower Group Member, subject to Section 5.9, shall do or cause to be done all things necessary to preserve and keep in full force and effect at all times the Liens securing the Obligations as provided in the Loan Documents.

 

SECTION 5.14.      Use of Proceeds.

 

The proceeds of the Loan will be used by the Borrower for the purposes specified in Section 1.4.

 

SECTION 5.15.      Pari Passu.

 

The Borrower shall ensure that its obligations under the Loan Documents shall at all times rank at least pari passu with all its present and future unsecured and unsubordinated indebtedness with the exception of any obligations that are mandatorily preferred by any applicable laws to companies generally and not by contract.

 

ARTICLE 6

 

NEGATIVE COVENANTS

 

Each of the Borrower Group Members and, in the case of Sections 6.1(b) and 6.2(b) only, the Parent Guarantor agrees that from and after the Closing Date until the Termination Date:

 

SECTION 6.1.        Sale of Stock and Assets.

 

(a)           No Borrower Group Member shall sell, transfer, convey, assign or otherwise dispose of any of its properties or other assets, including the Stock of any of its Subsidiaries (whether in a public or a private offering or otherwise) (any such disposition being an “Asset Sale”), other than the following (without duplication):

 

(i)           sales and other dispositions of immaterial assets in the ordinary course of business, and swaps, exchanges, interchange or pooling of assets in the ordinary course of business;

 

(ii)          sales or dispositions of surplus, obsolete, negligible or uneconomical assets no longer used or useful in the business of such Borrower Group Member;

 

(iii)           [Intentionally Omitted];

 

(iv)          sales or dispositions of Inventory (other than Collateral) in the ordinary course of business;

 

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(v)           subject to Section 1.2(b)(iv) in respect of sales or dispositions of assets that comprise the Collateral, sales or dispositions of other assets in arm’s length transactions at fair market value in an aggregate amount not to exceed [*] in the aggregate in any Fiscal Year;

 

(vi)          (x) sale, disposition, exchange or abandonment of Intellectual Property; provided, that such abandonment is (A) in the ordinary course of business consistent with past practices and (B) with respect to Intellectual Property that is not material to the business of such Borrower Group Member and (y) licensing or sublicensing of Intellectual Property in the ordinary course of business consistent with past practices;

 

(vii)         sale, disposition, exchange, lease or abandonment of Slots unless such sale, disposition, exchange, lease or abandonment could reasonably be expected to result in a Material Adverse Effect;

 

(viii)        sale-leaseback, synthetic lease or similar transactions involving Section 1110 Assets (other than such Section 1110 Assets that comprise the Collateral), aircraft or engines;

 

(ix)           the disposition of leasehold or similar interests in Real Estate that is not owned Real Estate (including Gate Interests), including through assignment, sublease or lease termination, as a whole or in part, or the return, surrender, exchange or abandonment of any property subject thereto to the extent any such disposition individually or all such dispositions in the aggregate could not reasonably be expected to result in a Material Adverse Effect; and

 

(x)           sale or disposition of aircraft, engines or spare parts, so long as such sale is consistent in all material respects with the Projections.

 

(b)           The Parent Guarantor shall not sell, transfer, convey or otherwise dispose of the Stock of (i) the Borrower or (ii) the Subsidiary of the Parent Guarantor (other than Lynx) with the highest gross revenues among all Subsidiaries of the Parent Guarantor (excluding the Borrower) for the preceding four full Fiscal Quarters, determined in accordance with GAAP at the time of such sale, transfer, conveyance or disposition.

 

SECTION 6.2.        Mergers.

 

(a)           No Borrower Group Member may enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or sell, lease, sell and leaseback, assign, convey, transfer or otherwise dispose of all or substantially all of its property or business, except that:

 

(i)             any Borrower Group Member (other than the Borrower) may be merged or consolidated with or into the Borrower (provided that the Borrower shall be the continuing or surviving corporation) or with or into any other Borrower Group Member (other than the Borrower);

 

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(ii)            any Borrower Group Member (other than the Borrower) may sell, lease, sell and leaseback, assign, convey, transfer or otherwise dispose of any or all of its assets (A) to the Borrower or any other Borrower Group Member (upon voluntary liquidation or otherwise) or (B) pursuant to an Asset Sale permitted by Section 6.1; and

 

(iii)           any Investment expressly permitted by Section 6.5 may be structured as a merger, consolidation or amalgamation.

 

(b)           The Parent Guarantor may not enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or sell, lease, sell and leaseback, assign, convey, transfer or otherwise dispose of all or substantially all of its property or business other than pursuant to a Permitted Merger.

 

SECTION 6.3.        Restricted Payments.

 

No Borrower Group Member shall make any Restricted Payment except (a) Restricted Payments made by any Borrower Group Member (other than the Borrower) to the Borrower, and (b) inter-company loans and advances made by the Borrower to the extent permitted under Section 6.5(c).

 

SECTION 6.4.        Indebtedness.

 

(a)           No Borrower Group Member shall create, incur, assume or permit to exist any Indebtedness, except (without duplication):

 

(i)             Indebtedness secured by purchase money security interests and Capital Leases (including in the form of sale-leaseback, synthetic lease or similar transactions) to the extent such Indebtedness (A) finances the acquisition or construction of aircraft, engines or spare parts (other than Spare Parts) or (B) finances the acquisition or construction of other assets and the principal amount of any such Indebtedness permitted under this clause (B) does not exceed [*] at any one time outstanding; provided, that the amount of such Indebtedness does not exceed [*]% of the purchase price or construction cost (including any capitalized interest and issuance fees) of the subject asset;

 

(ii)            the Loan and the other Obligations;

 

(iii)           Indebtedness existing as of the Closing Date described in Schedule 6.4 (including, for the avoidance of doubt, Indebtedness that may be incurred from time to time under revolving lines of credit referred to on Schedule 6.4);

 

(iv)          Indebtedness owed to any Lender (or any of its Affiliates) or any other Person in connection with Investments permitted under Section 6.5(d);

 

(v)           Indebtedness in respect of any overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing house transfers of funds;

 

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(vi)          Indebtedness to credit card processors in connection with credit card processing services and affinity card programs incurred in the ordinary course of business and consistent with past practices;

 

(vii)         Indebtedness in respect of letters of credit, surety and appeal bonds in an aggregate outstanding amount not to exceed [*];

 

(viii)        Indebtedness constituting a Permitted Refinancing of Indebtedness referred to in clauses (i) or (iii) above or (xii) below;

 

(ix)           unsecured Indebtedness (including letters of credit) incurred subsequent to the Closing Date to provide credit support for (x) obligations arising in the ordinary course of business and consistent with past practices in connection with credit card processing services and affinity card programs and (y) the Indebtedness described in clause (v) above;

 

(x)            other unsecured Indebtedness incurred subsequent to the Closing Date in an aggregate amount not to exceed [*] outstanding at any time;

 

(xi)           (A) Guaranteed Indebtedness incurred (x) by endorsement of instruments or items of payment for deposit to the general account of such Borrower Group Member in the ordinary course of business, or (y) for the benefit of any Loan Party if the primary obligation is expressly permitted by this Agreement, and (B) Guaranteed Indebtedness to the extent existing on the Closing Date as set forth in Schedule 6.4;

 

(xii)          Indebtedness (A) financing the acquisition of aircraft, engines or spare parts (other than Spare Parts) or the making of deposits or predelivery payments in connection with any such acquisition, in each case to the extent such acquisition is consistent with the Projections and is expected to be financed with Indebtedness permitted pursuant to Section 6.4(a)(i), or (B) otherwise secured by any aircraft, engines or spare parts (other than Spare Parts); and

 

(xiii)         inter-company Indebtedness permitted under Section 6.5(c).

 

(b)           No Borrower Group Member shall, directly or indirectly, voluntarily purchase, redeem, defease or prepay any principal of, premium, if any, interest or other amount in respect of any Indebtedness prior to its scheduled maturity, other than (i) the Obligations; (ii) Indebtedness secured by a Lien permitted under Section 6.6 if the asset securing such Indebtedness on a first-priority basis has been sold or otherwise disposed of in accordance with Section 6.1 and the proceeds of such sale or disposal are used to repay such Indebtedness; (iii) Indebtedness utilized to finance the acquisition of any aircraft, engines or spare parts (other than Spare Parts); (iv) Indebtedness subject to any Permitted Refinancing; (v) other Indebtedness not in excess of [*]; (vi) Indebtedness incurred subsequent to the Closing Date permitted under Section 6.4(a) (other than Indebtedness permitted under Section 6.4(a)(iii) or any Permitted Refinancing thereof); and (vii) as otherwise permitted in Section 6.3.

 

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SECTION 6.5.        Investments; Loan and Advances.

 

No Borrower Group Member shall make or permit to exist any Investment except (without duplication):

 

(a)           Investments comprised of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, or of notes payable, or stock or other securities, issued by Account Debtors to such Borrower Group Member pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary course of business, consistent with past practices;

 

(b)           Investments existing as of the Closing Date summarized on Schedule 6.5;

 

(c)           Investments by the Borrower in (i) the Parent Guarantor, (ii) any Subsidiary of the Parent Guarantor (other than any Borrower Group Member), and (iii) any other Borrower Group Member; provided that any such Investments made on or after the Closing Date do not exceed an aggregate amount equal to [*], and in the case of (i) and (iii), such Investments consisting of inter-company loans shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent; and provided further, however, that none of the limitations or requirements contained in the foregoing proviso shall apply to any inter-company loans made by the Borrower to the Parent Guarantor; provided further, however, on the Closing Date, the Parent Guarantor shall pledge to the Administrative Agent pursuant to the Guarantee and Collateral Agreement revolving inter-company notes of each Subsidiary (other than the Borrower Group Members), which shall be in an aggregate face amount (but allocated among such Subsidiaries on a pro rata or other basis reasonably acceptable to the Administrative Agent) not less than the amount by which the inter-company cash advances made by the Borrower to the Parent Guarantor from time to time outstanding exceed in the aggregate the total amount of cash and Cash Equivalents then held by the Parent Guarantor;

 

(d)           the Borrower may make Investments consisting of (i) currency swap agreements, currency future or option contracts and other similar agreements designed to hedge against fluctuations in foreign interest rates and currency values, (ii) interest rate swap, cap or collar agreements and interest rate future or option contracts, and (iii) fuel hedges and other derivatives contracts, in each case, to the extent that such agreement or contract is entered into in the ordinary course of business and not for speculation;

 

(e)           Investments in fuel consortia in the ordinary course of business consistent with past practice and consistent with industry practice;

 

(f)           Investments in the form of Cash Equivalents;

 

(g)           advances to officers, directors and employees of any Borrower Group Member in an aggregate amount not to exceed [*] at any time outstanding, for travel, entertainment, relocation and analogous ordinary business purposes;

 

(h)           Guaranteed Indebtedness permitted by Section 6.4; and

 

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(i)           the Borrower may make other Investments in an aggregate amount outstanding at any one time not to exceed [*] for all Investments made pursuant to this clause (i).

 

SECTION 6.6.        Liens.

 

No Borrower Group Member shall create, incur, assume or permit to exist any Lien on or with respect to (i) the Collateral or (ii) any of its other properties or assets (whether now owned or hereafter acquired), except for:

 

(a)           Permitted Encumbrances;

 

(b)           Liens securing Indebtedness permitted by Section 6.4(a)(xii), to the extent such Lien is solely with respect to the applicable aircraft, engines or spare parts, any purchase contract relating thereto and any proceeds thereof.

 

(c)           Liens created by conditional sale or other title retention agreements (including Capital Leases) or in connection with purchase money Indebtedness, in each case, permitted under Section 6.4(a)(i); provided, that (A) such Liens attach only to the assets (including related leases and subleases thereof and other assets integral to the use thereof including security deposits from any sublessee collaterally assigned for the benefit of lessors) subject to such purchase money debt, and (B) such Indebtedness is incurred within [*] days following such purchase and does not exceed [*] of the purchase price of the subject assets;

 

(d)           Liens securing Indebtedness permitted by Section 6.4(a)(v);

 

(e)           Liens on its deposit and operating accounts and amounts on deposit therein in favor of the beneficiaries of the amounts on deposit therein to the extent such Liens secure obligations owed to such beneficiaries and such obligations are otherwise permitted pursuant this Agreement;

 

(f)            any interest or title of a licensor, lessor or sublessor granted to others, but, with respect to the Collateral, only to the extent permitted by any of the Collateral Documents;

 

(g)           customary banker’s Liens on its bank accounts and amounts on deposit therein in favor of the depositary institutions where such accounts are maintained to secure fees, overdrafts, returned checks, and similar obligations;

 

(h)           Liens in respect of rights of setoff, recoupment and holdback in favor of credit card processors securing obligations in connection with credit card processing services incurred in the ordinary course of business and consistent with past practices;

 

(i)            Liens on cash deposits securing obligations referred to in Section 6.4(a)(vii) in an aggregate amount not in excess of [*];

 

(j)            Liens on cash deposits pledged as collateral for Indebtedness permitted under Section 6.4(a)(iv) in connection with Investments permitted under Section 6.5(d);

 

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(k)           Liens securing a Permitted Refinancing of Indebtedness, to the extent such Indebtedness being refinanced was originally secured in accordance with this Section 6.6; provided that such Lien does not attach to any additional property or assets of any Borrower Group Member;

 

(l)            Liens securing the Loan and the other Obligations;

 

(m)          Liens created in connection with operating Leases; provided that, such Liens attach only to the assets subject to such Lease (including any sublease thereof, other assets integral to the use thereof and security deposits from any sublessee collaterally assigned for the benefit of lessors); and

 

(n)           other Liens so long as the value of the property subject to such Liens, and the Indebtedness and other obligations secured thereby, do not exceed, in the aggregate, [*].

 

SECTION 6.7.        Limitation on Negative Pledge Clauses.

 

No Borrower Group Member will enter into any agreement (other than the Loan Documents) with any Person which prohibits or limits the ability of such Borrower Group Member to create, incur, assume or suffer to exist any Lien securing the Obligations upon any of its properties, assets or revenues, whether now owned or hereafter acquired, other than agreements that contain (a) prohibitions or limitations existing on the Closing Date and listed on Schedule 6.7, and any extension or renewal thereof on terms no less favorable to such Borrower Group Member, (b) prohibitions set forth in the Loan Documents, (c) prohibitions or restrictions imposed by any agreement relating to secured Indebtedness or other obligations permitted by this Agreement if such prohibition or restriction applies only to property secured or financed by such Indebtedness or other obligations and (d) restrictions prohibiting Liens contained in agreements relating to the use and occupancy of airport premises and facilities, operating leases, Capital Leases or Licenses with respect to properties subject thereto and interests created therein.

 

SECTION 6.8.        Affiliate Transactions.

 

No Borrower Group Member will sell or transfer any property or assets to, or otherwise engage in any other material transactions with, any of its Affiliates (other than between Loan Parties), except transactions (a) at prices and on terms and conditions no less favorable to such Borrower Group Member than could be obtained on an arm’s length basis from unrelated third parties and (b) any dividends, other distributions or payments permitted by Section 6.3.

 

SECTION 6.9.        Capital Expenditures.

 

No Borrower Group Member may make or commit to make any Capital Expenditure, except Capital Expenditures of Borrower Group Members (i) for aircraft, engines, aircraft spare parts and ground handling equipment or (ii) in the ordinary course of business not exceeding [*] in the aggregate in any Fiscal Year; provided, that (a) all or any portion of the amount referred to in clause (ii) above, if not so expended in the Fiscal Year for which it is permitted, may be carried over for expenditure in the next succeeding Fiscal Year and (b) Capital Expenditures made pursuant to clause (ii) above during any Fiscal Year shall be deemed made, first, in respect of amounts permitted for such Fiscal Year as provided above and, second, in respect of amounts carried over from the prior Fiscal Year pursuant to clause (a) above.

 

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SECTION 6.10.      Clauses Restricting Subsidiary Distributions.

 

No Subsidiary of the Borrower shall enter into or suffer to exist or become effective any consensual encumbrance or restriction on its ability to (a) make Restricted Payments in respect of any Stock of such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any other Borrower Group Member, (b) make loans or advances to, or other Investments in, the Borrower or any other Borrower Group Member or (c) transfer any of its assets to the Borrower or any other Borrower Group Member, except for such encumbrances or restrictions existing under or by reason of (i) any restrictions existing under the Loan Documents, (ii) any agreements existing on the Closing Date and listed on Schedule 6.10 and (iii) any restrictions with respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection with the disposition of all or substantially all of the Stock or assets of such Subsidiary.

 

SECTION 6.11.      Capital Structure and Business.

 

No Borrower Group Member shall amend its Organization Documents in a manner that would adversely affect in any material respect the rights or remedies of the Administrative Agent or Lenders under the Loan Documents, or such Borrower Group Member’s duty or ability to repay the Obligations. No Borrower Group Member shall engage in any business other than the businesses currently engaged in by it and businesses that are reasonably related thereto. No Borrower Group Member shall make any changes to its equity capital structure as in existence on the Closing Date, except pursuant to any transaction permitted under any other provision contained herein.

 

SECTION 6.12.      Change of Fiscal Year.

 

No Borrower Group Member shall change its Fiscal Year other than to conform its Fiscal Year with the Fiscal Year of the Parent Guarantor.

 

SECTION 6.13.      Financial Covenants.

 

The Borrower shall not breach or fail to comply with any of the Financial Covenants.

 

ARTICLE 7

 

TERM

 

SECTION 7.1.        Termination.

 

The financing arrangements contemplated hereby shall be in effect until the Maturity Date (or, if earlier, the Termination Date), and the Loan and all other Obligations shall be automatically due and payable in full on the Maturity Date.

 

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SECTION 7.2.        Survival of Obligations Upon Termination of Financing Arrangements.

 

Except as otherwise expressly provided for in the Loan Documents, no termination or cancellation (regardless of cause or procedure) of any financing arrangement under this Agreement shall in any way affect or impair the obligations, duties and liabilities of any Loan Party or the rights of the Administrative Agent and the Lenders relating to any unpaid portion of the Loan or any other Obligations, due or not due, liquidated, contingent or unliquidated or any transaction or event occurring prior to such termination, or any transaction or event, the performance of which is required after the Maturity Date. Except as otherwise expressly provided herein or in any other Loan Document, all undertakings, agreements, covenants, warranties and representations of or binding upon each Loan Party, and all rights of the Administrative Agent and each Lender, all as contained in the Loan Documents, shall not terminate or expire, but rather shall survive any such termination or cancellation and shall continue in full force and effect until the Termination Date; provided, that the payment obligations under Sections 1.11, 1.12 and 1.13, and the indemnities contained in the Loan Documents shall survive the Termination Date.

 

ARTICLE 8

 

EVENTS OF DEFAULT; RIGHTS AND REMEDIES

 

SECTION 8.1.        Events of Default.

 

The occurrence of any one or more of the following events (regardless of the reason therefor) shall constitute an “Event of Default” hereunder:

 

(a)           Any Loan Party (i) fails to make any payment of principal of the Loan or scheduled interest in respect thereof when due and payable, or (ii) fails to make any payment of any interest (not referred to in clause (i)) or any other Obligations not covered in clause (i) above within three [*] Business Days of the date when due and payable.

 

(b)           Any Loan Party fails or neglects to perform or observe (i) any of the provisions of Section 1.2, Section 4.1 with respect to paragraph (e) of Annex B, Section 5.1(a)(i) or Article 6 on its part to be performed or observed, (ii) any of the provisions of Section 4.1 (other than with respect to paragraph (e) of Annex B) on its part to be performed or observed and such failure continues for ten [*] Business Days from the date that the Administrative Agent delivers to the Borrower written notice of such failure, or (iii) any of the provisions of Article 5 (other than Section 5.1(a)(i)) on its part to be performed or observed and such failure continues for [*] days from the date that the Administrative Agent delivers to the Borrower written notice of such failure.

 

(c)           Any representation or warranty of any Loan Party contained herein or in any other Loan Document or in any written statement, report, financial statement or certificate made or delivered to the Administrative Agent or any Lender by any Loan Party is untrue or incorrect in any material respect, in each case, as of the date when made or deemed made.

 

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(d)           (i) Any Loan Party shall consent to the appointment of or the taking of possession by a receiver, trustee or liquidator of itself or of substantially all of its property, or (ii) any Loan Party shall admit in writing its inability to pay its debts generally as they come due, or does not pay its debts generally as they become due or shall make a general assignment for the benefit of creditors, or (iii) any Loan Party shall file a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization, liquidation or other relief in a case under any bankruptcy laws or other insolvency laws (as in effect at such time), or (iv) any Loan Party shall seek relief by voluntary petition, answer or consent, under the provisions of any other bankruptcy or other similar law providing for the reorganization or winding-up of corporations (as in effect at such time) or (v) any Loan Party’s board of directors shall adopt a resolution authorizing any of the foregoing.

 

(e)           An order, judgment or decree shall be entered by any court of competent jurisdiction appointing, without the consent of the applicable Loan Party, a receiver, trustee or liquidator of any Loan Party or of substantially all of its property, or substantially all of the property of any Loan Party shall be sequestered, and any such order, judgment or decree of appointment or sequestration shall remain in force undismissed, unstayed and unvacated for a period of thirty [*] days after the date of entry thereof; or a petition against any Loan Party in a case under any bankruptcy laws or other insolvency laws (as in effect at such time) is filed and not withdrawn or dismissed within [*] days thereafter, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to any Loan Party, any court of competent jurisdiction assumes jurisdiction, custody or control of any Loan Party or of substantially all of its property and such jurisdiction, custody or control remains in force unrelinquished, unstayed and unterminated for a period of [*] days.

 

(f)            (i) A final judgment or judgments for the payment of money in excess of [*] in the aggregate (to the extent not covered by insurance policies as to which liability has been accepted by the insurance carrier) at any time are outstanding against one or more Borrower Group Members or (ii) a final judgment or judgments for the payment of money in excess of [*] in the aggregate (to the extent not covered by insurance policies as to which liability has been accepted by the insurance carrier) at any time are outstanding against the Parent Guarantor or any Subsidiary thereof that is not a Borrower Group Member, and the same shall remain undischarged, unvacated and unstayed for a period of [*] consecutive days after the entry thereof.

 

(g)           The Loan Documents shall, for any reason (other than pursuant to the terms hereof of thereof), cease to create a valid Lien on any of the Collateral purported to be covered thereby or such Lien shall cease to be a perfected Lien having the priority provided for in the Collateral Documents, or any Loan Party shall so allege in any pleading filed in any court, or any material provision of any Loan Document shall, for any reason, cease to be valid and binding on any Loan Party party thereto (or any Loan Party shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any material provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms).

 

(h)           The Borrower shall cease to be a Certificated Air Carrier.

 

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(i)            In the case of any Slots or Gate Interests, any applicable Aviation Authority modifies, suspends, revokes, terminates, cancels or otherwise takes any action that adversely affects any Borrower Group Member’s Permits or any Borrower Group Member’s use or occupation or maintenance of or other interest in such Slots and Gate Interests due to any Borrower Group Member’s failure to abide by applicable law or any contract governing the use of such Slots and Gate Interests, or any Borrower Group Member otherwise ceases to use, occupy or maintain such Slots and Gate Interests, and any event referred to in this clause (i) could reasonably be expected to have a Material Adverse Effect.

 

(j)            (i) An ERISA Event shall have occurred, (ii) any Qualified Plan shall lose its qualified or tax exempt status or any Foreign Plan shall fail to maintain its good standing, or (iii) a Prohibited Transaction shall have occurred; and in each case in clauses (i) through (iii), such event or condition, together with all other such events or conditions that have occurred, if any, could reasonably be expected to have a Material Adverse Effect.

 

(k)           Any “Event of Default” or analogous term (as defined in the applicable Cross Default Agreement) after giving effect to any applicable notice, cure and grace periods (each, a “Cross Default”), shall have occurred and be continuing under (i) any Cross Default Agreement (unless waived under such Cross Default Agreement pursuant to the terms thereof, or unless waived hereunder by the Lender Party party to such Cross Default Agreement, in such Lender Party’s sole discretion) or (ii) the Bombardier Purchase Agreement (unless waived under the Bombardier Purchase Agreement pursuant to the terms thereof); provided that any Cross Default that occurs under any Cross Default Agreement between (i) any Lender Party other than the Original Lender or any Affiliate thereof and (ii) any of the Borrower, the Parent Guarantor or any of their respective Affiliates, shall not constitute an Event of Default under this subsection (k) unless such Lender Party shall hold at least [*] of the outstanding principal amount of the Loan.

 

SECTION 8.2.        Remedies.

 

If any Event of Default has occurred and is continuing, (i) the Administrative Agent may (and at the written request of the Requisite Lenders shall) terminate the Commitments, if any, and/or declare all or any portion of the Obligations, including all or any portion of any Loan, to be forthwith due and payable, all without presentment, demand, protest or further notice of any kind, all of which are expressly waived by the Loan Parties, or in the case of an Event of Default under Section 8.1(d)(iii) or (iv) with respect to the Borrower or the Parent Guarantor the Obligations shall automatically become due and payable, and (ii) the Administrative Agent may (and at the written request of the Requisite Lenders, shall), without notice, exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the Code.

 

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SECTION 8.3.        Waivers by Borrower.

 

Except as otherwise provided for in this Agreement or by applicable law, the Loan Parties waive: (a) presentment, demand and protest and notice of presentment, dishonor, notice of intent to accelerate, notice of acceleration, protest, default, nonpayment, maturity, release, compromise, settlement, extension or renewal of any or all commercial paper, accounts, contract rights, documents, instruments, chattel paper and guaranties at any time held by the Administrative Agent on which any Loan Party may in any way be liable, (b) all rights to notice and a hearing prior to the Administrative Agent’s taking possession or control of, or to the Administrative Agent’s replevy, attachment or levy upon, the Collateral or any bond or security that might be required by any court prior to allowing the Administrative Agent to exercise any of its remedies, and (c) the benefit of all valuation, appraisal, marshaling and exemption laws.

 

ARTICLE 9

 

ASSIGNMENT AND PARTICIPATIONS;

THE ADMINISTRATIVE AGENT

 

SECTION 9.1.        Assignment and Participations.

 

(a)           Right to Assign. Each Lender may sell, transfer, negotiate or assign all or a portion of its rights and obligations hereunder (including all or a portion of its Commitments and its rights and obligations with respect to the Loan) to any other Person acceptable to the Administrative Agent, provided, that the aggregate outstanding principal amount (determined as of the effective date of the applicable Assignment) of the Loan and Commitments subject to any such Sale shall be in a minimum amount equal to [*], unless such Sale is made to an existing Lender or an Affiliate or Approved Fund of any existing Lender, is of the assignor’s (together with its Affiliates’ and Approved Funds’) entire interest in the Loan or is made with the prior written consent of the Borrower and the Administrative Agent; provided, however, that no Lender shall sell, transfer, negotiate or assign any portion of its rights or obligations hereunder to a Person engaged in the business of air transportation in competition with any Loan Party or any of its Subsidiaries without the prior written consent of such Loan Party.

 

(b)           Procedure. The parties to each Sale made in reliance on clause (a) above (other than those described in clause (e) below) shall execute and deliver to the Administrative Agent (which shall keep a copy thereof) an Assignment, together with any existing Note subject to such Sale (or any affidavit of loss therefor acceptable to the Administrative Agent), any documentation required to be delivered pursuant to Section 1.10(c) (which shall also be delivered to the Borrower) and payment by the assignee of an assignment fee in the amount of [*]. Upon receipt of all the foregoing, and conditioned upon such receipt and upon the Administrative Agent consenting to such Assignment, from and after the effective date specified in such Assignment, the Administrative Agent, acting for this purpose as an agent of the Borrower, shall record or cause to be recorded in a register held at one of its offices (the “Register”) information contained in such Assignment.

 

(c)           Effectiveness. Effective upon the entry of such record in the Register, (i) such assignee shall become a party hereto and, to the extent that rights and obligations under the Loan Documents have been assigned to such assignee pursuant to such Assignment, shall have the rights and obligations of a Lender, (ii) any applicable Note shall be transferred to such assignee through such entry and (iii) the assignor thereunder shall, to the extent that rights and obligations under this Agreement have been assigned by it pursuant to such Assignment, relinquish its rights (except for those surviving the termination of the Commitments and the payment in full of the Obligations) and be released from its obligations under the Loan Documents, other than those relating to events or circumstances occurring prior to such assignment, and, in the case of an Assignment covering all or the remaining portion of an assigning Lender’s rights and obligations under the Loan Documents, such Lender shall cease to be a party hereto.

 

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(d)           Grant of Security Interests. In addition to the other rights provided in this Section 9.1, each Lender may grant a security interest in, or otherwise assign as collateral, any of its rights under this Agreement, whether now owned or hereafter acquired (including rights to payments of principal or interest on the Loan), to (A) any federal reserve bank (pursuant to Regulation A of the Federal Reserve Board), without notice to the Administrative Agent or (B) any holder of, or trustee for the benefit of the holders of, such Lender’s Securities by notice to the Administrative Agent; provided, that no such holder or trustee, whether because of such grant or assignment or any foreclosure thereon (unless such foreclosure is made through an assignment in accordance with clause (b) above), shall be entitled to any rights of such Lender hereunder and no such Lender shall be relieved of any of its obligations hereunder.

 

(e)           Participants and SPVs. In addition to the other rights provided in this Section 9.1, each Lender may, (x) with notice to the Administrative Agent, grant to an SPV the option to maintain all or any part of the Loan that such Lender would otherwise be required to maintain hereunder (and the exercise of such option by such SPV and the maintaining of the Loan pursuant thereto shall satisfy the obligation of such Lender to maintain such Loan hereunder) and such SPV may assign to such Lender the right to receive payment with respect to any Obligation and (y) without notice to or consent from the Administrative Agent or the Borrower, sell participations to one or more Persons in or to all or a portion of its rights and obligations under the Loan Documents; provided, that, whether as a result of any term of any Loan Document or of such grant or participation, (i) no such SPV or participant shall have a commitment, or be deemed to have made an offer to commit, to make the Loan hereunder, and, except as provided in the applicable option agreement, none shall be liable for any obligation of such Lender hereunder, (ii) such Lender’s rights and obligations, and the rights and obligations of the Borrower towards such Lender, under any Loan Document shall remain unchanged and each other party hereto shall continue to deal solely with such Lender, which shall remain the holder of the Obligations in the Register, except that (A) each such participant and SPV shall be entitled to the benefit of Section 1.8, Section 1.10 and Section 1.11, but, in the case of Section 1.10, only to the extent any such participant or SPV that is a Foreign Person complies with Section 1.10(c) as if it were a Lender, and in each such case only to the extent of any amount to which such Lender would be entitled in the absence of any such grant or participation and (B) each such SPV may receive other payments that would otherwise be made to such Lender with respect to the Loan funded by such SPV to the extent provided in the applicable option agreement and set forth in a notice provided to the Administrative Agent by such SPV and such Lender; provided, that in no case (including pursuant to clause (A) or (B) above) shall an SPV or participant have the right to enforce any of the terms of any Loan Document, and (iii) the consent of such SPV or participant shall not be required (either directly, as a restraint on such Lender’s ability to consent hereunder or otherwise) for any amendments, waivers or consents with respect to any Loan Document or to exercise or refrain from exercising any powers or rights such Lender may have under or in respect of the Loan Documents (including the right to enforce or direct enforcement of the Obligations), except for those described in clauses (iii)(B) and (iii)(C) of Section 11.2(a) with respect to amounts, or dates fixed for payment of amounts, to which such participant or SPV would otherwise be entitled and, in the case of participants, except for those described in Section 11.2(a)(vii) (or amendments, consents and waivers to release all or substantially all of the Collateral). No party hereto shall institute against any SPV grantee of an option pursuant to this clause (e) any bankruptcy, reorganization, insolvency, liquidation or similar proceeding, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper of such SPV; provided, however, that each Lender having designated an SPV as such agrees to indemnify each Indemnified Person against any Liability that may be incurred by, or asserted against, such Indemnified Person as a result of failing to institute such proceeding (including a failure to get reimbursed by such SPV for any such Liability). The agreement in the preceding sentence shall survive the termination of the Commitments and the payment in full of the Obligations.

 

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SECTION 9.2.        The Administrative Agent.

 

(a)           Appointment and Authorization.  Each Lender hereby irrevocably designates and appoints [*] as the “Administrative Agent” under the Loan Documents and authorizes the Administrative Agent to take such actions and to exercise such powers as are delegated to it thereby and to exercise such other powers as are reasonably incidental thereto.  The Administrative Agent shall not have any duties other than those expressly set forth in a Loan Document, or any fiduciary relationship with any Lender, and no implied obligations or liabilities shall be read into this Agreement, or otherwise exist, against the Administrative Agent.  The Administrative Agent does not assume, nor shall it be deemed to have assumed, any obligation to, or relationship of trust or agency with, the Borrower.  Notwithstanding any provision of this Agreement or any other Loan Document, in no event shall the Administrative Agent ever be required to take any action which exposes it to personal liability or which is contrary to the provision of any Loan Document or applicable law.

 

(b)           Delegation of Duties.  The Administrative Agent may execute any of its duties through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.

 

(c)           Exculpatory Provisions.  Neither the Administrative Agent nor any of its respective directors, officers, agents or employees shall be liable to any Lender for any action taken or omitted (i) with the consent or at the direction of the Requisite Lenders or (ii) in the absence of such Person’s gross negligence or willful misconduct.  The Administrative Agent shall not be responsible to any Lender or other Person for (a) any recitals, representations, warranties or other statements made by the Borrower or any of its Affiliates, (b) the value, validity, effectiveness, genuineness, enforceability or sufficiency of any Loan Document, (c) any failure of the Borrower or any of its Affiliates to perform any obligation or (d) the satisfaction of any condition specified in Article 2.  The Administrative Agent shall not have any obligation to any Lender to ascertain or inquire about the observance or performance of any agreement contained in any Loan Document or to inspect the properties, books or records of the Borrower or any of its Affiliates.  The Administrative Agent shall not be responsible to any Lender or the Borrower for any determination concerning whether any Person is an Eligible Assignee.

 

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(d)           Reliance by Administrative Agent.  As between the Administrative Agent and the Lenders, the Administrative Agent shall in all cases be entitled to rely, and shall be fully protected in relying, upon any document, other writing or conversation reasonably believed by it to be genuine and correct and to have been signed, sent or made by the proper Person and upon advice and statements of legal counsel (including counsel to the Borrower or any of its Affiliates), independent accountants and other experts selected by the Administrative Agent.  The Administrative Agent shall in all cases be fully justified in failing or refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of the Lenders, and assurance of its indemnification, as it deems appropriate.  Subject to Section 11.2, the Administrative Agent shall not effect any waiver or grant any consent or make any determination (except as provided in Section 1.5) without the direction of the Requisite Lenders.

 

(e)           Notice of Events of Default.  The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default unless it has received notice from any Lender or the Borrower stating that a Default has occurred hereunder and describing such Default.  Promptly upon receiving notice of the occurrence of any Default, the Administrative Agent shall notify each Lender of such occurrence.  The Administrative Agent shall take such action concerning a Default as may be directed by the Requisite Lenders (or, if required for such action, all of the Lenders), but until the Administrative Agent receives such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, as the Administrative Agent deems advisable and in the best interests of the Lenders.

 

(f)           Non-Reliance on Administrative Agent and Other Lenders; Lender Representations.  Each Lender expressly acknowledges that neither the Administrative Agent nor any of its respective officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Administrative Agent hereafter taken, including any review of the affairs of the Borrower or any of its Affiliates, shall be deemed to constitute any representation or warranty by the Administrative Agent.  Each Lender represents and warrants to the Administrative Agent that, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, it has made and will continue to make its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and creditworthiness of the Borrower and its own decision to enter into this Agreement and to take, or omit, action under any Loan Document.  Except for items specifically required to be delivered hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any information concerning the Borrower or any of its Affiliates that comes into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.

 

(g)           Administrative Agent and Affiliates.  Each of the Administrative Agent and its Affiliates may extend credit to, accept deposits from and generally engage in any kind of business with the Borrower or any of its Affiliates and, in its role as Lender, [*] may exercise or refrain from exercising its rights and powers as if it were not Administrative Agent.

 

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(h)           Indemnification.  Each Lender shall indemnify and hold harmless each of the Administrative Agent and its officers, directors, employees, representatives and agents (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably in accordance with its Pro Rata Share from and against any and all liabilities, obligations, losses, damages, penalties, judgments, settlements, costs, expenses and disbursements of any kind whatsoever (including in connection with any investigative or threatened proceeding, whether or not the Administrative Agent or such Person shall be designated a party thereto) that may at any time be imposed on, incurred by or asserted against the Administrative Agent or such Person as a result of, or related to, any of the transactions contemplated by the Loan Documents or the execution, delivery or performance of the Loan Documents or any other document furnished in connection therewith (but excluding any such liabilities, obligations, losses, damages, penalties, judgments, settlements, costs, expenses or disbursements resulting solely from the gross negligence or willful misconduct of the Administrative Agent or such Person as finally determined by a court of competent jurisdiction).

 

(i)            Successor Administrative Agent.  The Administrative Agent may, upon at least [*] days prior written notice to the Borrower and each Lender, resign its position as the Administrative Agent.  Such resignation shall not become effective until a successor Administrative Agent is appointed by the Requisite Lenders and has accepted such appointment.  Upon such acceptance of its appointment as the Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall succeed to and become vested with all the rights and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under the Loan Documents.  After any retiring Administrative Agent’s resignation hereunder, the provisions of Section 1.8 and this Section 9.2 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent.

 

ARTICLE 10

 

SUCCESSORS AND ASSIGNS

 

This Agreement and the other Loan Documents shall be binding on and shall inure to the benefit of the Loan Parties, the Administrative Agent, the Lenders and their respective successors and assigns, except as otherwise provided herein or therein. The Loan Parties may not assign, transfer, hypothecate or otherwise convey their rights, benefits, obligations or duties hereunder or under any of the other Loan Documents without the prior express written consent of the Administrative Agent and the Lenders. Any such purported assignment, transfer, hypothecation or other conveyance by the Loan Parties without the prior express written consent of the Administrative Agent and Lenders shall be void. The terms and provisions of this Agreement are for the purpose of defining the relative rights and obligations of the Loan Parties, the Administrative Agent and Lenders with respect to the transactions contemplated hereby and no Person shall be a third party beneficiary of any of the terms and provisions of this Agreement or any of the other Loan Documents.

 

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ARTICLE 11

 

MISCELLANEOUS

 

SECTION 11.1.      Complete Agreement; Modification of Agreement.

 

The Loan Documents constitute the complete agreement between the parties with respect to the subject matter thereof and may not be modified, altered or amended except as set forth in Section 11.2. Any letter of interest, commitment letter, fee letter or confidentiality agreement, if any, between the Borrower and the Administrative Agent or any Lender or any of their respective Affiliates, predating this Agreement and relating to a financing of substantially similar form, purpose or effect shall be superseded by this Agreement.

 

SECTION 11.2.      Amendments and Waivers.

 

(a)           Except as otherwise expressly provided in this Agreement, the Requisite Lenders (or the Administrative Agent with the prior written consent of the Requisite Lenders), on the one hand, and the Loan Parties, on the other hand, may from time to time enter into written amendments, supplements or modifications for the purpose of adding, deleting or modifying any provision of any Loan Document or changing in any manner the rights, remedies, obligations and duties of the parties thereto, and with the written consent of the Requisite Lenders, the Administrative Agent, on behalf of the Lenders, may execute and deliver a written instrument waiving, on such terms and conditions as may be specified in such instrument, any of the requirements applicable to the Loan Parties, or any Default or Event of Default and its consequences; provided, that:

 

(i)             no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent and the Requisite Lenders affect the rights or duties of the Administrative Agent under this Agreement or the other Loan Documents; and

 

(ii)            the Administrative Agent may, with the prior written consent of the Borrower, amend, modify or supplement any Loan Document to cure any ambiguity, typographical error, defect or inconsistency;

 

provided, further, that without the prior written consent (in addition to Lenders required above to take such action) of each Lender directly affected thereby, no such amendment, supplement, modification or waiver shall be effective to:

 

(iii)           (A) modify the Commitment of such Lender or subject such Lender to any additional obligation, (B) extend any scheduled final maturity of the Loan, (C) waive or reduce, or postpone or cancel any scheduled date fixed for the payment of (it being understood that any mandatory prepayment required under Section 1.2(b) does not constitute any scheduled date fixed for payments), principal of or interest on the Loan or any fees owing to such Lender, (D) reduce, or release any Loan Party from its obligations to repay, any other Obligation owed to such Lender or (E) consent to the assignment or transfer by any Loan Party of any of its rights and obligations under this Agreement;

 

(iv)           amend, modify or waive any provision of Section 1.2 or 1.3;

 

(v)           subordinate any of the Obligations or Liens securing the Obligations, except as permitted by this Agreement or any other Loan Document; or

 

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(vi)           (A) amend, modify or waive this Section 11.2 or any other provision specifying the Administrative Agent, Lenders or group of Lenders required for any amendment, modification or waiver thereof or (B) change the respective percentages specified in the definition of “Requisite Lenders”;

 

provided, further, that no such amendment, supplement, modification or waiver shall be effective to, without the prior written consent of all Lenders:

 

(vii)          release or permit the Loan Parties to sell or otherwise dispose of all or substantially all of the Collateral provided for in the Collateral Documents; provided, however, that no waiver, amendment, supplement or modification shall be required for the Administrative Agent to take additional Collateral pursuant to any Loan Document or to release any Collateral to the extent any Loan Document expressly permits the sale, assignment, lease, transfer, release, conveyance or other disposition of such Collateral.

 

(b)           Any waiver, amendment, supplement or modification pursuant to this Section 11.2 shall apply equally to each of the Lenders and shall be binding upon Lenders and all future holders of any of the Loan, the Notes, and all other Obligations.

 

(c)           Upon the Termination Date, the Administrative Agent shall deliver to the Borrower termination statements, mortgage releases, reconveyances and other documents necessary or appropriate to evidence the termination of the Liens securing payment of the Obligations.

 

SECTION 11.3.      Fees and Expenses.

 

The Loan Parties shall be jointly and severally liable to the Administrative Agent for all reasonable and documented out-of-pocket fees, costs and expenses (including the reasonable and documented fees and expenses of all of its counsel, advisors, consultants, auditors, appraisers and tax advisors) incurred in connection with the negotiation, preparation and filing and/or recordation of the Loan Documents and incurred by it in connection with:

 

(a)           any amendment, modification or waiver of, or consent with respect to, or termination of, any of the Loan Documents or advice in connection with the administration of the Loan made pursuant hereto or its rights hereunder or thereunder;

 

(b)           any litigation, contest, dispute, suit, proceeding or action (whether instituted by the Administrative Agent, any Lender, the Loan Parties or any other Person and whether as a party, witness or otherwise) in any way relating to the Collateral, any of the Loan Documents or any other agreement to be executed or delivered in connection herewith or therewith, including any litigation, contest, dispute, suit, case, proceeding or action, and any appeal or review thereof, in connection with a case commenced by or against any Loan Party or any other Person that may be obligated to the Administrative Agent by virtue of the Loan Documents, including any such litigation, contest, dispute, suit, proceeding or action arising in connection with any work-out or restructuring of the Loan during the pendency of one or more Events of Default; provided, that no Person shall be entitled to reimbursement under this clause (b) in respect of any litigation, contest, dispute, suit, proceeding or action to the extent any of the foregoing results from such Person’s gross negligence, bad faith or willful misconduct as finally determined by a court of competent jurisdiction;

 

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(c)           any attempt to enforce any remedies of the Administrative Agent or any Lender against the Loan Parties or any other Person that may be obligated to the Administrative Agent or any Lender by virtue of any of the Loan Documents, including any such attempt to enforce any such remedies in the course of any work-out or restructuring of the Loan during the pendency of one or more Events of Default;

 

(d)           any workout or restructuring of the Loan during the pendency of one or more Events of Default; and

 

(e)           efforts to (i) monitor the Loan or any of the other Obligations, (ii) evaluate, observe or assess any of the Loan Parties or their respective affairs, and (iii) verify, protect, evaluate, assess, appraise, collect, sell, liquidate or otherwise dispose of any of the Collateral, in each case pursuant to and in accordance with the terms of the Loan Documents; including, as to each of clauses (a) through (e), all reasonable and documented attorneys’ and other professional and service providers’ fees arising from such services and other advice, assistance or other representation, including those in connection with any appellate proceedings, and all reasonable and documented expenses, costs, charges and other fees incurred by such counsel and others in connection with or relating to any of the events or actions described in this Section 11.3, all of which shall be payable, promptly after receipt by the Borrower of reasonably detailed invoices therefor, by the  Loan Parties to the Administrative Agent and shall be part of the Obligations. Without limiting the generality of the foregoing, such expenses, costs, charges and fees may include: reasonable and documented fees, costs and expenses of accountants, environmental advisors, appraisers, investment bankers, management and other consultants and paralegals; court costs and expenses; photocopying and duplication expenses; court reporter fees, costs and expenses; long distance telephone charges; air express charges; telegram or telecopy charges; secretarial overtime charges; charges for any E-System; and reasonable and documented expenses for travel, lodging and food paid or incurred in connection with the performance of such legal or other advisory services.

 

SECTION 11.4.      No Waiver.

 

The Administrative Agent’s or any Lender’s failure, at any time or times, to require strict performance by the Loan Parties of any provision of this Agreement or any other Loan Document shall not waive, affect or diminish any right of the Administrative Agent or such Lender thereafter to demand strict compliance and performance herewith or therewith. Any suspension or waiver of an Event of Default shall not suspend, waive or affect any other Event of Default whether the same is prior or subsequent thereto and whether the same or of a different type. Subject to the provisions of Section 11.2, none of the undertakings, agreements, warranties, covenants and representations of the Loan Parties contained in this Agreement or any of the other Loan Documents and no Default or Event of Default by the Loan Parties shall be deemed to have been suspended or waived by the Administrative Agent or any Lender, unless such waiver or suspension is by an instrument in writing signed by an officer of or other authorized employee of the Administrative Agent and the applicable Requisite Lenders and directed to the  Loan Parties specifying such suspension or waiver.

 

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SECTION 11.5.      Remedies.

 

The Administrative Agent’s and Lenders’ rights and remedies under this Agreement shall be cumulative and nonexclusive of any other rights and remedies that the Administrative Agent or any Lender may have under any other agreement, including the other Loan Documents, by operation of law or otherwise. Recourse to the Collateral shall not be required.

 

SECTION 11.6.      Severability.

 

Wherever possible, each provision of this Agreement and the other Loan Documents shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement or any other Loan Document shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement or such other Loan Document.

 

SECTION 11.7.      Adjustments; Set-off.  (a) Except to the extent that this Agreement, any other Loan Document or a court order expressly provides for payments to be allocated to a particular Lender, if any Lender (a “Benefitted Lender”) shall receive any payment of all or part of the Obligations owing to it (other than in connection with an assignment made pursuant to Section 9.1), or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 8.1(d), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of the Obligations owing to such other Lender, such Benefitted Lender shall purchase for cash from the other Lenders a participating interest in such portion of the Obligations owing to each such other Lender, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such collateral ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

 

(b)           In addition to any rights and remedies of the Lenders provided by law, upon the occurrence and during the continuance of an Event of Default, each Lender shall have the right, without notice to any Loan Party, any such notice being expressly waived by each Loan Party to the extent permitted by applicable law, upon any Obligations becoming due and payable by any Loan Party (whether at the stated maturity, by acceleration or otherwise), to apply to the payment of such Obligations, by setoff or otherwise, any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender, any affiliate thereof or any of their respective branches or agencies to or for the credit or the account of any Loan Party.  Each Lender agrees promptly to notify the applicable Loan Party and the Administrative Agent after any such application made by such Lender, provided that the failure to give such notice shall not affect the validity of such application.

 

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SECTION 11.8.      Confidentiality.

 

The Administrative Agent and the Lenders agree to use commercially reasonable efforts (equivalent to the efforts the Administrative Agent or each Lender applies to maintain the confidentiality of its own confidential information) to maintain as confidential all confidential information provided to them by the Loan Parties and designated as confidential for a period of three (3) years following receipt thereof, except that each of the Administrative Agent and the Lenders may disclose such information (a) to Persons employed or engaged by the Administrative Agent or such Lender (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential); (b) to any bona fide assignee or participant or potential assignee or participant that has agreed to comply with the covenant contained in this Section 11.8 (and any such bona fide assignee or participant or potential assignee or participant may disclose such information to Persons employed or engaged by them as described in clause (a) above); (c) as required or requested by any Governmental Authority or reasonably believed by the Administrative Agent or such Lender to be compelled by any court decree, subpoena or legal or administrative order or process (provided, that in the event of any such disclosure under this clause (c) or clause (d) below, the Administrative Agent or such Lender, as the case may be, agrees to use commercially reasonable efforts to inform the Borrower of such disclosure to the extent not prohibited by applicable law); (d) as, on the advice of the Administrative Agent’s or such Lender’s counsel, is required by law; (e) in connection with the exercise of any right or remedy under the Loan Documents or in connection with any Litigation to which the Administrative Agent or such Lender is a party related to the Loan Documents or the Loan or other Obligations thereunder; (f) that ceases to be confidential through no fault of the Administrative Agent or such Lender; and (g) to its affiliates and its and their directors, officers, employees, advisors, representatives or agents (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential).

 

SECTION 11.9.      GOVERNING LAW.

 

(a)           THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

(b)           ANY LEGAL ACTION OR PROCEEDING ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH LOAN PARTY, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.

 

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SECTION 11.10.    Notices.

 

(a)           Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any of the parties by any other parties, or whenever any of the parties desires to give or serve upon any other parties any communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be deemed to have been validly served, given or delivered (a) upon the earlier of actual receipt and [*] Business Days after deposit in the United States Mail, registered or certified mail, return receipt requested, with proper postage prepaid, (b) upon transmission, when sent by telecopy or other similar facsimile transmission (with such telecopy or facsimile promptly confirmed by delivery of a copy by personal delivery or United States Mail as otherwise provided in this Section 11.10); (c) [*] Business Day after deposit with a reputable overnight courier with all charges prepaid or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address or facsimile number indicated in Annex D or to such other address (or facsimile number) as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. Failure or delay in delivering copies of any notice, demand, request, consent, approval, declaration or other communication to any Person (other than the Borrower, the Lenders or the Administrative Agent) designated in Annex D to receive copies shall in no way adversely affect the effectiveness of such notice, demand, request, consent, approval, declaration or other communication.

 

(b)           Subject to the provisions of Section 11.10(a), each of the Administrative Agent, the Loan Parties, the Lenders, and each of their Related Persons is authorized (but not required) to transmit, post or otherwise make or communicate, in its sole discretion, Electronic Transmissions in connection with any Loan Document and the transactions contemplated therein; provided, that notices to the Loan Parties shall not be made by any posting to an Internet or extranet based site or other equivalent service but may be made by e-mail or E-fax, if available, so long as such notices are also sent in accordance with Section 11.10(a). Each of the Loan Parties and each Lender hereby acknowledges and agrees that the use of Electronic Transmissions is not necessarily secure and that there are risks associated with such use, including risks of interception, disclosure and abuse and each indicates it assumes and accepts such risks by hereby authorizing the transmission of Electronic Transmissions.

 

(c)           Subject to the provisions of Section 11.10(a), (i)(A) no posting to any E-System shall be denied legal effect merely because it is made electronically, (B) each E-Signature on any such posting shall be deemed sufficient to satisfy any requirement for a “signature” and (C) each such posting shall be deemed sufficient to satisfy any requirement for a “writing , in each case including pursuant to any Loan Document, any applicable provision of any Uniform Commercial Code, the federal Uniform Electronic Transactions Act, the Electronic Signatures in Global and National Commerce Act and any substantive or procedural Requirement of Law governing such subject matter, (ii) each such posting that is not readily capable of bearing either a signature or a reproduction of a signature may be signed, and shall be deemed signed, by attaching to, or logically associating with such posting, an E-Signature, upon which each Lender and Loan Party may rely and assume the authenticity thereof, (iii) each such posting containing a signature, a reproduction of a signature or an E-Signature shall, for all intents and purposes, have the same effect and weight as a signed paper original and (iv) each party hereto or beneficiary hereto agrees not to contest the validity or enforceability of any posting on any E-System or E-Signature on any such posting under the provisions of any applicable Requirement of Law requiring certain documents to be in writing or signed; provided, however, that nothing herein shall limit such party’s or beneficiary’s right to contest whether any posting to any E-System or E-Signature has been altered after transmission.

 

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(d)           All uses of an E-System shall be governed by and subject to, in addition to this Section 11.10, separate terms and conditions posted or referenced in such E-System and related contractual obligations executed by the Lenders and each Loan Party in connection with the use of such E-System.

 

(e)           ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED “AS IS” AND “AS AVAILABLE”. NONE OF THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PERSONS WARRANTS THE ACCURACY, ADEQUACY OR COMPLETENESS OF ANY E-SYSTEMS OR ELECTRONIC TRANSMISSION AND DISCLAIMS ALL LIABILITY FOR ERRORS OR OMISSIONS THEREIN. NO WARRANTY OF ANY KIND IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PERSONS IN CONNECTION WITH ANY E SYSTEMS OR ELECTRONIC COMMUNICATION, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS. The Loan Parties agree that the Administrative Agent has no responsibility for maintaining or providing any equipment, software, services or any testing required in connection with any Electronic Transmission or otherwise required for any E-System.

 

SECTION 11.11.    Section Titles.

 

The Section titles and Table of Contents contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.

 

SECTION 11.12.    Counterparts.

 

This Agreement may be executed in any number of separate counterparts, each of which shall collectively and separately constitute one agreement.

 

SECTION 11.13.    WAIVER OF JURY TRIAL.

 

THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE ADMINISTRATIVE AGENT, LENDERS AND ANY LOAN PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.

 

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SECTION 11.14.    Press Releases and Related Matters.

 

Each Loan Party agrees that neither it nor its Affiliates will in the future issue any press releases or other public disclosure using the name of the Administrative Agent or any Lender or any of their respective Affiliates or referring to this Agreement or the other Loan Documents without at least [*] Business Days’ prior notice to the Administrative Agent or such Lender, as the case may be, and without the prior written consent of the Administrative Agent or such Lender, as the case may be, unless (and only to the extent that) the applicable Loan Party or Affiliate is required to do so under law and then, in any event, the applicable Loan Party or Affiliate will consult, to the extent permitted by law, with the Administrative Agent or such Lender, as the case may be, before issuing such press release or other public disclosure.  Each Loan Party consents to the publication by the Administrative Agent and each Lender of advertising material relating to the financing transactions contemplated by this Agreement using the Loan Parties’ names, products photographs, logos or trademarks. The Administrative Agent and each Lender, as applicable, shall provide a draft of any advertising material to the Loan Parties for review and comment at least [*] Business Days prior to the publication thereof. The Administrative Agent and each Lender reserves the right to provide to industry trade organizations information necessary and customary for inclusion in league table measurements.

 

SECTION 11.15.    Advice of Counsel.

 

Each of the parties represents to each other party hereto that it has discussed this Agreement and, specifically, the provisions of Sections 11.9 and 11.13, with its counsel.

 

SECTION 11.16.    No Strict Construction.

 

The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

 

SECTION 11.17.    Patriot Act.

 

Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Loan Parties that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of the Loan Parties and other information that will allow such Lender or Administrative Agent, as applicable, to identify the Loan Parties in accordance with the Patriot Act.

 

SECTION 11.18.    Conflict of Terms.

 

Except as otherwise provided in this Agreement or any of the other Loan Documents by specific reference to the applicable provisions of this Agreement, if any provision contained in this Agreement conflicts with any provision in any of the other Loan Documents, the provision contained in this Agreement shall govern and control.

 

[The remainder of this page is intentionally left blank.]

 

 

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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.

 

CHAUTAUQUA AIRLINES, INC., as the Borrower
By:	/s/ Lars-Erik Arnell
Name:	Lars-Erik Arnell
Title:	Vice President
REPUBLIC AIRWAYS HOLDINGS INC., as the Parent Guarantor
By:	/s/ Lars-Erik Arnell
Name:	Lars-Erik Arnell
Title:	Vice President
[*], as Original Lender and Administrative Agent
By:	/s/ [illegible]
Name:
Title:

 

 

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ANNEX A

TO

CREDIT AGREEMENT

 

DEFINITIONS

 

Capitalized terms used in the Loan Documents shall have (unless otherwise provided elsewhere in the Loan Documents) the following respective meanings and all references to Sections, Exhibits, Schedules or Annexes in the following definitions shall refer to Sections, Exhibits, Schedules or Annexes of or to this Agreement:

 

“Account Debtor” means any Person who may become obligated to a Borrower Group Member under, with respect to, or on account of, an Account, Chattel Paper or General Intangibles (including a payment intangible).

 

“Accounts” means all “accounts,” as such term is defined in the Code, now owned or hereafter acquired by a Borrower Group Member, including (a) all accounts receivable, other receivables, book debts and other forms of obligations (other than forms of obligations evidenced by Chattel Paper or Instruments), (including any such obligations that may be characterized as an account or contract right under the Code), (b) all of each Borrower Group Member’s rights in, to and under all purchase orders or receipts for goods or services, (c) all of each Borrower Group Member’s rights to any goods represented by any of the foregoing (including unpaid sellers’ rights of rescission, replevin, reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods), (d) all healthcare insurance receivables, and (e) all collateral security of any kind, now or hereafter in existence, given by any Account Debtor or other Person with respect to any of the foregoing.

 

“Administration Fee” has the meaning ascribed to it in Section 1.6(b).

 

“Administrative Agent” has the meaning ascribed to it in the Preamble.

 

“Administrative Agent’s Account” means the Administrative Agent’s account number [*] at [*], or such other account at a bank in the United States designated to the Borrower and the Lenders by the Administrative Agent.

 

“Adjusted Appraised Value” shall mean [*] of the then Appraised Value of the Collateral less the face amount of any principal of, and accrued and unpaid interest and fees on, any Indebtedness or other obligations (other than the Obligations) secured by a first-priority Lien on the Collateral (notwithstanding that this Agreement or any other Loan Document may not permit such Indebtedness or other obligations to be secured by the Collateral).

 

“Affected Lender” has the meaning ascribed to it in Section 1.13(a).

 

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“Affiliate” means, with respect to any Person, (a) each Person that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, [*] or more of the Stock having ordinary voting power in the election of directors of such Person, (b) each Person that controls, is controlled by or is under common control with such Person, and (c) each of such Person’s joint venturers and partners who are Affiliates under clause (a) hereof. For the purposes of this definition, “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise; provided, that the term “Affiliate,” when used with reference to any Loan Party, shall specifically exclude the Administrative Agent and each Lender.

 

“Airport Authority” means any city or any public or private board or other body or organization chartered or otherwise established for the purpose of administering, operating or managing airports or related facilities, which in each case is an owner, administrator, operator or manager of one or more airports or related facilities.

 

“Appendices” has the meaning ascribed to it in the recitals to this Agreement.

 

“Applicable Rate” means [*] per annum; provided, however, if the Projections for the [*] Fiscal Year or the [*] Fiscal Year delivered pursuant to Section 4.1 demonstrate a prospective material adverse change in the financial condition of the Parent Guarantor and its subsidiaries, taken as a whole, or the Borrower and its subsidiaries, taken as a whole, as compared with the Initial Projections, the parties hereto agree to negotiate in good faith a reasonable increase to such rate.

 

“Appraised Value” means the fair market value of the Collateral determined by an appraiser of nationally recognized standing selected by the Administrative Agent, acting reasonably, and reported to the Administrative Agent pursuant to the Appraised Value Report.

 

“Appraised Value Report” means a written report from an appraiser of nationally recognized standing selected by the Administrative Agent, acting reasonably, in form and substance reasonably satisfactory to the Administrative Agent setting forth the Appraised Value of the Collateral.

 

“Approved Fund” means, with respect to any Lender, any Person (other than a natural Person) that (a) is or will be engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and (b) is advised or managed by (i) such Lender, (ii) any Affiliate of such Lender or (iii) any Person (other than an individual) or any Affiliate of any Person (other than an individual) that administers or manages such Lender.

 

“Arrangement Fee” has the meaning ascribed to it in Section 1.6(a).

 

“Asset Sale” has the meaning ascribed to it in Section 6.1.

 

“Assignment” means an assignment and assumption agreement substantially in the form published by the Loan Syndications and Trading Association or another form reasonably acceptable to the Administrative Agent.

 

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“Aviation Authority” means any governmental authority of any nation, state, province or other political subdivision thereof, and any agency, department, regulator, airport authority, air navigation authority or other entity, in each case exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government in respect of the regulation of commercial aviation or the registration, airworthiness or operation of civil aircraft and having jurisdiction over the Borrower including, without limitation, the FAA and DOT.

 

“Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11 U.S.C. Sections 101 et seq.

 

“Bombardier Purchase Agreement” means the Purchase Agreement (No. [*]), dated [*], between Bombardier Inc., a Canadian corporation, as represented by Bombardier Aerospace, Commercial Aircraft, and Republic Holdings.

 

“Books and Records” means books and records of any Person, including financial, corporate, operations and sales books, records, books of account, sales and purchase records, lists of suppliers and customers, formulae, business reports, plans and projections and all other documents, logs, surveys, plans, files, records, assessments, correspondence, and other data and information, financial or otherwise, and all aircraft manuals, log books and other documents and records, including all data and information stored on computer-related or other electronic media.

 

“Borrower” has the meaning ascribed thereto in the preamble to this Agreement.

 

“Borrower Group” means the Borrower and each of its Subsidiaries.

 

“Borrower Group Member” means any member of the Borrower Group.

 

“Business Day” means (i) any day that is not a Saturday, a Sunday or a day on which banks are required or permitted by law to be closed in the State of New York, and (ii) with respect to all notices and determinations in connection with LIBOR, and borrowings and payments of principal and interest on any Loan that bears interest based on LIBOR, any day which is a Business Day described in clause (i) above and which is also a day for trading by and between banks in the London interbank Eurodollar market.

 

“Capital Expenditures” means, for any period, with respect to any Person, the aggregate of all expenditures by such Person and its Subsidiaries for the acquisition or leasing (pursuant to a Capital Lease) of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period) that should be capitalized under GAAP on a consolidated balance sheet of such Person and its Subsidiaries.  For purposes of this definition, the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment or with insurance proceeds shall be included in Capital Expenditures only to the extent of the gross amount by which such purchase price exceeds the credit granted by the seller of such equipment for the equipment being traded in at such time or the amount of such insurance proceeds, as the case may be.

 

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“Capital Lease” means, with respect to any Person, any lease of any property (whether real, personal or mixed) by such Person as lessee that, in accordance with GAAP, would be required to be classified and accounted for as a capital lease on a balance sheet of such Person.

 

“Capital Lease Obligation” means, with respect to any Capital Lease of any Person, the amount of the obligation of the lessee thereunder that, in accordance with GAAP, would appear on a balance sheet of such lessee in respect of such Capital Lease.

 

“Cash Equivalents”  means (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within three months from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of three months or less from the date of acquisition issued by any Lender or by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than [*]; (c) commercial paper of an issuer rated at least [*] by S&P or [*] by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within three months from the date of acquisition; (d) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than [*] days, with respect to securities issued or fully guaranteed or insured by the United States government; (e) securities with maturities of three months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least [*] by S&P or [*] by Moody’s; (f) securities with maturities of three months or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition; (g) money market mutual or similar funds that invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition; or (h) money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated [*] by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least [*].

 

“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.).

 

“Certificate re Non-Bank Status” means a certificate substantially in the form of Exhibit C annexed hereto.

 

“Certificated Air Carrier” means a Person holding an air carrier operating certificate issued pursuant to Chapter 447 of Title 49, for aircraft capable of carrying ten or more individuals or 6,000 pounds or more of cargo, or that is otherwise certified or registered to the extent required to fall within the purview of Section 1110 of the Bankruptcy Code.

 

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“Change of Control” means (i) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) shall become, or obtain rights (whether by means or warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of more than [*] of the outstanding common stock of the Parent Guarantor; or (ii) the board of directors of the Parent Guarantor shall cease to consist of a majority of Continuing Directors.

 

“Charges” means all federal, state, county, city, municipal, local, foreign or other governmental Taxes (including Taxes owed to the PBGC at the time due and payable), levies, assessments, charges, liens, claims or encumbrances (including interest and penalties relating thereto) upon or relating to (a) the Collateral, (b) the Obligations, (c) the employees, payroll, income or gross receipts of any Person, (d) any Person’s ownership or use of any properties or other assets, or (e) any other aspect of any Person’s business.

 

“Chattel Paper” means any “chattel paper,” as such term is defined in the Code, including electronic chattel paper, now owned or hereafter acquired by the Borrower, wherever located.

 

“Chautauqua Airlines” has the meaning ascribed thereto in the preamble to this Agreement.

 

“Closing Date” has the meaning specified in Section 2.1.

 

“Code” means the Uniform Commercial Code as the same may, from time to time, be enacted and in effect in the State of New York; provided, that to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 of the Code shall govern; provided, further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, the Administrative Agent’s or any Lender’s Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

 

“Collateral” means all property and interests in property and proceeds thereof now owned or hereafter acquired by any Borrower Group Member in or upon which a Lien is granted under this Agreement or any Collateral Documents.

 

“Collateral Documents” means the Guarantee and Collateral Agreement and any other agreement, instrument or document that creates or purports to create a Lien or guarantee in respect of the Obligations in favor of the Administrative Agent for the benefit of the Lenders.

 

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“Commission” means the U.S. Securities and Exchange Commission.

 

“Commitment” means (a) as to any Lender, the commitment of such Lender to make its Pro Rata Share of the Loan as set forth on Annex E to this Agreement or in the most recent Assignment executed by such Lender, and (b) as to all Lenders, the aggregate commitment of all Lenders to make the Loan, as to each of clauses (a) and (b), as such Commitments may be reduced, amortized or adjusted from time to time in accordance with this Agreement. After advancing the aggregate amount of the Commitment, each reference to a Lender’s Commitment shall refer to that Lender’s Pro Rata Share of the outstanding Loan.

 

“Compliance Certificate” has the meaning ascribed to it in clause (a) of Annex B.

 

“Consolidated Net Income” means, for any period, the consolidated net income (or loss) of a Person, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of, or is merged into or consolidated with such Person or a Subsidiary thereof, (b) the income (or deficit) of any Person (other than a Subsidiary of such Person) in which such Person or a Subsidiary thereof has an ownership interest, except to the extent that any such income is actually received by such Person or a Subsidiary thereof, in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary (other than any Loan Party) to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary.

 

“Continuing Directors” means the directors of the Parent Guarantor on the Closing Date after giving effect to the Transactions, and each other director, if, in each case, such other director’s nomination for election to the board of directors of the Parent Guarantor is recommended by at least a majority of the then Continuing Directors.

 

“Contracts” means all “contracts,” as such term is defined in the Code, now owned or hereafter acquired by any Borrower Group Member, in any event, including all contracts, undertakings, or agreements (other than rights evidenced by Chattel Paper, Documents or Instruments) in or under which such Borrower Group Member may now or hereafter have any right, title or interest, including any agreement relating to the terms of payment or the terms of performance of any Account.

 

“Copyright License” means any and all rights now owned or hereafter acquired by any Borrower Group Member under any written agreement granting any right to use any copyright or copyright registration.

 

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“Copyrights” means all of the following now owned or hereafter adopted or acquired by any Borrower Group Member: (a) all copyrights and General Intangibles of like nature (whether registered or unregistered), all registrations and recordings thereof, and all applications in connection therewith, including all registrations, recordings and applications in the United States Copyright Office or in any similar office or agency of the United States, any state or territory thereof, or any other country or any political subdivision thereof, and (b) all reissues, extensions or renewals thereof.

 

“Cross Default” has the meaning specified in Section 8.1(k).

 

“Cross Default Agreements” means the transaction documents or other agreements (other than the Loan Documents) relating to the purchase, finance, guarantee, lease, sale, service, or supply of airframes, engines, maintenance and/or spare parts, or other agreements entered into from time to time, in a transaction between (a) any of the Borrower, the Parent Guarantor or any of their respective Affiliates, on the one hand, and (b) any Lender Party on the other hand.

 

“Debtor Relief Laws” means all liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Default” means any event that, with the passage of time or notice or both, would, unless cured or waived, become an Event of Default.

 

“Default Rate” has the meaning ascribed to it in Section 1.5(b).

 

“Documents” means any “documents,” as such term is defined in the Code, now owned or hereafter acquired by any Borrower Group Member, wherever located.

 

“Dollars” or “$” means lawful currency of the United States of America.

 

“DOT” shall mean the United States Department of Transportation or any analogous successor agency.

 

“E-Fax” means any system used to receive or transmit faxes electronically.

 

“E-Signature” means the process of attaching to or logically associating with an Electronic Transmission an electronic symbol, encryption, digital signature or process (including the name or an abbreviation of the name of the party transmitting the Electronic Transmission) with the intent to sign, authenticate or accept such Electronic Transmission.

 

“E-System” means any electronic system, including Intralinks(R) and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent, any of its Related Persons or any other Person, providing for access to data protected by passcodes or other security system.

 

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“EBITDA” means, for any Person for any period, Consolidated Net Income of such Person for such period plus, without duplication and to the extent reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of (a) income tax expense, (b) interest expense, amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness (including the Loans), (c) depreciation and amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs and (e) any extraordinary or non-recurring non-cash expenses or losses (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, non-cash losses on sales of assets outside of the ordinary course of business), and minus, (a) to the extent included in the statement of such Consolidated Net Income for such period, the sum of (i) interest income, (ii) any extraordinary or non-recurring income or gains (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, gains on the sales of assets outside of the ordinary course of business), (iii) income tax credits (to the extent not netted from income tax expense) and (iv) any other non-cash income and (b) any cash payments made during such period in respect of items described in clause (e) above subsequent to the fiscal quarter in which the relevant non-cash expenses or losses were reflected as a charge in the statement of Consolidated Net Income, all as determined on a consolidated basis.  For the purposes of calculating EBITDA for any period of four consecutive fiscal quarters (each, a “Reference Period”), (i) if at any time during such Reference Period such Person shall have made any Material Disposition, the EBITDA for such Reference Period shall be reduced by an amount equal to the EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the EBITDA (if negative) attributable thereto for such Reference Period and (ii) if during such Reference Period such Person shall have made a Material Acquisition, EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Acquisition occurred on the first day of such Reference Period.  As used in this definition, “Material Acquisition” means any acquisition of property or series of related acquisitions of property that (a) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the common stock of a Person and (b) involves the payment of consideration in excess of [*]; “Material Disposition” means any Disposition of property or series of related Dispositions of property that yields gross proceeds in excess of [*]; and “Disposition” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

 

“Electronic Transmission” means each notice, request, instruction, demand, report, authorization, agreement, document, file, information and any other communication transmitted, posted or otherwise made or communicated by e-mail, E-Fax, Internet or extranet-based site or any other equivalent electronic service, whether owned, operated or hosted by the Administrative Agent, any Affiliate of the Administrative Agent or any other Person.

 

“Eligible Assignee” means any assignee permitted by and consented to in accordance with Section 9.1(a).

 

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“Environmental Laws” means all applicable federal, state, local and foreign laws, statutes, ordinances, codes, principles of common law, rules, standards and regulations, now or hereafter in effect, and any applicable judicial or administrative interpretation thereof, including any applicable judicial or administrative order, consent decree or judgment, imposing liability or standards of conduct for or relating to the regulation and protection of human health, safety, the environment and natural resources (including ambient air, surface water, groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic species and vegetation). Environmental Laws include CERCLA; the Hazardous Materials Transportation Act of 1994 (49 U.S.C. Sections 5101 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et seq.); the Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.); the Toxic Substances Control Act (15 U.S.C. Sections 2601 et seq.); the Clean Air Act (42 U.S.C. Sections 7401 et seq.); the Clean Water Act (33 U.S.C. Sections 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C. Sections 651 et seq.); and the Safe Drinking Water Act (42 U.S.C. Sections 300(f) et seq.), and any and all regulations promulgated thereunder, and all analogous state, local and foreign counterparts or equivalents and any transfer of ownership notification or approval statutes.

 

“Environmental Liabilities” means, with respect to any Person, all liabilities, obligations, responsibilities, response, remedial and removal costs, investigation and feasibility study costs, capital costs, operation and maintenance costs, losses, damages, punitive damages, property damages, natural resource damages, consequential damages, treble damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts and consultants), fines, penalties, sanctions and interest incurred as a result of or related to any claim, suit, action, investigation, proceeding or demand by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law, Environmental Laws or Environmental Permits, in each case, in connection with, or otherwise related to, any Release or threatened Release or presence of a Hazardous Material (whether on, at, in, under, from or about or in the vicinity of any real or personal property) or any environmental or Hazardous Material exposure matter.

 

“Environmental Permits” means all permits, licenses, authorizations, certificates, approvals or registrations required by any Governmental Authority under any Environmental Laws.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any regulations promulgated thereunder.

 

“ERISA Affiliate” means, with respect to any Borrower Group Member, any trade or business (whether or not incorporated) that, together with such Borrower Group Member, is treated as a single employer within the meaning of Sections 414(b), (c), (m) or (o) of the IRC.

 

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“ERISA Event” means, with respect to any Borrower Group Member or ERISA Affiliate, (a) the complete or partial withdrawal of such Borrower Group Member or ERISA Affiliate from any Multiemployer Plan or the incurrence by any Borrower or ERISA Affiliate of any Withdrawal Liability; (b) the institution of proceedings to terminate a Multiemployer Plan by the PBGC; (c) the failure by such Borrower Group Member or ERISA Affiliate to make when due required contributions to a Multiemployer Plan or any Foreign Plan; (d) any other event or condition that would reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Multiemployer Plan or for the imposition of liability under Section 4212(c) of ERISA; (e) the termination of a Multiemployer Plan under Section 4041A of ERISA or the Reorganization or Insolvency of a Multiemployer Plan under Section 4241 or 4245 of ERISA; (f) any Multiemployer Plan being, or being reasonably expected to be, in “endangered status” or “critical status” within the meaning of Section 432 of the IRC; (g) the imposition of a Lien (or the occurrence of conditions presenting a material risk of the imposition of a Lien) on the assets of such Borrower Group Member or ERISA Affiliate arising under ERISA or Subchapter D of Chapter 1 of the IRC or under applicable non-US law; (h) the occurrence of any Reportable Event; (i) any failure by any Title IV Plan to satisfy the minimum funding standards (within the meaning of Sections 412 or 430 of the Code or Section 302 of ERISA) applicable to such Title IV Plan, whether or not waived; (j) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Title IV Plan; (k) the failure to make by its due date a required installment under Section 430(j) of the Code with respect to any Title IV Plan; (l) a determination that any Title IV Plan is in “at risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA); (m) the receipt by any Borrower Group Member of ERISA Affiliates from the PBGC or a plan administrator of any notice relating to an intention to terminate any Title IV Plan or to appoint a trustee to administer any Title IV Plan under Section 4042 of ERISA; (n) the incurrence by any Borrower Group Member or ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of a Title IV Plan; or (o) with respect to any non-US defined benefit Pension Plan, (A) the failure to make or, if applicable, accrue in accordance with normal accounting practices, any employer or employee contributions required by applicable law or by the terms of such non-US defined benefit Pension Plan; (B) the failure to register any non-US defined benefit Pension Plan required to be registered or the loss of good standing with applicable regulatory authorities of any such Plan; or (C) the failure of any non-US defined benefit Pension Plan to comply with any material provisions of applicable law and regulations or with the material terms of such Plan.

 

“ESOP” means a Pension Plan that is intended to satisfy the requirements of 4975(e)(7) of the IRC.

 

“Event of Default” has the meaning ascribed to it in Section 8.1.

 

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“Excluded Taxes” of a Person means (A) any Tax imposed on all or part of the income, profits or gains (whether worldwide, or only insofar as such income, profits or gains are considered to arise in or to relate to a particular jurisdiction) of that Person, any franchise, doing business, net worth or capital-based Tax imposed on that Person, and any intangibles Tax or similar Tax imposed on the principal amount or value of the Loan, by any jurisdiction (including the United States) (i) in which that Person is organized, (ii) in which that Person’s principal office or applicable lending office is located, or (iii) in which that Person is subject to such Tax as a result of, and would not be subject to such Tax but for, that Person doing business therein unrelated to the transactions contemplated in this Agreement, (B) any Tax imposed on a transferee (including a participant) of a Lender or on payments to a transferee to the extent that, under applicable law in effect on the date of the transfer to such transferee, the amount of such Taxes exceeds the amount of such Taxes that would have been imposed on the transferor to such transferee or on payments to such transferor and indemnified against hereunder (with appropriate adjustment to reflect the amount of the Loan acquired by such transferee) or (C) any Tax to the extent that liability for such Tax is caused by, and would not have been incurred but for, (i) the gross negligence or willful misconduct of such Person or of an Affiliate, employer, director, officer, employee, agent, successor or permitted assignee of such Person or (ii) the inaccuracy of any representation of such Person in any Loan Document or (iii) the breach by such Person of any of its obligations under Section 1.10(c).

 

“FAA” means the Federal Aviation Administration of the United States of America, and any successor Governmental Authority.

 

“Facility” has the meaning ascribed to it in the recitals to this Agreement.

 

“Fair Labor Standards Act” means the Fair Labor Standards Act, 29 U.S.C. Section 201 et seq.

 

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System.

 

“Fees” means any and all fees payable to the Original Lender, the Administrative Agent or any Lender pursuant to this Agreement or any of the other Loan Documents, including the Arrangement Fee, the Prepayment Fee, if applicable, and the Administration Fee.

 

“Financial Covenants” means the financial covenants set forth in Annex C.

 

“Financial Statements” means the consolidated income statements, statements of cash flows and balance sheets of (i) the Parent Guarantor and its Subsidiaries (including the Borrower Group) and (ii) the Borrower Group, delivered in accordance with Section 2.1(f) and Annex B.

 

“Financing” has the meaning ascribed to it in the recitals to this Agreement.

 

“Fiscal Month” means any of the monthly accounting periods of the Parent Guarantor, the Borrower or any of their respective Subsidiaries, as applicable.

 

“Fiscal Quarter” means any of the quarterly accounting periods of the Parent Guarantor, the Borrower or any of their respective Subsidiaries, as applicable, ending on March 31, June 30, September 30 and December 31 of each year.

 

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“Fiscal Year” means any of the annual accounting periods of the Parent Guarantor, the Borrower or any of their respective Subsidiaries, as applicable, ending on December 31 of each year.

 

“Foreign Person” has the meaning ascribed to it in Section 1.10(c)(i).

 

“Foreign Plan” means each employee benefit plan (within the meaning of Section 3(3) of ERISA, whether or not subject to ERISA) that is not subject to U.S. law and is maintained or contributed to by any Borrower Group Member or any ERISA Affiliate.

 

“GAAP” means generally accepted accounting principles in the United States of America, consistently applied.

 

“Gate Interests” shall mean all of the right, title, privilege, interest, and authority now or hereafter acquired or held by any Borrower Group Member in connection with the right to use or occupy holdroom and passenger boarding and deplaning space (including, without limitation, hardstand positions) at any airport terminal located in the United States at which any Borrower Group Member conducts scheduled operations.

 

“General Intangibles” means “general intangibles,” as such term is defined in the Code, now owned or hereafter acquired by any Borrower Group Member, including all right, title and interest that such Borrower Group Member may now or hereafter have in or under any Contract, all payment intangibles, customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor and reissues, extensions or renewals thereof, rights in Intellectual Property, interests in partnerships, joint ventures and other business associations, licenses, permits, copyrights, trade secrets, proprietary or confidential information, inventions (whether or not patented or patentable), technical information, procedures, designs, knowledge, know-how, Software, data bases, data, skill, expertise, experience, processes, models, drawings, materials and records, goodwill (including the goodwill associated with any Trademark or Trademark License), all rights and claims in or under insurance policies (including insurance for fire, damage, loss and casualty, whether covering personal property, real property, tangible rights or intangible rights, all liability, life, key man and business interruption insurance, and all unearned premiums), uncertificated securities, choses in action, rights to receive tax refunds and other payments, rights to receive dividends, distributions, cash, Instruments and other property in respect of or in exchange for Stock and Investment Property, rights of indemnification, all Books and Records, correspondence, credit files, invoices and other papers, including without limitation all tapes, cards, computer runs and other papers and documents in the possession or under the control of the Borrower or any computer bureau or service company from time to time acting for the Borrower.

 

“Governmental Authority” means any nation or government, any state or other political subdivision thereof, and any agency, department or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including but not limited to, any Aviation Authority.

 

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“Guarantee” means the guarantee entered into by each Guarantor under Section 2 of the Guarantee and Collateral Agreement.

 

“Guarantee and Collateral Agreement” means the Guarantee and Collateral Agreement to be executed and delivered by each Loan Party, substantially in the form of Exhibit B.

 

“Guaranteed Indebtedness” means, as to any Person, any obligation of such Person guaranteeing, providing comfort or otherwise supporting any Indebtedness (“primary obligation”) of any other Person (the “primary obligor”) in any manner, including any obligation or arrangement of such Person to (a) purchase or repurchase any such primary obligation, (b) advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet condition of the primary obligor, (c) purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, (d) protect the beneficiary of such arrangement from loss (other than product warranties given in the ordinary course of business) or (e) indemnify the owner of such primary obligation against loss in respect thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed to be an amount equal to the lesser at such time of (x) the stated or determinable amount of the primary obligation in respect of which such Guaranteed Indebtedness is incurred and (y) the maximum amount for which such Person may be liable pursuant to the terms of the instrument embodying such Guaranteed Indebtedness, or, if not stated or determinable, the maximum reasonably anticipated liability (assuming full performance) in respect thereof.

 

“Guarantors” has the meaning ascribed to it in the preamble to this Agreement.

 

“Hazardous Material” means any substance, material or waste that is regulated by, or forms the basis of liability now or hereafter under, any Environmental Laws, including any material or substance that is (a) defined as a “solid waste,” “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely hazardous waste,” “restricted hazardous waste, “ “pollutant, “contaminant,” “hazardous constituent,” “special waste,” “toxic substance” or other similar term or phrase under any Environmental Laws, or (b) petroleum or any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCBs), or any radioactive substance.

 

“IATA” means International Air Transport Association.

 

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“Indebtedness” means, with respect to any Person, without duplication, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property payment for which is deferred six (6) months or more, but excluding obligations to trade creditors incurred in the ordinary course of business that are not overdue by more than six (6) months unless being contested in good faith, (b) all reimbursement and other obligations with respect to letters of credit, bankers’ acceptances and surety bonds, whether or not matured, (c) all obligations evidenced by notes, bonds, debentures or similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all Capital Lease Obligations and the capitalized amount of remaining lease or similar payments under all synthetic leases that would appear on the balance sheet of such Person in accordance with GAAP if such synthetic leases were accounted for as a Capital Lease, (f) all net obligations of such Person under commodity purchase or option agreements or other commodity price hedging arrangements, in each case whether contingent or matured, (g) all net obligations of such Person under any foreign exchange contract, currency swap agreement, interest rate swap, cap or collar agreement or other similar agreement or arrangement designed to alter the risks of that Person arising from fluctuations in currency values or interest rates, in each case whether contingent or matured, (h) all Indebtedness referred to above secured by any Lien upon or in property or other assets (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness, (i) the Obligations, (j) Guaranteed Indebtedness but excluding any claims arising upon the rejection of unexpired leases and other executory contracts, and (k) the liquidation value of all redeemable preferred Stock of such Person.

 

“Indemnified Person” has the meaning ascribed to it in Section 1.8.

 

“Initial Financial Statements” has the meaning ascribed to it in Section 2.1(f).

 

“Initial Projections” has the meaning ascribed to it in Section 2.1(f).

 

“Insolvent” with respect to any Multiemployer Plan means the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

 

“Instruments” means all “instruments,” as such term is defined in the Code, now owned or hereafter acquired by any Borrower Group Member, wherever located, and, in any event, including all promissory notes and other evidences of indebtedness, other than instruments that constitute, or are a part of a group of writings that constitute, Chattel Paper.

 

“Intellectual Property” means any and all Licenses, Patents, Copyrights, Trademarks (including the goodwill associated with such Trademarks), and technology.

 

“Interest Expense” means, with respect to any Person for any fiscal period, interest expense (whether cash or non-cash) of such Person determined in accordance with GAAP for such period.

 

“Interest Payment Date” means the last day of each Interest Period and the Maturity Date.

 

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“Interest Period” means, initially, the period commencing on the Closing Date and ending on the first scheduled payment date set forth in Section 1.1(b), and thereafter commencing on each scheduled payment date set forth in Section 1.1(b) and ending on the subsequent payment date set forth in Section 1.1(b), provided that:

 

(a)           any Interest Period that would otherwise end on a day that is not a Business Day shall end on the next preceding Business Day;

 

(b)           any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

 

(c)           no Interest Period shall extend beyond the Maturity Date.

 

“Interest Rate Determination Date” means, with respect to any Interest Period, the second Business Day prior to the first day of such Interest Period.

 

“Inventory” means any “inventory,” as such term is defined in the Code, now owned or hereafter acquired by any Borrower Group Member, wherever located, and in any event including inventory, merchandise, goods and other personal property that are held by or on behalf of any Borrower Group Member for sale or lease or are furnished or are to be furnished under a contract of service, or that constitute raw materials, work in process, finished goods, returned goods, supplies or materials of any kind, nature or description used or consumed or to be used or consumed in such Borrower Group Member’s business or in the processing, production, packaging, promotion, delivery or shipping of the same, including all supplies and embedded software.

 

“Investment” means (i) any direct or indirect purchase or other acquisition by any Borrower Group Member of, or of a beneficial interest in, any of the Stock of any other Person (other than such Borrower Group Member); (ii) any direct or indirect redemption, retirement, purchase or other acquisition for value, by any Borrower Group Member from any Person (other than such Borrower Group Member), of any Stock of such Person; and (iii) any direct or indirect loan, advance or capital contribution by  any Borrower Group Member to any other Person (other than such Borrower Group Member). The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment (other than reductions for return on capital as repayment of Indebtedness and the like). The term “Investment” shall not include deposits or reserves to secure the performance of leases or the making of deposits or predelivery payments described in Section 6.4(a)(xii).

 

“IRC” means the Internal Revenue Code of 1986, as amended, and all regulations promulgated thereunder.

 

“IRS” means the Internal Revenue Service of the United States of America.

 

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“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority.

 

“Lender Party” means the Original Lender or any Affiliate thereof, or, if different, any Lender.

 

“Lenders” means the Lenders named on the signature pages of this Agreement and, if any such Lender shall decide to assign all or any portion of the Obligations in accordance with Section 9.1(a), such term shall include any assignee of such Lender.

 

“Liabilities” means all claims, actions, suits, judgments, damages, losses, liability, obligations, responsibilities, fines, penalties, sanctions, costs, fees, Taxes, commissions, charges, disbursements and expenses, in each case of any kind or nature (including interest accrued thereon or as a result thereto and fees, charges and disbursements of financial, legal and other advisors and consultants), whether joint or several, whether or not indirect, contingent, consequential, actual, punitive, treble or otherwise.

 

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